Market Update

General - Newmont takeover - Syrah - Drogba

Good afternoon

Chinese exports as well as imports down - not good! Chinese government targets growth of between 6-and 6.5% this year. If we should have a 6 in front, I would be more than happy!

Chinese copper imports fall in December vs previous month as well as previous year! Given this data, metals are actually holding up pretty well - down by about 0,7% - nickel stocks down by another 1.500t on the LME…

Trump wants to destroy NATO-partner economically, if Turkey moves against the Kurds…I guess both are “nice allies” to have!

Chinese car sales down 4% in 2018…Continental warns of weaker sales in the first half of 2019

Soccer player Drogba sells his 5% stake in the Ity gold mine in Ivory Coast to Endeavour for paper worth 20 mill Can$. Looks like he is not only a better soccer player than myself, but also a better mining investor!

Hot week for BREXIT…

And here we go: Newmont taking over beaten up Goldcorp for paper, paying a 17% premium - 10 bill US$ agreed deal…..big is better! IS BIG BETTER??? I doubt it….even though the company has identified 100 mill A$ in cost custting - the history of the North American Miners taking somebody over, is NOT good…For now, it should be positive for numbers of Newmont, as GG is really beaten up…but these big beasts usually are difficult to manage. The second big company, which will sell assets - and usually, the smaller guys like the Australians have managed to cut costs substantially, when tehy bought from North American majors. In so far - an opportunity for the Evolution/Northern Stars of this world?

Syrah - declared commercial production from 1.1.2019. Production in the 4th Quarter was actually in line with reduced guidance, at 33.000t of graphite , following several disappointments earlier in 2018. Syrah is now looking to further ramp up production. Investors will also be watching, at what price the market can absorb the production. SYR will be the largest producer of graphite in the Western World - not for expandable graphite, though, which has a different target market - not for EVs, but for flame retardent building materials. Given past experience, one should be cautious - but I am toying with the idea to buy a few, as the stock is very cheap, if the company can halfway achieve it´s targets.

Have a nice evening


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