BlueRock Diamonds Plc (LON:BRD) – plant improvements finished ahead of time
Medusa Mining Limited (LON:MML, ASX:MML) – AGM statement shows infrastructure work at mine on track
Norilsk Nickel (NILSY US) - Norilsk joins United nations Global Compact
Shanta Gold Limited (LON:SHG) – Site visit presentation
Metal markets along with the US$ index and Brent are relatively flat this morning.
One of the exceptions is iron ore futures which climbed 7.3% today on the Dalian Commodity Exchange.
Iron ore prices volatility is reported at the highest level in six years with Dalian futures seen dropping 10% last week after climbing 23% in the period to Nov 11.
The benchmark spot price climbed to $74.9/t compared with a two year high of $79.8/t recorded earlier this month, according to Metal Bulletin.
Stornoway to sell 91,000cts of stones from new Renard diamond mine in the Otish mountains of Quebec
Dominion Diamonds moving HQ to Calgary in move to cut costs
Dow Jones Industrials +0.35% at 19,024 Thanksgiving tomorrow
Nikkei 225 at 18,163 Bank Holiday in Japan today
HK Hang Seng -0.01% at 22,677
Shanghai Composite -0.22% at 3,241
FTSE 350 Mining +1.50% at 15,037 FTSE 350 +105% since 1st January
AIM Basic Resources +0.51% at 2,433 AIM Basic Resources +49% since 1st January
Economic News
Eurozone – Activity in the single currency zone advanced to the highest in 11-months on climbing order books
Employment increased at one of the strongest rates since early 2008 with inflation pressures reported to be at the highest for over five years.
Markit Manufacturing PMI (Nov): 53.7 v 53.5 in Oct and 53.3 forecast.
Markit Services PMI (Nov): 54.1 v 52.8 in Oct and 52.9 forecast
Markit Composite PMI (Nov): 54.1 v 53.3 in Oct and 53.3 forecast.
Germany – Manufacturing held up well in Nov with the pace of growth holding up close to the highest level in nearly two years
Services PMI hit the strongest reading in six months.
New business orders including export markets came in strong.
Input inflation is reported to have accelerated to the fastest rate since Mar/12 on higher prices for raw materials including aluminium and steel as well as weaker euro.
“Although the PMI failed to further build on October’s ten-month high, the latest survey results highlight that Germany’s private sector economy remains in good shape in Nov,” Markit said.
“Moreover, the data suggest that economic growth has picked up from the meagre 0.2% rate in the third quarter.”
Markit Manufacturing PMI (Nov): 54.4 v 55.0 in Oct and 54.8 forecast.
Markit Services PMI (Nov): 55.0 v 54.2 in Oct and 54.0 forecast.
Markit Composite PMI (Nov): 54.9 v 55.1 in Oct and 55.0 forecast.
France – Private sector growth held up well in Nov driven by stronger performance from the services sector
New business increased for the fifth consecutive month with orders in manufacturing broadly unchanged and gains led by services sector.
Manufacturing input costs are said to have recorded the sharpest increase recorded in the manufacturing sector in nearly five years.
Markit Manufacturing PMI (Nov): 51.5 v 51.8 in Oct and 51.5 forecast.
Markit Services PMI (Nov): 52.6 v 51.4 in Oct and 51.9 forecast.
Markit Composite PMI (Nov): 52.3 v 51.6 in Oct and 51.9 forecast.
South Korea – State prosecutors raided offices of Samsung Group and the National Pension Service, the nation’s largest pension fund, as part of the investigation over Samsung contributions into foundations linked to Choi Soon-sil, a confidante of the current South Korea President.
Local media report that investigators are looking into NPS’s decision to vote through the $8bn merger of Samsung C&T and Cheil Industries.
Prosecutors allege that Samsung transferred €2.8m to a company co-owned by Ms Choi in return for the President approval of the deal.
Nigeria – central bank keeps rates on hold as economy deteriorates
Lowish oil prices continue to deepen the recession in Nigeria with the central bank holding rates in an attempt to support the economy.
South Africa – Q3 official unemployment rises to 27.1% highest level in 13 years
That’s 5.9m people without jobs vs 5.6m in Q2.
The unemployment rate is 36.3% when including people who have given up looking for jobs
Currencies
US$1.0607/eur vs 1.0646/eur yesterday. Yen 111.04/$ vs 110.72/$. SAr 14.085/$ vs 14.091/$. $1.238/gbp vs $1.249/gbp.
0.742/aud vs 0.740/aud. CNY 6.898/$ vs 6.885/$ – Yuan weakens further
Commodity News
Precious metals:
Gold US$1,212/oz vs US$1,218/oz yesterday
Gold ETFs 61.6moz vs 61.8moz yesterday
Platinum US$940/oz vs US$948/oz yesterday
Palladium US$744/oz vs US$741/oz yesterday
Silver US$16.64/oz vs US$16.87/oz yesterday
Base metals:
Copper US$ 5,589/t vs US$5,664/t yesterday
Aluminium US$ 1,764/t vs US$1,748/t yesterday
Nickel US$ 11,365/t vs US$11,445/t yesterday
Zinc US$ 2,592/t vs US$2,627/t yesterday
Lead US$ 2,198/t vs US$2,204/t yesterday
Tin US$ 21,200/t vs US$21,095/t yesterday
Energy:
Oil US$49.2/bbl vs US$49.6/bbl yesterday
Natural Gas US$2.957/mmbtu vs US$2.981/mmbtu yesterday
Uranium US$18.50/lb vs US$18.50/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$71.5/t vs US$69.0/t
Chinese steel rebar 25mm US$452.2/t vs US$446.6/t
Thermal coal (1st year forward cif ARA) US$68.5/t vs US$67.0/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unch
Ordinary hard coking coal is $270.0/t vs $270.0/t (Dalrymple Bay Coal Terminal)
Other:
Tungsten - APT European prices $198-203/mtu vs $198-203/mtu unch last week – boringly unchanged. Price will have to start rising sometime soon if Trump goes for growth.
Company News
Dominion Diamonds moving HQ to Calgary in move to cut costs
Stornoway to sell 91,000cts of stones from new Renard diamond mine in the Otish mountains of Quebec
Stornoway is on track to hit commercial production by the year end with the diamond sale a meaningful part of this target.
The average diamond value is expected to be $155/ct for 1.9mctpa over the first 10-year mine life
BlueRock Diamonds* (LON:BRD) 6.8p, Mkt Cap £2.6m – plant improvements finished ahead of time
BlueRock, which is now being led by CEO Adam Waugh is ahead of schedule in terms of repositioning of certain parts of the diamond recovery plant.
The repositioning of the pans and scrubber is now done and this should improve the flow of material while improving recovery rates.
Testing of the new plant configuration using stockpiled ore will take place over the next few weeks.
The new primary crushing and pre-screening circuits are due for completion by mid-January at a cost of around R2.5m
This should cut process costs, deliver better feed material and improve recoveries.
Contractors African Mining and Crushing (AMC) are to run the Drilling and Blasting, Loading and Hauling work at the mine with operational and cost benefits expected to follow from this new relationship.
The team are working on water management and are re-lining and repositioning the main primary water reservoir. South Africa either seems to have too much or too little water depending on where you are these days.
The team are also recruiting to support ramping up to 24 hour processing.
Conclusion: Adam Waugh is working hard to turn around the diamond mining and recovery operations. The calculated grade of the mine should support economic operation assuming the plant is able to meet reasonable industry standards with the potential for recovery of special stones to boost profits. Once the first diamond mine is working properly then BlueRock may consider development of other kimberlite pipes within their license area.
*SP Angel acts as Nomad & Broker to BlueRock Diamonds
Medusa Mining (LON:MML, ASX:MML) – AGM statement shows infrastructure work at mine on track
Norilsk Nickel joins United nations Global Compact
The initiative run by the UN is in the area of Corporate Social Responsibility and Sustainable Development.
“The mission of the Global Compact is to promote recognition and practical application by businesses worldwide of ten basic principles on human rights, labour, environment and anti-corruption. Following these principles globally will provide for sustainable development going forward.”
Currently, the Global Compact brings together over 13,000 corporate participants and other stakeholders from more than 160 countries, with global industry leaders among them. By joining the initiative, the Global Compact participants gain access to the UN's knowledge and experience in corporate social responsibility and sustainable development, as well as to its expertise of the private sector.
Shanta Gold (LON:SHG) 11.4p, Mkt Cap £66.3m – Site visit presentation
Our intrepid mining analyst Simon Beardsmore is at the Shanta Gold, New Luika mine site today. .
The company report production is stable at 60,000-90,000oz with a base case plan of 84,000ozpa from 2016 to 2020.
The plan will be updated in Q1 with new resources being added from the Ilunga and Elizabeth Hill prospects.
Costs which have been running at an impressive AISC 780/oz reflect the quality of the resource and the team.
Q3 costs were even better with Q3 AISC costs at US$621/oz and a cash cost of US$387/oz.
Initiatives could cut costs further with cheaper power, water, tailings, contractors and lower capital going foward
The Base Case mine plan does not include some 514,000oz of known resources. This give some confidence in the ability to extend the life of the mine by another 4-5 years in the short term depending on prevailing gold prices.
The mine started the new satellite Ilunga open pit in July.
Shanta finished mining at the Bauhinia Creek open pit in September
Underground operations at Bauhinia Creek in Q1 next year and should feed higher grade ore to the plant.
Open pit mining will continue at Ilunga, Shamba and Black Tree through most of 2017
While mining at the Jamhuri open pit finishes at the year end ore should be processed from this pit through most of 2017
Singida project: further work is ongoing to better understand the potential of this resource with exploration ongoing and a pilot mining project in progress.
Higher expected grades should compensate for higher strip ratios expected through November and December. We also expect lower contractor costs to help (this is our own assumption).
Exploration: the exploration team have done well to add ounces to the production plan and we look forward to further news from Piet Prinsloo, the exploration manager and his team.
Conclusion: Shanta’s presentation appears to deliver a positive message. We look forward to confirmation of this from out analyst in the field.