Good afternoon
Business Confidence in Europe is falling heavily - thank you, Mr.Trump! Consumer Confidence in the US is rising - I guess "we" are first again in the States! Also, strong housing market data out in the States. A still strong US$ does not hold gold down today - up by a few bugs - and metals - copper back up through 7000 US$, nickel holding this level around 14.300 US$/t.
The A$ is weak...just 76ct agains the US...resulting in good metal prices for Australian producers. A$ gold at 1750; copper at 9220 A$; nickel at 18830 A$ are great prices for most!
Katanga Mining, falls from 1.80 Can$ to 84ct on extended government/Glencore fighting. Glencore owns 86% of this company, which is capped at 1.6 bill Can$ even after the fall, and which is meant to underwrite the worlds growth in cobalt consumption. I am surprised, that cobalt is not making new highs.
Bloomberg reports about a deteriorating situation in Mali, where Jihadist attacks are getting stronger despite the UN forces being enlarged. Apparently, last week Jihadist groups destroyed the airport of Timbuktu and injured 14 French soldiers. Very bad for Mali - not good for the rest of West Africa, either! I am surprised, that Randgold still carries a premium rating, despite all this trouble in Mali ( also discussion about new mining code! ) and DRC, their most important countries.
Anglo having a longer than expected production outage of their iron ore operations in Brazil. The mine will be closed now into the last Quarter 2018 - orginally, analysts had expected, that the mine would be up and running again some time this Quarter. Perhaps this also explains, that the discount for inferior iron ore has been reducing for the first time in - I guess - 2 years. That´s good news for
Fortescue - they came out with their Quarterly today. Costs have been rising by 9% - the first rise in a long time, I think, albeit from an extremely low level. The reasons are not too much to worry about: Higher oil prices than assumed in their forecats, and also a slightly higher A$. I have to say, that the stock is in no-mans land for me in the moment. Unless the discount for their material is softening substantially, the stock is probably trading where it should.
Resolute - their Quarterly has not been good! Syama, which is very much in a transition-year, has been slightly disappointing. The big test is coming by year end, The company has reduced guidance from 300.000 oz at 1280A$/AISC to 280.000oz at 1360A$/AISC. That does not leave much room for cash generation - usually, it´s safe to add 200 A$ to AISC to arrive at total costs. The company has a very strong balance sheet with 110 mill A$ cash at the end of teh Quarter - all should be fine to finish the current transition to sub-level cave mining from Dec 2018. But that better works! I am always a bit cautious of sub-level cave mining -but that´s probably more an emotional thing, as I find it still an amazing mining methode! I think it´s worthwhile to hold the company through this period, still - if things work as planned, the stock has excellent price-potential, which cannot be said about many gold miners in Australia!
Doray - announced their Quarterly...company produced 18.000oz and 1000t of copper at AISC of 986 A$...pretty good Quarterly, and teh company has certainly turned the corner now. The company is now in net cash of about 8 mill A$, following a 24 mill$ placement last Quarter. Mine life at the current mine, Deflector, is limited - so much depends on the new orebody Da Vinci, which is currently being developed from the existing underground mine Deflector. The size of Da Vinci is unknown - initial grade from the first stope of 11g is very promising. I would be holding the stock - but to turn a buyer, I would want more confidence in Da Vinci.
Have a nice evening
WS
WS
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