Good afternoon
Australia continues it´s strange life on it´s own….
German economic advisor see GDP-contraction of up to 5% this year, potentially followed by 1,1% growth in 2021. There probable outcome is for less contraction - more like 2.5-3% - and a rapid expansion of 3+ in 2021. I fear, that their first case might be the probable outcome - but that is probably priced in !
Equities are having an unsually “quiet” day today….mixed in Europe, a little stronger in the States so far.
Trump is trying to be a star later by painting a negative picture now…100.000 death etc…
I have to say the way corona is exploding in his hometown - much worse than ever in Italy - is pointing to something like it! They claim to have made many hundred thousand of test - but reportedly, results often take a week or longer to com back…
Base metals and gold are little changed today as well, as the Junior Gold mines Index ETF, GDXJ, is recovering by about 3% right now, following this crazy fall of 10% on Friday night.
Genex - big win for some of us today, as GNX is announcing the long-awaited signature for a 10-year, vinding offtake agreement with EnergyAustralia! But tehy are not going to take equity - so some more equity is needed, which GNX probably is going to get from a larger investment by JD, the Japanese power group. Financial close is now expected in the 3rd Quarter. I understand, that the Queensland- as well as the Federal Government - is strongly supporting the project, and in fact , probably stronger than ever, as beside of being needed as a regulator of energy supply/demand, the project is also generating 500 jobs in the construction phase. I think equity in this project is highly desirable , genrating easy double-.digit returns for the foreseeable future in an extremely low interest rate enviroment. I have not had teh chance to talk to the company today, will do tomorrow…But the initial move of the stock to 19ct looks to me a much more appropriate valuation ( for now ) than today´s close of 15ct! More tomorrow!
West African Resources - are as yet unaffected by the virus, at least in terms of operational performance. No cases within the workforce or in local communities reported as yet, production going very well and teh plant has been running ahead of nameplate capacity, with recoveries of 92,2%. 94 kg of gold have been produced until 26th of March. Export og gold to Euroepan smelters in conjunction with other gold producers in the country via harter flight. Supply of consumables etc working consistently. The mineralised zone of the underground has been intersected, with grades of higher than 30g experienced…Open pit mining at M% and M1 South continues, as M1 North is being opened up now, increasing flexibility. A Broker analyst from Hartley´s expects, that once comissioning is finished ( any time very soon I guess ), the company will have more than satisfactory liquidity of 40 mill US$. 95% of the workforce are Burkinese, and the company is in negotiation with the government to allow some kind of travel for the expats. All continuing to go EXTREMELY well here - except for the share price, which is a joke at 43ct - despite the country risk, analysts value them from 90ct upwards!
Perseus - published their new Life Of Mine Plan, which is calling for Edikan to produce 212.000 oz on average for the remaining 6,2 years , including 231.000 oz on average for the next 4 years.The company expects all-in site costs ( which iclude ecverything except for tax, headoffice, and exploration ) of between 870-890 US$oz, and see the mine produce after-tax cashflow of 356 Mill US$ at a flat gold price of only 1300 US$ over the reminder of the mine life. I think this is very positive, also taking into account, that PRU currently have a second mine, Sissingue, and the potentially largest and most important mine, Yaoure, coming on stream sometime in teh next 12 month ( company says, that construction is going well, still - which would see first ore very late this year. But tehy also state, that there are certainly risks going forward from Corona, which could impact the timetable ).
Panoramic - the WA government has said today, that mines should be prepared for no FIFO workers being allowed from interstate from sometime in a few days on - unless tehy go on a 14day quarantine once entering WA. About 25% of PAN´s workforce incl contractors are from other states than WA - probably quite similar to most FIFO-gold mines in WA. The impact of this can be mitigated by workers incl their families - where possible - being relocated to WA, or be replacement from WA-based workers ( which might be difficult in a tight market ). It cannot be ruled out, this new initiative by the government will make it increasingly difficult to stick to original production targets for every mine in the State, which needs relies on a FIFO-workforce ( and that is most mines ).
Have a nice evening
WS