Good Morning,
What a week, with most pre-election polls being a joke.
Having thought that the UK would have ended up with a Labour SNP coalition, the
UK should be pleased. A slim majority means that nothing too drastic is likely
to happen (yet) but more so, Labour's financial record isn't put to the test
again. Expect European issues to be a proverbial echo of will they won't
they.
There is a plus to this election, Ed Balls is out of
politics (for now), whether you agree or not, its certainly my Christmas and I
suspect one Sharon Shoesmith will be pleased with. So as a thank you for all Ed
did whilst in Government and in opposition, Good Bye! (BBC).
Despite the dollar being in good form, the hedge funds and
Chinese are betting on their own recovery, for most it'll be a positive. For
Weatherly International (WTI), the price has to travel significantly before
they're in the money. WTI's trading
update is dire, and if they cannot get costs under control this
placing will look expensive with cash costs per tonne of $7,763. For old money
that's around $3.50/lb ish.
The bet is whether WTI can ramp up and reduce their costs,
with guidance slipping back. The market may have some relief after their
shining knight (Orion Mine Finance) didn't have them over a barrel and instead
anted up (USD) $5.2 million at 2 pence. Why the cost overrun facility wasn't
used is another question, perhaps an indicator of things to come!
Laden with debt and debt payments due from November, what's
the odds more cash is needed. WTI should now praying for a large bull run to
near $3.75/lb or their costs reducing 20%, both are a challenge, with
constrained production its not looking pretty. CEO out, COO in, over to Orion
to dictate the show.
On the 21st May those Glencore (GLEN) holders can look
forward to receiving their Lonmin (LMI) stock (AGM approval). With a slight recovery in the price, as the
shorts closed, it’s not looking pretty for LMI. With their discussions to reduce costs, it’s all too little too late.
Simply put, LMI's figures don't stack up and after the last debacle where
muppets gift-aided $817m (09 November 2012). Time now to pass the cap
around again, or conduct some drastic cuts. If the latter doesn’t work, at
least they’ve got a few more willing muppets in the form of post-Glencore
holders. The time is now for more cash psychologically, a fully under-written
gift-aider at 85 pence should entice most.
The cuts are 'perhaps' too little too late, those firms that
bought into the rights issue had a choice, good money after bad? Will there be
a recovery? No doubt, but simply put, the money may just be safer under the
mattress! More so, if these cuts can be imposed/implemented without an impact
on production then why wasn't it conducted earlier! LMI is one for the list of management
to beware of when investing, if their names pop up elsewhere. LMI should be
managed as a social enterprise by the Republic of South Africa. As such, they
may be able to entice the IMF to waste some monies as well, perhaps even the
Chinese version?
On a brighter note, Sirius Minerals (SXX) informed us
the special committee date has been set for the 30th June
(Put it in your diary now). Still in sector, Highfield Resources has its cap
out for $106M to build move forward their Spanish licenses.
Muga being central to the licenses in Spain is key, and initial indications are
there's been a positive uptake in raising the cash, albeit that has the caveat
of "at what price." One ASX trader suggests its a mere 5% discount to
close...
Randgold Resources (RRS), Q1 Results were out, it’s very hard to justify the
valuation, save for being protectionary on the basis of if one must invest in gold, then perhaps bigger is better?!?! RRS
note the supply of gold is slowing (only marginally currently), which may
actually assist the price and save some of the higher cost Co's that are just
about surviving.
RRS is a traders dream currently, although as it continues
so do the risks of a break out, but not yet. RRS remain silent on acquisitions.
A well-placed geologist bumped into some RRS personnel in another African
nation...one wonders what they could have been doing there, perhaps their
Satellite Navigation went wonky coming from Mali to Côte d’Ivoire?!
Atb Fraser
Fraser- Hi- Well done to the shy Tories- so we are saved from Labours obvious plans to pay lip service to sensible attempts to cut the deficit (the much hated austerity, which used to be a virtue but which has been painted by the "progressives" as far too sensible) as Red Ed had been conjuring up more and more left wing proposals in the latter weeks of the campaign. The Ed Stone was a silly prank and the donor covering that bill may not be too happy. The electorate clearly saw through the thin veneer of fiscal responsibility and looked long and hard at the pressures Labour would have had from within and also from the SNP to get the cheque book out and spend our way out of debt... complete lunacy of course, akin to the guy who keeps going "double or quits" at the casino and comes home sans shirt. Ed had a chance to establish some credibility by saying sorry for Labours overspending last time and he was too stupid to tap the ball into the empty net, instead fluffing the chance to say "yes, we got that wrong but have learnt from pour mistakes and will be sensible next time". Instead, they talked about cost of living crisis, which many reflected the withdrawal of crazy tax credits to all and sundry. The next time in power could be some way away as the loony Left are keen to get power now-- their equivalent of the night of the long knives soon as they tear into each other. No point in looking into Scotland for a leader as they have often done in the past.
ReplyDeleteAlong similar lines I noticed that Syriza has passed a law to reemploy 15k of the civil servants (mainly family members??!!) that were found to be idle and sacked previously. This makes it v clear that Grexit is a sure bet for me at least. The Germans will exit them via the institutions and when the rest of Europe see the ensuing chaos and added misery, they will fall into line and restructure. Syriza will go down in history but not for the reasons they hoped.
http://wrp.org.uk/news/10884 - with partial coverage
Cheers. The Leggie