MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Thursday, May 24, 2012
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3:27 AM Shell (RDS.A) extends its $1.8B offer to acquire Cove Energy (CNVGF.PK) to June 13, after Thailand's PTT Exploration came in with a higher $1.9B bid yesterday, sending Cove shares +11.2% in London to 249p, above PTT's 240p/share bid. Some expect Shell to pony up as much as $2.5B; Shell plays coy - it's "considering its options and will make a further announcement if appropriate." (previously) Comment!
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3:14 AM Rio Tinto (RIO) sticks to its aggressive iron ore expansion plans, confirming its global output capacity could almost double to 450M metric tons by 2016. Despite China's slowing growth, Rio expects strong long-term demand for iron ore - though reports earlier this week said Chinese buyers are deferring or defaulting on coal and iron ore deliveries following a drop in prices. Comment!
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Wednesday, May 23, 2012
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8:01 PM The first day of talks between Iran and world powers show a "fair amount of disagreement" but also areas of common ground , says a senior U.S. official. Iran was "engaged" in the discussions, and the meeting would continue into a second day on Thursday, the official said, adding that there was "plenty to go on" for a potential further round of talks. 6 Comments
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6:16 PM Royal Gold (RGLD) acquires a 3.0% net smelter return royalty on the Ruby Hill gold mine from International Minerals for $38M. The Ruby Hill mine is located in Nevada and operated by Barrick Gold (ABX). Shares -0.8% AH. Comment!
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3:21 PM Coeur d'Alene Mines (CDE +1.9%) temporarily shuts down its Palmarejo mine in Mexico after access was blocked by a "small, unorganized group of employees," but does not expect the move to have a material impact on 2012 production. The mine produced 9M oz. of silver and 125K oz. of gold ounces in 2011. Comment!
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3:06 PM Newmont Mining (NEM +2.6%) says it will cut capital spending on a controversial gold mine project in Peru to $440M from a previously budgeted $1.5B over the next 18 months due to delays caused by government and environmental reviews. NEM is expected to make a final decision by the end of June on whether to go ahead with the project. Comment!
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2:08 PM Alcoa (AA -0.6%) again postpones expansion of an alumina refinery in Australia in the face of continued pressure on aluminum prices. AA has already planned to cut refining capacity in the Atlantic region, which contributes to almost half its 18M tons of production capacity. Shares hit 52-week lows before rebounding. 1 Comment
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12:19 PM SNC-Lavalin (SNCAF.PK) reportedly receives the go-ahead to work on the Cobre Panama copper mining contract worth ~$355M in fees for a group led by the Canadian engineering and construction company. The overall cost of the project is expected at ~$6.2B, including $3.2B of infrastructure to be overseen by the SNC-led group. Comment!
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12:18 PM WTI crude dips below $90/barrel for the first time since October, now off a 2008-like 15% during the month of May. USO -1.5% for the day, -10.9% YTD. 7 Comments
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10:16 AM Ivanhoe Mines (IVN -2.7%) says it will launch a rights offering open to all its existing shareholders that would raise ~$1.8B in proceeds as part of its plan to finance development of the Oyu Tolgoi copper-gold project in Mongolia. Rio Tinto (RIO -2.9%), which owns 51% of IVN, plans to buy the maximum shares permitted by the terms of the offering. 1 Comment
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10:13 AM The SPDR Gold Trust (GLD) recorded $897M in outflows yesterday, the largest decline since August 2011. Commerzbank wants to see more days of outflows, but says it's surely a negative if even ETF investors are caught up "in the selling pull." More: Central GoldTrust (CTU) now trades at a discount to NAV vs. an average 3.4% premium over the past year. 16 Comments
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9:19 AM Uranium giant Cameco's (CCJ) planned effort to raise as much as $1B through a combination of securities may signal an upcoming acquisition, BMO Capital suggests, citing falling uranium equity valuations in recent weeks and CCJ's ample funding capability. Potential targets: Paladin Energy (PALAF.PK), Denison Mines (DNN), UEX Corp. (UEXCF.PK) 2 Comments
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4:30 AM Golden Star Resources (GSS) is bewildered by the 32% fall in its stock price since its May 17 announcement of a debenture purchase and exchange agreement; "there are no undisclosed material events at the company that would support the recent deterioration in the stock price." Q2 guidance unchanged at 83K-87K ounces of gold. Comment!
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Tuesday, May 22, 2012
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3:59 PM Seabridge Gold (SA +5.6%) has remained strong all day on no apparent news, although gold stocks of all sorts have received a flurry of interest in recent sessions. Trading volume near the close is 1.35M vs. the average daily volume of 322K shares. Options on SA had traded more than 22K times by mid-afternoon. 2 Comments
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3:28 PM Don't give up on the commodity sector yet, writes Russ Koesterich. Even as recent action has all asset classes seemingly moving together, he reminds commodities typically provide excellent diversification from equities. Real interest rates remain negative, and commodities - especially gold - tend to outperform in these periods. 1 Comment
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12:45 PM Northern Dynasty (NAK -17.5%) rips the EPA's draft Bristol Bay watershed assessment on the potential effects of mineral development in southwest Alaska as "rushed and inadequate." NAK owns 50% of the Pebble Partnership, which aims to develop a copper-gold-molybdenum project in Alaska. 1 Comment
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12:38 PM China Gerui Advanced Materials (CHOP +18.2%) shares are strong after the cold-rolled steel production company reaffirms its 2012 estimates, expecting revenue of $395M-$410M vs. $404M analyst consensus and EPS of $1.32-$1.37 vs. $1.27 consensus. Q1 EPS of $0.24 beat consensus, while revenue of $73M missed. Comment!
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12:35 PM Three lunchtime reads:
1) Where are gold prices headed: flat, down or up?
2) Smack! The BRICs hit a wall of their own making
3) Fed pondering why inflation and deflation threats ebbed Comment! -
11:58 AM Chinese demand for copper is likely to improve in H2, the head of Xstrata's (XSRAF.PK) copper unit says, as the miner pledges to lift output by ~60% over three years even as rivals such as BHP and RIO have put the brakes on expansion. Recent data from China show its economy cooling faster than expected, prompting premier Wen Jiabao to call for new growth measures. Comment!
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9:18 AM Anglo American (AAUKY.PK) and Chilean copper miner Codelco agree to restart settlement talks in hopes of avoiding a long legal battle over the ownership of copper mines in Chile worth as much as $22B, FT reports. The two have been at odds since last fall, when Codelco raised $6.8B to exercise an option to buy a 49% stake in Anglo's Sur mining property. Comment!
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