Mining News – Sunday roundup
Copper is the focus of attention this week as LME stocks reduced 2%, although Shanghai stocks rose.
The cause of concern is that Covid-19 is sweeping through Chile and Peru, both major copper producers, and their mines are starting to be closed as a result, resulting in a supply shortage and rising prices.
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Mining News – Sunday roundup
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Copper is the focus of attention this week as LME stocks reduced 2% this week, but still stand at over 300,000 tons. Shanghai stocks rose a little and stand around 114,000 tons, and there are other non warehoused stocks around, so certainly no imminent shortage of supply to worry about.
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The cause of concern is that Covid-19 is sweeping through Chile and Peru, both major copper producers, and their mines are starting to close to try and prevent further spreading, resulting in a reduction in mined supply, and this is spooking the market and causing the price to rise. The covid situation in Chile in particular is becoming quite alarming for such a small country, and it does look as though the areas around some mines in the Atacama region will be locked down.
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Guajardo said “the worsening situation meant Chile’s official estimate, of a dent in production of some 200,000 tonnes now looks conservative. His group estimated a reduction of 5.5% versus 2020 production forecasts, or some 320,000 tonnes”.
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Whilst people are focused on possible supply problems for copper, nobody seems to be picking up that a lot of silver is produced as a by product in those copper mines, so there is a possibility that silver could become in short supply too, and would therefore increase in price.
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Companies in the news this week.
Fosterville South (TSX.V: FSX) took advantage of the high share price after the recent good drill results and the announcement of the Leviathan Gold spinoff, and ran a placing at C$4 per share, a large discount to the prevailing price on the day the placing was announced.
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Colonial Coal (TSX.V: CAD) trod water after the recent steep rise, which as healthy in my view. The price of coking coal rose C$10 during the week, a nice increase in margin per ton in a typically low margin bulk tonnage commodity.
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Orla Mining (TSX.V: OLA) appointed a very experienced seasoned mining professional,Sean Spraggett, as General Manager, Panama, effective July 1, 2020.
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Orla remains focused on advancing its Camino Rojo oxide gold project in Mexico.
In addition, they are updating the Pre-Feasibility Study on their Cerro Quema Oxide Project in Panama, continuing exploration on both oxide and sulphide target areas with 4,000 metres of drilling planned in 2020, and completing a maiden mineral resource estimate on the Caballito copper-gold sulphide discovery.
A busy year for a really determined management team.
Metal prices
Gold……………..$1775
Silver…………….$18.06
Copper………….$2.76
Nickel……………$5.82
Zinc………………$0.92