Good afternoon
everybody is trying to get positioned for the year - I think this might be the reason for the volatility in metal markets. Base metals are very strong today - after having been very weak yesterday!
Cold weather and high energy demand, the upcoming US government spending program, weak bond markets - all these things affect commodities. Gold is strong today as well, as is oil. and Goldman´s are pushing very hard for the entire commodities-complex!
Gold stocks were very disppointing in Australia today - I think there has been a lot of carry-over selling from a weak, Northern American market in gold, which should bounce very nicely today, if gold holds the current 1860 US$/oz.
Eramet have ongoing problems at their nickel division, as locals continue to block their operations.
Foran - is using strong demand for it´s shares to raise 20 mill Can$ - at 65ct for some, and at 91ct for so called Flow-Through shares, which are eligible for tax reductions in Canada. Sahes need to be held for at least 4 month. This is good news - the company needs money to convert resources and drill. Currently, there are about 34 m t of resources, but only 11 M t can be used in feasibility studies. The value of the stock can increase substantially, if mineable reserves can be increased ( which should not be too hard! ) and therefore mine life extended. As I said yesterday - with a target of 2-3 years, the stock can easily exceed 2$/share, if this happends - and as it get´s closer to production! Using 10% to discount the NPV, the advantage of progressing towards production is obvious! To enable the company to progress exploration and feasibility study through this placement, is very good news for Foran, as is the placement price.
Dacian - released preliminary production numbers for the last Quarter. At 27.200 oz ( despite a 7day shutdown of the plant ), the Quarter has been excellent and year-to-date production of 60.000 oz agurs well for the full year guidance of 110-120.000 oz. The net-cash position improved to 14.5 mill A$ , from just net-cash negative at the end of September! This is despite reducing the hedge book by 6.000oz, which now stands at 55.500 oz at 2.140 A$/oz. The merger with NTM is scheduled to be completed by mid-March - also good news, as it will extend the mine life of Dacian, probably by several years and athigher grades than currently mined at Dacian´s operations. We are waiting for further news here from the Quarterly, and updates from NTM´s Redgecliff proejct throughout the year. But at this stage, I think there is good upside left in DCN.
Gascoyne - also delivered very solid, preliminary Dec-Quarter production numbers. Production of 20400 oz was in line with a strong, previous Quarter. The company has a net-cash position now as well - just - following net-debt of just uner 10 mill A$ at the end of September. The company ahs 53.700 oz hedged for the next 18 month - at this stage, in the money at 2.611 A$/oz.GCY also had some strong exploration results during the Quarter - this is very important, as the current 80.000oz p.a. production for only 4 years or so is not getting anyone excited, despite the stock being cheap! Exploration is the key here - mine and plant are doing well and have been doing well for some time!
Apollo Consolidated - announced a set of strong exploration results from their Rebecca Deposit 150km East of Kalgoorlie. strong intersections of 10-20 m with around 2 g gold/t augur well for the upcoming , next resource estimate in the 2nd Quarter. The company has currently 18.6 mill A$ in cash + the very valuable royalty on the Roxgold project Seguela in the Ivory Coast, for which they recently got the mining permit. Roxgold is aiming to produce 150.000oz p.a. for 10 years, with an investment decision due early this year.
Have a nice evening!
WS