Market Update & Important Indicators
U.S. stocks fell Thursday, pulling back one day after the Nasdaq Composite notched a record high. The decline comes on the heels of lower markets in Europe, which fell after hopes were dashed that Greece was close to a deal with its creditors. Stocks have been whipsawed this week as investors grapple with a mixed bag of economic data, a wave of new merger announcements and the prospect of the first interest-rate increase by the Federal Reserve in nine years later this year.The U.S. dollar edged higher on Thursday, buoyed by investors betting that the U.S. has emerged from its economic slowdown and is moving toward higher interest rates. The dollar rose 0.2% against the yen in afternoon trade to ¥123.88, on track to hit its highest close since June 22, 2007.
European stocks slipped Thursday as a rally spurred by hopes Greece was close to reaching a deal with its creditors petered out. The Stoxx Europe 600 ended the session down 0.5%. Greece aims to have an agreement with its international creditors by Sunday, a government spokesman said Thursday. But European officials played down the chances of an imminent deal, saying there was still work to be done before the impasse over the future of Greek finances is resolved, and the euphoria in markets receded. Germany's DAX index fell 0.8% on the day, France's CAC 40 was down 0.9%, while the U.K.'s FTSE 100 edged 0.1% higher.
Chinese stocks were rocked by a sharp selloff late Thursday afternoon that left Shanghai 6.5% lower, a sudden reversal of fortune for one of the world's top-performing markets this year. This was the market's biggest daily drop since Jan. 19, when it fell 7.7%. A trio of factors combined to send investors racing for the exits: China's sovereign-wealth fund said earlier this week it had sold stakes in two state-owned banks; brokerages were tightening restrictions on giving out credit to individual stock investors; and the central bank soaked up cash from commercial banks, a sign that the government is trying to contain excess liquidity in the financial market. The benchmark Shanghai Composite Index closed at 4,620 after starting the day within reach of 5,000, a level it was last at in January 2008. Shanghai remained up 43% for the year.
In base metals, spot copper closed 0.2% higher, although the rest of the basket was mixed. Gold was steady overnight at $1,188/oz, while Brent crude added 1.2% to $63.88/bbl.
In This Issue
Gold Road (GOR) | SPEC BUY
Gold Road (GOR) delivered an impressive Resource upgrade, increasing the Resource at Gruyere to 5.5Moz @ 1.24g/t (5.0Moz @ 1.24g/t when constrained by an A$1,400/oz pit). Both the inventory and vertical endowment (12.5koz ounces per vertical metre in top 260m) demonstrate clear potential to support a ~270-350 kozpa operation. Following recent M&A activities, Gruyere has become one of the few remaining available Australian gold assets with scale and the potential to attract a major. Gruyere’s scale, geometry, long life, and favourable metallurgical properties combined with a low sovereign risk jurisdiction, will ensure the asset attracts market and corporate attention. The project shares similarities with Barrick’s Cowal mine, which Evolution Mining (EVN) is acquiring for US$550m (A$711m), but will likely have significantly higher Reserves. A comparison with Tropicana highlights favourable attributes which reinforces the project’s quality. Argonaut’s valuation increases to A$0.75 following the upgrade.
Recent Contacts & Presentations
Orbital (OEC), Site Group (SIT), Saracen (SAR), Kibaran (KNL), Sino Gas & Energy (SEH), Rewardle (RXH), Alexium (AJX), Ausdrill (ASL), Tox Free (TOX), OBJ Limited (OBJ), 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), MZI Resources (MZI), High Peak Royalties (HPR), Spookfish (SFI)