Good afternoon
China to tighten IP rules - that is helping markets today. But base metals cannot join the rally - I guess the strong US$ is not helping here. Not much action in bonds today.
Hongkong voting for freedom and democracy.
Business Confidence in Germany improved somewhat. The ruling CDU had their Annual Meeting on the weekend - looks like the Prime MInister of Bavaria, Mr.Söder, has been the big winner - despite being a member of the sister party only. Mrs Kramp-Karrenbauer, Angie Merkel´s favourite, has been described today as the aunt visiting for Christmas - you are happy to see her coming, but at least as happy, to see her leaving! I agree - at least with regards to her….No charisma, no leader qualities at all…as boring as a politician could be!
Gold continues to feel a bit sick…as do gold stocks ( even with A$ gold price at 2150 A$/oz, still! ). Over the last year or 2, the physical gold price pretty well mirrored the chart of ETF-holdings…which might not sound so surprising - but the gold market is much larger than just holdings in the various ETF´s. Nevertheless - if this relationship is to hold, gold might not go down to test the 1400-level, which on the charts, looks to be support. So I will watch the inflows carefully…ETF´s seem to be the marginally buyer/seller in the moment, driving the price of gold.
Interesting enough, the FT had a large article on gold today - and that does not happen all that often these days! It´s talking about the US budget deficit. I have seen a few commentators starting to talk about this topic very recently - perhaps the atronomic numbers are getting more attention now, which should be good for gold!!
Panoramic - sorry, once again the takeover is delivering news. Largest shareholder Zeta is supporting the company with a 10 mill$, unsecured loan - expressing confidence in the future, while the Operational Review is continuing. PAN announced after markets closed, that they have not only granted due diligence to IGO, but also “a number of parties”. Without any doubt, the stock is in play - and usually, somebody will end up making a high enough bid ( well that´s what I hope! ). The main risk is now, that the largest shareholder wants too much money…you always have to leave something on the table for the buyer, in my opinion…
Centaurus Metals - this is an interesting one. I recently visited them in Perth. CTM bought the Jagua Nickel Proejct from Vale, based in the Carajas province, Brazil - home to multiple mining operations by Vale. Jaguar hosts a sizeable , low grade nickel project, consisting of 40 millt at 0,78% Ni sulphides , plus a little copper and cobalt. Vale had explored the area and stablished the resource with the plan for bulk mining ( which is what Vale is used to ), and for this, the resource proved to be too small - definitely for a giant like Vale. CTM will tackle the project differently - trying to establish a few pots of higher grade ersources, to be mined selectively. CTM have recently finished a 10 mill A$ capital raising at 1ct, giving the 56 mill$ company enough money to embark on a major exploration program. Infrastructure in the area is excellent: The large Oca Puma Ferronickelplant of Vale is only 15km down the road. I think the small company approach, to re-think the exploration concept with a much smaller operation in mind, sounds very interesting, and we have seen this to work numerous times in the past. Most people don´t like Brazil - buit obviously, it´s a major mining country, and CTM have signed an offtake-agreement with Vale for all nickel produced in concentrate - so I believe, that Vale has a suffcient interest to help them along. Centaurus have been active in the country for a long time. Previously, they have advanced the Jambreiro iron ore depsoit, in the same province, hosting 18 millt of 65% iron ore. A PFS has been completed, and resulted in a NPV8% of 115 mill A$, for pre-production capital of 60 Mill A$. I would not be surprised, if this asset would be sold at some stage, helping with the potential development of Jaguar. Definitely one to watch!
Have a nice evening
WS