TABLE OF CONTENTS
Riversdale Mining Obtains Approval for Mozambique Coal Project
French Eramet to Build Gabon Manganese Plant for US 286 million
Varun Energy Acquires Madagascar Uranium Mines
Victory Nickel Announces Results on Minago Nickel Deposit
Terrane Metals to Move Ahead with Mt. Milligan Copper-Gold Project
Goldcorp Agreement with New Gold to Acquire Xstrata’s 70% Interest in El Morro Project
Brazil to Participate More, Increase Taxes, Royalties from Mining Companies
Horizonte Minerals to Start Drilling at Tucuma Nickel Project
Rio Tinto Alcan to Negotiate with Paraguay ANDE for Aluminium Smelter
Andean to Develop $200 million Gold/Silver Mine in Patagonia
South Gobi Plans to Raise $465m in Hong Kong IPO
Lotus Resources Get Mongolian Mining License
Neyveli Lignite to Venture into Power Generation, Mining Industry
Kangaroo Resources to Acquire Indonesian Coking Coal Interests from Southgobi
Churchill Mining Completes Feasibility Study for East Kutai Coal Project
CIL to Develop Coal Mines Jointly With SAIL and TATA Steel
Oxus Uzbekistan Gold Project Secures $185 million from Chinese Consortium
Nyrstar Offers $137m for CBH Resources
Newcrest Receives Approval for Huge New Australian Gold Mine
BHP and Rio Tinto Sign Binding Agreements on Iron Ore Production Joint Venture
Regency Plans Exploration Program in Lake Johnstone Nickel Belt
JFE Steel Invests $555 Million in Australia Coal Mine
Poland Sells 10% of State Copper Miner KGHM for $720 million
KEFI Starts Drilling Copper-Gold Project in Turkey with Centerra Gold
Australia's Riversdale Mining (RIV.AX) said recently it had been granted permission by Mozambique's government to proceed with its $800 million Benga coal project.
The company completed a feasibility study for the coal mine in July in which it said it expects the project, which includes a hard coking and thermal coal mine, to have an anticipated run of 20 million tonnes per year.
"...following completion of an Environmental Impact Study (EIS) in mid 2009, the Ministrio para a Coordenao de Aco Ambiental (MICOA) has granted approval for the project to proceed," the miner said in a statement.
Riversdale said last year it plans to start producing coal at Benga this year, and aims to start exporting the mineral in the last quarter of 2010.
Its study envisaged that 5.3 million tonnes of coal would be extracted each year in an initial phase expected to start this year, including 1.7 million tonnes of top quality hard coking coal and 300,000 tonnes of thermal coal for export.
Expansion to the second stage, by 2014, will raise production to 10.6 million tonnes a year, of which 3.3 million tonnes will be coking coal and 2 million tonnes thermal coal for export.
It said the third stage, which has an open time frame, will almost double production to 20 million tonnes a year.
The Australian firm holds a 65% stake in the project, and India's Tata Steel (TISC.BO) owns the rest.
French metals firm Eramet will spend almost $300 million and employ 1,000 people in Gabon to build a manganese plant in the central African country, it and the Gabonese government said recently.
Gabon's President Ali Ben Bongo, who won disputed elections last August, has made diversifying the country's oil-reliant economy a policy priority as reserves begin to run down.
Manganese and timber are Gabon's other major natural resources.
The Moanda plant, around 400 km (248 miles) east of the capital Libreville, will produce 20,000 tonnes per year of manganese metal, and 65,000 tonnes per year of silico-manganese, an alloy used in steel.
"During the construction phase, 1,000 people will work for three or four years," Prime Minister Paul Mba said at a signing ceremony with the firm.
"It's a major 131 billion CFA francs ($286 million) project, and it's also an important development project for Gabon," said Marcel Abeke, managing director of Comilog, Eramet's 67-percent owned Gabonese subsidiary.
Former President Omar Bongo, the head of state's father, laid the first stone at Moanda last April, but work stalled after his death and the election that followed.
Business Standard recently reported that Varun Energy Corporation has acquired uranium mines in Madagascar, an island nation in the Indian Ocean.
As per the report, Varun Energy is one of the first private Indian companies to acquire rights directly in this business.
Mr Kiran Mehta CMD of Varun Group said that Madagascar has high concentration of uranium, besides thorium and gold. The group acquired 1,111 blocks covering 6,900 square kilometers with estimated reserves of 1,700,000 tonne of uranium, 4,350,000 tonne of thorium and traces of gold for exploration, exploitation and output sale. Varun is present in Madagascar as Varun International SARL and Madagascar Energy Corporation with 67% stake in both companies.
Varun Industries, with a turnover of INR 1,400 crore through its subsidiaries and associate companies has diverse interests globally in areas including gems and jewelry, oil and natural gas, mining and energy. The company was listed in 2007. It is also into retailing of stainless steel products under the brand name Varun. The group’s foray into uranium offers tremendous growth potential, as current demand for the heavy metal as a commercially viable alternative fuel for generation of nuclear energy far outstrips supply.
According to a World Nuclear Association report, India has an ambitious nuclear power program and expects to have 20,000 MW nuclear energy capacities on line by 2020 and 63,000 MW by 2032. It aims to supply 25% of electricity from nuclear power by 2050.
Victory Nickel Inc has released the results of the Definitive Feasibility Study on the 100% owned Minago sulphide nickel deposit in Manitoba, Canada. The DFS confirms that the development of an open pit mine and concentrator at Minago is technically and commercially feasible. The base case pricing uses three year trailing averages for metal prices and the US Canadian dollar exchange rate in accordance with the recommended practice of the US Securities & Exchange Commission Industry Guide 7.
The DFS is based on mining open pit reserves only and does not incorporate the potential for underground mining that was included in the Preliminary Economic Assessment completed by Wardrop, A Tetra Tech Company in November 2006.
Average annual ore production of 3.6 million tones is expected, with average annual nickel production in concentrate of approximately 11,000 tonnes.
Mr Rene Galipeau VC & CEO of Victory Nickel Inc said that "Completion of the DFS represents a major milestone for the development of the Minago deposit. The process of optimizing the technical and financial aspects of the project has already begun. Our next steps, early in the new year, are to create a project execution plan, begin road construction on site, select financial advisors to structure financing and submit the Environmental Impact Statement with a view to receiving environmental and operating permits before the end of 2010. In addition, consultation with local Aboriginal groups and other stakeholders can now be continued with a better understanding of the opportunities that are potentially available to local communities."
Terrane Metals Corp. is to move ahead with construction of the Mt. Milligan Copper-Gold Project after its board of director approved the decision.
Terrane was waiting on a decision from Goldcorp which had an option to convert its equity interest in Terrane to a participating joint venture, which has now expired. As part of the agreement with Goldcorp, it supplied Terrane with a $40 million credit facility, which has now been extended to May 7, 2010.
Mt. Milligan will be an open pit mine with a 60,000 tonnes per day copper flotation process plant. The feasibility study forecast average annual production of 262,100 ounces of gold and 89 million pounds of copper for the first six years of a 22-year mine life.
Net of a copper credit, the mine is expected to have a gold production cash cost of negative US $8 per ounce, assuming an average copper price of $2 per pound.
Terrane said it was now looking at financing alternatives to develop the project, with a projected construction cost of $172 million.
"Mt. Milligan is an outstanding asset," said Chuck Jeannes, Goldcorp President and Chief Executive Officer. "Goldcorp believes that the best way to continue participating in the bright future of this project is through our equity interest in Terrane. We look forward to our continued involvement and to sharing in the future success of this exciting enterprise."
Robert Pease, President and CEO, Terrane, stated: "With project ownership now clarified, Terrane will move forward with financing alternatives to develop the Mt. Milligan project. Terrane shareholder value is firmly underpinned by a six million ounce, low-cost and construction-ready reserve."
Goldcorp Inc. recently announced the execution of a binding agreement with New Gold Inc. whereby New Gold will exercise its right of first refusal and acquire the 70% interest in the El Morro project held by Xstrata Copper Chile S.A., a wholly owned subsidiary of Xstrata Plc. Goldcorp will advance $463 million to New Gold to fund the exercise of the right of first refusal by a New Gold subsidiary. Following the acquisition of the 70% interest by the New Gold subsidiary, Goldcorp will acquire that subsidiary from New Gold. Goldcorp will pay New Gold $50,000,000 in cash upon closing of the subsidiary acquisition, and has agreed to amend certain terms of the El Morro Shareholders Agreement, including with respect to New Gold’s capital funding obligations.
El Morro is an advanced stage copper-gold project located in a mining friendly jurisdiction in north-central Chile, Region III, approximately 80 kilometres east of the city of Vallenar. On a 100% basis, El Morro contains proven and probable reserves of 6.7 million ounces of gold and 5.7 billion pounds of copper(1), with an additional 2.2 million ounces of gold and 1.0 billion pounds of copper in the measured and indicated resource categories.
“In El Morro, Goldcorp has identified an ideal project with which to re-enter one of the best mining jurisdictions in South America,” said Chuck Jeannes, Goldcorp President and Chief Executive Officer. “The foundation of our peer-leading growth profile is built on high quality, long-lived assets with low cash costs in politically stable jurisdictions throughout the Americas. As well, we look for large land positions with strong organic growth potential. By all of these measures, El Morro is a natural fit for our company. With full construction of Peñasquito nearing completion, the project team that delivered what will be one of the largest mines in the world on schedule and on budget will now bring their considerable expertise to bear in building this major project. Our strong balance sheet provides the freedom to begin advancing El Morro toward commercial production immediately upon the closing of this transaction, and we look forward to working with New Gold to develop this project for the benefit of the shareholders of both companies.”
Upon completion of the transactions Goldcorp will hold 70% and New Gold 30% of the El Morro project.
Goldcorp’s financial advisors are GMP Securities L.P. and its legal advisors are Cassels Brock & Blackwell LLP in Canada.
Goldcorp is the lowest-cost and fastest growing multi-million ounce gold producer with operations throughout the Americas. Its gold production remains 100% unhedged.
The Brazilian government wants participation in the output of mining companies in addition to greater royalties and taxes, Mines and Energy Minister Edison Lobao told a local newspaper.
Demand from China for oil and metals in recent years has prompted governments in mineral-rich countries to secure a greater stake in natural resource exports. Venezuela, Ecuador and Bolivia are cases in point.
In a raft of bills that the Brazilian government is drafting to reform existing mining laws, companies would also have to pay a new tax at the start of production, Lobao told O Estado de S. Paulo daily recently.
"The tariff (at the start of production) is being considered. The company will pay an initial tariff to begin output and it will then begin paying a share of output once it is producing," Lobao said. "The government share in production would be apart from the royalties."
Lobao said the government will also raise the royalty that mining companies now pay on their output but he added that the total increase in royalties and taxes would not overburden the sector.
The government has been drafting the new mining law for about a year and Lobao has argued that the royalty of roughly 2 percent that mining companies in Brazil currently pay is too low.
Brazil has been attempting to push through Congress a reform of its oil laws, in which the government would also take a share of production in new subsalt oil discoveries and raise its stake in the state-run oil company Petrobras.
The regulatory uncertainty has suspended investments in both sectors until companies know what changes in the operating costs are coming. Brazil's Vale is one of the world's three largest iron ore producers and there are other multinational mining companies operating in Brazil.
As with the oil reform laws, the mining reforms would likely only apply to new concession contracts and not existing ones.
It is reported that Horizonte Minerals is expanding its exploration portfolio with plans to start drilling next year on the Tucuma nickel project in the prospective Carajas mineral district in northern Brazil.
The move comes following a successful priority application by Horizonte and its JV partner LGA Mineracao e Siderugia for a licence covering the Tucuma project.
Horizonte said that the project formed part of its strategic association with LGA to explore and develop gold and base metal projects in recognised mining districts in Brazil.
Tucuma covers 100 square kilometres of prospective ground, identified on the basis of favourable geology and geophysical data and previous exploration work in the region. It is located approximately 15 kilometres south east of Vale's Onca Puma nickel mine and 40 kilometres north east of the Boa Esperanca copper project being developed by Caraiba Metais.
Rio Tinto Alcan and the Administracion Nacional de Electricidad have signed a Letter of Intention to confirm that they will begin negotiations regarding a power purchase agreement for a potential aluminum smelter in Paraguay.
Under the terms of this agreement, Rio Tinto Alcan will be working with ANDE to develop an energy and development agreement that balances a competitive electricity price for a state of the art aluminum smelter and its contribution to Paraguay's social and industrial development priorities.
Mr Sandeep Biswas senior VP Business Development and Growth of Rio Tinto Alcan said that "We are very pleased to be taking this first step towards a project that would further both our goal of investing in top tier projects and Paraguay's desire for sustainable economic development. This potential aluminum smelter project would benefit from both our clean, efficient, world-class technology and our expertise in sustainable development. Our leading technology and production processes are respected throughout the industry."
Mr Biswas said that "Safety, environment and ethical business practices are key commitments at Rio Tinto Alcan. Our operations would seek to contribute to long term employment and industrial development in Paraguay."
Rio Tinto Alcan is the global leader in the aluminium industry. Its operations in Latin America include shares in both the Porto Trombetas bauxite mine and Alumar refinery in Brazil. Rio Tinto's regional experience includes a 30 per cent share of Escondida, the world's largest copper mine, in Chile and development of the wholly-owned La Granja copper project in Peru.
TSX and ASX listed Australian miner Andean Resources (TSX, ASX: AND) will invest $200 million to bring a new gold/silver mining operation into production in Argentina's province of Santa Cruz (which encompasses Patagonia). The province is becoming potentially a major gold producer with AngloGold's Cerro Vanguardia operation being expanded and moving underground, Hochschild's San Jose silver/gold project also expanded recently and a number of important potential new mines being investigated by companies like Exeter Resource, Minera IRL and Mariana/IAMGOLD among others.
Reuters quoted Argentina's Planning Ministry as saying "Annual production is expected to reach 300,000 ounces of gold and 3 million of silver" following a meeting between Andean's President, Wayne Hubert and Argentinuian government officials. Work on the new mine, Cerro Negro, is due to commence in the second half of this year.
Cerro Negro is an advanced stage high grade gold exploration project on the low level Patagonian plains, not far from Hochschild's San Jose operation. Andean reckons project infrastructure is excellent with access to the property via 54 km of bitumen and 80 km of gravel roads from the nearest provincial town of Las Heras (110km NE) which provides the local on-shore oil fields located in Santa Cruz with basic manufacturing and service facilities. The main regional centre of Comodoro Rivadavia (pop. 140,000) has port and airport facilities and is situated 160km north east of Las Heras.
Within the Cerro Negro project boundary (comprising 25,000 hectares) are ten currently identified prospect areas with manifestations of epithermal gold mineralization. Only two of these, the Vein Zone and the Eureka West prospects, have been subject to systematic drilling by Andean. Within the overall Cerro Negro project, there are at least five zones of known epithermal mineralization.
The latest full resource figures give Measured and Indicated at 3.6 million tonnes at 15.24 g/t gold and 179 g/t silver for a contained 1.77 million ounces of gold and 20.8 million ounces of silver plus an additional inferred resource of 962,000 tonnes at 8.91 g/t gold and 79 g/t silver for a further 276,000 ounces of gold and 2.4 million ounces of silver, although resources on the Eureka vein have been significantly upgraded since these resource figures were published. The company already talks of more than 2.5 million ounces of gold, and as exploration continues this is likely to be extended further.
Reuters reported that MMX plans to reach a capacity of 33.7 million tonnes per year from the current 9 million tonnes per annum much of which will be dedicated to the growing Chinese market in need of raw materials for a surging steel industry.
The report quoted Roger Downey president of MMX as saying that "The total investment will be between USD 1 billion and USD 1.2 billion to take MMX to a production of 33.7 million tones. We should reach that (target) around 2014, 2015."
The investment is slated for the expansion of the Southeastern system, which includes the 7 million tonnes per annum Serra Azul mine and the Bom Sucesso project which is still not operational. The company also owns the smaller Corumba system, located in southwestern Brazil, which has a capacity of 2 million tonnes per annum.
MMX's production dropped this year to as low as 50% of capacity as a result of the 2008 financial crisis, but Downey said it is now back near capacity.
Last month MMX announced a USD 400 million deal to sell a 22% equity stake in the company to China's Wuhan Iron and Steel Co through a share offering expected to bring at least $200 million more from minority shareholders.
Mr Downey said the Wuhan deal, together with additional capital from minority shareholders, would allow it to pay off its current USD 600 million of outstanding debt. The accord includes a 20 year ore supply contract and an agreement to build a steel mill at Porto do Acu a port terminal controlled by EBX logistics subsidiary LLX.
MMX is also evaluating Greenfield projects in Chile after signing agreements in 2008 giving it the option to buy mineral production rights there.
Canada-listed coal miner SouthGobi Energy Resources Ltd. plans to raise up to HK$3.6 billion (US$465 million) from a Hong Kong initial public offering, according to a term sheet.
The company, owned by Canada-based Ivanhoe Mines, would sell 27 million new shares at a maximum offer price of HK$133.50 per share, according to the term sheet, Reuters recently reported.
The offering represented about 16.8% of its enlarged share capital, a source familiar with the deal said earlier.
SouthGobi has secured Asia's top sovereign wealth funds, China Investment Corp (CIC) and Temasek as cornerstone investors, each subscribing to $50 million worth of shares with a six-month lock-up period.
SouthGobi's IPO follows a $500 million investment from CIC announced in October.
The company is focused on expanding its coal production capacity in Mongolia, centred around its Ovoot Tolgoi mine 40 kilometers from the border with China.
Ovoot Tolgoi's production target for 2009 was 1.5 million tonnes and it planned eventually to extract 8 million tonnes of metallurgical and thermal coal a year from Ovoot Tolgoi, it said.
According to the term sheet, 75% of the offering would be allocated to institutional investors, 15% to Canadian investors and 10 percent to Hong Kong retail investors.
The company plans to price the deal on Jan. 22 and aims to list on Jan 29. The deal is being handled by Citigroup and Macquarie.
London-based Lotus Resources, which concentrates on exploration and mining projects in Mongolia and China, announced recently it has acquired a fluorspar mining license for the Tsagaan Chuluut project in Dornogobi Province, Mongolia.
In a news release, the company said the Tsaggan Chuluut deposit "is genetically and morphologically very similar to Mongolia's largest fluorspar mine, Bor-Ondor, which is located about 70 kilometers west-northwest of Tsaggan Chuluut.
The license covers a 33-hectare area and the project has an approved resource of 170,000 tonnes of fluorspar.
Historical exploration drilling has been conducted by joint Mongolian-Russian geologists teams and by the Mongolian-Russian joint venture Mongolrostsvetmet, which was one of Mongolia's largest gold producers.
Lotus CEO Simon Longworth said, "The successful acquisition of a second mining license is another significant step towards achieving our aim of building a profitable fluorspar mining and processing business in Mongolia. We are now in a position where we can quickly bring several fluorspar mines into production”
Neyveli Lignite Corporation (NLC) recently said that it proposed to venture into power generation and mining industries business, Economic Times reports.
NLC planned to participate in development of coal blocks allotted to State governments or coal based power generation under public private partnership with State government undertakings, a company press release said, detailing some of the salient features achieved by NLC in 2009.
The company also proposed to participate in competitive bidding of power for taking up Ultra Mega Power projects floated by the Power Ministry, it said.
Stating that NLC's performance between April-November 2009 has exceeded the target, despite heavy rainfall in the third quarter of 2009-2010, it said net sales for the first half of the year 2009-2010 was Rs 1,765.85 crore, compared to Rs 1,397.40 crore the previous year.
On new projects, NLC said the pre-commissioning activities of the Rs 5,560.31 crore Rajasthan Lignite Mine-cum-Power Project were on "full swing". The 2x125 MW Barsingsar Thermal Power project and the second unit of the plant was also expected to be commissioned in March 2010, it said. For expansion of 2x250MW Thermal Power Station-II, NLC said the first unit was expected to be commissioned in Aug 2010 and the second in February 2011.
In the Barsingar Mine project, lignite production commenced in Nov 2009 and attained full capacity this month, it said. With implementation of the projects,the mining capacity would be increased from 24 million tonnes to 30.6 million tonnes per annum and power generation capacity from 2,490 MW to 3,240 MW in 2010, it said.
Since its inception, NLC witnessed "over Burden removal" of around 158 million cubic metres, lignite production of around 23.4 million tonnes and power generation of around 18,100 million units, the highest in 2009, the release added.
Emerging coal producer Kangaroo Resources announced that it has significantly enhanced its production pipeline in Indonesia after reaching agreement to acquire a coking coal project in East Kalimantan.
Under an agreement with TSX listed mining company SouthGobi Energy Resources Kangaroo will acquire all of SGER’s mining assets in Indonesia, including their 85% interest in the Mamahak Coking Coal Project for USD 1 million in cash and the issue of 50 million KRL shares.
The acquisition increases the total number of coal projects in KRL’s portfolio to eight, representing another major milestone in the Company’s rapid transformation into a significant Indonesian coal producer.
The Mamahak Project has a JORC resource of 10.22 million tonnes of high quality coking coal, extensive infrastructure capable of supporting up to 1.5 million tonnes per annum coal production and a large 30,000 tonne coking coal stockpile ready for immediate delivery.
Churchill Mining Plc has announced the completion of the feasibility study for its flagship project, the 75% held East Kutai coal project in Indonesia, confirming a preferred 20 million tonne per annum production rate. The company anticipates project construction work at EKCP to start in 2010 and take two years to complete.
Churchill Mining Plc's wholly owned subsidiary PT Indonesia Coal Development has been selected as a prospective thermal coal supplier to Indonesia's PT Cirebon Electric Power, which is building a 660 MW power plant in West Java which is due to start operations in 2011.
Churchill has put the project's infrastructure items out to tender and this process is well advanced. To date the bids received have been well below predicted costs due to the resurgence in global manufacturing and engineering capabilities following the global financial downturn.
It anticipates completion of its tender process and final evaluation of the bids by the end of January 2010. It will then be in a position to further inform investors of the expected capital cost and life-of-mine financial returns.
The feasibility study envisages that the EKCP coal will be transported from the mine, ultimately made up of three open pits, using a 160 kilometers overland conveyor system comprising eight flights at a speed of 5 metres per second, powered by a coal-fired plant using EKCP coal.
Churchill is now undertaking final bathymetric and wave, wind and tide studies for the future port facility. Tenders for the port piling and coal loader have been received.
Mr Paul Mazak CEO of Churchill Mining said that "We look forward to announcing the associated results of our economic modeling early next year. Churchill is still evaluating how best to generate value for shareholders. Our options include the sale of the project or company, the development of EKCP with a JV partner or the financing and implementation of the EKCP by Churchill itself. We continue to have discussions with a number of interested parties and the company hopes to be position next year to announce the results from these negotiations."
Coal India Ltd said it was exploring the possibility of developing coking coal mines jointly with Steel Authority of India Ltd and TATA Steel to secure coking coal supplies instead of handing over the mines to the steel behemoths.
P.S. Bhattacharyya, chairman of CIL, said that CIL and TATA Steel are jointly working on a coking coal mine within the Bharat Coking Coal Ltd command area, having an estimated 7 million tonnes of reserves.
Bhattacharyya said that CIL's intention was to first identify blocks and then think of exploring, mine planning and extracting coal from such blocks jointly with companies like SAIL and TATA Steel.
SAIL and TATA Steel jointly submitted a proposal to the Union government seeking control of coking coal blocks, which CIL has been neglecting for a long time.
According to Bhattacharyya, anyone who wants to develop mines would have to come via the bidding route but pointed out that securing coking coal is a challenge.
CIL, SAIL, NTPC Ltd, Rashtriya Ispat Nigam Ltd and National Mineral Development Corporation Ltd incorporated International Coal Ventures Ltd in May this year for hunting overseas coal assets and securing supplies of coking coal as well as thermal coal. The ICVL has not yet been successful in securing foreign coal assets.
Oxus Gold has entered into conditional agreements with a consortium of Chinese investors to invest and arrange financing of a total aggregate amount of US$185 million to help develop the company's gold project in Uzbekistan and increase production to 0.3 Moz (million ounces) of gold annually after 2011.
Under the terms of the financing, members of the concert party will make an investment in Oxus of US$85 million through an issue of new ordinary shares and convertible loan notes and will be granted warrants to subscribe for new shares in the company for US$20 million in return for an undertaking to arrange a further minimum of US$80 million in project finance.
The planned program on the company's 50% owned Amantaytau Goldfields joint venture (JV) in Uzbekistan will include the expansion of its existing open pit heap leach mining operations, the development of one of more underground mines and accelerated exploration. The Uzbek government controls the remaining 50 percent.
The proceeds are expected to allow AGF to target first production at the project for the middle of 2011 and an increase in annual production to 0.3 Moz.
The concert party consists of Baiyin Non-Ferrous Group Co Ltd, CITIC Construction Co Ltd and Chang Xin Yuan Su Equity Investment Fund Management LP. Baiyin and CITIC are ultimately owned and controlled by the government of the People's Republic of China. Chang Xin is a private equity fund registered in the People's Republic of China and managed by Long March Investment Consulting.
The members of the party will subscribe to 573 million shares in Oxus at 6 pence each, which will represent a 59.7% shareholding in the company.
"Oxus will also be able to draw on the concert party's extensive technical expertise and we very much look forward to working with them. All parties will now focus on obtaining the relevant governmental agreements and approvals as soon as possible, and we continue to target 2011 for first gold production from the underground mine at AGF," said Oxus chairman Richard Shead.
Oxus Gold has an unofficial in-house estimate of 24 million ounces of gold and almost 500 million ounces of silver for the total Amantaytau resource.
The mine plan for the project envisages gold production of 100,000 ounces per annum over 12 years. Total cash costs are expected to be approximately US$377 per ounce of gold produced, including royalties and operating taxes. Ungeared NPV for the project is US$103.7 million at a 7% discount rate per annum, the IRR is 34.8% and the payback is 30 months from the start of production. The ore will be processed using bio-oxidation technology provided by Gold Fields.
Zinc metal producer Nyrstar NV has offered around A$148 million ($137 million) for Australian zinc miner CBH Resources in an unsolicited move to secure further access to raw materials.
A takeover could redirect more than 59,000 tonnes of zinc in concentrate shipped annually to Toho Zinc in Japan to Nyrstar smelters in Australia and Europe.
It also comes as Nyrstar's major source of supply in Australia, the Century zinc mine owned by Minmetals, nears the end of its natural mine life.
Nyrstar already buys all the lead mined by CBH from its Endeavor mine in central Australia, though the more-prized and plentiful zinc ore is bought by Toho and shipped to Japan for smelting.
Toho owns 23% of CBH's stock and is the company's largest shareholder.
CBH this year is reactivating equipment, idled in 2008 when zinc prices crashed, that will allow it to more than double ore production to 850,000 tonnes, yielding about 59,000 tonnes of zinc metal and 30,000 tonnes of lead.
Lead ore from the mine is fed to a Nyrstar smelter in nearby Port Pirie, Australia.
CBH is also seeking various approvals to develop a second Australian mine starting later this year that will eventually match the size of the Endeavor lode.
Newcrest Mining Ltd (ASX: NCM; OTC: NCMGF) has received approval to develop the Cadia East project at its Cadia mining operations in northern NSW, a development expected to cost A$2 billion (US$1.83 billion).
The company which is Australia's dominant domestically-owned gold producer has had Cadia East under blueprint as its next mining step at the mining centre which produces most of NSW's gold.
Newcrest's general manager Cadia Valley Operations, Tony McPaul, said that receipt of planning approval was a critical next step in the project which was now expected to be considered by the Newcrest Board around the end of the first quarter in 2010 "after remaining regulatory approvals have been finalised."
"If approved by the board, the Cadia East project will be the largest underground mine in Australia and will secure our future in the region for at least the next 20 years," McPaul said.
It will be Newcrest's first panel cave, building on our expertise in underground mining.
He said Cadia East will mean significant ongoing direct and indirect employment and economic activity for the region. At the peak of construction about 1,300 employees will be required.
"We are delighted that the extensive environmental impact studies and community consultation process has culminated in the awarding of approval," he added.
Newcrest was now ranked as Australia's largest gold miner, ahead of Barrick Gold and Newmont Mining Corporation, and third largest mining company.
The company has seven operating mines in Australia, Indonesia and Papua New Guinea and has a market capitalisation of over A$18 billion (US$16.47 billion).
On 5 June 2009, BHP Billiton and Rio Tinto signed an agreement of core principles to establish a production joint venture covering the entirety of both companies' Western Australian iron ore assets. The companies on December 5, 2009 signed binding agreements on the proposed JV that cover all aspects of how the joint venture will operate and be governed.
The companies have also filed submissions with the European Commission and the Australian Competition and Consumer Commission in relation to the proposed production joint venture and expect to submit filings in other relevant jurisdictions shortly. The companies understand that the European Commission will review the production joint venture under Article 101 (formerly Article 81). Taking into account all regulatory review processes and shareholder approvals, BHP Billiton and Rio Tinto anticipate completion of the JV in the second half of calendar year 2010.
The production joint venture encompasses all current and future Western Australian iron ore assets and liabilities and will be owned 50:50 by BHP Billiton and Rio Tinto. It will deliver substantial synergies resulting from combining the companies' Western Australian iron ore operations, with the aim of producing more iron ore at lower cost. BHP Billiton and Rio Tinto believe the net present value of these unique production and development synergies will be in excess of US$10 billion (100 per cent basis). As previously outlined, these synergies are anticipated to come from:
■Combining adjacent mines into single operations;
■Reducing costs through shorter rail hauls and more efficient allocations of port capacity;
■Blending opportunities which will maximise product recovery and provide further operating efficiencies;
■Optimising future growth opportunities through the development of consolidated, larger and more capital efficient expansion projects;
■Combining the management, procurement and general overhead activities into a single entity.
BHP Billiton CEO, Marius Kloppers, said, "We are very pleased to now have formal and binding agreements in place to develop this important joint venture. With the history of both companies' attempts to join together these two world-class iron ore operations in Western Australia at various times, this deal has effectively been more than a decade in the making. It is an important milestone towards delivering substantial additional benefits to both sets of shareholders, and to the shareholders of our respective joint venture partners in the Pilbara."
Tom Albanese, chief executive, Rio Tinto, said, "Signing binding agreements brings us one step closer to unlocking the full production potential of our Pilbara iron ore assets and achieving substantial benefits for all our stakeholders. Completing the joint venture is a priority for Rio Tinto in 2010 and I look forward to realising this vision and capturing the synergies for our shareholders."
On 15 October 2009, BHP Billiton and Rio Tinto announced that the partners would not proceed with any joint venture marketing activity. This is the only material change to the non-binding core principles agreement signed on 5 June 2009. The production joint venture will deliver all its iron ore output to BHP Billiton and Rio Tinto to sell independently through their own marketing groups.
Regency Mines has commenced detailed planning of a USD 500,000 exploration program in the Lake Johnstone Greenstone Belt in Western Australia, where its tenements cover approximately two thirds of the 240 kilometres long belt.
The program is based on interpreted results from a SkyTEM aeromagnetic survey carried out over the Tay Munginlup section of the belt last year and will test two targets in Area 4 where nickel sulphide and gold targets have been identified.
These targets are located on a section of the greenstone belt that is cross cut by the Jerdacuttup fault, a major structure separating the Archaean Yilgarn Craton from reworked equivalent rocks of the younger Munginlup Gneiss. The Tropicana gold project (AngloGold Ashanti Independence Group), with a current gold resource of just over 5 million ounces, lies approximately 600 kilometres to the north east in a similar geological and structural setting.
Mr Andrew Bell chairman of Regency said that "The Southern Yilgarn hosts many substantial nickel and gold deposits but this belt is largely unexplored and in part only recently discovered. The northern section of the Lake Johnstone belt hosts the Emily Ann and Maggie Hays nickel sulphide mines, but the southern section of the belt is at the stage where geophysics has been done and has shown many targets to exist, but has not been followed up by drilling."
He added that "Regency controls approximately 220 kilometres of this belt, including 60 kilometres of untested ground in the newly recognised southern section and 60 kilometres of hypothesised lateral extensions. The recovery in nickel prices this year is very welcome and if this trend continues the Lake Johnstone belt could once again be seen as a key nickel exploration area."
The planned exploration programme will test nickel targets along the magnetic anomaly and gold-base metal targets in the conductive shear zone along the continental margin. The first stage, scheduled for January, is a ground electromagnetic survey to further define the target zone so as to minimise the amount of drilling, and Mobile Metal Ion geochemistry over magnetic and conductive targets.
JFE Steel Invests $555 Million in Australia Coal Mine
JFE Steel Corp., Japan’s second- largest producer, will invest 50 billion yen ($555 million) in a coal mine in Queensland, Australia, including an acquisition of a 20 percent stake, its biggest investment in coal, Bloomberg reports.
The investment in the mine, owned by QCoal Pty, includes capital expenditure on factory and mining machinery, Akira Suzuki, general manager of the raw materials department, told reporters in Tokyo recently. The unit of Tokyo-based JFE Holdings Inc. signed a long-term contract to secure 2 million metric tons of hard coking coal annually from the Byerwen coal mine.
JFE is seeking to secure coking coal and iron ore as global competition for raw materials intensifies. The Byerwen coal mine will start operations in 2012, and is expected to produce 10 million tons of coal a year, according to a JFE statement.
A group comprising Japan’s five largest blast furnace mills, including JFE, South Korea’s Posco and trading company Itochu Corp. announced a plan last October to buy 40 percent of Brazilian iron-ore producer Nacional Minerios SA for about $3.12 billion.
Poland has sold 10 percent of KGHM, Europe's second biggest copper producer, for some $720 million, riding a buoyant metals market as it embarks on an ambitious plan to raise at least $8.8 billion from privatizations in 2010.
The shares changed hands recently in off-market transactions at 103 zlotys each, Reuters data showed. The price set by Poland's treasury after it completed bookbuilding for the deal, which the treasury said was oversubscribed by 50 percent.
The ministry added in a statement that 56 percent of the shares offered were obtained by local investors, including pension funds, which bought around a third of the stake.
The centre-right government, which expects its budget deficit to soar to 52.2 billion zlotys ($18.2 billion) in 2010, said last year it would sell as much as 10 percent of KGHM on the market in 2010 but retain control over the miner.
KEFI Minerals PLC said it has started a drilling program at the Bakir Tepe project in southwest Turkey with the aim of testing a large geophysical anomaly that is interpreted to potentially be related to a Cyprus-style copper-gold volcanic-hosted massive sulphide (VHMS) deposit.
The exploration company with projects in Turkey and the Kingdom of Saudi Arabia is investigating Bakir Tepe as a joint venture with Centerra Gold Inc. Centerra has the right to earn a 51 percent interest in the project upon contributing US$750,000 to the JV over two years with a minimum expenditure of US$350,000 in the first year. KEFI Minerals is the manager of the joint venture.
The 900 metre drilling programme is planned to comprise three diamond drillholes targeting an anomaly down dip of surficial mineralisation that has returned up to 3.6% copper, 4.6 g/t of gold, and 67 g/t silver in rock chip samples.
The Bakir Tepe Project is located in the Burdur Province of southwestern Turkey and comprises seven tenements, which cover approximately 78 square kilometres within the Lycian Ophiolite Belt and recent work carried out by KEFI Minerals has identified the potential for Cyprus-style copper-gold VHMS deposits.
Also in a JV with Centerra, KEFI Minerals is currently conducting a drilling program at the Artvin gold project in northeastern Turkey targeting a very large geophysical gold and base metals anomaly identified on surface. Centerra is funding exploration there in order to earn up to 70 percent of Artvin upon expenditure of US$6 million.
KEFI's projects include seven in Turkey, targeting +1 million gold-ounce equivalent deposits. The company recently engaged in exploration activities in Saudi Arabia, where it established the Gemco Ltd joint venture (KEFI: 40 percent) with local construction and investment group ARTAR, targeting a 1 million oz gold deposit in the Precambrian Shield. KEFI and ARTAR have already lodged ten exploration licenses with the Saudi Arabian authorities.
McIlvaine Company
Northfield, IL 60093-2743
Tel: 847-784-0012; Fax: 847-784-0061
E-mail: editor@mcilvainecompany.com
Web site: www.mcilvainecompany.com