US – ADP payroll estimates show the strongest pick up in employment ytd in Jun (+237k v +203k in May and +218k forecast).
• The report suggests strong momentum remains in the labour market.
• Official NFPs are due this afternoon(the report moved from Friday as the nation celebrates Independence day).
• Economic reports due today:
o Jun NFPs (233k v 280k in May), Unemployment rate (5.4% v 5.5% in May), Average hourly earnings (+0.2%mom/+2.3%yoy v +0.3%mom/2.3%yoy in May), Weekly jobless claims (270k v 271k in the previous week)
UK - Property prices growth slowed to 3.3%yoy in Jun, market the weakest rate in two years.
• Prices climbed 4.6%yoy in May with estimates for a 4.5%yoy increase.
• The growth rate has been slowing in 10 months of the last 11.
Australia – Trade deficit fell in May on the back of the weaker Australan dollar offering support for nation’s exports.
• The deficit totalled A$2.75bn, down from A$4.14bn in Apr.
• Estimates were for A$2.26bn.
• Exports were up 1.0%mom while imports fell 4.0%mom.
Greece – PM Tsiparis’ government is guesstimating the result of the Sunday referendum continuing to change sides on the issues.
• In the yesterday’s address to the nation, Tsiparis urged Greeks to vote “no” in a referendum.
• “The sirens of destruction are blackmailing you to say yes to everything without any prospect of exiting the crisis,” Tsiparis said.
• Previously, the government is reported to have sent the creditors a letter saying Greece would accept most of economic reform proposals published by the EC with a few significant exceptions.
• The remaining concessions were not seen as “a handful of minor changes” and the letter will not be enough to release the €29.1bn bailout programme to Athens.
South Africa - Eskom application for a second power tariff increase for the Apr15/16 year has been refused. The application demanded a revision to the 12.7% tariff increase to 25.3%.
US$1.1055/eur vs 1.1135/eur yesterday. Yen 123.51/$ vs 122.79/$. SAr 12.324/$ vs 12.193/$. $1.559/gbp vs 1.566/gbp
Gold US$1,165/oz unch vs US$1,173/oz yesterday – gold remains subdued despite developments within the Greek debt crisis.
• Greek investors may be forced to sell gold to raise cash and pay bills through this crisis period weighing on the price of gold.
• We expect the price of gold to rise again once the crisis has unfolded. Gold fell briefly when the Lehman Bros crisis unfolded as traders move to sell liquid assets to cover margin calls and other losses.
• SA - Wage negotiations between gold producers and labour unions in South Africa are set to restart on Jul 6.
• Unions listened to companies’ proposals and would now discuss those with their members in the next few days to reconvene next Monday to table their responses.
Platinum US$1,079/oz vs US$1,085/oz yesterday –
Palladium US$704/oz vs US$689/oz yesterday –
Silver US$15.59/oz vs US$15.62/oz yesterday
Copper US$ 5,809/t vs US$5,772/t yesterday –
Aluminium US$ 1,732/t vs US$1,697/t yesterday
Nickel US$ 12,215/t unch vs US$12,020/t yesterday –
Zinc US$ 2,048/t vs US$2,006/t yesterday –
Lead US$ 1,797/t vs US$1,765/t yesterday
Tin US$ 14,465/t vs US$14,140/t yesterday
Oil US$62.4/bbl vs US$62.9/bbl yesterday
Natural Gas US$2.811/mmbtu vs US$2.803/mmbtu yesterday
Uranium US$36.25/lb vs US$36.75/lb yesterday –
Iron ore 62% Fe spot (cfr Tianjin) US$55.10/t unch vs US$55.40t was US$62.50t –
Thermal Coal $60.5 unch vs $59.4 cif ARA Europe –
Tungsten - APT European prices price $222.5/mtu vs $217.5/mtu – first price increase since February as the higher end of the price spread widens as traders look for better quality material.
• It is possible that the Chinese may have been dumping low quality tungsten material into the market dragging average prices lower at a time when the new Hemerdon tungsten mine in Devon, UK may be looking to place new material.
Lithium - Samsung planning to use graphene to enhance the life and energy density of its lithium batteries by 1.8 times to carry a charge of >6,000mAh
• The report also says the graphite anodes would be replaced with silicon batteries coated with graphene
• It is reported that when the silicon is combined with lithium cobalt oxide cathode (commercial), the entire battery with the help of the silicone coated graphene (carbide-free) reaches a figure of 972 and 700 Whl-1 (volumetric energy density) in the beginning and at the 200th cycle
Avalon Resources (ASX:AVI) A$0.03c, mkt A$7.5m - High grade intersection in the D Zone
• Drill hole VDD 186 has intersected 149.45m at 0.38% copper from 382m including a high grade intersection of 13.3m at 1.68% copper from 507m.
• The intersection also included 9.4m at 2% copper and 3.65m at 2.79% copper from 527m.
• VDD 186 was drilled between holes VDD 183 and VDD 185.
• Hole 186 was completed at 563.2m.
• Earlier results from VDD 185 returned an intersection of 10m at 1.2% copper from 425m including 5.6m at 1.6% copper and VDD 183 included an intersection of 57.4m at 0.5% copper from 6=543m including 17.3m at 0.4% copper and 7.5m at 1.0% copper from 577m.
• VDD 186 is the first hole in the D Zone which has been drilled from the SE to the NW and provides a better view of the interpreted footwall zone to the D Zone.
• This result provides scope for further mineralisation to be defined at the D zone and further evidence of grades and widths improving at depth.
• The D Zone has a resource of 13.6 Mt at 1.0% copper.
Conclusion: With results out from all three holes outside the current estimate of resource at D zone intersecting mineralisation, the resource estimate should go up from here in the D zone with better grades also coming through.
Coal of Africa (LON:CZA) 4.5 pence, Mkt Cap £78.5m – Current SPA for Mooiplats disposal lapses
• The current SPA for the disposal of Mooiplats to Blackspear Capital has lapsed.
• Discussions continue with various parties including Blackspear on the disposal of the asset.
North River Resources (LON:NRRP) 0.37 pence, Mkt Cap £7m – James Beams appointed to Board
• North River Resources have appointed James Beams, the current ceo, to the board as an executive director with immediate effect.
• The move will help James to fast track and finance the development of the Namib lead/zinc mine in Namibia.
• The company is backed by Mark Sawyer at Greenstone Capital who is keen to see the company maximise its potential through mine development and exploration.
• In a surprise move at the company’s AGM, Special Resolution 8 was voted down in a move which throws a bit of a spanner in the works
• Special Resolution 8 was a proposal for the company to allot up to £6m worth of shares in lieu of cash.
• We believe a disgruntled, former director and stockholder, may have been responsible for the action which we suspect may be more personally motivated and sadly may not have been cast in the best interests of the company.
• We hope the company will be able to support the funding of the Namib mine in other ways.
Sundance Resources (ASX:SDL) A$0.02c, mkt cap A$68.4m - Cameroon rail financing progress
West African Minerals* (LON:WAFM) 4.6p, Mkt Cap £17.6m –
IMIC – (LON:IMIC) 9.8p, mkt cap £19.9
Legend Mining (ASX:LEG) A$0.01, mkt cap A$19.6m
• Sundance Resources has updated the market on progress over the financing and construction of a heavy duty rail line for the transport of iron ore from its iron ore projects in Cameroon and in the Republic of Congo.
• The Mbalam-Nabeba project rail line will be owned by the Government of the Republic of Cameroon who will seek funding for the rail and port infrastructure in Cameroon.
• Sundance will develop the Mbarga and Nabeba mines and pay a tariff to use the infrastructure
• Sundance is extending the maturity date of exploration permit EP92 to July 2017 and the Mbalam Convention long stop date is to be extended to July 2017
• Sundance report that significant progress has been made in seeking financing for the Mbalam-Nabeba Iron Ore Project with the Cameroon Government agreeing to seek to fund 100% of the capital requirement for the rail and port infrastructure in Cameroon via a loan from China and possibly other friendly countries.
• Sundance is confident that this funding for the infrastructure will be obtained by the Cameroon Government and this will allow the Company to concentrate on the funding and the development of the Mbarga and Nabeba mines.
• The Cameroon Government has also begun a process to select an EPC contractor for construction of the rail and port infrastructure to support its application for a loan from financial institutions. It is anticipated it will take 6-12 months for the Cameroon Government to secure their financing commitment.
• Other companies with iron ore projects in the area are WAFM, IMIC and Legend Mining
*SP Angel act as broker to WAFM
Vast Resources (LON:VAST) 1.45 pence, Mkt Cap £19.7m – Update on Pickstone-Peerless
• The company appear to be pushing ahead with starting small gold production at Pickstone-Peerless in Zimbabwe.
• Production of 10,000 oz is being targeted from processing 10,000 tonnes a month at an initial grade of 3 g/t tonne.
• Blasting has started at both pits Pickstone and Peerless with stockpiles being built up.
• An electrowinning and gold production facility has been put into place.
Conclusion: Small production looks to be close to starting at Pickstone Peerless with relatively modest capex with refurbishment of the existing CIP and CIL facilities, A new mill and crusher have been sourced from China. It is good to see production starting at this mine although much scaled back from original ambitions.