Dow Jones Industrials +0.28% at 21,891
Nikkei 225 +0.30% at 19,986
HK Hang Seng +0.79% at 27,540
Shanghai Composite +0.60% at 3,293
FTSE 350 Mining +0.42% at 16,689
AIM Basic Resources +0.93% at 2,506
Amur Minerals* (LON:AMC) – Record drill hole results at Kun Manie
BlueJay Mining* (LON:JAY) – Further notes from the field trip to Pituffik
Condor Gold (LON:CNR) – Completion of soil geochemistry survey at La India
Galantas Gold (LON:GAL) – Grab samples at Omagh mine
Metminco* (LON:MNC) – Miraflores feasibility study on track
Gold is helped by the weakness in the US$ and fresh turmoil in the White House trading near the highest level in six weeks.
• The US$ index is flat on the day after losing 2.7% in July which was the fifth straight month of declines.
• The pound is trading at the highest in over 10 months against the US$ ahead of the MPC decision due on Thursday with chances of a rate hike currently standing at only 6.6%.
• The Stoxx Europe 600 Index, the gauge of the European equity market, is heading for the first gain in four days as more companies release corporate earnings; BP results beat estimates helping energy shares higher.
• Copper prices are consolidating in the $6,350-6,400/t range after hitting the highest level since May/15 in the previous session.
• Brent held gains trading at $52.8/bbl ahead of the US official data expected to show crude stockpiles extended declines.
• Both iron ore and steel rebar September futures posted new gains on Tuesday amid positive private and official PMI reports.
Economic News
US – Anthony Scaramucci has been let go as director of communications after just 10 days in the job.
China – Manufacturing sector growth accelerated to a four month high in July with both output and new orders increasing at the fastest pace in five months, according to Caixin/Markit private sector PMI data.
• New export sales were particularly strong climbing at the second-fastest rate for nearly three years.
• In line with official PMI report, Caixin/Markit mentioned strengthening inflation pressures with input costs and output prices “both continued to rise to hit four-month highs”.
• “Operating conditions in the manufacturing sector improved further in July, suggesting the economy’s growth momentum will be sustained,” the report concluded.
• Caixin Manufacturing PMI: 51.1 v 50.4 in June and 50.4 forecast.
Eurozone – Strong manufacturing sector growth numbers have been confirmed by the latest final Markit PMI data.
• The index has come down to 56.6 in July from 57.4 recorded in June; although the decline comes from the high base with the previous month’s reading being the highest level recorded in 74 months.
• Manufacturing sector growth was registered in all eight monitored countries (Austria, Netherlands, Germany, Italy, France, Ireland, Spain, Greece).
• Greece recorded the first back to back monthly improvement in the manufacturing sector in three years.
• Businesses are said to have benefited from solid gains in new orders from both domestic and foreign clients.
• “While rates of expansion in output (six-month low), new orders (five-month low) and new export business (four-month low) all eased during the latest survey month, they nonetheless remained among the best registered since the first half of 2011,” the report said.
• Eurozone Manufacturing Markit PMI: 56.6 in July (Final) v 56.8 in July (Flash) and 57.4 in June.
UK – Property prices growth slowed 0.2pp to 2.9%yoy in July amid a “subdued” market, Nationwide Building Society data showed.
• An average house price totalled £211,671.
• While market activity has cooled, prices continue to get support from a lack of supply of new properties, Nationwide said.
• Nevertheless, the overall trend remains in the direction of a slowdown.
• “Housing market activity is likely to remain subdued, with the balance in the market shifting a little further towards buyers in the quarters ahead.”
Australia – The RBA left rates unchanged at record low 1.5%, in line with estimates, while escalating the rhetoric against the appreciating A$.
• The stronger national currency is said to translate into a “slower pick-up in economic activity and inflation than currently forecast”.
• “The higher exchange rate is expected to contribute to subdued price pressures in the economy… it is also weighing on the outlook for output and employment,” RBA Governor Philip Lowe said in his statement.
• The AUDUSD exchange rate is down slightly (-0.3%) compared to the pre announcement level.
Tanzania – The government and Barrick Gold started talks to resolve a tax dispute between authorities and the Company’s subsidiary Acacia Mining, according to the president’s office.
Currencies
US$1.1816/eur vs 1.1733/eur yesterday. Yen 110.36/$ vs 110.64/$. SAr 13.224/$ vs 13.039/$. $1.323/gbp vs $1.312/gbp.
0.801/aud vs 0.798/aud. CNY 6.722/$ vs 6.725/$.
Commodity News
Precious metals:
Gold US$1,268/oz vs US$1,267/oz yesterday
Gold ETFs 66.3moz vs US$66.4moz yesterday
Platinum US$943/oz vs US$937/oz yesterday
Palladium US$889/oz vs US$891/oz yesterday
Silver US$16.81/oz vs US$16.70/oz yesterday
Base metals:
Copper US$ 6,342/t vs US$6,408/t yesterday
Aluminium US$ 1,908/t vs US$1,921/t yesterday
Nickel US$ 10,150/t vs US$10,300/t yesterday
Zinc US$ 2,776/t vs US$2,818/t yesterday
Lead US$ 2,312/t vs US$2,345/t yesterday
Tin US$ 20,565/t vs US$20,880/t yesterday
Energy:
Oil US$52.8/bbl vs US$52.8/bbl yesterday
Natural Gas US$2.826/mmbtu vs US$2.881/mmbtu yesterday
Uranium US$20.05/lb vs US$20.50/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$71.5/t vs US$72.4/t
Chinese steel rebar 25mm US$611.3/t vs US$599.8/t
Thermal coal (1st year forward cif ARA) US$75.5/t vs US$75.3/t yesterday
Premium hard coking coal Aus fob US$180.3/t vs US$179.9/t
Other:
Tungsten APT European US$230-235/mtu vs US$226-231/mtu
Company News
Amur Minerals* (LON:AMC) 6.4p, Mkt Cap £39.4m – Record drill hole results at Kun Manie
• The Company released the second set of exploration results from IKEN where step out drilling identified two blocks of mineralisation along the 2,800 trend in the direction of the KUB deposit.
• A total of 19 IKEN resource expansion drill holes has been completed since May/17 with the total of 5,312m completed in the western direction testing 1,600m segment of the 2,800m target area.
• The first block c.500m in strike length has been drilled by seven holes returning an average thickness of 31.8m per hole at average grades of 0.98% Ni and 0.28% Cu.
• The second block c.700m in strike length defined by four 200m spaced holes returned an average thickness of 35.8m per hole at average grades of 0.91% Ni and 0.22% Cu.
• The farthest and easternmost drill hole returned the highest grade and the longest intersection ever hit at Kun Manie: 76.4m at 0.93% Ni and 0.21% Cu.
• The mineralisation remains open in the dip direction at first block and in both the up and dip directions as well as to the east toward the KUB in the second block.
• “With infill drilling, these two blocks could substantially impact the project economics due to the higher than historically drilled grades,” the Company highlighted.
• The plan is now to switch to infill drilling of those two identified blocks while step out drilling is set to restart at KUB once drill roads are completed.
• Adding 500m in strike tested from the KUB side where latest step-out holes returned average intersections of 14.3m at 0.78% Ni and 0.20% Cu, leaves only 1,150m of untested area between the two deposits.
*SP Angel act as Nomad and Broker to Amur Minerals
BlueJay Mining* (LON:JAY) 12.3p, Mkt Cap £94m – Further notes from the field trip to Pituffik
BUY – Target Price 22p
• BlueJay are well underway with the summer field season at Pituffik, Greenland.
• The depth of the sediments in some areas can be between 40-60m along the coastal range crossed by multiple streams of meltwater.
• Sampling, pitting and trenching show higher grade ilmenite mineral sands along an extended section of beach up to 30km which runs around 1-2.7km in width.
• The tonnage potential is estimated in the SRK resource report at 7.9mt of material grading 44.3% total heavy minerals with 15.3% titanium oxide within the heavy mineral resource at a 5% cut-off grade. The resource has been calculated to 1m of depth only and should extend significantly with simple confirmation of the greater depth from the sonic drill rig through this field season. The company currently plans to drill between 600-1,000 holes this season using both the sonic rig and auger. The drill will target the basement rock where practical.
• The field team is well advanced in production of a 600t bulk sample, using simple screening to produce an ilmenite concentrate. The bulk sample will then go to prospective customers for the confirmation of quality and specification that should lead to orders for next year. Production should ramp up with initial production from 2018.
• The Danish Maritime Certified Bathymetry team are busy in the near shore and Bay Area further defining channels identified in previous surveys which will identify optimal points for loading carriers directly using a short pier.
• The bay provides a natural harbour for small vessels and a potential pond for dredging with a 'tombola' making a natural bridge and a 'spit' making two sides of the enclosed bay. While there are some mini icebergs in the bay they are small and can be deflected if necessary.
• The environmental team are on site finalising the EIA and Base Line studies checking the near shore environment with grab sampling used to see what is living on and within the sea bed.
• BlueJay are utilising the abandoned village of Moriusaq which has allowed the team to accelerate this year’s work programs.
• The facilities which the BlueJay team have been able to put in place in this settlement have allowed for 24 personnel managing multiple work programs. Many of the BlueJay team have worked extensively in Greenland and have secured a number of Greenlandic personnel utilising several Greenlanders trained in geology and engineering as well as tapping the local labour force which allows for significant local content.
• The mess room for the drillers and survey teams is reminiscent of a scene out of an Alien movie, particularly when the Giant Snow Crab comes out. The team are using a tracked Hagglunds all terrain vehicle to complete the scene in this environment. We are impressed by the quality of their chef whose serving of local dishes is outstanding and keeps morale high.
• Three recent graduates from the Camborne School of Mines are at site helping the survey teams. The three won the 2016 World Mining Games.
• The combined team appear to be executing a high quality, efficient and productive work program to provide a strong platform on which to build production through 2018.
*SP Angel acts as nomad and broker to BlueJay
Condor Gold (LON:CNR) 50.5p, Mkt Cap £31.0m – Completion of soil geochemistry survey at La India
• Condor Gold has announced that it has now completed a soil geochemistry survey over the entire 313 sq km area of its La India licence in Nicaragua.
• The survey, which has been completed over a three year period, collected over 13.100 samples for analysis at intervals between 50m and 400m along a series of north south oriented lines at separation distances varying between 100, 200 or 400m.
• The survey should provide a solid basis to guide future exploration within the wider La India licence and has already led to the identification of two, north-westerly trending, feeder zones as well as the confirmation of the La India and Andrea mineralised corridors and an east / west trending linking structure which have been reported previously.
Conclusion: With the completion of the soil survey, Condor Gold is establishing a solid database for its future exploration at La India where work by Condor and previous operators has already established a 2.3m oz gold resource at an average grade of 4 g/t.
Galantas Gold (LON:GAL) 5.9p, Mkt Cap £10.0m – Grab samples at Omagh mine
• Galantas Gold reports that during tunnelling work at its Omagh mine, it has intersected a stringer vein up to 0.5m wide which has yielded assay results from grab samples varying between 1.1 g/t to 11 g/t gold and 1.4 g/t to 7 g/t silver.
• The vein, which is a subsidiary structure to the main target, the Kearney Vein, and whose presence had been anticipated based on geological interpretations, is expected to be able to provide feed to the plant within 10 weeks.
• "Structural analysis, supported by the data in the tunnel intersect, indicates that a second intersection with a potential continuation of the stringer vein is likely, as the planned underground drivage turns from a westerly direction and continues northwards a further distance of 67 metres from the first intersect."
• The company also confirms that "Improved blasting arrangements have been formalised with Police Service Northern Ireland (PSNI), The improved arrangements are not expected to form an impediment to operations and are expected to accelerate development progress." This follows a setback earlier this year when security concerns raised by the police led to restrictions on the use of explosives at the mine.
Conclusion: The availability of mineralisation from this secondary mineralised structure should provide an additional source of plant feed within a relatively short time
Metminco* (LON:MNC) 2.6p, Mkt Cap £3.3m – Miraflores feasibility study on track
• In its quarterly report for the 3 months ending 30th june, the Company has announced that the feasibility study for its Miraflores project in the Cauca gold belt of Colombia is now around 70% complete and n schedule for completion by the end of Q3 2017.
• The mine design and scheduling work has been completed and concluded that longhole stoping is the appropriate mining method and that mining will be conducted by company personnel in preference to using a contractor. Metminco proposes to use "an experienced training team during te first year of ore production to train the Colombian labour."
• Using a cut-off grade of 1.75 g/t gold, the mine is expected to have a 10 year mine life at a production rate of 4,000 ounces of gold per month..
• Much of the waste generated during mining and processing will be used as underground mine backfill which will significantly reduce the surface footprint of mine development at Miraflores.
• The company estimates that life-of-mine capital expenditure totals US$30.8m.
• Further test work has confirmed that recovery rates of 93.45% are achievable over the life of the mine using a combination of gravity, flotation and cyanidation recover methods. Further confirmatory work in the form of a large scale gravity and flotation test is planned.
• The company has identified its preferred route for the power line from Quinchia and initiated discussions with landowners for the necessary access rights. "A substation upgrade at Quinchia will be necessary to accommodate the power requirements of the operation."
• "The critical path item for the Miraflores project is currently the completion of the baseline monitoring for the EIA." The company expects to complete this work in October 2017 and to submit the required applications by the end of 2017.
• Following the company's sale of its residual interest in the Los Calatos project for US$5m, Metminco currently has a csh balance of A$6.35m.
Conclusion: Feasibility study work for the development of Miraflores is on course for completion by the end of the current quarter and the baseline environmental work should be completed in October with a view to submitting applications by the end of the year.
*SP Angel act as broker to Metminco. SP Angel analysts have previously visited Los Calatos in Peru and the Miraflores project in Colombia.