Good afternoon
what an amazing day on Friday...S&P with a new intra-day high, bonds at a new high, gold at a new high....strange world - obviously, liquidity is driving it all!
Coal usage is staging something like a comeback in the States, as high temperatures drive the gas price up and make coal more competitive.
Iron ore and Steel Rebar are holding at good levels ( iron ore still 55 US$ ).....Most analysts are callinmg iron ore lower over the next few month....but tehy would have said the same a few month ago!
Citi, which is one of the top-rated commodity teams in the market, is generally bullish for commodities in 2017.
Gold is under a bit of pressure today, as equity markets are recovering all day, and as metals are also stronger. Nickel is up again, probably speculative interest, based on some comments of the new Enviromental Minister in the Philippines. As reported earlier on, she wants top audit all mining operations - but she has already set the scene on Friday, commenting, that she does not know a single mining operation, which is enviromentally ok. Does sound like the Philippino nickel miners need to take the the gloves off!
Panoramic - announced the planned spin-off of their gold asset, Gidgee - now called Gum Creek Gold. A prospectus is being prepared - IPO is planned for September. The plan is to value the asset at 15 mill A$, and raise 15 Mill in cash from existing shareholders of PAN only. This would leave all the value-add, and the expected re-rating, in the hands of shareholders. I understand, that PAN will hold 50% of the new company - but that remains to be cleared up. If this is the case, it will be a bargain - the NPV of Gum Creek at 1800 A$ and based on the initial 290.000oz of production from oxide material only, should be around 75 mill A$ - leaving all exploration upside ( which is thought to be substantial ), and the remaining 700.000 0z ( most of which is refractory ore ) out of the valuation.
PAN have been complaining for some time, that the gold asset is valued at extremely little as part of PAN - the separate listing should rectify this. More, once more detail is available!
Cardinal - raised 21.7 mill A$ ( total market cap was only 73 Mill A$ so dar, undiluted ) for exploration and development of the existing asset in Ghana.
The placement was something like twice oversubscribed! Shows us, just how much demand there is from institutional investors. Coernerstones are Precious Cap, Zurich, which most of you will know, and Colonial - interesting enough, a general fund of them, not the resources arm.
Have a nice evening
WS
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