Market Update & Important Indicators:
Stocks jumped after the FBI said no new evidence was found to warrant charges against presidential candidate Hillary Clinton. Monday's gains marked a rebound for stocks after the S&P 500 posted nine consecutive sessions of losses — its longest streak of declines in almost 36 years. Some investors blamed tightening polls for the fall, and interpreted the FBI's announcement as enhancing Mrs. Clinton's chances of winning in this week's race as well as removing an element of uncertainty in the event she is elected. Before the FBI update, as polls continued to signal a tight race in the election, the S&P 500 had closed lower Friday in its longest stretch of declines since 1980, while Wall Street's "fear gauge" posted its longest-ever stretch of gains. The CBOE Volatility Index, or VIX, fell 17% Monday after rising for the past nine sessions.
In European equity markets, the Stoxx Europe 600 climbed 1.5% Monday, its largest gain since Sept. 22. Japan's Nikkei Stock Average added 1.6% in its best day since September, helped by a weaker yen.
Asian share markets were broadly higher Monday, with the dollar surging after the U.S. Federal Bureau of Investigation stood by its earlier decision not to recommend charges against Democratic presidential hopeful Hillary Clinton. Japan's Nikkei Stock Average ended up 1.6%, while Korea's Kospi gained 0.8% and Hong Kong's Hang Seng Index gained 0.7%. In Hong Kong, key property stocks tumbled after the city's government late Friday imposed fresh measures–including an increase in transaction taxes – to cool the city's home property market.
Australian shares notched up their strongest advance in four months as the U.S. presidential race continued to drive sentiment after the Federal Bureau of Investigation said it had found no new evidence to warrant charges against Democratic nominee Hillary Clinton. Snapping a run lower over the last four sessions, the S&P/ASX 200 gained 70 points, or 1.4%, to 5250.8. All industry sectors were higher, with the basket of energy shares rising 1.9% and financials stocks picking up 1.8%. With a 2% drop in the ASX 200 last week, only 19% of companies had been trading above their 50-day moving average and about 40% were trading at a four-week low, IG chief market strategist Chris Weston said. The four largest bank stocks collectively added almost 22 points to the index Monday, recovering from recent weakness.
On the London Metal Exchange, copper for delivery in three months was recently up 2.14% at $5,098/t. In the other base metals, nickel rose 6.4% to $11,088/t, aluminium rose 0.3% to $1,721/t, zinc rose 0.8% to $2,453/t, tin rose 2.4% to $21,965/t, whilst lead bucked the trend falling 0.7% at $2,070/t.
In this Issue:
Oz Minerals (OZL) | PFS Further De-risks Carrapateena | HOLD
Market Cap $2,130 | Current Price $7.13 | Target Price $6.60
OZ Minerals (OZL) released the Prefeasibility Study (PFS) on the Carrapateena copper/gold project in South Australia. Key changes to the May 2016 Scoping Study (SS) include; higher average production based on lower dilution, slightly higher mining costs and a more gradual ramp-up schedule with high upfront mine development. OZL’s NPV9.5 estimate increases by 2.5% to $820m and the IRR drops from 24% to 21% (Argonaut models a NPV10 of $425m and 15% IRR). The restated Reserve for Carrapateena is 70Mt @ 1.8% Cu and 0.7g/t Au which is adjusted for mining, dilution and costs applied in the PFS. Argonaut maintains a HOLD recommendation with a revised target price of $6.60.
Gold Road Resources (GOR) | Paying up for a slice of the Big Cheese | BUY
Market Cap $547m | Current Price $0.63 | Target Price $1.10
Gold Road (GOR) has entered into a 50:50 joint venture with an Australian subsidiary of Goldfields Ltd (GF) for the development of the Gruyere Gold Project in Western Australia. The purchase consideration comprises $350m in cash payments and a 1.5% net smelter return (NSR) royalty. GF will fund up to 10% of cost over-runs and will provide funding support for any project level guarantee requirements. GOR will retain 100% interest in a large 2326km2 exploration tenements (excl. YAM-14, Alaric, Attila and Central Bore tenements) and will have potential to toll treat any new discoveries through commercial arrangements. The deal removes funding risk and partially removes execution risk by partnering up with a large globally recognized and experienced gold producer with multiple mines in numerous jurisdictions. Argonaut’s price target increases to $1.10ps (from $1.05ps) and we maintain our BUY recommendation.
Recent Contacts & Presentations:
Tox Free Solutions Ltd (TOX), Swick Mining Services Ltd (SWK), Davenport Resources Ltd (DAV), Orthocell Ltd (OCC), BC Iron Limited (BCI), ALT Resources Ltd (ARS), Gascoyne Resources Ltd (GCY), Dacian Gold (DCN), Orocobre Ltd (ORE), Alchemy Resources Ltd (ALY), Acacia Coal Ltd (AJC), Minotaur Exploration Ltd (MEP), Northern Minerals Ltd (NTU), Walkabout Resources Ltd (WKT), Antipa Minerals Ltd (AZY), Noxopharm Limited (NOX), Botanix Pharmaceuticals Ltd (BOT), Emerald Resources NL (EMR), Metals of Africa Ltd (MTA), Stavely Minerals Ltd (SVY), Australis Oil & Gas Ltd (ATS), Davenport Resources Ltd (DAV)