• Friday, September 23, 2016

  • 1:37 PM
    | 1:37 PM | 21 Comments
  • 12:25 PM
    • Oil is still set for a weekly gain, but is lower by 3% on today's session to $44.96 per barrel. Black gold began the week at about $44. USO -2.85%
    • Alongside oil's drop, the energy sector (XLE -1.3%) is far outpacing the 0.3% decline for the broad averages.
    | 12:25 PM | 20 Comments
  • 7:13 AM
  • 6:14 AM
    • Saudi Arabia has offered to lower its oil production if Iran agrees to cap output this year at its current level of 3.6M bpd.
    • The offer, which has yet to be accepted or rejected by Tehran, was made this month, sources told Reuters, and would be a major compromise ahead of talks in Algeria next week.
    • Ironic? The last two OPEC meetings held in the country - in 2004 and 2008 - led to unexpected production cuts to prop up prices.
    | 6:14 AM | 66 Comments
  • Thursday, September 22, 2016

  • 6:35 AM
    • OPEC members Saudi Arabia and Iran, whose rivalry derailed an oil supply accord earlier this year, met in Vienna a week before the organization holds talks in Algeria, Bloomberg reports.
    • Iraq is also suggesting that conditions are better for a supply deal to occur when producing countries meet on Sept. 28.
    • Besides the OPEC talk, oil prices are extending gains after a surprise third consecutive weekly U.S. crude inventory draw tightened surplus in the market.
    • Crude futures +1.1% to $45.84/bbl.
    | 6:35 AM | 30 Comments
  • 3:29 AM
    • The SEC's investigation of how Exxon Mobil values assets in a world of increasing climate change regulations is eliciting sharp reactions, with some investors seeing it as a tipping point, while others are calling it a politically motivated attack.
    • But many agreed on one thing: It's a potentially transformative moment for U.S. companies, which now have to worry about regulators' scrutiny of future climate change impacts more seriously than before.
    | 3:29 AM | 4 Comments
  • Wednesday, September 21, 2016

  • 5:55 PM
    • Newmont Mining (NYSE:NEM) was today's best-performing stock in the S&P 500 and precious metals miners gained across the board, enjoying a big boost from the Fed’s decision to keep interest rates unchanged.
    • NEM even outperformed the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) - +7.5% vs. +7% - and Credit Suisse analysts say business in looking up for the miner, as NEM continues to meet or beat cost and production targets, as well as strengthen its portfolio.
    • The firm adds that NEM believes shareholders appreciate its predictability, discipline and defining growth based on free cash flow rather than production.
    • Also today: ABX +8.6%, GG +7%, AEM +7.1%, EGO +5.7%, KGC +7.6%, SLW +7.8%, FNV +4.8%, RGLD +9.6%, IAG +7.9%, GOLD +4.7%, AU +10.4%, GFI +9%, SBGL +9.5%, HMY +11.8%AUY +7.6%, BTG +6.3%, NG +8.1%.
    | 5:55 PM | 25 Comments
  • 3:28 PM
    • Monsanto (MON +1.3%) is upgraded to Overweight from Neutral with a $128 price target at J.P. Morgan, which believes risk in the shares is "less than what the market assumes," despite regulatory hurdles for its deal with Bayer.
    • JPM believes the merger will happen at the $128/share offer share even as other investors gauge the likelihood of success at just 34% probability.
    • JPM thinks MON would earn $5/share and sell at ~20x earnings late in 2017, which would work out to $100/share, and given high returns and consistent with historical valuation, the firm sees risk in the shares as $100 and the reward at $128.
    | 3:28 PM | 10 Comments
  • 2:54 PM
    • German lawmakers lashed out in skepticism today at Bayer's (OTCPK:BAYRY -0.9%) planned takeover of Monsanto (MON +1.1%) in a meeting of parliament that highlighted the backlash Bayer faces in its home market against buying a company that many Germans see as a champion of genetically modified crops.
    • Eight of the 12 lawmakers who spoke, including three members from within Chancellor Merkel’s coalition, criticized the deal; the lawmakers have no legislative authority to stop the deal, but some are calling on regulators to do so.
    • The deal also drew scrutiny at the U.S. Senate Judiciary Committee yesterday, where Sen. Grassley said the deal was part of a "tsunami of consolidation" that could reduce choice and raise the price of chemicals and seed for farmers, which ultimately would affect choice and costs for consumers.
    • Company execs - including some from DuPont (DD +0.4%), Dow Chemical (DOW -0.1%) and Syngenta (SYT +0.2%) - sought to allay concerns and reassure lawmakers that they would keep licensing new types of seeds to smaller companies.
    | 2:54 PM | 29 Comments
  • 2:37 PM
    • BHP Billiton (BHP +2.9%) warns that Brazil’s impending wet season may result in further environmental damage due to the failed Samarco dam, carrying the risk of new fines and legal claims.
    • BHP says in its annual report that work is underway to reinforce dam structures to help contain tailings as the November-to-April rainy season arrives, but new releases or movement of tailings could cause further harm to the environment and have an effect on the feasibility and timing of a Samarco restart.
    • Total potential liabilities related to legal proceedings and enforcement actions “cannot be reliably estimated at this time,” BHP says, as the Samarco joint venture with Vale (VALE +5.3%) has been named in more than 23K small claims in addition to public civil claims made by federal and regional authorities in Brazil.
    | 2:37 PM
  • 12:57 PM
    • Gold Fields' (GFI +4.8%) South Deep mine will be smaller than initially planned for at least the next three years as the company focuses on keeping it profitable, CEO Nick Holland says.
    • GFI already had dropped its production target for South Deep to 650K-700K oz. by 2017 after years of technical problems, but "that will not be realistic as a target. After many years, it may well be achieved,” Holland tells the Denver Gold Forum.
    • South Deep, GFI’s only mine in its home country of South Africa, is the world’s second largest gold deposit and makes up ~75% of the company’s reserves, but the complexity of the ore formation, its depth, and operational and safety problems have mired the mine in delays throughout its 25-year lifespan.
    | 12:57 PM | 1 Comment
  • 11:58 AM
    • Vale (VALE +4.1%) shoots higher on speculation that it would announce the sale of 75% of a fertilizers unit to Mosaic (MOS +0.9%) for ~$3B, perhaps as early as today.
    • An O Globo newspaper online blog also said a sale of the remaining 25% of the unit was being negotiated with an undisclosed bidder for ~$1B.
    • Based on information from the O Globo blog, MOS would pay the equivalent of 15x the unit's operational earnings, a "very accretive multiple," according to Banco BTG Pactual.
    | 11:58 AM | 3 Comments
  • 11:45 AM
    • Huntsman (HUN +5.2%) surges after a fatal explosion at a Chinese competitor’s plant raised expectations that prices for polyurethane would rise.
    • The Wanhua Chemical Group plant in Yantai City, China, accounts for 8% of the global supply of methylene diphenyl diisocyanate, which is used to make polyurethanes in hundreds of applications including foam cushioning and rigid insulation.
    • HUN stands to benefit should the explosion extend the month-long plant shutdown as that would further tighten the MDI market in Asia, Nomura says.
    | 11:45 AM | 2 Comments
  • 10:59 AM
    • Silver Wheaton (SLW +2.6%) is eager to explore more streaming transactions with small mining exploration companies, CEO Randy Smallwood tells the Denver Gold Forum.
    • The CEO says he "would love to get some more on the books just because of the optionality they provide," referring to the potential for big financial gains for SLW from a small investment of typically less than $20M, if the exploration company finds a big mineral deposit.
    • Smallwood says there is ~$2B worth of streaming deals up for grabs in the market, although that is down from as much as $5B a year ago, as the rally in precious metals prices this year has cooled miners' appetite for streaming finance as share issues and other forms of funding have become available.
    | 10:59 AM | 7 Comments
  • 10:48 AM
    • New Gold (NGD +3.9%) has worried shareholders by revising upward to $1B the estimated cost of building the Rainy River mine, but Executive Chairman Randall Oliphant says NGD is confident that this will be the last projected increase.
    • NGD shares have slumped 17% since announcing on Sept. 7 that its capital cost for Rainy River in Ontario had risen by another 11% to $1.045B due to a redesign of the mine's facility to treat tailings to make it safer.
    • Oliphant also says Rainy River's startup, set for mid-2017, will not slip despite the extra 8M metric tons of construction rock it needs for the new tailings facility design.
    | 10:48 AM | 1 Comment
  • 7:14 AM
  • 2:39 AM
    • BHP Billiton (NYSE:BHP) halved the pay packet of its chief executive in the 12 months to end of June following the Samarco dam disaster in Brazil that claimed 19 lives and dragged the miner to a record annual loss.
    • Andrew Mackenzie was paid $2.24M, down from $4.58M the previous year.
    • While his base salary was maintained at $1.7M, he did not receive any short- or long-term incentive payments.
    | 2:39 AM | 4 Comments
  • Tuesday, September 20, 2016

  • 11:19 PM
    • BHP Billiton (NYSE:BHP) says it will fight the Australian Tax Office over a A$1B (US$756M) tax bill dating back to 2003, mostly involving its Singapore marketing office.
    • BHP says in its annual Economic Contribution and Payments to Governments Report that the dispute relates to the price at which Australian commodities are sold, noting that "it is a valuation issue and does not involve tax avoidance" and that it disagrees with the ATO's stance.
    • BHP also is fighting plans by Western Australia state to increase mining taxes.
    • Also, BHP discloses that CEO Andrew Mackenzie's FY 2016 salary was cut in half to A$2.24M from A$4.58M the previous year; while his base salary stayed at $1.7M, Mackenzie did not receive any short- or long-term incentive payments.
    | 11:19 PM
  • 5:55 PM
    • McEwen Mining (NYSE:MUX) Chairman/CEO and unabashed gold bull Robert McEwen predicts gold prices could surge as much as 44% to $1,900/oz. by the end of the year as confidence in the global economy wanes.
    • Record-low global interest rates will cause a “huge amount of anxiety” for investors, who will turn to gold as a store of value and an alternative asset, McEwen says.
    • "Crowd psychology is there. Reasons for anxiety are [more] multiple than what we’ve had in the past and there will be a triggering event," McEwen says.
    • On one of those could be the U.S. presidential election, where McEwen maintains that either a Trump or a Clinton victory is positive for gold: “Hillary has got a very accommodative platform... Trump is less expansionary, but he’s unnerved a lot of people with his statements, so they don’t really look at this policies, they look at his rhetoric.”
    | 5:55 PM | 59 Comments
  • 5:26 PM
    • A leak of contaminated water through a sinkhole at a Mosaic (NYSE:MOS) fertilizer facility in Florida will cost $20M-$50M to fix, CFO Rich Mack says.
    • The sinkhole damaged the liner system at the base of a stack of a radioactive waste created as a byproduct from the production of phosphate, which caused a retention pond on top to drain 215M gallons of contaminated water into the ground.
    • The incident will not materially affect phosphate production at the facility, Mack says.
    | 5:26 PM | 4 Comments
  • 4:38 PM
    • The numbers aren't yet available, but the API is reporting a sizable unexpected draw in oil inventories for the past week.
    • Crude has added about $0.50 to earlier gains since the news hit, now up 1.4% on the session to $44.48 per barrel.
    • USO +0.9% after hours
    • Update at 4:40: Crude oil draw of 7.5M barrels vs. a build of 1.4M last week. Gasoline draw of 2.5M barrels vs. a draw of 2.4M last week. Distillate build of 407K barrels vs. a draw of 1.1M last week.
    | 4:38 PM | 62 Comments
  • 12:41 PM
    • Weakness in the crop and fertilizer markets may not have hit rock bottom yet, meaning that now is the right time to merge leading farm input suppliers, Agrium (AGU +1.7%) CEO Chuck Magro says in making a pitch to skeptical investors for a merger with Potash Corp. (POT +0.7%)
    • "Are we at the bottom yet? We don't know. We know there's more upside than downside. This is the time in the cycle where it makes sense to do mergers and acquisitions," Magro says.
    • The deal would combine POT's crop nutrient production capacity with AGU's farm retail network, and some AGU investors worry that the merger would leave them with greater exposure to the weak potash market.
    • U.S. prices of potash, urea and phosphate fertilizers, as well as corn and soybean values, are well below five- and 10-year averages, the two companies say in a joint presentation at a Scotiabank investor conference in Toronto.
    • Rival fertilizer producer Mosaic (MOS +0.3%), which would be dwarfed by the merged AGU-POT, also is considering acquisition options, CFO Rich Mack says at the conference.
    | 12:41 PM | 8 Comments
  • 11:57 AM
    • B2Gold (BTG +1.8%) is upgraded to Buy from Neutral with a C$4.50 price target, up from C$4.25, at Dundee Capital, after saying it expected to be at the top end of its 2016 production guidance and at the low end of expectations on costs.
    • BTG's presentation at the Denver Gold Forum indicated the production should be at the top end of guidance of 510K-550K oz. in 2016, while costs should come in at the low end of guidance of $560-$595/oz.
    • Dundee says it always has liked BTG's liquidity, leverage and low-cost profile; after offering its production profile, the firm says it also likes BTG's valuation.
    • The firm also notes that BTG's at-the-market equity offering provides an additional $100M, cleaning up any near-term balance sheet concerns.
    | 11:57 AM | 2 Comments
  • 10:40 AM
    • The world’s top iron ore suppliers including Vale (VALE +0.4%), BHP Billiton (BHP +1.6%) and Rio Tinto (RIO -0.1%) will add nearly 50M tons of supply in the 12 months to next June, undermining prices and feeding a global glut, Liberum Capital says.
    • The group is set to supply 686M metric tons in H1 2017, from 677.8M tons this half and 636.3M tons in H1 2016, Liberum says.
    • “Despite the ‘value-over-volume’ mantra being adopted by Rio and Vale, we still expect iron ore supply growth to accelerate quickly in 2017,” the report says, noting that Vale likely will add a net 20M tons next year as its S11D project comes online.
    | 10:40 AM | 2 Comments
  • 9:53 AM
    • Newmont Mining's (NEM +0.1%) sale of its stake in the Batu Hijau mine in Indonesia may not close until Q4 amid a complex approval process, CEO Gary Goldberg says.
    • The possible delay comes after some analysts raised concerns after the June deal announcement that closing conditions, including requirements for a valid export license for the mine, posed risks for the deal's completion.
    • Goldberg says the buyer, Amman Mineral Internasional, remains motivated to purchase the asset, the Indonesian government is supportive and NEM has worked through terms of the transition with its employees at the mine.
    • The CEO also says NEM still hopes to acquire the 50% of Barrick Gold's (ABX -0.1%) Kalgoorlie gold mine in Australia that it did not already own.
    | 9:53 AM | 2 Comments
  • 8:59 AM
    • Vale (NYSE:VALE) says production from its new S11D iron ore mine in the Amazon region will be limited to 83% of full capacity as efforts to preserve cash and limit transport disruptions hamper a needed railway expansion.
    • The $14.3B project was expected to produce up to 90M metric tons/year of iron ore after a two-year ramp-up scheduled to begin by year-end, but instead S11D will deliver up to 75M tons to international sea-borne clients after a four-year ramp-up.
    • S11D is one of two giant iron ore mines in Vale's Carajas resource complex in Brazil's northern state of Para; the other mine, Serra Norte, is producing 155M metric tons/year.
    | 8:59 AM | 2 Comments
  • 7:34 AM
  • Monday, September 19, 2016

  • 6:38 PM
    • Barrick Gold's (NYSE:ABX) Veladero gold mine in Argentina could resume operations in the next two weeks, ABX President Kelvin Dushnisky says at the Denver Gold Forum, after the government temporarily suspended mine operations last week because of a leak of processing solution containing cyanide.
    • Dushinsky says ABX does not expect any material impact to project guidance, assuming repair work is finished within two weeks.
    • ABX also expects a competitive auction for its 50% share of the Kalgoorlie super pit mine in Australia, in a sale that could fetch as much as $1B.
    • Dushinsky says the company expects to be able to reach its target of reducing debt by $2B by year-end 2016 even without selling any assets.
    | 6:38 PM | 2 Comments
  • 4:58 PM
    • Royal Gold (NASDAQ:RGLD) agrees to acquire a 3.75% net value royalty covering a significant area of Barrick Gold's (NYSE:ABX) Cortez gold mine, including the Crossroads deposit, from a private seller for $70M.
    • RGLD says its interests at Cortez Crossroads now comprise a 4.37% net value royalty and a 5% sliding scale gross smelter return royalty at the current gold price.
    • RGLD says proven and probable reserves subject to its interests at Cortez were estimated at 3.7M oz., including ~3M oz. at Crossroads, as of year-end 2016.
    | 4:58 PM
  • 2:19 PM
    • U.S. Steel (X +5%) and AK Steel (AKS +3.9%) are upgraded to Sector Weight from Underweight at KeyBanc, which says the stocks at current levels better reflect the more competitive market conditions expected in Q4 and in 2017.
    • KeyBanc sees is a stronger investor appreciation for near-term and sheet supply and demand risk in 2017.
    • The firm downgraded the steel stocks just a month ago, citing caution on prospects for the U.S. carbon sheet market.
    | 2:19 PM | 2 Comments
  • 10:01 AM
    • Nucor (NUE +1.4%) agrees to acquire Independence Tube for $435M, as it looks to boost its presence in value-added products.
    • Independence Tube makes hollow structural section steel tubing from plants in Illinois and Alabama, close to NUE’s sheet mills.
    • NUE says the purchase price represents 6x average EBITDA over the 2013-15 period.
    | 10:01 AM | 2 Comments
  • 9:08 AM
    • Harmony Gold (NYSE:HMY) +2.7% premarket as it agree to acquire full ownership of the Hidden Valley mine in Papua New Guinea from 50-50 joint venture partner Newcrest Mining (OTCPK:NCMGF) for a nominal $1.
    • HMY says Hidden Valley has the potential to contribute 180K oz/year of gold to its production profile at an all-in sustaining cost of less than $950/oz within the next three years.
    • HMY says mining the stage 5 and 6 cutback will extend the current mine life by seven years and require an initial capital investment of ~$180M.
    • The companies will remain JV partners in the Wafi-Golfu project in Papua New Guinea.
    | 9:08 AM
  • 4:01 AM
    • OPEC and non-OPEC producers are close to reaching an output stabilizing deal, Venezuelan President Nicolas Maduro declared, a day after Iran welcomed any move aimed at market stability.
    • OPEC members may even call an extraordinary meeting to discuss oil prices if they reach consensus at an informal gathering in Algiers this month, OPEC Secretary-General Mohammed Barkindo said during a visit to Algeria.
    • Crude futures +1.7% to $43.77/bbl.
    | 4:01 AM | 11 Comments
  • Sunday, September 18, 2016

  • 8:14 AM
    • "Tehran welcomes any move aimed at market stability and improvement of oil prices based on justice, fairness and fair quota of all the oil producers," Iran's President Hassan Rouhani said on Sunday. "Instability and falling oil prices are harmful to all countries, especially oil producers."
    • OPEC members and Russia will likely revive talks on freezing crude production levels when they meet at the upcoming International Energy Forum in Algeria on Sept. 26-28.
    | 8:14 AM | 91 Comments
  • Friday, September 16, 2016

  • 3:33 PM
    • New Gold (NGD -0.9%) is upgraded to Buy from Hold with a $7 price target at Desjardins on valuation, highlighting EV/EBITDA as the most suitable near-term metric to watch.
    • Assuming a gold price of $1,320/oz., the firm figures NGD is trading at just 6.6x EVE/EBITDA based on its 2018 forecasts.
    • Despite near-term risks with the remaining Rainy River development, the firm thinks investors could benefit from the risk during the next 18-24 months as the project ramps up production.
    | 3:33 PM
  • 2:35 PM
    • Vale (VALE -1.1%) says Brazil's government has granted it a 10-year license to operate a 63-mile branch line connecting its S11D iron ore mine project in the Amazon jungle to the Carajas Railway.
    • The branch will allow Vale to haul iron ore from the $14.3B project to the Port of Ponta da Madeira to ships that will load the product for export.
    • S11D is expected to start operations this year and will have a capacity of 90M metric tons/year, or more than 25% of Vale's 2015 iron ore output.
    | 2:35 PM
  • 11:57 AM
    • Mosaic (MOS -0.6%) says a large sinkhole opened at its phosphate fertilizer facility in Mulberry, Fla., and leaked radioactive water.
    • MOS says the sinkhole damaged the liner system in the retention pond of a phosphogypsum stack, causing the pond on top to drain; seepage continued and the sinkhole has reached Florida's aquifer.
    • MOS says the incident released 215M gallons of "slightly radioactive" water into the aquifer.
    | 11:57 AM | 9 Comments
  • 11:42 AM
    • Silver Standard Resources (SSRI -2.4%) provides a revised five-year production and cost profile of its Marigold mine in Nevada, raising its gold production guidance by 20% to average nearly 220K oz./year.
    • SSRI forecasts cash costs decrease to an average of ~$700/oz. of gold sold due to increased production and sustained operating efficiencies.
    • Earlier this week, Endeavour Silver agreed to acquire SSRI's Parral properties in Mexico for $6M in shares.
    | 11:42 AM
  • 9:53 AM
    • Iran's August crude oil exports jumped 15% from July to 2.1M bbl/day, doubling exports since December and nearing pre-sanctions shipment levels of five years ago, Reuters reports.
    • The strong demand for Iran's crude in Asia and Europe has enabled it to raise its oil output to 3.8M bbl/day, although the figure is still shy of the 4M the government says is a precondition for discussing production limits with Saudi Arabia and Russia.
    • "The only way for producers to maximize their revenues in a low oil price environment to meet budget requirements is to raise production. So there is unlikely to be any supply deal... in late September," says IHS analyst Victor Shum.
    • Crude oil prices fall to one-month lows, as rising Iranian exports and returning supplies from Libya and Nigeria indicate no letup ahead for the global oil glut; WTI -2.4% to $42.86/bbl, and Brent -2.1% at $45.60/bbl.
    | 9:53 AM | 15 Comments
  • Thursday, September 15, 2016

  • 6:53 PM
    • Steel prices (NYSEARCA:SLX) likely will continue to move lower through year-end, Jefferies analysts say, citing "incremental weakness in raw material input costs as well as supply-side pressures from ramping capacity" at projects such as ArcelorMittal’s BF restart and Big River.
    • Still, while Jefferies lowers price targets on all the stocks in its coverage except three, it awards Buy ratings to Steel Dynamics (NASDAQ:STLD) and Nucor (NYSE:NUE); the firm sees STLD as its the top pick in the sector and NUE as the most defensive, saying the companies boast relatively lower cost operating structures and less levered balance sheets.
    • Meanwhile, Hold-rated U.S. Steel (NYSE:X) and AK Steel (NYSE:AKS) are highly sensitive to absolute steel prices and face margin risk from surging coking coal prices, so the shares likely will face the brunt of the downside pressure, Jefferies says.
    • Also rated Hold: CMC, ZEUS, RS, RYI, TMST, WOR.
    | 6:53 PM | 9 Comments
  • 5:58 PM
    • Agrium (NYSE:AGU) execs plans to meet with reluctant shareholders next week in Toronto to support its proposed merger with Potash Corp. (NYSE:POT), seeking to ease concerns that the new company would be too linked to the crop nutrient potash, which has fallen this year to decade lows on oversupply and tumbling crop prices.
    • AGU shareholders generally dislike the deal; shares slumped 6% from Monday's deal announcement to yesterday before bouncing a bit today.
    • AGU's farm retail business, currently worth 48% of EBITDA, would account for just 19% of the new company, a level that dismays some shareholders.
    • To be sure, some shareholders like the idea of creating a crop nutrient champion with nearly 3x the enterprise value of the next biggest fertilizer company.
    | 5:58 PM | 25 Comments
  • 3:07 PM
    | 3:07 PM | 1 Comment
  • 2:59 PM
    • Lundin Mining (OTCPK:LUNMF) says it has won another extension, until Sept. 29, to bid on Freeport McMoRan's (FCX +0.6%) stake in the Tenke Fungurume copper and cobalt mine in the Democratic Republic of Congo.
    • Lundin, which already was granted an extension to Sept. 15, does not say why it needs more time but reiterates that it has credible interest from multiple parties on a number of scenarios.
    • FCX agreed in May to sell its 56% stake in Tenke to China Molybdenum for $2.65B; Lundin owns a 24% stake but under a "right of first offer" can supplant any bids for the mine by matching them, or can decide to sell its stake, or do nothing and allow the China Moly deal to proceed.
    | 2:59 PM | 8 Comments
  • 2:49 PM
    • Teck Resources (TCK +5.6%) is upgraded to Equal Weight from Underweight with an $18 price target, hiked from $7, at Morgan Stanley, which notes that met coal prices have jumped ~80% over the past month.
    • Stanley analyst Evan Kurtz calculates that every $1/ton change in met coal prices adds C$35M to TCK's annualized EBITDA, meaning that the $57/ton increase during the last two weeks alone has added C$2B and contributed $8/share to the company's value.
    • “The historical pattern suggests that TCK could generate significant cash flow in the coming quarters, which could help to alleviate many of the balance sheet concerns prevalent earlier in the year,” Kurtz comments.
    | 2:49 PM | 11 Comments
  • 2:18 PM
    • Monsanto (MON -1.9%) moves lower, slipping nearly 20% below Bayer's (OTCPK:BAYRY -1.8%) $128/share offer price, amid doubts about the limited business overlap, potentially lowballed terms and significant closure risk.
    • CLSA downgrades MON Underperform with a $110 price target, citing disappointing deal terms and a far higher regulatory risk than both management teams suggest; the firm also notes that the offer price is less than 10% higher than where the stock traded two years ago, and says the $2B breakup free is a "fraction" of what MON offered in its pursuit of Syngenta.
    • Piper Jaffray keeps its Overweight rating on MON while lifting its price target to the $128 offer price, which it says was lower than expected; the firm pins its approval conviction on the "minimal crossover" between the two companies, while admitting that MON's remarks about Bayer as the best option for shareholders raises doubt about the company's growth expectations.
    • BMO keeps his Outperform rating and lifts its target to $128, echoing that product overlaps are small and that the deal will be closely scrutinized across the globe given the practical realities of farmer wallet impact, the companies involved, and ongoing reviews of the Dow-DuPont and ChemChina-Syngenta tie-ups, adding that MON could trade sideways for weeks or even months.
    | 2:18 PM | 27 Comments
  • 12:47 PM
    • Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it will have some short-term delays in its coking coal shipments from Queensland's Bowen basin in Australia after a train derailment over the weekend, which could further propel coal prices that have nearly doubled since early August.
    • The freight operator says the derailment caused major infrastructure damage but expects service to resumed on Sept. 19.
    • BHP Billiton (NYSE:BHP), which is among the coal miners operating in the Bowen region, says any impact on its operations would be reported in its next quarterly review.
    • Prices for coking coal, used primarily to heat iron ore during steel making, already have more than doubled since the end of May, partly on large curtailments of China's supply.
    | 12:47 PM
  • 10:53 AM
    • BHP Billiton (BHP +1.2%) says a proposed tax on producing iron ore in Australia would jeopardize development of its new South Flank project in the Pilbara region that may account for ~25% of its iron output from the country.
    • The leader of Western Australia’s Nationals party has proposed a production-rental cost on BHP and Rio Tinto of A$5/metric ton, up from $0.25 currently, a move the companies say would put jobs and competitiveness at risk.
    • BHP says South Flank could produce as much as 80M metric tons/year if approved; the company is targeting production of 290M tons/year from the Pilbara region and output from the new operation would replace the aging Yandi mine upon depletion.
    | 10:53 AM | 8 Comments
  • 10:17 AM
    • Barrick Gold (ABX -0.8%) says Argentina's government has temporarily suspended operations at its Veladero gold mine to allow for an inspection of the heap leach area after a small amount of processing solution that contains cyanide spilled late last week.
    • Last September, ABX temporarily suspended the gold leaching process at the same mine following a spill, after which the company was fined ~$9M by a provincial court in Argentina.
    • ABX says it does not expect this incident to materially affect 2016 operating guidance for the mine; Veladero is expected to produce 580K-640K oz. of gold this year.
    | 10:17 AM | 8 Comments
  • 7:59 AM
    • The prospect of iron ore at below $50/metric ton is back in view following the longest losing streak in more than five months, dropping 5.8% in the past seven sessions to $55.97.
    • Iron ore's September retreated has rekindled speculation that rising supply from mine ramp-ups and new projects may soon drag prices lower; for example, the Roy Hill mine in the Pilbara is expected to reach full annual capacity of 55M tons in early 2017.
    • Vale (NYSE:VALE) says that while its S11D project has capacity to produce 90M tons/year, constraints mean the net gain will be 75M tons, and it will take four years to reach full output.
    • BHP Billiton (NYSE:BHP) says prices likely will drop as the underperformance of supply this year is reversed over the next 12-18 months.
    • Other relevant tickers include RIO, OTCQX:FSUMF and CLF.
    | 7:59 AM | 9 Comments
  • 7:49 AM
    • The asset management firm had been overweight gold, but - expecting tighter monetary policy at some point in the near future - has pared back its allocation to the metal.
    • "Being in gold scares us," says Cohen & Steers portfolio manager Ben Ross, noting the 10-year Treasury yield "is really starting to move."
    • His firm isn't alone. In the past week, investors pulled $698M for SPDR Gold Shares (NYSEARCA:GLD), taking their holdings to the lowest since June.
    | 7:49 AM | 10 Comments
  • 7:21 AM
  • Wednesday, September 14, 2016

  • 8:28 PM
    • Star Bulk Carriers (NASDAQ:SBLK) -4.7% AH after reporting a slightly larger than expected Q2 loss and announcing a $51.5M common stock offering to be used for general corporate purposes.
    • SBLK also says it reached an agreement with its lenders to defer all debt repayment, totaling $223.9M, for 25 months to June 30, 2018 and to waive or substantially relax the financial covenants of its debt facilities until year-end 2019.
    | 8:28 PM | 5 Comments
  • 12:48 PM
    • Anglo American's (OTCPK:AAUKF, OTCPK:AAUKY) De Beers diamond unit expects some growth in the consumer market next year, but new CEO Bruce Cleaver warns that the overall sales environment likely will remain tough.
    • De Beers has been hurt by slowing demand and lower prices after global demand for diamond jewelry hit a high of $81B in 2014 and production soared, leaving the market flooded by 2015, but "the diamond market is in much better balance than a year ago," Cleaver says.
    • The company is heading into the critical holiday sales period for diamond jewelry, including the Diwali festival in India, Christmas and then Chinese New Year.
    • De Beers is set next week to officially open its majority owned Gahcho Kue diamond mine in Canada's Northwest Territories, which has a projected annual output of 4.5M carats.
    | 12:48 PM
  • 12:19 PM
    • Monsanto (MON +1.3%) is higher after Bayer (OTCPK:BAYRY +1.2%) finally clinched its $128/share takeover, but the stock still trades at ~$107 amid some doubt that the deal actually will happen.
    • Bernstein analysts anticipate significant anti-trust and political hurdles, and assign just a 50% probability of that the deal will be completed, citing conglomerate antitrust concerns as a large integrated crop protection and seeds company, U.S. national security concerns from a CFIUS review; and other political concerns, such as Sen. Grassley's hearing later this month on agriculture consolidation.
    • The proposed merger likely will face an intense and lengthy regulatory process in the U.S., Canada, Brazil, the EU and elsewhere; MON CEO Hugh Grant said in today's conference call that the companies will need to file in ~30 jurisdictions for the merger.
    • Bayer’s cottonseed, canola seed and glufosinate herbicide businesses, with sales totaling ~$1B, may need to be divested, according to a Bloomberg analysis.
    | 12:19 PM | 20 Comments
  • 11:57 AM
    • Eldorado Gold (EGO +1.6%) is upgraded to Buy from Underperform with a $5 price target at BofA Merrill Lynch, believing that as EGO advances its two Greek projects to the production stage, the stock's sizable discount to its peer producers will contract.
    • The firm also notes that the EGO's production levels were higher and operating costs lower than estimates, and the company guided to gold output of more than 900K oz. by 2020, more than double expected 2017 levels.
    • BofA adds that the sale of the Chinese gold mines should greatly strengthen EGO’s balance sheet, providing sufficient liquidity to advance the projects.
    | 11:57 AM
  • 10:56 AM
    • Freeport McMoRan (FCX -3.1%) is downgraded to Underweight from Equal Weight with a $7 price target, cut from $9, at Morgan Stanley, which says the risk/reward balance now is skewed to the downside as the stock is now pricing in $2.75/lb copper, above the firm's expected $2.43 average over the next three years.
    • “Copper would need to rise closer to the $3/lb mark for the company to be able to continue to both de-lever and pursue necessary mine extension capex at Grasberg," Stanley's Evan Kurtz writes.
    • FCX is in negotiations with Indonesia's government for the sale of its 10.64% stake in the Grasberg copper asset, for which FCX is seeking $1.7B while the government believes the stake is worth only $630M; Kurtz values the stake at $1.25B, near the midpoint of the current bid-ask.
    | 10:56 AM | 11 Comments
  • 9:17 AM
    • Nucor (NYSE:NUE) -2.2% premarket after saying it expects Q3 EPS of $0.85-$0.90, better than the $0.71 in the year-ago quarter but below the analyst consensus estimate of $0.95.
    • NUE says flat-rolled trade cases are having a positive impact, as steel imports are down in the first seven months of the year vs. the same period last year and duties are in place and being collected.
    • NUE expects profitability of its sheet mills to improve due to higher average selling prices, which benefited in part from contract sales that are priced on a lagging quarterly basis; demand for cold-rolled and galvanized sheet products is robust, but demand for hot-rolled sheet products has weakened since H1.
    | 9:17 AM
  • 7:28 AM
    • It's official: Bayer (OTCPK:BAYRY) agrees to acquire Monsanto (NYSE:MON) for $128/share in cash, in a deal that values MON at ~$66B.
    • The offer represents a 44% premium to MON's closing share price on May 9, the day before Bayer's first written takeover proposal.
    • Bayer expects annual synergies of ~$1.5B after year three; plus additional synergies from integrated solutions in future years.
    • Bayer has committed to a $2B reverse antitrust break fee, reaffirming its confidence that it will obtain the necessary regulatory approvals.
    | 7:28 AM | 63 Comments
  • Tuesday, September 13, 2016

  • 6:47 PM
    • Bayer (OTCPK:BAYRY) is expected to announce the acquisition of Monsanto (NYSE:MON) tomorrow for more than $66B, Reuters reports.
    • The breakthrough after more than four months of talks reportedly comes after Bayer further improved on its sweetened offer of $127.50/share in cash it disclosed last week, but the deal will still value MON at less than $130/share.
    • After MON's board approves the deal today, Bayer's board will meet tomorrow to also authorize the deal, with the goal of an announcement before the stock market opens in New York, according to the report.
    | 6:47 PM | 37 Comments
  • 5:58 PM
    • Pan American Silver (NASDAQ:PAAS) Chairman Ross Beaty is recruiting Argentina’s Pres. Macri to help him convince authorities in the Chubut province to lift a blanket ban on open pit mining so the company can start work at one of the world's largest silver deposits.
    • Beaty says Macri - who has repealed capital and currency controls and mineral export taxes since taking office in December to lure investment - has pledged his support for the Navidad project.
    • PAAS has $600M in financing for the first phase of development on the project, which would take 18 months to two years.
    | 5:58 PM | 7 Comments
  • 4:50 PM
    • The API reported a 1.4M barrel increase in U.S. crude inventories vs. expectations for a 4M barrel gain. Gasoline stocks fell 2.4M barrels; distillates rose 5.3M barrels.
    • Oil had a rough session, falling to $44.90 by 4 ET, but has rebounded to $45.20 per barrel since the API news hit - still down about $1 from 24 hours ago.
    • USO +0.7% after hours
    | 4:50 PM | 17 Comments
  • 11:14 AM
    • Monsanto's (MON -1%) board will meet today to decide whether to approve the company's sale to Bayer (OTCPK:BAYRY -1%) for more than $65B following four months of negotiations, Reuters reports.
    • The deal is expected to value MON at a little more than the sweetened $127.50/share offer that Bayer disclosed last week, according to the report.
    • Bayer's supervisory board reportedly will review the deal tomorrow, and the deal still could hit a snag with the board of either company.
    | 11:14 AM | 15 Comments
  • 7:41 AM
    • The U.S. International Trade Commission affirms most of the recent anti-dumping and anti-subsidy duties on hot-rolled flat steel imports (NYSEARCA:SLX) from Australia, Brazil, Britain, Japan, the Netherlands, South Korea and Turkey.
    • Used in automotive applications, construction, tubing and heavy machinery, hot-rolled steel imports from the seven countries more than doubled to nearly $2B last year, with ~$650M coming from South Korea.
    • The U.S. Commerce Department yesterday levied anti-dumping and anti-subsidy duties of roughly 64%-77% percent on certain Chinese-made stainless steel sheet and strip products.
    | 7:41 AM
  • 4:42 AM
    • Global oil demand growth is slowing at a faster pace than first thought, according to the International Energy Agency, which warned that investors would have to wait "a while longer" for markets to rebalance.
    • "For 2016, a gain of 1.3M bpd is expected," the IEA said in its latest market update, equating to a downgrade of 100K bpd from its previous forecast.
    • The prediction will be worrying for oil markets at a time when a delicate rebalancing of supply and demand was thought to be taking place.
    • Crude futures -2.2% to $45.28/bbl.
    | 4:42 AM | 56 Comments
  • Monday, September 12, 2016

  • 6:10 PM
    • Potash Corp. (NYSE:POT) and Agrium (NYSE:AGU) both finished lower in today's trade after Canada’s two largest fertilizer producers agreed to an all-share merger to create a company that would control nearly two-thirds of North American potash capacity and almost one-third of phosphate and nitrogen capacity there; POT closed -1.2% while AGU finished -2.7%.
    • AGU CEO Chuck Magro, who will be CEO of the merged company, and POT CEO Jochen Tilk, who will become executive chairman, say they are confident that the deal will receive regulators' approval as proposed, without the need for divestitures, but others are skeptical.
    • "This deal has some real antitrust concerns," says former U.S. Department of Justice official Seth Bloom, who adds that an antitrust review is unlikely before January, when a new U.S. president takes office.
    • The merger would leave Mosaic (NYSE:MOS) as North America's only other major potash producer; Bloomberg reports that AGU held early stage deal talks with MOS, but the talks fizzled out earlier this year and did not overlap with negotiations with POT.
    | 6:10 PM | 8 Comments
  • 3:15 PM
    • Vale (VALE +3.7%) and Rio Tinto (RIO +1.4%) are upgraded to Overweight from Neutral at J.P. Morgan, which now expect iron ore prices to be more supportive, staying within $50-$60/ton through 2017.
    • JPM expects Vale to post positive free cash flow in 2017 and beyond (before divestitures) vs. earlier expectations of negative free cash flow in 2017; also, Vale trades at a cheaper EV/EBITDA valuation than peers of 5.9x for estimated 2017 and 5.5x for 2018, respectively, even though it has higher volume and EBITDA growth than peers during the 2016-18 period.
    • The firm says Rio now screens attractive based on estimated 2017 EV/EBITDA of 6x, free cash flow yield of 6%, and price/NPV of 0.92x.
    • JPM maintains iron ore producing peer BHP Billiton (BHP +1.1%) at Neutral.
    | 3:15 PM | 5 Comments
  • 2:38 PM
    • Eldorado Gold (EGO +7.7%) shoots higher as shares are upgraded to Outperform from Neutral with a $5.50 target price, lifted from $5, at Credit Suisse, citing "improved clarity" on EGO's longer term outlook thanks to growth drivers through 2020.
    • The growth drivers that could raise production to 830K oz. in 2020 from 400K oz. in 2017 include the Kisladag expansion, Olympias Phase II (scheduled to begin in 2017), Skouries Phase I (expected to begin in 2019), and Tocantinzinho (scheduled for a late 2019 start), the firm says.
    • Credit Suisse notes that shares have suffered because of its exposure in Turkey following the July 15 coup attempt against Pres. Erdogan, but that foreign investment has not been impacted by unrest in the region, and headwinds to EGO seem to be receding.
    | 2:38 PM | 10 Comments
  • 2:18 PM
    • AK Steel (AKS +2.8%) spikes higher after the U.S. Commerce Department says it made a preliminary finding that imports of stainless steel sheet and strip from China are being dumped in the U.S. market at below fair value.
    • The DoC set preliminary antidumping duties ranging from 63.86% to 76.64%.
    • AKS and Allegheny Tech (ATI +3.9%) are two of the companies that sought a U.S. investigation, but other steel firms also are higher: X +2.4%, MT +3.1%, NUE +1.8%, CLF +0.9%, STLD +0.8%.
    | 2:18 PM | 26 Comments
  • 9:58 AM
    • Barrick Gold (ABX +0.6%) signs a deal with Cisco Systems for a “digital reinvention” of its global mining operations, starting with its Cortez mine in Nevada.
    • Executive Chairman John Thornton says ABX's goal is to cut costs and wring additional value out of existing mines; for example, ABX expects a flow of real-time data will allow it to predict when equipment is likely to need maintenance and to adjust mine plans quickly as conditions such as prices, weather or ore grades change.
    • Thornton says the ABX-CSCO partnership will increase cash flow over the long term while reducing environmental impact and increasing transparency with governments and communities.
    | 9:58 AM
  • 8:30 AM
    • Ashland (NYSE:ASH) discloses that it expects the 30M-share IPO for its Valvoline spinoff to price at $20-$23/share.
    • If the underwriters exercise options to buy an additional 4.5M shares, Valvoline could raise as much as $793M, before fees.
    • After the completion of the offering, ASH would own 170M Valvoline common shares, or 85% of the total outstanding shares (83% if the underwriters exercise their over-allotment option in full).
    • The company has applied for its common stock to be listed on the NYSE under the symbol VVV.
    | 8:30 AM
  • 8:16 AM
    • Israel Chemicals (NYSE:ICL) appoints Asher Grinbaum as its interim CEO following Stefan Borgas' resignation as CEO last week.
    • Grinbaum, currently ICL's executive VP and COO, will fill the interim CEO role effective immediately until a permanent CEO is appointed.
    • Analysts say the eventual successor will struggle to revive earnings given weak global prices for potash, the company's primary export.
    | 8:16 AM
  • 7:23 AM
    • Agrium (NYSE:AGU) and Potash Corp. (NYSE:POT) say they have agreed to combine in a merger of equals to create a fertilizer and farm retailing giant with pro forma enterprise value of $36B, including debt.
    • In the all-stock deal, POT shareholders would receive 0.4 common share of the new company for each common share they own, and AGU shareholders would get 2.23 common shares of the new company for each common share they own.
    • After the deal closes, POT shareholders will own ~52% of the new company, with AGU shareholders owing ~48%.
    • The companies expect the combination to generate up to $500M of annual operating synergies primarily from distribution and retail integration, production and SG&A optimization, and procurement; synergies imply value creation for the combined enterprise of up to $5B.
    | 7:23 AM | 35 Comments
  • Friday, September 9, 2016

  • 2:58 PM
    • Franco-Nevada (FNV -3.8%) is upgraded to Hold from Sell with a $74 price target, lifted from $62, at Deutsche Bank, which cites FNV's proven low cost of equity.
    • Deutsche Bank analysts say royalty/streaming companies are sensitive to interest rates, and combined with the company's proven low cost of equity, the firm now applies 4.5% (previously 5.5%) as a weighted average cost of capital - lower than Silver Wheaton (5%) - to recognize FNV's greater diversity of assets and commodities, and the royalty/stream split.
    • FNV boasts a strong business model, but the firm thinks this is fairly reflected in the share price.
    | 2:58 PM
  • 1:44 PM
    • Pan American Silver (PAAS -7.2%) says it has achieved critical milestones in two mine expansion projects in Mexico, although shares are lower as precious metals producers are broadly lower in today's trade.
    • PAAS says the new deep shaft at the La Colorada mine was commissioned in fully automatic mode earlier this month, ahead of schedule, and now expects the project to be completed 5%-10% under budget; by the end of 2017 when the project is expected to be completed, increased processing rates are expected to result in a 69% rise in annual silver output to ~7.7M oz.
    • PAAS also says the new power line that connects its Dolores mine to the national power grid was energized this month and was completed on budget; by year-end 2017, the project is expected to increase annual silver production by 40% to 6.3M oz. and gold production by 52% to 205K oz..
    | 1:44 PM
  • 12:57 PM
    • Silver Wheaton (SLW -3.6%) is started with a Buy rating and $37 price target at Deutsche Bank, but shares are sharply lower as natural resource stocks are broadly lower today.
    • Deutsche Bank says SLW enjoys a strong cash flow and is adding eight projects in its portfolio to 22 existing operations; as a result, the firm sees silver equivalent production reaching 54.7M oz. in the current year and 57M oz. next year.
    • The firm notes that SLW generates ~60% of revenue from silver and ~40% from gold, and has increased the number of assets and regions it is exposed to since 2004, and the company's diversified assets with low operating cost exposure reduce risk compared to peers.
    • Concerns about taxes that might be owed to the Canadian Revenue Agency are priced into shares, Deutsche Bank adds.
    | 12:57 PM | 3 Comments
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