column http://www.proactiveinvestors.co.uk Proactiveinvestors column RSS feed en Mon, 19 Feb 2018 17:48:02 +0000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) Base Metals pull back on stronger dollar http://www.proactiveinvestors.co.uk/columns/sp-angel/29399/base-metals-pull-back-on-stronger-dollar-29399.html No 1 Integrated Nomad and Broker for Mining on AIM*

Petra Diamonds (LON:PDL) – Interim results

SolGold* (LON:SOLG) – Latest drilling results from Alpala

Sub-sea mining started off as CIA plot in 1970’s (Nautilus Minerals)

  • A BBC report today tells a remarkable story of a CIA plot to recover a lost Soviet submarine which was carrying nuclear ballistic missiles.
  • Russia’s K-129 submarine had sunk 1,500 miles north-west of Hawaii.
  • The US sent a ship which was said to be financed by billionaire, Howard Hughes, to recover the submarine which was closely watched by Soviet spy ships.
  • Manganese nodules were recovered from the sea floor as a diversion to the Russians, while the American’s grabbed the Soviet sub.
  • The operation showed the way to potential mining of the sea-bed in deep water as is planned by Nautilus Minerals.
  • http://www.bbc.co.uk/news/resources/idt-sh/deep_sea_mining

 

Four nation alliance rising to counter China’s belt and road

  • The US, Japan, India and Australia may join forces to establish an alternative to China's Belt and Road Initiative in attempt to counter Beijing’s growing influence
  • The multi-billion dollar initiative aims to connect Asia, Europe, the Middle East and Africa with a vast logistics and transport network, using roads, ports, railway tracks and fibre optic lines for trade network
  • Control of the logistical network could give significant advantage to trade flows in certain directions to the advantage of the sponsoring economies
  • Donald Trump is meeting with The Australian Prime Minister, Malcolm Turnbull, to discuss the matter this week

 

Dow Jones Industrials

 

+0.08%

at

25,219

Nikkei 225

 

+1.97%

at

22,149

HK Hang Seng

 

-

 

 

Shanghai Composite

 

-

 

 

FTSE 350 Mining

 

+0.06%

at

19,057

AIM Basic Resources

 

+0.28%

at

2,592

 

Economics

Europe - European equities climbed this morning driven by baking and travel shares with both US and Chinese markets shut today.

  • US markets closed higher on Friday with the S&P 500 index reporting the best week in five years (+3.5%) after a strong correction recorded earlier in the month.
  • Gold prices were rangebound around $1,350/oz after briefly touching $1,360/oz on Friday.
  • Base metals are off this morning on the back of a rebound in the US$ index which bounced off a three year low recorded on Friday.

 

US – Consumer sentiment gauge climbed to second-strongest level since 2004 beating market estimates on back of a drop in personal-income tax withholding rates, according to the UoM survey

  • The negative effect of increased stock market volatility has been dominated by reports of “rising incomes, employment growth, and by net favourable perceptions of the tax reforms”.
  • “Purchase plans have been transformed from the attraction of deeply discounted prices and interest rates that outweighed economic uncertainty, to being based on a sense of greater income and job security as the fewest consumers in decades mentioned the favourable impact of low prices and interest rates,” report read.
  • Markets are closed today for President’s Day.

 

Japan – Strong exports growth point to robust overseas demand, although the recent pick up in the yen is likely to put some pressure on outbound shipments.

  • Exports to China were up 30.8%yoy, to the EU up 20.3%yoy and to the US up 1.2%yoy.
  • Imports were also up strongly which saw trade balance posting the first monthly deficit since mid-17.

 

Germany – 464k SPD members are voting in a postal ballot from Tuesday this week on whether the party should form the coalition agreement with Christian Democrats.

  • Local daily Bild polled the mayors of the 35 biggest towns and cities governed by the SPD reporting 26 in favour of the grand coalition.

 

UK – National property prices growth climbed slightly in February recovering from one of the lowest levels in more than five years, Rightmove numbers showed this morning.

  • Despite a slight rebound, monthly sales growth remained below the 10-year average for the time of the year.
  • In London asking prices fell 1%yoy this month marking a sixth consecutive decline with an average time to sell a property in London having climbed to 83 days from 73 days a year ago.
  • Month on month, London prices were up 4.4% amid a seasonal increase.
  • Average asking price in the capital was almost £630k versus a national average of £300k.
  • Rightmove House Prices (%mom/yoy): 0.8/1.5 v 0.7/1.1 in January.

 

South Africa – The Chamber of Mines agreed to postpone a court challenge against new changes to the mining code including an increase black ownership of mines to allow for negotiations with President Cyril Ramaphosa.

 

DRC – Glencore and Randgold are partnering together to lobby a replacement of the existing Chamber of Mines arguing it “was unable to satisfactorily consolidate and communicate” wishes of the industry regarding changes to the Mining Code.

  • China Molybdenum, Ivanhoe Mins, MMG, Zijin Mining and AgnloGold Ashanti have all joined the notion.
  • “Watching people shoot themselves in the head, not even in the foot, is frustrating for me… the mining environment in the DRC needs to be improved, but improved in construction with the main investors, which are China Molybdenum, Glencore and ourselves, Randgold CEO Mark Bristow said.
  • Miners asked President Joseph Kabila for a meeting “to once again put forward our positions” about changes to the mining code approved by lawmakers on January 27.

 

Currencies

US$1.2410/eur vs 1.2534/eur last week. Yen 106.56/$ vs 105.84/$. SAr 11.671/$ vs 11.612/$. $1.401/gbp vs $1.413/gbp. 0.793/aud vs 0.798/aud. CNY 6.342/$ vs 6.342/$.

 

Commodity News

Noble group warns of growing losses

  • Noble Group has warned it is on track for a net loss of $5bn for 2017 with a net loss of $1.9bn in Q4 due to challenging operating conditions
  • The group is reported to be lining up some $700m of financing
  • The board hopes the restructuring plan should restore shareholders equity and create a sustainable capital structure
  • Noble is a major trader of iron ore and coal and has invested in Mkango Resources for its potential future Rare Earth Element supply

 Precious metals:         

Gold US$1,348/oz vs US$1,360/oz last week

   Gold ETFs 72.1moz vs US$71.9moz last week

Platinum US$1,013/oz vs US$1,011/oz last week

Palladium US$1,049/oz vs US$1,027/oz last week

Silver US$16.69/oz vs US$16.92/oz last week

           

Base metals:   

Copper US$ 7,182/t vs US$7,244/t last week - Freeport-McMoRan has secured a one year extension to the permit to export copper/gold concentrate from the Grasberg operation.

  • The Energy and Mineral Resources Ministry approved an application for the export of 1.2mt in the next 12 months.
  • The Company and the government remain in negotiations over the nationalisation of the 51% stake in the operation and the valuation of the stake.

Aluminium US$ 2,193/t vs US$2,173/t last week

Nickel US$ 13,765/t vs US$14,165/t last week

Zinc US$ 3,559/t vs US$3,591/t last week

Lead US$ 2,609/t vs US$2,634/t last week

Tin US$ 21,850/t vs US$21,700/t last week

           

Energy:           

Oil US$65.2/bbl vs US$64.8/bbl last week

Natural Gas US$2.611/mmbtu vs US$2.565/mmbtu last week

Uranium US$21.75/lb vs US$21.75/lb last week

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$77.2/t unchanged

Chinese steel rebar 25mm US$638.3/t vs unchanged - Rio Tinto and BlueScope Steel nervously await Trump tariffs

  • Rio Tinto and Bluescope are reported to be facing a nervous wait as Donald Trump considers the imposition of new tariffs and quotas on foreign steel and aluminium
  • Three proposals released last week include blanket tariffs of at least 24% on all foreign steel and 7.7% on all aluminium shipped to US, putting Bluescope and Rio in the firing line
  • The Australian prime minister is likely to ask for an exemption for Australia to exempt Bluescope from the new tariffs
  • We suspect the tariffs are more aimed at the dumping of cheap steel and aluminium from China

Thermal coal (1st year forward cif ARA) US$80.2/t vs unchanged

Premium hard coking coal Aus fob US$233.1/t vs unchanged

 

Other:  

Tungsten APT European US$319-325/mtu unchanged

Cobalt LME 3m US$81,500.0/t unchanged

Lithium – New Water purification technology provide source for lithium

  • Scientists have come up with a new desalination technique to catch lithium ions and purify ocean water
  • The technology uses metal organic frameworks with sub-nanometer particles to catch lithium ions whilst purifying sea water
  • Sadly the technology is not yet ready for the real world but if it does prove to be commercial then it could provide some by-product lithium

 

Company News

Petra Diamonds (LON:PDL) 72p, mkt cap £385m – Interim results

  • After non-cash impairment charges of US$118m arising from the impact of a strong Rand on the carrying value of its Koffiefontein and Kimberley Ekapa Mining joint-venture “compounded by continuing operational underperformance”, Petra Diamonds reports a net after tax loss of US$117.7m for the six months to 31st December 2017 (2016 US$35.2m profit).
  • Although diamond production increased by 10% to 2.2m carats (2016- 2.0m carats), sales volumes declined by approximately 5% to 1.8m carats “mainly due to the blocked Williamson parcel not sold”.
  • Net debt increased to US$644.7m at 31st December (30th June 2017 – US$555.3m) and the “Company's financial position remains highly sensitive to the ZAR:US$ exchange rate; net debt for 30 June 2018 is targeted to fall to ca. US$600 million, assuming an exchange rate of ZAR12:US$1 and the sale of the blocked Williamson parcel in H2.”
  • Capital expenditure reduced by 43% to US$77.5m as the major capital programmes at the Group’s South African mines have been completed.
  • “Petra's main underground expansion projects remain on track, with both Finsch's Block 5 SLC and Cullinan's C-Cut Phase 1 continuing to ramp up during the Period. Finsch's ROM carat production rose 14% to 931,859 carats and Cullinan's ROM carat production rose 68% to 602,594, demonstrating the significant progress made at both assets. Due to the nature of sub level caving and block caving, each month Petra grows the footprint of the existing mining areas and opens up more access to the respective orebodies. These expanding footprints deliver higher production volumes each month, thereby growing access to undiluted ore.”
  • The company expects to produce 2.4-2.5m carats of diamonds during H2 maintaining its revised production guidance in the range 4.6-4.7m carats for the full year to end June 2018.
  • Petra Diamonds comments that “The diamond market is currently experiencing positive momentum post the healthy Christmas sales period, with pricing up ca. 3 - 4% on a like-for-like basis at the Company's first tender of H2 when compared to average prices achieved in H1.” As the Finsch and Cullinan mines produce increasingly from the new mining areas, the product mix is improving and as a result, the company expects improved prices from these mines during H2.

Conclusion: Operational and diamond market improvements are positive indicators for H2, however the company remains sensitive to the recent strengthening of the Rand, particularly in achieving its debt reduction targets.

 

SolGold* (LON:SOLG) 22 p, Mkt Cap £377m – Latest drilling results from Alpala

(SolGold own 85% of Cascabel in Ecuador)

  • SolGold reports the latest drilling and assaying results from holes 26-D3 to 35 on the Alpala project at Cascabel in Ecuador. In addition to the results reported today, results from a number of other holes are pending and the company expects to incorporate this additional information to update the maiden mineral resource estimate within the next two months.
  • Among the results highlighted today, which unfortunately are reported only in terms of copper equivalent grades (CuEq) and from unspecified depths within the drillholes which consequently obscures the underlying tenor and location of the copper and gold assays are:
    • A 1,100m long intersection in Hole 26-D3, from an undisclosed depth, averaging 0.54% copper equivalent  and including 164m averaging 0.76% and 224m averaging 0.75%, also reported in copper equivalent terms; and
    • A 178m long intersection in Hole 29-D1 averaging 0.62% CuEq including 48m averaging 0.82% CuEq; and
    • An 824m long intersection in Hole 33 averaging 0.82% CuEq which includes 576m averaging 0.93% CuEq and a 262m long section averaging 1.15% CuEq though, in the absence of depth information,  it is unclear whether the 262m portion in included within the wider 576m long portion or additional to it, though we assume that the former is the case; and
    • A 604m long intersection in Hole 33-D1 averaging 0.73% CuEq which includes 146m averaging 1.71% CuEq and 106m averaging 2.13% CuEq; and
    • A 302m long section of Hole 35 which averages 0.60% CuEq and includes 160m averaging 0.76% CuEq.
  • In addition to the results reported today, partial results from Hole 36 “indicate very high grades at Alpala Northwest, returning an open ended 82m @ 1.57% CuEq (1494‐1576m). Assays beyond 1576m are pending”.
  • Assays are also awaited from a number of other holes including Hole 36 which intersected visual copper sulphide mineralisation over 568m between 1432m and 2000m;  Hole 37, still in progress where visual copper sulphide mineralisation was encountered between 1620m and the current depth of 1842m; Hole 39 which intersected 205m of visual copper sulphide mineralisation between 665-870m; Hole 42 with 602m of mineralisation, open at depth was found from a depth of 309m; and approximately 205m of visual mineralisation, also open at depth from 665m.
  • The company particularly highlights the significance of Hole 37 at Alpala as it implies “major system extensions northwest towards the Trivinio prospect”, the bornite-chalcopyrite-magnetite mineral assemblage is “characteristic of the high‐grade centres of many porphyry copper‐gold systems”.
  • Taken in conjunction with recent geophysical interpretation which “has demonstrated that mineralisation from Alpala North and Northwest may be continuous with the Trivinio and Moran Targets, which would extend the Alpala System northwards by approximately 1km” the company appears to be building evidence for a broader model linking some of the prospects previously interpreted as discrete individual occurrences into a larger, linked entity.
  • Drilling of the Trivinio prospect is scheduled “following the completion of Holes 34 and 37 at Alpala”.
  • Commenting on the progress of the 120,000m planned 2018 drilling programme at Alpala, the company emphasises that it is directed at “northwest and southeast extensions”. The addition of further drilling capacity, and particularly the track mounted rigs at Alpala, which are now “delivering up to 100m core per day” and the use of directional drilling is delivering significant cost savings reported to “have more than halved from USD1,100 per metre to USD500 per metre”. Simplistically this implies potential savings on the 2018 Alpala work programme of up to around US$70m.

Conclusion: We look forward to the forthcoming assay results and subsequent update to the mineral resource estimate for Alpala and further evidence of the possible extension towards Trivinio once drilling there commences. Newcrest Mining geologists are overseeing the project and are said to be closely involved in its direction. The Newcrest team are expert in the evaluation of deep level, block cave mining.

*SP Angel act as UK broker to SolGold

 

 

]]>
Mon, 19 Feb 2018 11:51:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29399/base-metals-pull-back-on-stronger-dollar-29399.html
Northland Capital Partners View on the City - Beximco Pharmaceuticals http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29398/northland-capital-partners-view-on-the-city-beximco-pharmaceuticals-29398.html

Beximco Pharma Initiation of Coverage
(Note attached)

NORTHLAND VIEW
We initiate coverage on Beximco Pharma, an established, profitable, generic-drug manufacturer based in Bangladesh. The Company is one of the top generic drug producers for the domestic market. Having received regulatory approval from most of the major drug-regulators, including the US Food and Drug Administration (FDA), the Company is embarking on an aggressive global export strategy.
 Maintained domestic market share: Beximco Pharma is in the top three largest pharmaceutical companies by sales and volume in the domestic Bangladesh market.
 Aggressive export growth: Beximco Pharma is expanding its export operations and is the largest exporter of generic drugs in Bangladesh.
 Regulatory approval: The Company has received Good Manufacturing Practice (GMP) regulatory approval for most major drug regulators including the EU (Austria), Australia, Canada and the US FDA.
 Infrastructure development and portfolio expansion: Beximco Pharma currently has over 500 products and a continuous, healthy pipeline of potential generic drugs. The company has recently acquired a local pharmaceutical company and construction is nearing completion for a large-scale manufacturing unit.
 Unmet need for generic drugs: With the continually escalating prices of branded drugs, generic drugs offer a low-cost method of providing affordable medicines to cash-strapped healthcare providers.
 Valuation: We initiate coverage with a BUY rating and a 75p price target.

COMPANY DESCRIPTION
Beximco Pharma is a Bangladeshi company which manufactures and sells generic pharmaceuticals.

 

DISCLOSURES

Company Ticker Applicable Disclosures
Beximco Pharma (LON:BXP) 1.5
 
1. Northland Capital Partners Limited (‘Northland’) acts as Nominated Advisor and/or Broker to the Company.
2. Northland and or its affiliates, holds 1% or more of the Company’s equity shares.
3. Northland and or its affiliates, holds options or warrants in the Company which on conversion would represent 1% or more of the Company’s equity shares.
4. The authoring analyst or any associate of the authoring analyst has a long or short position in the Company’s securities held directly, or through derivatives.
5. Northland acts as corporate finance adviser and/or provides investment banking or research services to the Company for which it receives compensation.
6. A partner, director, officer, employee or agent of Northland is an officer, director, partner, employee or agent of the Company.

 

]]>
Mon, 19 Feb 2018 11:16:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29398/northland-capital-partners-view-on-the-city-beximco-pharmaceuticals-29398.html
Breakfast Alert - WideCells Group, Gordon Dadds Group, SimiGon http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29397/breakfast-alert-widecells-group-gordon-dadds-group-simigon-29397.html Set menu

AIM:

Total number of AIM Companies (Incl Susp):

955*

Total number of AIM Companies trading:

906*

*as at close of business  12 February 2018

 

Standard List**  of Main Market:

Total number of Standard List Companies

 (Incl Susp):

 136

 

Total number of Standard List Companies trading:

122*

*as at close of business  12 February 2018

 

NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):

86*

 

Total number of NEX Growth Market Companies trading:

82*               

*as at close of business 12February 2018

                                *A corporate client of Hybridan LLP

**  Standard Listing as defined by Hybridan LLP to be a business with strictly  operational activity

                                       

Dish of the day

Rockrose Energy readmitted (LON:RRE) readmitted to standard list following RTO of  Idemitsu Group.  Idemitsu UK's assets comprise, inter alia, a substantial number of producing fields in the North Sea . Market cap c £19.8m

 

Off the menu   

Red Leopard—RLH delisted under AIM rule 14. Potential RTO may see a new IPO in due course.

                               

What’s cooking in the IPO kitchen?

AIM

GRC International Group— holding company for a group of companies providing a range of products and services to address the IT governance, risk management and compliance requirements of organisations. Offer TBC, expected 5 March 2018

Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area . Vendor placing and new funds to a total of €225m, Target gross proceeds €207m.

TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer raising £70m at 190p with market cap of £185m, expected 21 Feb

Polarean  - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb

Block Energy—a  NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC

 

Main Market Specialist Funds

Life Settlement—closed-ended investment company whose principal activities will be to support and manage portfolios of whole and partial interests in life settlement policies issued by life insurance companies operating predominantly in the US.  Due 6 Mar.

 

Main Market Premium Listing

Energean Oil & Gas—Seeking gross proceeds of c.$500m. Independent oil and gas exploration and production company focused on  exploration, development and production of assets in the Eastern Mediterranean . Due march 2018.

IntegraFin provides platform services to UK clients and their financial advisers through its award-winning platform, Transact. Due Mar 18. FYSep2017 PBT up 44% to £29.9m.

 GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

 CVC (Sky Bet) rumoured to be seeking £2.5bn plus float.

 VC firm Augmentum rumoured to be seeking raise up to £125m.

                        

Breakfast buffet

WideCells Group (LON:WDC) 13.4p £8.7m

The healthcare services group focused on providing stem cell services and ground-breaking insurance for stem cell treatment, is pleased to announce a number of corporate developments.

David Henriques has been appointed to the board as a NED:

* Mr Henriques has significant asset management and corporate finance experience, and is involved with the digitalisation of insurance products

* Wideacademy, the Group's 100% owned education and training division, has successfully launched the first stage of www.wideacademy.

co -  Provides educational content for both the public and medical professionals to raise the profile of stem cell technologies and support the development of the industry.

* Platform combines free-to-access educational areas with paid for premium digital tools and resources for doctors/medical professionals.

We could see no forecasts.

 

Gordon Dadds Group (LON:GOR) 171.9p £49.16m

“The acquisitive legal and professional services business, is pleased to announce that it has completed the acquisition of Cardiff solicitors, Thomas Simon Limited for £1.88m plus an amount related to net tangible assets.”

 Thomas Simon is a well-established law firm whose main business areas are property (predominantly commercial), corporate, dispute resolution, private client and family.  For the year ended 31 July 2016, Thomas Simon achieved unaudited profit before tax of £0.43m on fee income of £2.09m.

Gordon Dadds recently moved its central Cardiff client facing business into new modern offices in anticipation of further expansion. Thomas Simon's business will be merged with Gordon Dadds' business in the new offices. The support functions for Thomas Simon's business enhance the Group's back office capacity and will be merged with Gordon Dadds' own support functions. FYMar18E rev £ 30.6m, £5.39m PBT.

 

SimiGon (LON:SIM) 15.25p £7.84m

The specialist “in modelling, simulation and training solutions, is pleased to announce that it has received a prime contract with the US Federal Aviation Administration (FAA) to deliver the Company's SIMbox simulation software, SIMbox simulation development tools, and engineering services for the FAA's Advanced Unmanned Aircraft System Research Simulator ("AURS").

This is a follow-on order from the original contract announced in September 2017 and is worth approximately $120,000 and has been factored into management's expectations for fiscal year 2018.”

 The AURS supports human factors research and safety research within the FAA's Aerospace Human Factors Research Division. SIMbox delivers the user interface for the operators in an aircraft simulation environment as well as a central repository for all components with the embedded configuration management capability.

We could see no forecasts.

 

Frontier IP (LON:FIPP) 83.5p £31.96m

“Completion of a first fundraising for portfolio company Molendotech Limited. Molendotech has received a commitment totalling £0.5m which will be invested in three tranches. Frontier IP will hold approximately 14% of the issued share capital of Molendotech following the investment of the third tranche. Molendotech develops a novel test which is able to identify the concentration of faecal bacteria in water. Molendotech's rapid, point-of-use test to determine water quality enables more informed decision-making about the use of water and significantly improves the ability to identify and track any pollution source.” Gaining commercial tractions.

 

Europa Oil & Gas (LON:EOG) 3.97p £11.97m

“Europa Oil & Gas, the UK and Ireland focused exploration, development and production company, is pleased to note a draft decision advertisement issued by the Environment Agency on 15 February (http:// bit.ly/2C3rPDh) that it is inclined to award a bespoke environmental permit for drilling and testing the Holmwood exploration well in PEDL 143 at Bury Hill Wood, Coldharbour Lane, Surrey. Further information can be found on the Environment Agency website http:// bit.ly/2Eu00ph.

A four-week public consultation process runs from 15 February to 15 March 2018. The Environment Agency issued a press release on 16 February 2018 regarding the consultation process. For further information, follow this link: http:// bit.ly/2Buoa05.”

 

Directa Plus (LON:DCTA) 50.5p £22.33m

The producer and supplier of graphene-based products for use in consumer and industrial markets, announces that the Ufficio Brevetti e Marchi (Italian Patent and Trademark Office) has granted the Company a patent for the product and application of its new graphene-based solution for enhancing the performance of tyres. Specifically, the patent covers Directa Plus' 'elastomeric composition comprising graphene and tyre components comprising said composition'.

The incorporation of Graphene Plus (G+) in tyres produces the joint effect of simultaneously reducing rolling resistance and increasing grip. The result is a tyre that is both faster in motion and safer in turning under braking or in extreme weather conditions.”

 

Next Fifteen Communications (LON:NFC) 421p £318.5m

“Next 15, the digital communications group, is pleased to announce a trading update ahead of its results for the year ended 31 Jan 2018, which are due to be announced in early April 2018. Next 15 anticipates that the results will be in line with the Board's expectations and the Board expects the Group to make further good progress in the year ahead.

The Group has seen an improvement in organic revenue growth in the second half of the financial year with organic revenue growth compared with the second half of last year expected to be in the high single digits. This comes off the back of the expansion of existing clients such as Samsung and the addition of Slack and Nike as significant new customers.” FY Jan 18E rev £198.8m, PBT £29.6m.

 

Diurnal Group (LON:DNL) 176.5p £92.8m

“The specialty pharmaceutical company targeting patient needs in chronic endocrine (hormonal) diseases, announces a marketing and distribution agreement with Emerge Health Pty Ltd (Emerge Health), a leading, specialised Australian pharmaceutical company focused on the marketing and sales of niche, high quality medicines to the hospital sector. The agreement covers the commercialisation of Diurnal's novel therapies, Alkindi® (hydrocortisone granules in capsules for opening) and Chronocort®­(modified release hydrocortisone), in Australia and New Zealand.” Potential Australian approval in 2020.

 

MedaPhor Group (LON:MED) 12.25p £11.1m

“The intelligent ultrasound software and simulation company, announces the launch of its new BodyWorks Eve simulator platform, an ultra-realistic manikin-based simulator to train medical professionals practising Point-of-Care Ultrasound (PoCUS) across emergency medicine and critical care.

First revealed at the International Meeting on Simulation in Healthcare (IMSH) in Los Angeles last month and now launched for general sale, the BodyWorks Eve is believed to be the first hi-fidelity female manikin-based simulator for emergency PoCUS training.”

 

 

 

]]>
Mon, 19 Feb 2018 09:24:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29397/breakfast-alert-widecells-group-gordon-dadds-group-simigon-29397.html
In the news: Panthera Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29396/in-the-news-panthera-resources-29396.html FROM THE BROKING DESK

A reminder that we’re marketing Geoff Stanley of Panthera Resources* (PAT LN) in the UK this week. Space is now obviously limited, but if you missed our previous announcement let us know and we’ll try and squeeze you in. RFC Ambrian listed Panthera on AIM just before Christmas last year. It owns rights to a 70% interest in the Bhukia Gold Project in Rajasthan, India, where it has defined a JORC resource of 1.74Moz of gold at a grade of 1.4 g/t.

While the company is underpinned by a portfolio of prospective West African gold exploration licences, it’s Bhukia that provides the most potential. The Geological Survey of India (GSI) has explored the project area, estimating a resource of 6.7Moz at a grade of 2.0 g/t; although not JORC-compliant, this represents a well-defined exploration target. Mineralisation remains open in all directions, suggesting the ultimate size of the project could be even greater. Progress on the granting of the Prospecting Licence (PL) has picked up over the past year and, although the timing is not final yet, the process seems on track. Panthera offers upside to exploration results from its West African portfolio and the grant of the PL and the resource drill-out at Bhukia.

 

RFC Ambrian recently initiated coverage with a Speculative Buy: Panthera Resources — Chasing an Indian Elephant, 15 January 2018. This rating recognises the high quality of Bhukia, but also that the PL remains outstanding. We have an illustrative valuation matrix justifying a valuation of 32p/share currently, increasing to 57p on the grant of the PL with the potential to increase to 109p if Panthera successfully outlines a JORC-compliant resource of 6.7Moz. We expect to revisit our recommendation after the granting of a PL or positive exploration results from the company’s West African projects. 

]]>
Mon, 19 Feb 2018 09:22:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29396/in-the-news-panthera-resources-29396.html
Morning Market Pulse - It's Mueller time http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29395/morning-market-pulse-it-s-mueller-time-29395.html FTSE 100 Index called to open +15pts at 7310, still in a bearish rising wedge pattern, but at least now 7300, making a bullish challenge on 6/7 Feb highs of 7315 overnight, retracing more of that early month sell-off and breakdown. Bulls still need a break above 7325 overnight highs. Bears need to see 1-week rising support at 7300 in jeopardy. Watch levels: Bullish 7325, Bearish 7300

 

Calls for a positive start to the week come as Asian equities (excl. China and  Hong Kong for Lunar New Year) built on last week’s global recovery, even if Wall St closed well off highs (Mueller Russia indictments) to close mixed on Friday into a long Presidents’ Day weekend that is likely to sap volumes today.

 

FTSE supported by USD off 3yr lows helping GBP edge further from last week’s highs to offer less resistance for UK blue chips. Note Australia’s ASX higher, but Miners in the red, as Copper and Gold trade off their highs, and in spite of Oil trending higher. UK Housebuilders may like stronger Rightmove House Prices in Feb

 

Corporate news this morning: AstraZeneca's IMFINZI gets US FDA approval for Stage 3 non-small cell lung cancer (after chemo/radiation), having showed showing 11.2 month improvement in progression free survival vs placebo. Reckitt Benckiser Q4 Like-for-like sales growth in-line, Europe/N. America a touch ahead, Developed Markets slower; Health ahead, others divisions light. Vows change in 2018 after flat 2017.

 

Petra Diamonds warns on FY profits, again. Enquest expects material production growth in 2018, increased cash flow and lower capex, helping reduce debt. Spectris FY 2017 Sales +6%, Op profit +8% Fidessa FY 2017 Revenues +7%, Adj. net profit +11%, FX boost.

 

SAGA appoints Patrick O'Sullivan as new Chairman, in same position at Old Mutual since 2010. McColls retail says Palmer & Harvey collapse still causing disruption, impacting sales performance. N Brown appoints Matt Davies Chairman-elect (from Tesco UK & RoI, prev. Halfords, Pets at Home).

 

US equity markets finished the week positively to notch their best weekly performance since 2013, however closed off their highs after indictments were brought against 13 Russian nationals by Robert Mueller. Both the Dow Jones and the S&P 500 closed a handfuls of points higher, the former having been over 200 points higher earlier in the session while the latter had been 0.9% higher. Both indices were led by Healthcare names as the Tech-heavy Nasdaq closed 0.2% lower.

 

Gold has continued to retreat from Friday’s highs of $1361.8 as the US dollar continues its climb from 3-year lows, however with the greenback struggling to better Friday’s highs, the precious metal is trading around rising lows support of $1347. The greenback will continue to dictate Gold’s performance, however the Presidents’ Day holiday in the US and Lunar New Year in Asia will likely result in low volumes today.

 

Crude Oil benchmarks are trading higher on protracted US dollar weakness and an unchanged Baker Hughes Rig Count on Friday, however have retreated from overnight highs as the greenback attempts to overcome Friday’s highs. Global benchmark Brent is back from highs of $65.6 with rising lows support at $65.1, while US Crude has retreated from $62.5 overnight highs with support at $62.

 

In focus today, on a quiet start to the week on account of holidays in both the US (Presidents’ Day) and Asia (Lunar New Year), will be the Eurogroup meeting in Brussels. The meeting of Eurozone Finance Ministers will cover a range of topics, however two key talking points will be the appointment of the next ECB Vice President and a review of Greek debt restructuring.


On a day of virtual radio silence for macroeconomic data, Eurozone Current Account (9am) and Eurozone Construction Output (10am) are the only picks of note

]]>
Mon, 19 Feb 2018 09:15:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29395/morning-market-pulse-it-s-mueller-time-29395.html
Beaufort Securities Breakfast Alert - Sir Philip Green faces more pension questions from Frank Field http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29394/beaufort-securities-breakfast-alert-sir-philip-green-faces-more-pension-questions-from-frank-field-29394.html Markets

Europe
The FTSE-100 finished Friday's session 0.83% higher at 7,294.70, whilst the FTSE AIM All-Share index was up 0.85% at 1,038.88. In continental Europe, the CAC-40 finished 1.13% higher at 5,281.58 whilst the DAX was up 0.86% at 12,451.96.

Wall Street
Last Friday in New York, the Dow gained 19.01 points to end the week at 25,219.38. The S&P-500 added 1.02 points to close at 2,732.22 and tech-focussed Nasdaq finished 16.96 points lower at 7,239.47. The New York Stock Exchange is closed today for Presidents' Day..

Asia
In Asia this morning, the Nikkei 225 was up 409.39 points, or 1.88%, at 22,129.64 heading into the close. Meanwhile, the Hang Seng remains closed for Lunar New Year.

 

Oil
At around 6:15am, WTI crude was 1.2% higher at $62.42 per barrel and Brent was up 0.79% at $65.35 per barrel.

 

 Headlines

Sir Philip Green faces more pension questions from Frank Field
MPs are to scrutinise pension schemes at the retail empire of Topshop boss Sir Philip Green. Frank Field, chairman of the Work and Pensions Committee, says the move follows reports Sir Philip is in talks to sell all or part of his business. The Sunday Times claimed that the billionaire had held talks with Chinese textiles giant Shandong Ruyi. Mr Field, who clashed with Sir Philip over BHS's collapse, told the BBC Sir Philip may have questions to answer. Sir Philip's Arcadia group, whose brands also include Burton, Miss Selfridge, Dorothy Perkins and Wallis, has 2,800 stores across the world. However, his flagship brand, Topshop, has struggled against competition from the rise of online rivals such as Boohoo and Asos. According to latest figures, profits at Taveta, Arcadia's holding company, fell 79% in 2016. Last year, Sir Philip revamped management in a bid to revive the brands. Sir Philip, aged 65, could not be reached for comment and the Sunday Times' report has not been confirmed. However, Mr Field said his committee would now "look at the state of Sir Philip Green's pensions schemes and whether he can sell to whomever he wants without having some very important questions or putting in some money into the whole Arcadia pension pot". The move risks re-opening a long-running feud between Sir Philip and the Labour MP, whose Commons committee last year investigated the sale and subsequent collapse of BHS. The failed High Street chain was left with a huge pension deficit, although Sir Philip later agreed a £363m cash settlement with the Pensions Regulator to plug the gap. Mr Field has criticised Sir Philip's actions, and last August the businessman sent a legal warning to the MP. Shandong Ruyi has been expanding in Europe. It has bought controlling stakes in the Swiss luxury leather goods company Bally and London-listed fashion manufacturer Bagir. The Chinese company bought Acquascutum last year for £95m.

Source: BBC News

Latest Video

 

On Wednesday, 7th February 2018 Mike Read, Chairman & CEO of Falanx answered questions posed by private investors at the Beaufort offices. Click here to see the interview.

]]>
Mon, 19 Feb 2018 09:13:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29394/beaufort-securities-breakfast-alert-sir-philip-green-faces-more-pension-questions-from-frank-field-29394.html
Oil price, Saffron/Coro, Victoria Oil & Gas, Zenith, Link And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29393/oil-price-saffroncoro-victoria-oil-gas-zenith-link-and-finally-29393.html WTI $61.34 +74c, Brent $64.33 -3c, Diff -$2.99 -77c, NG $2.58 -1c

Oil price

Traders say it was a funny old day in the market yesterday, an early sell off was closed with a weak greenback helping out, but WTI gained most as it finished up on the day. The differential is now below $3 and means that it won’t be long before it has less attractions than say, Brent in the global marketplace.

To add to all the other supportive voices yesterday saw the Saudis, the Nigerians and the UAE all claiming that adherence was high and will remain so for the long term. This was reinforced when the stories of a long term axis between Russia and the KSA were not denied, remember you heard it here first. The bearish talk is all about the USA but as long as Opec and its friends remain tight and control that marginal barrel they will still be getting more revenue than otherwise, despite how galling it is to see the Shermans revelling in moolah…

Saffron/Coro

Saffron is back with a bang as it reopened this morning at a huge premium to the old days after announcement of the Aim admission document publication. Subject to shareholder approval Saffron will become Coro on or around the 9th of April. There is the small matter of an Open Offer to raise £2m but at 4.38p, the same as the recent bigger raise it should prove popular.

Last night saw the formal launch of Coro Energy with all the razzamataz that you would expect from a Parsons project and amidst the fireworks, smoke and mission impossible music could be seen new director Ilham Habibie who had flown over from Indonesia just for the launch. He is a very impressive man and I suspect that he will be key to the startup of the South East Asia part of the new company’s strategy. Yesterday I interviewed Sara Edmonson who is to be CEO of Coro Energy and to watch the chat and hear more detail about plans for Coro’s future see this link.

Core Finance CEO interview: Sara Edmonson of Coro Energy

Victoria Oil & Gas

It is fair to say that the operational update and 2018 guidance announced this morning is a bit of a mixed bag. Operationally last year concluded very well, La 107 and 108 were completed with gas flow rates ahead of expectations with gas sales in the quarter up 18.56% up on the equivalent 2016 number. That made production in the year a highly respectable 10.98 MMscf/d, indeed a record and one that had demand problems not occured would have had the company set very fair indeed. But, and it is a big but, supply projections will be impacted following the news that ENEO does not place its Logbaba and Bassa power stations back on line, the company estimate 13 MMscf/d if online, 9 MMscf/d if not.

So the company has to rethink strategy for 2018 following a macro event with regards to ENEO which was outside of their control. Taking these things one at a time can give us an idea of what scenarios face the company. Firstly there is little doubt that ENEO, the regulator and the Ministry want the gas switched back on, power cuts are becoming more severe with between 10-15 blackouts a day in Douala at the moment so an agreement has to be reached at some stage. ENEO have said that they don’t want GDC to demobilise the kit and cannot afford to lose the 50 MW from the grid out of 1,300 plus another 100MW that is also missing as a result of this action so hope remains.

There are two obvious ways that VOG are planning to counter this loss of such an important customer, firstly by adding more new thermal customers (three were added in the quarter) and secondly by ensuring that existing and new customers can use GDC gas to power their factories and plants. Using bespoke gas to power installations, especially when gas is already on site, can save companies money, often up to 10%, and of course mean that power is not interrupted as it is at the moment. With modest gensets minimal capital is required and local gas can be switched on immediately.

Other ways of minimising the disruption, although in the longer term, is for the company to ramp up its CNG and NGV solutions and develop its markets and to address the possibility of raising prices for its very valuable condensate products.

Losing a 50+% client is not easy but it is possible ENEO will return but in the meantime VOG must assume that it will not and adjust accordingly. Further reductions in costs are under way and capex has been put back but exciting prospects at Matanda and Bomono are still very much in process. Indeed ENEO receivables, announced as being $8.7m in January have already fallen to $5m and are likely to continue to come down. The ENEO saga has been a blow to confidence just when VOG was about to deliver in a big way, whilst there is no sign yet of it blowing over one must remember that there is still a substantial and highly profitable market in Douala which shouldnt be forgotten.

Zenith Energy

3Q results from Zenith today but as usual on results day all the information is already in the market. The company continue to work on a number of wells in Azerbaijan with increasing success, when I visited the sites in the period I was impressed with the technical staff on site. Elsewhere the company has signed a commitment letter for the purchase of an onshore rig which will have an immediate positive effect when it arrives. The company are still committed to discussions with regard to potential acquisitions and have a number of transactions under consideration at present.

Marathon

Here is a message from my lovely wife Netty who is for reasons best known to herself running the London Marathon, again in April. Any donations would be really appreciated and your previous years kindnesses are not taken for granted!

I am running the Virgin London Marathon on 22nd April 2018 in aid of the Lords Taverners, giving disabled and disadvantaged children a sporting chance.

https://mydonate.bt.com/fundraisers/annettegraham-wood1

And finally…

It’s the FA Cup again and tonight there are two ties, the Foxes play the Blades and Chelski host the Tigers from Hull. Tomorrow the Owls play the Swans, the Seagulls take on the Sky Blues, the Baggies host the Saints, Rochdale entertain the Spurs and the Red Devils are at the Terriers.

Some great jumps racing this weekend, tomorrow at Ascot sses the Betfair Chase with a great lineup and at Haydock it is Grand National trials day

]]>
Fri, 16 Feb 2018 14:36:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29393/oil-price-saffroncoro-victoria-oil-gas-zenith-link-and-finally-29393.html
Changing of the Guard in South Africa: former miners’ leader Ramaphosa takes charge http://www.proactiveinvestors.co.uk/columns/jackhammer/29392/changing-of-the-guard-in-south-africa-former-miners-leader-ramaphosa-takes-charge-29392.html Fri, 16 Feb 2018 13:25:00 +0000 http://www.proactiveinvestors.co.uk/columns/jackhammer/29392/changing-of-the-guard-in-south-africa-former-miners-leader-ramaphosa-takes-charge-29392.html Morning View . Ganfeng listing to boost China’s dominance in global lithium http://www.proactiveinvestors.co.uk/columns/sp-angel/29391/morning-view-ganfeng-listing-to-boost-chinas-dominance-in-global-lithium-29391.html Galantas Gold (LON:GAL) – Hearings completed on judicial review of planning consent

Hummingbird Resources (LON:HUM) – Yanfolila ramp up progress shows full capacity on track for the end of Q1/18

Petropavlovsk (LON:POG) – Management change and new Board member

Rio Tinto (LON:RIO) – Evaluating power supply options at Oyu Tolgoi

 

Lithium - Ganfeng Lithium files for $1bn HK IPO

  • Ganfeng Lithium, China’s largest lithium producer, has filed for an initial public offering in Hong Kong
  • The share sale comes as carmakers are scrambling for supplies of lithium to meet their plans for EV’s
  • Genfent will use funds for acquisitions, further exploration and to expand capacity to meet rapidly growing demand for EV’s
  • Ganfeng, plans to extend its global dominance in production of the electric economy metal by deploying proceeds on acquisitions ranging from Ireland to Australia.
  • Based in Jiangxi in China’s southeast the company aims to target expansions through further exploration, and plans “to continue to actively explore the possibility of acquiring further sources of lithium in order to enrich our core portfolio”, according to a filing lodged with the Hong Kong stock exchange.
  • “The lithium industry in 2018 will be characterized by M&A”, notes energy metal analyst at Horse Mountain Partners LLC, and that “Ganfeng’s strategy of vertical integration is the way to survive and thrive as the lithium market grows dramatically”. Proceeds are expected to focus on increasing battery production capacity, particularly targeting next-generation solid-state technology, and to expand a recycling unit able to retrieve raw materials from spent cells.
  • The company aims to remain ahead of the surge in new lithium discoveries, with the requirement from global lithium production needing to quadruple within a decade for electric vehicles. According to Bloomberg New Energy Finance, the industry is likely to require a second wave of new projects beyond the mid-2020s to keep pace with demand.
  • The acquisitions aim to increase its market share to about 17% this year and increase the company’s global standing to second-largest producer. The supplier’s plan to add new production lines in China in 2018 will boost capacity and add a recycling facility capable of handling 34,000 tonnes of spent batteries. The boost to output also aims to expand the sale of products beyond its current 10 countries, and is in discussion with leading global vehicle manufacturers. Funds from the listing will also be used to offer financial assistance to Lithium Americas Corp., a project developer, and to boost research work on solid-state battery technology.
  • It has hired Citi for the IPO and could raise at least $1bn to $1.5bn.
  • Other potential targets are: Birimian Limited, Kodal Minerals*, Plymouth Minerals, Savannah Resources, European Metals, Lithium Power International, Neolithium, Lithium Americas

 

Sweden on the hunt for Cobalt

  • Sweden is to set up efforts to find precious minerals such as cobalt and lithium, government will invest 10 million kronor ($1.26 million) over the next two years to map for metals
  • In addition to the government funded initiative, Sweden has also seen a rise in private investments in the exploration of minerals used in batteries
  • Geological Survey of Sweden has a collection of 18,000 core samples to be analysed and although extraction so far has not proved cost effective it is believed this could change due to research
  • Might we suggest that if Sweden is serious about encouraging the mining of cobalt that it also supports Beowulf in its Kalak North iron ore mining proposal.

 

Bank 2017 commodities revenues fall 42% to lowest since 2006

  • Commodity related revenue at the 12 biggest investment banks fell by 42% last year to its lowest level since 2006 according to a report by Coalition.
  • Revenue from commodity trading, selling derivatives to investors and other activities in the sector fell to $2.5bn in 2017 from $4.3bn the previous year, it said in the report
  • We view the move as partially driven by banks being forced by regulators to de-risk as well as split retail from investment banking.
  • The reduction of the available balance sheet for commodity trading has hit bank’s ability to fund trading activities, reduced volatility and probably by the impact of China inc. and Glencore as dominant forces in the movement and trading of commodities.

 

Cyril Ramaphosa – sworn in as President of South Africa

  • Cyril Ramaphosa is now president of South Africa.
  • He was previously supported by Mandela and respected for his role in negotiating the peaceful transition of power from the Nationalist government to the ANC.
  • Ramaphosa has promised to root out the corruption which became so endemic under Zuma?
  • Will Zuma now face trial on the many charges relating to graft?
  • Will Ramaphosa replace the minister of mines, who is thought not to be popular with mining companies?
  • Will Ramaphosa adjust the BEE scorecard rules to attract investment back into South Africa?
  • Can South Africa fix the many problems at ESKOM and other state-led utilities to improve the functioning of the economy.
  • Will the ANC now focus on improving living standards in the townships?
  • Some talk of Ramaphosa’s reputation being tarnished when he was a NED director at Lonmin at the time of the Marikana strike, though he would have had no involvement in the massacre that followed. While we see this as fundamentally unfair to Ramaphosa it does highlight to us the risk of allowing issues of debt and debt collection from workers to fester in the community.
  • As a former leader of the NUM and later as a company director Cyril Ramaphosa understands well the benefits and issues associated with mining.

 

SP Angel rank No 1 in Copper price forecasting in the Q4 2017 MB APEX report

SP Angel analysts ranked:  See MB APEX report link for further details

  • 1st for copper, 1st = for gold, 2nd for Palladium, 3rd for Coking Coal, 5th for Zinc, 3rd in Q4 Precious Metals forecasts in Q4, 4th in Base Metals forecasting in Q4

SP Angel ranked No 1 for research by ‘Research Tree’ according to investor demand

 

Dow Jones Industrials

 

+1.23%

at

25,200

Nikkei 225

 

+1.19%

at

21,720

HK Hang Seng

 

+1.97%

at

31,115

Shanghai Composite

 

+0.45%

at

3,199

FTSE 350 Mining

 

+0.66%

at

19,254

AIM Basic Resources

 

+1.36%

at

2,585

 

Economics

US –Latest regional business sentiment measures point to improving outlook with forecast for stronger capital investment and employment; reports also point to increasing cost pressures.

  • Both Philly and New York business surveys reported stronger new orders as well as an increase in prices paid component.
  • Respondents to both surveys highlighted considerable optimism regarding the economic outlook.
  • Empire Manufacturing Index: 13.1 v 17.7 in January and 18.0 forecast.
  • Philly Fed Business Outlook: 25.8v 22.2 in January and 21.8 forecast.
  • In a separate report, industrial production growth moderated in January on the back of lower construction activity and mining and minerals production while colder than usual temperatures led an increase in electrical and natural gas production.
  • A pick up in industrial production translated into an increased pressure on existing capacity the utilisation ratios climbing to 77.5% in January versus 75.7% last year
  • Industrial Production ($mom): -0.1 v 0.4 (revised from 0.9) in December and 0.2 forecast.
  • US Treasury yields paused at around 2.9% after having climbed on the back of strong inflation numbers released previously.
  • The US$ index is hovering around a three year low following six straight daily declines.

 

Japan – Kuroda candidature has been nominated by PM Abe to head the BoJ for another five years with the parliament set to confirm the reappointment.

  • Two deputy governors have been suggested to join the Policy Board including central bank insider Masayoshi Amamiya and university professor Masazumi Wakatabe.
  • Amamiya, 62, has been with the BoJ for almost four decades pointing to an extensive experience in the field after having served under governors with different monetary policy approaches.
  • Wakatabe, 53, is a pro-stimulus future member who previously argued that tightening the policy prematurely would be a mistake and indicated that more monetary policy support may be needed to overcome a planned sales-tax hike in 2019.
  • Next policy meeting is on March 8-9 with new term for the Governor to start on April 9.

 

Germany – Producer prices growth accelerated slightly in January matching earlier reports of intensifying businesses’ cost pressures.

  • Stronger input inflation has been recorded by both manufacturing and services industries on the back of higher salary pressures, oil and fuel prices as well as rental fees.
  • Supportive demand allowed firms to pass on some of the higher costs onto consumers which bodes well for the inflation outlook.
  • PPI (%mom/yoy): 0.9/2.0 v -0.3/+1.8 in December.

 

UK – Retail sales growth recorded subdued performance in January with monthly purchases (in volume terms) increasing the slowest pace since Apr/17.

  • YoY purchases were up 1.6%yoy (volume terms) v 2.4%yoy increase recorded in Jan/17.
  • “Retail sales growth was broadly flat at the beginning of the New Year with the longer-term picture showing a continued slowdown in the sector… this can partly be attributed to a background of generally rising prices,” ONS said commenting on numbers.
  • The main contribution to the YoE growth was in non-food stores category with sports equipment, games and toys increasing sales by 10.9%yoy.
  • The latter category has benefited from the New Year’s resolutions to “get fit and lose weight”, retailers said.
  • Retail sales (%mom/yoy, value): 0.1/1.5 v -1.5/+1.3 in December and 0.6/2.4 forecast.

 

Recovery in metals gives reassurance of underlying fundamentals

  • Goldman Sachs Group Inc. remains reassured in bullish forecasts as broad recovery across metals follows the “stress test” during last week’s global market slump. “To the extent that last week’s sell off was triggered by inflation worries, this week’s experience suggests that higher inflation can be a tailwind, rather than a headwind, for metals”.
  • The resilience to investor panic suggests robust market fundamentals supported by sustained global growth, with both metal producer stocks and commodity futures offering good returns in terms of exposure to higher metal prices.

 

Currencies

US$1.2534/eur vs 1.2494/eur yesterday  Yen 105.84/$ vs 106.48/$  SAr 11.612/$ vs 11.665/$  $1.413/gbp vs $1.405/gbp  0.798/aud vs 0.797/aud  CNY 6.342/$ vs 6.342/$

 

Commodity News

Precious metals:         

Gold US$1,360/oz vs US$1,355/oz yesterday

  • Creeping US inflation and slumping USD are supporting gold’s biggest weekly advance since April 2016, recording 3.2%. The US dollar index recorded its worst performance since March 2015, dropping 2.1% as inflationary expectations return. Confluence of positive factors are driving gold higher with forecasts of $1,430 by June, with the weaker dollar the “bigger trigger” according to director at Commtrendz Risk Management Services.
  • Despite bullion prices rising, North American gold mining stocks reported quarterly earnings losses, highlighting the challenges faced containing costs and defending margins.
  • Kinross Gold Corp. fell as much as 10 percent Thursday after reporting weaker-than-expected fourth-quarter results due to lower production and sales, and higher taxes. Agnico Eagle Mines Ltd. fell as much as 3.3 percent a day after its earnings, while Barrick Gold Corp. slid as much as 5.1 percent, with Chief Operating Officer Richard Williams citing new inflationary trends in inputs from fuel to labor. “There’s inflationary trends that didn’t exist three years ago, be they in fuel, power, consumables, labor costs, contracting, and the works”, according to Williams.

   Gold ETFs 71.9moz vs US$72.0moz yesterday

Platinum US$1,011/oz vs US$1,005/oz yesterday

Palladium US$1,027/oz vs US$1,017/oz yesterday

Silver US$16.92/oz vs US$16.95/oz yesterday

           

Base metals:   

Copper US$ 7,244/t vs US$7,186/t yesterday

  • Copper’s weekly advance is on track for its best since November 2016 as the combined impact of a slumping dollar, global growth and inflation fears stock demand for metals. LME copper rose 0.4% to $7,213/t to support 6.8% growth for the week. “Stronger global growth coupled with weaker dollar will continue to attract a lot of funds in commodities and base metals”, according to head of commodities research at Nirmal Bang Securities Pvt. Ltd.
  • The number of bulls outweigh bears in the weekly Bloomberg poll of copper traders and analysts, with respondents favouring support from accelerating inflation and the potential for supply disruptions (Bullish: 6; Bearish: 3; Hold: 0)

Aluminium US$ 2,173/t vs US$2,190/t yesterday

Nickel US$ 14,165/t vs US$14,330/t yesterday

Zinc US$ 3,591/t vs US$3,586/t yesterday

Lead US$ 2,634/t vs US$2,602/t yesterday

Tin US$ 21,700/t vs US$21,600/t yesterday

           

Energy:           

Oil US$64.8/bbl vs US$64.8/bbl yesterday

Natural Gas US$2.565/mmbtu vs US$2.546/mmbtu yesterday

Uranium US$21.75/lb vs US$21.65/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$77.0/t vs US$76.8/t

Chinese steel rebar 25mm US$638.3/t vs US$638.3/t

Thermal coal (1st year forward cif ARA) US$80.0/t vs US$81.7/t

Premium hard coking coal Aus fob US$233.1/t vs US$233.1/t

 

Other:  

Tungsten APT European US$319-325/mtu vs US$317-325/mtu last week

Cobalt LME 3m US$81,500.0/t vs US$81,250.0/t

  • Swedish government looks to commit 10 million Kronor ($1.26 million) in ramping up efforts to explore for key domestic battery component metals, that are increasingly in demand among electric vehicle manufacturers. The investment aims support the Geological Survey of Sweden to map the potential existence of minerals across a nation experienced in base metal mining; expanding the output for more uncommon metals like battery metals, tungsten and rare earths.
  • Enterprise Minister notes “Sweden has unique assets in it bedrock. Historically we have mainly explored minerals such as copper, iron, silver and gold. But the shift to green technologies means there’s an increased need for other minerals.”
  • The move follows manufactures positioning themselves for a post-fossil fuel world, with Sweden’s Volvo Cars recently making global headlines with plans to make all of its new models electric from 2019.
  • Further to government commitment to green technology, Sweden has also seen a rise in private investment in the exploration of minerals used in batteries. For example, Australia’s Talga Resources is actively running exploration activities aiming to extract cobalt and graphite in northern Sweden.
  • The Geological Survey of Sweden aims to build upon 18,000 historical core samples dating back to 1858, which can be analyzed for traces of minerals previously overlooked.

 

Company News

Galantas Gold (LON:GAL) 5.5p, Mkt Cap £10.3m – Hearings completed on judicial review of planning consent

  • Galantas Gold reports that the legal hearings in connection with the third-party appeal against the “positive judicial review judgment, given by Madam Justice McBride, regarding the grant of planning permission at the Omagh gold mine in July 2015” have now been completed and that the Northern Ireland Court of Appeal “will deliver its judgement at a later date, currently unknown.”
  • In September 2017, the company announced that the judicial review supported its planning consent for the underground mine development of gold veins previously worked in an open pit. At that time, the company also reported that “The third party’s request for a quashing of the Consent was denied.”
  • “During the first quarter of 2016 Galantas confirmed that a third party had obtained leave from Belfast High Court to bring a judicial review challenging the actions of the Department of Environment Northern Ireland  in granting planning permission for underground mining beneath the existing open pit.”
  • The original consent was granted in June 2015 and in October 2015 company announced that it had “been made aware of what purports to be pre-action correspondence from an individual who intends to challenge, by judicial review, the actions of the Department of Environment Northern Ireland (DOENI) in granting planning permission for underground mining beneath the existing open pit.” The specific ground for the original challenge are not, however, clear though the drawn out process underlines the strength of opposition by at least one challenger and the difficulties of obtaining permitting.
  • Galantas Gold also encountered a setback last year, now apparently resolved, when concerns over the adequacy of security over the transport and use of explosives led to a temporary suspension of development work. It is tempting to infer that this issue may have been raised as a part of the wider opposition to mine development.

Conclusion: The protracted dispute over the planning consent for underground mining at the Omagh mine appears to be drawing towards an end.

 

Hummingbird Resources (LON:HUM) 36p, Mkt Cap £122m – Yanfolila ramp up progress shows full capacity on track for the end of Q1/18

  • The Company reports on the ramp up progress of the recently commissioned Yanfolila gold mine in Mali.
  • The plant is currently running at 90% capacity with gold recoveries reported at 96% versus budgeted 93%.
  • The Company is processing lower grade stockpiles during the ramp up period before feeding high grade material once the plant is finetuned and is run at planned capacities.
  • 10.7koz of gold has been produced since the start of operations in mid-December with 6.2koz poured in dore (5.5koz shipped to refiners) and 4.5koz estimated to remain in circuit.

 

Petropavlovsk (LON:POG) 7.5p, Mkt Cap £249m – Management change and new Board member

  • Andrey Maruta, CFO, will be leaving the Company and the Board on April 1, but will advise the Company during several months of transition before a successor is found.
  • Adrian Coates will be joining the Board as an Independent Non-Executive Director with immediate effect.
  • Mr Coates has many years of experience in investment banking having previously worked for HSBC and UBS as well as serving on boards of a number of resources companies including Polyus Gold, Kazakhgold and Regal Petroleum.

 

Rio Tinto (LON:RIO) 4,130p, Mkt Cap £74.5bn –Evaluating power supply options at Oyu Tolgoi

 

  • Rio Tinto reports that, following the decision by the Government of Mongolia to cancel the Southern Region Power Sector Co-operation Agreement (PSCA), it is, in conjunction with its partners at the Oyu Tolgoi mine, working to identify the optimum power supply solution.
  • Rio Tinto is the mine operator and owns 51% of Turquoise Hill which owns 66% of Oyu Tolgoi with the Mongolian Government holding the remaining 34% interest.
  • The mine is moving from the existing open-pit mine towards underground operations to exploit the 499mt copper reserve which grade 3.4% copper and is expected to bring the production of mined copper to over 500,000tpa by the early 2020s. We understand that the project requires around US$5bn of capital.
  • The company comments that “Oyu Tolgoi, Rio Tinto and Turquoise Hill Resources are committed to fulfilling all of the commitments under the Investment Agreement and are continuing to evaluate all viable power options, including the construction of an Oyu Tolgoi site-based power plant.” The company also notes that “Rio Tinto will continue to review its capex forecasts for the project but has already earmarked $250 million a year for the development of a power station in Mongolia in its 2019 and 2020 capex forecasts.”
  • Rio Tinto already operates on-site power generation at a number of its iron ore mines in Western Australia as well as in some of its aluminium operations and at the Kennecott copper operations in Utah and will certainly have both the in-house expertise and the wider industry contacts to develop a practical and cost-effective power supply solution for Oyu Tolgoi. 
]]>
Fri, 16 Feb 2018 10:52:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29391/morning-view-ganfeng-listing-to-boost-chinas-dominance-in-global-lithium-29391.html
Northland Capital Partners View on the City - Sunrise Resources (LON:SRES) http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29390/northland-capital-partners-view-on-the-city-sunrise-resources-lonsres-29390.html SECTOR: MINING

CS Pozzolan-Perlite Project Update

NORTHLAND VIEW
Sunrise Resources provides an update on the Phase 2 drill programme at the CS Pozzolan-Perlite Project, located in Nevada.
25 RC holes (838m) have been completed to improve definition of the zones that are of commercial interest and assist in the preparation of the mine plan for permitting.
Eight holes were completed in the Tuff Zone, all but one hole returned thick intersections of pozzolan.
Sixteen holes were completed in the Main Zone and twelve of the holes intersected perlite.
The first step-out hole in the Northeast Zone returned an intersection of 40m of pozzolan.

The Phase 2 drill programme undertaken by Sunrise Resources at the CS Pozzolan-Perlite Project has increased the Company’s understanding of the project and highlighted the large open-pittable potential of the project. Further testing will now be completed to assess the quality of the pozzolan from this round of drilling. This testing will be completed alongside mine design and permitting.

COMPANY DESCRIPTION
Sunrise Resources is an exploration company focused on its 100%-owned CS Pozzolan-Perlite Project, located in Nevada

 

]]>
Fri, 16 Feb 2018 09:55:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29390/northland-capital-partners-view-on-the-city-sunrise-resources-lonsres-29390.html
Beaufort Securities Breakfast Alert - Mid-earners 'locked out of buying a home' http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29389/beaufort-securities-breakfast-alert-mid-earners-locked-out-of-buying-a-home--29389.html Markets

Europe
The FTSE-100 finished yesterday's session 0.29% higher at 7,234.81, whilst the FTSE AIM All-Share index was up 0.82% at 1,030.13. In continental Europe, the CAC-40 finished 1.11% higher at 5,222.52 whilst the DAX was up 0.06% at 12,346.17.

Wall Street
Last night in New York, the Dow gained 306.88 points, or 1.23%, to end the day at 25,200.37. The S&P 500 added 32.57 points, or 1.21%, to close at 2,731.20 and NASDAQ finished 112.81 points higher at 7,256.43.

Asia
In Asia this morning, the Nikkei 225 was up 255.27 points at 21,720.25 heading into the close. The Hang Seng remains closed for a public holiday.

 

Oil
At around 6:15am, WTI crude was 0.33% higher at $61.37 per barrel and Brent was up 0.40% at $64.59 per barrel. 

 

Headlines

Mid-earners 'locked out of buying a home'
The extent to which young people are locked out of the British housing market has been revealed in new figures from economists. The biggest decline in home ownership in the last 20 years has been among middle-income 25 to 34-year-olds, the Institute for Fiscal Studies said. In 1995-96, 65% of this group owned a home, but just 27% do in 2015-16, with the biggest drop in south-east England.Middle earners are defined as having take-home pay of £22,200 to £30,600. This can be either as an individual or as a couple. A third of them are university graduates, while 30% left school at 16. Three-quarters of them live with a partner, and around 60% have children. The proportion of these middle earners owning a home (27%) has moved closer to the likelihood of those with a low income (8%) than those on a high income (64%).

Source: BBC News

 

Company news

 

Hummingbird Resources (LON:HUM) 33.5p – Speculative Buy
Hummingbird has announced an update on operations at the Yanfolila gold mine in Mali following its first gold pour in December 2017. The plant has been ramping up towards full production and is currently operating at an average of 90% of design capacity while achieving 96% recovery. The latter is significantly higher than the 92.5% stated in the DFS. To date, total gold recovered is 10,737oz (from 147,977t of ore) of which, almost half has been shipped to refiners. During this time, the plant has been processing ore from lower-grade stockpiles and is currently processing higher-grade ore. The Company also stated that it plans to spend US$8-10m this year on exploration by converting it's resources outside of the existing mine plan to reserves.

Our view: It's good to see the plant running almost at design capacity and we are encouraged with the very-high recovery rates to date. We also note that the Company is committed to exploration by spending a significant portion of its cash flows on converting additional resources to reserves. We look forward to further updates from Yanfolila as the plant begins to process higher-grade material. In the meantime, we reiterate our speculative buy on the stock.

Beaufort Securities acts as corporate broker to Hummingbird Resources plc

 

 Sunrise Resources (LON:SRES) 33.5p – Speculative Buy

Sunrise Resources has announced Phase 2 drilling results from its flagship CS Project, an industrial minerals deposit in Nevada. 25 RC holes were drilled (some infill, some step out) and all but one hit the targeted material. The main news is the step out holes intersected thick pozzolan and perlite material leading management to state that the CS Project has “very large tonnage potential”.

Our view:The previous CS Project news reported more excellent cement testwork results, confirming that CS Project pozzolan is a high performing fly ash alternative for cement manufacturing. It is also an environmentally friendly material unlike fly ash which is produced from burning coal. Today’s news confirms the long life potential of the project. Annual production tonnage will be determined by demand/marketing success. Also bear in mind that before mining starts permitting and various other licenses will be required. However the product is excellent, the deposit is large, Nevada is a good mining jurisdiction and upfront capex is likely to be modest. We have a Speculative Buy recommendation.

Beaufort Securities acts as corporate broker to Sunrise Resources Plc

]]>
Fri, 16 Feb 2018 09:27:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29389/beaufort-securities-breakfast-alert-mid-earners-locked-out-of-buying-a-home--29389.html
Morning Market Pulse - Balfour Beatty parties in the USA http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29388/morning-market-pulse-balfour-beatty-parties-in-the-usa-29388.html FTSE 100 Index called to open +30pts at 7265, maintaining a shallow uptrend towards 7300 since Monday, but in a bearish rising wedge that could yet see the uptrend scuppered. Bulls need a break above 7275 overnight highs to extend the uptrend; bears want to see a troubling of rising lows around 7245 to put the uptrend in jeopardy. Watch levels: Bullish 7275, Bearish 7245

 

Calls for gains at the open come after solid gains on Wall St and a largely positive session for Asian markets (ex-China and HK for Lunar New Year) as global volatility continues to ease, back below its long-term average of 20, and equities maintain their recovery course.

 

Japanese stocks are higher despite a stronger Yen, after BoJ Governor Kuroda was nominated for a second term, while further USD weakness (meaning stronger GBP and EUR) helps commodities like Oil and Gold. However, Australia’s ASX is the odd one out, in the red with Miners and Financials under water, the former having a potential negative knock-on for the FTSE.

 

Corporate news this morning: Balfour Beatty wins $1.95bn JV build-and-maintain contract (30% stake) for 6 station rail system at LAX airport. Rio Tinto working with Oyu Tolgoi Partners (Mongolia) to deliver power source within 4yrs; $250m/yr already earmarked in 2019/20 CAPEX. Segro FY adj. pre-tax profits +25.7%, EPS +5.9% (diluted by rights issue), NAV + 16.3%, final dividend +6.1%, early 2018 occupier demand strong across all markets.

 

Petropavlovsk CFO Stands Down. Hummingbird Resources says ramp-up on track and exploration commenced at Yanfolila Gold Mine, Mali. CVS plans 10% fundraising at 14% discount, using proceeds for acquisitions ($40m pipeline identified) and debt repayment.

 

US equity markets extended their winning streak to five days overnight, with the three major indices once again rallying over 1% a piece. The Dow Jones climbed 1.2% as Boeing provided more than double the gains of any other stocks with just three closing in the red, while Tech and Utilities launched the S&P 500 1.2% higher, outperformance in the former seeing the Tech-heavy Nasdaq outperform peers, up 1.6%.

 

Gold has broken above $1357 resistance as the US dollar extends its decline. The precious metal is trading a fresh 3-week high as the global reserve currency falls to a fresh 3-year low. Despite retreating from overnight highs of $1360, former resistance at $1357 is proving supportive. This afternoon, US Import Price Index will be the final US inflationary print that could influence USD.

 

Crude Oil benchmarks have climbed higher overnight, bouncing from intersecting support yesterday afternoon, however remain hindered by January falling highs resistance. Global benchmark Brent touched $65 before retreating marginally from its highs, off yesterday’s $63.4 lows, while US crude has dipped from $61.8 from yesterday’s lows of $59.7.

 

In focus today, with UK inflation blowing too hot and Bank of England primed to hike in May, will be UK Retail Sales (9.30am), forecast to have rebounded in January (0.6% vs -1.6% prev.) from a weak December (blame frontloading of big Christmas purchases around November’s Black Friday). The pick-up in annual growth (2.4% vs 1.3% prev.) will only add to the pressure on the BoE.

 

This afternoon, US Housing Permits and Starts (1.30pm) are expected to show the former having risen in January but the latter unchanged, before the latest stateside inflation metric - Import Prices (1.30pm) - shows a monthly increase (0.6% vs 0.1% prev.) but unchanged annually (3%).

 

 

While scheduled speakers today are limited to the ECB’s Coeure (8:20am) at the Reinventing Bretton Woods Committee International conference, today is the opening day of the Munich Security Conference, with attendees including UK PM May, NATO Chief Stoltenberg, Israeli PM Netenyahu and a range of major corporate Chief Security Officers (including Alphabet and Facebook). 

]]>
Fri, 16 Feb 2018 09:23:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29388/morning-market-pulse-balfour-beatty-parties-in-the-usa-29388.html
The Biggest Headaches for South Africa's Incoming President http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29387/the-biggest-headaches-for-south-africa-s-incoming-president-29387.html
Video commentary for February 15th 2018

Eoin Treacy's view
A link to today's video is posted in the Subscriber's Area.


The Biggest Headaches for South Africa's Incoming President
This article by Mike Cohen for Bloomberg may be of interest to subscribers. Here is a section:


Investigations by the nation’s graft ombudsman and Auditor- General found that graft is endemic in the state, with tens of billions of rand stolen or squandered each year. Zuma appointees head almost all the law-enforcement agencies, which have been slow or loathe to act against some of his closest allies who’ve been implicated in the free-for-all. The new president will need to replace several key officials, reassert confidence in the independence and integrity of the criminal prosecution system and show that the government is intent on ensuring all those found guilty of corruption are held accountable.
2. State-owned companies in chaos
The looting spree largely targeted state companies, especially power utility Eskom Holdings SOC Ltd., which is at risk of running out of cash. While Ramaphosa has already overseen the appointment of a new board at Eskom, it still needs to appoint a permanent chief executive officer, fill several other top management posts and urgently raise new funding. South African Airways and oil and gas company PetroSA Ltd. are among the other entities that have been hobbled by a lack of leadership and oversight

Eoin Treacy's view
Governance is Everything has been a mantra at this service for decades. Zuma did everything he could while in power to line the pockets of everyone loyal to him and that system of rent seeking and bribery is going to take a long time to unwind. It could well be that the water crisis in Capetown and the near bankruptcy of Eskom were the final catalysts for Zuma’s ouster. Right now, the market is willing to give the benefit of the doubt to Ramaphosa that some of these issues can be addressed. Capetown’s situation is urgent so Ramaphosa is unlikely to have much of a honeymoon period.Continues in the Subscriber's Area.



Mapping shadow banking in China: structure and dynamics
Thanks to a subscriber for this report from the Bank for International Settlements. Here is a section:

Understanding the structure of China’s shadow banking system is crucial for analysing China’s financial system. We provide a stylised map of shadow banking in China, which highlights the main forms of shadow banking and the resulting financial system interlinkages. Shadow banking in China takes a markedly different form compared to that in the United States. A key characteristic is that commercial banks are the dominant players in China’s shadow banking system. The system is effectively a “shadow of the banks”, while securitisation and market-based instruments still play only a limited role.
We show that the structure of shadow banking in China is evolving. Its size and dynamics have changed rapidly in recent years. The main area of growth has shifted from shadow credit provision to private firms with less privileged access to formal bank credit, towards offering alternative savings instruments (e.g. WMPs and trust products). Similarly, at the intermediate stage, new and more complex “structured” shadow credit intermediation has emerged and quickly has reached a large scale. This is driven by banks trying to alleviate regulatory burdens (e.g. NPL provisions or LTD ratio ceilings) through a reclassification of existing bank assets into investment receivables. Tight and growing financial sector linkages further raise the potential for the transmission of financial shocks among savers, banks and the bond market. In addition, new forms of internet-based credit intermediation, such as P2P lending, have been expanding at an extraordinary pace. As a result, shadow banking in China is growing more complex and thereby becoming slightly more similar to the US shadow banking.

Eoin Treacy's view
We tend to hear a great deal about the problem of non-performing loans and the shadow banking sector in China. However, a point that often seems to be overlooked is that not every bank is equally affected.Continues in the Subscriber's Area.



Copper, iron ore price jump sparks rally in mining stocks
This article by Frik Els for Mining.com may be of interest to subscribers. Here is a section:

The iron ore price which has been defying expectations of a pullback for months gained on Wednesday with benchmark Northern China import prices rising to a five-week best of $78.25 a tonne. The last time the steelmaking raw material traded above $80 was April 2017. Coking coal was also higher at $233.10 a tonne. Premium Australian exports were at $154 a tonne this time last year.
Obituaries were being written for Anglo two years ago before the 100-year old company went on radical restructuring drive. Since then the world's fourth largest diversified miner has surged 500%
The bullishness spilled over to mining's heavyweights which outperformed broader gains on US equity markets.
Shares in world number one miner BHP Billiton (NYSE: BHP) gained 2.8% in New York while Anglo-Australian peer Rio Tinto (NYSE: RIO) added 1.8%. Both companies are worth more than $100 billion having doubled in value since the beginning of 2016 when the mining industry hit the bottom of the cycle.
Vale (NYSE: VALE.P), the world's top iron ore and nickel producer, was one of the best performers on the day with a 6% jump valuing the company at $73.1 billion. The Rio de Janeiro-based company is up 30% over the past year and is up a fourfold since the end of the downturn when iron ore reached $37 a tonne and nickel bottomed at $7,700 a tonne.


Eoin Treacy's view
The vast majority of the global economy is still growing at a rate well above the trend of the last few years and that is helping to boost demand growth for commodities. Considering the majority of miners are no longer willing to bet big on expansion and development of greenfield sites, they now exhibit greater commonality with metal prices and even have potential to act in a high beta manner.Continues in the Subscriber's Area.


Cisco Surges to Highest in 17 Years on Bullish Earnings Outlook
This article by Ian King for Bloomberg may be of interest to subscribers. Here is a section:


Cisco is one of the richest companies in the technology industry. It has more than $70 billion in cash, most of which was earned overseas and parked there. The company will now bring back some of that money and devote an additional $25 billion to buying back stock. Cisco took a charge of $11.1 billion related to new tax laws, leading to a net loss of $1.78 a share in the second quarter. Excluding some items, it reported a profit of 63 cents a share, beating analysts’ estimates for 59 cents.
Sales rose for the first time in eight quarters to $11.9 billion in the three months ended Jan. 27, also coming in ahead of estimates.
Robbins is seeking to restore the growth that once made Cisco the biggest company in technology. It’s a challenge amid a fundamental change in the networking industry that’s forcing Cisco to acquire new skills and adapt its business model. The technology of networks is increasingly shifting to software control and security of data flow and away from fixed-purpose hardware. At the same time, some of the largest buyers of gear -- owners of data centers such as Amazon.com Inc.’s Amazon Web Services and Microsoft Corp.’s Azure -- are increasingly designing their own hardware forcing Cisco to come up with new, cheaper and more flexible products that might interest them

Eoin Treacy's view
A $25 billion buyback program is enough to move the needle for the majority of shares and Cisco extended the breakout from its more than decade long base formation.Continues in the Subscriber's Area.



Email of the day on risks associated with Italy
Hello Eoin, agreed: spreads in Euro area are to be looked closely, with a first trigger possibly the elections in Italy (beginning of March). Limited advances in terms of reforms and budget consolidation indicate Italy has thrown away the opportunity offered by QE to mend its ways. A slowdown in global economic growth or the implementation of protectionist measures may curb the country’s only engine of growth, i.e. its (thank God) very strong exports. It is a delicate situation which - but this is just a gut feeling - does not seem to be fully appreciated by market participants (Italy's equity market has been so far relatively strong)

Eoin Treacy's view
Italy’s upcoming election is unlikely to result in strong government but it could usher in another populist administration inspired, if not led by Silvio Berlusconi. Against that background there is little chance of the reforms needed to set the economy back on a path to anything close to fiscal rectitud


Eoin's personal portfolio update February 12th 2018

Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, I repost this section on a daily basis and the title will always include the date of my most recent trade. Continues in the Subscriber's Area.


Long-Term Themes Review February 9th 2018

Eoin Treacy's view
FullerTreacyMoney has a very varied group of people as subscribers. Some of you like to receive our views in written form, while others prefer the first-person experience of listening to the audio or watching daily videos.
The Big Picture Long-Term video, posted every Friday, is aimed squarely at anyone who does not have the time to read the daily commentary but wishes to gain some perspective on what we think the long-term outlook holds. However, I think it is also important to have a clear record for where we lie in terms of the long-term themes we have identified, particularly as short-term market machinations influence perceptions.
Here is a brief summary of my view at present. Continues in the Subscriber's Area.



2018, the 49th year of The Chart Seminar

Eoin Treacy's view
The first venue for The Chart Seminar in 2018 will be:
Melbourne on April 16th and 17th. We are currently in the process of confirming a venue. 
I will also hold an online seminar, probably in May over the course of three or four days.
There will be another Seminar in London in November and I am in initial discussions with a potential partner about organising a New York Seminar.
If you would like to attend or have a suggestion for another venue please feel to reach out to Sarah at sarah@fullertreacymoney.com. 

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non EU residents are not liable for VAT). Subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates. Continues in the Subscriber's Area.


 

]]>
Fri, 16 Feb 2018 09:12:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29387/the-biggest-headaches-for-south-africa-s-incoming-president-29387.html
Fundamentals remain supportive of commodities in 2018 http://www.proactiveinvestors.co.uk/columns/sp-angel/29386/fundamentals-remain-supportive-of-commodities-in-2018-29386.html Botswana Diamonds (LON:BOD) – Scoping study for the Thorny River Project

Bushveld Minerals* (LON:BMN) – Vanadium demand set to rise further as China raises standards for steel for vanadium in high-strength rebar for earthquake resistance

Golden Star Resources (LON:GSC) – Recent drilling implies Wassa may be more extensive than currently thought

SolGold* (LON:SOLG) – Half-year financial report highlights progress at Alpala, Ecuador and other copper exploration

Stratex International (LON:STI) – Exploration agreement for Hasancelebi and Dogala prospects in Turkey

 

Fundamentals remain supportive of commodities in 2018

  • Australia & New Zealand Banking Group Ltd. remain bullish on commodities throughout 2018 despite downward pressure last week following the broad global equity and bond rout. Strategist see “the levels many markets are now trading at present an opportune time for consumers to lock in prices, as we see fundamentals remain supportive of commodities in 2018”.
  • The bank focuses on supply-constrained metals such as copper and zinc, while rising inflation expectations and weaker USD should push gold prices towards $1,400/oz later this year.
  • Despite surging US crude oil output reaching record levels, ANZ remain positive on Brent crude with prices hovering around $70/bbl in the medium term.
  • Constrained supply of mined PGMs combined with robust auto and jewelry demand will drive platinum and palladium prices higher, forecasting $1,100/oz and $1,150/oz respectively.

 

South Africa – Jacob Zuma resigned as South Africa’s President ending his nine year term paving the way for Cyril Ramaphosa to be voted into the office by the parliament.

  • “I have come to the decision to resign with immediate effect, even though disagree with the leadership of my organisation,” Zuma said.
  • South African equities are likely to rerate higher on news of Ramaphosa’s election and if Ramaphosa moves to combat corruption within the ANC and the state in general

 

Tesla’s China factory could hit a roadblock over disagreement

  • Tesla and the Chinese government are reportedly not seeing eye-to-eye with regards to the ownership of the electric car maker’s proposed factory in Shanghai
  • China's central government says the plant must be a joint venture with local partners, while Tesla wants to own the factory completely
  • Tesla could face punitive import taxes if it is not able to open a factory in China

 

SP Angel rank No 1 in Copper price forecasting in the Q4 2017 MB APEX report

SP Angel analysts ranked:  See MB APEX report link for further details

  • 1st for copper, 1st = for gold, 2nd for Palladium, 3rd for Coking Coal, 5th for Zinc, 3rd in Q4 Precious Metals forecasts in Q4, 4th in Base Metals forecasting in Q4

SP Angel ranked No 1 for research by ‘Research Tree’ according to investor demand

 

Dow Jones Industrials

 

+1.03%

at

24,893

Nikkei 225

 

+1.47%

at

21,465

HK Hang Seng

 

+1.97%

at

31,115

Shanghai Composite

 

+0.45%

at

3,199

FTSE 350 Mining

 

+1.94%

at

19,139

AIM Basic Resources

 

+0.96%

at

2,550

 

Economics

US – Strong inflation numbers led to a selloff in US Treasury bonds with benchmark 10y bond yields hitting fresh four year highs.

  • Rising interest rates had little effect on equity markets with both S&P 500 and Dow Jones indices closing higher on the day (+1.3% and 1.0%, respectively).
  • CPI (%mom/yoy): 0.5/2.1 v 0.2/2.1 in December and 0.3/1.9 forecast.
  • Core CPI (%mom/yoy): 0.3/1.8 v 0.2/1.8 in December and 0.2/1.7 forecast.
  • White House officials said there is currently no plan in the works for placing trade tariffs on imported steel and aluminium, despite Mr Trump raising the issue several times this week, Bloomberg reports.
  • Additionally, a number of Republican lawmakers argued that tariffs are likely to cause more harm than good costing jobs in auto, aircraft, wiring and beverages industries.
  • Steel and aluminium users argued that proposed tariffs will hike input costs which would inevitably eat in their margins and place a large number of US jobs at risk.

 

Eurozone – Growth momentum is strong in the single currency region with quarterly GDP growth rate confirmed at 2.7%yoy in Q4/17, the data released yesterday showed.

  • The pace is off 0.1pp from the previous quarter when GDP rate hit the strongest level since the eurozone sovereign debt crisis.
  • Growth slowed slightly in Germany and Italy, while the pace accelerated in the Netherlands and Portugal.
  • The latest Makrit PMI data showed composite activity increased to the highest nearly in 12 years on the back of strong new business orders leading firms to expand staff numbers.
  • “The outlook for the eurozone economy also remained bright, with business confidence improving to an eight-month high,” the Markit report read.
  • A good set of sentiment indicators point to a sustained robust momentum through 2018.
  • GDP (%qoq/yoy): 0.6/2.7 v 0.7/2.8 in Q3/17 and 0.6/2.7 forecast.

EU looking at raiding corporate tax receipts to fill Eur15bn black hole left by Brexit

  • News in the FT today highlights radical options being considered by the EU to fill the EUR15bn black hole when the UK finally leaves the union.
  • The EU is considering siphoning a portion of corporate tax receipts from national treasures into the EU common pot. Can not see member states enjoying that.
  • “The plan is linked to EU proposals to harmonise how nations calculate companies’ taxable profits but does not involve imposing a single EU corporate tax rate. The commission believes the levy could bring in between €21bn and €140bn over the seven-year life of the budget. Another plan involves raiding the money that governments collect from issuing CO2 permits to airlines, energy companies and other polluters.” According to the FT.
  • We wonder if Luxembourg and Monaco might be exempt from the tax.

 

France – Unemployment rate recorded the steepest decline since the 2008 financial crisis in the final quarter of last year.

  • Strong uptick in labour numbers match reports of improved business outlook through the quarter with the latest Composite PMI (January) standing close to the highest in years.
  • Unemployment change (‘000): -205 v +66 in Q3/17.
  • Unemployment rate (%): 8.9 v 9.6 (revised from 9.7) in Q3/17 and 9.5 forecast.

 

Australia – Unemployment edged lower in January amid higher participation rate from increased number of women actively looking for job.

  • Part time jobs climbed strongly (+65.9k v +19.5 in Dec) more than offsetting a drop in the number of full time roles (-49.8k v +12.7k in Dec).
  • The national statistics body estimates 292k full time jobs have been added since the start of 2017 with women accounting for 55% of that.
  • The increase is attributed among other things to regulatory changes allowing paid parental leave and more flexible working arrangements.
  • Despite the jobless rate hovering around the lowest level since early 2013, market commentators are estimating unemployment should come down below 5% to sufficiently tighten the labour market to generate upward pressure on wages and prices.
  • Employment change (‘000): +16.0 v +33.5 in December and 15.0 forecast.
  • Unemployment rate (%): 5.5 v 5.6 (revised from 5.5) in December and 5.5 forecast.

 

Currencies

US$1.2494/eur vs 1.2366/eur yesterday  Yen 106.48/$ vs 107.37/$  SAr 11.665/$ vs 11.868/$  $1.405/gbp vs $1.388/gbp  0.797/aud vs 0.787/aud  CNY 6.342/$ vs 6.346/$

 

Commodity News

Precious metals:         

Gold US$1,355/oz vs US$1,332/oz yesterday

  • Spot gold advanced as much as 2% in yesterday’s trading to record the biggest intraday gain since May last year, as the precious metal nears its highest level in almost three weeks. The main culprit fell to USD weakness as investors weigh the impact of rising inflation, disappointing retail sales and concerns over US fiscal and current-account deficits.
  • US consumer prices rose more than expected in January as Americans paid more for gasoline, rental accommodation and healthcare. Inflation fears are prompting investors to purchase precious metals, although a rise in increase rates is expected to make non-yielding gold less attractive.
  • The Commerce Department announced yesterday that US retail sales decreased 0.3% last month, the largest decline since Feb. 2017, as households cut back on purchases of motor vehicles and building materials.

   Gold ETFs 72.0moz vs US$72.0moz yesterday

Platinum US$1,005/oz vs US$977/oz yesterday

  • Falling platinum demand, seeing a sharp contraction in Japanese investment and Chinese jewelry buying as well as a slowdown in consumption by carmakers, is expected to place the market into oversupply with Johnson Matthey estimating a 110,000 ounce excess.

Palladium US$1,017/oz vs US$989/oz yesterday

Silver US$16.95/oz vs US$16.58/oz yesterday

           

Base metals:   

Copper US$ 7,186/t vs US$6,982/t yesterday

Aluminium US$ 2,190/t vs US$2,125/t yesterday

Nickel US$ 14,330/t vs US$13,500/t yesterday

  • Nickel rises to its highest level in more than two years as metals climb on sliding USD which is under threat from widening US fiscal and current-account deficits. The metal climbed as much as 1.4% to $14,275/t, to record its best level since May 2015. Stockpiles tracked by LME shrunk to their lowest levels since 2014, helping the metal rise 12% ytd.

Zinc US$ 3,586/t vs US$3,459/t yesterday

Lead US$ 2,602/t vs US$2,545/t yesterday

Tin US$ 21,600/t vs US$21,600/t yesterday

           

Energy:           

Oil US$64.8/bbl vs US$62.6/bbl yesterday

Natural Gas US$2.546/mmbtu vs US$2.582/mmbtu yesterday

Uranium US$21.65/lb vs US$21.65/lb yesterday

  • Uranium’s recent price rally may be artificially upheld by Japan’s significant stockpile of the nuclear fuel, according to industry consultants Ux Consulting Co. Utilities stockpiled enough fuel to power the nation’s nuclear fleet for at least 6 years, while some generators remain active in accepting deliveries despite the near-total shuttering of the country’s reactors almost seven years earlier following the Fukushima disaster.
  • Japan’s large and growing inventories are certainly something that overhangs the uranium market. If any Japanese utility tries to sell some or all of its nuclear fuel inventory, it will probably try to do so in a discrete manner. The first choice is to sell to another Japanese utility so as to minimise the global market impact” comments Ux. Reintroduction into global markets could have a devastating impact on the recent rally in uranium prices after suppliers cut production across major projects, and reverse the effect of the recovery from the lowest annual average in a decade.
  • Spot uranium slipped more than 68% since the Fukushima disaster, falling to the lowest level in 12 years in November 2016. Coordinated production cuts by miners across Canada and Kazakhstan, the world’s biggest producer, brought spot price to average $22 in 2017.
  • Ux estimate Japanese generators have stockpiled at least 130 million pounds. Domestic sale of the product remains limited with Kansai Electric Power Co. and Kyushu Electric Power Co. representing the only companies with operating reactors, producing electricity from three atomic plants out of a nationwide fleet of 40.
  • Remaining utilities firms are reducing or deferring shipments as stockpile levels climb, with Tohoku Electric Power Co., Hokuriku Electric Power Co., and Tokyo Electric Power Company Holdings, Inc. all in negotiation with their suppliers. Chubu Electric Power Co. has secured enough uranium to operate the Hamaoka plant, while Chugoku Electric Power Co. has no plans to sell its stockpiles.
  • Momentum is on the rise for growing nuclear energy generation, with four more plants due to come online in the next four months.

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$76.8/t vs US$76.3/t

  • Speculation of sustained demand for higher-grade ore is expected to sustain prices as iron ore futures plough onto the highest close in more than five months. In Singapore, most-active SGX AsiaClear futures rose as much as 0.7% to $77.25/t, closing near the highest since Sept. 1, as the high-grade 62% content material surges 5.3% year to date.
  • Iron ore (or at least high-quality iron ore) will be well supported over the medium term. A significant part of the quality premium for iron ore is driven by the change in Chinese steel making philosophy, and we expect this to be permanent”, according to Sanford C. Bernstein Ltd. The benchmark iron ore remains in a sweet spot as China’s curbs on steel supply to fight pollution have underpinned demand for higher-quality ore, supporting preferential output from miners including Rio Tinto Group and Vale SA. Speculation follows that when restrictions are lifted in mid-March, the likely resurgence in activity by mills will be a plus for iron ore.
  • Further, steel inventories remaining low across China and improving mills’ profitability will enable a boost in usage of high-grade ore, according to Citigroup Inc.
  • In addition to the winter production restrictions, policy makers are advancing the drive toward overcapacity across the Asian nation.

Chinese steel rebar 25mm US$638.3/t vs US$637.9/t - China steel demand to aid prices as winter idling ends

  • Seasonal steel demand in China will absorb additional steel production, supporting steel prices
  • As local mills restart in the spring after winter curbs, the bank expects inventory levels may be too low, and lags to rebuild supply to meet higher demand may mean there is upside risk to steel prices
  • The potential constraints to supply contrast with the bank's expectation for Chinese steel demand to grow 25%, or 13 million mt in March from February, and further 1% month-on-month growth in April

Thermal coal (1st year forward cif ARA) US$81.7/t vs US$79.7/t

Premium hard coking coal Aus fob US$233.1/t vs US$230.2/t

 

Other:  

Tungsten APT European US$319-325/mtu vs US$317-325/mtu last week

Cobalt LME 3m US$81,000.0/t vs US$81,250.0/t - Umicore says cobalt recycling will be growing source of metal in coming years

  • Chief Executive Marc Grynberg told Financial Times that ‘recycling is an amazing mine of cobalt that is totally untapped’
  • Around 10% of global production goes into smartphones and if it is not extracted from dead batteries, the cobalt is lost forever
  • In order to meet increasing demand for electric car batteries, cobalt supply will need to reach 180,000 tonnes by 2026, up from 48,000 tonnes in 2016, Benchmark Mineral Intelligence says. By that time, recycling will start to make up a growing portion of supply

 

Company News

Botswana Diamonds (LON:BOD) 1.3 pence, Mkt Cap £5.9m – Scoping study for the Thorny River Project

  • Botswana Diamonds reports that it has started a scoping study to evaluate its Thorny River diamond project in the Limpopo Province of S Africa. The work is expected to take up to six months.
  • The project area totalling 2,771 hectares is a consolidation of the Frischgewaagt, Hartebeestfontein and Doornrivier properties which comprise “the eastern extension of the kimberlite dyke/pipe systems on which the Klipspringer & Marsfontein Mines are located, both of which have been economically mined.”
  • The company points out that “Extensive drilling, geophysics and sampling work has been undertaken at Thorny River during the last twelve months” although “The estimated diamond grade range remains at 46-74cpht” and “The estimated volume range remains at 1.2 -2.1 million tonnes of kimberlite”.
  • The company does, however note that “Further analysis of the work completed to date has led to an updated estimate of the diamond value range of US$120-US$220 per carat”. Botswana Diamonds comments that  the grade and value per carat “compares favourably with the published Indicated Resource grade of the neighbouring Klipspringer Mine of 49 carats per hundred tonnes and diamond value of US$130 / carat (2010 value), and value per tonne of US$64 / tonne.”

Conclusion: We look forward to the findings of the scoping study on the Thorny River diamond project in due course.

 

Bushveld Minerals* (LON:BMN) 8.5p, mkt cap £75m – Vanadium demand set to rise further as China raises standards for steel for vanadium in high-strength rebar for earthquake resistance

BUY – Target price 18.28 - (Bushveld Minerals now holds 59.1% of Vametco)

Click here for last Flash note

  • The People’s Republic of China is working to cut the use of substandard steel and improve standards for new high strength rebar.
  • The move is to help make buildings better resistant to earthquakes with the standards coming in to effect on 1 November
  • The standards released last week eliminates low strength Grade 2 (335MPa) rebar and brings in three high-strength standards:
    • Grade 3 (400MPa),
    • Grade 4 (500MPa),
    • Grade 5 (600MPa).
  • Hot-rolled HS rebar,
    • V content will be at 0.03%
    • V in Grade 3, 0.06%
    • V in Grade 4,
    • >0.1% Grade 5 rebar
  • The implementation of the new standard will significantly promote the application of vanadium in Chinese rebar products.

*An SP Angel Mining analyst and nomad have visited the Vametco vanadium mine and processing facilities in South Africa. 

 

Golden Star Resources (TSX:GSC) C$0.95, Mkt Cap C$360m – Recent drilling implies Wassa may be more extensive than currently thought

  • Golden Star Resources has released results from drilling undertaken during the second half of 2017 which suggest that the Wassa deposit in Ghana may be more extensive than is reflected in the current resource estimate, which the company’s website reports as 44.3m tonnes at an average grade of 2.33 g/t gold, equivalent to 3.3m oz of contained gold.
  • Investigation of the “B” Shoot and “F” Shoot to the south of the current resource envelope comprise a total of 6,818m of drilling and was undertaken from hole the BS17DD385M “mother” hole, collared 180 metres to the south of Wassa Underground’s current inferred resources, and four “daughter” holes.
  • Results from the “mother” hole, which have been reported  previously, “confirmed that the high grade zone extended 180m to the south of Wassa's Inferred Mineral Resources”. The results from the follow-up “daughter” hole programme tested the extension of the mineralisation in what is interpreted as the “F” Shoot “over approximately 400m of dip extension and intersected the “thickest zone of gold mineralization drilled to date at Wassa … [of] 94.0m averaging 4.4 g/t Au from 1,305.7m” in the third of the daughter holes.
  • The 94m long intersection covered higher grade sections including a 14m long section averaging 18.1g/t gold from a depth of 1305.7m and another 14m long interval averaging 8.6g/t gold from a depth of 1495m. We observe that the 94m long intersection is reported as the true width represented by a 211.3m long down hole intersection which indicates that the drilling is intersecting the mineralisation at an oblique angle of, we estimate, around 25⁰, and may complicate geological interpretation somewhat.
  • Overall, the company interprets the drilling has extended the orebody by “approximately 600m to the south of the current Mineral Reserves and remains open.”
  • Further southward drilling of the “B” Shoot and “F” Shoot is planned during Q2 2018
  • In addition to the drilling towards the south, underground drilling of two holes (612m) has shown continuity of gold mineralisation in the “B” Shoot North to extend 50m further north than the current planned mining area and opened up the possibility of adding additional production stopes in the near term.
  • The first of the new [underground] holes (BS17-720-29), which was drilled across the top of the interpreted zone, confirmed the grades and thicknesses intersected in the earlier hole, including 27.1m1 grading 8.7 g/t Au from 209.9m. The second new hole, (BS17-745-17), drilled approximately 20m up dip of the first new hole, also reported a significant intercept: 11.4m1 grading 7.3 g/t Au from 219.0m. This confirmed the continuity of the gold mineralization 50m to the north of the planned stoping area.”
  • Three holes, extending approximately 300m below the area previously mined were drilled on the 242 FW zone, which is located in the flatter dipping western limb of the Wassa fold structure. The most northerly of these holes “(242-17-DD006) returned an intercept of 6.8m1 grading 8.2 g/t Au from 488.0m and as a result, further drilling has been included in the 2018 exploration budget.” The company comments that “If further drilling of 242 FW is successful, it has the potential to supply additional underground ore to the Wassa processing plant and increase production”
  • Commenting on the results from the “B” and “F” Shoot drilling, CEO, Sam Coetzer, pointed out that the results “continue to support our belief that Wassa has substantial potential at depth … [and that they] … provide further confirmation that the ore body extends approximately 600m to the south of the current Mineral Reserves and remains open.  Importantly, they also suggest that it may widen at depth”. He went on to underline that “Wassa Underground is a central part of our exploration strategy in 2018 and I look forward to releasing further information about our other exploration targets during this quarter."

Conclusion: Drilling results are showing potential to increase the overall resource at the Wassa mine beyond the current 3.3moz of gold as the mineralised structures are being identified laterally well outside the existing resource envelope and at depth. We look forward to results from the future exploration and, in due course to an updated mineral resource estimate.

 

SolGold* (LON:SOLG) 22.7p, Mkt Cap £384m – Half-year financial report highlights progress at Alpala, Ecuador and other copper exploration

(SolGold own 85% of Cascabel in Ecuador)

  • SolGold report the drilling and assaying of holes 26 to 35 on the Alpala project at Cascabel in Ecuador.
  • The project is still open and so far indicates a true width of up to 700m with mineralisation down to 1,600m down hole.
  • The team is directed and supported by Newcrest who are funding some A$60m worth of exploration on the project.
  • Newcrest are expert in block cave mining and are considered to have world-class expertise when it comes to this sort of mining and project evaluation.
  • The recently accelerated drilling program continues to define and expand the mineralised envelope and to increase the scale of the project.
  • Management are preparing to release details on the new Mineral Resource estimate which was announced to the market on 3rd January.
  • The resource estimates: 1.08bnt grading an average 0.4% copper and 0.3g/t gold to give 0.6% copper equivalent.
  • Cascabel other targets; Solgold has only tested five of the 15 targets on the Cascabel license area. Alpala is one of these targets. The others are due for testing this year and may prove significant in adding to the effective resource inventory in the Cascabel area.
  • Other projects: SolGold expanded its licenses in Ecuador significantly last year and now holds 100% interests in some 77 concessions though a number of local subsidiaries. SolGold is using knowledge gained from its work at Cascabel alongside more traditional geological methods to target mineralisation on these concessions.
  • Solomon Islands; SolGold continue negotiations with landowners to gain access to project areas as Kuma and Mbetilonga. The company will start field work on the grant of the relevant licenses and access rights. Several strong copper anomoloies remain untested here.
  • Australia, Queensland; SolGold plan to follow up on numerous anomalous areas including the Mt Compton breccia pope at the Normanby project.
  • Funding: SolGold raised some A$78.4m in the second half last year to give the company a cash balance of A$138.4m at the year end.  This is an almost unprecedented sum for an exploration company.
  • Cash burn; the company spent A$26.6m on exploration and evaluation mainly at Alpala in Ecuador. The work principally covered the drilling and assaying of nine deep drill holes including daughter holes covering some 38,250m
  • Admin expenses; came in at A$9.8m through the second half.
  • Profit / loss; the company recorded a total comprehensive loss of A$14.9m through the second half due to increased exploration activity at Alpala and at a number of other, mainly copper/gold prospects.

Conclusion: SolGold with advice from Newcrest are working tremendously hard to fully evaluate the Alpala project. The company has also added personnel to ramp up other exploration in Ecuador which in our view is highly prospective and may well provide future targets for significant discoveries. SolGold’s very healthy cash balance is also enabling the company to reactivate exploration in Australia and the Solomon Islands.

*SP Angel act as UK broker to SolGold

 

Stratex International (LON:STI) 0.8p, Mkt cap £3.7m – Exploration agreement for Hasancelebi and Dogala prospects in Turkey

  • Stratex reports that it has reached an agreement with a private Turkish company, TET Madencilik Ltd, for TET to fund, over the next two years,  up to US$1.5m of exploration on the Hasancelebi  gold prospect located approximately 500km southeast of Ankara in Turkey.
  • Stratex will manage the exploration and drilling campaigns on behalf of TET, however, the agreement will “significantly reduce … [Stratex’s] operational overheads in Turkey through the transfer off licencing and staffing costs to TET.”
  • Under the agreement, Stratex is to receive US$50,000 within a week of signing the agreement. Provided that the exploration generates “a minimum JORC-compliant indicated or measured gold resource of 100,000oz (with a 0.3g/t cut off) is defined within the oxide and transition zones” within the 2 year exploration period, Stratex will receive a further US$500,000 success fee. Stratex will also receive a 1.5% NSR on any future precious metals production.
  • The trigger for payment of the success fee carries a number of practical conditions including the amenability of the deposit to surface mining, and satisfactory metallurgical test results and Environmental Impact Assessment. In the event that these criteria are met but TET does not proceed to development within a further 2 years, the properties revert to Stratex.
  • In the event that the exploration at Hasancelebi reaches the 100,000oz resource target within the agreed US$1.5m exploration budget, the balance of the funds will be used for exploration of the greenfield Dogala project which is located approximately 225km west of Hasancelebi, and is considered to be prospective for high sulphidation gold.
  • The Hasancelebi project area has been previously drilled in joint-venture with Teck Resources and “has demonstrated the potential for low-grade, high-tonnage gold mineralisation extending over a distance of between 1,000m and 2,000m, and vertical continuity of the system is confirmed down to 300m in some areas”.
  • Commenting on the agreement, interim CEO and founder of Stratex, Bob Foster described the projects as “non-core to Stratex's portfolio over the last few years” and noted that it would start to realise value on behalf of shareholders while it “allows us to share in any upside potential that might be realised, through a success-based payment and a royalty on future production”.
  • Earlier this month, Stratex enunciated its strategy as resting on the fast tracking of its exploration of the Dalafin deposit in Senegal with a reduction of the company’s financial exposure “through the conclusion of a joint-venture arrangement to bring in third party funding and additional expertise”; earning in to or acquiring new projects; monitoring of “its investment in other companies and support of further exploration as appropriate”; and to continue “the realisation of value from existing lower priority projects which are converting to royalty arrangements”. Today’s  announcement represents tangible delivery on the last of these strategic criteria.

Conclusion: Stratex’s agreement with TET over Hasancelebi and Dogala delivers on the recently announced strategy by generating value from a non-core asset while retaining the exploration management of the projects and exposure to exploration success through a discovery bonus and continuing royalty.

 

 

]]>
Thu, 15 Feb 2018 11:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29386/fundamentals-remain-supportive-of-commodities-in-2018-29386.html
Breakfast News - TruFin, Life Settlement, IntegraFin and more .... http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29385/breakfast-news-trufin-life-settlement-integrafin-and-more--29385.html Small Cap Breakfast

Set menu

AIM:

Total number of AIM Companies (Incl Susp):

955*

Total number of AIM Companies trading:

906*

 *as at close of business  12 February 2018

 

Standard List**  of Main Market:

Total number of Standard List Companies

 (Incl Susp):

136*

Total number of Standard List Companies trading:

122*

*as at close of business  12 February 2018

 

NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):

86*

Total number of NEX Growth Market Companies trading:

82*               

*as at close of business 12February 2018

 

                                *A corporate client of Hybridan LLP

**  Standard Listing as defined by Hybridan LLP to be a business with strictly  operational activity

                                    

Dish of the day

No Joiners Today

 

Off the menu   

No Leavers Today

                                             

What’s cooking in the IPO kitchen?

AIM

Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area . Vendor placing and new funds to a total of €225m, Target gross proceeds €207m.

TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer raising £70m at 190p with market cap of £185m, expected 21 Feb

Polarean  - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb

Block Energy—a  NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC

 

Main Market Specialist Funds

Life Settlement—closed-ended investment company whose principal activities will be to support and manage portfolios of whole and partial interests in life settlement policies issued by life insurance companies operating predominantly in the US.  Due 6 Mar.

 

Main Market Premium Listing

IntegraFin provides platform services to UK clients and their financial advisers through its award-winning platform, Transact. Due Mar 18. FYSep2017 PBT up 44% to £29.9m.

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

CVC (Sky Bet) rumoured to be seeking £2.5bn plus float.

VC firm Augmentum rumoured to be seeking raise up to £125m.

                               

Breakfast buffe

Concepta (LON:CPT) 6.1p £8.43m

“The UK healthcare company and developer of a proprietary product targeted at the mobile health market with a primary focus on women's fertility, is pleased to announce that it has signed a marketing agreement with Wei Yi Bei Lian (Shanghai) Information Technology Co., Ltd ("BB Link").

BB Link offers free WiFi to waiting rooms in 1,500 maternity hospitals across China. Concepta has developed a landing page that will be displayed when patients connect to this WiFi service. The page will give an overview of the myLotus product and a link to the Concepta website where more in depth information can be found. Initially, Concepta's landing page will be launched in a select number of hospitals, and longer term, the Company will be able to reach hundreds of thousands of women in a phased rollout, through a highly targeted marketing channel.” We  could see no forecasts.

 

Stratex International (LON:STI) 0.75p £3.5m

The  gold-focused exploration and development company in Turkey and Africa, is pleased to provide an update on its Hasançelebi and Doğala gold projects in Turkey

Agreement to transfer Hasançelebi and Doğala Exclusive Exploration Licences to TET;

TET to pay Stratex $50k within one week of signing the Agreement;

TET to spend up to $1.5m on exploration and drilling at the Projects within two years

TET to pay Stratex $0.5m success fee (in cash) if minimum JORC-compliant Measured or Indicated resource of 100,000 oz gold (at 0.3 g/t Au cut off) is confirmed within oxide and transition material at Hasançelebi -

Stratex to receive a 1.5% net smelter returns ('NSR') royalty on any future precious metals production at the Licences, and a 5% NSR royalty on the future production of any other metals or industrial raw minerals.

 

Scancell Holdings (LON:SCLP) 12.75p £39.79m

“ISA Pharmaceuticals B.V. ('ISA'), a clinical-stage immunotherapy company, and Scancell Holdings Plc, the developer of novel immunotherapies for the treatment of cancer, are pleased to announce that they have entered into a worldwide licensing and collaboration agreement to use ISA's AMPLIVANT® adjuvant technology for the manufacturing, development and commercialisation of Scancell's first Moditope® developmen­t candidate, Modi-1.  This partnership has the potential to provide a new treatment option for patients with triple negative breast cancer, ovarian cancer, sarcomas, and other solid tumours. Under the terms of this agreement, ISA has granted Scancell an exclusive worldwide license to manufacture, develop and commercialise the AMPLIVANT®:Modi-1 conjugate therapy and will contribute know-how and expertise related to AMPLIVANT®.“ Clinical studies to start H1 2019.

 

Stadium Group (LON:SDM) 119p £45.43m

Recommended cash offer by TT Electronics. 120p per share or £45.8m. 34.7% premium to yesterday’s close.

Stadium is a design-led technology business with a focus on wireless connectivity, power and interface and displays .

FYDec17E rev £61m and PBT £4.5m.

 

LiDCO (LON:LID) 7.37p £18.01m

FYJan18 trading update from the  hemodynamic monitoring company .

“LiDCO product revenues for the year are expected to be up 2% to £6.87m (2017: £6.76m) with total revenues (including third party products) expected to be up by 1% to £8.27m (2017: £8.21m).  Excluding China, where as previously announced no sales were recorded in the year as regulatory approval is sought for a fundamental accessory, LiDCO product revenues were up 9% to £6.87m (2017: £6:27m). During the year the Company launched its latest monitor, LiDCOunity v2, with the new highly differentiated High Usage Programme (HUP) business model. HUP is building momentum after its launch in July 2017, achieving a global installed base of 96 monitors with total annualised revenue of £0.73m. As of 31 January 2018, LiDCO had £0.60m of deferred revenues on the balance sheet arising from the HUP. Overall the new LiDCOunity v2 contributed to the strong demand for monitors with 315 units being sold or placed in the year (2017: 227 units).” FYJan19E rev £11.2m, PBT £1.3m.

 

The People’s Operator (LON:TPOP) 0.1p £3.34m

FYDec17 trading update from the cause-based commercial mobile virtual network operator.

* FY2017 average revenue per user ("ARPU") in the UK of £11.02 (FY2016: £13.22) for PAYG customers and £9.78 (FY2016: £12.50) for PAYM customers

* FY2017 average revenue per user in the US of $20.15 (FY2016: $22.09)

* Average customer acquisition costs remain low at £7.76 in the UK (FY2016: £5.70) and $21.71 (FY2016: $22.00) in the US

* Overall Airtime margin for 2017 is more than five times that of 2016, reflecting ongoing reductions in wholesale rates

* Year-on-year churn has more than halved in the UK and has declined by over 50% in the US

* ARPUs in the UK were affected, particularly in H2 2017, through discounting via affiliate platforms. Such unprofitable discounting has now been discontinued.

 

Earthport (LON:EPO) 12.02p £73.71m

“The leading payment network for cross-border payments, is pleased to provide an unaudited trading update for the six month period ended 31 December 2017 ("H1 FY 2018").

Financial Highlights

* Revenues grew by approximately 8% to £15.4m (H1 FY 2017: £14.3m)

* Adjusted gross margin decreased by 9% to 64% compared to 70% in H1 FY 2017, due to network delivery costs and mix of business

* Administrative expenses increased by approximately 7% to £13.9m (H1 FY 2017: £13m), representing 90% of revenues (H1 FY 2017: 91%)

* Adjusted EBITDA loss increased by approximately £1.7m to £3.2m (H1 FY 2017: £1.5m)

* Cash Balance at 31 December 2017 amounted to £30.6m, compared to £11.9m at 30 June 2017. This includes net proceeds of £24m raised in October 2017”.

 

Innovaderma (LON:IDP) 187.5p £26.96m

HYDec17 results from the UK developer of life sciences, beauty and personal care products.  Group revenue grew strongly by 31% to £4.2m.  Loss before tax of £0.03m (HY2016: £0.15m) due to planned investment in people required to support international growth, and pre-launch product development expenses. Successful launch of the new hair loss treatment and hair care brand, Roots Double Effect  ("Roots") in the UK, both within DTC and Retail channels during Q1 Cash of £2.05m.  Remains confident of meeting market expectations. FYJun18E rev £13.8m and PBT £2.4m.

 

Ten Lifestyle Group (LON:TENG) 160p £125.2m

The “technology-enabled lifestyle and travel platform for the world's wealthy and mass affluent, is pleased to announce it has won a new, additional contract with Visa International ("Visa") to provide concierge services to its high and ultra-high-net-worth clients as part of its Visa Infinite and Visa Signature affluent card concierge programmes. The service will be rolled out in Central Europe, the Middle East and Africa, with the transitioning process having already commenced.” FYAug18E rev £44.7m, PBT loss £10.6m.

 

 

]]>
Thu, 15 Feb 2018 10:45:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29385/breakfast-news-trufin-life-settlement-integrafin-and-more--29385.html
Northland Capital Partners View on the City - Botswana Diamonds (LON:BOD) http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29384/northland-capital-partners-view-on-the-city-botswana-diamonds-lonbod-29384.html SECTOR: MINING

Thorny River Project

NORTHLAND VIEW
  Botswana Diamonds has completed further analysis of the work it has completed to date at the Thorny River Diamond Project and updated the estimated diamond value range of US$120/ct-US$220/ct.
  The estimated diamond grade range and volume range remain at 46cpht-74cpht and 1.2mt and 2.1mt, respectively.
  The Company has also commenced a Scoping Study to assess the commerciality of the Project.

Botswana Diamonds’ believes that the Thorney River Diamond Project, compares favourably with the neighbouring Klipspringer Diamond Mine, which has an Indicated Resource grade of 49cpht, diamond value of US$130/ct and a value per tonne of US$64/t. They will now complete a Scoping Study at the project to assess the potential commerciality of the project.

COMPANY DESCRIPTION
Botswana Diamonds is a diamond focused exploration company that has a joint venture with Alrosa in Botswana, an interest in the Maibwe discovery also in Botswana and an interest in 10 prospecting rights that contains 20 kimberlites, in South Africa.

]]>
Thu, 15 Feb 2018 10:22:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29384/northland-capital-partners-view-on-the-city-botswana-diamonds-lonbod-29384.html
Oil price, Coro, RockRose And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29383/oil-price-coro-rockrose-and-finally-29383.html

WTI 60.60 +$1.41, Brent $64.36 +$1.64, Diff -$3.76 +23c, NG $2.59 -1c

Oil price

The traders took advantage of the better than expected EIA inventory stats to buy crude and the futures yesterday in what was described as a ‘thin’ market. It may be a dead cat bounce, only time will tell but maybe $60 for WTI and $63 for Brent are levels we shall see.

The EIA stats showed a build in crude of only 1.84m barrels less that the whisper of +2.7 and the API number of 3.9m so fears of a massive build were allayed. Further comments regarding adhesion to quotas also pacified the market.

Coro Energy

Today is launch day for Coro Energy as a result of the combination of the Italian assets of Sound Energy and Saffron Energy and PO Valley. New CEO is Sara Edmonson who will head up what we have been told is going to be very much a South East Asia gas play which would explain today’s high level board appointment. Mr Ilham Habibie will join the board as soon as practical and adds significant weight to the board as he is the son of the former President of Indonesia who took the country to democracy and he carries outstanding business credentials.

The launch event tonight will I’m sure, have the same chutzpah as usual and shareholders will hear from the board in detail what the plans are for the company. With new cornerstone investor CIP Merchant Capital cornerstoning the company and the Open Offer having provided every opportunity to climb aboard at the start of such a potentially exciting journey, all is set for another James Parsons and crew investment.

RockRose Energy

RockRose announce that the shares will relist today and that the B shares will be redeemed for 150p a share tomorrow, shareholders can expect payment on 23/2. This has been a massively profitable investment for those who believed the story and there is no reason to believe it will not continue.

And finally…

With the HubCap Stealers thrashing Porto, in Porto last night, the chances of an English club making progress in the tournament are significant. Meanwhile the Gooners and Celtic are in the Boropa Cup, for Gooners fans it is looking like last year for the Red Devils as a first four place in the Prem is far from certain and thus winning this cup begins to have real importance.

 

]]>
Thu, 15 Feb 2018 10:16:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29383/oil-price-coro-rockrose-and-finally-29383.html
Beaufort Securities Breakfast Alert - Steel pensions scheme victim to 'major mis-selling scandal' http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29382/beaufort-securities-breakfast-alert-steel-pensions-scheme-victim-to-major-mis-selling-scandal--29382.html Markets

Europe
The FTSE-100 finished yesterday's session 0.64% higher at 7,213.97, whilst the FTSE AIM All-Share index was up 0.48% at 1,021.76. In continental Europe, the CAC-40 finished 1.10% higher at 5,165.26 whilst the DAX was down 1.17% at 12,339.66.

Wall Street
Last night in New York, the Dow gained 253.04 points, or 1.03%, to end the day at 24,893.49. The S&P 500 added 35.69 points, or 1.34%, to close at 2,698.63 and NASDAQ finished 130.11 points higher at 7,143.62.

Asia
In Asia this morning, the Nikkei 225 was up 288.97 points at 21,443.14 heading into the close. The Hang Seng was 599.83 points higher at 31,115.43 and the Shanghai Composite was up 14.2 points at 3,199.16.

 

Oil
At around 6:15am, TI crude was 1.29% higher at $61.38 per barrel and Brent was up 0.96% at $64.98 per barrel.

 

 Headlines

Steel pensions scheme victim to 'major mis-selling scandal'
British Steel pension scheme members were targeted by "vulture" financial advisers after Tata was allowed to offload its retirement fund, MPs say. In 2017 the Indian firm announced a restructuring of the £14bn fund to keep its UK loss-making operations afloat. But the government, Tata and regulators failed to protect 124,000 members from a "major mis-selling scandal", the Work and Pensions Select Committee said. The UK government has yet to issue its response to the "neglect" claim. The Pensions Regulator said it would continue to work to protect savers. The report from the Work and Pensions Select Committee was looking at the closure of the British Steel Pension Scheme (BSPS). Regulators had accepted that Tata Steel UK would be insolvent if it continued to sponsor the scheme.

Source: BBC News

 

 

]]>
Thu, 15 Feb 2018 10:04:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29382/beaufort-securities-breakfast-alert-steel-pensions-scheme-victim-to-major-mis-selling-scandal--29382.html
Morning Market Pulse- Standard Life becomes Scottish Widow http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29381/morning-market-pulse-standard-life-becomes-scottish-widow-29381.html **Correction:**

“Corporate news this morning: RELX net profit beats (£1.66bn vs £1.38bn exp.), revenues in line; to simplify corporate structure by creating single parent company; announces further £700m share buyback. Convatec swings to full-year profit, however sees decline in EBIT margin in 2018 due to investment; expects organic revenue growth between 2.5%-3%.”

 

FTSE 100 Index called to open +35pts at 7250, continuing to trade in its shallow rising channel having recovered from a challenge of its channel floor yesterday afternoon but back from overnight highs of 7260. Bulls will be hoping for a further test of the 7260 channel ceiling for a breakout to last week’s highs of 7310. Bears will be looking for a pullback to the 7200 channel floor, hoping a further challenge leads to a leg lower.  Watch levels: Bullish 7270,Bearish 7220

Calls for a positive start come after Asian markets followed US peers higher, with the latter shrugging off a hotter-than-expected CPI print yesterday afternoon, as risk assets bounced sharply from session lows. FinancialsTech and Commodities have led the charge higher, with some Asian markets already winding down for Lunar new year. The US dollar trades 3-week lows, which may hinder the FTSE and DAX by way of stronger Sterling and Euro respectively.

Outperformance for miners down under will lend themselves to the FTSE’s heavyweight offering, while Gold and Crude Oil at 3-week and 1-week highs respectively will help Gold miners and Oilers alike. Meanwhile, South African stocks may react to President Zuma’s resignation overnight

Corporate news this morning: RELX to simplify corporate structure by creating single parent company; announces further £700m share buyback. Convatec net profit beats (£1.66bn vs £1.38bn exp.), revenues in line; sees decline in EBIT margin in 2018 due to investment; expects organic revenue growth between 2.5%-3%.

AstraZeneca’s  Selumetinib gets FDA orphan drug status, expects second phase trial results later in 2018.  Lloyds’ Scottish Widows to end £109bn investment management deal with Standard Life Aberdeen after 6-month post-merger no withdrawal window expires; the latter will book a £40m impairment charge in 2017 accounts.

US equity markets shrugged off stronger than expected inflation data to close higher, stringing together a 4-day winning streak. The Dow Jones climbed just over 1% with Goldman Sachs leading risers, while Financials and Tech outperformed on the S&P 500 (+1.3%), the latter helping the Tech-heavy Nasdaq to outperform peers (+1.9%).

Gold is trading close to a 3-week high following the US dollar’s sharp fall in reaction to yesterday’s hotter than expected inflation data. The greenback dive has seen the precious metal climb back above $1350 for the first time since 1 February, breaking out from the ceiling of a 1-week uptrend. The dollar will continue to drive sentiment today with another inflation metric, PPI, due out later today.

Crude Oil benchmarks have continued to climb sharply overnight, bolstered by a duo of bullish news. A smaller than expected build in US EIA inventories provided a short-term bullish boost to crude, while the OPEC Secretary General suggesting the group would not exit its current production cut programme further lifted sentiment. Brent crude has broken out from falling highs resistance to trade a 1-week high above $65, while US crude trades back above $61 after its own bullish breakout.

In focus today, hot on the heels of strong US Consumer Price Inflation yesterday and Wages growth data that spooked markets at the beginning of February, will be yet another price growth metric, Producer Price Inflation (1.30pm).

With oil prices having been strong into end-Jan, PPI also has potential for a January pick-up in contrast to a consensus cooling, adding to calls of returning inflation perhaps forcing the Fed (which concentrates on Core inflation) to tighten policy more quickly. Once again, watch how the USD reacts.

Thereafter, both Empire State Manufacturing and Philly Fed (1.30pm) will provide assessments of February corporate confidence in their respective regions. Economists expect the former to extend a 4-month downtrend to the weakest since August, the latter ticking down from an already weak January to revisit August’s 2017 lows.

US Industrial Production (2.15pm) likely slowed in January (0.2% vs 0.9% prev), normalising from a strong December, Manufacturing Production (2.15pm), however, should pick up. Capacity Use (2.15pm) is expected to extend a 4-month climb to its highest in 3 years and the NAHB Housing Market Index (3pm) is seen static in February.

 

Speakers today include the ECB’s Mersch (8.15am) giving a keynote speech at an Agricultural Exporters meeting in Paris, while the central bank’s Chief Economist Praet (10.45am) is on a panel discussion at a conference jointly organised by the French Treasury and IMF in Paris and Lautenschläger (1pm) gives a keynote speech at Dutch Banking Day 2018 organised by De Nederlandsche Bank in Amsterdam.”

]]>
Thu, 15 Feb 2018 10:01:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29381/morning-market-pulse-standard-life-becomes-scottish-widow-29381.html
Gold Futures Surge as Retail Fizzle Counters Inflation Surprise http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29380/gold-futures-surge-as-retail-fizzle-counters-inflation-surprise-29380.html
Video commentary for February 14th 2018

Eoin Treacy's view
A link to today's video is posted in the Subscriber's Area.

Some of the topics discussed include: Gold and gold shares surge, stocks steady, bonds yields hit new recovery highs, Volatility futures expire, Dollar weak particularly against the Yen.


Daily Journal AGM


Eoin Treacy's view
I drove into downtown LA this morning to hear Charlie Munger talk at the Daily Journal AGM. Here are some of the points he raised. 


Gold Futures Surge as Retail Fizzle Counters Inflation Surprise
This article by Luzi Ann Javier for Bloomberg may be of interest to subscribers. Here is a section:
Global markets were whipsawed last week after U.S. wage data spurred investors to reappraise the outlook for global inflation and weigh consequences for monetary policy and asset valuations. While investors often seek gold as a haven during times of turmoil, the metal fell on the same concerns that helped spark the selloff in stocks: the prospect of higher interest rates. Bullion regained some ground early this week.
The retail sales number “is one of the moving gears that can cause the Fed to actually take a step back from raising interest rates,” Daniel Pavilonis, a senior market strategist at RJO Futures, said in a telephone interview. “There’s a lot of uncertainty in the market and it’s helping gold. Traders are asking, is this number problematic enough to hold off on raising rates, or it is just temporary?

Eoin Treacy's view
Gold has been ranging mostly below $1350 since the middle of 2016 in another of a succession of 18-month ranges seen over the last 15 years. Gold is a hedge against financial troubles that reduce investors’ purchasing power so if there is any chance that the Fed will fall behind the curve of rising inflation, gold can be seen as a sound hedge.


Investment Journal
Thanks to a subscriber for this report from Cantor Fitzgerald which may be of interest. Here is a section:

As markets get spooked by the rising yield environment, (US 10 -year treasury’s at 2.7%, up 11% ytd and the German 10 year Bund at 0.67%, up c.55% ytd) investors continue to question equity valuations following a 9 year bull run as bond/bund yields begin to factor in a rising interest rate cycle. Given this backdrop we’ve seen a rotation out of bond proxy/high yield stocks like telco’s and utilities into the banking and insurance sectors. The chart below shows the correlation between the European banking sector and the German 10 year bund over the last year.
As you know we have been positive on the European banking sector for some time, given the improving economic backdrop across the Eurozone which bodes well for the sector. The latest European Q4 GDP came in ahead of expectation and when you look at historical data, 2016 estimates for Q4 2017 were 1.4% but came in at 2.7%. Specific to the banks, balance sheets have been repaired, lending growth is accelerating, consumer spending is improving, and confidence levels are going in the right direction. Both core and peripheral European banks are primed to take advantage of this upturn and to some extent has been reflected in higher moves over the last year or so. The sector though continues to trade at attractive valuations due to historical legacy issues but we believe that these issues, including Non-Performing Loans “NPL’s”, have been well managed and should be less of a headwind going forward. Quantitative Easing “QE” from the ECB is nearing an end, per recent comments from the central bank, as the market moves to a more normalised interest rate environment over the coming years to the benefit of the banking sector.

Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

Two of the consequences of quantitative easing were to rob savers of yields and to compress the profitability of banks by reducing the interest rates they could earn on short-term paper. The change to raising rates is a net positive for the banking sector. There is ample evidence of this in the USA following the announcement of the tax cuts and as the Fed gradually raises rates.

 

Eoin's personal portfolio update February 12th 2018

Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, I repost this section on a daily basis and the title will always include the date of my most recent trade. Continues in the Subscriber's Area.


Long-Term Themes Review February 9th 2018

Eoin Treacy's view
FullerTreacyMoney has a very varied group of people as subscribers. Some of you like to receive our views in written form, while others prefer the first-person experience of listening to the audio or watching daily videos.

The Big Picture Long-Term video, posted every Friday, is aimed squarely at anyone who does not have the time to read the daily commentary but wishes to gain some perspective on what we think the long-term outlook holds. However, I think it is also important to have a clear record for where we lie in terms of the long-term themes we have identified, particularly as short-term market machinations influence perceptions.
Here is a brief summary of my view at present. Continues in the Subscriber's Area.



 

]]>
Thu, 15 Feb 2018 09:16:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29380/gold-futures-surge-as-retail-fizzle-counters-inflation-surprise-29380.html
Market Briefing - Botswana Diamonds and SolGold http://www.proactiveinvestors.co.uk/columns/sp-angel/29379/market-briefing-botswana-diamonds-and-solgold-29379.html Botswana Diamonds (LON:BOD) – Raising £500,000 

SolGold* (LON:SOLG) – Initial Aguinaga drilling programme imminent

South Africa – Gupta business family compounds in South Africa are raided by police forces once President Zuma has been handed the resignation order by the ANC executive committee.
• Guptas are accused of using close connections to Mr Zuma violating anti-corruption regulations.
• The rand continued to strengthen against the US$ and is currently trading 11.85 (+5% YTD) on increasing expectations for Zuma to announce resignation later today.

Stockpiles swell ahead of Lunar New Year
• SHFE inventories of base metals rise as restocking ahead of tomorrow’s Chinese new year festivities. Deliverable aluminium stockpiles in Shanghai Futures Exchange warehouses extend multi-month gains to fresh records, growing 7,544 tonnes to 811,286 tonnes; increasing every week since late June.
• Deliverable zinc stockpiles also grow 4% to 102,557 tonnes, up for the 7th week.
• Deliverable copper inventories boosted levels 5.8% to 197,759 tonnes.
• Levels are expected to continue to rise as traders and mill workers have taken leave during the national holiday running 15th-21st Feb.

Dow Jones Industrials  +0.16% at 24,640
Nikkei 225   -0.43% at 21,154
HK Hang Seng   +2.47% at 30,577
Shanghai Composite    +0.45% at 3,199
FTSE 350 Mining   +0.15% at 18,402
AIM Basic Resources   -0.13% at 2,526

Economics
US – CPI numbers are due later today with markets trying to understand if there is a build-up in inflation pressures.
• Core CPI is expected to come in at 1.7%yoy in January compared with 1.8%yoy the previous month.
• Benchmark 10y bond yields are little change this morning (2.83%) after coming off recent highs hit on Monday (2.89%) while stock markets futures are pointing towards modest equity gains once trading starts later today.
• Fed funds futures markets imply that traders expect at least two rate increases by the end of the year, with a 50% chance of three.

Japan – Weak GDP and inflation numbers point to an extension of the supportive monetary policy
• Positive effect of stronger consumer spending and business investments has been dented by a drop in government spending, weaker inventories and an increase in imports.
• GDP (%qoq annualised SA): 0.5 v 2.2 (revised from 2.5) in Q3/17 and 1.0 forecast.
• GDP deflator (%yoy): 0.0 v 0.2 in Q3/17 and 0.0 forecast.

Germany – The economy recorded robust growth in the final quarter of 2017 driven by strong overseas demand, according to Destatis.
• The statistics agency said “exports increased substantially” while government spending climbed while household consumption was essentially flat.
• Market estimates are for the economic growth to accelerate to 2.4% next year, 2pp up on 2017.
• GDP (%qoq SA): 0.6 v 0.8 in Q3/17 and 0.6 forecast.
• GDP (%yoy WDA): 2.9 v 2.8 in Q3/17 and 3.0 forecast.

Sweden – One of the central banks that keep short term interest rates in the negative territory voted to leave repo rates at -0.50% during today’s meeting.
• Although, one of the six members’ Executive Board voted for an increase in the benchmark rate by 25bp despite downwards revisions to future inflation forecasts.
• The Riksbank highlighted that labour earnings have been growing at a slower pace than previously forecast despite strong labour market and GDP growth data.
• As such the central bank does not see repo rate increases before the start of the second half of the year.

Currencies
US$1.2366/eur vs 1.2326/eur yesterday  Yen 107.37/$ vs 107.65/$  SAr 11.868/$ vs 11.930/$  $1.388/gbp vs $1.386/gbp  0.787/aud vs 0.787/aud  CNY 6.346/$ vs 6.343/$.

Commodity News

Precious metals:         
Gold US$1,332/oz vs US$1,329/oz yesterday
• Gold rises for the third consecutive day as investors eagerly await key US inflation data which may offer fresh clues on monetary tightening. Bullion for immediate delivery climbed as much as 0.6% to $1,337.02 to add almost 2% to yearly gains for the precious metal. Gold’s increase was matched by a fourth day of losses for the Bloomberg Dollar Spot index, its worse run in a month to fall more than 3% lower for the year to date.
• “Some G-10 traders (are) arguing this is the most significant economic release in the past three years” according to Oanda analysts, with the looming inflation print “critical” following “last week’s market carnage in the wake of an inflationary uptick in wage growth”. “With the US dollar once again striking a bearish chord among G-10 traders, the long gold set up looks favourable. However, with nearly 100% of gold’s appeal trading off the back of US dollar weakness, the US CPI reading could be a day of reckoning for gold bulls”.
• Economists at Oversea-Chinese Banking Corp. suggest “gold’s reaction to inflation data is profoundly hard to predict. Given how markets have been pricing in more Fed rate hikes into 2018, faster-than-expected inflation pressures would likely persuade higher policy rates across key central banks and pressure prices lower, rather than lift gold’s status as an inflation hedge”.
• Data this week also indicates Dalio’s Bridgewater Associates raised its stakes across SPDR Gold shares and iShares Gold Trust in the final quarter of 2017, with recommendations for investors to consider placing 5-10% of assets in gold.
   Gold ETFs 72.0moz vs US$71.8moz yesterday
Platinum US$977/oz vs US$974/oz yesterday
Palladium US$989/oz vs US$984/oz yesterday
Silver US$16.58/oz vs US$16.64/oz yesterday
           
Base metals:   
Copper US$ 6,982/t vs US$6,919/t yesterday
Aluminium US$ 2,125/t vs US$2,144/t yesterday
Nickel US$ 13,500/t vs US$13,185/t yesterday
Zinc US$ 3,459/t vs US$3,416/t yesterday
• Zinc prices are expected to fade in the second-half of the year, as the metal reaches a 10-year closing high of $3,557/t on Feb. 1. Expectations for a slowdown in China’s property sector is forecast to soften demand for ferrous commodities according to senior research analyst at Macquarie Group Ltd, with Lloyd seeing prices drop to $2,850/t.
• Zinc will also face “headwinds from substitution pressure” as the price surges higher than aluminium, a common substitute metal.
Lead US$ 2,545/t vs US$2,510/t yesterday
Tin US$ 21,600/t vs US$21,200/t yesterday
           
Energy:           
Oil US$62.6/bbl vs US$62.9/bbl yesterday
Natural Gas US$2.582/mmbtu vs US$2.610/mmbtu yesterday
Uranium US$21.65/lb vs US$21.65/lb yesterday
           
Bulk:   
Iron ore 62% Fe spot (cfr Tianjin) US$76.3/t vs US$74.9/t
• Iron ore futures in China surged to their strongest in three-weeks on expectations for firm steel demand in the world’s top consumer during 1H 2018. The most-traded iron ore contract for May delivery on the Dalian Commodity Exchange jumped as far as $85/t, the highest since Jan. 23. The climb marked the second straight session of sharp gains in steelmaking raw materials, as price movements become exaggerated by low liquidity as many market players have taken off for the week-long Lunar New Year holiday.
• “Many mills have good profit expectations for the first and second quarter, so they have increased purchase of iron ore” according to a Beijing trader.
• A Chinese government think-tank warned earlier that the debated “unfair and unreasonable” US trade measures on steel will be met with “counter-measures” under World Trade Organization rules.
Chinese steel rebar 25mm US$637.9/t vs US$638.2/t
• Industrial buyers of steel in the US are appealing to President Donald Trump to protect the US steelmaking industry by directly negotiating with China, the main culprit driving global overcapacity, instead of instating trade restrictions on imported steel. Executive director of American Wire Producers Association penned the president a letter on behalf of steel consumers in the US arguing that restrictions on imports of foreign metal could be potentially ‘disastrous’.
• “We should be dealing with the overcapacity situation, not trying to plug one part of the industry that’s going to harm another industry”. The appeal follows on on-going investigation by the Commerce Department to prove whether imports of steel and aluminium represent a threat to US national security, under the premise of a seldom-used law, Section 232 of the Trade Expansion Act of 1962.
• Steel-import restrictions being considered by the US could have “unintended and disastrous consequences” for the domestic economy and manufacturers in his address written on behalf of 15 US industrial groups. The association represent more than 1 million jobs spread across 30,000 facilities. “Restrictions on basic steel imports will actually adversely impact national security, the economy, and the steel industry itself because it will undermine our competitiveness and limit our ability to make value-added products here”. 
China urges US to exercise restraint on steel trade actions
• China's Ministry of Commerce has urged the US to exercise restraint in using trade restrictions on steel imports ahead of a meeting between President Donald Trump and US lawmakers to discuss steel and aluminium trade issues
• Director of Chinese Ministry of Commerce, Wang Hejun, said ‘China is worried about the serious tendency of US protectionism in the field of steel products’
• He urged the US to exercise restraint in using trade restrictions and abiding by the multilateral trading rules with all parties so as to give a positive impetus to the development of world economy

Thermal coal (1st year forward cif ARA) US$79.7/t vs US$78.8/t - Global thermal coal demand to outstrip supply in 2018
• Powered by Asia’s continuing demand, the global seaborne thermal coal market is expected to grow by around 48mt or 5% from 2017 to 974mt in 2018, trading house Noble Group said
• While the spike in demand will largely come from Asia, the market is contemplating the supply to be short by about 10 million mt
• China is at the beginning of a new construction cycle looking at the increase in land purchase, also Indian steel production was expected to increase by about 10% in 2018, which would have a knock-on effect on power demand and hence coal consumption
Premium hard coking coal Aus fob US$230.2/t vs US$231.7/t

Other:  
Tungsten APT European US$319-325/mtu vs US$317-325/mtu last week
Cobalt LME 3m US$81,250.0/t vs US$81,250.0/t - Cobalt cannot be eradicated from electric car batteries – Umicore
• Makers of electric vehicle batteries will have to keep using scarce, expensive cobalt in their products for the foreseeable future despite a push towards higher nickel compositions, materials technology company Umicore said
• Whilst technology was evolving towards higher nickel loadings, not possible to completely design out cobalt as cobalt is the element that gives nickel stability
• Reducing cobalt has impact on cycle life and charging

Company News
Botswana Diamonds (LON:BOD) 1.1 pence, Mkt Cap £4.8m – Raising £500,000
• Botswana Diamonds has raised £500,000 through the placing of 50m new shares at 1p/share. The new shares represent approximately 9.8% of the enlarged capital of the company.
• The funds are to be used for continuing diamond exploration in Botswana, where Botswana Diamonds is working with the Russian diamond major, Alrosa, on projects in the Orapa region and in the central Kalahari, and in South Africa, where the company is evaluating ground in close proximity to the former Marsfontein diamond mine.
• Speaking in Cape Town last week, Managing Director, James Campbell, indicated that, among other initiatives, the company intended to commence drilling  to determine the size and shape of the kimberlite body at its Ontevreden project in South Africa within the next three months.

SolGold* (LON:SOLG) 22.25p, Mkt Cap £377m – Initial Aguinaga drilling programme imminent
(SolGold own 85% of Cascabel in Ecuador)
• Solgold has announced plans to mobilise two man-portable diamond drilling rigs to the Aguinaga prospect within its Cascabel exploration area in Ecuador. The Aguinaga area is located approximately 3km northeast of the Alpala project area where the company announced a maiden resource estimate in January.
• The initial programme, which is expected to start in early March, is planned to consist of five holes to depths up to 1200m although success at this relatively early stage of exploration will no doubt trigger further drilling.
• Aguinaga is one of 15 priority targets which Solgold has identified within the Cascabel project area and the recent arrival of five large rigs to continue the detailed deep drilling work at Alpala has freed up the man-portable rigs for deployment on the initial drilling at Aguinaga.
• The Aguinaga discovery occurred in 2015 when “field teams discovered porphyry copper-gold, quartz stock-work veining and telescoping of epithermal-gold style veining within potassic altered porphyritic diorite.  Rock saw-channel sampling over the limited exposure, returned an open-ended nine metres grading more than 1.0% copper and 0.7 g/t gold” in the upper part of the Aguinaga Creek.
• Since the original discovery, follow up exploration has assembled a compelling body of coincident geological, structural, geochemical and geophysical evidence which characterises Aguinaga as a potentially significant large porphyry centre located at the junction of “a deep seated regional north-west trending structure with major north-east- and north-trending lineaments”.
• A large scale positive magnetic anomaly some 500m x 500m in size, surrounded by an annular magnetic low is also “characteristic of a large porphyry centre … similar to magnetic signatures at the Bajo de la Alumbrera, Grasberg and Batu Hijau porphyry deposits”
• Additional chargeability and magneto telluric resistivity anomalies reinforce the geophysical case for an underlying porphyry beneath Aguinaga while “Coincident highs in copper, gold, molybdenum and the Cu-Zn ratio in soil and auger results are supported by a surrounding zone of low manganese-in-soil, which is likely to be related to intense late-stage hydrothermal alteration above the centre of the Aguinaga porphyry system.  These soil geochemical relationships are characteristic of the metal zonation around porphyry copper-gold deposits”.
• The Cascabel area hosts a number of high priority targets in addition to the Alpala cluster and the Aguinaga target and Solgold has also secured a number of other licences elsewhere in Ecuador including the Timbara prospect where the company recently announced the discovery of copper porphyry style mineralisation in outcrop.
• The company has budgeted for 120,000m of exploration drilling in 2018 with the majority focused on infill and expansion work at Alpala where a maiden resource of 1.08bn tonnes at an average grade of 0.68% copper equivalent was announced in January.
Conclusion: The imminent commencement of early stage drilling at the Aguinaga property is supported by a substantial body of geological, structural , geophysical and geochemical evidence and is no doubt also informed by the detailed knowledge and understanding of the controls to mineralisation the exploration team has accumulated during the continuing exploration of Alpala. We look forward to the initial drilling results from Aguinanga as well as results from the continuing drilling at Alpala.
*SP Angel act as UK broker to SolGold

]]>
Wed, 14 Feb 2018 10:57:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29379/market-briefing-botswana-diamonds-and-solgold-29379.html
Northland Capital Partners View on the City - Botswana Diamonds and Feedback http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29378/northland-capital-partners-view-on-the-city-botswana-diamonds-and-feedback-29378.html Botswana Diamonds 

NORTHLAND VIEW
  Botswana Diamonds has raised £500,000 through a placing of 50,000,000 shares at a price of 1p per share.
  Following the placing the Company will have 509,282,508 shares in issue.

Botswana Diamonds’ will use the net proceeds of this placing to fund ongoing diamond exploration in South Africa and Botswana and provide additional working capital.

COMPANY DESCRIPTION
Botswana Diamonds is a diamond focused exploration company that has a joint venture with Alrosa in Botswana, an interest in the Maibwe discovery also in Botswana and an interest in 10 prospecting rights that contains 20 kimberlites, in South Africa.

Feedback plc

  David Crabb was appointed as Chief Executive Officer and a director of Feedback with immediate effect. 
  Mr Crabb brings 20 years of experience to the role.  Most recently he was CEO of Cambridge Online Systems, a software company acquired by the global IT group Columbus in December 2016.  Previously, Mr Crabb held director-level roles in medium-sized technology and outsourced solutions companies with revenues from £50 million to over £1 billion.
  Dr Alastair Riddell, Chairman of Feedback plc, commented: “I am delighted that Feedback has attracted a highly experienced executive to complement the strong technical and regulatory expertise within the Company.  Under David's leadership, we are well-positioned to leverage our pioneering technology to create evidence-based imaging software, arming clinicians with innovative tools to improve patient outcomes."
The appointment of David Crabb will underpin the execution of the Company's growth strategy following the first CE marked release of TexRAD®, the Company's patented quantitative image texture analysis technology for diagnostic radiological scans.

COMPANY DESCRIPTION
Feedback plc is a medical imaging business.

 

 

]]>
Wed, 14 Feb 2018 09:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29378/northland-capital-partners-view-on-the-city-botswana-diamonds-and-feedback-29378.html
Today's Oil and Gas Update - Union Jack Oil http://www.proactiveinvestors.co.uk/columns/sp-angel/29377/today-s-oil-and-gas-update-union-jack-oil-29377.html In Brief
• Union Jack Oil*** (LON:UJO) – $37.4mm (0.65p) – Brighter 2018 to Follow Disappointing 2017: Today’s update from the company reminds us that a lot of progress was made in 2017, all of which, however, was overshadowed by Wressle’s planning rejection. While this is undoubtedly disappointing, it is by no means the only flight in the company's quiver. With an active programme over the coming 12 months, such as Biscathorpe, Holmwood and the results of the Fiskerton workover, not to mention the revision to Wressle’s development, there is a lot planned for 2018. We are reiterating our $37.4mm (0.65p) valuation.

]]>
Wed, 14 Feb 2018 08:55:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29377/today-s-oil-and-gas-update-union-jack-oil-29377.html
Beaufort Securities Breakfast Alert : Galileo Resources and Hutchison China Meditech http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29376/beaufort-securities-breakfast-alert-galileo-resources-and-hutchison-china-meditech-29376.html Markets
Europe
The FTSE-100 finished yesterday's session 0.13% lower at 7,168.01, whilst the FTSE AIM All-Share index was down 0.04% at 1,016.84. In continental Europe, the CAC-40 finished 0.60% lower at 5,109.24 whilst the DAX was down 0.70% at 12,196.50.
Wall Street
Last night in New York, the Dow gained 39.18 points, or 0.16%, to end the day at 24,640.45. The S&P 500 added 6.94 points, or 0.26%, to close at 2,662.94 and NASDAQ finished 31.55 points higher at 7,013.51.
Asia
In Asia this morning, the Nikkei 225 was down 63.12 points at 21,181.56 heading into the close. The Hang Seng was 357.44 points higher at 30,196.97 and the Shanghai Composite was up 8.06 points at 3,193.02.
Oil
At around 6:15am, WTI crude was unchanged at $59.19 per barrel and Brent was up 0.16% at $62.82 per barrel.

Headlines
Japan GDP slows to 0.5% in final quarter of 2017
Japan's economic growth slowed in the last three months of 2017 and missed expectations, preliminary official figures show. The world's third-largest economy expanded at an annualised rate of 0.5% in the quarter, against analyst forecasts of 0.9%. But it is still the country's eighth consecutive quarter of growth - the longest streak since the late 1980s. The GDP figures compare with annualised growth of 2.2% in the previous quarter. Annualised growth rates represent a value of growth if the quarter-on-previous quarter rate of change were maintained for a full year.
Source: BBC News

Company news


Galileo Resources (LON:GLR, 1.60p) – Speculative Buy
Galileo Resources announced yesterday encouraging initial results from its 51% owned Star Zinc project in Zambia. The Company has completed 750m of an estimated 1,750m drill campaign comprising 19 vertical and inclined holes up to a depth of 70m. Whilst assay results are still pending, 68% of the drill holes to date intersected high-grade zinc mineralisation based on hand-held XRF spectrometry. Highest point values obtained by the XRF was 52% Zn (willemite) and the averages of three point readings over mineralised intervals returned between 15% Zn and 28% Zn. Based on these initial results the mineralised zone has a strike length, to date, of 100m and remains open along strike and at depth. Galileo holds a 51% interest in the project with the right to increase to 85%. The Star Zinc project is a historical small-scale open pit that operated intermittently between 1950s and 1990s and has a non-compliant (historical) resource estimate of 275kt grading 20.2% Zn based on a cut-off grade of 14% Zn. The Star Zinc project has a four-year exploration permit and is currently under application for a further four-year period.

Our view: We are encouraged with the initial XRF data of up to 52% Zn and look forward to assay results in the coming weeks. In the meantime, we note that historical resource is based entirely vertical drill holes while Galileo has now drilled inclined holes which suggest that mineralisation may be associated with a series of E-W structures. We look forward to further exploration work as the Company continues delineate a 4.4km long geochemical anomaly defined by >100ppm Zn from XRF data. We also note that the Zn mineralisation is hosted in mainly limestone and this style of mineralisation may also contain anomalous silver contents. We maintain a speculative buy on the stock.

Beaufort Securities acts as corporate broker to Galileo Resources PLC

Hutchison China MediTech (LON:HCM, 4,490.00p) – Buy
Hutchison China MediTech (‘Chi-Med’), yesterday announced that it has completed the enrolment of 527 patients in China for pivotal Phase III trial of fruquintinib (jointly developed with Eli Lilly) in advanced non-small cell lung cancer (‘NSCLC’). Top-line data is expected to be reported in H2 2018.

Our view: Good progress for Chi-Med. This trials for NSCLC comes after the Phase II trials showed positive data with no unexpected safety issues. It is also worth noting that the same molecule (fruquintinib) has demonstrated positive results last year for the treatment of third-line colorectal cancer, which is now pending NDA approval in China. Chi-Med is scheduled to release its full year results on 12 March 2018 with a financial guidance includes revenue of US$225-240m, administrative expenses, interest & tax of US$18-19m and net loss of US$13-28m. We reiterate out Buy recommendation on the shares.

]]>
Wed, 14 Feb 2018 08:52:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29376/beaufort-securities-breakfast-alert-galileo-resources-and-hutchison-china-meditech-29376.html
Morning View . Next-generation batteries to sustain cobalt demand http://www.proactiveinvestors.co.uk/columns/sp-angel/29375/morning-view-next-generation-batteries-to-sustain-cobalt-demand-29375.html Amur Minerals* (LON:AMC) – £10m convertible loan issued

Atalaya Mining (LON:ATYM) – Settling royalty for shares

Kodal Minerals* (LON:KOD) – Confirmation of Sogola-Baoule extension at Bougouni lithium project

MC Mining (formerly Coal of Africa) (LON:MCM) – Integrated water use licence secured for Vele Colliery

 

Lunar New Year

  • Trading activity is winding down ahead of the week-long Lunar New Year break that kicks off on Thursday. Many traders and workers across mills in China, the world’s top commodity producer, have taken leave and expectations are the market may only see a sharp revival in appetite next month.
  • Iron ore and steel demand is expected to remain in a lull into March, with no “major restocking activity soon after the holiday” according to a Shanghai iron ore trader.
  • Gold demand is expected to remain high during the festive period, building on the 3% rise in annual jewelry demand throughout 2017.

Demand growth combined with low stock levels and inelastic supply could make 2018 a good year for base metals

ABC News comments today that renewed demand and low stockpiles could make 2018 the year of the base metal

  • They highlight that wide industrial application and new technologies are driving demand, particularly from China which uses 50% of all base metals globally

BMW still looking for 10 year’s worth of Cobalt and Lithium supply

  • BMW’s procurement department continue to look ahead to secure 10 year supply of cobalt and lithium for EV batteries as part of new strategy according to comments to Germany’s Frankfurter Allgemeine Zeitung last week.
  • The head of supply chain, Markus Duesmann, said that ‘aim is to supply all the way down to the level of the mine, for 10 years. The contracts are ready to be signed,’
  • BMW is looking to release a series of all new electric vehicles starting with an electric mini next year, with plans for all 12 electric cars to be on the market by 2025

 

SP Angel rank No 1 in Copper price forecasting in the Q4 2017 MB APEX report

SP Angel analysts ranked:  See MB APEX report link for further details

  • 1st for copper, 1st = for gold, 2nd for Palladium, 3rd for Coking Coal, 5th for Zinc, 3rd in Q4 Precious Metals forecasts in Q4, 4th in Base Metals forecasting in Q4

SP Angel ranked No 1 for research by ‘Research Tree’ according to investor demand

 

 

Dow Jones Industrials

 

+1.70%

at

24,601

Nikkei 225

 

-0.65%

at

21,245

HK Hang Seng

 

+1.29%

at

29,840

Shanghai Composite

 

+0.98%

at

3,185

FTSE 350 Mining

 

+0.42%

at

18,147

AIM Basic Resources

 

+1.72%

at

2,529

 

Economics

US – The volatility in equity market is seen subsiding after the worst week in years has been followed by the strongest two-day increase in just over two years on Monday.

  • The S&P 500 closed 2.9% over the past two sessions.
  • The volatility index based on the CBOE VIX measure has come down to 27.2 this morning, down from a high of 37.3 recorded last week.

 

China – New credit surged in January ahead of Chinese New Year, although, the trend in money supply growth remains downward as the government continues with the deleveraging programme.

  • Despite stronger than forecast new credit numbers for January, the gauge was down 17.2%yoy.
  • Aggregate Financing (CNYbn): 3,060 v 1,140 in December and 3,150 forecast.
  • M2 Money Supply (%yoy): 8.6 v 8.2 in December and 8.2 forecast.

 

UK – Inflation data came in stronger than forecast in January raising expectations for a rate hike this year.

  • Weak price pressures in auto fueld and food prices were compensated by increasing costs in the recreation and culture sectors; additionally, clothing prices recorded weaker losses than last year as seasonal discounts failed to match those in 2017.
  • Markets currently price in around three interest rate hikes over the next three years, with the first coming as early as May.
  • The pound jumped past the 1.39 mark on the back of the news before coming off slightly trading at 1.388.
  • CPI (%mom/yoy): -0.5/+3.0 v 0.4/3.0 in December and -0.6/+2.9 forecast.
  • Core CPI (%yoy): 2.7 v 2.5 in December and 2.6 forecast.

 

South Africa – The ANC party has asked President Jacob Zuma to resign paving the way for Cyril Ramaphosa to take power, according to people familiar with the decision BBC report.

  • The ANC national executive committee has reached the decision following a 13-hour meeting with an official letter confirming the ousting of Mr Zuma to be sent later today.
  • Interestingly, the NEC has not legal binding power to remove Mr Zuma from the office and should the President disagree with the decision the official no-confidence vote will have to be launched through parliament.
  • In case of a resignation, Mr Ramaphosa will immediately replace the President for a period of up to 30 days before parliament confirms his candidature.
  • The rand has been little changed against the US$ this morning hovering around the strongest level since mid-2015 on the back of expected changes in the government.

 

Currencies

US$1.2326/eur vs 1.2263/eur yesterday  Yen 107.65/$ vs 108.54/$  SAr 11.930/$ vs 11.967/$  $1.386/gbp vs $1.382/gbp  0.787/aud vs 0.781/aud  CNY 6.343/$ vs 6.324/$

 

Commodity News

Precious metals:         

Gold US$1,329/oz vs US$1,321/oz yesterday

  • Gold advances for its second day as the dollar retreats and equity markets begin to stabilize following last week’s selloff. The S&P 500 regained 1.4% during yesterday’s trading following the biggest weekly rout in two years. Oanda trading analysis note “prices were supported by a weaker dollar and physical demand ahead of the Chinese Lunar New Year. The equity market carnage has abated, and the waves of cross-assets selling to replenish equity margins have temporarily decreased, providing calmer market to reestablish gold longs”.
  • Investors await tomorrow’s US consumer-price index data as a signal on inflation views and indication of the pace of monetary tightening. “Prices should remain within a range ahead of this weeks’ US inflation data as the CPI will be a monster print for the markets’ inflation views, and could provide a catalyst for gold to bounce higher”.
  • As yields on 10-year Treasuries sit near 2014 highs at 2.83%, billionaire hedge fund manager Ray Dalio notes the risk of recession in the next 18 to 24 months is rising.

   Gold ETFs 71.8moz vs US$71.8moz yesterday

Platinum US$974/oz vs US$968/oz yesterday

Palladium US$984/oz vs US$987/oz yesterday

Silver US$16.64/oz vs US$16.43/oz yesterday

           

Base metals:   

Copper US$ 6,919/t vs US$6,825/t yesterday

  • Higher copper prices and new labour rules in Chile are driving broad wage negotiations across the world’s top supplier of the red metal. One of the most anticipated at BHP Billiton’s Escondida mine lies in the hands of the company, according to Union No.1 spokesman Carlos Allendes. Despite the historically fractious relationship, the doors are open to dialogue. If the company maintains the same position as the last negotiation, the union doesn’t rule out actions including a strike.
  • This intensifies concerns over significant supply disruptions as wage talks between Union No.1 and BHP failed in February last year and workers went on a 44-day strike that ended with no accord.

Aluminium US$ 2,144/t vs US$2,130/t yesterday

Nickel US$ 13,185/t vs US$13,030/t yesterday

Zinc US$ 3,416/t vs US$3,385/t yesterday

Lead US$ 2,510/t vs US$2,520/t yesterday

Tin US$ 21,200/t vs US$21,140/t yesterday

           

Energy:           

Oil US$62.9/bbl vs US$63.4/bbl yesterday

  • Hedge funds have begun liquidating record bullish positions in crude oil and refined fuels as the recent rally reverses amid signs that US shale production is surging. The hedge funds and other money managers cut their combined long position in six most important futures and options contracts linked to petroleum by the equivalent of 41 million barrels in the week to Feb. 6.

Natural Gas US$2.610/mmbtu vs US$2.575/mmbtu yesterday

Uranium US$21.65/lb vs US$21.50/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$74.9/t vs US$74.0/t

Chinese steel rebar 25mm US$638.2/t vs US$640.1/t

Thermal coal (1st year forward cif ARA) US$78.8/t vs US$75.8/t

Premium hard coking coal Aus fob US$231.7/t vs US$228.4/t

 

Other:  

Tungsten APT European US$319-325/mtu vs US$317-325/mtu last week

Cobalt LME 3m US$81,250.0/t vs US$81,250.0/t

  • Despite next-generation lithium-ion batteries evolving towards higher nickel consumption, markers of electric vehicle batteries will have to continue using the scarce, expensive cobalt for the foreseeable future according to materials technology company Umicore. Manufacturers are trying to redesign battery compositions to increase the proportion of nickel used in electric vehicle batteries to boost energy density, while reducing cobalt use to cut costs.
  • South Korea’s SK Innovation and LG Chem have recently announced plans to produce NMC (nickel-manganese-cobalt) 811 batteries (80%-10%-10%) this year. However, Umicore chief executive Marc Grynberg noted that while the technology was evolving toward higher nickel loadings, it was not possible to design cobalt out of the batteries. “If you increase the nickel proportion, you reduce the stability of the battery and so it has an impact on cycle life, the ability to charge it fast. Cobalt is the element that makes up for the lack of stability of nickel. There isn’t a better element than nickel to increase energy density, and there isn’t a better element than cobalt to make the stuff stable. So (while) you hear about designing out cobalt, this is not going to happen in the next three decades.”
  • Belgium’s Umicore raised $1.1 billion in an equity placing to fund investment in its fast expanding rechargeable battery material business, supplying broad materials including cobalt.
  • In the near-term, enough cobalt is being produced to meet demand from the electric vehicle industry, with Umicore sourcing Congolese metal via a responsible supply agreement audited by PwC. Long-term supply will require significant advancement in recycled material. The company expects to ramp up recycling of spent electric vehicle batteries to “significant” levels in the next seven to nine years, when more feedstock returns to the market. “If you look at a more mature market, like the market for catalysts that contain platinum group metals, about half of our supply is coming from recycling”.
  • Further minor metals trading house Darton Commodities forecast a 40% growth in cobalt usage in electric vehicle batteries to 12,600 tonnes in 2018. This represents a 1,500 tonne surplus this year as global supply increases.
  • Deficits are expected to return in 2021, and deepen in following years as EV sales surge. “Any surplus availability, be it as unrefined feed or refined downstream products, is likely to be absorbed and stockpiled by other market players in anticipation of renewed, future supply constraints”.

 

Lithium

  • South Korean entities are “moving faster than just about everybody else”, including Europe and North America to lock in sources of lithium supply; second only to China in seeking deals. Pilbara Minerals Ltd. CEO Ken Brinsden has been in discussions with LG Chem Ltd. and Polaris Shipping Co. on a potential South Koreas JV. Meanwhile, the company has multiple engagements with other SK entities not focused on vehicle manufacture, and is continuing to work on potential supply deals with the aim of being a diversified supplier by customer, segment and country.
  • The major Australian spodumene hard rock producer has ~200,000 tonnes of output from its expansion project that is currently uncommitted, with Pilgangoora on track to begin commissioning in 2Q, with first shipment by end of July.  

 

Company News

Amur Minerals* (AMC LN) 6.0p, Mkt Cap £38.1m - £10m convertible loan issued

  • The Company agreed a 8% up to $10m loan facility with an investment consortium of Cuart Investments and Y A II PN arranged by RiverFort Global Capital.
  • Loan proceeds will be used for resources/reserves update, update of the economic model, metallurgical test work and G&A.
  • The loan will consist of three tranches ($4m, up to $3m and the remainder of $10m) to be made available to the Company through the year and to be drawn at the Company discretion, approximately 120 days apart between each tranche.
  • The first $4m drawdown to be made tomorrow with a maturity of 13 March 2019.
  • Each drawdown is repayable in 12 equal instalments, including accrued interest.
  • Should the Company elect not to make a periodic repayment, loan providers can convert the instalment into new shares at own discretion.
  • The conversion price is the lower of 130% of the Reference Price (the 20 trading days VWAP immediately prior to the date of each drawdown) or 90% of the lowest daily VWAP over the five trading days before the conversion.
  • The Company can repay all outstanding amounts of an advance before the end of the loan facility if VWAP for five trading days prior to the redemption notice comes in below 130% of Reference Price, but the amount payable will be 110% of the amount due.
  • Additionally, investors will receive warrants for 30% of the value of each drawdown with an exercise price of 130% of the price of the advance and an exercise period of three years.
  • Following the draw down of the first $4m tranche, the Company will issue 9.3m warrants with an exercise price of 9.3p (implying 7.2p the Reference Price).
  • At no point investors can convert into new shares if doing so will take their stake in the Company to 25% or more.

Conclusion: The funds secured will help the Company to advance the Kun Manie nickel/copper sulphide project as the management is studying long term financing alternatives with Medea Financial Partners. Using the 7.2p Reference Price for the first tranche and 1.4 GBPUSD exchange rate as well as assuming share price trades around the Reference Price during the conversion period, we estimate the first tranche (including accrued interest) potentially amounting to 47.6m in new shares or 7.5% of outstanding share capital (excluding 9.3m in warrants).

*SP Angel act as Nomad and Broker to Amur Minerals

 

Atalaya Mining (LON:ATYM) 191 pence, Mkt Cap £258m – Settling royalty for shares

  • Atalaya Mining reports that it has issued 192,540 shares at a price of 186.7p/share in settlement of a US$500m outstanding royalty to the former owner of certain plots of land at its Proyecto TioTinto mine.
  • The royalty holder, Rumbo, “is entitled to receive a royalty payment of up to US$250,000 per quarter if the average copper sales price or LME price for the period is equal to or above $2.60/lb. As such, and given the fact that the average copper price for the third and fourth quarter of 2017 was above $2.60/lb, the Company is obliged to pay US$500,000 to Rumbo”.
  • The company and Rumbo “remain engaged in discussions over how to satisfy future payments, should they be required as per the Royalty Agreement.”

Conclusion: The company’s website discloses that at 1st January 2017, it had 116,679,555 shares in issue. The issue of shares to Rumbo to settle the outstanding royalty represents, therefore, less than 0.2% of the capital of Atalaya Mining. We look forward to further news on the outcome of the discussions regarding future royalty payments to Rumbo.

 

Kodal Minerals* (LON:KOD) 0.19p, mkt cap £12.6m – Confirmation of Sogola-Baoule extension at Bougouni lithium project

  • Kodal Minerals reports that the final assay results from its recently completed 1263m of reverse circulation drilling in ten holes at the Sogola-Baoule prospect have confirmed the south-western extension of multiple mineralised pegmatite veins which were previously identified in drill hole MDRCO15 including 12m at an average grade of 1.68% Li2O from a depth of 216m, a second 12m long intersection averaging 1.59% Li2O from 241m and 17m at an average grade of 1.79% Li2O from 277m depth.
  • The recent programme was intended to explore the “continuity of these intersections, to target the up-dip and potential near-surface mineralisation and extend the project.”
  • “Geological logging and evaluation of the drilling has confirmed multiple mineralised pegmatite veins and extensions to the defined bodies.” Among the new results highlighted in today’s announcement are:
    • A 24m long intersection at an average grade of 1.58% Li2O from a depth of 115m in hole MDRC026;
    • An 8m long intersection at an average grade of 1.50% Li2O from a depth of 133m in hole MDRC025, which also contained a second 2 metres wide zone of mineralisation averaging 1.71% Li2O from 148m;
    • A 13m long intersection at an average grade of 1.17% Li2O from a depth of 101m in hole MDRC027, which contained three additional mineralised zones at shallower depths, including 1m averaging 1.16% Li2O from 23m, 6m averaging 1.12% Li2O 33m and 7m averaging 0.70% Li2O from 86m; as well as
    • 3 separate intersections exceeding 1% Li2O in hole MDRC021B - 5m averaging 1.50% from a depth of 81m; 6m averaging 1.0% from 91m and 12m averaging 1.69% Li2O from a depth of 110m.
  • The company points out that the mineralisation lies beneath up to 14m of alluvial cover and that “Additional drill testing is proposed to target the extensions both to the southwest and northeast and provide additional data to allow an evaluation of the prospect.”
  • Confirming that “The geological interpretation is showing continuity of high-grade pegmatite bodies that currently remain open along strike”, CEO, Bernard Aylward noted that Sogola Baoule was the second of the targets at Bougouni “that we have now been able to drill test over a consistent strike length”. He went on to comment that “As our exploration campaign continues at Bougouni we anticipate further results from the Ngoualana prospect where geological logging of drill holes indicates further strike extensions, and geological reconnaissance has located evidence of pegmatite bodies beyond the current drilling”.

Conclusion: The recent drilling by Kodal Minerals continues to extend the footprint of the lithium mineralisation at Bougouni. Although there is not yet a resource estimate and consequently no mine plan, the identification of multiple mineralised structures within the licence has the potential to generate operational cost savings through a possible future bulk mining development.

*SP Angel act as Financial Advisor and broker to Kodal Minerals. A partner at SP Angel acts as Chairman to the company.

 

MC Mining (formerly Coal of Africa) (LON:MCM) 39.5 pence, Mkt Cap £55.6m –Integrated water use licence secured for Vele Colliery

  • MC Mining , which changed its name from Coal of Africa in December 2017, has announced that the South African Department of Water and Sanitation has granted its Vele Colliery an Integrated Water Use Licence for colliery’s “stream diversion and associated infrastructural activities.”
  • The company comments that “This approval completes the full regulatory suite of all authorisations required for the Vele Colliery.”
  • This now clears the way for the MC Mining Board to consider “the final decision on whether to proceed with the Plant Modification Project”.
  •  The Vele Colliery, which lies close to the Zimbabwe border, has been on care and maintenance since October 2013, however with 362mt of mineable resources and a planned 16 year mine life as an open-pit mine with the potential to extend into underground operations, it represents a significant asset. The plant Modification project, if approved, enables upgrading of the previously produced thermal coal product to include a semi-soft coking product.

 

Conclusion: We understand that the project has suffered issues of product quality and relatively poor yields in the past, and we await further news of the Board’s decision on whether to proceed with the development following resolution of the regulatory issues.

]]>
Tue, 13 Feb 2018 12:01:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29375/morning-view-next-generation-batteries-to-sustain-cobalt-demand-29375.html
Northland Capital Partners View on the City - Venture Life Group (LON:VLG) http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29374/northland-capital-partners-view-on-the-city-venture-life-group-lonvlg-29374.html  

SECTOR: HEALTHCARE

 

Commercial update
NORTHLAND VIEW

  Venture Life Group (‘VLG’) announced a strong commercial update for its product ranges with the current order book ahead of the same point in 2017 and in-line with management expectations.
  UltraDEX: During Q1 2018, UltraDEX mouthwash will be listed in Day Lewis Pharmacies, a pharmacy with over 300 UK stores. Superdrug pharmacy, will list UltraDEX toothpaste in c. 460 stores in Q1 2018. UltraDEX mouth spray will be launched in Roadchef outlets across the UK in Q1 2018, following listings in Moto motorway service stations in 2017. TV advertising for UltraDEX products run in Q1 2018 follows successful TV marketing campaigns in 2017. UltraDEX has been launched in Italy, France and Scandinavia through the Group's new long term exclusive partners. First orders were delivered at the end of 2017.
  Benecol: VLG will launch its Benecol, a cholesterol-reducing nutraceutical, in its first market, Jordan, in Q1 2018.
  Procto-eze: VLG signed an exclusive long-term partnership for Procto-eze Plus, a haemorrhoids treatment, with a new partner for the Romanian market. The Procto-eze range is currently partnered in 12 countries.
  Lubatti: The Lubatti skincare brand showed in-store sales growth in mainland China throughout H2 2017, via Gialen, VLG's long term partner, which has c. 2,200 stores in China. VLG has received orders in 2018 (from end of January) from Gialen, exceeding total revenues from Gialen in 2017.  

Following a strong trading update for the year ended 31 December 2017, indicating c.60% EBITDA (adj.) growth, this commercial update shows the continued growth of the Group’s brands. The new UltraDex listings further strengthens the Group's presence in the UK pharmacy sector and the TV advertising campaign is expected to increase customer awareness of the brand and grow sales. Outside of the UK, VLG is expanding its UltraDEX distribution into high-value European countries and seeing a significant increase in orders in mainland China for Lubatti. We expect the Group to continue to show increased profitability over 2018, as a result of the Company’s operating leverage.

COMPANY DESCRIPTION
Venture Life Group plc is a consumer healthcare company. The group develops, manufactures, and commercialises self-care products which target the ageing population.

]]>
Tue, 13 Feb 2018 10:34:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29374/northland-capital-partners-view-on-the-city-venture-life-group-lonvlg-29374.html
Morning Market Pulse - Trump pump, dump and stumble http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29373/morning-market-pulse-trump-pump-dump-and-stumble-29373.html FTSE 100 Index called to open +5pts at 7182, further extending Friday's bounce from 7000, but slowed up by falling highs resistance going back to 29 Jan’s pre-sell-off highs of 7700. Bulls need a break above overnight highs of 7220. Bears need a breach of yesterday afternoon’s lows of 7165. Watch levels: Bullish 7220, Bearish 7165

 

Calls for a tepid start come after Asian bourses stumbled overnight, failing to mimic Wall St’s biggest 2-day gain (Energy, Tech, Healthcare), since June 2016 thanks to stateside investors welcoming the next step in the Trump Administration’s stimulus efforts - Infrastructure spending - and 2019 budget details. However, how Trump plans to fund things (more federal cuts, other private investment) has disappointed.

 

US budget deficit implications have sent USD and US bond prices lower (yields higher), to hinder sentiment, with reciprocal Yen strength hampering the Nikkei, although Australia’s ASX and its Energy/Miners embraced higher oil and metals prices.

 

UK FTSE listed Energy/Miners will thus face the benefit of higher commodity prices versus the hindrance of GBP strength which  has yet to break above yesterday's highs versus the US Dollar but remains closer to 1.39 than to 1.38, and thus a headwind. That said, we note the EUR is outperforming vs USD (highest since 7 Feb), and thus a bigger negative for the German DAX.

 

Corporate news this morning: BHP Billiton flags $1.8bn income-tax expense after US tax reform. TUI narrows 1Q net loss and backs FY 2019 guidance. Faroe Petroleum expects 2018 production of 12-15K BOE/D. Pendragon 2017 pre-tax profit hit by shrinking margins. South African rand exposed stocks may be sensitive to the ANC demanding President Zuma steps down (old Mutual, Mondi, Investec, Mediclinic).

 

Gold retains its trend of shallow rising lows/narrowing channel from $1311 last Friday to trade $1325, closing in on $1330 after the USD basket broke below yesterday’s lows, to extend the downtrend from its mid-Dec peak. This came on the back of President Trump’s infrastructure spending plan and budget deficit implications and despite US inflation data due Wednesday while markets remain more volatile, thus increasing interest in the safe haven.

 

Crude Oil have also found support overnight thanks to the weaker USD and an easing in both oil supply (rising US shale/fracking vs OPEC production cuts) and global demand concerns after OPEC’s monthly report yesterday . US Crude oscillates around $63 and West Texas around $59.5.

 

In focus today will be UK Jan Consumer Price Inflation (9:30am). After a more hawkish than expected monetary policy statement  from the Bank of England last week, and further such commentary from MPC members Vliege and Mccafferty, any CPI print above the 2.9% YoY consensus (a slight cooling, but still well above the bank’s 2% target) would likely seal the deal on a May rate. This would likely further strengthen GBP, with a negative knock-on for the FTSE100 via its significant international trade and thus FX translational exposure.

 

Note the Bank's preferred metric, Core CPI, is expected to rise to 2.6% YoY from 2.5% in December, while Dec House Price growth retreats below 5%. The only other data print of note is US Jan Small Business Optimism (11am), expected to climb back above the 12-month average, before Japanese Q4 preliminary GDP tonight (11.50pm), forecast slower.

 

 

Speakers today include stand-in German Finance Minister Altmaeier (12:15pm) whose remarks may well more for political than economy oriented in light of current coalition organisation. FOMC voting member Mester (1pm; hawkish) speaks at an Ohio Chamber of Commerce event, with audience and media Q&A, before Italian Finance Minister Padoan shares his latest thoughts (1:30pm).

]]>
Tue, 13 Feb 2018 09:52:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29373/morning-market-pulse-trump-pump-dump-and-stumble-29373.html
Beaufort Securities Breakfast Alert - Amazon plans hundreds of layoffs http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29372/beaufort-securities-breakfast-alert-amazon-plans-hundreds-of-layoffs-29372.html Markets

Europe
The FTSE-100 finished yesterday's session 1.19% higher at 7,177.06, whilst the FTSE AIM All-Share index was up 1.12% at 1,017.29. In continental Europe, the CAC-40 finished 1.20% higher at 5,140.06 whilst the DAX was up 1.455% at 12,282.77.

Wall Street
Last night in New York, the Dow Jones gained a further 410.37 points, or 1.7%, to end the day at 24,601.27. The S&P-500 added 36.45 points, or 1.39%, to close at 2,656 and Nasdaq finished 107.47 points higher at 6,981.96.

Asia
In Asia this morning, the Nikkei 225 resumed trading and was down 127.77 points at 21,254.85 heading into the close. The Hang Seng was 452.69 points higher at 29,912.32 and the Shanghai Composite was up 31.77 points at 3,185.9.

 

Oil
At around 6:15am, WTI crude was 0.57% higher at $59.63 per barrel and Brent was up 0.59% at $62.96 per barrel.

 

Headlines

Amazon plans hundreds of layoffs
Amazon is cutting hundreds of positions at its headquarters and global operations, a move that comes after several years of significant growth. The cuts were first reported by the Seattle Times, which said the actions are focused on streamlining the firm's consumer retail business. Amazon said it is working to offer affected staff new roles. It said it expects "small reductions in a couple of places and aggressive hiring in many others." Amazon, which lists thousands of job openings on its website, has expanded rapidly in recent years, both through skyrocketing sales and acquisitions of companies such as grocer Whole Foods. The company reported about $3bn in profit on nearly $178bn in sales last year. It counted more than 560,000 full and part-time workers worldwide at the end of December, an expansion of more than 65% from the previous year. The firm's website shows many of the new positions report to Amazon Web Services, the firm's profitable cloud computing division. The firm is also building up units focused on the company's Alexa robot and other devices. Previous consolidations at the company have led to layoffs in some areas. Last year, Amazon closed Diapers.com and other sites operated by Quidsi, which it announced a deal to acquire in 2010 for about $500m. That led to more than 260 layoffs in New Jersey.

Source: BBC News

 

 

]]>
Tue, 13 Feb 2018 09:46:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29372/beaufort-securities-breakfast-alert-amazon-plans-hundreds-of-layoffs-29372.html
The EU's Real Rule-of-Law Crisis http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29371/the-eu-s-real-rule-of-law-crisis-29371.html


Video commentary for February 12th 2018

Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.


Interesting charts February 12th 2018

Eoin Treacy's view
The Dow Jones Industrials Average completed a reversion towards the mean at Friday’s low and extended the rebound today to confirm a low of near-term significance. Some short covering is now underway, but the damage to sentiment done by the speed of the decline suggests ranging will be required to encourage convalescence.

This is what David had to say during an email exchange we had this morning - ckick here to read more.



Eoin's personal portfolio update February 12th 2018

Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, I repost this section on a daily basis and the title will always include the date of my most recent trade. 


Email of the day - on the trend mean
Could you please advise how you work out the trend mean and also at which percentage and up that you regard it as overextended. I note that you use a 40 ema on the weekly.


Eoin Treacy's view
Thank you for this question which comes up from time to time. We use the 200-day exponential moving average which is analogous to the 40-week MA. Incidentally, the Chart Library only does the calculation once so that regardless of whether you are looking at a daily, weekly or monthly chart the moving average will be calculated using days.
Deciding by how much an instrument needs to be trading above its trend mean to qualify as an overextension will depend both on what is characteristic of that market and the stage of the cycle the instrument is in. For example, a volatile share like Amazon routinely has overextensions in excess of 10% while for an Index like the Dow Jones Industrials Average that condition is relatively rare.
Meanwhile it is normal for prices to become overextended following a breakout from a well-defined range because the trend has been inert and the breakout is therefore surprising. That generally signifies the beginning of a trend while an acceleration following an already well-established consistent trend is suggestive of an impending consolidation or even correction.


The EU's Real Rule-of-Law Crisis
This article by Simon Nixon for the Wall Street Journal may be of interest to subscribers. Here is a section:
Northern European countries will argue that the key to making the EU more resilient is to ensure that existing rules are more effectively enforced. For example, the German, Dutch and Finnish governments have called for changes to the way the EU budget is administered to make future EU funds conditional on member states undertaking reforms that would boost economic convergence.
That will put them on a collision course with countries in Eastern Europe who fear that the EU budget will be turned into another tool to allow Brussels to interfere in their domestic politics.
It will also put them on a collision course with the French government, which believes that simply relying on stricter enforcement of rules to rebuild trust isn’t sufficient.
French officials argue that the answer is deeper political integration based less on rules and more on institutions. They point to the creation of the European Central Bank as an example of a significant pooling of sovereignty that was greeted with suspicion at first but has won broad public trust by operating independently and decisively. They say that a similar leap is needed now.
But to succeed, France will need to convince skeptical partners that any new institutions can be trusted to apply EU rules consistently and ensure member states respect their obligations—rather than deepen what has become the EU’s true rule-of-law crisis.



Eoin Treacy's view
The European Union has one set of rules for large countries and quite another for small countries. At the same time the national champions of large countries can act with impunity while just about everyone else is expected to abide by the mille feuille of bureaucracy spewing from Brussels. Continues in the Subscriber's Area.

 

Today, Michio Kaku Described What Life Will Look Like in Twenty Years
This article by Jolene Creighton for Futurism may be of interest to subscribers. Here is a section:
Of course, technology also has the potential to help us connect with people wide and far. Kaku noted this point, outlining how tech will allow us to exchange thoughts and ideas as never before. “You will be able to talk to people in any language because your contact lenses will translate speech,” Kaku predicted.
Want to take a trip? Regardless of whether you’re going near or far, you won’t own your car; you also won’t drive one. Cars will drive you. You’ll also be able to travel much lighter than you do today because, as was mentioned above, you’ll be able to create most of what you want or need on demand.
For the things we do what to buy, Kaku believes we’re headed toward a future that will be socioeconomically unlike anything we’ve experienced.
“We are building up to something that I call ‘perfect capitalism,'” he said, describing the concept as “eliminating the middlemen, eliminating all the frictions of capitalism.” In this society, Kaku said, “the winner” will be all of society. The losers? The middlemen. The Stockbrokers.

Eoin Treacy's view
Moore’s law delivered upon a doubling of computing power every 18 months for 40 years but is now slowing down as the atomic limits of silicon atoms are approached. That has resulted in two primary responses by chip makers. The first is to focus more on power consumption than computing power and the second is to invest heavily in developing new forms of computing whether quantum, optical, memristors or other solutions


Long-Term Themes Review February 9th 2018

Eoin Treacy's view
FullerTreacyMoney has a very varied group of people as subscribers. Some of you like to receive our views in written form, while others prefer the first-person experience of listening to the audio or watching daily videos.
The Big Picture Long-Term video, posted every Friday, is aimed squarely at anyone who does not have the time to read the daily commentary but wishes to gain some perspective on what we think the long-term outlook holds. However, I think it is also important to have a clear record for where we lie in terms of the long-term themes we have identified, particularly as short-term market machinations influence perceptions.
Here is a brief summary of my view at present - continues in the Subscriber's Area.



2018, the 49th year of The Chart Seminar

Eoin Treacy's view
The first venue for The Chart Seminar in 2018 will be:
Melbourne on April 16th and 17th. We are currently in the process of confirming a venue. 
I will also hold an online seminar, probably in May over the course of three or four days.
There will be another Seminar in London in November and I am in initial discussions with a potential partner about organising a New York Seminar.
If you would like to attend or have a suggestion for another venue please feel to reach out to Sarah at sarah@fullertreacymoney.com. 

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non EU residents are not liable for VAT). Subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates. Continues in the Subscriber's Area.






 

]]>
Tue, 13 Feb 2018 09:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29371/the-eu-s-real-rule-of-law-crisis-29371.html
Breakfast Alert - Audioboom, Hutchison China Medi, Ebiquity and more... http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29370/breakfast-alert-audioboom-hutchison-china-medi-ebiquity-and-more-29370.html What’s cooking in the IPO kitchen?

AIM

TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer TBC, expected late Feb

Polarean  - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb

Block Energy—a  NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC

 

Main Market Specialist Funds

Life Settlement—closed-ended investment company whose principal activities will be to support and manage portfolios of whole and partial interests in life settlement policies issued by life insurance companies operating predominantly in the US.  Due 6 Mar.

 

Main Market Premium Listing

IntegraFin provides platform services to UK clients and their financial advisers through its award-winning platform, Transact. Due Mar 18. FYSep2017 PBT up 44% to £29.9m.

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

CVC (Sky Bet) rumoured to be seeking £2.5bn plus float.

VC firm Augmentum rumoured to be seeking raise up to £125m.

                                                              

Breakfast buffet

Hutchison China Medi  (LON:HCM) 4,430p £2.9bn

“Hutchison China MediTech Limited has completed patient enrolment of FALUCA, its Phase III pivotal trial of fruquintinib in advanced, third-line, non-small cell lung cancer patients in China. Fruquintinib is a highly selective and potent oral inhibitor of vascular endothelial growth factor receptors 1, 2 and 3, that has met its primary endpoint in several Phase II and III clinical trials in China for the treatment of lung, colorectal and gastric cancers. Top-line FALUCA data is expected to be reported in late 2018 when the overall survival data is mature and, subject to a positive outcome, would be followed by a second New Drug Application ("NDA") submission thereafter. Fruquintinib's first NDA, for the treatment of colorectal cancer, was submitted to the China Food and Drug Administration in June 2017.”

Ebiquity (LON:EBQ) 100.5p £74.37m

“Ebiquity is pleased to announce it has entered into an agreement for the disposal of its AdIntel business to Nielsen Media Research Limited, a subsidiary of Nielsen Holdings plc, a global measurement and data analytics company. The consideration is £26m, payable in cash on completion, and subject to adjustments for working capital.”

“For the 12 months to 31 Dec Ebiquity continued to grow revenues by 4.9% to £87.6m, and 1.5% on a constant currency basis. Excluding the Market Intelligence segment, revenue grew by 7.0%, and by 3.3% on a constant currency basis. As anticipated revenue grew faster in H2 for the remaining Group, consisting of the Marketing Performance Optimization and Media Value Measurement practices, with constant currency revenue growth in the second half of the year of 7.3%.”

Craneware (LON:CRW) 1597p £420.8m

2 contract wins from The specialist “in Value Cycle solutions for the US healthcare market. Both hospital providers are new customers to Craneware. The first contract with a large blue chip healthcare provider, sees Craneware's Value Cycle products being deployed across this organisation's 20 hospitals. Craneware's solutions will be an integral part of this provider's major system change, helping to ensure revenue integrity during the initiative and beyond.  This contract is expected to deliver c$5m of revenue over its initial multi-year term. The second contract win with an innovative surgical hospital is for the provision of Craneware's suite of products as part of its strategic growth plans, deploying multiple Craneware solutions, including the Trisus Platform and Trisus Claims Informatics. This provider is focused on improving all aspects of its value cycle. This multi-year contract is expected to deliver c$3.5m of revenue over its initial term. FYJun18E rev $46.1m, PBT $13.7m yield c.1.4%.

Audioboom (LON:BOOM) 3.6p £33.5m

“The leading spoken word audio on-demand platform, announces the Company's intention to acquire the entire issued share capital of Triton Digital Canada Inc, the parent company of Triton Digital, Inc., for a cash consideration of $185m, (approximately £134m)”.

Proposing to raise approximately £155m, before expenses, through a proposed placing. The shares will be suspended under AIM rule 15.

For the year ended 31 Dec 2016, Triton recorded audited US GAAP turnover of approximately $40.9m and audited US GAAP EBITDA of approximately $9.0m (excluding non-recurring items).

During the first two months of the first quarter the Company's revenues and trading performance have been ahead of management's expectations. FYNov18E rev £15.01m, pre-tax loss £1m.

MC Mining (LON:MCM) 39.5p £55.65m

MC Mining Limited is pleased to announce that the South African Department of Water and Sanitation has granted an Integrated Water Use Licence in terms of the National Water Act (Act 36 of 1998) for the Vele Colliery's stream diversion and associated infrastructural activities.

This approval completes the full regulatory suite of all authorisations required for the Vele Colliery. As previously advised, the final decision on whether to proceed with the Plant Modification Project will be placed before the Company's Board, which will include an assessment of long term pricing as well as logistics considerations. The Board will evaluate all options available, which will be communicated at the appropriate time.

Venture Life Group (LON:VLG) 42.5p £15.66m

The international consumer healthcare group focused on developing, manufacturing and commercialising products for the self-care market, announces further distribution gains and launches for its leading oral care brand UltraDEX, together with other commercial progress.

Day Lewis Pharmacies (300 outlets), 460 Superdrug Stores, and all Roadchef outlets.

Q1 2018 will also see the launch of the Benecol liquid sachets in Jordan, their first market, following the successful registration with the Jordanian FDA. These sachets are a novel way of delivering the cholesterol reducing active, plant stanol esters.

2018 has started well for the whole Group, with the current order book ahead of the same point in 2017 and in line with management's expectations.  FYDec18E rev £18m and PBT £0.37m.

Oncimmune (LON:ONC) 145p £86.57m

HYNov17 results from the  early cancer detection Company. We have recently entered an exclusive distribution and product development agreement in China which includes a £10m equity investment and £15.7m in minimum royalties. We have now secured agreements for 12 countries with minimum sales commitments of £25.6m. We have also entered a preliminary distribution partnership with a major US pulmonology salesforce which is progressing well and, if successful, should lead to a significant distribution agreement focused on the risk detection of indeterminate pulmonary nodules - a large and growing market.

Revenues £0.1m generated from early sales of the EarlyCDT®-Lung test. Loss before one-off and non-cash items of £3.04m (2016: £2.3m) reflecting recruitment of staff, product development and commercialisation activities. Cash balance at the period end was £6.3m (H1 2016: £7.6m)  FYMay18E rev £1.15m and pre-tax loss £5.55m.

Smart Metering Systems (LON:SMS) 692p £778m

“The integrated metering services company that connects, owns, operates and maintains current generation and new advanced metering assets and databases, is pleased to announce that it has signed a new meter rental agreement with Utilita Energy to provide an opportunity for over 100,000 new meters during 2018, starting immediately.

Under the terms of the agreement, SMS will provide domestic smart meters as part of the UK Government programme, overseen by the Department of Business Energy and Industrial Strategy, requiring domestic energy supply companies to provide all of their customers with a smart meter in homes and small businesses across the UK by 2020.” FYDec18E rev £90.3m and PBT £27.23m.

Walls & Future REIT (NEX:WAFR) 84.5p £2.8m

Walls & Futures REIT Plc is pleased to announce an Open Offer of new ordinary shares to raise up to £1.05m through the issue of up to 1,115,109 at a price of 94p per New Share to make further investments in the Supported Housing Sector.” The Issue Price represents a premium of 11.24% to the Company's mid-market price of 84.5p per share as at close of business on 9th February 2018.

National Milk Records (NEX:NMR) 90.5p £19.2m

HYDec17 results from the UK supplier of dairy and livestock service.

* Turnover for continuing operations substantially increased to £10.5m  (2016: 39.4m) 

* Profit on ordinary activities, before taxation, of 3957,000 (2016: £442,000) 

* Cash generation from operations of £1.1m

* Net Debt decreased to £3.3m, or 1.4 times EBITDA

“Our focus in the second half of the year is to continue to provide exceptional service to our core milk recording customers whilst driving the market for improved testing for health and provenance and we expect continued growth in testing for Johne's disease and BVD.

 

]]>
Tue, 13 Feb 2018 09:10:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29370/breakfast-alert-audioboom-hutchison-china-medi-ebiquity-and-more-29370.html
Oil price, Echo Energy, Sound Energy, Frontera Resources, Faroe, Reabold Resources, Market Timing Report And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29369/oil-price-echo-energy-sound-energy-frontera-resources-faroe-reabold-resources-market-timing-report-and-finally-29369.html

Oil price

That certainly was the week that was, kicked off by the jobs report and wages numbers the previous Friday, market turbulence was evident across the world and risk-off positions saw commodities hit across the board. With forecasts of higher US rates the greenback strengthened causing further grief to crude oil, WTI fell by $6.25 on the week while Brent lost $5.80.

Having said that the only other flies in the ointment were the EIA forecasts on US shale production for this year and next and the rig count, the overall count was up 29 units to 975 and oil was up 26 to 791.

Apart from all that it should have been plain sailing, the US economy is clearly still growing and so are others around the world creating greater demand for crude oil. Indeed, take a look at the numbers from China which last year became the world’s oil importer at around 8.4m b/d and in January that figure I recently mentioned of 9.57m b/d.

The other interesting point is that we have heard not a squeak out of the Russian/KSA axis which is probably good news. Obviously there will be a high level comment by a combination of Ministers or even Heads of State before long but the very fact that neither side thought it worthy of any holding statements regarding output or adherence levels signals a fairly mature view of the market. It might even confirm my thoughts that the alliance is quite happy in the $60-70 range…

Echo Energy

Echo has announced details of its work programme this morning and it looks pretty exciting. Three back to back workover wells will be drilled on Fracción D followed by four back to back exploration wells on Fracción C and Laguna De Los Capones. Also of significant interest is the seismic programme due later in the year on the Tapi Aike exploration block which showed excellent promise in the CPR with over 22 TCF of gross unrisked potential GIIP. This should hopefully lead to a drilling programme here in 2019.

Things are really beginning to kick on at Echo, this substantial programme should start producing newsflow within a month or so and investors will be able to monitor progress on a regular basis, in addition there is an investor visit scheduled for June of this year.

Sound Energy

Sound has announced significant progress in Morocco with the announcement of a new Petroleum Agreement at Sidi Moktar. The new 8 year agreement covers 4,999²km including all of Sidi Moktar and some more and will be called ‘Sidi Moktar Onshore’. Sound will own 75% of the licence and be the operator with ONHYM holding the remainder.

The licence has an exploration best case of 8.9 TCF with a high of 11.2 and a low of 6.7 TCF of unrisked gas originally in place (gross) and there is also an existing gas discovery at Kechoula. Along with Tendrara the new, expanded Sidi Moktar Onshore will be ‘an exciting second leg to our Moroccan portfolio’ according to CEO James Parsons and will make for an interesting time for shareholders.

Frontera Resources

Frontera has announced that it has raised £2.5m via PrimaryBid at 0.466p per share. I understand that this will up the drilling programme which is ongoing and the more that they can progress the better it looks likely to be. This was a market driven raise and existing and new investors took part which is most encouraging.

Readers know that since I met the new management last summer I have been most impressed and that the drilling programme is now genuinely meaningful with a number of potential areas for decent upside. I am going to Georgia in two weeks time to see the set-up and meet the operational management so will have much more to say then.

Faroe Petroleum

Faroe has announced the sale of an interest in the Fenja development in the Norwegian Sea to Suncor for $54.5m. Selling 17.5% to Suncor will leave FPM with 7.5% which is the same as their assets in the Greater Njord Area and keeps Faroe’s costs to around £70m. This is a continuation of FPM management policy whereby they use their exploration skills to find and early stage develop these type of projects before selling down enough to keep meaningful and profitable skin in the game for their shareholders. Or as CEO Graham Stewart puts it,  “Faroe has now generated cash returns through a partial-monetisation while still giving shareholders exposure to future cash flows from a continuing interest in this high quality project.”

Reabold Resources

The market has been awash with chat about a potential raise from private company Corallian lately and today Reabold Resources announce limited details of their participation in this raise. Corallian are raising the money in order to increase their exposure to the Colter prospect, the Wick prospect and to further progress additional assets including the Oulton prospect which will now be fully funded for all activities.

RBD has announced its intention to participate in the fundraising (it took a 35% stake in Corallian in November 2017) in order to increase its exposure to Corallian and thus to Colter, Wick and other Corallian opportunities. RBD remind the market that it is fully funded to participate in this raise and will ‘continue to to have cash on its balance sheet to pursue additional exciting opportunities’.

Readers will know that I have been a big fan of Sachin Oza and Stephen Williams as they deploy their capital in current opportunities in the oil market. I’m sure that it would have crossed their minds that Corallian would come to the market in a fund raise such as this but I know their pipeline of exciting opportunities is also quite full. The market has certainly seen some speculation about RBD raising more money to fund these projects but I am also aware that the discipline on that front is solid.

RBD are therefore under no pressure to raise money but would like to do so if the opportunity came up, having said that I know that they would rather not raise money at all than to do so at the wrong price. Having started so well I think that the company has sufficient supporters who understand such a policy and who would value an investment in the company, and the projects selected by the joint CEO’s that they would not expect a heavily discounted offering. Either way RBD already has a stable of excellent investments and can sit tight on current working capital or should the price be acceptable, go to work on a few more.

The Market Timing Report

I thought that this offer, exclusive to blog readers might be of some interest. I have subscribed to this service for over two years and find it an invaluable help, as an amateur chartist you will understand, very much worth a look. Andy Pancholi of Cycles Analysis has kindly offered this one-off deal for readers of the blog. 

‘Covering Oil, Gold, S&P500 Dollar Index and EURUSD, The Market Timing Report does “what it says on the tin” –  gives you key timing points created from our proprietary cycles system. This allows traders and investors to get an edge on when markets are likely to turn. The MTR has been forewarning readers that a large equity pullback was due- the dates were as given on the chart. Were you prepared?’

The Market Timing Report covers a whole host of topics from geopolitical affairs to the technical position of the markets.

Try the report now and you will receive the current February Edition, last months 2018 Special Edition COMPLETE with a 28 day money back guarantee – no questions asked! All for $97!

https://ws227.isrefer.com/go/MTR-ONEOFF/MGW/

www.markettimingreport.com

And finally…

It’s getting late so a swift run through, in the 6 Nations Ireland dutifully thrashed Italy and England beat Wales, a try wasn’t given for Wales that might have been but it had been knocked (not the knee incident, before) on so two mistakes by the TMO. Yesterday Scotland beat a mixed France side, Teddy Thomas looks exciting with the ball but the French ran out of steam at the end.

In the Prem there were wins for the Noisy Neighbours, the HubCap Stealers and Spurs over neighbours the Gooners, the Red Devils were very poor and deserved to lose at the Magpies. There were also good wins for the Swans, again, and the Hammers, the Toffees and the Terriers, it’s all very tight at the bottom…

 

]]>
Mon, 12 Feb 2018 15:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29369/oil-price-echo-energy-sound-energy-frontera-resources-faroe-reabold-resources-market-timing-report-and-finally-29369.html
Morning View - Metals and equities recover from last week’s selloff; Zimbabwe – farmers who lost farms may soon be compensated http://www.proactiveinvestors.co.uk/columns/sp-angel/29368/morning-view-metals-and-equities-recover-from-last-weeks-selloff-zimbabwe-farmers-who-lost-farms-may-soon-be-compensated-29368.html  

Anglo Asian Mining* (LON:AAZ) – Refinancing locks in cheaper rates and extends debt maturity

Acacia Mining (LON:ACA) – 2017 results show net loss of US$707m

Bluebird Merchant Ventures* (LON:BMV) – Second gold, silver mine added to portfolio in South Korea

Savannah Resources (LON:SAV) – Further drilling results from Mina do Barroso

Strategic Minerals;* (LON:SML) – Extension of access to Cobre magnetite stockpile

Thor Mining (LONTHR) – Resource estimate for Kapunda Copper Project

 

Cape Town – SP Angel wish to thank the 121 team for organising such a successful conference

  • Over 300 investors and analysts attended the event with more than 1,700 meetings booked giving an average of 20 meetings per company
  • Around 450 people attended the late Monday drinks highlighting the growth in interest in the Cape Town event
  • The event is open to investors, mining analysts and sponsoring companies only

 

Commodities claw back volatile losses

  • The Bloomberg Commodity Index, measuring returns on 22 basic resources, regained 1.1% after tumbling 5.7% over the past two weeks as raw materials are swept up in a global rout of risk assets. Despite the boost in broad pricing, the gauge remains 4.9% below the more than two-year high of 90.8 scaled last month.
  • Raw materials were hit by the same concerns that sparked last weeks’ broad sell-off in stocks; the prospect of higher interest rates. However, market fundamentals remain positive with all eyes on China. “No other country has a greater impact on global commodity prices than China. As Chinese New Year approaches, the uncertainties ahead provide risks to our base case of: steady Chinese economic growth, commodities demand improvement and supply rationalisation via capacity reductions and environmental regulations”.

China demand to support commodities into 2018

  • Citigroup analysts foresee sustained support for commodities as demand will continue to expand in China as government policy supports steady economic growth. Infrastructure spending is expected to grow +16% yoy, with downside risk to demand from property slowdown appears limited for the year with the market steadied by growth in rental/social housing and easing of property restrictions in some cities.
  • Supply-side policies shift from capacity closures to controlled expansion with a focus on replacement of outdated polluting systems.
  • Winter supply curbs could expand to copper, zinc, and nickel, and could intensify if air quality in north China disappoints.

Steel - China’s top steel city to extend winter output curbs

  • City of Tangshan said it would extend restrictions on production beyond the end of winter heating season on March 15
  • Documents say the city will draw up a plan to continue some curbs including eight central steel mills by the end of this month
  • Eight steel mills near city centre include the main site of Tangsteel, a unit of HBIS Group, will face unspecified ‘normalized’ production limits after March 15 and others will be required to stagger production

 

Zimbabwe – farmers who lost farms may soon be compensated

  • Zimbabwe could recover fast as President Mnangagwa sets reforms in place
  • Restitution and new investment in farms could lead to a rapid recovery in farming in the country.
  • The Zimbabwean government is said to have set up a committee to advance a process of compensating farmers whose farms where taken during the country's land reform programme.
  • President Emmerson Mnangagwa’s administration has appointed permanent secretary of the land and agriculture ministry, Ringson Chitsiko, to chair the committee until October next year.
  • The appointment of Chitsiko is part of a drive to make agricultural production attractive again.
  • Some of the evicted farmers have demanded $9bn in compensation for expropriated assets.

 

South Africa – Ramaphosa promises to end Zuma transition limbo

  • Cyril Ramaphosa has promised to end the situation with President Zuma.
  • While Zuma is still president, the ANC refused to allow the President to swear himself in again by postponing the State of the Nation ceremony in Cape Town last Thursday.
  • The leadership of the ANC is in discussion over the transition.
  • The ANC National Executive committee is meeting today to discuss and finalise the transfer of power with Cyril Ramaphosa as leader of the ANC expected to become president of South Africa once Zuma has been dispatched.
  • The transfer of power is a sensitive issue as Zuma still has some support in his tribal homeland and within the ANC though most voters would prefer Zuma to go.

 

SP Angel rank No 1 in Copper price forecasting in the Q4 2017 MB APEX report

SP Angel analysts ranked:  See MB APEX report link for further details

  • 1st for copper, 1st = for gold, 2nd for Palladium, 3rd for Coking Coal, 5th for Zinc, 3rd in Q4 Precious Metals forecasts in Q4, 4th in Base Metals forecasting in Q4

SP Angel ranked No 1 for research by ‘Research Tree’ according to investor demand

 

Dow Jones Industrials

 

+1.38%

at

  24,191

Nikkei 225

 

-2.32%

at

  21,383

HK Hang Seng

 

+0.19%

at

  29,563

Shanghai Composite

 

+0.78%

at

   3,154

FTSE 350 Mining

 

-0.06%

at

  17,691

AIM Basic Resources

 

-1.62%

at

   2,487

 

Economics

Fidelity is reported to have temporarily suspended new clients from buying three ETFs developed for betting on market volatility falling or staying low following heavy corrections in value of such products last week.

  • One of such products (XIV) dropped around 96% last week with Credit Suisse acting as the issuer of the security saying it will halt trading in it on February 20.
  • The decision has also affected the SVXY ETF which lost more than 90% and ZIV ETF whish was down 26% last week.
  • The correction in value of ETFs has come on the back of a sharp drop in equity markets last week which saw the CBOE VIX hitting the highest level in more than two years

 

European equities post a broad-based recovery following worst two-weeks in two years and US equity indices’ futures also trading higher.

  • Oil is stronger this morning halting breaking a run of consecutive losses in the last six days.
  • 10y US Treasury bond yields are trading higher hovering around the 2.9% mark, the highest level in four years.
  • Markets will be closely watching US inflation numbers due tomorrow for signs of the strength of a recent pickup in consumer prices growth rate with estimates for a slight slowdown in CPI in January (1.9%yoy v 2.1%yoy in December).

 

China – The nation is due to start New Year celebrations this Thursday running through February 21 with mainland markets shut for the period.

 

UK – Shoppers spent less last month than the year before causing spending to drop in January for the first time since 2013, according to the payments processing company Visa.

  • Household spending dropped 1.2%yoy and spending in shops was 4%yoy down as people stayed away from the traditional post-Christmas sales month.
  • “Consumer spending entered the new year on a downbeat note, falling for the eighth time in the past nine months, as Britons continued to cut back on spending,” Visa said.
  • HIS Markit which produces the survey for Visa highlighted consumers’ concerns over Brexit weighing on spending and confidence.
  • Visa accounts for a third of payments made by debit and credit cards in Britain.

 

South/North Korea – North Korean leader invited South Korean President to meet in Pyongyang with a potential which may signal of improving relations between neighbouring states.

  • Should South Korean President accept the invitation it would be the first time two leaders meet in the last 11 years.
  • In October 2007 then President Roh Moo-hyun and Kim Jong Il, the father of the current North Korean leader, signed a peace declaration calling to end the armistice with a permanent treaty, although progress stalled since then.
  • Technically, two nations remain at war.
  • “I hope President Moon will take the leading role to open a new chapter for unification and accomplish a legacy that will be remembered for long,” Kim Jong Un sister said acting as a broker for the meeting.

 

Russia – The central bank cut the benchmark rate by 25bp to 7.5% on Friday as inflation remained “sustainably low”.

  • Authorities said further cuts are possible given some subdued inflationary pressures.
  • Coupled with weaker oil prices, the decision saw the rouble falling to 58.5 against the US$ last week; the currency has gained slightly this morning with the USDRUB pair hovering around 58.0.

 

South Africa – New head of ANC is planning to hold a meeting with other party members to discuss a potential replacement of Jacob Zuma as the nation’s president.

  • The National Executive Committee which has the power to demand that Zuma step down will be meeting on Monday, Cyril Ramaphosa said at a rally in Cape Town yesterday.
  • The ANC leader and Zuma are holding direct talks over the transfer of power, Ramaphosa added.

 

Currencies

US$1.2263/eur vs 1.2271/eur yesterday  Yen 108.54/$ vs 109.17/$  SAr 11.967/$ vs 12.100/$  $1.382/gbp vs $1.396/gbp  0.781/aud vs 0.778/aud  CNY 6.324/$ vs 6.300/$.

 

Commodity News

Precious metals:         

Gold US$1,321/oz vs US$1,315/oz last week

  • Gold prices regained portions of last weeks’ losses as the US dollar slips and investors await inflation data from the US later this week for signs of the intensity of expected interest rate increases. US consumer price data will be released on Wednesday that is expected to give a clearer indication on the pace of inflation and therefore the frequency of the anticipated interest rate rises. Consumer price data is also expected to confirm concerns of rising inflation which triggered the global equity drop last week.
  • After last week’s sell off in risk assets, we expect gold to be well supported, especially if volatility in financial markets persists” according to chief economist at gold trader ABC Bullion. Last week, the S&P 500 dropped 5.2%, its biggest decline since January 2016.

   Gold ETFs 71.8moz vs US$72.0moz last week

Platinum US$968/oz vs US$971/oz last week

Palladium US$987/oz vs US$965/oz last week

Silver US$16.43/oz vs US$16.34/oz last week

           

Base metals:   

Copper US$ 6,825/t vs US$6,791/t last week

Aluminium US$ 2,130/t vs US$2,144/t last week

  • Aluminium prices fall as stockpiles across China expand to record highs of 1.805 million tonnes, up 25,000 tonnes from last week, according to researcher SMM Info & Tech Co.

Nickel US$ 13,030/t vs US$12,910/t last week

Zinc US$ 3,385/t vs US$3,372/t last week

  • Control remains firmly in the hands of the miners as zinc companies begin negotiations with smelters over processing fees at an industry conference in California, as dwindling stockpiles are a key bargaining tool. Miners will be hoping to erode at the $172/t level set last year with higher stockpiles. According to senior energy and mining equity analyst at Bloomberg Intelligence, “The market is super-tight right now. Miners are reportedly pushing for below half of last year’s level. They have the upper hand”.
  • Inventories tracked by the London Metal Exchange record the lowest levels since October 2008, with the metal expected to ring up a deficit of 230,000 tonnes. Bank of America Merrill Lynch analysts note with “LME stocks low, holdings concentrated and to a large extent not available, there is a risk of a short supply”. The rising deficit is enough to justify a 10% increase in price, with Wood Mackenzie forecasting the metal price to rise to $4,000/t by the third quarter.
  • Supply is expected to expand to match growing demand with “sufficient new mine supply to allow the world’s zinc smelters to collectively increase output by 6.5% or 880,000 tonnes, whilst high zinc prices will ensure that this can be produced profitability”. China boosted production in the close of last year to meet demand as zinc ended the year with gains on 30%.
  • Producers have been able to capitalise on attractive spot treatment charges, which dropped 22% to $180/t from 2015 highs of $220/t. Cosgrove forecast the benchmark treatment charge could land in the region of $120-130/t as tight conditions drive competition for smelter output.

Lead US$ 2,520/t vs US$2,494/t last week

Tin US$ 21,140/t vs US$21,265/t last week

           

Energy:           

Oil US$63.4/bbl vs US$64.3/bbl last week

Natural Gas US$2.575/mmbtu vs US$2.630/mmbtu last week

Uranium US$21.50/lb vs US$21.50/lb last week

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$74.0/t vs US$75.3/t

Chinese steel rebar 25mm US$640.1/t vs US$642.6/t

Thermal coal (1st year forward cif ARA) US$75.8/t vs US$78.0/t

Premium hard coking coal Aus fob US$228.4/t vs US$228.6/t

 

Other:  

Tungsten APT European US$319-325/mtu vs US$317-325/mtu last week

Cobalt LME 3m US$81,250.0/t vs US$81,250.0/t

Samsung SDI turns to used phones for cobalt as prices surge

  • Samsung SDI Co. a battery supplier to carmakers including BMW plans to recycle cobalt from used mobile phones as companies around the world scramble to secure supplies of the metal amid surging prices
  • Will buy stake in company with recycling technology and sign deal to ensure long term cobalt supplies
  • Plan fuels trend among battery makers to reduce dependence on Democratic Republic of Congo as source of cobalt

 

Lithium - New desalination membrane produces both drinking water and lithium

  • Team of scientists in Australia and US have developed a new desalination technique that can not only make seawater fresh enough to drink but can recover lithium ions for use in batteries
  • Key to the process is metal-organic frameworks (MOFs), which boast the largest internal surface area of any known material, which enable them to filter materials
  • The technique could also be put to work filtering waste water from industrial processes like fracking.

Tightening market drives lithium carbonate outside of Asia

  • As the majority of global lithium production flows into China, nations outside of Asia are receiving a boost in price in North America and Europe as limited short-term availability is tightening market conditions.
  • Global lithium carbonate rose 9.4% in January to an average $17,338/t; global lithium hydroxide +0.6% to avg. $19,238/t; and spodumene concentrate avg. $810/t.
  • Carbonate prices across Europe rose 7% and North America prices grew 3%, while a seasonal slowdown in consumption in China caused prices to fall.

 

Company News

Anglo Asian Mining* (LON:AAZ) 43p, Mkt Cap £48.9m – Refinancing locks in cheaper rates and extends debt maturity

  • A syndicated, two-year term loan has been secured with Pasha Bank as arranger for $15m at 7% (arrangement fee 0.25%).
  • Proceeds will be used to refinance existing loans to the amount of $13.5m including:
    • $3.7m owed to ATB (9.6% and was due this year);
    • $3.7m owed to Gazprombank (9.6% and was due this year);
    • $2.2m owed to Yapi Credit Bank (9.5% and was due this year);
    • $3.9m owed to Company CEO Reza Vaziri (7.0% and was due this year).
  • The facility is repayable in eight equal quarterly instalments with interest payments due monthly.
  • A rescheduling of principal repayments releases $8.4m in extra funds to be used in a capital programme including an installation of a second crusher, replacement/expansion of the mining fleet and purchase of new drilling rigs as well as exploration.
  • Interest on the remaining debt to the IBA in the amount of $2.1m has been revised down to 7% from previous 12%.
  • The Company presented at a well attended Proactive Investors Conference yesterday reiterating strong production guidance for 78-84koz GE in FY18.

Conclusion: Refinancing helps the Company to lock in lower interest rates (estimated $0.1m saving on interest payments), but more importantly allows the Group to smooth out loan repayments providing additional funds to help business development.

*SP Angel acts as nomad and broker to Anglo Asian Mining

 

Acacia Mining (ACA LN) 156 pence, Mkt Cap £640m – 2017 results show net loss of US$707m

  • Acacia Mining has reported a net loss of US$707m for 2017 (2016 – profit US$95m) including a US$644m non-cash impairment charge arising from the “uncertainty in the operating environment and the ban on exporting concentrate, resulting in US$264m of lost revenue in the last year.”
  • Despite these difficulties, the company also reports “its “lowest ever” all-in sustaining cost of US$875/oz of production (2016 – US$958/oz) on the 767,883 oz of gold production. Cash operating costs in 2017 were US$587/oz (2016 – US%640/oz).
  • The company notes that its sales of 592,861 ounces of gold (2016 – 816,743 oz) were 22% lower than production. Cash flow was, however, impacted by “Acacia’s inability to export and sell a total of 158,500 ounces of gold, 12.1 million pound of copper and 158,900 ounces of silver contained in concentrate as a result of the concentrate export ban.”
  • Acacia Mining highlights a successful drilling programme at its North Mara mine which has “more than doubled the Mineral Reserve at the Gokona Underground to 1.3Moz”
  • The CEO is quoted as saying that “The company recorded a resilient performance in what became a difficult operating environment in 2017 and expects to return the business to free cash generation during the forthcoming year.”

Conclusion: Acacia Mining has battled external conditions this year and produced record low sustaining costs of production. We wish the company well in its efforts to return to positive cash flow this year.

 

Bluebird Merchant Ventures* (LON:BMV) 3p, Mkt Cap £5.5m – Second gold, silver mine added to portfolio in South Korea

  • Bluebird is spending just US$500,000 to earn into a 50:50 jv with Southern Gold Ltd on the Kochang gold, silver mine in South Korea.
  • Kochang is just 130km south east of Bluebird’s main Gubong project.
  • The Korean Resource Corporation ‘KORES’, a government backed body funded 70% of last year’s Kochang campaign .
  • The Kochang assets were valued at around A$2m last year but could easily demonstrate greater value on further drilling and evaluation.
  • Kochang operated from 1928-1975 and produced some 110,000oz of gold and 5.9moz of silver between 1961 and 1975 according to a KORES report.
  • Bluebird have moved fast and have already dewatered the mine and gained access to the lowest levels of production. .
  • The mine has a series of parallel and vertical orebodies which could make for relatively simple and potentially low cost development depending on the width and consistency of the veins.
  • The Kochang mine closed at a time when the gold price was US$140/oz.
  • Bluebird’s geologists reckon that a number of separate veins associated with the ‘main’ gold vein were not exploited in the past while a number of additional veins have also been found at the ‘silver’ mine.
  • The ‘Main Vein’ runs for around 2km with a further 0.5km of strike identified through surface mapping.
  • Surface rock-chip samples show gold grades of: 8.2 g/t, 15.3 g/t, 3.61 g/t, 10.5 g/t, 6.35 g/t and 23.9 g/t.   
  • A further 500 metres of additional Main Vein strike has been identified to the south of known workings.  Assays from rock-chip sampling confirm high tenor, gold mineralisation along the entire strike of the newly mapped Main Vein trend.  This is now visually confirmed on surface from a newly located and significant open stope that was historically developed on high grade.
  • Bluebird previously published a Competent Persons Report on 26 January 2018 which included details of the Kochang project.
  • The acquisition of Bluebird’s share of the jv is funded through the last round of funding with sufficient funding to complete the feasibility reports on the Gubong and Kochang projects.
  • See company website for further details www.bluebirdmv.com

Conclusion: Bluebird is pressing ahead fast with evaluation ahead of potential mine development. The quick dewatering and access of Kochang the mine should make further evaluation much quicker than for many mining projects. We await further news on the potential mineable resource, metallurgy and permissions required for making the project viable.

*SP Angel act as broker to Bluebird Merchant Ventures

 

Savannah Resources (LON:SAV) 6.1p, Mkt cap £38.9m – Further drilling results from Mina do Barroso

  • Savannah Resources has provided further news on the progress of its reverse circulation drilling programme at its Mina do Barroso lithium exploration project in Portugal where a total of 7,081m has been drilled, to date, in 87 holes.
  • The drilling is aimed at increasing the estimated inferred mineral resource beyond the 3.2mt averaging 1.0% Li2O which was announced for the Reservatorio deposit in December 2017. The company expects to add a resource estimate for the Grandao deposit, which is located to the south-east of Reservatorio, during Q1 2018. A second drilling rig is expected to be deployed at Grandao during the second half of February in order to test depth extensions to the mineralisation.
  • Among the results from the drilling at Grandao which are highlighted today are:
    • A 59m wide intersection of the newly discovered vertical pegmatite body at an average grade of 1.13% Li2O from a depth of 5m in borehole 17GRARC31;
    • A 33m wide intersection of the flat-lying pegmatite body at an average grade of 1.22% Li2O from a depth of 40m in borehole 17GRARC41; and
    • A 31m wide intersection of the flat-lying pegmatite body at an average grade of 1.07% Li2O from a depth of 40m in borehole 17GRARC25. This intersection includes a higher grade section of 24m averaging 1.31% Li2O.
  • In addition to the drilling at Grandao, further exploration targets, described as “high priority” have been identified at Romainho, Campo de Futebol and Peigro Negro north-east of Grandao.
  • Results of drilling from 10 holes (768m) at the NOA deposit north-east of Reservatorio are also reported today, including:
    • 15m at an average grade of 0.83% Li2O from a depth of 9m in hole 17NOARC06 and
    • 14m at an average grade of 0.73% Li2O from 19m in hole 17NOARC10.
  • The company explains that “Results [from the NOA drilling] have been encouraging with 10m-15m wide zones of pegmatite being intersected over a strike length of 200m and a down dip depth of around 50m … . Further work is now required to access the full potential of the deposit.”
  • “Based on the new results an additional 16 RC drill holes have been added to the programme at Grandao, Romainho, Campo de Futebol and Piero Negro in order to further evaluate the potential of the wider project area.” A 1500m diamond drilling programme is also planned to provide samples for further metallurgical test work and to assist in the geological interpretation.
  • The current metallurgical testing programme, which is investigating the crushing characteristics of the mineralisation and its amenability to gravity separation processing,  is expected to be completed in Q1 2018.

Conclusion: Exploration drilling at Mina do Barroso is continuing to identify additional targets and we look forward to the publication of an initial resource estimate at the Grandao deposit later this quarter.

 

Strategic Minerals* (LON:SML) 2p, Mkt Cap £26.7m – Extension of access to Cobre magnetite stockpile

  • Strategic Minerals reports that it has received a further one year extension of its rolling agreement with the owner of the Cobre magnetite stockpile in New Mexico securing guaranteed access until 31st March 2019.
  • The agreement, between Strategic Minerals’ wholly owned subsidiary, Southern Minerals Group, and the owner of the stockpile, is subject to automatic one year extensions and Managing Director, John Peters commented that “We have a good working relationship with the mine owner and, on this basis, it would suggest that the contract will ultimately continue to rollover until the entire stockpile is removed.”
  • During 2017, sales revenue from Cobre increased by some 260% to US$5.64m from the sale of 84,980 tonnes of material  compared to 25,383 tonnes in 2016.
  • Mr. Peters went on to underline the importance of Cobre as a source of funding for the company’s wider exploration and development projects; “The expected Cobre sales and existing cash balances place the Company in a strong position from which we hope to be able to internally fund exploration programmes at Hanns Camp/Mount Weld and Redmoor and provide capital to restart the Leigh Creek Copper Mine operations.”
  • Strategic Minerals has also announced the appointment of Jeffrey Harrison as a non-executive director where Mr. Harrison’s expertise in mineral development in south-west England where he previously served as operatioons manager at the Wolf Minerals tungsten operation in Devon is particularly relevant to the continuing exploration of the Redmoor tin tungsten deposit. Mr Harrison has been a consultant to the project and the company comments that his appointment to the Board “will not preclude him from undertaking further consulting work…”.

Conclusion: The rollover of the Cobre agreement, though not unexpected, provides certainty of continued access and with the significant build-up of sales achieved in 2017 expected to continue into 2018 should enable the company to press ahead with its exploration programmes in the UK and Australia and with the acquisition and re-start of the Leigh Creek Copper mine in Australia.

*SP Angel act as Nomad and broker to Strategic Minerals

 

Thor Mining (LON:THR) 3.8p, Mkt Cap £23.5m – Resource estimate for Kapunda Copper Project

  • Thor Mining has announced that Environmental Copper Recovery (ECR) has announced an inferred resource estimate of 47.4mt at an average grade of 0.25% copper for the Kapunda copper project in South Australia. The estimate, which uses a cut-off grade of 0.05% copper,  incorporates a review of historical drilling information as well as hydrogeological parameters considered likely to influence recovery rates and yields.
  • Thor Mining is earning up to a 60% interest in ECR which is, in turn earning a 75% interest in the project from Terramin, giving, we estimate, Thor Mining a 45% interest in the possible in-situ leaching copper project.
  • The estimate published today relates to the upper 100 metres of the deposit and only relates to the portion expected to recoverable by in-situ leaching technique.
  • The company comments that “Further work is required to advance a range of areas prior to commercial development including ongoing local government and community engagement, continuing technical assessment and various environmental and regulatory issues.”

 

Conclusion: The initial resource estimate will need to be firmed up from the current inferred status but provides a firm base for continuing work as the company pursues the continuing technical, governmental and social issues and regulatory permitting. We look forward to further news as the project proceeds.

]]>
Mon, 12 Feb 2018 13:04:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29368/morning-view-metals-and-equities-recover-from-last-weeks-selloff-zimbabwe-farmers-who-lost-farms-may-soon-be-compensated-29368.html
In the news: Panthera Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29367/in-the-news-panthera-resources-29367.html FROM THE BROKING DESK

We’re marketing Geoff Stanley of Panthera Resources* (PAT LN) in the UK next week. RFC Ambrian listed Panthera on AIM just before Christmas last year. It owns rights to a 70% interest in the Bhukia Gold Project in Rajasthan, India, where it has defined a JORC resource of 1.74Moz of gold at a grade of 1.4 g/t.

While the company is underpinned by a portfolio of prospective West African gold exploration licences, it’s Bhukia that provides the most potential. The Geological Survey of India (GSI) has explored the project area, estimating a resource of 6.7Moz at a grade of 2.0 g/t; although not code-compliant, this represents a very well-defined exploration target. Mineralisation remains open in all directions, suggesting the ultimate size of the project could be even greater. Progress on the granting of the Prospecting Licence (PL) has picked up over the past year and, although the timing remains uncertain, the process appears on track. Panthera offers upside to exploration results from its West African portfolio and the grant of the PL and the resource drill-out at Bhukia.

 

RFC Ambrian recently initiated coverage with a Speculative Buy: Panthera Resources — Chasing an Indian Elephant, 15 January 2018. This rating recognises the high quality of Bhukia, but also that the PL remains outstanding. We have presented an illustrative valuation matrix justifying a valuation of 32p/share currently, increasing to 57p on the grant of the PL with the potential to increase to 109p if Panthera successfully outlines a JORC-compliant resource of 6.7Moz. We expect to revisit our recommendation after the granting of a PL or positive exploration results from the company’s West African projects. 

]]>
Mon, 12 Feb 2018 10:02:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29367/in-the-news-panthera-resources-29367.html
Northland Capital Partners View on the City- Savannah Resources (LON:SAV) http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29366/northland-capital-partners-view-on-the-city-savannah-resources-lonsav-29366.html

Mina do Barroso Lithium Project Update

NORTHLAND VIEW
 Savannah Resources’ reports the latest set of drill results from the Mina do Barroso Lithium Project, located in Portugal. Results include: 59m at 1.13% Li2O from 5m (17GRARC31); 33m at 1.22% Li2O from 40m (17GRARC41); and 31, at 1.07% Li2O from 40m (17GRARC25) from the Grandao Target. At the NOA Target, results include: 15m at 0.83% Li2O (17NOARC06); and 14m at 0.73% Li2O (17NOARC10).
 A second diamond drill rig will be mobilised in February to test for depth extensions at Grandao and collect samples for the next phase of metallurgical studies.

To date Savannah has drilled 87 holes (7,081m) at the Mina do Barroso Lithium Project and has defined a Mineral Resources Estimate of 3.2mt at a grade of 1% Li2O from the Reservatorio Deposit. In its second drill programme at the Project, Savannah has demonstrated the presence of significant intercepts of lithium mineralisation at the NOA and Grandao Targets and expanded the area of known mineralisation at Reservatorio, all of which will feed into an updated Mineral Resource Estimate. Savannah has also identified targets to the northeast of Grandao: Romainho; Campo de Futebol; and Peigro Negro, which will be drill tested in due course, but could add further tonnes to the project.

COMPANY DESCRIPTION
Savannah Resources is an energy metals group with copper-gold projects located in Oman, lithium projects in Portugal, and a operates a mineral sands project in Mozambique that is a JV with Rio Tinto

]]>
Mon, 12 Feb 2018 09:53:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/29366/northland-capital-partners-view-on-the-city-savannah-resources-lonsav-29366.html
Breakfast Alert - Active Energy, Bluebird Merchant, Proactis Holdings and more... http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29365/breakfast-alert-active-energy-bluebird-merchant-proactis-holdings-and-more-29365.html What’s cooking in the IPO kitchen?

AIM

TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer TBC, expected late Feb

Polarean  - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb

Block Energy—a  NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC

 

Main Market Specialist Funds

Life Settlement—closed-ended investment company whose principal activities will be to support and manage portfolios of whole and partial interests in life settlement policies issued by life insurance companies operating predominantly in the US.  Due 6 Mar.

 

Main Market Premium Listing

IntegraFin provides platform services to UK clients and their financial advisers through its award-winning platform, Transact. Due Mar 18. FYSep2017 PBT up 44% to £29.9m.

 

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

CVC (Sky Bet) rumoured to be seeking £2.5bn plus float.

VC firm Augmentum rumoured to be seeking raise up to £125m.                                                          

                               

Breakfast buffet

Active Energy (LON:AEG) 3.65p £34.67m 

“The international biomass based renewable energy and forestry management business, is delighted to announce that its first commercial CoalSwitch™ plant in Utah, United States, was officially opened on Friday 9 Feb 2018. The event consisted of an introduction to Active Energy Group PLC, its Utah operations, management team and a demonstration of the reactors which can produce five tonnes per hour of finished CoalSwitch™ product.  This equates to an annual production of more than 40,000 tonnes of CoalSwitch™ product per year, depending on the type of raw material being used in the process.  Last Friday, the material used for the demonstration was supplied by Young Living Farms for the launch of a new product for soil enhancement in Utah.”

 

Bluebird Merchant (LON:BMV) 2.85p £5.27m

“Bluebird Merchant Ventures, the Asian focused resource development group, announced that it has signed an agreement with Southern Gold Ltd. to develop and reopen the Kochang gold and silver mine in South Korea. Under the terms of the agreement a 50:50 joint venture will be formed once Bluebird has spent $0.5m to complete a report on the feasibility to reopen the mine as well as completed a Placing of A$0.25m in Southern Gold by 31 May 2018. Bluebird will be the operator of the project.”

* The Kochang mine operated from 1928 until 1975

* A 1991 KORES reports state that the mine produced 110,000 oz gold and 5.9 Moz silver between 1961 and 1975

* Bluebird has already dewatered the mine and gained access to the lowest levels of production

* The project is funded

 

Proactis Holdings (LON:PHD) 170p 157.9£m

“The global Spend Control and eProcurement solution provider, announced that it has delivered significant revenue and EBITDA growth during the period for the six months ended 31 Jan 2018 and trading currently remains in line to meet management expectations for the financial year ending 31 July 2018. The Board expects to report its interim results on 24 April 2018, at which point it anticipates reporting a 123% increase in revenues to approximately £26.3M1 (2017: £11.8m) and a 183% increase in Adjusted EBITDA to approximately £8.5m (2017: £3.0m).  This strong growth has been achieved following the acquisition of Perfect Commerce LLC which, having traded in line with expectations since the completion of the acquisition on 4 August 2017, contributed approximately £13.5m revenue and £3.7m of Adjusted EBITDA.” FYJul18E EPS 11.49p.

 

Proteome Sciences (LON:PRM) 3.26p £9.62m

FYDec17 trading update. “Driven by strong sales of our TMT® reagents and the associated royalties, unaudited revenues for the full year increased by 18% to approximately £3.2m (2016: £2.7m).  Costs of £5.1m were 5% lower than the previous year (2016: £5.4m) reflecting the early impact of consolidation and restructuring. The Company anticipates a reduced loss before tax of approximately £2.1m (2016: £2.9m).  While there has been significant volatility in foreign exchanges during the course of the year, affecting non-sterling denominated revenues as well as those costs associated with our primary facility in Frankfurt, the overall effect on EBITDA was neutral. Cash reserves at the year-end were approximately £0.8m despite the delayed payment of a material 2016 R&D tax credit, receipt of which is now expected during the first quarter of 2018.  In addition, the Board is pleased with a strengthening order book carried through from late 2017.”

 

Conroy Gold and Natural Resources (LON:CGNR) 27.5p £5.5m

Drilling commenced on Clontibret gold deposit.  Two Drill Rigs on Site

* 1,000 M programme

* Increased Resource Targeted Together With Conversion of Inferred into Indicated Resources 

* Extent of High Grade Gold Lodes Indicated by Channel Sampling in The Historic Tullybuck Antimony Mine Also Targeted

Conroy Gold and Natural Resources the gold exploration and development company focused on Ireland and Finland, announced that the planned drilling programme on the Company’s Clay Lake-Clontibret gold target in Ireland (announced on 29 January 2018) has now commenced. Two drill rigs have been mobilised to site. The current drilling programme is focused on the Clontibret gold deposit in the south west of the Clay Lake-Clontibret gold target; where a JORC resource of 517,000 ounces of gold has already been defined on 20 per cent. Of  the Clontibret gold target.

 

Milestone Group (LON:MSG) 0.26p £4.79m

“Milestone, the provider of digital media and technology, notifies shareholders that it has signed a Memorandum of Understanding with Seed Media Limited and Martin Heath to enter into a joint venture agreement.

The purpose of the Joint Venture is to produce payment processing and intellectual property solutions initially within the Media industry utilising a combination of private and public blockchain technologies. The backbone of the solution will be based upon proven Mutual Distributed Ledger technology platforms provided by Z/Yen Group Limited ("Z/Yen") and will utilise the expertise of Global Currency Exchange Network Ltd ("GCEN") with regards to currency transactions. The JV will also license marketing and analytical technologies from Seed Media Ltd. Both Z/ Yen and GCEN have issued signed Letters of Intent with respect to the project.”

 

TP Group (LON:TPG) 6p £34.96m

The specialist services, consulting and engineering group, is pleased to announce the official opening of its Advanced Manufacturing Centre ("AMC"), at the Dukinfield engineering facility in Greater Manchester.

The centre was officially opened on 9 Feb 2018 by The Worshipful The Civic Mayor of Tameside, Councillor Joyce Bowerman at an event attended by more than 30 guests. 

The AMC has the latest precision engineering equipment including high-precision machine tools and metrology, which better positions TP Group to deliver complex engineering solutions in high value sectors. It is the result of investment in excess of £1.5m to upgrade the factory environment, install new equipment and recruit a highly-skilled team of operators and technicians. This investment enables TP Group to work on complex components required by lucrative sectors such as the UK nuclear supply chain, aerospace and defence, all of which are premium end markets for the Group.

 

Medaphor (LON:MED) 10.5p £9.5m

“The intelligent ultrasound software and simulation company, announces the first pilot of its ScanNav real-time image analysis software at the Fetal Medicine Department of St George's University Hospitals NHS Trust, London, U.K.

ScanNav is believed to be the first CE marked artificial intelligence (AI) system to carry out an automated, real-time "peer review" of obstetric ultrasound images as the patient is scanned.

Monitoring performance by manually auditing images retrospectively is very time consuming, so ScanNav instead supports clinical staff by instantly confirming that the images they save conform to protocol, meaning additional images can be taken straight away if required. 

Initially targeted at the U.K. pregnancy screening programme (offered to all women at 20 weeks of pregnancy), ScanNav evaluates over 50 individual criteria to verify that the six views required by the NHS Fetal Anomaly Screening Programme are complete and fit for purpose.”

 

Styles & Wood Group (LON:STY) 457.5p £39.76m

“The integrated property services and project delivery specialist, is pleased to announce that it has been awarded a contract to deliver the fit out and refurbishment of the iconic India Buildings in Liverpool on behalf of its client Shelborn Asset Management.”

Styles & Wood was successful following a two-stage tender process and management believe that the contract, which will span a 72 week period, should contribute approximately £38.25m of revenue over the duration of its life.

FYDec18e rev £148.3M and  £7.4M PBT

 

Sosandar (LON:SOS) 15.75p £16.82m

“The online women's fashion brand, announces a strong performance across the Dec 2017 and Jan 2018 trading period with net revenues exceeding management expectations.” Strong seasonal sales were driven by both new customer acquisition and increased repeat purchase with key KPIs ahead of management expectations.  Basket size, conversion rate and traffic to the website were all ahead of target. Investment in new marketing channels continues to accelerate customer acquisition. Customer promotional brochures showcasing, partywear, dresses, knitwear, outerwear, luxury leather and footwear categories drove both new customer acquisition and repeat purchases during the festive period.  We could see no forecasts.

 

]]>
Mon, 12 Feb 2018 09:44:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29365/breakfast-alert-active-energy-bluebird-merchant-proactis-holdings-and-more-29365.html
Morning Market Pulse - 10 years on, Barclays feels the bite http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29364/morning-market-pulse-10-years-on-barclays-feels-the-bite-29364.html “FTSE 100 Index called to open +70pts at 7160 having sharply recovered from late Friday lows, although turning back to support at 7155 after failing to overcome intersecting resistance at 7180. Bulls will be hoping a further test leads to a break out from 7180 resistance, opening the door to last week’s highs of 7310. Bears, however, will hope the retreat from 7180 leads to a test and breakdown from 7100 support. Watch levels: Bullish 7185Bearish 7145

Calls for a sharply higher start to the week mirrors reciprocal performances from the US on Friday and in Asia overnight as bond markets return to relative calm. A return to risk assets following last week’s volatility-induced correction has helped regional indices climb, most notably Financials and Tech helping Hong Kong’s Hang Seng to outperform as Japan enjoys a market holiday, in turn providing a positive handover for European equities.

The US dollar retreating from its highs has bolstered commodities with a likely knock on for Miners, while Crude Oil has climbed sharply from Friday evening’s lows. Note a distinct lack of macroeconomic data today, which will place the onus for today’s stock market performance firmly on investor confidence following last week’s widely risk-off mood ahead of a key US inflation print on Wednesday.

Corporate news this morning: Barclays Bank unit has been charged by the SFO relating to its 2008 capital raising. IQE appoints new auditor. Acacia Mining posts $700m loss on Tanzania export ban hit; cuts dividend. London City airport has been closed after discovery of WWII bomb nearby. Heineken operating profit rose 6.2% to €3.76bn (£3.33bn) last year, in line with expectations.

US equity markets closed higher on Friday during another wide-ranging session, paring some of the week’s losses although failing to fully recover from lows, enduring their worst week in two years. The Dow Jones climbed 300 points (1.4%) thanks to gains for Healthcare and Financials, while the S&P 500 climbed 1.5% thanks to Tech sector strength, a trend that also saw the Tech-heavy Nasdaq climb 1.4%.

Gold has climbed overnight as the US dollar retreats from its highs in what may be a double top pattern. The precious metal is testing support turned resistance at $1324, however is failing to overcome the key level as the dollar holds at support. The greenback, and the performance of equity markets, will remain the drivers of the safe-haven asset which has so far failed to significantly capitalise on the equity market correction.

Crude Oil prices have rebounded from their lows as the US dollar retreats from its highs. Having touched fresh lows on Friday evening after another climb in the US Baker Hughes Rig Count, US dollar weakness has helped to lift both Brent and US crude from lows. Global benchmark Brent is back above $63.3 a barrel ahead of today’s OPEC Monthly Oil report, while US crude closes in on a $60 handle from Friday’s lows of $58.1.

In focus today will be the European reaction to Friday’s Wall Street recovery. After a choppy week of trading, the three major US indices climbed by over 1%, however this was not enough to save US indices from their biggest 1-week fall in two years.

On an extremely quiet day for macro data, the only releases of note are Swiss Inflation prints (8:15am) and US Consumer Inflation Expectations (4pm). The latter will be especially poignant given a key driver of last week’s market volatility was a presumed uptick in US inflation needing to be countered by tighter monetary policy from the US Fed.

 

Also of note amid the continued weakness in crude oil markets will be the OPEC Monthly Oil Report. Having rallied above $70 for the first time since 2014 earlier in the year, Brent Crude has since come under pressure as US production reaches its highest level in over four decades. Whether OPEC sees continued compliance and demand trends in place will be key in avoiding further weakness.”

]]>
Mon, 12 Feb 2018 09:43:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29364/morning-market-pulse-10-years-on-barclays-feels-the-bite-29364.html
Beaufort Securities Breakfast Alert - Aldi tops supermarket satisfaction survey http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29363/beaufort-securities-breakfast-alert-aldi-tops-supermarket-satisfaction-survey-29363.html Markets

Europe
The FTSE-100 finished Friday's session 1.09% lower at 7,092.43, whilst the FTSE AIM All-Share index was down 1.53% at 1,006.06. In continental Europe, the CAC-40 finished 1.41% lower at 5,079.21 whilst the DAX was down 1.25% at 12,107.48.

Wall Street
Last Friday in New York, the Dow Jones regained 330.44 points, or 1.38%, to end the session at 24,190.9. The S&P-500 added 38.55 points, or 1.49%, to close at 2,619.55 and Nasdaq finished 97.33 points higher at 6,874.49.

Asia
In Asia this morning, the Nikkei 225 was closed. Elsewhere, the Hang Seng was 220.79 points higher at 29,728.21 heading into the close and the Shanghai Composite was up 20.44 points at 3,150.29.

 

Oil
At around 6:15am, WTI crude was 1% higher at $59.79 per barrel and Brent was up 0.83% at $63.31 per barrel.

 

Headlines

Aldi tops supermarket satisfaction survey
Aldi has been rated the UK's best supermarket, nudging previously top-ranked Waitrose down to fourth place. Customers criticised Aldi stores for being "untidy" and for a lack of staff availability, but rated them highly for offering value for money, according to consumer group Which?. Marks and Spencer was second, winning marks for store appearance and product quality. Lidl ranked third. The large supermarkets fared worst, with Sainsbury's ranked last of nine. The survey, conducted last October, asked customers to rate their supermarket shopping experiences in the past six months. The chains are scored on customer satisfaction and whether they would recommend the store to a friend. Waitrose, Tesco, Morrisons and Sainsbury's lost marks over value-for-money compared to the discount chains. Which? said respondents praised the ease of finding items on shelves at Aldi. But both Lidl and Aldi scored poorly for queuing time, staff availability and for the range of products on offer. But they were marked up for the quality of their fresh and own-label products.

Source: BBC News

Company news

 

Savannah Resources (LON:SAV) 6.00p – Speculative Buy
Savannah Resources announced further drill results from its highly prospective lithium project, Mina do Barroso, in Portugal. To date, 87 RC holes totalling 7,081m have been drilled over three primary deposits confirming broad zones lithium mineralisation. Savannah holds a 75% interest in the Mina do Barroso lithium project which hosts numerous lithium deposits and covers an area of 1,018km2. Drill results from the Grandao deposit returned 59m grading 1.13% Li2O, 33m grading 1.22% Li2O, 31m grading 1.07% Li2O including 24m grading 1.31% Li2O, and 32m grading 0.89% Li2O including 17m grading 1.29% Li2O. In addition to these significant drill results, Savannah has identified new high priority targets to the north east of Grandao and will be drill tested. Further drilling on the NOA deposit has confirmed mineralisation over a 200m strike length with down dip extensions of at least 50m. Phase 2 of the metallurgical testwork is on-going with samples taken from all three deposits and results are expected in Q1 2018.

Our view: The above results are very encouraging given the continued thick intercepts and decent Li grades occurring near surface. The latest round of drilling highlights the expanding footprint of the Grandao deposit which should add to the overall resource of the Mina do Barroso project. Given that the global lithium demand is expected to double by 2025 on the back of the burgeoning battery market, Savannah is looking to capitalise on the lithium market with a strategic European lithium source. We look forward to further updates as the Company works towards new resource estimate for the Grandao deposit by the end of 2017 and metallurgical test results in early 2018. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Savannah Resources Plc

]]>
Mon, 12 Feb 2018 09:35:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29363/beaufort-securities-breakfast-alert-aldi-tops-supermarket-satisfaction-survey-29363.html
Volatility presents trading opportunities in individual metals, as global growth continues http://www.proactiveinvestors.co.uk/columns/jackhammer/29362/volatility-presents-trading-opportunities-in-individual-metals-as-global-growth-continues-29362.html Fri, 09 Feb 2018 13:29:00 +0000 http://www.proactiveinvestors.co.uk/columns/jackhammer/29362/volatility-presents-trading-opportunities-in-individual-metals-as-global-growth-continues-29362.html Morning View . Copper topples on surging inventories http://www.proactiveinvestors.co.uk/columns/sp-angel/29361/morning-view-copper-topples-on-surging-inventories-29361.html Cape Town’s mining conferences, seminars and lunches are drawing to a close

  • The 10,000 miners, geologists, financiers, drillers and other services are packing up to return back to base.
  • Cape Town’s water shortage highlights the need to preserve scarce resources.
  • With the taps due to be turned off in April everyone is focussed on how to preserve supply.
  • Politics, as always, play the largest part with central government seemingly happy to do nothing despite warnings over many years, preferring to wait for the inevitable catastrophe which many will blame on local government which is no the ANC.
  • The water shortage is exacerbated by the influx of some 3,000 new families into the municipality each month and the refusal of some communities to cut back on usage
  • Similarities exist in the world of mining where financial liquidity is seemingly insufficient to fund many new mines and where the world risks shortages of most if not all metals even without rapid growth in Electric Vehicles
  • Politicians through regulators are restricting  reservoirs of liquidity managed by banks. Fortunately traders and other capital sources are funding the better projects while more forward looking juniors and miners are working on the next generation of new mines with the collaboration between Newcrest and SolGold showing the way ahead

SP Angel rank No 1 in Copper price forecasting in the Q4 2017 MB APEX report

SP Angel analysts ranked:  See MB APEX report link for further details

  • 1st for copper, 1st = for gold, 2nd for Palladium, 3rd for Coking Coal, 5th for Zinc, 3rd in Q4 Precious Metals forecasts in Q4, 4th in Base Metals forecasting in Q4

SP Angel ranked No 1 for research by ‘Research Tree’ according to investor demand

 

Dow Jones Industrials

 

-4.15%

at

23,860

Nikkei 225

 

-2.32%

at

21,383

HK Hang Seng

 

-3.10%

at

29,508

Shanghai Composite

 

-4.05%

at

3,130

FTSE 350 Mining

 

-0.29%

at

17,650

AIM Basic Resources

 

-0.41%

at

2,528

 

Economics

 

US – Equities reported heavy losses on Thursday taking the market into a correction territory, defined as a 10% drop from recent highs.

  • Three major indices reported losses with S&P500 down 3.75%, Dow down 4.15% and Nasdaq off 3.90% erasing all gains from the beginning of the year.
  • Asian markets followed Wall Street lower with Hang Seng off 3.10%, SCI 300 -4.27% and Nikkei off 2.32%.
  • European equities are faring relatively better with UK FTSE100 down 0.35% and German DAX off 0.19%.
  • Among reasons behind a strong correction were expectations for increasing interest rates as well as algorithmic trading strategies triggered by a hike in volatility measures.
  • Yields returned on an increasing trend climbing as high as 2.88% for 10y Treasuries yesterday following a weak auction of government debt.
  • The CBOE volatility index hovered around 31.62 in European trading, higher than the long-term average of 20, but below the 50.3 reading hit on Tuesday; the index ended at 33.46 on Thursday.
  • The US government has been shut down for the second time in three week son Friday morning; although, the bill covering increased spending and debt levels have been passed in the Senate and following a vote in the House should give the bill green light shortly.
  • A Republican senator Rand Paul held up the two-year spending bill to protest his party’s spending plans but was later overcome just before 2am when the Senate passed the legislation 71-28.

 

China – Inflation slowed in January form a higher base last year which included seasonal increase in food prices ahead of the Lunar New Year holiday.

  • PPI has been coming off lately following a strong recovery recorded through H2/16 and H1/17 which in turn may see reduced pressure on final goods prices.
  • The data is consistent with the latest PMI numbers also showing softening inflation pressures.
  • CPI (%yoy): 1.5 v 1.8 in December and 1.5 forecast.
  • PPI (%yoy): 4.3 v 4.9 in December and 4.3 forecast.

 

UK – The pound is trading higher this morning as the BoE guided for a potential acceleration in tightening the monetary policy on the back of rising inflation expectations.

  • “It will be likely to be necessary to raise interest rates to a limited degree in a gradual process but somewhat earlier and to a somewhat greater extent than what we had thought in November,” Mark Carney said.
  • “Demand growth is expected to exceed the diminished supply growth.”
  • Rates have been left unchanged at 0.5% yesterday in a unanimous decision.
  • Market expectations of a rate hike in May have gone up on the back of the announcement with markets assigning a 75% chance of 0.25bp increase, up from 55% seen before the MPC statement.
  • GDP, CPI and bank rate estimates have all been revised upwards from previous forecasts in November.
  • GDP: 1.7 (+0.2) for Q1/18, 1.8 (+0.1) for Q1/19, 1.7 (-) for Q1/20;
  • CPI: 2.9 (+0.3), 2.3 (-), 2.2 (-);
  • Bank Rate: 0.5 (-), 0.8 (-), 1.0 (+0.1).

 

France – New industrial production numbers came ahead of expectations continuing to demonstrate strengthening growth momentum in the economy.

  • Manufacturing production reported a whopping 4.7%yoy increase in December.
  • Industrial Production (%yoy): 4.5 v 2.5 in November and 3.5 forecast.

 

Currencies

US$1.2271/eur vs 1.2235/eur yesterday  Yen 109.17/$ vs 109.63/$  SAr 12.100/$ vs 12.102/$  $1.396/gbp vs $1.385/gbp  0.778/aud vs 0.781/aud  CNY 6.300/$ vs 6.321/$

 

Commodity News

 

Precious metals:         

Gold US$1,315/oz vs US$1,310/oz yesterday

  • Gold remains on track for its second weekly decline on speculations on a firming dollar and concerns over the pace of global interest rate increases, despite late week rebound amid tumbling equity markets. Spot gold remains down 1% for the week as the dollar index rises more than 1% to record its best week since Oct. 27 2017.
  • Asian stock followed suit of Wall Street shares to tumble amid worries over rising bond yields. The benchmark 10-year Treasury note yield rose as high as 2.884% on Thursday as the Bank of England signaled more aggressive rate hikes, to fall just below the four-year high mark set on Monday this week. “The surge in US Treasury yield looks set to continue and this will keep a lid on gold prices due to the likelihood that real rates will be dragged up”, noted BMI Research. “However, we expect a continued rise in inflation expectations to cap real yields, which will limit the downside pressure on gold”.
  • The Bank of England announced it was likely to raise interest rates sooner and by more than it thought only three months ago, as Britain’s slow moving economy receives a boost from the global recovery.
  • ETF’s decrease their gold holdings for the fifth trading day, favouring silver amid market turmoil. Exchange-traded funds cut 69,511 troy ounces, drawing the net purchases for the year to 492,249 ounces. Meanwhile, 103,237 troy ounces of silver was accumulated during the last trading session, bringing net sales to 12.3 million ounces, recording the third day of growth.

   Gold ETFs 72.0moz vs US$72.1moz yesterday

Platinum US$971/oz vs US$974/oz yesterday

Palladium US$965/oz vs US$986/oz yesterday

  •  

Silver US$16.34/oz vs US$16.27/oz yesterday

           

Base metals:   

Copper US$ 6,791/t vs US$6,832/t yesterday

  • Copper price continues to unwind, touching its lowest in nearly eight weeks, following another significant rise in inventories. The red metal futures in China head for the worst week since November 2016 as rout in domestic stocks fuels negative mood amid global volatility. Copper on SHFE traded at 51,480 yuan/ton, down 3.8% for the week, and registered a 7.2% fall since the beginning of the year to the worst-performing metal in Shanghai.
  • Metals have been hit by panic sentiment this week as short position bets swell to the most since 2016 in domestic stock market. A combination of rising copper open interest and falling prices suggest further declines to come, especially as physical markets are also weakening.
  • On-warrant copper inventories in warehouses certified by the London Metal Exchange, not earmarked for delivery, rose 25,700 tonnes yesterday to support the surge by 75% over the past three weeks. Rising warehouse levels are signaling healthy and abundant market supply. “This correction has been needed to put metals prices in line with the fundamentals, which are not bearish but also not that bullish. T-Commodity analysis also see “copper has broken its $6,860 support level, so there’s still space for more of a correction lower. I don’t think we’ll go much lower than $6,500, which would be a good buying area”.
  • However, copper weakness is expected to be short-lived as risks of further supply disruptions remain high and China’s curbs on scrap purchases are set to boost imports of refined metal. Australia & New Zealand Banking Group maintain target price for $7,200/t as broad global recovery is also expected to support copper. The bank also raised its disruption allowance to 6% in 2018 (from normal 5%) to suggest the market will slip into 250,000 tonne deficit this year. Over the next three months, labour negotiations at Los Pelambres and Chuquicamata present this greatest supply risk.
  • China’s ban on imports of some copper scrap products could cut purchases by as much as 200,000 tonnes, presenting further opportunity for refined cargo to increase.

Aluminium US$ 2,144/t vs US$2,153/t yesterday

Nickel US$ 12,910/t vs US$12,905/t yesterday

Zinc US$ 3,372/t vs US$3,380/t yesterday

Lead US$ 2,494/t vs US$2,497/t yesterday

Tin US$ 21,265/t vs US$21,365/t yesterday

           

Energy:           

Oil US$64.3/bbl vs US$65.3/bbl yesterday

Natural Gas US$2.630/mmbtu vs US$2.720/mmbtu yesterday

Uranium US$21.50/lb vs US$22.15/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$75.3/t vs US$74.5/t

Chinese steel rebar 25mm US$642.6/t vs US$640.5/t

Thermal coal (1st year forward cif ARA) US$78.0/t vs US$78.7/t

  • In an effort to boost the environmental drive, coal companies will be encouraged to close inefficient and polluting mines and replace them with larger ones if they meet specific standards. The National Development and Reform Commission plans to increase high-quality coal supply by allowing companies to boost capacity if they agree to shut outdated production processes. The latest effort by authorities hopes to further streamline the industry and stabilize coal prices.

Premium hard coking coal Aus fob US$228.6/t vs US$224.5/t

 

Other:  

Tungsten APT European US$317-325/mtu vs US$315-320/mtu last week

 

Cobalt LME 3m US$81,250.0/t vs US$80,750.0/t

]]>
Fri, 09 Feb 2018 12:13:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29361/morning-view-copper-topples-on-surging-inventories-29361.html
Breakfast News - http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29360/breakfast-news--29360.html What’s cooking in the IPO kitchen?

AIM

TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer TBC, expected late Feb

Polarean  - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb

Block Energy—a  NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC

 

Main Market Specialist Funds

Life Settlement—closed-ended investment company whose principal activities will be to support and manage portfolios of whole and partial interests in life settlement policies issued by life insurance companies operating predominantly in the US.  Due 6 Mar.

 

Main Market Premium Listing

IntegraFin provides platform services to UK clients and their financial advisers through its award-winning platform, Transact. Due Mar 18. FYSep2017 PBT up 44% to £29.9m.

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

CVC (Sky Bet) rumoured to be seeking £2.5bn plus float.

VC firm Augmentum rumoured to be seeking raise up to £125m.

   
Breakfast buffet

Physiomics* (LON:PYC) 8.35p £4.91m

The “provider of technology-based solutions to predict the effects of cancer treatment regimens for the biopharma industry, is delighted to announce that it has been awarded a contract by a further major (global top-10) pharmaceutical client.  The project, which has a value of approximately £70k, is expected to be completed during the Company's current financial year and involves the use of Physiomics' Virtual Tumour technology in a pre-clinical setting.”

Dr Jim Millen, CEO said: "We believe that the signing of agreements with three major pharmaceutical clients within the space of three months is a real sign of the confidence in our technology that is starting to build within the industry. Our aim now will be to develop longer-term relationships with these major companies and to secure further pre-clinical and clinical projects."

 

Ukrproduct Group (LON:UKR) 4.6p £1.88m

“Further to the announcement made on 07 February 2018, Ukrproduct is pleased to announce that it has drawn down UAH 32.3m under the terms of the loan agreement with PJSC "CREDITWEST BANK" in order to fully repay all amounts outstanding to OTP Bank. Accordingly, the Company has no outstanding liabilities to OTP Bank. The Loan is secured against certain real estate and property assets of the Company.

As a result of the abovementioned drawdown, there remains approximately UAH 32.7m available to the Company under the terms of the CreditWest Loan Agreement.”

UKR is one of the leading producer and distributors of high quality branded dairy products and beverages in Ukraine.

 

Scancell Holdings (LON:SCLP) 12.35p £38.2m

The “developer of novel immunotherapies for the treatment of cancer, notes that European Patent Office has announced its intention to grant Scancell's application for a European patent for its Moditope® immunotherapy platform.

This case is key to the protection of the Company's pipeline of Moditope® vaccines for the treatment of cancer and will provide commercial exclusivity in all major European territories including: Austria, Belgium, Switzerland, Germany, Denmark, Spain, Finland, France, United Kingdom, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Sweden and Turkey.  Counterparts to this patent have been filed in Australia, Brazil, Canada, China, Hong Kong, Japan, South Korea, South Africa and the US.”

 

Ten Entertainment Group (LON:TEG) 248p £161.2m

“Ten Entertainment Group, one of the UK's leading ten-pin bowling companies, today announces that it has acquired two further sites, continuing its acquisition strategy and bringing its estate to 42 sites.

The two sites, located in Chichester and Warrington, are geographically complementary to the existing estate and are existing ten-pin operations set within leisure parks.

TEG has a proven track record of integrating acquisitions through its 'Tenpinisation' strategy to allow a planned re-development of acquired sites, bringing the operations, systems and technology and customer experience, up to the high standards of the Company's wider estate. Both sites will benefit from significant further investment in the coming months.”

FYDec18E rev £78.19m and PBT £15.23. PE c.13x, yield c.4%

 

SCISYS (LON:SSY) 129.5p £37.94m

The “supplier of bespoke software systems, IT-based solutions, web and mobile application development and support services to the Media & Broadcast, Space, Government, Defence and Commercial sectors, is pleased to announce the renewal of its service contract to supply support and maintenance services for the BBC's enterprise audio broadcast technology.

SCISYS' Media & Broadcast division, which supplies the dira! Media Asset Management platform, a bespoke version of dira! used by the BBC to deliver its radio news and entertainment, has signed an enhanced service contract to continue supporting the BBC for a term of up to 10 years.

The premium dira! product, developed by SCISYS specifically for the BBC's requirements, is the cornerstone of the BBC's audio broadcast technology and has been deployed to National Radio, News, World Service, Nations and Local Radio stations as well as to Information & Archives.” FYDec18E rev £55.5m, PBT £4.4m.

 

7digital Group (LON:7DIG) 5p £20.5m

“The B2B digital music and radio services company, today issues a trading update for the year ended 31 Dec 2017.

Unaudited revenue for 2017 is expected to be up 52% at £17.3m (2016: £11.3m). The Company's contracted and billed revenues for the period were in fact £18.6m, with revenues from major new client MediaMarktSaturn ("MMS") at £6.5m. However, of this MMS revenue, £1.3m is to be recognised in Q1 2018 rather than in the 2017 financial period leading to reported revenue of £17.3m.

Losses at Adjusted LBITDA level are expected to be significantly reduced from the previous period and be better than market expectations.” FY2017E rev £19.1m and pre-tax loss of £2.9m.

 

Angus Energy (LON:ANGS) 6.95p £18.37m

The “conventional oil and gas production and development company, is pleased to announce it has successfully raised £2m (gross) by means of a private placement with institutional and private investors.” Priced at 6p, a discount of 27% to the closing mid-market price on 8 Feb 2018.

Net proceeds from the Placing will:

* contribute funding to the acquisition of a 25% interest in the Balcombe Licence per the Company's 22 Jan RNS.

* defray operational and associated costs related to the Partnership.

 

Plus 500 (LON:PLUS) 1083p £1,223m

“Plus500, a leading online service provider for customers to trade CFDs internationally, is pleased to announce that International Enterprise Singapore has granted Plus500SG Pte. Ltd a Commodity Broker's Licence ("CBL") in Singapore. The CBL  will supplement the Capital Markets Services Licence granted to Plus500SG by the Monetary Authority of Singapore in December 2017, thus allowing for Plus500SG to offer its customers a more diversified range of financial instruments. The CBL is effective immediately and is valid for one year.

Asaf Elimelech, Chief Executive of Plus500 said:

"The addition of this licence demonstrates the positive momentum we are achieving in growth globally, following the announcement of the new licence granted in South Africa earlier this week."

FYDec18E rev $316.7m and PBT of $183.45m.

 

NetScientific (LON:NSCI) 54.5p £37.63m

“NetScientific plc, the transatlantic healthcare IP commercialisation group, notes that its portfolio company, Vortex BioSciences, has announced a report published by Nature Scientific Reports. The peer reviewed report, titled "Evaluation of PD-L1 expression on vortex-isolated circulating tumour cells in metastatic lung cancer" describes the use of the Vortex's technology in capturing circulating tumour cells (CTCs), in combination with the use of a novel immunofluorescence assay, for measuring programmed cell death ligand 1 (PD-L1) expression on the surface of the CTCs from patients with metastatic non-small cell lung cancer (NSCLC).”

Savannah Petroleum (SAVP.L) 30.3p £247.5m

“Savannah is pleased to announce an update on average production volumes from the Seven Assets over the course of the November 2017 - Jan 2018 period, which have been provided by Seven Energy.”

“Uptime at the Uquo CPF and the Stubb Creek EPF has been 100% and 98% respectively over the three-month period.

Production levels at the Seven Assets in February have continued to strongly increase, with month to date average production being 25.7 kboepd gross and 20.7 kboepd net, largely driven by increased sales to the Calabar NIPP which are supported by a World Bank Partial Risk Guarantee.”

]]>
Fri, 09 Feb 2018 09:57:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29360/breakfast-news--29360.html