Metals Acquisition inks deal with Polymetals, shares soar
\nArafura gets $300m loan approval, silver miner Adriatic raises $50m
\nSt Barbs downgrades guidance, Perseus back on the ground at Meyas Sands<\/p>\n
Here are some of the biggest ASX mining stories for Monday May 27.<\/p>\n
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Metals Acquisition (ASX:MAC)<\/a> has come to life in recent months alongside a resurgent copper price after a $325 million IPO to pursue a secondary listing Down Under.<\/p>\n This followed US$1.1 billion acquisition of Glencore\u2019s CSA mine in Cobar; a super high grade, but old and deep mine where \u201cimproving operational performance\u201d could lift output to historic levels of ~50,000tpa from 2026.<\/p>\n The company said it intends to grow further via acquiring assets that can be operated more efficiently than the previous owners<\/a>.<\/p>\n Enter neighbour Polymetals (ASX:POL)<\/a>, which is aiming to rejuvenate a historic asset of its own, called Endeavor.<\/p>\n Endeavor, a silver zinc lead mine ~40km from CSA, produced ~92Moz silver, 2.6Mt zinc and 1.6Mt lead over a 38-year mine life as one of the region\u2019s most prolific producers.<\/p>\n MAC and POL surged today after forming a non-exclusive strategic alliance to extract greater value from their respective assets.<\/p>\n MAC will snap up a cornerstone investment in POL, plus work towards a tolling deal (MAC\u2019s zinc ore to be treated at POL\u2019s plant) and water offtake (MAC to draw 150ML of water annually from the Endeavor mine pipeline, which runs right past the site).<\/p>\n \u201cWe believe that this kind of transaction is an example of how cooperation has the potential to extract the best value in the Basin,\u201d MAC CEO Mick McMullen says.<\/p>\n \u201cAs recently announced, the CSA copper mine appears to host high grade zinc mineralisation near surface and adjacent to existing development.<\/p>\n \u201cSubject to exploration success, modifying factors and some permitting, we think that having the option to treat this material at Endeavor can potentially create significant value for our shareholders.<\/p>\n \u201cThis is a logical way of securing a processing option for any zinc ore we might mine without distracting our operations from the core business of mining and recovering copper.\u201d<\/p>\n NOW READ: Why Metals Acquisition\u2019s Mick McMullen wants to breathe new life into Australia\u2019s highest grade copper mine<\/a><\/strong><\/p>\n\n <\/span>\u00a0<\/p>\n \u00a0<\/p>\n Despite the many billions of dollars poured into Western rare earths companies over the years, Lynas (ASX:LYC)<\/a> is currently the only producer of scale outside China.<\/p>\n This historical failure rate of near 100% is something Arafura (ASX:ARU)<\/a> is hoping to change with its monster Nolans project, spruiked as a critical source of REEs outside China.<\/p>\n The $1.68bn price tag will be <\/strong>funded via a near 50:50 mix of debt and equity, ARU says.<\/p>\n ARU has now scored conditional approvals for 68% of the targeted US$775 million senior debt funding for Nolans after the Canadian Export Bank tipped in US$300m.<\/p>\n A solid effort amid sluggish rare earths prices, which hit a four-year low in April.<\/p>\n This weak market has impacted the ARU share price, which is down an eye-watering 68% from a February 2023 peak of 63c\/sh.<\/p>\n\n <\/span>\u00a0<\/p>\n Silver-zinc-gold mine developer Adriatic Metals (ASX:ADT)<\/a> has sold its first shipment of concentrate from Vares, which is ramping up towards full capacity in Q4 this year.<\/p>\n \u201cThe production of saleable concentrates from the Vares silver operation represents a major milestone for the company and I am very pleased with the progress made by the processing team with the plant producing concentrates with recoveries as expected,\u201d ADT boss Paul Cronin says.<\/p>\n \u201cHigh silver, gold and zinc prices and low treatment charges due to a tight concentrate market are providing positive tailwinds for Adriatic\u2019s free cash flow generation, as we progress towards full production capacity in Q4 of this year.\u201d<\/p>\n The good news was tempered by an accompanying US$50m raise, which aims to \u201cprovide balance sheet flexibility during the final stages of ramp-up\u201d.<\/p>\n US$11m of this cash will be used to finalise the termination payment payable to a previous mining contractor.<\/p>\n Concurrent with the placement, major shareholder Orion will sell down 8m CDIs at the offer price, leaving it with a 4.99% stake.<\/p>\n The offer price of AU$4.15 per CDI represents a small ~5.7% discount to the last close price.<\/p>\n\n <\/span>\u00a0<\/p>\n St Barbara (ASX:SBM)<\/a> says a bunch of issues at it Simberi operations in PNG means less ounces and ballooning costs for FY24.<\/p>\n Full year production and cost guidance for FY24 is revised to 52,000 to 56,000oz (previously 60,000 to 70,000oz) at an All-In Sustaining Cost (AISC) of A$3,700 to A$3,900\/oz (previously A$3,200 to A$3,400).<\/p>\n That makes SBM is one of the few producers currently outside the money at a time of near record gold prices.<\/p>\n It is aiming to increase production to 230,000ozpa between FY28-34, with AISC dropping to US$1000-$1200\/oz over the same period.<\/p>\n\n <\/span>\u00a0<\/p>\n Meanwhile, Perseus (ASX:PRU)<\/a>, which owns the low cost Yaoure, Sissingue and Edikan mines in Cote d\u2019Ivoire and Ghana, is back on the ground at its Meyas Sand project in Sudan.<\/p>\n The 550,000ozpa producer had been banking on the 3.34Moz Meyas Sand project (MSGP) in Sudan as its next major development, put on ice due to an outbreak of civil war in 2023.<\/p>\n Only a temporary setback, it seems. PRU says drilling at the MSGP \u2013 secured by a security force led by in-house security personnel and the so-called Sudanese Mining Police \u2013 recommenced on 20 May.<\/p>\n \u201cWhen Perseus acquired the Meyas Sand Gold Project in 2022 through the acquisition of Orca Gold Inc, we were very excited by the prospects of developing a large scale, low cost, long life gold mine in northern Sudan that would add a further high quality mine to Perseus\u2019s multi mine, multi-jurisdiction asset portfolio,\u201d PRU Boss Jess Quartermaine says.<\/p>\n \u201cThe outbreak of hostilities in the south and west of Sudan in 2023 represented a serious setback for Perseus\u2019s ambitions for MSGP, but the recent recommencement of drilling activities is considered a positive step forward that hopefully will lead to the development of MSGP when peace is finally restored throughout the country.\u201d<\/p>\n\n \ufeff<\/span><\/span> The post Monsters of Rock: Metals Acquisition and Polymetals forge alliance, sparking surge in shares<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Arafura gets $300m loan approval, silver miner Adriatic raises $50m<\/strong><\/h2>\n
Gold Watch: St Barbs downgrades guidance, Perseus back on the ground at Meyas Sands<\/h2>\n
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