Good afternoon
Apple has won big tax-court case against the EU…undeserved, but equities like it! What they like even more is strong progress by Moderna and others to find a vaccine. Among them is also German company Biontec…their main shareholder with 50% ( and wirth roughly 10 bill US ) are the two Struengmann-brothers from Munich. The interesting part of the story: The y sold their family-pharma business 10-15 years ago for 7 - or 8 bill Euro…and they have been extremely successfull investors in pharma-related businesses since then, including some large realisations. I believe, that they have been less successfull in other inevstments…tells us once again, that you should only invest in things you understand!
Biotec´s and pharma-related stocks are leading equity markets higher today, as well as cyclicals. Iron ore is making new, recent highs - filling the coffers of the large , diversified miners and Fortescue, which made a new alltime high today. Base metals are having a volatile week - strong on Monday, weak yesterday - had a good start today, but relatively weak now. A little surprising, given the equity markets tedancy towards cyclicals, and relatively positive eco-numbers in the States.
Industrial Production in the US in June was stronger than expected - I guess July won´t be as strong? Import and export prices are rising quite strongly in the US.
Oceana - have lost the cort appeal in the Phillippins to re-start the Didipio Mine. This country is just a mess…and corona is also raging through the country. No need to own OGC, I fear…Tomorrow, tehy will update on their activities in New Zealand, which will probably me pretty positive - but that´s not for this year!
Tietto - have already lodged their application for a mining license with the Ivorian government. That´s a substantial piece of work,. and I am psoitievly surprised, that the have done so at this relatively early point in time. Work on tehir Enviromental & Social impact study is also progressing well, and the ESIA will be submitted in the 4th Quarter of this year. In the emantime drilling is ongoing, and the company expects to finish their 50.000 m - drilling program in August, which will be followed by a new resource stimate - which some people believe will hit the 3milloz-mark! All good here!
Warrego - Canaccord have initiated research coverage with a 37ct share price target! The stock is cheap - cheaper even than their JV-partner and operator of the main asset, Strike ( which is operator 9. But I am not sure, whether WGO have raised enough money for the enxt two wells…
Strike - Quarterly out today. Not unexpected at all, but still a touch negative: The company is writing off Jaws, the gas development in the Cooper Basis. Well, at least STX will not pay tax for a while! Construction of drill platform etc for West Erregulla drilling hast started - the well has been delayed by 2 weeks to late August/early September. no drama..just 2 weeks more waiting for this very imporatant well, which will give us further clarity as to their recent find, which looks to be an outstanding gas resource. I understand, that the company will be on a roadshow next week - I assume digitally! Strike at 21.6 mill A$ left at the end of June, which should be sufficient for the enxt two wells - 10-15 mill A$ each, and 50% of that to be born by STX. STX remain debt free.
RIO - I was surprised to read today, that RIO is already starting to make first preparations for starting up an operation in the Paterson Province, at their recent exploration success called Winu. It seems that tehy will start a phased mining operation with planned start-up in 2023, and start of construction in 2021. I recently pointed to little Antipa AZY, which has arguably the best ground position in the paterson - JV´t in three large JV´s to IGO, RIO and Newcrest. Those 3 will spend 20 mill A$ in commttied exploration over the enxt 2 years on t eJV-ground. AZY themselves have 9 mill in cash to continue exploring their 100%-owned ground there, which includes a 700.000 oz gold resource.
Metro Mining - Metro will announce their Quarterly some time next week, I think. While bauxite has had a difficult Quarter - not much rading going on, consumers reducing stock, corona hiiting demand for alumia etc ,the alumina price has gone up nicely very recently ( 60% or so of Metro´s sales are currently based on the price of alumina ) and is now nearly back to US$-based pricing from pre-corona and last year. The A$ is very slightly higher - but only 3-4%. So I think pricing is normalizing for bauxite. Also, the wet season in Western Africa ( i.e. Guinea , where most of the new supply is coming from ), is starting generally now - reducing exports to China. I think this will at least result in a stabilisation of the market, and stronger demand for Australian product. Freight rates are also slowly but surely increasing again - that benefits Metro as well. As a very rough guide, freight for them to China is 10$/t, while it´s 20$ from Guinea. When freight rates go up, they go up stronger for Guinea producers than for Northern Australia ones like RIO and MMI. I also believe, that RIO has set higher prices for their bauxite for the next month. So while prodcution at MMI is going extremely well, the prices for their product are also going up. And as we all know, the economy in China is already back on it´s feet ( well we will know more exactly tomorrow, after Chines GDP numbers ). I think our little MMI could move relatively quickly to the 15-20ct prive level, from the current 10-11-12ct level. Not a bad, potential return from an investment in a very well run, albeit small, mining company!
Cardinal - nice little takeover-fight here! Nord Gold from Russia has bid 69ct in cash now, topping the Chinese bid at 66ct. The market is guessing, that the Chinese company Shandong might come over the top, once again! I would have thought, that the margins will be getting slim here! Good for the market in gold stocks - many gold funds are invested in CDV, and the bid will free up cash for re-investment. It shoudl also help to reduce the discount being put on West African gold developers/producers.
Have a nice evening"!
WS