Amur Minerals* (LON:AMC) – Consultants are finalising Kun Manie operating costs update
Bluejay Mining* (LON:JAY) – Field season planning highlights progress to production next year
121 Mining Investment conference – sponsored by SP Angel – TODAY 10th and TOMORROW – 11th May 2017
• The 121 team are running the London 121 Mining Investment conference at No 8 Fenchurch Street in The City on 10-11 May.
• The event is for registered investment professionals, mining and exploration companies and mining analysts and brings the industry together alongside a series of investor briefings.
• 65 quality producers, developers and explorers attending / presenting
• I’m talking at 3:00 on the Thursday on: ‘UK mining outlook - A new era of UK funded exploration and production’.
• Follow link for investor passes - https://www.weare121.com/121mininginvestment-london/registration/register-investor/
Miners are rangebound with little change in European equity indices, in general.
• Mainland Chinese stocks continued to retreat losing 0.9% today with the Shanghai Composite Index trading at the lowest level since Oct/16.
• US$ is off slightly taking a break following a strong run over the last two sessions that saw the US$ index climbing more than 1%.
• The pound is trading just below the 1.30 level ahead of the MPC policy announcement and inflation report.
• Gold prices climbed $6/oz and are trading around $1,222/oz post seven sessions of losses and amid reports over North Korea proceeding with a nuclear test; although the outlook remains subdued with positive economic data from the US suggesting the US likely to remain on course with the tightening policy.
• Copper prices are down 0.5% today heading towards the weakest level since the start of the year with the latest weekly exchange data showing money managers cut bullish LME copper positions to the lowest in in almost six months.
• Brent is marginally stronger ahead of US inventories numbers with estimates for a fifth weekly reduction in stocks.
• Steel futures in China climbed 2.1% amid news over government order to limit some mills’ output around 14-15 May Belt and Road summit with a set of other reports suggesting authorities are intensifying environmental inspections of steel producers in Hebei.
• Iron ore futures followed steel prices following a week of losses.
Dow Jones Industrials -0.17% at 20,976
Nikkei 225 +0.29% at 19,900
HK Hang Seng +0.58% at 25,034
Shanghai Composite -0.92% at 3,052
FTSE 350 Mining +0.00% at 14,304
AIM Basic Resources +0.30% at 2,615
Economic News
US – Job openings climbed to an eight-month high in Mar while the share of people voluntarily quitting and filling up more attractive vacancies held at close to pre-recession levels.
• Involuntary layoffs remained extremely low.
• Latest labour numbers show the Mar slip in NFPs was rather a temporary blip with the market continuing to tighten which in turn lead to accelerating labour earnings growth.
• Donald Trump fired James Comey, a director of the FBI, with immediate effect on advice from Jeff Sessions, the attorney-general, and his deputy Rod Rosenstein.
China – Producer prices growth continued to slow with a particularly strong deceleration in the steel sector.
• Steel prices growth nearly halved to 22.3% in Apr compared to a Feb reading of 40.1%yoy.
• PPI (%yoy): 6.4 v 7.6 in Mar and 6.7 forecast.
• CPI (%yoy): 1.2 v 0.9 in Mar and 1.1 forecast.
Japan – The BoJ Governor reiterated the central bank commitment to the quantitative easing programme while accepting that meeting the 2% target inflation rate would be challenging.
• Haruhiko Kuroda confirmed that Bank purchases of bonds was growing at a slower rate than targeted (¥60tn v ¥80tn per annum) while arguing that the Bank is aiming to control interest rates rather than stick to announced amount of bond purchases.
• The Kuroda address to the Parliament had little effect on the currency with the yen briefly strengthening against the US$ amid the news that North Korea is preparing to conduct a sixth nuclear test.
UK – Markets expect the central bank to upgrade its 2017 inflation forecasts and lower growth estimates today, according to Bloomberg.
• In the latest inflation report issued in Feb/17, the MPC revised growth upwards to 2.0% in 2017 and 1.75% in 2018 while inflation is forecast to peak around 2.8% at the start of 2018 before falling gradually back to 2.4% in three years’ time.
France – Industrial production picked up in Mar marking the strongest performance in four months, although that was not enough to see the sector growing in Q1/17.
• Industrial sector was down 0.5%qoq dragging the nation’s Q1/17 GDP down to 0.3%qoq with the sector accounting for roughly 20% of total output.
• Expectations are for the sector to come back strong through the middle of the year on the back of improving world economic outlook and brightening growth outlook in the Eurozone.
• Industrial production (%yoy): 2.0 v -0.7 in Feb and 0.6 forecast.
Currencies
US$1.0892/eur vs 1.0913/eur yesterday. Yen 114.03/$ vs 113.61/$. SAr 13.603/$ vs 13.691/$. $1.298/gbp vs $1.294/gbp.
0.737/aud vs 0.734/aud. CNY 6.905/$ vs 6.908/$.
Commodity News
Precious metals:
Gold US$1,221/oz vs US$1,227/oz yesterday
Gold ETFs 59.7moz vs US$59.7moz yesterday
Platinum US$906/oz vs US$914/oz yesterday
Palladium US$796/oz vs US$811/oz yesterday
Silver US$16.16/oz vs US$16.24/oz yesterday
Base metals:
Copper US$ 5,515/t vs US$5,510/t yesterday
Aluminium US$ 1,867/t vs US$1,877/t yesterday
Nickel US$ 9,170/t vs US$9,205/t yesterday
Zinc US$ 2,609/t vs US$2,629/t yesterday
Lead US$ 2,173/t vs US$2,181/t yesterday
Tin US$ 19,700/t vs US$19,800/t yesterday
Energy:
Oil US$49.0/bbl vs US$49.6/bbl yesterday
Natural Gas US$3.209/mmbtu vs US$3.188/mmbtu yesterday
Uranium US$22.50/lb vs US$22.65/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$60.8/t vs US$59.5/t
Chinese steel rebar 25mm US$546.6/t vs US$540.3/t
Thermal coal (1st year forward cif ARA) US$64.3/t vs US$63.7/t yesterday
Premium hard coking coal Aus fob US$193.4/t vs US$199.4/t
Other:
Tungsten - APT European prices $210-219/mtu vs $212-219/mtu
Company News
Amur Minerals* (LON:AMC) 6.5p, Mkt Cap £40m – Consultants are finalising Kun Manie operating costs update
• Runge Asia Ltd is reviewing in-house operating cost estimates for the Kun Manie nickel/copper project.
• Updated costs estimates to be based on Q2/17 information with previous numbers deemed out of date.
• The process is well advanced with new estimates will account for combined open pit and underground mining operations and differences in terms of metallurgical recoveries in processed ores from identified three/four pits.
• To date, Runge has not identified any fatal flaws in previously reported information by the Company.
• The Company is planning a 6mtpa operation producing 30ktpa of nickel contained in flotation concentrate for processing by third parties or in-house smelter generating a low grade matte.
Bluejay Mining* (LON:JAY) 14p, Mkt Cap £103m – Field season planning highlights progress to production next year
BUY Target Price 22p
• Bluejay Mining is preparing for the field season in Greenland with applications lodged with government authorities for the exploration and extraction of mineral sands in the Pituffik area.
• The Bluejay team have now proven the Pituffik project to be the highest grade mineral sands project globally and are fast tracking the project to production in 2018.
• The team plan to expand and upgrade the ilmenite mineral resource beyond the 23.6mt @8.8% ilmenite (high-grade zone 7.9mt @14.2%) taken from just 17% pf the raised beach area.
• A program of 400 drill holes is planned to start on 22 July using sonic and auger drilling which are particularly quick in this environment. Sonic drilling, using vibrations is particularly good for unconsolidated mineral sands.
• Bulk sample: this is particularly important because it will be used to plan everything from geotechnical studies for dredging, mineral separation and civil construction.
• The dredging of a quantity of material from the drowned beach will give important information on the ease of dredging and probably on its potential environmental impact.
• The bulk samples may also prove useful for quality testing for offtake contracts.
• A survey also needs to be done to see if bulk carriers can call into Moriusaq Bay for the loading of concentrates.
• The team will load a barge with equipment in July for the field season.
• Excavation sites will be monitored for sediment recharge rates.
• There is still much to understand in terms of the ease and cost of dredging and the potential length of the field season for dredging in this part of Greenland.
• Ilmenite prices remain high due to supply constraints as production of titanium from titano-magnetite has pulled back due to local issues in Asia. Eg increased environmental controls in China and restrictions to production of mineral sands from beeches in the Philippines and Indonesia.
• A number of fires at pigment producers have served to keep titanium pigment prices high enabling producers to pay more for better quality primary concentrates.
• All this looks good for BlueJay and it is important for the company to get its ilmenite concentrate established in the market while demand remains firm.
*SP Angel act as nomad and broker to Bluejay Mining