B08 Metal Ore Mining

Atlas highly vulnerable to iron ore price decline

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Original article by Tess Ingram
The Australian Financial Review – Page: 21 : 1-Sep-16

Atlas Iron has reported net loss of $A159 million for 2015-16. The company lost $A1.38 billion in 2014-15. Revenue increased nine per cent to $A785.8 million. Auditor KPMG warned that Atlas Iron’s future is uncertain to such an extent that the group’s "ability to continue as a going concern" may be under question. At the end of June 2016, Atlas had debt of $A182.2 million and cash of $A80.9 million.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, McALEESE LIMITED – ASX MCS, KPMG AUSTRALIA PTY LTD

How the Samarco disaster unfolded

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Original article by Mark Ludlow
The Australian Financial Review – Page: 36 : 31-Aug-16

The collapse of the Fundao tailings dam at the Samarco mine in Brazil has been found to be caused by a series of events related to structural problems. The accident occurred on 15 November 2015. Its causes were analysed by consultants Cleary Gottlieb Steen & Hamilton. The study was commissioned by Samarco Mineraco’s joint owners BHP Billiton and Vale.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, VALE SA, SAMARCO MINERACAO SA, CLEARY GOTTLIEB STEEN AND HAMILTON LLC

Latest results show Fortescue has finally become unshakeable

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Original article by Tess Ingram
The Australian Financial Review – Page: 13 & 22 : 29-Aug-16

Fortescue Metals Group’s free cash flow increased by 93 per cent in 2015-16, to $US2.7bn, while its debt was slashed by $A2.9bn. Fortescue’s production cost averaged $US50 per tonne several years ago, but this was reduced to $US13.10 in June 2016 and the group aims to further reduce this in 2016-17. A number of factors have contributed to the reduction in production costs, such as the lower Australian dollar, the fall in the crude oil price, increased production and a significantly lower strip ratio.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG,{SPAC}VALE SA,{SPAC}PATERSONS SECURITIES LIMITED,{SPAC}CITIGROUP PTY LTD,{SPAC}MORNINGSTAR PTY LTD,{SPAC}MACQUARIE GROUP LIMITED – ASX MQG

BHP, Vale brace for fallout from dam collapse report

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Original article by Peter Ker
The Australian Financial Review – Page: 16 : 29-Aug-16

US law firm Cleary Gottlieb Steen & Hamilton will shortly release a technical report on its review into the tailings dam disaster at the Samarco iron ore project. Samarco is jointly owned by BHP Billiton and Vale, and the former has committed to full disclosure of the report, which will examine the causes of the November 2015 disaster. BHP has also responded to the Samarco incident by undertaking a review of its other joint ventures, which is likely to result in changes to how they are managed.

CORPORATES
BHP BILLITON LIMITED – ASX BHP,{SPAC}VALE SA,{SPAC}SAMARCO MINERACAO SA,{SPAC}CLEARY GOTTLIEB STEEN AND HAMILTON LLC,{SPAC}INTERNATIONAL COUNCIL ON MINING AND METALS,{SPAC}SOUTH32 LIMITED – ASX S32,{SPAC}RIO TINTO LIMITED – ASX RIO,{SPAC}SUPERIOR COURT OF JUSTICE (BRAZIL)

Cashed-up South32 on the hunt

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Original article by Paul Garvey
The Australian – Page: 19 & 26 : 26-Aug-16

Australian-listed South32 has exceeded market forecasts by posting 2015-16 underlying EBITA of $US356m. However, impairment charges resulted in the BHP Billiton spin-off posting a net loss of $US1.6bn (A$2.1bn). South32 boasted net cash of $US312m at the end of the financial year, and CEO Graham Kerr says it will consider a capital return to shareholders if there are no suitable acquisitions. He adds that South32 has pre-emptive rights over Anglo American’s stake in their manganese joint venture.

CORPORATES
SOUTH32 LIMITED – ASX S32, BHP BILLITON LIMITED – ASX BHP, ANGLO AMERICAN PLC, SHAW AND PARTNERS LIMITED

ERA confident of covering Ranger rehabilitation costs

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Original article by Barry FitzGerald
The Australian – Page: 23 : 25-Aug-16

Energy Resources of Australia has posted a 2016 interim net loss of $A196.5m, down from $A255.3m previously. Revenue fell from $A174.4m to $A154.4m, and ERA boasted total cash resources of $A454m at the end of the half-year. Rehabilitation work at the Ranger uranium mine is expected to cost $A507m, but ERA is optimistic that it will not have to access a $A100m credit facility from Rio Tinto to complete the site remediation work.

CORPORATES
ENERGY RESOURCES OF AUSTRALIA LIMITED – ASX ERA, RIO TINTO LIMITED – ASX RIO

Evolution strikes glittering $880m deal with Glencore

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Original article by Paul Garvey, Gretchen Friemann
The Australian – Page: 19 & 23 : 25-Aug-16

Australian-listed Evolution Mining will fund an $A880m deal to acquire an economic interest in Glencore’s Ernest Henry mine in Queensland via a $A401m equity ­raising and debt. Evolution will acquire all future gold production at the mine, whose annual output is about 80,000 to 850,000 ounces per year, plus 30 per cent of future copper output. Ernest Henry is expected to have a remaining mine life of about 11 years. Evolution will also undertake further exploration at the mine.

CORPORATES
EVOLUTION MINING LIMITED – ASX EVN, GLENCORE PLC, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, MINJAR GOLD PTY LTD

Doubts on Fortescue dividends

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 24-Aug-16

Analysts are divided regarding Fortescue Metals Group’s dividends in coming years, after the pure-play iron ore miner announced a total payout of $A0.15 per share for 2015-16. Paul McTaggart of Credit Suisse expects the total dividend to rise to $A0.17 in 2016-17, before falling to $A0.05 in 2017-18 due to expectations that the iron ore price will fall. Glyn Lawcock of UBS forecasts a dividend of $A0.18 per share in 2016-17 and $A0.11 in 2017-18, while Goldman Sachs and Morgan Stanley anticipate a big fall in the total payout for both financial years.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, SHAW AND PARTNERS LIMITED, DEUTSCHE BANK AG, JEFFERIES AND COMPANY, WOODSIDE PETROLEUM LIMITED – ASX WPL

Fortescue super-sizes dividends

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Original article by Tess Ingram
The Australian Financial Review – Page: 1 & 8 : 23-Aug-16

Fortescue Metals Group has posted a 2015-16 net profit of $US985m, which is 212 per cent higher than previously. Underlying EBITDA rose by 27 per cent to $US3.2bn, although a lower spot iron ore price resulted in revenue falling by 17 per cent to $US7.1bn. Fortescue reduced its debt by $US2.9bn during the financial year. The pure-play miner has lifted its final dividend from $A0.02 per share to $A0.12, for a total payout of $A0.15 per share.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, THOMSON REUTERS PLC

Northern Star on the hunt for organic growth

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Original article by Tess Ingram
The Australian Financial Review – Page: 16 : 23-Aug-16

Australian-listed Northern Star Resources has posted a 2015-16 net profit of $A151.4m, which is 65 per cent higher than previously. The company recently secured a deal to sell the Plutonic gold mine in Western Australia, and estimates that its net profit would have been $A165.3m if it had not owned the mine during 2015-16. Shareholders will receive a final dividend of $A0.04 per share, plus a special dividend of $A0.03.

CORPORATES
NORTHERN STAR RESOURCES LIMITED – ASX NST, BILLABONG GOLD PTY LTD