Equities

US Steel Refutes Cliffs' Claims; PZG Bond Deal; Metals Acquisition Warrant Redemption

U.S. Steel accuses Cleveland-Cliffs of misinformation in $14.1B Nippon deal; Paramount Gold reduces costs with new bond agreement.

By Alex P. Chase

5/21, 17:33 EDT
Alcoa Corporation
Cleveland-Cliffs Inc.
United States Steel Corporation
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Key Takeaway

  • U.S. Steel accuses Cleveland-Cliffs of misinformation to undermine its $14.1 billion takeover by Japan's Nippon Steel, despite shareholder approval.
  • Paramount Gold Nevada's agreement with DOGAMI and BLM aims to reduce capital requirements and streamline mining operations through a single reclamation bond.
  • Metals Acquisition Corp. will redeem all outstanding warrants on June 5, 2024, simplifying its equity base and potentially reducing future dilution for shareholders.

U.S. Steel and Nippon Deal

United States Steel Corp. has accused rival Cleveland-Cliffs Inc. of conducting a “misinformation campaign” to undermine its $14.1 billion takeover by Japan’s Nippon Steel Corp. U.S. Steel's board issued a statement accusing Cliffs of spreading false information to suggest the deal was in jeopardy. Cliffs, which was an unsuccessful bidder for U.S. Steel, has been vocal in its opposition to the deal, with CEO Lourenco Goncalves suggesting he would make a lower offer if the Nippon deal falls through.

“The investment by NSC has been under attack since day one by one of our competitors and unsuccessful bidder – Cleveland-Cliffs – who have been sowing misinformation to our stakeholders in a relentless and unbridled effort to derail the transaction,” U.S. Steel’s board said in an open letter. Cliffs responded by calling the allegations inaccurate and reiterated its belief that the deal would not succeed.

The deal, which was agreed upon in December, has already been approved by U.S. Steel shareholders but faces a U.S. regulatory review. It has also become a political issue, with President Joe Biden stating in March that U.S. Steel should remain American-owned. The United Steelworkers union has also opposed the deal and rebuffed efforts by Nippon Steel to hold discussions.

Paramount Gold Nevada Agreement

Paramount Gold Nevada has entered into a memorandum of understanding with the Oregon Department of Geology and Mineral Industries (DOGAMI) and the Bureau of Land Management (BLM). This agreement aims to reduce capital requirements and administrative burdens by requiring only one reclamation bond.

Paramount’s President Glen Van Treek praised the cooperation between DOGAMI and BLM, noting the benefits for the mine’s development and operation. The memorandum ensures coordinated guidance and monitoring of mining operations on both federal and private lands.

“This agreement is a significant step forward for our project, reducing both costs and administrative hurdles,” said Van Treek. The collaboration is expected to streamline the development process and provide a more efficient path forward for the company’s mining operations.

Metals Acquisition Warrant Redemption

Metals Acquisition Corp. announced it will redeem all outstanding warrants on June 5, 2024, for 10 cents each. Warrant holders have the option to exercise their warrants for cash or on a cashless basis by that date. The “Redemption Fair Market Value” is set at $13.33, granting 0.3063 ordinary shares per warrant for cashless exercises. Notices have been sent to registered warrant holders to inform them of the redemption process.

This move is part of the company’s broader strategy to streamline its capital structure and improve financial flexibility. The redemption is expected to simplify the company’s equity base and potentially reduce future dilution for existing shareholders.

Alcoa and CITIC Group Transaction

Alcoa has announced that to comply with U.S. regulations, CITIC Group will receive approximately 1.5% of its consideration as non-voting preferred stock instead of CHESS Depositary Interests (CDIs). The transaction is expected to be completed in the third quarter of 2024.

This adjustment is part of Alcoa’s efforts to ensure regulatory compliance while completing its transaction with CITIC Group. The company has stated that this change will not affect the overall value of the transaction but is necessary to meet U.S. regulatory requirements.

Management Quotes

  • Glen Van Treek, President of Paramount Gold Nevada:

    "The cooperation between DOGAMI and BLM ensures coordinated guidance and monitoring of mining operations on both federal and private lands."