Mining acquisitions and JV agreements

Resources Corner

Iron ore and gold miners Kingsgate Consolidated Limited (ASX:KCN), Trafford Resources Limited (ASX:TRF), Sundance Resources Limited (ASX:SDL), Hanlong Mining, Endeavour Mining Corp (ASX:EVR) and Avion Gold Corporation (TSX:AVR, OTCQX:AVGCF) are in the midst of acquisitions and joint venture agreements.
Resources news
Oil has been at two-month highs this week, up over $1.40 and sitting around US$93.67 a barrel for September light crude in New York.
Iron ore exports fell sharply in July according to port authority figures. Exports from Port Hedland, which houses BHP Billiton Limited (ASX:BHP) Fortescue Metals Group Limited (ASX:FMG) and Atlas Iron Limited (ASX:AGO) shipping terminals, has seen declines for the second straight month.  A slowdown in demand from China, the world’s largest importer of iron ore, has been attributed for the decline.
Former Managing Director of the International Monetary Fund, Rodrigo de Rato, believes commodity prices should hold at current levels provided global conditions don’t worsen.
“They [China] have room to manoeuvre to use monetary policy because of a lack of inflationary pressures and they have room to manoeuvre to use fiscal policy. I think most predictions or forecasts for the growth of the Chinese economy in the next 18 to 24 months are around 8 per cent. And I share that view,” Mr de Rato told Fairfax Media following a presentation at the Diggers & Dealers mining forum in Western Australia.
The positive outlook doesn’t appear to be shared by Xstrata who announced this week they will defer $1US billion in capital spending planned for the year.
Joint ventures and acquisitions
Gold miner and explorer Kingsgate Consolidated Limited (ASX:KCN) has inked a joint venture agreement with Trafford Resources Limited (ASX:TRF). The JV is with Kingsgate's Dominion Gold Operations in South Australia. Trafford has bought a 51 per cent stake in the Western Gawler Craton Joint Venture surrounding the established high grade Challenger Gold Mine.
Shares in Sundance Resources Limited (ASX:SDL) remain in a trading halt as the iron ore explorer is reportedly considering a revised bid from Chinese suitor Hanlong Mining. According to media reports the resources giant reduced its offer by 30 per cent to $0.40 a share, valuing the company at $1.2 billion. Hanlong’s original offer of $0.57 per Sundance share valued the company at about $1.7 billion. The two companies remain in discussions over the adjusted offer. The downgrade comes as iron ore prices remain at their lowest levels in more than two years.
Dual listed Endeavour Mining Corp (ASX:EVR) is set to acquire Canadian based gold mining company Avion Gold Corporation (TSX:AVR, OTCQX:AVGCF) pending shareholder and regulatory approval. Endeavour expects the acquisition to deliver increases in gold production by about 50 per cent for the year.
Rio Tinto reports
Rio Tinto Limited (ASX:RIO) has reported a 34 per cent drop in its underlying earnings, coming in at $US5.15 billion for the first half of its 2012 financial year. The global miner’s result was impacted by softening commodity prices and a strong Australian dollar over the first six months of 2012. CEO Tom Albanese says the company is confident in the long term outlook and remains well positioned to deliver shareholder value over the long term. An interim dividend 72.5 US cents per share has been declared, up 34 per cent from the year before. 

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