Good afternoon
the market is keenly looking forward to Glencore´s investor day tomorrow, hoping to get a clue about the potential re-opening of some zinc mines. I think the presentations should be bullish, given their recent comments - and I actually hope, that they will restart some of their closed zinc mines. If zinc rises higher than today, the risk of substitution will become very real.
Genex - what a year for this small. new power producer! They finally got recognition, and the share price is now under steam...And the next few month will be very important for them: I am still waiting for a fixed price deal with some contractor for building the hydro project. That is important, but might not get all that much market attention aside from keeping the interest in the stock high. Then it gets more interesting: GNX has been talking to financiers and offtakers for a few month now and about an off-take agreement for the electricity as well. Both negotiations are obviously very complex, involving changing electricty markets, and long time frames. But for both, I am expecting agreements within the next two/three month or so. The political will is certainly there, and the need for energy storage even more so.This will be a company-making time for GNX. Following those deals, they will have to decide on either selling part of the project - which by then, will be substantially de-risked - to some infrastructure investor, or raising 150-200 mill$ in equity. I guess the latter question will be answered by the share price. This thing could well double again in the next few month. If it does, I guess they might be thinking of even going it alone. We will find out - in any case, this is the time for the believers to make some quick returns.
The only thing I do not like about GNX is the fast changing electricty market in Australia, and in the world. Regulations change fast these days, and technology does even faster - who knows, in a few years, storage might not be a problem any more, reducing the value of a hydro pump station like GNX´s. For now, all systems are go for GNX!
Mineral Resources - have made a paper bid for AWE, one of Australia´s gas producers. MIN ahve been talking about gas plans, and small-scale LNG-plants for some time - now tehy are making a pretty substantial move, with AWE having a market cap of about 500 mill A$. Strategically, it might be a very good move by MIN - but in the short term, I think investors in MIN are there for exposure to lithium, and not gas. Anyway - I am a holder, and will back the excellent magamenet team at MIN.
Beadell - CBA announced today a new ownership interets, having bought another 23 mill shares. One can view this positively - a well managed fund increasing the stake - as well as negatively: share price has been falling despite this. For now, I view it rather negatively. BDR are a high cost producer and have disappointed for some time now - a falling gold price will not be very helpful for a company under pressure! The current Quarter is extremely important for them, as a big production number is expected. If they do not deliver, anotehr capital raising might be necessary.
Have a nice evening
WS