Stocks to Watch: July

JULY brings the start of a new financial year and for many, a welcome fresh start.
Stocks to Watch: July Stocks to Watch: July Stocks to Watch: July Stocks to Watch: July Stocks to Watch: July

Staff reporter

Far East Capital's Warwick Grigor noted there was little to complain about, despite ongoing trade tensions.

"Our All Ords and Mining indices are hitting new highs. The iron ore and gold prices are looking strong even though the trade war dominates the news," he said.

The MySteel 62% iron ore fines price is at US$118 per tonne, while gold slipped this morning but remains near $1400 or A$2000 an ounce.

RBC Capital Markets says the current price is unsustainable and could start to reverse this quarter, and has a forecast gold price of US$1350 for the second half of 2019 and 2020.

It said base metals remained attractive, particularly copper

"The mining sector continues to be whipsawed by the macro headlines but the underlying fundamentals remain steady," RBC said.

"Base metals markets are relatively tight which is supportive of prices against a backdrop of a moderating global economy. This sets up a healthy market for producers which can return capital to shareholders and pursue growth opportunities."

While the big end of town has been thriving, things still remain tough in the junior space.

"Looking at the bottom end of the market, we are once again seeing that new stories are offering much better pickings," Grigor said.

"The best strategy is to dump those companies that have failed to live up to expectations. Remember that this end is more akin to gambling given the risks, the challenges and the untruths.

"Abandon those companies that have been stuffed full of stale bulls and look for companies that have tailwinds rather than headwinds. Avoid those companies that are running out of cash with share prices below 2-3c."

In the booming iron ore space, Fortescue Metals Group will this week turn the sod on its US$1.25 billion Eliwana project in the Pilbara. CEO Elizabeth Gaines will also speak at the WA Mining Club on Thursday.

Later in the month, Rio will provide more detail on recent Pilbara operational challenges and it set to update its 2019 cost guidance of $13-14 per tonne.

Outside iron ore, one of the more anticipated quarterly reports will be Dacian Gold's. Dacian shares fell off a cliff last month when the company reported underperformance at its new Mt Morgans mine so the test will be to see if it can meet its revised June quarter guidance.

There should be plenty of other news in the gold space.

Calidus Resources will release a prefeasibility study for its Warrawoona gold project near Marble Bar, putting some economics around the project for the first time.

Breaker Resources will update the resource for its Lake Roe project near Kalgoorlie, while Bellevue Gold is also due for another resource upgrade for its rapidly growing namesake project.

Cardinal Resources is due to release the bankable feasibility study for its Namdini project in Ghana this month, paving the way for a final investment decision.

Also releasing a BFS will be Canada-focused zinc developer Superior Lake Resources.

In nickel, Mincor Resources is due to formalise an offtake deal with BHP Nickel West as a step towards the restart of its Kambalda operations.

St Barbara is on track to complete its takeover of Canada's Atlantic Gold. Atlantic shareholders will vote on July 15, with the deal expected to close on July 19.

Shareholders of Canada's eCobalt will also vote on a merger with Jervois Mining, with First Cobalt urging other investors to vote against it.

A catalyst for uranium this month is US president Donald Trump's looming decision on an investigation into uranium imports.

Local producers have lobbied for the government to ensure domestic supply comprise 25% of uranium used in the country's nuclear industry.

On the event front, the major gathering is the Noosa Mining & Exploration Investor Conference in Queensland on July 17-19.

In its ninth year, the event expects to attract 70 mining companies and over 1000 delegates.

"With the rapid growth of new sectors such as battery minerals along with traditional powerhouses such as coal, gas and iron ore, the Noosa conference will put the spotlight on the next wave of major miners set to drive this vital national industry," NM Events' Phil Dickinson said.

The nominees of the third annual MNN Awards will be announced this week across four categories: Deal and/or Merger of the Year, Explorer of the Year, CEO of the Year, and New and/or Emerging Leader of the Year.

The nominees will be profiled by MNN's editorial team over the next few weeks before a panel of judges decide the winners, to be announced later this month. 

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