Deals despite downturn

Resources Corner

There’s plenty of deals being done as resource companies grapple with cooling commodity prices. Metals X is set to go ahead with the Cannon Mine joint venture with Southern Gold Limited; and OceanaGold will buy Newmont’s Waihi gold mine for $US101 million. At the same time Arrium has announced a further restructure of its mining business with $320 million in write downs. 
 
Commentary
 
Last week Finance News Network spoke with Robert Swarbrick, the Executive Chairmen of Aus Asia Minerals about their iron ore moves in Indonesia.
 
FNN: What is your current presence in Indonesia and plans to expand it?
 
Robert Swarbrick: Aus Asia’s got two projects, a producing iron ore project and a coal concession, which isn’t producing quite yet. The main aim of the company is to slowly acquire more projects, as we get larger.
 
FNN: What are the Board’s ambitions for Aus Asia Minerals?
 
Robert Swarbrick: The main focus really is to get the iron ore project into full production. And then after we start producing 30,000 tonnes a month, we want to acquire some other projects and refocus that. So we’ll consolidate and perhaps have three or five mines of the same size, with a major ambition to pay dividends back to shareholders.
 
See the full interview here
 
Deals and growth
 
Aurizon Holdings Limited (ASX:AZJ) says it has reached an enterprise agreement with Queensland rail unions. Aurizon has agreed to a 4 per cent pay increase each year for 3 years as well as the removal of rail passes for employees with the exception of those with more than 25 years of service.
 
Syrah Resources Limited (ASX:SYR) announced a positive assessment into the economics of a huge coated spherical graphite facility in the US. The Africa focused resource company says there’s strong demand from battery producers for the superior performance of its graphite. 
 
Contract wins
 
Empired Limited (ASX:EPD) has won $10 million worth of managed services contracts with a global oil and gas company to provide infrastructure managed services and professional services. The information technology services firm has not disclosed the name of the company but advised the contracts are for three years.  
 
Metals X Limited (ASX:MLX) has announced that the Cannon Mine joint venture with Southern Gold Limited (ASX:SAU) will go ahead. Formal approval has been given to the Stage 1 open pit gold mine near Kalgoorlie in Western Australia. 
 
Slowdown
 
Arrium Limited (ASX:ARI) has announced a further restructure of its mining business. The company will book $320 million in write downs and warned of the sale of significant assets.
 
Gold gains
 
OceanaGold Corporation (ASX:OGC) looks set to acquire Newmont’s Waihi gold mine for $US101 million. CEO Mick Wilkes says this is a significant milestone and that the asset is a very prospective and high quality goldfield.
 
Operations at the Newcrest Mining Limited (ASX:NCM) Lihir gold mine were shut down for 36 hours over the weekend after disruptions by community interests. The gold miner says it is in discussions with mining authorities, landowners and local governments with an audit process having been agreed on the 14th May. 
 
Aurizon Holdings Limited (ASX:AZJ) says the impact of Cyclone Marcia and industrial action by rail unions in Queensland will shave up to $30 million from earnings. The company is still working to recover lost volumes as a result of cyclone damage to its infrastructure.