THE possibility that BHP Group’s takeover proposal for Anglo American last month could trigger a fresh wave of M&A activity in the mining sector raises the question as to whether mining valuations are in danger of overheating. Yes, according to Investec Securities. The bank comments in a recent report that BHP’s preference for shares over cash is a sure-fire signal. “All share acquisitions traditionally indicate a sector that is getting expensive relative to the broader market,” says mining analyst Nkateko Mathonsi. A cash or cash and share offer would “not necessarily be well received by ..read more

NICO Muller, Impala Platinum (Implats) CEO, carries a slightly haunted air at the moment. Speaking at the PGMs Industry Day conference in Joburg last month, he reflected ruefully on the chasm between shareholder expectations and the exigencies of his platinum group metals (PGM) business. He would much prefer to pay shareholders lower dividends during periods of high metal prices so as to afford acquisitions in the down cycle, when equities are favourably priced. He also yearns for “an alternative funding methodology”, as he described it. “So you don’t go through this boom or bust when prices a ..read more

WEST African gold producer Endeavour Mining’s production dropped 22% in the quarter to end-March compared with the December 2023 quarter negatively affecting its production metrics and also breaching its stated debt ratio target. Gold produced fell to 219,151 ounces (December 2023 quarter – 279,785 oz) and all-in sustainable cost (AISC) per oz of gold sold jumped to $1,186/oz from $947/oz. The reason for the drop in gold output was lower production from the Houndé and Sabodala-Massawa mines which was partially offset by higher production at Ity and Mana. In 2021 Endeavour implemented a dividen ..read more

The good times are about to roll for Barrick shareholders if the gold price stays at current levels around $2,300/oz with CEO Mark Bristow commenting the group is in a position to benefit from  a “positive double whammy” “We have an expanding margin and, as we ramp up our production, we grow the margin further because we bring down the costs,”  he commented Bristow likened Barrick’s situation to that of the former Randgold Resources back in 2011 when the gold price took off with the big difference then that management’s top priority was to “fix the balance sheet”. He commented, “we h ..read more

ABOUT 3,900 jobs are on the line at platinum group metals (PGM) miner Implats as weak platinum prices and input cost pressures have forced it to consider retrenchments, it said today. This number represents about 9% of the workforce at Impala Rustenburg, Impala Bafokeng and Marula, as well as the corporate office. Implats intends to cut 30% of head office costs. It said in a statement it had initiated talks with the unions in terms of Section 189 of the Labour Relations Act “which may lead to staff reductions”. Spokesperson Johan Theron said in the negotiations, all alternatives to retrenchmen ..read more

HARMONY Gold reported a staggering increase in net cash to R1.5bn in the nine months ended March 31 compared to R74m at the half year point only three months earlier. Commenting in a March quarter production update, the South African miner said grade and consequent gold production increases helped drive the improvement. But gains in the rand gold price stands out most prominently especially as it could be higher yet in the current quarter assuming the current spot price. Net cash was also helped by underspend on capital projects. The average rand price received was just over R1.2m per kilogram ..read more

GLENCORE said its marketing division would benefit from high interest rates helping it report earnings before interest and tax of between $3bn to $3.5bn for its 2024 financial year ended December 31. It previously guided to a $2.2bn to $3.2bn range. The Swiss headquartered miner also maintained its full-year production guidance despite lower first quarter production year-on-year for cobalt and ferrochrome. “First quarter copper, zinc and coal production was broadly in line with the prior year comparable period, while nickel increased 14%, reflecting recovery from the Raglan strike impacts in t ..read more

INVESTORS continued to influence platinum group metals (PGMs) in Impala Platinum’s (Implats’) third quarter resulting in volatile pricing, the firm’s CEO Nico Muller said in a production update on Monday. Demand from Implats’ contractual customers was “robust” despite macroeconomic and geopolitical uncertainty, he said. Spot sales were also elevated in the three months. But Muller added: “PGM pricing remains lacklustre however, with notable volatility in both platinum and palladium reflecting the continued influence of investor activity”. The spot price of palladium is unchanged in the last th ..read more

A TURNAROUND in the vanadium price from its current lows and back up to $40 per kilogram of vanadium (kgV) would see Bushveld Minerals “printing money”, CEO Craig Coltman said. But in the short term, if it does not receive support from shareholders, there is a very real risk that the company will cease to be a going concern, he said on a conference call with investors. The group’s plans to raise additional funds from Acacia Resources and Southern Point Resources (SPR) have hit obstacles. Acacia did not fulfil the terms of its subscription letter to provide $3.5m by end-February. The sale of 50 ..read more

SIBANYE-Stillwater’s annual general meeting on May 28 carries more than the usual jeopardy following the company’s surprise $500m convertible loan launched last year. If shareholders vote against the normally standard resolution permitting the issue of shares, Sibanye-Stillwater will have no option but to settle the bond in cash. Right now, with net debt last stated at R12bn and commodity prices cratering, the company would find it difficult to do so. Based on analysts’ questions at the group’s annual results presentation on March 5, there’s a view that management should solve its own liquidit ..read more