Good afternoon
the most important thing first:
Please access the itinery for the AUSTRALIAN RESOURCES CONFERENCE in Zurich on the 3rd of March, this Friday, via following link:
www.schroeder-equities.com/conference/
If you would like to come, and have not let us know, please also use our webpage to register your attendance, which is for free - but we would need to know, because of Lunch attendance.
This is real fun! nothing better than the early stages of a bull gold market (????!!!). A lot of interest for gold stocks in Australia across the board - and unsurprisingly, it´s being used by many companies for equity raisings! Last year, the window of opportunity has been quite short - I hope and believe, that this year will pan out to be more interesting for gold - and not only for financial market erasons, but perhaps also for political reasons??? In my opinion, gold would react strongly to a Trump-election in the States! I am praying, though, that this is not going to happen!
The fact, that nobody has any gold stocks, can most easily be seen in the performance of Newcrest, which has really sky-rocketed and is used by most institutional investors as the proxy. But I think it will not be for long, that the next level, stocks like Evolution, or perhaps Regis, will attract a new round of fresh money, following some consolidation.
Unfortunately, the 1250 US$-level seems to be quite a hurdle for gold - today it´s weaker for a change, trading at 1232 US$, while I am writing. Base metals are looking well supported today, and after some initial strength, oil is trading a touch weaker.
German 10-year bonds hit a high yesterday - they were trading at a yield of 0,1%!!!! So even on that long term basis, we start to hit negative territory! Can´t be bad for gold - but it also tells you something about the economy, and political trouble in Europe.
Ivan Glasenberg is calling the low of the commodity market..he think´s it´s behind us. well - he has got a lot of it, and dearly needs better prices - but his voice does get heard! On that front, Chile produced 13% less copper in january - that´s a big number - but I guess a one-off.
Manufacturing in the States seems to sabilize, according to today´s figures...and as we probably have the Fed as well as the EZB talk about interest rates and measure to keep things going shortly, the recovery is continuing - but I do not think, that the bad news is over. Bond markets tell a different story!
West African Resources - I am very happy to present this small gold developer at our conference on Friday! Small story so far - but with an NPV5% of after tax of 85 Mill A$ at a gold price of 1300 US$. The probable ersource of 440.000 oz as the basis for the mine plan is a little bit light for a planned capex incl working capital and contingency of 46 mill$ is a little light - an additional 100.000 oz would notz only push them over the line, but would also increase NPV by about 40 mill A$. This is nearly double today´s market cap of 21.5 mill A$ as at today - hence the stock is VERY sensitive to exploration success. The company had reported on several good holes this year ( which have not been part of the existing resource ), but todays results of 31m with 17g; 12m at 11g; 24m with 7g; and 4m with 36g were outstanding and will almost certainly increase the mine life. I do like management, and I do like the project - even as it´s a bit small to raise attention. This might well change!
Have a nice evening
WS