Base Metals Weekly Round-Up: Peru in Line for New Copper Mine

- September 14th, 2018

In the news this week — Peru’s Minsur has itself a US$1.6-billion mine to work on, New Century Resources has reached the pointy end of restart activities at the Century zinc mine and Bougainville inches towards the reopening of the Panguna copper mine.

As it turns out, even a real hurricane can’t drown out the roar of all the storms US President Donald Trump sets off by tweeting his thoughts.

As long as Trump hates on NAFTA, he’ll attract opponents from around North America, with House Democratic leader Nancy Pelosi warning it must remain a trilateral agreement, and cannot go forward without Canada — no doubt something Canadian Prime Minister Justin Trudeau would like to hear repeated, slowly.

Besides the general ructions all the trade talks are causing in the markets, in the commodities space S&P Global Ratings has dropped its forecast copper and zinc prices in light of trade war talk.

On the London Metal Exchange, copper was trading up this week, dragging itself skywards from its Monday (September 10) start at US$5,840 per tonne up to US$5,990.50 by Thursday (September 13).

The red metal is now slightly higher than its early September value, which was US$5,950 on September 3.

No so for zinc, which is 4.3 percent below its starting point for the month (US$2,474.5 per tonne) at US$2,368. The weekly numbers are not any better, with the metal down from its Monday value of US$2,405.50.

For lead, the week saw a dip through the middle of the week. The base metal started at US$2,054 a tonne on Monday before falling to US$1,969 on Tuesday and recovering to US$2,041.5 by Thursday.

Base metals top news stories

1. Minsur Approves US$1.6-billion Mina Justa Copper Mine

Peru-based Minsur has pulled the trigger on its US$1.6-billion Mina Justa copper project, which is the second major mining investment in the country.

Minsur, which is a top tin-producing company, is aiming to start production in 2020/2021, with output set to reach 102,000 tonnes of copper and 58,000 tonnes of copper cathode per year.

Peruvian President Martin Vizcarra announced the project at a palace ceremony on Monday morning. “It is gratifying to start the week with this news, which will improve and reactivate our economy,” he said.

2.New Century Begins Zinc Concentrate Transport to Karumba

New Century Resources (ASX:NCZ) has begun transporting zinc concentrate along a recently developed slurry pipeline to its port facility in Karumba, Queensland.

According to the company, the startup of the slurry pipeline represents “another important milestone.” The zinc concentrate produced at the company’s Century mine is now going through its first round of logistics for export.

With this progress, the company anticipates seeing first revenue from concentrate sales later this month, and remains on track to make its first concentrate shipment in Q4 2018.

The projected annual export volume out of the Karumba port is 300,000 to 400,000 tonnes over an estimated six-and-a-half-year mine life.

3.RTG Presents Panguna Copper Proposal to Bougainville Government

After being nominated as the preferred development partner for landowners, RTG Mining (ASX:RTG,TSX:RTG) has presented its Panguna copper mine redevelopment proposal to Bougainville’s House of Representatives.

RTG is working in collaboration with a consortium of Papua New Guinea (PNG) landowners, including the Special Mining Lease Osikaiyang Land Owners Association, to revitalize and restart the mine.

Located in Central Bougainville, the Panguna mine was once considered the largest open-pit mine in the world and made up around 40 percent of PNG’s total economy while in operation.

According to RTG’s Monday release, the consortium won the support of the House of Representatives Committee from Central Bougainville, and is working to gain approval from the Bougainville government.

As part of the efforts to win support from both the Bougainville government and nearby community, the consortium has been working to develop social license through various ventures. This includes an extensive community awareness program in all key villages, and lending support to local programs.

In other base metals news

Analysts are predicting nickel could see a boost in value through 2019 thanks to ongoing strong demand and short supply — with prices tipped to reach US$16,000 a tonne by the end of this year and US$18,000 in the following 12 months.

In the Democratic Republic of Congo (DRC), government ministers are telling miners to suck it up and implement the government’s new mining code, which slaps extractive industries with higher taxes, strips away protections and — according to miners — makes the DRC less attractive for investment.

In August, international miners with assets in the DRC established a new industry body to engage the government on their concerns about the mining sector.

A key part of the new code — the implementation of a “strategic resources” classification for certain minerals — will be decided upon soon, according to the DRC government. No doubt shareholders will hear the rabble of objection from miners first.

Staying in Africa, Nevsun Resources (TSX:NSU) is absolutely chuffed that Eritrea, the host country of its Bisha zinc mine, is finally getting along with its next-door neighbor Ethiopia, removing the specter of conflict and lowering the risk factor of its secondary asset and money-making mine.

The spurned prospective buyer of Nevsun, Lundin Mining (TSX:LUN), remains in the hunt for lucrative copper assets, according to its incoming CEO Marie Inkster, who said the company would be willing to spend as much as US$3 billion on the right base metals asset depending on availability.

In South America, Cochilco reported that Chile has produced 3.31 million tonnes of copper so far in 2018 — up over 10 percent on the same time last year, cementing the country’s title as copper-producing champion of the world.

In Australia, private equity firm Black Mountain has found itself a nickel project, taking the idled Lanfranchi mine off Panoramic Resources (ASX:PAN) for AU$15.1 million. Black Mountain was very much in the market, having nixxed a proposal to purchase Poseidon Nickel (ASX:POS) in its entirety in August.

Speaking of Poseidon, the action that made Black Mountain turn sour on the company — an increase in shares controlled by Andrew Forrest — is now the subject of a challenge by the Australian Securities and Investment Commission, which says the increase in shares held by Forrest (through his company Squadron Resources) was done without first gaining shareholder approval.

Don’t forget to follow us @INN_Resource for real-time updates!

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

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