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Duluth Metals

Duluth's JV partner Antofagasta buys TMM

Update | Mining | 11 Nov 2014

Antofagasta has made an offer to buy all of Duluth Metal's outstanding shares at C$0.45 each in cash. All things considered this is a good deal for Duluth's shareholders; Antofagasta is one of the few majors that could have the ability to develop the Twin Metals Minnesota (TMM) project, a Tier 1 asset. A decision as to whether a plan of arrangement on the takeover bid will be made by mid-November. The shareholder approval meeting is estimated to be in early January 2015.

Duluth Metals

Buy now, pay later

Update | Mining | 27 Oct 2014

Duluth's PFS highlights the Twin Metals Minnesota (TMM) project as an economically viable Tier 1 asset at reasonable long-term commodity price forecasts. With Antofagasta recently deciding not to increase its ownership and reverting to a conventional 40% funding equity interest, options for TMM's development lead to an increased focus on the Barclays strategic review currently underway. Finding a suitable Tier 1 asset developer capable of funding multi-billion dollar projects is limited to a small pool of large mining companies. Recent M&A activity in the copper space highlights such companies are buying Tier 1 assets to fit longer-term growth profiles.

Duluth Metals

Twin Metals Minnesota draft PFS released

Update | Mining | 22 Aug 2014

Duluth's announcement of a draft PFS on its 60%-owned Twin Metals Minnesota (TMM) project highlights a large and long-life mining operation, producing large amounts annually of copper, nickel, gold, silver and platinum group metals in concentrates. Estimated C1 (on-site operating cash costs) costs over life-of-mine are a first quartile US$0.76/Ib Cu (net of all by-product credits), which provide considerable insulation to the current copper price. Duluth now requires further financing to progress the project, for which Barclays has been appointed to undertake a strategic review of Duluth's options. We are currently reviewing our forecasts and will publish a further note with an updated valuation in due course.

Duluth Metals

TMM resources move a step closer to reserves

Flash note | Mining | 04 Mar 2014

Duluth's consultant AMEC has reported a resource upgrade for its world-class scale Twin Metals project in Minnesota (TMM). Of most significance in our view is the inclusion of a maiden 295Mt in the measured category from the Maturi deposit. This high-confidence resource category could therefore potentially aid early mining at the project. This resource upgrade is in line with Duluth's stated release for this announcement back in January 2014, and supports its target date to release a PFS in mid-2014.

Atalaya Mining

Indaba special, 2014

Sector Commentary: | Mining | 28 Jan 2014

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Duluth Metals

Twin Metals PFS on track for mid-2014

Flash note | Mining | 10 Jan 2014

Duluth has confirmed the comprehensive NI 43-101 compliant Technical Report on the Twin Metals (TMM) project pre-feasibility study (PFS) is scheduled for completion in mid-2014. The PFS is based on the December 2012 indicated resource of 1.17bn tons at 0.58% Cu and 0.19% Ni using a 0.3% Cu cut-off. Mine planning is focusing on the higher-grade subunit of the Maturi deposit containing 500Mt at 0.72% Cu and 0.23% Ni using a 0.6% Cu cut-off. We anticipate a potential C$30m fund-raising following PFS completion to help fund Duluth's 35% share of TMM BFS costs.

Duluth Metals

New drilling to upgrade TMM resource

Flash note | Mining | 09 Dec 2013

Duluth Metals has announced results from a fence drilling programme within the Maturi deposit at the TMM project, highlighting the consistency and continuity of the resource. The results provide data required for planned drilling to upgrade estimates from indicated to measured resource categories. An updated resource for the TMM project is expected to be published in spring 2014.

Duluth Metals

Continued commitment to TMM JV

Update | Mining | 26 Nov 2013

Despite market concerns following its recent project review, we believe Antofagasta remains committed to the TMM JV, which it continues to fund. Duluth's cash burn appears well controlled and we expect current cash of C$11.0m to provide funding through to completion of the TMM PFS in H114. Following the PFS, we anticipate Duluth will be in a strong position to proceed with a fund-raising. We estimate that C$60m would be sufficient to fund Duluth's 35% share of TMM BFS costs. Our base case valuation is C$2.77-4.25 per share and our upside valuation, based on potential results from the PFS, is C$4.13-6.87 per share depending on dilution.

PolyMet Mining

Low-cost polymetallic development project

Initiation | Mining | 21 Nov 2013

PolyMet Mining Corp's initial investment case rests on its ability to secure environmental permitting for its NorthMet Project, arrange financing and complete construction on time and within budget. PolyMet purchased the Erie Plant and associated infrastructure for a fraction of the replacement cost, which positions the project at a low capital and operating cost relative to its peers. PolyMet's valuation has material upside if it expands its capacity or uses its infrastructure to consolidate the Duluth Complex in Minnesota. Our base case valuation is US$479m or US$1.32/share on a diluted basis. Our upside valuation, based on potential plant expansion to 90ktpd, is US$1,254m or US$3.08 per share (diluted).

Duluth Metals

Increasing potential

Update | Mining | 26 Sep 2013

Exploration drilling results indicate potential for significant additional mineralised zones within both the TMM JV project area and Duluth's 100%-owned exploration area. No value is attributed to these exploration areas in our current valuation. We have made minor revisions to our forecasts to update for Q213 financials and revised our valuation model to fully reflect Duluth's non-capital funding contributions to the TMM JV. Our base case valuation range is C$2.78-4.27 per share and our upside valuation is C$4.06-6.88 per share depending on dilution.

Duluth Metals

Positive metallurgical test work results

Flash note | Mining | 22 Jul 2013

Metallurgical test work has confirmed the viability of two processing alternatives for the Twin Metals project to be evaluated during the pre-feasibility study. Pilot plant work has shown that the CESL process can be used to produce copper cathode and a saleable high-grade nickel MHP product from a bulk copper-nickel concentrate. Alternatively, separate marketable copper and nickel concentrates can be produced for direct sale to smelters. High base and precious metals recoveries were demonstrated to both bulk and separate copper and nickel concentrates.

Duluth Metals

Steadily unlocking value

Outlook | Mining | 03 Jun 2013

Duluth Metals (DM) is focused on the development of the Twin Metals Minnesota (TMM) Cu-Ni-PGM project through a JV with Antofagasta, while also exploring for new discoveries in close proximity. A PFS is underway, which is expected to completely redefine the scale and economics of the project. Our NPV10 base case valuation range is C$3.00 to C$4.66 per share and we estimate that the PFS results could uplift our NPV10 valuation to between C$4.22 and C$7.11 per share depending on dilution.