Author: yinghui

Bradken chairman Nick Greiner and managing director Brian Hodges, who says the string of overtures from outsiders in the past 13 months had been frustrating to deal with at the same time as the company responded to a sharp downturn in the mining cycle.
Photo: Dean Osland Bradken chairman Nick Greiner says the beleaguered mining services group’s share price has “overreacted” to the company’s recent woes, as it entered into 60-day talks with Chilean industrial group Sigdo Koppers to explore a merger with its grinding media group, Magotteaux.
As revealed by Fairfax Media on Thursday, CHAMP Private Equity teamed up with the Chilean firm to inject $70 million into Bradken via redeemable convertible preference securities, preventing it from breaching its debt covenants.
The company also struck a deal with its lenders to lift the company’s gearing covenant to 3.5 times until December 31, giving the company valuable breathing space as it works to complete a restructure and commence the merger talks.
Investors pushed the company’s share price down to its lowest level in six years. In morning trading, the stock slid 15 per cent to $1.46, the lowest it has traded since March 2009, before closing down 11.3 per cent to $1.52.
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The mining consumables group once had a market capitalisation of $1.6 billion, when it was trading at just under $15 a share in 2007.
Mr Greiner said Bradken had eyed off a deal with Magotteaux for almost a decade.
“Magotteaux has been one of the companies, and I have been around for 10 years, that has been on our list … of acquisition targets,” Mr Greiner told Fairfax Media.
“It makes overwhelming commercial logic to put them together. We actually like the fact that there is some diversification away from mining … the world is changing and we think this is the sort of proposal that makes sense because it gives you serious scale and diversification.”
The potential merger is the latest in a long line of offers, of gradually decreasing values, the company has fielded in the past year.
In August 2014, Pacific Equity Partners (PEP) and Bain Capital offered $6 a share before reducing the offer and eventually walking away from it due to financing issues. PEP returned in April, this time partnering with Koch Industries, with a $2.50-a-share offer, which Bradken rejected on the basis it was “opportunistic”.
Mr Greiner said the recapitalisation with Sigdo Koppers and CHAMP, which bought and sold the company more than a decade ago and counts Mr Greiner as a member of its advisory board, and the potential merger with Magotteaux, presented a better option.
“What remains to be worked out is the extent of the future profitability of a combined business and how much Bradken shareholders can get in terms of value. But everyone, in terms of SK, realises we are looking at a value that is very clearly above the $2.50 [offer],” he said.
“PEP and Koch know my number and if they come back and it’s an attractive price it is perfectly obvious what the board will do.”
The company had $433.8 million net debt at December 31 and was guiding towards tough trading conditions in the second half. Bradken said it expects full-year EBITDA to fall between $136 and $138 million, with net debt of $420 million, prior to the investment by CHAMP and Sigdo Koppers. It also flagged a non-cash impairment charge of $135 million to $145 million.

Gindalbie Metals has called for a trading halt pending an announcement regarding a long term financing transaction.

Lower than forecast production and weak iron prices saw Gindalbie suffer a massive impairment on its Karara Mining project in half-year financial results.

The miner revealed Karara had $77.1 million in short-term liabilities, including “impending” debt repayments.

At the time, Gindalbie said it was working with its majority Karara partner Ansteel and Chinese lenders to secure financing options.

In March Gindalbie cut around 70 jobs in a bid to reduce costs.

Rio Tinto’s development of Oyu Tolgoi has taken a step further with an agreement signed by the Mongolian Government, Turquoise Hill Resources and Rio Tinto.
The Oyu Tolgoi Underground Mine Development and Financing Plan, announced this morning, addresses key shareholder issues in terms of funding for the project.
A statement from Rio Tinto said the next phase of development will shift to finalising project finance, conducting the feasibility study and securing permits to proceed.
Mongolian prime minister Chimediin Saikhanbileg expressed his hopes for the impact of Oyu Tolgoi on the Mongolian economy, which holds a 34 per cent stake in the project.
“Mongolia is back in business,” he said.
“Oyu Tolgoi is a world-class copper-gold asset and its further development is of great economic significance for Mongolia.
“Unlocking Oyu Tolgoi’s underground mine will have a significant impact on the Mongolian economy, which will benefit Mongolian citizens for generations to come.
“Our joint agreement clearly positions Mongolia as an attractive country for investment and underscores the fact that Mongolia is open for business.”
It is expected the Oyu Tolgoi mine will contribute about a third of the Mongolian economy at full production, and will be the world’s third biggest copper mine.
The Oyu Tolgoi expansion project was plagued by disagreement between the Mongolian Government and JV partners over accusations of non-payment of US$30 million in taxes, which Rio Tinto denied.
Construction of the project began in 2009, and was suspended in July 2013, which resulted in job losses for 1700 workers.
Rio Tinto copper and gold chief executive Jean-Sebastien Jacques said the joint agreement reflected “tremendous leadership” on the part of all parties concerned.
“The resolution of the outstanding issues reinforces the principles of the Investment Agreement signed in 2009, which underpinned the US$6 billion invested in Oyu Tolgoi to date, and provides a clear and stable framework for the future,” he said.
The first phase of Oyu Tolgoi shipped a total of 1 million tonnes of copper concentrate by March 2015, less than two years after first production.
Rio Tinto said the project has paid US$1.3 billion in taxes, fees and royalties to the Mongolian Government to date.

Twitter is a great way for mining companies to show the public what they’re all about, and some have nailed the medium to create entertaining content for us tweet-heads.

We are a huge fan of Twitter here at the Australian Mining office and use it every day to source information, see what companies are up to and just generally stay in the loop as to what’s going on in the world.

But our favourite Twitter accounts centre around the world of mining because we love the sector.

The Marion 7900 Walking Dragline stood 60m high and scooped 19.11 m3 in one bite from a bucket. Moura Mine 1960s