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South32 - Ex-BLT miner (S32)     

HARRYCAT - 21 Apr 2016 12:14

South32 is a globally diversified metals and mining company with high-quality and well maintained operations which mine and produce bauxite, alumina, aluminium, energy and metallurgical coal, manganese, nickel, silver, lead and zinc in Australia, Southern Africa and South America.

We operate a regional model, with our headquarters in Perth, Australia. Our African operations are supported by a regional office in Johannesburg, South Africa and our Australian and South American operations by an office in Perth. Our marketing activities are managed from Singapore and London.


HARRYCAT - 21 Apr 2016 12:18 - 2 of 19
South32 Ltd is continuing to strengthen its balance sheet by focusing on value, not volume, its CEO, Graham Kerr, said in a quarterly operational report.

"We are making great progress on our cost-out program across all operations and have continued to generate cash despite volatile commodity markets," he said.

"We have successfully completed the Appin Area 9 project at Illawarra Metallurgical Coal and are close to completing the PC02 project at GEMCO. Both will be delivered below budget."

* South32's strong balance sheet remains a key point of difference. At 31 March 2016, estimated net cash1 position was US$18M.

* The company is well positioned to achieve FY16 production guidance for all its operations and remain on track to reduce controllable costs2 by US$300M.

* Strong operating performance at Worsley Alumina supported a 5% increase in production in the March 2016 quarter.

* The recommencement of longwall mining at Dendrobium and completion of the Appin Area 9 project resulted in a 35% increase in metallurgical coal production in the March 2016 quarter.

* A reduction in mill availability, associated with an outage in January, resulted in lower sequential production at Cannington in the March 2016 quarter.

* The company has successfully reconfigured South Africa Manganese to operate with greater flexibility to respond to market demand, having ramped-up ore production to an optimised 2.9Mtpa (100% basis).

* The Appin Area 9 project was completed 33% below budget and ahead of schedule. The Premium Concentrate Ore Project (PC02) at GEMCO is 98% complete and will be commissioned in the June 2016 quarter.

HARRYCAT - 21 Apr 2016 12:20 - 3 of 19

Barclays comment today:
"South32 delivered a decent production quarter in 3Q with all key assets tracking in line or ahead of our FY estimates. The company reiterated production guidance for all operations, as well as controllable cost reductions and capex. The only material operational change was the ramp up of manganese ore production in South Africa in response to very strong market conditions (YTD production 81% of our estimate). Importantly, the company reported a US$134m decline in net debt since Dec-15, reaching a net cash position of US$18m as of end March. This was despite a $30m FX related increase in finance leases and $23m of one-off redundancy costs. The implied underlying FCF generation is therefore $748m annualized, or ~11% FCF yield. We remain Equal Weight on the stock."

HARRYCAT - 22 Apr 2016 09:10 - 4 of 19

Deutsche Bank today reaffirms its hold investment rating on South32 Limited (LON:S32) and raised its price target to 81p (from 80p).

HARRYCAT - 14 Mar 2017 12:58 - 5 of 19

Macquarie today reaffirms its outperform investment rating on South32 Limited (LON:S32) and set its price target at 230p.

Barclays Capital today reaffirms its overweight investment rating on South32 Limited (LON:S32) and set its price target at 200p.

HSBC today upgrades its investment rating on South32 Limited (LON:S32) to buy (from hold) and left its price target at 185p

Citigroup today (27/04/17) reaffirms its buy investment rating on South32 Limited (LON:S32) and cut its price target to 190p (from 200p).

Macquarie today (11/05/17) reaffirms its outperform investment rating on South32 Limited (LON:S32) and set its price target at 200p.

HARRYCAT - 08 Jun 2017 10:47 - 6 of 19

Jefferies International today downgrades its investment rating on South32 Limited (LON:S32) to hold (from buy) and cut its price target to 170p (from 225p).

HARRYCAT - 10 Jul 2017 09:36 - 7 of 19
South32 Ltd advises that underground operations at the Appin colliery, which forms part of its broader Illawarra Metallurgical Coal operation, remain suspended.

A review of the operation's systems and operating practices was being undertaken to ensure its ongoing safety and reliability.

Given the scope of this review, an extended outage was now anticipated before production at Illawarra Metallurgical Coal can be restored to historic levels.

The Dendrobium mine continued to operate.

HARRYCAT - 13 Oct 2017 09:46 - 8 of 19
South32 said it has recommenced production at its Appin metallurgical coal mine in Australia following a review of operating procedures.

Longwall 707 restarted production today, ahead of the return to a two longwall configuration in the December 2018 quarter.

"We have completed a detailed review of Illawarra Metallurgical Coal's operating systems and processes to address the unacceptable levels of performance that have been achieved as the Appin Area 9 project ramped-up to capacity," chief executive Graham Kerr said.

"Longwall utilisation rates of 30% to 40% are significantly below industry benchmark levels and an opportunity exists for us to sustainably improve productivity in order to maximise the value of this high quality, long life resource."

Illawarra Metallurgical Coal produced 819kt of coal during the September 2017 quarter, including 494kt of metallurgical coal and 325kt of thermal coal.

HARRYCAT - 20 Oct 2017 12:48 - 9 of 19

Macquarie today reaffirms its neutral investment rating on South32 Limited (LON:S32) and set its price target at 200p.

HARRYCAT - 07 Nov 2017 13:46 - 10 of 19

Deutsche Bank today downgrades its investment rating on South32 Limited (LON:S32) to sell (from hold) and left its price target at 170p

HARRYCAT - 27 Nov 2017 10:09 - 11 of 19
South32 has approved the 4.3 billion South African Rand ($301m) Klipspruit life extension project at South Africa Energy Coal.

Development activity is expected to commence in the current quarter with first coal expected from the open-cut operation in the 2019 financial year, the company said.

"The investment is expected to generate an internal rate of return on investment of more than 20% by unlocking 616Mt of resource at the Klipspruit South and Weltevreden deposits, and fulfilling around half of our current rail obligations with Transnet," chief executive Graham Kerr.

HARRYCAT - 17 Jan 2018 09:50 - 12 of 19
South32 upgraded annual production guidance for its South African manganese operations and left guidance for all other minerals unchanged.

The company had a mixed output performance in the second quarter, with alumina, nickel, zinc, lead and silver production all falling.

Metallurgical coal production jumped after mining operations resumed in Australia, while manganese production also rose.

The company said that industry cost curves steepened during the December 2017 half year as a result of US dollar weakness, rising commodity prices and the environmental policy response in China.

HARRYCAT - 15 Feb 2018 08:31 - 13 of 19
Mining company South32 grew its underlying EBITDA by 2% to US$1.1bn in the first half of FY2018.

Higher realised prices for most of its commodities gave rise to a US$273m increase in sales revenue, despite a significant reduction in coal and metal production at Illawarra Metallurgical Coal and Cannington, respectively.

The group's cost base was primarily impacted by external inflationary pressures such as a stronger Australian dollar and South African rand, higher price-linked royalties and rising raw material input costs.

Underlying EBIT increased 5% to US$724m, benefitting from a reduction in depreciation and amortisation. Underlying earnings increased 14% to US$544m.

The group's statutory profit after tax decreased by 12% to US$543m. The corresponding period's profit benefitted from the recognition of a fair value gain on non-trading derivative instruments of US$189m.

Graham Kerr, South32 CEO, said: "After a challenging start to the 2018 financial year, production for the majority of our operations is tracking on or ahead of schedule. We achieved record production at Australia Manganese and Mozal Aluminium, increased production guidance at South Africa Manganese in response to favourable market conditions, and delivered a 23% increase in payable nickel production at Cerro Matoso as ore grades improved.

"We also announced a 4.3 billion South African rand investment in the Klipspruit colliery, which will extend its life by approximately 20 years, and our decision to manage South Africa Energy Coal as a stand-alone business to sustainably improve its financial performance. This major strategic initiative will also allow us to transform the ownership of South Africa Energy Coal, consolidate our functions and further reduce duplication."

HARRYCAT - 18 May 2018 09:49 - 14 of 19

Liberum Capital today reaffirms its sell investment rating on South32 Limited (LON:S32) and raised its price target to 185p (from 90p).

HARRYCAT - 18 Jun 2018 09:47 - 15 of 19
South32 and Arizona Mining entered an agreement for South32 to acquire the remaining 83% stake in Arizona Mining via a plan of arrangement, representing a fully funded, all cash offer of $1.3bn.

The offer price of C$6.20 per share represents a 50% premium to the closing price on 15 June and implies a total equity value for Arizona Mining of $1.6bn.

Directors and officers of Arizona Mining, who own 34% of the common shares on issue, have entered into voting support agreements and the directors of Arizona Mining entitled to vote, unanimously recommended to their shareholders that they vote in favour of the transaction.

Arizona Mining is the owner of the Hermosa Project, containing the high grade base metals Taylor deposit, the Central zinc, manganese and silver oxide resource and an extensive, highly prospective land package with potential for discovery of polymetallic and copper mineralisation.

The Taylor deposit is a greenfield development project that has a reported resource of 101m short tons (measured and indicated mineral resources) at 10.4% zinc equivalent grade and is open at depth and laterally.

The project is located close to key infrastructure in an attractive mining jurisdiction.

A preliminary economic assessment completed by Arizona Mining in January 2018 indicated that this low cost, long life project has the potential to deliver a very high internal rate of return on investment.

South32 CEO Graham Kerr said: "Our all cash offer for Arizona Mining will allow us to optimise the design and development of one of the most exciting base metal projects in the industry.

"We have been a major shareholder in Arizona Mining since May 2017 and an active participant in the Hermosa project with representation on the operations committee and a nominee on the board of directors.

"Our deep understanding of this high grade resource and surrounding tenement package, and extensive experience at Cannington, makes us the natural owner of this project and ensures we are well positioned to bring it to development, delivering significant value to our shareholders."

Arizona Mining founder Richard Warke said: "South32's all cash offer of C$6.20 per share represents a premium reflective of the truly world class nature of the Hermosa project and allows shareholders to realise immediate value.

"In addition, the transaction is not contingent on financing, which significantly reduces transaction risk.

"Our board of directors and a special committee of three independent members from the board of directors evaluated this offer and determined that it represented the best outcome for all shareholders.

"Importantly, South32 knows the asset well and understands the significance of the strong relationships that we have built in Arizona with all of our stakeholders.

"I wish South32 all the best in developing Hermosa and the Taylor deposit."

HARRYCAT - 21 Jun 2018 09:35 - 16 of 19

HSBC today downgrades its investment rating on South32 Limited (LON:S32) to hold (from buy) and raised its price target to 240p (from 225p).

HARRYCAT - 18 Jul 2018 10:34 - 17 of 19

Barclays Capital today reaffirms its overweight investment rating on South32 Limited (LON:S32) and raised its price target to 260p (from 225p).

HARRYCAT - 13 Aug 2018 07:39 - 18 of 19

South32 Limited (ASX, JSE, LSE: S32; ADR: SOUHY) (South32) is pleased to announce that it has completed the acquisition of the remaining 83 per cent of issued and outstanding shares of Arizona Mining that it did not already own via a plan of arrangement. Under the terms of the transaction, former shareholders of Arizona Mining were entitled to C$6.20 in cash for each common share held. The transaction consideration of US$1.3 billion was funded from cash on hand.

With the acquisition now complete, Arizona Mining was delisted from the Toronto Stock Exchange (TSX) on 10 August 2018. Arizona Mining will also cease to be a reporting issuer under applicable Canadian securities laws.

South32 Chief Executive Officer, Graham Kerr said: "The acquisition of Arizona Mining adds to our portfolio one of the most exciting base metal projects in the industry. Our deep understanding of the high-grade Hermosa project and surrounding land package, together with our extensive experience at Cannington, positions us well to bring the project to development and deliver significant value to our shareholders."

HARRYCAT - 05 Dec 2018 09:48 - 19 of 19

UBS today upgrades its investment rating on South32 Limited (LON:S32) to buy (from neutral) and cut its price target to 210p (from 215p).
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