Good afternoon
German IFO-Institute survey very positive: It rose to the highest since may 2014, which is a surprise. The IFO Institute conducts a survey of 7.000 companies, about their current and 6-month outlook. The positive number does not prevent the DAX from being down 2%, and European markets being generally weak, amid yet another new low for Deutsche Bank - down 6%, and weak banking stocks.
Gold is looking a touch better, base metals unchanged to a touch weaker, bonds are stronger - oil is very strong amidst some optimism, that OPEC will come to some form of curtailment.
I wonder, hoch much further room there is for Australian producers within the GDXJ....van Eck, the fundmanager of the ETF, now owns between 15-and 18% of St Barbara, Resolute, Saracen and Regis....
Citibank sees US interest rates going up, if Trump wins - and therefore, sees downside for gold. I think that´s complete nonsense - risks around the world will go up dramatically in such a case, and gold should be very strong, in my opinion!
Evolution - an Australian survey called East Coles has done a survey for the 2016 Corporate Performance Award, which has been answered by 55 fundmanagers. The best CEO, as well as the best board went to Evolution Mining! I could not agree more! Yet the stock is not priced at a premium, as it should!
Finders Resources - I forgot to report their hedge restructure last week: They have closed out all hedges for a 42 Mill US$ gain,a nd put on a new hedge ( required by their bankks ) of 16.500t at the current price of 4.800 US$/t, for delivery between Jan 2017 and March 2019 - approx 50% of production for that time frame ). The funds have been used to reduce debt by the same amount, to 103 mill US$ ( all numbers are for their subsidiary, which is 75.9% owned by FND ). The 103 mill US$ debt includes a VAT-facility, which is expected to be repaid from VAT-refunds - so debt net of receivables should be 91 Mill US$. as reported earlier, the enw plant should produce at name plate by next month. At 2.40 US$lb for copper, respected broker Euroz expects FND to generate 98 Mill A$ in EBITDA in calendar year 2017., for EPS of 5ct/share. They value FND at 31ct. They are forecasting AISC of 1.30 US$/lb. Stock remains cheap, in my opinion, trading at 0,175 A$.
Peak Resources - updated on progress of their bankable feasibility study today, which should take about 4 weeks longer than expected, to Dec 2016 or early 2017. About 80% of teh study are complete. The site for the refinery in Europe has been choosen, and the company is currently negotiating on an option to purchase the site. In my opinion, the latter has been the biggest question mark behind Peak´s plans...firm plans for a Europe-based refinery, and the feasibility study for the African plant will be important steps for the market to value the project on much firmer numbers. I am holding Peak as a "sleeper" in my portfolio - there will be a day, when the market will be much more interested in Rare Earth, once again, and by that time, the stock will have jumped again!
Lucapa Diamonds - and another big stone! The company announced the discovery of a 172ct, IIa diamond today - the next large diamond within a few days. Big turnover in the stock - 8.8 mill shares today...To my knowledge and according to the company, they do not have a single institutional holder on their register, at least until now. When you look at the various, London-listed diamond stocks, they all have sveral insto´s as shareholders - and some of them have been doing very well lately. Alrosa, the large Russian producer, also announced some excellent sales-figures last week, indicating, that the diamond market is recovering nicely this year. A great enviroment for outperformance of Lucapa Diamonds, of which I am holding a reasonable position.
Have a nice week!
WS
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