| | | BTO, MAI
B2Gold aka BTO released an update on what they are calling the Fekola Regional area. This comprises a number of properties located about 25 km NW of the main Fekola mines and mill. BTO has been able to outline a number of deposits in the Region including both sulphide and oxide ore, and they are busy drilling up more prospects as well as converting known mineralization in Resources and Reserves.
The largest of the deposits, Anaconda, already has more than 3.4M between Inferred and Indicated, which will be updated in Q3. As a result, a study to bring these satellite deposits into production by trucking ore to the Fekola mill will be delayed until year end. BTO opines that they might be able to increase Fekola's overall production to 800k oz/year, which would be a big boost to the company.
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In response, TD released a new analyst report calling the NR Slightly Positive, They model total Fekola production at only 600k oz Au/yr, and kept them at Action List Buy with a target of $9.
Mexican gold miner developer Minera Alamos aka MAI released it annual financials for last year plus an operational update. Last year marked the beginning of production at the Santana mine, and although they experienced some hiccups and delays, mostly to do with the weather, they did manage to produce almost 12k oz Au with another 7k oz already on the leach pad. As a result, in 2002 they managed to generate a net income of $5.6M, so at year end their cash stash was over $13M. They remain debt-free, though that may change as they are in talks with various potential sources for financing the construction of their second mine, Cerro de Oro.
We also learn the possible reason for the recent weakness in the share price. Gold production at Santana is currently low because they are concentrating on waste stripping while waiting for permits to expand the leach pad to triple its current size. They say they can make up part of the deficit very quickly once they get the permits, and ongoing exploration has defined enough new minerlaization to fill those leach pads.
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Looking at the price of gold, Saville points out that gold has made a triple top, greatly increasing the chance of a major upside breakout, but it likely won't happen until the monetary headwinds abate. He is looking for a fairly large correction first, before the breakout comes in H2. Likewise, he is looking for silver to drop to around $23 before it heads into the $30s later this year.
Saville also argues that inventory numbers have little predictive power for industrial commodities like copper; rather, they are driven by macroeconomic conditions and unexpected supply disruptions. He currently sees copper as having a better chance of heading to the low $3s rather than getting approaching $5.
In other words, he thinks there are some very good buying opportunities to come.
The IKN newsletter has been bullish copper for some time, and remains tentatively so based on market fundamental but has become wary and is keeping an eagle eye on Dr. Copper. |
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