Good afternoon
Merkel and Macron hammered out a massive stimulus deal…I have to say: In times of US, China and Russia not being our friends, a strong and united Europe is very important, and I am proud of them - not even ignoring the massive cost of it. But this is an important manifest! I know, that I am controversial here - but this money is political money, and I think it´s well spent. I am also sure, though, that the giving countries will somehow have to raise the funds for it - and what is easier than taxing the rich? And equitiy-profits…and property, like Biden is proposing! But it´s a price we should pay…in my very personal opinion.
Gold was trying to go higher in European trading, but after lunch here, it took really off. Gold is currently at 1837 US$/oz. As you would expect, gold stocks are very strong in North America , GDXJ is up by about 3,5%.
Gold ETF´s saw strong inflows yesterday of 318.000 oz, more than double of recent numbers.
Secondary placements in gold stocks, according to Bloomberg numbers, were 2,4 bill US$ in the second Quarter, highest by a long shot since 2013. Gold is very much wanted!
Yesterday was the 20th of July - important date in Germany, as Stauffenberg and friends tried to kill Hitler on that date and saved the German soul!
Equity markets are relieved and have yet another excuse to go higher!
Base metals are also stronger - BHP warned about copper production in Chile and forecast 20%or so smaller production for their mines in Chile in the current fiscal year. The company produced a record amount of iron ore last Quarter - but Vale had slightly disappointing numbers, so iron ore made a new high on the Dalian Exchange.
The A$ is very strong against a weaker US$…highest at 0,71 US$ since April 2019…neadless to say, that once again, the A$ gold price is unchanged at 2592 A$/oz currently.
Tietto - announced some high grade, strong intersections yesterday, from about 180m below the base of the current resource , of 5m with 8,3g and 1m with 35g, at a depth of about 400m. The next resource estimate in September should be fun! I am not convinced as aet, that we will also see an underground mine here - but it´s certainly a possibility and further drilling will probably tell!
Chalice - farmed into a property about 300 km from Julimar, which includes a look-a-like Ni-Cu-PGE target over 20km strike length. CHN will spend 3,7 Mill A$ over 4 years to earn 70% of the project. Chalice is obviously big believers in the entire area!
Perseus - had an ok Quarter. Production was better than the previous Quarter, but slightly below expectations - at relatively low costs vs expectations of AISC 935 US$/oz. The guidance for the current half year is also slightly disappointing - but the company emphasizes, that this is the case because of potential virus impact. Very positive is, that Yaoure construction continues very positively, and is tracking slightly below cost-and time budget, for a start-up in december of this year. Yaoure will be their most important asset. The takeover of Exore is nearly complete - at todays gold price of 1840 US$, it looks like a very timely and probably rather cheap aquisition. All fine with PRU - they will probably run with the gold price. The stock is ok priced - but then, some others appear rather pricey! But we will have elections in Ivory Coast this year, and there could be some trouble ahead. In my opion: At the current gold price,a nd above 1.50 A$, nothing wrong with taking a few off the table! Endeavour as the kind of flagship company in Western Africa is underperforming - perhaps this fate is near for PRU. And I can only repeat myself: WAF is just so much cheaper!
Have a nice evening
WS
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