May 20, 2012
Daily updates of the latest resource investment information
Morning Market Brief: May 4th
(Posted On May 4, 2012 by Martin Place Securities)
Overnight Headlines:
- The ECB left its key lending rate unchanged at 1%, stating the Governing Council did not consider a rate cut at the meeting and that current monetary policy is “accommodative” with real rates at negative levels in much of the euro era. Draghi offered no hint of further stimulus.
- Spain sold €2.52b of bonds, exceeding the target of €1.5-€2.5b, but paid higher with three-year bonds rising to 4.037%, from 2.617% on 1 Mar’12.
- In the secondary market, yields on 10-year Spanish bonds fell to 5.80%.
- France sold €3.32b of 10-year bonds at an average yield of 2.96%, lower than 2.98% at an Apr’12 sale.
- The European Union had reportedly failed to reach a final deal on new capital rules after more than 12-hours of discussions. Discussions will continue when finance ministers meet in mid May’12.
Resources Snapshot:
- Indonesia will start imposing a 20% tax on mining exports beginning next week. The tax covers 14 mineral ore types, including copper, nickel and gold. The tax excludes coal which will be decided on separately.
- Zimbabwe’s 1Q12 mining revenues increased by 10.4% to US$454m with gold contributing $187.9b, despite the controversial move by the state to control 51% of mines.
- Santos stated that NSW could face “significant” gas shortages if CSG reserves weren’t tapped soon.
Markets:
- DOW JONES: Down 0.47% (or 61.98 points) to 13,206.59. Despite taking positive leads from Europe, the U.S. market turned south and ended the session in the red on the back of mixed economic data. Firstly, the ISM services sector index fell by 2.5 points to 53.5 for Apr’12, lower than the 55.4 expected and the lowest point since Dec’11. Secondly, jobs data came in better than expected with initial jobless claims falling 27,000 to 365,000, better than the 378,000 expected. Claims from two weeks ago were revised upwards. 23 of 30 Dow components fell, lead by HP (-3.1%), Bank of America (-2%), Caterpillar (-1.9%), Alcoa (-1.5%) and Intel (-1.4%). Gainers included P&G (+0.8%) and Disney (+0.6%).
- FTSE 100: Up 0.15% (or 8.44 points) to 5,766.55. European markets, including the FTSE 100, traded in positive territory for most of the day before paring gains late in the session on the back of U.S. data. The main market moving European activity was ECB’s decision to leave the lending rate at 1% and Draghi’s press conference. The banking sector was largely lower with Lloyds and RBS losing 1.3% and 0.9% respectively, while Barclays lost 0.4%. Miners saw mixed results, but were largely lower with BHP and Rio ending down 1.1% and 1.2% respectively. Additional fallers included Randgold Resources, Fresnillo, Kazakhmys and Fresnillo. Energy companies were mostly higher with Shell gaining 0.4%.
Overnight Summary:
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Morning Market Brief: May 3rd
(Posted On May 3, 2012 by Martin Place Securities)
Overnight Headlines:
- Eurozone PMI fell to 45.9 in Apr’12, from 47.7 the previous month and below an early estimate of 46.
- Germany’s PMI for Apr’12 fell to 46.2, a 33-month low and below expectations.
- Manufacturing data in Italy, Spain, France and Greece also shrank.
- Seasonally-adjusted Eurozone unemployment rose to 10.9% in Mar’12, from 10.8% the previous month and to a euro-era high. The number of unemployed workers increased by 169,000 to 17.365m.
- Germany’s unemployment rose by a seasonally-adjusted 19,000 to 2.87m with the rate remaining at 6.8%.
- S&P raised Greece’s credit rating to CCC from SD (selective default) after the country completed its distressed debt exchange.
- Yields on 10-year Spanish bonds rose to 5.87%.
- Yields on 10-year Italian bonds rose to 5.56%.
- Weaker than expected private-sector employment figures and a substantial drop in factory orders were seen during the U.S. session.
Resources Snapshot:
- India’s silver jewellery exports increased to US$105m in Mar’12, up from US$69 in Mar’11. Traders stated exports to the U.S. hit a new all time high.
- Peter Coleman, CEO of Woodside, stated a “very broad range of investors” had expressed an interest in buying Shell’s 23.26% stake in the company. The company has ruled out a buy-back.
- Barrick Gold announced a 3% in increase in 1Q12 profit, allowing for a 33% dividend increase to US$0.20.
- Assuming the timeline holds, Northern Graphite’s Bisset Creek Project in Ontario will open in 2013.
- Columbia’s leading coal producers are reportedly looking to spend US$1.3b to improved and expand their ports in an effort to increase production to 120mt by 2014.
Markets:
- DOW JONES: Down 0.08% (or 10.75 points) to 13,268.57. U.S. markets took negative leads from Europe and ended in the red overnight. However, despite weak local data, indices staged a grinding comeback throughout the session to end only marginally lower and on their session highs. Firstly, ADP reported that private sector employment increased by 119,000 in Apr’12, lower than expected and the smallest increase since Sep’11. The average monthly increase in 1Q12 was around 200,000. Secondly, U.S. factory orders for Mar’12 fell 1.5%, the largest fall in three years and much lower than the 1.1% increase in Feb’12. 14 Dow components rose, lead by Intel (+0.8%), Home Depot (+0.8%), P&G (+0.6%) and Caterpillar (+0.5%). The banks were among the largest fallers with Bank of America and JP Morgan falling 1.8% and 1.4% respectively. Alcoa fell the most, ending 2.4% down.
- FTSE 100: Down 0.93% (or 54.12 points) to 5,758.11. European markets, including the FTSE 100, cut into yesterday’s gains as weak data across both Europe and the U.S. hurt investor sentiment. The banking sector lost ground with Lloyds, Barclays and RBS falling between 2.1% and 5.6% each. The mining sector offered little support with heavyweights BHP and Rio losing 1.1% and 1.9% respectively. Additional fallers included Fresnillo, Kazakhmys, Randgold Resources and Anglo American. The energy sector was weak with Shell losing 1.7% while BP gave up 1.7%.
Overnight Summary:
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MPS Morning Market Brief: May 2nd
(Posted On May 2, 2012 by Martin Place Securities)
Overnight Headlines:
- Few European markets were open due to May Day.
- U.K’s manufacturing PMI fell to 50.5 in Apr’12, from 51.9 the previous month and below expectations.
- Gains last night were attributable to bullish U.S. manufacturing data; the ISM manufacturing index for Apr’12 rose to 54.8 from 53.4 in Mar’12, above expectations of a fall to 53. Additionally, within the data, new-orders measures rose to 58.2 from 54.5 while the employment gauge climbed to 57.3 from 56.1.
- Former U.S. Federal Reserve Chairman Alan Greenspan spoke at a Bloomberg Summit overnight, claiming “Stocks are very cheap. There is no place for earnings to grow except into stock prices”.
- The Dow closed at its highest point since 2007.
Resources Snapshot:
- Rio is hoping to finalize the sale of five alumina plants across France and Germany by Sep’12.
- Deloitte Access Economics’ quarterly survey of Australian investment projects show more than $921b of projects at various development stages. with $412b attributable to mining projects.
- The Australian Environment Court has ruled that climate change cannot be considered when granting coal mining consents.
- According to the Mainichi, Japan and India have reached a basic agreement to jointly develop rare earths with India to supply Japan with ~14% of its rare earth demand.
- Cameco, the world’s largest uranium miner, announced 1Q12 revenue increased by 22% via a 33% increase in sales volumes. Gross profit gained 31% to US$178m.
Markets:
- DOW JONES: Markets across the United States started the month with gains as indices rallied on the back of better than expected manufacturing data. The U.S. ISM manufacturing index for Apr’12 unexpectedly rose to 54.8 from 53.4 the previous month and above expectations of a fall to 53. This data overshadowed weak construction figures with Mar’12 construction spending climbing just 0.1%, versus expectations of a 0.5% rise. Lastly, most automakers announced their car sales with cars selling at an annualized rate of 14.4m. Despite the Dow fading late in the session, 22 Dow components rose, lead by Alcoa and Bank of America, both gaining 2.5%. Fallers included Cisco and Caterpillar.
- FTSE 100: Up 1.30% (or 74.45 points) to 5,812.23. London’s benchmark ended higher overnight with a number of European markets closed for May Day. The FTSE 100 kicked off May’12 with a solid gain after spiking higher on the release of better than expected U.S. manufacturing data. The banking sector rose with Barclays and RBS gaining 3.6% and 4.2% respectively, while Lloyds jumped over 8% on the back of earnings results. The miners noted gains with heavyweights BHP and Rio topping over 2% each. Gainers also included Fresnillo, Kazakhmys, Randgold Resources and Anglo American. Shell ended 0.9% higher to help boost the energy sector.
Overnight Summary:
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Morning Market Brief: May 1
(Posted On May 1, 2012 by Martin Place Securities)
Overnight Headlines:
- The Spanish economy contracted 0.3% in 1Q12, the second consecutive quarter of decline, officially putting the economy into recession.
- S&P took negative action on 16 Spanish banks overnight, cutting multiple credit ratings to various levels.
- There was heightened corporate activity in the U.S. overnight; Microsoft announced a JV with Barnes & Noble via a US$300m investment and Energy Transfer Partners said it will acquire Sunoco for US$5.3b.
- The Dow squeezed out a 0.01% monthly gain, extending the consecutive monthly gains to seven, the longest winning streak since Jan’07.
Resources Snapshot:
- Lynas has undertaken defamation claims against a Malaysian median outlet to denounce some of the claims against its proposed processing plant in Malaysia.
- Zambia’s Vice President stated the country will not change its mining tax code, but will increase revenue through ensuring company compliance.
- According to RareMetalBlog, the Russian government is seeking to re-enter the rare earths game and has begun creating the conditions needed for an active resumption of rare earth production.
- According to Bloomberg, Arch Coal is seeking buyers for several of its thermal-coal mines in the United States.
Markets:
- DOW JONES: Down 0.11% (or 14.68 points) to 13,213.63. Taking negative leads out of Europe, U.S. markets opened the week lower as investors absorbed the release of weak economic data. Despite finishing the session strongly, the Dow ended a four-session winning streak with 14 components falling. Firstly, the Chicago manufacturing PMI index fell to 56.2 in Apr’12 from 63.3 the previous month and is currently at a 29-month low. Additionally, consumer spending in the U.S. rose 0.3% in Mar’12, slightly below expectations of 0.4%. Personal spending gained 0.4%, beating expectations of a 0.3% climb. The biggest gainers included Merck & Co (+2%), Kraft (+1.2%), Cisco (+0.9%) and Travelers (+0.7%). Fallers included Caterpillar (-1.7%), Bank of America (-1.7%), P&G (-1.2%) and GE (-1%).
- FTSE 100: Down 0.68% (or 39.33 points) to 5,737.78. European markets, including the FTSE 100, started the week lower as major indices ground lower overnight on the back of poor Spanish news and weak U.S. data. The banking sector was lower with Barclays and Lloyds falling 2.2% and 0.6% respectively, while RBS lost 0.3%. The mining sector fared little better with Rio down over 2% while Randgold Resources, Vedanta, Fresnillo and Kazakhmys all ended in the red. BHP countered the trend and ended 0.4% higher. Following BHP, energy companies rose with BG Group and Shell gaining 0.5% and 0.2% respectively.
Overnight Summary:
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MPS Morning Market Brief: April 27th
(Posted On April 27, 2012 by Martin Place Securities)
Overnight Headlines:
- The European Commission’s Eurozone economic sentiment indicator fell to 92.8 in Apr’12, from 94.5 the previous month and to the lowest reading since Dec’11.
- A German newspaper reported that Eurozone leaders are working on a bank bailout program via the European Stability Mechanism, however, according to the Dow Jones, this was denied by the leaders.
- S&P cut Spain’s long-term credit rating to BBB+ and maintained the negative outlook.
- Spain’s economic issues have begun hurting companies with Santander, the largest bank in the Eurozone by market cap, announcing it set aside €3.13b in provisions for non performing loans in 1Q12, resulting in the firm taking a loss.
Resources Snapshot:
- Vale’s 1Q12 net income fell 44% to US$3.83b, generally in line with expectations and attributable to rain-affected exports, falling prices and increased CAPEX on new projects.
- In response to the recent nationalization of YPF, Orocobre Limited, with significant exposure to Argentina, said the mining sector in the country is fundamentally different to the energy sector and the nation’s government is supportive of mining.
- Earnings continued in the U.S, with Exxon Mobil missing expectations of US$2.08 EPS with US$2.00. Net income fell 11% with a 1% reduction in oil equivalent production.
Markets:
- DOW JONES: Up 0.87% (or 113.90 points) to 13,204.62. U.S. markets gained modestly overnight on better than expected housing data and a solid run by the tech stocks. However, not all data was positive with initial jobless claims falling by a meagre 1,000 last week to 388,000. Economists had expected a fall to 375,000. Additionally, claims from two weeks ago were revised upwards to the highest level since the first week of Jan’12. Conversely, the National Association of Realtors pending-home-sales index rose 4.1% to 101.4 in Mar’12, above expectations. Also, Feb’12 was revised upwards to 97.4. The index is 12.8% higher than this time last year. Lastly, the Kansas City manufacturing index missed expectations and fell to 3 in Apr’12, from 9 the previous month. Over 80% of Dow components rose, lead by Wal-Mart, Chevron and AT&T, all gaining over 2% each. The fallers included Exxon Mobil, Microsoft and Boeing.
- FTSE 100: Up 0.52% (or 29.83 points) to 5,748.72. European markets, including the FTSE 100, spent the first half of the session in the red on the back of poor data out of the Eurozone. However, markets turned upwards on better than expected U.S. home sales data. The banking sector gained with RBS, Lloyds and Barclays rising between 1% and 3.2% each. The mining sector was largely mixed with heavyweights BHP gaining 0.8% while Rio headed south 0.2%. Fresnillo, Randgold Resources and Anglo American followed BHP higher while Kazakhmys took Rio’s route and ended down 1.3%. Lastly, the energy sector noted gains with BG Group and Shell rising 1.3% and 3.2% respectively.
Overnight Summary:
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Morning Market Brief: April 26th
(Posted On April 26, 2012 by Martin Place Securities)
Overnight Headlines:
- U.K’s 1Q12 GDP contracted 0.2%, following a 0.3% contraction the previous quarter.
- Yields on 10-year Spanish bonds fell to 5.82%.
- Notable U.S. earnings results included Caterpillar with 1Q12 EPS of US$2.37, higher than the US$2.13 estimated.
- The NASDAQ noted its largest gain of the year (+2.3%), lead by Apple beating earnings expectations and rising 8.9%.
- Key points from the Federal Open Market Committee and Bernanke Press Conference:
- The language was virtually unchanged with commentary stating economic growth will remain moderate over coming quarters and then only pick up gradually.
- Benchmark interest rates unchanged.
- Unemployment rate forecasts were revised down to 7.8%.
- Seven members believe the Fed should be tightening in 2014, compared to five in the previous meeting.
- In response to a question of if the Fed is doing enough, Bernanke stated “we’re prepared to do more”.
- Bernanke stated the central bank is considering publishing the interest-rate forecast of individual policy makers as it reviews ways to improve its public communication.
Resources Snapshot:
- Atlas Iron and QR National are believed to announce today a feasibility study for a new open-access railway in the Pilbara.
- Consejo Minero, the President of the Chilean Mining Lobby Group, believes multiple mining projects will be shelved due to the high cost and scarcity of electricity in the country.
- S&P stated that the Argentinean decision to nationalize oil company YPF will “contribute to Argentina’s deteriorating economic and political links with the international community”.
- Following the completion of all Chinese regulatory requirements, China’s Chalco and Rio have finalized a JV to operate the Simandou iron ore project in Guinea.
- Latest IMF figures show that the weakened Gold price in Mar’12 lead to central banks buying 57.9t of gold throughout the month; Mexico 16.8t, Russia 16.5t, Turkey 11.5t, Kazakhstan 4.3t and Ukraine 1.2t.
Markets:
- DOW JONES: Up 0.69% (or 89.16 points) to 13,090.72. Markets across the United States took positive leads out of Europe and continued higher throughout the session with the biggest news stories including Fed comments and durable goods orders. Firstly, in economic data, orders for durable goods for Mar’12 fell 4.2%, a larger drop than expected with Feb’12 numbers also being revised lower. Markets maintained their gains after the release of FOMC commentary and a live press feed with Fed Chairman Ben Bernanke. 24 Dow components rose, lead by Boeing (+5.3%), American Express (+2.2%), DuPont (+2.1%) and Intel (+2%). The biggest fallers included Caterpillar, Wal-Mart, GE and JP Morgan.
- FTSE 100: Up 0.16% (or 9.40 points) to 5,718.89. European markets, including the FTSE 100, extended their gains into a second session as London’s benchmark traded in a tight 40-point range all day. Despite British GDP contracting in 1Q12, the FTSE 100 rose with Lloyds gaining 0.5%, HSBC rising 0.1% while Barclays ended flat and RBS fell 0.4%. The mining sector was mostly higher with heavyweights BHP and Rio gaining 1% and 1.9% respectively. Additional gainers included Fresnillo, Randgold Resources, Anglo American and Kazakhmys. The energy sector notes mixed results with Shell falling 0.1% while BG Group topped 0.4%.
Overnight Summary:
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MPS Uranium Roundup: Fortnight to 20 Apr 2012
(Posted On April 24, 2012 by Martin Place Securities)
Highlights:
- The uranium spot price was unchanged (again) over the fortnight, in both USD and AUD terms. Compared to last year, the AUD spot price is 7% lower and likely to reach parity during the next fortnight.
- The EV of the pure U companies rose 3% to $4.1b. ERA was the main contributor with a 31% improvement. The in-ground value of the sector’s resource is priced at $2.12/lb WCM. Companies with 25mlb and 300ppm are trading at $2.82/lb WCM, while companies that have not achieved these hurdles are trading at 58c/lb WCM.
MPS Uranium Index Vs All Ordinaries:
Summary:
- The news in summary. There was favourable news out of Japan & China in regards to future U demand. The U sector lost three senior executives (BKY, UNX & DYL) and gained two (EMX & THX). There were three resource upgrades (BMN, FTE & AGE) and four quarterly production reports (PDN, ERA, BHP & RIO). The latest stats on nuclear power in the USA and globally were also released.
- 6 Apr’12 – India’s Atomic Energy Regulatory Board (AERB) has become the 11th member of the Multinational Design Evaluation Program (MDEP). MDEP is a program where national regulators share technical data and standardise regulations to help review new nuclear power reactor designs. See more.
- 7 Apr’12 – The Japanese PM and three cabinet ministers reportedly approved safety standards for restarting nuclear power plants in the country. See more.
- 9 Apr’12 – A new 650MWe reactor has begun commercial operations at the Qinshan Phase II nuclear power plant in China. See more.
- 10 Apr’12 – BMN announced their DFS Results. Highlights: (See more 01 / 02 / 03):
- LOM production has been maintained but achieved in less time by increasing the processing plant by 33%, lowering the stripping ratio and tinkering with the recovery rate. The LOM cash cost is ~US$46/lb (excluding 3% royalties & US$1.10/lb marketing & transport).
- The capex assumptions have been increased substantially. Total capex/LOM production has increased 31% to ~US$12/lb.
- BMN calculates that the LOM breakeven point is US$61/t U3O8 – approximately the current long term contract price.
- Assuming a US$75/lb price, the free cashflow after capital (undiscounted, post-tax) is US$923m. The payback period is six years.
- The 16 year mine life is based upon the Measured & Indicated Resources of 148.8mlbs @ 201ppm. Further resource drilling in the surrounding area and within the 63.9mlb @ 176ppm Inferred Resource could extend the mine life to beyond 20 years.
- Accompanying the DFS was the maiden Reserve estimate. At 119.3mlb @ 194ppm, the conversion from measured and indicated to reserves was ~80%. The in-ground value of BMN’s resource is currently valued at ~44c/lb WCM, which compares very favourably with companies with 25mlb and 300ppm resources that are trading at $2.82/lb WCM and companies that have not achieved these hurdles that are trading at 58c/lb WCM.
- Based upon MPS testing eight key assumptions, the project is most highly leveraged to the uranium price.
- 10 Apr’12 – PDN has received a number of participation proposals relating to its non-producing assets and is considering its options to secure optimal value through JVs. See more.
- 10 Apr’12 – David Cameron (British PM) and Yoshihiko Noda (Japanese PM) reaffirmed their commitment to nuclear cooperation. See more.
- 10 Apr’12 – DYL announced assays results from infill drilling at the MS7 deposit. The results highlighted mineralisation at depth with the best intercept of 58m @ 535ppm U3O8 from 117m. The results will go towards increasing the size and confidence of the current resource at MS7. See more.
- 10 Apr’12 – Japan has tentatively approved the restart of two reactors in Japan, the first such approval since new safety guidelines were announced the previous week. See more.
- 10 Apr’12 – ERA’s Mar’12 Quarterly Operations Review Highlights: See more
- Above average rainfall continued to deny mining access to the high grade material in the Ranger pit. Total material mined was ~50% lower YoY. Mining is expected to re-commence by May’12 and dewatering completed by Jul’12.
- Uranium oxide production was 612t, up 18% YoY and down 41% QoQ. Mill recovery continues to improve (88%). The mill head grade fell 54% YoY to 0.11%, due to the ore being sourced from lower grade stockpiled material.
- Production is expected to be maintained at current levels during the Jun’12 quarter until access to the higher grade material is available. Nevertheless, FY12 guidance has been lifted from 3,000t-3,700t to 3,200t-3,700t.
- The wet weather also delayed exploration activity. Just $2m of the $40m program for 2012-14 was undertaken during the quarter.
- 11 Apr’12 – ERA’s Chairman (David Klinger) and Chief Executive (Rob Atkinson) addresses at the 2012 AGM. See more 01 / 02.
- 11 Apr’12 – DYL have appointed advisors to explore a possible AIM listing. See more.
- 11 Apr’12 – DYL announced Dr Leon Pretorius, the Namibian based MD of DYL’s Namibian operations, will leave the company to pursue other interests. See more.
- 11 Apr’12 – PEN received approvals to commence drilling at Sites 45 and 49 of the Karoo Uranium Project in South Africa. See more.
- 11 Apr’12 – EVE has appointed Golder Associates as the lead environmental consultant for the baseline environmental studies at its Aurora Project, USA. The studies will support the application to both state and federal permitting agencies. See more.
- 11 Apr’12 – The Nuclear Energy Institute (NEI) released 2011 U.S. nuclear figures; 104 reactors produced 790b units of electricity – enough to meet 19.2% of local needs. There were 62 unplanned shutdowns, three fewer than the 2005 record. See more.
- 11 Apr’12 – FTE increased the resource at the A238 deposit in Mauritania 56% to 23.4 mlbs U3O8 @ 235ppm. The grade was 8% lower than the previous estimate. A further resource update is expected in Jul’12. See more.
- 12 Apr’12 – EVE submitted a “pre-filing” fee to the Oregon Department of Energy in order to commence its consideration of the permitting requirements for the Aurora Project. See more.
- 12 Apr’12 – GGG’s 2011 Annual Report. See more.
- 13 Apr’12 – BKY announced the resignation of Brendan James from the Managing Director role as at 20 May’12. See more.
- 13 Apr’12 – EMX announced the appointment of Kim Robinson as Managing Director, effective 30 Apr’12. See more.
- 13 Apr’12 – UEQ announced completion of the PhosEnergy Process Demonstration Plant with commencement scheduled for May’12. Additionally, a PFS Engineering Study is planned to be completed before the end of 2012. See more.
- 13 Apr’12 – The IAEA released global nuclear electricity generation figures for 2011. Key points: See more.
- 2011 nuclear generation fell 4.3% to 2,518 TWh. The key contributors were Japan (down 44.3% to 152.6 TWh) and Germany (down 23.1% to 102.3 TWh).
- Six new reactors were connected in 2011, adding 4,014 MWe of capacity.
- Capacity upgrades in the Czech Republic, Finland, Mexico, Spain and the U.S added ~440 MWe of capacity.
- Two reactors formally began construction in 2011, one in Pakistan and India, with combined gross capacity of 1,040 MWe.
- Only one non-Japanese or German reactor was shut down. The Oldbury 2 Magnox reactor in the U.K was shut down after 43 years of production.
- 14 Apr’12 – THX announced that Tony Lofthouse has been appointed as CEO effective Apr’12. See more.
- 16 Apr’12 – ERA’s updated company presentation. ERA is planning 35,000m of drilling on the Ranger Project during 2012. Three drill rigs will be used, with two rigs arriving in Apr’12 See more.
- 16 Apr’12 – WHE entered into a definitive agreement to sell its non-core uranium assets in the United States. The terms state the Saltwater Project in Wyoming can be sold for US$1.4m with an option to buy the Bison Basin Project in the same state for an additional US$100,000. Assuming the Bison Basin option is triggered, the sale will be valued at US$1.55/lb or US61c/lb WCM. The assets had a carry value of ~$1.5m as at 31 Dec’11 after a $3.79m write-down during the preceding period. See more.
- 16 Apr’12 – PDN released their 1Q12 results. Highlights: See more.
- Langer Heinrich, Namibia – Production was 10% below PDN’s target at 1,052klbs (+32% YoY & -12% QoQ) due to commissioning problems & planned lower grade feed. The average grade fell 17% QoQ to 850ppm. Mining activities reported robust improvements, including a 32% QoQ increase in ore mined. The Stage 4 feasibility study has been deferred to Dec’12.
- Kayelekera, Malawi – Record production of ~725klbs (+20% YoY & +15% QoQ). The positives included 15% QoQ increase in processing plant throughput & 8% QoQ increase in grade to 1,205ppm. The main negative was a 33% QoQ increase in the waste/ore ratio. The 2011 drilling program results are due during Jun’12.
- Sales – Total sales were ~1.1mlbs (-19% YoY & -14% QoQ) at an average price of US$59.17/lb (-11% YoY & +12% QoQ). Some inventory build up occurred in anticipation of higher sales volumes during 2Q12.
- 17 Apr’12 – RIO’s share of U3O8 production during the Mar’12 quarter was ~2mlbs, up 39% YoY but down 10% QoQ. FY12 guidance is 9.4m-10.1mlbs, well up on FY11’s 7.1mlbs. Focusing on Rossing (69% owned) as ERA (68% owned) reports separately, the 1Q12 result was ~1mlbs, up 27% YoY and 59% QoQ. Improved crushing performance and slightly higher head grades were the key drivers to the improved results. See more.
- 17 Apr’12 – MEU has commenced its 2012 drilling program at Junction Dam with the aim of expanding he resource base. See more.
- 18 Apr’12 – BHP’s Olympic Dam produced 896t U3O8 during the Mar’12 quarter, down 16% YoY and steady QoQ. Planned maintenance was undertaken during the quarter. See more..
- 18 Apr’12 – USA announced that a second round of drilling targeting uranium mineralisation in granite basement below the Blackbush deposit has commenced. 3,000m of drilling is anticipated to be finished by 29 Apr’12. See more.
- 18 Apr’12 – Denison Mines has agreed to sell its U.S. mining assets to Energy Fuels in an all-share transaction valued at US$107.5m. See more.
- 18 Apr’12 – Reactor construction continues in China; the dome of unit 1 of the Fangchenggang plant was lowered into place and the delivery of heavy components for the primary reactor cooling system of the first EPR at Taishan. See more.
- 18 Apr’12 – A Japanese subcommittee has been established to look at the options for future nuclear fuel cycles in the country. See more.
- 18 Apr’12 – SHE raised $0.71m via the issue of 23.8m shares from a one-for-four rights issue with a shortfall of 57.2m to be issued at the Board’s discretion. See more.
- 19 Apr’12 – UNX announced the resignation of Managing Director Matthew Gauci effective 30 Apr’12. Rodney Chittenden, the current Project Development Manager, will be acting CEO until a replacement is secured. See more.
- 19 Apr’12 – AGE announced their maiden JORC resource estimate at the Caramal deposit in Northern Territory. The all inferred resource is 0.94mt @ 3,100ppm U3O8 for 6.5mlbs using a 1,000ppm U3O8 cut-off. The grade sits behind Koongarra (12,441ppm) and Jabiluka (4,858ppm) in the same region. AGE is trading at $9.78/lb WCM, much higher than the current $2.12/lb WCM average. See more 01 / 02.
- 19 Apr’12 – Inkai (Cameco and Kazatomprom JV) is seeking the Kazakh government’s approval by the end of 2012 to boost uranium output by 33% to 4.4mlbspa U3O8. See more.
- 19 Apr’12 – A government report stated Switzerland’s decision to not expand nuclear capacity, essentially phasing out all nuclear by 2034, will cost US$33b. See more.
- 19 Apr’12 – Japan has posted its worst ever trade deficit (US$54b) on the back of elevated energy import prices, most notably LNG, in the midst of an almost complete shutdown of nuclear generation. Additionally, Japan’s nine regional power utilities are expected to post a combined loss of US$9.6b in FY11, from a US$4.1b profit the previous year. See more.
- 19 Apr’12 – FTE announced initial assay results at for the RC drilling programme at Firawa, Guinea. Notable intersections include 32m @ 359ppm U3O8 and 17m @ 363ppm U3O8. See more.
- 20 Apr’12 – UEQ presented at the 2012 Electric Metals Conference. See more.
- 20 Apr12 – MEU has successfully applied for three new uranium prospective tenements in NSW, near their current Junction Dam project. The tenements are prospective for sandstone-hosted uranium and lie in the Lake From Embayment. See more.
Relative EV/LB WCM Performance:
Summary of ASX-listed Uranium Companies:
Morning Market Brief: April 20th (Company Briefs: FMG)
(Posted On April 20, 2012 by Martin Place Securities)
Overnight Headlines:
- Despite reasonably successful bonds auctions out of Spain and France, markets across Europe and the U.S. lost ground overnight on the back of a host of weaker than expected U.S. economic data.
- The Spanish Treasury sold €2.54b of 2- and 10-year bonds after targeting sales of between €1.5-€2.5b. Yields on both auctions rose compared to a previous sale.
- In the secondary market, yields on 10-year Spanish bonds rose to 5.92%.
- France sold €7.97b of medium and long term bonds at auction.
- Vague rumours circulated that Fitch would not resolve the Negative Outlook on France until 2013 – these were later denied by the ratings agency.
- Christine Lagarde, the IMF Chief, said Spain currently does not need any help and the present political situation is “solid”.
Resources Snapshot:
- Paladin is set to launch about US$300m in convertible bonds re repay an issue that falls due in Mar’12.
- The long-awaited independent report on Newmont’s US$4.6b gold and copper mine in Conga was handed to the Conga government. Amongst other things, the report recommends avoiding covering of two lakes.
- Canadian mining company Quaterra Alaska and county supervisors in Northern Alaska have filed a lawsuit against the U.S. government aiming to reverse a 20-year mining closure of uranium-rich land near the Grand Canyon.
- According to Reuters, the U.S. will maintain their position as the world’s top coal producer despite the collapse of their domestic market due to cheap gas.
Markets:
- DOW JONES: Down 0.53% (or 68.65 points) to 12,964.10. Markets across the United States took weak leads from Europe and continued to fall on the back of poor local economic data. While the Dow bounced of its lows, it again gave up the 13,000 level. Firstly, the Philadelphia Fed manufacturing index for Apr’12 fell to 8.5 from 12.5 the previous month and below expectations of 10.8. However, the employees sub-index rose to 17.9 from 6.8, with 26.7% of respondents claiming they increased hiring. Secondly, initial jobless claims rose to 386,000, missing expectations of a drop to 374,000. Previous weeks were also revised upwards. Additionally, sales of existing homes fell 2.6% in Mar’12 to 4.48m, missing expectations of 4.63m. Lastly, and bucking the negative trend, the Conference Board’s leading indicator index rose 0.3% in Mar’12, the highest level since 2008. 27 Dow components fell with DuPont, Caterpillar, Bank of America, Alcoa and McDonalds all losing over a percent. Travelers was the top gainer, rising 3.8%.
- FTSE 100: Down 0.01% (or 0.74 points) to 5,744.55. While most European markets ended lower on the back of a later denied rumour of a French downgrade and weak U.S. economic data, the FTSE ended virtually unchanged. The banks were broadly lower with RBS and Lloyds falling over 2% each while Barclays lost 0.9%. The mining sector was mixed with heavyweights BHP and Rio losing 0.2% and 0.8% respectively, while Anglo American also fell. Conversely, gainers included Randgold Resources, Fresnillo and Kazakhmys. Energy stocks failed to offer any support with BG Group and Shell slipping 0.8% and 1.5% respectively.
Overnight Summary:
MPS Company Briefs:
- Fortescue Metals Group Ltd (FMG) | March 2012 Quarterly:
- The Pilbara iron ore operations produced 41.4mt (100% basis), up 15% YoY but down 8% QoQ. Cyclone activity interrupted operations. The annualised rate is ~166mt which compares favourably to the current record of 178mt (Dec’11 qtr).
- Full year guidance is unchanged at 159mt. This should be done in a canter, despite the scheduled maintenance and tie-in activities scheduled for the Jun’12 quarter.
- Capex for the Pilbara iron ore expansion totals US$7b (equity share). The Port Hedland Inner Harbour expansion to 220mtpa (US$1.9b) is 49% complete and described as on schedule and on budget (due 2H CY12). A further pre-commitment expenditure of US$779m has been approved for the proposed Outer Harbour development. BHP’s total capex program is currently ~US$26b (equity share).
- Comment – Appeared to have delivered to expectations adjusted for the weather.
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Morning Market Brief: April 19th (Company Briefs: BHP, RIO, BCI)
(Posted On April 19, 2012 by Martin Place Securities)
Overnight Headlines:
- The Bank of Spain stated the ratio of bad loans for the sector hit a 17-year high in Feb’12 of 8.2%.
- Yields on 10-year Spanish bonds fell to 5.81%.
- According to Reuters, the Italian Government will delay its plan to reach a balanced budget by 2013 by a year. Additionally, the country’s deficit target will be increased to 1.7% of GDP in 2012, 0.5% in 2013 and 0.1% in 2014.
- A biannual IMF report on global financial stability stated that between 2006 and 2011 bank stocks have been the most sensitive to sovereign risk (i.e. credit default swaps of countries) and economic activity (i.e. Eurozone PMI).
- The latest Bank of England minutes pulled in expectations of additional stimulus with eight out of nine members backing no change to the current policy.
Resources Snapshot:
- The U.S Environmental Protection Agency (EPA) stated fracking wells will have until 2015 to comply will new rules designed to reduce air pollution.
- The EIA stated crude inventories rose by 3.8m barrels in the week ending 13 Apr’12, higher than the 0.4m increase expected.
- Damian Callachor, a director of the Chamber of Minerals and Energy WA, stated that the biggest challenge facing the Australian gold sector is the rise production costs, claiming “There are three contributing factors – labor, energy and grade impacts”.
- Leucadia National has engaged FMG in a legal battle over a move by the miner to replicate a royalty note issued to Leucadia in 2006.
- Rio is planning to invest ~US$100m to explore for copper in Kazakhstan through a 50/50 JV with Tau-Ken Samruk. Rio will fully fund the exploration work.
- Robert Friedland, along with 6 other Directors, have resigned from Ivanhoe Mines as part of the new Rio financing agreement.
- South African Deputy President Kgalema Motlanthe stated at a mining convention in Johannesburg that more state intervention is required in the mining industry.
Markets:
- DOW JONES: Down 0.63% (or 82.79 points) or 13,032.75. U.S. markets took poor leads from Europe and lost ground overnight after spending the first half of the week in rally mode. With economic data light throughout the session, investors turned to weak earnings results from Intel and IBM and headed lower. The Dow closed near its session lows. Seven Dow components still managed gains with HP (+0.9%), Caterpillar (+0.7%), Pfizer (+0.6%) and Exxon Mobil (+0.4%) leading the way. IBM (-3.5%) and Intel (-1.8%) were the biggest fallers. JP Morgan and Alcoa were also among the fallers.
- FTSE 100: Down 0.38% (or 21.66 points) to 5,745.29. European markets pulled back from a strong rally in an earlier session overnight with Spain again a key focus after an increase in bad loans. The banking sector was the worst performer with RBS and Lloyds falling 3.1% and 3.2% respectively, while Barclays lost 2.9%. Miners attempted to buoy the index with heavyweights BHP and Rio gaining 0.9% and 0.6% respectively. Fresnillo also rose while Kazakhmys, Anglo American and Vedanta headed lower. The energy sector was lower with BG Group and Shell slipping 0.2% and 0.6% respectively.
Overnight Summary:
MPS Company Briefs:
- BHP Billiton Limited (BHP) | March 2012 Quarterly:
- The Pilbara iron ore operations produced 41.4mt (100% basis), up 15% YoY but down 8% QoQ. Cyclone activity interrupted operations. The annualised rate is ~166mt which compares favourably to the current record of 178mt (Dec’11 qtr).
- Full year guidance is unchanged at 159mt. This should be done in a canter, despite the scheduled maintenance and tie-in activities scheduled for the Jun’12 quarter.
- Capex for the Pilbara iron ore expansion totals US$7b (equity share). The Port Hedland Inner Harbour expansion to 220mtpa (US$1.9b) is 49% complete and described as on schedule and on budget (due 2H CY12). A further pre-commitment expenditure of US$779m has been approved for the proposed Outer Harbour development. BHP’s total capex program is currently ~US$26b (equity share).
- Comment – In line with management guidance.
- Rio Tinto Limited (RIO) | March 2012 Quarterly:
- The Pilbara iron ore operations produced 55.8mt (100% basis), up 10% YoY but down 10% QoQ. Cyclone activity interrupted operations. The annualised rate is ~224mt which compares to the current record of 245mt (Dec’11 qtr). Full year guidance is 250mt (100% basis) for the global operations.
- The capacity of the Pilbara system has been successfully increased by 5mtpa to 230mtpa, following a second debottlenecking project at the Dampier Port.
- Capex for the Pilbara operations is ~US$15.6b (100% basis), a rather large proportion of the company’ total capex program of ~US$36b. The expansion to 283mtpa remains on track for Dec’13. A further US$1.2b (100% basis) for the proposed expansion to 353mtpa has been committed. FID is due by Dec’12.
- Comment – Another solid result from the core of RIO.
- BC Iron Limited (BCI) | March 2012 Quarterly:
- Operations remain in ramp-up and appear to be running well. Exports rose 51% QoQ to 1mt. To achieve the FY12 target of 3.5mt, the last quarter has to hit 1.4mt. This appears probable given the mining and new trucking capability.
- The average price was ~US$124/dmt CFR. This compares to ~$180/t during 1H12.
- The net cash position has improved from $15m at Dec’11 to $33m.
Comment – BCI appears to have met its guidance. The share price response indicates it wasn’t enough.
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Iron Ore Roundup: Fortnight to 30 Apr’12
Highlights:
The quarterly production reports for the Mar’12 quarter have been released. The production and sales figures for seven Northern WA producers are summarised below. The QoQ performances reflect the negative effects of the cyclone season. AGO was the only company to suffer YoY declines.
Comment – BCI appears to have met its guidance. Link.
Comment – another solid result from the core of RIO. Link.
Comment – In line with management guidance. Link.
Comment – Appeared to have delivered to expectations adjusted for the weather. Link.
Comment - With China growing again, all should be well with the iron ore market. Link.
Relative EV/T WCM Performance:
Summary of ASX-listed Northern WA Iron Ore Companies: