ASA Resource (LON:ASA) – Freda Rebecca awarded Top Producer award and secured 5% in export incentives
BlueRock Diamonds* (LON:BRD) – Trading update
Solgold* (LON:SOLG) – Interims
The US$ index is up this morning on the back of increasing political risks in France with the president candidate Ms Le Pen suggesting a referendum on the France’s membership in the Eurozone and as concerns over the IMF participation in the latest €86bn Greece bailout programme resurfaced.
• Stronger US$ holds back dollar denominated metals and oil prices.
• Brent is off 0.6% today after falling some 1.7% the previous day amid speculation over increased US production.
• Iron ore futures rebounded on Tuesday after shedding more than 8% over two days post Lunar New Year holiday season and as the Chinese renminbi weakened against the US$.
Dow Jones Industrials -0.09% at 20,052
Nikkei 225 -0.35% at 18,911
HK Hang Seng -0.07% at 23,332
Shanghai Composite -0.12% at 3,153
FTSE 350 Mining +0.87% at 16,461
AIM Basic Resources +1.35% at 2,594
Economic News
China – Preliminary credit data suggest lending could have exceeded the previous monthly record in Jan, Bloomberg reports.
• Regulators estimate new loans to have exceeded record CNY2.5tn recorded in Jan/16 with market estimates for a CNY2.4tn reading.
• It remains unclear if the data includes the effects of the PBoC decision to raise rates on the medium-term loans on Jan 24.
• Official numbers will be released in coming days.
Germany – Industrial production slumped the most since early 2009 in Dec led by a contraction in manufacturing and construction. IP fell 0.7%yoy.
• Construction dropped 1.7%mom while manufacturing declined 3.4%mom.
• The activity is likely to pick up moving forwards as indicated by an increase in order intake in both industrial and construction sectors with factory orders climbing the most cine 2014 as a report released last showed.
• Industrial Production (SA %mom): -3.0 v 0.5 in Nov and 0.3 forecast.
UK – Annual property prices growth pace slows in Jan on the back of “increasing pressure on spending power, along with affordability constraints”, Halifax data showed.
• Nevertheless a 5.7%yoy growth recorded for three months through Jan show the sector continues to benefit from “an ongoing shortage of property for sale, low level of housebuilding, and exceptionally low interest rates”.
• House Prices (%mom): -0.9 v 1.6 in Dec and 0.0 forecast.
• House Prices (%yoy 3m): 5.7 v 6.5 in 3m to Dec and 6.0 forecast.
France – Government bond yields are off this morning after hitting the highest level in over a year on Monday on the back of increasing popularity for Ms Le Pen and her comments on a potential referendum regarding the nation’s membership in the single currency zone.
• S&P ratings agency warned that a Frexit would lead to a likely downgrade of the sovereign debt.
Greece – Yields on two year sovereign debt surged past the 9% mark for the first time since Jun as IMF officials said divisions over the course of the bailout programme within its executive board remain.
• Without the Fund’s participation in the €86bn bailout, the whole funding programme would fold.
• A number of officials at the IMF argued more fiscal tightening as well as a form of debt relief is required to put nation’s debt levels at sustainable levels.
• Greece desperately requires new funds to complete a nearly €7bn payment due to its creditors in Jul.
Currencies
US$1.0671/eur vs 1.0758/eur yesterday. Yen 112.19/$ vs 112.67/$. SAr 13.441/$ vs 13.270/$. $1.237/gbp vs $1.248/gbp.
0.763/aud vs 0.766/aud. CNY 6.882/$ vs 6.863/$.
Commodity News
Precious metals:
Gold US$1,231/oz vs US$1,223/oz yesterday
Gold ETFs 57.6moz vs US$57.4moz yesterday
Platinum US$1,008/oz vs US$1,007/oz yesterday
Palladium US$762/oz vs US$760/oz yesterday
Silver US$17.61/oz vs US$17.57/oz yesterday
Base metals:
Copper US$ 5,809/t vs US$5,785/t yesterday
Aluminium US$ 1,826/t vs US$1,826/t yesterday
Nickel US$ 10,370/t vs US$10,330/t yesterday
Zinc US$ 2,774/t vs US$2,760/t yesterday
Lead US$ 2,322/t vs US$2,310/t yesterday
Tin US$ 19,090/t vs US$19,700/t yesterday
Energy:
Oil US$55.7/bbl vs US$57.0/bbl yesterday
Natural Gas US$3.092/mmbtu vs US$3.066/mmbtu yesterday
Uranium US$26.15/lb vs US$25.75/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$76.7/t vs US$78.0/t
Chinese steel rebar 25mm US$501.9/t vs US$502.8/t
Thermal coal (1st year forward cif ARA) US$66.2/t vs US$66.7/t yesterday
Premium hard coking coal Aus fob US$168.4/t vs US$167.8/t
Other:
Tungsten - APT European prices $196-205/mtu vs $194-200/mtu
Company News
ASA Resource* (LON:ASA) 1.7p, Mkt Cap £29m – Freda Rebecca awarded Top Producer award and secured 5% in export incentives
BUY, Target price 2.5p
• Under the state programme to promote export earnings, the Reserve Bank of Zimbabwe introduced a 2.5% export incentive scheme to large miners in the country effective 01May/16.
• The introduced incentive netted $1.3m in cash credits for the period to Dec/16 at Freda Rebecca.
• Additionally the mine has been voted the Best Large Scale Top Producer which would see Freda Rebecca attracting another 2.5% in bonus credits on top of the existing programme for the period of next 12 months.
• The Company estimates 5% in export incentives to translate into more than $4.5m in cash rebates from the RBZ over 2017.
*SP Angel acts as Nomad and broker to ASA Resouces and its analysts have visited ASA’s Bindura Nickel, Freda Rebecca and Zani Kodo assets.
BlueRock Diamonds* (LON:BRD) 4.8p, Mkt Cap £2.6m – Trading update
• Heavy rainfall delayed the restart of operations at the Kareevlei mine in the Northern Cape of South Africa.
• Drilling in the pit ahead of blasting is now in progress with mining operations to start soon.
• In the meantime, available stockpiles of kimberlite will be used to fine tune the processing plant including new crushing circuit.
*SP Angel acts as Nomad & Broker to BlueRock Diamonds
Solgold* (LON:SOLG) 32p, Mkt Cap £458m – Interims
• The Company has recently completed 19,667m of diamond drilling at the Alpala porphyry copper gold deposit, part of the Cascabel project.
• This took the total number of metres drilled at Alpala to date to 27,061m in 22 drill holes including six holes demonstrating over 1km continuous copper/gold mineralisation grading over 1% CuEq.
• The pace of drilling operations is set to increase with five rigs to be in operation by the end of Q1/17 and up to seven drilling rigs by Sep/17.
• Additionally, the team continued with geological mapping, a series of geophysical studies and rock sampling across mineralised zones to refine further drilling targets.
• Of 14 targets, eight zones including Alpala, Hematite Hill, Alpala SE, Cristal, Trivinio, Moran, Tandayam-America and Aguinaga are planned to be drill tested first.
• Metallurgical studies are ongoing as part of the NI43-101 compliant Independent Technical report on the Cascabel project ahead of the TSX listing early this year.
• The Company raised A$71.3m by issuing 475.1m shares and converting some of outstanding liabilities into equity during the period. This included a subscription to 142.9m shares (10% of the Company) by Newcrest International, a major copper/gold miner with an expertise in development and operations of high tonnage open cast and underground block cave mines.
• The Company recorded A$3.7m (H1/FY15: A$1.0m) in operating cash outlays and A$6.0m (H1/FY15: A$3.5m) in capitalised exploration expenses in H1/FY16.
• As of 31Dec/16, the Company had A61.6m in cash and marketable securities and no debt allowing it to continue with extensive drilling programme at the Alpala deposit and other high priority targets at Cascabel.
*SP Angel acts as Nomad and Broker to SolGold; An SP Angel analyst has previously visited the Cascabel project