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  • Wednesday, October 22, 2014

  • 3:53 PM
    • Coeur Mining (CDE -14.1%) plunges after BMO Capital downgrades shares to Underperform from Market Perform and slashes its stock target price to $4 from $9.50, pointing out signs of "strained" valuation.
    • The downgrade comes as BMO describes its view that silver will continue to underperform gold over the next 12 months, and that silver miners "will need to look increasingly toward grade as a mechanism to reduce unit costs at the expense of reserve life."
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  • 3:44 PM
    • Dow Chemical (DOW -0.8%) CEO Andrew Liveris said during today's earnings conference call that he has been continuing to speak with Dan Loeb of Third Point Capital and other shareholders about how to raise Dow’s share price.
    • Liveris denied any "adversarial” relationship with Loeb and promised to listen to his analysis, agreed with Loeb that Dow needs to "show where we’re making money," and suggested an investor day next month would offer greater clarity.
    • The CEO added that Dow was close to reaching a “running rate” of EBITDA of $10B/year “in the near term," an objective the company first set in 2009.
    • Falling oil prices have sparked investor concerns about Dow and other U.S. petrochemical manufacturers, but Liveris said the plunging prices will stimulate national economies and help rather than hurt its plastics business next year.
    | 1 Comment
  • 2:44 PM
    • Crude inventories rose 7.1M barrels for the week ended October 17, according to the EIA, vs. expectations for a 2.7M jump. Helping boost inventories were fewer refinery runs - down 113K barrels per day with utilization rates dropping 140 basis points to 86.7%. In the Midwest, utilization rates are the lowest for this point in the year since 2010.
    • WTI crude oil last week briefly dropped under $80 per barrel for the first time since the summer of 2012, and it's testing that level again today, -2.9% to $80.36. USO -2.4%
    • Gasoline (UGA -2.2%) stockpiles fell 1.3M barrels vs. expectations for a 1M barrel drop, and distillates (UNH -0.8%) rose 1M barrels vs. expectations for a 1.3M barrel decline.
  • 2:43 PM
    • P-E firms are coveting Bayer's (OTCPK:BAYZF, OTCPK:BAYRY) €10B ($12.7B) plastics business, hoping to sway the German drugmaker from its plan to list the division in an IPO, Reuters reports.
    • Advent, Carlyle and KKR reportedly are among P-E firms, as well as sovereign wealth funds and pension funds, considering MaterialScience after Bayer said in September that it planned to spin off the division through a stock listing.
    • Market conditions for IPOs have weakened in recent weeks, forcing a number of companies to pull their listings and potentially heightening the attractiveness of a sale to P-E firms.
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  • 11:59 AM
    • Norwegian fertilizer producer Yara (OTCPK:YARIY -1.6%) reports a 9% Y/Y rise in net profit on rising revenue, and says it will invest 2.25B kroner ($343M) to boost production capacity at the Porsgrunn plant in Norway.
    • Yara's Q3 net profit totaled 1.71B kroner vs. 1.57B in the year-ago quarter but short of analyst consensus estimate of 2.24B kroner.
    • Q3 revenue totaled 24.1B kroner, above 20.6B a year ago and expectations this quarter for 21.6B; EBIT was 2.76B, up from 2.39B a year ago but below expectations of 3.16B.
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  • 10:43 AM
    • BHP Billiton (BHP -1.1%) is the latest company to report record output of metallurgical coal, as extra supply far outpaces demand in countries such as China and Japan, which produce much of the world’s steel.
    • BHP says it produced a record 12.8M metric tons of met coal in Q3 - including output from the major new Caval Ridge mine in Australia - up 7% Q/Q and 25% Y/Y, and Anglo American’s (OTCPK:AAUKF, OTCPK:AAUKY) H1 2014 met coal production jumped 21% Y/Y.
    • The willingness to dig up more coal (NYSEARCA:KOL) despite lower prices mirrors a similar push in iron ore, where global miners miners are investing and producing more in a bet that their efficiencies of scale will allow them to profit, but critics say the strategy risks creating supply gluts that will take years to clear.
    • The price for Australian premium hard coking coal has dropped 16% this year to $110/ton, near the lowest level in more than seven years and well below the $300/ton fetched in early 2011.
    | Comment!
  • 10:19 AM
    • Taseko Mines (TGB -0.6%) believes Canada's government acted unlawfully in rejecting its New Prosperity copper project in British Columbia, so it is suing the Ottawa government for damages and to find out what happened.
    • TGB appears in a federal court in Vancouver today to argue that its two judicial review applications to Ottawa should be combined into one civil suit seeking damages, in a move that appears to be unprecedented and is fiercely opposed by the government.
    • TGB says it has evidence of actual malfeasance by federal officials, including secret meetings with opponents of the $1.5B project that could have swung Ottawa’s decision.
    • If TGB’s request for a civil suit is granted, the miner would have a greater ability to force disclosure of the documents, in addition to the potential damages.
    | 1 Comment
  • 9:46 AM
    • Cliffs Natural Resources (CLF +5.5%) opens sharply higher after Credit Suisse, a longtime bear on the stock, now says it is bullish ahead of next week's earnings report and that the magnitude of CLF's cost-cutting efforts is likely to surprise the Street.
    • Credit Suisse believes the total cuts could be worth more than $300M in EBITDA, and it thinks Q3 trade data also looks strong.
    • The firm says it is time to cover shorts, and that's no small matter with 44% short interest in CLF.
  • 8:10 AM
    • Dow Chemical (NYSE:DOW) +3.2% premarket after reporting a 44% Y/Y rise in Q3 earnings, which also beat analyst expectations.
    • Performance plastics, Dow’s biggest revenue driver, posted an 8.5% sales gain to $3.92B, performance materials sales rose 8% to $3.57B, and feedstocks and energy segment sales gained 2% to $2.4B.
    • Sales rose in all geographic areas; sales in developed geographies gained 4%, led by North America, where sales rose 7%.
    • EBITDA rose 24% to $2.3B, while adjusted EBITDA margin widened more than 240 bps to 15.9%.
  • Tuesday, October 21, 2014

  • 7:28 PM
    • BHP Billiton (NYSE:BHP) reports Q3 production numbers showing the iron ore and coking coal divisions performed as well as or better than expected, as overall production rose 9% Y/Y with records achieved for eight operations and four commodities.
    • The 62M metric tons produced by BHP's Pilbara iron ore division means the business is ahead of schedule on its target to produce 245M metric tons in FY 2015.
    • Produced a better than expected 13M tons of met coal, a 25% increase, as Queensland Coal achieved record quarterly production and sales volumes.
    • Petroleum production gained 7% to 67.4M boe, as onshore U.S. liquids volumes jumped 49% to a record 11.5M boe.
    • Full year production guidance remained in line with prior guidance for iron ore, copper, petroleum and both types of coal.
    | Comment!
  • 6:11 PM
    • Kinross Gold (NYSE:KGC) agrees to sell its mothballed Fruta del Norte gold project in Ecuador to Fortress Minerals (OTC:FTMNF) for $240M in cash and equity.
    • The sale is a relief for KGC, which was forced to write down the project after clashing with the Ecuadorian government on the economic terms.
    | Comment!
  • 3:13 PM
    • Jefferies lowers its commodity price forecasts, cuts 2015 earnings estimates for mining companies it covers by an average of 21%, and downgrades BHP Billiton (BHP +0.6%) to Hold from Buy but maintains a Buy rating on Rio Tinto (RIO +1.5%) and a Hold on Vale (VALE +1.1%).
    • The firm expects BHP to outperform over the very long-term but sees limited upside potential over the next 6-12 months, with shares now trading at a premium on price/NPV; BHP also has limited scope to materially grow its dividend over the next year.
    • Jefferies maintain its Buy rating on RIO based on relative valuation as well as capital return potential, high return on capital invested and strong free cash flow even in a weaker iron ore price environment.
    | 1 Comment
  • 12:57 PM
    • Almaden Minerals (AAU +2.3%) says it is reorganizing its structure and will spin off its early-stage exploration projects, royalty interests and certain other non-core assets.
    • AAU says it is undertaking the reorganization to focus on the development of its Ixtaca gold-silver deposit in Mexico, and will allow the market to value Ixtaca independently of its early stage mineral exploration and royalty business.
    | 1 Comment
  • 12:34 PM
    • The U.S. says it will terminate a 15-year-old deal sheltering Russian flat-rolled steel producers from high import duties, and anti-dumping duties will apply beginning Dec. 16.
    • U.S. steel producers, including U.S. Steel (X +5%) and Nucor (NUE +2.2%), complained to the Commerce Department in July that the reference price set in a 1999 agreement, which also set a cap on imports, had been below U.S. market prices since 2004.
    • However, J.P. Morgan analysts see no reason for buying steel stocks (NYSEARCA:SLX), saying the move impacts only 1.4% of U.S. market share; in fact, the firm suggests shorting steel stocks on the "misinterpretation" of duties on Russian imports of hot rolled steel.
    • Other steels also are higher: AKS +3.9%, MT +3.6%, CMC +2.3%, STLD +1.7%.
    | Comment!
  • 11:29 AM
  • 9:56 AM
    • RGLD Gold (RGLD +1.2%) agrees to a $175M gold stream transaction with Euromax Resources that will finance a significant portion of the construction of the Ilovitza gold-copper project in Macedonia.
    • Euromax will deliver 25% of any gold produced from Ilovitza until 525K oz. have been delivered, and 12.5% thereafter; RGLD's purchase price/oz. will be 25% of the spot price at time of delivery.
    | Comment!
  • Monday, October 20, 2014

  • 6:37 PM
    • Gold Resource (NYSEMKT:GORO) reports Q3 production of 17.2K gold equiv. oz., which brings total YTD production to ~65.1K gold equiv. oz.; GORO also maintains its FY 2014 outlook at 85K-100K gold equiv. oz.
    • Q3 production fell 28% Q/Q as slower than expected mine development resulted in fewer tons delivered to the Aguila Mill; GORO says the production issues revealed needed managerial changes at the Arista mine, which are underway.
    | Comment!
  • 5:34 PM
    • Kaiser Aluminum (NASDAQ:KALU) resumes trading after a halt, -7% AH after Q3 earnings fell 36% Y/Y and missed analyst estimates by a wide mark, citing unanticipated problems at its Spokane, Wash., facility that hurt shipments in the quarter.
    • Because of the disappointing Q3 results, KALU now anticipates 2014 adjuste EBITDA will fall slightly below 2012 and 2013 levels; EPS and revenues were $3.82 and 1.36B respectively in 2012, and were $3.65 and $1.3B in 2013.
    • Analyst consensus expectations for 2014 EPS and revenues are $3.78 and $1.36B, respectively.
    | Comment!
  • 3:59 PM
    • Citigroup upgrades Freeport McMoRan (FCX +1.5%) and three other names in the mining and energy sector, attracted to their valuations after stocks in its coverage area have been hit by the recent correction in the broader market, even as it downgrades Cliffs Natural Resources (CLF +2.2%).
    • Analyst Brian Yu raises FCX to Neutral from Sell following the price decline, saying that while the company remains highly leveraged to global growth based on its copper and oil exposure, FCX has been aggressively selling assets to manage the balance sheet.
    • Consol Energy (CNX -0.1%), Newmont Mining (NEM +2%) and Alliance Holdings (AHGP +1.9%) are all lifted to Buy from Neutral.
  • 12:54 PM
    • Gold Fields (GFI -0.2%) says it remains on track to achieve its production guidance for FY 2014 of ~2.2M gold equiv. oz., and expects full-year costs to come in below earlier guidance; GFI sees FY 2014 costs at ~US$1,090/oz. vs. its previous outlook for $1,125/oz. and all-in costs of ~$1,130/oz. from its prior guidance of $1,150/oz.
    • Attributable gold equivalent production for Q3 is seen at ~559K oz. at all-in sustaining costs of $1,074/oz. and all-in costs of $1,096/oz.
    | 1 Comment
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