Gold rose at the end of last week after seven weekly losses
• Gold saw a modest rise at the end of the week of 0.4% to US$1,098/oz.
• Gold is down 7.3% year to date but could now to be factoring in potential US$ rises.
China – Stocks rallied by 4.5% on speculation of restructuring of State Owned Enterprises (SOEs)
• The nation’s cabinet is said to have approved plans to overhaul the SOEs.
• This is expected to provide an economic boost to the economy.
• Economic data from China continues to be poor with producer prices reported over the weekend the weakest since 2009.
• This week we get Chinese trade and inflation data with imports and exports expected to decline year on year.
• Chinese inflation data is also expected with headline inflation expected to remain at 1.4% against a background of falling producer prices.
• Chinese fixed asset investment to be reported on Wednesday is expected to be 11.5% higher than July last year and little changed from June.
• Industrial production also out on Wednesday is expected to weaken at 6.6% from 6.8% in June.
• The government also continues to push for further de-regulation of interest rates with CDs being issues to the public using different rates.
• The government are attempting to de-regulate a system where there has been a long standing cap on bank deposit rates making cheap funding available to SOEs.
Economic News
Eurozone – Second quarter GDP growth from Germany and France expected on Friday
• German growth is expected to have picked up 0.5% quarter on quarter from 0.3% in the first quarter.
• French growth by contrast is expected to have slipped from 0.6% to 0.2% in the second quarter.
• Eurozone growth is expected to remain at 0.4% in the second quarter.
Greece – Cautious optimism appears to be surrounding a deal for Greece’s rescue prospects
• It appears that Greece is making more concessions which would enable a more European friendly deal to be arrived at by the August 20th deadline.
• On August 20th Athens is due to make a €3.2bn debt repayment to the ECB.
• Concessions are being made by Greece on administrative reform, spending cuts and privatisations.
South African mine wage negotiations
• The main mining unions in S Africa, the NUM (National Union of Mineworkers) and AMCU (Association of Mining and Construction Union), have rejected an offer of around an 18% increase over three years with a 6%pa increase – terms are slightly different for each of the main participating companies.
• Negotiations are due to resume on Wednesday 12th August. In addition to the annual increases, improved terms are on offer for medical disability, severance and adjustments to retirement ages are on offer. Negotiators for the Chamber of Mines have stated, however, that “the quantum of our offer is final”. NUM negotiator, David Sipunzi is reported to have said that “It is possible that we will strike if our demands are not met. It is one of the tools we use.”
UK – Employment data
• The Bank of England rate setting committee is likely to be focussing on wage growth as well as headline inflation rates in terms of interest rate decisions.
• Wage growth for the three months is expected to slow to 2.8% from May’s 3.2% year on year.
• The unemployment rate is expected to be 5.6%.
US$1.0964/eur vs 1.0929/eur last week. Yen 124.65/$ vs 124.77/$. SAr 12.6802/$ vs 12.717/$. $1.5475/gbp vs 1.551/gbp
US$0.7370/audunch vs0.737/aud.
Commodity News
Precious metals:
Gold US$1,097/oz vs US$1,092/oz last week
Platinum US$972/oz vs US$954/oz last week
Palladium US$602/oz vs US$603/oz last week
Silver US$14.96/oz vs US$14.80/oz last week
Base metals:
Copper US$ 5,183/t vs US$5,145/t last week
Aluminium US$ 1,594/t vs US$1,588/t last week
Nickel US$ 10,965/t unch vs US$10,810/t last week
Zinc US$ 1,880/t vs US$1,860/t last week
Lead US$ 1,731/t vs US$1,690/t last week
Tin US$ 15,285/t vs US$16,300/t last week
Energy:
Oil US$48.55/bbl vs US$49.90/bbl
Natural Gas US$2.834/mmbtu vs US$2.809/mmbtu
Uranium US$35.95/lb unch vs US$35.95/lb – prices going up as Japan prepares to restart reactors
Bulk commodities:
Iron ore 62% Fe spot (cfr Tianjin) US$54.20/t unch vs US$54.90t –
Thermal Coal $55.4 vs $55.4 cif ARA Europe –
Tungsten - APT European prices price $215.0/mtu unch vs $220/mtu – Price range pulls back to $210-220/mtu vs $210-230/mtu previously
Company News
Amur Minerals (LON:AMC) 20.8 pence, Mkt Cap £90.6m – Advisory Agreement with Far East and Baikal Region Development Fund
• The company has signed a Financial Advisory Agreement with the Russian Government’s Far East and Baikal Region Development Fund.
• The fund should be helpful in attracting financing from the Russian Federation, India and China.
• The fund was set up to gender economic and social development in the sparsely populated Far East region of the country which borders with China.
• The fund will target potential funding for the Kun-Manie project from the Asian markets.
Conclusion: This is a good collaboration for Amur as it helps to broaden funding sources as well as align the interest of the project with the Russian government.
* SP Angel act as Nomad and broker to Amur Minerals
** An SP Angel analyst has visited the Kun Maine licenses in Russia
W Resources (LON:WRES) 0.275 pence, Mkt Cap £9.8m – Completion of drilling at Regua identifies extensions to tungsten mineralisation
• W Resources has announced the completion of its drilling programme on the Regua tungsten property in Portugal. The programme has firmed up details of the mineralisation within the central part of the deposit where open pit mining is expected to commence as well as identifying extensions to the mineralisation towards both the north-east and the north-west.
• The new drilling data underpins a re-evaluation of the existing resource at Regua of 4.46m tonnes at an average grade of 3.08% tungsten trioxide. The company expects to provide its resource updates for Regua and for its La Parilla project in Spain by early Q4 2015.
• W Resources has drilled 5 short drill holes in the central part of the deposit and reports multiple, relatively shallow, mineralised intersections including 3.08m at an average grade of 0.61% tungsten trioxide from a depth of 33.6metres and 6.24m averaging 0.75% from a depth of 44.29m in hole RGD-027 4.35m averaging 0.83% from a depth of 1.60m in hole RGD-028, 8.42m averaging 0.45% from 8.99m in RGD-030 and 4.4m averaging 0.44% from 15.46m in RGD-032.
• Additional drilling in holes RGD-024 and RGD-025 has encountered extensions of the mineralisation towards the north-east at greater depths including 2.2m averaging 0.36% tungsten trioxide from a depth of 96.77m in hole RGD-024 and 5.82m averaging 0.33% from a depth of 129.95m and 3.07m averaging 0.56% from 132.7m in hole RGD-025.
• Hole RGD-026A intersected two mineralised horizons to the north west; 2.58m averaging 0.43% from a depth of 144.67m and 6.45m averaging 0.35% from 206.55m. The company identifies the north-west extension as “significant” and reports that the orebody remains “open at depth and in all directions.”
• The company is planning an initial shallow open-pit mine at Regua with a second phase comprising a larger scale high grade underground operation. The forthcoming resource update should underpin mine planning.
Conclusion: W Resources has made significant progress on its Spanish and Portuguese tungsten projects and we look forward to the updated resource estimates for Regua and for details of any metallurgical testing which may point to the nature of the flowsheet. Planned underground mining in the future may require additional drilling to demonstrate detailed continuity of mineralisation and to assist in defining stope layouts.