Tag Archives: mining M&A

Mammoet completes ALE acquisition

Bulk handling, Mining mergers and acquisitions, Mining services, , , ,

Mammoet has completed the acquisition of ALE, just over four months since the two heavy logistics companies agreed on the deal.

The businesses will now operate as one company under the Mammoet brand and, over the coming months, a fully developed integration plan will be rolled out that will focus on bringing the two organisations together, while maintaining safe and world-class service levels to our customers, Mammoet says.

According to Mammoet, the global coverage of the combined business covers over 140 offices and branches worldwide. Both companies specialise in engineered heavy lifting and transport for sectors such as the petrochemical industry, renewable energy, power generation, civil construction and the offshore industry.

Paul van Gelder, Mammoet CEO, said: “We are looking forward to working together with our new colleagues all over the world and establishing long-term relationships with our customers, existing and new. We will put all our efforts into supporting them with their activities aimed at enhancing cities, businesses and communities that are all part of the transition to a more sustainable future. As their goals increase in size and complexity, we must reshape ourselves to support them while keeping our primary focus on safety.”

Mammoet’s combined team of professionals, as well as its fleet of heavy equipment, are now the world’s largest, according to the company. “This significantly enhances scalability, innovation capabilities and efficient mobilisation, like no one else in the industry.”

Mammoet says it is the only global heavy lifting and transport business with a large R&D facility run independently from its operational activities, allowing it to innovate for the long term in close collaboration with customers.

Anglo American eyes polyhalite potential with Sirius Minerals bid

Bulk handling, Energy minerals, Mineral project development, Mining mergers and acquisitions, Mining project news, , , , , , , , ,

Anglo American has gone public with a bid to buy Sirius Minerals and its North Yorkshire polyhalite project in the UK.

The all-cash bid, which values Sirius at £386 million ($507 million), comes shortly after Sirius announced a strategic review for the project that included a broader process to seek a major strategic partner for the asset.

Anglo says it identified the project as being of potential interest some time ago, given the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product.

The North Yorkshire polyhalite project, which is spilit into two stages, will see product extracted via two mine shafts and transported to Teesside, in the northeast of England, on a conveyer belt system in an underground tunnel. It will then be granulated at a materials handling facility (MHF), with the majority being exported to overseas markets.

Infrastructure development on the project includes sinking the shafts at the Woodsmith mine to access the polyhalite deposit (using Herrenknecht’s Shaft Boring Roadheader); developing a 37 km-long underground mineral transport system using tunnel boring machines; constructing a MHF in Teesside for granulating or chipping the mined material into the final product; and harbour facilities comprising an approximately 3.5 km-long overland conveyor, a ship berth and a ship loader located adjacent to the harbour on the River Tees.

In its announcement this morning, Anglo said: “The project has the potential to fit well with Anglo American’s established strategy of focusing on world-class assets, particularly in the context of Anglo American’s portfolio trajectory towards later cycle products that support a fast-growing global population and a cleaner, greener, more sustainable world.”

Anglo is not new to the fertiliser market having, until 2016, a phosphates business in Brazil. It sold the mine, beneficiation plant, two chemical complexes and two further mineral deposits that made up this business that year to China Molybdenum in a $1.5 billion deal that also included its niobium assets.

Sirius announced its strategic review back in September 2019 after it had to terminate a $2.5 billion revolving credit facility stage 2 financing for the project (to get it to 20 Mt/y capacity) due to a worsening of market conditions for a required bond raising.

This led to the company slowing development across the project in order to preserve funding to allow more time to “develop alternatives and preserve the significant amount of inherent value in this world-class project”, Chris Fraser, Managing Director and CEO, said at the time.

This saw the company lay out a pathway that would still see first polyhalite production in the June quarter of 2022, but could see the ramp-up to stage one 10 Mt/y polyhalite capacity reached in the September quarters of 2025 or 2026, depending on if there was a 12 or 24 month deferral of the planned development scope.

Anglo said, during the first two years after an offer is successfully completed, development work on the project is expected to be broadly in line with Sirius’ revised development plan “although Anglo American intends to update the development timeline, optimise mine design and ensure appropriate integration with its own operating standards and practices”.

It added: “Anglo believes that the project has the potential to become a world-class, low-cost and long-life asset. Sirius has progressed the development of the project to an advanced stage, with construction now under way for over two years.

“Sirius has indicated that this is currently the world’s largest known high-grade polyhalite deposit with a JORC reserve of 290 Mt, with a grade of 88.8%, and a resource of 2,690 Mt. The resource indicated by Sirius has the scale, thickness and quality to be mined efficiently using bulk mining methods through a relatively simple, low-energy, non-chemical production process.”

In addition, Sirius has indicated the project could operate at an EBITDA margin potentially well in excess of 50%, according to Anglo, leaving the project well positioned for strong through-the-cycle profitability with a long anticipated asset life.

“At this stage, the project requires a significant amount of further financing to develop and commission the operation that has proven challenging for Sirius to procure on an economic basis,” the diversified miner said. “Anglo American, as one of the world’s leading mining companies, has the resources and capabilities to help build on the achievements of the Sirius team. Anglo American remains committed to its disciplined capital allocation framework.”

Anglo explained that there is potential long-term benefits in applying its technical expertise in both the development and operational phases, as well as utilising its recognised Operating Model to drive safety and productivity to “world-leading standards”.

“Integration into Anglo American’s global marketing network would provide full mine-to-market capabilities and build on Anglo American’s institutional experience in the world’s major fertiliser markets,” it added.

Sirius’ polyhalite product, POLY4, is a multi-nutrient fertiliser certified for organic use and has the potential to generate demand at a competitive cost that supports a strong margin, according to Anglo.

“POLY4 is an attractive low-chloride alternative to traditional potassium-bearing mineral products on a cost-effective basis. It includes four of the six key nutrients that plants need to grow – potassium, sulphur, magnesium and calcium,” it said. “The use of fertilisers is one of the most effective ways to improve agricultural yields and therefore help to address the anticipated future imbalance between food, feed and biofuel demand and supply caused by a fast-growing global population and limited additional land availability for agricultural use.”

Epiroc hands over drilling consumables facility to Monark

Equipment maintenance, Mining consumables, Mining mergers and acquisitions, Mining services, , , , , ,

Epiroc has completed the divestment of its handheld drilling consumables manufacturing facility in Ockelbo, Sweden, less than two months after announcing the plan.

Epiroc sold the facility and its business to an affiliate of Monark AS, a rock drilling tools manufacturer based in Hof, Norway. The announcement of the planned sale in October came just before Epiroc said it had decided to restructure the manufacturing of its handheld rock drilling equipment and tools business in China.

The new owner will continue to supply Epiroc with products, mainly rods for handheld drilling, which are used by customers in construction and mining, Epiroc said.

The facility was part of Epiroc’s Rock Drilling Tools division and the approximately 40 employees who work at the facility were offered to transfer to the new owner.

Detour Lake acquisition to make Kirkland Lake Gold plus-1.5 Moz/y producer

Mine operation news, Mining finance, Mining mergers and acquisitions, Precious metals, , , , , ,

Kirkland Lake Gold and Detour Gold Corp have entered into a definitive agreement will see the ASX- and TSX-listed miner become a plus-1.5 Moz/y gold producer through the all-share acquisition of Detour and its Detour Lake gold mine, in Ontario, Canada.

Under the terms of the transaction, which values Detour at C$4.9 billion ($3.3 billion), all the issued and outstanding common shares of Detour Gold will be exchanged at a ratio of 0.4343 of a Kirkland Lake Gold common share for each Detour Gold common share. Upon completion of the transaction, existing Kirkland Lake Gold and Detour Gold shareholders will own around 73% and 27% of the pro forma company, respectively.

Kirkland Lake says Detour Lake is a uniquely large-scale, long-life Canadian mine, with current production of around 600,000 oz/y and substantial growth potential.

The deal also solidifies Kirkland Lake’s position as a senior gold producer with pro-forma 2019 output targeted at more than 1.5 Moz and analyst consensus 2019 free cash flow of almost $700 million, Kirkland said.

The deal also increases Kirkland Lake’s mineral reserve base, adding 15.41 Moz to Kirkland Lake Gold’s mineral reserve base and extending its reserve life index by eight years.

The financial strength and technical expertise of the combined company is expected to support the continued optimisation and potential expansion of Detour Lake, Kirkland Lake said, explaining that opportunities exist to significantly increase production at improved unit costs and to expand current mineral reserves and mineral resources.

It also provides exploration upside, with Detour Gold’s land position covering 1,040 km2 along the northernmost sections of the prolific Abitibi Greenstone Belt (including 646 km² on existing Detour Lake property).

Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, said: “The acquisition of Detour Gold is an excellent fit for Kirkland Lake Gold. We have already taken two mining operations, Macassa and Fosterville, and transformed them into high-quality assets that generate industry-leading earnings and free cash flow. The addition of Detour Lake provides an opportunity to add a third cornerstone asset that is located in our back yard in northern Ontario.

“Detour Lake will provide the pro forma company with a 20-plus year mine life which provides unparalleled optionality and excellent growth potential for the benefit of all shareholders. The management team at Detour Gold has done an exceptional job in making improvements and building momentum at the mine.

“Once the transaction is completed, we will continue efforts to optimise current operations and commence engineering work to evaluate expansion opportunities at Detour Lake, which we anticipate could lead to significant production growth, improved unit costs and higher levels of mineral reserves and mineral resources.”

Monadelphous after Chile mining exposure with Buildtek, Maqrent deal

Mining mergers and acquisitions, Mining services, , , , , , ,

Engineering company Monadelphous Group is expanding its South America presence through the acquisition of 75% stakes in Chile-based construction and maintenance services contractor, Buildtek SpA, and plant and equipment hire company, Maqrent SpA.

Buildtek provides multidisciplinary construction and maintenance services to the mining sector in Chile, having facilities in Antofagasta, Rancagua and Calama, and a head office in Santiago. Maqrent provides a range of plant, machinery and equipment for hire to Buildtek and external customers in the mining and construction sectors. Customers include major resources and energy companies such as Codelco, BHP, Albemarle, Anglo American and GNL Quintero. The business achieved an annual turnover in excess of CLP20 billion (A$24.7 million) in the last financial year.

Monadelphous Managing Director, Rob Velletri, said the acquisition formed part of the company’s markets and growth strategy, through the expansion of its existing services into new geographical regions. The announcement was the result of “significant efforts” over a number of years to understand the South American market, he added.

“The acquisition enables our entry into the growing Chilean resources market through an established and well-recognised operator. We will support Buildtek and Maqrent as they continue to grow and expand in the South American market,” he said.

Monadelphous is paying CLP5 billion in cash to acquire 75% of the companies, with an option to purchase the remaining 25% in three years’ time. The companies were founded in 2007 by Victor Valech and employ around 700 people. Valech will continue to manage and run the operations in Chile, with support from Monadelphous.

Mitchell Services ups pureplay drilling ante with Deepcore Drilling acquisition

Explosives and blasting, Mining equipment, Mining mergers and acquisitions, Mining services, , , ,

Mitchell Services has agreed to acquire Deepcore Drilling for A$32 million ($22 million) in cash and shares, turning the ASX-listed company into, it says, one of the largest and most diversified pureplay drilling services companies in Australia.

The acquisition is expected to be 38.5% earnings per share accretive based on pro-forma financials and the agreed A$15 million cash and A$17 million shares deal.

Deepcore is a privately-owned company providing services to the mining and infrastructure sectors. It specialises in highly technical underground mobile drilling, including specialty acoustic drilling that Mitchell does not currently provide and deep hole directional diamond core drilling, the company said.

Mitchell has increasingly been expanding into new segments of the drilling market in order to capture market share and, in July, entered the drill and blast production drilling market with the award of a new contract at Adaman Resources’ Kirklalocka gold project in Western Australia.

Mitchell said Deepcore, which also carries out surface drilling, is primarily gold and copper focused, balancing the company’s existing commodity mix. It has 32 drill rigs and is involved with work primarily in Victoria and New South Wales, where Mitchell already has a small presence.

Deepcore is majority owned by founder Scott Tumbridge, who will be invited to join the Mitchell board as an Executive Director after the transaction is completed; expected to be by end-2019. Deepcore had 2019 financial revenues of A$46.5 million and EBITDA of $6.3 million.

NRW in the lead for BGC contract mining business

Mining mergers and acquisitions, Mining services, , ,

NRW Holdings, in response to recent media speculation, says it has been selected as the preferred bidder in the sale of BGC Contracting.

The company said it has consistently stated it is pursuing opportunities to “further diversify its revenues and enhance shareholder returns”, with this including discussions with various parties regarding potential acquisitions. This included talks with BGC Contracting.

Earlier this year, BGC Contracting’s owners, BGC Pty Ltd, said it was exploring options for the group’s national contract mining, maintenance and civil construction business.

While NRW confirmed its preferred bidder status for BGC, it said this status was subject to final documentation and a number of conditions considered “customary in this type of transaction”.

“NRW believes there is significant merit in the acquisition of BGC Contracting and would only enter into a transaction applying a similar discipline to previous transactions (Golding Group and RCR Mining Technologies) on terms that deliver appropriate value for NRW shareholders, including a requirement that any transaction be earnings per share accretive,” it said.

NRW said it has multiple funding options available to it and, furthermore, any transaction would include the assumption of outstanding equipment finance obligations of approximately A$190 million ($131 million), “which is well supported by a considerable fleet of major mobile equipment”.

Metso and Outotec tie-up wins backing at EGM

Comminution of minerals, Mineral processing, Mining mergers and acquisitions, , , ,

Metso says its Extraordinary General Meeting (EGM) has seen the Board of Directors’ partial demerger plan and combination with Outotec approved.

The decisions of the EGM will become effective as of the registration of the completion of the partial demerger, which is expected to take place in the June quarter of 2020, subject to the statutory creditor hearing process and receipt of all required regulatory and other approvals, including competition clearances.

The combination of Metso Minerals and Outotec is highly complementary and will create a unique company in the industry, according to the two companies. “Metso Outotec will leverage the strengths of both companies, including technology and R&D, product and process excellence, scale and global service offering footprint. The combination will deliver significant benefits to all stakeholders,” they said.

As part of the deal, Metso Flow Control, which was recently split off from the Metso Minerals division, will become a pure-play listed entity under the name of Neles.

Pursuant to the demerger plan, all such assets, rights, debts and liabilities of Metso which relate to, or primarily serve, Metso’s Minerals business will transfer, without liquidation of Metso, to Outotec.

The planned combination received approval from the Finnish Financial Supervisory Authority earlier this month.

De.mem to take controlling stake in Germany-based wastewater treatment company

Environmental, Mining mergers and acquisitions, Mining services, Water management, , , , ,

De.mem says it has signed a binding agreement to acquire 75% of the shares in Geutec Umwelt- und Abwassertechnik GmbH, an industrial wastewater treatment company based in Essen, Germany.

The A$915,000 ($620,140) cash deal provides a platform for De.mem to roll-out its membrane technologies into the German and European industrial wastewater treatment markets Geutec currently supplies wastewater treatment products and solutions to, the ASX-listed firm said. This includes small and medium sized companies and several multinational corporations from the heavy industrial, plating and metals processing industries.

Geutec’s solutions are based on a range of proprietary chemical formulations that have been developed and optimised over decades of operation, De.mem said. The manufacturing of these chemicals is performed in Germany but could eventually be expanded by De.mem into its Australia or Asia locations, the company noted.

Following the acquisition of Geutec, De.mem intends to set up a Chemicals Division across the group’s different locations so that it can intensify its sales efforts for water treatment chemicals based on the proprietary product range of Geutec. In addition to supplying mining, resources and heavy industrial sectors in Australia, there are strong opportunities also in Asia, with its large manufacturing sector, De.mem said.

The company said: “Geutec’s chemicals are highly complementary to De.mem’s innovative membrane-based water treatment products, the core of De.mem Group’s intellectual property.”

De.mem manufactures a range of hollow-fibre membrane technologies at its factories in Singapore and Australia. The membranes and membrane modules produced are the key components in many of the company’s turnkey water and wastewater treatment plants.

“There is strong demand from De.mem’s existing customer base for Geutec’s chemicals products,” De.mem said. “Chemicals such as coagulants and flocculants, cleaners and anti-scalants are often requested by customers in conjunction with membrane-based water treatment. Chemicals are also typically requested by customers as a follow-up to De.mem’s equipment sales.”

In Australia alone, De.mem has already sold around A$450,000 in chemicals over the 12 months ended June 30, 2019. But, to date, De.mem has limited its chemicals sales to a small number of mining and industrial sites because its chemicals have been supplied to De.mem by third parties.

“The acquisition of Geutec will not only allow De.mem to supply additional customers with a broader range of chemical products, but also to increase its margins in this segment,” it said.

Completion of the deal is subject to payment of the purchase price and expected within the next week, De.mem said. Immediately following the transaction, Geutec GmbH will be re-named De.mem-Geutec GmbH.

Andreas Kroell, CEO of De.mem Group, said: “The acquisition of Geutec GmbH provides a logical expansion of De.mem’s product range into the supply of industrial chemicals for water and wastewater treatment. Furthermore, the acquisition further diversifies our revenues and provides growth options in the German and European industrial wastewater treatment markets.”

Uwe Graessel, Founder, Owner and Managing Director of Geutec GmbH, said: “Our existing customers can benefit from the wider De.mem product offering and we look forward to supplying our innovative chemicals solutions to De.mem’s customers globally. We see significant opportunities given the extended range of products and capabilities.”

Major Drilling bolsters northeastern Ontario offering with Norex buy

Equipment maintenance, Mineral exploration, Mining equipment, Mining mergers and acquisitions, Mining safety, Mining services, , , ,

Major Drilling Group has entered into an agreement to acquire Norex Drilling, a family-owned drilling company and leading exploration drilling contractor based in Timmins, Ontario, Canada.

The purchase price for the acquisition is valued at an amount up to C$19.7 million ($14.8 million), consisiting of cash and shares.

Denis Larocque, President & CEO of Major Drilling, said Norex had been operating successfully in the Ontario marketplace for around 40 years and had a solid reputation with its clients.

“The acquisition of Norex is a unique opportunity for Major Drilling to gain a strong position to service our customers in both surface and underground exploration drilling services in the prolific northeastern Ontario region,” he said. “The culture and operational values of both companies are very similar in terms of personnel and strategies, and this will allow us to provide our customers with expanded drilling services.”

Major Drilling is retaining the management team, is gaining access to skilled and experienced drillers and personnel, and is taking over existing contracts, according to the company.

Through the purchase, it will also acquire an additional 22 drill rigs, including 17 compatible specialised surface drill rigs and five underground drills, together with related support equipment and inventory.

For the last two years, Norex had average yearly revenue of approximately C$21 million and EBITDA of aroundC $5 million.

The company said: “While Norex’s historical performance should not be viewed as guidance for future performance, we are optimistic about the continuing growth potential in this region considering Norex’s customers’ stated plans and the current market condition in the mining industry.”

The acquisition is expected to close on or about November 1, 2019, and is subject to customary closing conditions.