Good afternoon
base metals, as well as steel and iron ore, continue to trade at very high levels - yet resources-equities are a bit tired! Large caps like BHP, S32, Antofagasta etc are still very well supported - but there is little demand astill for small caps! They need more general confidence to really take off - but this will come with every week the underlying commodities are staying strong!
More investors/analysts are now convinced, that a mixture of supply-discipline, and rising manufacturing in China and the US are now giving us a good base for rising demand for industrial metals in 2017!
coal prices have eased a little, but are still trading at very healthy levels, and substantially higher than anybody would have expected just a few month ago.
I remain convinced, that we are in for a great time in resources - at least for the next year or so.
And equities in general still continue their upeard trend unabated - even the Italian situation cannot hold them back. I think the market might be a little complacent here - 2.200 bill Euro in debt, 360 bill Euro in non-performing loans, and 36% unemployed under 25 years are a hefty mix in Europe´s 3rd largest economy.
The only problem remains with gold - little inclination here for investors to add to positions. It´s interesting, though, that there does not seem to be any big selling pressure in gold stocks anymore. I am also starting to get more positive here, and while I have not added any positions, the relative strength of gold miners is carefully being watched!
Peak Resources - is making progress. They have today announced the planned site for their rare earth plant, in Northern England. Close to infrastructure, close to chemical producers, and in an enviroment, which is strongly supportive of new foreign investment at the time of a looming Brexit...Surprisingly, rare erath prices are still in the doldrums. Over the last few weeks they have advanced a little - but this is rather a stabilisation than a new trend - for now. On the slightly negative side, the feasibility study will take an additional month or two, to incorporate the processing plant in the new location. I am not worried about this at all, as I am used to these things rather taking longer just so often - but it certainly does not help!
Genex Power - have closed their debt-fainancing for the solar plant. Up to 110 Mill A$ for capex, as well as 8.8 Mill A$ as a government grant have been fixed. I guess there will be 10 MillA$ in equity needed, mainly for working capital. This is all excellent news, but lately, it has been expected. I think the market now is expectinmg some kind of a placement, as the hydro-power project is currently valued at just about zero. It remains to be seen, whether teh company will do that, or sell part of the project to an incoming partner - but I doubt the latter. We will find it before Christmas, I guess!
Have a nice evening
WS
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