Hard BREXIT looks like a distinct possibility…and in light of Europe slowing down anyway, that´s the last thing we need. Disruption to business could - or better : will! - be very substantial, and this uncertainty is not good at all!
China definitely scraps the special car tax on US cars from the 1st of Jan - good news for the German car manufactures, which have substantial production and exports from US factories! China will also import a few mill t of US corn.
European car sales down again in Nov, European PMI still showing growth, but also less than expected.
News from China is not that much better: 5,4% Industrial Production growth is substantial - but expectations were for 5,9%. Retail is also slowing down further, to 8,1% - Fixed Asset Inv was better than feared at a respectable 5.9% in November.
The risks, they are increasing!! And equity markets are showing this today - base metals also down a little, while bonds are slightly stronger across the board. Today we are seeing multiple bad news from the economic front - I´d say heavy bombardement ! Not surprisingly, the US$ is strong today. It got further support from strong Retail Sales today, and very strong Industrial Production ( up by 0,6% vs expected 0,3%, but downward revision of previous month ). PMI weaker, but still very strong at 53.6
They finally caught this French terrorist - well, he got a bullet and I am not that sorry about that - despite one should not say this! French PMI down, impacted by the recent protests.
Resolute - has started the sub-level cave operation at Syama and have produced 400.000t of ore so far. Consistent ramp-up is planned to reach name plate by June ( 200.000t ) from just under 80.000t in Dezember. This is a good start, and the first step of de-risking the mine. Autonomous loading to start in may, autonomous hauling in August. Still, many risks remain - but so far, they are getting there. The share price probably has the risks priced in?
Explaurum - new offer from Ramelius for the gold developer, which offers just about 1/3rd of the updated NPV. I think in this market, the bid ( 1:4 shares plus 2ct/share cash = just above 13ct at todays share price of 0,45 A$ for Ramelius ) will have a realistic chance of success, despite the recent placement at 12ct to Alkane. Ramelius will probably have to make Ramelius a seperate offer for their 13- and 14ct options. All is a little disappointing for EXU shareholders - but recently, the stock has traded sown to about 8ct. We all know, how difficult it is for small commpanies to get the necessary equity for new mines - shareholders might well want to share the risk with Ramelius, for whom it would be much easier to finance all necessary steps ( one of them might be to truck the ore to Edna May ). My most important advisor on geology believes, that EXU has got very substantial resource potential above the currently known stuff.
Strike - had their AGM today. They publishd a detailed flow rate diagram for the first time from Jaws 1. Flows are clearly increasing and are currently around 150.000 cbm/day - definitely not comemrcial, though, as yet. But the company continues to be happy with the gradual increase . Water production has been pretty steady, gently falling now , which is accompanied by these rising gas flows. STX also published a time-based diagram with targets for the enxt 6 month. So called “Commercial Flow Rate” is targeted for about February on the time scale. Management is confident to not only achieve this, but produce even better. Only time will tell, and while the wait is a bit disappointing, it´s still looking on target otherwise! STX also very happy with more detailed work on West Erregulla in West Australia, where more early work, preceding the first well in March, has increased their confidence of a substantial gas resource there. The share price at only 9ct I think is partually due to a few smaller shareholders becoming bored, as much as I guess some selling from sharehodlers, who got their script through the UIL paper-takeover. Strike today announced compulsory aquisition of the remaining stock in UIL, having now reached the 90% threshold. All good here - except for two very important issues: Time and Price! More/higher of both is needed here, unfortunately!
Panoramic - my favourite base metal stock got a buy- recommendation from Macquarie, which had not covered the stock since halting production 2 years or so ago. Macquarie analysts see PAN trade at 0,9x EV/EBITDA for 2012 - that´s cheap in absolute terms and a lot cheaper than IGO ( 3.5x ) and WSA ( 2.4x ), which are the two existing, listed nickel producers in Australia. They value PAN with 70ct, and see 10ct/share increase in value for every additional year of mine life . In my opinion, not too hard to achieve this, as Sanannah North has only been partially drilled.
Have a nice weekend!
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