Market Update & Important Indicators
The Dow Jones Industrial Average slipped Friday but posted its sixth consecutive month of gains. U.S. stocks made most of their advances in the first half of July, as investors bet that global central banks would extend stimulus measures after the U.K. voted to leave the European Union, and as the June jobs report reassured investors that the economy was improving. The blue-chip index closed at a record seven times in July, its most in a month since December 2014. Yet in the last two weeks, the market's momentum has slowed. The Dow industrials have moved up or down less than half a percent each trading session this week. The index was down 0.1% Friday, down 0.75% for the week and up 2.8% for the month. On Friday, the government said U.S. gross domestic product grew at a seasonally adjusted rate of 1.2% in the second quarter, far lower than the consensus among economists. The S&P 500 rose 0.2% Friday, leaving it up 3.6% in July. The tech-heavy Nasdaq Composite Index, which has lagged behind the two other indexes throughout the year, posted a 6.6% gain for the month.
European stocks closed higher Friday as bank shares fared well ahead of the release of stress-test results for the industry and as investors cheered better-than-expected second-quarter results. The Stoxx Europe 600 index gained 0.7% to finish at 341.89, sending it up 3.6% for the month. That marks the best monthly advance since October last year.
The Bank of Japan delivered a big disappointment to Asian markets on Friday, offering a moderate easing when many expected something much more aggressive. The Nikkei Stock Average closed up 0.6% after falling by as much as 1.8% in earlier trade. The Shanghai Composite Index closed down 0.5%, the Hang Seng Index declined 1.3%, and South Korea's Kospi slipped 0.2%. Japan's share market was helped by the BOJ's commitment to nearly double its annual purchases of exchange-traded funds, and indications the central bank is near its limit on negative interest rates.
The S&P/ASX 200 index shrugged off disappointment at the modest easing measures outlined by the Bank of Japan to close up 0.1% Friday. The Bank of Japan said it would increase annual exchange-traded fund purchases to 6 trillion yen from Y3.3 trillion previously, but largely kept other main policies unchanged.
Copper futures closed higher in London on the back of a sharply weaker dollar. The London Metal Exchange's three-month copper contract was 0.58% higher at $4,924/t at the PM kerb close Friday. Other base metals were also mostly higher. Aluminium closed up 2.3% at $1,636/t, zinc was up 1.8% at $2,243/t, nickel was down 0.6% at $10,587/t, lead was up 1.1% at $1,813/t, and tin was up 0.5% at $17,840/t.
In this Issue
Doray Minerals (DRM) | Transitioning | HOLD
Market Cap $326m | Current price $1.05 | Valuation $0.92
Doray Minerals (DRM) delivered 17koz @ AISC of $1542/oz Au, below Argonaut’s forecast of 19.8koz. FY16 production of 84,135oz @ 8.0g/t Au was at the higher end of company forecasts (78-85koz) with full year C1 cash costs of A$665/oz within guidance of A$600-$700/oz. Higher costs were attributable to lower feed grade and additional ground support costs. Deflector construction was completed within budget with production ramp up in 1QFY17. Andy Well exploration shows upside with a significant discovery at Gnaweeda (4.6Mt @ 1.8g/t, 266koz Au) and potential for satellite ore feed ~10km from Andy Well. Argonaut upgrades DRM to a HOLD (from SELL) after changes to our model sees a lift in our price target to A$0.92 (from $0.86).
Recent Contacts & Presentations
Hammer Metals Ltd (HMX), Helix Resources Ltd (HLX), Saracen Mineral Holdings Ltd (SAR), Merdeka Copper Gold (MDKA: IJ), Monument Mining (MMY.V: TSX), Apollo Consolidated (AOP), Botanix Pharmaceuticals (BOT), Sino Gas & Energy (SEH), 4DS Memory Ltd (4DS), Troy Resources (TRY), Gold Road Resources (GOR), Bionomics Ltd (BNO), Orthocell Ltd (OCC), Walkabout Resources Ltd (WKT), Migme Ltd (MIG), Syntonic Ltd (SYT), Berkeley Energia (BKY), Hazer Group Ltd (HZR).
Please read Argonaut's Important Disclaimers & disclosures