Market Update & Important Indicators
The Dow Jones Industrial Average ended the week lower, capping a rocky stretch that included political turmoil, terror attacks and disappointing earnings. Indexes spent much of Friday hovering between slight gains and losses, as a lack of major economic data and corporate earnings contributed to quiet trading. Then declines picked up toward the close on Friday, echoing Thursday's late-session selloff. The Dow industrials fell 76.22 points, or 0.4%, to 21674.51 on Friday, posting a weekly decline of 0.8%. It's the second week of declines for the blue-chip index, and the worst two-week percentage drop in nearly a year. Even with the recent declines, the Dow industrials remain up 9.7% in 2017. The S&P 500 fell 4.46 points, or 0.2%, to 2425.55 Friday, while the Nasdaq Composite shed 5.39 points, or less than 0.1%, to 6216.53. The Dow industrials had briefly jumped into positive territory following reports that chief strategist Steve Bannon was leaving his role at the White House. Mr. Bannon has been viewed as a controversial figure within the administration. A day earlier, the Dow industrials posted their biggest decline in three months, as Wal-Mart Stores and Cisco Systems declined following earnings, and investors were rattled by a terror attack in Spain and fallout from President Donald Trump's remarks on the protests in Charlottesville. The U.S. gold price finished down slightly overnight, closing down 0.3% to finish at 1,284.20 US$/oz.
Spanish stocks slumped Friday, as part of a wider selloff across European markets a day after terrorists killed at least 13 people in the heart of Barcelona. More than 100 people were injured in Spain's second-largest city in a late Thursday afternoon attack claimed by Islamic State, and the death toll could rise, officials said. Hours later, police killed five alleged terrorists as they responded to a separate attack that hurt seven people in Cambrils, a town southwest of Barcelona, the Catalan government said. In Madrid, the IBEX 35 dropped 0.6% to close at 10,385.70, and had fallen by as much as 1.7% in early trade. The Stoxx Europe 600 index fell 0.7% to end at 374.20, trimming its weekly gain to 0.6%.
In Asia, markets were lower Friday with financial shares among the region's biggest decliners. The Nikkei Stock Average was down 1.2%. There was added pressure from the advance of the yen against the dollar, last up 0.4%. Hong Kong's Hang Seng Index was down 1.1%, while Korea's Kospi was off 0.1%. In China, the Shanghai Composite Index was flat. Further woes in the Trump administration after the president's policy advisory council of executives disbanded risk hurting market confidence and business sentiment globally.
Australian shares closed lower on Friday, following the dip in U.S. market after the terror attack in Spain and political tensions. The S&P/ASX-200 ended the day more than 0.5% lower at 5747.1. Financials, industrials and resources were among decliners, while consumer staples and healthcare gained.
The London Metal Exchange's three-month copper contract traded slightly lower overnight, falling 0.06% to $6,486/t. The other base metals finished mixed. Aluminium prices lost 0.6% to 2,072/t, whilst lead prices fell 2.3% to 2,335/t. Tin prices added 0.3% to 20,365/t, but zinc prices were stronger, advancing 2.1% to 3,117/t – making a fresh multi-year high. Nickel prices were also higher, jumping 2.4% to finish at 10,929/t.
In this issue
Paringa Resource (PNL) | Construction Underway | BUY
Market Cap $133m | Current Price $0.42 | Target Price $1.66
Paringa Resources (PNL) has commenced construction at Poplar Grove, the first mine to be developed at the Buck Creek Thermal Coal Complex. Excavation of the boxcut is underway in preparation of the slope (decline) construction to access the WK No. 9 coal seam. First washed coal production is expected Q3 CY18. All major contracts have been signed on a fixed price basis which should mitigate price and timing overruns. The Company has achieved ~US$1.2m cost saving on the development capex to date. Argonaut maintains a BUY recommendation with a $1.66 target price.
Xanadu Mines (XAM) | Building the Next Mongolian Empire | SPEC BUY
Market Cap $100m | Current Price $0.19
Argonaut recently visited Xanadu Mines (XAM) advanced stage copper/gold exploration assets in Mongolia. The Company has two core projects, Kharmagtai and Red Mountain, and both contain several clusters of porphyry intrusions with a range mineralisation styles. An intercept of 646m @ 0.51% Cu & 0.87g/t Au at the Stockwork Hill deposit earlier this year confirmed the potential for the Kharmagtai Project to develop into a globally significant porphyry district. Kharmagtai has three defined discrete porphyry deposits, and a fourth would likely provide the critical mass to promote development. We believe the Golden Eagle prospect at Khamagtai could be the next discovery with a gold rich cap identified in shallow RC drilling supported by coincident geophysical and geochemical anomalism. The pipeline Red Mountain Project is well advanced with defined porphyry mineralisation at the Dolerite Hill prospect (184m @ 1.06% Cu Eq) and a massive sulphide intercept at Target 10 (6.2m @ 5.5% Cu Eq). SPEC BUY recommendation.
Recent Contacts & Presentations
New Century Zinc Ltd (NCZ), Metal Bank Ltd (MBK), Rift Valley Resources Ltd (RVY), Panoramic Resources Ltd (PAN), Doray Minerals Ltd (DRM), Wellard Limited (WLD), Bryah Resources Ltd (BYH), Auris Minerals Ltd (AUR), Gage Roads Brewing Co Ltd (GRB), Stavely Minerals Ltd (SVY), Orbital Corporation Ltd (OEC), 4DS Memory Ltd (4DS), Kin Mining NL (KIN), Pharmaust Limited (PAA), Botanix Pharmaceuticals Ltd (BOT), Dimerix Ltd (DXB), Metro Mining Ltd (MMI), Paringa Resources Ltd (PNL), Independence Group NL (IGO), MZI Resources Ltd (MZI), Transerv Energy Ltd (TSV), Emmerson Resources Ltd (ERM), Antipa Minerals Ltd (AZY), Echo Resources Ltd (EAR), Sovereign Metals Ltd (SVM)