Good afternoon
Existing Home-Sales in the US very strong…Tesla jumps the 100 bill$ market cap, largerthan the world´s largest car producer, VW.
The ex-Vale boss is subject to homicide charges - no doubt sending some tremors through the mining world. I am not close enough to judge - but it seems pretty harsh to me, also given the short time he has been at the helm of the company.
Looks like the Saudi crown prince has hacked Jeff Bezos, who´s Washington Post has been a big critic of him…If I really want to be cynical: the idiot has been caught again doing what nobody should be doing!
Fortescue continues to surge ahead - perhaps overdoing it a little? One has to say, that more analysts are coming to the conclusion, that iron ore prices can stay higher for longer, as Brazilian shipment numbers have been affected by heavy rain in Dec and Jan.
Base metals are a touch stronger so far today, and gold is about unchanged. Equities in Europe going nowhere, if not down a little - while the US-market is looking stronger, again!
Antofagasta, one of the world´s major copper producers, announced a very average Quarterly, with a relatively subdued production outlook for 2020, with higher costs than expected as well. Few newspapers report about it in the moment - but the recent trouble in Chile has not really quietened down as yet…more disruption is always possible, it seems.
St Barbara - the Dec-Quarter was ok with reduced expectations, but their guidance has been cut for Gwalia - continued delay in accessing high-grade parts of the mine - and Simberi, which is slowly but surely finishing it´s existing mine life - unless the company commits to a new circuit to enable processing of the sulphide resource. Tehir recenbtly aquires North American asset did relatively well in the Quarter, but the newguidance is calling for much reduced cash flow from Gwalia this year, as well as Simberi at a time, when cash is needed for big capex over the next few years in North America. This does not feel too good….probably little reason to own them in the moment…
Regis - have had a good Quarter…and have a very solid balance sheet indeed. But their reserve situation at Duketon North and -South is limited ( even though they have regurlarly managed to extend that in the past ), and Mcphillamys in NSW is still being dragged away by the approval process. I would say, that this is not only a question of when ( company believes 6-18 month ), but there is also a small degree of IF here….so I fear this is another one, which you can leave alone for now!
Reading my writing and also over the last few days, there are not that many Australian gold producers you need to own in the moment! Perseus are a positive exemption, as id Evolution ( but they are probably a core, save and reliable investment in gold in the moment, rather than an exciting growth story… Cowal has the potential, though, to prove me wrong…if there is enough rain! ).
Syrah - the company received a betetr price for it´s graphite in the Quarter finished. They have been themselves instrumental here, by moothballing a lot of production - hence they are still burning cash! Unless you see EV´s really taking off soon and big time, no reason to own them either!
Atrum Coal - I have been following them for a while now, owning a very small position. Coal is such a dirty word…but this is not thermal coal, but coking coal, and as long as the world needs steel, it needs coking coal! They own the Elan Project in Alberta - adjacent to the Grassy Mountain Project, which was recently bought for 800 mill$ by Gina Rinehart, the Australian iron ore “princess”. Elan is currently being very successfully explored, with current cash of approx 10 millA$ in the bank, and about 3.2 mill$ to be spent this Quarter. The current resource of coking coal is 217 millt, but because of extensive and very positive drilling over the last few month, will be substantially increased soon- next estimate some time this Quarter. It´s not easy to get the necessarely approvals in Alberta for a large coal mine, despite this being the heartland of Teck, and Canadian coking coal production - and it will take some time. But ATU are sitting on a high-quality , coking coal resource here, which is actively driven by a very experienced management team. Worth to have a look for anybody interested in coking coal! There is some smart money involved here, and I think the stock has a future. Their largest shareholder, Regal Funds Management, has constantly increased it´s position over the last two years.
Have a nice evening
WS
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