Good afternoon
And more stimulus coming from left right and center: Bank of Japan increasing support for corporates, China doing more, apparently, Trump planning a massive infrstaructur program, and the FED is buing corporate bonds…the party that never ends in equities! And unfortunately, inequality will continue to rise….As we say in Germany: The dog is always shitting on the biggest pile!!
And a big surprise today: retail sales in the US were revised upwards for April, and despite this, have been ultra-strong and above all expectations in May, giving markets another strong push today! Industrial Production advanced by less than expected - only 1.4%.
But nevertheless: I have to admit, that I am a bit frightened of this second leg of infections, and the indications are increasing, that the virus is changing…potentially really bad news.
Gold was having a nice recovery yesterday, and so far, it´s continuing today…currently at 1731 US$. Base metals are strong - infrastructure spending is something metal investors love to hear! But as I am finishing, it´s giving up to strong equity markets, trading at about 1721 only!
Strike - announced yesterday, that the JV has signed a contract for a drill rig, which will start drilling West Erregulla III in the 3rd Quarter, once civil work has been completed for the drill pad construction. I believe, that this work is already in progress, and that drilling will start in July! West Errgulla IV should be drilled straight therafter, pending approval, and potentially, West Erregulla V as well - subject to JV-approval. This will all be very exciting for us long term Strike shareholders - we could see the cristallisation of a very long wait! If successfull, we should see30-40ct for our Strike shares! The probability for success are much better than 1:1
Panoramic - the rights issue is now finished. 66% of teh retail entitlement were taken up by small shareholders, equalling 357 mill shares. 108 mill shares went to the priority-subunderwriter, Western Areas, taking their shareholding to 19.9%. Only about 74 mill shares are available for subunderwriters - that´s a shortfall of about 13% or just 3.8 mill A$….The market cap of a debt-free Panoramic, with about 35 mill A$ in cash and a nice nickel mine with probably much more than 10 years mine life, is just roughly 150 mill A$…I would not think, that Western Areas want to sit there with 19.9% forever…
The next interesting question now in the corporate restructuring of Panoramic will be: What will happen with the shareholding in Horizon Gold, which could be worth a lot more than the current share price, and the Panton PGM project?
Perth Broker Euroz securities is reported to be in talks to take over Hartley´s, an old and well regarded broker in Perth as well. The consolidation of the sector continues, since Canacccord recently bought out Pattersons. The combined entities are pretty respectable players in the resources space.
Have a nice evening
WS