Economic News
US – Economic news due this week:
Date Announcement Period Actual Expected (Bloomberg) Prev month
Wednesday Core Retail Sales (ex Auto) Sep -0.1%mom 0.1%mom
Core PPI Sep 0.1%mom/1.2%yoy 0.3%mom/0.9%yoy
Fed Beige Book
Thursday Weekly Jobless Claims weekly 270k 263k
New York Manufacturing Index Oct -8.0 -14.7
Philly Business Outlook Oct -2.0 -6.00
CPI Sep -0.2%mom/-0.1%yoy -0.1%mom/0.2%yoy
Core CPI Sep 0.1%mom/1.8%yoy 0.1%mom/1.8%yoy
Friday Industrial Production Sep -0.3%mom -0.4%mom
Capacity utilization Sep 77.3% 77.6%
UoM Consumer Sentiment Oct (prelim) 89.0 87.2
Japan – The BoJ hints no action to be expected during the regulatory meeting later this month.
• “Unless oil prices further decline, the negative impact coming from lower oil prices will dissipate, fade out, disappear. And the, 1% inflation is quite likely to come,” BoJ Governor Haruhiko Kuroda said.
• The Bank will release its updated inflation and economic growth forecasts on Oct 30.
Australia – Credit spending came off slightly through Aug but remains strong when compared to the previous year on the back of lower interest rates.
• Credit card purchases amounted to A$24.4bn in Aug v A$24.7bn in Jul and A$22.4bn last year.
Turkey – Suicide bombers claim 95 lives in a twin bombing at peace rally in Ankara on Saturday.
• Explosions registered near a train station where supporters of the pro-Kurdish People’s Democracy Party gathered before heading on to a protest against clashes between security forces and Kurdish PKK insurgents.
• Kurds blame official forces for complicity or negligence at least during bombings.
• While no group has taken responsibility for bombings for now, police have started operations against alleged Isis members across Turkey with some 40 people having been arrested.
Belarus – Exit polls suggest incumbent President Alexander Lukashneko who took office in Jul/94 won more than 80% of votes to secure another five year term.
• More than 80% of eligible voters are reported to have cast their ballots in elections.
• The EU said it may lift sanctions including financial penalties and visa bans on officials later this month should elections be complete without violations.
• Current elections are reported to have avoided wide-spread protests recorded in 2010 when thousands went out in the streets only to be met by riot police and government security forces.
Currencies
US$1.1379/eur vs 1.1325/eur yesterday. Yen 120.15/$ vs 120.14/$. SAr 13.317/$ vs 13.369/$. Sterling $1.535/gbp vs 1.537/gbp
0.736/aud vs 0.728/aud –
Commodity News
Precious metals:
Gold US$1,164/oz vs US$1,151/oz yesterday –
Platinum US$990/oz vs US$935/oz yesterday
Palladium US$713/oz vs US$692/oz yesterday
Silver US$15.99/oz vs US$15.70/oz yesterday
Base metals:
Copper US$ 5,342/t vs US$5,143/t yesterday –
Aluminium US$ 1,629/t vs US$1,569/t yesterday -
Nickel US$ 10,685/t vs US$10,150/t yesterday
Zinc US$ 1,876/t vs US$1,681/t yesterday
Lead US$ 1,806/t vs US$1,668/t yesterday
Tin US$ 16,100/t vs US$16,000/t yesterday
Energy:
Oil US$53.10/bbl vs US$52.00/bbl yesterday
Natural Gas US$2.537/mmbtu vs US$2.470/mmbtu yesterday
Uranium US$37.30/lb unch vs US$37.05/lb yesterday –
Bulk commodities:
Iron ore 62% Fe spot (cfr Tianjin) US$54.2/t vs US$54.0/t –
Thermal coal (1st year forward cif ARA) US$49.50/t vs US$49.20/t
Other:
Tungsten - APT European prices $180/200 per mtu unchanged at this impossibly low level
Ferrochrome – Benchmark charge chrome price for delivery in Europe fell 4c to US$1.04/lb last week marking the lowest reading since Q1/10.
Company News
Avalon Minerals (LON:AVI) A$0.028, Mkt Cap A$6.7m – ESIA programme started at Viscaria
• The ESIA has started at the Viscaria project.
• This will be essential in attaining approval for the project.
• Project planning studies are also underway with a view to a release of scoping study in Dec 2015.
• The scoping study will look further into the preliminary studies done on potential for open pits and decline development to access underground mining.
• The latter is particularly pertinent given the positive results from VDD 193.
• Studies will also look at a geotech assessment for both the open pit and underground, a benchmarking exercise on capital and operating costs, preliminary reviews of waste and tailings management options, scenario assessment for open pit and underground, infrastructure planning and metallurgical testwork.
Conclusion: It is good to see the Viscaria project moving towards the scoping study stage where recent drill data has been promising.
Caledonia Mining (LON:CMCL) 41 pence, Mkt Cap £21.4m – Q3 Production Update
• In Q3 the company produced 10,927 oz of gold 5% up from Q2 2015 and up 10.5% on the same time last year.
• This puts them on track to produce 42,000 oz of gold for the year.
• For the first half the company produced 20,361 oz at a cash cost of US$699/oz and an AISC of US$984/oz.
• At the end of H1 2015 the company had cash and cash equivalents of US$23.7m enabling them to declare a quarterly dividend on October 6th.
Conclusion: Caledonia continues to deliver on its production for this year. They are starting to implement their long term plans for Blanket and we look forward to further detail on the resource definition work.
Glencore (LON:GLEN) 130 pence, Mkt Cap £18.7bn – Proposed sale of Cobar and Lomas Bayas copper mines
• Glencore have started the process to sell its wholly owned Cobar mine in Australia and the Lomas Bayas copper mine in Chile.
• This is said to be in response to a number of enquiries received from various potential buyers.
• Cobar currently produces 50,000t of copper in concentrate a year and Lomas Boyas produces 75,000 t of copper cathode.
Conclusion: The two mines were not part of the original asset disposal programme of US$2bn and would be incremental to funds raised from other targeted disposals. Anglo recently disposed of Mantoverde and Mantos Blancas with a deal worth between US$300-500m depending on the copper price – this was for around 100,000t of production.
Savannah Resources (LON:SAV) 2.05 pence, Mkt Cap £5.1m – Jangamo JV Update
• Rio and Savannah have agreed to extend the long stop date for fulfilment of conditions for their JV from the 19th Oct 2015 to 31 March 2016.
SolGold (LON:SOLG) 1.75p, Mkt Cap £13.3m – Hole 12 indicates greater scale at Alpala Central, Cascabel, Ecuador
• SolGold report results of extended mineralisation at the Alpala Central portion of the Cascabel property in Ecuador.
• Drilling of Hole 13 is also nearing its target depth.
• Hole 12 shows over 1km of visible copper porphyry mineralisation indicating that the mineralised system ‘remains open to the southeast’.
• We expect assay results in a week or so to support visual evidence of this significant intersection.
• The company press release gives further description of the type of mineralisation seen in the Hole 12 intersection.
• The release also shows the location of the magnetic contours being tested by Hole 13 and how the planned 1,800m hole is to intersect the lower conductive zone.
Conclusion: SolGold continue to report massive >1km intersections of copper / gold mineralisation with holes 12 and 13 indicating greater scale to the orebody.
It is still early days in terms of the resource development and mine planning but drill results to date indicate potential for a sizeable underground operation.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has visited the Cascabel project.