Asiamet Resources (LON:ARS) – BKM drilling update
BHP Billiton (LON:BLT) – $2.2bn investment in Mad Dog Phase 2 oil project approved
Nordgold (NORD LI) – GDRs de-listing
European equities climb for a third day (Stoxx Europe 600 +0.2%) with miners trading lower amid range bound base and precious metals prices and stronger pound.
• Gold prices are little changed this morning after having climbed $23/oz since the start of the week and touched the highest level since Nov on Wednesday on safe haven demand.
• An increase in gold prices came despite a 0.2% appreciation in the US$ index during the week.
• BHP stopped production at Escondida ahead of the labour action; copper prices are flat today after having climbed 1.7% in the previous trading session.
• Brent is up 1.1% this morning building on gains recorded yesterday despite the EIA report showing a 13.8mbbl jump in US stockpiles last week, marking the second biggest gain on record.
• Iron ore futures have almost regained all its losses recorded post the end of Lunar New Year holiday season on the back of strong spot steel prices. May Dalian futures climbed 1.1% as Shanghai rebar and hot-rolled coil contracts gained 0.1% and 0.3%, respectively.
Dow Jones Industrials -0.18% at 20,054
Nikkei 225 -0.53% at 18,908
HK Hang Seng +0.17% at 23,525
Shanghai Composite +0.51% at 3,183
FTSE 350 Mining -1.70% at 16,041
AIM Basic Resources +0.18% at 2,628
Economic News
Germany – Despite a slowdown towards the end of the year, annual trade surplus hit the highest level in 2016.
• The nation recorded a €253bn surplus last year, up from €244bn hit in 2015.
• Exports growth (+1.2%yoy) has been driven by the single currency block demand (+1.8%yoy), while shipments outside the EU were down 0.2%yoy.
UK – MPs approved the Brexit bill with no amendments by 494 votes to 122 yesterday with the bill now moving to the House of Lords for approval.
Greece – Unemployment held at 23% in Nov confirming the nation’s status as the one with the highest jobless rate in the Eurozone.
• The unemployment rate stayed above 20% in the last six years.
• The government remains in negotiations with its creditors over €86bn programme which stalled as a number of officials at IMF, one of key donors, argued a form of debt restructuring is required before the Fund commits to the deal.
Currencies
US$1.0709/eur vs 1.0652/eur yesterday. Yen 112.23/$ vs 112.23/$. SAr 13.458/$ vs 13.491/$. $1.258/gbp vs $1.250/gbp.
0.764/aud vs 0.763/aud. CNY 6.864/$ vs 6.881/$.
Commodity News
Precious metals:
Gold US$1,243/oz vs US$1,234/oz yesterday
Gold ETFs 58.1moz vs US$57.9moz yesterday
Platinum US$1,022/oz vs US$1,010/oz yesterday
Palladium US$774/oz vs US$767/oz yesterday
Silver US$17.81/oz vs US$17.72/oz yesterday
Base metals:
Copper US$ 5,876/t vs US$5,888/t yesterday
Aluminium US$ 1,852/t vs US$1,840/t yesterday
Nickel US$ 10,440/t vs US$10,465/t yesterday
Zinc US$ 2,850/t vs US$2,816/t yesterday
Lead US$ 2,388/t vs US$2,361/t yesterday
Tin US$ 18,895/t vs US$18,980/t yesterday
Energy:
Oil US$55.7/bbl vs US$54.8/bbl yesterday
Natural Gas US$3.168/mmbtu vs US$3.119/mmbtu yesterday
Uranium US$26.50/lb vs US$26.15/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$80.7/t vs US$79.7/t
Chinese steel rebar 25mm US$508.0/t vs US$504.7/t
Thermal coal (1st year forward cif ARA) US$66.5/t vs US$66.9/t yesterday
Premium hard coking coal Aus fob US$168.0/t vs US$168.4/t
Other:
Tungsten - APT European prices $196-205/mtu vs $194-200/mtu
Company News
Asiamet Resources (LON:ARS) 4.3p, Mkt Cap £30.5m – BKM drilling update
• The Company reported drilling results from 10 holes completed in the northern part of the Beruang Kanan Main (BKM) copper deposit in Central Kalimantan, Indonesia.
• High grade and close to surface intersections recorded at the BKM044 Zone are reported to demonstrate “excellent continuity of copper mineralisation over 500m of strike length and is up to 325m wide and 100m thick in parts.”
• Selected intersections include:
• 26.85 meters at 2.34% Cu from 34.15 meters;
• 16.0 meters at 3.02% Cu from 44.0 meters;
• 4.35 meters at 4.93% Cu from 3.00 meters;
o Including 2.0 meters at 8.97% Cu from 4.0 meters;
o 30.0 meters at 0.75% Cu from 9.00 meters;
o 33.5 meters at 0.75% Cu from 34.5 meters;
o 4.0 meters at 1.87% Cu from 2.00 meters.
o A total of 70 holes have now been completed for 7,030m with further 48 holes planned and a third drilling rig mobilised to expedite exploration programme ahead of the release of an updated resource statement.
o New resource will cover drilling completed over 2016/17 and is expected to be released “shortly after” Q1/17.
BHP Billiton (LON:LT) 1,329p, Mkt Cap £77.6bn - $2.2bn investment in Mad Dog Phase 2 oil project approved
• The Board approved the $2.2bn investment in the Mad Dog Phase 2 project in the Gulf of Mexico
• The capex represents the 23.9% stake held by BHP in the Mad Dog oil field with BP, the operator, holding 60.5% and Union Oil Company of California, an affiliate of Chevron, owning the blance 15.6%.
• The project includes a new floating production facility with a capacity of 140kbpd of crude oil from 14 wells with first output expected in 2022.
Nordgold (NORD LI) $3.45, Mkt Cap $1.3bn – GDRs de-listing
• Nordgold will be cancelling the listing of GDRs from the official list and trading on the LSE arguing current market capitalisation does not accurately reflect fundamental value.
• The Company said despite “strong operating and financial performance and a proven ability to deliver returns to shareholders… the market capitalisation of the Company has failed to increase in line with the market, and in particular against its peers, during a period of a major gold price rally”.
• “The Directors believe that the principal reason for the undervaluation is the very low trading volumes and general lack of liquidity in the GDRs, caused by the Company’s capital structure.”
• The Board considered options to improve Nordgold free float and liquidity, although a listing of shares “even at the current price, would results in the unacceptable dilution of current shareholders”.
• Post de-listing the Company plans to retain an independent international Board of Directors as well as maintain the release of annual reports and operating and financial updates with a view for a potential return to public markets.
• Existing holders of GDRs are offered an option to tender their GDRs to Nordgold at $3.45/GDR from 9 Feb/17 through to 16 Mar/17 or remain investors in the delisted Company “receiving the benefit of its consistent returns in the form of dividends”.
• GDR holders will have additional four occasions to tender their securities past the Mar/17 deadline including “after the announcement of its financial results for each of the HY results ended 30 Jun/17 and 30 Jun/18 and for each FY ended 31 Dec/17 and 31 Dec/18”.
• The number of share subject to the tender offer is 34.3m representing 9.3% of the issued capital with the balance of 90.7% owned by the principal shareholder Alexey Mordashov.