Good afternoon
sell in May and go away - it looks like not many investors have done that this year, and certainly not in Australia. Cash levels are relatively high and have been for some time- so there is probably enough caution in the market, to prevent too heavy fallouts from all these potential pitfalls in June - especially BREXIT, and a Fed-move.
While Personal Income in the Sates rose, as expected, Personal Spending was very strong - at the same time, the PMI was pretty good, as was Consumer Confidence. So certainly not a good day for those, who are hoping for a FED stand-still.
In Australia, stronger than expected Net Exports inspired a stronger A$ today.
Gold is finding some friends again today - probably reacting to a slightlöy weaker US$, but I feel, that we have some work to do to convince the market, that gold will not dive below 1200 US$ again.
Cardinal Resources- announced some excellent infill drilling today, as tehy are reducing the drill space from 100 x 100m to 50 x 50m. 220 m of mineralized sone is certainly what the market likes - including 59m with 1.42g; 30m with 1.2g; 15 m with 1.7g and 9m with 3.44g. The resource continues to hold all the promises for a large 2-3 mill oz deposit, but I guess we will have to wait for more drilling ( which is fully financed ) and the first resourcee stimate to get a feel for what is possible in terms of size, grade and perhaps also strip ratio. I have little concern for size and strip ratio - but I am not totally convinced about the grade of the deposit. I am holding, but not adding CDV at these levels.
Breaker - managed to raise 2.1 mill$ to finance further exploration, and started to sell some exploration properties, which reduces the holding costs of their large land bank. For, now, all good - knowing Tom sanders, of the 2.1 mill raised, the vast majority will go into drilling...but it´s still a promising exploration play - not more.
Macquarie published a comprehensive document on lithium and related stocks - name by name, the big brokers are now entering the game. But tehy correctly point out, that lithium is in strong demand now and probably will be for years to come, but that there are many lithium deposits out there, and a myriad of projects in the development/planning stadium, which could meet an oversupplied market, once the majority of them will enter it in 2018/2019. So there might be some money in it for now - but you don´t want to be the one holding the baby in the end!
Foran Mining - even though in Canada, a good story, as mentioned before. Stock had a big jump yesterday and got an enquiry - but company had no explanation for the move. They are one of the few with a good zinc deposit, close to infrastructure and especially close to a very hungry smelter. Zinc stocks fell strongly the other day on the LME, and while we all know, that LME-stocks are not the strong indicator they used to be ( because of all the Chinese off-market stocks for lending purposes ), the fall of zinc stocks over the last 18 month or so has been quite astounding. Back in 2006/7, when stocks were at their all time lows, the metal jumped more than 4-fold . I am not expecting this his time - but zinc is certainly the metal with the strongest fundamentals, and hence, I do like companies like FOM or NSU in Canada, and little Heron Resources in Australia. They might not be as hot as lithium stocks, but definitely are much deeper value!! I have small position in FOM, and in HRR.
have a nice evening
WS
Wilhelm Schröder
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