mhlld
15 years ago
Vale turns up heat on iron ore prices
By Javier Blas
Published: March 11 2010 19:17 | Last updated: March 11 2010 19:17
Vale of Brazil, the largest iron ore miner, has asked some of the world’s top steel producers to pay 80-100 per cent more for their ore supplies in 2010-11, according to the association of the European steelmakers.
Eurofer’s statement is the first confirmation that iron ore miners, including Vale, Rio Tinto and BHP Billiton, are seeking a record price increase for iron ore supplies.
Gordon Moffat, Eurofer director general, told the Financial Times that Vale had proposed an 80-90 per cent increase in the cost of lower quality ore fines to European steelmakers and a more than 100 per cent increase in the price of higher quality ore lumps and pellets. “Rio Tinto and BHP Billiton are so far sitting on the sidelines,” he said.
In a statement, Eurofer said: “The European steel industry is outraged at the announcement by the iron ore industry to massively increase prices.”
Mr Moffat added that Vale wanted to move ore supply deals from annual to quarterly contracts. He declined to name the steelmakers that have received the offers, but ArcelorMittal and ThyssenKrupp are the two key members of Eurofer and traditionally have led the negotiations between European mills and the miners.
Vale did not respond to calls seeking comment.
The demand for a record price increase in the bulk commodity used in steelmaking comes as iron ore trades near an 18-month high on the spot market. Spot Australian benchmark iron ore – 62 per cent iron content – rose on Thursday to $131.60 a tonne, according to swaps cleared at the Singapore Exchange. Excluding freight costs from Australia to China of about $10 a tonne, current spot prices are about double the $60-a-tonne level at which the annual contracts were settled for 2009-10.
Spot prices have surged 120 per cent over the past year as Beijing stepped up international purchases to offset lower domestic production.
Mining executives have already warned that so-called benchmark annual contracts had to reflect higher spot market prices.
The steelmakers and the miners are running out of time to reach an agreement before the current 2009-11 contracts expire on March 31. Negotiations could continue after the cut-off date, with prices adjusted retroactively.
The steelmakers are ferociously resisting the price increase, arguing that the spot market does not reflect the iron ore market’s true supply and demand balance. Mr Moffat said price increases of the magnitude proposed would have a “significant impact on steel prices”, suggesting mills would raise prices by about €100 a tonne from current quotes of about €450 a tonne for benchmark hot rolled coil.
http://www.ft.com/cms/s/0/6754fcb0-2d3d-11df-9c5b-00144feabdc0.html
mhlld
15 years ago
Wuhan Steel Group Seeks More Iron Ore Assets Overseas (Update1)
March 7 (Bloomberg) -- Wuhan Iron & Steel Group, China’s third-biggest steelmaker, is seeking to invest in more overseas iron ore assets to cut reliance on expensive imports, General Manager Deng Qilin said.
“We aim to be self-sufficient in iron ore supplies in three to five years and reduce purchases,” Deng, who’s also chairman of the China Iron & Steel Association, told reporters today in Beijing during the annual National People’s Congress. “We will continue to invest overseas even as the cost rises. We have achieved good returns from our previous investments.”
Owning resources gives Chinese steelmakers more control over raw material prices and reduces dependence on overseas suppliers like BHP Billiton Ltd., Rio Tinto Group and Vale SA. Contract iron ore prices may rise 60 percent this year on strong Asian demand and a push by BHP to peg pricing to higher spot levels, Morgan Stanley said last week.
This year’s price negotiations with suppliers will be “difficult” because of “differences in view,” Deng said. “We can’t accept a price that would force us to incur losses.”
Chinese steelmakers may have to accept a price increase higher than the 20 percent than they expected this year, Angang Steel Co. Chairman Zhang Xiaogang said on March 5 in Beijing.
The benchmark cash price of iron-ore delivered to China jumped to $134.50 a metric ton on March 2, the highest since at least Dec. 12, 2008, according to The Steel Index. China’s imports rose 42 percent to a record 628 million tons last year.
China failed to reach an accord over prices last year with Rio, BHP and Vale, the world’s three biggest iron ore suppliers. Domestic steelmakers reached private agreements with the suppliers instead, Deng said.
Wuhan Steel expects to produce 36 million tons of crude steel this year, up from 30.3 million tons in 2009, Deng said. The nation’s steel output may rise to 600 million metric tons this year, from 568 million tons in 2009, Deng said. Production capacity probably has exceeded 700 million tons, he said.
Chinese steelmakers, which controlled almost half of the world’s production last year, will have small profits over the next 10 years because they cannot raise prices enough amid the domestic overcapacity, Deng said.
The Chinese government should regulate the market for iron ore trading to stop speculation over prices, he said.
Link to Company News:{WHISGZ CH <Equity> CN <GO>}
--Helen Yuan. Editors: Gregory Turk, Eugene Tang.
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net
http://www.businessweek.com/news/2010-03-07/wuhan-steel-group-seeks-more-iron-ore-assets-overseas-update1-.html
mhlld
15 years ago
Nippon Steel to Source More Coking Coal, Ore Itself (Update1)
March 8 (Bloomberg) -- Nippon Steel Corp., Japan’s largest steelmaker, will pursue investments in iron ore and coal mines, joining rivals in a bid to curb costs and secure supplies of the steelmaking ingredients.
The company wants to supply 50 percent of its raw material needs by buying stakes in mines or developing new ones “as early as we can,” Executive Vice President Shinichi Taniguchi said March 4 in an interview in Tokyo. Mines partly owned by the mill supply 35 percent of its iron ore and 25 percent of its coking coal needs.
Nippon Steel, ArcelorMittal and Posco are scouring the world for resources as prices rise. BHP Billiton Ltd., the world’s largest coking-coal exporter, last week won a 55 percent price increase from Tokyo-based JFE Holdings Inc., Japan’s second-biggest steelmaker, for a three-month contract from April 1.
“We have to defend ourselves by increasing the proportion of the materials we secure from our own sources,” Taniguchi said. “If we see a good offer, we’ll go for it.”
Nippon Steel shares rose 2 percent to 350 yen at 12:37 p.m. on the Tokyo Stock Exchange.
Essar Group said at a weekend news conference its purchase of Trinity Coal Corp., the Indian company’s first overseas coal mine acquisition, will help lock in raw materials.
Aggressive Pursuit
Posco, Asia’s most profitable mill, will “aggressively” pursue investments in mines, Chief Executive Officer Chung Joon Yang said last month in Seoul. ArcelorMittal, the biggest steelmaker, supplies about half of its iron ore needs and plans to raise the share to between 75 percent and 85 percent by 2014, Bill Scotting, head of strategy, said last December.
“Global demand for steel products will expand in longer term as the population and personal incomes grow,” Taniguchi said. “The significance of having our own sources will increase.”
Nippon Steel, Japan’s four other biggest blast furnace mills and Itochu Corp. in 2008 agreed with South Korea’s Posco to buy 40 percent of Brazilian iron ore producer Nacional Minerios SA, known as Namisa, for about $3.12 billion.
Nippon Steel’s investment in Namisa will boost the ratio of its ore procurement to more than 40 percent when the Brazilian company’s expansion is completed in 2013, Taniguchi said.
Raising Output
The Brazilian miner is slated to raise annual iron ore output to 38 million tons from the 18 million tons forecast for 2009, according to an October 2008 statement by the Japanese steelmakers.
Nippon Steel’s other investment in mines include the Rio Tinto-led Robe River iron ore venture and the Warkworth coal mine in Australia, as well as Vale’s Nibrasco iron-ore project in Brazil.
JFE Holdings is spending 50 billion yen ($553 million) to buy a 20 percent stake in a mine in Queensland Australia, its biggest investment in coal, the company said on Dec. 17.
The cost of 62 percent iron-content ore delivered to the port near Tianjin in northeastern China, was $133.10 a ton on March 5, according to the Steel Index, up from $66.30 a year ago.
BHP agreed to sell coking coal on shorter term contracts to customers in Europe, China, India and Japan, breaking away from annual pricing. JFE said on March 5 it agreed to pay $200 a metric ton between April and June.
Nippon Yusen K.K., Japan’s largest shipping line, forecast in October global sea trade of iron ore will probably reach 1.33 billion tons by 2019. The compares with an estimated 908 million tons for 2009, according to data compiled by Clarkson Research Services Ltd.
Iron ore contract prices may rise 70 percent this year as producers seek rates closer to cash levels, Nomura Holdings Inc. said on March 1.
--Editors: Aaron Sheldrick, Tan Hwee Ann.
To contact the reporters on this story: Masumi Suga in Tokyo at msuga@bloomberg.net; Yasumasa Song in Tokyo at ysong9@bloomberg.net.
To contact the editor responsible for this story: Andrew Hobbs in Sydney at ahobbs4@bloomberg.net.
http://www.businessweek.com/news/2010-03-07/nippon-steel-plans-to-source-more-of-its-own-coal-ore-supplies.html
mhlld
15 years ago
Rio, BHP to Push For 80 Pct Iron Ore Hike
By REUTERS
March 5, 2010 Filed at 4:29 a.m. ET
SYDNEY (Reuters) - Australia's Rio Tinto <RIO.AX> and BHP Billiton <BHP.AX><BLT.L> could hold out for -- and get -- an 80 percent increase in the price of iron ore, their second highest annual hike ever, to help fund expansion, if the mining giants should lose a battle to switch to spot pricing.
Analysts and fund managers told Reuters the world's second and third largest iron ore producers respectively were driving steel mills to accept increases of 80 percent as an alternative to adopting indexing for the 2010/11 shipping year.
Speaking on condition of anonymity because they did not want to appear to be siding with the mining houses amid price talks, the analysts said steel mills were warming to the idea of an 80 percent rise in contract prices next year.
"Given the way the spot price is running, 80 percent is starting to look cheap," an Australia-based mining analyst said. Spot iron ore on a landed China basis is trading around $133 a tonne <.IO62-CNI=SI>, double the 2009 free-on-board contract. An 80-percent boost would dramatically improve both firm's price to earnings ratios, boost credit ratings and ensure billions of dollars in added revenue to help pay for new mines planned in the Australian Pilbara iron belt.
"If the iron ore miners win only a 70 percent increase then, at its current share price, Rio Tinto would be trading on a P/E of only eight," a fund manager based in Singapore said.
Rio now trades at a forward PE of 13.8 and BHP trades at a PE of 18.1, Reuters data shows.
A Reuters poll this week showed analysts have increased expectations for annual prices to a median 40 percent versus 30 percent at the end of January.
But the poll includes several contributions that have not been updated or are under review. Excluding those numbers, the median forecast is for an increase of 65 percent.
ArcelorMittal <ISPA.AS>, the world's biggest steel maker, reportedly already is bracing for a hike of 70 to 80 percent for the shipping year starting April 1, a view increasingly in line with forecasts.
A Chinese media report this week that global miners are offering Chinese steel mills a 50 percent rise in iron ore prices has been dismissed by analysts as posturing.
Rio and BHP have become increasingly frustrated over an inability to persuade steel mills across Asia to drop the decades-old one-price-a-year system and agree to set prices quarterly, or even monthly or daily.
BHP Chief Executive Marius Kloppers has called for an end to annual pricing, saying the system is antiquated and out of touch with changing market conditions. Kloppers last month said the only number that should be followed was the spot price, which equated to a 90 percent hike at the time.
Rio and BHP are locked in negotiations with Chinese mills to reach some type of agreement for 2010/11. A 50 percent hike would send the price of iron ore fines to about $91.50 per tonne.
Investment bank Morgan Stanley has tipped iron ore prices to rise 60 percent. Japan's Nomura Holdings Inc says a 70 percent hike is likely.
But analysts remain divided over whether Rio and BHP will agree to price ore on an annual basis at all this year, given the run up in spot.
"This may be the year they draw a line in the sand and say, 'It's over, no more'," said James Wilson, a mining analyst for DJ Carmichael & Co.
Goldman Sachs JBWere analyst Neil Goodwill believes Rio, BHP and smaller rival Fortescue Metals Group <FMG.AX> may be missing out on a combined $20 billion in annual sales revenue by not selling iron ore at cash prices.
BHP has already earmarked investment of $1.93 billion (1.28 billion pounds) to spruce up rail and port facilities in the Pilbara, which will cover about half the cost of lifting annual output by 17 percent to 240 million tonnes.
Rio aims to boost production 6 percent to a record 230 million tonnes in 2010 and is considering a leap to 330 million within five years.
(Additional reporting by Bruce Hextall and Nicholas Trevethan)
(Editing by Clarence Fernandez).
http://www.nytimes.com/reuters/2010/03/05/business/business-uk-ironore.html
mhlld
15 years ago
China raises iron ore imports from small supplying countries as India ore proportion fell
Published: 26 Jan 2010 22:54:08 PST
Jan. 27 MetalBiz--Although Australia and Brazil ore is still China's main iron ore sources, as the demand is increasing and China has intention to seek for many channels of import modes, China increase the iron ore imports from other countries. According to analysis of 2009 data, the proportion of iron ore from South Africa, Ukraine, Russia and Canada accounting for China's iron ore imports increase.
In 2009, China's iron ore demand created a fresh highest, it is difficult for China to kill off the price difference with Rio Tinto, BHP Billiton and Vale. Though China is largest iron ore importer, facing three big iron ore giants holding 70% of global iron ore, China is passive in the iron ore price negotiation. Hence, many specialists suggest that China should expand the more channels to import, turning to other countries except for Brazil and Australia.
As a matter of fact, from 2009 data, the proportion of iron ore imports from Australia and Brazil accounting for the total imports is same as 2008, but small iron ore supplying countries play the more role in satisfying China's iron ore demand. Iron ore imports from South Africa takes up 5.44% from 2008's 3.27%. In 2008 and 2009 years, South Africa was China's fourth-largest iron ore supplying country.
On the other hand, the proportion of India iron ore obviously decreased. Its proportion slipped to 17.1% from 20.5% in 2008.
Insiders stated that with the continuous increase of the future demand, the proportion of China's iron ore imports from small supplying countries will consecutively go up. But the absolute iron ore quantity of these countries is still small, it is difficult for them to contend against three big miners, so the current seller market is hard to change.
http://news.alibaba.com/article/detail/metalworking/100239701-1-china-raises-iron-ore-imports.html
mhlld
15 years ago
Palladon Ventures Announces Board and Management Changes
.Press Release Source: Palladon Ventures Ltd. On Monday January 25, 2010, 6:32 pm EST
SALT LAKE CITY, UTAH--(Marketwire - 01/25/10) - Palladon Ventures Ltd. ("Palladon" or the "Company") (TSX-V:PLL - News)(Frankfurt: PV-1) announces the following changes to its corporate structure:
- Dale S. Gilbert has been appointed President and Chief Executive Officer, and has also been appointed to the board of directors.
- Steve L. Gilbert has been appointed to the board of directors.
- John W. Cutler has been appointed Chief Operating Officer.
- Leonard Sojka has resigned from the board of directors.
Steve Gilbert is the founder of Gilbert Development Corporation, a large regional construction company headquartered in Hurricane, Utah. Under Steve's leadership, Gilbert Development expanded into a variety of major construction activities, including housing subdivisions, dams, highways and open-pit mines.
Dale Gilbert worked his way up the family business, and is currently the President and Chief Executive Officer of Gilbert Development Corporation. He oversees all operations of the General Engineering/Mining parent company Gilbert Development Corporation, as well its manufacturing division Crusher Rental and Sales, which is a leading manufacturer of mining and construction equipment.
Dale and Steve have been involved with the Iron Mountain Project since Gilbert Development Corporation began mining operations there in the late 80's under US steel and later Geneva Steel. Since being awarded the current mining contract with Palladon Ventures, Dale's expertise has helped Palladon move the project forward on a number of levels.
COO John Cutler stated: "We are very pleased to have Steve and Dale formally join our company. They bring a wealth of knowledge about the project, and have already worked very hard to advance it. Dale's appointment as CEO of Palladon Ventures recognizes his interest in and value to the project. In addition to his industry contacts and broad industry experience, Dale brings an intimate knowledge of the Iron Mountain Project itself. We look forward to Dale and Steve making significant contributions on a number of corporate initiatives."
Palladon CEO Dale Gilbert stated: "I am extremely excited and optimistic about this opportunity to help advance the Iron Mountain Project. I appreciate the confidence placed in me by the Palladon Board and management team, and I look forward to working closely with them.
The Gilbert family has a long and well-established operating history with the Iron Mountain Project. We fully understand the mining and logistical aspects of the business, and will bring all of our resources to bear in an effort to resume shipment of iron ore as soon as possible. The market environment for iron ore has improved significantly. As such, we will pursue near term options to profitably ship run-of-mine ore. We will also continue to efforts develop the project for the eventual shipment of iron concentrate.
I understand the near-term challenges facing the company. However I have a vested interest in achieving a successful outcome and I am optimistic that we will quickly pursue the best path for the Company. We look forward to updating shareholders on a regular basis, as we pursue near-term shipping scenarios and as we evaluate options to refinance the outstanding debt."
On Behalf of the Board of Directors,
Dale S. Gilbert, Chief Executive Officer
About Palladon
Palladon Ventures Ltd. is a junior resource company focused on advancing the Iron Mountain Project, an iron ore mine located west of Cedar City, Utah.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, which include the Company continuing to work on a plan to repay its Luxor debt and to finance current operations and further development of the Iron Mountain Project. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties and speculative nature associated with mineral exploration and production, (3) a decreased demand for minerals, (4) any number of events or causes which may delay or cease exploration and development of the Company's property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labor problems; (5) the risk that the Company does not execute its business plan, (6) inability to retain key employees, (7) inability to finance operations and growth, (8) other factors beyond the Company's control; and (9) the risk that the Company will not be able to raise funds due to Luxor Capital Group. These forward-looking statements are made as of the date of this news release and, except as required by law, the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contact:
Contacts:Palladon Ventures Ltd.Dale S. GilbertPresident & CEO801.521.5252801.521.5454 (FAX)info@palladonventures.comwww.palladonventures.com
http://finance.yahoo.com/news/Palladon-Ventures-Announces-iw-2967057066.html?x=0&.v=1
sumisu
16 years ago
Adriana Partners With ArcelorMittal
Wednesday August 20, 4:00 am ET
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Aug 20, 2008 -- Adriana Resources Inc. ("Adriana" or the "Company") - (CDNX:ADI.V - News) is pleased to announce that it has reached an agreement (the "Port Agreement") with ArcelorMittal, the world's leading steel company, on the principal terms for the development of an iron ore port facility in the State of Rio de Janeiro, Brazil (the "Port"). The Port will be constructed on lands acquired by Adriana in January 2008 (the "Joint Venture").
Highlights
Adriana will partner with ArcelorMittal to advance an iron ore strategy to become a fully integrated iron ore producer. The Joint Venture will include the following material elements:
- Through a series of transactions, ArcelorMittal will acquire 80% of the Port for total consideration of approximately $40.5 million USD with Adriana holding the remaining 20%;
- ArcelorMittal has agreed to acquire up to 19.9% of the Company's common shares which represents up to $25 million CDN (or up to approximately 24,900,000 common shares) in two private placements and will also be granted a seat on Adriana's Board of Directors;
- The parties will each fund their pro rata portion of the Port development costs estimated to total approximately $250 million USD for the 10 million tonne per annum ("Mtpa") port;
- ArcelorMittal will assist Adriana in sourcing funding for Adriana's portion of the Port development costs ("Port Debt");
- The parties will share in the capacity of the Port, in proportion to their ownership and Adriana expects to have a minimum of 2 million tonnes iron ore throughput with the planned development of the Port to 10Mtpa;
- ArcelorMittal and Adriana have agreed to investigate future strategic and mutually beneficial world-wide opportunities; and
- Upon closing the Port Agreement and related financings, Adriana expects to have over $65 million CDN in working capital inclusive of the above referenced private placements with ArcelorMittal.
Michael Beley, President and CEO of the Company stated, "Three years ago, Adriana recognized the surging mineral super cycle and through strategic partnerships with Athena and WorldLink, quickly identified the need for a new iron ore port facility in Brazil that would create an export opportunity to deliver iron ore to the "End User". Today we have partnered with the leading steel corporation in the world to export iron ore from Brazil. Partnering with ArcelorMittal is a significant milestone in the advancement of our Brazilian iron ore strategy. ArcelorMittal brings the global expertise in mining, ports, seaborne shipping logistics and the ability to finance large infrastructure and mining projects through to operation."
Aditya Mittal, Chief Financial Officer and Member of ArcelorMittal's Group Management Board, stated, "The planned port facility at Sepetiba Bay in Brazil is the ideal captive solution to deliver access to the export market for ore from the Iron Quadrangle region."
Background to the Port Development
The acquisition of the Port lands was disclosed in the Company's news release dated January 10, 2008. In summary, the Company purchased a total of 771,818 square meters of land on the coast of Brazil (Bay of Sepetiba) for the development of an iron ore port facility. The purchase of an additional 85,757 square meters is expected to be completed during the third or fourth quarter of 2008. Since January 2008, the Company has been developing key strategic relationships and establishing a team of mining, port engineering, shipping and iron ore trading professionals to assist in advancing the Company's iron ore strategy.
Prior to the Port Agreement, the Company had commenced the engineering and permitting required to develop a port facility capable of handling 5 - 10Mtpa of iron ore at inception and increasing to a potential 50 million tonnes by year five through the accelerated development of a deep water port facility. The Port Agreement is the culmination of the Company's strategy in Brazil to develop the port facility with an end-user of iron ore. Given the capital-intensive nature of the project, the Company expects that the Port Agreement will establish the required funding, technical and regional expertise, and industry recognition to move the project through to completion and revenue generation.
Pursuant to the terms of the Port Agreement, ArcelorMittal has agreed to jointly develop the Port with the Company and acquire 80% of the Port for a lump-sum payment of approximately $40.5 million USD. The Company will retain the remaining 20% of the Port with pre-emptive rights until the Port reaches a capacity of 20Mtpa.
ArcelorMittal will use reasonable endeavours to assist Adriana in obtaining its portion of the Port Debt. Each party undertakes that it will be responsible for servicing and repaying its respective share of the Port Debt, consistent with its percentage ownership. The Company believes this support will substantially minimize dilution to the Company's common shareholders. In addition, ArcelorMittal will own 80% of the proposed port capacity while the remaining 20% will be retained by the Company. Port capacity in excess of 20Mtpa will be subject to further negotiation and may result in the Company increasing its utilization rights.
The two companies also agreed to co-operate to explore future strategic and mutually beneficial world-wide opportunities, although neither party is obliged to enter into any agreements.
Pursuant to the terms of the Port Agreement, the Company has agreed to acquire all of the third party owned interests in Brazore Holdings Ltd. ("Brazore Barbados"), of which the Company currently beneficially owns 60% of the outstanding issued share capital. The acquisition cost for the minority interest, held by Athena Resources L.L.C. ("Athena"), will be $19.6 million USD. The Company and Athena have agreed that up to $19.6 million USD of the purchase price will be paid in shares of the Company at a deemed price of $1.10 CDN. In 2006, Athena brought the Port opportunity to Adriana based on Adriana management's previous successful track record within Brazil and ability to advance projects on a global scale. Adriana and Athena continue to work closely together to review other opportunities within Brazil.
In addition to the consolidation of the minority interest in Brazore Barbados, the Company has agreed to acquire the minority interests of its Brazilian subsidiary for consideration of approximately $3.5 million USD. The Company and the minority interest holders have agreed that up to $1 million USD of the purchase price may be paid in shares of the Company at a deemed price of $1.10 CDN.
The Company's agreement with the WorldLink Group in respect of port utilisation has been amended to match the Company's Port off-take capacity of 20%. No further obligations are contemplated in connection with the WorldLink agreement.
The Port Agreement is subject to applicable regulatory and corporate approvals and the negotiation and execution of a definitive agreement by the parties which is anticipated to be concluded by September 30, 2008 (the "Definitive Agreement").
Upon completion of the proposed transactions Adriana will move forward with three strategic alliances: ArcelorMittal, WorldLink Group and Athena Resources L.L.C. Such partnerships and supported iron ore strategy will allow minimal dilution for shareholders for future project financings.
Private Placements
In connection with the transaction, ArcelorMittal has agreed to participate in a non-brokered private placement for proceeds of $6.45 million CDN (the "Debenture"). The Debenture will have a three-year term and will bear interest at 7% per annum. The principal amount of the Debenture is convertible into common shares of the Company at a conversion price of $0.90 if exercised in the first two years of the Debenture and at a price of $0.99 if exercised in the third and final year of the Debenture. Interest on the Debenture will be convertible at the market price of the Company's shares on such conversion date. Up to 7,166,667 common shares of the Company will be reserved for listing on the TSX Venture Exchange (the "TSX-V") as the maximum number of securities issuable to ArcelorMittal upon conversion for the principal of the Debenture (or approximately 10% of the current issued and outstanding common shares of the Company). Additional common shares of the Company will be reserved for listing on the TSX-V to satisfy the conversion related to the interest on the Debenture. The Debenture is subject to regulatory approval and the Debenture and Common Shares issuable upon conversion of the Debenture will be subject to applicable statutory hold periods from the date the Debenture is issued.
The Company expects that it will issue additional debentures to other parties on the same terms as above (together the "Debentures") bringing the intended gross proceeds of the debt offering of up to $9 million CDN. Proceeds from the issue and sale of the Debentures will be utilized for the Company's ongoing commitments in Brazil and Canada, as well as the acquisition of the minority interests in Brazore Barbados and Brazore Brazil as described above.
Upon completion of the Definitive Agreement, ArcelorMittal has agreed to invest additional capital into the Company by way of a non-brokered private placement of common shares (the "Share Placement") and intends to acquire up to 19.9% of the Company's common shares after taking into account potential shares issued upon the conversion of its Debentures and the Share Placement. It is anticipated that the gross proceeds of the proposed Share Placement will be up to $18 million CDN at $1.10 per common share (representing approximately 18,000,000 common shares) and will be utilized for funding the Company's proportionate share of development costs in connection with the port facility and for additional working capital.
The acquisition of the minority interests in Brazore Barbados and Brazore Brazil, the Debenture financing and the proposed Share Placement all remain subject to regulatory approval and all securities issued in connection with the proposed transaction will be subject to a hold period of not less than 4 months from the date of issue of the securities.
About ArcelorMittal
ArcelorMittal is the world's leading steel company, with over 320,000 employees in more than 60 countries.
ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. With an industrial presence in over 20 countries spanning four continents, the Company covers all of the key steel markets, from emerging to mature.
Through its core values of sustainability, quality and leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and wellbeing of its employees, contractors and the communities in which it operates. It is also committed to the sustainable management of the environment and of finite resources. ArcelorMittal recognises that it has a significant responsibility to tackle the global climate change challenge: it takes a leading role in the industry's efforts to develop breakthrough steelmaking technologies and is actively researching and developing steel-based technologies and solutions that contribute to combat climate change.
In 2007 ArcelorMittal had revenues of 105.2 billion USD and crude steel production of 116 million tonnes, representing around 10 per cent of world steel output.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MTP), Brussels (MTBL), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal visit: http://www.arcelormittal.com or to obtain a copy of the Early Warning Report filed by ArcelorMittal pursuant to applicable securities laws, please contact:
Haroon Hassan
General Manager, Corporate Communications
Head of Media Relations
7th Floor, Berkeley Square House
Berkeley Square
London, W1J 6DA
United Kingdom
Tel: +44 (0)20 3214 2847
About Adriana Resources Inc.
Adriana's goal is to become a fully integrated iron ore producer through strategic partnerships, acquisitions and development projects. The continued development of its iron ore port facility in Brazil, jointly owned by ArcelorMittal, will be a significant milestone in advancing that goal with Adriana having access to a minimum of 2 million tonnes of iron ore capacity that will grow as the Port develops in size. Adriana is committed to the acquisition of iron ore assets in South East Brazil that are strategically located and able to access the Port. The Company is continuing development of its 100% owned Lac Otelnuk, December Lake and Bedford iron properties in Quebec and Labrador & Newfoundland, respectively and actively pursuing iron ore acquisitions around the world and through its partnerships with ArcelorMittal, WorldLink Group and Athena. Adriana's management and technical team continue to review other opportunities to further enhance the Company's position as "The New Player in Iron Ore".
ON BEHALF OF ADRIANA RESOURCES INC.
Michael J. Beley, President
Certain information regarding the Company including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with mining exploration and development, volatility of prices, currency fluctuations, imprecision of resource estimates, environmental risks, access to labour and services, competition from other companies and ability to access sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Contact:
Contacts:
Adriana Resources Inc.
Robert Ferguson
(604) 629-0250 or Toll Free: 1-877-629-0150
Adriana Resources Inc.
Ali Sinawi
(604) 629-0250 or Toll Free: 1-877-629-0150
(604) 629-0923 (FAX)
Website: http://www.adrianaresources.com
--------------------------------------------------------------------------------
Source: Adriana Resources Inc.
johnlw
17 years ago
Rio iron ore deal may sink BHP price plan: analysts
James Regan
Reuters
Tuesday, June 24, 2008
SYDNEY (Reuters) - Miner BHP Billiton may be forced to scrap its plan to rewrite the way billions of dollars of iron ore are sold every year after rival Rio Tinto struck a benchmark deal with China, analysts said on Tuesday.
Rio agreed a near-doubling of iron ore prices with China's biggest steel-maker, Baosteel <600019.SS>, on Monday. BHP may have to follow suit, though its own alternative pricing blueprint could have reaped even higher returns, analysts said.
BHP, smaller in iron-ore mining than Rio though larger overall, has yet to announce any agreements with Asian steel mills as it looks at other pricing mechanisms it says are more efficient, marking a departure from previous years when it took a commanding role in setting industry-wide prices.
It also comes as BHP attempts to convince investors Rio would be better off under BHP management.
BHP had already started using a new over-the-counter market to sell ore on the spot market instead of under long-term contracts prior to Rio's latest settlement with China's Baosteel <600019.SS>, representing a 96.5 percent jump over last year.
A BHP spokeswoman in Australia, where the firm later on Tuesday is holding a scheduled briefing with its iron ore and coal division heads, declined to comment on iron ore contracts.
Rio shares gained over 1 percent on the back of the hike -- also giving it a chance to trumpet its defense against the $163 billion takeover bid by BHP.
"BHP was traditionally the one that signed first, then Rio followed," said James Wilson, an analyst for DJ Carmichael & Co. "But now the shoe's on the other foot and maybe Rio is trying to show BHP who's boss in iron ore," Wilson said.
Rio in announcing the new prices, said it was setting a benchmark for all its Hamersley long-term contract sales for the shipping year ending March 31, 2009.
"The Rio agreement shows the benchmark system is alive and well at least for another year, which could leave BHP no choice but to go along," Wilson said.
Baosteel's agreement with Rio eclipses the 65-71 percent that Chinese mills reached with Brazilian miner Vale
.
"The agreement builds on the valuation premium for Rio's Pilbara iron ore businesses...," Rio's iron ore boss, Sam Walsh, said in a statement.
Both Rio and BHP are relying on strong demand for ore in China to justify the billions of dollars each has earmarked to dig more mines in Australia. Rio forecasts Chinese iron ore imports will double over the next six years.
The value of Rio's Australian iron ore mines, carved out of the deserts of the Pilbara region in west Australia, are at the centre of its defense against BHP's overtures.
Rio is fighting the bid, pitched at 3.4 BHP shares for every Rio share, saying it is too low and fails to appreciate Rio Tinto's growth prospects.
Credit Suisse and Deutsche Bank said last week they would offer cash-settled swaps in iron ore.
BHP shares were up 1.8 percent, partly on hopes it would also achieve a big price rise.
Fund manager Ken West of Perennial Growth Management doubted the iron ore price rise would help Rio's defense against BHP's bid approach. "It's good for Rio and good for BHP in a sense. I don't think it's going to really impact (on the bid)," he said.
($1=A$1.05)
(Additional reporting and editing by Mark Bendeich)
© Reuters 2008
1upandaway
17 years ago
Cardero Receives Positive Metallurgical Test Results for Pampa de Pongo Iron Ore Deposit
Tuesday April 22, 1:08 pm ET
Initiates Additional Metallurgical Testing
NI 43-101 Resource of 953Mt @ 44.7% Iron and 0.12% Copper
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Apr 22, 2008 -- Cardero Resource Corp. ("Cardero" or the "Company") (Toronto:CDU.TO - News)(AMEX:CDY - News)(Frankfurt:CR5.F - News) is pleased to announce it has received from Rio Tinto Exploration a copy of a positive metallurgical test report on two samples from the Pampa de Pongo iron deposit. The object of the 1996 metallurgical study ("Study"), conducted by Met-Chem Canada Inc. on behalf of RTZ Mining & Exploration, was to investigate the feasibility of producing a pellet feed chemically suitable for Direct Reduction pellet manufacture and, if suitable, to evaluate the resulting pellets on a laboratory scale. The test results from the study indicated that the iron material from Pampa de Pongo is suitable for the production of Direct Reduction grade pellets. In order to provide independent verification of these positive results, Cardero has initiated testing of a larger sample of Pampa de Pongo mineralization.
Pellet Feed Production
Following investigation of conventional beneficiation techniques (screening, magnetic separation and flotation) it was demonstrated that the Pampa de Pongo mineralized material could be concentrated up to 66-69% iron through a simple Low Intensity Magnetic Separation (LIMS) process, with the remaining gangue (waste) material consisting of 2.5-3.0% magnesium oxide (MgO) and 0.5-1.5% sulphur (Figure 1, to view, please click the following link: http://media3.marketwire.com/docs/cdu0422.pdf). Concentrates were obtained through 3 passes in a magnetic separator and recoveries are described by Met-Chem as excellent. Concentrates showed a high magnetite content that normally results in low energy consumption in the firing process. Results are as follows:
Table 1: Initial Sample and Concentrate Chemical Composition
Sample 1 (4B/9B) Sample 2 (4B/4B)
Head Grade Concentrate Head Grade Concentrate
--------------------------------------------------------------------
Fe % 56.2 69.0 53.0 66.7
SiO2 % 5.42 0.55 6.19 0.84
Al2O3 % 1.66 0.69 2.17 0.92
MgO % 8.00 2.60 9.62 2.89
S % 1.84 0.54 2.37 1.51
Fe3O4 % 64.3 82.5 61.0 80.2
--------------------------------------------------------------------
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Pelletizing Tests
Pellets produced from Sample 1 were of good quality and strength, meeting normal commercial specifications without further work. The pellets exhibited extremely low clustering indexes, which is highly desirable in the natural gas based Direct Reduction processes. Sample 1 contained a slightly higher than normal percentage of MgO but this did not affect the quality of the pellet produced. Additional slagging in the EAF (Electric Arc Furnace) can reduce the MgO content, however the high MgO content of the metalized pellet can be an advantage in the steelmaking process as most EAF refractory linings are MgO based, and the slag routinely needs to be conditioned to have 10-14% MgO so as to mitigate slag line refractory erosion.
Concentrate from Sample 2 contained higher MgO and higher sulphur content than Sample 1. The pellets produced from Sample 2 were weaker due to higher sulphur content in the concentrate. In this case, Met-Chem suggested that further test work, including a finer grind and more sophisticated flotation reagents, should further improve the concentrate chemistry. Requirements for further work are typical of early-stage metallurgical test work and Cardero is confident that elevated MgO contents can be addressed through process flowsheet optimization. The pellets exhibited extremely low clustering indexes, which is highly desirable in the Direct Reduction process. Samples 1 and 2 were mixed with 0.8% bentonite, pelletized and fired. The fired pellet chemical compositions were as follows:
Table 2: Fired Pellet Chemical Composition
Sample 1 Sample 2
(4B/9B) (4B/4B)
--------------------------------------------
Fe % 66.9 66.6
SiO2 % 0.81 1.22
Al2O3 % 0.74 0.95
MgO % 2.61 2.91
S % less than 0.01 0.01
--------------------------------------------
It was concluded that the strength and reduction properties (reducibility, linder and clustering) of the pellets are well within the acceptable range for typical commercial products. Additional processing steps would be required to reduce the sulphur content of sample 4B/4B.
Future Work
The metallurgical study reported here provides an important indication that Pampa de Pongo iron ore will be suitable for production of Direct Reduction grade pellets. The test work was conducted on small quantity of sample and Cardero has now initiated a follow-up study, which will test larger samples and independently verify the positive results presented here. It is believed that the final product can be further improved, resulting in even better pellets, by additional processing steps, such as regrinding of the concentrate prior to pelletizing.
Laboratory Details
The metallurgical testing was completed by Met-Chem Canada Inc. of Montreal, Quebec, Canada in 1996 on behalf of RTZ Mining and Exploration with the objective of determining whether quality direct reduction pellets could be produced from iron ore samples. Laboratory work was completed by CRM (Centre de Recherche Minerale) of Sainte-Foy, Quebec, Canada. Two samples were analysed weighing 36 and 38 kilograms, respectively.
"We are extremely pleased with the results of this metallurgical test work, which demonstrates the viability of producing Direct Reduction grade pellets from the Pampa de Pongo iron ores" stated Henk Van Alphen, Cardero's President & CEO. "We have known for some time that we have a world class deposit at Pampa de Pongo and now we have the first indications that a high value DR pellet can be produced, which adds considerable value to the asset."
1upandaway
17 years ago
Cardero Announces Magnetic Survey Results & Exploration Potential for Pampa de Pongo Iron Deposit
Thursday April 17, 1:58 pm ET
NI 43-101 Resource of 953Mt @ 44.7% Iron and 0.12% Copper
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Apr 17, 2008 -- Cardero Resource Corp. ("Cardero" or the "Company") (Toronto:CDU.TO - News)(AMEX:CDY - News)(Frankfurt:CR5.F - News) is pleased to announce detailed ground magnetic survey results and the interpretation of the significant exploration potential at its 100% owned Pampa de Pongo Iron Deposit in Peru. Pampa de Pongo is the largest undeveloped iron resource on the western seaboard of the Americas, with a N.I. 43-101 Inferred Resource of 953Mt @ 44.7% iron and 0.12% copper. The Company has embarked on an aggressive work program designed to quantify the Pampa de Pongo iron deposit, starting with a magnetic survey, a mining scoping study, a definition drill program and a pre-feasibility study. Cardero will provide regular updates in the coming months as work progresses.
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Ground Magnetic Survey
Cardero's recently completed detailed ground magnetic survey has identified a large magnetic anomaly located to the south of the known central deposit, where Rio Tinto drilled one drillhole (PPD-04, Figure 1) and intersected significant massive iron mineralization. Given the strong correlation between magnetic anomalies and ore grade intersections in the central deposit, Cardero is confident that the new anomaly to the south has potential to be ore grade. The new anomaly measures 1,400 x 530 metres at its widest point, which is comparable in size with the 848Mt central deposit (1,260 x 890 metres).
The Pampa de Pongo iron deposit has a strong magnetic response, which can be seen on the regional airborne magnetic survey data (Figures 2 and 3). In 2004, Cardero undertook a ground magnetic survey covering the central and southern deposits at Pampa de Pongo (Figure 2). Data from the 2004 survey was processed by Quantec Geophysics and the resulting 3D magnetic body demonstrated an extremely strong correlation with thick, high-grade mineralization intersected during resource definition drilling.
To view Figure 1 please click on the following link: http://media3.marketwire.com/docs/0417cru.jpg
In March 2008, Cardero completed an expanded magnetic survey (Figure 2) to evaluate exploration potential beyond the known resources. Quantec completed inversion modeling of a central area (outlined in Figure 3), which includes the known central deposit. An inversion model is a 3D model highlighting areas of high magnetic susceptibility. A horizontal slice at a depth of 400 metres from surface is presented in Figure 1.
The map shows a strong anomaly in the north of this central area, which corresponds to the central deposit at Pampa de Pongo (848Mt @ 44.9% iron and 0.12% copper).
Critically, the survey has identified a new, large magnetic anomaly located to the south, where Rio Tinto drilled one drillhole (PPD-04, Figure 1) and intersected significant massive iron mineralization. Given the strong correlation between magnetic anomalies and ore grade intersections in the central deposit, Cardero is confident that the new anomaly to the south has potential to be ore grade. The new anomaly measures 1,400 x 530 metres at its widest point, which is comparable in size with the 848Mt central deposit (1,260 x 890 metres).
Drillhole PPD-04 intersected iron mineralization from 276 to 558 metres (282 metres) and from 609.2 to 633.1 metres (23.9 metres). Highlights include:
---------------------------------------------------
Drillhole From (m) To (m) Interval (m) Fe %
---------------------------------------------------
PPD-04 276 290 14 43.57
---------------------------------------------------
PPD-04 296 362 66 43.31
---------------------------------------------------
PPD-04 472 516 44 47.48
---------------------------------------------------
PPD-04 522 536 14 46.02
---------------------------------------------------
PPD-04 609 624 14.8 48.52
---------------------------------------------------
(i) Data sourced from Rio Tinto.
The iron mineralization intersected in drillhole PPD-04, located within the new magnetic anomaly, suggests that the anomaly may be caused by iron mineralisation. As such, this new anomaly represents significant upside potential for the 953Mt Pampa de Pongo Iron deposit.
Project Background
Cardero's 100% owned Pampa de Pongo Iron deposit is the largest undeveloped iron resource on the western seaboard of the Americas, with a NI 43-101 Inferred Resource of 953Mt @ 44.7% iron and 0.12% copper (see September 6, 2005 news release). Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineralization remains open. Cardero is investigating the possibility of extracting iron ore through a combination of open-pit and underground block-caving methods to produce a high grade, direct shipping +65% magnetite ore and a blast furnace or direct reduction grade iron pellet product. Both products would be shipped from a nearby deep water port, 40 kilometres to the west.
Cardero's primary focus during the next 12 months will be to further quantify its iron assets, which enjoy considerable infrastructural advantages in comparison to other similar stage projects globally, including proximity to a under-utilized deep water port, the availability of cheap electrical power, the planned extension of a near-by natural gas pipeline, the proximity of the Pan-American highway bordering the projects, the existence of a pre-existing iron mining labour pool and, finally, a stable, pro-mining government.
sumisu
17 years ago
Adriana Reports Results at Lac Otelnuk-Drills 95.8m of 30.4% Fe
Thursday April 3, 9:15 am ET
VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 3, 2008) - Adriana Resources Inc. ("Adriana" or the "Company") - (TSX VENTURE:ADI - News; WKN:A0F7EL) is pleased to announce assay results from the final 11 holes of its 27-hole 2007 diamond drilling program at its Lac Otelnuk Iron Project in the Labrador Trough, Quebec, Canada.
"Final results from the 2007 drilling program on the South Zone of the Lac Otelnuk Iron Deposit are very favourable, and as seen in the table below, continue to indicate a much thicker mineralized zone than identified during drilling in the 1970s. Drill hole No. LO-S-1024, with an intersection of 95.8 meters at a head grade of 30.4% Fe, clearly indicates that the mineralized zone is considerably thicker than indicated in the 1970s," commented Michael Beley, President of Adriana. "Drilling at the Lac Otelnuk Iron Deposit continues to confirm the opportunity to outline a potential resource. Iron ore prices continue to soar in the global commodity markets and Lac Otelnuk could become a long term strategic asset for the world steel mills as demand for iron continues to build. Of local interest, a Business Standard news service article on March 24, 2008 identified that Government-owned NMDC, India's single largest iron ore producer and exporter, announced they are in talks with Canada's New Millennium Capital Corp. for potential multi-billion dollar capital investment. New Millennium controls iron ore properties southeast of Lac Otelnuk and directly west and northwest of our recent acquisition of the Bedford Iron Prospect."
The table presented below is a preliminary summary of the final 11 drill hole results, weight-averaged on the basis of a Davis Tube Weight Recovery cut-off grade of 20%.
[continued in following link]
http://biz.yahoo.com/ccn/080403/200804030452750001.html?.v=1
mhlld
17 years ago
Palladon Signs Long-Term Iron Ore Sales Agreement
Tuesday April 1, 11:02 am ET
SALT LAKE CITY, UTAH--(MARKET WIRE)--Apr 1, 2008 -- Palladon Ventures Ltd. (CDNX:PLL.V - News)(Frankfurt: PV-1) announces that its private subsidiary, Palladon Iron Corporation (PIC), has signed a long-term sales agreement with China Kingdom International Minerals & Metals Co., Ltd (CKI). The recent commodity price increases have made the sale of run-of-mine iron ore financially attractive, enabling PIC to contract for the immediate sale of run-of-mine iron ore, rather than await the financing and construction of a processing plant.
The five-year contract provides for the purchase by CKI and its Australian operating subsidiary, China Kingdom International Australia, of run-of-mine iron ore at an initial annual rate of 2,000,000 metric tonnes. Pricing is fixed through March 31, 2009, and will adjust for future annual periods based on changes in the World Benchmark Prices for iron ore. The contract price is quoted FOB a west coast U.S. port, with CKI responsible for all ocean-going freight including the contracting and scheduling of ocean vessels.
The contract price for the initial period exceeds PIC's anticipated per ton operating and shipping costs, and the run-of-mine sales are expected to generate meaningful free cash flow for PIC. PIC estimates initial capital investment to be less than $5 million, with shipments expected to commence in the third quarter of this year. PIC is in the process of finalizing its mining plan and logistics plans for the start of operations at its Iron Mountain project in southwestern Utah. The electrical sub-station facility has been installed, grounded, and charged, and is ready to be connected to the Cedar City power grid. Mobilization for mining and shipping will begin shortly in anticipation of the pending shipping dates.
It is anticipated that PIC will reinvest some of the cash flow from the run-of-mine sales into a formal feasibility study to help finance the eventual construction of a processing plant on-site. When an iron ore concentrate processing plant is completed at Iron Mountain, the agreement with CKI contemplates modification to reflect the new product and pricing.
Based in Beijing, CKI is one of China's leading importers of iron ore, with close ties to major global iron ore producers and Chinese steel manufacturers.
"We are very excited to be working with CKI. CKI gives us access to customers and shipping that we could not have achieved on our own, and we expect CKI will be a great strategic partner for PIC for many years to come," said Donald G. Foot, Jr., President and CEO of Palladon Ventures Ltd. "The latest global benchmark pricing increases enable us to export unprocessed iron ore profitably while we build a processing plant to produce high-grade iron concentrates. The significant cash flow generated from this contract should provide for a robust future for Palladon and our shareholders."
On Behalf of the Board of Directors,
Donald G. Foot, Jr. President and Chief Executive Officer
About Palladon
Palladon Ventures Ltd. is a junior resource company focused on redeveloping the Iron Mountain project in Iron County, Utah. Palladon also holds interests in gold exploration projects in Nevada, Utah and Argentina.
The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of the contents hereof.
Contact:
Contacts:
Palladon Ventures Ltd.
Hamish Greig
Vice President
(604) 484-7088
(604) 484-7044 (FAX)
Email: info@palladonventures.com
Website: http://www.palladonventures.com
Palladon Ventures Ltd.
Frank Dolce
Vice President
(801) 521-5252
(801) 521-5454 (FAX)
Email: frank.dolce@palladoniron.com
Website: http://www.ironbullmining.com
--------------------------------------------------------------------------------
Source: Palladon Ventures Ltd.
http://biz.yahoo.com/iw/080401/0382495.html
johnlw
17 years ago
Consolidated Thompson strikes financing deal
The Canadian Press
March 6, 2008 at 6:13 PM EST
TORONTO — — Consolidated Thompson Iron Mines Ltd., [CLM-T ]a Toronto-based miner, says it has struck a financing deal to raise $156-million to help launch the Bloom Lake open-pit iron mine in Quebec.
This agreement "positions us with a very strong balance sheet in terms of cash," Richard Quesnel, president and chief executive officer, said Thursday in an interview.
"We already had $190-million in cash in hand. So with this financing it almost completes the financing requirement for the project," he said.
The company has struck a deal with underwriters to sell 20 million shares at $7.80 each and will use the money for the Bloom Lake mine in the North Shore region near Fermont, Que., and for acquisitions and working capital.
Consol. Thompson Iron Mines
Earlier Thursday, the Quebec government approved the mine, expected to operate for 34 years. Consolidated Thompson had bought the property in September, 2005.
The company announced Thursday that it had signed the financing agreement, which took about nine months to negotiate, with a syndicate of underwriters led by Macquarie Capital Markets, and including Canaccord Capital Corp., GMP Securities and RBC Capital Markets.
Mr. Quesnel said "we've already spent $50-million on the project itself. We're getting very close to finalizing our requirements."
The financing deal "gives us more flexibility to be able to move on and develop the mine now that we have our permits on a fast track and be able to deliver by the second quarter of 2009."
The mine is expected to begin operating in 2009 and produce seven million tonnes of high-quality 66.5 per cent iron concentrate per year.
The company said early last year, following the completion of a feasibility study, that the capital cost for the mine would be about $410-million.
China-based Worldlink Resources Ltd. had previously agreed to buy seven megatonnes, representing a full year of production.
The world's largest iron producer, Companhia Vale do Rio Doce, recently negotiated a 65 per cent hike in iron prices from some of its major customers — putting upward pressure on the widely used base metal, a primary raw material for steel production.
The deal with Worldlink comes at a time when the demand for steel has grown by 33 per cent in China over the last three years.
"The iron market is known to be cyclical, and the prospects for the next few years are very encouraging. Very strong demand for our product and rising prices on world markets make this an exceptionally good time to launch our project," Mr. Quesnel said.
"We've already committed roughly about half of our expense in terms of locking in on equipment, on supplies and the cement and infrastructure bringing it online," he said.
According to the feasibility study, total operating costs would be about $19.76 (U.S.) per tonne concentrate, with a total undiscounted cash flow of $2.75-billion, and forecast yearly cash flow exceeding $150-million.
The payback has been set at about 2.5 years.
At this point, Mr. Quesnel doesn't see any threat from a U.S. recession, but said "a global recession would have an impact."
The driver in the steel market has been the Asian market over the past three or four years with demand at 10 per cent and plus in China as well as India, he said.
In contrast, North American and European growth on steel consumption has been about 2 to 3 per cent, he said.
The ore will be moved directly by rail and ship to China through the deep sea port at Sept-Îles, Que. "We're building our own facilities there," Mr. Quesnel said.
To keep costs down, "We're setting ourselves up for bigger ships in the neighbourhood of 300,000 tonnes," he said.
As well, some of the highest quality ore comes from Canada.
"Ours is at 66.5 per cent concentrate. In the blast furnace this produces more tonnes per hour than, say, 58 per cent like some of the ore from Brazil," Mr. Quesnel said.
"The better quality there is, the more attractive it is to steel mills."
johnlw
17 years ago
Baffinland confirms vast iron ore play
ANDY HOFFMAN
Globe and Mail Update
February 19, 2008 at 10:34 PM EST
Call it an overnight success story more than 45 years in the making.
Amid skyrocketing prices for iron ore, Baffinland Iron Ore Mines Corp. confirmed Tuesday that its Mary River project in Nunavut, first discovered in 1962, is one of the largest undeveloped iron ore deposits in the world, containing 365 million tonnes of proven and probable reserves.
The major impediment for Baffinland is the fact the valuable metal, used in the production of steel, is found among the permafrost and 24-hour winter darkness of Baffin Island, some 3,200 kilometres from its head office in Toronto.
The feasibility study estimates it will cost $4.1-billion to build Mary River, including 145 kilometres of rail lines as well as ports to accommodate the ice-breaking ships that will transport the iron ore to steel-making customers in Europe.
Construction and logistics are not, however, the largest hurdle the junior miner will have to overcome if it wants to start production by its target of 2014, said president and chief executive Gordon McCreary.
“The biggest challenge is raising the money … This is not the kind of asset that is normally in the hands of a junior company,” Mr. McCreary said in an interview.
Constricted credit markets have made raising capital exceedingly difficult for junior miners. However, record iron ore prices are expected to bolster efforts to finance what some have called the “Mackenzie Valley Pipeline of the Eastern Arctic” – referring to the project's massive scale.
On Monday, industry giant Companhia Vale do Rio Doce (Vale) became the first iron ore producer to reveal contract prices for 2008, as strong demand from China's booming economy and production problems in Australia keep supply tight. The Brazilian mining major said it won price increases of between 65 and 71 per cent from its key steel-making customers in Japan, South Korea and Germany.
Mary River has been well known in the mining industry since its initial discovery 46 years ago. In fact, Mr. McCreary even wrote his MBA thesis on the deposit in 1978. But the project languished for years amid low metal prices until Baffinland went public in 2004 with Mr. McCreary at the helm. Since then, the company has spent more $170-million advancing Mary River and increasing the resource base through drilling.
The company is now searching for a financing partner willing to purchase up to 49 per cent of the project, which is expected to produce 18 million tonnes of iron ore a year over a 20-year mine life. It has hired CIBC World Markets Inc. and Citigroup Global Markets Inc. to conduct the process. Mr. McCreary said confidentiality agreements have already been signed with 16 potential partners but that none of the major iron ore producers including Vale, Rio Tinto and BHP Billiton are on the list, because the agreements prohibit them from bidding for the company.
“They all know us and they all know us well. None though have chinned themselves up to sign a confidentiality agreement, because it's got a standstill provision,” he said.
Catherine Gignac, an analyst at Wellington West Capital Markets, said Mary River's high-grade ore is likely to generate strong interest from both steel makers and miners.
“It is the world's largest and best quality there's no question,” she said, adding that if the deposit had been located in a less challenging area such as Brazil, it would have been “mined out completely in the 1970s and '80s.”
1upandaway
17 years ago
my favourite play: cardero resource, cdy, cdu.to
Iron Ore is the new Uranium
Word from the Iron show in London last week was that many of the projects that are expected to be in production over the next 10 years are being evaluated at $2.00 per tonne in the ground. A small comparative analysis on 3 iron projects has turned up some interesting results:
- Baffinland (Canada) will need to build a rail line running either 100 km north to Milne Inlet or 120 km south to Steensby Inlet, as well as a port facility. From the port, iron ore will be loaded unto ships bound for Rotterdam, a journey of at least 5,000 km. The company plans to extend the 4-month shipping season used by the nearby Nanisivik mine to 8-9 months by using icebreakers when necessary.
- Baffinland (BIM-TSX) recently had a market cap of $500 million before the correction, and is now sitting at about $350 million, and a resource of around 200 million tonnes. BIM has engaged CIBC, and Citigroup to act as the company's co-financial advisers in seeking a minority strategic partner.
Distance does not matter when it comes to Iron Ore Takeover Targets in Australia
- Murchision’s Jack Hills (400 mil. tonnes) iron ore project has to travel 683 KM to reach a port, while Midwest’s Weld Range (570 mil. tonnes) project is 448 KM away.
- Murchison has offered one of its shares for 1.08 Midwest shares, which were set to close on January 23rd.
- Sinosteel made a $1.3 billion offer to buy Midwest.
- Midwest's board has rejected Murchison's offer (Jan. 24th) as undervalued and remains locked in a stalemate with Sinosteel.
Making Sense of Cardero's Pampa de Pongo Iron Deposit News Release
- A world class (c. 1 Billion Tonne) underground Iron Ore deposit.
- Largest undeveloped iron resource on the western seaboard of the Americas, with a 43- 101 compliant inferred resource of 954 Mt @ 44.7% Iron, 0.12% Copper.
- Capex bringing Pampa de Pongo into production is conservatively estimated US$1.8 Billion.
- Planned annual production capacity of 10 million tonnes of high quality 67% iron oxide pellets.
- Mining and production costs are conservatively estimated at $38.00 per tonne.
- Additional credits of 42 million pounds of copper and 40,000 ounces of gold per year.
- Using conservative pricing of $100.00 / tonne for iron pellets, $2.00 / pound for copper, $500.00 / ounce for gold; gross revenue of $1.1 Billion per annum could be realized, with production costs of approximately $400 Million per annum.
- SRK consultants supervising 2008 Scoping Study and 30,000m definition drill program.
Project Background
The Pampa de Pongo Iron Deposit is an IOCG-type deposit, located in the southern coastal belt of Peru, approximately 450 km southeast of Lima. The property was discovered by Rio Tinto Mining and Exploration in 1994 while drill testing a large magnetic anomaly located about 30km southeast of the Marcona Mine site. Cardero’s 100% interest is costing US$500,000 paid from 2005-2008. The final payment will be made prior to January 27, 2008.
The deposit has a N.I.-43-101 compliant resource. It is estimated to contain an inferred resource of approximately; 954 million tonnes @ 44.7% Iron, 0.12% Copper, 0.09 g/t Gold. This resource is open and further exploration is expected to add significantly to resources. Drill highlights to date include; 302m @ 51.6% Iron and 0.1% Copper, 292m @ 47% Iron and 0.16% Copper, and 216m @ 51% Iron and 0.1% Copper.
Mining and Processing
The portion of the deposit to be mined first will be the central zone, which is up to 370 metres thick, 1,000 metres wide and 1,200 metres long. The deposit is ideal for an underground caving method of extraction, with the top of the deposit at approximately 350 metres below surface.
This mining method has a number of key advantages:
- Low cost, highly mechanized mining method.
- No strip ratio.
- High percentage of ore recovery from the resource.
- Minimal drilling, blasting and timbering are done per tonne of ore.
- High rate of production.
Planned processing facilities, constructed at port, would produce 10 million tonnes / annum of iron oxide pellets at 67-69% Fe. In addition, copper concentrate containing payable gold will be produced for export or trucked to smelting and refining facilities in Peru. Preliminary
metallurgical work on ‘run-of-mine’ mineralization by Rio Tinto in 2003 indicated that the mineralization is readily upgradeable to form either a 69% iron concentrate or a high quality 67% iron oxide pellet.
Project Advantage
The primary attractive feature in the potential development of the Pampa de Pongo deposit is the excellent infrastructure including:
- Close proximity to the deep water port at San Nicolas (42km).
- Critically, there is excess capacity at the San Nicolas port.
- The Pan-American Highway passes within 6 km of the deposit.
- A paved road crosses the property.
- A high-tension power line crosses the property immediately adjacent to the Central Zone.
- The existence of a pre-existing iron mining labour pool.
These factors set Pampa de Pongo apart from rival deposits elsewhere around the world, where access to port capacity in particular, can represent a huge challenge.
The Future
Cardero has initiated a 30,000 metre definition drill program, which is designed to upgrade the National Instrument 43-101 Inferred Resource to a combination of Indicated and Measured Resource status. SRK will design and oversee programs for the collection of geotechnical and geological data from drill core. The budget for definition drilling is US$5 million. SRK has also been retained to complete a Mine Scoping Study, scheduled to commence in early February. The scoping study will focus on determining the likely mining methods and will include an initial caveability and fragmentation assessment of the massive central orebody. The scoping study will also determine the range of potential mining costs, which should permit the development of a robust financial model for the deposit. The budget for the Scoping Study is US$250,000.
In the massive Central Zone, the top of the high-grade semi-massive magnetite resource is typically 350 metres below surface. This is the portion of the resource, which is believed to be suitable for underground caving. The overlying stockwork zone includes shallow intersections of up to 347 metres @ 22.5% iron. The scoping study will investigate the possibility of extracting this material from surface by open-pit methods. This mineralisation has not been included in the current inferred resource and, if the extraction of this material appears viable, the scoping study will include an increased Pampa de Pongo Inferred Resource.
Cardero Initiates Scoping Study and Resource Definition Program at Its Pampa de Pongo Iron Deposit, Peru
Tuesday January 15, 9:30 am ET
http://biz.yahoo.com/iw/080115/0348628.html
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Jan 15, 2008 -- Cardero Resource Corp. ("Cardero" or the "Company") (Toronto:CDU.TO - News)(AMEX:CDY - News)(Frankfurt:CR5.F - News) is pleased to announce that it has initiated a mining scoping study and resource definition program at its Pampa de Pongo Iron Deposit in Peru.
The scoping study will be produced by the internationally respected consulting firm SRK Consulting Engineers and Scientists (SRK) and is designed to determine the optimum mining method and estimated production costs. In tandem with the scoping study, Cardero is implementing a 30,000 metre definition drilling program, anticipated to commence in February, which is designed to deliver a National Instrument 43-101 compliant combined Indicated and Measured Resource in the third quarter of calendar 2008.
Cardero's focus over the coming 6 months will be to realise the considerable value which it believes is locked in the Company's significant iron ore assets, while continuing to progress its base and precious metal exploration projects in Argentina and Mexico. As part of this process, Cardero's iron ore assets are in the process of being transferred to its wholly owned subsidiary, Cardero Iron Ore Company Ltd.
PERU IRON PROJECTS
Pampa de Pongo Iron Deposit
Cardero's 100% owned Pampa de Pongo Iron deposit is the largest undeveloped iron resource on the western seaboard of the Americas, with a N.I. 43-101 Inferred Resource of 953 Mt @ 44.7% iron and 0.12% copper. Cardero is investigating the possibility of extracting iron ore through an underground caving operation and producing a blast furnace or direct reduction grade iron pellet product for shipping from the San Nicolas deep water port, 40 kilometres to the west.
Preliminary metallurgical work on 'run-of-mine' mineralization by Rio Tinto indicates that the mineralization is readily upgradeable to form either a 69% iron concentrate or a high quality 67% iron oxide pellet. Consequently, the Company has initiated a 30,000 metre definition drill program, which is designed to upgrade the National Instrument 43-101 Inferred Resource to a combination of Indicated and Measured Resource status.
SRK will design and oversee programs for the collection of geotechnical and geological data from drill core during the planned drill program, which is expected to commence in February and continue through to July 2008. SRK has also been retained to complete a Mine Scoping Study, scheduled to commence in early February. The scoping study will focus on determining the likely mining methods and will include an initial caveability and fragmentation assessment of the massive central orebody. Overburden characteristics, hydrogeology and major structural features will all be reviewed. The scoping study will also determine the range of potential mining costs, which should permit the development of a robust financial model for the deposit.
In the main Central Zone, the top of the high-grade semi-massive magnetite resource is typically 350 metres below surface, with intersections up to 302 metres @ 51.6% iron and 0.10% copper. Cardero believes that this portion of the resource may be suitable for an underground cave mining operation. The overlying stockwork zone includes shallow intersections of up to 347 metres @ 22.5% iron. The scoping study will investigate the possibility of extracting this material from surface by open-pit methods. This mineralisation has not been included in the current inferred resource and, if the extraction of this material appears viable, the scoping study will include an updated Pampa de Pongo Inferred Resource including this material.
A primary attractive feature in the potential development of the Pampa de Pongo deposit is the excellent infrastructure including: proximity to the deep water port at San Nicolas, the fact that the Pan-American highway passes within 6 km of the deposit and that a paved road and high-tension power line cross the property immediately adjacent to the Central Zone and the existence of a pre-existing iron mining labour pool.
Pampa el Toro Iron Sands Project
Cardero has purchased a dry magnetic separation pilot plant from ERIEZ Manufacturing Co., which is presently en-route to the Company's custom built testing facility in Peru where approximately 1,400 tonnes of Pampa el Toro 'Run Of Mine' (ROM) material has been excavated from the extensive magnetite bearing dune field and is securely stored. ROM material will be upgraded by magnetic separation to produce approximately 40 tonnes of iron concentrate anticipated to grade between 50 and 60% iron. This phase of the work programme is scheduled to commence in February 2008.
The concentrate will subsequently be exported to the United States for pilot plant scale melting tests, which were designed by Cardero Iron's President Glenn Hoffman to produce a premium quality pig iron ranging from 96 to 98% iron and 2 - 4% carbon. In tandem with the above work, SRK have been retained to complete the 43-101 compliant resource estimate for the Pampa el Torro project.
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