Bluerock Diamonds’ shares jump on record find

BlueRock Diamonds (LON: BRD) shares were up 15% on the London Stock Exchange Friday after the miner announced it had recovered its largest diamond to date, a 24.9 carat gem quality stone.  

BlueRock owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa.  The miner’s largest diamond prior was 16.28 carats, which sold for $78,947.
 
“This record recovery of such a high-quality diamond is an exciting milestone and underpins why we are so confident about the potential of the Kareevlei mine. We have a comprehensive development plan to increase production and look forward to providing further updates as we progress,” executive chairman Mike Houston said in a media statement. 

The diamond will be put to tender, the results of which will be announced June 17, the company said.

BlueRock’s shares were priced at 11 pence on the LSE late Friday, on a day that saw trading volume at 61.9 million, mover six times the average daily trading volume is 9.5 million. The company has a £1.8 million market capitalization. 

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Canada’s Desert Gold renews permit for Malian gold project

Desert Gold Ventures (TSXV: DAU) announced this week that the Malian government approved the renewal of its permit to operate the Djimbala project, located in southern Mali.

In a press release, Desert explained that the permit renewal is for an initial 3-year term, renewable for two additional 2-year terms, which gives the Canadian company control of Djimbala until May 2026.

At present, the Delta, British Columbia-based miner is working on assaying 2,150 soil samples that its field team collected over the north-western portion of the property. “This work, in conjunction with follow-up field evaluation and property-scale mapping and soil sampling over the remaining portion of the permit, is expected to lead to the development of a significant number of drill targets on the property which has seen no reported drilling to date,” the media statement reads.

Djimbala is a 100-square-kilometre land pack located in Mali’s Yanfolila gold belt. The project is close to several large operating mines and gold deposits including Hummingbird’s 2.2-million ounces Komana East and West deposits, Wassoul Or’s Kodieran mine and Endeavour’s 3.25-million ounces Kalana deposit.

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Sibanye, Lonmin create world’s No.2 platinum producer as merger OK’d

Shareholders of both precious metals miner Sibanye-Stillwater (JSE:SGL) (NYSE:SBGL) and struggling rival Lonmin (LON:LMI) approved Tuesday the planned merger of the companies, effectively creating the world’s second-largest platinum producer.

Sibanye-Stillwater said that 87% of its shareholders backed the all-share offer, which it revised down in April, valuing the smaller miner at 226 million pounds ($286 million), 60 million pounds less than initially offered.

Later in the day, the majority of Lonmin's shareholders rubber-stamped the deal.

South Africa's Competition Appeal Court had cleared the way for the business combination earlier this month, blocking Lonmin's main mining union’s attempt to block the takeover or have re-examined. The Association of Mineworkers and Construction Union’s (AMCU) move was an effort to avoid some of inevitable layoffs, originally estimated at 3,000, that will take place after the merger.

The takeover is seen as a rescue deal for Lonmin, severely hit by weak platinum prices during the 2016-2017 downturn, costs related to the strengthening rand, a large labour force and expensive deep-level mines.

For Sibanye, is just one more of many deals struck by chief executive officer, Neal Froneman, who has transformed the gold miner by expanding its operations into the platinum-group metals sector.

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Barrick’s bid for Acacia an “appropriate” and “elegant” solution to Tanzania’s woes — CEO

Barrick Gold’s (TSX:ABX)(NYSE:GOLD) chief executive, Mark Bristow, said the company’s bid for its 64%-owned Acacia Mining (LON:ACA) is an “appropriate” and “elegant” solution to the long-running row over outstanding tax claims that has hit the African miner’s bottom-line.

The $285-million offer, considered by some analysts and Acacia’s minority shareholders as a low, would see the world's second largest gold miner buying the remaining 35% of Acacia it does not already own, at a discount.

“We’re not trying to exploit any particular situation,” Bristow told Bloomberg. “At the end of the day we do believe it’s a well-considered, fair and proper proposal that should be taken seriously.”

“We’re not trying to exploit any particular situation,” CEO Mark Bristow said referring to Barrick’s $285-million offer for Acacia Mining.

The proposed takeover, said Barrick last week, was made after realizing that the government of Tanzania was not prepared to deal directly with Acacia to settle their differences.

Acacia, the African country's No.1 gold producer, has been embroiled in a battle with Tanzania since 2017, when the  government banned exports of unprocessed metal and slapped it with a $190 billion tax bill— equal to almost two centuries worth of revenue.

The company was also forced to cut output by a third from two of its three mines in the country — Bulyanhulu and Buzwag.

A "tragedy"

Since then, the relationship between Barrick and Acacia has been strained and progress moving an agreement forward has been “almost impossible,” Bristow acknowledged earlier this month.

“It’s a tragedy," he said. "We’re dealing with a complete breakdown of relationships.”

For about two years, Barrick has been leading negotiations with President John Magufuli’s administration, first under executive chairman John Thornton and, more recently, under Bristow.

The South African geologist, who spent decades finding and building his own mines in Africa, has been considered by many analysts as the only one who could effectively end the never-ending row.

Acacia has sought to resolve some of its issues with Tanzania through international arbitration.

framework deal reached in February proposed that Acacia would pay $300 million to settle the tax claims and agree to split returns from operations with the country going forward. But Acacia has maintained its position that before approving any agreement its board should review it first.

“In our opinion, the bid value reflects the $300 million tax payment that has been negotiated between Barrick and the government of Tanzania, which becomes payable once a resolution is ratified,” Jefferies’ analysts wrote last week.

Acacia, which has said that much of the tax dispute stems from the period when the Canadian mining giant fully owned it, has sought to resolve some of its issues with Tanzania through international arbitration.

According to sources close to the matter, Barrick may choose to postpone any decisions on the proposed takeover until then.

With files from Bloomberg

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Danakali about to secure financing for potash project in Eritrea

Australia’s Danakali’s (ASX, LON:DNK) said Monday it was about to close debt financing agreements worth $200 million with two African financial institutions, which will allow it fund construction and growth of its flagship Colluli potash project in Eritrea.

The deals with African Export-Import Bank (Afreximbank) and Africa Finance Corporation (AFC) could be finalized “any day” and are expected to accelerate equity financing, executive chairman Seamus Cornelius said at Dakali’s Annual General Meeting.

Development of the 1.1 billion-tonnes potash project, a joint venture between the Australian miner and Eritrea’s state mining company, is expected to take 2 and a half years.

UN study says the Colluli potash project has the potential to significantly boost Eritrea’s economy and advance the country’s sustainable development agenda.

In the initial phase of operation, Colluli would produce more than 472,000 tonnes a year of sulphate of potash (SOP), a premium grade of fertilizer. Annual output could rise to almost 944,000 tonnes if Danakali decides to go ahead with a second phase of development, as the project has a possible 200-year plus mine-life.

Game changer

A United Nations report published in January suggested that Colluli could boost the economy of Eritrea, a country that until last year was on the UN’s sanctions list.

The independent study, commissioned and funded by the UN Development Program (UNDP), also said the project could “meaningfully” advance the north African nation’s sustainable development agenda.

The future looks rosy. Danakali already has an offtake agreement with EuroChem, one of the world’s top fertilizer companies, which has agreed to buy at least 87% of Colluli’s output for 10 years.

The project location has its pros and cons. On one hand, being so close to the Red Sea coast  by Eritrea's eastern border, makes it one of the world’s most accessible potash deposits. As mineralization begins at 16 metres, it is also the world’s shallowest. Additionally, its proximity to ports will provide easy access to Asian markets.

Colluli is also by the border with Ethiopia, with which Eritrea held one of Africa’s deadliest border wars. In June 2018, the ruling coalition of Ethiopia (Ethiopian People's Revolutionary Democratic Front), headed by Prime Minister Abiy Ahmed, agreed to fully implement the peace treaty signed with Eritrea in 2000, with peace declared by both parties in July last year.

Danakali’s potash project could be a game changer for Eritrea — UN

Colluli’s location. (Courtesy of Danakali.)

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B2Gold says not trying to buy Zimbabwe gold project

Mid-tier Canadian miner B2Gold (TSX:BTO)(NYSE: BTG) on Friday dismissed reports indicating it was mulling the acquisition of an idled gold mine in Zimbabwe, emphasizing it was not currently interested in any mergers or acquisitions.

Chief executive, Clive Johnson, reiterated B2Gold’s long-term growth strategy by saying that in addition to developing its existing pipeline of projects, the company continued to seek global exploration opportunities.

“Spread the word – no M&A from us,” Johnson told analysts on the miner’s earnings call on May 8, when reported total gold of 230,859 ounces, about 6% above plan. “We’re not going to pay for ounces,” he added.

“Spread the word: no M&A from us.” — Chief executive, Clive Johnson.

Bloomberg News reported on May 23 that the Vancouver-based wanted to add Metallon Corp.’s  Shamva gold mine to its portfolio. The article added that B2Gold would bid if it were exempted from a law in Zimbabwe that requires producers to sell all the metal to the country’s central bank.

The country’s two main miners – Metallon and RioZim – are suing the central bank over its payment arrangements. Gold miners are required by law to sell their output to Fidelity Printers, an arm of the Reserve Bank, which then pays them back partly in dollars and partly in local quasi-currency that cannot be traded outside of Zimbabwe.

Mining is the biggest source of foreign exchange for Zimbabwe, which has the world’s largest platinum reserves after South Africa. It also known for its diamonds, though alluvial deposits are almost depleted, and it's said to have eight out of nine “rare earth” minerals and a processing capacity for gold, diamond and chrome.

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Zambia’s just deepened worries of sinking global copper output

Zambia’s Chamber of Mines delivered Thursdays further signs of a major global undersupply of copper about to hit the market by announcing that the country’s output of the metal could be as much as 100,000 tonnes lower than last year.

The industry lobby group attributed the expected drop in production to changes to mining taxes introduced in January, which is driving companies to cut output.

“The new tax regime forced miners to do the unthinkable – cut production – because many cannot afford to continue producing as before,” it said in a statement.

Zambia, Africa’s second largest copper producer, churned out 861,946 tonnes of the metal last year. In the first three months of this year, the nation’s copper output fell by 11.3% to 195,244 tonnes, compared to the previous quarter, the Bank of Zambia said earlier this week.

Copper output in Africa’s second largest producer could decline by as much as 100,000 tonnes this year, adding to recent, sharp declines at the world’s main producing nations.

The world’s main copper producing nations have been showing output declines this year, according to the latest monthly bulletin from the International Copper Study Group (ICSG).

Global production declined 2.4% in February 2019, when compared to the same month last year, with 1,515kt (19,749ktpa) of contained copper produced globally.

Chile, the world’s No.1 producer of the metal, led the pack with output down 7.1 % y/y to 415.9kt (5,412ktpa) while Peru, the second main global producer, saw its output fell by 5.1% y/y to 176.1kt (2,296ktpa).

Despite weaker copper production so far this year, ICSG data indicates a small surplus in February of 74kt with refined usage down 14% y/y, totalling 1,758kt (22,917ktpa).

Industry analysts at CRU believe that is undeniable that global demand for copper will soon surpass supply, the world may not need as many new mines as originally forecast.

Over the past year there has been board approval for several high-profile expansions and new projects that are due on-stream over the next five years.

CRU says the coming online of major projects, including Anglo American’s Quellaveco (2022), Teck Resources’ Quebrada Blanca expansion (2021) and First Quantum’s Cobre Panama (already in production) should momentarily eliminate the gap between supply and demand.

The research group now expects 900,000 tonnes a year more mine copper supply by the early 2020s than at this time in 2018. 

The EV effect

While the effect on copper demand from the electric vehicles (EVs) sector is expected to be important, the consensus is that it will not meaningfully impact on demand until the second half of the 2020s, CRU says.

The red metal is a key component in the lithium-ion batteries used in EVs, as well as power inverters and in the charging infrastructure needed to keep them running.

Data released by the International Copper Association (ICA), an industry-funded body, shows more than 40 million charging ports will be needed over the next decade, consuming an extra 100,000 tonnes of copper a year by 2027.

Zambia just deepened worries of sinking global copper output

All types of EVs require copper. It is used in batteries, windings, rotors, wiring, busbars and charging infrastructure. (Source Research commissioned by the International Copper Association (ICA).)

From those stations, at least 3 million will be built in China by 2030, according to the study.

Consumption from the car industry will also weigh on demand, but later. An average gasoline-powered car uses about 20 kg of copper, mainly as wiring. A hybrid needs about 40 kg and a fully electric car has roughly 80 kg of copper (176 pounds).

Zambia just deepened worries of sinking global copper output

Copper demand will be substantially impacted by the growing market for electric vehicles (EVs) over the next decade. (Source Research commissioned by the International Copper Association (ICA).)

It means that, in the next decade, global copper demand will increase between 3 and 5 million tonnes, experts predict. Once electric vehicles become popular, they estimate demand to reach 11,000,000 tonnes of new copper for EV’s alone.

Copper is also a key element in green technologies and renewables, which despite being adopted at a fast pace, they still represent only a minor percentage of the world’s total energy production.

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ICMM 2018 mining safety data released

The International Council on Mining and Metals (ICMM) released the Benchmarking 2018 Safety Data report on Wednesday, detailing the safety data of its company members.

The report, which collates the safety data of about a million workers and contractors, recorded 50 fatalities in 2018. This was a decrease from 51 fatalities in 2017 and 63 fatalities in 2016.
This benchmarking report includes data from 2018 and does not include fatalities from the Brumadinho tragedy that occurred in January 2019.   11 of ICMM’s 27 company members reported no fatalities in 2018 compared to eight in 2017
 
Eleven of ICMM’s 27 company members reported no fatalities in 2018 compared to eight in 2017. Miners reporting no fatalities were: Africa Rainbow Minerals, Barrick, Freeport McMoRan, Goldcorp, JX Nippon, Minera San Cristóbal, Minsur, Mitsubishi Materials, Newcrest, Orano, and Sumitomo.

The number of hours worked across ICMM’s members increased by 16% due to data included from new company members: Minera San Cristóbal, Minsur, Newcrest and Vale. While total fatalities dropped by 2%, the fatality frequency rate dropped 19from 0.027 to 0.022 fatalities per million hours worked.


 
There was also a drop in the injury rate from 3.94 in 2017 to 3.41, despite an increase in the number of recordable injuries from 7,515 to 7,751. The highest number of fatalities (14) occurred in South Africa, where 400 million hours were worked
 
 The report findings include: 

  • One fewer fatality recorded in 2018 compared to 2017 
  • Nine fatalities (18%) were caused by fall of ground in underground mines, 8 fewer than the 17 in 2017 
  • Fifteen fatalities (30%) were caused by transportation/mobile equipment, 4 higher than the 11 fatalities recorded in 2017 
  •  In the 6 years of safety data published by ICMM, fatalities have dropped from 90 in 2012 to 50 in 2018 and in this time, the fatality frequency rate has dropped by 33% to 0.022 deaths per million hours worked.Since 2012, total recordable injuries have dropped from 13,895 to 7,751 and the total recordable injury frequency rate has dropped by 33%. 

The report also examines incidents by country. The highest number of fatalities (14) occurred in South Africa, where 400 million hours were worked. There were six fatalities in Chile and Ghana where respectively 281 million and 51 million hours were worked.

 “Our annual safety data tragically records that 50 people lost their lives at work in 2018. ICMM and our company members are determined to eliminate fatalities from their operations. The single highest cause of deaths in 2018 was from mobile mining equipment which is why we are exploring collision avoidance technology in our Innovation for Cleaner, Safer Vehicles program,” Tom Butler, ICMM’s CEO said in a media release.  

Read the full report here.

 

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Acacia blames Barrick for barring it from Tanzania talks, mulls takeover bid

Barrick Gold’s subsidiary Acacia Mining (LON:ACA) condemned its parent company on Wednesday for keeping it out of the discussions with the government of Tanzania about a long-running row over outstanding tax claims.

The African miner’s comments come on the heels of the Canadian gold giant’s bid to take full control of the company, which is Tanzania’s No. 1 gold miner.

Toronto-based Barrick has proposed to buy the remaining 35% of Acacia it does not already own through an all-stock offer pitched at a discount, arguing that the plan offers a route to end Acacia’s crippling dispute with Tanzania’s government.

Barrick said it made the $285m-takeover bid because it was clear the government of Tanzania was not prepared to deal directly with Acacia and settle their long-running tax row.

The $285 million proposal made to Acacia’s board and management will offer 0.153 of Barrick shares for each of Acacia’s and implies a valuation of $787 million for the whole unit.

“Since the proposal is in Barrick shares, the Acacia minority shareholders will be able to benefit from any future potential upside in both the Acacia assets and Barrick's broader portfolio of assets,” Barrick said in the statement.

The offer, it noted, was made after realizing that the government of Tanzania was not prepared to deal directly with Acacia to settle their differences.

“As a consequence of the negotiations with the government of Tanzania, Barrick has had the opportunity to undertake detailed due diligence on the Acacia assets and on the basis of this work has concluded that the proposal on the terms set out above reflects the fair value of the company,” it said.

Faith in Bristow

For about two years, Barrick has been leading negotiations with President John Magufuli’s administration, first under executive chairman John Thornton and, more recently, under chief executive Mark Bristow.

The South African geologist, who spent decades finding and building his own mines in Africa, has been considered by many analysts as the only one who could effectively end the row over unpaid taxes claims.

Barrick has until June 18 to decide if it will follow through with a firm offer.

A framework deal reached in February proposed that Acacia would pay $300 million to settle the tax claims and agree to split returns from operations with the country going forward. But Acacia has maintained its position that before approving any agreement its board should review it first.

“In our opinion, the bid value reflects the $300m tax payment that has been negotiated between Barrick and the government of Tanzania, which becomes payable once a resolution is ratified,” Jefferies’ analysts wrote in a note on Wednesday.

“Acacia notes that it continues to be excluded from the discussions between Barrick and the government of Tanzania,” it said. “In the meantime, Acacia shareholders are strongly advised to take no further action.”

The company, which owns and operates Tanzania’s three major mines — Bulyanhulu, Buzwagi and North Mara, also said it would seek to clarify the position of Tanzania’s government.

Barrick has until June 18 to decide if it will follow through with a firm offer.

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