Jan 6, 2021

Caldas Gold agrees extension to Marmato mining contract

Colombia
Gold
Contracts
Dominic Ellis
2 min
Agreement with Agencia Nacional de Mineria will see Canadian firm’s request for a 30-year extension of its mining contract granted
Agreement with Agencia Nacional de Mineria will see Canadian firm’s request for a 30-year extension of its mining contract granted...

Caldas Gold Corp, the Canadian junior mining company, has reached an agreement with Colombia's Agencia Nacional de Mineria (ANM), on the economic conditions for a 30-year extenstion to its Marmato mining contract 014-89M, which is set to expire in October.

The key conditions associated with the approval of the extension include:

  • An increase in the royalty rate paid to the ANM on gold production, from 6 to 7 percent. The ANM royalty on silver revenue will remain at 8 percent.
  • An ongoing commitment to fund annual social investment based on a rate of US$25 per ounce produced, adjusted annually based on changes in the US CPI Index, and subject to an annual minimum of US$300,000, which is also indexed annually based on the US CPI Index; and
  • A contract premium of US$6 million to be paid over a four-year period, indexed annually based on the US CPI Index.

The ANM has indicated that its process related to the technical information and finalization of the legal documents for the extension will be completed by mid-January.

“We are very pleased with the cooperative manner in which our mining title extension request is being handled. It is clear that all parties understand the importance of this project to the nation, the Department of Caldas, the local community at Marmato and to our investors,” said Serafino Iacono, Chairman and CEO of Caldas Gold, commenting on the extension update. 

“We look forward to a successful conclusion of the extension process later this month, enabling us to bring the Aris Gold transaction to a close and to move ahead more aggressively with the MDZ expansion by accessing funds available under the Wheaton Precious Metals’ stream and being held in escrow from our Gold Notes financing.”

Caldas Gold is currently advancing a major expansion and modernisation of the underground mining operations at its Marmato Project in the department of Caldas, Colombia. 

The company also owns 100 precent of the Juby Project, an advanced exploration-stage gold project located within the Shining Tree area in the southern part of the Abitibi greenstone belt about 100 kilometres south-southeast of the Timmins gold camp.

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May 6, 2021

Copper, iron ore surge as Chinese investors unleash demand

Copper
Iron ore
Renewables
EVs
3 min
Iron ore broke $200 a tonne for the first time, while copper approached a record high as Chinese investors unleashed fresh demand following May holiday

The reopening of major industrial economies is sparking a surge across commodities markets from corn to lumber, with tin climbing above $30,000 a tonne for the first time since 2011 on Thursday.

In the wake of mounting evidence of inflation fuelled by higher raw materials prices, investors are also increasingly focused on when the U.S. Federal Reserve might start throttling back its emergency support.

Copper

Many banks say the rally has further to run, particularly for copper, which will benefit from rising investment in new energy sectors. Copper is at the highest in a decade, fueling bets it will rally further to take out the record set in February 2011. Steel demand is surging as economies chart a path back to growth just as the world’s biggest miners have been hampered by operational issues, tightening ore supply.

“The long-term prospects for metals prices are ‘too good’ and point to higher prices in the next few years,” said Commerzbank AG analyst Daniel Briesemann. “The decarbonization trends in many countries, which include switching to electric vehicles and expanding wind and solar power, are likely to generate additional demand for metals.”

Trading house Trafigura Group and several major Wall Street banks including Goldman Sachs Group Inc. and Bank of America Corp. expect copper to extend gains.

Copper rose as much as 1.6% to $10,108.50 a ton on the London Metal Exchange before trading at $10,080 as of 4:07 p.m. in London.

Iron Ore

Benchmark spot iron ore prices rose to a record, while futures in Singapore and China climbed.

The boom comes as China’s steelmakers keep output rates above 1 billion tons a year, despite a swath of production curbs aimed at reducing carbon emissions and reining in supply. Instead, those measures have boosted steel prices and profitability at mills, allowing them to better accommodate higher iron ore costs.

Spot iron ore with 62% content hit $201.15 a ton on Thursday, according to Mysteel. Futures in Singapore jumped as much as 5.1% to $196.40 a ton, the highest since contracts were launched in 2013. In Dalian, prices closed 8.8% higher.

Erik Hedborg, Principal Analyst, Steel at CRU Group commented: “Recent production cuts in Tangshan have boosted demand for higher-quality ore and prompted mills to build iron ore inventories as their margins are on the rise. Iron ore producers are enjoying exceptionally high margins as well, around two thirds of seaborne supply only require prices of $50 /dmt to break even.”

China

Still, some analysts including Commerzbank’s Briesemann expect a short-term correction as metals become detached from fundamentals. There’s also a risk that China could engage in policies that may cool demand for iron ore and copper.

The metals rally has boosted concerns about short-term Chinese demand. Some manufacturers and end-users have been slowing production or pushing back delivery times after costs surged, while weaker-than-expected domestic consumption has opened the arbitrage window for exports.

Tin climbed as much as 2% to $30,280 a ton on the LME, boosted by rising orders for the soldering metal. Tin is at the highest since May 2011, with a 48% gain this year making it the best performing metal on the LME.

 


 

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