Good afternoon
it´s really unbelievable - the world is on fire, and equity markets are behaving as if nothing is happening! The wonders of liquidity!
Equities are so far stronger today, a weaker weaker than expected CPI in the States is putting some pressure on gold, and metals are quite strong today. LME nickel stocks down by another 6.000t today to just over 100.000t. By the way - when we last reached this level back about 7 years ago, nickel was trading at around 20.000$/t. After all - perhaps current levels of 17660 US$ are not that high ?? Market watchers are still at a loss to explain, what´s happening here…
Bonds are very weak today .
The market is anticipating at least some mini-trade agreement…
PGM´s strong today - Palladium witn a new high currently, just above 1700 US$, and platinum is making up some lost ground, moving above 900 US$ again!
The debt market for US shale stocks is making investors very nervous in the moment…prices of stocks and bonds have been falling like a stone this year, and bancrupties have increased dramatically in the sector. There is more to come - unless we see a major rally in oil soon. The market is realizing more and more, that shale production is - very often - not a cash generating exercise and could not work, if interest rates would be at a normal level. Even so - in many cases, companies are crumbling under their debt burden. I am sure, that OPEC is watching this very closely…who knows - perhaps the US will be a net-importer of oil again in a few years time?!
Resolute - have a major problem at Syama - a crack in the roaster! Without the roaster, no production from sulphide ore. This is a major issue - nobody knows yet, how long it will take to repair - is it weeks, or even month? RSG will update shortly. Syama Underground ( that´s sulphide ) is by far their largest asset….
Lucapa - sold diamonds worth 15 mill A$ …5469 carats from Lulo for 5.9 mill US or 8,9 mill A$; and 5.300 carats from Mothae for 4.4 mill US or 6,6 Mill A$. I think those numbers are good enough, but not as good as being hoped for, as the sales included a few really good stones. Still - I stay with yesterday´s comment, that the stock is cheap - but perhaps not as cheap as being hoped for? More opinion from analysts over the next few days.Full Quarterly is also yet to be announced, incl costs etc, following yesterday´s record production update.
Panoramic - with very good news…from drilling. The company has drileld three different parts of the ore body Savannah North: some infill drilling from areas, where production is planned in the near term. Intersections and grades were excelllent, as expected. This drilling does deruce the risk of starting from the new ore body. Some good drilling results also from the otehr side of the fault, which indicates, that the ore body is continuing and has probably not been replaced. I was surprised, that the market did not react a bit more positive - probably investors want to see the Quarterly first ( and that´s expected to be very average, with production only from the old Savannah. Savannah North will start producing soome development ore from November, and stoping ore “ early in the new Quarter”, as expected. Potentially, once that´s happening , production can be ramped up pretty quickly, which will improve production dramatically. As you know - I believe PAN to be very cheap - but this requires some forward looking and also assumes, that Savannah North will produce as planned. Given recent experience, the market is not giving them any credit for the outlook - investors want to see real numbers, before rerating can happen. Investors with some risk appetite should move now…I have a full position in Panoramic.
Osino Resources - tthe Canadian company has started a new, 10.000m drilling program to further test the TWin Hills area, where they had their success recently. They are also planning to drill Twin Hill West, a large anomaly, and some first pass drilling on nearby properties. 2 drill rigs at work currently, two more to arrive soon. Results are expected from mid-November onwards. If tehy can extend their recent run of success, the stock will be cheap! Quite a bit of smart money is watching carefully.
Have a nice evening
WS
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