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6 E&MJ; • DECEMBER 2015 www.e-mj.com NEWS-LEADING DEVELOPMENTS repowered key assets at lower energy prices, built-up a profitable value-added casthouse network, established the foun- dation for a strong commercial bauxite business, and made substantial produc- tivity improvements. ÒIn the face of continued adverse mar- ket forces, we are once again not standing still. These difficult but necessary measures will further strengthen our upstream port- folio, reducing our cost position and driving greater resilience as we prepare to launch this business as a strong standalone com- pany in the second half of 2016.Ó Cliffs Suspends Production at Two Minnesota Operations Cliffs Natural Resources announced in mid-November it would temporarily sus- pend iron ore pellet production at its Northshore Mining operation in northern Minnesota by December 1. The company previously suspended production at its United Taconite operation, also in northern Minnesota, in August. The Northshore announcement stated that until the blast furnace capacity utilization rates of CliffsÕ U.S. customers improve, the company will satisfy customer demand from current pel- let inventory. Cliffs anticipates that the Northshore and United Taconite operations will remain idle through the first quarter of 2016. Cliffs will continue to operate Hibbing Taconite in Minnesota and the Tilden and Empire mines in Michigan at normal rates. The company expects to continue to assess and adjust its production based on market conditions. Cliffs President and CEO Lourenco Goncalves stated, ÒThe historic high ton- nage of foreign steel dumped into the U.S. continues to negatively impact the steel production levels of our domestic cus- tomers. As our pellet inventory at both Northshore and United Taconite is ade- quate to meet current customer demand, we will be able to optimize our working capital and cash flow by temporarily idling this production. ÒOur pellet inventory is currently at a seasonally historic high level. As a result, we are taking this action to work off pellet inventory pending receipt of our customersÕ tonnage requirements for 2016, which have not been finalized. The resolution of the trade cases currently filed by the domestic steelmakers against several countries and covering a broad range of steel products should bring a positive impact to the domestic market sometime during the first half of 2016. ÒAs soon as the unfairly traded steel problem subsides and domestic steel pro- duction recovers to normal levels, we will be able to immediately ramp up iron ore pellet production by bringing idled capaci- ty back to operation.Ó Northshore Mining has a current rated capacity of 6 million long tons (lt/y) of magnetite pellets; 2014 production totaled 5.2 million lt. United Taconite has current rated capacity of 5.4 million lt/y of mag- netite pellets; 2014 production totaled 4.9 million lt. Cliffs U.S. iron ore operations produced 15 million lt of product in the nine months ended September 30. Barrick Sells Nevada Assets Barrick Gold reached an agreement to sell a number of Ònoncore assetsÓ in Nevada for $720 million in cash, including the Bald Mountain mine, the Ruby Hill mine, its 50% interest in the Round Mountain mine and the companyÕs 70% interest in the Spring Valley project. Including these transactions, Barrick has announced asset sales, joint ventures and partnerships worth $3.2 billion since the start of 2015. The company said it remains on track to meet its debt reduction target of $3 billion for 2015, which would represent a 23% reduction in total debt. ÒThe sale of these assets is consistent with our strategy to create long-term value for our shareholders by strengthening the balance sheet and further focusing our portfolio on core mines that will drive free cash flow growth,Ó said Barrick President Kelvin Dushnisky. ÒAs we move into 2016 and beyond, we will continue to take steps to strengthen our balance sheet, but we will balance debt repayments with invest- ments to drive future growth in free cash flow and [earnings].Ó Kinross Gold will acquire BarrickÕs interest in Round Mountain and the Bald Mountain mine. The two companies have also agreed to form an exploration joint venture that will own a large land package on the Bald Mountain property. Both will fund exploration activities and advance new mine development opportunities on a 50:50 basis, with Kinross acting as the operator. The consideration for these assets is $610 million in cash. Waterton Precious Metals Fund II Cayman LP will buy BarrickÕs interest in the Spring Valley project and the Ruby Hill mine for $110 million in cash. The trans- action with Waterton is expected to be completed by the end of 2015. The trans- action with Kinross is expected to be com- pleted by mid-January 2016. KinrossÕ President and CEO Paul Rollinson said Bald Mountain, an open-pit, run-of-mine, heap-leach gold mine, is a low-cost producer with a large estimated mineral resource base. The operation is expected to benefit from significant capital investments in equipment, infrastructure, stripping and drilling over the past five years. The mine is expected to have a pro- duction range of 175,000Ð300,000 oz/y of gold (equivalent) with an all-in sustaining cost (AISC) range of $700-$1,130/oz Au eq. over the three-year period from 2016 through 2018. Bald Mountain had proven and probable gold reserves of 1.36 million oz based on 60 million metric tons (mt) at 0.70 g/mt and additional measured and indicated gold resources of 4.16 million oz based on 207 million mt at 0.63 g/mt. Located along the southern extension of the prolific Carlin trend, the Bald Mountain property is the largest mine site by area in the United States, and has numerous brownfield and greenfield exploration tar- gets. It stretches approximately 40 km north to south and 15 km east to west. Kinross already owned the other 50% of Round Mountain, which uses conven- tional open-pit mining methods and recov- ers gold using four independent processing operations including crushed ore leaching, run-of-mine ore leaching, milling and a gravity concentration circuit. In Q3 2015, Round Mountain became KinrossÕ third-lowest cost operation, achieving its highest production in six years and lowest cost of sales per ounce in three years. Going forward, Kinross expects to realize continued benefits from leach-pad operations, pumping and piping infrastruc- ture optimization, gold recovery timing, and in leaching previously under-leached areas of the leach pads. Round Mountain (on a 100% basis) is expected to have an annu- al production range of 340,000-430,000 Au eq. oz. with an AISC range of $850- $1,000/oz over the three-year period from 2016 through 2018. In December, Kinross intends to begin a scoping study on a potential expansion at Round Mountain known as Phase W. A large zone of known mineralization exists at depth and to the west of the main Round Mountain pit. The study is expected to be completed in Q2 2016.