We are at the 121 Mining Investment conference today apologies for short morning note
bull; Investors are invited to attend the inaugural 121 Mining Investment conference at 155 Bishopsgate
bull; SP Angel are founding sponsors
Please vote for SP Angel in the Extel 2015 survey
Metals amp; Mining analysts: John Meyer, Carole Ferguson, Simon Beardsmore and Sergey Raevskiy
Sales: Richard Parlons, Bonnie Hughes. Click on: www.extelsurveys.com/quickvote
Economic News
US Core inflation came in line with expectations in Mar climbing 0.2%mom/1.8%yoy.
bull; CPI including oil prices change slipped below 0 in Mar hovering around 0.0 mark since the start of the year.
China The central bank cut the reserve requirement by 1pp to 18.5% on Sunday.
bull; This marks the second reduction this year.
bull; 1pp cut is estimated to translate into an increase in new lending of c. CNY1.2tn (US$194bn).
bull; Despite the announcement, Chinese stocks are were today following the regulators decision on Friday to cut leveraged trading and expand short selling.
Greece Greek banks may soon run out of collateral to access the ECB refinancing programme unless Athens reach an agreement with the EU and IMF on economic reforms, according to Banque de France Governor.
bull; Comments put pressure on the Greek government to negotiate a deal with its international creditors.
US$1.0773/eur vs 1.0819/eur yesterday Yen 118.73/$ vs 118.82/$. SAr 12.034/$ vs 11.964/$. $1.494/gbp vs 1.500/gbp
A$0.781aud/usd vs 0.776aud/usd US dollar weakens on last weeks poor economic data.
Commodity News
Precious metals:
Gold US$1,207/oz vs US$1,204/oz yesterday
Platinum US$1,171/oz vs US$1,165/oz
Palladium US$783/oz vs US$782/oz
Silver US$16.33/oz vs US$16.44/oz
Base metals:
Copper US$6,082/t vs US$6,134/t Anglo American is in progress of selling parts of its Norte and Sur units in Chile.
Aluminium US$1,833/t vs US$1,839/t –
Nickel US$12,530/t vs US$12,775/t Workers go on strike at the Ambatovy ickel/cobalt plant operated by Sherritt in Madagascar only a month after a short similar action reported at the operation.
Zinc US$2,217/t vs US$2,242/t
Lead US$2,042/t vs US$2,042/t
Tin US$14,900/t vs US$14,775/t – Tin association in Indonesia said its members will halt sales of the metal at prices below US$17,000/t in an effort to stop a sharp sell off.
Energy:
Oil US$64.0/bbl unch vs US$63.2/bbl Chinas crude oil imports up 7.5% in Q1. Reckon China will be building new storage capacity as fast as it can
Natural Gas US$2.585/mmbtu vs US$2.584/mmbtu
Uranium US$38.90/lb unch vs US$39.00/lb
Bulk commodities:
Iron ore spot price index (62% fines Tianjin) $49.60/t vs $48.60/t Rio Tinto to continue with low cost iron ore expansion in Pilbara despite falling iron ore prices, CEO Sam Walsh said in London this week.
Thermal Coal (CFR European ARA price) $57.40/t vs $57.20/t. Coking coal $108.5/t vs $108.5/t
Speciality metals and alloys:
Tungsten APT European US$252.5/mtu unch vs US$257.5/mtu last week
Company News
Kefi Minerals* (LON:KEFI) 1.08p, Mkt Cap pound;14.2m DFS progress for bank finance
bull; Kefi Minerals announces it is making good progress towards the completion of its Definitive Feasibility Study in accordance with the requirements of bank and project financing.
bull; Snowden Mining consultants have independently verified the mine plan and costs for the updated mineral resource and revised mine plan.
bull; The consultants have verified the semi-selective mine design as part of the study.
bull; Verified mine plan:
bull; Throughput 1.2mtpa, to give a total of 12.0mt ore mined over 11 years
bull; Grade of 2.52g/t at mine head with a waste:ore ratio of c. 10:1
bull; Gold production 86,000ozpa to total 960,000oz ounces over 13 years including the addition of a further two years of processing of low grade stockpile
bull; The consultants have updated cost forecasts to reflect the updated mine plan and are to be further refined as part of the 2015 DFS.
bull; Cash costs $634/oz excluding royalty and $721/oz including royalty.
bull; AISC costs $906/oz including initial investment and $768/oz excluding initial investment
bull; Milestones for completion of 2015 DFS
publication of updated Ore Reserves
arrangement of final bids by short-listed mining contractors
finalisation of value-engineering to reduce the cost of process plant, including due diligence on available existing processing plants
review of the 2015 DFS by the project financiers independent technical expert
bull; Capex: cut to $120m inc contingency funds from $150m by using contractor mining and assuming a 10% saving on all new plant
bull; Funding: Kefi expect to raise c. $100m of senior secured finance and c. $20m in other debt or finance
Conclusion: Kefi is fast moving towards the conclusion of its DFS, financing and the start of mine development. We expect the company to start to break ground this year with first gold production next year.
*SP Angel act as Nomad to Kefi Minerals. An SP Angel analyst has visited the Tulu Kapi mine site with Kefi Minerals.
Noricum Gold* (LON:NMG) 0.2p, Mkt Cap pound;2.8m Exploration starts at Walchem mine
(Walchen 100% ownership)
bull; Noricum Gold have started exploration at the historic Walchem mine in Austria which was closed in 1942.
bull; Walchem was last mined in 1942 producing average grades of:
o Copper 1.71%
o Zinc 3.23%
o Lead 2.48%
o Silver 83g/t
o Gold 0.5g/t Au.
bull; The polymetallic ore may also contain nickel and cobalt.
bull; The ore zones appear to consist of two main ore horizons with horizontal extension of 3-4km each having a thickness of 0.5-4m.
bull; Noricums press release contains a map showing extensive underground workings at the Walchem mine along with photos of outcropping ore and one of the adits for entry into the underground workings
Conclusion: Noricum have been fortunate to acquire the Walchem mine. The ore grade looks highly valuable at the grades shown above and access to historic records and the old mine workings should enable Noricum to produce exploration results and evaluate the mine relatively quickly. The mine has extensive workings and very good potential to produce an economic resource.
*SP Angel acts as Nomad and Broker to Noricum. An SP Angel analyst has visited the Schonberg site in Austria.