Good afternoon
following from a weak start, European equities are recovering - taking the lead from the US - and are now slightly green.
Base metals got a hit early in Asia today, when somebody just hammered nickel at the close of Asian trading. They are now looking slightly better - but still down on the day. Obviously, the market is still very uncertain about the enxt 12 month outlook for the world economy. Interesting, though, that stainless steel production in China, as well as other steel production, have already recovered big time in China.
Gold is looking a bit better, after having been sold quite heavily yesterday - currently at 1735 US$. Gold ETF´s so far saw a much smaller inflow this week than more recently.
Carawine - I have mentioned them before - don´t own any for the fund, as tehy are pretty small with 14 mill A$ market cap. They have three relatively large JV´s: RIO is spending 5 mill$ , Fortescue 6 mill$ to earn 80% interests in their respective Paterson´s projects, very prospective for copper / gold and home to the recent Winu discovery of Rio, and the Haverion deposit of Greatlands/Newcrest. Independence have to spend another 5 mill$ , to get to 70% of their Fraser Range JV, where Independence have the Nova Nickel Mine. Perhaps the most interesting asset is the 100% owned property in Victoria, where CWX have had multiple, strong exploration results with good gold grades. They believe, that the ore body shows all the hallmarks for a copper/gold Porphyry deposit, which tend to be very large. I think CWX is giving you 4 shots for your money - in relation to their market cap, that´s very good. The compüany could do with some cash at some stage , even though tehy are financed for the next drilling program. The otehr negative is, that in Victoria, their exploration will only start again in October. CWX have a very strong share register, and I think tehy are worth accumulating during the coming, probably quiet period.
Horizon Gold - this is the one in the very junior space I am most bullish on. The downside: They are/will be controleld by Zeta Resources, which has not been good for us as a major shareholder of Panoramic. I have done very conservative numbers again on them today, and as I mentioned the other day, tehy are a real sleeper. Ther mineable deposits at Gum Creek in Western Australia have a few hundred thousand ounces in mineable gold - how much exactly need sto drilled out. To upgrade the inferred resources here to indicated resourecs needs anotehr 1 mill A$ in drilling - which the company does not have. I have constantly tried to pressure the company into finally doing the necessary rights issue, to raise just 2 Mill A$ ( 1 year headoffice + the drilling program ), but nothing has eventuated so far. So the major shareholder is the clear downside here…and that is real. But the upside is massive. My conservative calculations have resulted in a NPV of 67ct/share, only using 5 years mine life and 125.000 oz at 4g average grade for this result, trucking 200.000t p.a. to the next available plant. There are several options around to toll treat this material. Potentially, much larger tonnage could be trucked to Westgold´s plant, and the potential mining reserve could easily be double of what I have been using. I have not done the numbers for this scenario - but surely they would exceed 1$/share at today´s gold price. I seem to be the only buyer of this stock just about - but one day, they will come out of their sleepy mode! the funds don´t really bother, because the market cap is low ( 19 mill A$ ), and some don´t like the corporate situation. But even if you discount the stocks underlying value by 50%, there is still good money to be made here. The rights issue, which has to happen in the near future, could provide a good buying opportunity and also some more liquidity in the stock.
There has not been much corporate news today and yesterday - the only important news in my universe came from Strike, but I only want to comment on that, once I ahve had the opportunity to speak to the company on Monday!
Have a nice weekend
WS
WS
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