Pilbara Battens Down the Hatches to Save Cash

Liontown's quarterly sees 4% sell-off, Capricorn launches surprise capital raising

The Pre-Start

  • Pilbara produced 220kt, selling spod at US$682/t (SC5.3) (19% lower QoQ). Its cash balance retreated by $274m to A$1.4b. The Ngungaju plant will be placed in care & maintenance, with FY25 guidance trimmed by 100kt (PLS) Mid-stream work has also been deferred (PLS/CLX)

  • Liontown produced 28Kdmt of spod & sold ~10Kdmt (revenue received post-Q). Recoveries averaged 51% while 1,869m of development was completed. It closed with cash of $263m. The company is reviewing mine & production plans with an update to be delivered by end of CY24 (LTR) Steady-state Q1 CY25

  • Lynas revenue dropped 6% to $120m, while cash fell ~$90m to $414m. NdPr output lifted to 1,677 REOt while $125m was invested in the business (LYC)

  • Zimplats produced 166koz of 6E in con. (70koz plats + 58koz palladium) at a cash cost of US$841/6E oz (ZIM)

  • Gold Road produced 34koz at an A$2,551/oz AISC & maintained guidance. FCF was $20m with it reporting a Corporate All-In Cost of A$2,980/oz (GOR)

  • Nickel Industries produced 31kt of Ni (RKEF), 2,125t of MHP (HPAL) & sold 3Mwmt of Ni ore (mining). Cash closed down US$165m at US$193m, with US$300m borrowed + a US$380m acquisition payment (NIC)

  • Metro produced 2.13Mwmt, with unit cost improvements, while it repaid $12m. Operating CF totalled $29m, leaving $17m cash at Q end. Bauxite prices continue their grind higher (MMI)

  • Aeris produce CuEq of 10.2kt at an AISC of A$5.32/lb, with cash flow from operations of $25m. It closed the Q with $26m in cash, with $40m debt (AIS)

  • Karoon increased the contingent resource (2C) at Who Dat to 15.7MMboe, with the JV progressing earlier development studies (KAR)

  • Meeka provided a Murchison update, accom villlage almost complete, OP haul road ahead of schedule & plant commissioning underway (MEK)

  • Winsome finished the Q with $34m cash, exclusive option to acquire Renard extended to 31 Dec 24 (DD mostly complete, no red flags yet) (WR1)

  • Image Resources finished the quarter with ~$30m (before US$20m offtake pre-pay was secured in Oct), with commencement of construction at its Atlas mineral sands project accelerated after approvals received (IMA)

  • Emerald released an exploration update with drilling results from its Memot, Okvau and Dingo Range gold projects (EMR)

  • Black Cat advised refurbishment activities at its Paulsens processing facility are progressing as planned, with first gold expected in Dec ‘24 (BC8)

  • L1 Capital increased their stake in MinRes to ~6.5% (MIN)

High Grade It

  • China considers over $1.4 trillion in extra debt over next few years (Reuters) and further stimulus if Trump wins

  • Gina Rinehart’s iron ore flagship Roy Hill delivered a staggering $4bn dividend off the back of another shipment record (West)

  • MinRes admitted it has been investigating the tax evasion claims against its MD Chris Ellison for more than 2 years (AFR)

  • MINs rejected claims it may have breached ASX rules around market disclosures over tax issues involving its MD Chris Ellison (Australian)

  • LG Energy Solution expects strong demand for energy storage and plans to release a new high capacity LFP product with improved energy density (ESS)

  • BHP trials first battery-electric Toyota Hilux at Port Hedland (West)

  • China’s cobalt king hits output goal months ahead of schedule (Bloomberg)

  • Westgold-backed Ora could offer significant Meekatharra sugar hit (MiningNews)

  • FMG said the iron ore market may have misjudged fundamentals due to the hurdles involved in ramping up overall supplies (Bloomberg)

  • Namibia’s state oil company aims to triple its stake in future projects to 30% with a surge in activity tipped after multiple offshore discoveries (Bloomberg) Hints of the nationalisation scare that saw uranium stocks plummet last year

  • BlueScope cut its first-half profit guidance as the economic slowdown & US election weighed on it (Australian)

Wheelin’ n Dealin’

  • The Australian’s article on Vault’s hedgebook resurfaces conjecture of a tie-up with Genesis (Dataroom)

  • Aurumin confirmed it received an NBIO from Brightstar in relation to a potential JV at its Central Sandstone gold project (AUN)

Rattlin’ the Tin

  • Lithium Americas finalised a US$2.6bn loan from the US Dep’t of Energy for financing the construction of processing facilities at Thacker Pass (LAC.TSX)

  • Global Atomic updated on its Dasa U project, with the US development bank reiterating its support to cover 60% of the costs, with approval expected in Q1 25; The company continues to explore alternatives (GLO.T)

  • Capricorn is raising $200m at $6.00/share (CMM) to fund the expansion at Karlawinda that was announced yesterday, adding an additional 2.5Mtpa of processing capacity, plus “fully funding” MGGP

    CMM expansion
  • Red Metal increased its SPP to $6m (RDM)

  • Yandal shared that Blackpeak would underwrite options up for expiry, netting $5.5m (YRL)

  • Syrah executed a US$150m binding loan deal with the US Int’l DFC. An initial US$73m disbursement is expected in Nov (SYR) Stock up 10%

Word on the Decline

  • Before Karora tied the knot with Westgold, we are led to believe the Canadian-listed miner was in advanced negotiations with Northern Star to undertake a processing facility swapsies: Lakewood for Jubilee

  • While Jubilee is on C&M and needs a bit of work to bring back online, we hear there’s a gold deposit beneath the Lakewood mill that might even be possible for Northern Star to access with a decline from the other side of their stockpiles?

Do you have some Word on the Decline? Reply to this email or shoot a message to [email protected] directly. We will always take your privacy seriously.

In the Weeds

  • Crossings at Bell Potter and Mineral Resources (AFR’s Rear Window)

  • The documents MinRes directors didn’t see (AFR op-ed) By Neil Chenoweth

  • $4b later: the MinRes board’s big mistake (AFR’s Chanticleer)

  • Interview with Evy Hambro, manager of the BlackRock World Mining Trust on Money Makers podcast (Spotify, Apple)

  • Why Europe’s car crisis is mostly made in China (FT)

  • Robert Friedland interview on SmarterMarkets At his flowing best

  • The Iron Lady (SMH) A 2012 deep dive into Gina Rinehart

  • Inside the contest to succeed Ken MacKenzie at the top of BHP (AFR Analysis)

  • Q3 2024 Massif Capital Investor Letter - China, Siemens, Alphamin, Tail Risk

  • Whitehaven’s AGM address dropped this morning & is actually worth a read (WHC) let’s see if they can avoid the 2nd consecutive rem strike

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Today’s Top Tweet

Okay that wasn’t mining-related but admittedly I am half way through Joe’s book and I’m hooked. Which mining chief first comes to mind when you read this characterisation of Joyce?

The CHairman's Lounge

From the Chairman’s Lounge

Devil’s in the Detail

It was only 23 days ago that Pantoro executed an option trade for ~24% of its 2025 production oz, with puts at $3,500/oz and calls at $4,200/oz.

The Aussie gold price was ~$3,900/oz at the time and as of today, now sits above Pantoro’s call price at +$4,200/oz. How time flies when you’re having fun!

Fortunately, the structure has a minimal effect on their realised price if the gold price continues to improve.

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