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Lucara expects better 2018

The miner put its guidance for 2018 at 270,000-290,000 carats, up from 260,000-270,000ct expected for 2017, which itself was a revision to the initial 290,000-310,000ct. 

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Can tech make insider laws obsolete?

Deutsche Asset Management’s Global Research Institute head Stuart Kirk wrote in the Financial Times this week there would soon be very little insider information in companies, so to keep markets fair companies would need to release everything, immediately.

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Gaines is new FMG CEO

Fortescue Metals Group (ASX: FMG) chairman Andrew Forrest has announced the company’s chief financial officer, Elizabeth Gaines, will replace the departing Nev Power as the company’s third CEO.

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RESOURCEStocks Q&A: Ironbark’s Jonathan Downes

RESOURCEStocks: Your recent revised feasibility study reinforced the long-term earning potential/credentials, and asset value, of Citronen. What do you see as the most compelling aspects from a peer-comparison valuation perspective?

Jonathan Downes: I think that generally peer to peer is always hard from a valuation perspective because every project typically has distinctions. Nevertheless I consider that Ironbark has been overlooked due to the significant time spent securing the 30-year mining permit. The project is fully drilled out, engineered, permitted and located in a low sovereign risk jurisdiction with a large 100% owned resource.

RS: What are the standout points of difference in your value proposition at this stage?

JD: The scale of the project is probably one of the key defining points and the resource to date is limited only by the current extent of drilling. In production it would be one of the largest zinc mines in the world with over 5.2 million tonnes of defined zinc metal in resources.

RS: Presumably, valuation upside is another of the real distinctions. I’m struggling to see a bigger disconnect between a (revised) project NPV, and the value the market is putting on the company/asset. What do you put that disconnect down to, and what is going to turn it around?

JD: I am also surprised at the market disconnect – it is simply absurd. Some feedback I have received has been that the market needs to see more clarity and get more comfort around the financing of the project. The resource and study work has all been done by independent and credible engineering and construction groups, Greenland is a great jurisdiction to develop a project, and the zinc price is strong and forecast to remain so. We are making some solid headway into the financing and I believe it is going to be one of the situations when just one investor “stepping up” is required and then the vision will be realised, followed by the rest of the financing and a major revaluation of the company.

RS: What is the zinc-price ‘sweet spot’ for this project?

JD: The zinc sweet spot once operational is anything over the total projected costs of US$0.66/lb plus something to return to our investors. I am confident that we will see a healthy margin above this going forward.

RS: Where is there scope to further improve the economics of Citronen/what will be the focus of work to be done over the next 3-6 months?

JD: The level of engineering work and optimising has been substantial and we are confident that we already have a workable, industry proven and cost effective plan. To optimise this further may involve some further metallurgical testwork, which is currently ongoing, and some potential opportunities regarding reduced shipping costs. We are pleased that the project is currently robust. Work now is really focused on the project financing package.

RS: What were the main things to come out of the recent site visit you made with senior Greenland Government, and NFC, officials?

JD: The recent site visit was helpful in introducing the senior Greenland Government officials to the senior China Nonferrous (NFC) officials and building a relationship of trust. The main objective however was to provide site access to the NFC engineers to the project to finalise their feasibility study. This included core library inspections, visiting the proposed equipment sites, decline site and proposed tailings sites.

RS: What comments would you make about the outlook for next year, in terms of the impact continuing strength in zinc prices, and clarity on what’s in the supply pipeline, might have on Ironbark’s plans and valuation going forward?

JD: Going forward I am seeing a lot of credible research suggesting strong zinc prices so with our project at such an advanced stage I am confident we can achieve development in a rapid time frame. One of the more interesting aspects of the zinc market is just how little material is available to the industry in the reported zinc stockpiles and the war between smelters as the Chinese treatment charge rates fall to attract zinc concentrate from around the world.

It is a fascinating time in the zinc space.


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Oil edges up in timid trading ahead of OPEC meeting in Vienna

SINGAPORE (Reuters) – Oil prices edged up amid low trading volume on Thursday, ahead of an OPEC meeting in Vienna at which producers are expected to extend a supply-cut deal that came into effect in January with the goal of tightening supplies and propping up prices.

The Organization of the Petroleum Exporting Countries (OPEC) will be meeting at its headquarters in the Austrian capital, along with ministers from other oil producing countries, most importantly Russia.

OPEC is scheduled to hold an open session, including media, at 10 a.m. (0900 GMT) in Vienna on Thursday, before going into a closed session at noon, according to a tentative program on OPEC’s website. Non-OPEC ministers are set to join at 3 p.m., followed by a joint press conference after the meeting.

Traders said trading volumes were low ahead of the meeting.

Brent crude oil futures for February, the international benchmark for oil prices, were at $62.84 a barrel at 0704 GMT, up 31 cents, or 0.5 percent, from their last close. The front-month January contract expires today.

U.S. West Texas Intermediate (WTI) crude futures were at $57.50 a barrel, up 20 cents, or 0.4 percent.

While there has not been an official statement, OPEC and Russia seem ready to prolong their oil supply cuts until the end of 2018. The cuts were put in place last January and are set to expire next March.

“If OPEC extends without any caveats, then price may slowly edge higher,” said Oystein Berentsen, managing director for crude trading at Strong Petroleum in Singapore.

However, an extension may include a review in June should healthy demand amid ongoing supply restraint overheat the market.

“The current consensus is that members will agree on an extension to the production cuts but the duration of the extension is uncertain,” said William O‘Loughlin, investment analyst at Rivkin Securities.

ANZ bank said “anything less than a nine-month extension to the current production agreement could see the recent sell-off accelerate.”


One of OPEC’s biggest concerns is rising output in the United States, largely due to shale drillers who are fast gaining global market share and are undermining the producer club’s efforts to tighten the market.

U.S. oil production hit a new record of 9.68 million barrels per day (bpd) last week, according to government data released on Wednesday. [EIA/S]

Rystad Energy, a consultancy, said it expects U.S. oil production to reach 9.9 million bpd in December.

That would bring U.S. output close to levels of top producers Russia and Saudi Arabia.

Despite this, U.S. crude inventories are down by 15 percent from their March record, to 453.7 million barrels.

That is below levels at this time in 2015 and 2016, although above five-year averages.

U.S. crude stockpiles fell by 3.4 million last week, the Energy Information Administration said on Wednesday. Gasoline and distillate stockpiles both rose more than anticipated.

Traders said the fall in inventories was largely down to a two-week interruption of the Keystone pipeline bringing Canadian crude to the United States, which has now been resolved, and as American companies increasingly export excess crude.

Reporting by Henning Gloystein; Editing by Tom Hogue and Christian Schmollinger

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Tech tumble hits Asian stocks, bitcoin steadies

TOKYO (Reuters) – Asian shares fell on Thursday, weighed down by a plunge in high-flying tech shares on fears that a long boom in micro-chips may have peaked, while virtual currency bitcoin steadied after a roller-coaster ride in the previous session.

The digital currency’s 10-fold increase in price this year has stoked worries of a bubble and potential crash that could rattle conventional financial markets.

Bitcoin BTC=BTSP rose nearly 3 percent to around $10,100 during Asian trading on Thursday. On Wednesday, it surged to a record high of $11,395, before it slipped to a low of $9,250.

European shares were seen falling slightly, with spread-betters expecting Britain’s FTSE .FTSE to fall 0.3 percent and France’s CAC .FCHI and Germany’s DAX .GDAXI to fall 0.1 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 1.3 percent, with technology bellwether Samsung Electronics (005930.KS) falling 4.3 percent to two-month lows and Taiwan’s TSMC (2330.TW) down 3.6 percent.

Japan’s Nikkei .N225 reversed early losses to end 0.6 percent higher, though the country’s electronic machinery makers index .IELEC.T was down 1.5 percent.

In the U.S., the Nasdaq Composite .IXIC dropped 1.27 percent as investors shifted to financials and other sectors even as the SP 500 .SPX was almost flat and the Dow Jones Industrial Average .DJI gained 0.44 percent.[.N]

Shares of (AMZN.O), Apple (AAPL.O), Google parent Alphabet (GOOGL.O) and Facebook (FB.O) fell between 2 percent and 4 percent. Among the year’s other high fliers, Netflix (NFLX.O) slid 5.5 percent.

Possibly weighing on them were concerns, sparked by a Morgan Stanley report earlier this week, that “super-cycle” in memory chip demand is likely to peak soon.

“It is true that if you look at the world’s semiconductor sales on chart, their year-on-year growth appears to be peaking out. Given the current high sales level, some market players would be naturally worried,” said Hiroshi Watanabe, economist at Sony Financial Holdings.

“But if you look at what’s driving demand, it’s not just smart phones and actually a lot of things, such as data centres. The world’s demand is likely to continue expanding in 2018 and I don’t see the need to be pessimistic now,” he said.

Some market players said selling in tech shares had more to do with profit-taking ahead of the end of the year, and described the slide as a healthy correction.

“Tech shares have done so well over the past year. There are many shares that saw their prices doubling. So investors have been on guard. They have been looking for an opportune time to sell,” said Norihiro Fujito, senior investment analyst at Morgan Stanley.

The Nasdaq index is still up 26.8 percent so far this year, more than 9 percentage points above gains in the SP. The ex-Japan Asia-Pacific MSCI index edged up 0.5 percent for the month, taking its gains for far this year to more than 30 percent.

On the other hand, U.S. bond yields rose across the maturities and the dollar gained some traction after the U.S. third-quarter GDP growth was revised up to an annualised 3.3 percent USGDPP=ECI, from the initial estimate of 3.0 percent USGDPA=ECI.

That was the fastest growth in three years, though economists noted that inventories, goods yet to be sold, accounted for nearly a quarter of GDP growth.

The U.S. Senate on Wednesday took a step toward passage of tax legislation that is a top White House priority, setting up a likely decisive vote later this week.

But it remained unclear if the bill has enough Republican support to become law.

The 10-year U.S. Treasuries yield rose to 2.389 percent US10YT=RR, edging near this month’s high of 2.414 percent.

There was no immediate market response after U.S. President Donald Trump nominated Carnegie Mellon University professor Marvin Goodfriend, viewed as a policy hawk, to be a member of the Federal Reserve Board of Governors.

The euro EUR= traded at $1.1863, steady in early Asian trade but has been on retreat since it had hit a two-month high of $1.1961 on Monday.

The dollar also firmed to 112.00 yen JPY= from Monday’s ten-week low of 110.85 yen.

The British pound GBP=D4 hit a two-month high of $1.3480 after European Union diplomats said that Britain has moved “close” to EU demands over Brexit.

Among Asian currencies, the South Korean won stepped back from a 2-1/2-year high set the previous day after the country’s central bank raised interest rates for the first time in more than six years, which had been widely expected.

Oil traded cautiously ahead of an OPEC meeting in Vienna later in the day, with members set to debate an extension of the group’s supply-cut agreement.

While the Organization of Petroleum Exporting Countries and key non-member Russia look set to prolong oil supply cuts until the end of 2018, they have signalled that they may review the deal when they meet again in June if the market overheats.

U.S. crude futures CLc1 traded at $57.41 per barrel in early Asian trade, up 0.2 percent, while Brent futures LCOc1 rose 0.4 percent to $63.37 a barrel.

(This version of the story has been refiled to add new graphic and fix typo in paragraph 2)

Editing by Kim Coghill

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Miners lower despite positive market mood

Investors sent Australian gold stocks down today though, with Evolution Mining (AU:EVN) and Newcrest Mining (AU:NCM) among those closing lower.

In North America, Barrick Gold (CN:ABX) and Goldcorp (US:GG) also finished lower, despite hopes of US tax cuts boosting the markets.

Southern Silver in sight of silver giants

Southern Silver in sight of silver giants

St Barbara: 'Ain't seen nothing yet'

St Barbara: ‘Ain’t seen nothing yet’

RESOURCEStocks QA: Thundelarra's Tony Lofthouse

RESOURCEStocks QA: Thundelarra’s Tony Lofthouse

Vic Gold sets the pace in Yukon

Vic Gold sets the pace in Yukon

Nickel prices closed up yesterday in London but Australian producer Western Areas (AU:WSA) went backwards 3.7%, one of the biggest declines in today’s SP/ASX200 index. Its shares have been on an upward path since mid-year.

Among the diversified majors, BHP (AU:BHP) closed 1.2% lower, following the lead of Rio Tinto’s (LN:RIO) drop of almost 1.9% yesterday in London.

Finally, embattled Tanzanian miner Acacia Mining (LN:ACA) lost last week’s gains, falling almost 7.6% yesterday on no news.

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Australia bows to years of pressure, announces inquiry into finance sector

SYDNEY (Reuters) – The Australian government said on Thursday it will hold a wide-ranging inquiry into a scandal-hit finance sector, arguing one was needed to restore public confidence as it reversed its long-held opposition amid mounting political pressure.

The year-long Royal Commission, which will look at the conduct of banks, pension funds, insurers and other financial services firms, will have the power to compel witnesses and recommend criminal charges.

It has the potential to be far more embarrassing for the industry than the regular parliamentary questioning of bank CEOs that Prime Minister Malcolm Turnbull has instigated in response to public outrage over scandals ranging from misleading financial advice to breaches of anti-money laundering rules.

“Uncertainty … over the potential for such an inquiry is starting to undermine confidence in our financial system and, as a result, the national economy,” Turnbull told reporters.

“This is essentially a regrettable but necessary action. The political environment has created a sense of inevitability.”

The inquiry, which must report back by February 2019, will examine any conduct which “falls below community standards and expectations” and whether remuneration or governance practices have encouraged it, according to draft terms of reference published by Turnbull’s office.

“It’s going to be costly and take up a lot of time of senior people,” said Matthew Ryland, portfolio manager at Greencape Capital, which holds bank shares.

“The cost-focus banks are probably in a better position to handle that than the sales-focused banks,” he added.

Other analysts noted it would become more challenging for the banks to raise mortgage rates to meet regulatory requirements for higher levels of reserve capital while the inquiry was being conducted.

Among Australia’s “Big Four” banks, Commonwealth Bank of Australia (CBA.AX) saw its shares fall the most on the news, losing 1.9 percent.

It is facing a civil lawsuit from the federal anti-money laundering agency, which accuses it of enabling more than 50,000 payments of criminal proceeds. The bank is defending the matter, saying the payments occurred but blaming a computer glitch.

Australia and New Zealand Banking Group Ltd (ANZ.AX) and the country’s biggest investment bank Macquarie Group Ltd (MQG.AX) also lost ground, ending down 1 percent and 1.5 percent respectively.


Two people at separate banks with knowledge of planning said lawyers had already been appointed to deal with the Royal Commission.

The banks would likely create dedicated teams to lead their response over the next 12 months, drawing on expertise in their legal, retail, institutional, mortgage pricing and communications teams, said the people who requested anonymity as they were not authorized to speak to the media.

The commission, which will be headed by either a former or serving judge yet to be named, will be able to make wide-ranging recommendations including changes to legislation. A Royal Commission in 2001 that looked into the collapse of the country’s second-biggest insurer, HIH Insurance, led to criminal convictions and prison sentences.

It won‘t, however, have the power to order firms to pay compensation in relation to individual cases.

The government had until now argued against an inquiry into the banks on the grounds that existing regulation was working and it would be distracting and undermining to an industry central to the world’s 12th largest economy.

But Turnbull’s political clout has weakened as questions over dual citizenship caused elected members to quit and after his support for same-sex marriage caused rancour within the conservative coalition. This month rural lawmakers in the coalition circulated a bill demanding a commission, which already had the support of opposition parties.

While the banks had vocally campaigned against a Royal Commission for years, the heads of the major lenders on Thursday published a joint letter saying one was now in the national interest.

“We now ask you and your government to act to ensure a properly constituted inquiry into the financial services sector is established to put an end to the uncertainty and restore trust, respect and confidence,” said the letter, addressed to Treasurer Scott Morrison.

Several of the banks later issued individual statements promising to cooperate with the inquiry.

But the pension fund lobby, the Association of Superannuation Funds of Australia, said it was disappointed its industry was included in the inquiry since it had already faced a “plethora of never-ending inquiries, reviews and regulation”.

The scandals that have hit Australia’s big banks in recent years also include accusations of using outdated medical definitions to avoid life insurance payouts and rate rigging.

This month, ANZ and Macquarie also confirmed receiving complaints alleging sexual misconduct by senior executives – potentially drawing the sector into the same kind of scandals that have recently struck down the careers of more than a dozen public figures, particularly in the United States.

($1 = 1.32 Australian dollars)

Reporting by Byron Kaye and Paulina Duran; Additional reporting by Wayne Cole and Tom Westbrook; Editing by Edwina Gibbs

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