Search Results for "Congo"

Glencore Xstrata Studying $3B Congo Iron Ore Mine

Mining and commodities giant Glencore Xstraa Plc (LSE:GLEN) will proceed with a study into an iron mine in the Republic of Congo costing up to $3 billion, Bloomberg reported.

As quoted in the market news:

The assessment, with partner Zanaga Iron Ore Co., “is now being advanced on the basis of a staged development, substantially reducing the initial capital requirement and including the potential for initial production using existing infrastructure,” Baar, Switzerland-based Glencore said today in a statement.

Click here for the full Bloomberg article

Exxaro’s Congo Iron Project on Schedule

South Africa-based Exxaro’s (OTCMKTS:EXXAY) plans to develop an iron ore mine in Congo (Brazzaville) and a coking coal project in Queensland, Australia are progressing on schedule, Steel Guru reports via Argus.

As quoted in the market news:

Congo granted Exxaro an exploitation permit for the Mayoko Lekoumou iron ore project earlier this month. The mining firm and the government are now in negotiations to finalize a mining convention, which will include rail and port agreements.

Click here for the full story in Steel Guru

Poyry and Xstrata Aim to Achieve Sustainable Iron Ore Mine in Congo

Pöyry’s Water & Environment group reported it will prepare a social and environmental impact for MPD Congo on its Zanaga iron ore mining project.

As quoted in the press release:

MPD Congo is assessing the Zanaga Iron Ore Project, which is at pre-feasibility stage. If developed the Zanaga Project would comprise an iron ore mine and processing plant, transport corridors and a port. Processed ore would be transported to a new port facility located north of Pointe Noire, Congo for export overseas.

Iron Prospect in Congo Shows High-Grade Promise

Mining Weekly reported Kilo (TSXV:KGL) shares are 13% higher after announcing promising iron ore results from its joint-venture project.

As quoted in the market news:

At its iron-ore joint venture with Rio Tinto in the Democratic Republic of Congo, Kilo said drilling results continued to indicate the project had the potential for direct-shipping ore, meaning it is of such high grade it does not need to be processed at a plant before being used to make steel.

Click here to read the full Mining Weekly report.

Sundance says to spend $600 mln on Congo iron ore mine

Reuters Africa reports Australian mining company Sundance Resources (ASX:SDL) will spend $600 million to develop its iron ore mine in the Congo Republic.

The article is quoted as saying,

The Nabemba mine, which is expected to start producing in 2014, will have a capacity of 21 million tonnes per year and a lifespan of about a decade, with output to be shipped via rail to Cameroon’s Kribi port for export overseas.

Explorer to raise A$36m for Congo iron-ore exploration

Mining Weekly reports Equatorial Resources (ASX:EQX) was looking to raise A$36-million through a share placement to fund its planned exploration program in the Republic of Congo.

The article is quoted as saying,

The exploration target is the combination of three main prospects and comprises between 200-million and 300-million tons of potential enriched hematite cap iron mineralisation, and between 1.1-billion and 1.9-billion tons of primary itabirite iron mineralization.

For the complete article, click here.

5 Top Weekly TSX Stocks: Base Metals Up

The S&P/TSX Composite index (INDEXTSI:OSPTX) was slightly up for the week, closing at 15,575.81, a modest gain of 0.17 percent.

That being said, The Globe and Mail reported that the index was down for a second straight day on Friday, as oil prices dropped and some heavyweight energy shares lost ground.

“The market has rallied on expectations of good things to happen in the future but as we are getting the data that is factual of what is going on, it is not as good as people are hoping,” said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management in Chicago.

Despite this, a number of stocks in the mining sector saw a share price increase–notably in the base metals sector– including:

  • Paladin Energy (TSX:PDN)
  • New Millennium Iron (TSX:NML)
  • Alderon Iron Ore (TSX:ADV)
  • General Moly (TSX:GMO)
  • Hudbay Minerals (TSX:HBM)

Without further ado, here’s a look at the 5 top weekly TSX stocks.

Paladin Energy

Paladin Energy is a uranium production company. The Company is engaged in the development and operation of uranium mines in Africa together with exploration and evaluation activities in Africa, Australia and Canada.

Over the five day period, shares of Paladin Energy saw a spike of 38.89 percent to close the five day period at $0.125.

New Millennium Iron

New Millennium Iron has actively explored properties in Canada’s Labrador Trough and is now at the development stage. Its Taconite Project has centered on the development of either or both of the LabMag and KeMag deposits to produce pellets and concentrate.

Shares of New Millennium Iron saw an increase of 36.73 percent last week to reach $0.33.

Alderon Iron Ore

Middle of the pack on last week’s 5 top weekly TSX stocks is Alderon Iron Ore, whose shares saw an increase of 35.85 percent to close the five-day period at $0.72.

Alderon is an iron ore development company in Canada. The Kami Project, owned 75 percent by Alderon and 25 percent by Hesteel Group Co. through The Kami Mine Limited Partnership, is located within Canada’s premier iron ore district and is surrounded by two producing iron ore mines.

General Moly

General Moly is a mineral development company developing two primary molybdenum projects, both in Nevada, U.S.A.  The Mt. Hope Project is a joint venture between General Moly (80 percent ownership) and POSCO (20 percent ownership), one of the world’s largest steel producers based in South Korea.  The Liberty project is wholly-owned by General Moly, contains both moly and copper, and is the company’s second project following Mt. Hope.

Shares of General Moly saw an increase of 34.62 percent last week to reach $0.70.

Hudbay Minerals

Last but not least on the 5 top weekly TSX stocks is Hudbay Minerals, whose shares made an increase of 14.89 percent to $10.57.

Hudbay is an integrated mining company producing copper concentrate (containing copper, gold and silver) and zinc metal. With assets in North and South America, the company is focused on the discovery, production and marketing of base and precious metals. The company has recently reported their production and cost guidance for 2017.

Data for 5 Top TSX Stocks articles is retrieved each Friday after market close using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $50 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

This article is updated each week. Please scroll to the top for the most recent information.

5 Top Weekly TSX Stocks: Index Gains on Trump Inauguration

By Jocelyn Aspa, January 22, 2017

The S&P/TSX Composite index (INDEXTSI:OSPTX) had another strong week, closing the five-day period at  15,547.88 points following Donald Trump’s presidential inauguration on Friday (Jan. 20).

As reported by the Toronto Star on Friday, the index gained 138.07 points while the Canadian dollar slipped. Overall, Canada’s main index rose 0.90 percent for the week.

On that note, a number of mining stocks on the TSX also so weekly gains, including:

  • Western Potash (TSX:WPX
  • General Moly (TSX:GMO)
  • Champion Iron (TSX:CIA)
  • Atalaya Mining (TSX:AYM)
  • Katanga Mining (TSX:KAT)

Here’s a closer look at those companies..

Western Potash

Western Potash is currently a development stage company focused on its solution mine on the Milestone Project in Saskatchewan. The company’s most recent news was released near the end of December 2016, wherein Western Potash received the final engineering report on the proposed Milestone Pilot Plant Project.

In that regard, shares of the company increased 58.82 percent last week to close the five-day period at $0.27.

General Moly

Next on the list is General Moly, who is a US-based company focused on the the exploration, development and mining of molybdenum. The company own two moly projects, including an 80 percent interest in the Mt. Hope project and 100 percent interest of the Liberty project, both in Nevada.

As such, shares of  General Moly spiked 33.33 percent last week to finish the week at $0.52.

Champion Iron

Middle of the pack in last week’s five top weekly TSX stocks is Champion Iron, who spent the week prior at the top of the list. On that note, Champion Iron n iron ore exploration and development company with projects in the Labrador Trough. Through the company’s wholly-owned subsidiary, Champion Iron Mines, Champion Iron’s Fermont Holdings is made up of 12 iron-rich projects.

Shares of Champion Iron rose 25.33 percent last week to close the five-day period at $0.94.

Atalaya Mining

Atalaya Mining is new to the European copper producing scene with Proyecto Riotinto as its main focus.  The company’s most recent news was released in December 2016, noting that  that nameplate capacity of 9.5Mtpa was achieved  at its 100 percent owned Riotinto Copper Project.

While the company has not released any other news since then, its share price increased 22.04 percent last week to close the five-day period at $2.99.

Katanga Mining

Last but not least on the five top weekly TSX stocks is Katanga Mining, who operates a large-scale copper-cobalt project in the Democratic Republic of Congo.

While the company has not released any recent news, its share price increased 17.65 percent last week to $0.20.

Data for 5 Top TSX Stocks articles is retrieved each Friday after market close using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $50 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.

Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

This article is updated each week. Please scroll to the top for the most recent information.

5 Top Weekly TSX Stocks: Uranium Stocks Fly

By Jocelyn Aspa, January 13, 2017


It was another week of gains for the S&P/TSX Composite index (INDEXTSI:OSPTX), rising 0.24 percent over the five-day period to 15,497.28 points.

Although the index closed the week on a high, it did have a bit of a rocky week, Reuters reported on Friday. Higher bonds and US bank earnings helped push the index back up.

In that regard, a  variety of mining stocks on Canada’s main stock index performed well, particularly in the uranium sector, following the news that Kazakhstan would be chopping its production by 10 percent. The five top stocks include:

  • Champion Iron (TSX:CIA)
  • Mega Uranium (TSX:MGA)
  • Denison Mines (TSX:DML)
  • Ur-Energy (TSX:URE)
  • Cameco (TSX:CCO)

Here’s a closer look at the five top weekly TSX stocks.

Champion Iron

First on the list is Champion Iron, an iron ore exploration and development company with projects in the Labrador Trough. Through the company’s wholly-owned subsidiary, Champion Iron Mines, Champion Iron’s Fermont Holdings is made up of 12 iron-rich projects.

Shares of Champion Iron rose 61.29 percent last week to $0.75. Despite the share price increase, the company did not have any related news.

Mega Uranium

Second on the list is Mega Uranium, whose shares jumped up by 50 percent last week to close the five-day period at $0.24.

The company is currently involved in three properties, all located in Australia: the Ben Lomond property, the Georgetown property, and Kintyre property. Mega Uranium also holds equity interests in aa number of uranium companies, with key holdings in Toro Energy (ASX:TOE) and NexGen Energy (TSX:NXE).

Denison Mines

Middle of the pack is Denison Mines, a uranium exploration and development company who is focused on its interests in the Athabasca Basin. Denison’s interests currently include its 60 percent owned Wheeler River project. The company also has a 22.5 percent interest in the McCLean Lake uranium mill, which is processing ore from the Cigar Lake mine.

On January 10, Denison announced the execution of an agreement to increase ownership of the Wheeler River Project up to 66 percent. With that in mind, it’s no surprise to see Denison’s shares rise 29.63 percent last week to $1.05.


Last week, shares of Ur-Energy rose 24.39 percent to t $1.02.

Much like Mega Uranium and Denison Mines, Ur-Energy is also focused in the uranium sector. More particularly, the company operates the Lost Creek in-situ uranium facility in Wyoming, which has a two million pounds per year capacity.

Despite its share price increase, Ur-Energy did not have any recent news.


Rounding out the top five weekly TSX stocks is Cameco, one of the world’s largest uranium producers, accounting for approximately 18 percent of global production from mines in Canada, the US, and Kazakhstan. With the announcement earlier in the week regarding Kazakhstan’s plans to cut production by 10 percent, the Financial Post reported an upgrade of Cameco to buy from hold at TD Securities.

That said, shares of Cameco increased 22.4 percent last week to close the five-day period at $17.43.

Data for 5 Top TSX Stocks articles is retrieved each Friday after market close using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $50 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.

Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

This article is updated each week. Please scroll to the top for the most recent information.

5 Top Weekly TSX Stocks: Index Nears All-Time Highs

By Jocelyn Aspa, January 9, 2017

The start to 2017 was positive for the S&P/TSX Composite index (INDEXTSI:OSPTX), rising 1.32 percent to close the first week of the year at 15,496.05 points.

BNN reported the index’s first three sessions of the year brought it near all-time highs before taking a slight hit on Friday.

Still, the TSX composite index has held steady above 15,000 points for seven weeks in a row, and a number of mining stocks performed well–particularly in the gold and energy sectors–during the first trading week of the year, including:

  • Alexco Resource (TSX:AXR)
  • Paladin Energy (TSX:PDN)
  • Scandium International Mining (TSX:SCY)
  • Alamos Gold (TSX:AGI)
  • Pilot Gold (TSX:PLG)

Without further ado, here’s a look at the 5 top weekly TSX stocks.

Alexco Resource

First on the 5 top weekly TSX stocks is Alexco Resource, who owns the Keno Hill Silver District in the Yukon. The company’s Bellekeno silver mine has a production grade of 1,00 grams per ton, and was brought into production in 2011. That said, Alexco’s latest news released January 3 detailed an updated resource mineral estimate for its Bermingham deposit in the Keno Hill Silver District, noting mineral resources have expanded from 5.2 million ounces to 17.3 million ounces.

As such, it’s no surprise that Alexco’s sares saw an increase of 33.94 percent to close the five-day period at $2.21.

Paladin Energy

Second on the list is Paladin Energy, a uranium production company with projects in Australia and two mines in Africa. The company’s most recent news was released at the end of December, noting it had received a notice from Electricite de France with respect to a $200 million pre-payment under the Long Term Off-Take Agreement between the companies entered into in August 2012.

Shares of Paladin Energy rose 31.25 percent last week to $0.105.

Scandium International Mining

Middle of the pack on last week’s 5 top weekly TSX stocks is Scandium International Mining, whose shares jumped 28 percent to close the five-day period at $032.

Scandium International Mining owns an 80 percent interest in the Nyngan scandium project, located in New South Wales, Australia. In May of 2016, the company completed a feasibility study, and is nw working towards bringing the Nyngan project to production.

Alamos Gold

Next is Alamos Gold, whose shares jumped 26.57 percent last week eto $10.48.

Alamos is an intermediate gold producer with diversified production from three operating mines in North America, including the Young-Davidson Mine in northern Ontario, Canada, and the Mulatos and El Chanate Mines in Sonora, Mexico. On January 6, the company released its 2016 fourth quarter production results together with its 2017 outlook.

Pilot Gold

Last but not least is Pilot Gold, who is currently advancing a number of past-producing Carlin-Style gold projects in the western US. Some of its projects include Goldstrike, which is on the Utah/Nevada border and  Black Pine in Idaho.

Shares of the company surged 22.35 percent last week to close the five-day period at $0.52.

Data for 5 Top TSX Stocks articles is retrieved each Friday after market close using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $50 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.

Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

Related reading:

5 Top Weekly TSX Stocks: Gold Stocks Up

Mining Convention Signed for Mayoko-Moussondji

Equatorial Resources Ltd. (ASX:EQX) has signed a mining convention agreement over its Mayoko-Moussondji iron project in the Democratic Republic of the Congo. The convention defines the fiscal rights and legal obligations of the Congo government and Equatorial in respect to the project.

As quoted in the press release:

The Mining Convention was signed at a ceremony in Brazzaville on 9 December 2014 attended by senior members of the ROC Government and Equatorial’s Managing Director & CEO, Mr John Welborn. Mr Welborn commented that the signature of the Mining Convention for Mayoko Moussondji demonstrated the strong ongoing support received from the ROC Government for Equatorial’s planned development of the Project.

Equatorial CEO John Wellborn stated:

Mayoko-Moussondji is a robust iron-ore project as demonstrated by the recently completed prefeasibility study. Securing the mining convention represents the last required administrative approval and indicates Equatorial has advanced a greenfield acquisition in 2010 to a fully permitted project opportunity. The government’s strong ongoing support will be essential as Equatorial confronts the current difficult market for iron ore and explores financing opportunities.

Click here for the Equatorial Resources Ltd. (ASX:EQX) press release.

Ebola Outbreak Hurting West Africa’s Iron Ore Companies

Symptoms of ebola

Despite efforts to contain the current outbreak of Ebola, which began in Guinea last year and has since spread not only to various other West African countries, but also to Spain and the United States, the disease remains a problem. 

In its latest report on the situation, released on October 10, the World Health Organization states that since October 8 there have been 8,399 “confirmed, probable, and suspected cases” of Ebola and 4,033 deaths. The cases have been reported in seven countries, with Guinea, Liberia and Sierra Leone described as having “widespread and intense transmission” and Nigeria, Senegal, Spain and the US said to have experienced “an initial case or cases, or with localized transmission.”

While of course the disease’s most serious impact is the fact that it’s taken so many lives, it’s unfortunately had a number of other negative consequences. For investors, the key thing to note is that Ebola has created significant issues for mining companies operating in and around the affected areas — for instance, copper and cobalt producers have faced difficulties, while more recently diamond miners have encountered problems.

Currently, however, the sector whose hardships are in the spotlight is iron ore. The metal’s price has been on a downward spiral this year due to increased sales from companies like BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT) and Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), and the Ebola outbreak has further hurt smaller companies by prompting investor anxiety about their stability.

For instance, Bloomberg reported on Monday that African Minerals (LSE:AMI) and London Mining (LSE:LOND), both of which operate in Sierra Leone, are down 92 and 96 percent this year, respectively. While the former continues to operate, the latter was “suspended from trading on Oct. 10 after it said the only investors it was still engaged in talks with were those not seeking to keep the company operating.”

Meanwhile, the news outlet states, Sable Mining Africa (LSE:SBLM), which is developing an iron ore mine in Guinea, is down 85 percent so far this year, while Bellzone Mining (LSE:BZM), which is also focused on Guinea, has had its shares suspended.

While those poor figures have resulted in buying opportunities for companies like Glencore (LSE:GLEN), which is rumored to be interested in taking over Rio Tinto, for the most part they do not seem to have brought similar benefits for investors. As The Wall Street Journal notes, while London Mining is certainly a takeover target for major miners, the company has stated that “[u]nder the structures currently proposed, the board believes that there will be little or no value remaining in the equity of the company and the other listed securities of the group.” Not good news for investors.

As a result, many market participants, particularly those involved in the iron ore space, are now wondering about the best way to handle investing in Africa, with some raising the question of whether it’s possible to create an “Ebola-proof” portfolio.

That would certainly be helpful, but as Louis James, chief metals & mining investment strategist at Casey Research, points out in a recent note, it’s easier said than done. ”Unfortunately,” he quips, “with the disease already present in the US and EU, the only sure [way to do so] is to sell everything and go 100% to cash.”

That’s an “extreme” measure, he admits, and also one that it’s too early to take, but it does help highlight the fact that now is not the time for investors to sit idly by. James recommends selling “all stock in companies that rely upon or have close connections to Liberia, Guinea, and Sierra Leone — if not the rest of the countries on the outbreak list, except for the US and Spain,” pointing out that “West Africa’s gold fields are a major source of global mine supply, and if the disease does spread farther across the continent, especially east and south, there could be serious supply issues with copper, uranium, and other metals.”

At the same time, James states, investors need to keep the situation in perspective and not be alarmed by fearmongering. “Think of it as an orderly retreat, made only when necessary in the face of a clear and present danger, such as Mali or Côte d’Ivoire looking like the next Ebola dominoes to fall,” he suggests, concluding that he is “not ready to sell everything in Africa yet.” Investors should certainly be taking a good look at what they believe.


Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

What Does the Ebola Outbreak Mean for Congo Copper Operations?

Epidemics and Mining: How Companies Are Dealing with Crisis

Tekmira Pharmaceuticals Surges as Ebola Reaches United States

Sundance Resources: Divide and Conquer?

Sundance Resources: Divide and Conquer?

By Brad George

The Sundance Resources (ASX:SDL) saga took an unusual turn last week with a A$40 million cash injection via unsecured convertible notes, from Ukrainian mining billionaire Gennadiy Bogolyubov. The deal comes with attached options, which if exercised could give Bogolyubov an 18% stake in the company. The funds will be used for general corporate purposes as the company progresses toward the development of its large Mbalam-Nabeba iron ore project in West Africa.

This is the second A$40 million capital raising in less than 12 months, following an earlier similarly sized convertible note issued in October 2013, half of which was taken up by major commodity trader Noble Group. Prior to this raising, at the end of the June quarter, Sundance had only A$14.3 million in cash, and had been consistently operating at a burn rate of near A$4 million per month. Removal of near term cash issues provided some minor support to the share price, lifting slightly to A$0.087, however it still lags marginally below where it was when the project was discovered in late 2008, despite several hundred million dollars having been spent since, and significantly below its January 2011 peak of A$0.60

The longer term questions however now remain that of how the $5 billion project will be funded, and given the emergence of Bogolyubov on the share register, who will ultimately own it.

Sundance has had checkered and tragic history since first discovering high grade DSO quality iron ore straddling the border between Cameroon and the Republic of Congo (as distinct from the neighboring Democratic Republic of Congo) in late 2008.

Sundance’s DSO resources are substantial at 775Mt @ 57.2% Fe, including reserves of 436Mt @ 62.6% Fe.  In addition there are over 4 billion tonnes of underlying lower grade Itabirite resources at 36.3% Fe that could form the basis of a later second stage project.

The DSO material is high quality, offering the promise of a low cost, high quality sinter feed product, however its location is problematic. Not only is the area remote, heavily forested and with not even basic infrastructure, but the total tonnage of DSO is divided between two primary deposits, the Mbalam deposit in Cameroon, and the larger Nabeba deposit 70 km south in the Republic of Congo. Transport was always going to be the primary challenge.

The Mbalam deposit in Cameroon is the smaller of the two, too small to bear the capital cost of its own rail line. In contrast, the Nabeba deposit in Congo is larger, however the Congo route to the coast is over twice the distance of the Cameroon option, and so similarly uneconomic. Therefore combining the two projects with a Cameroon rail and port was the only realistically feasible option, but one that was politically unpopular.

Both countries at first pushed for their own rail lines, not only for iron ore, but to open up vast areas of their impoverished interiors to other development opportunities. In addition, the picture was complicated by lobbying from smaller companies with lesser projects on or near the planned transport route, arguing that their projects were too small to bear the cost of transport infrastructure, but could be developed if third party rail was available.

Political issues seem to have eventually been resolved with conventions and approvals signed through 2013 into 2014, however the issue now is that of economics and ownership.

The deposits were first identified in late 2008, with resource drilling being carried out into 2010. But the company then suffered a tragedy in June 2010 when most of its board of directors and its largest investor Ken Talbot, perished in an aircraft crash in Congo while traveling to visit the project.

The management was gradually rebuilt, but the accident paved the way for Chinese trading house Sichuan Hanlong Group to enter the scene by purchasing the Talbot stake. In October 2011, Hanlong agreed to buy 100% of Sundance’s shares at A$0.57 per share, valuing the company at A$1.65 billion. The deal however was not without strings; despite being a private company, Hanlong was required to obtain numerous funding guarantees from Chinese banks and thus by proxy, the Chinese Government, before the deal would be ratified. Sundance then had effectively taken itself out of play for other potential suitors, but had left the door open for Hanlong to renegotiate

What then followed was 30 months of near farce. Hanlong missed deadline after deadline, and on every occasion, with Sundance in turn submitting to all requests for extensions or waiving of conditions. Time dragged on, Sundance’s finances were drained and predictably the takeover offer was revised downward to A$0.45 per share, before eventually collapsing entirely in April 2013.

The Mbalam-Nabeba project was probably too small to appeal to the majors, however during late 2012, it was widely rumored that Xstrata had been running the numbers for a possible deal. Xstrata already had a significant iron ore presence in Congo via its troubled Xanaga project and with its sister company Glencore (LSE:GLEN) holding a 20% stake in the Avima iron ore project immediately to the west of Nabeba, there were some obvious synergies. The timing however was not ideal as the protracted Xtrata/Glenore merger prevented any assets being added to the mix during the process, and so no offer was forthcoming.

With few remaining equity options, Sundance looked to its offtake and sourced funds from trading house Noble Group in exchange for an option over marketing rights to production, which was then formalised in mid 2014.

And now this latest funding deal.

For a company with a market cap of A$250m and little cash, funding a capital project of A$5 billion presents challenges, but also options. Sundance however seems to have made a series of strategic decisions almost intentionally designed to limit its options.  It now seems in effect to have been carved up. Hanlong can’t increase its stake due to issues in China, and is more than likely a seller at the right price. Noble doesn’t need to increase its stake as it now has the off-take which is all it really ever wanted and so would also possibly be a seller at the right price. While it’s new partner Bogolyubov already has established mining businesses in Africa and Australia, a stated desire to build a mining empire and now sitting alongside two large shareholders who are likely sellers at the right price.

Sundance has made great strides of late in moving this complex project forward, for which it deserves credit. But its extraction of shareholder value from a high quality project seems open to question.


Securities Disclosure: Brad George holds no investment interest in any of the companies mentioned. 

Brad George is a geologist by trade, and has spent over 25 years working in the mining industry around the world in a variety of capacities. Primarily focused on exploration, Brad has gained extensive experience in iron ore, base metals and gold on five continents. He has extensive experience in the management of public resource companies.

Upon completing an MBA, Brad spent several years in London as a partner in a boutique brokerage house, developing a franchise as a rated mining and metals analyst. Brad now resides in Perth, Western Australia.

Sundance Subsidiaries Sign 10-year Offtake Agreement with Noble Resources

Sundance Resources Ltd. (ASX:SDL) announced that its subsidiaries, Cam Iron SA and Congo Iron SA, have signed a 10-year offtake agreement with Noble Resources International Pte Ltd., a global commodities trader.

The company describes the move as a “pivotal step towards development” of its Mbalam-Nabeba iron ore project, located on the border between Cameroon and the Republic of the Congo.

Transaction highlights include:

  • Noble will buy all product produced for the first 10 years of operation outside that allocated to project equity participants.
  • Project equity participants can buy up to 50 per cent of the production.
  • Sales will be based on international standard pricing benchmark (Platts IODEX 62% Fe CFR China less freight costs) Free on Board (FOB) Lolabe Cameroon.
  • Contract will help facilitate completion of debt funding for the construction of the port, rail, and mines.

Giulio Casello, managing director at Sundance, commented:

This contract represents another key step in our strategy to develop the Mbalam-Nabeba Project. Having Noble sign such an extensive sales agreement is a huge vote of confidence in the Project and we believe it will give financiers the comfort they need to provide debt funding.

Click here to read the full Sundance Resources Ltd. (ASX:SDL) press release.

Exxaro Wins Permit to Produce Iron Ore at Mayoko Mine

Reuters reported that Exxaro Resources Ltd. (OTCMKTS:EXXAY), a South African company, has been awarded a permit to begin production at the Mayoko iron ore mine, located in the Republic of the Congo.

As quoted in the market news:

Medard Ndombi, a geologist at the Congolese ministry, confirmed that two other contracts had been signed on Jan. 29, covering rail transport to the coast and port infrastructure at Pointe-Noire.

Ndombi added that Exxaro could export up to 2 million tonnes of iron ore used for steelmaking this year and 10 million tonnes by 2017, as the port is expanded.

Click here to read the full Reuters report.

Iron Ore Prices Highest Since April

Iron Ore Prices Highest Since AprilChina may be slowing, but that hasn’t stopped the iron ore price from climbing.

The Steel Index reported that benchmark Australian iron ore containing 62-percent iron rose to $133.10 a tonne, its highest level in three months, on Wednesday.

Putting that number into perspective, the Financial Times (subscription required) said prices are nowhere near their peak of $200 a tonne during the Chinese construction boom, but are still over three times levels reached in 2007. The steelmaking ingredient has risen 20 percent since the start of June despite pessimism from other commodities sectors underpinned by a slowdown in the Chinese economy.

While demand for iron ore has been sluggish all year, a recent report from Macquarie, an Australian bank, indicates that sentiment is improving in the Chinese steel sector. That’s important because China accounts for about 60 percent of the seaborne trade in iron ore and is the world’s largest consumer of the commodity. The Macquarie report quoted by the Financial Times “pointed to a ‘marked improvement in sentiment’, noting that orders had improved and steelmakers were no longer destocking raw materials such as iron ore. Purchasing plans ‘have moved back up into positive territory, which should be supportive for prices.’”

In fact, even better times may be ahead for the steel market, which would translate to good prices for iron, according to Metal-Pages. It reported Wednesday that Austrian producer Voestalpine (VIE:VOE) is forecasting increases in steel prices by the fourth quarter, helped by current low inventories. Other analysts say the market could go into oversupply and counteract the recent price recovery.

Company news

Gindalbie Metals (ASX:GBG) about a week ago announced production of its first batch of 68-percent iron magnetite concentrate from its Karara mine in Western Australia. The mine is a joint venture with Chinese steelmaker Ansteel.

Eurasian Natural Resources (LSE:ENRC) said Wednesday that its ferrochrome and iron ore production increased in the second quarter, with its iron ore division operating at full capacity for all products except pellets. Iron ore extraction increased 9.9 percent, to 10.9 million tons, while saleable iron ore output advanced 21 percent, to 4.3 million tons. “Our operations in Kazakhstan and Africa have had an excellent quarter,” CEO Felix Vulis said in a statement. “Production volumes are up year-on-year across all of our key commodities, with the iron-ore division having had its best quarter in three years.”

Glencore Xstrata (LSE:GLEN) will suspend Australian iron ore mining from mid-August due to weak demand from China and higher costs, Metal-Pages reported. The company started mining magnetite with iron ore at its Ernest Henry mine in Queensland two years ago. “The business case, which made magnetite production a positive contribution to Ernest Henry’s operations, is not supported in the current market,” a spokesperson for the company said.

Three big names are out of the race to purchase Rio Tinto’s (LSE:RIO,NYSE:RIO,ASX:RIO) 59-percent stake in Iron Ore Company of Canada. The Financial Post reported that according to sources, “private equity firm Apollo, which had been working with Canadian pension fund CPPIB, rival Blackstone and commodity trader and miner Glencore were no longer in the race after a second round of bids last month” came in lower than expected. Rio is trying to sell a number of assets, including its $1.3-billion diamond business, as it seeks relief from a $19-billion debt burden.

Sundance Resources (ASX:SDLannounced Wednesday that it is issuing tender documents for the financing and construction of its Mbalem-Babeba iron ore project in Cameroon and Congo. reported that the project, including port and rail infrastructure, could be owned outright by Sundance or developed with a strategic partner. notes that the $5-billion tender release comes despite recent setbacks for Sundance, including a collapsed deal with China’s Hanlong (USA) Mining Investment and a lawsuit from the family of a man killed in the airplane crash that killed the entire Sundance board of directors in 2010.


Securities Disclosure: I, Andrew Topf, hold no investment interest in any of the companies mentioned. 

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Majors Forge Ahead With Iron Ore Expansions

Majors Forge Ahead With Iron Ore Expansions

Spot iron ore is currently trading around $139.40 a dry metric ton (MT), up slightly from $134.40 four weeks ago, but still below its 16-month high of $158.90, which it hit on February 20.

However, iron ore swaps declined earlier this week, with contracts for May down about $3 on Tuesday, to $132 to $135 a dry MT, Platts reported. That decline came after number-one iron ore consumer China reported that its economy expanded at an annualized rate of 7.7 percent in the first quarter, down from 7.9 percent in the previous quarter and below economists’ expectations of 8-percent growth.

“Traders are reacting to the Chinese growth data coming in below expectations,” Ben Goggin, a swaps broker at ICAP, told Bloomberg. “Meanwhile the physical market was quiet, which shows the swaps are more jittery depending on macro news.”

On April 9, Deutsche Bank (NYSE:DB) said that it expects iron ore prices to stabilize around the $130 to $140 mark over the next few weeks, thanks to restocking from Chinese steel mills. “Opportunistic buying from Chinese mills is to be expected following a price correction, furthermore we are hearing reports that some re-stocking of manufactured goods (air-conditioners, washing machines, etc.) is taking place in China,” the bank said in a quarterly report quoted by Platts.

However, Deutsche Bank also said prices could slip below $100 later this year on slowing growth in steel consumption. That’s similar to a pattern we saw in 2012, when prices declined to a three-year low of $86.70 in September.

Despite warnings of lower prices ahead, major producers, including BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT), Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) and Fortescue Metals Group (ASX:FMG) are sticking with plans to ramp up production. These three companies plan to add 235 million MT per year (mtpa) of new mine capacity by 2015, which is nearly equivalent to Rio Tinto’s 2012 output, according to Bloomberg.

Ken Brinsden, managing director at Atlas Iron (ASX:AGO), told The Australian on April 17 that he feels the investment community is taking too negative a view of iron ore’s outlook.

“The feedback from our customers is to indicate they are still concerned about supply and where it is coming from and in the event that we can be delivering more in both the short and medium term, I’m confident they would be taking a lot more than we could offer today because they are concerned about supply,” he said.

“There is a massive disconnect in comparison to where the investment community is at with respect to where iron ore is heading,” he added. “We are looking forward to healthy prices for a period to come.”

As well, production costs for the three leading iron ore producers, Vale (NYSE:VALE), BHP and Rio, range between $40 and $50 per MT, so their profit margins should remain healthy even if iron ore falls below $100.

Company news

Rio Tinto reported record first-quarter iron ore production and shipments thanks to “debottlenecking and productivity improvements with minimal capital expenditure,” the company said in its quarterly operations review. Rio also said its Pilbara operations in Australia have recovered from cyclone season and are now running at full capacity of 237 million mtpa. As well, Rio’s plan to increase that amount to 290 million mtpa remains on budget and on track for completion in the third quarter of 2013.

Gindalbie Metals (ASX:GBG) opened its Karara iron ore project in Western Australia on April 9. The company expects the mine’s production to reach a rate of 8 million mtpa by the end of April, according to its press release. Gindalbie said the construction phase was finished “broadly” within the revised budget of $2.57 billion. However, in March 2011, it increased its estimate by 30 percent after previously hiking it by 20 percent. The overruns forced the resignation of CEO Garret Dixon in March 2011.

Sundance Resources (ASX:SDL) shares lost nearly half their value on April 9, after the company announced that its takeover agreement with Sichuan Hanlong Group collapsed after Hanlong was unable to secure funding for the $1.19-billion deal, Bloomberg reported. Hanlong holds about 14 percent of Sundance and was seeking to acquire the remaining shares. Sundance is now looking for a joint venture partner to help advance its Mbalam-Nabeba iron ore project, which straddles the border between Cameroon and the Democratic Republic of the Congo, according to an April 12 interview with Sundance CEO Giulio Casello posted on the company’s website.

African Minerals (LSE:AMIexpects to process 15 to 18 million MT of iron ore this year and export 13 to 15 million MT from its Tonkolili project in Sierra Leone. The company also said that it still expects to achieve its production goal of 20 million mtpa by the second quarter of its 2013 fiscal year, Mining Weekly reported. As well, African Minerals said it is “confidently on track” to achieve operating expenses of $30 per MT.

Labrador Iron Ore Royalty (TSX:LIF) hired advisers to consider strategic alternatives for the company after Rio Tinto said that it intends to sell its 58.7-percent stake in the Iron Ore Company of Canada (IOC). Labrador Iron Ore Royalty holds 15.1 percent of IOC and takes a 7-percent royalty and a $0.10-per-MT commission on the iron ore that IOC sells. Labrador Iron Ore Royalty said its options include “a potential sale of the company or all or part of its assets, the separation of LIORC’s 7 percent royalty interest in IOC … from its other assets, and the maintenance of the status quo.”

Sesa Goa (BSE:500295) saw its iron ore sales fall 80 percent in its 2013 fiscal year, which ended March 31, 2013, Platts reported. The Indian mining firm continues to be hurt by mining suspensions in the states of Karnataka and Goa, which have been in effect since August 2011 and September 2012, respectively. The bans are part of a plan to curb illegal mining, according to Business Standard. However, Reuters has reported that 19 iron ore mines are expected to reopen in Karnataka this fiscal year. Prior to the bans, India produced about 200 million mtpa of iron ore and exported about half that amount.

Junior company news

Alderon Iron Ore (TSX:ADVreceived the final payment of C$119.9 million from Hebei Iron & Steel Group (SZSE:000709) for its 25-percent stake in Alderon’s Kami project in Canada’s Labrador Trough. Alderon owns the remaining 75 percent. In all, Hebei, China’s largest steelmaker by capacity, has paid $182.2 million for its interest. Alderon aims to start commercial production at Kami in the fourth quarter of 2015 and envisions production of 8 million mtpa of concentrate at 65.2-percent iron over a 30-year life, according to Platts.

Cap-Ex Iron Ore (TSXV:CEV,OTCQX:CPXVF) agreed to reprice the brokered private placement announced on March 22, 2013 to $0.10 a unit from $0.15. It has also lowered the $5-million maximum to $3 million. Each unit will consist of one common share and one common share purchase warrant that will let the holder buy one Cap-Ex common share at an exercise price of $0.20 for 24 months from the date of issue. The company will use the proceeds to keep advancing its Block 103 project in the Labrador Trough and to seek a strategic partner.


Securities Disclosure: I, Chad Fraser, hold no positions in any of the companies mentioned in this article.

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China Rains on Iron Ore’s Parade

What Lies Ahead for Iron Ore Prices

What Rio Tinto’s IOC Sale Means for Canadian Iron Mining

Waratah Youkou and Mekambo Iron Project Update

Mining Weekly reported Waratah Resources (ASX:WGO) reported an update on the Youkou and Mekambo-Est iron project on the border of Gabon and Congo.

As quoted in the market news:

In May, the company reported that X-ray fluorescent (XRF) testing and analysis indentified high-grade ore at the project site. This finding was confirmed following the drilling of 14 holes, totalling 698 m, in May.

The assay results of the seventh drill-hole showed high iron-ore content that included 66% iron, 0.089% phosphorus and 1.78% silicon, all at 20 m. Previous assay results of the hole at 26 m showed iron at 62%, using the portable XRF testing and analy- sis device.

Click here to read the full Mining Weekly report.

Junior Miners Tapping into the West African Iron Ore Boom

Junior Miners Tapping into the West African Iron Ore Boom

West Africa is on the verge of becoming one of the world’s leading iron ore regions, and junior mining firms feel they could hold the key to the area’s success.

By 2020, West African nations, including Guinea, Sierra Leone, Liberia, and the Republic of the Congo, could supply 250 million tons, or 9 percent of the world’s total iron ore production, according to mining research firm Raw Materials Group.

That’s why both major and junior mining companies have been making big investments in West Africa over the last few years, fueling a mining boom that some think could turn the region into the next Pilbara, the iron ore heartland of Australia.

Big projects are set to start production

Right now, the iron ore market is highly concentrated, with two nations, Brazil and Australia, each accounting for about a third of global exports. Similarly, global iron ore production is dominated by three major mining companies: Rio Tinto (NYSE:RIO,LSE:RIO,ASX:RIO), BHP Billiton (NYSE:BHP,LSE:BLT,ASX:BHP) and Vale (NYSE:VALE).

All three majors are active in West Africa. A landmark project in the region is the massive Simandou development, located in Southeast Guinea. Simandou is a joint venture between Rio Tinto and Chalco, a subsidiary of Chinese state-owned aluminum producer Chinalco. Rio Tinto holds a 50.35 percent stake in the project, and Chalco owns 44.65 percent. International Finance Corporation, the private sector arm of the World Bank, owns the remaining 5 percent.

According to Rio Tinto, Simandou is the largest iron ore and infrastructure project ever developed on the continent. The partners expect the mine to produce 95 million tonnes of iron ore a year when it starts up in 2015. The project also involves the construction of a 650-kilometer railway and a new deepwater port south of Conakry, the capital of Guinea.

Rio Tinto has pegged the total cost of the project – including the railroad and port – at around $10 billion.

China gets in on the action

Simandou highlights another trend that is driving the development of West Africa’s iron ore industry: the growing participation of Chinese companies.

China is already a major iron ore producer. Last year, it mined 1.33 billion tons of ore. However, at roughly 20 percent iron, its iron ore is relatively low grade. At the same time, the country is the world’s most voracious iron ore consumer, importing 686 million tons of iron ore in 2011.

As a result, China’s domestic production falls short of the amount of iron it needs to fuel its ongoing development.

That is prompting the country’s mining firms to aggressively move into new markets like West Africa in a bid to meet the Chinese government’s goal of securing an additional 250 million tons of iron ore annually.

A very recent example of Chinese participation can be seen in Guinea’s first operating iron mine, which will start up on June 30.

The mine cost $300 million to build and is expected to produce 10 million tonnes of ore per year when it reaches full capacity. It is operated by the Guinea Development Corporation, a joint venture between the government of Guinea, the China International Fund (CIF), and Bellzone Mining (LSE:BZM). The Guinean government owns 15 percent and Bellzone and CIF own 42.5 percent each.

Why junior miners are bullish on West Africa

But even with the influx of investment from major producers and Chinese companies – not to mention worrying headlines about weaker iron ore demand due to the Eurozone debt crisis and Chinese economic slowdown – junior miners still see lots of opportunity in the region.

In fact, some think these near-term worries will put pressure on majors to delay investing in new projects that many of their investors see as too risky. That could be a plus for juniors, according to John Welborn, CEO of Equatorial Resources (ASX:EQX).

“Africa represents an opportunity to get a foothold in a commodity that has been dominated … by a small number of companies,” Welborn said. “Copper has dozens of producers; iron ore has basically three. If those three change their investment strategy, that creates opportunity.”

Equatorial owns two iron projects in the Republic of the Congo. The company says its Badondo property could contain between 1.3 and 2.2 billion tonnes of ore grading 30 to 65 percent iron. Equatorial is also drilling at its Mayoko-Moussondji project further north, with a goal of providing an initial metal estimate by mid-2012.

Here are two other junior iron ore firms that are currently active in West Africa:

  • West African Iron Ore (TSXV:WAI) is exploring for iron ore at its Forécariah and Kérouané properties in Guinea. The company has not yet defined a resource, but says that Soviet geologists explored Forécariah in the early 1970s and estimated that the property could contain 750 million tonnes of ore.
  • Sable Mining Africa (LSE:SBLM) owns the 308 square kilometer Bopulu licence, the 349 square kilometer Timbo licence, and the 532 square kilometer Kpo Range concession. All three are located in Liberia near iron-ore-bearing properties owned by major producers ArcelorMittal (NYSE:MT) and Russia-based Severstal (LSE:SVST).

Cost control is key to junior success

Juniors’ long-term prospects are still unclear. West Africa continues to have strong long-term potential, but smaller producers face a number of hurdles. In addition to the usual challenges of finding a mineable deposit, costs for other necessities, such as labor and equipment, are rising.

The biggest obstacle that juniors face is the high cost of building infrastructure. Often, crucial links such as roads, railways, and ports have to be built from scratch, and many juniors simply don’t have access to the capital these projects require.

In addition, though many West African countries are becoming friendlier to foreign mining interests, many are still unstable, which adds to uncertainty.

Still, many juniors feel that if they can keep operating costs low – between $20 and $40 a tonne – they will remain profitable even if market conditions remain weak.


Securities Disclosure: I, Chad Fraser, hold no positions in any of the companies mentioned in this article.

Iron Ore Junior Miners Pushing Ahead in West Africa

Reuters reported junior miners are pushing ahead with plans to tap West Africa’s iron ore resources and break into the lucrative market for the steel-making ingredient despite tough market conditions.

As quoted in the market news:

Worries over slackening demand from China, which has led demand for iron ore for the past decade, combined with soaring operating costs and uncertain equity and commodity markets, have led investors to fret over the future of dozens of junior miners and exploration companies working on deposits from Mauritania to the Republic of Congo.

Click here to read the full Reuters report.

Exarro May Fast Track Mayoko Iron Ore Deposit

Bloomberg reported Exxaro Resources Ltd. (TSX:EXX) says it may fast track its Mayoko iron-ore deposit in the Republic of Congo.

As quoted in the market news:

Exxaro, the second-largest South African coal miner, is reviewing the work done on the Mayoko deposit by African Iron Ltd., which it acquired for A$313 million ($321 million) in March, and will start rail and port negotiations with the Congolese government once the new plans are completed, Nkosi said in an interview in Pretoria yesterday. African Iron targeted first production by mid-2013 and output of 5 million metric tons a year, Macquarie First South Securities (Pty) Ltd. said in a research note last month.

Click here to read the full Bloomberg report.

Exxaro Bid Leaked Early

Mining Weekly reported Exxaro’s (FWB:LCQ)  offer for African Iron (ASX:AKI) is one of the worst kept secrets on the ASX.

As quoted in the market news:

What was relevant, however, was that, in finally officially announcing its R3-billion (A$338-million) cash takeover offer of African Iron with such positivity, South Africa’s black-controlled diversified mining company certainly helped to put the Republic of Congo (RoC) on the map as a new African iron-ore development frontier.

Click here to read the full Mining Weekly report. 

Delrand Reports Further Iron Ore Exploration Results

Delrand Resources Limited (TSX:DRN,JSE:DRN) announced additional positive drilling results from its iron ore joint venture project.

As quoted in the press release:

The Company’s May 3, 2011press release stated that its joint venture with Rio Tinto has discovered high grade haematite (a form of iron ore) in its exploration areas within Province Orientale, Democratic Republic of the Congo (the “DRC“).

To date, a total of 1,117.1 metres of diamond drill holes have been drilled and all the drill cores have been analysed revealing average grades from the mineralised intercepts ranging from 62.5% to 68.5% iron. This is a wider range, slightly lower and slightly higher, than the initial results but nevertheless high grade by international standards. The weighted average grade is 66.6%.

Click here to read the Delrand Resources Limited (TSX:DRN) press release.