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06 July 2018 07:53 AM
Overseas Market ReportCurrent
Weekly %
Dow Jones Industrial Average24,3570.00
S&P 5002,7370.00
FTSE 100 Index7,6030.00
DAX 3012,4640.00
CAC 40 Index5,3660.00
Nikkei 225 (Japan)21,5470.00
SSE Composite Index2,7340.00
S&P/TSX Composite Index16,2670.00
NZ 509,0690.00
US Volatility (Vix)15
Overseas Market Report

US sharemarkets increased on Thursday on the back of tech and auto shares, despite the looming US tariff deadline on Friday (midnight US time, 2pm AEST). Reports that President Trump maybe willing to hold-off implementing tariffs on European cars boosted General Motors (+1.3%), Ford (+0.7%) and Fiat Chrysler (+6.0%).Micron Technology shares rose 2.6% after it confirmed that China's blocking of some chip sales wont materially impact its revenue. The Dow Jones was up by almost 182 points or 0.8%. The S&P 500index rose 0.9% and the Nasdaq rose by 83 points or 1.1%.

Global oil prices fell on Thursday as US crude stockpiles rose by 1.3 million barrels last week according to the US EIA. Markets had a expected a 3.5 million decline. Brent crude fell by US85 cents or 1.1% to US$77.39 a barrel and the US Nymex fell by US$1.20 or1.6% to US$72.94 a barrel.

Base metal prices were mixed on the London Metal Exchange (LME) on Thursday. Zinc (-0.5%) fell to 12-month lows due to higher supply expectations. Lead rose by 1.4%.

The gold futures price rose by US$5.30 an ounce or 0.4% to $1,258.80 an ounce. The spot gold price was trading near US$1,257 an ounce in late US trade. Iron ore fell by 85 cents or 1.3% to US$62.50 a tonne, a 7-month low.

Weekly %
Oil Brent77.390.00
Oil - West Texas crude73.130.00
Gold Spot $/OZ1,257.000.00
Silver Spot $/OZ16.100.00
Iron Ore59.100.00
Thermal Coal Newcastle116.600.00
Coking Coal FOB ECP AUS195.800.00
Aluminium ($US/t)2,1020.00
Copper Mar-18 ($US/lb)2.810.00
Lead ($US/t)2,3520.00
Nickel ($US/t)14,1040.00
Zinc ($US/t)2,7380.00
Tin ($US/t)19,4930.00
Uranium ($US/lb)23.000.00
Australian Market ReportCurrent
Weekly %
ASX All Ords6,3030.00
S&P/ASX 2006,2160.00
ASX 24 Futures6,195
Australian Market Report

Thursday 5 July - close. Financial stocks continue to see saw on the Australian share market, which closed in the green despite a tough day for the major miners. The market has been somewhat jittery ahead billions in tariffs which are expected to be implemented by the US and China tonight. Both superpowers are set to impose tariffs on around $34bn of goods. China said it would only retaliate if the US goes ahead with the tariffs first and will target soybeans, corn, wheat, rice and other food products. The benchmark S&P/ASX200 closed up 32.1 points, or 0.52 per cent, at 6,215.5 points on Thursday, while the broader All Ordinaries index gained 29.2 points, or 0.47 per cent, at 6,302.9 points.

Ashanti Headlines

Bacanora Lithium PLC (BCN.LN, 89P, mcap GBP119.4M with 134.2M SOI. Cash US$19m, Lithium Developer)

  • Bacanora Lithium has announced a US$150m Senior debt facility to help the financing of its Phase 1 development of the Sonora lithium project in Mexico.
  • The facility, provided by RK Mine Finance for a 6 year term, bears interest at the 3-month LIBOR rate plus 8%pa but allows for interest to be capitalised every three months for the initial 24 months.
  • RK has also provided a second US$56m bond with a 20 years term which is “repayable by reference to monthly production of lithium at a rate of US$160 per tonne of lithium produced, with any remaining amount repayable at the end of the 20-year term.”
  • Both of the facilities are structured as Eurobonds to be listed in Jersey. RK Mine Finance is described as a specialist provider of “bespoke financing solutions to metals focused mining companies … The fund has a strong track record of supporting mining companies with their financing needs and since its inception has committed capital of over US$1.6bn.”
  • The capital expenditure for the phase 1 development of 17,500tpa of Li2O production at Sonora amounts to US$420m and “In addition to this, Company estimates that approximately a further US$40 million will be required for working capital purposes.”
  • In addition to the debt financing, “The Company is continuing its financing discussions with its off-take partner, Hanwa, the Japanese trading company, and other strategic, long term investors for the additional funding required to complete the Stage 1 project development.”
  • Describing the debt facility as one of the larger such facilities for a junior resource company in recent years, and highlighting its competitive costs and terms, Bacanora Lithium’s CEO, Peter Secker, went on to underline the scale of the deposit and its expected position within the lowest quartile of production costs as well as the team’s proven operating credentials during extensive pilot plant testing.
  • Mr. Secker said “We believe that it is this compelling combination that has enabled us to attract blue-chip backers including the Japanese trading company Hanwa as an offtake partner and strategic investor, tier one fund managers as major shareholders, and now RK as a debt provider.  We continue to talk with other important participants in the lithium space with a view to securing additional high quality strategic partners, as we focus on entering into the construction phase of what we believe will be the next significant producer of battery grade lithium carbonate."
  • The Debt funding is a significant milestone in Bacanora’s development of the Sonora Lithium project. We look forward to further news on the continuing financing discussions and offtake arrangements.

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