November Newsletter – 02.11.2020


  • Osisko could breathe life back into BC’s Barkerville Gold Mines
  • Nova Resources takes KAZ Minerals private in GBP 3 billion takeover
  • Takeovers Panel faced with Cardinal chaos
  • Fortescue sees early signs steel-making recovery in Japan, South Korea
  • Mining magnate Gina Rinehart tops the rich list again after DOUBLING her wealth to $29billion during the pandemic – as the top ten wealthiest Australians are revealed
  • Glencore beats production estimates but trims coal guidance
  • Taiwan Taking Firmer Stance on Chinese Sand Dredgers
  • The Chinese Government Creates the Country’s Second-largest Coal Mining Conglomerate in Shanxi

Osisko could breathe life back into BC’s Barkerville Gold Mines

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Osisko Gold Royalties’ Barkerville Gold Mines’ Cariboo gold project.

British Columbia’s next new gold mines could be in production as early as 2022 and promise to breathe life back into B.C.’s historic Barkerville region.

Osisko Gold Royalties Ltd. (TSX,NYSE:OR) completed a reverse takeover earlier this month of shell company Barolo Ventures Corp. (TSX-V:BVC.H) to form Osisko Development, which will assume the development of the Cariboo Gold project.

That’s the large gold district assembled by Barkerville Gold Mines (BGM), which Osisko Royalties acquired in November 2019. The new company has also been given the San Antonio Gold project in Mexico to develop.

The spinout will leave Osisko Royalties as a pure play gold royalty and streaming company, with a majority interest in Osisko Development mines.

The announcement of the new company came on the same day Osisko published drill results confirming high grades of gold for the Cariboo Gold project, which is not so much a single gold mine, but a district with multiple potential mines.

“The mineralized trend that we’ve mapped out is 83 kilometres long in two pieces that are parallel to each other,” Osisko Royalties CEO Sean Roosen told BIV.

The most recent drill results confirm high grades of gold in multiple zones, notably Cow Mountain.

Mickey Fulp, publisher of the Mercenary Geologist, said the drill results published last week are “same old, same old” – which is to say “fabulous.”

“It’s not really news in the fact that they’ve been doing this for three-plus years,” Fulp said. “Those drill result were perhaps a nice little opportunity to show, once again, how good the project is.

“This Cariboo Gold project, it’s got six million ounces of gold and it’s growing. This is the best project in Canada, no doubt in my mind. This is Canada’s next big gold belt, and it certainly is B.C.’s next mine. There is nothing else on the horizon in B.C., as far as gold goes, that will be profitable in the near term.”

Nova Resources takes KAZ Minerals private in GBP 3 billion takeover

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High growth copper company Nova Resources has acquired Kazakh mining company KAZ Minerals in a GBP 3 billion take-private deal. Listed on the Canadian Venture Exchange, Nova Resources is a company owned and controlled by a group of investors which was formed by two of KAZ Minerals’ largest shareholders, Kazakhstani businessmen and billionaires Vladimir Kim and Oleg Novachuk, who is also KAZ’s chairman. Nova Resources already owns a 39% interest in KAZ. The recommended all-cash offer to purchase the remaining shares in the company will be financed using debt and will be executed using a scheme of arrangement. United Kingdom-registered copper mining company KAZ holds most of its assets in Kazakhstan, and has retained a public listing on the London Stock Exchange and the Kazakhstan Stock Exchange. The company’s shares will be delisted following the acquisition’s close, which is expected to take place in the first half of 2021, subject to antitrust and regulatory clearances. KAZ’s main focus is on the production of cheap and large-scale copper using copper mines in Kazakhstan and the Commonwealth of Independent States region. For KAZ, the disposal has strategic benefits, allowing the company to focus on a capital-intensive strategy with long-term growth at its core. Therefore, KAZ believes that the development of some of its assets such as its Russia-based copper mine Baimskaya will be best done away from the public markets and as a private company. In a statement, Novachuk said: “Driven by the current market uncertainty and the corporate circumstances of sequential development projects, we believe that KAZ Minerals’ long-term interests would be best served as a private company.”

Takeovers Panel faced with Cardinal chaos

PERTH ( – The Australian Takeovers Panel has been left to muddle through the Cardinal Resources tussle, having now been approached by all the invested parties.

Takeover target Cardinal Resources on Friday submitted an application to the Takeovers Panel to allow both suitors, Shandong Gold Mining and Nordgold, to improve their respective A$1 a share offer, as both companies had issued last and final statements.

A stalemate was reached last week after Nordgold upped its own 90c a share offer to match the A$1 a share offer from Shandong, after the Chinese firm had issued its last and final statement saying it would only increase its offer price if its A$1 a share bid was exceeded.

With Nordgold matching the Shandong offer, it effectively prevented the Chinese suitor from increasing its own offer price.

Nordgold previously turned to the Takeovers Panel to seek orders reaffirming that Shandong would be unable to increase its offer price, unless a bid higher than A$1 a share was made.

Cardinal Resources has now also approached the Takeovers Panel, asking that both suitors be allowed to increase their offer price, given that Cardinal’s shares have been consistently trading above the A$1 a share benchmark set, and since it appeared that “no shareholders have accepted either bid as a result of the last and final statements”.

Cardinal argued that by allowing both parties leave to raise their offer price, the current stalemate between the bidders would be freed.

Meanwhile, Shandong Gold Mining on Monday also filed an application with the Takeovers Panel, with the company trying to nul shareholder MM Asset Management’s (MMAM’s) earlier acceptance of Nordgold’s 90c a share offer, and requesting its release from its best and final statement, allowing the company to raise its offer price for Cardinal.

Shandong pointed out that MMAM had sold off more than 48.5-million shares in Cardinal through a series of on-market transactions on the day Cardinal initially increased its offer price from 66c a share to 90c a share, effectively giving Nordgold an 8.55% interest in the takeover target.

Shandong argued that MMAM’s actions were not economically rational when taking into account that there were good prospects of the competitive bidding process continuing, and that a material volume of the accepted shares could have been sold on market at a price higher than 90c a share, at a date after Nordgold’s first increased offer.

Fortescue sees early signs steel-making recovery in Japan, South Korea

Australia’s Fortescue Metals Group Ltd FMG.AX posted a 5% rise in first-quarter iron ore shipments on Thursday, fed by robust Chinese demand for the key ingredient in steelmaking, which an executive said was also improving elsewhere in Asia.

Iron ore prices have stayed buoyant this year despite a coronavirus-induced slump in demand for most commodities, as the world’s top metals user China ramped up infrastructure spending to counter the economic shock from curbs against coronavirus.

Signs are emerging of a recovery in other steel-making markets, said Greg Lilleyman, chief operating officer at the world’s fourth largest iron ore producer.

“Steel-making activity is starting to pick up across Japan and Korea recently,” he told a news briefing.

Peer Rio Tinto RIO.AX had warned in October that a virus resurgence was putting global economic growth at risk, and that steel production outside China had dropped sharply.

Iron ore prices have tempered from last month’s five year highs, given easing coronavirus-related supply restrictions and lower stimulus spending from China, although analysts anticipate further global easing measures could support prices.

“We expect FMG will find support from investors given the price environment as well as potential for additional stimulus (driving demand),” RBC analysts said in a note.

Fortescue’s Chief Executive Elizabeth Gaines said on Thursday she welcomed the approach by investors worth $10.2 trillion who said they had written to the boards of global mining companies to better understand their engagement with First Nations people after Rio Tinto destroyed an ancient rockshelter in May.

In a government inquiry into the disaster, the Aboriginal Wintawarri Guruma group said Fortescue was withholding royalty payments of nearly A$2 million ($1.4 million) until it signed off on mining leases at the firm’s $287-million Queens Valley project, home to many sacred sites.

“The Queens Valley approval process has recommenced,” said Gaines, adding that the move was the outcome of discussions with Wintawarri, which Fortescue has met six times since June.

“We are working hard to facilitate the payment of those royalties.”

The Perth-based miner shipped a record 44.3 Mt of iron ore in the quarter ended Sept. 30, up from 42.2 Mt a year earlier, and in line with UBS estimates of 44.1 Mt. It said it was “well-positioned” to meet its full-year iron ore shipment forecast of 175 million tonnes to 180 million tonnes (Mt).

Mining magnate Gina Rinehart tops the rich list again after DOUBLING her wealth to $29billion during the pandemic – as the top ten wealthiest Australians are revealed

The title of Australia’s richest person for 2020 has been snapped up by mining magnate Gina Rinehart.

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The Australian Financial Review released part of its 38th Rich List on Thursday, revealing Ms Rinehart is now valued at $28.89billion – up from $13.81billion in 2019.

Iron ore tycoon Andrew ‘Twiggy’ Forrest scored the second position on the list, while businessman Anthony Pratt came in at third after topping the list for three years.

AFR attributed Ms Rinehart’s wealth to the price of iron ore surging to about $US120 per tonne, a price it has not reached since the early 2010s.

At the same time her Roy Hill mine in Pilbara plans to pay a maiden dividend of $475million five years after making first shipment out of WA.

Her company Hancock Prospecting is based in Western Australia, which has had its borders closed off to the rest of Australia since the outbreak of the COVID-19 pandemic, and has been leading the charge for the states’ job recovery,

Earlier this year Hancock Prospecting released a post stating: ‘We support WA jobs for recovery.

‘West Australian is built on mining and agriculture. We are too.’

Dr Forrest, founder of Fortescue Metals Group, was ranked second on the list.

Glencore beats production estimates but trims coal guidance

JOHANNESBURG (Reuters) – Glencore GLEN.L reported stronger third-quarter production but its shares fell after it lowered its 2020 coal production guidance by 5.7% as a strike at the Cerrejon mine in Colombia entered its 60th day on Friday.

Cerrejon, owned equally by Glencore, BHP Group BHPB.L and Anglo American AAL.L, has been in negotiations with its largest union and on Wednesday said that “significant advances” had been made.

With Glencore’s year-to-date coal production down 20% at 83.5 million tonnes, partly owing to the Cerrejon strike, the company downgraded its full-year output guidance to 109 million tonnes from 114 million tonnes.

Glencore’s London-listed shares were down 2.4% by 0804 GMT.

The group maintained its 2020 guidance for all other products.

Copper production was up 17.6% from the previous quarter at 347,000 tonnes, partly because of an end to coronavirus-related mine shutdowns in various countries.

“Glencore has bettered our estimates in Q3, a trend we have been generally seeing as companies recover from COVID-19 impacts from Q2,” RBC analysts said.

Taiwan Taking Firmer Stance on Chinese Sand Dredgers

Taiwan is taking a harder stance on Beijing’s sand dredgers after its parliament passed proposed legislation on Oct. 29 imposing heavier penalties for unauthorized sand mining in Taiwanese waters.

According to China Times, offenders could be sentenced in prison from one to seven years and facing fines of up to $3 million.

The draft legislation also addresses the storage and handling of confiscated vessels or equipment.

The Chinese Government Creates the Country’s Second-largest Coal Mining Conglomerate in Shanxi

China is consolidating its smaller coal-producing units in Shanxi through the merger of its smaller debt inducing coal production units

The latest merger of China’s state-controlled coal companies in Shanxi is set to be the country’s second-largest coal conglomerate. The merger is still in the works and comes after the recent Shandong Energy merge between Yankuang Group and Shandong Energy.

The Shanxi mines are merging into one company- Jinneng Holding. This company is expected to absorb these mining companies-

  • Datong Coal Mine Group
  • Shanxi Jincheng Anthracite Mining Group
  • Shanxi Lu’an Mining Industry Group
  • Taiyuan Coal Exchange Centre

The exact coal production of Jinneng Holding remains unknown but consolidated, the Shanxi province will surpass Inner Mongolia Yitai in terms of coal production. The consolidation comes as an attempt to “modernise and restructure” coal production and it’s also a move to unite China’s coal mining and power generating units.


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