Mining Review Sunday Update 24th Oct 2021
The story of the week is the 50% rise in price of Colonial Coal (CAD.V), which has long been acknowledged as an incredibly undervalued stock at the asset level, in a tier 1 country, and finally the market is waking up to this fact.
The surprise of the week was an unsolicited bid by Ramelius Resources for Apollo Consolidated (AOP.AX) which was board accepted, and recommended shareholders to do likewise. Then came along Gold Road Resources (GOR.AX), who announced a 19.9% stake in Apollo, effectively blocking Ramelius’ bid as it requires a 90% acceptance.
Mining Review Sunday Update 24th Oct 2021
The story of the week is the 50% rise in share price of Colonial Coal (CAD.V), which has long been acknowledged as an incredibly undervalued stock at the asset level, in a tier 1 country, and finally the market is waking up to this fact.
The high steelmaking (coking) coal price has clearly focused minds, and the current shortage of coking coal highlights the need to secure future supply. Quite frankly, if this doesn’t bring bidders to the table, I don’t know what will.
The surprise of the week was an unsolicited bid by Ramelius Resources for Apollo Consolidated (AOP.AX) which was board accepted, and recommended shareholders to do likewise. Then came along Gold Road Resources (GOR.AX), who announced a 19.9% stake in Apollo, effectively blocking Ramelius’ bid, as it requires a 90% acceptance, so is now mathematically impossible.
Gold Road offered a straight cash bid of A$0.56 rather than the cash and scrip offer by Ramelius. Cash is clearly more attractive in my view. Apollo are asking shareholders to wait before making a decision. One wonders if Ramelius can cancel their original bid, and make a fresh offer where the 90% acceptance is not a condition?
As a shareholder of both Apollo and Gold Road, I feel I am in a win win situation here. From my perspective I hope both bidders raise their offer prices, as I am eyeing a couple of fresh investments, and the cash would be useful.
I do wonder whether the loser might look at Bardoc Gold?
Looking at commodities, it has been a big week, and the undoubted highlight is the London Metal Echange (LME) virtually running out of copper. Yes, they are down to 14,000 tonnes of the metal, and stocks have fallen 90% since August. To cool the situation the Chinese governement have released some stocks for their markets.
Nickel reached a seven year high on supply concerns, due to falls in production from major suppliers in Canada, Russia, the Philippines, and Indonesia.
Rio Tinto has warned that the world faces a growing lithium defecit, as demand for EV production increaes in the next few years. EV’s currently require 350,000t of lithium per year, but with a planned 55% of cars set to be EV’s by 2030, the demand will rise to 3 million tonnes per annum, one sizeable leap.
Thermal and coking coal prices fell after the intervention of the Chinese governement to contol the price after the recent stong gains. The governmenet have told miners to maximise output, and they are allowing some mines closed for safety inspections to reopen to fill the supply gap.
Stocks from our watchlist in the news this week
Due to a technical problem the market data will be added leter.
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