Good afternoon
I will have to leave at lunch time today - cut-off for my blog is earlier than usual today…
Terrible start for the Democrats in Iowa…could you guess the results, please? In future, they might well use AI to find out caucus results! Never mind voting!
Metals are going through the roof today…nickel up by 3.5% / copper 3% / zin 3.% currently….
Equities are having another strong day…bonds are weak, as you would expect, and gold is currently down by 9$ to 1567 US$. Looks as if investors are happy enough so far with measures taken by China to containe the virus….I am sure we will continue to see volatility….US stocks, led by Tesla, are going through the roof ! Remember when Volkswagen went from 200 to 1000 back in 2008 on a short-squeeze? It ended with Volkswagen being back to 200 only 2 month later! As good as Tesla might be - this feels similar! Stock is up another 10% pre market at 850 US$!!
Gold held by ETF´s rose to a new all time high.
Tietto - I contacted the company today re their drilling crews, which in part are from China, as is the MD ( well, he has been living in Australia for many years ). The company is handling the situation well…all drilling operations are generally supervised by Chinese guys, and helped by local guys. The company has had the current drilling team on site since the 6th of January, and all are well. Some people will be returning from China over the next few weeks - all wll be held in voluntary quaratine for 14 days on their return to Ivory Coast. The MD himself, who has been in China recently, is working from home for 2 weeks in total. The situation appears to be very well managed, using high precautions which will most probably be unnecessary - but which make perfect sense! Drilling operations are going as planned….But the MD did cancel his trip to INDABA. We should see more drilling results relatively soon, as the company is drilling about 5.000m/month.
Metro Mining - 100% of their bauxite goes to China. At this stage, there is no reason to believe, that cargos could be impacted - but who knows? Probably it´s good, that they will only start mining again in about 2 month time - by then, I would hope the virus saga to be cooled down! The company has a great chance currently to sign up excellent contracts for freight , which would be subject to force majeur clauses - i.e. if Chinese clients declar force majeur , MMI could cancel out freight contracts. As I wrote the other day - freight rates can be nearly as high as mining cost - so this is a significant plus for MMI and will mitigate any potential impact from potentially weak bauxite price due to the virus-outbreak. MMI also are in a strong balance sheet position. Any further weakness should be a good buying opportunity, as the mining season will start again in 8 weeks.The stock has held relatively well under the circumstances - perhaps there is a chance developing to get them 1-2ct cheaper than today.
Have a nice evening
WS