B10 Exploration and Other Mining Support Services

Mining sector costs on rise as cycle turns

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Original article by Paul Garvey
The Australian – Page: 15 & 16 : 19-Dec-16

There are indications of an upturn in mining industry activity in Australia in the wake of rising commodity prices. Independence Group CEO Peter Bradford notes that there is growing demand for mining equipment and the services of mining contractors, as well as growing competition for skilled labour. Fortescue Metals Group CEO Nev Power adds that it is becoming more difficult for the iron ore miner to achieve further cost savings, particularly with the rising oil price, which has in turn increased the cost of diesel fuel.

CORPORATES
INDEPENDENCE GROUP NL – ASX IGO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BARMINCO PTY LTD, DFP RECRUITMENT SERVICES PTY LTD, REGIS RESOURCES LIMITED – ASX RRL, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD

Ichthys key to CIMIC bid for UGL

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Original article by James Thomson
The Australian Financial Review – Page: 15/20 : 11-Oct-16

Shares in listed engineering contractor UGL closed 48.6 per cent higher at $A3.18 on 10 October 2016, in response to a takeover bid from CIMIC Group. The cash offer of $A3.15 per share values the bid at $A524m, but Allan Gray Australia MD Simon Mawhinney argues that it will be difficult to assess the bid until UGL updates investors on its Ichthys LNG contracts. UGL’s 2015-16 financial accounts included a provision of $US200m associated with its Ichthys construction contracts.

CORPORATES
UGL LIMITED – ASX UGL, CIMIC GROUP LIMITED – ASX CIM, ALLAN GRAY AUSTRALIA PTY LTD, CITIGROUP PTY LTD, HOCHTIEF AG, GRUPO ACS, MACQUARIE GROUP LIMITED – ASX MQG, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, UBIQUE ASSET MANAGEMENT PTY LTD, DEVINE LIMITED – ASX DVN, SEDGMAN LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Bradken board backs Hitachi bid

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Original article by Paul Garvey, Bridget Carter
The Australian – Page: 17 & 19 : 4-Oct-16

Directors of listed mining services group Bradken have endorsed a takeover bid from Hitachi Construction ­Machinery. The offer of $A3.25 per values Bradken at $A688.5m, or $A976.1m when its debt is included, and is 34 per cent higher than the stock’s last trading price. The Japanese suitor boasts annual sales of $A10bn and a market capitalisation of $A5.5bn. President and CEO Yuichi Tsujimoto says the two companies’ operations are complementary.

CORPORATES
BRADKEN LIMITED – ASX BKN, HITACHI CONSTRUCTION MACHINERY COMPANY LIMITED, PACIFIC EQUITY PARTNERS PTY LTD, BAIN CAPITAL LLC, KOCH INDUSTRIES INCORPORATED, CHAMP PRIVATE EQUITY PTY LTD, SIGDO KOPPERS SA, EMECO HOLDINGS LIMITED – ASX EHL, AUSENCO LIMITED – ASX AAX, CARDNO LIMITED – ASX CDD, SEDGMAN LIMITED

Booming gold sector powers Barminco profit

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Original article by Paul Garvey
The Australian – Page: 22 : 29-Sep-16

Unlisted mining services group Barminco has posted a net profit of $A42.4m for 2015-16, compared with a net loss of $A48.4m previously, while EBIT rose from $A43.6 million to $A57m. Barminco now boasts debt of just $US306m after repaying some $US79.8m ($104m) during fiscal 2016. The group has benefited from its strong presence in the gold sector, which accounts for more than 50 per cent of its contracts.

CORPORATES
BARMINCO PTY LTD, GRESHAM PRIVATE EQUITY LIMITED, NORTHERN STAR RESOURCES LIMITED – ASX NST

ALS in play after private equity lobs $2bn approach

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Original article by Paul Garvey. Bridget Carter
The Australian – Page: 19 & 22 : 2-Jun-16

Shares in Australian-listed ALS went into a trading halt on 1 June 2016, ahead of an announcement about a potential buyout. Media reports have suggested that private equity firms Bain Capital and Advent International have approached the mining services group regarding a takeover bid. ALS shares last traded at $A4.05, having peaked at more than $A10 in 2013. The laboratory testing group’s net loss widened to $A240.7 million in the year to 31 March 2016.

CORPORATES
ALS LIMITED – ASX ALQ. BAIN CAPITAL LLC. ADVENT INTERNATIONAL CORPORATION. BANK OF AMERICA AUSTRALIA LIMITED. MERRILL LYNCH (AUSTRALIA) PTY LTD. JP MORGAN AUSTRALIA LIMITED. THE GOLDMAN SACHS GROUP INCORPORATED. SGS LIMITED. ISATEC LIMITED. BUREAU VERITAS. CRESCENT CAPITAL PARTNERS LIMITED. CARDNO LIMITED – ASX CDD. BRADKEN LIMITED – ASX BKN. MOLY-COP. ARRIUM LIMITED – ASX ARI. TPG CAPITAL LP. THE BLACKSTONE GROUP LP. RHONE CAPITAL LLC. BOART LONGYEAR LIMITED – ASX BLY. CENTERBRIDGE PARTNERS LP

Orica shares dive 12pc as shareholders blast poor result

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Original article by Jared Lynch
The Australian Financial Review – Page: 1 & 11 : 10-May-16

Mining services group Orica has posted a 2015-16 interim net profit of $A149m, which is 33 per cent lower than previously. The explosives manufacturer’s revenue was 22 per cent lower at $A2.6bn, and its half-year dividend has been reduced from $A0.40 per share to just $A0.205 following a decision to abandon its progressive dividend policy. CEO Alberto Calderon has warned that a significant improvement in commodity markets is unlikely for some time.

CORPORATES
ORICA LIMITED – ASX ORI, STANDARD AND POOR’S CORPORATION, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, AUSTRALIAN TAXATION OFFICE, MORGANS FINANCIAL LIMITED

Forrest steps up exploration focus

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Original article by Jonathan Barrett
The Australian Financial Review – Page: 6 : 12-Aug-15

Fortescue Metals Group founder Andrew Forrest has lodged exploration applications over his cattle stations in the Pilbara region in Western Australia. The applications were lodged through Forrest’s investment firm Squadron Resources in July 2015. It is unclear whether Forrest’s aim is exploration or rather blocking access to the area for other mining companies.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, SQUADRON RESOURCES PTY LTD, WESTERN AUSTRALIA. DEPT OF MINES AND PETROLEUM, MINDEROO PTY LTD, HARVEY BEEF

Exploration ‘zombies’ on rise as mining cash dries up

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Original article by Tess Ingram
The Australian Financial Review – Page: 21 : 1-Jul-15

Data from accounting firm BDO shows that smaller Australian-listed exploration companies spent an average of $A539,000 on exploration during the March 2015 quarter. However, about 20 per cent of the 793 junior explorers invested less than $A10,000 on exploration during the period, while 12 per cent did not undertake any exploration programs. Only one explorer listed at the lower end of the market during the quarter.

CORPORATES
BDO AUSTRALIA LIMITED, CSIRO, NORTHERN STAR RESOURCES LIMITED – ASX NST, LA MANCHA RESOURCES INCORPORATED, SARACEN MINERAL HOLDINGS LIMITED – ASX SAR, EXCELSIOR GOLD LIMITED – ASX EXG, RAMELIUS RESOURCES LIMITED – ASX RMS

More mining collapses ‘inevitable’

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Original article by Amanda Saunders
The Australian Financial Review – Page: 18 : 29-Jun-15

KordaMentha’s Scott Langdon expects more Australian mining services groups to experience financial problems in 2015. He says privately-owned firms whose turnover is below $A50m are most vulnerable to insolvency. However, Langdon adds that investors and lenders will seek alternatives to insolvency such as debt restructuring deals. He also forecasts an increase in cost reduction measures in the resources sector, such as staff and wage cuts, as well as the departure of some CEOs.

CORPORATES
KORDA MENTHA AND COLLEAGUES PTY LTD, BRADKEN LIMITED – ASX BKN, BIS INDUSTRIES LIMITED, ATLAS IRON LIMITED – ASX AGO, SIGDO KOPPERS SA, CHAMP PRIVATE EQUITY PTY LTD

Haoma Mining protects itself from Atlas Iron’s woes

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Original article by Tess Ingram
The Australian Financial Review – Page: 16 : 10-Apr-15

Australian-listed Haoma Mining has put a caveat on two of Atlas Iron’s iron ore tenements in the Pilbara region of Western Australia. Haoma holds the exploration rights for non-iron ore minerals, and chairman Gary Morgan says the group wanted to protect its interests should Atlas sell the tenements. Shares in Atlas Iron were placed in a trading halt in early April 2015, pending a review of its operations

CORPORATES
HAOMA MINING NL – ASX HAO, ATLAS IRON LIMITED – ASX AGO, BC IRON LIMITED – ASX BCI