Good afternoon
incredible, how strongly these markets are coming back today!! Metals up by 2-3%, equities 0,5-1%, and European equities strong despite continuing weakness of the US$! It looks like that might continue - at least for the currency, as Europe is doing well, and the US is caught in political turmoil!
Many are watching steel prices in China as a bellweather for economic strength - that´s looking good, and has recovered by more than 10% this week - just 3% under this years highs!
Not to forget, oil prices have recovered very nicely this week. OPEC has done it´s bit...but I think they will also make sure, that the price does not rise too much!
A little surprising perhaps, that gold is so resilient , following it´s recent advance, as "normal" markets are so strong. But the weakness of the US$ is certainly supporting it, as are the charts. It´s currently trading at 1253 US$ and 1682 A$, down just a little from this weeks highs. I am sure, New week - new scandal in Washington - I think we can count on that!!!!
Gold Road - Goldfields preparing a complete move here? They have bought 72 mill shares at 86ct - way above the market - to bring their holding to 10%. As you will remember, they have already secured control over the project previously. There is a stand still agreement between GOR and Goldfields - but that may be broken, if the Gold Road board agrees. At a full bid at 86ct, I think the board would be extremely tempted to agree to a full bid. This leaves a bit of headroom for players - stock is up nicely, but trading at 72ct. I could kick myself, that I have missed this stock. It might not be too late - 20% is nothing bad in these markets!
Certainly, a bid would be great news for the Aussie gold sector, freeing up cash fopr otehr stocks. Dacian in the larger developers, West African Resources in the smalelr ones, and Breaker as an advanced exploration play are coming to mind!
KGL - had their AGM yesterday. Impressive to see teh progress they have made on their copper play right in the middle of the Australian continent...not that easy, given the location, and tehy will clearly have to show a much abover average asset to get it going there - but with relatively little money, they have steadily increased the reserve potential, especially at Rockface. Simon Kidston, who got thrown out a while ago in a very unromantic way, must feel proud, as he started all this. Anyway - not a dirt cheap story, given nearly 70 mill A$ market cap - but the stock is very tioght, and more drilling results should be in train. If I would still own them, I might as well would hold on now to watch, wether they have got something real here, or wether tehy will own one of the many smaller projects waiting for better copper prices. In OZL and SFR, there are two hungry local players, who would snapp it up, if KGL can indicated good chances to become a 30-40.000t producer. Interesting to watch, even though I am not a holder....
Cardinal - one of trader´s darlings - some good drilling results, indicating, that mineralisation extends down to 600m. That´s all fine and good - but I do not think, that grades are sufficient at this stage to go underground. management is doing everything they can to suck their two, corporate holders into a bid. Gold miners just love these continous, flat and low strip-ratio orebodies - but this one has not the easiest metallurgy in town, and extraction should be more costly than for other mines, taking some sex-appeal away. Also, I would not want to be at the mercy of the current management, and I remind you, that the title to the project still is not completed! Too many potential crisises for me - especially, as the MD is one of them!
Have a nice weekend
WS