Mining Journal > Finance > Stockpile: Kazakhmys advances after loan agreement

Kazakhmys plc finished the top gainer amongst London’s main-market mining companies this week, which has seen Kazakh-focused companies figure prominently.

The copper producer gained 4% after signing a memorandum of understanding for a US$1.5 billion loan facility with the China Development Bank to advance the Aktogay project.

Through the agreement, Kazakhmys is able to retain 100% ownership of the project, contrasting with a previous memorandum of understanding for a joint venture with Jinchuan Group Ltd signed last year, in which Jinchuan would have taken a 49% stake in the project.

Meanwhile, Kazakhmys’ 26%-owned miner in the country, Eurasian Natural Resources Corp (ENRC), fluctuated throughout the week before closing 2% lower.

ENRC was the subject of takeover speculation in last weekend’s London media, with commodities trader Glencore International plc named as the suitor.

Initially, this speculation helped ENRC regain a chunk of the losses that saw it finish one of last week’s biggest losers from the industry. The rebound was short-lived however, as Glencore announced it wasn’t considering a bid at this stage.

Major miners BHP Billiton and Rio Tinto were two of the few companies to finish higher with marginal rises.

BHPB’s rise was despite strike action at joint-venture coal operations in the Bowen Basin of Queensland, which have added to the company’s problems in the Australian state this year.

The company hasn’t yet said if the industrial action will impact quarterly production, but has already reported a 14% fall for the March quarter owing to the severe weather in Queensland during that period.

Rio Tinto’s slight rise came on the back of news it will accelerate its iron-ore expansion in the Pilbara region of Western Australia by spending US$676 million.

International Ferro Metals Ltd (IFM) took a battering ahead of the next pricing round for ferrochrome. Analysts have predicted prices may drop by up to 10% and these fears left IFM almost 28% lower for the week.
Other companies that recorded notable losses included Aquarius Platinum Ltd and Namakwa Diamonds Ltd, which finished 8% and 6% lower respectively.

On AIM, Patagonia Gold plc shot up more than 20% to lead the juniors despite not releasing any significant news during the week.

Uranium Resources plc gained 11% after the company and 45% investor Estes announced they had bolstered their relationship though the addition of lawyer Dimitri Pashov to the former's board.

Stratex International plc’s maiden JORC-compliant resource estimate for its Muratdere copper-gold project in Turkey improved the company’s value by 8%. The calculation found Muratdere contained 186,000t of copper and 204,296oz of gold, along with 3.9Moz of silver and 6,390t of molybdenum.

The next best performed AIM miners were Minco plc and Norseman Gold plc with gains of about 5% each.

Vatukoula Gold Mines plc’s share price fell 19% following the completion of a placing it announced in late May, issuing 4.8 million shares at £1.25 each to raise £6 million. The company operates on Fiji.

Anglo Asian Mining plc dropped 15% after releasing an update on activities at its Gedabek gold-copper mine in Azerbaijan. The company said a defined exploration programme is in place aimed at increasing the project’s resource, proving reserves and extending the life of mine. A new JORC-compliant reserve report on the project is expected to be available in the first half of next year.

Other companies to suffer considerable losses included Beowulf Mining plc and Arian Silver Corp, which both finished about 13% down.