Wysiwyg
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So commodities are not the place to be now?
"The best place to be is in commodities"
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Commodities is the place to be long-term.
Mining Analysts' Ratings and Estimates - Juniors
Bill Matlack / September 28, 2011
To view the tables, please click the link below:
http://www.kitco.com/ind/matlack/sep282011_juniors.html
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Bill Matlack / September 28, 2011
To view the tables, please click the link below:
http://www.kitco.com/ind/matlack/sep282011_juniors.html
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October 02, 2011
That Was The Week That Was … In Australia
By Our Man in Oz
www.minesite.com/aus.html (Free registration)
Minews. Good morning Australia, your market doesn’t seem to have been quite as nasty this week.
Oz. That’s one way of putting it. The dramatic declines of previous weeks slowed, and parts even rose. The biggest worry down this way is that China has run out of puff. From an Australian perspective that’s a much bigger story than your Greek tragedy and you Euro political/banking fiasco. Sliding base metal prices are a reflection of concern about Chinese demand for copper, zinc, and the rest of the gang in that sector. There’s concern especially around nickel, which went below US$8 a pound after we had closed on Friday. Gold has been more resilient, and edged up over the course of the week, and Australian producer enjoyed a double benefit because the Aussie dollar declined against its US cousin.
Minews. It sounds as if you believe the worst of the current correction is behind us.
Oz. I wouldn’t go that far, but we do seem to be forming a bottom. Friday’s sell off can partly be explained as an end of quarter balancing by investment funds. The view seems to be that copper will probably have a tough December quarter before rising again early next year. The fundamental case for copper, the bellwether of the metals, is that demand from industrialising Asia will continue to outstrip supply. Chinese companies certainly seem to have that view, as we saw with the latest takeover bids to make the headlines down this way: a A$1.3 billion offer for Anvil Mining (AVM), and a A$297 million deal relating to a small coal mine in Western Australia.
Minews. It is interesting to watch the Chinese buying assets as the rest of the world sells.
Oz. Isn’t that the key to everything? China is buying because it can, and because it is confident of continuing growth.
Minews. Enough of the philosophical stuff, time for prices.
Oz. The all ordinaries, surprisingly, added a respectable 2.3 per cent in a topsy-turvy week. Metals and mining lost a shade under one per cent. Gold was the weakest, putting in a decline of five per cent, but with most of that damage done by the sector leader, Newcrest (NCM), which fell a sharp 5.6 per cent to A$34.08
Most other gold companies performed better than Newcrest, and some even posted interesting rises. Troy Resources (TRY) staged a strong rebound after recent heavy selling. At one stage on Friday it rose to a peak of A$4.18, a gain of A34 cents, before easing at the close to end at A$4.12, up A28 cents. Northern Star (NST) rose by A4 cents to A50 cents after reporting a strong profit, fresh drilling results, and plans to more than double its output. Gold Road (GOR) also attracted interest with its latest exploration presentation, recovering A4.5 cents of recently lost ground to close at A39.5 cents, although it did trade as high as A47 cents on Wednesday. Elsewhere, PVI (PVM) put on A5 cents to A54 cents, following an upbeat presentation given by management at an investment conference on the Gold Coast. And Silver Lake (SLR) added A3 cents to A$2.57, also after getting a good response at a rival investment conference in Melbourne.
Notable among the fallers were Gryphon (GRY), down A8 cents to A$1.30, Kingsgate (KCN), down A32 cents to A$7.18, Kingsrose (KRM), down A3 cents to A$1.22, Sumatra (SUM), down A1.5 cents to A15 cents, St Barbara (SBM), down A4 cents to A$2.05, Resolute (RSG), down A1 cent, and Integra (IGR), down half a cent to A47 cents.
Minews. Nothing too painful there. Over to the base metals now, please.
Oz. It was curiously mixed in the copper space. In a week when you might have expected a wholesale slide to match the fall in the physical price of the metal, a surprising number of companies rose, perhaps reflecting the view that this downward correction will not last long into next year. The best performer was Anvil, thanks to the takeover bid from China Minmetals. It added A$1.87 to end the week at A$7.65, well short of the offer price in Canadian dollars of C$8.00 (roughly the same on conversion to Aussie dollars), and a sign that no-one is expecting a counter bid. Sandfire (SFR) recovered a bit of lost ground, adding A12 cents to A$6.05, and PanAust (PNA) crept up by A6 cents to A$2.54. Other movers included: Marengo (MGO), up A1 cent to A19.5 cents, Hot Chili (HCH), down A1 cent to A49 cents, Altona (AOH), up half a cent to A22 cents, OZ Minerals (OZL), down A1 cent to A$9.42 and Metminco (MNC), up half a cent to A19 cents.
Nickel companies put in an equally mixed performance, which was also curious, given the fall in the nickel price. Western Areas (WSA) lost A13 cents to A$4.32, and Mincor (MCR) was A1.5 cents weaker at A69.5 cents. But Poseidon (POS), managed a rise of half a cent to A16.5 cents, and Independence (IGO) added A6 cents to A$4.32.
Zinc companies were also surprisingly resilient, which may be another sign that we’re close to the bottom in the market correction. Perilya (PEM) lost A2.5 cents to A47 cents, but Terramin (TZN) managed a half cent rise to A19.5 cents. Meridian (MII) also added half a cent to A13 cents, while Blackthorn (BTR) lost A2 cents to A28.5 cents. Kagara (KZL) dropped A2 cents to A40 cents.
Minews. The bulks next, starting with iron ore, please.
Oz. Most iron ore companies lost ground. The most significant iron ore faller was Fortescue Metals (FMG), which dropped A53 cents to close the week at a 12 month low of A$4.42. Market chatter, denied by the company, is that some of its customers are declining to take deliveries, at a time when Fortescue is trying to expand its output. Aquila (AQA) was another company with iron ore operations in the planning stage that was sold down. The company’s shares dropped A22 cents to A$4.98. The troubled magnetite iron ore companies all struggled. Murchison (MMX) slipped to a 12 month low of A32 cents on Wednesday, before closing the week at A33.5 cents, for a fall overall of A7.5 cents. Gindalbie (GBG) and Grange (GRR) performed in a similar manner, both touching 12-month lows during the week, but recovering slightly by the close. Gindalbie fell to as low as A46 cents on Thursday, but its recovery to A48 cents represented a decline over the week of A1.5 cents. Grange fell to A38 cents on Monday, but its eventual close of A40 cents represented a decline over the week of A2 cents. Other movers included: Iron Ore Holdings (IOH), up A3.5 cents to A$1.00, Brockman (BRM), down A34 cents to A$1.98, Northern Iron (NFE), up A6 cents to A$1.40, Mt Gibson (MGX), up A4 cents to A$1.34, and Atlas (AGO), down A19 cents to A$2.85.
New Hope (NHC) was the best of the coal companies, putting in a rise of A24 cents to A$5.39. Carabella (CLR) was the worst, falling A12 cents to A$1.49. No discernible trend could be identified from movements among the other coal companies. Continental (CCC) rose A2 cents to A$20.5 cents, Coalspur (CPL) fell A7 cents to A$1.38, Bathurst (BTU) fell A4.5 cents to A63.5 cents, Stanmore (SMR) fell A6.5 cents to A74.5 cents, and Bandanna (BND) fell 6.5 cents to A66 cents.
Minews. Uranium and minor metals to close, please.
Oz. It was mostly down in both areas, although two uranium companies, and two rare earth companies gained a bit of ground. Bannerman (BMN) was the pick of the uranium companies, as investors bought in, perhaps in the hope of a Chinese takeover bid. Bannerman added A5.5 cents to A31.5 cents. Havilah (HAV) rose by A2 cents to A52 cents. After that it was all down. Manhattan (MHC) shed A1 cent to A33 cents. Deep Yellow (DYL) dropped A1 cent to close at A12.5 cents. Berkeley (BKY) eased back by half a cent to A33.5 cents. Paladin (PDN) fell a sharp A22 cents to A$1.21, but did fall as far as $1.13 on Thursday, a 12 month low. Once the star of the sector, Paladin has now fallen by 78 per cent since it peaked at A$5.61 in mid-January.
Arafura (ARU) and Lynas (LYC) were the two companies that rose among the minor metals. Arafura added A2 cents to A57 cents, while Lynas added A4 cents to A$1.09. Alkane (ALK), the other principal player in the rare earth business, slipped A3 cents lower to A$1.14. Potash companies fell, with South Boulder (STB) leading the way, as it dropped by A27 cents to A$2.22. Lithium companies repeated the trick. Galaxy (GXY) fell A5.5 cents to A60.5 cents, and Orocobre (ORE) fell A9 cents to A$1.11. Tin companies were also weaker. Kasbah (KAS) fell by A1 cent to A16.5 cents, and Venture (VMS) fell by A1 cent to A33.5 cents.
Minews. Thanks Oz.
************
That Was The Week That Was … In Australia
By Our Man in Oz
www.minesite.com/aus.html (Free registration)
Minews. Good morning Australia, your market doesn’t seem to have been quite as nasty this week.
Oz. That’s one way of putting it. The dramatic declines of previous weeks slowed, and parts even rose. The biggest worry down this way is that China has run out of puff. From an Australian perspective that’s a much bigger story than your Greek tragedy and you Euro political/banking fiasco. Sliding base metal prices are a reflection of concern about Chinese demand for copper, zinc, and the rest of the gang in that sector. There’s concern especially around nickel, which went below US$8 a pound after we had closed on Friday. Gold has been more resilient, and edged up over the course of the week, and Australian producer enjoyed a double benefit because the Aussie dollar declined against its US cousin.
Minews. It sounds as if you believe the worst of the current correction is behind us.
Oz. I wouldn’t go that far, but we do seem to be forming a bottom. Friday’s sell off can partly be explained as an end of quarter balancing by investment funds. The view seems to be that copper will probably have a tough December quarter before rising again early next year. The fundamental case for copper, the bellwether of the metals, is that demand from industrialising Asia will continue to outstrip supply. Chinese companies certainly seem to have that view, as we saw with the latest takeover bids to make the headlines down this way: a A$1.3 billion offer for Anvil Mining (AVM), and a A$297 million deal relating to a small coal mine in Western Australia.
Minews. It is interesting to watch the Chinese buying assets as the rest of the world sells.
Oz. Isn’t that the key to everything? China is buying because it can, and because it is confident of continuing growth.
Minews. Enough of the philosophical stuff, time for prices.
Oz. The all ordinaries, surprisingly, added a respectable 2.3 per cent in a topsy-turvy week. Metals and mining lost a shade under one per cent. Gold was the weakest, putting in a decline of five per cent, but with most of that damage done by the sector leader, Newcrest (NCM), which fell a sharp 5.6 per cent to A$34.08
Most other gold companies performed better than Newcrest, and some even posted interesting rises. Troy Resources (TRY) staged a strong rebound after recent heavy selling. At one stage on Friday it rose to a peak of A$4.18, a gain of A34 cents, before easing at the close to end at A$4.12, up A28 cents. Northern Star (NST) rose by A4 cents to A50 cents after reporting a strong profit, fresh drilling results, and plans to more than double its output. Gold Road (GOR) also attracted interest with its latest exploration presentation, recovering A4.5 cents of recently lost ground to close at A39.5 cents, although it did trade as high as A47 cents on Wednesday. Elsewhere, PVI (PVM) put on A5 cents to A54 cents, following an upbeat presentation given by management at an investment conference on the Gold Coast. And Silver Lake (SLR) added A3 cents to A$2.57, also after getting a good response at a rival investment conference in Melbourne.
Notable among the fallers were Gryphon (GRY), down A8 cents to A$1.30, Kingsgate (KCN), down A32 cents to A$7.18, Kingsrose (KRM), down A3 cents to A$1.22, Sumatra (SUM), down A1.5 cents to A15 cents, St Barbara (SBM), down A4 cents to A$2.05, Resolute (RSG), down A1 cent, and Integra (IGR), down half a cent to A47 cents.
Minews. Nothing too painful there. Over to the base metals now, please.
Oz. It was curiously mixed in the copper space. In a week when you might have expected a wholesale slide to match the fall in the physical price of the metal, a surprising number of companies rose, perhaps reflecting the view that this downward correction will not last long into next year. The best performer was Anvil, thanks to the takeover bid from China Minmetals. It added A$1.87 to end the week at A$7.65, well short of the offer price in Canadian dollars of C$8.00 (roughly the same on conversion to Aussie dollars), and a sign that no-one is expecting a counter bid. Sandfire (SFR) recovered a bit of lost ground, adding A12 cents to A$6.05, and PanAust (PNA) crept up by A6 cents to A$2.54. Other movers included: Marengo (MGO), up A1 cent to A19.5 cents, Hot Chili (HCH), down A1 cent to A49 cents, Altona (AOH), up half a cent to A22 cents, OZ Minerals (OZL), down A1 cent to A$9.42 and Metminco (MNC), up half a cent to A19 cents.
Nickel companies put in an equally mixed performance, which was also curious, given the fall in the nickel price. Western Areas (WSA) lost A13 cents to A$4.32, and Mincor (MCR) was A1.5 cents weaker at A69.5 cents. But Poseidon (POS), managed a rise of half a cent to A16.5 cents, and Independence (IGO) added A6 cents to A$4.32.
Zinc companies were also surprisingly resilient, which may be another sign that we’re close to the bottom in the market correction. Perilya (PEM) lost A2.5 cents to A47 cents, but Terramin (TZN) managed a half cent rise to A19.5 cents. Meridian (MII) also added half a cent to A13 cents, while Blackthorn (BTR) lost A2 cents to A28.5 cents. Kagara (KZL) dropped A2 cents to A40 cents.
Minews. The bulks next, starting with iron ore, please.
Oz. Most iron ore companies lost ground. The most significant iron ore faller was Fortescue Metals (FMG), which dropped A53 cents to close the week at a 12 month low of A$4.42. Market chatter, denied by the company, is that some of its customers are declining to take deliveries, at a time when Fortescue is trying to expand its output. Aquila (AQA) was another company with iron ore operations in the planning stage that was sold down. The company’s shares dropped A22 cents to A$4.98. The troubled magnetite iron ore companies all struggled. Murchison (MMX) slipped to a 12 month low of A32 cents on Wednesday, before closing the week at A33.5 cents, for a fall overall of A7.5 cents. Gindalbie (GBG) and Grange (GRR) performed in a similar manner, both touching 12-month lows during the week, but recovering slightly by the close. Gindalbie fell to as low as A46 cents on Thursday, but its recovery to A48 cents represented a decline over the week of A1.5 cents. Grange fell to A38 cents on Monday, but its eventual close of A40 cents represented a decline over the week of A2 cents. Other movers included: Iron Ore Holdings (IOH), up A3.5 cents to A$1.00, Brockman (BRM), down A34 cents to A$1.98, Northern Iron (NFE), up A6 cents to A$1.40, Mt Gibson (MGX), up A4 cents to A$1.34, and Atlas (AGO), down A19 cents to A$2.85.
New Hope (NHC) was the best of the coal companies, putting in a rise of A24 cents to A$5.39. Carabella (CLR) was the worst, falling A12 cents to A$1.49. No discernible trend could be identified from movements among the other coal companies. Continental (CCC) rose A2 cents to A$20.5 cents, Coalspur (CPL) fell A7 cents to A$1.38, Bathurst (BTU) fell A4.5 cents to A63.5 cents, Stanmore (SMR) fell A6.5 cents to A74.5 cents, and Bandanna (BND) fell 6.5 cents to A66 cents.
Minews. Uranium and minor metals to close, please.
Oz. It was mostly down in both areas, although two uranium companies, and two rare earth companies gained a bit of ground. Bannerman (BMN) was the pick of the uranium companies, as investors bought in, perhaps in the hope of a Chinese takeover bid. Bannerman added A5.5 cents to A31.5 cents. Havilah (HAV) rose by A2 cents to A52 cents. After that it was all down. Manhattan (MHC) shed A1 cent to A33 cents. Deep Yellow (DYL) dropped A1 cent to close at A12.5 cents. Berkeley (BKY) eased back by half a cent to A33.5 cents. Paladin (PDN) fell a sharp A22 cents to A$1.21, but did fall as far as $1.13 on Thursday, a 12 month low. Once the star of the sector, Paladin has now fallen by 78 per cent since it peaked at A$5.61 in mid-January.
Arafura (ARU) and Lynas (LYC) were the two companies that rose among the minor metals. Arafura added A2 cents to A57 cents, while Lynas added A4 cents to A$1.09. Alkane (ALK), the other principal player in the rare earth business, slipped A3 cents lower to A$1.14. Potash companies fell, with South Boulder (STB) leading the way, as it dropped by A27 cents to A$2.22. Lithium companies repeated the trick. Galaxy (GXY) fell A5.5 cents to A60.5 cents, and Orocobre (ORE) fell A9 cents to A$1.11. Tin companies were also weaker. Kasbah (KAS) fell by A1 cent to A16.5 cents, and Venture (VMS) fell by A1 cent to A33.5 cents.
Minews. Thanks Oz.
************
October 03, 2011
It’s Payback Time: Metals Suffer As The World Begins To Withdraw From A Decades-Old Addiction To Debt
By Rob Davies
www.minesite.com/aus.html (The registration is free)
Economists, like their close cousins, metals analysts, are brilliant at explaining what has just happened. Usually they then project that analysis back into the future and use it as a base for their forecasts. The best explanation Minesite has heard for the current crisis is known in economist speak as “secular deleveraging”. In plain English it just means paying back the debts that have been accumulated over decades, and not just the borrowing incurred as a result of the recession.
In the US, where the data is best, this debt, measured relative to GDP, has been rising for over fifty years. Unwinding this position is going to take a lot more than one presidential term, and that explains why this recovery is the worst on record. A good illustration of this difficult truth is that US capacity utilisation rates have only risen to 77 per cent from a recessionary low of 66 per cent. A more normal recovery would have seen the figure 10 percentage points higher.
Debt-fuelled growth has driven commodity demand for decades, and especially during the most recent decade. What has foxed the non-specialist commentators, though, has been the strength of commodity prices in the face of this “deleveraging”. So their glee last week when metals continued to slide was perhaps to be expected.
Yet prices, as measured by the LME index, which fell to 3309.5, were only down 3.3 per cent, roughly the same as the 3.4 per cent fall in the gold price to US$1619 an ounce. Copper attracted a lot of the attention, as usual, because of its high profile, and also because it fell more than the wider group, by 10.5 per cent to US$6,975 a tonne.
Analysts, perhaps with an eye on the upcoming LME week, have taken the opportunity offered by the sell-off to trim their forecasts. One analyst shaved 20 per cent off his prediction for next year’s price, knocking it down to US$6,500 per tonne. But that is only slightly below the current price, which goes to show that forecasts for next year would not generally have been as high as the recent highs of US$8,000 or US$9,000 anyway.
And this in turn suggests that the impact of the recent price falls on the earnings forecasts for the miners will not be quite as dramatic as some might expect. Moreover the continued strengthening of the dollar, which rose 0.5 per cent last week, will mitigate the impact on miners that have costs in other currencies. Last week the Aussie dollar fell 0.9 per cent, which will be a big relief for miners in the Lucky Country.
So, while sentiment has turned down, it is worth remembering that metal markets are still finely balanced. In the case of copper, one investment bank is projecting a shortfall of 140,000 tonnes this year and a surplus of only 120,000 tonnes next year. But what the bank doesn’t tell us is the standard deviation around those forecasts. The chances are that the range of likely outcomes is higher than the projected imbalance. Like many forecasts in economics, the actual figure is crucially dependent on the small difference between two large numbers, both of which are themselves forecasts.
In any case, the semantics of specific price forecasts are mostly irrelevant when it comes to deciding on long-term macro asset allocation strategies. What matters more is whether the economic world is expanding or contracting, through the addition of debt or the reduction of debt. Outside China it is still contracting as debt is paid down, and that’s what is depressing the outlook for metal prices.
“Deleveraging” is fine when the concerned parties have the resources to pay back what they borrowed. What are problematic, though, are borrowers, like Greece, that do not have the capacity to repay their obligations. The creditors of such borrowers can either force the debtor to repay every last centime, thereby bankrupting the country in question. Or they can accept that they will never get all their money back and write off the debt. But it is all still deleveraging and, unfortunately, the end result of lower economic growth is the same.
*****************
It’s Payback Time: Metals Suffer As The World Begins To Withdraw From A Decades-Old Addiction To Debt
By Rob Davies
www.minesite.com/aus.html (The registration is free)
Economists, like their close cousins, metals analysts, are brilliant at explaining what has just happened. Usually they then project that analysis back into the future and use it as a base for their forecasts. The best explanation Minesite has heard for the current crisis is known in economist speak as “secular deleveraging”. In plain English it just means paying back the debts that have been accumulated over decades, and not just the borrowing incurred as a result of the recession.
In the US, where the data is best, this debt, measured relative to GDP, has been rising for over fifty years. Unwinding this position is going to take a lot more than one presidential term, and that explains why this recovery is the worst on record. A good illustration of this difficult truth is that US capacity utilisation rates have only risen to 77 per cent from a recessionary low of 66 per cent. A more normal recovery would have seen the figure 10 percentage points higher.
Debt-fuelled growth has driven commodity demand for decades, and especially during the most recent decade. What has foxed the non-specialist commentators, though, has been the strength of commodity prices in the face of this “deleveraging”. So their glee last week when metals continued to slide was perhaps to be expected.
Yet prices, as measured by the LME index, which fell to 3309.5, were only down 3.3 per cent, roughly the same as the 3.4 per cent fall in the gold price to US$1619 an ounce. Copper attracted a lot of the attention, as usual, because of its high profile, and also because it fell more than the wider group, by 10.5 per cent to US$6,975 a tonne.
Analysts, perhaps with an eye on the upcoming LME week, have taken the opportunity offered by the sell-off to trim their forecasts. One analyst shaved 20 per cent off his prediction for next year’s price, knocking it down to US$6,500 per tonne. But that is only slightly below the current price, which goes to show that forecasts for next year would not generally have been as high as the recent highs of US$8,000 or US$9,000 anyway.
And this in turn suggests that the impact of the recent price falls on the earnings forecasts for the miners will not be quite as dramatic as some might expect. Moreover the continued strengthening of the dollar, which rose 0.5 per cent last week, will mitigate the impact on miners that have costs in other currencies. Last week the Aussie dollar fell 0.9 per cent, which will be a big relief for miners in the Lucky Country.
So, while sentiment has turned down, it is worth remembering that metal markets are still finely balanced. In the case of copper, one investment bank is projecting a shortfall of 140,000 tonnes this year and a surplus of only 120,000 tonnes next year. But what the bank doesn’t tell us is the standard deviation around those forecasts. The chances are that the range of likely outcomes is higher than the projected imbalance. Like many forecasts in economics, the actual figure is crucially dependent on the small difference between two large numbers, both of which are themselves forecasts.
In any case, the semantics of specific price forecasts are mostly irrelevant when it comes to deciding on long-term macro asset allocation strategies. What matters more is whether the economic world is expanding or contracting, through the addition of debt or the reduction of debt. Outside China it is still contracting as debt is paid down, and that’s what is depressing the outlook for metal prices.
“Deleveraging” is fine when the concerned parties have the resources to pay back what they borrowed. What are problematic, though, are borrowers, like Greece, that do not have the capacity to repay their obligations. The creditors of such borrowers can either force the debtor to repay every last centime, thereby bankrupting the country in question. Or they can accept that they will never get all their money back and write off the debt. But it is all still deleveraging and, unfortunately, the end result of lower economic growth is the same.
*****************
Goldman Sachs lowers oil and copper price targets, but still sees upside
A slower than expected global economy will weigh on prices for oil and copper, but Goldman Sachs still sees an upside for commodities with emerging markets on track for growth.
The Wall Street firm said Tuesday that barring a global financial crisis, the turmoil in Europe will only flatten the growth in commodity prices, not push them lower as emerging market demand is expected to remain strong.
"We view the European turmoil as a headwind to global growth, which we expect will only take away some of the upside to commodity prices, not reverse it," the firm said in a report.
Source: http://www.canadianbusiness.com/art...nd-copper-price-targets-but-still-sees-upside
*******
A slower than expected global economy will weigh on prices for oil and copper, but Goldman Sachs still sees an upside for commodities with emerging markets on track for growth.
The Wall Street firm said Tuesday that barring a global financial crisis, the turmoil in Europe will only flatten the growth in commodity prices, not push them lower as emerging market demand is expected to remain strong.
"We view the European turmoil as a headwind to global growth, which we expect will only take away some of the upside to commodity prices, not reverse it," the firm said in a report.
Source: http://www.canadianbusiness.com/art...nd-copper-price-targets-but-still-sees-upside
*******
Bespoke's Commodity Snapshot
Copper, Platinum, Silver and Wheat Were Hit Hard, During the Last Couple of Weeks
http://www.bespokeinvest.com/thinkbig/2011/10/6/bespokes-commodity-snapshot.html
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Copper, Platinum, Silver and Wheat Were Hit Hard, During the Last Couple of Weeks
http://www.bespokeinvest.com/thinkbig/2011/10/6/bespokes-commodity-snapshot.html
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October 08, 2011
That Was The Week That Was … In Australia
By Our Man in Oz
www.minesite.com/aus.html
Minews. Good morning Australia, your market seems to have enjoyed quite a rebound last week.
Oz. It did, but it was just making up lost ground. The metals and mining index added an eye-catching seven per cent, but actually only got back to where it was in mid-September. It has to rise by another 20 per cent to get back to its mid-year high.
Minews. That’s a sobering thought. But let’s stick to last week where most of the sectors wee followed seemed to be in recovery mode.
Oz. They were, and there were some quite handsome rises, interspersed with the odd patch of weakness, especially among the base metal stocks. The major issues affecting the Australian mining market are the same as those that are affecting in London, with one addition, tax. As if the European debt mess and worries about Chinese growth weren’t already worrying enough, last week there was a tax summit held in Canberra. One of the major topics was whether the proposed new mining tax is high enough. Another was how best to spend the proceeds. It was a rather depressing event because the people talking tax have no understanding of mining, they simply see an opportunity to siphon cash out of a highly-profitable part of the economy and to redistribute it as social welfare hand-outs, or in propping up failing industries in non-mining parts of the economy.
Minews. No plan for boosting national savings, or investing in better rail and port systems?
Oz. A little, but not much. The mining tax, and its cousin, a tax on carbon emissions are caught in the short-term political cycle which is getting more interesting by the day, as the incumbent Prime Minister, Julia Gillard, is widely reported to be facing a challenge from the man she deposed, the former PM, Kevin Rudd.
Minews. We’ll let you enjoy your domestic political games, but keep us informed if they start to have an effect on the mining industry. Now let’s finish off on the key indices, before moving on to the equities market.
Oz. The all ordinaries rose by about half as much as the miners, adding 3.8 per cent, while the gold index added 4.4 per cent. Gold companies in Australia failed fully to capitalise on renewed strength in the gold market because the Australian dollar was on the rise as well, meaning that the local gold price barely moved.
Minews. That comment means gold is a good place to start calling the card.
Oz. There were widespread rises across the gold sector, and a handful of falls, which we’ll cover as we go. Some of the strongest performers were the Aussie gold companies active in West Africa. Resolute (RSG) led the way, adding A13.5 cents to A$1.65. It was followed by Gryphon (GRY), up by A15 cents to A$1.45, Perseus (PRU), up A30 cents to A$3.35, and Adamus (ADU), up A4 cents to A69 cents. Ampella (AMX) swam against the incoming tide, shedding A10 cents to A$1.80. But Troy Resources (TRY) continued to attract strong interest as it expands the Casposo project in Argentina. It added A42 cents to A$4.54, and is now not far short of its 12 month high of A$4.84. Another strong performer was Kingsrose (KRM), which added A25 cents to A$1.47, largely on reports that it is close to developing a second mine in Indonesia.
Minews. We might take a closer look at Kingsrose next week.
Oz. Good idea. Also on the move were Silver Lake (SLR), up A16 cents to A$2.73, Integra (IGR), up A4 cents to A51 cents, Kingsgate (KCN), up A57 cents to A$7.75, Northern Star (NST), up A4 cents to A54 cents, Medusa (MML), up A27 cents to A$7.12, and PVI (PVM), up A6 cents to A60 cents. Heading the other way, Gold Road (GOR) shed A2 cents to A37.5 cents after it unveiled a fresh capital raising. Allied Gold (ALD) fell by A34 cents to A$2.48 after it reported lower than expected gold production from its Simberi mine. And Beadell (BDR) slipped A1.5 cents lower to A70 cents.
Minews. Iron ore next, as that sector seems to be closest to the China factor in the market.
Oz. It is. People in the industry are watching the pace of Chinese steel production very carefully to see if we are heading into a slowdown. For now, though, prices in the iron ore sector last week seem to indicate that demand for iron ore remains strong. Fortescue (FMG), which had been sold down heavily over September because it is in the middle of a major expansion, rebounded by A48 cents to A$4.90. Atlas (AGO) also recovered much of its lost ground, adding A36 cents to A$3.21. Gindalbie (GBG) put on A7.5 cents to A55.5 cents. Other movers included: Mt Gibson (MGX), up A7 cents to A$1.51, Iron ore Holdings (IOH), up A5 cents to A$1.05, and Grange (GRR), up A5.5 cents to A45.5 cents. Iron ore companies that lost ground included: Brockman (BRM), down A11 cents to A$1.83, and Northern Iron (NFE), down A3 cents to A$1.37. Also worse off was Murchison (MMX), which ended the week down A5.5 cents at A28 cents, but did get to an all-time low of A23.5 cents on Wednesday.
Minews. Base metals next, please.
Oz. Nickel, surprisingly, was the best performer in the base metals complex, not that prices rose far. Copper was mixed, trending up, and zinc trended down. Best of the nickel companies was Western Areas (WSA), which reported a fresh discovery beneath its flagship Flying Fox mine. That news drove the shares up by A98 cents to A$5.30. Mincor (MCR), after a horrid time for most of the past six months, also shared in the favourable nickel environment, adding A10 cents to A79 cents, while Mirabela (MBN), rose A10 cents to close at A$1.45.
Best of the copper companies was Sandfire (SFR) which had been hit hard by selling pressure during September. It rebounded with a strong gain of A97 cents to A$7.02. PanAust (PNA) wasn’t far behind, putting in a rise of A36 cents to A$2.90. Ivanhoe (IVA) added A12 cents to A$1.08, and Rex (RXM) rose by A9 cents to A$1.30. Other movers included: Metminco (MNC), up A1.5 cents to A19.5 cents, Sabre (SBR), up A2.5 cents to A13 cents, Altona (AOH), up A3 cents to A25 cents, Hot Chili (HCH), down A5 cents to A44 cents, and Exco (EXS), up A3.5 cents to A67 cents.
Most zinc companies lost ground, but not by much. Perilya (PEM) was a rare riser, up A2 cents to A49 cents. Ironbark (IBG) shed A1 cent to A27.5 cents. Terramin (TZN) lost A1.5 cents to A18 cents, and Blackthorn (BTR) fell by the same amount, A1.5 cents, to A41 cents.
Minews. The two energy sectors, coal and uranium, next, followed by minor metals to close, please.
Oz. Coal companies performed well, thanks largely to a fresh burst of takeover interest. New Hope (NHC), a miner controlled by the Millner family of Sydney, added A86 cents to A$6.25 after it reported that it had received unsolicited bids and had decided in response to throw its books open to all comers. Aston (AZT) was also named as a takeover target, and added A84 cents to A$10.90. Meanwhile, Carabella (CLR), which has been suffering a bout of boardroom instability, rose by 16 cents to A$1.65. Other coal movers included: Coalspur (CPL), up A14 cents to A$1.52, Stanmore (SMR), up A15.5 cents to A90 cents, and Whitehaven (WHC), up A40 cents to A$5.73.
Paladin (PDN) was the pick of the uranium companies, regaining A34 cents lost during a heavy September sell-off, to close at A$1.55. Extract (EXT) attracted fresh takeover talk, rising by A31 cents to A$8.04. Other movers included: Bannerman (BMN), up A2.5 cents to A33 cents, Manhattan (MHC), up A5.5 cents to A38.5 cents, and Greenland (GGG), down A1.5 cents to A48.5 cents.
The minor metals moved least last week. Rare earth companies firmed. Lynas (LYC) rose A9 cents to A$1.18 and Alkane (ALK) rose A2 cents to A$1.16. Potash plays performed the same way. South Boulder (STB) rose A10 cents to A$2.32 and Potash West (PWN) rose A2.5 cents to A21 cents. Lithium companies were in greater demand. Orocobre (ORE) rose A9 cents to A$1.20, and Galaxy (GXY) rose A7.5 cents to A68 cents. Tin companies barely moved.
Minews. Thanks Oz.
*****************************
That Was The Week That Was … In Australia
By Our Man in Oz
www.minesite.com/aus.html
Minews. Good morning Australia, your market seems to have enjoyed quite a rebound last week.
Oz. It did, but it was just making up lost ground. The metals and mining index added an eye-catching seven per cent, but actually only got back to where it was in mid-September. It has to rise by another 20 per cent to get back to its mid-year high.
Minews. That’s a sobering thought. But let’s stick to last week where most of the sectors wee followed seemed to be in recovery mode.
Oz. They were, and there were some quite handsome rises, interspersed with the odd patch of weakness, especially among the base metal stocks. The major issues affecting the Australian mining market are the same as those that are affecting in London, with one addition, tax. As if the European debt mess and worries about Chinese growth weren’t already worrying enough, last week there was a tax summit held in Canberra. One of the major topics was whether the proposed new mining tax is high enough. Another was how best to spend the proceeds. It was a rather depressing event because the people talking tax have no understanding of mining, they simply see an opportunity to siphon cash out of a highly-profitable part of the economy and to redistribute it as social welfare hand-outs, or in propping up failing industries in non-mining parts of the economy.
Minews. No plan for boosting national savings, or investing in better rail and port systems?
Oz. A little, but not much. The mining tax, and its cousin, a tax on carbon emissions are caught in the short-term political cycle which is getting more interesting by the day, as the incumbent Prime Minister, Julia Gillard, is widely reported to be facing a challenge from the man she deposed, the former PM, Kevin Rudd.
Minews. We’ll let you enjoy your domestic political games, but keep us informed if they start to have an effect on the mining industry. Now let’s finish off on the key indices, before moving on to the equities market.
Oz. The all ordinaries rose by about half as much as the miners, adding 3.8 per cent, while the gold index added 4.4 per cent. Gold companies in Australia failed fully to capitalise on renewed strength in the gold market because the Australian dollar was on the rise as well, meaning that the local gold price barely moved.
Minews. That comment means gold is a good place to start calling the card.
Oz. There were widespread rises across the gold sector, and a handful of falls, which we’ll cover as we go. Some of the strongest performers were the Aussie gold companies active in West Africa. Resolute (RSG) led the way, adding A13.5 cents to A$1.65. It was followed by Gryphon (GRY), up by A15 cents to A$1.45, Perseus (PRU), up A30 cents to A$3.35, and Adamus (ADU), up A4 cents to A69 cents. Ampella (AMX) swam against the incoming tide, shedding A10 cents to A$1.80. But Troy Resources (TRY) continued to attract strong interest as it expands the Casposo project in Argentina. It added A42 cents to A$4.54, and is now not far short of its 12 month high of A$4.84. Another strong performer was Kingsrose (KRM), which added A25 cents to A$1.47, largely on reports that it is close to developing a second mine in Indonesia.
Minews. We might take a closer look at Kingsrose next week.
Oz. Good idea. Also on the move were Silver Lake (SLR), up A16 cents to A$2.73, Integra (IGR), up A4 cents to A51 cents, Kingsgate (KCN), up A57 cents to A$7.75, Northern Star (NST), up A4 cents to A54 cents, Medusa (MML), up A27 cents to A$7.12, and PVI (PVM), up A6 cents to A60 cents. Heading the other way, Gold Road (GOR) shed A2 cents to A37.5 cents after it unveiled a fresh capital raising. Allied Gold (ALD) fell by A34 cents to A$2.48 after it reported lower than expected gold production from its Simberi mine. And Beadell (BDR) slipped A1.5 cents lower to A70 cents.
Minews. Iron ore next, as that sector seems to be closest to the China factor in the market.
Oz. It is. People in the industry are watching the pace of Chinese steel production very carefully to see if we are heading into a slowdown. For now, though, prices in the iron ore sector last week seem to indicate that demand for iron ore remains strong. Fortescue (FMG), which had been sold down heavily over September because it is in the middle of a major expansion, rebounded by A48 cents to A$4.90. Atlas (AGO) also recovered much of its lost ground, adding A36 cents to A$3.21. Gindalbie (GBG) put on A7.5 cents to A55.5 cents. Other movers included: Mt Gibson (MGX), up A7 cents to A$1.51, Iron ore Holdings (IOH), up A5 cents to A$1.05, and Grange (GRR), up A5.5 cents to A45.5 cents. Iron ore companies that lost ground included: Brockman (BRM), down A11 cents to A$1.83, and Northern Iron (NFE), down A3 cents to A$1.37. Also worse off was Murchison (MMX), which ended the week down A5.5 cents at A28 cents, but did get to an all-time low of A23.5 cents on Wednesday.
Minews. Base metals next, please.
Oz. Nickel, surprisingly, was the best performer in the base metals complex, not that prices rose far. Copper was mixed, trending up, and zinc trended down. Best of the nickel companies was Western Areas (WSA), which reported a fresh discovery beneath its flagship Flying Fox mine. That news drove the shares up by A98 cents to A$5.30. Mincor (MCR), after a horrid time for most of the past six months, also shared in the favourable nickel environment, adding A10 cents to A79 cents, while Mirabela (MBN), rose A10 cents to close at A$1.45.
Best of the copper companies was Sandfire (SFR) which had been hit hard by selling pressure during September. It rebounded with a strong gain of A97 cents to A$7.02. PanAust (PNA) wasn’t far behind, putting in a rise of A36 cents to A$2.90. Ivanhoe (IVA) added A12 cents to A$1.08, and Rex (RXM) rose by A9 cents to A$1.30. Other movers included: Metminco (MNC), up A1.5 cents to A19.5 cents, Sabre (SBR), up A2.5 cents to A13 cents, Altona (AOH), up A3 cents to A25 cents, Hot Chili (HCH), down A5 cents to A44 cents, and Exco (EXS), up A3.5 cents to A67 cents.
Most zinc companies lost ground, but not by much. Perilya (PEM) was a rare riser, up A2 cents to A49 cents. Ironbark (IBG) shed A1 cent to A27.5 cents. Terramin (TZN) lost A1.5 cents to A18 cents, and Blackthorn (BTR) fell by the same amount, A1.5 cents, to A41 cents.
Minews. The two energy sectors, coal and uranium, next, followed by minor metals to close, please.
Oz. Coal companies performed well, thanks largely to a fresh burst of takeover interest. New Hope (NHC), a miner controlled by the Millner family of Sydney, added A86 cents to A$6.25 after it reported that it had received unsolicited bids and had decided in response to throw its books open to all comers. Aston (AZT) was also named as a takeover target, and added A84 cents to A$10.90. Meanwhile, Carabella (CLR), which has been suffering a bout of boardroom instability, rose by 16 cents to A$1.65. Other coal movers included: Coalspur (CPL), up A14 cents to A$1.52, Stanmore (SMR), up A15.5 cents to A90 cents, and Whitehaven (WHC), up A40 cents to A$5.73.
Paladin (PDN) was the pick of the uranium companies, regaining A34 cents lost during a heavy September sell-off, to close at A$1.55. Extract (EXT) attracted fresh takeover talk, rising by A31 cents to A$8.04. Other movers included: Bannerman (BMN), up A2.5 cents to A33 cents, Manhattan (MHC), up A5.5 cents to A38.5 cents, and Greenland (GGG), down A1.5 cents to A48.5 cents.
The minor metals moved least last week. Rare earth companies firmed. Lynas (LYC) rose A9 cents to A$1.18 and Alkane (ALK) rose A2 cents to A$1.16. Potash plays performed the same way. South Boulder (STB) rose A10 cents to A$2.32 and Potash West (PWN) rose A2.5 cents to A21 cents. Lithium companies were in greater demand. Orocobre (ORE) rose A9 cents to A$1.20, and Galaxy (GXY) rose A7.5 cents to A68 cents. Tin companies barely moved.
Minews. Thanks Oz.
*****************************
The anti-peak case for commodities
Future Rx: Optimism, preparation, acceptance of risk
L. M. Cathles
Cornell University, Ithaca, USA
[Abstract of a paper presented recently at Fermor 2011 / UK Geological Society]
The world population, presently at 7 billion, will rise to 10.5 billion in the next century, and all 10.5 billion will rightly expect at least a European living standard. Our great challenge is to provide the energy and mineral resources needed to meet this expectation. Can we? I believe we unquestionably can, provided we have optimism, preparation, and acceptance of risk.
Considering the oceans, the world is a planet awash in energy and mineral resources. Raising energy consumption to the European level of 7 kW/p for the current population would require tripling our present total energy production from 15 TW to 45 TW, and accommodating a population growth to 10.5 bn would require 72 TWe. Growing from 15 to 72 TW over 100 years represents a modest compound growth rate of 1.6%/yr. With breeder technology, the 4.6x109 tonnes of U dissolved in the oceans (not to mention Th which is a better nuclear fuel) can sustain a 72 TW production for 78 centuries.
My estimated seafloor Cu and Zn resources can sustain humanity for 50 and 140 centuries, respectively. Three percent of the Li dissolved in the oceans could provide ¼ of a hybrid car per person for 10.5 bn. Deep-sea muds contain a resource of the rare earth elements that is at least as abundant as that on land. The deep ocean could sustain the phosphate needs of world agriculture for 33 centuries. Thus if we tap the oceans, humanity has the resources needed for a sustainable future. Furthermore, the oceans offer more equitable access to these resources, and the mobility of the ocean mining infrastructure means these resources can be surgically mined and recovered with less environmental damage and greater safety than is possible on land. Risk remains, but we need to accept it with the confidence that we can fix any problems that arise and thereby become ever better at mitigating it. This approach is far less risky than trying to avoid all risk.
To move forward we need to accelerate laying the knowledge foundation for recovering ocean resources in the most environmentally and ecologically acceptable way possible, and impress the next generation, not with the immensity of future pain, but the immensity of future gain: sustaining everyone at a European standard indefinitely with the huge increases in the scientific understanding of natural systems that meeting this challenge will provide.
***************************************
Future Rx: Optimism, preparation, acceptance of risk
L. M. Cathles
Cornell University, Ithaca, USA
[Abstract of a paper presented recently at Fermor 2011 / UK Geological Society]
The world population, presently at 7 billion, will rise to 10.5 billion in the next century, and all 10.5 billion will rightly expect at least a European living standard. Our great challenge is to provide the energy and mineral resources needed to meet this expectation. Can we? I believe we unquestionably can, provided we have optimism, preparation, and acceptance of risk.
Considering the oceans, the world is a planet awash in energy and mineral resources. Raising energy consumption to the European level of 7 kW/p for the current population would require tripling our present total energy production from 15 TW to 45 TW, and accommodating a population growth to 10.5 bn would require 72 TWe. Growing from 15 to 72 TW over 100 years represents a modest compound growth rate of 1.6%/yr. With breeder technology, the 4.6x109 tonnes of U dissolved in the oceans (not to mention Th which is a better nuclear fuel) can sustain a 72 TW production for 78 centuries.
My estimated seafloor Cu and Zn resources can sustain humanity for 50 and 140 centuries, respectively. Three percent of the Li dissolved in the oceans could provide ¼ of a hybrid car per person for 10.5 bn. Deep-sea muds contain a resource of the rare earth elements that is at least as abundant as that on land. The deep ocean could sustain the phosphate needs of world agriculture for 33 centuries. Thus if we tap the oceans, humanity has the resources needed for a sustainable future. Furthermore, the oceans offer more equitable access to these resources, and the mobility of the ocean mining infrastructure means these resources can be surgically mined and recovered with less environmental damage and greater safety than is possible on land. Risk remains, but we need to accept it with the confidence that we can fix any problems that arise and thereby become ever better at mitigating it. This approach is far less risky than trying to avoid all risk.
To move forward we need to accelerate laying the knowledge foundation for recovering ocean resources in the most environmentally and ecologically acceptable way possible, and impress the next generation, not with the immensity of future pain, but the immensity of future gain: sustaining everyone at a European standard indefinitely with the huge increases in the scientific understanding of natural systems that meeting this challenge will provide.
***************************************
October 10, 2011
The Uncertainty Surrounding The European Debt Crisis Continues To Distort Metals Markets
By Rob Davies
www.minesite.com/aus.html
As LME week rolled on, got underway last Monday, the signs on the markets were not propitious for producers: copper hit a 14 month low of US$6,635 a tonne. But if their counterparties were smiling early on in the week, it was a different story by Friday. By then a sharp rally had taken the copper price back up to US$7,265 a tonne, once again giving producers a lovely warm, wet feeling.
The net result of that roller coaster week was tiny drop of 0.2 per cent in the LME index, to 3,303. Since that was achieved in the face of a 0.8 per cent increase in the dollar against the euro, the net impact was slightly positive for all but US-based traders.
Overall, the trend was encouraging as traders sensed that demand from China will be maintained. China’s dominant 40 per cent share of copper consumption means that looms over the industry like the proverbial 800 pound gorilla. That said, the overall sentiment in capital markets is becoming ever more focussed on the evolution of the European debt crisis. If it lurches from severe to catastrophic the impact on commodities as well as equities and bonds could be horrendous.
And it is because the negative consequences are so painful that the bulls are convinced there will be a satisfactory resolution. As ever the resolutions revolve around refinancing the banks. At the moment the French banks are under the spotlight, but credit defaults spreads on German banks are edging up.
Suspicious investors seem to be moving to the view that whatever happens in Europe, German banks will be left holding a lot of low quality debt. Indeed, one of the curiosities of the current crisis is the continuation of the safe-haven status of German sovereign debt.
German 10 year bonds only offer a yield of two per cent, yet the bill for any recapitalising of the European Financial Stability Facility and the ECB, which will be needed if the Latin states are to be bailed out, will ultimately come through Germany’s letterbox. As Germany is the biggest metal basher in Europe, miners have a strong interest in seeing that the German economy stays healthy.
It is, of course, the desire of Germany to maintain the financial strength of its fellow Europeans and thereby markets for its export-driven industry, that is behind its interest in maintaining the integrity of the eurozone. How long it can maintain this stance in the face of domestic political opposition and increasing unease in capital markets is the great unknown.
And that unknown is distorting markets. Whereas the focus in the metal markets should be on the balance between demand and supply, a recent survey by investment bank Macquarie showed that a collapse of the European economy is the biggest worry for half the respondents polled.
Without the certainty that European banks can survive this crisis the normal news flow that dominates the metals market gets relegated to trading noise. Whether the better-than-expected data on US jobs triggered the end of week rally is hard to know. But it is a good reminder that the fundamentals for many base metals remain sound, even though lead fell three per cent to US$1,943 per tonne and zinc fell 1.4 per cent to US$1,843 during the previous week.
Tight markets and dangerous politics will certainly keep metal traders on their toes over the remainder of the year as the festivities of LME week fade into history.
::::::::::::::::::::::::::::::::::::::::::::::::::::::::
The Uncertainty Surrounding The European Debt Crisis Continues To Distort Metals Markets
By Rob Davies
www.minesite.com/aus.html
As LME week rolled on, got underway last Monday, the signs on the markets were not propitious for producers: copper hit a 14 month low of US$6,635 a tonne. But if their counterparties were smiling early on in the week, it was a different story by Friday. By then a sharp rally had taken the copper price back up to US$7,265 a tonne, once again giving producers a lovely warm, wet feeling.
The net result of that roller coaster week was tiny drop of 0.2 per cent in the LME index, to 3,303. Since that was achieved in the face of a 0.8 per cent increase in the dollar against the euro, the net impact was slightly positive for all but US-based traders.
Overall, the trend was encouraging as traders sensed that demand from China will be maintained. China’s dominant 40 per cent share of copper consumption means that looms over the industry like the proverbial 800 pound gorilla. That said, the overall sentiment in capital markets is becoming ever more focussed on the evolution of the European debt crisis. If it lurches from severe to catastrophic the impact on commodities as well as equities and bonds could be horrendous.
And it is because the negative consequences are so painful that the bulls are convinced there will be a satisfactory resolution. As ever the resolutions revolve around refinancing the banks. At the moment the French banks are under the spotlight, but credit defaults spreads on German banks are edging up.
Suspicious investors seem to be moving to the view that whatever happens in Europe, German banks will be left holding a lot of low quality debt. Indeed, one of the curiosities of the current crisis is the continuation of the safe-haven status of German sovereign debt.
German 10 year bonds only offer a yield of two per cent, yet the bill for any recapitalising of the European Financial Stability Facility and the ECB, which will be needed if the Latin states are to be bailed out, will ultimately come through Germany’s letterbox. As Germany is the biggest metal basher in Europe, miners have a strong interest in seeing that the German economy stays healthy.
It is, of course, the desire of Germany to maintain the financial strength of its fellow Europeans and thereby markets for its export-driven industry, that is behind its interest in maintaining the integrity of the eurozone. How long it can maintain this stance in the face of domestic political opposition and increasing unease in capital markets is the great unknown.
And that unknown is distorting markets. Whereas the focus in the metal markets should be on the balance between demand and supply, a recent survey by investment bank Macquarie showed that a collapse of the European economy is the biggest worry for half the respondents polled.
Without the certainty that European banks can survive this crisis the normal news flow that dominates the metals market gets relegated to trading noise. Whether the better-than-expected data on US jobs triggered the end of week rally is hard to know. But it is a good reminder that the fundamentals for many base metals remain sound, even though lead fell three per cent to US$1,943 per tonne and zinc fell 1.4 per cent to US$1,843 during the previous week.
Tight markets and dangerous politics will certainly keep metal traders on their toes over the remainder of the year as the festivities of LME week fade into history.
::::::::::::::::::::::::::::::::::::::::::::::::::::::::
Bill Matlack: Metals & Mining Analysts' Ratings - Juniors
October 14, 2011
http://www.kitco.com/ind/matlack/oct142011_juniors.html
[The sector with the most "Buy" ratings is Uranium, in 8 out of 14 companies]
October 14, 2011
http://www.kitco.com/ind/matlack/oct142011_juniors.html
[The sector with the most "Buy" ratings is Uranium, in 8 out of 14 companies]
October 15, 2011
That Was The Week That Was … In Australia
By Our Man in Oz
www.minesite.com/aus.html
Minews. Good morning Australia. Your market seems to have gone nowhere last week.
Oz. “Flat” is the one-word description for a week which had three up days, two down, and finished virtually where it started. Technically, the metals and mining index finished up half a per cent, the all ordinaries rose by up one per cent, and gold was absolutely flat. The big news down this way was that Parliament passed laws to introduce a tax on carbon emissions. And that development was followed by a warning from the Opposition that companies should not purchase any carbon emission certificates because if elected in less than two years time it will repeal the law.
Minews. That would seem to make running a business which emits carbon, as most miners do, rather difficult.
Oz. Impossible, I would have thought, especially since the government is a country mile behind in the public opinion polls and a change of government is as close to a certainty as is possible in politics. What can be said with confidence is that the carbon tax, and the proposed mining tax which will be introduced in Parliament later this year, have clearly polarised the left and right of Australian politics.
Minews. Enough of the idle chatter, time for prices.
Oz. Good idea, because while the indices went nowhere, and a surprising number of companies ended the week where they started, there were some strong individual performances. Top of the list was PMI Gold (PVM), the company planning to redevelop the Obotan mine in Ghana. It rocketed by 73 per cent to an all-time high on Friday of A$1.04 after reporting a 270 per cent increase in its gold resource. Obotan now boasts a resource of 4.5 million ounces, with 3.22 million ounces in the higher quality measured and indicated category and 1.29 million ounces in the inferred category. Those numbers will be incorporated into a pre-feasibility study set for completion by the end of the year.
Three other solid performers are worth singling out, two in the copper sector and one in the iron ore business. Tasman Resources (TAS) starred in copper, bursting into the headlines after years on the sidelines by announcing an exploration joint venture with Rio Tinto on a tenement close to BHP Billiton’s giant Olympic Dam copper/uranium mine. Rio has agreed to invest up to A$92 million in a series of staggered payments, which could see it end up with 80 per cent of the Vulcan iron ore-copper-gold (IOCG) prospect located 30 kilometres north of Olympic Dam. The timing of that news was no accident. Last week Olympic Dam received government approval last week for a major expansion. On the market, Tasman rose 170 per cent to A16.5 cents, but did trade up to a 12 month high of A21 cents on Wednesday.
Rex Minerals (RXM) was the other copper company that performed strongly, adding A30 cents to A$1.61 after it announced plans to double planned production at its Hillside project in South Australia where feasibility studies are ongoing. It is now aiming for annual production of 100,000 tonnes of copper equivalent a year, over a minimum 10 year mine life.
Over in the iron ore sector the best performer was Iron Ore Holdings (IOH) which announced a second sale of exploration assets in little more than a week. The latest involved the offloading of tenements to Mineral Resources for A$42 million. The first was a A$32 million sale of tenements to Rio Tinto. On the market, IOH added A30 cents to A$1.35, though the real significance lies in the decision the company has made to sell its exploration ground rather than try to develop it.
Minews. Perhaps a comment on how IOH sees the future price of iron ore?
Oz. It might be that, but it could also be that the company has recognised the cost and difficulty of developing remote pods of iron ore without a transport solution, such as access to a railway and port.
Minews. Time to call the card, starting with gold, please.
Oz. After PMI it was a dull affair, largely because the recovery in the US dollar gold price was cancelled out by an equally solid revival in the value of the Australian dollar, meaning that the local gold price fell by around A$50 an ounce. Troy Resources (TRY) was one of the stronger performers, adding A9 cents to A$4.63. Northern Star (NST) put on A4 cents to A58 cents. Crusader (CAS) also rose by A4 cents to A$1.11. Other movers included: Kingsgate (KCN), down A20 cents to A$7.55, Azumah (AZM), up A4 cents to A44.5 cents, Resolute (RSG), up A4 cents to A$1.69, Newcrest (NCM), up A74 cents to A$36.50, Ausgold (AUC), down A2 cents to A$1.35, and Silver Lake (SLR), up A2 cents to A$2.75. Companies that opened and closed at the same price included: Integra (IGR) at A51 cents, Kingsrose (KRM) as A$1.47, and Gold Road (GOR) at A38.5 cents. Perseus (PRU) was sold down by A15 cents to A$3.20 after announcing a A$90 million capital raising.
Minews. Iron ore next please, as there seems to have been a bit of action there.
Oz. Iron Ore Holdings was the pick of the sector, though Brockman (BRM) was the real news generator. It added A6 cents to A$1.89, but made the news after its chairman, Peter Luk, was asked by the Hong Kong fraud squad to assist with enquiries. No news on what those enquiries are, but Brockman is the third Australian company in the past month to be caught up in an investigation by the corporate cops. Iron ore explorer Sundance (SDL) and uranium explorer Bannerman (BMN) are the other two. Sundance crept half a cent higher last week to A44.5 cents, but remains well below the A50 cent level promised by a Chinese takeover bid. Bannerman (BMN) slipped A3 cents lower to A35 cents. Other iron ore movers included: Atlas (AGO), up A9 cents to A$3.30, Gindalbie (GBG), up A4.5 cents to A60 cents, Murchison (MMX), up A1.5 cents to A29.5 cents, Mt Gibson (MGX), up A3 cents to A$1.54, and Northern Iron (NFE), down A5 cents to A$1.32.
Minews. Over to the rest of the base metals now, starting with the rest of the copper sector.
Oz. After Rex and Tasman there wasn’t much to report. PanAust (PNA) rose A10 cents to A$3.00. Hot Chili (HCH) rose A6 cents to A50 cents. Sandfire (SFR) fell A23 cents to A$6.79. OZ Minerals (OZL) fell A76 cents to A$10.98. Exco (EXS) fell A2.5 cents to A69.5 cents, and Ivanhoe (IVA) fell A14 cents to A94.5 cents.
Nickel and zinc companies improved, a little. Best of the nickels was Western Areas (WSA), up A16 cents to A$5.46. Independence (IGO) added A24 cents to A$5.03, but probably more because of its gold and copper assets. Mincor (MCR) continued its revival, up A1.5 cents to A81 cents.
Ironbark (IBG) was the pick of the zinc companies, up A2 cents to A29.5 cents after it announced a funding and off-take agreement with Glencore. Kagara (KZL) added A1 cent to A43 cents despite hitting a snag in selling its nickel assets. Perilya (PEM) rose by A1 cent to A50 cents, but Blackthorn (BTR) slipped half a cent lower to A40.5 cents.
Minews. Coal and uranium next, please, and minor metals to close.
Oz. Minimal movement among the coal companies, but we might see more on Monday if BHP Billiton bids for US metallurgical coal producer Walter Energy, as speculated. Whitehaven (WHC) added A17 cents to A$5.90, thanks to its status as the takeover most likely to happen. New Hope (NHC) firmed by another A21 cents to A$6.46, as it conducted its beauty parade of potential suitors. Bathurst (BTU) rose by A5 cents to A77.5 cents. Coalspur (CPL) gained A4 cents to A$1.56, and Carabella (CLR) put on A2.5 cents to A$1.67 after announcing a new chief executive.
Extract (EXT) was the best of the uranium companies, rising by A46 cents to A$8.50 on fresh rumours of a revised Chinese takeover bid. Paladin (PDN) continued to recover after a couple of torrid weeks, adding A8.5 cents to A$1.63. Berkeley (BKY) gained A6 cents to A39.5 cents. Greenland (GGG) continued to attract interest, adding A7 cents to A55 cents. Manhattan (MHC) posted a rise of A1 cent to A39.5 cents.
Orocobre (ORE) was the best of the minor metals companies, as it benefited from increased interested in its lithium project. It added A18 cents to A$1.38. Galaxy (GXY), another lithium player, slipped A4 cents lower to A64 cents. Lynas (LYC) led a revival in rare earth companies, rising by A6 cents to A$1.24. Alkane (ALK) added A5 cents to A$1.21, and Arafura (ARU) gained A6 cents to A65.5 cents.
In tin, Venture (VMS) and Kasbah (KAS) both rose by A2 cents, to A34.5 cents and A18.5 cents respectively.
Minews. Thanks Oz. Enjoy the weekend rugby semi-finals. Shame England can’t join you.
Oz. In which case you’ll have to cheer for Wales!
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That Was The Week That Was … In Australia
By Our Man in Oz
www.minesite.com/aus.html
Minews. Good morning Australia. Your market seems to have gone nowhere last week.
Oz. “Flat” is the one-word description for a week which had three up days, two down, and finished virtually where it started. Technically, the metals and mining index finished up half a per cent, the all ordinaries rose by up one per cent, and gold was absolutely flat. The big news down this way was that Parliament passed laws to introduce a tax on carbon emissions. And that development was followed by a warning from the Opposition that companies should not purchase any carbon emission certificates because if elected in less than two years time it will repeal the law.
Minews. That would seem to make running a business which emits carbon, as most miners do, rather difficult.
Oz. Impossible, I would have thought, especially since the government is a country mile behind in the public opinion polls and a change of government is as close to a certainty as is possible in politics. What can be said with confidence is that the carbon tax, and the proposed mining tax which will be introduced in Parliament later this year, have clearly polarised the left and right of Australian politics.
Minews. Enough of the idle chatter, time for prices.
Oz. Good idea, because while the indices went nowhere, and a surprising number of companies ended the week where they started, there were some strong individual performances. Top of the list was PMI Gold (PVM), the company planning to redevelop the Obotan mine in Ghana. It rocketed by 73 per cent to an all-time high on Friday of A$1.04 after reporting a 270 per cent increase in its gold resource. Obotan now boasts a resource of 4.5 million ounces, with 3.22 million ounces in the higher quality measured and indicated category and 1.29 million ounces in the inferred category. Those numbers will be incorporated into a pre-feasibility study set for completion by the end of the year.
Three other solid performers are worth singling out, two in the copper sector and one in the iron ore business. Tasman Resources (TAS) starred in copper, bursting into the headlines after years on the sidelines by announcing an exploration joint venture with Rio Tinto on a tenement close to BHP Billiton’s giant Olympic Dam copper/uranium mine. Rio has agreed to invest up to A$92 million in a series of staggered payments, which could see it end up with 80 per cent of the Vulcan iron ore-copper-gold (IOCG) prospect located 30 kilometres north of Olympic Dam. The timing of that news was no accident. Last week Olympic Dam received government approval last week for a major expansion. On the market, Tasman rose 170 per cent to A16.5 cents, but did trade up to a 12 month high of A21 cents on Wednesday.
Rex Minerals (RXM) was the other copper company that performed strongly, adding A30 cents to A$1.61 after it announced plans to double planned production at its Hillside project in South Australia where feasibility studies are ongoing. It is now aiming for annual production of 100,000 tonnes of copper equivalent a year, over a minimum 10 year mine life.
Over in the iron ore sector the best performer was Iron Ore Holdings (IOH) which announced a second sale of exploration assets in little more than a week. The latest involved the offloading of tenements to Mineral Resources for A$42 million. The first was a A$32 million sale of tenements to Rio Tinto. On the market, IOH added A30 cents to A$1.35, though the real significance lies in the decision the company has made to sell its exploration ground rather than try to develop it.
Minews. Perhaps a comment on how IOH sees the future price of iron ore?
Oz. It might be that, but it could also be that the company has recognised the cost and difficulty of developing remote pods of iron ore without a transport solution, such as access to a railway and port.
Minews. Time to call the card, starting with gold, please.
Oz. After PMI it was a dull affair, largely because the recovery in the US dollar gold price was cancelled out by an equally solid revival in the value of the Australian dollar, meaning that the local gold price fell by around A$50 an ounce. Troy Resources (TRY) was one of the stronger performers, adding A9 cents to A$4.63. Northern Star (NST) put on A4 cents to A58 cents. Crusader (CAS) also rose by A4 cents to A$1.11. Other movers included: Kingsgate (KCN), down A20 cents to A$7.55, Azumah (AZM), up A4 cents to A44.5 cents, Resolute (RSG), up A4 cents to A$1.69, Newcrest (NCM), up A74 cents to A$36.50, Ausgold (AUC), down A2 cents to A$1.35, and Silver Lake (SLR), up A2 cents to A$2.75. Companies that opened and closed at the same price included: Integra (IGR) at A51 cents, Kingsrose (KRM) as A$1.47, and Gold Road (GOR) at A38.5 cents. Perseus (PRU) was sold down by A15 cents to A$3.20 after announcing a A$90 million capital raising.
Minews. Iron ore next please, as there seems to have been a bit of action there.
Oz. Iron Ore Holdings was the pick of the sector, though Brockman (BRM) was the real news generator. It added A6 cents to A$1.89, but made the news after its chairman, Peter Luk, was asked by the Hong Kong fraud squad to assist with enquiries. No news on what those enquiries are, but Brockman is the third Australian company in the past month to be caught up in an investigation by the corporate cops. Iron ore explorer Sundance (SDL) and uranium explorer Bannerman (BMN) are the other two. Sundance crept half a cent higher last week to A44.5 cents, but remains well below the A50 cent level promised by a Chinese takeover bid. Bannerman (BMN) slipped A3 cents lower to A35 cents. Other iron ore movers included: Atlas (AGO), up A9 cents to A$3.30, Gindalbie (GBG), up A4.5 cents to A60 cents, Murchison (MMX), up A1.5 cents to A29.5 cents, Mt Gibson (MGX), up A3 cents to A$1.54, and Northern Iron (NFE), down A5 cents to A$1.32.
Minews. Over to the rest of the base metals now, starting with the rest of the copper sector.
Oz. After Rex and Tasman there wasn’t much to report. PanAust (PNA) rose A10 cents to A$3.00. Hot Chili (HCH) rose A6 cents to A50 cents. Sandfire (SFR) fell A23 cents to A$6.79. OZ Minerals (OZL) fell A76 cents to A$10.98. Exco (EXS) fell A2.5 cents to A69.5 cents, and Ivanhoe (IVA) fell A14 cents to A94.5 cents.
Nickel and zinc companies improved, a little. Best of the nickels was Western Areas (WSA), up A16 cents to A$5.46. Independence (IGO) added A24 cents to A$5.03, but probably more because of its gold and copper assets. Mincor (MCR) continued its revival, up A1.5 cents to A81 cents.
Ironbark (IBG) was the pick of the zinc companies, up A2 cents to A29.5 cents after it announced a funding and off-take agreement with Glencore. Kagara (KZL) added A1 cent to A43 cents despite hitting a snag in selling its nickel assets. Perilya (PEM) rose by A1 cent to A50 cents, but Blackthorn (BTR) slipped half a cent lower to A40.5 cents.
Minews. Coal and uranium next, please, and minor metals to close.
Oz. Minimal movement among the coal companies, but we might see more on Monday if BHP Billiton bids for US metallurgical coal producer Walter Energy, as speculated. Whitehaven (WHC) added A17 cents to A$5.90, thanks to its status as the takeover most likely to happen. New Hope (NHC) firmed by another A21 cents to A$6.46, as it conducted its beauty parade of potential suitors. Bathurst (BTU) rose by A5 cents to A77.5 cents. Coalspur (CPL) gained A4 cents to A$1.56, and Carabella (CLR) put on A2.5 cents to A$1.67 after announcing a new chief executive.
Extract (EXT) was the best of the uranium companies, rising by A46 cents to A$8.50 on fresh rumours of a revised Chinese takeover bid. Paladin (PDN) continued to recover after a couple of torrid weeks, adding A8.5 cents to A$1.63. Berkeley (BKY) gained A6 cents to A39.5 cents. Greenland (GGG) continued to attract interest, adding A7 cents to A55 cents. Manhattan (MHC) posted a rise of A1 cent to A39.5 cents.
Orocobre (ORE) was the best of the minor metals companies, as it benefited from increased interested in its lithium project. It added A18 cents to A$1.38. Galaxy (GXY), another lithium player, slipped A4 cents lower to A64 cents. Lynas (LYC) led a revival in rare earth companies, rising by A6 cents to A$1.24. Alkane (ALK) added A5 cents to A$1.21, and Arafura (ARU) gained A6 cents to A65.5 cents.
In tin, Venture (VMS) and Kasbah (KAS) both rose by A2 cents, to A34.5 cents and A18.5 cents respectively.
Minews. Thanks Oz. Enjoy the weekend rugby semi-finals. Shame England can’t join you.
Oz. In which case you’ll have to cheer for Wales!
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October 17, 2011
Communist China May Turn Out To Be Less Socialist Than Europe, With Corresponding Benefits For Metals Prices
By Rob Davies >> www.minesite.com/aus.html (The registration is free)
When the trading environment is wall-to-wall horrific, it only takes the realisation that things are only bad, not terminal, to bring relief. On the face of it there seems little other explanation for the rally that took place across a number of markets last week.
Be that as it may, the relief didn’t appear get through to the base metals, as the LME index fell by 24 points or 0.7 per cent over the week. But, as ever in finance, nothing is quite what it seems and a 2.5 per cent fall in the dollar over the period actually left metals prices higher in many currencies.
Although there was plenty of news circulating, there was nothing really substantial enough to pin the equity rally on, or the recovery in the euro. Even the news that China is probably sitting on the better part of a few million tonnes of copper inventory was not enough to halt the 1.1 per cent rise in the copper price to US$7,327 a tonne.
Compared to the LME warehouse inventories of 453,000 tonnes those Chinese stocks are massive, but most market participants suspected the figure was pretty high anyway, so what’s the big surprise? In the same way, the disclosure the other week that the value of copper in the British Telecom phone network exceeds the company’s market capitalisation is not price sensitive. No one is expecting BT to create even more road works by digging up all its cables.
Europe remains the primary concern of most traders. Even though the news is not getting any better there is a growing realisation that the relevant authorities are prepared to do what is needed to keep the Eurozone functioning, even if in the extreme case of Slovakia it took a new government to get funding for the European Financial Stability Facility approved.
The most recent data for Europe is actually positive. Eurozone industrial production rose 1.2 per cent in August, for example. But there are still worrisome signs. Carrefour, the French retailer issued its fifth profit warning last week. In Sweden, Scandia, the truck maker, announced it will cut production by between 10 per cent and 15 per cent from November. There’s not much that is more cyclical than truck sales, so that development does not bode well.
But even if that news from Scandia does presage a further slowdown, there are, in any case, already signs of rising distress in Europe. The bailout of Dexia, the Franco-Belgian bank, is probably just the start of the second wave of bank bailouts. Because it is clear that no European bank, however badly run, will be allowed to fail in a way that that compromises the political edifice that is the single currency.
Other banks are taking the less painful option of shrinking their business to stay solvent. Citi, formerly the biggest bank in the world, has shrunk its asset base from US$2,200 billion to US$1,400 billion. No wonder credit is hard to get, even if money is cheap.
And then there’s the China factor. Despite certain select areas of strength, such as Burberry’s booming sales to Chinese tourists, commodity investors will be more concerned by the increasing signs of distress in Chinese property developers. How that situation will develop is anyone’s guess.
Much will depend on whether the Chinese end up taking a more free market approach to business failures than the Europeans. It may yet turn out that the Europeans are more socialist than the Chinese communists.
While everyone knows Europe is in a mess, and the data verifies that, commodity prices seem to be anticipating a worse situation in China than the one that actually prevails. If China does slow down dramatically, then the prices of two weeks ago will be vindicated.
But last week’s rally, the biggest in six months, shows what can happen when sentiment gets too detached from reality.
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Communist China May Turn Out To Be Less Socialist Than Europe, With Corresponding Benefits For Metals Prices
By Rob Davies >> www.minesite.com/aus.html (The registration is free)
When the trading environment is wall-to-wall horrific, it only takes the realisation that things are only bad, not terminal, to bring relief. On the face of it there seems little other explanation for the rally that took place across a number of markets last week.
Be that as it may, the relief didn’t appear get through to the base metals, as the LME index fell by 24 points or 0.7 per cent over the week. But, as ever in finance, nothing is quite what it seems and a 2.5 per cent fall in the dollar over the period actually left metals prices higher in many currencies.
Although there was plenty of news circulating, there was nothing really substantial enough to pin the equity rally on, or the recovery in the euro. Even the news that China is probably sitting on the better part of a few million tonnes of copper inventory was not enough to halt the 1.1 per cent rise in the copper price to US$7,327 a tonne.
Compared to the LME warehouse inventories of 453,000 tonnes those Chinese stocks are massive, but most market participants suspected the figure was pretty high anyway, so what’s the big surprise? In the same way, the disclosure the other week that the value of copper in the British Telecom phone network exceeds the company’s market capitalisation is not price sensitive. No one is expecting BT to create even more road works by digging up all its cables.
Europe remains the primary concern of most traders. Even though the news is not getting any better there is a growing realisation that the relevant authorities are prepared to do what is needed to keep the Eurozone functioning, even if in the extreme case of Slovakia it took a new government to get funding for the European Financial Stability Facility approved.
The most recent data for Europe is actually positive. Eurozone industrial production rose 1.2 per cent in August, for example. But there are still worrisome signs. Carrefour, the French retailer issued its fifth profit warning last week. In Sweden, Scandia, the truck maker, announced it will cut production by between 10 per cent and 15 per cent from November. There’s not much that is more cyclical than truck sales, so that development does not bode well.
But even if that news from Scandia does presage a further slowdown, there are, in any case, already signs of rising distress in Europe. The bailout of Dexia, the Franco-Belgian bank, is probably just the start of the second wave of bank bailouts. Because it is clear that no European bank, however badly run, will be allowed to fail in a way that that compromises the political edifice that is the single currency.
Other banks are taking the less painful option of shrinking their business to stay solvent. Citi, formerly the biggest bank in the world, has shrunk its asset base from US$2,200 billion to US$1,400 billion. No wonder credit is hard to get, even if money is cheap.
And then there’s the China factor. Despite certain select areas of strength, such as Burberry’s booming sales to Chinese tourists, commodity investors will be more concerned by the increasing signs of distress in Chinese property developers. How that situation will develop is anyone’s guess.
Much will depend on whether the Chinese end up taking a more free market approach to business failures than the Europeans. It may yet turn out that the Europeans are more socialist than the Chinese communists.
While everyone knows Europe is in a mess, and the data verifies that, commodity prices seem to be anticipating a worse situation in China than the one that actually prevails. If China does slow down dramatically, then the prices of two weeks ago will be vindicated.
But last week’s rally, the biggest in six months, shows what can happen when sentiment gets too detached from reality.
***********************
Bill Matlack: Metals and Mining Analysts' Ratings - Seniors
http://www.kitco.com/ind/matlack/oct142011.html
[Among the seniors the "buy" ratings are scarce indeed]
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http://www.kitco.com/ind/matlack/oct142011.html
[Among the seniors the "buy" ratings are scarce indeed]
*****************************
Which Gold Miners Have Largest Upside ?
http://www.kitco.com/ind/Holmes/holmes_oct182011.html
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http://www.kitco.com/ind/Holmes/holmes_oct182011.html
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Wysiwyg
Everyone wants money
- Joined
- 8 August 2006
- Posts
- 8,428
- Reactions
- 284
Ummm, nice copy and paste promotions but nothing lasts forever. There are hundreds and hundreds of resource explorers/producers share prices that have been decimated. If you promote they are going to make long term gains then you are blatantly lying. Repeat, nothing lasts forever but there "could" be some, repeat some, resource companies that will go the "long-term".
Long term buyers research.
Are commodities in a bubble ?
http://seekingalpha.com/article/301062-so-are-commodities-really-in-a-bubble?source=yahoo
******
http://seekingalpha.com/article/301062-so-are-commodities-really-in-a-bubble?source=yahoo
******
Bespoke's Commodity Snapshot
http://www.bespokeinvest.com/thinkbig/2011/10/20/bespokes-commodity-snapshot.html
***
http://www.bespokeinvest.com/thinkbig/2011/10/20/bespokes-commodity-snapshot.html
***
October 22, 2011
That Was The Week That Was ... In Australia
By Our Man in Oz
www.minesite.com/aus.html
Minews. Good morning Australia. Apart from your team finishing third in the Rugby World Cup there probably isn’t much to talk about this week.
Oz. Third was probably what we deserved. The cup itself was always out of reach. At least watching the rugby, and getting ready for our big horse race down this way, the Melbourne Cup, has stopped most people from talking about the flat stock market.
Minews. Understandable - there doesn’t seem to have been much happening on the ASX over the past week.
Oz. Most prices fell, but as with previous weeks there wasn’t a rout, more a continuation of the correction which started mid-year. No sector gained ground. Gold stocks were hit hardest as the gold price slipped to around US$1,620 an ounce during our trading hours. The price-bounce back above US$1,640 per ounce occurred after we had closed, as did the 2.3 per cent rise on the New York market, and the 1.9 per cent rise in London.
On the ASX last week the all ordinaries slipped lower by a relatively painless 1.6 per cent. The metals and mining index lost a more significant 5.2 per cent, a weakness attributable largely to falls among iron ore companies. And the gold index led the way down with a fall of 6.7 per cent, a plunge that was spearheaded by Newcrest Mining (NCM), the sector leader, which reported a 16 per cent fall in gold production for the September quarter and then watched its share price tumble by 8.7 per cent.
Minews. Like the rest of the world, your market seems to be captive to events in Europe and China.
Oz. Very much so, we’re in the same boat as the UK - waiting for Europe to acknowledge that a cafe lifestyle is not an industry which actually generates wealth and jobs. The Prime Minister of tiny Luxembourg, Jean-Claude Juncker, is one of the few leaders who seems to be telling the truth in that regard. “We all know what to do”, he said. “We don’t know how to get re-elected once we have done it”.
Minews. How often does the truth come from the mouths of babes? Enough philosophy, time for prices, starting with iron ore because there seems to be something significant going on in that sector.
Oz. That something is declining global steel production, an event closely related to Europe’s woes and declining rates of growth in China. All iron ore companies fell last week, as the iron ore price fell by around 15 per cent, and as industry watchers predicted a continued slide in the price next year. Fortescue Metals (FMG), which has most to lose as it is in the middle of an expansion program, dropped by A64 cents to A$4.25. Atlas Iron (AGO), another producer with big expansion plans, lost A30 cents to A$3.05. Among the other movers in iron ore was Mt Gibson (MGX), down A10 cents to A$1.45, Grange (GRR), down A1 cent to A43.5 cents, Gindalbie (GBG), down A5 cents to A55 cents, and Murchison Metals (MMX), down A4 cents to A25.5 cents. Brockman (BRM) fell A24 cents to A$1.65, but did touch a fresh 12 month share price low of A$1.60 in early Friday trade. Also weaker was Sundance (SDL), which feel A1 cent to A43.5 cents, despite the promise of a takeover bid priced at A50 cents from a Chinese suitor.
Minews. Not a pretty picture. Let’s try the gold sector next.
Oz. Not much better, though at least it wasn’t all red ink as a handful of companies added a few cents. What’s more, most of the falls were relatively modest in comparison to Newcrest’s substantial decline. Among the companies that rose, just, were Silver Lake (SLR), up A2 cents to A$2.77, Scotgold (SGZ), up one-tenth of a cent to A9 cents, and Mt Isa Metals (MET), which burst back into life after a quiet period, putting in an eye-catching rise of A5.5 cents to A32 cents on no fresh news. Among the fallers were Adamus (ADU), down A2.5 cents to A65.5 cents, Perseus (PRU), down A20 cents to A$3.00, Kingsgate (KCN), down A23 cents to A$7.32, Kingsrose (KRM), down A6 cents to A$1.41, Medusa (MML), down A32 cents to A$6.79, Integra (IGR), down A3 cents to A48 cents, Allied (ALD), down A30 cents to A$2.30, and Troy (TRY), down A38 cents to A$4.25.
Minews. Over to base metals, starting with copper, please.
Oz. It was more of the same across the base metals spectrum. Two copper companies rose, plus one nickel explorer and two zinc companies, but by the barest possible margins. The copper companies that gained ground were Talisman (TLM), up A 1.5 cents to A41.5 cents, and Exco (EXS), up A1.5 cents to A71 cents. Other copper movers included Rex (RXM), down A12 cents to A$1.49, Sandfire (SFR), down A15 cents to A$6.64, OZ Minerals (OZL), down A20 cents to A$10.78, Hot Chili (HCH), down A2 cents to A48 cents, Altona (AOH), down A2 cents to A24.5 cents, and PanAust (PNA), down A16 cents to A$2.84.
The nickel company that rose was Poseidon (POS), which announced fresh drilling results at its Cerberus orebody, near the historic Mt Windarra mine. Among the best drill hits was 4.07 metres at 3% nickel, and 2.83 metres at 3.24% nickel. On the market, those results plus news of the steady dewatering of the Windarra mine helped Poseidon add A3 cents to A19 cents. After Poseidon it was all down. Western Areas (WSA) lost A18 cents to A$5.28. Mincor (MCR) shed A5.5 cents to A75.5 cents. Mirabela (MBN) slipped A17 cents lower to A$1.30, and Panoramic (PAN) was A10 cents weaker at A$1.27.
Ironbark (IBG) and Meridian (MII) were the two zinc companies that rose. Ironbark rose by half a cent to A30, and Meridian by half a cent to A13.5 cents. Other movers in zinc included Perilya (PEM), down A2.5 cents to A47.5 cents, Kagara (KZL), down A 3.5 cents to A39.5 cents, Terramin (TZN), down A 3 cents to A14.5 cents, and Blackthorn (BTR), down A1 cent to A39.5 cents.
Minews. Coal and uranium, with minor metals to close, please.
Oz. There was one big winner in the coal sector, and two modest winners. Coal of Africa (CZA), which has been sold down in recent months because of problems with the government approvals process, finally won the right to proceed with mining at its Vele property after the suspension of a water-use licence was lifted. That news sent the shares up by an initial A24 cents to A90 cents. Later selling then trimmed the week’s gain to A13 cents and the shares closed at A83.5 cents. Metro Coal (MTE) and Carabella (CLR) were the other coal companies that rose. Metro added A5 cents to A72 cents, and Carabella rose by A7 cents to A$1.74. Other movers included New Hope (NHC), down A38 cents to A$5.93, Aston (AZT), down A17 cents to A$10.17, Whitehaven (WHC), down A18 cents to A$5.72, and Stanmore (SMR), down A4 cents to A71.5 cents.
Uranium companies were flat, with one significant fall. Extract (EXT), which has been waiting for a revised Chinese takeover bid, fell by A55 cents to A$7.95 after Rio Tinto made a takeover move on a Canadian miner, potentially taking it out of the race for control of Extract and its London-listed associate, Kalahari Minerals. Other uranium movers included Manhattan, down A6.5 cents to A33 cents, Berkeley (BKY), down A4.5 cents to A25 cents, Bannerman (BMN), down A3 cents to A32 cents, and Greenland (GGG), down A1.5 cents to A53.5 cents.
Minews. Minor metals, and then off to watch the rugby final.
Oz. The eye-catching move among the minor metals was a spectacular A6.1 cent rise by Indonesian-focussed explorer Western Manganese (WMN), which climbed to A14.5 cents. There was no fresh news from the company, and the significance of the rise can be discounted somewhat because it was on thin volume, and the shares have only traded on three of the last 24 days. Spitfire (SPI) attracted revised interest as it re-starts drilling at its South Woodie Woodie project, and added A1 cent to A13.5 cents. Rare earth companies weakened. Alkane (ALK) shed A11 cents to A$1.10, and Lynas (LYC), lost A15 cents to A$1.09. Lithium, tin and phosphate companies also lost ground.
Minews. Thanks Oz.
***
That Was The Week That Was ... In Australia
By Our Man in Oz
www.minesite.com/aus.html
Minews. Good morning Australia. Apart from your team finishing third in the Rugby World Cup there probably isn’t much to talk about this week.
Oz. Third was probably what we deserved. The cup itself was always out of reach. At least watching the rugby, and getting ready for our big horse race down this way, the Melbourne Cup, has stopped most people from talking about the flat stock market.
Minews. Understandable - there doesn’t seem to have been much happening on the ASX over the past week.
Oz. Most prices fell, but as with previous weeks there wasn’t a rout, more a continuation of the correction which started mid-year. No sector gained ground. Gold stocks were hit hardest as the gold price slipped to around US$1,620 an ounce during our trading hours. The price-bounce back above US$1,640 per ounce occurred after we had closed, as did the 2.3 per cent rise on the New York market, and the 1.9 per cent rise in London.
On the ASX last week the all ordinaries slipped lower by a relatively painless 1.6 per cent. The metals and mining index lost a more significant 5.2 per cent, a weakness attributable largely to falls among iron ore companies. And the gold index led the way down with a fall of 6.7 per cent, a plunge that was spearheaded by Newcrest Mining (NCM), the sector leader, which reported a 16 per cent fall in gold production for the September quarter and then watched its share price tumble by 8.7 per cent.
Minews. Like the rest of the world, your market seems to be captive to events in Europe and China.
Oz. Very much so, we’re in the same boat as the UK - waiting for Europe to acknowledge that a cafe lifestyle is not an industry which actually generates wealth and jobs. The Prime Minister of tiny Luxembourg, Jean-Claude Juncker, is one of the few leaders who seems to be telling the truth in that regard. “We all know what to do”, he said. “We don’t know how to get re-elected once we have done it”.
Minews. How often does the truth come from the mouths of babes? Enough philosophy, time for prices, starting with iron ore because there seems to be something significant going on in that sector.
Oz. That something is declining global steel production, an event closely related to Europe’s woes and declining rates of growth in China. All iron ore companies fell last week, as the iron ore price fell by around 15 per cent, and as industry watchers predicted a continued slide in the price next year. Fortescue Metals (FMG), which has most to lose as it is in the middle of an expansion program, dropped by A64 cents to A$4.25. Atlas Iron (AGO), another producer with big expansion plans, lost A30 cents to A$3.05. Among the other movers in iron ore was Mt Gibson (MGX), down A10 cents to A$1.45, Grange (GRR), down A1 cent to A43.5 cents, Gindalbie (GBG), down A5 cents to A55 cents, and Murchison Metals (MMX), down A4 cents to A25.5 cents. Brockman (BRM) fell A24 cents to A$1.65, but did touch a fresh 12 month share price low of A$1.60 in early Friday trade. Also weaker was Sundance (SDL), which feel A1 cent to A43.5 cents, despite the promise of a takeover bid priced at A50 cents from a Chinese suitor.
Minews. Not a pretty picture. Let’s try the gold sector next.
Oz. Not much better, though at least it wasn’t all red ink as a handful of companies added a few cents. What’s more, most of the falls were relatively modest in comparison to Newcrest’s substantial decline. Among the companies that rose, just, were Silver Lake (SLR), up A2 cents to A$2.77, Scotgold (SGZ), up one-tenth of a cent to A9 cents, and Mt Isa Metals (MET), which burst back into life after a quiet period, putting in an eye-catching rise of A5.5 cents to A32 cents on no fresh news. Among the fallers were Adamus (ADU), down A2.5 cents to A65.5 cents, Perseus (PRU), down A20 cents to A$3.00, Kingsgate (KCN), down A23 cents to A$7.32, Kingsrose (KRM), down A6 cents to A$1.41, Medusa (MML), down A32 cents to A$6.79, Integra (IGR), down A3 cents to A48 cents, Allied (ALD), down A30 cents to A$2.30, and Troy (TRY), down A38 cents to A$4.25.
Minews. Over to base metals, starting with copper, please.
Oz. It was more of the same across the base metals spectrum. Two copper companies rose, plus one nickel explorer and two zinc companies, but by the barest possible margins. The copper companies that gained ground were Talisman (TLM), up A 1.5 cents to A41.5 cents, and Exco (EXS), up A1.5 cents to A71 cents. Other copper movers included Rex (RXM), down A12 cents to A$1.49, Sandfire (SFR), down A15 cents to A$6.64, OZ Minerals (OZL), down A20 cents to A$10.78, Hot Chili (HCH), down A2 cents to A48 cents, Altona (AOH), down A2 cents to A24.5 cents, and PanAust (PNA), down A16 cents to A$2.84.
The nickel company that rose was Poseidon (POS), which announced fresh drilling results at its Cerberus orebody, near the historic Mt Windarra mine. Among the best drill hits was 4.07 metres at 3% nickel, and 2.83 metres at 3.24% nickel. On the market, those results plus news of the steady dewatering of the Windarra mine helped Poseidon add A3 cents to A19 cents. After Poseidon it was all down. Western Areas (WSA) lost A18 cents to A$5.28. Mincor (MCR) shed A5.5 cents to A75.5 cents. Mirabela (MBN) slipped A17 cents lower to A$1.30, and Panoramic (PAN) was A10 cents weaker at A$1.27.
Ironbark (IBG) and Meridian (MII) were the two zinc companies that rose. Ironbark rose by half a cent to A30, and Meridian by half a cent to A13.5 cents. Other movers in zinc included Perilya (PEM), down A2.5 cents to A47.5 cents, Kagara (KZL), down A 3.5 cents to A39.5 cents, Terramin (TZN), down A 3 cents to A14.5 cents, and Blackthorn (BTR), down A1 cent to A39.5 cents.
Minews. Coal and uranium, with minor metals to close, please.
Oz. There was one big winner in the coal sector, and two modest winners. Coal of Africa (CZA), which has been sold down in recent months because of problems with the government approvals process, finally won the right to proceed with mining at its Vele property after the suspension of a water-use licence was lifted. That news sent the shares up by an initial A24 cents to A90 cents. Later selling then trimmed the week’s gain to A13 cents and the shares closed at A83.5 cents. Metro Coal (MTE) and Carabella (CLR) were the other coal companies that rose. Metro added A5 cents to A72 cents, and Carabella rose by A7 cents to A$1.74. Other movers included New Hope (NHC), down A38 cents to A$5.93, Aston (AZT), down A17 cents to A$10.17, Whitehaven (WHC), down A18 cents to A$5.72, and Stanmore (SMR), down A4 cents to A71.5 cents.
Uranium companies were flat, with one significant fall. Extract (EXT), which has been waiting for a revised Chinese takeover bid, fell by A55 cents to A$7.95 after Rio Tinto made a takeover move on a Canadian miner, potentially taking it out of the race for control of Extract and its London-listed associate, Kalahari Minerals. Other uranium movers included Manhattan, down A6.5 cents to A33 cents, Berkeley (BKY), down A4.5 cents to A25 cents, Bannerman (BMN), down A3 cents to A32 cents, and Greenland (GGG), down A1.5 cents to A53.5 cents.
Minews. Minor metals, and then off to watch the rugby final.
Oz. The eye-catching move among the minor metals was a spectacular A6.1 cent rise by Indonesian-focussed explorer Western Manganese (WMN), which climbed to A14.5 cents. There was no fresh news from the company, and the significance of the rise can be discounted somewhat because it was on thin volume, and the shares have only traded on three of the last 24 days. Spitfire (SPI) attracted revised interest as it re-starts drilling at its South Woodie Woodie project, and added A1 cent to A13.5 cents. Rare earth companies weakened. Alkane (ALK) shed A11 cents to A$1.10, and Lynas (LYC), lost A15 cents to A$1.09. Lithium, tin and phosphate companies also lost ground.
Minews. Thanks Oz.
***
Commodities - Mega profits at the world's biggest trading houses
http://www.reuters.com/article/2011/10/21/us-commodities-houses-idUSTRE79K49320111021
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http://www.reuters.com/article/2011/10/21/us-commodities-houses-idUSTRE79K49320111021
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