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09 July 2018 07:21 AM
Overseas Market ReportCurrent
PreviousChangeDaily %
Monthly %
Dow Jones Industrial Average24,45624,357100.000.41-3.40
S&P 5002,7602,73723.000.85-0.69
FTSE 100 Index7,6187,60314.000.19-0.83
DAX 3012,49612,46432.000.26-2.12
CAC 40 Index5,3765,3669.000.18-1.37
Nikkei 225 (Japan)21,78821,547241.001.12-3.99
SSE Composite Index2,7472,73413.000.49-10.43
S&P/TSX Composite Index16,37216,267105.000.651.04
NZ 509,0579,084-27.00-0.301.32
US Volatility (Vix)13
Overseas Market Report

US sharemarkets increased on Friday as investors focused on stronger-than-expected US jobs growth. Shares of Apple and Microsoft both rose by 1.4%. Biogen shares surged by 19.6% after the company announced positive Alzheimer's disease drug trial results. The Dow Jones was up by almost 100 points or 0.4%. The S&P 500 index rose by 0.9% and the Nasdaq rose by almost 102 points or 1.3%. Over the week, the Dow Jones (+0.8%), S&P500(+1.5%) and Nasdaq (+2.4%) indexes all rose.

Global oil prices were mixed on Friday. The continued supply outage at Canada's Syncrude oil sands facility supported US crude prices. But Saudi Arabia increased oil production by 458,000 barrels per day in June according to OPEC, pushing the Brent crude price lower. Brent crude fell by US28 cents or 0.4% to US$77.11 a barrel, but the US Nymex rose by US86 cents or 1.2% to US$73.80 a barrel. For the week, the Nymex lost 0.5% and Brent fell by 2.9%.

Base metal prices were mixed on the London Metal Exchange on Friday. Zinc (+0.9%) rose on reports that Chinese production would fall to its lowest level since 2015 in Q3 18. Nickel performed poorly(-1.8%) and over the week (-6.6%).

The gold futures price fell by US$3.00 an ounce or 0.2% to $1,255.80 an ounce, but was up US$1.30 or 0.1% for the week. The spot gold price was trading near US$1,254 an ounce in late US trade. Iron ore rose by 15 cents or 0.2% to US$62.65 a tonne, but was down US$1.80 or 2.8% for the week.

PreviousChangeDaily %
Monthly %
Oil Brent77.2277.
Oil - West Texas crude73.8973.800.090.1212.40
Gold Spot $/OZ1,256.001,255.001.300.10-3.30
Silver Spot $/OZ16.1016.000.000.11-4.42
Iron Ore59.1059.30-0.20-0.27-3.70
Thermal Coal Newcastle116.10116.60-0.50-0.432.93
Coking Coal FOB ECP AUS195.80195.800.000.00-1.06
Aluminium ($US/t)2,1102,1028.000.37-9.92
Copper Mar-18 ($US/lb)2.812.81-0.10-0.04-13.76
Lead ($US/t)2,3272,352-24.00-1.03-7.60
Nickel ($US/t)13,85014,104-253.00-1.79-11.04
Zinc ($US/t)2,7632,73825.000.91-13.99
Tin ($US/t)19,39319,493-100.00-0.51-7.92
Uranium ($US/lb)23.0023.000.00-0.44-3.79
Australian Market ReportCurrent
PreviousChangeDaily %
Monthly %
ASX All Ords6,3566,30353.000.843.23
S&P/ASX 2006,2726,21657.000.913.76
ASX 24 Futures6,250
Australian Market Report

Friday 6 July - close. The Australian share market has hit a fresh decade-high as Asian markets collectively shrugged their shoulders in response to the start of US President Donald Trump's tariffs on $US34 billion worth of Chinese imports. The benchmark S&P/ASX200 closed up 56.8 points, or 0.91 per cent, at 6,272.3 points on Friday, the highest level since December 2007, while the broader All Ordinaries index gained 52.8 points, or 0.84 per cent, at 6,355.7 points. Over the course of the week the ASX 200 index rose 1.25%, having lost 0.5% last week. The most improved sectors this week were Telecoms +6%, followed by Utilities +3.3%, Industrials +2.2% and Financials +2%. Leading the sector falls were Materials -1.2%, and Information Technology was the only other group to end lower with a fall of 0.5%.

Ashanti Headlines

Adriatic Metals PLC (ADT.ASX, 43cps, m.cap A$56.2m with 130.8m SOI, Cash $10.5m, Polymetallic Explorer / Developer

  • Our fellow supporters of ADT, Sprott Capital Partners, published a note from a resent visit to site
  • Sprott's view: SCPe >600Koz at 15 g/t AuEq, with >300Koz AuEq per 100m down-plunge growth
  • "In short, we think Rupice has Tier 1 potential, with a high-grade core of SCPe >600koz @ 15g/t AuEq defined by current drilling alone. This excludes barite credits, and by value is ~30% Ag, 20% Au, 25% Zn, 20% Pb, and 5% Cu.... Beyond this we see good, albeit more speculative, potential for a multi-million-ounce upside including; (i) down plunge extensions at Rupice, (ii) along-strike IP features NW and SE, including the IP anomaly at Brestic-Jurasevac with historic workings, and (ii) regional / satellite upside."
  • Why Sprott likes Adriatic:
    • High-grade mineable inventory potentially already defined (SCPe > 600koz @ 15g/t AuEq)
    • Near-term share price catalyst with down-plunge drilling of best mineralisation to date
    • Underexplored, underappreciated belt with apparent Tier 1 potential
    • Bosnia's combination of excellent infrastructure + logistics and low opex, royalties, taxes
  • Catalysts
    • 3Q18: First assays from Brestic-Jurasevac
    • 2H18: Potential land holding expansion
    • 2018-9: Ongoing 14,000m exploration drill programme
    • 1Q19: Maiden Rupice resource, updated Veovaca resource
    • Mid-2019: Scoping study for combined Veovaca-Rupice operation

Our preferred exposure to ASX listed base metals explorer/developer plays is Adriatic and we share a similar view as outlined by Sprott above. 

Please contact the desk on +61 8 6169 2668 should you wish to discuss ADT further.

MOD Resources Limited (MOD.ASX, 48cps, m.cap A$105.3m with 231.5m SOI, Cash $23.0m, Copper Explorer /Developer)

  • Strong visible copper mineralisation intersected in veins within a zone extending up to 67m down hole width in the large A4 Dome
  • MO-A4-003D is targeting the core of A4 Dome, 1.8km west of the first mineralised hole, MO-A4-001D (announced 12 June 2018)
  • Mineralised veins commence at approximately 232m and extend to approximately 299m down hole depth and the hole is being deepened to test other EM targets
  • Chalcopyrite is the dominant sulphide in the veins, with localised bornite and chalcocite occurring deeper in the vein zone
  • A4 Dome is first of seven ‘buried domes’ to be drilled in T3 Dome Complex as part of a major drilling campaign, with five drill rigs now operating
  • MOD's Managing Director, Mr Julian Hanna said, "Our geologists are excited that MO-A$-003D has intersected a mineralised stockwork vein system, within what appears to be a large, intact dome. This opens up the possibility that any copper that was deposited in the A4 Dome is still there" …. and added "The wider significance is that this hole has also confirmed the benefits of using state-of-the-art EM to successfully target copper within these previously unrecognised domes."
  • Please click here for a link to the full announcement
  • Our preferred exposure to a narrowing field of ASX listed copper developers is MOD Resources who's 70% owned T3 project (PFS announced 31 January 2018 confirms a robust and long life copper mine) combines a near term development scenario with significant district scale exploration potential. An extensive drilling campaign is currently underway with numerous targets within its 11,500Km2 land holdings along the highly prospective Kalahari Copper Belt in Botswana
  • Please contact the desk on +61 (8) 6169 2668 should you wish to discuss further

Berkeley Energia Ltd: (BKY.ASX, 78cps, m.cap A$198.6m with 254.7m SOI, Cash $99.8m, Uranium Developer)

  • BKY has identified a number of opportunities to reduce the initial capital expenditure required to bring the mine into production
  • Potential savings of up to EUR9M (based on the FEED estimate as announced on 6 July 2017) arise from:
    • optimisation of plant capacities within the overall process design,
    • outsourcing of peripheral infrastructure, and
    • reducing initial throughput for production from the Retortillo deposit and right-sizing of the associated plant
  • The proposed modifications remain consistent with the future expansion of production from Zona 7 and Alameda
  • The initiatives proposed will be taken forward to detailed engineering in parallel with the commencement of planned on-site construction activity, including site preparation, bulk earthworks and initial civil construction works.
  • BKY remains our preferred exposure to Uranium for the following reasons:

    • Salamanca is fully funded and slated to be one of the top 10 producers globally. 
    • A quality project that is globally competitive on capex and opex metrics.
    • Project NPV of c$300M using conservative $45/lb uranium price
    • Strategic project with a +15 year mine life.
    • We anticipate there will be several key macro catalysts for Uranium by end of CY18.

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