22 April 2020

Covid-19: Centamin maintains 2020 guidance, decreases capex

Centamin Egypt has reported a year-on-year rise in quarterly production with the production of 125,090oz from its Sukari gold mine in Egypt during the first quarter of this year.

The company also reported that it has reduced its 2020 capital expenditure and expects it to be in the range of $150m-$170m from $190m.

It noted that 2020 full-year guidance will continue to be maintained and the company targets gold production between 510,000oz and 540,000oz.

Concurrent with the first-quarter results, Centamin’s board of directors has also declared a 2020 first interim dividend of six cents per share payable on 15 May this year.

Centamin CFO Ross Jerrard said: “The commitment and response by our workforce to the Covid-19 pandemic has been exceptional, and we would also like to acknowledge the assistance and support of the Egyptian Government. Centamin has and will continue to implement proactive measures to minimise the impact on our people, business, community and wider stakeholders.

“Centamin is a resilient and responsibly run business with zero debt and $379.2m in cash and liquid assets, as at 31 March 2020. I am confident in our long-term strategy and our ability to respond quickly in this difficult environment.”

During the first quarter, the company generated revenue of $222.2m from the sale of 139,784oz of gold at an average realised price of $1,587 per ounce.

As of 20 April, Centamin said it had not recorded any cases of coronavirus at the company’s operations, and there have been no material interruptions to its operations, supply chain, and gold shipments.

The company has put necessary contingency plans in place to deal with various possible disruptions.

Centamin is a mineral exploration, development and mining company. It is dual-listed on the London and Toronto Stock Exchange.

Its key asset, the Sukari Gold Mine, is located in the Eastern Desert approximately 700km from Cairo, Egypt, and 25km from the Red Sea.

In January, Endeavour Mining dropped its plan to acquire Centamin for $1.9bn as it did not get enough information on the latter’s assets during an assessment.

1 of 8

21 April 2020

Russian firm Nordgold to build new power plant at Lefa gold mine

Russian gold miner Nordgold has signed an agreement to build a new power plant at its Lefa mine in Guinea, as part of efforts to reduce greenhouse gas (GHG) emissions.

The company has signed an engineering, procurement and construction (EPC) agreement with China’s manufacturing service group SUMEC to construct a 33MW plant at the gold mine.

Nordgold noted that the new heavy fuel oil (HFO) facility would replace the existing power plant.

The move is expected to reduce fuel consumption for electricity production by 15% as well as engine oil by 30%. This could result in an emissions reduction of 17,000 tonnes per annum (tpa).

Design and construction cost of the project is estimated at $23m.

The power plant is expected to be completed by the end of next year.

Nordgold CEO Nikolai Zelenski said: “Even during these challenging times, we remain committed to investing in Guinea. The new power plant is an important investment as it enables us to both decrease greenhouse gas emissions and provide sustainable power generation for our Lefa mine.”

Nordgold acquired the gold mine in 2010. Lefa is one of the largest gold mines in Guinea. The mine employs around 1,200 people directly, and provides over 800 indirect jobs.

Last year, Nordgold signed a deal with Total Eren, an independent power producer specialising in renewable energies, and its strategic development partner Africa Energy Management Platform, to construct a 13MW solar photovoltaic power plant for its Bissa and Bouly gold mines in Burkina Faso.

Nordgold, which acquired many of its major assets during the 2008-2009 financial crisis, also operates in Russia and Kazakhstan.

2 of 8

20 April 2020

BHP creates fund to aid Chilean contractor companies

Multinational commodities giant BHP has established a $25m fund to aid its contractors in Chile. The decision comes after the miner was forced to progressively reduce the number of contractors at its operations due to the coronavirus (Covid-19) pandemic.

BHP has reduced the number of employees in its operations from the existing 7,310 to 4,910 and reduced contractor workers from 21,911 to 11,289 due to the Covid-19 health emergency.

The company will voluntarily undertake a major portion of the cost of contractor companies to maintain the remuneration of its demobilised workers.

BHP previously contributed $8m of aid which was implemented between 23 March and 13 April.

BHP Minerals Americas supply vice-president Pedro Correa said: “These measures constitute a powerful tool to contribute to the well-being of our economy and local and regional communities.

“Our objective is to protect people’s health and maintain operational continuity, because we have a responsibility to the country where we operate, to the Antofagasta and Tarapacá regions and to the workers and their families.”

This month, BHP confirmed that a small number of its global workforce have tested positive for coronavirus and noted that all of them are recovering well.

Last month, BHP announced an A$50m ($28.7m) Vital Resources Fund to support regional Australian communities in its areas of production in response to the significant challenges to those communities caused by the pandemic.

In the same month, the company reduced payment terms for small, local and indigenous businesses in a bid to support its communities and regional economies during the Covid-19 pandemic.

3 of 8

20 April 2020

Precipitate Gold closes private placement with Barrick

The deal between Precipitate Gold and Barrick has closed, with Barrick to acquire a 70% stake in Precipitate’s Pueblo Grande project.

Precipitate Gold will issue 12.7 million common shares prices at C$0.11 ($0.07) a share, for gross proceeds of about C$1.39m ($0.99m).

The closing of the deal follows the announcement earlier this week that Barrick Gold signed an earn-in agreement with Precipitate Gold to acquire the stake in the project.

Barrick will have to invest a minimum of $10m in exploration and deliver a pre-feasibility study within six years of the agreement.

The Pueblo Grande project is located next to Barrick’s Pueblo Viejo mine in the Dominican Republic. Pueblo Viejo is a joint venture between Barrick Gold (60%) and Newmont Goldcorp (40%).

Precipitate Gold president and CEO Jeffrey Wilson said: “We are excited to close this important equity financing, as the proceeds provide the Company with a strong financial position to pursue its ongoing exploration efforts at multiple existing advanced-staged targets at the company’s Juan de Herrera Project as well as emerging target areas within the Ponton Project located just 30km east of Barrick’s Pueblo Viejo Mine.

“Furthermore, adding Barrick Gold Corporation to its shareholder registry offers Precipitate a significant new shareholder with global mining recognition and substantial in-country prominence and expertise.”

Precipitate will use the funds generated from the offering towards its projects in the Dominican Republic. A portion of the funds will also be used for general working capital purposes.

According to the exploration firm, all securities issued under the offering are subject to a four-month hold period which is to expire on 18 August this year.

Last month, Barrick Gold announced its plans to extend the life of the Pueblo Viejo gold mine beyond 2040.

4 of 8

17 April 2020

B2Gold employee in Mali mine tests positive for Covid-19

Canada-based mining firm B2Gold has reported that one of its employees near the Fekola mine site in Mali has tested positive for the Covid-19 virus.

The employee was deployed at the Fekola exploration camp, a few kilometres away from the mine site. However, regular operations at the mining site have not been affected as the positive case was identified in the exploration camp.

Currently, the infected employee is quarantined at the camp.

As a precautionary measure, B2Gold has also isolated the entire Exploration Group within the camp and identified all individuals who came in contact with the individual. It has also initiated a disinfection process of the site to prevent the disease from further spreading.

In a statement, the company noted: “B2Gold will continue to update its plan and response measures based on the safety and wellbeing of its workforce, the severity of the pandemic in areas where it operates, global response measures, government restrictions and extensive community consultation.

“The company is working closely with national and local authorities and will be monitoring each site’s situation closely while ensuring the safe operation of its mines.”

The Fekola Mine is located in south-western Mali on the border between Mali and Senegal. B2Gold owns an 80% stake in the site, while the remaining interest is with the State of Mali.

As of 17 April, Mali reported a total of 171 Covid-19 cases in the country.

Globally, the pandemic has infected more than 2.1 million people, while more than 146,000 people have lost their lives.

5 of 8

17 April 2020

Barrick aims to achieve full-year targets despite Covid-19

Barrick Gold has said that it is positioned to achieve its full-year production targets despite a drop in gold output in the first quarter of this year.

The company registered preliminary first quarter production of 1.25 million ounces of gold in the first three-month period of 2020, dropping from 1.37 million ounces of gold reported last year.

Barrick also reported preliminary first quarter sales of 1.22 million ounces of gold and 110 million pounds of copper.

Additionally, the Canadian firm noted that copper output was 115 million pounds in the same period. The figure is an 8.5% increase on a year-on-year basis, reported Reuters.

Barrick Gold president and CEO Mark Bristow said: “These results positioned Barrick well to achieve its guidance for the year despite the impact of the global Covid-19 pandemic and the resultant lockdowns.”

The company also said it has devised a comprehensive programme to combat the impact of this pandemic on its businesses.

Headquartered in Toronto, Barrick is one of the largest gold miners in the world.

Earlier, the company forecast full-year attributable gold production in the range of 4.8 million ounces to 5.2 million ounces. The company also aims to produce around 440 million to 500 million pounds of copper this year. Barrick is expected to announce its first quarter results on 6 May.

Recently, the company signed an earn-in agreement with Precipitate Gold to acquire a 70% stake in the Pueblo Grande project. The Pueblo Grande project is located adjacent to Barrick’s Pueblo Viejo mine in the Dominican Republic.

6 of 8

17 April 2020

Covid-19: South Africa allows mining sector to operate at 50% capacity

The Government of South Africa has agreed to allow the mining sector to operate at up to 50% of its production capacity during the nationwide lockdown.

The government amended the Disaster Management Act regulations to allow mining companies to ramp up operations to half of their capacities. However, the government also advised the sector to implement all preventive measures and ensure safety of the workers.

Earlier, the government ordered most of the underground mines to be put on care and maintenance as the country entered a period of nationwide lockdown to limit the spread of Covid-19. Coal mines, which are essential for power generation, were excluded from the order.

The lockdown, which began on 27 March, has now been extended to the end of this month.

In a news conference, South African Mines Minister Gwede Mantashe told that the decision was taken to avoid instability in some deep-level mines due to long-term closures.

Mantashe was quoted by Reuters as saying: “In the amendment we are identifying a risk, particularly in deep mining, (that) if they are left alone for a long time the stability of the ground gets tampered with.”

The amendments were also welcomed by the industry body Minerals Council South Africa.

Minerals Council CEO Roger Baxter said: “It is Minerals Council’s view that government has adopted a pragmatic and practical approach to fighting the pandemic and enabling the economy to survive the crisis.”

As of 17 April, more than 2,600 people in South Africa are infected by Covid-19. The death toll stands at 48.

7 of 8

16 April 2020

Zambia plans to revoke Mopani Copper Mines licences

Zambia intends to revoke the mining licenses of Mopani Copper Mines (MCM), a subsidiary of Glencore, as the firm did not give sufficient notice before suspending its mining operations due to the coronavirus Covid-19 crisis.

Mining Licensing Committee secretary Michael Chibonga sent a notice dated 14 April to Mopani chief executive Nathan Bullock. The notice stated that Mopani did not give sufficient notice to the government before the mines were kept on care and maintenance.

According to the letter seen by Reuters, Mopani is alleged to have also violated the country’s labour laws by making its workers opt for forced leave and ending the contracts of mining supplies and services

While referring to Mopani’s Nkana and Mufulira mines, the letter said: “In view of the above, the Mining Licensing Committee intends to revoke the large-scale mining licences.”

Glencore has to reply to the committee in seven days detailing why its licences should not be revoked by the government.

A Mopani spokesman told Reuters that Glencore was in talks with the government on the future course of action.

Although Mopani closed its mines on 8 April, it continued with processing material it has on location in its smelter and refinery. Mopani had cited the reason for the closure as being due to a quick fall in the copper price, and disruptions to transportation and supply chains as a result of Covid-19.

Last week, Glencore launched a $25m fund in response to the novel coronavirus (Covid-19) outbreak.

Glencore noted that the fund will support the company’s teams that are working in close cooperation with governments and health agencies in over 35 countries and at 189 sites. The funds will be used to identify their needs to provide the best possible and effective response.

8 of 8