Good afternoon
yesterday´s sell-off in bonds is bad news…even though the market is doing what it´s meant to do: React to supply and demand! Today we are seeing stability so far in the US, but continued weakness in Europe. The German 10 year bond is currently trading at -0,25% yield, which is up from -0,8% yield just a few days ago. Does not sound all that big a move - but yield has trippled in just a week!
The US$ is strong - the A$ is weak! Gold is doing ok so far at about 1510 US$/oz, and certainly so in A$, at 2560 A$/oz, which is a whisper from the all time ( intra-day-) high of 2625 A$/oz…and would mark a new closing high, if we finish here!
Base metals are weak today, led by copper, which is down the worst by far with -7% currently, vs 3-4% for the others. Equities are not too bad - down 3-4-5% in the moment, at mid-afternoon European time.Oil continues to get hammered! Down to 26 US$/barrel for Brent - shale producers in the States being buried by the Saudis!
Let´s face it - this virus is bad, and governments are right in taking strong measures against it, to avoid health systems around the world being overwhelmed. But this is just a bad, virus, with a ( much ) higehr mortality-rate than normal. It will be overcome - be it because of governments action, or bacuase a cure/vacciniation is being found ove rthe next few month. By May, I hope we will all be in front of our screens again, and wonder about the hurricane, which has just swept across us! Let´s not forget, that in China, we have only about 7.000 people left with Corona - the other 80.000 have mostly recovered, and some have died. Korea has also stagnated for some time now! The Earth is not “forgetting” to turn!!
But to keep some normality going, we want to report some micro-news , despite of any of them being pretty irrelevant in the moment!
Oceanagold - long serving MD Mick Wilkes resigns, with immediate effect, for personal reasons. His resignation had been rumoured some time ago, and was not taken well at the time. He has been a very capable MD, very respected in the market. Not an easy company to manage, with assets in 3 continents…and a very difficult one in the Phillippines.
Mincor - announced some more, excellent drilling results for nickel from their Cassine project, which is shaping up as a very nice nickel asset.
Bellevue - have finished their very large drilling program, and are now doing a new resource estimate - for the first time, they will show an indicated resource. While the resource of 2.2 milloz at average 11,3g gold/t is very large, it´s not that easy to bring it into indicated status, as most of it is underground. I have seen anaysts estimating 300-500.000oz as a maiden, indicated resource. The company is currently dewatering the old mine and will hopefully be able to drill from underground, which will be much cheaper. For now, only 2 drill rigs will continue to do some infill drilling, and two large conductors at Deacon, for which the reported 400.000oz resources at 12.3 g 4 weeks ago. I am a little bit relieved - at this pace, the cash will last until the end of the year - the recent rate of 8-9 drill rig drilling would have used up the remaining approx 10 mill ( estimate! ) by mid-year! Also, the logistical exercise of so many drill rigs at a time of corona is not that easy, and exploration in parts of Australia has been finished because of the virus.
Have a nice evening, and keep up the spirit!
WS