Bluejay Mining* (LON:JAY) –Final public consultation meeting completed for Dundas project
Condor Gold* (LON:CNR) – Interim results and project update
Europa Metals Limited (LON:EUZ ) – Resource update for Toral zinc, lead, silver project in Spain
Exxaro (EXX) – Exxaro EBITDA rise 40% due to higher coal exports and lower South African rand
Horizonte Minerals (LON:HZM) – Interim Results
Pure Gold (LON:PUR) – Q2 Results maintain first-ore production guidance
Serabi Gold* (LON:SRB) – Strong quarterly cash-flow as gold price lifts profits 142%
Sibanye-Stillwater (SSW J) – Higher gold, palladium, rhodium and Platinum prices combine with weak rand to raise earnings
China produces record crude steel in July
China produced 93.36mt of crude steel in July compared to 91.58mt in June, a record amount never seen in the month before (Refinitiv).
Crude steel output in July was 1.9% higher than the month prior, and 9.1% higher than July 2019, according to data from the National Bureau of Statistics.
Steel output in China has rebounded after China eased lockdown restrictions and its government implemented vast amounts of infrastructure spending to kickstart the economy.
China stimulus – RMB 50tn ($7.2tn) stimulus across 25 provinces – RMB7.6tn (US$1.1tn) planned for this year
China is targeting ~RMB2tn ($280tn) per year of new investment in infrastructure in its 5-year plan with RMB10tn (US$1.4tn) of direct investment and RMB17tn (US$2.4tn) of indirect investment by 2025. (Fitch)
China used RMB4tn (US$570bn) of stimulus to kick start the economy in 2008 focussed mainly on road, rail and urban construction.
We expect flooding along the Yangtze to command significant additional expenditure for new flood defences and to repair much that has been washed away.
Flooding has hit nearly 20% (13m acres) of all China’s productive farm land costing some $21m in damage to roads and other property (Winknews)
China is now focussing new technology infrastructure such as EV charging and wind and solar farms as well as new grid-scale battery storage.
New infrastructure projects include 5G networks, big data centres, EV charging stations, modern technological transportation routes and ultra-high voltage (UHV) power-transmission projects.
These new infrastructure projects require more technological know-how than traditional projects, and mainly funded by companies and local governments.
The combined investment value of such projects will account for around 14% of the announced infrastructure investments in 2020 with 6.6% spent on transportation routes by local governments and a 5G/UHV network rolled out by State Grid Corporation of China totalling RMB181bn (Fitch Ratings).
The new infrastructure initiative is different from ‘Made in China 2025’ as it has less stringent rules regarding the origin of core components, and instead focuses on ‘stabilizing the economy and stabilizing growth’ following the economic and social impacts of the coronavirus (Nikkei).
Wuhan beer festival – Wuhan is to hold a week-long beer festival.
New brews are: Batweiser, Batvaria, Bat Ale, Batmeister lager, Bathaven Best, Old Speckled bat, Honey Bat and Tennents Lockdown
IG TV / SP Angel interview
VOX Markets / SP Angel podcast
Dow Jones Industrials
HK Hang Seng
US – Jobless claims continued to come down falling below 1m mark for the first time since the pandemic started in March.
While declining trend is a welcome news, levels remain high.
Continuing claims stood at 15.5m in the week to August 1, far above historical levels going back to the 1960s and highlighting challenges of the road ahead.
Jobless Claims: 963k v 1,191k in the previous week and 1,100k est.
China – The economy continued to recover, although, at a slower than expected pace.
On YTD numbers, industrial production and retail sales in the first seven months of the year were both still down, while FAI were 1.6%yoy lower.
Weakness in the consumer spending is of particular concern, although, declines are slowing down.
Industrial Production (%yoy): 4.8 v 4.8 in June and 5.2 est.
Retail Sales (%yoy): -1.1 v -1.8 in June and 0.1 est.
FAI (%YTD): -1.6 v -3.1 in June and -1.6 est.
Israel – historical peace deal and normalisation of relations between Israel and the UAE
Israel and UAE to establish full diplomatic ties and will ‘delay’ annexation of Palestinian lands (Aljazeera).
The US helped Israel and the UAE broker a deal to normalise relations and potentially settle the issue of Palestine.
Al Jazeera’s senior political analyst Marwan Bishara said the Israel-UAE is not about ‘peace in the Middle East’.
‘The UAE does not border Israel. The UAE does not have territorial or national claims with Israel.
It is the Palestinians that have a problem with Israel, and the UAE has basically gone against the Arab Palestinian public opinion,’
HK – Swire Pacific reports US$1bn loss, looks to HK for support
Japan – The economy is on course for the worst quarterly reading since records began in 1955 amid the global coronavirus pandemic.
Estimates are for GDP to contract at an annualised pace of 27% in Q2 marking the third consecutive negative quarterly output reading with the economy first hit by trade wars and a sales tax hike, then by the virus, according to Bloomberg.
Eurozone – Preliminary GDP data confirmed the region slipped into a recession in Q2 with output down 12.1%qoq during three months to June.
This follows a 3.6% drop in Q1 and no growth in Q4/19.
Separately, employment data showed a 2.8% drop in jobs numbers, the most on record, in Q2.
This is after accounting for effects of the furlough programme implemented across the 19-nation block that helped to soften the blow to the jobs market.
This implies that around half of the 12m jobs created since the region’s debt crisis have been wiped out, with more losses likely to follow, Bloomberg reports.
GDP (%qoq/yoy): -12.1/-15.0 v -3.6/-3.1 in Q1.
Germany – Economy Ministry says industry’s rapid recovery continues but will lose momentum due to weak foreign demand.
The ministry also says there will be a strong increase in GDP in Q3
Daimler has reached a $1.5 billion agreement with U.S. regulators to settle diesel emissions claims
France – UK quarantines travellers from France for two weeks from tomorrow
France has declared Paris and the Bouches-du-Rhone department around Marseille as “red zone” for the spread of coronavirus allowing local authorities to impose new restrictions on movement (FT)
Separately PM Johnson added France to a Britain’s quarantine list starting from Saturday.
The news follows a recent increase in daily new cases with the rate reaching 2,669 people on Thursday, the fourth time in a week that the number has exceeded 2,000.
The move reflects rising cases of the Coronavirus in France and a desire by the UK government to keen the infection rate down in the UK.
Australia – The economy is unlikely to pick up until final three months of this year as a renewed lockdown in Victoria is “broadly offsetting” the recovery elsewhere, RBA Governor Philip Lowe said.
Markets estimates are for the economy to contract 6.9%qoq in Q2 before returning to growth in Q3 (+1.2%qoq) and Q4 (+1.4%qoq).
Turkey – France sends two fighter jets and frigate to eastern Mediterranean
France has called on Turkey to halt oil & gas exploration in disputed waters in the area (Reuters).
Bolivia – on the precipice of violence (The Economist)
Bolivia exports silver, lead, zinc, tin and gold.
It has huge lithium resources though we believe these are metallurgically challenged as well as in areas of higher rainfall than seen in the Atacama in Chile.
Bolivian miners are not people to argue with. In 2016 they kidnapped and killed the deputy minister of the interior over new legislation.
Ethopia – Ethiopia has detained more than 9,000 people after deadly clashes last month,
The government is struggling to curb violence from ethnic nationalism between tribes.
Mozambique – Islamic militants attack and occupy Mocímboa da Praia in the north of Mozambique according to an unconfirmed report (CNBC Africa)
Security forces are working with a private security company ‘DAG‘ Dyck Advisory Group. Wonder what sort of advice these mercenaries give out?
DAG are currently based at Pemba 300km to the south.
UK – job vacancies rise to highest level since the lockdown began
The most vacancies are seen for gardeners, childminders, construction workers, lorry drivers and sadly debt collectors (The Times)
fines of up to £3,200 fo rnot wearing a face masks
On-the-spot penalties of up to £10,000 for organisers of illegal parties.
Hammersmith bridge closed to vehicles, pedestrians. Pedestrians walking in step can break bridges, every engineer should know that one.
This is just one example of ageing infrastructure in need of replacement, for example the M4 from London to Heathrow also needs major structural work.
We suggest a new road tunnel from Central London to the end of the overhead section would be a good start.
A third of childcare centres believe they may close permanently challenging parents’ ability to return to work and putting pressure on potential economic recovery plans.
The survey marked a two times increase as in a similar poll carried in April.
With UK childcare costs for parents among the highest in the world, personal incomes that were cut during the furlough schemes as well as an outright loss of jobs are unable to maintain extra costs.
England will start gradually reopening theatres, concert venues and sports arenas resuming final stages of lifting restrictions that were put on pause two weeks ago on concerns about an increase in the number of people testing positive for COVID-19.
“The situation now appears to have levelled off,” the government said.
A small number of sporting events to test the safe return of spectators will resume from mid-August, with a plan to reopen sport venues from October 1, FT writes.
Isle of Wight – T-Rex bone discovered on beach in the Isle of Wight
We suspect there are also natives in the area who believe Britain still rules the waves and its empire spans half the globe.
Isle of Wight natives can be easily spotted wearing red trousers.
Quantum communications has taken a new leap with a low-orbit satellite communicating with an earth station using quantum transmission
The transmission could make 5G look as effective as a set of smoke signals on a foggy morning
US$1.1792/eur vs 1.1829/eur yesterday. Yen 106.81/$ vs 106.63/$. SAr 17.456/$ vs 17.417/$. $1.306/gbp vs $1.308/gbp. 0.715/aud vs 0.716/aud. CNY 6.949/$ vs 6.943/$.
Sterling rises towards five-month peak against the dollar
Sterling advanced 0.6% to $1.3125 on Thursday, its biggest daily rise since the end of July although was little changed against the euro at £0.9046.
The climb was driven by a weakening dollar and rising hopes of a post-Brexit trade deal before the transition period ends this year, as the Irish Prime Minister said he believes there is a ‘landing zone’ to reach a trade deal between the UK and the EU.
Gold US$1,944/oz vs US$1,930/oz yesterday – Gold set for first weekly decline since early June
The price of gold continued to slide on Friday, as an uptick in US treasury yields made the yield-bearing asset more attractive compared to safe-haven bullion.
However, dollar weakness has offered support to the gold price this week as US stimulus negotiations stall.
Overall fundamentals remain supportive of gold, including negative US real rates, quantitative easing throughout major economies along with a high level of underlying uncertainty driven by the coronavirus and rising tensions between the US and China (Kitco).
At the time of writing, gold is on course for a 4% weekly fall, as spot gold fell 0.5% on Friday morning to $1,943/oz whilst US gold futures fell 0.9% to $1,952/oz (Reuters).
Gold ETFs 108.4moz vs US$108.5moz yesterday
Platinum US$948/oz vs US$937/oz yesterday
Palladium US$2,150/oz vs US$2,128/oz yesterday
Silver US$26.52/oz vs US$25.84/oz yesterday
Copper US$ 6,330/t vs US$6,357/t yesterday
Aluminium US$ 1,770/t vs US$1,780/t yesterday
Nickel US$ 14,325/t vs US$14,190/t yesterday
Zinc US$ 2,381/t vs US$2,373/t yesterday
Lead US$ 1,950/t vs US$1,936/t yesterday
Tin US$ 17,645/t vs US$17,560/t yesterday
Oil US$44.8/bbl vs US$45.2/bbl yesterday
Natural Gas US$2.186/mmbtu vs US$2.190/mmbtu yesterday
Uranium US$32.00/lb vs US$32.10/lb yesterday
Iron ore 62% Fe spot (cfr Tianjin) US$115.2/t vs US$115.4/t – LKAB produces world first fossil-free iron ore pellets.
The pelletising process uses bio-oil in place of fossil oil at Malmberget in Sweden also reducing emissions by 40% in the test period.
Chinese steel rebar 25mm US$542.3/t vs US$543.4/t – Brazil – Steel imports fall 11.9% in July
Imports of steel products totalled 79,000 tonnes last month, down 11.9% compared to the same period last year according to the Brazilian economy ministry.
Imports of cold-rolled steel from China fell 88.1% YoY, whilst hot-rolled coil from China fell by 94.9% to 55 tonnes from 1,074 over the same period (Fastmarkets MB).
Thermal coal (1st year forward cif ARA) US$56.5/t vs US$56.7/t
Coking coal swap Australia FOB US$118.5/t vs US$119.0/t
Cobalt LME 3m US$33,200/t vs US$33,200/t
NdPr Rare Earth Oxide (China) US$48,001/t vs US$47,028/t
Lithium carbonate 99% (China) US$4,994/t vs US$4,998/t
Ferro Vanadium 80% FOB (China) US$30.3/kg vs US$30.2/kg
Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg
Tungsten APT European US$205-210/mtu vs US$205-215/mtu
Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t
Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t
China EV sales
Data from the China Association of Automobile Manufacturers on Tuesday shows EV sales increased in China for the first time in over a year.
NEV sales rose 19.3% on the year to 98,000 units. BYD led NEV sales with 14,000 units sales whilst Tesla led pure electric sales with 11,041 units.
The majority of sales in July were pure EVs which grew 24%, accounting for 78,000 units.
Vehicle sales more broadly showed signs of recovery as well with a 16.4% increase to 2.112m in July. From Jan to July sales were down 12.7% compared to the same time last year.
Commercial vehicles rose 59.4% to 447,000 units while sales of passenger vehicles including SUVs grew 8.5% in July.
Enel X expands charging network through e-roaming connectivity
Enel X has partnered with Last Mile Solutions, has-to-be and E.ON to expand its charging network through eRoaming connectivity.
The company’s network has expanded from 30,000 to 50,000 charging points by allowing users of the JuicePass app to access charging points operated by Last Mile Charging Solutions through the Hubject e-mobility platform.
The 20,000 additional chargers are located across Europe in Austria, Belgium, Switzerland, Germany and Netherlands.
Enel X plans to expand its charging network to 736,000 points by 2022.
A charging network dense enough to support EV drivers is a key hurdle in getting consumers to switch to an electric vehicle. Surveys show it is one of the primary concerns alongside vehicle range and cost and charging times.
Charging networks across the globe are becoming more numerous. China leads the way with 1.2m charging stations but Europe and the US are also moving in the right direction.
Chargepoint claims to have the largest charging network globally with 60,000 stations.
VW to produce battery cells and packs in house for its US vehicles
VW is looking to expand its production capabilities at its Chattanooga facility to include development and testing cells and battery packs for future US models Reuters reports.
The Company hopes to have a fully operational lab by Spring 2020.
The Company signed $48bn worth of battery deals in 2018 with CATL, LG Chem and Samsung SDI whist the German automaker entered into a JV with Northvolt last year to build a Gigafactory in Lower Saxony, Germany.
The decision to manufacturer batteries in-house is a deviation in strategy for VW with the Company suggesting in 2018 that there were no plans to go into serial production of batteries explaining it as not a core competency of the Company.
Bluejay Mining* (LON:JAY) – 7.36, Mkt cap £71.4m – Final public consultation meeting completed for Dundas project
Bluejay managemenr report the final public consultation meeting has completed on the Dundas ilmenite mineral sands project has completed.
All questions, comments and concerns will be collated and reviewed by the government .
The Public Consultation period ends on 2 September after which e expect the government to issue a mining license for Bluejay subject to addressing the concerns of the government and its people.
*SP Angel act as nomad and broker to Bluejay Mining
Condor Gold* (LON:CNR) 50.5p, Mkt Cap £58.7m – Interim results and project update
Click here for Initiation note pdf
Condor Gold benefitted from a currency translation gain of £1.32m in its reported £0.98m profit for the six months ending 30th June (2019 – £1.10m loss).
As a result of the £7.7m fundraising in May 2020, the company reports a 30th June cash balance of £7.51m.
Yesterday, the company reported progress on several important issues as it moves forward with the development of its 1.1moz La India gold deposit in Nicaragua.
In particular, the company reported that it has now purchased 85% of the land within the mine permit area including sites for the open-pit, processing plant, tailings storage area and explosives storage magazine and that it expects to have completed the balance of the necessary land acquisition by the end of 2020.
Condor Gold also outlined progress on the engineering design where work on the tailings disposal facility is now 40% complete and much of the design of the process plant, infrastructure and power supply has been advanced to the point where further more detailed work awaits the purchase of a new or second hand process plant
During the period, Condor Gold secured the necessary environmental permits for the high-grade satellite pits at America and Mestiza which provide the opportunity to schedule higher grade ore-feed containing around 230,000oz of gold to the mill in the early years of the mine’s life.
Commenting on the future production schedule, Chairman and Chief Executive, Mark Child, said that Condor Gold “is targeting production of 120,000 oz gold per annum from open pit material for 7 years, which compares to the PFS of 79,300 oz gold p.a. for the same period”.
Mr. Child also said that the “significant underground Mineral Resource of 1.2M oz gold (1.27Mt at a grade of 5.8 g/t gold, for 238,000 oz gold in the Indicated category and 5.47Mt at a grade of 5.1 g/t gold, for 889,000 oz gold in the Inferred category) will be analysed and potentially converted to Mineral Reserves after production from the open pits has started … [and he goes on to confirm that] … The intention is to permit the underground Mineral Resource after open pit mining begins”.
Mr. Child summarises progress saying that “To conclude, the Company has made good progress in the six-month period and continues to de-risk the Project … Gold production at the Project has been materially expanded by the grant of Environmental Permits to extract gold from two high-grade satellite feeder pits. … [and as a result] … Condor has 1.12M oz gold open pit Mineral Resources permitted for extraction (8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category) inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold. The Company is targeting production of 120,000 oz gold per annum from open pit material for 7 years, which compares to the PFS of 79,300 oz gold p.a. for 7 years. The significant underground Mineral Resource of 1.2M oz gold (1.27Mt at a grade of 5.8 g/t gold, for 238,000 oz gold in the Indicated category and 5.47Mt at a grade of 5.1 g/t gold, for 889,000 oz gold in the Inferred category) will be analysed and potentially converted to Mineral Reserves after production from the open pits has started”.
Conclusion: Condor Gold has made important progress on the development of La India where it expects to produce an average of 120,000ozpa for the initial seven years. Plans to develop and permit the underground resources of 1.3moz classes as indicated with a further 0.9m inferred oz will be progressed following commencement of open-pit mining.
*SP Angel act as sole broker to Condor Gold
Europa Metals Limited (LON:EUZ) 20.5 pence, Mkt Cap £1.8m – Resource update for Toral zinc, lead, silver project in Spain
Europa Metals reports a 40% increase in the estimated mineral resource tonnage classified as indicated at its Toral zin/lead/silver project where indicated resources, at a cut-off grade of 4% zinc equivalent, are now 3.8mt at an average grade of 4.7% zinc, 3.9% lead and 30g/t silver for an average zinc equivalent grade of 8.3%.
In addition, an inferred resource, at the same cut-off, of 14mt at an average grade of 4.0% zinc, 2.7% lead and 23g/t silver brings the total resource estimate to 17mt at an average grade of 6.9% zinc equivalent (4.1% zinc, 2.9% lead and 24g/t silver).
The new estimate, which has been prepared independently by Addison Mining Services and Barra Consulting is based on the results from 113 diamond drill holes (including daughter holes) and 4 reverse-circulation drill holes totalling almost 61,000m of drilling plus underground channel sampling and incorporates “updated fault models for the first time”.
“The Company expects to utilise the updated resource model, together with ongoing engineering analysis and the upcoming third phase metallurgical results, for assimilation into updated preliminary economic parameters, … ahead of a Pre-Feasibility Study. The revised economics will represent an update to those derived from the 2018 Scoping Study, bringing the significant amounts of work completed, and data obtained, over the last two years into the operating and financial model for Toral. Prior to establishing the revised economic parameters, the Company intends to announce updates in respect of the third phase metallurgical test work and ore sorting”.
CEO, Laurence Read said that “With every stage of additional work over the last 12 months we have further identified Toral as having significant potential to be a future high-grade producer of concentrates, located in an area with first-rate infrastructure and benefitting from the support of the Junta of Castilla y Leon. Europa Metals looks forward to releasing operational updates on metallurgy and ore sorting shortly”.
Executive Chairman, Myles Campion explained that “By drilling two key targeted holes in the last drilling campaign we have been able to both increase Toral’s Indicated resource estimate by 40% and obtain sufficient samples for further metallurgical analysis. The significant increase in the Indicated resource category achieved on the back of the last drilling campaign reflects well on Europa Metals’ technical team.”
Conclusion: The revised mineral resource estimate for the Toral project, together with the results of metallurgical work currently underway, is to be incorporated in an updated financial model. We look forward to this analysis in due course.
Exxaro (EXX J) R13,800, Mkt cap R49.5bn – Exxaro EBITDA rise 40% due to higher coal exports and lower South African rand
Coal production rise by 7% to 1.495mt due to performance at the Belfast and Grootegeluk mines in South Africa
EBITDA rose 40% to R3.9bn (US$225m)
Higher volumes to Eskom and a rise in exports helped.
Horizonte Minerals (LON:HZM) 4.1p, Mkt Cap £60.0m – Interim Results
Horizonte Minerals reports a loss of £2.7m for the six months to 30th June (2019 – £1.1m loss) including finance costs of £1.9m (2019 – £0.1m).
The company’s 30th June cash position remains strong, however, at £15.6m “following completion of the US$25 million royalty transaction with Orion Mine Finance in Q4 2019” which leaves Horizonte Minerals “Well funded to advance Araguaia towards being construction ready”.
Earlier this week, the company announced that a syndicate of 5 international financial institutions had been mandated to arrange project financing of US$325m for the development of Phase 1 of the Araguaia ferro-nickel project in Brazil.
Closing of the financing is expected by the end of 2020.
The company comments that “Nickel market fundamentals remain robust, with analyst consensus price of $16,133/t at the time Araguaia is forecast to commence production, driven by growth in the EV battery sector and steady growth in the stainless steel market”.
Pure Gold (LON:PUR) – 114p Mkt cap £416m – Q2 Results maintain first-ore production guidance
Last quarter saw Pure Gold advance its Red Lake Mine project, with the Ontario Ministry of the Environment, conservation and Parks approving and issuing an amended Environmental Compliance Approval (ECA) for air and noise for the project.
The amended ECA sets out operating conditions relating to air and noise at a throughput limit of up to 1,089t of ore processed per day.
The company maintains its first-ore production guidance of before year-end, with the procurement of major equipment 95% complete at this stage.
Pure Gold recently commenced a 33,600m diamond drilling programme to grow its mineral resource, financed through a non-brokered private placement of 9,868,421 common shares at a price of $1.52/s, for gross proceeds of $15m.
The programme includes 28,200m of surface drilling as well as 5,400 meters of underground exploration drilling, as well as a 2D seismic survey over the North Madsen/ Derlak and over the 8-zone.
In July, the company announced results from its underground exploration drilling, intersecting high-grade gold mineralization, with drilling results highlighted below:
46.7 g/t gold over 7.0 metres from drill hole PGU-0118; including 193.5 g/t gold over 1.0 metre;
57.0 g/t gold over 1.0 metre from drill hole PGU-0121;
15.8 g/t gold over 2.3 metres from drill hole PGU-0117;
7.2 g/t gold over 5.0 metres from drill hole PGU-0113; including 22.3 g/t gold over 1.0 metre;
12.8 g/t gold over 10.0 metres from drill hole PGU-0136; including 20.1 g/t gold over 5.0 metres;
9.3 g/t gold over 2.4 metres from drill hole PGU-0123; including 16.2 g/t gold over 1.1 metres; and
10.6 g/t gold over 2.0 metres from drill hole PGU-0124;
Financial statements for the three months ended June 30th 2020 show the following:
Total revenue exploration expenditures – $0.1m
Change in fair value of derivatives – $10.9m
Net loss and comprehensive loss for the period – $9.7m
Basic and diluted loss per shares – ($0.03)
The company’s balance sheet as at June 30th 2020 shows the following:
Total assets – $197.3m
Current liabilities – $20.1m
Non-current liabilities – $104.9m
Serabi Gold* (LON:SRB) – 94p, Mkt Cap £53.4m – Strong quarterly cash-flow as gold price lifts profits 142%
Serabi Gold reports a 142% increase in YTD after tax profit of US$4.2m for the six months to 30th June (2019 – US$1.7m)
The result reflects the impact of higher gold prices of US$1,647/oz (2109 – US$1,287/oz) on gold production of 17,524oz of gold at a cash cost of US$961/oz and all-in-sustaining cost of US$1,265/oz (2019 – 19,691oz at a cash cost of US$860/oz and AISC of US$1,085/oz).
EBITDA for the six months of US$9.4m is 24% higher than the US$7.6m achieved during H1 2019.
The company says that “The impact of CV-19 pandemic has resulted in production of 17,524 ounces of gold for the first six months of the year. The company is working hard to expand the camp allowing for a return to full staffing levels before the end of the third quarter. With this in mind third quarter performance is anticipated to be similar to that of the second quarter, with a return to full levels of production in the early part of the fourth quarter. Should this be achieved, full year production would be expected to be between 34,000 and 37,000 ounces”.
CFO, Clive Line, said that the 2nd quarter “has proved, financially, to be one of our most successful ever and viewed in the context of the uncertainties that we were facing at the end of March, both from a financial and operational perspective, the workforce have produced an exceptional result in extremely challenging circumstances”.
Net operating cash flow after capital expenditure was strong at US$4.2m in what the company described as “the best level of quarterly cash flow generated by the Company to date “ and “The Company was able to repay the US$3.5 million outstanding secured loan liability to Sprott Resource Lending during the quarter without any impact on our cash position”.
Conclusion: Serabi Gold has benefited from strong Q2 gold prices which more than offset the higher unit costs incurred as a result of Covid19 containment measures and has delivered the best quarterly cashflow in its history.
*An SP Angel analyst has visited the Serabi’s gold mining operations in Brazil
Sibanye-Stillwater (SSW J) R5,511, Mkt cap R147bn – Higher gold, palladium, rhodium and platinum prices combine with weak rand to raise earnings
(Sibanye-Stillwater acquired Lonmin in June last year)
Sibanye-Stillwater which operates gold and platinum mines in South Africa and the US reports its H1 trading statement.
The Group expects 3,780% increase in basic earnings to R9,385m (US$563m vs a loss of R255m (US$18m) yoy
Management managed to improve operational performance in the gold mines despite the COVID-19 lockdown and strike action by the militant AMCU union.
The results also include results from Lonmin’s Marikana platinum mine following completion of the acquisition of Lonmin in July last year.
The SA rand was 17% weaker for H1 yoy helping earnings higher
Significantly higher prices for gold, palladium, rhodium and platinum were the key driver
Conclusion: We are impressed by management’s handling of the lockdown. The COVID-19 situation should enable the company to become more effective operationally while high gold and PGM prices combine with a weak rand to lift earnings.
Published at Fri, 14 Aug 2020 11:08:00 +0000-Today’s Market View – Condor Gold, Europa Metals, Bluejay Mining, Serabi Gold and others