Good afternoon
markets are not quite sure about direction...while the US$ has strengthened today and yesterday to some degree, metals are sliding a little bit today- equities also see-sawing and largely unchanged on balance. But as the day progresses and the US-markets wake up, metals are turning green
German investor confidence slipped following the recent turmoil, but is still strong. ZEW expects an improving economy for the next 6 month.
Weak result after market today from BHP. Much improved certainly from last year, but 6% below consensus. Div better than expected. Costs were a little higehr than expected and contributed to the miss vs analyst expectations.
Regis - a very good result from them today...8ct Div for the half, EPS of 17.29 at average gold price received 1640 A$/oz; cash on hand 172 mill A$ - joining the growing rank of well cashed up Australian gold miners. Some expectations, though, have been higher. Guidance of 335-365.000 oz for the full year will be achived , most probably at the mid-to upper end, with AISC of 858 A$/oz, which is below the lower end of cost guidance. Mine life is the only slight issue for Regis - operationally, they perform very well as ususal. The company has many friends- understandably - but it´s certainly not cheap!
Prairie Mining - is making new highs today in London, following a relatively large line being crossed yesterday. The market is speculating on two things here: Progress and financial details on Jan Karski, and further talks ( potentially a takeover/JV ) on Debiensko with JSW in Poland. Both announcements could/should be strong value generators for Prairie! If for example JSW would buy the entire project for say 100 mill$ + a royalty ( the project has a NPV of 1.5 bill US$), it would pay for more than PDZ´s market cap - not to talk about the Jan Karski mine! Similar to the situation at Jan Karski, where Bogdanka could utilise their existing infrastructure, the same aparently applies to a JSW-co-operation of some sort for Debiensko! Don´t sell a share, in my opinion - there is a lot of upside here!
Northern Star - result was ok, a little below some estimates - exploration was excellent! Looks like they will be able to expand mine life at their most important mine, Jundee, by a few years - but too early to tell, and new results are quite a way from existing development. NST always has to be seen relative to EVN - and I still believe, that EVN are teh clear leader here. Do to their very low costs, free cash generation of EVN is nearly double of NST´s, and reserves are nearly double as well - yet EV is only 35% or so higher for EVN. If bullish forecats for NST are right, though, they have the better growth-profile. The ultra-agressive exploration effort by NST is playing out so far - but at a cost: For Jundee alone, they have increased this year´s exploration budget to 45 mill$! The W.A.-mining services companies will love it! Swick Mining have a large, existing contract with NST for Jundee - this will help them, and I would not be surprised, if they would put another 4-5 drill rigs to work there.
Breaker - the market is clearly believing rumours here, that the resource is not hanging together, and therefore, the first resource estimate might disappoint. In today´s exploration update, Tom sanders is stressing a few times the great continuity of results. We will find out in late March - but you would think, that management would have a good idea about the progress of the first resource estimate. Results today includded many nambers like 10-25m between 1- and 1.5g/t, but also some pretty excisting stuff like 34m with 14g. I tend to be with management here - the stock is probably very cheap here in the 50ties.
Foran Mining - Foran just announced first results from their ongoing drilling campaign: 143% Zn, 21g Ag + some gold and copper over 4m and a similar hole over 5m - nothing in itself to get too excited, but certainly excellent results, closer to the surface than the current resource. More of these results ( drilling program in full swing ), and the market should get excited!
Have a nice evening
WS