Mining Roundup

Beowulf (LON:BEM) has confirmed positive testwork results for the composite samples taken from Pitkajarvi and Aitolampi graphite prospects located in eastern Finland.

Both were new discoveries in 2016 and are eastern extensions to the Haapamaki prospect.

Testwork on composite samples for Pitkajarvi and Aitolampi produced concentrate grades of 94.5% total carbon (Ct) and 94.7% Ct, respectively.

A secondary cleaning circuit produced grades of at least 95.7% Ct in all size fractions between 65 mesh and 200 mesh (210-75 micron), with the highest grade of 97.4% Ct obtained from the -80/+100 mesh (180-150 micron) size fraction for Pitkajarvi (test MET-03-3).

Most of the carbon in the samples was associated with graphite, with only small amounts of organic carbon and carbonate carbon.

Chief executive Kurt Budge said: “It’s good to get some positive testwork results for the composite samples taken from Pitkajarvi and Aitolampi.

“We are now finalising plans to drill up to 2,000 metres on the most promising electromagnetic targets at these two prospects, with a start date timed in early March.

“The drilling programme is expected to significantly enhance our geological understanding of these two prospects, provide representative sample material for further testwork and an assessment of commercial prospects, for example in battery, micronised and expandable graphite applications.

“We look forward to providing shareholders with further updates on our progress and findings.”

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Antofagasta (LON:ANTO) reports a strong performance in the final quarter of 2016 with production up 13.8% versus the previous quarter.

As a result, copper production for the full year was just under 710,000 tonnes, 12.5% higher than in 2015.

Copper production in Q4 2016 was 205,500 tonnes, 13.8% higher than the previous quarter with strong performances from Centinela, Zaldivar and Los Pelambres driven by higher grades and increased throughput.

Group copper production for the full year increased by 12.5% compared to 2015 to 709,400 tonnes.

This was driven by higher copper production at Centinela and additional production coming from the group’s new Antucoya and Zaldivar operations, partly offset by the closure of Michilla at the end of 2015.

Gold production was 91,100 ounces in Q4 2016, a 29.7% increase on Q3 2016 due to higher grades and throughput at Centinela.

For the full year production was 270,900 ounces, 26.6% higher than in 2015, again reflecting better grades and throughput at Centinela.

Molybdenum production at Los Pelambres was 2,000 tonnes in Q4 2016 and 7,100 tonnes for the full year.

This was a small increase for the quarter and a 3,000 tonne decrease for the full year as grades and recoveries fell.

Chief executive Ivan Arriagada said: “As expected Antofagasta put in a strong performance in the final quarter of 2016 with production up 13.8% versus the previous quarter.

“As a result, copper production for the full year was just under 710,000 tonnes, 12.5% higher than in 2015.

“Reflecting our continued focus on profitable tonnes, net cash costs for 2016 fell by 20.0% year-on-year, to $1.20/lb benefiting from rigorous cost control, increased production and lower input prices.

“During the year our new Antucoya mine successfully ramped up to full production and our latest acquisition, Zaldivar, contributed its first full year of production.

“Both operations are now fully integrated into the Group and are operating well.

“Looking ahead into 2017 we remain focused on operating and cost efficiencies, and achieving our production targets.

“Although we believe the industry has passed the low point in this commodity cycle, uncertainty persists and we need to build carefully on the solid foundations of our existing operations.”

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Vedanta Resources (LON:VED) announces the expiration and results of its previously announced tender offers to purchase for cash any and all of its outstanding $750m 9.50% bonds due 2018 and $1.2bn 6.00% bonds due 2019.

The Tender Offers expired at 8am New York time on Jan. 24.

At this time, valid tenders had been received with respect to about $370.868m of the 2018 bonds and $425.028m of the 2019 bonds.

Additionally, $227,000 of the 2018 bonds and $200,000 of the 2019 bonds were tendered pursuant to the guaranteed delivery procedures described in the Tender Offer Memorandum dated 16 January 2017.

“The Company has accepted for payment all of the Bonds validly tendered prior to the Expiration Time pursuant to the Tender Offers,” Vedanta said.

“In addition, the Company will accept any additional Bonds properly tendered by means of the guaranteed delivery procedures provided.”

On Jan. 30, such tendering bondholders would receive the purchase price in the amount of $1081.25 per $1000 principal amount of 2018 bonds tendered and accepted for purchase and $1025.00 per $1000 principal amount of 2019 bonds tendered and accepted for purchase, plus accrued and unpaid interest to, but not including, the payment date.

“The Company will arrange for cancellation of all Bonds validly tendered and accepted for purchase following purchase by the Company, and any bonds not validly tendered will remain outstanding and accrue interest in accordance with their terms,” it said.

“Following the cancellation of validly tendered Bonds, including Bonds validly tendered pursuant to guaranteed delivery procedures, $378.905m of the 2018 Bonds and $774.772m of the 2019 bonds will remain outstanding.”

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Obtala (LON:OBT) said the fourth quarter to the end of December had been exceptionally busy, with significant management focus, time and effort allocated to raising capital in order to monetise embedded asset value with the aim of accelerating productivity from these assets.

The company said key highlights during the quarter were:

Key highlights

– $14.25m raised in subsidiary Preference share issue

– Successfully exported timber produce internationally and received follow-on orders

– Successfully exported fresh agricultural produce from Tanzania to Dubai

– Completed the sale of loss-making Lesotho/African Home Stores retail chain

– CPI status within Mozambique activated

Chairman Miles Pelham said: “The decisions taken now with regard to scaling up our businesses are critical.

“Significant time and effort is being spent on detailed planning, reviewing and stress-testing our plans prior to embarking on the recruitment of skills and capex required to drive a material step change in revenues from both business lines.

“We have come a long way during my 7 month tenure of 2016 and I am pleased with the change we have implemented and the progress made.

“As we head into 2017 we leave behind a final quarter where we proved, tested and stressed the business model, procedures, logistics and operational competence of management.

“I am happy with our operational progress and we move to the next stage of utilising the funds received from our Argento preference share raising to ramp up production dramatically.

“We should expect more business partnerships throughout 2017 as we use the deep experience and networks of our new operational management and investors to broaden our horizons and develop to the scale envisaged in our Mission Statement. “I would like to welcome the numerous new investors whom joined us throughout 2016 and thank existing stakeholders for their loyal support and commitment.

“Special thanks goes to on-the-ground management whom have been placed under immense pressure to enact change in a quick but stable fashion.

“The work has been long and hard but their efforts are already starting to bear fruit.

“I am confident 2017 will be a revolutionary year for the company as we move forward into growing markets well-funded, unencumbered, and with a competent and motivated management team.

“We are working with reputable independent research houses and we expect them to initiate coverage within the current quarter.”

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Horizonte Minerals (LON:HZM) has appointed Wagner Lucio Oliveira to a non-board position as feasibility study manager for the company’s 100% owned Araguaia nickel project, which is being developed as the next major nickel project in Brazil.

Horizonte said: “Wagner brings with him a wealth of nickel experience having worked with Anglo American plc at its Barro Alto ferronickel mine in Brazil on its engineering, construction and start-up between 2007 to 2010.

“He is skilled in a wide range of technical areas including smelter technology, refining, processing, performance management, plant operations, project management and capital cost rationalisation.

“In addition to his nickel experience, Wagner has built a diverse skillset from work undertaken with other major companies such as Rio Tinto, Vale and most recently McKinsey & Company in Chile and Peru.”

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BHP Billiton (LON:BLT) has maintained full year production guidance for petroleum, iron ore and coal and said record production for the half year was achieved at Western Australia Iron Ore.

But production guidance for copper has been reduced to approximately 1.62 Mt, 2% below prior guidance, reflecting lower volumes now expected at Olympic Dam.

The group said all major projects under development were tracking to plan.

The Bass Strait Longford Gas Conditioning Plant project achieved initial gas sales in the December 2016 quarter and mechanical completion was achieved at the Escondida Water Supply project with first water expected in the March 2017 quarter.

Chief executive Andrew Mackenzie said: “We have performed well during a period of higher prices, with record iron ore volumes achieved at WAIO.

“Our simpler organisational structure has freed our assets to focus on what matters most and to deliver safer and more productive operations.

“Our consistent delivery of operating and capital productivity, and strict adherence to our capital allocation framework have positioned us to maximise shareholder value.

“In Petroleum, we will accelerate our counter-cyclical oil exploration efforts this year.

“Our successful Trion bid leaves us in a leading position to develop the newly opened Mexican acreage in the Gulf of Mexico, where we can leverage our core expertise.

“We are encouraged by recent positive drilling results at the LeClerc well in Trinidad and Tobago and the Caicos well in the Gulf of Mexico.

“After the first successful rig, our Onshore US gas hedging programme will also be expanded to secure attractive returns.”

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Jubilee Platinum (LON:JLP) has issued 2,500,000 ordinary shares following the exercise of warrants at 3.15975p apiece.

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Fresnillo (LON:FRES) achieved record production in 2016, having produced 50.3 moz of silver and 935.5 koz of gold.

Silver production – including Silverstream – was up 7.1% vs. 2015, in line with guidance and 4Q16 silver production of 13.3 moz – including Silverstream – was up 9.5% vs. 4Q15, mainly due to the start up of San Julian phase I.

A higher ore grade at Cienega and an increased contribution from the Silverstream also had a positive impact on production.

Quarterly silver production increased 13.1% vs. 3Q16 due to San Julian (phase I) ramp-up, higher ore processed at Saucito and a higher ore grade and ore processed at Fresnillo.

Record annual gold production of 935.5 koz was up 22.8% vs. 2015 and ahead of guidance, mainly due to reduced gold inventories at Herradura.

Additionally the San Julian (phase I) start-up and an improved overall average speed of recovery at Noche Buena contributed

Quarterly gold production increased 24.2% vs. 4Q15 and 22.0% vs. 3Q16 mainly due to reduced gold inventories at Herradura and the San Julian start up.

For 2017 silver production is expected to be in the range of 58-61 moz including 4 moz from the Silverstream while gold production is expected to be in the range of 870-900 koz, due mainly to the stabilisation of production at Herradura following the reduction in inventories.

Chief executive Octavio Alvidrez said: “I am pleased to report that Fresnillo plc has delivered record production in 2016, having produced 50.3 moz of silver and 935.5 koz of gold.

“The successful ramp-up of San Julian (phase I) was the principal reason for the 7% increase in annual silver production, although higher silver grades at both Cienega and Fresnillo also contributed to the rise in production.

“At the Fresnillo mine, despite reporting a slight improvement in silver production, we continued to experience some issues during the year that impacted the delivery of our turnaround plan.

“We have however, implemented a number of measures and remain focused on addressing these issues and are targeting a year-on-year increase in silver production in the range of 7-10% at the mine in 2017.

“Our 2016 gold production of 935.5 koz exceeded our revised guidance, primarily due to the reduction of inventories at Herradura. The start-up of San Julian (phase I) and a strong performance at Noche Buena also contributed to the increase to gold production.

“We continued to make good progress with our development projects in 2016. Construction of San Julian phase II continued to advance and is on track to be commissioned in the second quarter of 2017, with both phases of San Julian producing a combined annual average of 10.3 moz of silver and 44 koz of gold.

“Further progress was made at the Pyrites Plant project which is set to deliver 3.5 moz silver and 13 koz a year once commissioned in 1H18, while the construction of the second line of the Dynamic Leaching Plant at Herradura remained on track.

“Looking ahead, our 2017 gold production is anticipated to be between 870-890 koz as we expect to reach a steady level of inventories after last year’s inventory reductions at Herradura; whilst silver production is expected to be within the range of 58-61 moz, on track to reach 65moz by 2018.”

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Edenville Energy (LON:EDL) has issued 3,304,167 new ordinary shares following the exercise warrants at 0.80p apiece.

At 3:56pm:

(LON:ANTO) Antofagasta PLC share price was +27.25p at 851.25p

(LON:BEM) Beowulf Mining PLC share price was +2.13p at 12p

(LON:BKY) Berkeley Energia Ltd share price was +1.5p at 66p

(LON:CEY) Centamin PLC share price was -7.4p at 147.4p

(LON:CZA) Coal of Africa Ltd share price was +0.36p at 3.51p

(LON:FDI) Firestone Diamonds PLC share price was 0p at 47p

(LON:FRES) Fresnillo PLC share price was -64.5p at 1417.5p

(LON:GEMD) Gem Diamonds Ltd share price was -0.12p at 119.63p

(LON:HOC) Hochschild Mining PLC share price was -15.85p at 237.25p

(LON:HZM) Horizonte Minerals PLC share price was 0p at 2.45p

(LON:KMR) Kenmare Resources PLC share price was -4p at 318.5p

(LON:OBT) Obtala Resources PLC share price was +0.13p at 19.38p

(LON:VED) Vedanta Resources PLC share price was +6p at 1065p

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