Dalradian Resources (LON:DALR) – Start of test stoping at Curraghinalt
Firestone Diamonds (LON:FDI) – Extension of deadline for the sale of BK11
Metal Tiger (LON:MTR) – MOD Resources goes into trading halt on ASX
Noricum Gold* (LON:NMG) – Drilling anticipated to show extensions to gold mineralisation at Kvemo Bolnisi in Georgia
Premier African Minerals (LON:PREM) – Developments at the RHA tungsten mine
Wolf Minerals (LON:WLFE) – New General Manager for the Drakelands tungsten Mine
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PlOD along to the 121 Mining Investment Conference in London on 14th -15th April at 8 Fenchurch Place, Fenchurch Street Station
• See the inflatable PODs at the 121 Mining Investment Conference - Investors and analysts go free:
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Dow Jones Industrials -0.75% at 17,603
Nikkei 225 -0.11% at 15,715
HK Hang Seng +0.15% at 2,207
Shanghai Composite -0.08% at 3,051
FTSE 350 Mining +0.07% at 8,573
AIM Basic Resources -0.25% at 1,743
Economic News
IMF – Christine Lagarde is urging policymakers to step economic reforms in an effort to avoid the period of weak growth rates.
• It is widely expected the IMF to cut its growth forecasts when new economic update is due to be released next week.
• The IMF currently expects the global economy to grow 3.4% this year on its Jan numbers.
• Global growth “remains too slow, too fragile and risks to its durability are increasing,” Lagarde said.
• Lagarde was supportive of the Fed decision to start tightening the policy while also backed the BoJ and the ECB deployment of negative interest rate to raise inflation.
OECD – Inflation data released for 34 countries show the rate of growth in prices slowed in all major OECD economies in Feb except the UK and Japan where CPI remained unchanged and picked up, respectively.
• The CPI index showed that inflation across G7, G20 and the EU in Feb.
• The index slowed to 1.0%yoy, down from 1.2%yoy in Jan.
• Energy prices recorded a 8.8%yoy decrease while food prices posted a 0.9%yoy growth.
US – Services sector expanded at a faster pace in Mar marking the first increase in the growth rate since Oct/15, on ISM numbers.
• The report follows a positive manufacturing report released earlier showing the first increase in growth rate since Aug/15.
• Weak overseas growth weighed on US exports and drove the US trade deficit to the widest reading since Aug/15 in Feb/16.
• Wide trade deficit is likely to see a downwards revision to Q1/15 growth estimates.
• JOLTS job openings fell more than forecast in Feb while hiring was reported to have hit the highest level since Nov/06.
• Stronger hiring was driven by private sector and retail trade, food services, and education services, in particular.
Date Index Period Actual Expected (Bloomberg) Previous
Monday Factory Orders/Core Feb -1.7%mom/-0.8%mom -1.7%mom/-0.5%mom 1.2%mom/-0.6%mom
(revised from 1.6%mom/-0.2%mom)
China – Services sector growth accelerated in Mar on the latest private survey results prepared by Caixin/Markit.
• Services PMI: 52.2 v 51.2 in Feb.
• Stronger services PMI pushed the composite index higher (51.3 v 49.4 in Feb).
• “Overall, the services sector developed well, but the economy is riding choppy waves, indicating the lack of a solid foundation for a recovery. The government needs to push forward with “supplyside reform” to encourage the development of emerging industries,” Caixin/Markit wrote.
• “Despite the slightly stronger expansion of business activity, services companies took a cautious approach to staff numbers. This was highlighted in Mar by the first fall in service sector employment since Aug/13, albeit only slight.”
• “ Manufacturing also cut their payroll numbers in Mar.”
Japan – The yen continued to strengthen driven by the risk off sentiment.
• The currency briefly hit the ¥109.95 level against the US dollar yesterday marking the strongest level since Oct/14.
Germany – Industrial production contracted in Feb driven by weak output of energy, consumer and capital goods.
• On a positive note, estimates were for a sharper decline.
• Construction recorded good performance climbing 1.3%mom.
• Industrial production: -0.5%mom v 2.3%mom in Jan and -1.8%mom forecast.
Uganda – Eases its key lending rate to 16% - just think of what that would do to your mortgage
Currencies
US$1.1351/eur vs 1.1369/eur yesterday. Yen 110.41/$ vs 110.45/$. SAr 15.211/$ vs 14.904/$. $1.411/gbp vs 1.423/gbp
0.755/aud vs 0.757/aud. CNY 6.483/$ vs 6.473/$.
Commodity News
Precious metals:
Gold US$1,227/oz vs US$1,232/oz yesterday – Prices came off this morning on the back of a recovery in the US dollar index that moved away from the five month low of 94.32 recorded last week.
• Gold ETFs 56.5moz vs US$56.7moz – representing the first pull back in overall ETF holdings in a week
Platinum US$958/oz vs US$957/oz yesterday – Royal Bafokeng sells 5% stake in Impala Platinum cutting its stake to 6.3%.
Palladium US$554/oz vs US$557/oz yesterday
Silver US$15.13/oz vs US$15.15/oz yesterday
Base metals:
Copper US$ 4,780/t vs US$4,784/t yesterday –
Aluminium US$ 1,509/t vs US$1,537/t yesterday
Nickel US$ 8,520/t vs US$8,370/t yesterday
Zinc US$ 1,794/t vs US$1,830/t yesterday
Lead US$ 1,700/t vs US$1,709/t yesterday
Tin US$ 16,415/t vs US$16,560/t yesterday – Members of the local community blockes access road to the San Rafael tin mine, one of the world’s largest operation, located in Peru.
• Minsur, the operator of the mine, has not received notification of why the road was blocked and says operations are likely to be affected should the blockage be prolonged.
Energy:
Oil US$38.7/bbl vs US$37.6/bbl yesterday
Natural Gas US$1.923/mmbtu vs US$2.012/mmbtu yesterday
Uranium US$28.15/lb vs US$27.90/lb yesterday
Bulk comodities:
Iron ore 62% Fe spot (cfr Tianjin) US$53.2/t vs US$53.3/t –
Steel – Vale is selling its stake in the Brazilian steel mill venture CSA to Germany partner ThyssenKrupp as part of the a strategy to dispose of non-core assets to help improve its balance sheet.
• Vale is aiming to reduce its debt load and exposure to outstanding CSA liabilities on completion of the deal.
• The deal would “not have a significant impact on its financial results” and was “part of its initiative to simplify its asset portfolio”, the Company said.
• The CSA plant located in Brazil cost US$10bn to build and had €2.6bn in total liabilities at the end of 2015.
• The plant has a total production capacity of 5mt per annum.
Thermal coal (1st year forward cif ARA) US$41.8/t vs US$40.9/t yesterday – Japanese power utilities reported to be close to agreeing a new benchmark contract price at around 10c/t lower than last year.
Other:
Tungsten - APT European prices stood at $170-185/mtu vs $168-185/mtu last week –
Company News
Dalradian Resources (LON:DALR) 48.5 pence, Mkt Cap £104.6m – Start of test stoping at Curraghinalt
• The company reports that it has recently commenced a programme of test stoping and underground development at the Currghinalt gold deposit in Northern Ireland.
• The programme is expected to be completed during the second half of the year and will comprise extracting around 1000 tonnes of ore from each of two (and possibly up to four) test stopes as well as around 950-1000 metres of underground development, including 190 metres of ramp development.
• The work forms part of the work for the mine feasibility study which is currently underway and will commence on the V75 vein which is considered to be typical of the Curraghinalt resource.
• The test programme is designed to provide data on the rock mechanics, backfill characteristics and grade and metallurgical features of the veins which will be important factors for the feasibility study and future mine planning work.
Conclusion: The mining trials at Curraghinalt will give detailed information on the mining and metallurgical features of the Curraghinalt veins which will be an essential component of the feasibility study work. We look forward to the results of the test programme as they become available.
Firestone Diamonds (LON:FDI) 27.3 pence, Mkt Cap £84.7m – Extension of deadline for the sale of BK11
• Firestone Diamonds reports that it has extended the “Revised Drop Dead Date” for its disposal of the Botswana assets to Tango Mining so that it “can be extended, in certain circumstances, to 29 August 2016.”
• “This extension is to enable Tango Mining to finalise the proposed US$30.0 million loan commitment with Vanderbilt Commercial Lending, Inc. to finance the acquisition of the Company’s Botswana operations and to recommence operations at the BK11 mine”
• In July 2015, Firestone announced that it had reached a conditional agreement to dispose of its Botswana assets to Tango Mining for a total consideration of US$8m. However, in October 2015, it was reported that Tango Mining had been unable to meet the 30th September deadline for payment of a US$0.3m deposit and that the deadline had been extended to 8th April 2016. It now appears that Tango has again been unable to complete the transaction by the revised date, hence the extension announced today.
Conclusion: The further delays to the sale of BK11, which remains on care & maintenance, will no doubt come under scrutiny from the Botswana authorities which we assume would favour a speedy conclusion and resumption of operations. With no other potential purchasers emerging, however, there seems limited room for manoeuvre.
Metal Tiger (LON:MTR) 6.1 pence, Mkt Cap £29.2m – MOD Resources goes into trading halt on ASX
(Metal Tiger hold 30% of MOD Resources)
• MOD Resources has entered into a trading halt on the ASX pending the release of assay results from the first two drill holes at their T3 joint venture in Botswana.
• The trading halt follows a ‘Price and Volume Query’ by the ASX last week.
• MOD Resources are drilling on their T3 property which is close to Cupric Canyon’s copper project. Cupric Canyon is backed by the former team from Barclays Natural Resources.
• The following announcement released on Friday last week gives some indication as to what MOD Resources are working with.
• https://media.wix.com/ugd/a5d095_71c4ba1f3c614a17b26b25d717e4c5ab.pdf
• The news indicates potential for further development in Botswana.
Noricum Gold* (LON:NMG) 0.2p, Mkt Cap £6.2m – Drilling anticipated to show extensions to gold mineralisation at Kvemo Bolnisi in Georgia
• Noricum Gold have completed a 34 drill hole program at their Kvemo Bolnisi project in Georgia, Eastern Europe.
• The drill hole data is to be used to complete mine planning and pit design ahead of planned ore production in Q3 2016.
• The drill program extended to 34 holes from an initial 19 so as to test possible extensions to mineralisation to the north east and west of the target program.
• We hope the new drill assays will confirm gold in this mineralisation but will have to wait for the results.
• Kvemo Bolnisi has a total non-JORC resource of 532,700oz grading 1.02g/t and 160,158t of copper grading 1.41% - we expect these numbers to change on further drilling
• The resource includes around 15,000oz of gold at surface across two pits grading 2.7g/t. The planned pits are <7km from the Madneuli gold plant for processing.
• There is no capital expenditure requirement as the gold ore starts at surface and contract mining can supply ore for sale at the mine gate.
• Conversion of the Soviet GKZ resource into JORC should provide a useful guide for further development.
• Noricum also need to firm up on arrangements with their joint venture partner to mine and process ore from Kvemo Bolnisi at their Madneuli plant.
• If all goes well then we expect Noricum to have a working template for further mine and resource development with their jv partner.
• Tsitel Sopeli: drilling is due to start this month with planning underway in advance of gold ore production.
Conclusion: Noricum is making good progress towards production. Confirmation of expected assay results is important as is the firming up of arrangements for the supply and treatment of ore at the Madneuli mine plant. Noricum believe it has potential to develop a much larger gold and possibly copper project within the joint venture license area.
*SP Angel acts as Nomad and Broker to Noricum.
Premier African Minerals (LON:PREM) 0.6 pence, Mkt Cap £10.9m – Developments at the RHA tungsten mine
• Premier African Minerals reports that work to re-equip the 120m deep vertical shaft at its 49% owned RHA tungsten mine in Zimbabwe is nearing completion and that the first ore from the 870m level of the mine is expected to be hoisted during this month.
• The company is also upgrading the crushing circuit at a cost of “less than $100,000 and [it will] take less than two weeks to install once all the components are at site at RHA.”
• Interestingly, in relation to the crushing circuit upgrade, the company comments that its consultant, Appropriate Process Technologies “have been instructed to proceed immediately at their expense.”
• CEO, George Roach, comments that “I am pleased to report that Premier has dramatically reduced fixed expenditure at RHA and we remain confident that as and when 870 ore is processed at the grades indicated, and through-put and recovery meet design criteria, RHA will operate profitably.”
• At under US$180/metric tonne unit, the benchmark ammonium paratungstate (APT) price continues to languish near to the lowest prices seen since at least the beginning of 2010. Trade sources suggest that, with Chinese stocks overhanging the market, there is little prospect of a near term recovery in prices.
Conclusion: We look forward to news that the RHA mine is hoisting and processing underground ore and that it has successfully completed the plant modifications and shaft refurbishment.
Wolf Minerals (LON:WLFE) 7.8 pence, Mkt Cap £62.8m – New General Manager for the Drakelands tungsten Mine
• Wolf Minerals reports the retirement of Jeff Harrison as General Manager of its newly completed Drakelands tungsten mine in Devon. Jeff, who managed the construction of the UK’s first major metal mine in over 40 years is to be replaced by Alan Fearon.
• Alan Fearon is a Camborne School of Mines trained metallurgical engineer with an impressive track record with major mining companies including most recently the position of General Manager of Barrick Gold’s Cowal mine in Australia as well as previous posts with Barrick Gold and Newmont Mining in Australia.
Conclusion: We join the Company in wishing Jeff Harrison a long and enjoyable retirement and we congratulate Alan Fearon on his appointment.