Mining Sector: Anglesey Mining jumps on LIM's deal with Tata Steel
LIM and Tata will work together to ensure the successful joint development of rail and port infrastructure facilities at Schefferville and Sept-Iles.
Tata will purchase an initial 51% joint venture interest in LIM's Howse deposit for a $30m in cash and LIM will acquire the right to develop the Tata Timmins 4 deposit at a rate of $2 per tonne.
Kenmare Resources [LON:KMR] posted after-tax profits of $49.5m for the year to the end of December - up from $23.7m last time.
Kenmare - which operates the Moma titanium minerals mine in Mozambique - said revenues rose to $234.6m from $167.5m and earnings before interest, tax, depreciation and amortisation of $98.9m - up from $71.7m last time.
Looking ahead, chairman Justin Loasby says he belives 2013 will be a watershed year for Kenmare.
He said: "Until now the company has been developing and building its assets at Moma.
"With the 50% expansion coming on stream, we are now at the point where we can concentrate on operating the assets to achieve a sustainable return on the investment which has gone into their development.
"Shareholders have supported the company with great patience during the long investment period, and the Board remains focused on getting to a position where our net cash inflows from operations will enable us to start paying dividends to our shareholders at prudent levels.
"In order to do so, the company must, in accordance with its financing agreements, meet a number of conditions, which include paying the deferred portion (US$96.5 million at 31 December 2012) of the subordinated debt that helped us with the original financing of Moma, before any dividends can be declared. We are working towards achieving this objective as soon as possible.
"The latter part of 2012 saw difficult conditions emerge in the market for our products, as for many mineral commodities. But there are two main reasons for our confidence that the outlook for the company for 2013 and beyond is very positive.
"First, the nature of commodity markets such as ours is that re-stocking invariably follows de-stocking (sometimes with relatively rapid upturn in prices).
"Secondly, Moma is a world-class, developed resource with a very long mine life and intrinsically low operating costs per tonne, two characteristics of enduring success in the global mining industry."
Chilean copper miner Antofagasta [LON:ANTO] reported record revenues, up 10.9% year on year to $6.74bn in the year to end-December despite lower commodity prices.
EBITDA increased to $3.829bn, a 4.6% increase on the $3.66bn generated in 2011.
A significant final dividend will be paid, including a special dividend, of 90 cents per share. This results in a total dividend for the year of 98.5 cents per share, more than double the 2011 level, and reflecting a payout ratio of 70% of net earnings (before exceptional items). The total dividend comprises a special dividend of 77.5 cents per share and ordinary dividend of 21.0 cents per share (final - 12.5 cents, interim - 8.5 cents).
At present the Board anticipates a return to a 35% payout level from 2013 onwards.
Balance sheet position remains strong. The Group had cash (including liquid investments) of $4.3bn and net cash of $2.4bn at 31st December 2012.
The group reported record copper production of just under 710,000 tonnes, ahead of the original forecast for the year and 11% higher than 2011, mainly reflecting the further increase in production at Esperanza. Gold and molybdenum production were also at record levels.
Significant production growth at Esperanza, reflecting the on-going optimisation of the operation. Plant throughput levels reached over 89,000 tonnes per day in Q4 2012, compared with 70,000 tonnes per day in the first quarter of the year. Work is continuing to achieve the original design capacity of 97,000 tonnes per day.
Review of the Antucoya project continues. A decision as to whether to resume development of the project will be taken when the review is complete. Given the inherent uncertainties while a review such as this is being undertaken, the Group has performed what it considers to be a conservative assessment of the project's assets and accordingly has recognised an impairment of US$500 million in respect of those assets, of which the Group's attributable share based on its 70% economic interest in the project is US$350 million.
Continued progress with evaluation of organic growth pipeline in Chile. The Esperanza Sur deposit could enhance the existing Esperanza mine plan, as well as having the potential to support an incremental expansion of the Esperanza plant. There is also potential for a further incremental plant expansion at Los Pelambres. The Encuentro oxides deposit provides the opportunity to continue to maximise the use of the existing SX-EW plant at El Tesoro. There is therefore potential for incremental expansions to generate additional production. In the longer-term, there are several very large scale growth opportunities, including potential for stand-alone plants at the Esperanza Sur and Encuentro sulphides deposits, and major expansion of Los Pelambres.
Diego Hernandez, CEO, commented: "2012 was an important year for the Group, in which we consolidated the performance of our existing operations, and strengthened our organisation for the future opportunities we face.
"The Group produced just under 710,000 tonnes of copper, which was ahead of our original forecast for the year of approximately 700,000 tonnes. This level of production was a record for the Group, and 10% higher than 2011, mainly reflecting the further increase in production at Esperanza. We also produced record amounts of gold and molybdenum. This translated into another strong financial performance, with earnings per share (before exceptional items) of 140.2 cents, compared with 139.7 cents in the prior year. After taking account of exceptional items, underlying earnings per share was 104.7 cents (2011 - 125.4 cents).
"I have now been with Antofagasta for just over seven months, and during that time I have been able to get a clear view of the Group's key strengths and opportunities. Firstly the quality of the Group's existing assets and its people provides an extremely strong base for our future development. Secondly, we have very significant and high quality growth opportunities - both in terms of optimising and expanding our existing operations, and also our potential for further green field development.
"My first few months with the Group have also confirmed my initial view that many of my own areas of focus correspond closely with the Group's existing strengths and culture. For example - a concentration on day to day operational excellence as the bedrock which underpins everything else we want to achieve; and a focus on efficiency and value in everything we do.
"I am looking forward to playing a part in the next stage of the Group's development, and I am sure that the next few years will be an exciting and significant period for the Group."
Chaarat Gold Holdings [LON:CGH] says it has made significant progress in Shandong Gold Mineral Resources Group.
And it says while talks with SGMR have been delayed due to a change in senior personnel at the holding company level of the SGMR group, recommencement of the negotiations has been agreed with the new management team.
Chaarat chief executive Dekel Golan said: "We announced last November that the company was in discussions with Shandong Gold.
"Since that time significant progress has been made towards an agreement, which the directors believe should be beneficial to our shareholders.
"Discussions had to be postponed before the Chinese New Year due to a change in the senior management.
"Now that the new members of SGMR's management are in place, recommencement of discussions has been approved and, although we cannot be certain, we hope that renewed negotiations will lead to a satisfactory outcome before too long.
"In the meantime we have maintained momentum towards production. Our project team has submitted designs for approval and made significant progress with both permitting and procurement and the Chaarat project proceeds towards production."
Namakwa Diamonds [LON:NAD] expects 21 days' plant downtime at its Kao Mine, in Lesotho, while an upgrade is undertaken.
The company said it expects the upgrades to be completed by end-May.
"The technical team we have assembled is completing a technical study for the Kao Mine in order to update the mine planning, optimization and scheduling by the end of March 2013, and has identified the constraints present in the plant design and equipment," the company said.
"Rectifying action has been taken for items of plant which have performed poorly and which are inappropriately designed or sized for the intended purpose," it said.
"Management, together with consultants Consulmet, have targeted the end of May 2013 for this initial plant upgrade project to be completed.
"This will include the installation of the new Cobar scrubber as per the frame and mounting design supplied by Consulmet, the completion of a jet-pump system to the recovery, a properly sized tailings screen to ensure plant reaches design capacity, the construction of a closed re-crush circuit to improve diamond liberation, as well as the installation of a new scrubber.
"The impact in terms of plant downtime is estimated at 21 days. Temporary repairs are being effected on the current scrubber with the intention to run it until the new scrubber unit can be installed in order to optimize production. The Company is examining all legal recourses available to it with regards to consequential damages."
Forte Energy [LON:FTE] says further assay results from its drilling campaign in Mauritania confirm intermittent narrow mineralisation over a strike length of 0.5km to the north of the existing A238 Resource.
It says a structural model developed from drilling and ground surveys will be used to identify other prospective structural targets within its licences and the A238 Resource remains open at depth.
The company said it had now received Fusion XRF chemical assay results from the reverse circulation (RC) drilling programme completed at the A238 Prospect in Mauritania on the 14 December.
The programme included 28 holes drilled, totalling 4,115m and covered the structural extensions identified in the high resolution ground magnetic and radiometric surveys to the north and south of the existing A238 Resource.
A total of 12 holes were drilled to 2km north of the existing A238 Resource at 200m spacing. Positive assay results from five of the holes located over 0.8km to the north of A238 indicated narrow mineralised structures over a strike length of 0.5km.
Assay results from RC 222 indicated intermittent mineralisation from 53m to 100m below surface, with grades of up to 567ppm U3O8.
A total of 13 holes were drilled to the south, all of the holes confirmed the structural extension of the Zednes shear zone to the south, but none of which identified uranium mineralisation. Three holes were drilled at the south eastern end and outside of the A238 Resource with RC 219 potentially increasing the width of the mineralisation.
Managing director Mark Reilly said: "These latest drilling results provide further evidence of a mineralised structure to the north of our existing resource as well as a continuation of the Zednes Shear Zone to the south.
"Our strategy remains to drill out additional nearby targets in the A328 licence, as well as the calcrete deposits at Hassi Baida, and add further to our substantial existing resource base in Mauritania."
Lower diamond prices hit Gem Diamonds' [LON:GEMD] full year results despite a strong operational performance with record carat production.
Revenues of $202m for the year to the end of December were down from $306m in 2011 and underlying earnings before interest, tax, depreciation and amortisation fell to $66m from $167m.
Attributable net profit fell to $17m (before exceptional items) - down from $62m in 2011.
Chief executive Clifford Elphick said: "Although 2012 was a challenging year for the diamond mining industry and for Gem Diamonds, it is pleasing to see that 2012 was a strong operational year for the group, with a second successive record carat production at Letšeng, our flagship asset.
"Moreover, the disposal of underperforming assets will result in a more focused management team, confident on improving returns to shareholders in the coming years.
[LON:AMI] American Investment Trust share price was +9.5p at 265p
[LON:ANTO] Antofagasta share price was +36.5p at 1131.5p
[LON:AQP] Aquarius Platinum share price was +2.88p at 55.38p
[LON:AYM] Anglesey Mining share price was +4.38p at 11.25p
[LON:BEM] share price was +0.01p at 12.13p
[LON:BKY] share price was -0.5p at 31p
[LON:CEY] Centamin Egypt Ld share price was +0.2p at 52.65p
[LON:CGH] share price was +0.88p at 25.5p
[LON:CHL] share price was -0.45p at 8.75p
[LON:CZA] share price was -0.5p at 16p
[LON:FDI] Firestone Diamonds share price was -0.25p at 3.5p
[LON:FRES] share price was -10p at 1480p
[LON:GEMD] share price was -10.75p at 152.25p
[LON:HOC] share price was -5.6p at 348.4p
[LON:KMR] Kenmare Resources share price was +2.95p at 34.25p
[LON:NAD] Nadlan share price was +0.03p at 1.6p
[LON:VED] Vedanta Resources share price was +15.5p at 1202.5p
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