Good afternoon
Chinese Industrial Company profits rose again in August, setting the scene for a strong day in equities, following on from recent weakness and the general comment, that there is no way around investing in equities, as interest rates will stay low for a long time to come!
Base metals are also stronger, and once the US was awake, gold was heading higher as well, despite holdings of gold ETF´s falling again on Friday.
Tietto - announced some very good drillinng results on Friday - the best being 21m at 7,3g gold/t from 173m. The 61.000m drilling program has been finished ( but drilling will continue ), which will result in a new ( and hopefully above 3 mill oz! ) resource estimate in mid-October! The stock was down last week on some pretty strong turnover - the second Tranche of the placement settled recently, and a sub.underwriter to this placement has been rumoured as seller.Obviously, this new estimate is very important - it will also be very important to see a reasonable amount of the resource being classified as “indicated” - as opposed to only “inferred”. But whatever happens - there is a lot of work left to do, and I do not believe, that the forthcoming estimate will be the last one!
Carawine - the company has completed the expected placement! 6 Mill A$ have been raised in a heavily oversubscribed transaction at 20ct. For teh first time in it´s short history, this successfull explorer has sufficient cash now to do a systematic, 3 millA$ p.a. exploration program over it´s highly prospective ground in Victoria and Western Australia! Provided the gold price holds, there is only one way for this stock, I believe.
Warrego - announced the previously rumoured offtake agreement with very high quality client Alcoa today, to take 42TJ/day of gas starting 1.1.2024 from the Strike/Warrego JV. This is additional to the offtake by Strike a while ago, to supply Wesfarmers ( equally high class customer ) with 25TJ/day - both agreements are in place for many years. Both companies did not disclose the sales price - rumour is for the low 3s for Strike, and low 4s for Warrego, with escalation clauses. These agreements should make potential bank financiers for the project very happy. As you know, the JV is currently drilling to put more certainty to the size of the resources. Full results will take another 6 weeks or so - but I would expect some earlier news as to the progress and perhaps initial results/indications. Both companies will need some more cash - Warrego definitely, and Strike probably, to be able to drill not only the next 2 appraisal wells, but also the next well early in 2021, which will be an exploration well and which could greatly enhance the value to both companies.
Piedmont - what a boomer! They have signed a 5 year offtake agreement with Tesla, and as you would imagine, this is an absolutely buzzword for this little company! The feasibility study will need at least another 12 month - but the stock shot up by nearly 90% ( and had gone up by 40% before!!!???) to a market cap of 317 mill A$. Well - that was before the ADR started trading in New York! It traded as high as 40$ - but is currently traing at 27.50 US$/ADR , on turnover of 10.5 mill shares - for a market cap of 322 mill US$ or 455 Mill A$ - that´s up another 50% or so from the Australian close!!!!
Liontown - while PLL is expensive now, Liontown ( and others ) appear very cheap in relation! LTR have the 4th largest hard-rock lithium resource in the world - and on top of the size, it appears also to be a quality-project. I could well imagine, that otehr car- or battery producers will want to secure their supply of lithium…so while it won´t be Tesla, somebody else might come out of the bushwork! Owning Kathleen Valley, as well as the Julimar look-alike project near Perth, I think we might have some fun ahead here as well.
Resolute - managed to avoid further strike-action and agreed to a deal with the Union - I am sure, that it will increase labor costs , but this has not been mentioned. The company has cut guidance by 15.000oz - this is a lot for a 9-day strike! Might they be hiding some other problems and made use of this opportunity? Not really sure…but I repeat, that this company does not feel well for me…despite the price below 1$, I would call it a hold because of lingering uncertainly surrounding Syama.
Have anice evening
Ws
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