China Molybdenum Co has sold the rights to future gold and silver production from its Northparkes mine in Australia to a company backed by US hedge fund Elliott Management.
Under the deal announced on Sunday, CMOC, which is listed in Shanghai and Hong Kong, will receive $550m in cash upfront from Triple Flag Precious Metals Corp plus ongoing payments in return for gold and silver output from the mine.
The agreement between CMOC, which has a market value of $12bn, and Triple Flag is the first so-called streaming transaction involving a Chinese mining company.
Royalty and streaming transactions — acquiring long-term rights to buy metal from mines in return for an upfront payment — have become big business in recent years. Companies active in the space include Franco-Nevada, Wheaton Precious Metals, Royal Gold and Triple Flag.
Many big streaming and royalty deals were announced during the commodity prices crash of 2014 to 2016 as cash-strapped miners rushed to bolster their balance sheets and reduce debt.
While the mining industry is in much better financial shape today, bankers still expect a steady flow of royalty and streaming deals this year as the relative value of gold to copper provides an opportunity to tap into a fresh form of financing.
“This transaction provides CMOC with a long-term financing arrangement at a compelling cost of capital and demonstrates significant value from the gold and silver byproduct production from Northparkes,” said CMOC executive Li Chaochun. “Additionally, CMOC maintains its core exposure to copper production in alignment with our future plans for the mine.”
Gold has been one of the best performing assets in 2020, rising almost 20 per cent to a nine-year high of more than $1,800 an ounce, while copper is up just 3.5 per cent.
In a recent interview with Bloomberg, David Harquail, the chief executive of Franco-Nevada said there was a large number of base-metal companies considering selling big precious-metal streams from their assets.
Located 380km west of Sydney, Northparkes is an underground copper mine that also produces gold and silver as a byproduct. Last year, it churned out 36,000 tonnes of copper, 25,000 ounces of gold and 308,000 ounce of silver.
Toronto-based Triple Flag is run by Shaun Usmar, the former chief financial officer of Barrick Gold. It was founded four years ago with financial backing from Elliott and now has 40 assets in its portfolio.
The deal with CMOC is its biggest to date and the ninth-largest in the history of the streaming industry. The support of Elliott has allowed the company to write large cheques for big streaming deals.
CMOC has been one of the most acquisitive Chinese mining companies. In 2016 it paid $2.65bn for Tenke Fungurume, the giant copper and cobalt mine in the Democratic Republic of Congo, and spent $1.5bn to purchase Anglo American’s niobium and phosphate mines in Brazil.
TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
TORONTO – Thomson Reuters reported its third-quarter profit fell compared with a year ago as its revenue rose eight per cent.
The company, which keeps its books in U.S. dollars, says it earned US$301 million or 67 cents US per diluted share for the quarter ended Sept. 30. The result compared with a profit of US$367 million or 80 cents US per diluted share in the same quarter a year earlier.
Revenue for the quarter totalled US$1.72 billion, up from US$1.59 billion a year earlier.
In its outlook, Thomson Reuters says it now expects organic revenue growth of 7.0 per cent for its full year, up from earlier expectations for growth of 6.5 per cent.
On an adjusted basis, Thomson Reuters says it earned 80 cents US per share in its latest quarter, down from an adjusted profit of 82 cents US per share in the same quarter last year.
The average analyst estimate had been for a profit of 76 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
