Good afternoon
Chinese GDP growth of 6,1% last year, and 6% yearly rate in the 4th Quarter, is in line and I think pretty positive - provided we can trust the numbers! Industrial output , Fixed Asset Investment as well as retail all pretty much as expected in December. Housing starts in the US were very strong, Industrial Production a little weaker.
Equities are continuing the recent run…today, Europe is playing catch-up with the US markets, which made new highs yesterday and again today.
Base metals slightly stronger…should be supported by Chinese numbers.
Despite a slightly stronger US$, gold continues to edge higher….while Palladium and Platinum are still shootimng all the lights out! The combined A$ price for the two metals is 5144A$/oz PT+PD (!!!!) now, and Rhodium also continuing to make new 10-year highs ( and nearly all time highs, up by 6% today alone and by 50% this year ) ). Sibanye, Norilsk are laughing all the way to the bank!! And probably also shareholders of the Candian company Regency, which seems to be a shell company and bought Panoramic´s Canadian PGM asset. Palladium is crying for a correction….but I thought that yesterday as well, and today it´s up by 212 US$/oz !! Well, taht´s at 4.15 pm German time! God knows, where it will close…
Metro Mining - now I know the reason fr the stronger share price! Australian broker Shaw ( one of the largest private client brokers in Australia ) initiated coverage, and has a valuation of 30ct ( share price target 24ct, because of execution risk of the expansion ). Their assumptions are very reasonable - perhaps even conservative….they expect a 2ct Div from 2021 on….I agree….as you know, my 2 year target ist also 30ct…
Horizon Gold - the stock had a bit of a move today, finally…2260 A$/oz is a great gold price, and the company has 1 4 mill oz in resources, of which 8200.000 oz are non-refractory. The Swan- and the Swift resources alone are just above 400.000 oz, at an average grade of 7g/t….The striping ratio will be high, but if I assume very high AISC incl pre-strip of 1700 A$/oz, this would leave still 560 A$ divided equally by the toll-treatment plant and Horizon = 118 mill A$ in undiscounted cash flow…vs a current market cap of just 20 mill A$. In my opinion, this stock could well be worth 50 mill A$ or more = more than double the current price. The above numbers are pure speculation, though…Panoramic have done a scoping study on it, and have spoken to possible toll-treatment partners - but none of this has been made public, as the Australian watchdog does not allow these numbers to be announced, if they are based on inferred resources only. In my opinion, Horizon should raise 3-4 mill A$, drill the ore body into indicated status, and announce the numbers! The stock is very thinly traded and hard to buy - but I know, that many are following it , as it´s 51% owned by Panoramic - and quite a few of my readers own it from the time it was spun off a few years ago! Don´t sell it, at least not so, if you believe in gold.
Warrego - respected broker Hartley´s have initiated research on them , and value the stock at 35ct, which is nearly double the current price. In a very detailed report, they spend a lot of time to look at the Western Australian gas market, which currently, looks oversupplied. The story for Strike and Warrego - both own 50% of West Erregulla , their recent top-class gas discovery - remains unchanged: Whilst their project will be much cheaper to produce from than gas from the very large, offshore LNG producers, the real upside is to find enough gas in the area ( which is a distinct possibility ) to have enough to feed into the LNG plants. On such a basis, both companies could still multiply in value from todays level - due to about 2-3x higher gas prices via LNG. I am still holding a large position in Strike, and a small one in Warrego. A real trigger would be, if a large broking company would take up research coverage…and obviously, more success with their next well some time in the second half. Hartley stated also, that the purchases of Waitsia in 2017, by Beach Petroleum and Mitsui, valued resurces at more than double the value , implied by todays share price of Warrego.
Have a nice weekend!
WS
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