TABLE OF CONTENTS
ENRC Acquires 50pctplus Shares of Camrose Resources
Vale Acquires Iron Ore Property Option from Avanco Resources
Corriente Plans Copper Projects in Ecuador
New Projects and Exploration to Boost Mining in Arequipa
Jiangxi Copper Builds Plant in Guangdong
China Mining United Seeks USD 442 Million for Gold and Iron Ore Investment Fund
FMG and BC Iron JV Starts Construction of Iron Ore Mine
Eurasian Natural Resources Corporation PLC announced that its wholly owned subsidiary ENRC Congo BV, has privately purchased 50.5 percent of the outstanding common shares of Camrose Resources Limited.
The Camrose shares have been purchased from Silvertide Global Limited, Zanette Limited and Cerida Global Limited which are held by the Gertler Family Trust.
Camrose's assets are high quality copper and cobalt exploitation licenses located in the DRC.
The consideration for the acquisition is USD 175 million. ENRC has paid USD 50 million in cash and issued promissory notes totaling USD 125 million which mature between 9 months and 24 months.
As part of the transaction, ENRC will provide Camrose with a USD 400 million shareholder loan facility. The loan will be made available to Camrose for the purposes of satisfying existing payment obligations on the part of the Highwind Group, repaying committed loans previously undertaken by Camrose, funding working capital, commencing feasibility studies, as well as mine planning and development. ENRC is also providing a guarantee of USD 155 million to secure repayment by Cerida of outstanding debt.
ENRC has entered into a shareholders' agreement with Cerida and Camrose in respect of the management of the joint venture. ENRC will both operate and manage the joint venture on a day to day basis. Both Cerida and ENRC each have the right to appoint two directors to the Board of Camrose, with one of the ENRC appointed directors being the Chairman who has a casting vote.
Camrose primarily holds indirect interests in five copper and cobalt exploitation licenses situated in the DRC by way of:
1. 45,400,000 common shares of Africo Resources Limited, representing approximately 64 percent of Africo, which is listed on the Toronto Stock Exchange. Africo owns a 75 percent interest in the exploitation licence for the Kalukundi property in the Kolwezi District of Katanga Province in the southeast of the DRC
2. A 56 percent (indirect) interest in La Congolaise de Mines et de Développement. Comide holds the exploitation licences for Kii, Mashitu and Pangalume, which are contiguous to Africo's Kalukundi property
3. The entire share capital of Highwind Properties Limited, Pareas Limited, Interim Holdings Limited and Blue Narcissus Limited together, the 'Highwind Group. Under the terms of a joint venture agreement dated 7 January 2010, between the Highwind Group, the DRC, Gécamines and Simco Sprl, an entity associated with Gécamines, the Highwind Group has a 70 percent interest in Metalkol Sarl which owns the tailings exploitation licence covering the Kolwezi Tailings Site
The transaction is complementary to ENRC's existing operations in the DRC. The Camrose assets are contiguous to ENRC's existing DRC assets. These proximate homogenous ore bodies have the potential to share power allocation and logistics capacity, with the ability to reduce mining costs through the optimisation of mining methods and enhanced scale of processing facilities.
Avanco Resources has reported that its subsidiary AVB Mineracao Ltda has entered into a binding agreement with Brazilian major Vale SA to provide them an option to acquire the Trindade North Property.
Trindade North is believed to be highly prospective for iron ore and is situated proximal to Vale’s giant N4-N5 iron ore mine in the Carajas, Brazil.
The final agreement has been signed and will be executed as a partnership with Vale being granted exclusive exploration rights for up to 3 years. On satisfying conditions precedent, Vale will have earned the right to exercise an option to acquire sole ownership of the property.
The key provisions for the agreement are
1. For a two year option term, Vale will pay Avanco a non refundable fee of USD 350,000 on signing and receipt of regulatory permissions to drill.
2. Vale should drill at least 2,500m at Trindade North within the first year.
3. After one year Vale must pay Avanco USD 600,000 for the second year. To retain and extend the option for a third year, Vale must make a further payment of USD 1,000,000 to Avanco.
4. Based on drilling results Vale will pay Avanco a royalty for any in-situ JORC compliant iron ore resources in the measured and indicated categories.
5. On Avanco receiving funds from Vale inclusive of 1, 3 and 4 (above) estimated at USD 10,000,000 or more, Vale will have satisfied conditions precedent and will have earned the right to complete the acquisition for sole ownership of Trindade North. The total sum of all qualifying payments to Avanco is capped at a maximum value of USD40,000,000.
6. In the event economic mineralization other than iron ore is discovered, both parties will renegotiate terms with Vale retaining preferential rights to first refusal.
7. Avanco can elect a representative to participate in the exploration program.
Mr Tony Polglase ED of Avanco said “Avanco is extremely pleased to have agreed to terms with Vale on the Trindade North Property. This transaction has the potential to deliver significant cash flows to Avanco through in situ iron ore royalty payments. This would shift Avanco to a new operating level as a self funded explorer and developer of copper and nickel projects in the Carajas.”
The company remains committed to growing its position in copper and nickel sulphides, whilst being ideally placed to benefit from any Vale iron ore drilling success.
The Trinidade North iron ore property is located in the Serra dos Carajas region in the state of Para, northern Brazil, which hosts the largest resources of high grade iron ore in the world. Known reserves of Carajas iron ore have been reported as 7.2 billion tonnes at an average grade of 65 percent Fe.
Reserves in the region include the Northern Range 2.9 billion tonnes and the world’s largest unexploited high grade deposit Serra Sul 4.2 billion tonnes within the Southern Range. The Carajas region is dominated by Brazilian major Vale, the largest global iron ore producer.
Avanco’s project portfolio includes the Trindade North and Trindade South Properties which are located close to the Northern and Southern iron ore ranges respectively. Avanco holds the rights to 100 percent of both properties through its wholly owned Brazilian subsidiary, AVB Mineracao Ltda.
Trindade North is believed to be highly prospective for the discovery of economic iron ore. It comprises a single contiguous exploration license of 4,966 hectare and is largely land locked by Vale tenure.
Reuters reported that Canadian miner Ecuacorriente plans to start building a copper mine in Ecuador in November with an initial investment of USD 631 million.
Ecuacorriente said that the Mirador project has estimated reserves of 25 billion pounds of copper located in the South American country's southern province of Zamora Chinchipe.
Mr Ian Harris VP of Ecuacorriente said that "Our plan is to initiate construction on the mine in November this year. This project will involve internal infrastructure, opening the mine and a port for exports."
CRCC Tongguan, controlled by China's Tongling Nonferrous Metals Group and China Railway Construction agreed last year to buy the Vancouver based miner Corriente.
Ecuador has a nascent mining industry. Some larger projects were initially delayed as the government of President Rafael Correa hammered out new regulations for the sector. To supply energy to its project, Ecuacorriente plans to build a hydroelectric plant at an additional cost of around USD 100 million.
The executive said that e expect exploitation of copper to begin in the fourth quarter of 2012. Production at Mirador is forecast at 132 million pounds per year.
Ecuacorriente is also developing the Panantza San Carlos copper project. It is in the advanced exploration stage, with construction expected to start in the Q1 of 2013 with an investment of USD 1.3 billion.
Mr Harris said that Panantza San Carlos should be producing in the Q1 of 2015, estimating annual production at around 627 million pounds of copper.
BNamericas reported that new mining projects and exploration works in southern Peru's Arequipa region will keep it in the forefront of the country's mining activities.
Mr Alberto Butron manager of regional energy and mines said that projects and exploration by large and medium sized miners in the region are mostly focusing on copper and iron ore. Companies are continuing to explore and it's possible that they will find new reserves which will maintain activity.
Red metal projects in the region include US based Southern Copper's Tia Maria project in Islay province. The project will require initial CAPEX of USD 934 million for a copper cathode output of 120,000 tonnes per year.
The main iron ore project in the region is the Chinese Nanjinzhao Group's Pampa de Pongo deposit in Caraveli province which will require an investment of USD 3.0 billion.
Mr Butron said Arequipa also has some 240 small scale mining companies that hold concessions of 2,000 ha or less. 95 percent of these miners are exploring for or producing gold.
Jiangxi Copper Builds Plant in Guangdong
Reuters reported that Jiangxi Copper Company Limited will build 400,000 tonne per year copper product plant in Zengcheng city of Guangdong province.
As per report, an agreement was signed by city officials and Mr Long Ziping ED of Jiangxi Copper with total investment set at CNY 2 billion.
Mr Kang Shuigen spokesman of Jiangxi Copper said that Jiangxi Copper had planned to build a copper product plant with annual capacity of 300,000 tonnes to 400,000 tonnes and a total investment of around CNY 300 million.
Jiangxi Copper operates more than 500,000 tonnes of annual copper product capacity that uses refined copper as feed. The company plans to produce 900,000 tonnes of refined copper this year compared with 802,000 tonnes last year.
Bloomberg reported that China Mining United Fund plans to raise CNY 3 billion to CNY 5 billion to invest in gold, iron ore and metals projects to supply commodities to the world’s biggest consumer of metals and energy.
The Beijing based company said the fund which owns stakes in Brazil Potash Corp and Canada Allana Potash Corp will seek marketing rights for the mines and oilfields it invests in.
China Mining United Fund which raised CNY 500 million last year said “We are investing in whatever China is short of potash, cobalt, uranium, chromium, copper, gold, silver, oil, coking coal and iron ore.”
Chinese companies, including the nation sovereign wealth fund, spent more than USD 30 billion last year buying assets in Nigeria, Australia and Canada as two decades of growth averaging 10.1 percent spurred raw materials consumption. Bets on commodities helped China Investment Corp. post an 11.7 percent return on its overseas portfolio in 2009, reversing a loss.
China Mining United Fund has invested in companies and projects in the US, Canada, Japan, Australia and Hong Kong. It also owns a stake in Excelsior Energy Ltd a Canadian energy exploration company.
Thursday, 19 Aug 2010Australian iron ore company BC Iron Limited announced that mining infrastructure construction has commenced at the Nullagine Iron Ore Joint Venture in the Pilbara region of Western Australia.
Approvals have been received for Stage One of the Project from the Department of Mines and Petroleum. The approvals comprise the Project Management Plan, the Mining Proposal and the Clearing Permit which allowed work to commence on Stage 1 haul road construction. These approvals will also allow mining to start during Q3 2010. Approvals for Stage 1, permit access from the Mining lease to public roads which will allow for the haulage of the first ore via the Newman-Marble Bar Road.
In addition, continuous mining tenure has been secured for the Project between the Project mining areas and Fortescue Metals Group’s (FMG) rail head at the Christmas Creek Ore Processing Facility.
The Project Approval process has been split into three Stages to allow construction and operations to commence on the Mining lease and northern haul road whilst approvals progress on the central and southern haul road areas.
McIlvaine Company
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