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Prospects reports loss of $4,135 million

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Prospects reports loss of $4,135 million

PROSPECT Resources (Prospect) says it reported a loss after tax of $4,135 million during the half
year ended December 31, 2018 compared to a $2,640 million recorded in previous period.

The Australia Stock Exchange-listed firm said explorations costs at its flagship Arcadia Lithium Project
weighed further on the operating performance.

The loss after adjustment for exploration and evaluation expenditure, impairments, project generation
and share-based payments has increased from the prior year period as the group progresses the
Arcadia Project and prepares for the next stage, being its development,” Prospect said.

Exploration and development stages of mining operations require heavy capital outflows before
positive cash flows are realised.
Revenue from continuing operations increased to $3,534 million during the review period compared to
$1,590 million achieved in previous comparable period. The group’s assets increased to $30,364
million during the half year ended December 31, 2018 compared to $30,250 million recorded in prior
comparable period.

Prospect said net cash outflows from operating and investing activities amounted to $8,915 million
during the review period compared to $5,078 million achieved in previous comparable period.

“As at reporting date, the group had cash and cash equivalents of $8,067 million. These conditions
indicate a material uncertainty that may cast significant doubt about the group’s and the company’s
ability to continue as going concerns,” the miner said.

Prospect also noted that assets and liabilities affected by the Monetary Policy Statement include cash
and cash equivalent, trade and other receivables and trade and other payables.
The firm said however, financial impact of this change has not been recognised in the groups
accounts at December 31, 2018.

Recently, Prospect said it has acquired new technological equipment, high pressure grinding rolls
(HPGR), which will reduce capital expenditure by $2,3 million at Arcadia.

The lithium miner has also been awarded special economic zone (Sez) status at Arcadia, which will
grant the project generous tax breaks and other concessions. The junior miner, which applied for the
status last year in November, said
the incentives and benefits to be received from the Sez status, reinforces the financial outcomes of the
project outlined in the definitive feasibility study.

Arcadia is Africa’s second-largest undeveloped lithium project. It is estimated to contain 610 500
tonnes of lithium oxide and 11,3 million pounds of tantalite pentoxide. It has an ore reserve of 26,9
million tonnes and has received its mining licence and environmental impact approval.

This comes as lithium has gained global prominence as the most valuable mineral for the future given
its use in a number of areas including medicines and ceramics, but more importantly manufacture of
electric vehicle batteries.

Government granted Prospect a mining lease for 57 claims in the country. The junior miner has
committed millions in Zimbabwe’s lithium mining sector in the past year and is currently developing the
assets.

Last year, the miner said it will start exploration of rare earth elements (REEs) at its Chishanya
carbonatite project in Dorowa, in eastern Zimbabwe.

Prospect, which has impaired costs incurred on the Prestwood and Sally Mines, also operates
Penhalonga Gold Mine, Sally Gold Mine and Prestwood Gold Mine in Gwanda._Daily News

CALEDONIA registered a 4% increase

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CALEDONIA registered a 4% increase

CALEDONIA Mining Corporation registered a 4% increase in after tax profits to US$21,42 million in the full year to December 2018 compared to US$20,61 million in 2017, despite a fall in production.

Chief executive officer Steve Curtis said this was mainly due to “an increase in amounts due in respect of gold sales and VAT refunds from the government of Zimbabwe and a reduction in trade and other payables”.

Revenue during the period was down to US$68,4 million from US$69,76 million in the 2017 period on account of a 3% decline in production to 54 511 ounces (1,55 tonnes) from 56 133 ounces (1,59 tonnes).

In a statement accompanying the company’s results, Curtis said production was lower due to an unplanned lower recovered grade as a result of added dilution.

“During the year, we continued to implement the investment plan at Blanket Mine, with the objective of increasing production to 80 000 ounces per annum (2,26 tonnes). Certain operational and economic factors have resulted in less development being achieved than planned, which will result in a slower production ramp-up than originally expected,” he said.

“The monetary environment in Zimbabwe became more challenging following changes in policy, although the general direction of policy development appears to be positive. Policy changes disrupted the commercial banking system in October 2018 and February 2019, which adversely affected procurement.”

Production costs were up 8,7% to US$39,31 million last year compared to the 2017 comparative of US$36,18 million.

“Delays in procuring critical items meant that capital equipment suffered from a lack of maintenance which increased the frequency of breakdowns. We are optimistic that the introduction of a market exchange rate in February 2019 will, in time, allow a return to normal operating conditions.”

Caledonia is a Canadian mining firm that operates in Zimbabwe through its 49% legal ownership in the Blanket Mine. However, pursuant to the signing of an agreement announced on November 6, 2018, “Caledonia intends to purchase a further 15% of Blanket from one of Blanket’s indigenous shareholders”.

Earnings per share at 131,5 cents were lower compared to the previous year’s 135,4 cents._NewsDay

Amnesty accuses electric vehicles makers of using unethically sourced minerals

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Amnesty accuses electric vehicles makers of using unethically sourced minerals

Human rights advocate Amnesty International has accused the electric vehicle (EV) industry of selling itself as environmentally friendly while most of the batteries they produce use polluting fossil fuels and unethically sourced minerals.

In a report published on Thursday, the rights group says manufacturing batteries can be carbon intensive, while the extraction of minerals used in them has been linked to human rights violations such as child labour.

Amnesty has outlined a vision for battery production that can result in ethical and sustainably produced batteries within five years. That process involves extraction, ethical manufacturing, reuse and recovery of batteries, and a prohibition on deep-sea mining.

The group called on companies to publicly disclose information about how human rights abuses and environmental risks are being prevented, identified and addressed throughout the lithium-ion battery’s life cycle.

Group argues that unregulated industry practices for the extraction of minerals used in lithium-ion batteries have led to human rights abuses and environmental damage.Some leading companies — including Apple, BMW, Daimler, Renault, and battery maker Samsung SDI — have already published supply chain data. Amnesty wants others to do the same.

“The massive global corporations that dominate the electric vehicle industry have the resources and expertise to create energy solutions that are truly clean and fair,” Kumi Naidoo, Amnesty International’s Secretary General, said in a statement.

“With demand for batteries soaring, now is the time for a drastic overhaul of our energy sources that prioritizes protection of human rights and the environment,” Naidoo said.

Automakers are investing billions of dollars to ramp up EVs production. German giant Volkswagen, for one, is spending $50 billion to refocus the company on the making of EVs, autonomous vehicles and new mobility services.

The Wolfsburg-based manufacturer plans to raise annual production of EVs to 3 million by 2025, from 40,000 in 2018.

Eyes on the DRC

Market estimates see demand for cobalt, a key battery metal, reaching 200,0000 tonnes per year by 2020. The problem, says Amnesty, is that no country legally requires companies to publicly report on their cobalt supply chains.

Amnesty accuses electric vehicles makers of using unethically sourced minerals

Courtesy of CRU Group.

More transparency could help improve working conditions in the Democratic Republic of Congo (DRC), which generates more than 60% of the world’s cobalt.

Much of the country’s production is sent to China to be processed by multiple companies before it is used in batteries. In addition, up to 20% of the DRC’s cobalt is mined by hand, often by children with picks and shovels, as a previous Amnesty International investigation showed.

That research linked those mines to the supply chains of many of the world’s leading electronics brands and electric vehicle companies.

Amnesty said it is collaborating with Greenpeace to identify and map human rights and environmental impacts of EV battery production.Mining.com

Gunmen kills five miners in Ethiopia

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Gunmen kills five miners in Ethiopia

Gunmen in Ethiopia have shot and killed five workers from a mining company in the restive west on Tuesday, residents said, with a TV station reporting two foreigners among the dead.

The unidentified attackers struck near Nedjo town, about 500 km (310 miles) from the capital Addis Ababa in the Oromiya region where several conflicts simmer, the inhabitants told Reuters.

State-affiliated Fana Broadcasting said on Twitter three Ethiopians and two foreign nationals had died in the incident early on Tuesday. It did not give their countries.

The huge region is home to Ethiopia’s largest ethnic group, the Oromo, and has at least four separate conflicts in addition to a border dispute constantly threatening violence.

Prime Minister Abiy Ahmed, himself an Oromo, has overseen a series of major political and economic changes since coming to office in April 2018 – making peace with arch-foe Eritrea, freeing political prisoners, pledging to open up the state-controlled economy and promising to overhaul security services.

But the reforms have not stopped ethnically-charged violence – including in his own native region.

Ethiopia’s Oromo, who make up about a third of the population, have long complained of being marginalized during decades of authoritarian rule by governments led by politicians from other smaller ethnic groups. In recent years the Oromo have been angered by what they see as encroachment on their land.

It was unclear which mining company was involved in Tuesday’s incident.

Among companies operating in Ethiopia are MIDROC Gold Mine Plc owned by Ethiopian-born Saudi billionaire Mohammed Hussein al-Amoudi, which has operated an open-cast mine in the Guji zone of Oromia region for more than two decades.

Its license was suspended last year after weeks of protests by locals who accused the mine of polluting their water and the atmosphere.

Others are Newmont Mining, which is prospecting for gold, while Norwegian fertilizer maker Yara International plans to build a potash mine and a fertilizer factory._Reuters

Gold near 3-week peak; palladium at record high

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Gold near 3-week peak; palladium at record high

Gold rose on Thursday, trading close to a three-week peak hit in the previous session after the U.S. Federal Reserve phased out a possibility of an interest rate hike this year, while palladium scaled a record peak on supply issues.

FUNDAMENTALS

Spot gold gained 0.3 percent at $1,315.81 per ounce as of 0114 GMT, after touching its highest since Feb. 28 at $1,316.58 in the previous session.

U.S. gold futures rose 1.1 percent to $1,316.10 an ounce.

Spot palladium gained 0.4 percent to $1,609.70 an ounce, after registering a record high at $1,615.5 earlier in the session.

The dollar nursed heavy losses in Asia on Thursday after the Federal Reserve stunned markets by abandoning all plans to raise rates this year, a signal its three-year campaign to normalise policy might be at an end.

 Having downgraded their U.S. growth, unemployment and inflation forecasts, policymakers said the Fed’s benchmark overnight interest rate, or fed funds rate, was likely to remain at the current level of between 2.25 percent and 2.50 percent at least through this year.

Shares in Asia rose on Thursday after the Fed’s policy decision, but concerns over slowing global growth and U.S.-China trade talks are expected to limit gains.

U.S. President Donald Trump warned on Wednesday that the United States may leave tariffs on Chinese goods for a “substantial period” to ensure that Beijing complies with any trade agreement.

Prime Minister Theresa May made an impassioned appeal to British lawmakers to support her on Wednesday after the European Union said it could only grant her request to delay Brexit for three months if parliament next week backed her plans for leaving.

Rapid flows of investor money into physically backed platinum exchange-traded funds (ETFs) and a sharp drop in speculative bets on lower prices suggest the autocatalyst metal is on the verge of a recovery.

Citigroup Inc plans to sell several tons of gold placed as collateral by Venezuela’s central bank on a $1.6 billion loan after the deadline for repurchasing them expired this month, sources said, a setback for President Nicolas Maduro’s efforts to hold onto the country’s fast-shrinking reserves.

South Africa’s labour court ruled on Wednesday that the extension of a wage agreement to cover all gold unions and non-unionised employees of mining group Sibanye-Stillwater is valid and lawful, the miner said._Reuters

Caledonia optimistic of interbank exchange market

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Caledonia optimistic of interbank exchange market

AIM-listed mining group, Caledonia Mining Corporation, is optimistic that the introduction of the inter-bank foreign currency exchange market in February will help stabilise business operations and assist the company to yield more profits.

The chief executive officer, Mr Steve Curtis, said this in a media update yesterday, while reflecting on the performance results for the fourth quarter period ended 31 December 2018.

Caledonia has local operations at Blanket Mine in Gwanda, Matabeleland South province.

Mr Curtis said the 2019 Monetary Policy statement issued last month by the Reserve Bank of Zimbabwe (RBZ), which dumped the previous 1:1 US$- RTGS dollar exchange rate, would restore investor confidence and assist business growth.

He said the fixed exchange rate had negatively affected the company’s operations.

“The monetary environment in Zimbabwe became more challenging following changes in policy although the general direction of policy development appears to be positive. Policy changes disrupted the commercial banking system in October 2018 and February 2019, which adversely affected procurement. Delays in procuring critical items meant capital equipment suffered from a lack of maintenance, which increased the frequency of breakdowns,” he said.

“We are optimistic that the introduction of a market exchange rate in February 2019 will in time allow a return to normal operating conditions.”

The Caledonia boss expressed hope that the new inter-bank trading mechanism would address the most pressing challenges that hampered implementation of programmes to expand the business. 

“Provided the RTGS/US Dollar exchange rate used to calculate Blanket’s RTGS-denominated gold receipts is at an inter-bank rate that recognises economic fundamentals and Blanket continues to receive its gold proceeds promptly and in full, management is optimistic the revised policy may create a more stable economic environment,” said Mr Curtis.

In the 12 months to December 31, 2018, Caledonia produced 54 511 ounces of gold, which was lower compared to the relative period in 2017, when 56 113 ounces of gold were produced.

The miner said production was low primarily due to lower grade. Gross profit for the period was also down by US$4 744, from US$26 321 in 2017.

Mr Curtis said in the report that production for the year was lower than 2017 due to an unplanned lower recovered grade and the prevailing economic challenges in the country.

Caledonia recently cried foul after the RBZ withdrew the export credit incentive scheme for gold producers stating that their earnings per share would decline by approximately US$5, 4 million._The Chronicle

Zim considering allowing small scale miners diversify operations

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Zim considering allowing small scale miners diversify operations

GOVERNMENT is considering allowing small-scale miners to diversify operations by participating in the production of semi-precious stones.

Mines and Mining Development Deputy Minister, Engineer Polite Kambamura said this during a small-scale miners’ forum held in Bulawayo yesterday.

“Our artisanal small-scale mining sector will soon diversify to include mining of semi-precious stones, manganese and other minerals apart from gold and chrome they have been mining. You agree with me that focus has been made on gold and little attention to other minerals,” he said. 

Engineer Kambamura said Government now wanted to give equal attention to all minerals in order to derive maximum benefits from its mineral resources.

“For example, semi-precious stones, the coloured gemstones found in Karoi, Mashonaland West province, have a potential to earn the country billions of dollars,” said Eng Kambamura.

He said despite vast deposits of semi-precious stones in the country, very little was being exploited.

“Small but high value minerals like lithium, manganese and magnesium are not being exploited at artisanal and small-scale miners’ level yet developed nations are scrambling for control of such resources dubbed the                                                                                            ‘minerals of the future’. We need to urgently develop the sector for the benefit of our country,” he said.

The Deputy Minister said investors from across the globe have been flocking to Zimbabwe seeking investment opportunities in the different economic sectors including mining.

“There have been many investors coming to Zimbabwe after the President (Mnangagwa) declared that the country is ‘open for business’. Our offices are inundated daily with investors from all over the world and that should tell you that there is something unique in the country,” he said. 

Eng Kambamura said as part of enhancing gold production Government was administering the Gold Development Fund, which was funded to the tune of $150 million with some small-scale miners having already benefited from the facility. 

He, however, said some of the beneficiaries were defaulting in paying back the revolving fund. 

The funding has traditionally been used to secure mining equipment for small scale miners through a model called Plant and Equipment Lease-to-Buy Scheme under a three-year tenure. 

According to Fidelity Printers and Refiners, in the first two months of the year, the country produced 3,91 tonnes of gold with the bulk of it coming from small-scale miners who delivered 2,53 tonnes. 

Of the 2,14 tonnes delivered to Fidelity Printers and Refiners in February 1,5 tonnes came from small-scale miners while 0,64 tonnes was by large mining companies.

Zimbabwe targets to produce 100 tonnes of gold by 2023 from 33,3 tonnes produced last year.

The country has an estimated 13 million tonnes of unexploited yellow metal reserves worth about $16 trillion._The Chronicle

$100 million to bankroll small scale mining

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$100 million to bankroll small scale mining

FIDELITY Printers and Refiners (FPR) would this year mobilise $100 million to bankroll small-scale mining operations in addition to the $150 million Gold Development Initiative Fund.

Speaking during a small-scale miners’ conference in Bulawayo yesterday, FPR head of Gold Development Initiative Fund Mr Matthew Chidavaenzi said: “We got about $150 million from the Reserve Bank of Zimbabwe (RBZ) and of that amount we have given out $120 million. 

“We still have $30 million to use but I’m happy to tell you that we have managed to get additional funding for small-scale miners for 2019.

Mr Chidavaenzi said about $80 million, which represents about 50 percent of the Gold Fund, had benefited women miners. 

“We still believe that this is too low and because of that we have come up with a refined package, which we will be introducing for women,” said Mr Chidavaenzi. 

He said FPR had noted that most of the small-scale mining equipment required foreign currency.

The GDIF facility was launched by the RBZ in 2016 as part of initiatives to capacitate small-scale miners in order to boost gold production._The Chronicle

SA court rules extension of wage agreement to AMCU valid and lawful

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SA court rules extension of wage agreement to AMCU valid and lawful

South Africa’s labour court ruled on Wednesday that the extension of a wage agreement to cover all gold unions and non-unionised employees of mining group Sibanye-Stillwater is valid and lawful, the miner said.

Sibanye had in December extended the agreement, reached the previous month with the National Union of Mineworkers, UASA and Solidarity, to all employees at its South African gold operations, including members of the Association of Mineworkers and Construction Union (AMCU).

AMCU had however rejected the extension as unscrupulous and said it would remain on strike, disputing the miner’s argument that the action was illegal because of the extension.

AMCU has been on strike at Sibanye-Stillwater’s gold operations since mid November in a pay dispute.

In February it wanted to extend the strike to at least 11 other mines, including the gold and platinum operations of Anglo American, and operations of Harmony Gold and Lonmin.

But the labour court rejected AMCU’s request to hold an industry-wide strike.

“We are extremely pleased with the ruling provided by the Labour Court,” Sibanye-Stillwater Chief Executive Neal Froneman said in a statement.

“It provides a clear path forward to resolving the ongoing strike in a manner which does not compromise our values or undermine our other stakeholders, who have also been negatively impacted by the AMCU strike action,” Froneman added.

Froneman urged AMCU to respect the ruling and allow due processes to be followed.

AMCU was not immediately available for comment._Reuters

Petra Diamonds keeps founder as chairman

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Petra Diamonds keeps founder as chairman

South Africa’s Petra Diamonds (LON:PDL) is keeping founder Adonis Pouroulis as chairman, despite some shareholders voting against his renewal at the 2018 annual general meeting.

The company, which appointed last month former gold miner Richard Duffy as chief executiveeffective in April, said the appointment of a new chair was “not appropriate” at this time.

Petra said the board and nomination committee had considered the 22.12% vote against Pouroulis’ re-election as chairman in the context of Petra’s ongoing three-year succession plan.

Despite concerns raised by some shareholders, the diamond miner said the current chairman continued to “demonstrate the independence of thought and challenge required for his role, notwithstanding the number of years he has served as a director”.

Pouroulis founded Petra in 1997 and has been its chairman ever since.

The company has been seeking to turn around its fortunes after piling up debt to expand its iconic Cullinan, in South Africa, where the world’s biggest-ever diamond was found in 1905._Mining.com

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