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21 January 2020 06:50 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average29,34829,29850.000.173.14
S&P 5003,3303,31713.000.393.37
NASDAQ9,3899,35732.000.345.20
FTSE 100 Index7,6517,675-23.00-0.300.91
DAX 3013,54913,52623.000.171.73
CAC 40 Index6,0796,101-22.00-0.360.95
Nikkei 225 (Japan)24,08424,04142.000.181.12
HKSE28,79629,056-261.00-0.903.32
SSE Composite Index3,0963,07520.000.663.02
S&P/TSX Composite Index17,59717,55938.000.222.80
NZ 5011,78111,74734.000.292.60
US Volatility (Vix)12
Overseas Market Report

US sharemarkets were closed for a public holiday. On Friday the Dow Jones index was up by 50 points or 0.2%. The S&P500 index rose by 0.4% and the Nasdaq index lifted by 32 points or 0.3%. Last week the week the Dow rose by 1.8%, S&P 500 rose by 2% and Nasdaq rose by 2.3%. 

Global oil prices rose by up to 0.5% on Monday. Reuters reported: "Two major oilfields in southwest Libya began shutting down on Sunday after forces loyal to Khalifa Haftar closed a pipeline, potentially cutting national output to a fraction of its normal level, the National Oil Corporation (NOC) said." But analysts expect the disruptions to be short-lived and any lost production may be met with supplies from other producers. The Brent crude price rose by US34 cents or 0.5% to US$65.19 a barrel. And the US Nymex price rose by US12 cents or 0.2% to US$58.66 a barrel. 

Base metal prices were mixed on Monday. Lead and copper fell by up to 1.1%. Other metals rose by up to 0.8%, led by nickel, although tin rose by just 0.2%. Zinc rose 0.7% to near 2-month highs. Stocks of zinc in London Metal Exchange-approved warehouses are close to 20-year lows. 

The spot gold was up by around US$8 an ounce to near US$1,564 an ounce. Iron ore rose by US10 cents or 0.1% to US$95.85 a tonne.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent65.2564.850.400.62-1.35
Oil - West Texas crude58.5458.520.020.03-3.94
Gold Spot $/OZ1,561.001,561.000.000.005.58
Silver Spot $/OZ18.1018.100.00-0.065.05
Iron Ore89.8088.701.101.245.53
Thermal Coal Newcastle69.9070.00-0.10-0.145.35
APAC Hard Coking Coal FOB154.00154.000.000.005.84
Aluminium ($US/t)1,8061,79313.000.711.78
Copper ($US/lb)2.852.850.100.051.28
Lead ($US/t)1,9531,974-21.00-1.081.80
Nickel ($US/t)13,94013,836105.000.76-3.65
Zinc ($US/t)2,4662,44917.000.695.22
Tin ($US/t)17,80617,77036.000.202.66
Uranium ($US/lb)25.0025.000.000.20-3.34
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords7,1967,18016.000.223.93
S&P/ASX 2007,0807,06415.000.223.86
ASX 24 Futures7,031
Australian Market Report

Monday 20 January 2020 - close. Australian shares have powered to new highs for a fifth consecutive day as the unprecedented bull run continues. The benchmark S&P/ASX200 index finished Monday up 15.4 points, or 0.22 per cent, to finish at 7,079.5 points after reaching a new high of 7092.5 in morning trade. The broader All Ordinaries gained 16 points, or 0.22 per cent, to 7,196.3.

Ashanti Headlines

Adriatic Metals PLC (ADT.ASX, 184cps, m.cap A$328.1m with 177.8m SOI, Cash cA$35m, Polymetallic Explorer / Developer)

  • ADT have released further met-test work results this morning. The test work confirms the ability to produce a separate copper concentrate – which is significant as it is expected to greatly improve the copper payability and add to the gold and silver payability also. Overall – if this process flowsheet is confirmed during the feasibility study it will further improve the already impressive economics of the Vares Project.
  • Following the completion of the successful preliminary metallurgical test work in September 2019, Adriatic engaged WAI to initiate a second program of metallurgical tests intended to 1) verify the sequential concentrate production following the successful separation of copper, and 2) confirm the metallurgical recoveries from feed with varying grade and metal assemblage. WAI undertook a metallurgical investigation on a representative sample characterising the higher-grade zones of the Rupice deposit, which were assumed to be mined first in the recent Scoping Study completed in November 2019
  • A detailed froth flotation study focussed on the production of separate copper, lead and zinc concentrates as well as a barite product. Variables investigated included primary grind size, reagent type, reagent dosage, pH profile and residence time. A suite of batch rougher and cleaner tests culminated in a locked cycle test and the results for LCT1 (Locked Cycle Test 1) are summarised below in Table 1.
  • Ausenco Engineering Canada Inc (Ausenco) has been selected as lead consultant for the feasibility program following an extensive adjudication process. Ausenco will take the lead role of directing and managing the preliminary feasibility study process. The Company will be appointing additional consultants to carry out specialist roles under the guidance and management of Ausenco and the Company. These additional consultants will include specialist Institutes and companies in Bosnia and Herzegovina with which the Company wishes to continue to help develop local capacity for supporting mineral extraction and other industries.
  • Ashanti has a buy rating on ADT with a price target of A$2.16
  • Please see link to full announcement here
  • Please contact your adviser or the desk on +61 8 6319 7807 should you wish to discuss further

Base Resources (BSE.ASX, 25cps, m.cap A$292.9m with 1.16b SOI, Cash US$39.2m, Mineral Sands Producer)

  • BSE has provided an update on recent drilling at its Toliara Project in Madagascar. 
  • Notable drill holes from the extensional drilling to the west of the current Ranobe Ore Reserves (all from surface) include: 
    • Hole R2076 – 81m @ 15.7% HM and 8.5% slimes, including LSU of 67.5m @ 18.3% HM and 9.3% slimes. 
    • Hole R2074 – 87m @ 13.9% HM and 5.1% slimes, including LSU of 69m @ 16.4% HM and 5.4% slimes. 
    • Hole R2084 – 71.5m @12.2% HM and 5.4% slimes, including LSU of 41.5m @ 17.6% HM and 6.7% slimes. 
    • Hole R1507A - 72m @11.6% HM and 8.2% slimes, including LSU of 43.5m @ 16.5% HM and 7.1% slimes. 
    • Hole R2022 – 87m @ 9.1% HM and 5.8% slimes, including LSU of 52.5m @ 13.8% HM and 7.3% slimes.
  • The Company is awaiting all assays / further mineralogical test work for recently completed drilling before providing a Resource upgrade, but the aerial and cross sections depicting high grade intercepts suggest there will be a material update to follow. 
  • The Toliara DFS was released in mid-December last year, confirming the project’s accretive value for Base (NPV10%, Post-Tax of US$652M from a 586Mt Reserve grading 6.5% HM, with an annual average NPAT of US$110.2M over the 33year LOM). The market is clearly waiting to see how Base finances the Stage 1 capex at Toliara of US$442M.
  • Ashanti remains of the view that Base is a long term hold due to existing profitable operations (Kwale, located in Kenya) and arguably the best advanced development projects in the mineral sands industry.
  • A link to the full announcement can be found here


Have a question? admin@ashanticapital.com.au

ERA Communications