Good morning, what a brilliant start to the week!
There's quite a few items that weren't able to be covered last week due to time constraints and commitments, Rio Tinto Investor Seminar - media release update I will also be coming back to. Its hoped when I finish trading for the three ish weeks of Christmas time can be set aside to cover Rio, Severn Trent, + many more and and the most obvious gold trade of this year. Citi's Willem Buiter informed us last week gold's been in a bubble for 6,000 years: Gold is a 6,000-year bubble - Citi. You'd be wise to consider history when investing, but six thousand years? Give over...
So the Swiss obviously voted no with Gold Tumbles After Swiss ‘No’ Vote as Silver Sinks to 5-Year Low By Glenys Sim for the acquisition of 1,500t's of gold. The market reacted with the predictability of selling down Asia (Currently $1159.46/oz.) with Silver tacking along for the ride at $15.03/oz. with gold now creating towards a the magic 80's:1 ratio (2009) compared to silver (its currently 77), there's a real risk of further slides for gold in addition silver being punished.
The importance being silver is now at a level not seen for some time and with risks of dipping to the lows of 2008 that means one would be wise to give HOC (Hochschild Mining) another consideration for a short (save for any recovery in Silver). HOC's operational update last week shows they won't be making a profit at today's prices even next year. With AISC (all-in sustaining costs) likely to be $15-16 an ounce it doesn't bode well. Having reviewed this company if they achieve $16, they should be congratulated, that's even allowing for the ramp up of production, if one was to factor no recover in oil for some time the $15-16 is possible, if oil rises more than 10%, no way josé.
With the dire straits of commodities, its somewhat amusing how positive certain analysts and attendees are this week for Mines & Money. Clearly the hospitality is overriding the need for sobriety. Yours truly is off there cordially invited and transported by a certain group whose taken leave of their senses, having disagreed with me on most items its going to certainly be far from a bore; perhaps I will end up being the court jester!
In due course, if I'm not going home on foot I'll endeavour to update...we hope there will be plenty of employees from certain AIM companies attending the Yielding High Value Through Optimising Mining Excellence Workshop and Evaluating Risk Management in Mining Projects. Contrary to some warped individuals the diamond drinks is not a speed dating event. If I do find the diamond in the drink I will be sure to set it aside for Ian's (eventual engagement to someone/thing). Its quite handy they need to educate us with "Mining in a day", perhaps for certain individuals that have no idea, will there be a workshop of improving shareholder returns? I can't find it on the programme!
It was with regret I misread the Beowulf Mining Plc (BEM) RNS assuming with some stupid belief it was the VOG Directorate change email that the board had resigned and there was change afoot. The Victoria Oil & Gas Directorate Change RNS today goes nowhere near what is required at VOG to change my view that parties would be wise only to value the asset. Over to VOG to appoint people with greater experience of Cameroon, albeit unlikely. For BEM it comes with no surprise with a need to spin their other plates, quite why they're focusing on Kallak; yet more higher cost Iron Ore in Sweden.
Finally, China November PMIs show economy cooling, argue for more stimulus rather sums it up, more importantly people in the National Bureau of Statistics would be kind enough to leave certain stats there long enough for a copy and paste jobby it would be appreciated. So I'll hand the gauntlet over to someone with the time and the patience to find it here http://www.stats.gov.cn
We'll leave parties to look at the tank on ASX over night...corr blimey!:-)
Atb Fraser
Fraser- Have fun at Mines and Mining-- I hope your disguise works and you aren't drawn into analysis of some of the strange IRRs that have gold at $1,300/oz and I saw one the other day with iron ore at $90- perhaps its that mythical Swedish iron ore which is one of the most valuable assets on the planet apparently.... we will all chip in for a National Express ticket when your driver works out who you are, Im sure. We cant have you hitchhiking with all those scary Altas shareholders around ;-))
ReplyDeleteThat Swiss vote was baked in but still saw rose tinted buyers panicking in Asia overnight--- so the big moves ($30/oz) continue and silver gets battered too- perhaps a move from the group of "precious" metals into bulk commodities via a relegation for silver its too far away--- Ive found two Canadian listed silver miners that are worth considering but Im not finger catching at this stage yet. The market there hasn't been functional for a couple of years, but some gems appear for those with wellies and marigolds prepared to delve amongst the brown stuff...
Re Oil- again, v volatile and the Yanks haven't had their markets open since the OPEC "news" so this afternoon could be interesting, as many of the shale oilers are heavily indebted and the Canadian tar oil guys must all be heavily loss making at this time, so Im not buying here yet either. Still some v interesting buys will appear over the next few weeks, so I have my bottom fishing gear ready on the riverbank. Curiously some of the gas plays have been pulled in here on the oil tank, which is counterintuitive and lazy from another watching the sector. The oil tank is positive for gas, albeit most gas devs have some oil/condensate too. Im sure Im right on this, but happy to discuss further.
Cheers. The Leggie
To what extent the Indian legalisation (reduction in smuggling) will have in India on the global gold price is anyone's guess. It's alleged demand will stay the same but will be more transparent. http://www.bloomberg.com/news/2014-11-28/india-eases-gold-import-restrictions-to-remove-trade-distortions.html
ReplyDeleteYes Leggie, Mines & Lack of Money should be good, Wednesday I attend. I don't think they could cope with me all week!
Cheers Fraser
Fraser- Yes- The Indian move could help gold, or at least make the trade legal.
ReplyDeleteGood luck to all presenting on Wednesday then--- if they find out who is coming, they will try to move to another day :-)) Ive have never been but I bet its probably good fun.
Cheers. The Leggie
The market was very slow to react to Pressure Technologies, a well run firm that had not been impacted to the same degree as other oil suppliers. http://ftalphaville.ft.com/marketslive/2014-11-28/ From Friday, see down in £100M market cap...today 80M. Well spotted Roice et Al
ReplyDeletePressure Technologies today finally informed the market they're in the oil sector being unfortunately punished (Disc: Short). I say unfortunately as the company is well managed and has been a significant long until more recently. http://www.investegate.co.uk/pressuretechnologies--pres-/rns/final-results/201412090700331829Z/ Today's final results are positive but one would be wise to work on a 20% reduction in revenue for the year ahead as a conservative approach. Cheers Fraser
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