Good afternoon
lots of numbers out today...
China growth in 1st Quarter was a strong and expected 6,8% - driven more by retail sales than Fixed Asset investment
German investor confidence is very weak - I think politics/trade conflict etc taking their toll
US Housing numbers positive, and especially Industrial Production. I think the latter numberw as instrumental in turning metal markets, which have been pretty weak before. All LME stocks have been up today - I think market participants might deliver stocks held off-market previously, if they have been pruchased from Russian producers?? Still lots of talk and speculation around aluminium and the ptential impact of sanctions against Rusal.
Gold was also slightly weaker earlier on, but appears well supported by inflows into gold ETF´s.
Oz Minerals - Quarterly out today, which was a touch weaker than expected, as costs were up a little. Nevertheless - a very good Quarterly, with cash costs of copper production below 1$/lb, and AISC of 1.36 US$/lb, the company is generating lots of cash from it´s mine Prominent Hill. The open pit has been finished now - from now on, stockpiled- and udnerground ore will be treated. Guidance for costs as well as tons is unchanged for the full year.
The cash pile of 640 mill A$ is bing used to drive the development of Carapateena, which is making good progress ahead of plan and will start producing late in 2019. Following the takeover bid for Brazilian copper developer Avanco, OZL are still on the search for more projects. Management has done a very good job so far - if they do aquisitions as well as managing the assets, the stock will have a long way to go. It remains Australia´s prime exposure to copper...
Saracen - good Quarterly, stock made a new high today - much the same as Regis, St Barbara and Evolution. But of those top-performers in Australia, none is cheap - and if I had to buy one, you know which one I would buy, anyway...Market is obviously prepared to pay a little premium for Austzralian-based production. Given all the recent , bad experience, I can understand that very well!! Indonesia...Poland..Tansania...etc etc etc...As somebody said today - mining is a tough game anyway - the last thing you need is problems with nationalistic regulators and authorities!
St Barbara - have made anotehr inevstment in an exploration company the other day, and said , that they are still on the look-out to transfer their underground mining expertise ( that is something these guys do VERY well!)They are mainly looking at North Americab markets, as they believe, that investments are cheaper over there.
Foran Mining - I just cannot believe, how cheap they are! They fell out of bed with just 250.000 shares turnover - no bad news - just a lack of interest! Very anyoing! That´s the disadvantage of small stocks, especially in resource development: When the general mood is risk-off, turnover in tehse things can be very limited, and once there is a forced seller, it can have a massive impact. Recent drilling results have been good - the market in copper/zinc is still fantastic, and tehre are very very few large, new mines on the horizon to fill the increasing demand from urbanization + electric vehicles. Cynics would ask, why no serious miner would be making a takeover bid for Foran? Well, management + Pierre Lassonde are holding 25% at least, and I would be very surprised, if they would be sellers below 1$ - in fact, probably rather 1.50$....The NPV of the project is currently around 500 mill Can$ or about 10x the share price...and probably it´s growing via exploration larger tha that! Great busing opportunity for the patient investor - and hopefully, not that much patience required!
Have a nice evening - I am frustrated and will have a beer in the sun now!
WS