Good afternoon
business - as well as consumer confidence sky-high in Germany....The Leading Index in the States up by 0,6% vs 0,5% expected.
Mnichin talking the $ down, Draghi complaining about it! I think the former is begging for a hug from Trump in Davos!
Metals are holding their extraordinary gains from yesterday, as the US$ was very slightly recovering, until Draghi showed himself little concerned about the strong Euro. It´s now making new lows!: Copper stocks are substantially up for a 3rd day in a row - still, the metal is slightly up again. Zinc , lead and nickel making new , recent highs. Nickel especially went on a huge run yesterday, after breaking the 13.000-resistance. Not as strong as that in A$ - but still trading at a 2.5 year high. On the charts, it looks like it could go 15-20% higher over time. Would be nice indeed!
German bonds are yielding the most in 24 month today, 0,61% for the 10-year bond.
Northern Star - their Quarterly today was not all that great...33 mill A$ in free cash generation, production fell for a third Quarter in a row, while ASIC of 1067 A$/oz were ok but not as good as usually. The company claims, that the emphasis has been on growth in the Quarter - well, they will have to improve quite a bit from the last Quarter to make guidance. Bill Beamot has done a great job with the company, has rejuvenated his aquired assets and is pushing them very hard - but I doubt, whether they will get any better than they are today. I have been wrong so far - but I think the the company is fully valued at least. They have more than 400 Mill$ on the balance sheet, and could easily make a full bid for Echo Resources, of which they own 19%. I am not that sure, though, that this would be a good move! The exploration update in February could be quite xciting, giving their almost frentic activity - but the valuation of the stock does need this.
Foran Mining - Glencore has completed the technical revue of the project, and Foran with asistance of Glencore is now moving towards a full feasibility study. They point out, that the NPV7 of the project, based on 1,06$ for zinc ( which is now trading at 1.56 $ ) according to the PEA has been 382 Mill can$! Market cap of Foran, following the placement recently and the strong share price move, is only 65.5 Mill Can$! A lot more fun to come here, I think and certainly hope! Largest shareholder, Pierre Lassonde, whom many will know as co -founder and chairman of Franco Nevada, increased his shareholding at 49ct by 1.1 mill shares to 12.07% of the company.
Finders Resources - as announced previously, they only produced 4.100t of copper in the Quarter, due to well-documented problems. Despite the much lower production ( at steady state, they produce 7.200t/ Quarter ) , tehy still generated cash and made EBITDA of 6.8 Mill A$. AISC were 2.53 US$/lb. More important is, that production will from now normalize. I do not expect the current Quarter be back to above 7.000t, but definitely the June-Quarter. All operations are now running as they are planned to do. It will be interesting to see, whether this will lead to a higehr takeover-bid, which definitely woould be required to get above 50%. At current levels of 3,20$/lb , and once back in production, the project will generate more than 115 Mill$ in cash p.a. - about 75% of this belongs to FND. - EV i about 2.5 years of cash generation, vs a proven and probable reserve which lasts 7 years at this stage. Takeover games are boring for me - but unless the bid gets very close to 30ct, I do not want to sell this cash machine.
Have a nice evening - Australia will be closed on Friday because of Australia Day.
WS
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