Good afternoon
equity markets are not doing much - metals are stronger, again. Especially nickel - up by 2,2%, and zinc +1,6%. Copper with a new high. Gold is under pressure - $ is stronger, and stimulus package in the US is yet hitting another road block!
Oil was stronger, but is now slightly down amid an unexpected increase of stocks.
Iron ore is trading at 148$, and the discount for 58% material is continuing to tighten! All good for the large producers, but especially for Fortescue!
China car sales last month up by 7.8% YoY…electrical vehicles sales are booming and doubled to 169.000 cars. EV- and hybrid sales in Germany ub by 522% last month YoY! As we can see in investor- as well as corporate interest in lithium - this market is on a roll!
Foran Mining - released the first resource estimate for Bigstone the other day, which is close to their existing resource. 2 millt at 2,22% copper eq are seen by the company as a starting resource. The company is planning for more resource drilling in early 2021.
Poseidon Nickel - has started with the drill drive, which should be completed by Feb 2021 and will make underground drilling more efficient, faster and cheaper.
Fortescue - has put first ore through the plant of their new iron ore mine Eliwana, which will produce 30mt p.a. and has been constructed on time and within budget. The company has had an Investor Day yesterday in Australia, commenting very positively on ongoing demand from China , a potential decrease of port stock piles in China to below 2016-lows. The company is wondering, whether Brazil might have ongoing problems in ramping up production in 2021.
Genex - has started to produce from their second wind farm, Jemalong, which has been constructed as planned. Currently, they are delivering into the spot market, but the market is expecting some sort of off-take agreement with electricity companies. This is tehs eond, large solar power project tehy have brought into production as planned. Broker Euroz believe, that the company is only valued currently on the two solar projects, with no value ascribed to the pumped hydro project at all!
Oz Minerals - after completing teh takeover, tehy announced an updated PFS for their West Musgrave project in Australia. Final investment decision for this mine, which will produce 32.000 t of copepr and 26.000t of nickel, is expected for 2022. By the time it´s in full production in 2026, it will contribute substantially to profits of OZL.
Atrum Coal - have released an updated scoping study for their high quality coking coal project in the US. It´s only 30km from a major coal mine of Teck, and is neighbouring Gina Rhinehardt´s project, which seems to be smaller, but was still taken over at a substantial premium. The next positive trigger for Atrum should be the issue of a mining license to that company, which should re-rerate Atrum as well. The revised scoping study assigns an NPV9 of about 1.4 bill $ to the project . I think there is a high chance, that either Gina Rhinehardt, of Teck could buy this company, before it´s developed. But I guess a mining lease would be needed for the corporate teams to go ahead! This is a high risk / high return company for speculative investors. The quality of the asset, as well as the coal quality are excellent - but these days, it´s hard to find institutional buyers for coal - even though this is coking coal for teh steel industry, and not thermal coal for power stations! I am holding a small position in ATU in my fund.
Have a nice evening
For everybody who might want to visit: We are in the middle of packing up, and by the new year, you will find our office at Pilotystr.4 in Munich, just around the corner of our current office.
Ws