Morning Notes

02/11/2017 Argonaut Morning Note

Market Update & Important Indicators
The Dow Jones Industrial Average climbed to start November, after major indexes posted a flurry of records last month. Stocks inched slightly higher after the Fed left rates unchanged as expected but signalled it would consider lifting them before year's end amid signs the economy was gaining momentum. The Dow industrials were recently up 0.2%. The blue-chip index posted its seventh straight monthly gain Tuesday, its longest streak since April 2012. The S&P 500 climbed 0.2%, and the tech-heavy Nasdaq Composite swung between small gains and losses and was recently down 0.2%. Major indexes have continued to hit fresh all-time highs in recent sessions despite many market events still ahead this week, including pending announcements on the Fed's future leadership and tax changes. Buoyant oil prices supported shares of energy firms, with Devon Energy, Chesapeake Energy and Marathon Oil also among the best performers in the S&P 500. The index's energy sector rose 0.7%, with U.S. crude oil prices near their highest level of the year amid signs that production cuts by major suppliers are helping to rebalance the market. The U.S. gold price traded higher overnight, bouncing 0.3% to finish at 1,274.30 US$/oz.

European stocks posted their highest close in more than two years Wednesday, boosted by resource stocks after solid Chinese manufacturing data and car makers following strong U.S. sales figures. The Stoxx Europe 600 index climbed 0.4% to 396.77, for its highest close since August 2015, according to FactSet data. Germany's DAX 30 index rallied 1.8% to 13,465.51, for another all-time closing high. Trading in Germany was closed Tuesday for the Reformation Day holiday. France's CAC 40 rose 0.2% to 5,514.29, and the U.K.'s FTSE 100 slipped 0.1% to 7,487.96.

Asian equities markets mostly began November on a strong note, following an upbeat session on Wall Street and mostly positive earnings reports in the region. Japan's Nikkei Stock Average closed up 1.9%, leading an advance in the region. The yen softened 0.3% against the dollar. Tech stocks helped South Korea's Kospi rise 1.3% as Samsung Electronics rose 3.9%, both hitting fresh record highs. Hong Kong's Hang Seng Index rose 1.1%.

Australian shares continued their push towards 2017's top, potentially paving the way for the S&P/ASX 200 to get through 6000 for the first time since early 2008. It rose 0.5% today to 5937.8, starting the month on a positive note after rebounding 4% in October, the most this year. Today's gains were broad, led by energy companies as oil keeps moving higher. But Oil Search dropped 3% after surprising investors with a foray out of Papua New Guinea and into Alaska oil. The major banks were higher, though CBA barely finished in the green. NAB led with a 0.7% rise ahead of tomorrow FY report.

The London Metal Exchange’s 3-month copper contract traded higher overnight, gaining 1.3% to finish at $6,930/t. The other base metals all finished stronger. Aluminium prices added 1.2% to close at 2,168/t, whilst tin prices gained 0.2% to 19,535/t. Zinc prices rose 0.1% to 3,326/t, while Lead prices jumped 3.0% to 2,474/t. Nickel prices were again strongest, posting another 4.1% gain at 12,758/t, as enthusiasm for demand that may come from Electric vehicles drives prices.

In this issue
Salt Lake Potash (SO4) | Technical ticks | SPEC BUY
Market Cap $93m | Current Price $0.53

The fact that SO4 has consistently spent more per quarter than its peers has allowed it to regularly tick technical boxes for the Goldfields Salt Lake Potash Project (GSLP). With $13.7m in cash at September quarter end we expect it to continue to do so. In our view SO4 is one of the Australian SOP projects more likely to progress to development, with location, attractive costs and development optionality being key attributes.

Recent Contacts & Presentations
Gold Road Resources Ltd (GOR), Apollo Consolidated Ltd (AOP), De Grey Mining Ltd (DEG), Triton Minerals Ltd (TON), Evolution Mining Ltd (EVN), Silver Mines Ltd (SVL), NTM Gold Ltd (NTM), Gascoyne Resources Ltd (GCY), Southern Cross Electrical Ltd (SXE), MOD Resources Ltd (MOD), Meteoric Resources NL (MEI), Emmerson Resources Ltd (ERM), Gage Roads Brewing Ltd (GRB), Otto Energy Ltd (OEL), Whitebark Energy Ltd (WBE)

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