Good afternoon
just amazing…this run seems to never stop! But as somebody pointed out today: The Democrats still ahve a chance to win the Senate in january - and I would be surprised, if the US-equity market would like that!
Base metals are very strong today - copper and lead up by nearly 3%, nickel and zinc 1.5-2%!
I am surprised, that resources stocks are not doing more. Everybody is talking about cyclicals, and I guess you cannot get much more cyclical than buying resources. You would not believe it - but I am even thinking about buying some BHP! Perhaps we shoudl not underestimate, just how long insto´s need to change from buying what everybody has been buying ( that is the FANG´s ) to actually not only thinking about resources, but doing it! And so often, the top blue chips are the first ones these guys are looking at! Iron ore, to be sure, has made new highs - the large iron ore producers are just killing it, especially, as freight rates are also very low. As a very rough guide: Cash costs of production are 13$ - transport to China is 7$ currently ( but has been much higher in the past! ) - price received is currently 128 US$ for RIO/BHP and about 112 US$/t for FMG! If you produce 180 Millt of this stuff, these numbers are adding up to just unbelievable profits!!! RIO and BHP ( for memory ) are producing 340 millt and 280 millt resp.! And in the case of FMG, a very substantial part of these profits go straight through to shareholders ( mainly to Andre Forrest !) in form of fully franked dividends ( = tax free for Australians, and 100% to shareholders overseas - taxable in the country of residence of the shareholder ).
Centaurus - again some very strong drilling results from their Brazilian project: 41m at 1,37% from 66m and 78m with 1% Ni from surface. Thex currently have a 500.000t Ni resource, and and a lot of it seems to be open-pittable. The feasibility study. Their last resource update is from June, and since then, tehy have delivered many strong results. They have 5 drill rigs working double-shift, preparing the ground for a new resource update also in the first Quarter 2021. Most probably, more excitement to come for this one, I much prefer to be here than in a hiped-up stock like Azure Minerals, which has a larger market cap, but is far away from the first resource estimate!
Have a nice evening
WS