Good afternoon
so, soccer worldcup is starting...obviously, I am a big fan of our German/Turkish Team ( remember: two of our players regard Mr.Erdogan as their respected President! )....unfortunately, I got England in a sweepstake....Sorry to all football fans in Canada ( I think there might only be one?? ) theEnglish have to be a distant outsider, but at least I have hedged my feelings!
Industrial Production in Europe down - the next weak ecomomic figure! PPI in the US slightly stronger than expected, driven by strong oil prices ( Bloomberg )
Late in the European afternoon, all base metals, but especially nickel are putting on a nice show...nickel up by more than 2% currently!
A few brokers have been upgrading their numbers for coking coal, which is trading at about 200 US$/t in the moment, as well as for thermal coal, which is trading at around 110 US$/t or even higher, depending on which price you look at. In any case - thermal coal, which has been called down so often, is trading at a fantastic price! Limited availibility of finance, as well as local resistance to potential, new mines is having an effect. Stocks like Peabody, Arch Coal or Alliance Resource Partners have been very strong recently. US coal stocks are very low. Some thermal coal producers in the States have started exporting into this very lucrative market. Some people are speculating, that we will see a price spike up to the high 40ties for local, Illinois coal. That would be very bullish for:
Paringa - who have been very disappointing lately. The comapny needed more money to complete the project, and more time...and now, also a new Managing Director! The old one got the sack - I think very rightly so - and Todd Hannigan, the Deputy Chairman and ex CEO will take over on an interim basis. He is proven and experienced - should be good news...and he owns 11.4 mill shares, which I think he all had to pay for, incl 2.8 mill shares in the rights issue just finished. This is one of my largest holdings - as disappointing the stock has been recently, as cheap it is now! And should we see continued strenght in thermal coal prices, it´s even extremely cheap!
Oz Minerals - have nearly completed the takeover of Avanco, now having accpetances for more than 70%. I think Avanco could be a good aquisition for them, again increasing OZL´s copper leverage and growth pipeline. I have one concern - a lot of people have underesttimated the difficulties of operating in Brazil! That thought keeps me slightly reserved - but OZL´s current management is doing an excellent job, and I hope and believe, that tehy can handle this risk.
Breaker - again, a lot of excelelnt intersections from drilling of their Borborema project in WA announced today. Excellent grade, long intersections - some infill drilling, some extensional drilling. Very little doubt, that these results will lead to resource increases in the future. The market, though, is still scpetical, as Tom Sanders has promoted them too heavily in the past, and expectations were disappointed with the recent, first resource estimate of 722.000 oz. Hard to say, when the stale bulls will be gone - and I guess, that there is some tax-loss selling happening as well before 30th of June! But at 25ct, I think the market is too harsh with them. A few directors including Tom have been buying recently, some in significant quantities. BRB have 8 mill$ cash in the kitty - certainly enough for a lot of drilling...I think it´s time to accumulate them again.
Strike Energy - the company has released a pretty impressiive presentation of their recently aquires asset in Western Australia, just 16km from AWE´s Watsia project, which triggered a takeover-battle recently for the company and ended with Mitsui winning . Dificult for me to judge, but some smart gas-people believe, that Strike might actually be on to something here. I am speculating - but STX have enough on their plate for the time being with their Copper Basin project - I guess tehy might be thinking of finding a partner for this new asset to be explored/developed. In any case - a nice fall-back project, and there seems to be potential to sit on something quite significant here!
On a different matter, The Australian has released an article today, which cites some experts, who expect the East Coast gas price to increase to North of 10$ over the next 3 years, as a shortage of LNG is coming up, soaking up all new supply of gas in Eastern Australia.
Have a nice evening - and you hopefully enjoy the PAN-share price as much as I do!
WS
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