Pic: Bloomberg Creative / Bloomberg Creative Photos via Getty Images
Mining
ASX-listed miners are in a collective rut and even a record year of iron ore exports from BHP (ASX:BHP) could not get it in the green today.
BHP lost upwards of 2% on the Aussie bourse, as did Rio Tinto (ASX:RIO), Lynas (ASX:LYC), Champion Iron (ASX:CIA) and 29Metals (ASX:29M).
Gold hit six month highs at around $2480/oz in Australian terms pulling some gold stocks higher, but negative sentiment continued to weigh down top tier producers like Northern Star Resources (ASX:NST) and Evolution (ASX:EVN).
The materials sector was down more than 1.8% as the ASX slipped 0.46%. But a few mid and large cap mining companies managed to float above the negativity to give shareholders a little bit of joy on a rainy day.
Some iron ore miners gather premiums, some gather super premiums and then some are Grange Resources, which is selling iron ore pellets at a super duper premium.
While BHP, Rio and FMG sell their iron ore at a price point below the average benchmark price, $966 million capped Grange sailed above the crowd after announcing it received US$287.15/t ($373.72/t) in the June quarter from its 2.5Mtpa Savage River mine in Tasmania.
That was a casual US$80/t or so upwards of the average 62% fines price, even better than Brazil’s Vale, which is known for its pure 65% ore.
Macmahon Holdings announced it had signed contracts for $1.35 billion worth of work previously announced to the ASX, including the $500 million Gwalia deal it won at the expense of Byrnecut from May, Anglo American’s Dawson South mine and the $650m five year contract on the Red 5 (ASX:RED) King of the Hills expansion project.
Macmahon has also signed a new contract on Northern Star’s Julius pit at its Yandal gold operations, but at $25m over 12 months its a minor contribution, and is finalising commercial arrangements for the next stage of work on the Batu Hijau copper-gold mine in Indonesia.
Ahead of its next financials the company has sought to provide some confidence to shareholders as well by flagging that revenue and underlying EBIT(A) will meet its FY21 guidance of $1.3-1.4b and $90-100m, respectively.
$450m capped Macmahon was up around 2.4%.
Silver Lake Resources was started by a number of ex-WMC vets and takes its name from the first nickel mine on the Kambalda Dome, the 1966 vintage ‘Silver Lake Shaft’.
But it’s always been known as a gold miner, owning the Mount Monger complex east of Kalgoorlie-Boulder and the Deflector copper-gold mine in WA’s mid west, which it mopped up in its takeover of Doray Minerals.
That also includes the Rothsay mine it picked up in the takeover of EganStreet Resources (another company with a very Kal name referencing one of the streets that hosts the world famous WA School of Mines.)
Rothsay’s high grade ore is now being hauled to the new carbon in pulp circuit at Deflector, and will contribute around 45,000-50,000oz of gold a year.
Silver Lake has FY21 guidance of 240,000-250,000oz at all in sustaining costs of $1400-1500/oz and was on track as of its last quarterly.
PNG oil and gas producer Oil Search has been in the wars lately, having parted ways with its MD Kieran Wulff on Monday, who resigned for “medical health reasons”.
But the company also divulged Wulff had been under board investigation over complaints about his behaviour.
“(Oil Search chairman Rick) Lee said the Board considered that Dr Wulff had behaved in a manner inconsistent with the standards expected by the Board in relation to his management style,” a statement Monday read.
In an investor briefing shortly after Lee denied the company had received any takeover proposals, which turned out to not be entirely true.
OSH “clarified” today that its PNG LNG partner Santos (ASX:SAN) had lobbed a merger bid that would have given Santos shareholders 67% of a combined entity worth $22 billion on the market.
Oil Search’s board knocked back the proposal but said it would be open to a revised offer. The company said at a 6.8% premium to its Monday close price, the deal did not represent value for shareholders.
OSH stock was up 6.3% today.
Mining
Mining
Mining
Get the latest Stockhead news delivered free to your inbox.
