Good afternoon
European equities are taking a breather today, as Johnson & Johnson is als halting testing of it´s vaccine. Johnson & Johnson, JPM, Black Rock and Citi with strong results. Expectations for Amazons´s Prime Day are, that they will shoot out the lights!
Chines exports last month were booming ( +9,9% in US$ ) and imports even more so ( + 13,2% yoy). Amazing numbers, driven by the fact, that manufacturing is very strong in the more-or-less corona-free economy. Car sales were also surging - +7,4% yoy and including 138.000 EV´s! A European research body expects a doubling of EV sales in Europe this year to about one million cars , and 1.8 mill or nearly 15% of total car sales in 2021. The news for EV´s are getting stronger every day - copper/nickel and especially lithium will profit! It´s still early days - but numbers are growing extremely strongly, and demand for batteries etc will be so strong, that price rises for these commodities are inevitable??
Investor Confidence is Germany is falling much stronger than expected , as corona numbers are surging! The CPI is falling in by 0,4% in Europe, as expected - in the US, it was rising by 0,2% - also as expected. Bonds are stronger today - in Germany and Switzerland, governments are charging you about 0,55%p.a., if you want to lend them any money! As people hate that, especially young people are increasingly buying stocks…at least you have the chance to make some profit!
Base metals are mixed today in a quiet market, with gold weaker ( 1891 as I am writing ) and the US$ is up. Gold came under heavy pressure as soon as the US CPI had been announced.
West African Resources - presented at Diggers & Dealers. The company poured 45.000 z of gold in the Quarter, which was up strongly from the previous Quarter. But only 22.000t were prduced from underground! Covid is making travelling very difficult, still, and at least initially, the underground mine needs more expat-labor relatively to the open pot. The market was worried about this and sold the stock down from yesterday´s fresh alltime high. I personally think, that it´s more important, that grades from the initial undergrund hit target of 10,5g/t. Richard Hyde is still forecasting strongly rising production this Quarter, and next , as more personell has been made available. Still - a small disappointment , just as shares were making new highs - never good, but I am not worried about a few month here or there to fire up the underground to full speed! The plant continues to perform ahead of expectationsI have not even tried to speak to Richard, though, as Diggers & Dealers is in full swing! Late this year, the company will present the Life-Of-Mine plan, as well as an updated resource, especially for the underground resource. Initial drilling here has been very positive and I think life f the underground mine will almost certainly be extended, possibly to 10 years.
Apollo Consolidated - Roxgold announced another round of exciting results from Seguela, which is subject to a royalty, owned by Apollo. 25m with 7,4g / 18.8m with 8,8g are certainly results, from which y0u would expect an increase of reserves. As I said befoore - the value of the royalty got to approach 20 mill A$ fast! that´s of an enterprise value of about 71 mill A$ - so pretty significant and underlining the value in AOP, which themselves have a resource of 1 mill oz+ with Lady Rebecca in Western Australia. It´s hard to find better value than in AOP in my universe, I think!
Have a nice evening!
WS