Good afternoon
German Investor Confidence looking ugly…
Mr. trump has tweeted again..the English ambassador to the US is a “very stupid guy” and he ahs been told, that he is a “Pompous fool”. He further went on with his tweet boasting, that he told Thersa May how to do that deal, but in her foolish way, she was unable to get it done. What a president!!!!!!
The US$ is slowly but surely climbing higher…not helping metals today incl gold…nickel holding up pretty well , contrary to copper, which saw larger LME stock-increases recently. After all, perhaps LME-stocks are still at least an indication of underlying balances?
Iron ore raced back the last two-three days - just under 120 US$ and in money-printinmg territoty for just about anyone in the business of mining the stuff! Especially Ms Rinehart and Andrew Forrest are doing well!!!!
Macquarie -analysts have adjusted their commodity prices - mainly a reaction to recent weakness. Copper has been the main casualty - about 15% lower prices of the enxt few years are now expected, but still 20% higher than today for 2022 and rsing further thereafter. Nickel prices have been cut by about 10% for the enxt 2-3 years - but for every year higehr than today, and rising with increasing EV-production. Palaldium and Rhodium ( for which Macquarie had been overly cautious ) saw the largest increases, followed by iron ore ( surprise, surprise! )
Liontown - a sensational resource increase today, from 20 millt to 74 millt at 1,3% LiO2, which is larger than all expectations/hopes! Of those, 70 millt are above 200m in depth - deemed to be open pittable. Interesting is, that the cut-off grade does not change the resource by much - at 0,3%, the open pittable resource is 70,2 millt - at 0,9%, it´s still 62 millt. Speaks for the robustness of the resource. Of the 74 millt total resource, 70 millt are in the Measured & Indicated category! The resource has still not been clsoed off. I think it´s now highly probably, that the Kathleen Valley Project will now have 50 millt + in reserves….Valuing this at teh same metrics as the takeover price currently being paid for Kidman, this implies a share price of +40ct, according to analyst Chris Baker. For now, he leaves his valuation at 22ct/share. We should also see some drilling results shortly for LTR´s second project, which is currently being drilled. I have little doubt, that LTR will need some more money to continue exploration of both projects, + finish the pre-feasibility study…that´s probably why the stock did not move today. But major good news for Liontown and it´s big supporter, Tim Goyder! He is now sitting on a worldclass-resource, which is completely uncommitted, 100% owned, and which can be developed with experience gained from the development of other hard rock mines in Australia.
Peel Mining - have announced their maiden resource for their Southern Nights/ Wagga Tank deposit , which contains 4.1 millt at 5,1% Zn, 1,9% Pb; 71g silver ; 0,28% Cu and 0,32g gold. It has a high-grade estimate of 1,8 millt with 9% Zn; 3,6% Pb; 116g silver; 0,19% Cu and 0,29g gold. All pretty interesting stuff - but I ahve been a little disappointed. I do not own any stock, but have been tempted several times to buy a few - I am now happy not to have any PEX! The market cap of 81 mill A$ at this stage does not make them dirt-cheap, and when I compare this with Foran Mining, which is 2.5x larger at better grades ( and more copper than PEX ) at higehr confidence levels and a market cap of 36 Mill Can$, I know which one I prefer!
Pilbara - the stock turned it´s earlier, weak performance today around following an early production report for the June-Quarter, and a more positive outlook. PLS had shocked the market a few weeks ago with it´s pretty bearish shipment outlook, because of weak demand. Today´s announcement was more upbeat. Shipments for the June Quarter were at the upper end of guidance ( 43.200 dmt of spodumene ). they expect shipments of between 35-and 48.000t in the current Quarter, impacted by a 2-week shutdown of the plant to enable work to improve the plant performance. PLS expect to furtehr ramp-up shipments to between 65-and 80.000t of spodumene in the Dec-Quarter. This confidence is also coming from a new sales agreement with Great Wall , which is a new customer and will take 20.000t p.a. beginning in August. Talks with Posco regarding the JV in Korea, to produce lithium-hydroxide, are also making strong progress. Could Posco be one of the interested parties for the planned sell-down of Pilgangoora? The market will watch this with a lot of interest, as it does test the corporate appetite for large lithium resources in a currently quite depressed market for spodumene. I am very sure, that our friends from Liontown will be extremely interested to see the outcome of the selldown - if it happens!
Have a nice evening!
WS
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