Good afternoon
sorry…forgot to push the button yesterday! So this is yesterday´s report, followed underneath by today´s edition….
crazy world…Wall Street up by 5% yesterday, and looks strong again today, as the world seems to be gearing up for fiscal and monetary support….doing anything to keep the economies going - and not to forget: markets! And this afternoon, the FED has acted: 0,5% cut, the same as earlier by the Australian Reserve Bank.
Gold got to be a beneficiary of this….more money printing, more spending….not to talk about uncertainty! And following the rate cut just now, gold is moving strongly…1628 US$/oz currently!
I cannot buy more for my fund, but I have leaded up privately on Evolution, Apollo Consolidated, Tietto, Carawine, Oklo, Osino - to name the most prominent ones. I want to use the opportunity to introduce or reiterate a few , relatively new names to you.
Apollo Consolidated - run by Nick Castleden, whom I have known for years - but only very recently became a shareholder at current levels. AOP just completed a placement at 21ct to bring their cash holding to about 16 mill A$ - gearing up for a lot of exploration. The main asset is the Lady Rebecca Gold Project, about 150 km North East of Kalgoorlie - not far from Breaker´s asset, and about 40 km from Saracen´s Carusoe Dam Mine. Lady Rebecca recently announced it´s maiden resource of 27 millt at 1,2g gold/t, including 11.7 millt of indicated resources at 1,5g., for a total resource of 1.035 mill ounces so far The project has been driven as a high grade deposit, and only recently got more attention for the lower gardes, surrounding the higher grade halo´s. The market cap of 60 Mill A$ ( incl 16 mill A$ in cash ) makes them rather cheap today - and certainly cheap, if you see further upside - and this is what my geologist-friends in Perth definitely see here. The MD is strong and trustworthy - headoffice is very tight, and the company is spending below 1 mill A$ p.a. on admin and headoffice. I guess this will change a bit - at least it should - as the company is gearing up to more agressive exploration, and development is on the horizon, requiring more personell. Anyway - none of the several lodes at Lady Rebecca have been closed off as yet, and the 20% owned ( and carried to a decision to mine ) asset in Northern Ivory Coast in JV with Exore is also promising. The recent placement is giving the ( conservatively managed ) company enough funds for the first time, to really spend heavily on exploration! I would be surprised, if we would not get more results within the next few weeks.
Carawine - CWX, are trying to find a copper/gold porphyry deposit in Victoria. The big price has not been found as yet, but strong sniffs have been had. The Hill 800 prospect, as part of the wider Jamieson Project, has delivred drilling results like 93m with 3,22g gold / 43 m with 4,24g - most drill holes are associated with 0,2/0,3/0,4% copper as well. Just last week, the company discovered a new high grade zone there with 11m at 9,9g gold + 0,3% copper, and results of one deep hole are expected later in March, while another deep hole is currently being drilled. Also at Carawine, corporate and headoffice costs are below 1 mill$ - nevertheless, cash will be an issue here in the not too distant future, as by the end of this Quarter, they will only have 2 mill$ cash left. However - we will have results of the two current holes soon, and more drilling to test established anomalies is starting within 2 weeks . If these guys confirm, what I think they might have, the share price will go on a strong run much before any potential placement! CWX counts two of the wealthiest Australians among it´s largest shareholders, who I understand, are both strong supporters of the company. Very unusual for such a small stock!
Tietto - I don´t know why, but the stock has languished since the last placement took place ( at 28ct )in late November. Many of you have seen them in Zurich recently ….this is a very strong story, having announced resources of 2,2 mill oz recently - and at a market cap of 78 mill A$ ( incl approx 16 mill A$ in cash ) , with 4 company-owned drill rigs drilling , we should see many results over the enxt weeks and month, as they are working through a 50.000m drilling program. Some investors might see them connected to the virus outbreak, as the drill rigs are partially manned by Chinese drillers ( the MD is originally Chinese ) , but all Chinese employees, in case they went to China this year, have been subject to a voluntary, 2 week quarantine ( and I am sure, that none of them are stupid enough to go back to China for the time being!! ). I think you should certainly use the current weakness, like I am personally doing!
Horizon Mining - I ahve written several times about them. I just know, that they have to raise funds in the short term - be it from the market, or from a potential JV-partner, as their cash will be approaching zero. I believe, that they only need to riase 1-2 mill$ to enable a drilling program, which can convert inferred resources to indicated resources. The watchdog in Australia does not allow them to publish the results of a completed scoping study based on inferred resources. Recently, Panoramic which still own 25% of the company ) have sold 25% of Horizon to major shareholder Zeta Resources, at 25ct. I am sure, that PAN needed the money, and hence, I am ok with this - but I am sure, that Zeta ( which has board representation ) would be well aware of the scoping study results…..and very-much-back-on-the-envelope calculations would arrive at potentially much higher valuations. Even if I only include the 400.000oz of HRN, which I understand have been subject to the scoping study , as part of their more than 1 mill oz total resource, the market cap os say 18 mill A$ ( following a 2 mill$ placement ) is still way too low, in my opinion.
All of the above stocks, with the exception of Carawine, already have existing resources - and have at least run some metallurgical testwork ( all of them positive ). So in my opinion, the risk in these stocks is not dramatic, and especially a basket of them, could see strong performance ove rthe next few month in an enviroment, which should continue to be very supportive at least for gold stocks!
And here is today´s report !:
So after I finished yesterday´s report late afternoon, the market in N.Y. tanked, once again, to finish the down by nearly 3%! But today, everything is looking strong again….Biden´s victory is being seen as very positive - obviously, Sanders would be a very bad alternative to Trump, at least in the eyes of Wall Street!!! And I have to admit, that I find it very hard to believe, that a democrat socialist would be good for the US…
Metals are slightly stronger - and gold is holding nicely above 1640 US$ ! Very disappointing indeed, how gold stocks are performing ! But as I wrote above - I think there is some fun to come…But for now, gold stocks are down by 1% in New York..just don´t want to move, despite of bond yields falling again today.
Chalice - reported some more drilling results, with some good, but as yet, uneconomic mineralisation. Nevertheless, in light of the very large target tehy are drilling, and the current, very wide spacing, I do regard this as good news. It´s one step forward in trying to understand the target - but not the big breakthrough as yet!
Oz Minerals - reported, that the new Carapateena plant is now running at design capacity, So that´s obviously good news, as recoveries as well as concentrate-grade are also as expected. But the full ramp-up of mining will take time, and teh company is targeting a full ramp-up until the end of this year. Good company and all fine here - but I think to buy them in the current enviroment, I would like to see them lower!
Have a nice evening!
Ws