Good afternoon
generally, a relatively quiet day today! Equities are edging slightly higher, as technology shares are helped by a stronger bond market.
There is some bargain hunting in oil today, and base metals are slightly up ( copper ) to reasonably strong ( zinc ). The US$ continues to trade around 1,19 gainst the Euro….and precious metals are slightly lower.
Australia´s East Coast is seeing major flooding…heavy rain is expected to continue until Wednesday! I am sure, that some mines will be affected in NSW and Queensland. Not sure , how badly Evolution´s Cowal Mine and Newcrest´s Cadia have been affected - I think it might be a litlle less worse than in Sydney and at the coast - but bad enough! And more rain to come! Not the best ground conditions to drive with a 200t truck out of a big hole!
Strike/Warrego - the wireline logging performed in the secondary and tertiary target of the well did not result in any joy for us! The net pay is smaller that being hoped for, and the overall permeability is as well, making it harder to produce from it. But the main target is still to come - the rig is currently drilling at 4400 m and I guess will get to total depth within the enxt 10 days! That´s when we want to see excitement!
Mineral Resources - started production from their latest iron ore mine, Wonmunna, only 5 month after starting construction…and should reach name plate of 5 millt p.a. some time next Quarter! The mine can easily be expanded to 10 millt p.a…..production costs should be below their older mines and should be extremely profitable at current iron ore prices. But the price is under pressure - not sure, whether it will hold here. For enviromental reasons, China is clamping down on too polluting steel production currently, reducing the demand for iron ore. Not sure, where this will end for the iron ore price!
sorry, this was yesterday, which I did not activate to be sent….Here is today´s report:
Equities are not doing anything serious today…they are generally slightly weaker. The new lockdown over Easter in Germany does not help European markets. Bonds, as you might expect, are stronger today.
base metals are weaker, as China is believed to think about releasing some strategic stockpiles of aluminium. The same could hit other metals, people fear. Copper is down by about 1%.
Tietto - released another round of high grade hits from drilling their Ajubar project in Ivory Coast. Nice grades, but usually reasonably narrow at 1 m or so. It will be interesting to see, what the Prefeasibility study comes up with as a mineable resource. The next resouirce update is due at the end of next Quarter, the final feasibility in September or so.
Marvel Gold - announced some more drilling results from their Tabakorole project in Mali, increasing the grade probably with results of 15m at 2g gold/t, 6m at 5.8g and 28m at 1,5g. They also discovered a new zone of mineralisation with 16m at 2g, potentially increasing the size of the resource. They have multiple targets left to drill and hopefully, tehy are well on teh way to a resource of 1.5 mill ounces by the end of this year. This would be needed, I guess, to end up with a reserve of 1 mill oz eventually to enable a start-alone operation and a new gold mine here.
Also, we should hear more about the plans for the Tanzanian graphite project some time next month, which could be exciting giving valuations of similar projects in MOzambique and Tanzania paid by the market.
Pacific Nickel Mines - following uncertainty surrounding their title to their two properties in the Solomon Islands, the company got relisted the other day. The government confirmed title for one, while there is a court hearing coming up as to the validity of the second. This has very little chance of success - but without wanting to sound arrogant, you never know in these countries! Markets for nickel ore are still looking good and the material is still wanted by Chinese NPI-producers. It´s speculative, but with a lot of upside. One for the punters….
Predictive Discovery - funny name, as very few things in mining are for sure…and certainly not discoveries! But for sure, these guys have made one! Backed by the same, Australian-owned drilling company Capital Drilling, as Marvel Gold, PDI is active in Guinea, another West African country - better known for it´s iron ore project Simandou. Guinea is a difficult place to do business in - reportedly very corrupt. But PDI could be up to something big here, so I think it might be worth the risk. It all started about a year ago, when the company reported drilling results from it´s Kaninko Gold project: 46m with 6,6g / 42m with 2,9g / 50m with 1,5 g met with a lot of excitement. The latest results a few days ago were including 45m with 5,4g / 65m with 2,7g / 19m with 4,8g and 74m with 1,3g gold/t, most of them starting close to surface. These results are from an area 3km away from the first discovery. The length of mineralisation in the hoels, the grades and the location let people believe, that the maiden resource due this summer could already exceed 1 mill oz, and people are talking about a potential multi-million ounce project .
The other day, the potential was kind of validated by two senior board appointments: Francis Harper, Chairman also of Tietto, and previous Chairman of West African, and Andrew Pardey, 5year CEO of Centamin, and also on the board of Marvel Gold. Mr.Pardey has had senior management roels at mines operating in Guinea as well.
I think one should have a foot in the door here! the company had 13.7 mill A$ cash at the end of December - so despite an active drilling program, a placement should be some time away.
Have a nice evening
WS