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27 February 2020 06:51 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average26,95827,081-124.00-0.46-7.01
S&P 5003,1163,128-12.00-0.38-5.43
NASDAQ8,9818,96615.000.17-3.59
FTSE 100 Index7,0427,01825.000.35-7.16
DAX 3012,77512,790-16.00-0.12-5.91
CAC 40 Index5,6855,6805.000.09-5.64
Nikkei 225 (Japan)22,42622,605-179.00-0.79-3.93
HKSE26,69626,893-197.00-0.73-4.48
SSE Composite Index2,9883,013-25.00-0.830.38
S&P/TSX Composite Index17,04217,177-135.00-0.79-2.98
NZ 5011,59011,53456.000.49-1.84
US Volatility (Vix)28
Overseas Market Report

US sharemarkets were volatile as investors digested news on COVID-19. Shares in Walt Disney fell by 3.8% on news that Robert Iger will step down as chief executive officer, to be replaced by Bob Chapek. At the close of trade, the Dow Jones index was down by 124 points or 0.5% after trading in a 652 point range. In morning trade, the Dow was up 461 points. The S&P500 index was lower by 0.4% and the Nasdaq was up by 15 points or 0.2%. 

Global oil prices fell by up to 2.8% on Wednesday after hundreds of new coronavirus cases were reported in Asia, Europe and the Middle East. Prices were supported by data showing a 452,000 barrel modest increase in US crude stocks last week (forecast 2- million barrel increase). Brent crude fell by US$1.52 or 2.8% to US$53.43 a barrel. The US Nymex price fell by US$1.17 or 2.3% to US$48.73 a barrel. 

Base metal prices were mixed on Wednesday. Lead, tin, copper and aluminium fell by up to 3.2% while other metals rose with nickel and zinc both up by 0.9%. 

The gold futures price fell by US$6.60 an ounce or 0.4% to US$1,640.40 an ounce. Spot gold was trading near US$1,638 an ounce in late US trade. Iron ore fell by US$2.75 or 3.1% to US$87.35 a tonne.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent53.3854.95-1.57-2.86-12.04
Oil - West Texas crude48.7349.90-1.17-2.34-10.08
Gold Spot $/OZ1,641.001,641.00-0.30-0.023.70
Silver Spot $/OZ17.9017.900.00-0.03-1.02
Iron Ore84.4085.60-1.30-1.48-5.53
Thermal Coal Newcastle67.8067.90-0.20-0.22-1.95
APAC Hard Coking Coal FOB159.50160.00-0.50-0.314.93
Aluminium ($US/t)1,6741,683-9.00-0.52-5.40
Copper ($US/lb)2.572.58-0.60-0.21-4.15
Lead ($US/t)1,8511,912-62.00-3.22-5.17
Nickel ($US/t)12,47812,372106.000.85-3.06
Zinc ($US/t)2,0282,01018.000.91-13.79
Tin ($US/t)16,64016,707-67.00-0.40-1.01
Uranium ($US/lb)25.0025.000.000.001.43
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords6,7916,954-163.00-2.34-5.73
S&P/ASX 2006,7086,867-159.00-2.31-5.39
ASX 24 Futures6,627
Australian Market Report

Wednesday 27 February - close. The Aussie market endured another difficult day on Wednesday as the steep sell off continued. The ASX 200 shed a further 158 points or 2.3 per cent to 6708 to make it a fourth straight session of losses. This follows a second successive day of 3 per cent declines for the Dow Jones and broader S&P 500 on Wall Street. Meanwhile our market has given back 6 per cent or 430 points this week and is now just 0.36% higher for the year. Local shares hit all-time highs as recently as last Thursday. 

Ashanti Headlines

Japan Gold Announces Country-Wide Alliance with Barrick Gold Corporation & Acquires Six New Projects in the Southern Kyushu Epithermal Gold Province

Following the recent placement in epithermal gold explorer Southern Gold Limited, we note the recent transaction between Barrick Gold and Japan Gold. We believe this is a clear demonstration and proof of concept on the attractiveness of applying modern exploration techniques to epithermal gold regions. The details of the country wide alliance are noted below for reference.

  • Japan Gold Corp. (TSXV: JG) announced the formation of a country-wide alliance with Barrick Gold Corporation (NYSE: GOLD) to jointly explore, develop and mine certain gold mineral properties and mining projects in Japan (the "Barrick Alliance"). 
  • Japan Gold Corp. also announced a further consolidation of its position in the Southern Kyushu Epithermal Gold Province with the acceptance of an additional six new project areas, by the Japan Ministry of Economy, Trade and Industry ("METI").
  • Barrick Alliance Highlight:
    • The Barrick Alliance covers the entire country of Japan including 28 out of 30 projects currently held by Japan Gold (Figure 1).
    • The Barrick Alliance does not include the Ikutahara Project in Hokkaido and the Ohra-Takamine Project in Kyushu and Japan Gold will continue to advance these two projects independently.
    • Barrick will sole fund a 2-year Initial Evaluation Phase of each project.
    • Barrick will sole fund a subsequent 3-year Second Evaluation Phase on projects which meet Barrick criteria.
    • Japan Gold will act as the Manager of each project, subject to Barrick's right at any time to become the Manager of a project.
    • Barrick may identify a project as a Designated Project, at any time during the Initial Evaluation Phase or the Second Evaluation Phase, which Barrick may elect to sole fund to completion of a pre-feasibility study ("PFS"). Upon completion of a PFS, Barrick will earn a 51% interest in the Designated Project.
    • Barrick may elect to continue to sole fund a Designated Project following the completion of a PFS to a bankable feasibility study ("BFS"). Barrick's interest in the Designated Project at the completion of the BFS will increase to 75%.
    • Where Barrick has elected to sole fund a Designated Project through to completion of a BFS, Japan Gold will be fully carried through completion of the BFS and retain a 25% interest in the Designated Project.
    • Barrick and Japan Gold will establish a Technical Committee to, among other matters, provide input in respect of the preparation of programs and budgets for, and the conduct of operations on, projects that are part of the Barrick Alliance. All programs and budgets for projects that are part of the Alliance will be subject to approval by Barrick.
    • New gold projects acquired by Japan Gold may be included in the Barrick Alliance, at Barrick's election and if Barrick wishes to apply for any new gold mineral rights in Japan, or acquire an interest in certain mining rights or projects in Japan, it will be required to offer such opportunity first to the Barrick Alliance.
    • Mining news article can be found here
    • Please contact your adviser or the desk on +61 8 6319 7807 should you wish to discuss further.


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ERA Communications