Good afternoon
the market is woried today by massive corona-numbers from South America, and the US…Trump has not bothered to talk to his health-advisors for the last 2 weeks. I am of the strong believe that this guy is mad - at least completely irresponsible! Corona-infections in some parts of the US are continuing to rise at a disturbing pace. Equities will probably end the day 2-3% down!
German IFO Institute business confidence continues to rise
Biden is leading the polls by a wide margin!
Base metals are down a little today, while gold is continuing to rise - even in A$ now, at 2564 A$/oz, represnting a June high. Corona-fears are driving it…and certainly the massive money-printing exercise by just about every government in the world! Contacts are also telling me, that there is massive interest in placements from North America, and still large appetite from Chinese corporates for deals!
Bellevue - announced some very good metallurgical results today: 97,8% recoveries from gravity + leaching, and results from 73,6% to 91,7% from gravity only. That is excellent, and is pointing to low costs for a plant Nevertheless - one of my favourite stories in Australia is becoming expensive now! At a market cap of 800 mill A$, with 2,2 mill oz in inferred resources, they are all but cheap now. While I can clearly see the potential to go to say 3 mill oz in the not too distant future, and say 1 mill oz in indicated resource at around 11g/t average grade, too much future is being bulit into the share price now.
Saturn Metals - have placed new shares at 50ct to Dundee Corp - bringing their cash balance to about 5 mill A$ ( more than they have ever had ), and Dundee´s shareholding to 9,9% of the company. Dundee recently bought a stake, when Peel Mining sold down. The Canadians are a renowned and smart group - good for Saturn! Saturn looks like being able to show 1 mill oz in resources, soon, but at very low grades of about 1g/t. That is easily feasible tehse days, with an A$ gold price of nearly 2600 A$. But at 50 mill A$, they are cheap - but not ultra-cheap. Worth holding, I think!
Horizon gold - announced a new shareholder loan from zeta, their main shareholder. I don´t like this at all…zeta is running them like their private feefdom. the new loan is extening the old 300.000$ loan to the 30th of September, and increases it to 800.000 A$. I want Horizon to raise proper funds and drill out their infererd resource….this story makes me furious! I hope that shareholders will succeed to vote down yet anotehr sale of Panoramic´s shareholding to Zeta next week. I know, that their is large support for this, and hope, that we will have enough voting power to smash them! This continues to be a very cheap stock - but I can understand, if investors don´t like the corporate situation here.
So what is still cheap?
I think Dacian and Apollo Consolidated still are, and probably Tietto….Dacian is heavily hedged for the next year - but their story is as much on the gold price, as it is on bringing additional reserves into the mine plan…every additional year of production is worth around 10ct/share. Apollo is grossly undervalued based on it´s 1 mill oz , Western Australian project. There is also more to come from exploration -they have announced good results several times recently. Except for more than 20 Mill in cash, they have a royalty, which is worth 15-20 mill A$, which would bring their EV down to a very cheap 40-45 mill A$!
And last but not least, Tietto is also adding ounces, and could potentially hit 3 mill oz in resources later this year. Ivory Coast is not Australia - but the valuation gap to our local stocks is still massive! Even if they just miss the 3 mill oz mark with the next resource estimate - they are cashed up and will continue drilling.
Liontown - Chairman Tim Goyder has once again added a meaningful purchase to his already very large holding. Respected broker Bell Potter have initiated coverage the other day, with a 19ct valuation. As I said previously - buy straw hats in winter!
Have a nice evening
WS
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