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Verbrec’s StacksOn™ stockpile monitoring system just got a major endorsement with BHP deal

Special Report: Verbrec is transforming the way mining companies monitor their stockpiles with their new software StacksOnTM and none other … Read More
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This article was originally published by Stockhead

Verbrec is transforming the way mining companies monitor their stockpiles with their new software StacksOn and none other than the Big Australian is showing its support.

Verbrec (ASX:VBC) is confident its first product offering, stockpile monitoring software StacksOn, will provide future growth opportunities for the company after signing a multi-year licence agreement with mining giant BHP.

Under the agreement BHP will use Verbrec’s proprietary internally developed software at its Western Australian iron ore mines.

Verbrec CEO Linton Burns told Stockhead StacksOn tracks material properties such as grade, orebody origin, and “time since stacked” in a virtual 3D stockpile.

He said it had been developed and refined for more than 10 years to originally use in-house and provides the unique ability to monitor inventory, stockpiling and cashflow.

“You might have seen stockpiles of iron ore at a mine site where they are about to be loaded onto a rail network to transport to port and then at a port there are more stockpiles waiting to be loaded onto a ship for export,” he said.

“It is collecting data at those stockpiles including grade, orebody origin and “time since stacked”  to improve stockpile capacity and grade control.

“StacksOn provides real-time visualisation of product grade within the stockpile allowing miners  to reclaim right on the specifications needed for shipping to deliver in terms of their contract requirements. StacksOn can also be used to predict and address off-spec shipments before they are filled.”

 

Verbrec forecasts further contracts with BHP and other miners

Burns said StacksOn opens extensive opportunities for growth. He said the company was hopeful of rolling out the StacksOn software beyond BHP’s WA mines.

“The feedback has been fantastic with BHP seeing the value in real time monitoring of the grade of iron ore they are reclaiming from their stockpile,” he said.

“We started with one BHP mine site and now it’s being implemented at a further three within the WA Pilbara region. We see opportunity to implement StacksOn wherever there’s a stockpile, including at their ports.

“In addition to BHP we will also target the other WA iron ore producers including Rio Tinto, Fortescue Metals and Roy Hill.”

But it’s not just iron ore producers Verbrec is targeting with StacksOn. Coal producers along Australia’s east coast also monitor their stockpiles.

“In Queensland there are a lot of coal stockpiles in the Bowen Basin both at the mines and at the ports,” he said.

“BHP has coal operations on the east coast so we’re keen to leverage our strong relationship with their iron ore business and implement StacksOn  within their coal operations as well.”

 

StacksOn part of Verbrec’s refocused growth strategy

Burns said the agreement with BHP and development of StacksOn as a product represents further delivery of Verbrec’s refocused growth strategy of growing non project-based and recurring revenues.

“Right now, we are known as a service provider, with StacksOn we have launched our first product. We will do everything we can to maximise the commercial opportunity that this presents, be it in Australia or overseas,” he said.

“It was a watershed moment to be able to sign a multi-year agreement with a global company like BHP because it really validates value within the product.

“StacksOn, being a software product, it will generate much higher gross margins than the existing services business which generated underlying gross margins of 32.5% in the last financial year. We will also generate revenue implementing the product via a fee-for-service arrangement.”

Burns said the company would initially focus StacksOn on the Australian market, where it has built strong relationships with local miners, but venturing to countries like Brazil which have a large mining industry was also part of its long-term growth plans.

 

StacksOn capitalising on how companies monitor assets

Burns said StacksOn was an example of the benefits of digitalisation that is occurring everywhere.

“StacksOn is taking data and representing it in a very user-friendly visual way so companies have the ability to control their operations live and how they might optimise their stock-pile assets,”  he said.

“With our software and control systems engineering capability we see at lot of future growth opportunities in this area as companies transform their legacy assets.”

 

Verbrec forecast strong growth in year ahead

Despite the impacts of COVID-19 and several poor performing legacy projects FY21 was a successful year for Verbrec with the company, which has a workforce of around 670 people, completing two acquisitions as part of its growth strategy and a successful $3 million capital raise.

Supported by institutional, sophisticated and strategic investors, the raise was used primarily to replenish the balance sheet and to fund the working capital requirements following the acquisition of training service provider Site Skills and infrastructure service provided EIM.

Burns said he is confident of a strong year for the company with current work-in-hand at an all-time high at close to $80 million.

“A key indicator of our forward revenues is how strong our order book is, and it is very strong at present,” he said.

“Work-in-hand has more than doubled from a year ago and several key financial indicators have risen 20-25% from the lows seen in early 2021,” he said.

This article was developed in collaboration with Verbrec, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Verbrec’s StacksOn™ stockpile monitoring system just got a major endorsement with BHP deal appeared first on Stockhead.


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Today’s News

Phoenix Gold Begins Phase 2 Drilling at York Harbour Cu-Zn-Ag-Co Project in Newfoundland

 

Vancouver, British Columbia – TheNewswire – October 27, 2021 – Phoenix Gold Resources Corp. (TSXV:PXA) (OTC:PGRCF) (Frankfurt:5DE) (“Phoenix…

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Vancouver, British Columbia – TheNewswire – October 27, 2021 – Phoenix Gold Resources Corp. (TSXV:PXA) (OTC:PGRCF) (Frankfurt:5DE) (“Phoenix Gold” or the “Company”) is pleased to report that Phase 2 diamond drilling has begun on its York Harbour Mine Property (“York Harbour” or the “Property”) in western Newfoundland, Canada. Three drill holes have been completed during the past 10 days of a planned 27-hole diamond drilling program totalling an estimated 4,225 metres.

The on-site project geologist has reported that the latest drill hole YH21-14 intersected semi-massive and massive volcanogenic sulphide (‘VMS’) mineralization from a drilling length of 105 to 120 m.  After geological and geotechnical logging the drill core from holes YH21-13 and -14 will be transported to the Planet X Exploration facilities in Gander for sampling and later shipping to Actlabs in Ancaster, Ontario for rush ICP analyses and over-limit assaying.

Photographs of the drill core with the reported massive sulphide mineralization intersected by drill holes YH21-13 and 14 are shown as follows.


Click Image To View Full Size

 

       Massive sulphide in DDH YH21-13              Massive sulphide in DDH YH21-14

 

The Phase 1 drilling program was carried out from July 28th to August 14th.  This program, the first on the property since Wolfden Resources’ drilling in 2004, successfully validated historical drilling results with 6 of the 9 drill holes intersecting drill-indicated Cyprus-type VMS mineralization in the historical ‘A’, ‘G’ and ‘H’ zones and encountering similar mineralization both along strike and downdip of these zones.  Two diamond drill holes had to be abandoned when they encountered a wide fault zone, and a third hole intersected a section of the 400 Level adit where it lost circulation and was not completed to its intended depth.

At the present time the Company is awaiting the analytical results for 200 of 300 drill core samples from the Phase 1 diamond drilling program.  Selected mineralized intercepts from 4 of the 9 Phase 1 drill holes were reported in the Company’s news release dated October 12th.  A few of those mineralized intercepts that were previously reported for drill holes YH21-04, -06, -08 and –09 are as follows.

DDH

From

To

Interval

Copper

Zinc

Silver

Target Zone

No.

(m)

(m)

(m)

(%)

(%)

(gpt)

 

YH21-04

180.03

189.54

9.51

1.69

0.13

1.43

H Zone

YH21-06

146.26

194.05

47.79

0.85

0.57

1.49

H Zone

YH21-08

122.30

128.90

6.60

0.62

0.65

3.37

G Zone

YH21-09

5.00

14.54

9.54

1.69

0.11

2.83

A Zone

 

The Phase 2 diamond drilling program has been designed to firstly better delineate the known drill-indicated VMS mineralization for future resource estimations and to explore for additional similar mineralization both along strike and downdip.  Historical underground drill holes report a number of massive and semi-massive mineralized intercepts between and along strike of the known zones but without reported assays.  At two of these historical intercepts the latest drill holes YH21-13 and 14 have confirmed significant VMS mineralization.  Thus, the Phase 2 program will include both delineation and exploration drilling.

In addition to the Phase 2 drilling program exploration work on the property has also included re-locating the No. 4 Brook adit and massive sulphide showing situated approximately 1 km from the current drilling on the eastern limb of the folded volcanic sequence which hosts known VMS mineralization.  On October 16th several field personnel visited the site and reported approximately 15 m of massive and semi-massive sulphide mineralization, including pyrite, chalcopyrite and sphalerite, in a sheared zone near the sloughed-in adit.  This showing is currently accessible via a cut trail but will require upgrading for ATV and drill rig access.  A field crew is currently cutting channel samples across the visible mineralization with shipping and analysis to follow.  This showing is scheduled to be drill tested in early 2022.

Consulting mining engineers of Gemtec, based in St Johns, have been commissioned to apply for permitting approval to enter the 400 Level adit, and in the meantime the Company is investigating the use of a lidar drone to survey the adit this year.

The following figures show the proposed locations of the Phase 2 diamond drilling on the York Harbour property.  The red coloured and hatched bodies in Figures 2 and 3 are the two-dimensional, surface-projected images of the drill-indicated VMS mineralization.  The purple hatched body is the surface projection of the 400 Level adit.


Click Image To View Full Size

 

Figure 1: Plan View of Proposed Phase 2 Diamond Drilling Program, York Harbour Property

 


Click Image To View Full Size

 

Figure 2: Plan View of North Section of Proposed Phase 2 Diamond Drilling Program


Click Image To View Full Size

 

Figure 3: Plan View of South Section of Proposed Phase 2 Diamond Drilling Program

 

About the York Harbour Mine Property

 

The York Harbour Mine Property is located approximately 27 kilometres west of Corner Brook, NL and known to be prospective for its copper-zinc-silver-gold-cobalt massive sulphide deposits. The known mineralization exhibits characteristics consistent with classic mafic-type flow dominated (Cyprus-type) VMS deposits. Similar geological environments and styles of mineralization have formed relatively large copper-zinc deposits elsewhere in Newfoundland at Tilt Cove (9 Mt of between 1% and 12% copper) and in Cyprus at the Mavrovouni mine (15 Mt of 4% copper with zinc and gold); as noted in Messina Minerals Inc. 9th Year Assessment Report (2009).

 

Copper and zinc massive sulphides were first discovered at York Harbour in 1893. Since then a total of 2,134 metres of documented underground drifting and development have been completed for which documentation is available.  Drill core logs and sampling data is available for a total of 19,323 metres of historical drilling that tested eleven lenses or zones of copper-zinc-silver-gold-cobalt massive sulphide mineralization. These zones occur over a 600-metre strike length and many remain open for expansion both along strike and downdip.

 

Most historical exploration and underground development have been concentrated within a 350- metre long segment of a stratigraphic contact between lower and upper basaltic units, and within 150 metres of surface. An overturned synclinal fold is interpreted to extend and repeat the favourable mineralized horizon along the western portion of the property where surface prospects at the No. 4 Brook showing of copper- and zinc-bearing massive sulphides have been discovered and documented in outcrop but have received very little modern exploration attention.

 

J.D. Blanchflower, P. Geo. is a qualified person in accordance with National Instrument 43-101 who has reviewed and accepted the technical material contained in this news release.

 

For further information:

 

Andrew Lee CEO, President and Director

Telephone: 778-302-2257 | Email: [email protected]

Website: www.phoenixgoldresources.ca

 

Cautionary Statement Regarding Forward-Looking Information

 

This news release may contain “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities legislation. All information contained herein that is not historical in nature may constitute forward-looking information. Forward-looking statements herein include but are not limited to statements relating to satisfactory completion of due diligence and any acquisition under the Option and are necessarily based upon a number of assumptions that, while considered reasonable by management, are inherently subject to business, market and economic risks, uncertainties and contingencies that may cause actual results, performance or achievements to be materially different from those expressed or implied by forward-looking statements. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements.

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

 

Copyright (c) 2021 TheNewswire – All rights reserved.

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Futures Slip From All Time High Amid Fresh China, Growth, Valuation Concerns

Futures Slip From All Time High Amid Fresh China, Growth, Valuation Concerns

One day after US equity futures hit an all time high, rising…

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Futures Slip From All Time High Amid Fresh China, Growth, Valuation Concerns

One day after US equity futures hit an all time high, rising to a record 4,590, risk sentiment has reversed and overnight index futures fluctuated and stocks in Europe retreated from a near-record on Wednesday after a flare up in U.S.-China tensions, signs of further regulatory crackdowns from Beijing, a decline in commodity prices, renewed concerns about economic growth and a rise in short-dated U.S. Treasury yields doused the equity market rally on Wednesday. At 7:45 a.m. ET, Dow e-minis were up 27 points, or 0.07%, S&P 500 e-minis were down 2.50 points, or -0.06%, and Nasdaq 100 e-minis were down 15.5 points, or 0.09%. Bonds and the dollar gained and bitcoin stumbled.

The overnight losses started earlier in Asia, where tech stocks suffered hefty falls after China’s internet watchdog said it planned stricter registration rules for younger net users, while Chinese tech shares slid on concerns about more scrutiny from Washington after the U.S. banned China Telecom’s American business. U.S. futures also turned negative as the bullish mood over Tuesday’s forecast-beating results from Google owner Alphabet and Microsoft started to wane.

Shares of energy firms including Exxon and Chevron tracked lower oil prices, while major lenders such as Bank of America slipped on a flattening U.S. yield curve. Microsoft Corp rose 2.1% in premarket trading after it forecast a strong end to the calendar year, thanks to its booming cloud business. Twitter gained 1.4% after the social networking site’s quarterly revenue grew 37% and avoided the brunt of Apple Inc’s privacy changes on advertising that hobbled its rivals. Google owner Alphabet also reported record quarterly profit for the third straight quarter on a surge in ad sales. However, its shares were down 0.6% after rising nearly 59% so far this year. Here are some of the biggest movers today:

  • Microsoft (MSFT US) shares gain 2.2% in premarket after first- quarter results that analysts said were very strong across the board, showing scale and justifying the valuation of the software giant.
  • Alphabet (GOOGL US) rises 1.3% after 3Q earnings earned a mostly positive reception from analysts, with at least three raising their price targets on the Google parent.
  • Twitter (TWTR US) adds 2% amid resilient third-quarter sales at the social media company as it weathers Apple’s new limits on consumer data collection.
  • Enphase Energy (ENPH US) gains 13% after its 3Q results and 4Q forecasts beat estimates. Analysts await more clarity on supply chain constraints.
  • Robinhood (HOOD US) slumps 12% as some analysts cut price targets after the retail brokerage reported 3Q revenue that missed estimates and flagged further weakness in 4Q.
  • Visa (V US) falls 2.4% as analysts flag a disappointing outlook from the payments company.
  • Texas Instruments (TXN US) declined 4% after a forecast that may disappoint some investors who are concerned about a potential slowdown in demand for electronic components. Watch peers for a readacross.
  • Angion (ANGN US) plunges 55% after company said a kidney transplant drug failed to meet primary end points in a phase three trial. European partner Vifor (VIFN SW) slips 6%.

“While some prominent earnings misses have clouded the picture, the reality is that on aggregate, the reporting season so far has been very solid,” said Max Kettner, a multi-assets strategist at HCBC Holdings Plc. “Everyone, literally everyone, in the market right now is worried about supply-chain constraints, higher input costs and the like, so headwinds from this side are now very well reflected in near-term earnings expectations.”

Concern over more tension between Beijing and Washington also weighed on markets after the U.S. Federal Communications Commission voted to revoke the authorization for China Telecom’s U.S. subsidiary to operate in the United States after nearly two decades, citing national security.

“We have good U.S. data in earnings which is very reassuring but valuation is very stretched in both the value as well as the growth sector,” said Sebastien Galy, senior macro strategist at Nordea Asset Management. “And people are also getting a bit hesitant and are a bit worried because the amount of money that is going through will slow down with the Fed slowly starting to taper – but that is not necessarily a bad thing.”

MSCI’s global equity benchmark hovered close to Monday’s seven-week high and is on track for the best month in almost a year.

However, European stocks softened, led by a 1.6% drop in mining and resource firms in the Stoxx Europe 600 index as prices of raw materials including aluminum and iron ore fell along with crude oil. Germany’s DAX underperformed after Europe’s biggest economy cut its 2021 growth forecast, citing the lingering effects of the pandemic and a supply squeeze. Bund yields dropped along with those on other European bonds. Bank shares also slipped, with Deutsche Bank down more than 5% despite forecast-beating earnings. Europe’s Stoxx 600 dropped about 0.3%, weighed down the most by miners and energy firms. FTSE 100 and DAX both down similar amounts. Here are some of Wednesday’s major earnings and corporate news from Europe

  • Deutsche Bank AG dropped more than 6% after disappointing earnings, while Banco Santander SA declined despite a bullish outlook.
  • Heineken NV fell after reporting a drop in demand for beer.
  • BASF SE slipped after flagging dwindling returns on its core suite of chemical products as sputtering global supply catches up with demand.
  • GlaxoSmithKline Plc rose after improving its profit outlook.
  • Dutch semiconductor equipment maker ASM International NV advanced after revenue forecasts beat analyst estimates.
  • Puma SE gained after raising full-year profit forecasts.
  • Temenos AG surged as much as 16% after Bloomberg reported EQT AB is exploring an acquisition of the Swiss banking software specialist.

Earlier in the session, the MSCI Asia Pacific Index was down 0.4% in late afternoon trading, paring an earlier drop of 0.7%, with Tencent, Alibaba and Meituan the biggest drags. Asian equities fell as risk-off sentiment fueled by renewed concerns over Evergrande’s debt woes and an escalation in China-U.S. tensions drove losses in Chinese tech giants. Benchmarks in Hong China and China led declines around the region. The Hang Seng Tech Index plunged as much as 3.9%, the most in over five weeks after Washington moved to ban U.S. business by China Telecom, following previous similar measures against Chinese tech firms including Huawei. Meanwhile, Secretary of State Antony Blinken called for a greater role by Taiwan in the United Nations, raising objections from Beijing. Chinese tech stocks have been rattled this year by a crackdown amid President Xi Jinping’s “common prosperity” campaign. There had been signs of a rebound recently, however, as the government signaled it would limit its restrictions. Investor confidence in beaten-down Chinese tech stocks hasn’t been fully restored “so they rush to dump those stocks at any negative news and signs of flow reversal,” said Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong. “This round of tech rebound has peaked,” he added. Key equity gauges also fell more than 0.5% in Indonesia and South Korea, while Vietnam’s benchmark climbed more than 2%.

Japanese equities fell, though they closed off intraday lows, as electronics makers and telecommunications providers drove losses. Auto and chemical makers provided support for the Topix which closed down 0.2%, paring an earlier drop of as much as 0.7%. The Nikkei 225 closed little changed, with a gain in Fast Retailing offsetting a drop in SoftBank Group. Asian stocks were broadly lower, as the U.S. moved to ban China Telecom and amid renewed concern over Evergrande’s debt woes. Meanwhile, Japan Exchange Group said Tokyo Stock Exchange will extend the trading day by 30 minutes in the second half of the fiscal year ending March 2025. 

In rates, the 10Y yield is down 1.2bp at 1.595%, trailing steeper declines for U.K. and German counterparts, which outperform by ~3bp as money markets trim expectations for BOE and ECB rate hikes. Long-end Treasuries continued to outperform vs front-end ahead of 5- and 7-year auctions Wednesday and Thursday, as well as month-end rebalancing expected to favor bonds over equities. Long-end yields are lower on the day by ~2bp, front-end yields higher by similar amounts, following selloff in Australia front-end bonds after strong 3Q CPI numbers. 5s30s curve breached 82bp for first time in a year. Gilts flatten further ahead of a revised gilt remit that is expected to report a GBP33b reduction. U.K. 10-year yield falls 5bps to 1.06%, the lowest since Oct. 14, outperforming bunds by ~1bp.

In FX, the Japanese yen strengthened ~0.5% against the U.S. dollar, leading G-10 majors and followed by the Swiss franc. All other G-10 peers are red against the dollar, which is up about 0.06%. The fading risk sentiment meanwhile pushed up the safe-haven Japanese yen which rose 0.4% against the U.S. dollar though the greenback in turn held just off a one-week high versus a currency basket.

The euro kept gravitating toward the $1.16 handle as overnight plays in the common currency as well as the loonie took the spotlight before the monetary policy meetings by the Bank of Canada and the ECB. The three-month Euro benchmark funding rate fell to -0.556%, matching the record low set on Jan. 6, as excess liquidity hovers near an all-time high seen earlier this month. The pound slipped and the Gilt curve bull-flattened ahead of the U.K. government’s budget announcement. The U.K. is expected to trim gilt sales to GBP33b, according to a Bloomberg survey of analysts at primary dealers.

Commodity currencies, led by the krone, fell and the Australian dollar erased an Asia-session gain in European hours. The Aussie earlier rallied while Australian 3-year yield surged as much as 24bps to briefly top 1% after core inflation accelerated back inside RBA’s target, and taking its game of chicken with the bond market to new heights. Kiwi trailed most G-10 peers following a record trade deficit. The Offshore Chinese renminbi fell against the U.S. dollar amid heightened U.S.-China tensions.

Currency and bond traders were looking to a slew of central bank meetings over the coming week for guidance. Canada is first up at 1400 GMT on Wednesday while the European Central Bank meets on Thursday, when the Bank of Japan also concludes its two-day meeting.

The Fed has all but confirmed it will soon start to whittle back its asset purchases, though has said that shouldn’t signal that rate hikes are imminent. Nevertheless, Fed funds futures are priced for a lift-off in the second half of next year.

“We updated our Fed call to show a hike in Q4 2022 and four hikes in 2023,” analysts at NatWest said in a note. “The inflation overshoot has been persistent,” they said. “There is (only) so much the Fed can tolerate before reacting … it feels inevitable that that conversation will be brought up more and more as we go into next year.”

Commodities are in the red. Brent crude down about 1.3% back to $85 a barrel, while WTI slips 1.7% to $83. Base metals drop. LME aluminium, copper, and nickel decline the most. Spot gold down $5 to trade around $1,787/oz.  The crypto space tumbled sharply shortly after the European close, pushing Bitcoin below $59,000 and wiping out much of the ETF launch gains. No changes are expected from Tokyo, but traders are expecting the ECB to push back on market inflation forecasts and are looking for hawkish clues from the Bank of Canada as prices put pressure on rates. Policymakers are facing a steady drip of evidence that there is no let-up from pressure on consumer prices. The latest came from Australia, where data showed core inflation hit a six-year high last quarter, raising the possibility of sooner-than-planned rate increases. The Australian dollar jumped after the data but soon pared the gains.

Looking at today’s busy calendar, we will get preliminary September wholesale inventories, durable goods orders and core capital goods orders from the US. In Europe, Germany November GfK consumer confidence, France October consumer confidence and Euro Area September M3 money supply are due. In central banks, monetary policy decisions from the Bank of Canada and Central Bank of Brazil will be released. On the corporate earnings front, companies reporting include Thermo Fisher Scientific, Coca-Cola, McDonald’s, Boeing, General Motors, Santander and Ford. Elsewhere, the UK government announces Autumn Budget and Spending Review.

Market Snapshot

  • S&P 500 futures little changed at 4,569.75
  • STOXX Europe 600 down 0.3% to 474.38
  • MXAP down 0.4% to 199.65
  • MXAPJ down 0.8% to 656.34
  • Nikkei little changed at 29,098.24
  • Topix down 0.2% to 2,013.81
  • Hang Seng Index down 1.6% to 25,628.74
  • Shanghai Composite down 1.0% to 3,562.31
  • Sensex up 0.2% to 61,468.43
  • Australia S&P/ASX 200 little changed at 7,448.71
  • Kospi down 0.8% to 3,025.49
  • German 10Y yield fell 4 bps to -0.157%
  • Euro little changed at $1.1593
  • Brent Futures down 1.1% to $85.46/bbl
  • Gold spot down 0.5% to $1,784.14
  • U.S. Dollar Index little changed at 93.98

Top Overnight News from Bloomberg

  • Chinese authorities told billionaire Hui Ka Yan to use his personal wealth to alleviate China Evergrande Group’s deepening debt crisis, according to people familiar with the matter
  • Germany cut its 2021 growth outlook to 2.6% — compared with a prediction of 3.5% published at the end of April — reflecting a scarcity in some raw materials and rising energy prices, particularly for gas, Economy Minister Peter Altmaier said Wednesday in an interview with ARD television
  • China plans to limit the price miners sell thermal coal for as it seeks to ease a power crunch that’s prompted electricity rationing and even caused a blackout in a major city last month
  • The SNB stressed that in light of the highly valued currency and the degree of economic slack, expansive monetary policy needs to be maintained, according to an account of President Thomas Jordan’s meeting with Swiss govt
  • Sweden’s National Debt Office is reducing its bond borrowing in both kronor and foreign currency because central government finances are recovering faster than expected from the pandemic, according to a statement

A more detailed look at global markets courtesy of Newsquawk

Asian markets adopted a downside bias as sentiment waned following the mild gains on Wall Street, in which the S&P 500 and DJIA eked out record closes after easing off best levels. The US close also saw earnings from behemoths Microsoft, Alphabet and AMD – the former rose 2% after blockbuster metrics, whilst the latter two dipped after-market. Meanwhile, Twitter shares rose almost 4% after hours as the Co. highlighted the lower-than-expected Q3 impact from Apple’s privacy-related iOS changes. On the flipside, Robinhood slumped over 8% after reporting a steep decline in crypto activity. It’s also worth noting that Berkshire Hathaway Class A shares – the world’s most expensive shares – are quoted +51% after-market (+USD 223,614.00/shr); reasoning currently unclear. Overnight, US equity futures resumed trade flat before a mild divergence became evident between the NQ and RTY, whilst European equity futures’ losses were slightly more pronounced. Back to APAC, the ASX 200 (+0.1%) was buoyed by its tech sector amid the post-Microsoft tailwinds from the US, but the sector configuration then turned defensive, whilst Woolworths slumped some 4% after earnings and dragged the Consumer Staples sector with it. The Nikkei 225 (-0.1%) saw losses across most sectors, with Retail, Insurance and Banks towards the bottom. The KOSPI (-0.8%) conformed to the downbeat mood, whilst Hyundai shares were also pressured amid its chip-related commentary. The Hang Seng (-1.6%) and Shanghai Comp (-1.0%) declined despite another substantial CNY 200bln PBoC liquidity injection for a net CNY 100bln. The Hang Seng accelerated losses in the first half-hour of trade with Alibaba, Tencent and Xiaomi among the laggards. Meanwhile. PAX Technology slumped 45% after the FBI raided the Co’s Florida officers amid suspicion PAX’s systems may have been involved in cyberattacks on US and EU organizations. Finally, 10yr JGBs were lower amid spillover selling from T-notes and Bund futures, whilst the Aussie 3yr yield topped 1.00% for the first time since 2019 as the trimmed and weighted Australian CPI metrics moved into the RBA’s target zone.

Top Asian News

  • China Agrees Plan to Cap Key Coal Price to Ease Energy Crisis
  • China Tech Stocks Slump as Tensions With U.S. Spook Investors
  • Top Court Orders Probe Of India’s Alleged Pegasus Use
  • Tokyo Stock Exchange to Extend Trading Day by 30 Minutes

European equities (Stoxx 600 -0.3%) are trading moderately lower in a session which has been heavy on earnings and light on macro developments. The APAC session saw more pronounced losses in Chinese bourses (Shanghai Comp -1%, Hang Seng -1.8%) compared to peers despite ongoing liquidity efforts by the PBoC with Hong Kong stocks hampered by losses in Alibaba, Tencent and Xiaomi. Stateside, performance across US index futures were initially firmer before following European peers lower with more recent downside coinciding with the US Senate Finance Committee Chairman unveiling a tax proposal focused on unrealised gains of assets held by billionaires and impose a 23.8% capital gains rate on tradable assets such as stocks; ES -0.1%. The US close saw earnings from behemoths Microsoft, Alphabet and AMD – the former rose 2% after blockbuster metrics, whilst the latter two dipped after-market. Meanwhile, Twitter shares rose almost 4% after hours as the Co. highlighted the lower-than-expected Q3 impact from Apple’s privacy-related iOS changes. On the flipside, Robinhood slumped over 8% after reporting a steep decline in crypto activity. In the pre-market, upcoming earnings highlights include McDonalds, Boeing, GM, Bristol Myers and FTSE 100-listed GSK. Back to Europe, sectors are mostly lower with Basic Resources and Oil & Gas names at the foot of the leaderboard amid performance in underlying commodity prices. Banking names are also trading on a softer footing following earnings from Deutsche Bank (-5.4%) which saw the Co. report a decline in trading revenues whilst managing to make a profit for the 5th consecutive quarter. Spanish heavyweight Santander (-2.5%) is also acting as a drag on the sector despite reporting a net profit above expectations for Q3 with some desks highlighting softer performance for its US operations. Elsewhere, Sodexo (+5.6%) is the best performer in the Stoxx 600 after strong FY results, whilst Puma (+3.2%) trades on a firmer footing after reporting a beat on Q3 earnings and raising guidance. To the downside, BASF (-1.0%) shares are seen lower despite exceeding expectations for earnings with the Co. cautioning that the impact from higher Nat Gas prices in the first nine months of the year amounted to EUR 600mln costs and a significant increase in costs is expected following the October price hike.

Top European News

  • Deutsche Bank Falls; Results Fail to Provide Fresh Catalyst
  • BASF Points to Chemical Price Surge Easing as Supply Increases
  • SNB’s Jordan Stressed Need for Loose Policy in Govt Meeting
  • U.K.’s Sunak Set to Cut Tax on Domestic Flights: The Independent

In FX, nearly, but not quite for the index in terms of turning full circle on Tuesday and matching the prior week high as it fell just shy at 94.024 vs 94.174 on October 18, while also narrowly missing 94.000 on a ‘closing’ basis with a last price of 93.956. Moreover, month end rebalancing factors are moderately bearish for the Greenback against G10 rivals, and especially vs the Yen that has a relatively large 1.6 standard deviation and appears to be playing out in the headline pair and Jpy crosses on spot October 29. Indeed, Usd/Jpy has recoiled further from yesterday’s peak circa 114.31 to sub-113.60 before taking cues from the BoJ tomorrow and Japanese retail sales in the run up, but decent option expiry interest between 113.55-50 (1.8 bn) may underpin and support the DXY by default within a narrow 94.008-819 band. More immediately for the Buck in particular and peers indirectly, US durable goods, advance trade, wholesale and retail inventories.

  • CHF/AUD – Also firmer vs their US counterpart, as the Franc clambers back above 0.9200 irrespective of a deterioration in Swiss investor sentiment and the growing chance that the SNB could be prompted to respond to a retreat in Eur/Chf from 1.0700+ to 1.0637 or so. Elsewhere, the Aussie has pared some of its post-core inflation inspired gains, but is holding close to 0.7500 and still outpacing its Antipodean neighbour as Aud/Nzd hovers around 1.0500.
  • NZD/CAD/GBP – A downturn in overall risk sentiment and the aforementioned cross headwinds are weighing on the Kiwi that has slipped under 0.7150 vs its US namesake, and it’s a similar tale for Sterling that failed to retain 1.3800+ status or breach 0.8400 against the Euro before the latest reports about France preparing retaliatory measures against the UK over the fishing rights dispute. On top of that, Eur/Gbp tides are turning into month end and the usual RHS flows seen into and around fixings, while the Pound may also be acknowledging a pull-back in Brent prices in advance of the Budget, like the Loonie in respect of WTI ahead of the BoC, with Usd/Cad back above 1.2400 compared to 1.2350 at one stage on Tuesday and a tad lower in the prior session. Note, the break-even via implied volatility indicates a 58 pip move on the policy meeting that comes with a new MPR and press conference from Governor Macklem.
  • EUR – Notwithstanding several gyrations and deviations of late, the Euro seems largely anchored to the 1.1600 mark vs the Dollar and yet more option expiries at the strike (1.5 bn today) may well be a contributing factor as the clock continues to tick down Thursday’s ECB convene that is seen as a dead rubber event in passing ahead of the big one in December – check out the Research Suite for a preview and other global Central Bank confabs scheduled this week.
  • SCANDI/EM – Hardly a surprise to see the Nok recoil alongside crude prices, but the Sek is holding up relatively well in wake of an uptick in Swedish household lending and a big swing in trade balance from deficit to surplus. Conversely, the Try’s stoic revival mission has been derailed to an extent by dip in Turkish economic confidence offsetting a narrower trade shortfall, the Rub and Mxn are also feeling the adverse effects of oil’s retracement, the Zar is tracking Gold’s reversal through 200 and 100 DMAs, and the Cny/Cnh have been ruffled by the latest US-China angst, this time on the telecoms front. Last, but not least, the Brl anticipates a minimum 100 bp SELIC rate hike from the BCB, if not 125 bp as some hawkish forecasts suggest.

In commodities, a softer start to the session for WTI and Brent seemingly stemming from the cautiously downbeat tone portrayed by broader risk and continuing to take impetus from last night’s Private Inventory report. For reference, the benchmarks are currently lower in excess of USD 1/bbl and WTI Dec’21 has been within touching distance of the USD 83.00/bbl figure, though is yet to test the level. Returning to yesterday’s crude report which printed an above consensus build of 2.318M for the headline print while the gasoline and distillate components were unexpectedly bearish, posting modest builds against expected sizeable draws. Looking ahead, the EIA release is expected to post a headline build. Aside from this, crude specific newsflow has been limited ahead of next week’s OPEC+ gathering though Iran remains on the radar given the latest release of constructive commentary on nuclear discussions. Albeit, we are still awaiting details on a return to full Vienna discussions. Moving to metals, spot gold and silver are softer on the session in a continuation of action seen around this time during yesterday’s session; metals pressured in wake of a choppy, but ultimately firmer, dollar. Elsewhere, China has reportedly agreed to set a price cap for thermal coal sales and comes as part of the ongoing crackdown by China on the commodity which spurred Zhengzhou thermal coal futures to hit limit-down overnight.

US Event Calendar

  • 8:30am: Sept. Durable Goods Orders, est. -1.1%, prior 1.8%; 8:30am: Durables Less Transportation, est. 0.4%, prior 0.3%
    • Sept. Cap Goods Orders Nondef Ex Air, est. 0.5%, prior 0.6%
    • Cap Goods Ship Nondef Ex Air, est. 0.5%, prior 0.8%
  • 8:30am: Sept. Retail Inventories MoM, est. 0.2%, prior 0.1%; Wholesale Inventories MoM, est. 1.0%, prior 1.2%
  • 8:30am: Sept. Advance Goods Trade Balance, est. -$88.3b, prior -$87.6b, revised -$88.2b

DB’s Jim Reid concludes the overnight wrap

It’s day 42 out of 42 on crutches without any weight bearing on my left leg. Over that period I’ve been hopping, crawling, sliding, and using the crutches as a pole vault amongst other various forms of self transportation. So sadly today is the last day I get waited on. When I wake up tomorrow I’ll try to walk again and fend for myself.

Equities threw away their crutches a couple of weeks ago and haven’t looked back. US Earnings have helped and while they aren’t as good as the headline beats suggest, due to big unwinding of reserves for loan loss provisions at the banks, they are notably better than some of the stagflationary gloom stories that dominated in the weeks ahead of this season. A reminder that our equity guys did their state of play on earnings a couple of days back here.

Big tech was always going to be the swing factor between a slightly better than normal level of beats and a more aggressive one. Last night Alphabet, Microsoft, and Twitter all reported after hour. Alphabet and Microsoft beat on both sales and earnings, while Twitter’s revenue just missed expectations but traded higher after hours. Of the 41 S&P 500 companies that reported yesterday, 33 beat estimates. For the earnings season to date, 166 S&P companies have reported, with 139 beating earnings estimates.

Prior to this, markets continued to stay in their “new normal” of record or cyclical high equity prices and multi-year breakeven highs. Positive surprises for earnings on both sides of the Atlantic helped yesterday as did strong US consumer confidence numbers.

Starting with the US, along with strong earnings, a number of positive surprises in an array of economic data yesterday did just enough to push the S&P 500 (+0.18%) and the DJIA (+0.04%) to new record highs, while the Nasdaq (+0.06%) fell short of beating its record set on September 30th. The FAANG Index lagged on the day, dropping -0.33%, but managed new all-time highs intraday. On the other side of the Atlantic, European equities notched solid gains as well, with most major European markets finishing well in the green territory, lifting the STOXX 600 by +0.75% – a fraction below its record high. All index sectors but energy (-0.29%) finished higher on the back of strong earnings early in the session, particularly from UBS and Novartis.

Taking a closer look at the aforementioned economic data, October US consumer confidence came in at 113.8 versus 108.0 expected, while the Richmond Fed Manufacturing index rose to 12, beating expectations of 5. In housing, new home sales for September (800k) surpassed estimates (756k) by a decent margin, whereas the August FHFA House Price Index came in at +1.0% versus +1.5% expected. There were further signs of a tight US jobs market as the labour market differential in the Conference Board index improved to 45.0, the best reading since 2000.

Similar to Monday, breakevens climbed as real yields fell in the US and Germany. Nominal 10-year Treasuries were -2.3bps lower, while breakevens increased +2.6bps to 2.69%, still just a hair beneath all-time highs for the series. 10-year bunds declined -0.3bps while the breakeven widened +3.0bps. Breakevens took a breather in the UK, narrowing -8.6bps, whilst 10-year gilts were -3.0 bps lower.

In Asia, most major indices are down this morning. The Nikkei 225 (-0.61%), KOSPI (-0.92%), Hang Seng (-1.58%) and Shanghai Composite (-0.92%) are all trading lower. Sentiment soured after the real estate saga continued with Chinese authorities asking companies to get ready to repay offshore bonds, while also urging Evergrande’s founder to employ his own wealth to aid the struggling developer. Additionally, in geopolitics, the US Federal Communications Commission banned China Telecom (Americas) Corp. from operating in the US on the back of national security concerns.

Data releases from Asia continued to support the inflationary narrative amid rising commodity prices as we saw a +16.3% YoY growth in China’s industrial profits in September, up from +10.1% a month earlier. Meanwhile, Australia’s trimmed mean CPI (+2.1%) came in above expectations (+1.8%), sending the 3y yield higher by +14.5bps. The S&P 500 mini futures (0.00%) is broadly unchanged with the 10y Treasury at 1.622 (+1.4bps).

In commodities, oil futures were mostly mixed yesterday, but both WTI (+1.06%) and Brent (+0.48%) managed to rise by the European close, as Saudi Aramco said earlier in the session that oil output capacity is declining rapidly across the world. On the other hand, European weather forecasts that pointed at lower temperatures starting next week did little to propel natural gas prices, which declined both in the region (-0.33%) and in the US (-0.27%).

Briefly taking a look at the virus news, The FDA’s vaccines advisory committee voted 17-0 to back jabs for kids ages 5-11. The dose for the younger cohort amounts to one third of the current one given to those over the age of 12, which means that it could be more quickly distributed if the demand is there. The agency will give its final ruling soon, which is expected to follow the panel’s recommendation, and then the shots could be distributed within weeks to schools, pediatricians, and pharmacies. Elsewhere, Singapore will allow fully vaccinated travelers from Australia and Switzerland to enter without quarantine from November 8.

In terms of upcoming data releases today, we will get preliminary September wholesale inventories, durable goods orders and core capital goods orders from the US. In Europe, Germany November GfK consumer confidence, France October consumer confidence and Euro Area September M3 money supply are due. In central banks, monetary policy decisions from the Bank of Canada and Central Bank of Brazil will be released. On the corporate earnings front, companies reporting include Thermo Fisher Scientific, Coca-Cola, McDonald’s, Boeing, General Motors, Santander and Ford. Elsewhere, the UK government announces Autumn Budget and Spending Review.

Tyler Durden
Wed, 10/27/2021 – 07:53





Author: Tyler Durden

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Energy & Critical Metals

Lithium darling Vulcan Energy calls a halt in the wake of J Capital short report

Activist short seller J Capital Research has put ASX market darling Vulcan Energy (ASX:VUL) in its cross hairs, calling the … Read More
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Activist short seller J Capital Research has put ASX market darling Vulcan Energy (ASX:VUL) in its cross hairs, calling the company a “wannabe lithium miner” which “based highly optimistic assumptions for (its) project on work done by small consultancies that were owned by management and acquired by Vulcan.”

Vulcan Energy, J Capital — game on

Vulcan owns the Zero Carbon Lithium Project in Germany’s Upper Rhine Valley, where it promises to produce both renewable electricity and lithium on a ‘carbon negative’ basis from deep geothermal wells.

Excitement around the project has seen Vulcan raise more than $300 million from investors this year alone, secure lithium offtake deals with Umicore and LG and bring Australia’s richest person Gina Rinehart on board as a backer.

The company’s shares are up more than 6,000% since its management engineered a reverse takeover of minerals explorer Koppar Resources, having dropped in recent weeks from a high of more than $16 — 80x Vulcan’s 20c share price in early 2020.

That market exuberance transferred through to Kuniko (ASX:KNI), an arguably run of the mill Scandinavian base metals explorer spun out of Vulcan that mooned on listing in August.

Vulcan has also been the subject of some scepticism. While it maintains both its component parts of geothermal energy generation and direct lithium extraction are well understood and existing commercial technologies, no geothermal lithium project has entered commercial production to date.

“They claim the project is a twofer: profitable geothermal power and “green” lithium,” J Capital’s Tim Murray wrote in the note, titled ‘Vulcan: God of Empty Promises’.

“Neither assertion is likely to be true. ”

“Our research shows that the project may never actually get under way: the costs are higher than the company claims, output will be lower, the environmental impact is brutal enough that public outcry will block permits, as has happened before in the area, and the quality of the lithium resource is low.

“Many experts agree with us that this project is a non-starter.”

What was Vulcan’s response?

Pre-market indicators on Commsec suggested Vulcan, which was trading at $14.99 and a market valuation of $1.87 billion, was looking at 13% hit to its share price on the open this morning (now more like 10% according to Commsec).

It is now in a trading halt to prepare a detailed response to the J Capital Research note, after issuing a brief riposte this morning.

In it, Vulcan took aim at Murray’s background, as well as J Capital’s disclaimer that it plans to profit off shorting the stocks it reports on and does not hold an Australian Financial Services License.

“The report is authored by a Mr. Tim Murray, co-founder of J-Capital, who according to his own bio has lived in China for 19 years and has a degree in “Chinese Political Economy”,” Vulcan said.

“Based on his online profile, it is not apparent that Mr. Murray has any technical qualifications in geothermal energy or lithium extraction.”

“Mr. Murray’s report makes a large number of inaccurate statements and assertions regarding Vulcan and its Zero Carbon Lithium Project — in particular its Pre-Feasibility Study (PFS) published over nine months ago.

“Given the warning on J Capital’s website, it is clear the report is merely an attempt to profit from ‘shorting’ Vulcan.”

Vulcan went on to trumpet the “globally unique experience in geothermal energy project development and direct lithium extraction” across its 80 person team, saying it was committed to delivering the project.

“We are highly motivated towards achieving our goals of decarbonising these industries, and will always happily dedicate time and effort to answer any questions about our Zero Carbon Lithium Project that come from stakeholders with a genuine interest in the Company and the Project,” Vulcan claimed.

A more detailed response to the claims made in the J Capital report appears to be on its way.

What did J Capital claim?

J Capital claimed in its report that several positive claims made by Vulcan in its January pre-feasibility study were inflated. The PFS gave the Zero Carbon Lithium Project a 2.8 billion Euro NPV.

Murray said “assumptions in the PFS that beautify the project are easily disproved.”

He claims Vulcan has likely overstated its flow rates and recoveries in the PFS, and ignored evidence of community opposition to geothermal energy projects in Germany and adjacent regions of France.

He also criticised the use of Vulcan co-founder Horst Kreuter’s consultancy Geo-T, later purchased by Vulcan, in its PFS.

Murray claimed Kreuter received 1.5m performance shares on the successful completion of the PFS, and resigned as a director on March 25.

Vulcan also acquired Gec-co, which had worked on the PFS, having appointed its CEO and owner Thorsten Weimann as COO of Vulcan.

“Gec-co and GeoT provided a key assumption for the PFS, for flow rate, that is unrealistic,” Murray claimed.

“The recovery rate for lithium is also unrealistic. Realistic assumptions would halve the output of lithium and kill the commercial viability of the project.”

Among a litany of other claims, J Capital says Vulcan has published an unrealistic production schedule and is likely to face significant public opposition, something MD Francis Wedin said was not likely in an interview with Stockhead in July, and that geothermal wells often have a high failure rate.

Although it released a statement this morning, Vulcan requested a trading halt “pending an announcement to the market in order to prepare a response to an online report.”

Vulcan Energy share price today:

 

The post Lithium darling Vulcan Energy calls a halt in the wake of J Capital short report appeared first on Stockhead.





Author: Josh Chiat

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