Market Update & Important Indicators
U.S. stocks fell on Tuesday, pulling back after the S&P 500 index notched its biggest two-day advance in more than a month. Contributing to the pause in equities is uncertainty about when the Federal Reserve may start to raise short-term interest rates. Investors are waiting for more data coming out of a slow winter quarter. The dollar turned lower against the Japanese yen and the euro Tuesday after trade data indicated a larger drag on U.S. growth than initially estimated, raising the likelihood the Federal Reserve won't raise borrowing costs anytime soon.
European stocks and bonds fell sharply Tuesday amid continuing uncertainty over Greece's future, as last week's abrupt shakeout in markets showed no sign of slowing. The Stoxx Europe 600 closed 1.5% lower. Greece's Athex led declines, falling more than 4% after the European Union cut itsn forecast for the country, citing political uncertainty and tighter financing.
Shanghai shares suffered their second largest daily fall this year, as worries about margin trading put an abrupt halt to the market's 39% year-to-date rally, while an interest-rate cut in Australia failed to lift the market. The Shanghai Composite Index on Tuesday closed down 4% at 4298.71, its biggest daily percentage loss since Jan. 19, when the market plunged 7.7% on similar fears that Beijing was clamping down on the use of borrowed money by retail investors to buy stocks.
Copper prices rose in tandem with other base metals on the London Metal Exchange on Tuesday as the dollar weakened and sentiment improved. Brent crude was up 1.6% to $67.52/bbl, while gold gained 0.5% to $1,194/oz.
In This Issue
Saracen (SAR) | BUY
First results from Saracen’s (SAR) underground drilling campaign at Karari reaffirmed Argonaut’s view that the asset is one of the best amongst the Company’s portfolio in terms of exploration potential and highly likely to deliver organic growth. Whilst early stage, the results demonstrated both grade and width potential at Karari. A successful extensional drilling campaign at Karari will support boosted production at Carosue Dam (to potentially >200koz pa) and lower LOM costs, which should translate to significant share price appreciation. Given the strong results, the Company is expected to commence stoping during the September Q. A maiden underground Reserve is due H2 CY15. SAR is targeting a >4 year operation at Karari, and the released results consist of ~10-15% of SAR’s target area (see Figure 2, page 4). Exploration is continuing with 7 rigs and further results, including those from other targets, are expected in the coming weeks. BUY recommendation maintained with a $0.57 valuation.
Recent Contacts & Presentations
Dacian (DCN), Saracen (SAR), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Buru Energy (BRU), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), Migme (MIG), Vmoto (VMT), Pioneer Credit (PNC), Minemakers (MAK), MZI Resources (MZI), High Peak Royalties (HPR), Leaf Resources (LER), Austin Engineering (ANG), Ausdrill (ASL), Matrix (MCE), Austal (ASB), MMA Offshore (MRM), CTI Logistics (CLX), 99 Wuxian (NNW)