Monsters of Rock: Big miners place growth projects back on the agenda
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After years of consolidation and cost cutting cashed-up big boys BHP and Rio Tinto seem to be looking again at major growth projects.
BHP (ASX:BHP) is expected to make an investment decision soon on its US$5.7 billion Jansen potash project in Canada, while it also yesterday announced a friendly US$258 million offer to buy out Canadian nickel explorer Noront Resources.
That TSX-listed company had been coveted by Andrew Forrest, who secured a big stake earlier last year through his privately owned company Wyloo Metals only to have a follow up takeover bid knocked back by the Noront board in May.
Meanwhile Rio Tinto (ASX:RIO) will spend US$2.4 billion to build its Jadar Lithium Mine in Serbia if it can convince regulators in the Balkan country to approve the development of what would be Europe’s largest lithium mine.
Miners joined in a sour day for the local bourse, with materials down 0.77% but broadly in line with the ASX200 as every sector bar real estate entered the red.
Gold Road Resources’s fourth quarter results came in largely as expected after warning late in June that it would be impacted by issues with the processing plant at its Gruyere JV with Gold Fields.
It was among the better performers across the major Aussie gold stocks today after announcing production of 53,132oz at AISC of $1659/oz in the June Quarter, a drop of ~13,000oz from the March Quarter.
Gold Road sold 28,425oz at $2145/oz, with about 36% of its sales hedged at an average contract price well below spot of $1823/oz.
The company has $129 million in cash and equivalents with no debt.
Silver Lake was up ~2.5% on no news.
The company reported its June quarter results on Friday, with sales of 60,617oz of gold and 516t of copper at $2275/oz and AISC of $1478/oz.
The Mt Monger and Deflector gold mine owner has $330.2 million in the bank and expects to produce 235,000-255,000oz of gold and 600-1000t of copper at an AISC of $1550-1650/oz in 2021-22.
Champion Iron shares have crept up more than 10% over the last five trading days as anticipation grows for the $3.6 billion-capped iron ore miner’s June quarterly tomorrow.
The Canadian-Australian miner operates the ultra-high grade Bloom Lake complex in North America.
It produced iron ore concentrate with an average grade of 66.5% and is conducting lab testing currently to see if it can deliver a 69%+ product as it looks to double capacity to 15Mtpa by the middle of next year.
With both record prices and premiums for high grade iron ore across the June Quarter, expect some exceptional sales figures from Champion, which saw revenues climb from C$329.5m in the December Quarter to C$396.7m in March.