Good afternoon
investors are awaiting TRump´s tax plans later today. I guess the seriousness of his proposal will decide on whether the "Trump-trade" will be completely off, or be revived in the weeks ahead.
Gold stocks got hammered last night in the US, and subsequently in Australia today. Stocks gave up 5-10% of their respective market caps today - not much to do with fundamentals, though, as the gold price is just down by 2% from it´s recent closing high, and just 1% from the recent closing high in A$! Risk-Off, following the French election, certainly does not help the sentiment!
Beadell - a bad Quarterly from them today....only 28.500 oz of production in the Quarter, at a very high 1.161 US$/oz AISC. The company has burnt 17 mill A$ in the Quarter, incl exploration and corporate costs, if my calculations are right ( and I think they are! ). This is very rough indeed! The company has left guidance unchanged of 140-1500.000 oz for the full year, as tehy expect a recovery in grades, especially in the second half. And not to forget - this Quarter was a wet season Quarter, so a difficult one. Still, it was disappointing, and does help the company, as teh sharte price will stay under some pressure anyway leading up to the re-weighting of the gold index ETF on 10th of June. More recently, the company had announced a resource increase, which has also been a little disappointing in light of previously released, strong drilling results. This Quarter does not change my cautious approach towards the company!
Breaker - great drilling results again - the company is clearly on it´s way to a gold mine here! BRB is currently infill drilling the relatively wide drill spacing at the 2.2km long Borborema discovery to a 20x40m grid, with a target top release the first resource by the end of the year. The company ahs ample cash with 9.5 mill $ to do so, and has currently 3 drill rigs working. Todays results included 20m with 3,65g / 45m with 1.79g / 3m with 21 g / 7m with 8.6g / etc...so some nice high grade stuff within a lot of low grade results. Corporate costs are staying very low, and hence, of the 1.7 mill$ planned to be spent this Quarter, 1.5 mill will go straight into exploration! At this pace, BRB have nearly 6 Quarters of cash left - certainly enough to announce the first resource within 9 month or so.
Paringa - Commonwealth Bankl, the most prominent, Australian resources investor, have announced a substantial shareholding in PNL today - the second, very large fund after Australian Super, another very large and very long term, Australian fund. Good to have the validation from these guys!
Peak Resources - I could not get hold of the MD this morning - but tehy announced a potentially very significant release today. ERP, a NOrth American investor specialised in buying mining assets out of bancrupcy, are teaming up with Pala Investment from Zug, and Peak Resources to aquire Mountain Pass, the only North American rare earth mine of any substance. The ex General Manage of this mine is now the COO of Peak. This could be a very significant announcement, furtehr establishing Peak as the pre-eminent, Western producer of rare earth. More tomorrow...
Finders - a good Quarterly - well, good under the circumstances. The March Quarter is the wettest Quarter in Wetar, and the company managed to produce EBITDA of 21 Mill US$ from 6.100 t of copper production, vs 7.000t name plate., at cash costs of 1.03 US$/lb.The company had 2.250t of unsold copper ( worth 13 mill US$ ) in inventory at the Quarter end, and total exisiting project debt ( of which 74% belongs to FND ) stands at 81 mill US$. This result has been achieved despite copper grades of 1.47% vs more than 2% so far, as areas of the open pit with lower grade or have been mined. Grade will come back to normal again from late May. The reserve continues to reconcile positively with the feasibility study by +4,7%. Of interest is also, that the SX-WW plant, which is the bottleneck of the operation, exceeded name plate at times by 10%, raising hpes, that it could continuesly do so to end up with total copper procution of more than 30.000t on an annualised basis ( 74% of that belongs to FND ). For a copper producer of 22.000t at cash costs around 1 US$/lb, the stock is cheap indeed, and my target is still in the mid-twenties, up to 50% higher than today!
Have a nice evening
WS