Good afternoon
US gehts overwhelmed with unemployed peopel - to be honest, this should not be a surprise! Perversely, equities in the US are up for now”on expectation of more stimulus”…crazy crazy crazy…
Europe saw some profit taking all morning, but at least by early afternoon, US markets are slowly but surely dragging us closer to zero for the day, and we will be closing green all over!
Gold continues to be fun…it tried to go below 1600 US$ a couple of times today, but always met with good buying…and now it´s looking strong at around 1630 US$. It´s more stable in A$ for much of the day, around 2700 A$/oz.
Base metals are behaving a little like yesterday - with US markets waking up, some more buying coming in, and they are mostly just ahead today.
Northern Star - a very strange profit warning today. They are not going to pay the interim div of 55 Mill A$, even though their net debt position of 170 mill A$ is only small. They are deferring hedges to next year, to be able to get the full current gold price instead - again maximising cash flow. They are warning, that production for the Quarter will be 10-15% lower because of Corona making things more difficult. 10-15% down for the Quarter equals at least 30% down for March - that sounds pretty outrageous for something, which was not worth a mention at the time of their half-yearly report in early March. At the end of Feb, we had 24 cases of corona in Australia, up from 22 a week earlier - nobody can tell me, that he took action, which put his production down by 30% then…Very strange…I did not have the chance to listen to their investor call, as it´s still not available at 3 pm our time - but there got to be something wrong, I would say! Stay away for now…and probably anyway…As you know, I prefer my Evolution - only 10% or one of the smaller mines depending on Fly-in-fly-out! FIFO is not a desaster necessarly in corona-circumstances, but it certainly makes it more complicated !
Resolute - also issued statement with regards to corona-impact. They sound very confident - production at their Mko Mine might be down a little ( that´s my interpretation ) because of operating with a reduced workforce. Both their mines are being operated now by a vast majority of local people. Syama seems to be going well, despite travel limitations etc. It did not sound at all as if anything would not go well there. Interesting announcement vs Northern Star, which sounded pretty alarming. Is this because Resolute management has been through Ebola-outbreak and all sort of problems, which are more usual in Africa? I am not sure, but in any case, this announcement is a very confident one.
Westgold Resources - the Western Australian gold producer also updated re corona. All three plants are unaffected so far, and are running at full capacity. Again - makes me really curious about Northern Star´s problems.
Have a nice evening
WS