Morning Mumble: Anglo American's (AAL) woes, Patagonia Gold (PGD) and yet more SRX Jam

Good Morning,

Anglo American (AAL) have a growing discontent, with the strikes being declared by Anglo as wildcat. Despite them allegedly not going through the proper channels Anglo are speaking 'with the powers at be.' The starting rate of 6000 Rand a month, is the bone of contention, well the tip of the iceberg. Post any resolution, we can expect the time served miners to strike because their premium for experience and skills is now under-represented in their pay-packets. 

AAL, will of course open dialogue to discuss the miners woes, having recently agreed wage deals in June 2014, its unlikely there will be a deviation from the deal agreed. BHP Billiton (BLT) and Rio Tinto (RIO), although not as connected with the South Africa issues (excluding Short32), on the coal face and mine pits in Australia there's also a disharmony. With strikes unlikely at the moment in Australia, longer term BLT and RIO are at risk of being held to ransom by their employees. 

BLT have recently recommended to the Productivity Commission to limit industrial action to specific events, allegedly on safety grounds. The Unions of the contractors and workers are starting to feel their corporate parent isn't behaving appropriately.

Patagonia Gold (PGD) announced results today, unlike most with an unrealistic expectation of a profit. PGD have made a decent headway in covering their costs, when all things are considered, this could just be the start of the turn for PGD. It’s rare to get excited about potential, but PGD might just be a favoured minnow of a gold play. The caveat being, it depends on how much money they sink into proving up the 'currently' uneconomic proposed heap leach at Cap-Oeste. Simply put, in the absence of a significant increase in the oxide resources, any proposals are not viable a gold prices below $2,100/oz. and sub $24/oz. silver. 

It was a pleasure to be part of the thundering troop (poor I know) of Horse Hill today for a not so untidy profit in a few hours and out again. With continued news to come, surely there won't be further fundraisers. Please don't forget the sarcasm, but more importantly, is there a leak yet again! We won't comment either on the 5% divestment made by a certain mining company either, where the timing was poor to insulting. 

Had there been time yesterday it was intended to comment on Tech Metals Research which is turning into the place to go for Rare Earth Metals commentary. Some good analysis and a decent place to start, one broker could do well to spend some continual professional development time on the internet rather than getting his metals so confused. 

Little time to cover Sierra Rutile (SRX)'s Q1 results in-depth. With some positive hedging in fuel costs, but one must take the opportunity to remind the market, it's essential for a company (especially SRX) to sell the products they produce, please note their costs (as eluded to by EMC). It's pointless producing a produce/ore without sales. 

The TiO2 market is in the crapper as SRX states, any improvements are likely to be, "tempered by forced sales from certain distressed TiO2 feedstock producers that continue to undermine price improvements." It’s prudent at this stage to reiterate the view of EMC's from March. Until any decent recovery in TiO2 (Titanium dioxide to you), there is no reason whatsoever to hold SRX. If one was to be forced to throw a dart, it's difficult to find any value about 10.75 pence and that could just be too generous. 

Atb Fraser