From mining to dining: Century Iron Mines expands into food production
The Canadian mining company announ...
As the outlook for iron ore continues to look bleak, Century Iron Mines Corp. is turning a negative into a positive.
The Canadian mining company announced it plans to postpone further advancements on its flagship high-grade Joyce Lake project, opting instead to expand into a new business of selling Australian eggs to China while iron ore prices recovery.
“Australia is going from mining to dining,” said Sandy Chim, chief executive officer at Century Iron Mines Corp.
The company has signed an exclusive distributorship agreement with Sunny Queen, Australia’s leading egg producer, to debut its own products in Hong Kong and Macau.
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According to Bloomberg, Century Iron Mines will invest $2 million into the egg venture, drawing on capital originally set aside for the Joyce Lake mine project.
“I am delighted with the successful launch of our new business unit with Sunny Queen, a major player in the food sector, the support of our strategic partners and shareholders, and Alan on board to build and lead a professional team to execute our business plans,” said Chim. “We all look forward to advancing Century Food, beginning with Sunny Queen, and to prospering as China continues to urbanize and develop for decades to come.”
In November, Century Iron Mine said it was anticipating spending $250 million on development and starting production by 2017. However, prices for iron ore are currently hovering around $56 a ton. The break even for Century’s Joyce Lake is $58.25.
“We are going to sit on it and wait until the market comes back,” Chim said.
The shift into food production isn’t surprising. Australian mining billionaires Gina Rinehart and Andrew Forrest have both expanded into food production as prices for iron ore remain stale.
John Meyer, a mining analyst at SP Angel Corporate Finance LLP in London, said the move isn’t surprising when faced with a money-losing mine.
“Sometimes it is a question of survival,” Meyer said. Mining entrepreneurs “are good at following the money and not patient enough to wait for the cycle to turn,” he said.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.