Russia’s Nordgold injects another $70m into Guinea mine

Russian miner Nordgold (LON:NORD) invested $70 million last year in its Guinea-based gold mine, $22 million more than the total allocated in 2017, the company said on Monday.

Nordgold, which spun off of Russian steelmaker Severstal in 2012, said the funds allowed it to both, extend Lefa mine’s life and improve efficiencies at the operation.

The gold producer, which acquired the mine in 2010, said it since has invested almost $1 billion in the West Africa’s nation. Additionally, Nordgold has paid $180 million in corporate taxes and royalties from 2011 to 2018.

Nordgold acquired the Lefa mine in 2010 and has already invested roughly $1 billion in Guinea.

“We remain committed to Guinea and to driving performance at the Lefa mine,” the operation’s acting manager, Alejandro Rodriguez, said in the statement. “This intensive investment programme will put us in the best position to maximise the value of this major asset.”

This year, Nordgold estimates it would increase its investment in Lefa by 15% to about $80 million.

Lefa is one of the largest gold mines in Guinea, employing almost 1,200 people directly, as well providing over 800 indirect jobs.

The operation has invested significantly to improve the provision of local health and education services, including support in the fight against Ebola, as well as the creation of new medical facilities and some 40 schools.

Nordgold, which acquired many of its major assets during the 2008-2009 financial crisis, also operates in Russia, Kazakhstan and Burkina Faso.

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Mick Davis a step closer to mining iron ore in Guinea with Liberia deal

Niron Metals, an investment vehicle co-founded and headed by the former boss of Xstrata Mick Davis, has struck a deal with Liberia allowing it to use a rail and port to export iron ore from Guinea's Zogota deposit, previously owned by BSG Resources (BSGR).

Gaining access to the shipping route, the same Guinea has vetoed for years for the much larger Simandou project, could help Davis bring the proposed mine into production quickly and relatively cheaply.

Gaining access to the shipping route, the same Guinea has vetoed for years for the much larger Simandou project, could help Davis bring Zogota iron ore mine into production quickly and relatively cheaply.

“This MOU is an important milestone in our plans to develop the Zogota project,” Davis said in an emailed statement. “We intend to complete our feasibility study within six months and continue to work with relevant stakeholders to bring Zogota rapidly into production for the benefit of all.”

Guinea has always said that ore mined from Simandou would have to be shipped via the country’s own ports, but has shown more flexibility when it comes to the much smaller Zogota.

Davis’ comeback to the mining industry was made possible thanks to a deal between the Guinean government and BSGR, which ended a long-running dispute over mining rights in the resource-rich west African country. The miner, controlled by Israeli diamond billionaire Beny Steinmetz, has been embroiled in bribery and corruption probes, but has consistently denied any wrongdoing.

As part of the make-up agreement, Davis was asked to develop the Zogota iron ore project, expected to produce around 2 million tonnes of iron ore a year.

Davis is well known in the mining industry. He led Xstrata from a $500 million business in the early part of the last decade to an operation so big that — at one point — it made a takeover offer for Anglo American (LON:AAL).

His latest venture, mining fund X2 Resources, ended up losing its backers as it was unable to score any deals in the three years since launch.

Mick Davis a step closer to mining iron ore in Guinea with Liberia deal

 

Niron said it had started work on a feasibility study, which aims to complete within six months, adding that it was in discussions with Guinea on a number of issues, including payments and project milestones.

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Former Xstrata boss Mick Davis to mine Guinea’s Zogota iron ore deposit

Niron Metals, headed by the former boss of Xstrata Mick Davis, will develop Guinea's Zogota iron ore deposit, previously owned by BSG Resources (BSGR).

The news, confirmed via an emailed statement, follows a Monday agreement between Israeli tycoon Beny Steinmetz, BSGR’s owner, and the government of Guinea over the rights to Simandou, one of the world’s largest untapped reserves of iron ore.

“[BSGR’s deal] has paved the way for the creation of an effective mining partnership between Niron and the Government to mine this deposit,” it said, “The company looks forward to bringing this to fruition subject the satisfactory settlement of all disputes between the parties.”

As part of that settlement, BSGR has relinquished its claims on blocks 1 and 2 of Simandou, whose development has been hindered by years of legal wrangling as well as the $23 billion cost of the required infrastructure.

The Zogata project is expected to produce around 2 million tonnes of iron ore a year.

Rio Tinto (ASX, LON:RIO), the world’s second largest iron ore producer, still holds a 45.05% stake in Simandou's remaining blocks 3 and 4.

“At the request of the Republic of Guinea, a new group of investors (presented by and including Steinmetz) will exploit the Zogata deposit, in order to export iron ore, according to an accelerated timetable,” a statement quoted by Financial Times reads.

The Zogata project is expected to produce around 2 million tonnes of iron ore a year, which will be transported by rail and exported via a port in neighbouring Liberia.

Guinea's government had previously stated that ore had to exported via the West African nation's own ports.

Davis is well known in the mining industry. He led Xstrata from a $500 million business in the early part of the last decade to an operation so big that — at one point — it made a takeover offer for Anglo American (LON:AAL).

His latest venture, mining fund X2 Resources, ended up losing its backers as it was unable to score any deals in the three years since launch.

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Russia’s Nordgold to invest over $360m in Guinea mine by 2034

Russian miner Nordgold (LON:NORD) has received a fresh 15-year mining permit for its Lefa mine in Guinea, where it intends to invest more than $360 million to continue developing it the asset, one of the country’s largest gold producing mines.

The new licence, effective from March 21, is valid until 2034, in line with Lefa’s current life-of-mine.

Nordgold, which spun off of Russian steelmaker Severstal in 2012, acquired the mine in 2010 and has already invested over $1 billion in Guinea, according to the statement.

Nordgold acquired the Lefa mine in 2010 and has already invested over $1 billion in Guinea.

Lefa is one of the largest gold mines in Guinea, employing around 1,200 people and providing over 730 indirect jobs.

The operation, said Nordgold, has contributed almost $12 million to empowering the local communities and it intends to continue doing so, with the aim of improving people’s living conditions for the life-of-mine and beyond.

In 2017, the Lefa’s production increased 7%, churning out a total of 208,800 ounces. Overall, the company produced 968,300 ounces gold from its nine operating mines, earning revenues of $1.22 billion.

Nordgold, which collected many of its major assets during the 2008-2009 financial crisis, also operates in Russia, Kazakhstan and Burkina Faso.

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