9-Dec-2020
$250k turned into $1B in 6 years
OZ Minerals today announced the results of their PFS on their West Musgraves nickel-copper project in Western Australia. With a headline NPV of ~A$1B, post-tax IRR of ~20% over a 26 year mine life and $67M commitment to progress the project to a 2022 investment decision things look very positive for the asset.
It is worth keeping in mind that Cassini Resources acquired the West Musgraves project from BHP Billiton for $250k in 2015, prior to OZ Minerals consolidating 70% of the project for $36M in 2019.
Not a bad evolution of project value from $250k to $1B over those 6 years!
31-July-2019
129g/t Au over how many metres?…
Kinross today announced the acquisition of the 3.9Moz PFS-stage Chulbatkan project in eastern Russia for $283M and deep within the announcement detail was a biblical drilling intersection from confirmatory due diligence drilling: 52m @ 129g/t from 168m (RKC-4).
While the project is early stage, informed insiders are already hailing the region by an auspicious new name “Cortezstan”.
Presentation here.
15-May-2019
C$802M cash-funded gold deal at A$2000/oz?
St Barbara Ltd surprised investors today with an all cash C$802M EV friendly offer for Atlantic Gold Corporation (TSX-V:AGB) and a concurrent A$490M equity raising via a JUMBO (accelerated non-renounceable offer).
The deal particularly surprised the market given it is cash funded, despite the current A$/oz gold price that has pushed St Barbara’s share price to lofty heights.
The deal looks rich at an EV/Reserve of C$428/oz but Moose River is one of the lowest cost, recently-commissioned, OECD gold mines in the world.
Atlantic only commissioned Moose River in March-2018 after sinking ~$150M capex to build the 90Kozpa operation. Exceptional capital efficiency at this acquisition EV.
25-February-2019
What do $5B of synergies look like?
Through the haze of the “blood in the water” gold M&A frenzy, another victim has just lost a limb to a large-cap bite!
Barrick-Randgold (aka Barrick) today launched an all share transaction to merge with Newmont, with an at-market exchange ratio of 2.5694 Barrick shares for each Newmont share and estimated synergies between the pair of >US$7B (full pres here). The level of disclosure around the synergies was refreshingly extensive, with Nevada making up US$5B of these synergies.
So what does $5B in synergies look like spatially? A picture tells a thousand words…
6-February-2019
The Friedland effect, again.
Today Ivanhoe Mines announced study outcomes for the Kakula copper project in the DRC, a 6Mtpa base case PFS and an 18Mtpa expansion case PEA.
The stage one 6Mtpa Kakula case PFS boasts an NPV8 of US$5.4B, IRR of 47%, 25 year mine life for US$1.1B capex. The first 5 years of this stage one average 6.8% Cu headgrade with mine-site cash costs of US$0.43/lb Cu.
The expansion case PEA of 18Mtpa across Kakula, Kansoko and Kakula West yields an NPV8 of US$10B and an IRR of 41%.
While the capital intensity of both cases look a little light the headline numbers are extremely impressive. It looks like SpaceX’s Falcon 9 launch in two weeks wont be the only rocket-ship launching in February, the Ivanhoe Mines share price is set for a similar trajectory after this announcement.
Mr Copper, you’ve done it again!
2-August-2018
Oligarch’s arctic mammoth tamed for $900M
On 2 August KAZ Minerals acquired one of largest undeveloped Cu-Au projects from an entity controlled by Chelsea FC owner Roman Abramovich for US$900m ($675M upfront + $225M deferred). While KAZ estimate the project will cost $5.5B to develop over 8 years, it is expected to produce 250Kt Cu + 400Koz Au per annum over 25 years (avg. strip ratio 0.8x) at first quartile <$1.05/lb Cu cash costs.
One does wonder if the proposed capital intensity of US$16,700/t is realistic given the remote project location of Chukotka in the Far East of Russia, however, government-sponsored infrastructure could be forthcoming. Lets hope Roman threw in a few Chelsea FC box seats to sweeten the deal – 8 years until first production is a long time in the arctic!
Further information on the project and the acquisition can be found here.
1-June-2018
$105M NPV diamond mine sold online for $8M
What a difference two years can make, particularly in diamond mining. On 31 May the Lerala diamond mine in Botswana was sold at an online auction for $8.1M to an unidentified buyer after liquidators for Kimberley Diamonds Ltd (ASX:KDL) failed to secure viable bids in a conventional sale process. The sale included the mining lease (5 kimberlite pipes), a 200tph processing plant, 4.2MW diesel generator and related ancillary assets. Lerala boasts reserves of 5Mt @ 31cpht and an inferred resource estimate of 10Mt @ 31cpht (US$74/ct).
It was only two years ago in February 2016 that independence “experts” at Venmyn-Deloitte valued the Lerala Diamond Mine at A$105M. The mine was put on care & maintenance following poor sales and high opex. ‘Back to the drawing board’ for the next independent valuation report…
31-May-2018
Eliwana approved. Pilbara construction mini-boom
The least surprising capital project approval in Australian mining was announced by Fortescue today in the form of the Eliwana 30Mtpa mine and rail project. Announced capital intensity was US$42/t for 143km rail and a 30Mtpa OPF.
This project approval was widely anticipated given the limited 59/60% Fe ore sources available to Fortescue for product blending, with only Firetail high grade reserves of 125Mt @ 59.2% Fe available (vs. Chichesters at 56% Fe resource grade) as at 30 June 2017.
The 30Mtpa Eliwana project will join Rio Tinto’s 40Mtpa Koodaideri project and BHP’s 80Mtpa South Flank project that are all going to be rapidly developed between 2019 – 2021 for total capex of US$6 – 7 billion. This doesn’t include any Pilbara lithium or conglomerate gold projects that may also be developed in this same time period. This should create a helpful (but short lived) mini-boom for Pilbara-servicing contractors and undoubtedly result in cost inflation.
For further detail on Eliwana and the other Pilbara brownfields expansions (Koodaideri/South Flank) check out the Curious Professional’s great post here (summary table below).
16-May-2018
BHP back exploring in Baffin Island Canada eh?
Sharp-eyed mining insiders would have noted on slide 13 in today’s BHP investor presentation from the 2018 Global Metals Mining and Steel Conference an early stage copper exploration project in northern Baffin Island (Nunavut Canada) near the town of Shimik. This appears to signal an end to BHP’s 10 year Nunavut exploration hiatus, since the great northern diamond rush saw deals inked with the likes of Peregrine Diamonds in Nunavut. Watch this space eh?
12-March-2018
Cadia tailings dam collapse
In the late afternoon of Friday 9 March, Newcrest’s Cadia team identified a limited breakthrough of tailings material at its northern tailings dam embankment. An area of the embankment slumped following the earlier identification of cracks in the dam wall during a regular inspection. When these cracks were noticed the site team quickly engaged an independent consultant geotechnical expert to assist internal Cadia geotechnical engineers with an inspection and preliminary assessment of the embankment. Full Newcrest update here: Cadia – Northern Tailings Dam
Thoughts with the Newcrest team investigating/rectifying the incident.
24-July-2017
99mines.com targets $44B global mine listings market with >$30M listings in 4 months
Imagine if realestate.com.au charged a 3% sale commission just to list your house online, or if you had to review 10 different websites to see houses from 10 different suburbs – that was the sorry state of the global mine listings market that triggered the creation of 99mines in December 2016.
Founded by a geologist, a former professional computer gamer and an investment banker, 99mines is bringing transparency to a brokerage dominated online market and is committed to delivering the most comprehensive mine listing marketplace and aggregation index for committed mining enthusiasts.
Unlike many of the existing mining marketplaces across the world, 99mines is completely free to use. No costly commission or listing fees that would leech away money better spent in the ground exploring. With a simple listing process, sellers can have their projects advertised within 5 minutes. As an indexing service, 99mines will also regularly update the website with listings from across the world to create a ‘ one-stop-shop’ that breaks down existing regionalised listings barriers.
In 2016 there were US$44.3B global mining and metals deals announced (Ernst & Young) of which less than 5% was conducted online. With over 36,000 tenements in Australia alone and hundreds of transactions conducted every year, it became apparent that current mine listing websites lacked the capacity to facilitate this growing market. 99mines is the first global marketplace to combine direct mine listings and third party aggregation, the “Expedia for mining”. By actively sourcing mine listings from public marketplaces across the world, 99mines will provides a level of information unprecedented in the current landscape.
“When we first thought about 99mines, we intended to create the fairest and most accessible mine listing marketplace in Australia. We identified an opportunity to directly connect buyers and sellers in a way that’s never been done before. By aggregating mining projects from across the world, we aspire to be the one-stop shop for all mine project sales – without the hassle of clunky interfaces, excessive listing fees and unfair commissions.”
About 99mines.com
99mines.com is a broker-free, mine listing marketplace and aggregation index made by miners, for miners. The vision of 99mines.com is to create the most comprehensive and accessible global mine listing platform. Whether you’ re a private investor, prospector or an ASX/TSX listed mining company, 99mines.com is where credible buyers meet trustworthy sellers.
Since launching in 2017 over $30,000,000 worth of projects have been listed on 99mines.com. 99mines.com has a dual revenue model, split between advertising and premium subscriptions. Premium subscriptions have the option of upgrading their listing to ‘Featured Status’ , which increases their visibility for a limited time.
Headquartered in Perth, the team from 99mines.com have had extensive experience in both the mining and technology industries. With over two thirds of registered Australian tenements being located in Western Australia, 99mines.com is well connected in the heart of Australian mining.
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