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16 October 2018 08:13 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average25,25125,340-89.00-0.35-3.46
S&P 5002,7512,767-16.00-0.59-5.31
NASDAQ7,4317,497-66.00-0.88-7.23
FTSE 100 Index7,0296,99633.000.48-3.76
DAX 3011,61411,52490.000.78-4.21
CAC 40 Index5,0955,096-1.00-0.02-4.81
Nikkei 225 (Japan)22,27122,695-423.00-1.87-3.57
HKSE25,44525,801-356.00-1.38-6.75
SSE Composite Index2,5682,607-39.00-1.49-4.23
S&P/TSX Composite Index15,40915,414-5.00-0.03-3.77
NZ 508,8108,838-28.00-0.32-4.97
US Volatility (Vix)21
Overseas Market Report

US sharemarkets remained volatile on Monday. Shares in Bank of America fell by 1.9% after reporting loan growth below that of its rivals. Defensive sectors were favoured by investors. The Dow Jones fell by 89 points or 0.4% after holding in a 238 point range. The S&P500 index fell by 0.6% and the Nasdaq index lost 66 points or 0.9%.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent80.9180.780.130.163.61
Oil - West Texas crude71.8771.780.090.134.17
Gold Spot $/OZ1,228.001,227.000.400.042.86
Silver Spot $/OZ14.7014.700.000.164.70
Iron Ore67.3067.300.000.036.57
Thermal Coal Newcastle109.20109.200.000.05-5.33
Coking Coal FOB ECP AUS0.000.000.000.000.00
Aluminium ($US/t)2,0262,034-8.00-0.410.95
Copper Mar-18 ($US/lb)2.792.79-0.20-0.076.05
Lead ($US/t)2,0932,06825.001.183.13
Nickel ($US/t)12,53412,579-45.00-0.35-0.31
Zinc ($US/t)2,6262,676-49.00-1.8413.39
Tin ($US/t)19,14119,11328.000.150.50
Uranium ($US/lb)27.0028.000.00-0.180.55
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords5,9735,94825.000.42-4.84
S&P/ASX 2005,8685,83730.000.52-4.83
ASX 24 Futures5,851
Australian Market Report

Monday 15 October - close. Overseas weakness has proven to be a drag on the Australian share market, with the benchmark index falling to a six-month low led by losses in banking and mining stocks. The benchmark S&P/ASX200 index was down 58.6 points, or 0.99 per cent, at 5,837.1 points on Monday, while the broader All Ordinaries was down 58.6 points, or 0.98 per cent, at 5948.0. 

Global oil prices rose modestly on Monday supported by geopolitical tensions. Saudi Arabia been under pressure since journalist Jamal Khashoggi, a critic of the kingdom and a US resident, disappeared on October 2 after visiting the Saudi consulate in Istanbul. The US President has vowed "severe punishment" if the journalist was found to have been killed in the consulate. Brent crude rose by US35 cents or 0.4% to US$80.78 a barrel and the US Nymex price rose by US44 cents or 0.6% to US$71.78 a barrel.

Base metal prices were generally weaker on the London Metals Exchange on Monday. Zinc fell the most (down 1.8%). But lead rose 1.2% and tin rose 0.1%.

The gold futures price rose by US$12.70 an ounce or 1.0% to $1,234.70 an ounce. The spot gold price was trading near US$1,226 an ounce in late US trade. Iron ore fell by US25 cents or 0.3% to US$71.25 a tonne.

Ashanti Headlines

MOD Resources Limited (MOD.ASX, 36.5cps, m.cap A$85.6m with 231.5m SOI, Cash $17.3m, Copper Explorer /Developer)

  • MOD Resources is making excellent progress on its T3 Feasibility Study, due for completion by March 2019
  • Feasibility Study Milestones:
    • Resources upgrade: The FS is based on a revised Mineral Resource of 60.2Mt @ 0.98% Cu and 13.9g/t Ag at a cut-off of 0.4% Cu prepared by consultants CSA Global (announced 16 July 2018). This includes 36.6Mt @ 1.14% Cu and 15.8g/t Ag in the Indicated Mineral Resource Category (Table 1).
    • Metallurgical Testwork: Recent metallurgical testwork undertaken on bulk composites for the FS has confirmed, and improved upon, the outstanding results achieved during the Pre-Feasibility Study (PFS). The potential benefits from rougher optimisation testwork are summarised below:
      • Rougher flotation recoveries exceed 97% for Cu and 95% for Ag
      • Target grind size increased to P80 = 212µm (PFS target P80 = 106µm)
      • Reduced capital and operating costs by lowering comminution power requirements
      • Rougher flotation at natural pH (without lime addition) should reduce operating costs further
      • Improved tailings dewatering characteristics 
    • Cleaner optimisation testwork will commence soon. Concentrate grades are expected to average 30-35% Cu over the life of mine based on test work results from the PFS and subject to further testwork during the FS.
    • Process Engineering: A recently completed comminution study completed by Orway Mineral Consultants confirmed that a standard crush/SAG/Ball circuit is appropriate for the proposed T3 pit. Process engineering consultants, Sedgman, have commenced preliminary design work on the crushing and grinding circuits. The process plant design throughput is 3Mtpa with expansion capacity to 3.5Mtpa for modest incremental capital. The plant layout will consider future expansion options beyond 3.5Mtpa.
    • Mining Engineering: Additional geotechnical drilling is in progress to provide more detailed information for the final pit design, which is required by mining consultants, SRK Consulting, to complete the T3 pit optimisation study. Mine scheduling is expected to follow.
    • Mine Dewatering and Process Water: A substantial program of pit dewatering drilling and pump testing has been completed around the planned T3 pit. Groundwater modelling will be used to estimate yields from pit dewatering and production water bores planned to be used for ore processing and related infrastructure requirements.
    • Mine Infrastructure: Botswana Power Corporation (BPC) has commenced installation of infrastructure for the grid power transmission line to be extended adjacent to the A3 Highway, which is only 12km from the T3 Project. During Q2 2018, an agreement was finalised to acquire the area of a farm where the T3 Project Area is located. The land area is approximately 25km2 which is sufficient for the open pit, process plant and associated infrastructure, with ample capacity for expansion. A long term lease agreement has also been executed for a 100m wide strip of farmland planned to be used for the mine access road joining the A3 highway and the T3 Project. This will also be used to accommodate the planned grid power spur line into site.
    • Accommodation Village: The first stage of the accommodation village located on the A3 Highway near Ghanzi (refer picture) is nearing completion. A Project Brief has been submitted to DEA to increase the size of the accommodation village from the current size of40 personnel up to 400 personnel and allow for an additional 300 personnel during construction.
    • Environmental and Social Impact Assessment (ESIA): The Environmental Scoping and Terms of Reference report for the ESIA was approved by the DEA in August 2018. This indicates the key baseline assessment and consultation process was followed and the proposed work program for the detailed ESIA that Tshukudu is undertaking will satisfy the expectations of the DEA, If carried out and reported to a satisfactory standard and meets regulatory requirements. In addition to the local requirements, the ESIA work is undertaken in line with international requirements and best practice. The scoping stage of the ESIA work program commenced in December 2017 involving preliminary public and stakeholder meetings. The ESIA includes a wide range of specialist work, an environmental and social management plan and regular stakeholder engagement, all of which is well advanced. The Environmental and Social Impact Statement (ESIS), which is a compilation of all work being undertaken, is being prepared by environmental consultants and registered practitioners, Loci Environmental. It is on track for submission to DEA during Q4 2018 and the Company will provide further updates as this progresses.
    • Funding for T3 Project: Working with its’ debt advisers, MOD has already received significant interest from several global financial institutions regarding financing the development of the T3 Project. This coincides with the FS focussing on further improvements in project economics from the already robust PFS announced earlier this year and the outstanding metallurgical characteristics of the T3 ore. The Board has a clear strategy with many alternative funding options being progressed including traditional banks, alternative debt providers, trading houses and smelters on the back of strengthening Chinese copper demand, limited new supply entering the market and falling global stockpiles.
    • Please contact the desk on +61 8 6169 2668 should you wish to discuss further


Have a question? admin@ashanticapital.com.au

ERA Communications