Mining Roundup

Sirius Minerals (LON:SXX) has raised gross proceeds of about £370m through the Firm Placing and Placing in connection with its Stage 1 financing requirements to begin the construction of its North Yorkshire polyhalite project.

Concurrently, the Company has successfully placed $400m of Convertible Bonds through the Convertible Bond Offering.

Capitalised terms not otherwise defined in the text of this announcement have the meanings given in the Company’s announcement of 2 November 2016.

Pursuant to the Firm Placing, Firm Placees have agreed to subscribe for 1,665,805,761 Firm Placed Shares at an issue price of 20.00 pence per New Ordinary Share (the “Issue Price”).

The Firm Placed Shares represent approximately 40.0 per cent of the Company’s issued Ordinary Shares following Admission.

In addition, pursuant to the Placing and Open Offer, the Joint Bookrunners and Co-Lead Managers have placed 185,089,529 Open Offer Shares at the Issue Price with the Conditional Placees, subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer.

The Open Offer Shares represent approximately 4.4 per cent of the Company’s issued Ordinary Shares following Admission.

Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to apply for the Open Offer Shares at the Issue Price, on and subject to the terms and conditions of the Open Offer, pro rata to their holdings of Existing Ordinary Shares on the Record Date, on the following basis:

2 New Ordinary Shares for every 25 Existing Ordinary Shares

Open Offer Shares will also be made available to Qualifying Shareholders under the Excess Application Facility. Fractions of New Ordinary Shares will not be allotted and each Qualifying Shareholder’s entitlement under the Open Offer will be rounded down to the nearest whole number. Further information will be set out in the prospectus to be published by the Company in due course.

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Highland Gold Mining’s (LON:HGM) production of gold and gold equivalent totalled of 191,752 oz over the first nine months of the year, in line with 191,408 oz a year ago.

Q3 production was 63,096 oz – 11% down on last time. The company said production at Mnogovershinnoye (MNV) and Novoshirokinskoye (Novo) was in line with Q3 of last year but output at Belaya Gora was lower due to management decision to process lower grade stockpiles while contractor SRK develops updated mining and processing plans.

Other highlights:

– Average Q3 realised gold price of 1,335 USD/oz.

– Exploration drilling programmes totalling over 60k metres completed at MNV, Kekura, Blagodatnoye and Sredny Golgotay.

– At Kekura, Fluor awarded a contract for key sections of a detailed feasibility study (DFS), while construction of key infrastructure is under way.

The company affirmed its forecast for total production of gold and gold equivalent of 255,000-265,000 oz for the full year.

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Randgold Resources (LON:RRS) has improved its 9-month pretax profit to $274.8m, from $190.3m. Total income was $869.7m, from $816.9m.

“A strong third quarter performance kept Randgold Resources on track to meet its 2016 guidance,” the company said in a statement.

“Forecast cash flows generated from operations are expected to support funding for the three new projects the company has set as a goal to establish over the next five years as well as increasing dividends.”

CEO Mark Bristow said Kibali and Tongon had bounced back well from the technical issues that had plagued them in the first half of the year while the flagship Loulo-Gounkoto complex continued on its steady course.

He said it was worth noting that despite the high level of activity, there had been zero lost-time injuries across the group during the quarter.

“Tongon got its mills back up at the end of June and Kibali ramped up production, boosting group throughput by 13%. Unit costs were also better, with decreased processing costs supported by lower strip ratios at Tongon and Kibali. The higher gold price also contributed to the significant increase in profit,” Bristow added.

“If the gold price stays above $1 250 per ounce, and we deliver on our forecasts, we should get close to a $500 million net cash position at the year end.”

Turning to exploration, Bristow described the company’s strategy as “Three in Five” – the defining or securing of three new projects in the next five years, be they from the company’s exploration portfolio or from new business initiatives.

Current priorities were to fast-track the development of the Boundiali structures with the aim of making a world-class discovery; to establish whether Massawa or Gbongogo could replace Tongon; to define mineable satellites around Tongon while replacing depletion at the other mines; and to continue driving generative programmes to feed the company’s resource portfolio.

The Gounkoto Super Pit feasibility study is nearing completion and if, as expected, the project goes ahead, it will significantly enhance the Loulo-Gounkoto complex’s production and cost profiles.

In the meantime, new targets at Loulo’s Yalea and Gara operations are being investigated in a programme which has already delivered 600 000 additional resource ounces at Gara.

“Loulo-Gounkoto and Kibali are both strongly placed to produce in excess of 600 000 ounces per year for the next 10 years, and Tongon’s life of mine continues for at least another five years. In the meantime, the prospects for our next mine or mines are taking increasingly tangible shape.

“Considering that we have a business that is designed to be profitable at a gold price of $1 000 per ounce, I believe that Randgold still stands alone in terms of its ability to create and deliver real value,” Bristow said.

HIGHLIGHTS:

– Profits up 32% quarter on quarter and 58% on corresponding quarter of prior year

– Earnings per share up 35% quarter on quarter and 56% on corresponding quarter of prior year

– Production up 7% quarter on quarter and in line with corresponding quarter of prior year

– Total cash cost/oz down 9% quarter on quarter and 5% on corresponding quarter of prior year

– Net cash generated from operations increases 18% quarter on quarter and cash up 32% to $361.1 million

– Loulo-Gounkoto complex remains on track to beat 2016 guidance

– Morila transitions to full tailings retreatment

– Tongon gets back on track with gold production up 41% and costs down 21% quarter on quarter

– Kibali delivers improved operational performance with gold production up 23% and costs down 9% quarter on quarter

– Zero lost time injuries in Q3 improves group LTIFR to 0.36 for the year

– Ongoing work points to improved 10 year production profile for Loulo-Gounkoto complex

– Exploration teams back in the field with exciting portfolio of targets

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Anglo Asian Mining (LON:AAZ) has announce that an updated investor presentation is now available on its website: www.angloasianmining.com.

The investor presentation includes details of the all in sustaining costs per ounce of gold produced by the company at the Gedabek gold, copper and silver mine in western Azerbaijan as calculated from information derived from its published financial statements.

The AISC is calculated in accordance with the World Gold Council’s Guidance Note on Non-GAAP Metrics dated 27 June 2013. The AISC for the six months to 30 June 2016 was US$703 per ounce of gold. This compares to US$925 per ounce of gold for the six months to 30 June 2015 and US$858 per ounce of gold for the 12 months ended 31 December 2015.

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Eurasia Mining (LON:EUA) has issued an update on progress on its three projects in Russia.

Eurasia’s West Kytlim platinum and gold project is now in production, first shipments of concentrate began in early September.

The Monchetundra Project is in late stage development and has been bolstered by an Engineering, Procurement, Construction and Commissioning contract with Sinosteel Equipment and Engineering Co Ltd, while the Semenovsky Gold in Tailings Project remains under review as metallurgical test work for cyanide gold recovery nears completion.

Managing director Christian Schaffalitzky said: “We have endeavoured to replicate the structure, which has been proven to work at West Kytlim, at the Monchetundra Project with an additional contract to cover the considerable capital outlay.

“We believe this presents a route to project development which minimises exposure for Eurasia, further shareholder dilution, and allows the project to be developed despite a continuing resource sector downturn.

“We believe the transaction is very much on trend considering Sino-Russian relations over the past number of years. Chinese firms are increasingly active in the Russian market in rare earths, PGM, base metals and precious metals.

“It was our intention to capitalise on this evolving relationship and to offset some of the development risk to a suitably qualified and experienced engineering firm with considerable banking and political reach. Sinosteel is, under the terms of the contract, highly motivated to deliver the plant as stipulated in the contract, because they will be responsible for $150 million until they reach the production level of 130,000 oz of platinum equivalent per annum.

“Further outsourcing the running of the mine to an international company with experience in operating mines is now a top priority for Eurasia. Engaging such a group to act as owner’s representative during plant construction aims to ensure the plant is built in line with best international practice. We look forward to updating on developments in this regard in the near term.”

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Edenville Energy (LON:EDL) has issued 1,602,564 new ordinary shares following the exercise of warrants.

At 4:12pm:

(LON:AAZ) Anglo Asian Mining PLC share price was -0.75p at 31.5p

(LON:BEM) Beowulf Mining PLC share price was -0.13p at 5.75p

(LON:BKY) Berkeley Energia Ltd share price was -1p at 45.5p

(LON:CEY) Centamin PLC share price was +5.45p at 166.15p

(LON:CHL) Churchill Mining PLC share price was +0.75p at 30.75p

(LON:CZA) Coal of Africa Ltd share price was -0.06p at 3.24p

(LON:EUA) Eurasia Mining PLC share price was 0p at 0.73p

(LON:FDI) Firestone Diamonds PLC share price was 0p at 56p

(LON:FRES) Fresnillo PLC share price was -69.5p at 1710.5p

(LON:GEMD) Gem Diamonds Ltd share price was -0.62p at 115.88p

(LON:HGM) Highland Gold Mining Ltd share price was -12p at 156.75p

(LON:HOC) Hochschild Mining PLC share price was -1.25p at 270.45p

(LON:KMR) Kenmare Resources PLC share price was -13p at 287.5p

(LON:RRS) Randgold Resources Ltd share price was -452.5p at 7132.5p

(LON:SXX) Sirius Minerals PLC share price was -7.87p at 25.38p

(LON:VED) Vedanta Resources PLC share price was -9.5p at 741p

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