The hottest metal this Year is #Zinc. This is the Story

Here is a comment on the Zinc market from Scotiabank:

 

 

Market participants are saying that an already tight zinc concentrate market has become even tighter.  Global smelters and refineries have been revising up production drawing on as much concentrate as they could get and now port inventory of zinc concentrates is down significantly by the end of July.  Given the low availability of concentrate there is an expectation that smelters/refineries will be forced to take maintenance shutdowns.  This should translate to a tighter refined zinc metal market. The market has been expecting a refined metal deficit and it looks like things are setting up nicely to visibly show it.  Interesting the market shrugged off the LME zinc inventory spike in New Orleans +29,800t which probably was hidden stocks getting flushed out.   Right now, it is really the zinc concentrate tightness that is exciting the market in our view. TC=Treatment charges by smelters.

 

Total global zinc stocks are now at 782kt which is +4.3% YTD and +4.0% YoY.

Days of Consumption = 19.4

 

 

 

… And Where Do You Get Your Zinc On?  Check out our Zinc Sensitivities in the Table below…  Our Metals Research Team showing what a 10% and 20% move in Zinc prices would do to our numbers for Teck, Lundin, Hudbay, Trevali.  We assume zinc prices will average $1.10/Ib in 2017e.

 

 

 

 

 

 

 

 

 

Source:  Scotiabank Metals Research

Investing in #Gold #MiningStocks: The Big Picture

Here are some of the basic and macro points you should always bear in mind when investing in Junior Gold Mining Stocks. 

This from Gwen Preston the Resource Maven https://www.resourcemaven.ca Maven Mondays:

On The Macro: Context and Requirements   To start I want to post (with permission!) this gold price chart from Jordan Roy-Byrne of www.thedailygold.com.

The blue line is the average price pattern from the two best bull markets (1976 and 2008) while the red averages the price from the last four rebounds. Black is us today, clearly tracking the four-cycle average very closely. If gold continues to track like that the price could reach US$1,500 per oz. before the end of the year.      Beyond that – well, you can see the possibilities. Including gold priced at US$1,900 by the end of next year.      I put this up for two reasons: to stoke excitement, in case anyone is lacking that, and to bestow confidence that it still makes sense to buy stocks today that are already up significantly.      A lot of companies will see share price gains if gold follows anything close to the trajectory shown above. Some, however, will rise farther and faster than the rest. My job is to identify which those are, and in recent weeks I've gone through my outlook in a couple different ways (including last week's list of the kinds of opportunities available today).      This week I want to outline the project attributes that I think will matter most. In the last bull market bigger was better and few cared about cost. Things will be different this time around. I think this bull market will focus on assets that actually make sense (at least to start – if the market gets really hot then sense could well disappear again). So with pragmatism in mind, here is my list of essential project attributes. Location. That starts with rule of law (security of mineral rights, reliable fiscal structures, etc) but of equal importance also includes social license (from sage grouse to water rights to spawning grounds to artisanal miners to tree huggers to political impacts) and accessibility (steep mountains? roads anywhere nearby? lots of waterways that would require bridges?) Not every project has to answer all the questions of Could It Be A Mine right off the bat, but major hurdles like these can really limit speculative interest in a discovery. Infrastructure. People think this only matters in terms of building a mine, but it matters way before then. I was chatting with a geologist yesterday who has decades of experience in Russia. He has a list of prospects in the Russian Far East that he would love to explore – but just to mobilize a drill program there costs $1 million, and that's before the first foot of core. These considerations matter, especially in a market that is demanding consistent news flow (after a long bear market, investors are still jittery and will take gains and run if not given constant reasons to stay. GSV is a perfect example.). The costs of working in difficult locations mean ongoing financing struggles AND gaps between exploration programs, because working constantly is too expensive. Together those represent a big challenge in today's market. Grade with scale. The last bull market saw miners in an inane race to produce as many ounces as possible, without any thought for making money. That setup led companies to develop marginal assets – decisions that are still hurting balance sheets to this day. Marginal assets will not come back into favor any time soon. The best way for an asset to support better economics is with higher grades. That being said, those grades need to come within a package that offers scale potential – the big returns will come from takeovers where a major bids at a premium to buy a company for its large, high-grade discovery. Easy. No project is ever easy, but an oxide deposit with good grade that gives up its gold in a run-of-mine heap leach will have a serious advantage over a refractory asset that would require roasting, or even a hard polymetallic ore that needs multiple stages of grinding and floating to produce concentrates. Historic advantage. Unless it is a brand new discovery (which can also work), there needs to be a reason why the project didn't work in the last cycle and a way the new team is approaching past work differently to make it an asset for them. The right path for the time. This is a people requirement – the folks in charge of the asset have to consider the project's potential and what is going on in the market to come up with a plan that delivers progress people will care about. Sometimes focusing on putting a small oxide deposit into production makes sense, but in other cases drilling to expand that deposit would deliver much bigger results. Sometimes making a big deposit bigger is important, but other times the market needs metallurgical work and permitting progress and infrastructure plans to accept that the asset makes sense. It depends on the asset, the market, the costs, the timelines, and the goal, but at the end of the day it has to be a story that investors want to hear at the time

World @GoldCouncil, #LME and key banks launch #LMEprecious

New suite of exchange-traded and centrally-cleared precious metals products.

World Gold Council, LME and key market participants to launch LMEprecious

The World Gold Council and the London Metal Exchange (LME), together with Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale, today announce their intention to introduce a suite of exchange-traded and centrally-cleared precious metals products.

The initiative has been driven by the need for greater market transparency, to support and aid ongoing regulatory change,  provide additional robustness to the precious metals market, broaden market access, make trading more capital efficient and trade lifecycle management easier. LMEprecious will be developed to accommodate the interests of the full range of market stakeholders and to reinforce the strengths of the London market.

Today's announcement follows an extended process of engagement with major market participants and users, and the LMEprecious service has been designed based on extensive consultation with core market players. Advanced discussions are taking place with a number of other leading institutions that have indicated their strong support for this initiative.

Aram Shishmanian, the Chief Executive of the World Gold Council, said: "This is another important step in the modernisation of the gold market. It will strengthen London's position in the global gold market, enabling it to meet the needs of all participants, attract new players and satisfy the highest standards of regulatory compliance.

"We are proud to have been the catalyst for this process, defining the new trading capabilities and driving market engagement. We are confident that the new offering will be successfully implemented and supported by the market."

LMEprecious will comprise spot, daily and monthly futures, options and calendar spread contracts for gold and silver. Future developments will include platinum and palladium contracts.  All trading will be centrally cleared on LME Clear, the LME's cutting-edge, real-time clearing house, and leverage the London market's existing delivery infrastructure. The new product suite will complement the bilateral over-the-counter (OTC) market, offering market participants similar levels of execution flexibility, including the ability to bring bilaterally negotiated (phone-based) trades into clearing. Market participants will also benefit from tight on-exchange price discovery and a product model designed to maximise capital efficiencies.

Garry Jones, the Chief Executive of the LME, said: "We are delighted to be working with the World Gold Council and a group of leading banks, to now take this project forward towards an enhanced market structure. LMEprecious opens up trading opportunities for existing LME members and their clients, as well as for new participants wishing to take advantage of optimised precious metals trading."

The banks participating in this initiative will act as liquidity providers for the precious contracts to ensure efficient price discovery and establish market depth. Additional market participants are openly invited to participate in supporting and sharing in the success of the new contracts. LMEprecious will launch in the first half of 2017, following a comprehensive process of integration and testing with participants and subject to regulatory approvals.

The press release is online here: http://www.gold.org/news-and-events/press-releases/world-gold-council-lme-and-key-market-participants-launch-lmeprecious

ENDS

For further information please contact: Melissa McVeigh World Gold Council T   +44 207 826 4701 E   Melissa.mcveigh@gold.org	Dan Adkins Edelman T   +44 203 047 2310 E   gold@edelman.com
Miriam Heywood London Metal Exchange T   +44 7554 667846 E   Miriam.Heywood@lme.com
Note to editors: World Gold Council The World Gold Council is the market development organisation for the gold industry. Our purpose is to stimulate and sustain demand for gold, provide industry leadership and be the global authority on the gold market. We develop gold-backed solutions, services and products, based on authoritative market insight and we work with a range of partners to put our ideas into action. As a result, we create structural shifts in demand for gold across key market sectors. We provide insights into the international gold markets, helping people to understand the wealth preservation qualities of gold and its role in meeting the social and environmental needs of society. The membership of the World Gold Council includes the world's leading and most forward thinking gold mining companies. The London Metal Exchange The London Metal Exchange, a member of HKEX Group, is the world centre for industrial metals trading. More than three quarters of global non-ferrous metals business is conducted on the LME's three trading platforms: LMEselect (electronic), the Ring (open outcry) and the 24-hour telephone market. The world's metal community uses the LME to trade futures and options, and to hedge against adverse price movements. Prices that are discovered on its markets are used as the global reference prices. Participants can trade aluminium, aluminium alloy, copper, tin, nickel, zinc, lead, molybdenum, cobalt, steel billet, steel rebar and steel scrap, and four regional aluminium premium contracts. In 2015, 170 million lots were traded on the LME, the equivalent of 4 billion tonnes and $12 trillion in notional value. At the close of the year, approximately 4.2 million tonnes of material was held on LME warrant in more than 600 storage facilities across 37 locations internationally.