Good afternoon
initially, equities quite strong today…but then Trump hit out with tariffs again, this time against Brazil and Argentina, arguing that they have been “presiding over a massive devaluation of their currencies!! I guess we all know, that none of these shaken countries have done that voluntary…but Trump is looking after his electorate, in this case, US-farmers, and the steel companies. Europe fears, once again, to be the next target, as can be seen in the divergence between US- and European equity prices today. But I am sure, that the market is very open for excuses to take profits at record highs!
PMI´s in China in positive territory, for a change - and also better in Europe, and in positive territory also in the States - but importantly, manufacturing declined.. Construction spending weaker than expected.
The US$ is slightly weaker, as Trump pressures the Fed to cut interest rates, once again.
Little change in base metals or gold today, but bonds are very weak across the board - economy starting to look a bit better? Bonds in Europe probably also weak, as the leadership of coalition partner SPD changed, with a pretty leaft-wing duo taking over, with possible ramifications for Angie´s government. Well let´s hope, that this tariff nonsense, and political turmoil in Germany, does not derail us any further! And who knows - in the end, Trump might get a deal - and even a good deal - with China!
Zijin bids 1,37 bill Can$ for Continental Gold , which developes a gold mine in Columbia…stock started moving strongly 2 trading days ago - interesting!
Codelco - will have to transfer more cash to the Chilean government, in light of the promises made following the recent upheavel in the country. This will put the spending plans of 20 bill US$ for the next few years at risk, as the company is already carrying record amounts of debt currently. Yet again, another positive for copper.
Perenti Global - which is better known under it´s previous name, Ausdrill, has withdrawn from two contracts in Burkina Faso - the one operate by Semafo, called Boungou ( where the terrible incident happened 4 weeks ago , with 39 dead any many wounded ), and another one in the North, operated by Nordgold. Bad for Burkina - but interesting, that they specificially mentioned West African´s new project, and two others, which are loctaed more central and having lesser security concerns.
Liontown - came ut with a strong feasibility study , for their Kathleen Valley liithium project.. But nobody is interested in Lithium these days, even in such a good project. At longterm lithium prices, returns are excellent - but at short term prices, results are only about break even. Not good enough, to get financed! But that has not been expected anyway…the company is targeting to go into production by 2024, when demand for lithium will be much stronger. The company is well cashed up, will continue with a feasibility study and further drilling , with chances to increase reserves by another 50% or so. At the currently planned processing rate of 2 mill t, the existing reserves are already catering for 26 years of mine life - so there is certainly upside to production plans. But for now, it´s smart to drive the feasibility study , but keep development on ice. Kathleen Valley will have it´s day - but we might have to wait a while - unless some corporate has a real long term view! I think within the enxt 12 mont, we will get a better feeling for what´s happening in the EV-market , with multiple large manufacturers getting serious with the launch of their products.
Have a nice evening
WS
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