Market Update & Important Indicators
U.S. stocks drifted lower Tuesday afternoon in quiet trading as the most recent push toward record highs ran out of steam. The Dow Jones Average fell 105 points, or 0.6%, to 18011. The S&P 500 declined 13 points, or 0.6%, to 2092. Stocks have resumed their slow march to record highs in recent weeks, after seeing bigger swings earlier in the year. U.S. consumer prices rose 0.2% in February from a month earlier, the first increase since October and the biggest since June, the Labor Department said Tuesday, in line with expectations. Prices excluding volatile food and energy costs also rose 0.2%.
European stocks rose Tuesday, as data indicated recovery in the eurozone is picking up steam and as the euro's attempt to drive higher against the dollar proved short-lived. The Stoxx Europe 600 swung up 0.3% to 402.49, with regional indexes climbing as the euro briefly fell below $1.09 against the greenback. European Central Bank President Mario Draghi in Brussels on Monday said weakness in the euro and lower oil prices have aided growth prospects for the eurozone economy. In a topsy-turvy session, Germany's DAX 30 turned higher by 0.9% to 12,005.69. The U.K.'s FTSE 100 had been on track for a record high, but reversed course and fell 0.3% to 7,019.68.
Fresh signs of slowing in China pushed down stocks in Hong Kong but drove up the mainland market, where local investors banked on further stimulus from Beijing and trading volumes hit a record high. Factory activity in the country fell to its lowest level in 11 months, as a preliminary gauge of Chinese manufacturing activity by HSBC Holdings PLC released Tuesday fell to 49.2 in March, from 50.7 in February.The Shanghai Composite Index also marked its longest winning streak since 1992, with 10 straight day of gains. It rose 0.1% to 3691.41 Tuesday.
Based metals on the LME finished mixed. Gold gained 0.3% to US$1,192.7/oz and Brent declined 0.8% to US$55.50/bbl. The AUD is buying US$0.788.
In This Issue
Gold Road | SPEC BUY
Gold Road (GOR) released an intersection of 59m @ 3.0g/t (GOR estimated true width ~20m) from 127m from its RC drilling program at Smokebush Dolerite. This target sits within the Southern Yamarna JV (Sumitomo earning 50%). Although early stage and further drilling is required, the ore grade intersection validates regional prospectivity and the effectiveness of GOR’s exploration approach. The stock is catalyst rich and well-funded (A$21m at 31st December). With ~5 rigs drilling at Gruyere and deposit remaining open, Argonaut anticipates Resource upgrades which could translate to boosted production and AISC parameters in the upcoming PFS. Gruyere’s potential scale, geometry, long life, and favourable metallurgical properties, combined with a low sovereign risk jurisdiction, will ensure the asset attracts market and corporate attention.
Saracen (SAR) | BUY
Saracen (SAR) released better than expected results from a Feasibility Study (FS) on its 100% owned Thunderbox (TB) project (Stage I open pit only). The asset shares numerous similarities with the existing Carosue Dam operation and enables SAR to step up its production profile to >300koz pa. Whilst Argonaut’s valuation on TB remains modest, the operation offers significant exposure to operational and gold price upside. Argonaut upgrades its target price to A$0.55 (was A$0.53) and maintains a BUY recommendation. The stock remains a key pick in the gold space.
Recent Contacts & Presentations
Saracen (SAR), Beadell (BDR), Pacifico (PMY), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Helix Resources (HLX), Rift Valley Resources (RVY), West African Resources (WAF), Matrix (MCE), Austal (ASB), Ausdrill (ASL), TFS Corporation (TFC), Gage Roads (GRB), Austin Engineering (ANG), Buru Energy (BRU), OBJ Limited (OBJ), Strandline Resources (STA), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), MMA Offshore (MRM), Migme (MIG), Vmoto (VMT)