Wednesday, December 17, 2014
- A U.S. District Court today rejected Vale’s (NYSE:VALE) request to dismiss a lawsuit alleging it conspired with Israeli billionaire Benjamin Steinmetz to take a West African mine away from rival Rio Tinto (NYSE:RIO).
- The judge also dismissed Vale’s argument that the suit should be brought in an English court, saying Rio’s choice of a U.S. court is justified based on the plaintiff’s likelihood of obtaining jurisdiction over all of the defendants.
- The civil lawsuit, filed in April, alleges that Vale and its former partner Steinmetz worked together to take Rio’s rights to the Simandou iron ore deposit through corruption.
- Barrick Gold (NYSE:ABX) probably will take steps - perhaps as soon as tomorrow - to stop production at its Zambian operation after the country increased mining royalties, Bloomberg reports.
- Zambia's parliament approved the government's 2015 budget proposals, which will replace corporate income tax on mines with increased royalties and increase the rates on open-pit mines such as ABX’s Lumwana to 20% from 6%.
- AK Steel (NYSE:AKS) +7% AH after saying it sees Q4 EPS of $0.05-$0.10, above analyst consensus estimate $0.04, despite incurring ~$31M in costs associated with a planned Ashland Works blast furnace outage.
- AKS says it expects shipments to jump 37% Q/Q to 2M tons in the current quarter from ~1.46M shipped in Q3, helped by acquisitions and strong demand from the auto industry.
- AKS also expects to benefit from lower iron ore, carbon scrap and energy costs in Q4 compared to Q3.
- AKS shares already had surged 6% in the regular trading session, as steel companies (NYSEARCA:SLX) finished broadly higher.
- A top Chinese government official says the country has approved Syngenta’s (NYSE:SYT) genetically modified Agrisure Viptera corn, one year after China began rejecting shipments of grain it said contained traces of the unapproved trait, according to U.S. Agriculture Secretary Tom Vilsack.
- Chinese Vice Premier Wang Yang said imports of the MIR 162 corn had been approved by China's Ministry of Agriculture, Vilsack says, adding that the ministry also approved imports of biotech soybeans developed by DuPont Pioneer (NYSE:DD) and Bayer CropScience (OTCPK:BAYZF, OTCPK:BAYRY).
- The import approvals do not represent a loosening of China's long regulatory review process for GMO crops, Vilsack says.
- The stock market has retraced its post FOMC gains as Janet Yellen walks the line between hawkishness and dovishness at her press conference, but remains nicely higher, with the major averages all up by 1% or more.
- The really wild swings today have been in crude oil, which sank as low at 54.50 this morning, soared above $59 this afternoon, but has plunged back into the red for the session at $56.20 per barrel. USO -0.1%
- ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, CRUD, UWTI, USL, DWTI, UHN, DNO, SZO, OLO, OLEM, TWTI
- Previously: Yellen: Every meeting is "live" (Dec. 17, 2014)
- Previously: Yellen: There's been no policy change (Dec. 17, 2014)
- Sherritt International (OTCPK:SHERF +22.1%) shares rise the most in five years on speculation that the producer of nickel in Cuba would benefit from moves by the U.S. to end its isolation of the country.
- Relaxation of U.S. restrictions on Cuban exposure would open up Sherritt to potential increased U.S. shareholder ownership, TD analyst Greg Barnes says.
- Sherritt has a 50% stake in the Moa nickel and colablt joint venture in Cuba, and has a stake in Energas, a Cuban electricity joint venture.
- Teck Resources (TCK +10.2%) is upgraded to Buy from Hold with a C$20 price target at UBS, which believes its dividend can be funded at lower prices.
- UBS thinks TCK's Fort Hills oil sands project in Alberta should realize net backs of ~C$45/bbl vs. C$65/bbl previously, adding that while project economics deteriorate with lower oil prices, Fort Hills could benefit from other factors including a lower oil differential, lower diluent, and likely a lower Canadian dollar.
- To fund the dividend, cover capex, and pay debt, the firm estimates TCK needs to generate C$7.3B during 2015-17 and that TCK can generate ~C$6B in operating cash flow, indicating that, while it would have to draw on the revolving credit facility, TCK could maintain the dividend (if it choose to) given cash of $1.7B and undrawn credit of $3B as of Sept. 30.
- Separately, TCK also announces the first shipment of zinc and lead in concentrate from its restarted Pend Oreille operations in Washington state to its nearby Trail perations in B.C. for processing.
- Iamgold (IAG +4.9%) chairman and co-founder William Pugliese has sold ~40% of his shares in the company this year, Financial Post reports, continuing a long-term trend in which he has steadily unloaded his stake.
- Pugliese has been selling down his stake for several years: He has dumped 1.475M shares of the 3.7M he owned as of April 2014, after holding 5.1M shares in 2010 and 10.6M as of the 2004 proxy circular.
- The CEO sold 500M shares at $4.31 in August, another 500K shares a month later when the stock price was a full dollar lower, and sold 300K shares earlier this month at an even weaker price of $2.69; meanwhile, execs at Barrick Gold, Kinross Gold and Yamana Gold have been snapping up shares after their stock prices plunged to multi-year lows.
- Fortuna Silver Mines (NYSE:FSM) says it plans to expand its San Jose silver-gold mine in Mexico to 3K tons/day from 2K and construct a dry stack tailings deposit and filter facility at a combined cost of $30M.
- FSM says the two projects will positioning it to increase annual consolidated production to 12M-14M oz. of silver equivalent while maintaining its low cost producer status.
- Coeur Mining (NYSE:CDE) agrees to acquire Paramount Gold and Silver (NYSEMKT:PZG) for $146M in stock, as it expands its mining footprint in Mexico.
- As part of the deal, PZG will spin off its non-Mexican assets into a stand-alone publicly listed company, of which CDE will own a 4.9% stake.
- PZG's San Miguel mining project neighbors CDE's Palmarejo silver-gold mine in northern Mexico, and the merger enables Palmarejo to continue as one of the largest and highest grade silver and gold mines in the world.
- PZG +21.8% premarket.