Base Metals

This week, copper yielded all the gains it has made this year, weighed down by concerns about a proposed Chinese property tax and signals that the Fed’s asset purchases may come to an end.

Copper slipped to a 2013 low on Thursday after China said it is considering a property tax to rein in sharp rises in home prices. Meanwhile, the US Federal Reserve signaled that quantitative easing may come to an end, with some board members voicing concerns that additional “asset purchases could foster market behavior that could undermine financial stability” and pose a risk to inflation.

“The Fed minutes and concerns over China’s property sector hurt market sentiment, weighing down China’s stocks market and commodities,” Peng Guoliang, an analyst at Dadi Futures, told Bloomberg.

Still, Wiktor Bielski, head of commodity research at VTB Capital, said he expects brighter economic data out of China as well as evidence of the restocking of copper. “We remain confident that these trends will steadily become more evident through 2013, driving prices higher, although in the short-term, markets are likely to remain pressured by renewed uncertainty,” The Wall Street Journal reported Bielski as saying.

On the London Metal Exchange, copper for three-month delivery closed down 1 percent, to $7,880 per ton, from the $7,960 closing price on Wednesday. COMEX copper for March delivery was down 1.5 percent, at $3.5555 per pound, in mid-afternoon trade in New York.

Company news

BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT) said Andrew Mackenzie, the current head of its nonferrous division, will replace CEO Marius Kloppers, who is retiring in May. BHP also said its revenue fell 14.1 percent in the six months to December 31, to $32.2 billion, while net impairments and exceptional costs of $1.4 billion caused its earnings per share to drop 58 percent, to 79.6 cents.

Freeport-McMoRan Copper & Gold (NYSE:FCXreached agreements with two bank syndicates that will provide it with a $4-billion term loan and a new $3-billion revolving credit facility in connection with its proposed acquisition of Plains Exploration & Production (NYSE:PXP) and McMoRan Exploration (NYSE:MMR).

Xstrata (LSE:XTA) has been granted environmental approval for the $5.9-billion Tampakan copper-gold mine in the Philippines, Reuters reported. The project is currently held up by the provincial government’s 2010 ban on open-pit mining; there are no plans to revoke the ban, but the central government’s environmental compliance certificate puts Xstrata a step closer to construction if the ban is lifted.

Inmet Mining’s (TSX:IMN) board decided to waive a plan that could have given shareholders rights to buy shares at half the market price if anyone attempted to buy 20 percent or more of the company. Inmet said it waived the plan because the February 27 expiration date of First Quantum Minerals’ (TSX:FM) $5.2-billion offer “provides sufficient time for the full review and potential execution of all strategic alternatives being evaluated by the Inmet board.” Inmet said it will “provide shareholders with further information regarding its strategic alternatives as appropriate and prior to the expiry of the First Quantum offer,” and reiterated its recommendation that shareholders reject the offer.

Southern Copper (NYSE:SCCO) union workers in Peru reached a deal with the company on a pay rise and other benefits. They plan to sign the collective agreement next week, Fox Business reported.

Anglo American’s (LSE:AAL) revenue fell 10 percent in 2012, to $32.8 billion, while a $4-billion after-tax impairment on the Minas Rio iron ore project in Brazil helped push the bottom line into a loss of $1.19 per share compared to a profit of $5.10 per share in 2011.

Junior company news

Panoro Minerals (TSXV:PML) plans to raise up to C$17.3 million in a public equity financing deal that will be underwritten by Canaccord Genuity. The company will use the net proceeds to fund continued exploration and development of the Cotabambas copper-gold-silver project in Peru.

Coro Mining (TSX:COP) is selling its Chacay property, an early stage copper porphyry prospect in Chile, to Teck Resources’ (NYSE:TCK,TSX:TCK.A) Compania Minera Relincho for $2.5 million plus a 1.5-percent net smelter return royalty. The company plans to use the proceeds to help advance its Berta, El Desesperado and Payen copper and gold projects.

Catalyst Copper (TSXV:CCY) announced plans for a private placement of up to 10 million units at a price of $0.06 per unit to raise up to $600,000. The proceeds will be used to pay the remainder of its financial commitments to secure a 60-percent stake in the La Verde copper project in Mexico.

EMED Mining (LSE:EMED,TSX:EMD) completed an updated technical report on its Rio Tinto copper project in Spain. The report supports the company’s base case of 9 million tons per annum over 14 years for annual production of existing ore reserves from the Cerro Colorado deposit. The report also notes exploration potential peripheral to Cerro Colorado that could potentially provide scope to grow the resource and expand operations within existing permit areas. The net present value of the project is estimated at $427 million per year at a copper price of $3.50 per pound.

Candente Copper (TSX:DNT) is “extremely pleased” with results from the first exploration hole of the 2013 drilling program at the Canariaco Sur porphyry copper-gold system. President Sean Waller said that this hole, together with two previous drill holes, contains copper and gold mineralization extending over 500 meters from the surface to the end of the hole, “indicating that Canariaco Sur has the potential to be a very significant system.”

Nevada Copper (TSX:NCUexpects to receive all the permits required to operate and develop its Pumpkin Hollow copper project in Nevada in the second quarter of this year.

Euromax Resources (TSXV:EOX) said drilling results at its KMC project in Serbia show thick sequences of gold-copper skarns, gold skarns, zinclead-copper-gold skarns and volcanic-hosted gold mineralized silica breccias. “We are now confident to proceed with a maiden resource estimate on the copper canyon skarn,” Chief Operating Officer Pat Forward said in a statement.

Copper North Mining (TSXV:COL) said its 2012 exploration program in the Redstone Copper Belt in the Northwest Territories indicates the “geological potential for a conceptual stratiform, sedimentary rock-hosted copper target that spans up to 10,000 m of strike length at Coates Lake.”

Benton Resources (TSXV:BEX) sold its stake in the Stillwater Mining (NYSE:SWC) for net cash proceeds of $5.02 million. The company now has around $10 million in cash and $3.02 million in remaining equity positions.


Securities Disclosure: I, Ragnhild Kjetland, hold no investment interest in any company mentioned in this article. 


S&P 5004264.50+57.23


Heating Oil3.51+0.03
Natural Gas8.76-0.11