Only registred members can create thier own customized alerts.
Fairfax Market Report including African Eagle, Stellar Diamonds, Oxus Gold, Hambledon Mining and others
Morning View
Gold $1,358/oz
· Gold prices to remain high for long period according to the China National Gold Group Corp. (CNGGC)
· Supplementation of gold reserves will be a matter of national security. The CNGGC has long appealed to the Chinese government to replenish the country’s gold reserves (Xinhua News agency).
· Jewellery market returns to normal following the Diwali holidays
Thanksgiving holiday on Thursday means a shortened trading week in the US with markets closing on Thursday.
· Funds generally de-risk ahead of Thanksgiving and the Christmas break hence profit taking seen last week
· Economic focus will remain on the third quarter preliminary US GDP data due for release tomorrow with the UK figures released on Wednesday.
Japanese national holiday tomorrow for Labour Thanksgiving Day.
Conferences:
Mines & Money conference (London) - Conference - 30th November & 1st December
Probably the best speech to attend will be on Tuesday November 30th at 3:55 as follows:
15.55 Jean-Claude Trichet ate my mining investment - investment strategy for miners and investors
John Meyer, Analyst, Fairfax IS
http://www.minesandmoney.com/london/conference/conference-day-one
Economic News
Ireland - European Finance ministers have agreed to a request from Ireland for an 80-90bn euro bailout that will include contributions from the UK. Ireland will channel the funds to lenders through a “contingent” capital fund, Irish Finance Minister Brian Lenihan announced yesterday. The deal will not be concluded until the end of November.
China - The State Council announced on Sunday a number of measures to rein in rising commodity prices and ease the economic pressure on the nation’s poorest people.
· Local governments and departments are required to boost agricultural production and stabilize supply of agricultural products and fertilizer while reducing the cost of agricultural products and ensuring coal, power, oil and gas supplies. Further curbs to stop increasing inflation are expected to be announced over the next few weeks.
· The People’s Bank of China said on Friday that it will raise the required reserve ratio’s for banks by 50 basis points from the end of the month in an effort to further tighten credit.
· Government efforts the curb the property market look likely to produce results in 2011 according to a recent market report. China's property prices are likely to decline by almost 20% next year according to the report produced by the Renmin University of China.
US – The National Association of Business Economics has published a report that estimates the US economy will fail to strengthen in 2011 as companies limit hiring and consumers curb spending. The report estimates that GDP will increase 2.6% next year after having increased by 2.7% this year.
· Q3 GDP Data will be released tomorrow.
Australia – The Age reports that treasury boss Ken Henry admits that the new MRRT is complex but not a degree that companies will no understand their obligations.
· From mid 2012 the 30% tax will see miners pay state royalties that can be credited against their MRRT liability. The MRRT has been negotiated to replace the even more controversial Henry Tax and has been negotiated with the involvement of BHP, Rio and Xstrata.
· The whole tax debacle on miners by the current government has significantly increased the risk profile for Australia as a jurisdiction for miners and could be making other jurisdictions more attractive going forwards. However, the country remains a major source of mineral wealth to the world.
Portugal - Yields on bonds of Portugal have jumped amid concern that fallout from Ireland would spread. The extra yield that investors demand to hold Portuguese 10 year bonds instead of German bunds climbed to a record 484 basis points last week as concerns that problems in Ireland will spread.
New Zealand – Efforts to locate the 29 workers trapped after an explosion at the Pike River coal mine last week continue. Pike River said earlier today that it was as yet unable to determine the exact cause of the explosion or the implications to its property and business.
Currency – The Euro rose for a fourth day against the dollar and the yen on the assumption that a Irish bailout would contain the debt problems and stop the spread of worries to other peripheral nations. The dollar has weakened further today.
US$1.374/eur vs $1.371eur yesterday. Yen83.47/$ vs 83.23/$ SAr6.98/$ vs 6.94/$ $1.606/GBP vs 1.608/GBP
Commodity News
Precious Metals:
Gold US$1,358/oz vs US$1,361/oz Friday– Prices are up today after having experienced some volatility
· The latest report from the VM Group showed that global hedging fell 2.0moz QoQ - the largest fall for in 3.
· SPDR gold holdings rise slightly to 1,289.30t (41,453moz) from 1,286.30t (41,355moz), value US$55.638n.
Platinum US$1,668/oz vs US$1,666/oz Friday –
Palladium US$709/oz vs US$705/oz Friday –
Silver US$27.55oz vs US$27.28/oz Friday – Prices are expected to increase next year according to industry reports as investors seek alternatives to gold to preserve wealth.
Rhodium US$2,350/oz vs US$2,350/oz Friday–
Base metals: Prices are up across the board today as the dollar weakened.
Copper US$8,414/t vs US$8,517/ Friday – Striking workers at giant Collahuasi mine in Chile were holding firm on strike action. At most only 3% of the 1,551 striking employees returned to work on Friday which was the first day that Chilean law allowed them to quite the walkout and go back to work without being fined by the union. Workers have till tomorrow to do this, after which they could be fined.
· Codelco, the world’s largest copper producer, said Nov. 20 it reached an agreement with unions at its Norte division over job layoffs
Aluminium US$2,292/t vs US$2,324/t Friday –
Nickel US$22,030/t vs US$22,070/t Friday –
Zinc US$2,193/t vs US$2,230/t Friday –
Lead US$2,297/t vs US$2,350/t Friday –
Tin US$25,200t vs US$25,680/t Friday –
Energy:
Oil US$85.40/bbl vs US$84.89/bbl Friday – Prices have rebounded today as optimism increases that the Irish bailout will contain debt concerns from infecting the Euro zone impacting economic growth.
Gas US$4.212/MMBTU vs US$4.002/MMBTU Friday – Further evidence of Chinese intentions over the next few years and their push to reduce dependency on coal was seen as China National Petroleum Corp announced that it would build four natural gas storage depots in the coming years.
Uranium – $59.50/lb this week vs $58.50/lb last week–
Coal – Chinese authorities have stepped in to limit rapidly rising coal prices with the NDRC ordering coal producers to boost self discipline and for local governments not to restrict sales outside their province.
· China is suffering coal shortages in some regions with power generators having to import coal.
Other:
Iron Ore – Prices relatively stable last week finishing at US$165-166/t cfr China for Indian fines. Supply has improved as the Indian Monsoon has come to an end. That prices haven’t pulled back despite the seasonally weaker demand in China is an indication that supply could be tighter from other parts of the world Metal Bulletin reports.
Company News
Mining:
African Eagle (LSE:AFE) – Uranium JV signed up on non-core assets
· African Eagle has vended its non-core uranium division to Jacana Resources, a private Australia company in return for A$200,000 on signature of the agreement, A$300,000 in shares plus a further A$500,000 in cash or shares on Jacana’s IPO.
· African Eagle will also nominate the non-exec Chairman of Jacana and be entitled to receive 20% of any options issued prior to an IPO. African Eagle’s Zambian partner Kapumba Mining will receive 7.5% of the company’s payments in consideration of its 50.1% holding in the Lunga uranium area.
Conclusion: This is another step forward for the company as it divests of non-core interests to better enable it to focus on its Dutwa Nickel project in Zambia, which is a large nickel laterite project with particular characteristics that could lead to a highly economic resource e.g. low acid consumption and high leach rates.
Stellar Diamonds (LSE:STEL) – Exploration update on Tongo project
· Stellar Diamonds has updated the market on the bulk sampling programmes at its 100% held Tongo Kimberlite Dyke in eastern Sierra Leone where it has collected kimberlite from Dyke 1 and nearly completed the construction of the processing facility to lead to results in early 2011.
· Tongo comprises of four dykes ranging 0.5km-3km long and 50-100cm widths, with previous mini bulk sample of Dyke 1 returning 100cpht at US$144/carat.
· The company has collected over 500t from a 60m section of Dyke 1. The aim of the programme is to yield between 1,000 and 2,000 carats for grade and valuation purposes.
Mining last week:
Oxus Gold* (LON:OXS) – LR Global convert 16.5m shares at 12p
Konkola Resources – Copper subsidiary of Vedanta to be IPO’d to raise at least US$1.1bn
Sable Mining (LSE:SBLM) – Iron ore interests in Guinea acquired
Lonmin (LSE:LM) – Q3 production report to June
Avocet Mining (LSE:AVM) – Initial Mineral Resource at Souma
International Ferro Metals (LSE:IFL) – Quarterly production report shows steady production but weaker sales
Hambledon Mining* (LSE:HMB) – Ognevka in bankruptcy as expected
Baobab Resources (LSE:BAO LN) – Heads of agreement signed with North River Resources
African Aura+ (LSE:AAAM LN) – Resource at New Liberty increased to 1.51moz at 3.78g/t
Medusa Mining* (LSE:MML LN) – Management decision to expand Co-O to 200,000ozpa
Oxus Gold* (LSE:OXS) – Chinese consortium grant critical approval for financing deal
Baobab Resources (LSE:BAO) – Tenement package boundaries updated
Ormonde Mining * (LSE:ORM) – Record APT prices Corporate
