This was meant to be yesterday´s report….which I did not send out….
Hi guys
I have to admit, that I can´t be bothered today! This is no fun!
Enjoy a bottle of red tonight, and stay home!
Wille
Hi guys
I finished the bottle of red on my own last evening, after I saw the finish in the US for mid-sized gold stocks, as measured by the GDXJ - down a wapping 25%! Absolutely amazing…It´s trading at the same level as a few years agon, when physical gold was trading at about 1100 US$ or about 1550 A$/oz!!!
Anyway… Australia last night had the most amazing turnaround I can think of since 1985, when I started working…down 8,2% by late lunch Australian time, and up by 4,4% at the close…a turnaround of nearly 14 on the day!!! My Australian contacts are absolutely sure, that the market turned with the news from a Canadian company, which claims to have found a cure for the virus - ready to be tested on humans by July/August…
Not exactly sure, wheather this is the entire story…also rumours flushing around , that the FEd will take drastic action by buying bonds, equities etc etc…we will find out!
For now, things are looking a bit brighter…European equities are 2-3 % up, base metals are up by between 2% for copper , and 8% for nickel. In that context, it´s worthwhile to mention the almost astonishing performance of metals recently:, during the turmoil: Copper is down by less than 2% since the end of Feb / up by about 1% in A$ terms - Zinc is up by 2% in A$, and nearly unchanged in US$ - nickel is up by more than 2% in US$ and up by about 5% in A$! I think this is an incredible performance. Do people want hard assets, or are they expecting economic stimulus by central banks and governments to turn things around ( whatever it takes! ) in a few month time?? Probably a bit of both…
Gold, by the way, exactly unchanged in the moment ( 1583 US$/oz ) from 28.2., and more than 2% up in A$ to currently 2506 A$/oz. I bought Evolution yesterday - obviously, one day too early - and I bought Bellevue today. Both stocks are incredibly cheap - EVN as a safe stock, and Bellevue as a deep value gold developer…a little more here:
Bellevue Gold - the stock crashed like everything else…the day after conference on the 24th of Feb, the stock closed at 64ct - today, it closed down 42% vs the GDX, which is down 45% over this time frame. But Bellevue announced a great resource increase by 400.000oz at more than 12g/t on that very day. Broking analysts estimate, that Bellevue has to spend 110-140 mill A$ incl capex for underground development ( 30 mill ) to produce 160.000 oz p.a. at AISC of about 1000 A$ - or let´s say total costs of 1400 A$/oz ( that´s my personal nack-on-the-envelope number). That leavs them making 1100 A$/oz in free cash - or 176 mill A$ p.a. vs a current market cap of 213 mill A$. With resources of 2,2 mill ounces right now, and strong upside from multiple lodes within the system, I think this stock would end up with 10 years mine life! I think this stock is crazily cheap! The only small caveat: At the current , massive rate of spending + dewatering , they will run out of money by June…I am sure, that they can slow down things a bit - but still, at some stage this year, tehy will need more money. I have no problem with that, as eveyr drilling program so far and every placement, has lead to a large amount of gold being found. The fantastic grades and teh ( still ) large exploration upside right in the middle of a few existing gold mines, make BGL a standout-corporate target in my view. Wheather it´s EVN, SAR, SLR, NST or even some outsider like Western African Resources ( once in proper production ) - I think a takeover at double todays price would add a lot of value to all these guys, with the exception perhaps of WAF - but they would gain a second mine, and one in Australia vs the current one in Burkina Faso!
Panoramic - now it´s confirmed…Andrew Forrest´sinvestment vehicle bought 5,5% of PAN - and he also increased his stake in Mincor to 12%…nice work in this market! I am sure, thathe has a grand-plan