Good afternoon
markets continue to recover…most amazingly perhaps in the States, where NASDAQ is only down by 10% this year! Europe is also recovering today, but the DAX for example is still trading 21% below the end of 2019. Are we getting a first indication currently of what´s going to happen this year - kind of a melt-up?
My feeling is, that Corona is certainly not behind us yet, and the Quarterlies coming out soon, alongside what will be a very negative outlook generally for the current Quarter, might well be providing investors, which have missed the boat so far, with a new opportunity to participate it what could be a strong, liquidity-and recovery-driven rally in the second half of this year.
Metals are relatively flat - gold ETF´s continue to see strong infölows, and are driving the gold price strongly higher today - currently at 1677US$ or 2663 A$/oz. It´s not going up in A$ anymore - too strong is the A$ against US at 63ct!! Gold stocks very strong - in the moment , they are up by 6% as measured by the GDXJ. Oil is up by nearly 2$ to 34,60 US$ for Brent….hoping for OPEC/Russia/US getting their act together!
Vale is extending the close of Voisey´s Bay for up to another 3 month, as Las Bambas, MMG´s large copper mine in Peru, has declared force majeure.
Oceana - presented an update, also to introduce the new MD, who knows the company well - he has been COO since 2012. I ahev not met him. He is certainly coming into the job at a very difficult time: Didipio on the Phillippines still closed, Haile still not doing overly well, and the Waihi development in NZ completely closed. Macraes in NZ is producing at reduced capacity. Basically- all mines eitehr out of production, or not producing fully - that´s very nasty! I fear little reason in the short term, to own them…but I am keeping my eyes open here, as a buying situation might be coming up.
Tietto - neraly 5 month ago they completed a highly succesfull, oversubscribed placement at 26ct - today, they are trading at 21ct! In the meantime, that announced a few rounds of good drilling results, and today. a very positive outcome of some metallurgical studies. The ore is of only very moderate hardness, gravity recovery is very high at up to 80% (!) and recovery from standard CIL-treatment is 98%! That´s excellent, and should ensure relatively low operating costs. A new resource stimate is expected for the 3rd Quarter, and a pre-feasibility study should be finished in 12 month time. The company has enough cash to last until the end of the pre-feasibility! In a way, many of tehse valuations are crazily cheap…Tietto for example, has 2,2 mill oz of resources….let´s be conservative and assume, that only 1 mill oz will be mineable - so since the last placement, the valuation of that in the ground, discounted with 12% ( very conservative! ) . At the placement, resources using the same ratio of mineable ore, was about 100 A$/oz in the ground - today, it should theoretically be worth an additional 90 mill A$ - or roughly 50ct - the actual value today is 20% less, at 79 mill A$ with about 16 mill A$ of that in cash! That´s a very agressive way to value them - but not totally crazy! In any case - they are really really cheap at 0,225 A$!
Have a very Happy Easter in strange and often difficult times!
WS