Good afternoon
the strong US$ is putting some pressure on commodities today....it´s just about to break through 1.11 against the Euro. Gold is seeing some pressure today, and base metals are victim to some profit-taking after a very strong day yesterday.
That does not prevent all the large mining stocks from trading up so far in London today.
Following a few good economic numbers over the last few days, inevstor confidence jumped strongly in Germany today
Samsung having massive problems with the Galaxy 7....major debacle for them, and a massive boost to Apple!
BHP and Newcrest fighting over Junior company Solgold and it´s copper/gold/zinc asset in Ecuador. It has been a long time, that we have seen something like this before! Another old hand and well-known entrepeneur, Ross Beaty, is just in the process to establish an interesting group, active in Ecuador as well, called Odin Mining. I declare a small interest here.
The World Steel Association is now forecasting a modest increase of steel production this year, vs a previous forecast of a slight slip. We are certainly seeing this in bulk commodities...Nippon Steel just settled for a sensational 200$/t coking coal for the current Quarter, while iron ore edges higehr even to just above 56$/t. Thermal coal is trading around 85$/t....nobody at all would have expected these prices just a few month ago!!!
Prairie Mining - just talking about them yesterday, the stock had a strong run today in Australia, on massive turnover ( best since early 2014 ), and even more turnover in Poland today...more than 4 mill shares traded there by lunch time! The company aquired what they call a strategic asset in Poland, the Debiensko Hard Coking Coal Project. It´s fully permitted with a 50-year mining concession, and has a potential resource of 120-150 millt of hard coking coal, of which Europe is currently importing 80% of it´s needs for the steel industry.. There has been a lot of historical exploration work / drilling been done, but results will need to be reviewed, and confirmed by infill-drilling. The cost of developing it has histrocially been estimated at 830 mill Euro - PDZ believe, that it could be done much cheaper. PDZ has paid 0,7 Mill A$ in cash, and a deferred consideration of 2.2 mill$ in cash to what I understand, is the receiver of New World Resources. Importantly, the project is located imemdiately adjacent to 2 mines run by JSW, which is Polands premier coking coal producer. This stock has gone up 700% since January of this year, and is now capped at 2.5 bill A$ equ....a stunning performance. This spectacular rise, and also the strong rise of Bogdanka in Poland, might explain the strong interest of polish punters in PDZ...as I am writing this, more than 5.5 mill shares PDZ have changed hands in Warsaw, and additional 2.2 mill shares in Germany ( JSW are up by another 11.7% today, on turnover of 40 Mill A$!! )
PDZ now own two large coal projects in Poland, a large thermal coal project, and a potentially large coking coal project...I think the rise today is well warranted...let´s not forget, that it traded up to 60ct as recently as 2014...There might be quite a bit of fun left here!
Last but least, PDZ are well cashed up to drive exploration and studies, with 16 mill$ in the bank as at today. I will certainly hold my shares....we must not forget, that a large cap like S32 is up from 90ct in January, to 2.53 A$ as at today - a market cap of 13 bill A$....Teck have moved from 3$ in Jan to 18$ today...market cap of about 10 bill US...Whitehaven Coal have moved from 35ct in Jan to 2.86$ today, market cap of 3 bill A$... why not see our small babys double or triple!
This market reminds me of 2004-2005, when BHP more than doubled, and the small guys hardly moved - before exploding over the following 3 years. Panoramic for example actually fell over 2005-2005, before rising 10-fold over 2006-2007. We cannot believe today, that something like this can happen again...but in buying stocks like Paringa, Prairie Mining, Panoramic, Foran Mining or Finders, you are not risking that much at today´s prices.
Middle Island Resources - I think they are on their way to a gold mine! Good drilling results from infill- and extension drilling of their Sandstone Project in WA with 5m at 14g; 10m at 4g; 16m at 2.2 g and so on. The independent resource estimate for sandstone is underway, the pre-feasibility study is on track for delivery late this Quarter. The company has also made good progress in defining more drill targets, which will be tested over the coming weeks - especially some diamond drilling to test mineralisation, which delivered 22m with 24g and 8m with 56g in historic drilling. The beauty of MDI is the fact, that they already have a plant, just in need refurbishment for 8-10 mill A$. Sandstone is planned to be back in production in 2017, pending positive outcome of the PFS.
Have a nice evening, and forgive me for agressive writing....but this is the way I am thinking in the moment!
WS
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