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CVS closes in on deal to buy health insurer Aetna: source

(Reuters) – CVS Health Corp (CVS.N) is moving closer to a more than $66 billion cash and stock deal to buy health insurer Aetna Inc (AET.N) that could be announced as early as Monday, a source familiar with the matter said on Thursday.

The companies are in advanced stages of negotiating a deal that would value Aetna at between $200 and $205 per share and would be comprised mainly of cash, according to a Wall Street Journal report.

Shares of both companies rose on the news, with the enhanced cash component viewed as a positive surprise. CVS shares were up 3.9 percent and Aetna gained 1.3 percent.

Jeff Jonas, portfolio manager for Gabelli Funds, said the reported price was a bit less than he had expected.

“The bigger deal is if they’re going to be paying mostly cash it would be much more accretive to CVS,” he said.

“Initially I’d been thinking anywhere from a third to a half in stock and it’s a pretty depressed stock price. This is actually much more positive than I thought,” added Jonas, whose fund holds both stocks.

Sources told Reuters earlier this month that the deal would value the company at more than $200 per share.

The deal would combine CVS, one of the largest U.S. pharmacy benefits managers (PBMs) and drugstore chains, with Aetna, one of the oldest health insurers, whose far-reaching business ranges from employer healthcare to government plans nationwide.

Healthcare consolidation has been a popular route for insurers and pharmacies, under pressure from the government and large corporations to lower soaring medical costs.

PBMs negotiate drug benefits for health insurance plans and employers, and have in recent years taken an increasingly aggressive stance in price negotiations with drugmakers.

They often extract discounts and after-market rebates from drugmakers in exchange for including their medicines in PBM preferred formularies with low co-payments.

A tie-up with Aetna could give CVS more leverage in its price negotiations with drug makers.

Additional reporting by Bill Berkrot in New York and Ankur Banerjee in Bengaluru; Editing by Marguerita Choy and Meredith Mazzilli

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/9o3xXNudjwM/cvs-closes-in-on-deal-to-buy-health-insurer-aetna-source-idUSKBN1DU28V

Goldman eschews bitcoin but wants to help clients crypto-trade

NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N) is trying to figure out how to cater to investors who want to trade bitcoin even though the digital currency remains too volatile for the Wall Street bank to trade itself, according to comments by a representative and its chief executive officer on Thursday.

At an event, CEO Lloyd Blankfein said there was no imminent need for Goldman Sachs to develop a strategy around bitcoin, which rose to an all-time high of $11,395 on Wednesday only to lose one-fifth of its value on Thursday.

“Something that moves up and down 20 percent in a day doesn’t feel like a currency, doesn’t feel like a store of value,” Blankfein said at an event hosted by Bloomberg to promote Goldman’s 10,000 Small Businesses endeavor.

The bank will trade in bitcoin if it becomes more established, trades in a less volatile manner and has more liquidity, he said.

Even so, Goldman has been looking at ways to facilitate bitcoin trades for customers. It is still doing so, spokeswoman Tiffany Galvin told Reuters in a statement.

“In response to client interest in digital currencies, we are exploring how best to serve them in the space,” she said.

Established in 2009 as a digital currency not backed or regulated by governments, bitcoin was mainly supported by technology enthusiasts at first. Its reputation was marred by hacks that lost investors billions of dollars, and by those who allegedly used the currency to mask illicit dealings.

But as its price has soared, traditional investors have entered the market, and major exchanges plan to introduce bitcoin futures contracts. The technology that underpins bitcoin trading, called blockchain, has also become popular among large financial institutions that see it as a mechanism to more cheaply and efficiently handle other transactions.

Prominent Wall Street executives and U.S. officials have been split on whether digital currencies themselves are worth spending time and money on.

JPMorgan Chase Co (JPM.N) CEO Jamie Dimon called bitcoin a “fraud” at a conference in early September, while Morgan Stanley (MS.N) CEO James Gorman characterized it as “more than just a fad” at an event a few weeks later.

Meanwhile, Citigroup Inc (C.N) CEO Michael Corbat predicted governments will issue digital currencies of their own, something a U.S. Federal Reserve official said the central bank is considering at an event on Wednesday. The following day, another Fed official called bitcoin a threat to the financial system.

Reporting by Olivia Oran; Writing by Lauren Tara LaCapra; Editing by Cynthia Osterman

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/bJshyfhwNUo/goldman-eschews-bitcoin-but-wants-to-help-clients-crypto-trade-idUSKBN1DU2O4

Kroger profit improves amid Amazon threat, shares pop

(Reuters) – Kroger Co (KR.N) issued an upbeat holiday forecast and better-than-expected quarterly results, helped by aggressive discounts that lured more shoppers to its supermarkets, and shares soared as much as 13.6 percent.

The results suggest that Kroger is successfully responding to a new wave of competition from traditional rivals like Wal-Mart Stores Inc (WMT.N) and Aldi, as well as new entrants such as Amazon.com/Whole Foods (AMZN.O) and German discounter Lidl.

“Based on the wall of worry over Amazon, Walmart and Aldi, fundamental concerns over Kroger’s competitive position proved to be overblown,” said Pivotal Research Group analyst Ajay Jain. He added that Kroger’s year-over-year earnings in the period improved for the first time in four quarters.

Kroger managed to boost gross margins more than anticipated. It posted more sales of higher-profit, private-label products as it also lowered its overall cost of goods, which took some pain out of its significant price cuts.

After booking its best-ever “Black Friday” results for general merchandise, Kroger now expects fourth-quarter sales at identical stores open at least a year to exceed 1.1 percent.

But the company, which operates some 2,800 U.S. supermarkets under banners including Ralphs, Harris Teeter and Food 4 Less, is not out of the woods yet. It is locked in a brutal grocery price war and a multi-front fight for a “share of the stomach.”

The company launched “Restock Kroger” in October to strengthen its position. Among other things, it has begun levying fines for late supply deliveries, which improves product selection and curbs waste.

Kroger is also expanding online services that include home delivery and “ClickList” curbside pickup.

It expects “Restock Kroger” to generate $400 million in incremental operating profit margin over the three years from 2018 to 2020.

Shares in Cincinnati-based Kroger were up 8.1 percent at $26.37 in early afternoon trading after hitting a session high of $27.70.

But even with Thursday’s gain, the stock remains down more 20 percent this year. It trades at a price-to-earnings ratio of 14.8 percent, compared with 29.2 for Wal-Mart, its chief rival.

Profit rose 1.5 percent to $397 million, or 44 cents per share, for the third quarter ended Nov. 4, and total revenue rose 4.5 percent to $27.75 billion. That topped analysts’ targets of 40 cents per share on sales of $27.46 billion, according to Thomson Reuters I/B/E/S.

Kroger also reaffirmed its 2017 adjusted earnings per share forecast of $2.00 to $2.05, just above analysts’ average target of $1.97 per share.

Editing by Martina D’Couto and G Crosse

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/A92MeRJXZaQ/kroger-profit-improves-amid-amazon-threat-shares-pop-idUSKBN1DU1QW

Dow tops 24,000 as tax bill garners crucial support

(Reuters) – The Dow Jones Industrial Average broke the 24,000 mark for the first time on Thursday and other Wall Street indexes rallied on strong indications that President Donald Trump’s tax-cut plan may get enough support to pass.

Republican U.S. Senator John McCain said he would back the tax bill, adding it would boost the economy and provide tax relief for all Americans.

“McCain was also against the Obamacare legislation revision, and so his change of conviction on this issue represents an important swing vote,” said Mark Grant, managing director and chief strategist at Hilltop Securities.

The blue-chip Dow index has crossed four similar 1,000-point milestones this year on the back of strong corporate earnings, robust economic data and hopes that Trump’s tax plan would make headway.

“The market is beginning to price in a higher certainty of tax reform happening and that is the big driver today,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management in Horsham, Pennsylvania.

The market has priced in only a 20 percent to 40 percent probability of tax cuts, according to UBS strategists.

A reduction in corporate tax rate to 25 percent could boost SP 500 earnings by 6.5 percent, UBS U.S. equity strategist Keith Parker estimated.

At 12:31 p.m. ET (1731 GMT), the Dow Jones Industrial Average .DJI was up 279.87 points, or 1.17 percent, at 24,220.55 and the SP 500 .SPX was up 25.4 points, or 0.97 percent, at 2,651.47.

The Nasdaq Composite .IXIC rose 0.87 percent to 6,883.82, a day after posting its biggest one-day drop in more than three months as investors rotated out of technology stocks.

The SP and the Dow were set to post eight straight months of gains, while the Nasdaq was on track to record five months of rises.

The SP energy index .SPNY rose more than 1.3 percent after OPEC agreed to extend oil production cuts until the end of 2018.

Goldman Sachs (GS.N) jumped 3 percent, while JPMorgan (JPM.N) and Bank of America (BAC.N) rose more than 1.5 percent, tracking higher U.S. treasury yields.

Kroger (KR.N) was the biggest SP gainer, surging about 10 percent after the supermarket chain forecast upbeat same-store sales for the holiday quarter and reported higher-than-expected results.

Data that pointed to sustained increase in underlying price pressures and a drop in first-time applications for unemployment benefits last week also helped sentiment.

Advancing issues outnumbered decliners on the NYSE by 1,916 to 947. On the Nasdaq, 1,686 issues rose and 1,171 fell.

Reporting by Sruthi Shankar and Rama Venkat Raman in Bengaluru; Editing by Sriraj Kalluvila

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8cu7bmaJIFg/dow-tops-24000-as-tax-bill-garners-crucial-support-idUSKBN1DU1P5

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"Dollars make their way to projects that sustainably source material"

This was one of the primary points made by speakers on a Mining Indaba ‘Africa on the edge of new frontier in battery metals’ webcast on Thursday.

With over 60% of cobalt mined in the Democratic Republic of Congo, they said those in the battery supply chain would need to ensure cobalt was sustainably sourced.

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Eurasian Resources Group head of strategic cobalt marketing Tony Southgate said, over the next decade, most cobalt would primarily be mined as a by-product of copper from the DRC, with the 60% ratio likely to increase.

“We have to look at sustainable sourcing concerns. Large miners adhere to highest standards of mining … but there still a sizeable amount of cobalt out of the DRC today that is derived from artisanal mining, and in some cases that involves child labour,” he said.

Southgate, however, said the arrival of automakers in the supply chain had resulted in more scrutiny.

“We welcome the recent scrutiny of the supply chain because we know this material is reaching the cobalt supply chain, battery supply chain, mainly through exports in the form of concentrate and/or hydroxides and once it arrives at refiners it’s indistinguishable from major miners’ material,” he said.

According to Cobalt 27 (CN:KBLT) chairman and Pala Investments managing director Anthony Milewski a “tremendous amount of exploration dollars and also capex” will be directed to copper-cobalt projects over the coming years.

“We’re going to see that dollars make their way to projects that sustainably source material … as demand increases for EVs and has a knock-on effect on cobalt,” Milewski said.

“As projects go online, funding will go to projects where managers can prove the material is ethically sourced.”

Article source: http://www.mining-journal.com/politics/news/1309529/-dollars-projects-sustainably-source-material

WAF hits more gold at Sanbrado

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Article source: http://www.mining-journal.com/feasibility/news/1309523/waf-hits-gold-sanbrado

Record year just the start for Tharisa

Tharisa CEO Phoevos Pouroulis told Mining Journal it had been a pleasing year, with management happy with the operational performance.

The company mined 5 million tonnes of ore during the year, 3.9% up from the previous year, and exceeded the nameplate capacity of its processing plants for the first time.

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This resulted in PGM output rising 8.3% on the year to 143,600 ounces of contained PGMs and 1.3Mt of chrome concentrate, up 7%.

Tharisa saw overall PGM recoveries of 79.7% and 64.1% for chrome.

The PGM output was below the guidance of 147,400oz and it also missed its 80% recovery target, although chrome concentrate production was on point with forecasts.

Pouroulis said the guidance was missed primarily due to the processing of oxidised reef ore, which impacted the smaller 1.2Mt per annum Genesis processing plants, but it had been “nothing technical or untoward in terms of throughput”.

He added that the slightly low feed grade should not be of concern to shareholders, either, as it hadn’t been much below estimates.

Tharisa achieved net profit after tax of US$67.7 million, more than four times higher than $15.8 million the year before, despite a muted PGM basket price and volatile spot chrome concentrate prices.

The improved earnings led to the board proposing a “handsome” dividend to shareholders of $0.05 per share, up from $0.01 in 2016 and equating to 19.2% of its consolidated net profit after tax (NPAT).

It is Tharisa’s policy to pay at least 10% of its consolidated NPAT as a dividend, although this will change to at least 15% in the 2018 fiscal year and it also aims to introduce an interim dividend payment.

We would like to expand our logistics platform and our marketing trading platform and hopefully we’ll be able to conclude a number of those transactions over the course of the next year or two

During the financial year, Tharisa acquired a drilling sub-contractor’s business to start in-sourcing drilling operations and focusing on improving run-of-mine grades and fragmentation.

Pouroulis said the acquisition was a natural progression and the company now has adequate equipment, including 19 drill rigs.

It also entered into an operating, sales and marketing agreement with Lonmin to take over operations of its K3 UG2 chrome concentrator plant, with 20,000t of chrome concentrate produced during September.

“Lonmin has been a very nice transaction. We took operational control of the processing plant and have been operating it since September, which means only one month is included in the results, but it’s going very well. Efficiencies are improving and, in terms of productivity, it’s been very pleasing,” he said.

Looking to the 2018 fiscal year, CFO Mike Jones said Tharisa had commissioned a new flotation plant that should allow for improvements, with guidance set at 150,000oz of PGMs and 1.4Mt of chrome concentrates.

Pouroulis said the company’s ‘Vision 2020’ plan implied production volumes would keep improving. Through the plan, Tharisa is looking to increase its throughput volumes to 5.9Mt and upgrade the PGM flotation plant.

It is also looking to develop two distinct processing plants, the UGI plant and the Vulcan plant.  

Volumes are expected to increase to 200,000oz of PGMs and 2Mt of chrome by 2020.

“In terms of other initiatives, we have those expansion plans, we’re looking at opportunities in various jurisdictions in South Africa, abroad and to diversify commodities”, Pouroulis said.

“We are looking at expansion and growth as per our expansion strategy. We would like to expand our logistics platform and our marketing trading platform and hopefully we’ll be able to conclude a number of those transactions over the course of the next year or two.”

He was also optimistic about the platinum price, noting levels had been depressed on the back of the 2016 diesel scandal, but there was a case for some future upside due to widening supply deficits.

“The basket price has been supported by higher palladium prices and rhodium prices as well,” Pouroulis said.

Article source: http://www.mining-journal.com/pgms/news/1309522/record-start-tharisa

Dialog shares tank on report Apple to design own power chips

FRANKFURT (Reuters) – Apple is designing its own power-management chips for use in iPhones as early as 2018, the Nikkei business daily reported on Thursday, triggering a more than 20 percent slide in shares of supplier Dialog Semiconductor.

If confirmed, the move would reduce Apple’s dependence on the Anglo-German chipmaker, which itself is heavily reliant on the smartphone industry and has been trying to diversify its customer base.

By 1526 GMT Dialog shares were still down a shade more than 19 percent at 30 euros.

Investors are particularly jittery after Apple said in April that it planned to replace graphics chip supplier Imagination Technologies, sending the London-listed stock down 70 percent in a single session. Imagination was subsequently sold off in two separate deals.

In the past dozen years U.S. tech giant Apple has dropped several smaller chip suppliers, ultimately forcing them to merge with bigger rivals.

Responding to the Nikkei report, which quoted unnamed sources, a Dialog spokesman said its business situation had not changed.

“The level of visibility into the design cycle of our leading customers remains unchanged and the business relationships are in line with the normal course of business,” the spokesman said.

Apple did not immediately respond to a request for comment.

The sell-off echoed one in April, after Bankhaus Lampe analyst Karsten Iltgen advised investors to sell Dialog shares because Apple was working on its own battery-saving chip to replace Dialog’s power-management integrated circuits, or PMICs.

Asked to comment on the Nikkei report, Iltgen said: ”I don’t know their sources, but our own checks always suggested that this is an ‘open secret’ in the industry.

“Therefore, we are not surprised that finally another source is verifying our thesis. The article is certainly credible, in our view.”

DIALOG‘S LOSS, TSMC‘S GAIN

The Nikkei business daily quoted one source saying iPhone would make about half its own power-management chips, starting next year, with another source saying this could be delayed until 2019. (s.nikkei.com/2Al5nSl)

The Apple-designed chips would be solely manufactured by Taiwan Semiconductor Manufacturing Co (TSMC), according to industry sources cited by the newspaper.

TSMC, the world’s biggest contract chipmaker, has been Apple’s sole supplier of core processor chips for iPhones since 2016 and also makes Dialog’s power-management chips.

Dialog Semiconductor shares have lost 36 percent of their value since the April sell-off, reducing the company’s market capitalization to 2.74 billion euros ($3.27 billion), according to Reuters calculations.

Company management typically does not comment on individual customers and has been guarded in its statements about the likely impact of Apple’s launch of the iPhone X, its tenth anniversary model.

Speaking to investors in mid-November, Chief Executive Jalal Bagherli said Dialog stood to benefit from up to six or seven new growth drivers that represented efforts to diversify but refused to be drawn on any possible Apple boom.

Dialog derives more than half of its revenue from Apple, analysts estimate. Two years ago close to three quarters of its revenue came from being sole supplier of power-management chips for use in Apple devices.

Additional reporting by Eric Auchard and Paul Sandle in London and Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta and David Goodman

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/2_NHvAgySAM/dialog-shares-tank-on-report-apple-to-design-own-power-chips-idUSKBN1DU1T0