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Investing Guides
Debt Funding Update
January 24, 2023
Queensland Pacific Metals Ltd (ASX:QPM) (“QPM” or “the Company”) is pleased to provide an update on its debt financing initiatives for the TECH Project.
Highlights
- QPM’s debt financing process is progressing well:
- Ongoing discussions with other financiers providing QPM with greater clarity of the likely indicative debt syndicate for the TECH Project;
- Independent Techncal Expert RPM Global has formally commenced technical due diligence; and
- Independent Market Consultant CRU Group has commenced its review of the Nickel and Cobalt Sulfate markets to support the financing.
- Non-binding letter of interest received from Export Development Canada (“EDC”), Canada’s export credit agency, for the potential provision of debt funding for the TECH Project for up to A$200m. EDC’s financing is subject to the successful completion of its due diligence process and underwriting conditions.
QPM’s strategy is to work with international export credit agencies and other government backed lenders for the provision of debt financing for the TECH Project. This process has included ongoing discussions with EDC. Based on its initial analysis and discussions with Canadian companies, EDC has provided a non-binding letter of interest to QPM for support to the TECH Project by lending up to A$200m as a direct lender over an indicative tenor of 9 years. EDC’s interest is in relation to potential equipment and services supply from Canadian companies for the construction of the TECH Project. The provision of financing by EDC is subject to the successful completion of its due diligence process and typical project finance conditions such as security, debt servicability and equity financing.
EDC is the official export credit agency of Canada and is dedicated to helping Canadian businesses make an impact at home and abroad. EDC has the financial products and knowledge Canadian companies need to confidently enter new markets, reduce financial risk and grow their business as they go from local to global.
Debt Financing Update
QPM’s debt financing strategy has been to target a debt syndicate largely consisting of government backed lenders led by Australian agencies, Export Finance Australia (“EFA”) and Northern Australian Infrastructure Facility (“NAIF”). QPM remains in active discussions with these Australian and other international government agencies, as well as other commercial lenders.
The non-binding letter of interest received from EDC demonstrates continued progress by QPM on its debt financing initiatives which has already resulted in:
- $250m indicative financing letter of interest received from EFA;
- Completion of strategic assessment phase for NAIF;
- Indicative letter of interest and support received from Korea Trade Insurance Corporation (K-Sure).
QPM has recently appointed independent consultants who will be assisting the lenders in their due diligence on the TECH Project. RPM Global has been formally appointed as Independent Technical Expert for the debt syndicate and has commenced its technical due diligence on the TECH Project. CRU Group has been appointed as the Independant Market Consultant and will be producing a detailed report on the Nickel and Cobalt Sulfate markets.
Click here for the full ASX Release
This article includes content from Queensland Pacific Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
QPM:AU
28 June 2023
Element 25 Signs US$85M Supply Deal with GM for Manganese Sulphate
Element 25 (ASX:E25) has signed a deal with General Motors (NYSE:GM) to supply the car manufacturer 32,500 tonnes of manganese sulphate annually, according to a news report by Reuters.
The news follows GM’s announcement to take an equity stake in Queensland Pacific Metals (ASX:QPM) for a new source of nickel and cobalt for battery cells, in a move to secure the car maker’s supply of battery minerals for its North American electric vehicle production, the report said. This is also Element 25’s second major supply agreement after a deal with global mobility provider Stellantis was sealed earlier this year.
The GM deal will provide Element 25 with US$85 million to fund its Louisiana battery-grade high-purity manganese sulfate (HPMSM) facility, which is scheduled to open in 2025.
To read the full article, click here.
Click here to connect with Element 25 (ASX:E25) for an Investor Presentation.
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20 February
Chalice Mining Makes Metallurgical "Breakthrough" at Gonneville Project
Chalice Mining ( ASX:CHN,OTC Pink:CGMLF) said on Monday (February 17) that it has made an important metallurgical breakthrough at its Gonneville projected, located in Western Australia.
The company said a hydrometallurgical process for nickel concentrate is no longer needed, as recent testwork results confirm that two saleable, smelter-grade flotation concentrates can be produced across the entire sulphide resource.
Managing Director and CEO Alex Dorsch said in a press release that this new information "materially reduces" capital and operating costs for Gonneville, also substantially reducing technical risk and process complexity.
Gonneville was discovered by Chalice geologists in 2020, and is wholly owned by Chalice Mining. The company says it is the first discovery of its kind in Australia, hosting palladium, platinum, nickel, copper and cobalt.
In 2024, the discovery was the recipient of two major project status honours, one from Western Australian Premier Roger Cook in September, and another from Commonwealth Minister for Industry and Science Ed Husic in October.
These recognitions underscore the project’s role in Australia’s future critical minerals ambition.
Chalice is currently working on a prefeasibility study for Gonneville, and said testwork and optimisation will continue through the first quarter. Prefeasibility work began in 2023, with completion targeted in mid-2025.
In July 2024, Chalice signed a non-binding strategic memorandum of understanding with Mitsubishi (TSE:8058).
The company said at the time that this arrangement will be beneficial to the project, allowing for collaboration on marketing and offtake solutions and improvements in optimization for Gonneville.
Under Australia's newly legislated Critical Minerals Production Tax Incentive, the project may receive a 10 percent tax offset for its carbon-in-leach leaching, which qualifies as an eligible expenditure.
Shares of Chalice rose as high as AU$1.60 after the news on Monday, but pulled back later in the week.
Chalice said it is well positioned moving forward, with AU$90 million in cash and listed investments.
Don’t forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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19 February
Anglo American to Sell Nickel Business to MMG for Up to US$500 Million
Anglo American (LSE:AAL,OTCQX:AAUKF) has agreed to sell its Brazil nickel operations to MMG Singapore Resources, a subsidiary of MMG (OTC Pink:MMLTF,HKEX:1208), for a cash consideration of up to US$500 million.
According to a Tuesday (February 18) press release, the transaction includes Anglo American’s Barro Alto and Codemin ferronickel operations, along with two development projects, Jacaré and Morro Sem Boné.
The purchase price comprises an upfront payment of US$350 million, a potential price-linked earnout of up to US$100 million and a further US$50 million contingent on a final investment decision for the development projects.
The transaction remains subject to regulatory and competition approvals, with completion expected by Q3 2025.
Anglo American Chief Executive Duncan Wanblad said the sale is a key milestone in furthering the company’s restructuring strategy, which involves divesting certain assets to focus on copper, premium iron ore and crop nutrients.
“Today’s agreement, together with those signed in November 2024 to sell our steelmaking coal business, is expected to generate a total of up to US$5.3 billion of gross cash proceeds, reflecting the high quality of our steelmaking coal and nickel businesses,” Wanblad explained, adding that the company sees MMG as a safe and responsible operator.
MMG Chief Executive Cao Liang described the acquisition as a strategic move to diversify the company’s asset base and expand its presence in Latin America, highlighting MMG’s longstanding collaboration with Anglo American.
Anglo American’s nickel operations serve both the stainless steel and battery sectors, and Barro Alto is the only nickel mine globally that is certified by the Initiative for Responsible Mining Assurance.
Together, the company's assets produced 39,400 metric tons of nickel in 2024.
Since last year, Anglo American has been refocusing to concentrate on key commodities while divesting non-core assets.
As mentioned, in November 2024, it reached agreements to sell its steelmaking coal business.
Anglo American has also announced plans to divest its De Beers diamond unit, and is proceeding with the planned demerger of its platinum operations, which is expected to be completed by June 2025.
Platinum remains key for the automotive industry, and despite growing demand for electric vehicles, which do not use platinum-group metals, the company believes supply constraints in South Africa could support future pricing.
Anglo American will retain a 19.9 percent stake in the demerged platinum unit, but will not have board representation. The company has stated that it intends to gradually reduce its stake over time.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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12 February
Nornickel's Net Profit Dips 37 Percent as Western Sanctions and Market Hurdles Persist
Moscow-based miner Norilsk Nickel (Nornickel) reported a 37 percent decline in net profit for 2024, citing ongoing western sanctions and lower metal prices as primary factors affecting its financial performance.
According to the company’s 2024 financial results, consolidated revenue fell 13 percent year-on-year to US$12.5 billion. EBITDA was down 25 percent to US$5.2 billion, with net profit dropping 37 percent to US$1.8 billion.
Company President Vladimir Potanin said that geopolitical restrictions, reduced access to western equipment and shifting trade patterns have negatively impacted the company’s ability to generate cashflow.
“Our business as part of Russian economy remains under significant external pressure. Sanctions and restrictions as well as falling prices of our key metals continued to weigh on our revenue, profitability and ability to generate cash flow," Potanin commented in a press release shared on Monday (February 10).
“Nevertheless, in 2024 we managed to focus on operations and reverse the negative momentum."
CFO Sergei Malyshev said that Nornickel’s board would not recommend paying dividends for 2024.
Although Nornickel itself is not directly sanctioned, broader measures against Russian industries have led to reduced purchases from western clients, disrupted payment channels and logistical difficulties.
The company has redirected its sales to Asian markets to mitigate these effects.
Nornickel is forecasting a global nickel surplus of 150,000 metric tons in 2025, the same as its 2024 surplus estimate. In terms of the market for palladium, which it also produces, it's expected to remain balanced.
The company notes that the US administration’s policy direction on vehicle electrification could influence palladium demand, given its use in internal combustion engine exhaust systems.
Nornickel was tight-lipped about its discussions surrounding a Chinese joint venture.
In December, two sources familiar with the matter told Reuters the company was in talks with Chinese conglomerate Xiamen C&D (SHA:600153) to establish a joint venture to process Nornickel’s copper raw material into metal. Nornickel confirmed the negotiations at the time, and said in a conference call this week that it can't disclose further details.
Nickel market facing challenges in 2025
On a macro level, the nickel market is under pressure due to oversupply and slow demand growth.
The base metal experienced price volatility in 2024, with a brief surge in the first quarter followed by a decline, closing the year in the US$15,000 to US$15,200 per metric ton range.
Industry analysts have pointed to a continued supply glut as a key factor suppressing prices.
For instance, Indonesian production has expanded significantly in recent years, adding to the global nickel surplus. Efforts to rebalance the market have been slow, with limited price recovery expected in 2025.
The potential policy shifts under US President Donald Trump’s administration could further influence the global nickel market. The Inflation Reduction Act, introduced under the previous administration, imposed restrictions on the sourcing of critical minerals for electric vehicle (EV) batteries. Current rules require that nickel suppliers meet foreign entity of concern standards to qualify for tax credits in the US EV market.
Under existing provisions, companies linked to China, Russia, Iran or North Korea cannot hold more than 25 percent control over entities supplying critical minerals for US EV batteries.
This has affected Indonesian nickel exports, as many projects in the country have significant Chinese ownership.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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11 February
Blackstone Minerals Expands Portfolio with Mankayan Copper-Gold Project Acquisition
In a strategic move that marks a significant expansion beyond the company's nickel-mining operations, Blackstone Minerals (ASX:BSX,OTC Pink:BLSTF,FWB:B9S) has announced a merger of equals with IDM International to acquire the Mankayan copper-gold project in the Philippines.
This acquisition positions Blackstone to leverage its expertise in the evolving mining landscape, driven by energy transition requirements, according to Blackstone Managing Director Scott Williamson.
"We can leverage (the) experience that we have from operating in Vietnam, which is a similar jurisdiction. We've operated in Vietnam for the last five or six years; we've been focused on nickel in Vietnam. Now we can use that team and our expertise in developing mines in Vietnam to the Mankayan project in the Philippines," he explained.
The Mankayan project is renowned for its high-grade copper and gold potential, supported by impressive historical drill results. Williamson emphasized the project's significance, indicating the potential for a substantial resource expansion.
Blackstone's future plans for the Mankayan project include an aggressive exploration and development strategy.
"We're looking to do a bit of geophysics, but then also, once the merger has been completed, assuming it is all successful, then we would look to do further drilling. We think that there's opportunity to expand the resource," Williamson said.
The Philippines presents a favorable backdrop for this acquisition. Williamson pointed out that the government's pro-mining stance, coupled with successful operations by other companies in the region, creates an opportune climate for development.
Watch the full interview with Blackstone Minerals Managing Director Scott Williamson above.
Disclaimer: This interview is sponsored by Blackstone Minerals (ASX:BSX,OTC Pink:BLSTF,FWB:B9S). This interview provides information which was sourced by the Investing News Network (INN) and approved by Blackstone Minerals in order to help investors learn more about the company. Blackstone Minerals is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Blackstone Minerals and seek advice from a qualified investment advisor.
This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.
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24 January
Vale Launches Strategic Review of Thompson Nickel Operations Amid Market Challenges
Vale (NYSE:VALE) announced on Thursday (January 23) that its subsidiary, Vale Base Metals, has initiated a strategic review that will involve evaluating its mining and exploration assets in Thompson, Manitoba.
The company will look at a range of options for the properties, including a potential sale.
The Thompson Nickel Belt has been producing nickel since 1956. Spanning 135 kilometers, the belt includes two operational underground mines, an adjacent mill and significant exploration opportunities.
During the 12 month period ended in Q3 2024, the Thompson assets put out 10,500 metric tons of finished nickel.
The strategic review is intended to optimize Vale Base Metals' asset portfolio and strengthen the competitiveness of its nickel operations. The company expects the review to conclude in the second half of 2025.
Nickel market struggling with oversupply
Nickel prices entered 2025 in the US$15,000 to US$15,200 per metric ton range.
The metal struggled to gain momentum last year, with increased output from Indonesia and limited growth in demand from key sectors such as stainless steel and electric vehicle batteries.
Ewa Manthey, commodities strategist at ING, noted that the market surplus is unlikely to ease in the near term.
“We believe nickel’s underperformance is likely to continue — at least in the near term — amid weakening demand and a sustained market surplus,” she said in comments emailed to the Investing News Network.
China’s recent steps to support its economy, which include a US$1.4 trillion investment plan over the next five years, may influence nickel demand indirectly. However, analysts caution that measures introduced in 2024 had limited effects on China’s housing and manufacturing sectors, which are key drivers of stainless steel consumption.
Indonesia, the world’s top nickel producer, continues to play a central role in the market surplus. Its expanding nickel output, supported by significant Chinese investment, has solidified its dominance in the industry.
However, there are indications that Indonesia may consider curtailing production to stabilize prices. Reports suggest that the Indonesian government is evaluating deeper cuts to nickel-mining quotas.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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