Connect with us

Articles

Sibanye (NYSE:SBSW) Buys 50% of Potential Future Largest US Lithium Mine for $490M

Precious metal miner Sibanye-Stillwater (NYSE:SBSW) has bought a 50% stake in the pioneer Ltd. Rhyolite Ridge mine in Nevada. The lithium-boron project…

Share this article:

Published

on

This article was originally published by Mining Feed
Rhyolite Ridge. Source: Fluor

Precious metal miner Sibanye-Stillwater (NYSE:SBSW) has bought a 50% stake in the pioneer Ltd. Rhyolite Ridge mine in Nevada. The lithium-boron project has the potential to become the largest lithium mine in the US, according to Sibanye’s CEO.

This is Sibanyes’ third investment this year, after Eramet acquired a 30% stake in the Cone Lithium mine in Finland and Eramet’s purchase of a nickel processing plant in Normandy. The deal, one of the largest lithium deals in the US, and comes amid growing concerns about more investment as demand for the metal outstrips supply and efforts to combat climate change could be delayed. The companies say they will form a joint venture to develop Rhyolite Ridge lithium mine 355 km north of Las Vegas. 

ioneer will remain the operator of the project, leveraging Sibanye’s (NYSE:SBSW) experience as the world’s largest platinum group metals (PGM) miner to develop the project. Silbanye-Stillwater has agreed to underwrite a strategic placement of new common shares of Ioneer for $70 million, representing 7.1% of the share capital after the placement. 

The miner said it had already begun securing debt financing to finance the remainder of the $850 million project. According to the company, the full funding and necessary permits are expected by the end of next year and the project is expected to start by the end of 2024. This would bring a critical project online at just the right moment with rising prices and a lack of supply converging into some of the most favourable conditions for lithium miners in history.

Sibanye-Stillwater chief executive Neal Froneman, commented: “Rhyolite Ridge is a world-class lithium project and we recognize its strategic value, with the potential to become the largest lithium mine in the US,” 

Perfect Timing

Once operational, the Nevada mine is expected to produce 2,200 tons of lithium hydroxide, which is used in most Tesla batteries and will fuel the electric vehicle boom for other automakers as well. 

Auto giants such a Volkswagen Group, Toyota, Mercedes-Benz, and BMW all have plans to develop their electric vehicle lines further. The need for high-density batteries is one of the critical points of concern for the supply chain, and miners will be a large part of stabilizing supply. 

The deal also includes the rights for ioneer to expand operations at nearby lithium deposits, in which case the company has the option to pay an additional $50 million to secure a 50% interest in the project. The project is at an advanced stage and is the largest and most durable lithium project near Tesla’s Gigafactory in the nearby Port of California. The proximity of the project to the Gigafactory and the battery production facilities housed there is a good setup for simple infrastructure and distribution in the future. 

The proposed mine is intended to boost local lithium supplies to U.S. automakers and battery manufacturers. In June, ioneer signed an agreement to supply lithium carbonate units to South Korean battery manufacturer Ecopro. This is likely to be just the tip of the iceberg for the sector as it is heating up quickly with new deals announced regularly and M&A a pivotal part of many lithium miners’ strategies.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

The post Sibanye (NYSE:SBSW) Buys 50% of Potential Future Largest US Lithium Mine for $490M appeared first on MiningFeeds.

Author: Matthew Evanoff

Share this article:

Precious Metals

Inflation Is Eating Your Lunch If You’re Doing This One Common Thing

Nearly all savings accounts at U.S. banks are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, but beyond that, it makes less…

Share this article:

Nearly all savings accounts at U.S. banks are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, but beyond that, it makes less and less sense for savers and investors to use them. Households that continue to keep a significant portion of their wealth in the bank should be aware that inflation is eating their lunch at a rate I’ve personally never seen.

Take a look at the chart below, which comes from JPMorgan’s September quarter Guide to the Markets report. In particular, I want you to look at the bars, which represent average annual income earned on $100,000 in a savings account. The blue lines, meanwhile, represent the income that’s needed to beat inflation.

Savings Accounts AIn't What They Used To Be
click to enlarge

In the 1990s, households generally did well by using savings accounts. Inflation rarely ran above 2% year-over-year, and interest rates were above 5%.

Ever since the financial crisis, though, savings income hasn’t kept pace with inflation. The Federal Reserve slashed rates to near 0%, where they’ve more or less remained. Savers fell underwater.

But then 2021 happened. Due in large part to massive global supply chain disruptions, inflation has jumped to levels unseen in decades. (And this doesn’t even take into consideration so-called shadow inflation.)

As a result, the spread between the average income generated in a savings account and the income needed to beat inflation has never been wider. We’re talking about a difference of $3,907, based on a savings account holding $100,000. What could have been a mortgage payment, a weekend vacation or down payment on a new car instead went poof due to the invisible tax known as inflation.

Tax-Efficient Investing Should Also Take Inflation into Consideration

Most savvy investors are familiar with tax efficiency. They may structure their investments and use certain instruments, including tax-free municipal bonds, to pay the least amount of taxes allowable.

Inflation is a hidden tax that I don’t think enough people account for. They feel the pain at the pump and grocery store, but seldom do they see it with their wealth. If they did, the personal saving rate for the U.S. wouldn’t be as high as it is right now. Although it’s fallen from all-time highs, the share of disposable personal income (DPI) that’s still sitting in bank accounts remains elevated.

U.S. Personal Savings Rate Remains Elevated
click to enlarge

But as Warren Buffett famously said, “If you don’t find a way to make money while you sleep, you will work until you die.” (Leave aside for a moment the fact that Buffett, at age 91, is still working fulltime as CEO of Berkshire Hathaway.)

Diversify with Alternative Investments, Including Gold and Bitcoin

Many investors diversify using a number of alternative assets, including art and real estate, but my favorite ways include gold and Bitcoin.

Right now, gold is extremely unloved. The metal is down some 6.5% for the 12-month period and down more than 14% from its all-time high set in August 2020. I believe this makes it the ultimate contrarian investment. What’s more, a number of gold mining stocks look very attractive right now, with many of them generating remarkably higher free cash flow yields than the industry as a whole and the S&P 500.

Most cash flush gold miners in universe of investable companies
click to enlarge

As you can see, there are quite a few companies that have very strong cash positions at a time when investor sentiment for gold miners is very low. Again, when sentiment has been this low, returns have historically been attractive six months later. The companies above, I think, would be a good place for investors to start hunting for opportunities in anticipation of the next bull run. We invest in several of the names here at U.S. Global Investors.

And then there’s Bitcoin. The crypto is up more than 430% for the 12-month period, having receded from its record high of nearly $67,000. Inflation has certainly been a demand driver, as has this week’s launch of the first U.S.-based Bitcoin-linked ETF, the ProShares Bitcoin Strategy ETF, ticker BITO, which now holds the record for reaching $1 billion in assets in the fewest days, according to Bloomberg’s Eric Balchunas. (Appropriately enough, the former recordholder was State Street’s SPDR Gold Shares ETF (GLD), which made its debut way back in 2004.)

Clearly BITO has found a market, but keep in mind that it does not invest in Bitcoin directly; instead, it holds Bitcoin futures contracts, which some investors may not prefer. A spot Bitcoin ETF is not available at the moment, but it probably won’t take long for one or more to be issued.

And don’t forget about listed crypto miners. I’m obviously biased, but HIVE Blockchain Technologies (Nasdaq: HIVE) is the only one that mines both Bitcoin and Ether on an institutional scale, and the first to use 100% green renewable energy sourced in Iceland, Sweden and Canada.

Today HIVE announced that it would be purchasing 6,500 next-generation Bitcoin miners, which will have an aggregate hash power of 585 Petahash per second (PH/s). These machines, when fully installed, are estimated to generate an additional 3.7 Bitcoin per day, or the equivalent to an additional $250,000, or $7.5 million in monthly run rate income. Learn more by reading the press release here.

 

The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Frank Holmes has been appointed non-executive chairman of the Board of Directors of HIVE Blockchain Technologies. Both Mr. Holmes and U.S. Global Investors own shares of HIVE. Effective 8/31/2018, Frank Holmes serves as the interim executive chairman of HIVE.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/2021): Torex Gold Resources Inc., Centerra Gold Inc., Gran Colombia Gold Corp., Dundee Precious Metals Inc., Pretium Resources Inc., Endeavour Mining PLC, Barrick Gold Corp., Eldorado Gold Corp., SSR Mining Inc., Silver Lake Resources Ltd., Karora Resources Inc.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.











Author: Author

Share this article:

Continue Reading

Articles

Global Exploration Budget Rises to $11.2 Billion, 2022 Expected to Continue Trend

According to a new report from S&P Global Market Intelligence, the annual global exploration budget will increase by 5% to 15% per year starting in…

Share this article:

According to a new report from S&P Global Market Intelligence, the annual global exploration budget will increase by 5% to 15% per year starting in 2022.

The 2021 global annual exploration budget shows that the exploration sector has rebounded from the recession caused by the COVID-19 pandemic. The prediction of a market study showed according to their data that the aggregate annual budget to annual global exploration has increased by 35% year over year. Compared to the $8.3 billion budget in 2020, this year it increased to $11.2 billion. 

The large companies that continue to dominate the sector account for half of the global exploration budget with a total of $5.6 billion. However small company budgets have increased their planned allocations by 62% annually to a total of $4.1 billion. 

The increase in the value of base metals such as gold which dominate the exploration target, and increased financing activity are the main drivers of the budget recovery in 2021.

“As we move into the final quarter of this year, metals prices and financings remain strong, and the risk of further pandemic-related closures has diminished,” Kevin Murphy of S&P Global Market Intelligence said in the report. 

In terms of location, the report shows that Canada has brought in a large share of the global budget with an $800.5 million increase YoY to $2.1 billion, reaching its highest level since 2012. Conversely, Africa showed an underperformance with allocations.

Canada’s Mining Strength

Mining in Canada and gold mining, in particular, has long played a pivotal role in building and solidifying Canada’s economy today. The mining infrastructure that was built alongside cities in the 19th century has since grown to generate exports worth $21.6 billion for Canada by 2020. 

The country’s favourable geological and technological characteristics enable and facilitate gold production. The discovery, mining, and production of gold have laid the foundation for many of Canada’s towns, cities, and regions.

Today, Canada has the geology, technology, political and regulatory stability to be a premier gold mining jurisdiction. Because of this, mining companies have great opportunities for gold exploration, development, and production in Canada. 

Technology and Investment 

Canada is the number one country in equity financing raised for mining and mineral exploration. Forty-seven percent of the world’s public mining companies are listed on the TSX and TSXV.

Mining companies raised $44 billion over the past five years on the TSX and TSXV, accounting for 52% of all global mining financing over the past five years. 

In addition, the Canadian government also supports mining innovation. Investment funds such as Canada’s $155 million Clean Growth Canada program invest in clean technologies for more sustainable mining.

It’s no secret that the small country of just over 30 million pulls far above its weight when it comes to the mining industry:

  • The Canadian mining industry, directly and indirectly, employs 719,000 people across the country. This accounts for 1 out of every 26 jobs in Canada.
  • The Canadian mining industry has the highest average wage of all industrial sectors.
  • The mining industry is the largest private-sector employer of Indigenous Canadians.
  • Canadian gold mines produce more revenue than all other metal mines combined and account for more than half of 2019 exploration budgets.
  • As the world’s fifth-largest gold producer, Canadian gold mining is a key part of international production.
  • More than 75% of Canadian gold comes from Ontario and Québec.

Gold mining has played an essential role in Canada’s domestic and international economy and will continue to do so in the future. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

The post Global Exploration Budget Rises to $11.2 Billion, 2022 Expected to Continue Trend appeared first on MiningFeeds.



Author: Matthew Evanoff

Share this article:

Continue Reading

Articles

Top Mining Stocks To Watch

Will These Mining Stocks Continue Rising In The Market? If you’ve looked…
The post Top Mining Stocks To Watch Mid October appeared first on Gold Stocks…

Share this article:

Will These Mining Stocks Continue Rising In The Market?

If you’ve looked into mining stocks, you’ve probably noticed how unpredictable the market is right now. Over the previous year, the market has seen a lot of activity in mining stocks. When the economy isn’t doing well, mining stocks frequently rise in value. This is because precious metals like gold and silver become more desirable as the value of the dollar declines.

It’s easy to become perplexed while investing in mining stocks. As a result, creating an investment strategy can be quite beneficial. While there is more intricate information available, let’s stick to the fundamentals of mining company tracking. When investing in mining companies, keeping up with world events is critical. Because of the pandemic, this is especially evident in 2021. When it comes to investing in these equities, sector news is also crucial. If there is a lithium shortage, for example, it will most certainly affect lithium-related stocks. Company-specific news is also critical, as it frequently determines the direction in which a company’s stock price will move.

Mining stocks are frequently avoided by investors who believe they have no chance of making a return. However, this is untrue, as many of these assets are currently increasing in value. When it comes to investing, it is advisable to consider the volume, recent news, and global news. Let’s take a look at three mining stocks that are currently performing well in the market.

Top Mining Stocks To Watch

  1. McEwen Mining Inc. (NYSE: MUX)
  2. Sandstorm Gold Ltd. (NYSE: SAND)
  3. Harmony Gold Mining Company Limited (NYSE: HMY)

McEwen Mining inc. (NYSE: MUX)

McEwen Mining Inc., a mining company, saw its stock increase 1.69 percent in the market on October 14th. This is a company that looks for, develops, manufactures, and sells different types of resources. The majority of the company’s sales are made up of silver, gold, and copper. It owns 100% of the El Gallo project, the Fenix project, the Black Fox mine, and a number of other ventures. It has properties in Mexico, Canada, Argentina, and the United States, among other countries.

On October 6th, McEwen announced its consolidation production for the third quarter of 2021. The company reported 30,400 gold equivalent ounces in the same period last year, compared to 42,900 this year. McEwen was able to meet his goal thanks to the production of 32,100 ounces of gold and 792,000 ounces of silver. For the nine months ended September 30th, 2021, it produced 114,300 gold equivalent ounces, up from 85,700 in 2020.

This indicates that its output is approaching the midpoint of its yearly projection range this year. Three months ahead of schedule, McEwen completed commercial production at the Froome deposit. Will MUX be on your list of mining stocks to watch now, given this additional information?

Sandstorm Gold Ltd. (NYSE: SAND)

Sandstorm Gold is a gold royalty firm that purchases gold and other commodities from a variety of mining companies. The companies in question are developing or running mines that are at various phases of development. Sandstorm pays for gold streams or royalties upfront and has the right to buy a share of the mine’s production for the mine’s whole life.

The company declared on October 6th that it had raised its credit facility to $350 million. Sustainability-linked incentive pricing terms are included in the ESG Revolving Loan. As long as Sandstorm’s sustainability goals are met, it will be able to lower borrowing rates by up to 5 basis points.

The Chief Financial Officer of Sandstorm, Erfan Kazemi said, “We’re pleased to announce that Sandstorm is the first royalty company with a credit facility linked to sustainability goals. With this credit agreement, the Company is helping to lead a new era of corporate lending that benefits shareholders while promoting corporate responsibility.” Based on this new info, will SAND make your list of mining stocks to watch in mid-October?

Harmony Gold Mining Company Limited (NYSE: HMY)

Harmony Gold Mining Company Limited is a mining stock that is currently outperforming the market. This is a corporation that extracts gold, silver, copper, and uranium from mines and processes them. Harmony’s operations are situated in South Africa and Papua New Guinea, both of which have proven to be beneficial to the company.

Harmony has released their annual report for the fiscal year 2021, which ended on June 30th. During this time, the company’s sales increased by 45.2 percent year over year. In addition, their net debt dropped by 52% year over year.

Even if the company’s performance was excellent, it was not the main determinant of its stock price. The market price of HMY varies in lockstep with gold prices. As a result of this knowledge, will you add HMY stock to your watchlist this month?

Mining Stocks in the Future

If mining stocks continue to climb as the pandemic fades, the market will watch how the market reacts. The planet is still in a constant state of change at the present. The value of materials is rising as industrial demand and retail sales both rise. So, in mid-October, which mining stocks will you add to your portfolio?

The post Top Mining Stocks To Watch Mid October appeared first on Gold Stocks to Buy, Picks, News and Information | GoldStocks.com.

Author: Jon Phillip

Share this article:

Continue Reading

Trending