Three month copper prices on the London Metal Exchange are now hovering around $5,149 per ton, after hitting a six-year low in August.
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Commodities giant Glencore reported “significant progress” on plans to cut net debt to the low $20bns by the end of 2016 and increased output from its mines generally in line with estimates. For the purposes of this third quarterly dividend, the Company has elected to issue common shares under the DRIP through treasury at a 3% discount to the Average Market Price, as defined in the DRIP.
And the broker still thinks the shares are now worth no more than 93p, a fraction of the 450p valuation promoted by rival researcher Bernstein.
“While the low commodity price environment has had its challenges, it has also created a few great opportunities”, Randy Smallwood, the company’s chief executive officer, said in a release.
“The company has suffered a sharp drop in confidence”, Liam Fitzpatrick, an analyst at Credit Suisse Group AG who has an outperform rating on the stock, wrote in a note to clients.
“This transaction provides nearly immediate production and operating cash-flow from a proven and well-established asset”.
Glencore Plc sold a share of its future silver output from a mine in Peru, in a deal that includes a $900 million upfront payment, as miners seek new funding sources in the worst commodity slump in a generation. The company has a market cap of $7.46 billion and a P/E ratio of 33.72. The company has already issued capital, cut dividends, slashed spending and commenced procedures for selling assets as part of the massive debt restructuring plan.
Still, investors welcomed Glencore’s update and the firm’s share price had surged 5.44 percent to 125.95p as of 08:45 GMT today. The shares have tumbled 58 percent this year, making them the worst performers on the FTSE 100 Index. A written copy of the prospectus included in the registration statement may be obtained by contacting the Corporate Secretary of the Company at 666 Burrard Street, Suite 3150, Park Place, Vancouver, British Columbia, Canada V6C 2X8. Industrial demand is picking up and supplies are likely to come under pressure.
Silver Wheaton is the largest pure precious metals streaming company in the world.
Glencore now expects to reduce copper production by 455,000 tonnes, up from its previous forecast of 400,000 tonnes, by suspending operations at two mines in Africa – Katanga in Democratic Republic of Congo and Mopani in Zambia.
During the third quarter, copper production was actually up 1% on a year ago at 396,600 tonnes, but down 2% for the year-to-date. By 2019, estimated annual attributable production is anticipated to increase significantly to approximately 55 million silver equivalent ounces, including 325,000 ounces of gold.
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Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent nonexecutive director at Glencore.
