Good afternoon
Manufacturing Confidence in Sweden at record, in Italy at 10-year high today....not that these countries are important, but they show, that Europe is certainly doing very well - and the renewed strength of the US$ will certainly help confidence further.
Industrial profits in China very strong, as well as durable goods orders in the States.
BHP believe, that One Belt - One Road program in China will see steel-demand continue to grow over the next few years. They are also bullish EV´s, and believe, that the potential increase of copper demand from EV´s is underestimated by the market. EV´s use 4x as much copper as conventional cars, and further applications continue to grow this ratio. BHP sees 2017 as the big turning point of EV´s, finally getting real traction. Macquarie have increased their sales forecast for EV´s. In a world, where it´s not easy to make a buck, I am sure, that this investment-theme will continue to find new fans.
Perseus - in the latest presentation they state, that at 1200 US$/oz, the two mines will generate 225 Mill UIS$ in free cash until 30th June 2019. I find this a very ambitious statement - at the current 1300 US$, this numebr would rocket again. Anyway - Jeff Quartermaine is a guy, who knows, that it´s important for PRU to continue to deliver, if the company wants to regain trust. They brought out some more bullish forecasts for NPV...if Jeff is right,. the stock should be able to double from here! In dubio pro reo - that´s my attitude, but I thiink the market in general wants to see more evidence, before it believes!
Finders - hmmmm...unlucky...the first real hick-up, since they started production. Without going into much detail, a human mistake was responsible for some solution overflowing into the elctrowinning circuit. One could argue, that something like that should have been monitióred bý sensors or something similar - and I understandm, that such a thing will be installed. Anyway - no major drama, but a little hickup, costing 500t production in Sept, and perhaps a smaller amount as well in Oct. More detail in the Quarterly Report on Friday. The stock is very cheap anyway....but got a little cheaper today! Most probably, another good buying opportunity.
Lynas Corp - another 10 mill US of the convertible bond got exercised. The only negative is, that I guess all of these new shares will be sold - some might have been sold even beforehand. In the absence of new incentive to buy the stock, the continuing exercise of warrants and convertibles will add new supply. The market cap, though, is already 1 bill A$, and EV fully diluted is about 1.5 bill A$...( of which 115 MillUS$convertible debt and 185 mill US$ straight debt ).- so I have NO doubt, that LYC will be included in the next Index-Review in ASX 200 - and I believe, that they are not yet included in the MSCI as well. Both would be pretty positive events.
Cardinal - Goldfields have continued buying, and have increased their holding by more than 10 mill shares to 8.8% of the company....I still don´t see, that the situation re land title is fully cleared up - until that happens, they would never make a full bid. But obviously, Goldfields are confident enough to build their position up to a blocking stake.
Have a nice evening
WS