As August slides toward its end and summer evenings being to cool, along comes a week such as the last one wherein news from the mining sector seems to be front and centre everywhere. Barrick Gold has announced its intention to sell its 74% share in African Barrick, perhaps to Chinese interests. (More on that at the end of today’s news.)
For all the wrong reasons, Lonmin’s Marikana platinum mine in South Africa made the headlines. Police there fired on striking workers, killing 34 and injuring almost 80 others. Such are the headlines the mining industry does not want to make.
On a more positive note, there is money to be had for the sector. That is always good news. Let’s begin with the big news.
Kinross Gold of Toronto has secured a US$1.0-billion term loan and increased its unsecured revolving credit facility to US$1.5 billion. The term loan will mature on Aug. 10, 2015, and has no mandatory amortization payments. Better investment grade ratings have allowed the company to boost its credit facility by US$300 million, to US$1.5 billion. That’s a lot of money to be used for, as Kinross says, “general corporate purposes.”
A quick look at the development projects that Kinross has in the pipeline underlines the company’s need for such large amounts of money. First there is the Tasiast gold project in West Africa, and then the high grade Dvoinoye gold project near the company’s Kupol operation in Russia. Also on the horizon is the Lobo-Marte gold project and Cerro Casale gold-copper project in northern Chile, plus the Fruta del Norte gold discovery in Ecuador. Kinross has not ignored the potential of the Yukon; it continues to test the White Gold project 95 kg south of Dawson City. (Kinross.com)
For readers more comfortable with millions rather than billions, Toronto-based Lake Shore Gold has issued convertible senior unsecured debentures worth C$90 million. The deal jumped from the original C$75 million to C$90 million over night from last Thursday to Friday, Aug. 17. The debentures were priced at C$1,000 each, with an interest rate of 6.25% per annum, payable semi-annually. They will mature on Sept. 30, 2017. The debentures are also convertible into common shares of the company at a price of C$1.40 per share.
Lake Shore intends to use the net proceeds to replay its US$50-million three-year corporate revolving credit facility and for the ubiquitous “general corporate purposes.” The company is increasing production at its two gold mines near Timmins, ON, to 100,000 oz this year from 85,000 oz last year, and again to 150,000 oz/year by 2014. (LSGold.com)
Junior Northern Gold Mining of Toronto has successfully made a non-brokered private placement worth up to C$13 million. It will issue up to 43.3 million common shares at a price of C$0.30 each. The proceeds will be used for “general working capital purposes” and to advance the company’s three gold exploration projects in Ontario. Northern’s undertakings include the Garrison, Garrcon and Jonpol gold deposits approximately 100 km east of Timmins. Resources are growing and the company is examining the potential of developing open pits. (NorthernGold.ca)
While labour violence is insupportable in all industries, miners can take heart that for every bad news item last week there were at least three good news items about investing in the industry. Let’s look for more good news, and pray the bad news items are few and far between.