Wednesday, November 27, 2013

Copper M&A: Teck, Newmont, Blackstone in joint Las Bambas bid MUX, TNR.v, LCC.v


  Reuters reports about the building up some competition to Las Bambas Copper Chinese bidding war. The best Copper assets can now be found on stock exchanges and in the project portfolios. This demand will filter through to the more early stage projects soon like Los Azules copper and Taca Taca in Argentina. Recent developments in Argentina indicate further sign of economic normalisation after the elections.

McEwen Mining And TNR Gold: Repsol shares soar on Argentina compensation news MUX, TNR.v, LCC.v

"We have more positive news coming from Argentina. Business climate is changing to the more positive investment outlook after the recent elections in the country. It should be translated in higher valuations of Los Azules Copper project for McEwen Mining and TNR Gold now."

Rob McEwen's Presentation At Cowen & Company's Global Metals, Mining and Materials Conference MUX, TNR.v, GDX

Brutal Past 24 Months For Precious Metals Investors, Nearing A Bottom – Rob McEwen MUX, TNR.v, GLD, GDX, SLV, CU

  "Rob McEwen can not control Gold, Silver or Copper prices, but he can control the management of his company. McEwen Mining has delivered solid results in the very tough environment and shows very entrepreneurial approach to advance its business plan. 
  We would like to see the more aggressive approach in the promoting and marketing of Los Azules copper deposit in Argentina now. This is truly the world class asset, according to McEwen Mining and this project deserves the spotlights on the scene where Chinese companies are scooping all available resources now.  After delivered PEA in September and recent elections in Argentina there is a window of opportunity to capitalise on the recovery - like Lumina Copper price action has demonstrated this year. Las Bambas copper project bidding war amongst Chinese conglomerates is just another reminder about the smart money actions in this market.
  Without the advance of Los Azules the dream about S&P 500 in 2015 will stay as a dream, but any development here will be the Catalyst for McEwen Mining and TNR Gold. McEwen Mining is very heavily shorted and it will provide the rocket fuel for the launch.
  Among other positive developments we would like to mention ongoing exploration on a number of projects and combination of the McEwen Mining and Hochschild Mining properties around San Jose Mine in Argentina; received environmental permit for El Galo 2 in Mexico and 10 million in tax return from Mexico in addition to the reported cash position. 
  Very strict cost control in mining and production and, particularly, in the new projects development demonstrates the solid potential of Rob's team. Higher Gold and Silver prices will help to ignite this story again, but Los Azules development is potentially the most explosive value driver with the right amount of effort on its marketing now. Today's perception of country Risk can be the main valuation driver tomorrow."

Copper M&A: Peru Officials Meeting Chinalco, Minmetals This Week on Las Bambas Bids MUX, TNR.v, LCC.v, CU, GDX

 "With Chinese economy in the recovery mode quest by Chinese companies for the best mining assets is ongoing worldwide. Lumina Copper is getting some bids today again and Los Azules copper will be getting on the investors' radar screens with the changing political landscape in Argentina again."

"Los Azules Copper ProjectArgentina (100%)
In September, McEwen Mining announced an updated PEA for the Los Azules Copper project. The results from the PEA demonstrate that Los Azules has the potential to become one of the largest, lowest cost copper mines in the world. In addition, there remains excellent exploration potential to further expand the size of the existing mineral resource. Highlights from the PEA are shown below:
  • Pre-tax Net Present Value of $3.0 billion (8% discount rate) and an Internal Rate of Return of 17.7%.
  • Annual copper production during years 1-5 to average 258,000 tonnes (568 million lbs), which would have placed it in the top 3%1 of copper mines in the world during 2012. Life of mine annual copper production to average 171,000 tonnes (377 million lbs) over 35 years.
  • Indicated resource of 5.4 billion pounds of copper (grading 0.63% Cu) and 0.8 million ounces of gold (389 million tonnes with a cut-off grade of 0.35% Cu) and Inferred resource of 14.3 billion pounds of copper (grading 0.46%) and 2.6 million ounces of gold (1,397 million tonnes with a cut-off grade of 0.35% Cu).
  • Initial capital costs to construct the mine and process plant have been estimated at $3.9 billionwith a payback on a pre-tax basis has been estimated at 3.8 years at $3.00/lb copper and$1,300/oz gold.
1 Based on internal market data.
The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.
The PEA has been filed under the Company's profile on SEDAR ( pursuant to the requirements of Canadian National Instrument 43-101 and is also available on the Company's website -"

All slides are from McEwen Mining presentations.


Exclusive: Teck, Newmont, Blackstone in joint Las Bambas bid - sources

By Greg Roumeliotis, Euan Rocha and Michael Erman
NEW YORK/TORONTO (Reuters) - Teck Resources Ltd (TCK-B.TO), Newmont Mining Corp (NEM), private equity firm Blackstone Group LP (BX) and a firm led by the former head of Barrick Gold (ABX.TO) are working together on a bid for Glencore Xstrata's (GLEN.L) Las Bambas copper mine in Peru, according to several people familiar with the matter.
China's Minmetals has so far been seen as the front runner for the $5.9 billion project after Chinalco , the largest aluminum producer in China, dropped out of the race.
The next round of bids for Las Bambas is due next month, according to several sources.
The sources did not want to be named because the process is private and ongoing.
Teck, Newmont, Blackstone and Magris Resources, a firm led by former Barrick CEO Aaron Regent, have already reached out to financing banks for the potential bid, one of the sources said, suggesting the consortium sees itself a serious contender.
Commodities trader Glencore agreed this year to sell Las Bambas to secure approval from China's competition authorities for its takeover of miner Xstrata because Beijing feared the merged group would have too much power over the copper market.
A Chinese buyer has been considered a virtual certainty since Las Bambas was put on the block, given the deep pockets of the country's state-owned enterprises and China's hunger for copper - it is already the world's top consumer of the metal.
Teck, Magris and Blackstone declined to comment. A spokesman for Newmont was not immediately reachable for comment.
MMG - the Hong Kong-listed offshore arm of China Minmetals Corp - is bidding alongside CITIC group and other smaller partners, though the final lineup is still unclear.
Initial bids for Las Bambas came in around $6 billion last month, including the sum invested in construction so far - close to analysts' estimates of the mine's value. In a research note published in May, Nomura analysts put the end-2014 value at about $6.2 billion.
By the time a sale is agreed, Glencore Xstrata estimates that it will have spent $3.3 billion on Las Bambas. It has estimated the total construction cost will be $5.9 billion.
Las Bambas, one of the largest mines in Xstrata's project portfolio, is due to begin production in 2015. It is expected to produce more than 450,000 tons of copper a year in its first five years and 300,000 tons a year thereafter.
(Reporting by Greg Roumeliotis and Michael Erman in New York and Euan Rocha in Toronto; Editing by Gary Hill and Phil Berlowitz)"

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