Market Update & Important Indicators
U.S. stocks slipped, following a downbeat outlook from Wal-Mart Stores Inc. that eclipsed strong earnings from other retailers. Wal-Mart shares slumped 3.5% to $69.40, touching a more than 2 1/2 -year low. The retailer cut its earnings guidance for the year to between $4.40 and $4.70 a share from its previous forecast of $4.70 to $5.05 a share. In other earnings news, Home Depot Inc. again lifted its outlook for the year, as the U.S. housing recovery helped drive better-than-expected sales growth in its latest quarter. Shares rose 2.3% to $122.39.
Europe bucked the trend of global caution, with the Stoxx Europe 600 finishing 0.2% higher. Still, European shares have struggled to make up lost ground after falling last week, amid worries that China's devaluation was a further sign the country's economy is slowing. Commodity-linked sectors of European stock markets remained under pressure, with energy and mining shares falling. London's resource-heavy FTSE 100 index fell 0.4% on the day.
Fresh anxieties about China's commitment to steadying the stock market sparked heavy losses in Shanghai, despite signals of a housing recovery and the central bank's latest steps to keep cash from fleeing. The Shanghai Composite Index tumbled 6.2% to 3748.16, just 240 points above its recent trough on July 8 and 27% off its June peak. The smaller Shenzhen Composite Index fell 6.6% to 2174.42. In Hong Kong, shares fell 1.4%, turning negative for the year, and a gauge of Chinese companies listed in the city fell 1.8%. Worries about the health of the world's no. 2 economy continues to drag industrial metals and regional currencies to multiyear lows.
Copper futures closed at a six-year low in London on Tuesday, the latest sign of market concern over Chinese demand at a time of worsening economic data in the world's second-biggest economy. Other LME metals all finished lower. Gold is steady at US$1,118/oz. Oil prices rebounded as bargain buyers and profit takers outweighed some of the pressure from Chinese economic concerns and strong supply that have recently added to oil's fall.
Thought for the day
Rift Valley (RVY)
Rift Valley (RVY) Resources recently delivered a high grade maiden Resource at Dalafuma (1.2Mt @ 4.1g/t @ 167koz). The grade of the deposit exceeded Argonaut’s expectation. Given the shallow depth (Resource estimated to a vertical depth of 150m), Dalafuma has excellent open pit potential. The total project inventory at Miyabi (100% RVY), Tanzania, has increased to 700koz @ 1.5g/t.
Dalafuma is a recent discovery made in 2012 following a systematic exploration program. The deposit remains open in several directions with potential for a parallel ‘NW’ zone.
The project area remains under explored and has good potential for further discoveries, with the Miyabi Structural Corridor remaining open to the NE and untested beyond Dalafuma and Kilimani.
A large part of the project area is covered by a laterally extensive layer of laterite and transported ferricrete, which could have rendered historical shallow holes (typically ~10m RAB holes are ineffective). Additional exploration at the project will likely include geophysics and more effective, targeted drilling.
The inventory of 700koz bodes well for a potentially economic, open pit operation. The Indicated portion of the Resource is 385koz @ 1.7g/t. This potential will be significantly enhanced with additional ‘Dalafuma’ identified within the tenements.
The Miyabi project is located 30km from Resolute’ s (RSG) Nyakafuru (842koz @ 1.1g/t, 90% basis), and 50km west of Acacia Mining’s 4.5Moz Buzwagi mine, proving further optionality.
RVY has a promising exploration pipeline in Africa, including:
• Kitongo, Tanzania (Au)
• Miyabi, Tanzania (Au)
• Cassenha Hill, Angola (Cu / Au, drilling imminent)
• Bongo, Angola (Au)
• Longonjo, Angola (REE)
The Company has a cash position of A$3.4m at 30th June.
Recent Contacts & Presentations
Dacian (DCN), Evolution (EVN), Austal (ASB), Resolute (RSG), Pacifico (PMY), Kingsgate (KCN), Troy (TRY), Northern Star (NST), Sandfire (SFR), Regis (RRL), Saracen (SAR), Sino Gas & Energy (SEH), Buru Energy (BRU), Carnarvon Petroleum (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), High Peak Royalties (HPR), Karoon Gas (KAR), Austex Oil (AOK), Central Petroleum (CTP), Senex Energy (SXY), Newmont, Coventry (CYY), Energia (EMX)
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