Category Archives: Business

Teck issues rail line blockade warning

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Teck Resources Ltd. [TECK.B-TSX, TECK.A-TSX, TECK-NYSE] shares were down by almost 15% Friday after the company reported weaker than expected fourth quarter results and disappointing coal production forecasts.

Teck reported adjusted earnings per share of 22 cents in the fourth quarter of 2019, which was well below the consensus estimate of 40 cents. The fourth quarter earnings before interest, tax, depreciation and amortization (EBITDA) of $649 million was 24% below consensus of $854 million.

Meanwhile, Teck said it expects to produce between 23.25 million tonnes of coal this year, marking a 7% reduction from 2019 production levels. The softer volume guidance is attributed to weak short-term demand and record high inventory levels due to rail and port constraints.

“Our first quarter 2020 steelmaking coal sales are being negatively affected by severe weather in British Columbia, causing rail and port terminal performance issues and by blockades on rail lines,” the company said in a press release. “The estimated impact on first quarter sales is expected to be in excess of 1.0 million tonnes.”

Teck’s Class B common shares fell 14.4% or $2.46 to $14.63 on Friday on volume of almost 4.7 million. The shares are currently trading in a 52-week range of $16.85 and $34.32.

On Friday, the Federal Government was looking for ways to end rail blockades led by Indigenous protestors that have being going on for more than two weeks.

Teck Resources is a diversified resource company with business units focused on steelmaking coal, copper, zinc and energy. The company currently has interests in 13 operating mines, a large metallurgical complex and several major development projects in the Americas.

Teck recently said it wants to be carbon neutral across all of its operations and activities by 2050.

The mining giant said the carbon neutrality plan demonstrates its support of the transition to a low-carbon economy and worldwide efforts to meet the goal of the Paris Agreement to limit global temperature increases. “It also aligns with commitments by Canada and Chile – which are home to the majority of Teck’s operations – to be carbon neutral by 2050,” the company said.

Teck is pledging its commitment to climate action following reports that the Canadian Federal Government is close to making a decision on an Alberta oilsands operation known as the Frontier Project. The project is owned by Teck.

Located between Fort McMurray and Fort Chipewyan in northeastern Alberta, Frontier is truly large. The $20 billion truck and shovel oil sands mine is expected to produce 260,000 barrels per day of bitumen, while delivering $55 billion in provincial royalties and taxes over a projected lifespan of 41 years. The project is also expected to generate $12 billion in federal income and capital taxes.

Decision looms on Teck’s Frontier oil sands project

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By Peter Kennedy

The Federal Government is just weeks away from having to make a decision on another major Canadian resource project. This time it involves an Alberta oil sands operation known as the Frontier Project, which is owned by Vancouver-based Teck Resources Ltd. [TECK.B-TSX; TECK.A-TSX; TECK-NYSE]

Located between Fort McMurray and Fort Chipewyan in northeastern Alberta, Frontier is truly large. The $20 billion truck and shovel oil sands mine is expected to produce 260,000 barrels per day of bitumen, while delivering $55 billion in provincial royalties and taxes over a projected lifespan of 41 years. The project is also expected to generate $12 billion in federal income and capital taxes.

However, in deciding whether or not to approve Frontier, Ottawa will need to weigh the impact of such a large project on both the environment and its greenhouse gas commitments. It is expected the project will cover an area about half the size of Edmonton, potentially adding 4.1 mega-tonnes annually to Canada’s greenhouse gas emissions – this at a time when Canada is trying to reduce its carbon impact.

With a decision expected before the end of February, Ottawa will also need to be mindful of the economic impact on Alberta where the population is still feeling the impact of the drop in oil prices and the lack of progress on key pipeline projects.

Frontier is expected to employ up to 7,000 people during peak construction and 2,500 workers while it is in operation. Therefore, any decision to proceed will be applauded in places like Edmonton, which currently has the largest unemployment rate of any major city in the country.

Teck has said it is committed to developing the Frontier Project responsibly, by incorporating best practises for environmental protection, tailings management, water use, reclamation and management of greenhouse gases.

In its Frontier Project literature, Teck said oil is expected to remain an important source of energy into the foreseeable future, along with growth in renewable energy options such as solar and wind. Global energy demand is expected to grow by 32% by 2040. In that context, Teck has said responsible development of Canadian oil sands projects such as Frontier will play a key role in meeting this growing demand.

The Frontier Project has undergone extensive review by federal and provincial regulators, stakeholders and Indigenous communities. It won regulatory approval from a joint Alberta-federal review in 2019. Alberta Premier Jason Kenney has said the project must be approved by Ottawa as soon as possible.

Teck Resources is a diversified resource company with business units focused on steelmaking coal, copper, zinc and energy. The company currently has interests in 13 operating mines, a large metallurgical complex and several major development projects in the Americas.

On Wednesday, the company’s Class B common shares advanced 0.338% or $0.06 to $17.81. The shares are currently trading in a 52-week range of $17.47 and $34.24.

Lord Conrad Black says Canada should do more to develop its resources

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By Peter Kennedy

Former media baron Conrad Black warned a Vancouver mining conference about the need to prevent the “victimization” of energy producing provinces like Alberta and Saskatchewan.

In a speech to the Cambridge House International Vancouver Resource Investment Conference (VRIC) on Sunday, Black touched on a number of other topics, including the political situation in the United States, the impact of climate change on public policy and the virtues of capitalism.

“The only economic system that works is capitalism because it is the only one that is aligned with the universal human desire to have more,” he said.

Black is a controversial figure to be sure. A founder of the National Post daily newspaper, he was once at the helm of a media empire that included English Daily Telegraph, the Post in Jerusalem and the Chicago Sun-Times. He was convicted of felony fraud and obstruction of justice by a U.S. district court in 2007. The charges were later upheld by the country’s Supreme Court. In 2018, he wrote a biography of Donald Trump and was granted a full pardon by the U.S. President in May, 2019

However, the decision to name him as keynote speaker as this year’s VRIC conference was clearly a popular one. Many investors showed up an hour early to hear him give a 35-minute speech without the aid of notes. He later participated in a panel discussion with former Canaccord Financial Chairman Peter Brown and Fraser Institute President Niels Veldhuis.

As Black was asked to speak about the current state of Canada in a natural resources context, it was no surprise to hear him discuss public policy and the impact on the oil and gas sector.

“On the issue of equitable treatment of resource [producing provinces] I think we get a stark F,” he said. “The oppression of Saskatchewan and Alberta in particular is a disgraceful and outrageous thing.”

This was clearly a reference to Canada’s failure to complete major pipeline projects which are required to get domestic oil and gas production to international markets outside of the United States.

Resource industry officials have complained that Federal legislation such as Bill C-69, which aims to overhaul the way that major energy projects are approved in Canada, is actually driving away investment by making it more difficult to get projects like pipelines approved.

He also expressed his view that the collapse of the former Soviet Union has prompted people on the left of the political spectrum to use the environmental movement as a powerful battering ram to attack capitalism.

Black said the current level of alarm surrounding the threat of climate change was unjustified.

“There is no scientific unanimity about climate change, no unanimity at all that it is bad or that it is influenced by what people do,” he said.

Meanwhile, as Trump prepared to face an impeachment trial in Washington, Black reiterated his support for the U.S. President, saying he has had the best first term of any President in history, with the exception of Abraham Lincoln, Franklin D. Roosevelt and Richard Nixon.

“I think his tax cuts have worked, his regulation has worked. I think his reduction of illegal immigration has worked,” he said. Trump should be praised for standing up to China, Black said.

“He has a good chance of getting re-elected because the Democratic Party contenders are so unimpressive.”

Black also praised publisher Rupert Murdoch. “He has made the Wall Street Journal a great newspaper.”

Meanwhile, with the copper price trading near an eight-month high, investors could be in for a good couple of years, Peter Brown said during the panel discussion. Copper is the metal that will face the most shortages, he said. The forecast came amid speculation that renewed global growth concerns could support safe havens like gold.

South32 in Alaska joint venture with Trilogy Metals

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Trilogy Metals Inc. [TMQ-TSX, NYSE] and South32 Australia Ltd. [S32-ASX, JSE, LSE, SOUHY-ADR] have agreed to form a joint venture to develop the Upper Kobuk Mineral Projects in northwest Alaska.

The moves comes after South32 exercised an option to acquire a 50% interest in the joint venture company that will own the Upper Kobuk Mineral Projects (UKMP). Trilogy will contribute all of the assets associated with UKMP and South32 will provide US$145 million to the joint venture.

Establishment of the joint venture is expected to occur in February 2020 and follows an initial exploration partnership between South32 and Trilogy over three field seasons to advance both parties’ geological understanding of the UKMP.

Once the joint venture is established, it will retain US$87.5 million of the US$145 million subscription payment to fund its activities. The balance of US$57.5 million will be loaned back to South32.

Trilogy shares advanced on the news, rising 9.6% or 27 cents to $3.09. The shares are trading in a 52-week range of $2 and $4.10.

“Having the support and partnership from a senior mining company like South32 – both in terms of their financial support and technical expertise – is tremendous for Trilogy Metals,’’ said Trilogy President and CEO James Gowans.

Trilogy Metals, which was previously known as NovaCopper Inc., is a diversified exploration company with a focus on the Ambler mining district in northwestern Alaska.  Ambler ranks as one of the richest and most prospective known districts for the discovery of world class polymetallic volcanogenic massive sulphide (VMS) deposits that contain copper, zinc, lead, gold and silver as well as carbonate replacement deposits with high grade copper mineralization.

The UKMP is located within the Ambler Mining District and includes the high grade, polymetallic Arctic deposit, the Bornite copper deposit and a highly prospective regional exploration portfolio. Arctic is located is located 20 miles north of the Bornite carbonate replacement deposit.  Both are located on Trilogy’s land package, which covers 143,000 hectares.

Trilogy has an agreement with NANA Regional Corp. a regional Alaska Native Corp. and owner of the giant Red Dog zinc-lead silver mine which is operated by Teck Resources Ltd. [TECK.B-TSX, TECK.A-TSX, TECK-NYSE], and which has been in operation for 26 years.

The mining lease agreement provides a framework for the exploration and potential development of Amber district in co-operation with local communities. Trilogy’s goal has been to develop the Ambler district into a premier North American copper producer.

South32 is a diversified mining and metals company, producing bauxite, alumina, aluminum, energy and metallurgical coal, manganese, nickel, silver, lead and zinc at operations in Australia, Southern Africa, and South America.

“Forming the UKMP joint venture will be another important milestone as we reshape and improve our portfolio, by adding high-quality copper and base metals development options,’’ said South32 CEO Graham Kerr. “The decision to exercise the option follows a successful exploration partnership with Trilogy Metals and is an exciting step forward,” he said.

Endeavour’s Centamin plan hits roadblock

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Centamin Plc [CEE-TSX, CEY-LSE] has released an update in relation to an unsolicited conditional proposal from Endeavour Mining Corp. [EDV-TSX] in connection with a proposed all-share combination of the two companies.

“Since it was approached by Endeavour in November, Centamin has repeatedly made it clear to Endeavour that it is willing to facilitate a reciprocal exchange of due diligence information in order to better assess the value to shareholders of the potential combination,” Centamin said in a press release Wednesday December 18.

“To allow that exchange of information to take place, Centamin proposed that a non-disclosure agreement (NDA) be executed,” the company said.

However, Centamin said Endeavour declined to enter into an NDA and instead made a voluntary announcement which, under City Code on Takeovers and Mergers, triggered an automatic and mandatory deadline of 31 December [the PUSU Deadline] for Endeavour to either announce a firm intention to make an offer for Centamin under Rule 2.7 of the Code or announce that it does not intend to make an offer for Centamin.

On December 10, Centamin said the parties executed an NDA and the Chairman of Centamin and CEO of Endeavour met. During that meeting on December 14, Centamin said it was agreed that the parties would conduct a reciprocal due diligence in order to fully assess the value to shareholders of the potential combination as a precursor to any further negotiations.

However, Centamin said Endeavour has now indicated that it will not provide the information that Centamin has requested unless and until Centamin agrees to an extension of the PUSU Deadline. “Without Endeavour providing important information that is core to the assessment value, such as its financial model, Centamin cannot properly assess the proposed combination,” the company said.

Centamin went on to say that its board of directors is disappointed that despite its efforts at constructive engagement, Endeavour has repeatedly refused to engage in a proper manner. “The unsolicited approach from Endeavour has created an intense period of uncertainty for all of the company’s stakeholders. Therefore, the board of Centamin believes that Endeavour should, without further delay, enter into substantive reciprocal due diligence,” Centamin said.

“The company will determine whether to seek an extension of the PUSU Deadline following its review of any information forthcoming from Endeavour.”

Centamin Plc is a mineral exploration and development mining company with a dual listing on the London and Toronto stock exchanges.

Centamin’s principal asset, the Sukari Gold Mine, began production in 2009 and is the first large scale modern mine in Egypt. Base case production is 500,000 ounces per year, with the potential to exceed this level as optimization of the mining and processing operations continues.

The company has said its strong record of replacing reserves at Sukari means that despite producing more than 3.7 million ounces of gold to date, Sukari still has a current reserve life of more than 15 years.

Centamin gained a foothold in Burkina Faso, West Africa, via the 2014 acquisition of Australian company Ampella Mining Ltd. and a district-scale land package in southern Burkina that covers the southwest margin of the Boromo Greenstone belt and extends across the border into Cote D’Ivoire.

Endeavour Mining is a West Africa-focused gold producer. It operates four mines across Cote d’Ivoire (Agbaou and Ity) and Burkina Faso (Hounde, Karma), which are expected to produce 650,000 ounces of gold this year at an all-in-sustaining cost of US$795 to US$845 an ounce. Its ongoing five-year exploration program aims to discover 10-15 million ounces of gold by 2021, which represents more than twice the reserve depletion during the period.

Endeavour has said it believes that an all-share merger with Centamin would strongly benefit both sets of shareholders due to the compelling long-term value creation opportunity.

On Wednesday, Centamin rose 2.5% or $0.05 to $$2.06.  The shares are trading in a 52-week range of $1.39 and $2.53. Endeavour eased 1.1% or 26 cents to $23.60.  The shares trade in a 52-week range of $17.24 and $28.98.

Centamin rejects Endeavour Mining combination

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Centamin Plc [CEE-TSX; CEY-LON] has rejected a $1.9 billion takeover bid from Endeavour Mining Corp. [EDV-TSX; EDVMF-OTCQX].

Following a review of the proposal and the available public information on Endeavour, Centamin said in a press release on Wednesday December 4 that its board of directors believes the company is better positioned to deliver shareholder returns than the combined entity.

“The board believes that the proposal is skewed in favour of Endeavour’s shareholders and fundamentally undervalues Centamin,” the company said.

On December 3, 2019, Centamin issued a statement saying it notes the announcement by Endeavour Mining regarding an unsolicited preliminary proposal for a potential all-share combination of the company and Endeavour based on an exchange ratio of 0.0846 Endeavour shares for each Centamin share. It said the proposal implies a 5% premium based on the preceding 30-day weighted average price of each company to November 22, 2019.

On Wednesday, Centamin shares eased 0.45% or $0.01 to $2.19. The shares are currently trading in a 52-week range of $1.39 and $2.53.

Endeavour shares advanced 0.08% or $0.03 to $24.91 and now trade in a 52-week range of $16.34 and $28.98.

Centamin Plc is a mineral exploration and development mining company with a dual listing on the London and Toronto stock exchanges.

Centamin’s principal asset, the Sukari Gold Mine, began production in 2009 and is the first large scale modern mine in Egypt. Base case production is 500,000 ounces per year, with the potential to exceed this level as optimization of the mining and processing operations continues.

The company has said its strong record of replacing reserves at Sukari means that despite producing more than 3.7 million ounces of gold to date, Sukari still has a current reserve life of more than 15 years.

Centamin also gained a foothold in Burkina Faso, West Africa, via the 2014 acquisition of Australian company Ampella Mining Ltd. and a district-scale land package in southern Burkina that covers the southwest margin of the Boromo Greenstone belt and extends across the border into Cote D’Ivoire.

Endeavour Mining is a West Africa-focused gold producer. It operates four mines across Cote d’Ivoire (Agbaou and Ity) and Burkina Faso (Hounde, Karma), which are expected to produce 650,000 ounces of gold this year at an all-in-sustaining cost of US$795 to US$845/oz. Its ongoing five-year exploration program aims to discover 10-15 million ounces of gold by 2021, which represents more than twice the reserve depletion during the period.

Endeavour has said it believes that an all-share merger with Centamin would strongly benefit both sets of shareholders due to the compelling long-term value creation opportunity.

“After several unsuccessful attempts to engage Centamin on November 25, 2019, Endeavour submitted a proposal regarding a merger to the board of directors of Centamin to initiate formal discussions regarding the prospects for a combination,” Endeavour said in a press release.

However, Endeavour said meaningful engagement was not forthcoming.

Endeavour has estimated that the combined entity could produce 1.2 million ounces of gold at an all-in-sustaining cost of US$875/oz.

However, in its response to the proposal, Centamin says the exchange ratio in the proposal would result in Centamin shareholders owning only 47% of the shares of the enlarged company even though Centamin would have contributed 100% of the free cash flow during the first half of 2019.

Centamin also said its board believes the proposal puts at risk Centamin’s shareholders’ ability to continue receiving dividends at historic levels and exposes the company to Endeavours’ substantial US$729 million gross debt obligations. That includes debt obligations of US$310 million that mature in 2021.

“The Board strongly believes that Endeavour’s proposal significantly increases financial and operating risk without any material benefits to our shareholders,” said Centamin Chairman Josef El-Raghy. “Centamin’s stated strategy has always been to maximise returns for all its shareholders, having returned approximately US$500 million to shareholders since 2014,” he said.

Centamin has advised its shareholders to take no action.

GLOBE 2020 | Vancouver Convention Centre West

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FEB 10           | GLOBE Exchange

FEB 10-13     | GLOBE Forum

FEB 11-12     | Innovation Showcase

GLOBE Series is the largest and longest-running sustainable business summit and innovation showcase in North America. Since 1990, 170,000 people from 97 countries have come to GLOBE to learn from industry leaders, marvel at cutting-edge technology and form long-lasting partnerships. In 2020, we’ll be celebrating the 30th anniversary of this event and our amazing community — that’s 30 years of big deals, big ideas and big impact!

Given the urgency of the global climate crisis, GLOBE 2020 will have a laser focus on impact, action and outcomes. Offering stellar growth and networking opportunities to thousands of corporate, government and young leaders, GLOBE 2020 is the business summit with global impact.

The time for acting on opportunities in the clean economy is now. Trillions of dollars are on the table. This is your chance to shape the economy of tomorrow.

GLOBE Exchange: For the first time ever, GLOBE is dedicating a full day to business-to-business (B2B) networking and transactions focused on cleantech. Taking place on February 10, 2020, GLOBE Exchange will connect capital and market opportunities with innovation to accelerate the transition to the clean economy.

GLOBE Forum: GLOBE Forum is our flagship business summit, featuring world-renowned thought leaders, innovators and sustainability experts. The GLOBE community is at the forefront of economic transformation: we generate ideas, make deals and take bold steps that transform our economy and change the world for the better.​ Every session, activity, networking break and exhibit will be focused on creating a big impact — for your business, for the economy and for the planet.

Innovation Showcase: GLOBE’s Innovation Showcase is the place to experience cutting-edge technology and find your own path through the clean economy. The latest and greatest in cleantech will be front and centre at GLOBE 2020. In the Hall of Technology, you will get a chance to touch and feel the newest innovations in sustainability. Our Hall of Discovery will give you the opportunity to meet leaders from Canada and around the world, featuring corporate vanguards in five thematic clusters: Bioeconomy/Circular Economy, Mobility, Smart Cities, Carbon Productivity, and Oceans & Plastic.

Meet your people. Grow your business. Change the world.

Register today with code RWM15 for a 15% discount on GLOBE Forum and/or GLOBE Exchange.

Special Discounts

For groups, buy 3 get 1 free! Various discounts also available for students, municipal governments, NGOs, NFPs, and start-ups. Please email register@globeseries.com to learn more.

Junior Mining Sector Responds to Predatory Short Selling; Launches “Save Canadian Mining”

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Today Terry Lynch, CEO of Chilean Metals Inc. launched Save Canadian Mining – an advocacy group created to give voice to the specific interests of Canada’s junior mining sector. Save Canadian Mining will work to raise awareness for this important segment of the country’s economy and advocate for positive change on their behalf with government and regulatory agencies. Specifically, the campaign will be lobbying for revisions to existing marketplace rules and regulations that have created severe challenges for junior public companies in the sector.

“The current rules in our equity markets have created an environment for predatory short selling practices to thrive, particularly on our vulnerable junior markets,” said Mr. Lynch. “For smaller cap mining companies, short selling activity spooks true investors into selling prematurely, effectively stunting the growth of these businesses at critical early stages. Save Canadian Mining is dedicated to helping ensure Canada’s capital markets remain viable for junior miners now and into the future.”

In 2012, the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Securities Administrators (CSA) removed a 142-year securities trading rule known as the “tick test.” The tick test restricted short selling to positive price changes at the time of the sale (i.e., an investor could only short a stock if it was on an upward trajectory). This change was applied not only to the main listing venue of the TSX Venture Exchange, but was equally applied across all Canadian trading venues of which there are 14 today. Since the removal of the tick test, Canadian markets have evolved, and there now exists a dynamic where Canada’s junior markets are finding it increasingly difficult to raise capital.

“Short selling activities have increased in the junior mining market since 2012,” said Lynch. “The advent of high frequency trading and algorithmic trading are exploiting the combination of a lack of a tick test, with 14 different trading markets to the detriment of one of Canada’s most important industries.”

Save Canadian Mining plans to meet with government in the coming weeks to share the stories of many small businesses in the mining sector. The organization will also be sharing its desired regulatory amendments with government and the OSC for consideration shortly.

Save Canadian Mining has already attracted the support of many prominent voices in the mining and investment community, including: Brady Fletcher, Managing Director, and Head of the TSX Venture Exchange; Eric Sprott of Sprott Mining; Garry Clark, Executive Director of the Ontario Prospectors Association (OPA); and Chris Hodgson, President, Ontario Mining Association.

“The practice of short-selling plays a role in maintaining a healthy, efficient market. However, TSX Venture Exchange understands that certain changes to market operations in Canada, specifically related to the removal of the tick test, may have had unintended negative consequences for our junior, or more illiquid issuers,” said Brady Fletcher Managing Director, Head of TSX Venture Exchange. “We look forward to working with Save Canadian Mining and industry stakeholders to engage Canada’s regulators in evaluating the reinstatement of a tick test, and in pursuit of continued improvements to our globally unique venture market, many of which were tabled for discussion in our 2019 Trading Roundtable report available at https://www.tsx.com/resource/en/2011/.”

“As an active investor in the mining sector, I recognize the need to reinstate the tick test rule. Save Canadian Mining is providing leadership for the junior mining community during an important time. Regulations need to change and this campaign is going to help achieve those changes.” – Eric Sprott, CEO, Sprott Mining Ltd.

“The Ontario Prospectors Association (OPA) is supporting Save Canadian Mining in its mission to work with regulators to make some very specific changes to the investment landscape for junior miners in Ontario and Canada.” – Garry Clark, Executive Director of the Ontario Prospectors Association.

Broad support for the initiative is reflected in the following quotes from prominent industry representatives:

“The Ontario Mining Association (OMA) supports Save Canadian Mining. We understand that a strong mining sector depends on the ability of junior miners to attract investment and grow into larger Canadian companies. We are pleased to see campaigns like this emerge to ensure the health of the sector.” – Chris Hodgson, President of the Ontario Mining Association

“As the CEO of a junior mining and exploration company, I am very encouraged by this announcement. It is becoming increasing difficult for companies like ours to raise the capital required to become successful in Canada and we fully support Save Canadian Mining.” – Wayne Tisdale, CEO, 21c Metals Inc.

“Capital formation is an integral part of company building. It provides the resources necessary to hire labour, purchase equipment, and de-risk projects,” said Daniel Barankin, CEO of 6ix and a founder of Save Canadian Mining. “The restoration of the tick test rule will make Canadian companies more competitive.”

For additional information please go to
https://savecanadianmining.com

Contact:

Terry Lynch
Founder
Save Canadian Mining Inc.
Cell (647) 448 8044
Office (647) 649-7283

Barrick Gold begins sale of non-core assets

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Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] has struck a deal to sell its 50% stake in Kalgoorlie Consolidated Gold Mines (KCGM) in Western Australia to Saracen Mineral Holdings Ltd. [SAR-ASX] for US$750 million in cash.

KCGM is a joint venture which owns and operates the Super Pit gold mine. It ranks as one of Australia’s largest gold mines, with average annual production of 660,000 ounces. Newmont Goldcorp Corp., [NGT-TSX; NEM-NYSE] holds the other 50% stake in the joint venture. Operations began at KCGM in 1989 and the mine has produced 21 million ounces of gold over the last three decades.

“The sale of our non-operating interest in KCGM represents the first step in our plan to realize in excess of US$1.5 billion from the disposal of non-core assets by the end of next year,” said Barrick President and CEO Mark Bristow. “While this iconic gold mine has been a valuable contributor to Barrick over the years, the asset does not fit with our strategy of operating mines that we own,” he said. “The sale allows us to further focus our portfolio on core operations,’’ he said.

Barrick shares advanced on the news, rising 1.78% or 39 cents to $22.30. The shares are currently trading in a 52-week range of $15.37 and $26.69.

Bristow said Barrick was pleased to have achieved a successful outcome following a competitive sale process and was confident that Saracen would be an excellent partner at KCGM going forward. “Proceeds from the sale will be used to further strengthen the balance, invest in our future and support our commitment to deliver returns to shareholders,” he said.

News of the sale comes after Barrick released its third quarter financial results. It has predicted that its annual gold production will remain flat at between 5.15 to 5.6 million ounces over the next five years.

The world’s second largest gold miner beat street estimates by reporting an adjusted third quarter profit of US$264 million or US $0.15 a share. That was ahead of the consensus forecast of US $0.12 a share, and compares to a year ago profit of US$89 million or US$0.08 per share.

Meanwhile, Barrick said it remains on track to achieve the upper end of its production forecast in 2019 (5.15 to 5.6 million ounces), while costs are expected to be at the lower end of the forecasted US$870 to US$920/oz.

The company said its guidance for copper production this year remains unchanged at 375-430 million pounds at an all-in-sustaining-cost range of US$2.40 to US$2.90/lb.

Barrick has mining operations and projects in 15 countries, including Canada, Argentina, Chile, the Democratic Republic of Congo Senegal and the United States. The company recently moved to consolidate its position as one of the world’s leading gold producers by agreeing to merge with Randgold Resources Ltd.

Teck defers $500 million of planned spending

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Teck Resources Ltd. [TECK.B-TSX; TECK.A-TSX; TECK-NYSE] on Thursday October 24 released its third quarter financial results and said it is reducing costs and cutting spending for the balance of 2019 and 2020.

“Over the past few years, we have focused our attention on maximizing production to capture margin during periods of higher commodity prices,” said Teck President and CEO Don Lindsay. “However, current global economic uncertainties are having a significant negative effect on the prices for our products, particularly steelmaking coal,” he said. “As a result, we are focusing our attention on our RACE21 program to improve efficiency and productivity across our business, the development of the QB2 [Quebrada Blanca Phase 2] project, which is key to Teck’s future growth, and the execution of our priority project at Neptune.”

Quebrada Blanca Phase 2 is a low-cost, long life copper project that is being built by Teck and project partners in northern Chile. The other partners are Sumitomo Metal Mining Co. Ltd., Sumitomo Corp., and the Chilean state agency known as ENAMI. The project is targeting completion by the fourth quarter of 2021.

RACE21 is an innovation-driven efficiency program involving the renewal of Teck’s technology infrastructure.

While Teck said its financial position is strong, in light of uncertain economic conditions, it has implemented a company-wide cost reduction program and will defer some planned capital projects, targeting reductions of approximately $500 million from previously planned spending through the end of 2020.

Teck’s Class B common shares declined on the news, falling 5.26% or $1.16 to $20.88 on volume of 1.4 million. The shares are currently trading in a 52-week range of $19.34 and $34.31.

Teck is Canada’s largest diversified resource company with operations and projects in Canada, the U.S., Chile and Peru. It is also producer of copper, zinc, steelmaking coal and energy.

In the third quarter, Teck beat street estimates by reporting an adjusted profit of $403 million or 72 cents a share, down from a year ago profit of $466 million or 81 cents per share. The adjusted profit for the third quarter of 2019 was above the consensus estimate of 66 cents.

However, the company said coal sales in the quarter were negatively impacted by material handling issues and planned construction outages related to an ongoing expansion of the Neptune terminal in Vancouver, British Columbia.

Teck has warned that the capital expenditure for the Neptune expansion has increased to $750-$800 million, up from only $400 million previously. However, it said the project remains on track for completion in the first quarter of 2021.

Despite stronger coal production of 6.5 million tonnes in the quarter, coal sales of 6.1 million tonnes were below the company’s guidance range of 6.3-6.5 million tonnes.

While Teck reaffirmed its 2019 met coal production guidance of 25.5-25.6 million tonnes, the fourth quarter production forecast of 6.7 million tonnes is lower than expected due to planned outages at both the Neptune and Ridley terminals. The Ridley terminal is located near Prince George, B.C.