Good afternoon
a tax-cut , especially for corporates, in the US seems to be a pretty sure call now...whatever we think about this, it should be good for growth in the US. Counterbalancing this to some degree, are the news regarding Russian contacts of Flynn etc , putting severe pressure on Trump.
A BREXIT-deal seems much closer - relieve for many.
Factory Ordres and Durable Goods Orders in the States fell, but much less than expected.
Metals ended Friday very strong, and are largely unchanged today so far - gold has come under a bit of pressure. The current goldi-locks economy can´t be positive for gold!
Graphite stocks and especially Syrah got a boost today from Syrah´s announcement of a new off-take agreement for it´s graphite, 20.000t, with a large Chinese company. That´s about 12-15% of their production next year. Not sure, how much is left - but I think they might be close to being sold out for next year, with more off-take agreements under negotiation.
Foran Mining - finally, somebody has discovered, that this thing is very very cheap! Glencore have entered into a Technical Services Agreement with the company, Glencore will do a 60-day, comprehensive review of the project as basis for a feasibility study. An infill drilling program will be required, to be jointly designed. Glencore would then be responsible for all engineering- and technical aspects of the feasibility study. Glencore will also assist Foran with the procurement of project finance. Once feasibility study and financing are done, Glencore will get the off-take agreement.
Foran notes the results of the old PEA, which arrived at a NPV7 of 382 Mill CAN$, at prices for zinc of 1.06 ( vs 1,48$ today ) and copper at 3$. The Canadian $ is also substantially lower than today, implying an NPV7 north of 500 millCan$.
There are a few if´s and when´s open here - but this is very substantial announcement on the way to developement, with substantial involvement from Glencore, which would not put it´s name to it, if they would not like it, and if they had not done a lot of due diligence already. This should make Foran fly, I hope! I guess we will hear a bit more detail soon. The next thing will probably be drilling results.
Genex - announced today, that they are in commercial production, and first revenue is flowing from their Stage 1 solar project. This project is being valued at at least half the share price, but obviously, the real value-add will be in the Hydro Project, and the Stage 3 solar project, which is 4x the size of Stage 1. In any case - for a young company, it´s very important to deliver their first project in time and on budget!!
Strike Energy - and another one of my large holdings, which finally gets some recognition: They announced a firm contract with blue chip drilling and services company, Halliburton, to run with the Jaws project, According to Strike, Halliburton has substantial experience with US onshore directional drilling and advanced simulation systems - this is what STX need. Strike expects to be able to announce commercial success , and to potentially convert resources to reserves by drilling Jaws 1. A very slight disappointment for me is the start of drilling on the 14th of February - I had expected rather End January. I hope and believe, that out patience and suppport over the last few years will work out late in the 1st Quarter cy 2019!!
Sheffield - has started early works on it´s mineral sands project in Western Australia. I guess they will wait until 8th of December, which should see a final result of court proceedings by some "dissident" aboriginal, which I expect with high certainty to be in favour of SFX ( after having won in the first two instances! ). In my opinion, this will remove the last bit of uncertainty on their way to development!
Mineral Resources - the smart boys take some money off the table, when things are great! That´s what management have done - MD Chris Ellison sold 37 Mill$ worth of stock ( to keep 400 Mill! ) and Chairman Peter Wade is selling 4 Mill$ worth of stock, to keep 6 mill$ worth. The stock is up about 6-fold since early 2016 - I have no problem with their selling, but the market certainly never likes this kind of thing....stock was down 80ct to 18.77 A$ today. While there are lots of positive voices out there for lithium, you never know, and I would have done the same probably some time ago.
Piedmont - released another round of good drilling results on their US-exploration asset for lthium. This looks pretty certain now to have a sizeable resource. More results are coming. Probably the market would place a premium to this resource, as US-investors always prefer the assets to be in the States. Given recent experience in Indonesia etc, I can certainly understand them ! And Piedmont is very close to existing mines, which might not want to see any competition.
Galaxy - announced a large resource increase for their Quebec-based lithium project. This thing is a while away from a reserve, and a bankable feasibility study + mining permits etc - but it shows us a again, that we should not get too carried away with lithium, as there is a lot of it around!
Have a nice evening
WS