April Newsletter – 01.04.19


Behre Dolbear sponsors Asian Mining Club Luncheon

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Date: 03 April 2019 (Wednesday)

Time: 07:00pm Reception, 07:30pm to 9:30pm Dinner

Venue: Chatham Room, 7thFloor, Conrad Hotel, Admiralty

Price: Behre Dolbear guest

Dress code: Business Attire

Traditional sources of capital for the mining sector are being disrupted- in some markets in.2018 new equity issuance by mining companies was at its lowest level in 20 years. The lack of capital for the sector has opened the door for alternative capital providers to provide the source of funding still needed by a capital intensive industry. Increasingly Private Equity and Streaming companies are filling the gap and providing needed capital to mining companies as well as generating attractive returns for their investors. Streaming financing has been at the forefront of alternative capital for the mining sector with companies like Wheaton Precious Metals leading the way. The Asia Mining Club is pleased to present Randy Smallwood, President and CEO of Wheaton Precious Metals, discussing the future of mining finance and how streaming companies are providing capital for the next generation of mining projects.

Behre Dolbear is again a proud sponsor of SME’s 7th annual Current Trends in Mining Finance (CTMF 2019) Conference in New York City on Sunday April 28 to Wednesday May 1, 2019. Chris Wyatt, Director of Behre Dolbear, will Chair a round table discussion about Ocean Minerals: A New Frontier to Recover Minerals and Barney Guarnera, Director and Principal of Behre Dolbear, will be a co-panelist as part of a round table discussion about SEC Rule S-K 1300: Modernization of Property Disclosure for Mining Registrants. We hope to see you there!

Visit the CTMF website with content-rich agenda here https://community.smenet.org/currenttrendsinminingfinance/program/program56


China’s top two steel producing cities to extend output curbs -sources

BEIJING, April 1 (Reuters) – Steel mills in the two biggest steelmaking cities in China – Tangshan and Handan – will be required to continue production restrictions in the second quarter as part of local governments’ efforts to improve air quality, multiple industry sources said.

Mills in the two cities will have to cut back the operations at about 20 percent of their blast furnaces under the restrictions for the April to June period, down from 30 percent for the restrictions during the November to March period, according to the five sources who spoke to Reuters on Friday and Saturday.

Industrial emissions are a major source of air pollution. Local governments in smog-prone northern China have ordered factories during the past two years to cut output during the Northern Hemisphere winter to meet air quality targets set by Beijing.



Rout Hammers Palladium After Slew of Bubble Warnings

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Palladium posted the biggest weekly decline in more than three years as investors’ focus turned to demand amid concerns over slowing global growth.

The metal used in auto catalysts to curb emissions sank for the three days through Thursday before paring losses, putting it on course for an 11 percent weekly drop. The metal hit an all-time high on March 21 after a massive rally that spurred predictions a reversal was inevitable, with hedge funds cutting bullish bets.

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West Africa — an emerging gold exploration investment hotspot

West Africa is well endowed with mineral resources, and many world-class deposits have been discovered there in recent years. The region is a key source of gold, iron ore, bauxite, diamonds, phosphate, uranium, and its mainly untapped mineral wealth provides exceptional greenfield development potential.

But despite increased interest in the whole spectrum of commodities in West Africa, the region is a hotspot for investment in gold exploration.

Foreign companies invested billions of dollars in gold exploration activities over the past few years, resulting in West Africa having the biggest growth rate in the yellow metal’s resources in the world.

Data compiled from Mining Intelligence’s proprietary database demonstrates the number of gold asset changes within West Africa’s mining development pipeline.

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AngloGold to comply with South Africa mining rights directive

Bloomberg News

AngloGold Ashanti Ltd. is complying with an order from South Africa’s Department of Mineral Resources to amend its mining rights to reflect black economic empowerment, the company’s spokesman Chris Nthite said.

The world’s No. 3. gold producer may have contravened black economic empowerment rules tied to its mining rights when it awarded a 4.5 percent stake to employees instead of 6 percent, City Press reported Sunday. The other 1.5 percent was sold to a firm belonging to company Chairman Sipho Pityana. AngloGold denied there was anything wrong with the two transactions, the paper said.

The department directed the company to amend clauses on two of its mining rights to accurately record the two local ownership deals, Nthite said. “We have submitted an application for consent to amend those clauses accordingly,” the spokesman said. “We were also requested to provide certain information and we have provided the requested information. We have fully complied with the directive.”

Failure to comply with the directive could have placed South Africa-based AngloGold’s mining licences in the country at risk of cancellation, City Press said.



MEC to purchase Mission assets

Murray Energy Corp. (MEC) was selected as the successful bidder to acquire the Oak Grove, Seminole Alabama and Maple Eagle Mining complexes, located in Alabama and West Virginia, from Mission Coal Co. LLC, through the Mission bankruptcy proceedings. Mission accepted Murray Energy’s bid and filed notice with the bankruptcy court on March 27.

MEC has formed a new, majority-owned subsidiary company, Murray Metallurgical Holdings LLC, to acquire and operate the Mission assets, with its existing joint venture partner, Javelin Global Commodities (UK) Ltd., as the minority owner of the subsidiary.


Russia is stocking up on gold as Putin ditches U.S. dollars

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Vladimir Putin’s quest to break Russia’s reliance on the U.S. dollar has set off a literal gold rush.

Within the span of a decade, the country quadrupled its bullion reserves, and 2018 marked the most ambitious year yet. And the pace is keeping up so far this year. Data from the central bank show that holdings rose by 1 million ounces in February, the most since November.

The data shows that Russia is making rapid progress in its effort to diversify away from American assets. Analysts, who have coined the term de-dollarization, speculate about the global economic impacts if more countries adopt a similar philosophy and what it could mean for the dollar’s desirability compared with other assets, such as gold or the Chinese yuan.

French President Emmanuel Macron said in an interview with CNN in November that European corporations and entities are too dependent on the U.S. currency, calling it “an issue of sovereignty.” Last year, Poland and Hungary surprised analysts by making the first substantial gold purchases by a European Union nation in more than a decade.



PolyMet Gets Final Federal Permit for NorthMet Project

Poly Met Mining Inc., a wholly-owned subsidiary of PolyMet Mining Corp., announced the U.S. Army Corps of Engineers has issued its Record of Decision and Section 404 wetlands permit for the NorthMet Project. Along with recently issued state permits, PolyMet now holds all necessary permits to construct and operate the NorthMet copper-nickel-precious metals mine and processing plant located near Hoyt Lakes, Minnesota.

PolyMet also announced it has entered into an extension agreement with Glencore AG with respect to the approximate US$243 million in secured convertible and non-convertible debt owing to Glencore, which is due to mature on March 31. Glencore has agreed to extend the maturity date of the debt to provide PolyMet time to prepare for and complete a rights offering by June 30, fully backstopped by Glencore, to raise sufficient funds to repay the outstanding debt. In connection with the extension agreement, the company has also agreed to issue additional purchase warrants to Glencore and to make certain amendments to the existing exchange warrants held by Glencore, subject to applicable stock exchange approval.



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