Nomura ups Anglo American to buy, cuts BHP to reduce

(Reuters) - European Metals & Mining:

* Nomura raises Anglo American to buy from neutral

* Nomura cuts BHP Billiton to reduce from neutral

* Nomura raises Xstrata price target to 770P from 630P; rating buy

Finger-pointing at Anglo AGM

Among the unhappy shareholders firing questions at CEO Cynthia Carroll and chairperson Mark Moody-Stuart at the recent Anglo American annual general meeting (AGM) was none other than Barry Davison - former CEO and chairperson of Anglo Platinum (AngloPlat) and former executive director of Anglo American.

He was given short shrift by both executives, although Anglo spokesperson James Wyatt-Tilby described the exchanges as "polite".

Davison wanted to know the reasons for AngloPlat's poor performance. He cited a drop in output of 559 000 ounces of platinum between 2006 and 2009, as well as a 31% annual rise in costs for the three-year period.

Carroll retorted that AngloPlat had "serially" failed to meet production and cost forecasts for years, and reminded Davison there was a stated production target of 3.5 million oz which was not met when he "was involved".

That target was set by Davison as part of AngloPlat's strategy to grow the overall platinum business and expand its share of the market. He maintained for years that it would be met, despite growing analyst scepticism.

Carroll also pointed out to Davison that AngloPlat met its 2008 production targets despite floods and power problems, and was a safer business for its employees to work in.

It's unprecedented for a retired senior Anglo executive of Davison's stature to quiz current management in such a manner in a public forum like the AGM.

Read more here

Spectacular drilling results for Canadian pgms project

Gauged interest indicates Magma Metals Ltd (ASX: MMB) may be oversubscribed in its planned raising of $A16 million ($US M) through issuing 50 M new shares at A32 cents - a placement which Anglo American plc participated in to maintain its 12% stake in the company.

The raising, with Perth stockbroker Hartleys Ltd as lead manager, was being taken up by domestic and international investors to provide fresh capital for the Thunder Bay North platinum-palladium-copper-nickel prospect in Ontario.

Interest in Magma was sharpened by the release this week of a spectacular round of drilling results form the Current Lake-Beaver Lake area at Thunder Bay North, where drilling has been on a 3 kilometre strike.

Latest results included hole TBND134 which had 37 metres grading 4.55 grams/tonne combined platinum-palladium, 0.49% copper and 0.26% nickel, including 22m @ 6.52 g/t Pt-Pd, 0.69% Cu and 0.33% Ni; and hole TBND171 with 40.45m @ 7.12 g/t Pt-Pd, 0.84% Cu and 0.41% Ni, including 9m @ 10.68 g/t Pt-Pd, 1.21% Cu and 0.5% Ni.

The initial resource was expected to be completed in the September quarter.

Magma has now completed 26,500m of drilling at Thunder Bay North.

Managing director Keith Watkins said the new capital would be sued to complete definition drilling and resource estimates as well as step-out drilling to extend the resource to the south east.

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South African mine group awaits pay demands for talks

Bloomberg reported that the Chamber of Mines of South Africa will start talks about a national two year wage deal once it receives filings from all worker organizations.

Mr Elize Strydom the chamber’s industrial relations adviser said that a date will be set for talks once the chamber, which represents companies including Anglo American Plc, BHP Billiton Limited and Xstrata Plc, gets outstanding submissions from unions.

Mr Strydom said that South Africa is the world’s third largest gold producer and the biggest coal supplier for European power plants. About 160,000 gold miners and 30,000 coal workers will be affected by the talks. Mr Strydom said that the chamber will approach the process mindful of the challenges faced by the industry, with sustainability playing an important role in informing the decisions we are likely to take.”

The National Union of Mineworkers said that it’s seeking a 15% pay increase from gold and coal producers.

Read more here

Convertibles Re-Emerge

April has been a sweet month for European convertible bond deals. Some $3.21 billion has been raised, snapping a seven-month drought, according to data provider Dealogic, amid a number of positive signs for European share sales.

Bankers predict convertible issuance will remain lively for the rest of the quarter as long as stock markets remain relatively stable.

Convertible bonds, which let investors convert debt into shares, are attractive for issuers because it is a cheaper way to raise debt than by issuing a traditional bond. But issuance dried up after hedge funds dumped existing convertible bonds to offset losses elsewhere and raise cash to meet redemptions, sending prices tumbling.

The biggest convertible bond this month has been the $1.7 billion offering by U.K.-listed miner Anglo American PLC on April 16, managed by Goldman Sachs Group Inc. and Morgan Stanley. Other recent issuers include steel maker Arcelor Mittal SA, consultancy Capgemini SA and property company Unibail-Rodamco SA.

Several signs point to greater stability in European stock markets. That could mean that convertible bonds will account for a substantial portion of the activity in Europe's equity-capital markets this quarter.

One positive has been the opportunities for placing large blocks of stock. J.P. Morgan Cazenove sold shares in U.K. retailer J Sainsbury PLC worth £90 million ($132.5 million) this month for administrators of Icelandic bank Kaupthing Bank hf. It also completed a £68 million share sale by Dutch electronics group Philips Electronics NV of a 17% stake in Pace, which makes set-top boxes for televisions.

"The first trade was to offload a block of equity for an administrator, while the second was a disposal off the back of a stock price rally," said Laurence Hollingworth, co-head of capital markets at J.P. Morgan Cazenove. "The fact that it was possible to execute trades in these different situations is a positive sign for the market."

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Anglo American, don’t mine near Bristol Bay

The London-based mining company Anglo American has recently invested in a proposed open-pit mine known as the Pebble project in the watershed of Bristol Bay. Through its Pebble Limited Partnership with Canada-based Northern Dynasty Minerals, Anglo is preparing to apply for state and federal permits to proceed.

Our delegation, representing Alaska Natives and the people of Bristol Bay, has journeyed to London to meet with Anglo American executives and shareholders and express our very deep concerns with, and our steadfast opposition to, the proposed Pebble mine, which if built, would ruin our watershed.

Over thousands of years, Alaska Native peoples have relied on the land that now includes the Pebble mining district. It has sustained our culture and lifestyle for countless generations and must for years to come. The rivers and creeks that feed into Bristol Bay from the mining area help produce the largest wild commercial sockeye salmon fishery on Earth. This sustainable and renewable resource is vitally important to our local economy and subsistence livelihoods.

Indeed, part of the income derived from the annual sockeye harvest ultimately comes from the United Kingdom. Most of the canned sockeye salmon consumed in the U.K. is caught in Bristol Bay. The proposed Pebble mine will certainly damage and permanently harm this treasure. As fishing families and as stewards for future generations, we cannot allow this to happen.

The Pebble Limited Partnership proposes holding billons of tons of mine waste behind massive earthen dams in one of the most seismically active areas on the planet. We know this as we have personally witnessed earthquakes, volcanic eruptions and violent storms here. We believe that there is simply no way the partnership can guarantee those structures would remain intact forever. Even if it could, the watersheds that support our fisheries, and thus our peoples’ culture and way of life would certainly be damaged from other mining activities. Please keep in mind the unique wet and cold environment and the sensitive habitat that this area provides for fish and other animals on which we subsist.

Read more here

Anglo says commodity prices stabilising, Rio sees Chinese steel rise in second half, De Beers sees diamond improvement signs

The prices of most commodities appear to have stabilised, says Anglo American CEO Cynthia Carroll. Read on page 5 of this edition of Mining Weekly of the copper price increasing by more than 50% off its December low, platinum going above $1 200/oz from its sub-$800/oz October lows, nickel going to $12 000/t and zinc to $1 455/t.

Anglo expects the economic recovery of the industrialised countries and the ongoing industrialisation of the major developing countries to drive long-term demand for commodities, stimulated by government spending programmes in many major economies, including the US and China. The company says that commodities supply is likely to be hit later by the lack of new projects coming through.

Rio Tinto sees Chinese demand for steel recovering in the second half of 2009. Rio CE Tom Albanese is keeping his global iron-ore guidance for 2009 at 200-million tons. He has also kept Rio’s iron-ore production in Q1 2009 at the level of Q4 2008. Also, Rio’s net debt position is stable and Anglo says it is able to manage sustainably with an ongoing net debt of $11-billion.

Read more here

Long Term Incentive Plan

News Type : Official Announcement

Anglo - Long Term Incentive Plan

The company announces that share awards granted under the LTIP in 2006 vested on 20 April 2009. These shares will be transferred to the undernoted directors / PDMRs subject to the deduction of ordinary shares to meet appropriate income tax and national insurance liabilities. Following those deductions, the net increases in share interests are:
R Medori - (Director) - 13 706 shares
P M Baum - (PDMR) - 3 951 shares
B R Beamish - (PDMR) - 3 687 shares
R J King - (PDMR) - 8 972 shares
The notification of these transactions is to satisfy the company's obligations under the Financial services authority disclosure rules 3.1.2 to 3.1.4.

Gold rises most in a month as equities fall

Gold rose the most in a month as a slide in European and US equities boosted demand for precious metals as a store of value. Silver also climbed.

Europe’s Dow Jones Stoxx 600 Index sank as much as 3.9% on prospects for lower profits from metals producers BHP Billiton and Anglo American. Analysts estimate earnings at companies in the Standard & Poor’s 500 Index fell for the seventh-straight quarter through March. Some investors buy gold as an alternative to holding company shares.

"Gold prices today are firmer as European equity markets and US equity futures are in negative territory,” said Bayram Dincer, a Dresdner Bank commodity analyst in Zurich. "Gold’s short-term direction is determined by equities."

Gold futures for June delivery jumped $US19.60, or 2.3%, to $US887.50 an ounce on the Comex division of the New York Mercantile Exchange. That’s the biggest gain since March 19.

Gold may "very likely" rise to as high as $US890 an ounce this week, Dincer said. "Today’s gold price is even more impressive as the US dollar rises."

The US Dollar Index, a six-currency gauge that includes the euro and yen, climbed as much as 1% to 86.871 and has risen for five straight sessions. The index has gained 6.5% this year.

Silver futures for May delivery jumped 31.5 cents, or 2.7%, to $US12.105 an ounce on Comex. The price still has tumbled 32% in the past year.

"Gold will continue to trade inversely to equities," said Tom Pawlicki, a metals analyst at MF Global in Chicago. "A long-term bottom has been made in equities, and therefore, a long-term top has been made in gold. If the equity correction lasts for a couple weeks, it could push gold up to around $US915 and $US930 an ounce, but not much higher."

Last week, the yellow metal slid 1.7%, the fourth- straight drop and the longest stretch of weekly losses since August. The most-active contract still is down 3 percent in the past year and 4.1% this month.

Read more here

European Shares Slip Sharply, Led By Banks on BoA at Close

(Reuters) - European shares closed sharply lower on Monday, with banks taking most points off the index as investors gave the thumbs down to Bank of America results marked by an increase in troubled loans.

The FTSEurofirst 300 index of top European shares closed 3.5 percent lower at 786.12 points, the biggest daily percentage drop since March 30. The index has fallen 5.5 percent so far this year, but is up nearly 22 percent since reaching a record low on March 9.

"This (the slump) is just a logical consequence of what happened over the last six weeks, in which the market has constantly gained," said Philippe Gijsels, senior equity strategist at Fortis.

"This could be the end of the bear market rally," he added.

Banks took the most points off the index, with BNP Paribas, Deutsche Bank and Barclays all down between 6.6 and 8.6 percent.

The DJ STOXX Banks Index was down 5.5 percent.

Bank of America Corp said on Monday its acquisition of Merrill Lynch & Co helped quarterly profit but results included a big increase in troubled loans, sending the company's shares tumbling.

Insurers also fell with Allianz, Aviva, AXA and Prudential down between 4.3 and 8.4 percent.

Across Europe the FTSE index was down 2.5 percent, Germany's DAX was down 4.1 percent and France's CAC fell 4 percent.

"It's been quite a good bounce from the lows," said Philip Lawlor, strategist at Nomura in London.

"A bit of a pullback on a given day isn't a big surprise," he said. "You can't expect the market to go on gaining at that (26 percent) rate. But people still sense there is a bottoming out process in the economic indicators."

Mining stocks slumped, as copper fell 4.3 percent, with Anglo American, Antofagasta and BHP Billiton down between 4.3 and 6.4 percent.

Read more here

increase of convertible bond offering

News Type : Official Announcement

Anglo -- increase of convertible bond offering

Anglo announced the full exercise of the over- allotment option (greenshoe) by Goldman Sachs International and Morgan Stanley & Co International plc, on behalf of the managers (as defined below), following the successful offering of its convertible bonds (the "bonds") on 16 April 2009, increasing the overall size of the offering to USD1.7 billion.

Goldman Sachs International, acting as stabilising manager, has informed Anglo that it has not to date carried out any stabilisation activities.

Application will be made to the Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "UKLA") for the bonds to be admitted to the Official List of the UKLA and to be admitted to trading on the London Stock Exchange's Professional Securities Market. Listing particulars will be prepared in connection with the listing of the bonds.

voting results

News Type : Official Announcement

Anglo - voting results

Anglo American plc announces that all resolutions were passed by the requisite majorities at the company's annual general meeting held at The Royal Society at 11.00am on Wednesday 15 April 2009. In line with recommended practice, a poll was conducted on each resolution at the meeting. Electoral Reform Services acted as independent assessors and the result of the polls was as follows. This announcement will be available for viewing on the company's website, www.angloamerican.co.uk, along with a transcript of the annual general meeting,

Anglo gets downgrading

News Type : Media Comment

Anglo gets downgrading

Business Report noted that rating agency DBRS has downgraded the long- and short-term ratings of Anglo. DBRS' reasons were deteriorating commodity prices and higher leverage as a result of acquisitions and robust capital spending.

Anglo eases debt burden

Anglo American, which said its $11bn debt load is "sustainable", has issued convertible bonds to raise between $1.5bn and $1.7bn for general corporate purposes. These will include refinancing borrowings in 2009 and 2010.

Anglo in April issued a $2bn bond in the United States, which was massively oversubscribed and could have prompted the diversified group to issue this second bond, which will mature in 2014.

The $2bn bond issue attracted $7bn worth of demand. It appears Anglo is striking while the iron is hot to raise more capital in the bond market.

"Bear in mind there was a very positive response to that earlier issue, I suppose they're linked in so much as we were aware there was a strong appetite for bonds in the market," said Anglo spokesperson James Wyatt-Tilby.

The $1.5bn convertible bond placed with investors outside the United States could increase to $1.7bn by the end of April if the full over-allotment option is exercised by the joint bookrunners, Goldman Sachs and Morgan Stanley & Co International.

Read more here

places USD1.5 billion convertible bond

News Type : Official Announcement

Anglo - places USD1.5 billion convertible bond

Anglo American plc is pleased to announce the successful placement of its offering of USd1.5 billion principal amount of Convertible bonds due 2014, announced earlier. The proceeds of the offering will be used for general corporate purposes. Under the terms of the offering, there will be a 90-day lock-up period on issuances or sales of shares or equity-linked securities by the company, subject to certain customary exceptions. The principal amount of the bonds is USD1.5 billion.

The offering may be further increased to a maximum of USD1.7 billion if the over-allotment option granted to the Joint bookrunners is exercised in full and by 30 April at the latest. The bonds will be convertible into new ordinary shares of Anglo American plc and will have a coupon of 4% per annum, payable in two semi-annual instalments, and a conversion price of GBP18.6370. The bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or cancelled, will mature on the fifth anniversary of the issue of the Bonds in 2014. The company will have the option to call the bonds after the first three years should the price of the shares exceed 130% of the then prevailing conversion price over a specified period. Settlement and delivery of the bonds is expected to take place on 7 May 2009.

launch of USD1.5 billion convertible bond

News Type : Official Announcement

Anglo -- launch of USD1.5 billion convertible bond

Anglo (the "company" or the "Issuer") announced that it intends to make an offering of USD1.5 billion principal amount of convertible bonds ("bonds") due 2014 (the "Offering") in order to further strengthen its balance sheet, diversify its sources of funding and lengthen its debt maturity profile. The proceeds of the offering will be used for general corporate purposes. Under the terms of the offering, there will be a 90-day lock-up period on issuances or sales of shares or equity-linked securities by the company, subject to certain customary exceptions.

The aggregate principal amount of the issue is USD1.5 billion which may be increased to USD1.7 billion in the event the over-allotment option granted to the joint bookrunners is exercised in full. The bonds will be convertible into new ordinary shares of Anglo ("shares") and are expected to have a semi-annual coupon in the range of 4.25-4.75% per annum and an expected initial conversion price at a premium of 30-35% above the weighted average price of the Shares during the course of Thursday, 16 April 2009, up to the time of pricing. The bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or cancelled, will mature on the fifth anniversary of the issue of the bonds in 2014. The company will have the option to call the bonds after the first three years, should the price of the shares exceed 130% of the then prevailing conversion price over a specified period. The final terms of the bonds are expected to be announced on Thursday, 16 April 2009. The bonds are being offered only to qualified investors within the meaning of Directive 2003/71/EC of the European Parliament and the Council of November 4th, 2003, in accordance with the respective regulations of each country in which the bonds are offered. The bonds are not being offered or sold in the United States of America or to, or for the account or benefit of, US persons. Settlement and delivery of the bonds is expected to take place no later than 7 May 2009.

Application will be made to the London Stock Exchange plc (the "London Stock Exchange") for the bonds to be listed on the official list of the London Stock Exchange and to be admitted to trading on the London Stock Exchange's Professional Securities Market. Listing particulars will be prepared in connection with the listing of the bonds.

Anglo's $11bn debt 'sustainable'

Anglo American believes its debt of $11bn is sustainable. It has sold a number of assets, issued a bond and raised debt towards reducing it and funding its projects, executives said at the group's annual general meeting.

Anglo CEO Cynthia Carroll sounded an upbeat note about the commodities market, saying prices appeared to have stabilised recently.

"Indeed, there are even signs of some improvement, most notably in the copper price that has increased by more than 50% from its low point reached in December," she said.

"Looking forward, we are confident that the medium- to long-term fundamentals are firmly in place for strong commodity demand growth," she said.

The massive fiscal packages to stimulate the economies of China and the United States among others as well as delays to other firms' greenfield mining projects fed into Anglo's view of the future commodity market.

Anglo has slowed expenditure on its development projects, but is continuing work on them so it will be ready to take advantage of an upturn in the commodity cycle.

The end of 2011 and 2012 is an important time for Anglo, with its three big projects - the iron ore and nickel projects in Brazil and its copper venture in Chile - all coming into production or reaching expanded output levels.

The diversified mining group's chairperson Mark Moody-Stuart, who said his replacement would be sought during the coming year, told investors that the controversial Pebble copper and gold project in Alaska will not go ahead if it damages the environment.

Read more at Fin24

General text amendment

News Type : Official Announcement

Anglo - general text amendment

The following amendment has been made to the `Issue of USD Senior Notes due 2014/2019' announcement released on 9 April 2009 at 16.46 under RNS No 4717Q.
"USD1 250 000 9.375% Senior Notes due 2014" has been changed to
"USD1 250 000 000 9.375% Senior Notes due 2014."
All other details remain unchanged.
The full amended text is shown below:
Pursuant to DTR 6.1.11, Anglo American plc announces that the USD notes issued by Anglo American Capital plc guaranteed by Anglo American plc listed below were issued on 8 April 2009 and have been admitted to listing on the official List of the U.K. listing authority and to trading on the London Stock Exchange, a regulated market:
USD1 250 000 000 9.375% Senior Notes due 2014
USD750 000 000 9.375% Senior Notes due 2019
The notes were sold in the United States to qualified institutional buyers under rule 144A of the US Securities Act of 1933, as amended, and outside the United States to non-US persons in reliance on regulations of the Securities Act. The notes listed above have not been, and will not be, registered under the Securities Act, or under the securities legislation of any state of the United States, and may not be offered or sold in the United States, other than pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

Issue of debt

News Type : Official Announcement

Anglo - issue of debt

Anglo American plc announces that the USD notes issued by Anglo American Capital plc guaranteed by Anglo American plc listed below were issued on 8 April 2009 and have been admitted to listing on the official list of the U.K. listing authority and to trading on the london stock.
Exchange, a regulated market:
USD1.250.000 9.375% Senior notes due 2014
USD750.000.000 9.375% Senior notes due 2019
The notes were sold in the United States to qualified institutional buyers under rule 144A of the US Securities Act of 1933, as amended, and outside the United States to non-US persons in reliance on regulations of the securities act. The notes listed above have not been, and will not be, registered under the securities act, or under the securities legislation of any state of the United States, and may not be offered or sold in the United States, other than pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.