Copper M&A in Latin America, TNR Gold And McEwen Mining With Los Azules Copper.

  

  We have the great news from McEwen Mining, you can Google for the whole news release. Before the value for Los Azules was based on the acquisition price paid by US Gold for Minera Andes. After the collapse in Gold prices and Argentina troubled couple of years this accounting value has became the wishful history. Now based on the valuations of Taca Taca in First Quantum Minerals takeover of Lumina Copper McEwen Mining will make the conservative accounting valuation of Los Azules. Normally the selling price for the assets is above such an assessment. You will have to make your own numbers or contact Jim Mustard at PI Financial, who is acting on behalf of TNR Gold.

McEwen Mining:

"We are conducting an impairment test of our Los Azules project in Argentina as a result of the recently announced acquisition of Lumina Copper Corp. by First Quantum Minerals Ltd., for approximately C$470 million. Lumina's only significant asset is the Taca Taca copper project located in Salta, Argentina. While there are some notable differences between Taca Taca and Los Azules, we believe the similarities in project scale and location within Argentina warrant consideration for the Lumina transaction to be a triggering event for impairment analysis. Our preliminary analysis, which places a substantial weighting on the announcement day value of the Lumina transaction to value Los Azules, indicates a pre-tax asset impairment charge in the range of approximately $90-135 million⁽¹⁾. The actual amount, when we have completed the final impairment assessment, will be reported in our quarterly 10-Q which is due to be filed on August 7, 2014.

"With First Quantum acquiring Lumina Copper and their Taca Taca project, Los Azules moves to the forefront in terms of world-class, undeveloped, high-grade copper assets not owned by a major mining company. As we have said in the past, Taca Taca serves as a good proxy for the value of Los Azules and we believe this transaction demonstrates value in projects located in Argentina", said Rob McEwen , Chief Owner, Chairman and CEO.

(1) This is a preliminary estimate range and the impairment testing work, both internally and in collaboration with our external valuation consultants is ongoing, including with respect to various underlying assumptions and comparable transaction analysis. We note that the Lumina/First Quantum transaction is not scheduled to close until approximately August 30, 2014. As of March 31, 2014, we carried the Los Azules project at a pre-tax net book value of approximately $431 million."

Mining M&A in Latin America, China And Prospects For Copper Supply.

  "Chile, Indonesia, USA, Australia and Canada together account for 80% of the world’s copper supply, and with the revived interest in the metal, many national companies are now making headlines with plans of acting to relieve demand pressures and ease supply shortfalls, signalling the potential turnaround and the major bottom in this mining cycle anticipated in the copper market. Read more." 

All slides in this part of the post are from McEwen Mining presentations.

Please Note that TNR Gold Qualified Person - as it is defined by NI 43-101, was NOT able to Verify and Confirm Any Provided Information by The Third Parties; you must NOT rely in any sense on any of this information in order to make any Resource or Value Calculation, or attribute any particular Value or Price Target to any Discussed Securities.

  Please find more information on TNR Gold website.

End of slides from McEwen Mining presentations.

Mining M&A: China's Top Gold Firm Talking To Barrick And Friedland As Copper Rallies.

    

  As we have discussed before, we have really Hot Winter In Argentina for mining M&A. Now Frik Els confirms "China's Top Gold Firm Talking to Barrick Gold, Has Friedland "hotline":

"China's largest gold mining company, China National Gold, is officially setting up shop in junior mining hub Vancouver this week as part of a push into new markets and its global acquisition strategy.

President Xin Song told the Wall Street Journal ahead of Wednesday's event, the Beijing-based firm is on the hunt for global acquisitions and partnerships in gold, silver and copper:

"The growing strategy is very clear, we are going out looking at things globally. On our hands we have a few opportunities, at different stages."

Song, who also chairs the China Gold Association, has not ruled out acquisitions in developed countries, such as Canada, Australia and the US, but the main focus of its expansion strategy is assets in the region including in Mongolia, Russia and countries in central Asia.

Investments in "politically stable" countries in Latin America and Africa are also being considered Song said. Mining.com"

TNR Gold Los Azules Copper: Chinese M&A - Watch Out For Las Bambas Effect.

  

  "Frik Els provides a very good insight into the Chinese deal culture and mining M&A particularly. Las Bambas deal is not only the very good indicator of the turning mining cycle, but also provides guidance for the smaller companies in China to go on The Hunt For Copper and other commodities. You can witness this approach in our particular case of Strategic Commodities with International Lithium and Ganfeng Lithium as well. Read more."

TNR Gold Investor Presentation March 2014 from Kirill Klip

TNR Gold: Los Azules Copper And M&A in Argentina - First Quantum Minerals to Acquire Lumina Copper For $470 Million.

Mining M&A in Latin America, China And Prospects For Copper Supply.

Source: ICSG and IMF. 

  Chile, Indonesia, USA, Australia and Canada together account for 80% of the world’s copper supply, and with the revived interest in the metal, many national companies are now making headlines with plans of acting to relieve demand pressures and ease supply shortfalls, signalling the potential turnaround and the major bottom in this mining cycle anticipated in the copper market.
  Roughly half of all mined copper is used to manufacture electrical wire and cable conductors that are used in today's energy and communication technology applications. With both of these sectors rapidly advancing worldwide, it shouldn’t surprise market observers that the demand for copper is similarly on the rise. 

  

Source: ICSG and IMF.

  Yet as copper gained ground, hitting a four month high at the beginning of July (London Metal Exchange) and peaking just above US $3.25/lb, many analysts had to re-rate their copper valuations, which were largely based on overblown fears of a dropping demand from China, it being the world’s largest base metal consumer. In actuality, Chinese copper demand continued to rise while the refined copper market ran into a deficit.

Source: IMF.

  There is however a new drive for copper demand to be considered, a technological drive delivered by the global introduction of the electric car. Copper finds itself a prerequisite for every electric and hybrid car: it goes into the electric motors, the wiring and the battery power supply system. A complimentary factor, charging infrastructure, presents another component of the driving force developing the rapidly growing demand for copper cables and it's wiring market. The Chinese march against air pollution has catapulted electric car industry into the status of the strategic industry. In the recent news Beijing  has announced building charging infrastructure with 1,000 fast charging stations and "electric cars ready" wiring mandate  for all new residential communities. 

Source: Tesla Motors.

  Speaking of the U.S. and Europe Elon Musk continues to build the supercharger networks for Tesla Motors and talks with BMW and Nissan strongly insinuate that this technology could become the industry standard igniting the rapid development of the mass market for electric cars.

  Copper demand is further bolstered by the development of high-speed railway network in China. This move is mirrored in the West with the UK and US flirting with the idea of developing their own high speed mass-transit systems, representing another strategic consideration for the industry which begins to feel somewhat constrained supply for all the projected demand.

  A change in the copper market cycle was signified this spring with the carefully engineered by Chinese authorities acquisition by Minmetals Group of Las Bambas copper in Peru for US $6 billion from Glencore. Frik Els from Mining.com has reported that according to PwC Global Mining Leader John Gravelle this takeover is the sign of things to come, with companies further down the scale will also be impacted by the "Las Bambas" effect. It seems that the new M&A boom is just around the corner now: 

"The size of the deal reflects Chinese belief in copper.  And China's smaller and private mining operations take their guidance from the large state-owned enterprises," said Gravelle.
The National Development and Reform Commission, China's powerful economic planning agency, in May put into effect a new regime to govern overseas investment, making it much easier for domestic companies to make acquisitions and set up joint ventures abroad.
The so-called Order 9 scraps the approval process for deals worth less than $1 billion entirely, replacing it with a simple registration process, eases forex requirements and cuts out much of the bureaucracy. Mining.com"

  Interestingly, while many Wall Street market forecasters were caught off guard, Vancouver based TNR Gold Corp., a junior exploration company and Lumina Copper Ltd., a junior miner, planned to capitalise on the copper turnaround.  Both companies pursued and secured their copper interests near the Andean Copper Belts in Argentina. For Lumina Copper Ltd. the foresight clearly paid off as the company recently announced they found a buyer for their Taca Taca project in the Salta Province (120 kilometres east of the Escondida, the world's largest producing copper mine). First Quantum Minerals Ltd. struck a deal to buy Lumina for CDN $470-million in cash and stock, and with the recent advance in copper prices Lumina Copper market cap is now close to CDN $500 million.

  With revived interest in the commodity and that of the copper rich area, TNR Gold Corp. holds rights into the next obvious valuable asset for potential prospectors. The company retains a back-in right to northern part of Los Azules in San Juan, one of the largest undeveloped copper deposits in the world, currently owned and operated by McEwen Mining. 
  The back-in right is exercisable following the completion of a feasibility study and allows TNR to back-in for 25% of the northern part of the Los Azules property, which McEwen stated contains the largest share of the known resource at Los Azules. TNR’s advantage in this deal is that it does not assume any risks, nor does it need to raise any funds until a feasibility study is complete – which typically costs companies between $80-100 million. TNR has engaged PI Financial Corp., a leading independent investment dealer, to help market and sell TNR’s interest in this world-class, early-stage copper asset.

  It is clear from looking at Lumina Copper’s stock, which went from CDN $3 to nearly CDN $11 in three months, that the market is slowly catching on to the real potential value of essential metal projects. Now it’s just a matter of patience and apt timing until the Los Azules project gains recognition for its formidable asset worth.

 "The sale of our Back-in Right will provide the necessary liquidity and catalyst to all of our group of companies. Rob McEwen has done a great job as Operator developing this project and now Los Azules is at the top of the list of the best copper projects in the world available for sale, according to PI Financial! I would recommend to contact Jim Mustard VP at PI Financial to get more information about Los Azules Copper project and our Back-In Right Asset. Read more."

TNR Gold Investor Presentation March 2014 from Kirill Klip

TNR Gold Los Azules Copper - Reuters: Fund Managers See Value In Copper Miners.

  

  

  M&A in Copper is heating up and now according to Reuters Fund Managers See Value In Copper Miners. Now projects like Los Azules will be moving onto the M&A radar screens in the industry, it will be interesting now to find out who will be the first to pick this developing story and issue a valuation report.

"Some of big funds have increased exposure to copper

* Copper market seen tilting into deficit from 2016

* Lack of investment to feed next boom-analysts 

By Silvia Antonioli

LONDON, July 4 (Reuters) - Some fund managers are increasing exposure to copper mining companies, betting the industry has reached the bottom of a downturn and that shares offer value for money.

Copper has lost almost a third of its value from a peak in 2011 due to a slowdown in top metals consumer China, which buys about 40 percent of global output.

Copper miners' shares represented by the Thomson Reuters GFMS pure-play copper companies index fell by almost 40 percent over the same period. Reuters."

All slides in this part of the post are from McEwen Mining presentations.

Please Note that TNR Gold Qualified Person - as it is defined by NI 43-101, was NOT able to Verify and Confirm Any Provided Information by The Third Parties; you must NOT rely in any sense on any of this information in order to make any Resource or Value Calculation, or attribute any particular Value or Price Target to any Discussed Securities.

  Please find more information on TNR Gold website.

End of slides from McEwen Mining presentations.

Copper M&A: Lumina Copper Hits CAD10.36 - Is Another Bid Coming For Taca Taca Now?

  "Please do not get very excited and read my legal disclaimer carefully, but as we have seen before this kind of price action in Lumina Copper case can tell us that something is going on. It can be the simple arbitrage play by the big guns, but the market cap of Lumina copper is already higher than the calculated at the announced acquisition price by First Quantum Minerals. The announced price was CAD 470 million. Lumina Copper has 46,978,235 Fully Diluted shares, price at CAD10.36 gives us already CAD 487 million! I do not think that it is bet on rising Copper price or rising First Quantum share price - you can more safely buy the First Quantum shares in that case. Somebody thinks that Taca Taca can be worth more...

  Let's see what the next couple of weeks will bring us here. I will repost my yesterday's entry and you will appreciate later why it is important. Now Los Azules Copper will be making its rounds in the industry.

Mining M&A: China's Top Gold Firm Talking To Barrick And Friedland As Copper Rallies.

    

  As we have discussed before, we have really Hot Winter In Argentina for mining M&A. Now Frik Els confirms "China's Top Gold Firm Talking to Barrick Gold, Has Friedland "hotline":

"China's largest gold mining company, China National Gold, is officially setting up shop in junior mining hub Vancouver this week as part of a push into new markets and its global acquisition strategy.

President Xin Song told the Wall Street Journal ahead of Wednesday's event, the Beijing-based firm is on the hunt for global acquisitions and partnerships in gold, silver and copper:

"The growing strategy is very clear, we are going out looking at things globally. On our hands we have a few opportunities, at different stages."

Song, who also chairs the China Gold Association, has not ruled out acquisitions in developed countries, such as Canada, Australia and the US, but the main focus of its expansion strategy is assets in the region including in Mongolia, Russia and countries in central Asia.

Investments in "politically stable" countries in Latin America and Africa are also being considered Song said. Mining.com"

TNR Gold: Shotgun Gold Project - Why Do We Need New Gold Deposits?

"We are working on the corporate structure now, which will allow to develop Shotgun Gold with the potential new strategic partner on J/V basis like we are doing with Ganfeng Lithium in International Lithium. You can find more information in the Shotgun Gold Project presentation below, on our website and give us a call to discuss it at any time. Read more."

TNR Gold Shotgun Gold Presentation, Alaska - April 2014 from Kirill Klip

  Gold smells Inflation and is moving higher these days, Chinese quest for resources will bring new deals into the mining M&A space and projects like Shotgun Gold will be on the radar screens of investors again.

  Now Copper is making headlines as well and Wall Street Journal reports "Copper Prices Seen Marching Higher":

"Some investors are turning bullish on copper prices, brushing aside concerns sparked by a probe into the metal's place in China's financial system. Instead, these investors are focusing on a rebound in manufacturing world-wide, which they expect will boost copper demand broadly. Increasing consumption by factories will offset any decline in the use of copper as collateral to back loans as a result of the probe, these investors say. China is the world's biggest copper consumer and importer, though how much of the metal goes to manufacturers is unclear. WSJ."

  As you already know, my personal take on the Missing Collateral in China is Bullish for the metals:

Bullish For Metals?! Missing Collateral in China, Follow The Trail of Loans, Copper and Fraud.

"In my personal opinion, we are witnessing the same game of the rehypothecation as it is happening with FED, BIS, Investment Banks and Gold. This, actually missing metal as collateral, will be the very bullish set up for the commodities markets. After initial selling due to the margin calls and unwinding of Paper Positions in the market, Mr Market will realise that all these metal accounted for the supply and demand picture is NOT there. Industrial demand will stay in place, but Supply which was supposed to be hoarded in the warehouses is missing: the collateral was used a few times for the different transactions. Read More."

TNR Gold Los Azules Copper: Chinese M&A - Watch Out For Las Bambas Effect.

  

  "Frik Els provides a very good insight into the Chinese deal culture and mining M&A particularly. Las Bambas deal is not only the very good indicator of the turning mining cycle, but also provides guidance for the smaller companies in China to go on The Hunt For Copper and other commodities. You can witness this approach in our particular case of Strategic Commodities with International Lithium and Ganfeng Lithium as well. Read more."

TNR Gold Investor Presentation March 2014 from Kirill Klip

TNR Gold: Los Azules Copper And M&A in Argentina - First Quantum Minerals to Acquire Lumina Copper For $470 Million.