ARE YOU READY FOR AN A1 AUGUST?
Good morning MINING AIM and welcome to Thursday.
Before we touch on the world of the juniors, a word on the sticky situation in which the Federal Reserve finds itself. As those of you attuned to the wider markets will know, the recent wobble was caused (arguably) by traders using cheap Japanese Yen to take large positions in high growth US tech stocks, or even in US dollars, to take advantage of the disparity in interest rates between the two currencies.
With Japan's central bank very, very gingerly hiking rates, traders panic-exited their risk positions and the whole market started vomiting.
Anyway, in case you thought this was over, it's not.
Let's say you're JPOW with a whisky in one hand and your trusty printer in the other:
If you don't cut rates, unemployment keeps rising in the US, and it's already at a three year high. Recession beckons.
If you do cut rates, you risk inflation coming back, but worse, you make the 'Yen carry trade' lower reward, worsening the unwinding and probably smacking the NASDAQ where it hurts (sentiment). Oh and when the index falls, so does unemployment. Recession beckons.
Politically this is difficult because the central bank is in an unusual position where doing nothing might look like a choice designed to back one Presidential candidate over another.
This all matters because everything in mining is priced in USD, and when the US hurts, so does global demand for metals.
Speaking of, here's a few companies you need to be watching right now:
Arc Minerals: Botswana assays should be coming back soon, and if my sources are correct, they're looking peachy. Yesterday, in typical ARCM midday RNS style, investors were informed of 'the start of a major drilling campaign in Zambia following extensive geological work over our tenements.'
Major, as in Anglo American, the titan the company had the temerity to name, or major as in millions and millions and millions of dollars of drilling?
Both. There is going to be major news flow going forward. And if it's not apparent from that RNS, Anglo has been quietly busy in-country on pre-drill work - yes it's late in the day to get drilling started, but three months of dry season is a long time.
Rome Resources: four diamond drill rigs are going to dig deep into Bisie North, which is probably the most prospective tin exploration ground on Earth. One has already started at Kalayi. I've gone into why this is a winner a few times now, but want to quickly add in some of the grades from previous drilling conducted by Rome:
Kalayi:
KBDD002: 2.5m at 2.6% Sn from 79.0m including 1m at 4.68% Sn from 79m.
KBDD003: 12.5m at 1.05% Sn from 40.5m including 1m at 7.21% Sn from 51.5m.
KBDD003: 3.0m at 1.92% Sn from 70.0m.
At Mont Agoma, one hole came back with 41.0m at 0.12% Sn, 3.5% Cu and 0.6% Zn from 139.0m.
3.5% copper. This will rip.
Alien Metals: Is it finally happening? As someone who only jumped on the UFO bandwagon a few weeks ago, it's endearing to see long term holders (many of whom resemble Théoden prior to the Helm's Deep charge, and at least some of whom resemble Théoden prior to his exorcism) start to feel a flickering of hope. The corporate presentation is updated, the stage is set, and a JV for Hancock is imminently coming down the track. If it all goes to plan.
And then it's building an Iron DSO mine, which a small child could do with little support. Fortunately, they've hired a very competent adult.
Helix Exploration: HEX is on the verge of drilling at Ingomar, and once completed, the rig is off to Rudyard. I've said it before so will say it here:
If you're here for the potential reward, then really there are only three scenarios:
Both assets succeed; share price explodes
One asset succeeds, the other doesn't; share price still does well
Both assets fail (I think unlikely, but exploration risk exists); share price sinks
What the stock does in-between is largely not important as both are drills fully funded - what matters is how they react to success and we know what will happen if it works as planned - fireworks!
These assets and the team behind them are disgustingly good, I've gone into detail on why on this site - and it all kicks off now.
Metals One: MET1 just hired Wardell Armstrong to write up the Preliminary Economic Assessment (PEA) of its Black Schist project, with the report due back in November. This is the document you need to get EU Strategic Project status and unlock EU grants, alongside permit fast-tracking.
You've also got Rana drilling results next month, Black Schist environmental and social studies commencing now, and site visit videos to come. MET1 is in the doldrums but a news heavy period is coming, so this one could recover nicely through the rest of this half.
But that's not all. Amaroq will soon report assays from the Nalunaq Target Block extension drilling. Drill pad preparations are also well underway at Stendalen. Sovereign Metals' pilot plant should smash out some more data towards the end of the month.
Jubilee Metals is looking very good value with Roan's upgrade likely to shock the market out of complacency. That amount of copper will put a fire under the share price - targeting a total of 25,000tpa. It's going to rocket.
Galileo's plans for Luansobe must be clear soon. And drilling at Licence 28001 in the Western Foreland in NW Zambia has just started.
Again - if you drill for copper in Zambia, you're onto a winner.
And if you're a fan of African Pioneer or Bezant, I think you can also get your hopes up.
Fulcrum will soon sign an exclusivity licence with Extrakt.
Then there's Guardian Metal. Assays from Pilot Mountain are now due, as is US government grant funding, should the gods of mining deem it so. Spare a thought for Power Metal, with its ridiculously cheap share price - at times, its shareholding in GMET is worth more than its entire market capitalisation. For those of you with a weaker risk appetite, this might be a good shout.
Apparently a quiet August is not happening this year.
- Charles Archer, 8/8/2024