Market Update

General - Oceana - Beadell - Newcrest - Oz Minerals

Good afternoon


We would like to invite you to our yearly Australian Resources Conference in Zurich, 24th of February, Hotel Baur au Lac. As always, the attending companies are inviting all interested investors and other interested followers. Please pass on the information to your colleagues as well! 

Please register by clicking this link:

Australian Resources Investment Conference

This year, following companies will attend:

Evolution Mining / Perseus Mining / Panoramic Resources / Prairie Mining / Genex Power / Graphex Mining / Breaker Resources / Peak Resources / Finders Resources / Energia Minerals


Market Update

Donald I, King of USA, is starting to off even his allies....this guy is completely out of his brain...But it´s good to see, that our special friend Boris Johnson claims to be better informed about the travel-ban than the US embassy in London. I guess he might have "alternative facts"!!

Goldmans warn on frictions that raise near-to medium-term US$ denominated costs....

German CPI rises by 1.9%, the highest increase since 2013....

European economic confidence rises to 6-year high

Metals are mixed to slightly better today, holding up ok despite a strong US$

Oz Minerals - an excellent Quarterly out today, as the company produced more copper and gold than expected. Costs remained in line, despite the better production, indicating some cost pressure. The company published a new mine plan for the next few years, increasing copper production, but cutting gold production forecasts. This in turn leads to higher costs in the next 2-3 years, as gold as a by-product is reducing the cash costs of copper production. Nevertheless, this is pretty positive, unless you are mega-bullish for gold. For the next few years, all cash generated will flow into the development of Carapateena, while maintaining most of the current 690 Mill A$ in cash ( and no debt! ). Still, you have to be considerably more bullish then the analysts on copper, to make the stock a buy at today´s price of above 9$/share.

Beadell Resources - that was not a great Quarter....Cash & Bullion decreased by 8 mill A$, despite production of 42.400 oz at AISC of 709 US$....That looks a bit funny to me...In the end, what counts, is cash in the bank, and the last Quarter will have had some high grade production included. Guidance for this year is about in line with what last year has shown: 140-150.000 oz at 830-930 US$ AISC. Costs are negatively impacted by the strong Brazilian Real. I am not to sure about this Quarterly and the guidance - there have been some problems in mining, and even more so in recovery rates....My gut feeling is not good here...I just don´t trust them ( I would like to point out: This is very subjective !!!). Analysts see the Quarterly more positive than I do - but they might well be positioning their firms for fee-based work....As I said above - I find it hard to reconcile production of 42.300 Oz at 709 US$/oz AISC with a cash balance reducing by 8 Mill$. They certainly did not spend 20-30 mill A$ on capex last Quarter....

Newcrest - had a good Quarter in line withe xpectations, producing 615.000 oz of gold and 25.000t of copper, at a very respectable 751 US$/ oz  AISC. But the stock is definitely not cheap. As the largest and most liquid , Australian gold producer, they will always attract a premium, but more than performance in line with the gold price cannot be expected from Newcrest. The rising copper price has been instrumental in cutting total costs of gold proeuction - so similar to EVN, better than expected copper prices will continmue to have a positive effect on earnings and cash flow.

Oceana - a good Quarterly from them! Didipio did not have a great Quarter, though costs have been excellent-  but the NZ-operations were very positive on production as well as on costs. Overall, AISC have been 708 US$ for the year - and 372 US$b ( !!! ) for the Quarter. For 2017, the company is guiding for roughly same production at same costs as for 2016, which places them under the cheapest producers! The new mine Haile in South Carolina has just produced it´s first gold, and will contribute an additional ca.160.000oz at just above 500 US$ AISC - this is clearly an excellent asset in the US, which will be rated highly. The new project should drive costs down further, to the guidance of 600-650 US$ overall. OGC´s quality is certainly better than most! The problems in the Phillippines have quietened down, and Hailie is reducing the risk-profile of Oceana. The company is one of the very few, well-managed and good-quality Australian gold miners with a reasonable risk-profile.

Have a nice evening



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