Base metals show some recovery as precious metals fall despite US dollar weakness
Base metals show some recovery today following sustained price pressure in recent weeks
The move signals a pause in the relentless selling caused by deleveraging, short sellers and forced sellers
Commodity Trading Hedge funds report to us that they have had a good month as market conditions proved beneficial for trading strategies
Sadly this is not helpful for the millions of people who depend on mining for their income many of whom face uncertain times at best or total loss of income
Survival is the name of the game in mining in the present environment as base metal prices are well below the marginal cost of production
Our only solace is that the sharper and harder the downturn then the quicker and more robust will be the recovery .
Cap Gemini’s report on US High Net Worth wealth shows wealth and population reached record levels in 2014
US HNWI accounts for 28.6% of new HNWI wealth added globally since 2008.
There was an 8.6% increase in the number of US HNWIs to 4.4m and a 9.4% increase in investable wealth to US$15.2 trillion.
The 12 largest US metro areas led by Texas and the West Coast added over US$1 trillion of new HNWI.
Real estate growth caused these cities to benefit the most.
Houston recorded the largest HNWI population growth of all the cities moving to 7th from 8th position in the top-12 ranking.
Bank of China – to be fined in US on a daily basis
The Bank of China is liable to huge fines on a daily basis if it does not hand over details of accounts for companies accused of selling fake goods
The bank claims it would be violating China’s privacy laws if it hands over the information
The US court ruling relates to a case brought by Gucci and Yves Saint Laurent
US – Manufacturing sector surprisingly reported a decline in activity in Nov based on ISM PMI numbers.
That was the first time the index fell below 50.0 threshold in three years amid a strengthening US dollar and cuts by oil companies.
New orders fell while customers continued to work through elevated inventory levels.
10 of 18 industries including apparel, machinery, primary metals, electrical equipment, appliances and components and computer and electronic products reported contraction in Nov.
On a more positive note, auto sales remained on track to hit record high levels this year.
UK – Retail prices fell in Nov in the run up to Black Friday sales in non-food sector and a continuing competition in the food segment.
Lower commodity prices have also contributed to a decline in the average retail price in UK shops.
Prices fell 2.1%yoy last month following a 1.8%yoy decline in Oct.
Australia - GDP growth accelerated in Q3/15 marginally beating market estimates.
The economy climbed 0.9%qoq/2.5%yoy versus 0.3%qoq/1.9%yoy in Q2/15 and 0.8%qoq/2.4%yoy forecast.
Brazil – The economy contracted for a third consecutive quarter in Q3 marking the longest losing streak since records began in the mid-90s.
GDP came in -1.7%qoq/-4.5%yoy which compares to estimates for a -1.2%qoq reading.
US$1.0622/eur vs 1.0606/eur yesterday. Yen 123.12/$ vs 122.91/$. SAr 14.364/$ vs 14.379/$. Sterling $1.507/gbp vs 1.512/gbp
0.732/aud vs 0.729/aud – yesterday. Non-Farm payrolls due Friday, Fed rate decision on 16 December
Gold US$1,068/oz unch again vs US$1,071/oz yesterday –
Platinum US$841/oz vs US$839/oz yesterday -
Palladium US$540/oz vs US$547/oz yesterday –
Silver US$14.17/oz vs US$14.18/oz yesterday
Copper US$ 4,583/t vs US$4,572/t yesterday –
Aluminium US$ 1,469/t vs US$1,444/t yesterday –
Nickel US$ 8,970/t vs US$8,790/t yesterday – Eight major producers said they will cut 15kt of nickel production in Dec and reduce output by at least 20% in 2016.
15kt equates to c.2% of annual Chinese aggregate production and <1% of the 2mtpa market.
Zinc US$ 1,560/t vs US$1,546/t yesterday –
Lead US$ 1,648t vs US$1,636/t yesterday –
Tin US$ 15,030/t vs US$14,850/t yesterday –
Oil US$44.2/bbl vs US$44.7/bbl yesterday –
Natural Gas US$2.198/mmbtu vs US$2.237/mmbtu yesterday –
Uranium US$36.10/lb unch vs US$36.10/lb yesterday –
Iron ore 62% Fe spot (cfr Tianjin) US$39.9/t unch vs US$40.8/t – yesterday – Iron ore prices continue to decline following massive price fall in Singapore on Friday
Collapsing iron ore prices will be putting pressure on Australian budget forecasts with the Mid-Year Economic and Fiscal Outlook (MYEFO) due later this month.
The May estimate for US$48/t fob price will need to be revised down US$33-34/t to match current spot <US$40/t CFR price.
General estimates suggest every US$10/t downwards revision in the price leads to a US$2.5bnpa in lost revenue.
Thermal coal (1st year forward cif ARA) US$46.00/t vs US$46.60/t – yesterday
Tungsten - APT European prices $165-175/mtu unch again
Atlantic Coal (LON:ATC) 0.1 pence, Mkt Cap £5.2m – Letter from shareholder requisitioning General Meeting to cancel AIM listing
Atlantic Coal has received a letter from an activist shareholder, Mr Stuart James Thomas, who holds 7.7% of the shares, requisitioning a General Meeting to discuss and vote on:
"The Company is delisted from the AIM stock market"
“It is hereby proposed that the Company's name be changed to Atlantic Carbon PLC with immediate effect and that notice of the Change of Name of the Company be filed at Companies House."
“The Board of Atlantic Coal is currently seeking advice in relation to the validity of the letter.”
Atlantic coal recently announced that it was cancelling its US OTCQX listing due to the cost associated with the listing.
Dalradian Resources (LON:DALR) 35.5 pence, Mkt Cap £76.0m – High grade exploration samples
The company has announced high grade gold assays from exploration samples taken on the Rylagh area approximately 12.5km south west of the company’s Curraghinalt deposit in Northern Ireland.
The new results come from 40 field samples of a series of quartz-carbonate veins grading from less than 0.01 g/t to as high as 139.5 g/t gold and 168 g/t gold. The samples were taken from an area “in and around the Rylagh Burn” close to the edge of the company’s DG3 licence.
The company has previously reported some high-grade exploration drilling results from the Crow, Causeway West and Mullan veins to the south of Curraghinalt and these latest results hint that the mineralisation may be extend beyond the immediate Curraghinalt area itself.
In October, 2014, the company reported a Measured and Indicated Resource for Curraghinalt of 3mt at average grades of 10.4g/t gold, 3.9 g/t silver representing 1m oz of contained gold. In addition, inferred resources of 8mt at an average grade of 9.7g/t gold and 3.9g/t silver represents an additional 2.5m oz of gold.
Conclusion: The discovery of high grade mineralisation at Rylagh is encouraging for Dalradian Resources, however, these appear to be very early stage prospecting samples which will require considerable follow up work before the company is able to develop a resource or establish the scale of the occurrence. The priority is likely to continue to be advancing the feasibility study of the planned underground mine at Curraghinalt.
ASA Resource (LON:ASA) 0.38 pence, Mkt Cap £6.3m – Nickel prices hit Bindura Nickel Corp
(formerly Mwana Africa)
Mwana Africa is struggling to contain the impact of much lower nickel prices on its subsidiary Bindura Nickel Corporation ‘BNC’.
BNC posted a 56% fall in revenues to $20.6m in the first half of the financial year ending 30 September.
The fall was mainly down to a 29% fall in concentrate sales of 2,762 at an average price of 7,654/t vs $11,809/t .
The combination of the fall in prices with lower tonnages sold cut gross profits to $2.3m for the half year from $23.8m a year earlier.
An operating loss of $4m was recorded vs $12.5m gave rise to a Profit After Tax of $3.4m vs $8.5m yoy.
The company invested some $8.8m in the project to restore the nickel smelter to operation.
Trojan nickel mine: head grade fell to 1.41% at Trojan vs 1.51% causing nickel production to fall 28% yoy to 2,792t
Rambler Metals (LON:RMM) 3 pence, Mkt Cap £4.3m – First Quarter Production Results in line
For the quarter the company produced 4,788 dry tonnes of copper concentrate of 26.57%.
58,053 dry tonnes were milled at copper grades of 2.42% with recoveries of 95.3%.
This in line with full year guidance of around 17,000-21,000 tonnes of copper concentrate.
On a quarter on quarter basis dry tonnes produced are down by 6% with copper head grades down from 2.79% to 2.42%.
Copper recoveries were 95.3% in line with guidance.
Gold recovered was 1,986 oz with silver of 15,664 oz.
Guidance for FY 2016 is based on the PFS optimisation of the lower footwall zone (LFZ).
The optimisation is based on blending increasing amounts of LFZ ore with Ming massive sulphide ore as production is ramped.
For FY 2016 the company expect to achieved 850 tpd before mill capacity is expanded to 1,000 tpd.
To reach the target 1,250 tpd for Phase II, the grinding capacity has to be increased to 1,250 tpd.
Phase II is targeted for the end of 2018.
Conclusion: The company appears to be in line with their optimisation strategy for the lower footwall zone.
Sirius Minerals (LON:SXX) 18.5 pence, Mkt Cap £424.5m – Period for Judicial Review of the Planning Decision expires
Sirius Minerals reports that the timetable for lodging any challenges with the High Court to the positive planning decision by the North York Moors National Park Authority expired on 30th November and that the “Authority has confirmed that it has not been notified of any application for a JR [Judicial Review] having been submitted.”
The granting of planning permission to develop a potash mine inside the North York Moors National Park has been a protracted process and Sirius Minerals has put in lot of work to address concerns, build local support for the project and allay the fears of a range of interested parties. It now appears that, with the exception of the outstanding application for the development of harbour facilities on Teesside which is expected to be resolved by the summer of 2016, that the planning issues are now complete and the company can move ahead with the financing and engineering work required.
Sirius Minerals is nearing completion of the Definitive Feasibility Study and expects to “publish the material findings of the DFS in January 2016.”
SolGold* (LON:SOLG) 1.6p, Mkt Cap £13.2m – New corporate presentation
SolGold report the posting of a new corporate presentation on their website.
The presentation highlights developments at the Cascabel copper/gold project in Ecuador and strategies for its ongoing exploration.
Investors may also chose to view the company’s most recent video presentation
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has visited the Cascabel project.
Base metals show some recovery as precious metals fall despite US dollar weakness