Trade Growth is New Source of Output Weakness
Slumping world trade growth is the latest reason for lowering global growth forecasts. As it releases its twice yearly World Economic Outlook on Tuesday the International Monetary Fund will be joining a succession of international economic organisations warning of the consequences of a decline in global trade growth. The World... Show More
Livewire Exploration Watch
Azure Minerals has reported a 67.1 meter thick interval of mineralised material at its Loma Bonita prospect in Sonora State in Mexico. The discovery includes a 25.9 meter thick zone from surface grading 1.31 g/t Au and 17 g/t Ag and a 25.9 meter interval from 36.6 meters grading 2.4... Show More
The Investor Roadshow: How to Choose?
Twenty mining companies have just completed a two day investor roadshow in Sydney and Melbourne. Most have not yet commenced production or are at a very early stage in building output. How to choose from a presentation alone? Four criteria might offer a useful initial filter: a structured presentation built... Show More
Lithium Watch – MJ Doubts PLS DFS
UK-based industry publication Mining Journal has questioned the price assumptions underpinning the recently released Pilgangoora lithium project definitive feasibility study from Pilbara Minerals. The Journal has observed that “there is very little sound analysis present” to justify the prices assumed for the 36 years of the project. While the Mining... Show More
Livewire Exploration Watch
Lithium Watch – Orocobre Criticises Lithium Scepticism
According to The Australian newspaper, Orocobre chief executive Richard Seville has described scepticism around lithium as “overblown”. http://www.theaustralian.com.au/business/mining-energy/orocobres-seville-expects-ongoing-demand-for-lithium/news-story/1344f63141c921a2b60e5f0a334bdd77 The newspaper report refers to Orocobre’s lower share price being “due to growing concerns that new and expanded sources of lithium supply could swamp the global market”. The share price has declined... Show More
Mining Industry Profits Stabilise
Mining industry profits may have started to stabilise during the first half of 2016 with two consecutive quarterly rises, albeit only modest, in seasonally adjusted pre-tax profits in the March and June quarters of 2016, according to the Australian Bureau of Statistics, after a dramatic cyclical decline over the prior... Show More
Lithium Watch – A Good Project but Poor Return
No track record but priced for success. That is the Pilbara Minerals story. Despite what they say, investors continue to show a preference for ‘trend’ over ‘team’ in making investment choices. The Pilbara Minerals definitive feasibility study released in the past week puts a A$709 million value on the Pilgangoora... Show More
Falling Australian Profit Share Drags Market Lower
Australia’s corporate profit share has reverted to the upper end of a range which had prevailed for five decades prior to 2007 during which time it had been an especially compelling guidepost for medium term investors. The blue line in the chart showing private non-financial corporate operating surplus as a... Show More
Livewire Exploration Watch
Thundelarra has reported high grade intersections of unweathered gold-bearing quartz-carbonate vein material at its Garden Gully prospect. Results include 7 metres at 21 g/t Au from 11 metres downhole, 2 metres at 8 g/t Au from 49 metres and 12 metres at 4 g/t Au from 96 metres. The proximity... Show More
Whitehaven Coal Rating Update
Whitehaven Coal (WHC:AU), an expanding New South Wales coal producer, has been rated ‘3+’ on the PortfolioDirect five point rating scale. Strong share price gains have left the market price within 5% of the PortfolioDirect assessed value. There is now less scope for company initiated activities to precipitate a further... Show More
Gem Mining Targets Luxury Goods Market
Mustang Resources has secured tenements prospective for rubies near the world’s largest ruby deposit held by AIM-listed Gemfields Plc in Cabo Delgado Province in northern Mozambique. Mustang has reported finding 10 rubies totalling 2.61 carats in initial test excavations from areas bearing strong similarities to the alluvial terraces being mined... Show More
Kin Mining Revisits Sons of Gwalia
Kin Mining is another in a growing list of explorers applying new techniques and insights into areas of historical gold mineralisation. The company has commenced a 3,000 metre drilling program at its Gwalia South prospect 2.5km south of the historic Sons of Gwalia Mine in Western Australia. It has been... Show More
Livewire Exploration Watch
Base metal explorer Peel Mining has reported intersections of 7 metres at 2.01% Cu and 9 metres at 2.24% Cu 300 metres north of its Mallee Bull copper-silver-gold resource in central New South Wales. The results came from a weak down hole electromagnetic conductor at a depth of 270 metres.... Show More
Gascoyne Resources Rating Review
Gascoyne Resources (GCY:AU), developing gold assets in Western Australia, has been classified as a Phase II company and rated ‘3+’ on the five point PortfolioDirect rating scale. A sevenfold change in the Gascoyne Resources share price dating from the beginning of 2016 exceeded the increase in the ASX All Ordinaries... Show More
Gold Prices - Just Like the 1980s?
It is tempting to infer a continuing uptrend in the gold price but this year’s price action bears a strong resemblance to the adjustment in the early 1980s which preceded two decades with no net gain in price. Show More
Impact Minerals Steps Up Exploration Excitement
Impact Minerals has raised its exploration excitement level reporting a 48 metre thick interval of sulphide mineralisation including 23 metres at 224 g/t Ag (3.6oz/t) and 1 g/t Au at its Commonwealth (NSW) prospect. The latest result, combined with two earlier thick drill intersections (68 metres and 48 metres) on... Show More
Exploration Opportunities Remain for Patient Investors
St George Mining remains one of Australia’s most exciting exploration companies with interests in nickel, copper and gold bearing deposits around Laverton and Leonora in Western Australia. A rapid succession of favourable drill results including another this week at Mt Alexander is suggestive of a nickel-copper system with development potential.... Show More
Fortescue Improves While BHP Struggles
Fortescue Metals Group stands out as an Australian mining industry success story after having overcome extreme scepticism about its prospects. The PortfolioDirect modelling methodology assesses the Fortescue steady-state bond equivalent return, based on its 2015/16 operating outcome, at 4.7%. This is not especially exciting but significantly better than the negative... Show More
BHP Offers a Rich History but Mediocre Investment Returns
BHP Billiton is one of the first stops for professional money entering the resources sector globally, along with being the most widely held stock by Australians. In attracting investors, BHP continues to take advantage of its historical positioning rather than offering an outstanding financial performance. The recently reported 2015/16 operating... Show More
I usually favour the longest possible historical series so sympathise with your 20th century perspective. The chart which shows an average ratio of 54 is 'confined' to 35 years primarily because, earlier than that, governments had prevented the gold price from fluctuating while the silver price was freer to move.
Theoretically, a handful of superannuation funds will eventually own all the stock in the ASX 200 at current rates of growth. The Australian superannuation arrangements are structurally unsound. The upshot is ASX 200 stocks ending up in an asset bubble or Australia's household savings being forced offshore. Neither is without its policy problems.
Company management pitched itself as having a superior skill base and in doing so created expectations of near perfection. The Vietnam drill results were not bad. They were not perfect. A more strongly capitalised company could brush it off and keep going. Neon needed a perfect outcome to succeed. Moral: the chance of a company outperforming if it has already produced returns among the top 3-5% in the sector is low.
The official statistics do not get revised like the HSBC ones. In this instance, I am prepared to accept that the official numbers are better quality than the bank numbers because the latter are designed for speed (and profile for the bank). Chinese new year, weather, smog are all influnces in the short term but take a step back and the numbers have been consistently showing very little postive momentum. You get the same message from whichever angle the data are viewed.
Kazakhstan supplies c.40%. See my wire today on stocks.
On There has been good news from Japan but bad news from Kazakhstan for the uranium industry this month -
You are right but it would only take ASX/ASIC to tackle one or two cases to cause a change because companies are taking advice from professonals on what they can get away with. Consequently, I am happy to take the opportunity, when it arises, to refer to ASX as running a seedy backstreet Moroccan bazaar to goad it into action.
I have not read these studies but the conclusion referred to would be consistent with comments by the Fed chairman that consideration would be given to the unusually and persistently low participation rate in framing any future unemployment target. See my comment and chart at http://www.eimcapital.com.au/portfoliodirect/daily_views0913.htm for 9 September on the employment-population ratio.
If ICAC had its way, any potential explorer would have to raise capital first (i.e. the current model would be turned on its head). That is what ICAC wants to have happen but it does risk stifling activity - all because we cannot count on NSW politicians being honest.