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  • McEwen Mining & TNR Gold: Chinese Giants Poised To Go Head To Head In Battle For $5.9bn Las Bambas Mine MUX, TNR.v 0 comments
    Oct 11, 2013 9:44 AM | about stocks: TRRXF, MUX, GDX, GG, GLD, SLV, NEM, AEM, RGLD, AUY, SLW, FCX, RIO, BHP, TCK, VALE, SSRI, PAAS, NG, KGC, EGO, GDXJ, FXI, CU

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    We have more news coming out of London on the Las Bambas copper mine bidding war. More reports are coming out now with the positive outlook for copper as well, but the most important in any market is the money talk and now the real money has been put on the table. Only one buyer will be successful in this bidding war and it will bring industry attention to Los Azules copper project with the valuation catalyst for McEwen Mining and TNR Gold. Lumina Copper recent advance with its Taca Taca copper project also located in Argentina is the very good sign of things to come here.

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    Los Azules Copper, McEwen Mining and TNR Gold: Lumina Copper Surged 63% From August Low MUX, TNR.v, LCC.v, GDX


    "Lumina Copper has become one of our main success stories this summer which we have shared with our fellow travelers. As you know, we are not giving any investment advice here and our observations of the markets and trends will stay only observations until Mr Market will make up his mind. Please read our full legal disclaimer.

    With Lumina Copper we have noticed the catalyst when Ross Beaty has increased his 22% in the company and bought 1 million worth of shares this summer. For us it is our "Dream Team" with Tenke Mining all over again: one of the best mining leaders at the helm with his personal wealth at stake, goods are there - safely in the ground - and the valuation is extremely distorted by the political risk perception.

    The dive in commodity prices did not help the valuation in the first half of the year either. The fear of dramatic slowdown in China was hanging over the market. Then we have news start to flow from Clencore:"

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    All slides are from McEwen Mining September 2013 presentation.

     

    McEwen Mining & TNR Gold: Las Bambas Copper Bidding From China Heats Up TNR.v, MUX, LCC.v, GDX, CU

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    "It is a good choice to invest in mining assets, which is a much better choice than investing in one government's bonds - especially when this country cannot guarantee to pay even its own employees"

    Gu Liangmin, head of copper at Minmetals.

    BusinessDay:

    CHINESE GIANTS POISED TO GO HEAD TO HEAD IN BATTLE FOR $5.9BN LAS BAMBAS MINE

    LONDON - Two groups of Chinese miners, in partnerships that will pit giant Chinalco against rival Minmetals, lead a short list of suitors for Glencore Xstrata's $5.9bn Las Bambas copper mine in Peru, according to sources involved in the process.

    Glencore agreed in 2013 to sell the Las Bambas project to meet demands from China's competition authorities after its record-breaking takeover of mining group Xstrata. The Chinese regulator feared the tie-up handed the newly formed commodities heavyweight too much power in copper.

    Several sources said initial bids for Las Bambas - due to begin production in 2015 and one of the largest copper mines to come on the block in recent years - had come in around the $6bn mark, including the sum invested in construction so far.

    Suitors will begin due diligence next week and could fine tune their numbers, which are close to analysts' estimates of the mine's value and, two of the sources said, above Glencore's target price.

    In a research note published in May, Nomura analysts put the end-2014 value of the mine at about $6.2bn.

    Las Bambas is expected to produce more than 450,000 tonnes of copper a year in its first five years of operation and an annual 300,000 tonnes thereafter.

    Providing details of the shortlist for the first time, the sources said there were five to six groups of suitors, led by Chinalco, which has partnered with Jinchuan, and rival Minmetals, partnering with the China International Trust and Investment Corporation. Chinalco already has a presence in Peru with the Toromocho mine.

    Unusually, both Chinese groups have gone on the shortlist, although it is unclear if both sets of Chinese suitors will submit binding offers next month.

    Minmetals said last week that it had submitted a bid but would not pay a "crazy" price.

    Glencore declined to comment on the process but said publicly last month that it had seen robust Chinese interest and expected a sale agreement before the year end.

    There are also non-Chinese suitors, the sources said, including mid-tier Western miners, potentially with existing Peruvian presence.

    Among the miners named by several of the sources is Newmont Mining, which said in a newspaper interview last week that Las Bambas was "interesting" and has also indicated it could seek to increase copper production.

    By the time a sale is agreed in 2013, Glencore Xstrata estimates it will have spent $3.3bn on Las Bambas, one of the largest mines in Xstrata's project portfolio. It has estimated the total construction cost will be $5.9bn.

    Reuters"

    FT:

    "Dr Copper" predicts recovery in world economy"

    Reuters:

     

    Chinese lead shortlist for Glencore's $5.9 bln Peru mine -sources

    By Clara Ferreira-Marques and Anjuli Davies

    LONDON | Thu Oct 10, 2013 7:38pm IST

    Oct 10 (Reuters) - Two groups of Chinese miners, in partnerships that will pit giant Chinalco against rival Minmetals, lead a shortlist of suitors for Glencore Xstrata's $5.9 billion Las Bambas copper mine in Peru, according to sources involved in the process.

    Glencore agreed this year to sell the Las Bambas project to meet demands from China's competition authorities after its record-breaking takeover of mining group Xstrata. The Chinese regulator feared that the tie-up handed the newly formed commodities heavyweight too much power in copper.

    Several sources said that initial bids for Las Bambas - due to begin production in 2015 and one of the largest copper mines to come on the block in recent years - had come in around the $6 billion mark, including the sum invested in construction so far.

    Suitors will begin due diligence next week and could fine-tune their numbers, which are close to analysts' estimates of the mine's value and, two of the sources said, above Glencore's target price.

    In a research note published in May, Nomura analysts put the end-2014 value of the mine at about $6.2 billion.

    Copper has been among the most resilient metals even as the commodity price cools, making copper assets desirable even for miners under pressure to rein in spending.

    HUNGRY CHINA

    China already consumes about 40 percent of the world's copper and has remained particularly hungry for significant sources of supply. Las Bambas is expected to produce more than 450,000 tonnes of copper a year in its first five years of operation and an annual 300,000 tonnes thereafter.

    Providing details of the shortlist for the first time, the sources said there were five to six groups of suitors, led by Chinalco, which has partnered with Jinchuan, and rival Minmetals, partnering with CITIC. Chinalco already has a presence in Peru with the Toromocho mine.

    Unusually, both Chinese groups have gone on the shortlist, though it is unclear if both sets of Chinese suitors will submit binding offers next month.

    "It is like playing a game of poker with two hands," one of the sources said as the groups prepare for due diligence.

    A Chinalco spokesman was not immediately available to comment. MMG, which drives Minmetals' base metals expansion abroad, Jinchuan and CITIC Resources declined to comment. Minmetals said last week that it had submitted a bid but would not pay a "crazy" price.

    Glencore declined to comment on the process but said publicly last month that it had seen robust Chinese interest and expects a sale agreement before the year end.

    WESTERN SUITORS

    There are also non-Chinese suitors, the sources said, including mid-tier Western miners, potentially with existing Peruvian presence.

    Among the miners named by several of the sources is Newmont Mining Corp, which said in a newspaper interview last week that Las Bambas was "interesting" and has also indicated that it could seek to increase copper production.

    Other, sources, however, question Newmont's appetite, while the company itself has declined to say whether or not it is in the running for either all or part of Las Bambas.

    By the time a sale is agreed this year, Glencore Xstrata estimates that it will have spent $3.3 billion on Las Bambas, one of the largest mines in Xstrata's project portfolio. It has estimated the total construction cost will be $5.9 billion.

    At current bid levels - and at a time when most major producers are under pressure from investors to pull back on deals and new projects - all buyers are expected to form consortiums ahead of the final round, the sources said.

    That would mean a Las Bambas ownership structure harking back to the copper expansions of the 1990s, before boom-year prices encouraged bold solo projects.

    Some of Latin America's largest copper operations are already joint ventures. They include Chilean mines Collahuasi, a partnership between Glencore Xstrata and Anglo American, and Escondida, the world's largest copper mine and a venture that includes BHP Billiton and Rio Tinto.

    Glencore has notified shortlisted suitors, the sources said. The miner is pressing for second-round binding offers by mid-to-late November, with a deal to be agreed by the end of the year."

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