Market Update & Important Indicators
U.S. stocks recovered most of their Tuesday losses as investors considered whether the prior day's selloff driven by Italy's unfolding political drama might have been overdone. The Dow Jones Industrial Average added 1.3%, while the S&P 500 also climbed 1.3%. Both indexes had their worst day in more than a month Tuesday and closed at their lowest level in three weeks. The Nasdaq Composite added 1%. U.S. bank stocks, which were among the hardest hit Tuesday amid worries that debt-heavy governments like Italy's could weigh on the banking sector, bounced back Wednesday. The S&P 500 financial sector rose 2.1%. Investors were weighing news that planned talks on trade between the U.S. and Chinese governments could be derailed by the U.S. decision to move forward with tariffs on $50 billion in imports. HP raised its profit forecast for the year as the maker of personal computers and printers topped expectations in the most recent quarter. Shares added 3.8%. Cloud software firm Salesforce rose 2.4% after reporting record quarterly revenue. Stocks also got a boost from a rebound in oil prices, with S&P 500 energy firms climbing 3.3% as U.S. crude was on track to end a five-session losing streak. The US gold price gained 0.2% to record 1300.90 US$/oz.
The Stoxx Europe 600 index closed up 0.3% at 385.49, as stocks tentatively recovered from sharp falls on Tuesday due to political uncertainty in Italy. The FTSE MIB index ended 2.1% up as sentiment improved after Italy's debt auction drew solid demand, albeit with higher borrowing costs. "Equity markets are largely higher today as the fear surrounding Italy has cooled in the wake of the successful government bond auction," said David Madden at CMC Markets. Italian banks were among the biggest gainers, with Mediobanca up 7.1% and Intesa Sanpaolo gaining 3%, while oil stocks followed recovering oil prices upward. Still, analysts warned that investors will remain nervous and the wave of optimism may not last. Germany's DAX rose 0.9%, the U.K.'s FTSE 100 was up 0.7%, Spain's Ibex 35 finished 0.5% higher, and France's CAC 40 closed down 0.2%.
In Asia, stocks caught up with the sharp declines in the western world, with Japan's Nikkei 225 dropping 1.5%. China's Shenzhen A-Share Index and Hong Kong's Hang Seng fell 2.8% and 1.4% respectively. News that planned talks on trade between the U.S. and Chinese governments could be derailed by the U.S. decision to move forward with tariffs on $50 billion in imports also weighed on stocks.
Australian stocks didn't fall as much as others in Asia Pacific this morning, and that outperformance persisted all day even as the S&P/ASX 200 fell for the 8th session in 10 and closed below 6000 for the 1st time in a month. It dropped 0.5% to 5984.7 as financials shed 1.4% and hit 18-month lows amid the global selloff seen amid worries about Italy and subsequent slump in Treasury yields in particular. But the energy sector rose slightly and consumer stocks were little changed.
Base metal prices were mostly mixed on the London Metal Exchange. The aluminium price decreased 0.1% to 2,263/t, while the lead price declined 0.5% to 2,422/t. A small downward movement of 0.2% was recorded in the 3-month copper contract, which closed at 6,831/t. The nickel price gained only slightly by 1.5% to 15,067/t. Tin gained 0.5% to close at 20,600/t. Finally, Zinc gained 1.1% finishing at 3,125/t.
In this issue:
Explaurum (EXU) | Tampia Feasibility Study | Spec Buy
Market Cap $47bn| Current Price $0.10 | Target Price $0.19
EXU has released a positive result for their Tampia Gold Project Feasibility Study (FS) outlining a low cost and high margin operation with All-in sustaining cost (AISC) of $998/oz for the life of mine (LOM) and AISC of $896/oz over the first two years. The capital cost of $119m (+/- 15%) includes a contingency of $10.8m. EXU envisages a 1.5Mtpa processing plant (hard rock capacity) with an initial mine life of 6 years and 534koz mined. Production will peak at 104koz in the first two years, with LOM average production of 92kozpa. The project will generate average EBITDA of $62mpa over the LOM with a pre-tax NPV8% of $125m, an IRR of 47% and a payback of 1.5 years. EXU will now move to complete the Bankable Feasibility Study by October 2018 with board approvals for finance and development options expected by December 2018. Maintain Speculative Buy and TP $0.19ps (prior $0.21ps).
Recent Contacts & Presentations
Triton Minerals (TON), Calima Energy (CE1), Peel Mining (PEX), Catalyst Metals (CYL), Vault Intelligence (VLT), Doray Minerals (DRM), Nzuri Coppoer (NZC), Bowen Coking Coal (BCB), Phosphagenics Limited (POH) Great Boulder Resources (GBR), Orthocell (OCC), Northern Minerals (NTU), ABM Resources Ltd (ABU), Vital Metals Ltd (VML), Todd River Resources Ltd (TRT), Pacific Energy Ltd (PEA), Carnarvon Petroleum Ltd (CVN), Australian Mines Ltd (AUZ), Australian Finance Group (AFG), Paladin Energy Ltd (PDN), Cooper Energy Ltd (COE), Medibio Ltd (MEB), Botanix Pharmaceuticals Ltd (BOT), Salt Lake Potash Ltd (SO4), Golden Mile Resources Ltd (G88), NTM Gold Ltd (NTM), Ausmex Mining Group Ltd (AMG), Matrix C&E Ltd (MCE), Austal Ltd (ASB), Decmil Group Ltd (DCG), Ventnor Resources Ltd, Ausdrill Ltd (ASL), Alice Queen Ltd (AQX), PNX Metals Ltd (PNX), Alliance Resources Ltd (AGS), Myanmar Metals Ltd (MYL), Primary Gold Ltd (PGO), Sino Gas & Energy Holdings Ltd (SEH)