Good afternoon
not that much good news around for metals in the moment…economies slowing down slowly, but surely….
Newly found strength of the US$ does not really help the gold price…But in A$ terms, still trading at around 1950 A$…
Pilbara - will use plant maintenace and improvements to scale down production in July, as offtake-partners do not need all the spodumene being produced! Bad news….while production is going ok generally, and the company still maintaining, that they will reach planned recovery by year end. But if you have problems selling the stuff, this is no fun really. The company is also reporting about prices still coming down a little - from 640-650 US$ recently, to 600-640 US$/t now. The mismatch between spodumene production, chemical processing to battery-grade lithium, and battery production rates with expected use of EV´s is still a problem. Most market participants comment, that they believe in the medium-to long term market for lithium / batteries ( and I think, that they are right ! ), the next year or two could be difficult! Car companies just need some time to bring their EV´s to market- VW for example is not really starting in earnest to produce meaningful quantities of EV´s until autum of this year! And most models are planned to be on sale only in 2020. So I would not be surprised, if the next 2 years will be tough for spodumene producers in Australia.
Mineral Resources have the benefit of iron ore prices being as strong as a bull - but companies like PLS could do it tough. The big question here is, whether some strategic player will buy into their asset Pilgangoora with a long term view, and therefor, will be happy to pay a long term price. But if I would be the potential buyer, I would definitely take my time!
Bellevue Gold - they continue to drill away with 4-5 rigs - for now, only targeting extensions of the Viago- and Tribune lodes, as well as new disoveries. They recently reported visible gold from some holes, which I am certain will increase the relevant lodes. The enxt resource increase is around the corner - I guess in early July. And recent drilling indicates, that their success continues….The next number should be a few hundred thousand oz higehr than the last number of 1.5 mill oz inferred resources. Importantly, gardes seem to hold up above 10g - perhaps even a little more. Indiactions from the most recent drilling ( which will not as yet add to inferred resources ) are, that 2 mill oz are probably not the end of it, as none of the lodes have been closed off. Also, I would expect relatively high conversion of inferred resources to indicated resources…If BLG can show potential for say 2 mill oz of indicated resources ( which probably assume an inferred resource of 2.5 mill oz ) at 11g, I am sure, that all of the top 4-5 Australian mid-tier producers would be interested to take them out! I continue to hold a position in the stock - it won´t make us rich, but I would not be surprised to see prices closer to 1$ by year end. So far, the company will have plenty of ammunition to drill - I guess about 22 mill $ or so by Quarter end.
St Barbara - the string of bad news came to an end! Simberi production going very well, and the mine will produce close to 1400.000oz, according to a company announcement today. Recent problems with the past fill at Gwalia are also behind the company now. I still believe, that the stock will udnerperform from here , a t least for a while: The value of the takeover of Atlantic Gold will be questioned by investors for some time, and ggrades at Gwalia are reverting back to reserve grades.
Have a nice eveing - I will be travelling for the next few days!
WS
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