We just need the price of copper to keep going up. Spoke to...

We just need the price of copper to keep going up. Spoke to management for almost an hour last week after my return from Japan, and what I gathered is (a) general sentiment among producers globally is that POC needs to be around USD3.50 to offset increasing higher TCR cost due to reducing ore grades (IMO I would take this comment with abit of salt, but anything above USD3 is great), (b) strong Chinese demands still, and (c) drilling works all done and they are in the process of interpreting for other half of the ore reserve study, and moving along smoothly.

Copper prices have also spiked on reducing local Chinese stockpile and their local local producers cutting back on exports. China is also pledging to reform its financial sector to make it easier for companies to tap oversea markets for funds instead of relying on dodgy shadow banking deals using copper as collateral, so the reducing stockpile can only mean actual industrial demands IMO.

http://www.infomine.com/investment/metal-prices/copper/1-month/

Hopefully Straits will ride the tides up with this good news out of China:

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Copper price hits two-month high
DOW JONES NEWSWIRES MAY 13, 2014 6:30AM
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Copper prices jumped to the highest level in two months on Monday after China unveiled a blueprint for reforming its capital markets, a move that investors hope will spark economic growth in the world's largest consumer of the metal.

Copper for May delivery rose 6.6c, or 2.1 per cent, to $US3.1665 a pound, the highest closing price since March 7 on the Comex division of the New York Mercantile Exchange. It was the biggest percentage gain for the contract since December 4. The more actively traded July contract rose 2.2 per cent to $US3.1495 a pound.

Concerns about China's demand for the industrial metal -- which is used to make everything from pipes to air conditioners to iPhones -- have whipsawed copper prices this year. Prices slid to the lowest level in nearly four years in March and are now up 6.4 per cent from that low.

"China is the only game in town for copper these days," said James Cordier, founder of Liberty Trading Group. "It appears the leadership is serious about not letting the economy contract too much, and that puts a real floor under copper prices."

China's State Council on Friday released a series of guiding principles for reforming the country's financial markets, pledging to reduce regulation, ease the way for local companies to access foreign capital and overhaul the system for initial public offerings.

Many of the proposals were similar to those issued six months ago, when Communist Party leaders rolled out a sweeping economic-reform agenda for the next decade. Nevertheless, the reiteration reassured investors that China's leadership is mindful of growth, after months of concerns that the world's second-largest economy is slowing down.

China's eagerness to demonstrate its commitment to short-term growth may have surprised some investors, forcing them to cancel out bets against copper by purchasing the metal, pushing prices higher on Monday, said Michael Turek, director of the metals group at Newedge in New York.

"Clearly, for some people these announcements were unexpected," Mr. Turek said.

China worries pushed money managers to cut their bets on higher copper prices in the week ended May 6, although the market remained nearly deadlocked between bullish and bearish traders, data from the Commodity Futures Trading Commission showed Friday. Traders betting on lower prices outnumbered bulls for most of March and April, with net bets only turning bullish on copper on April 29.

Copper's use in a wide variety of manufacturing applications makes its price sensitive to economic shifts, particularly in China, which accounts for 40 per cent of the metal's imports. Expectations that China's economy is decelerating after decades of rapid growth, as well as forecasts that the industry would produce a glut of the metal after four years of falling short of demand, have put pressure on copper prices this year.

Recent Chinese economic data have been mixed, with April trade figures showing strong demand for oil, iron ore and other commodities, while a survey of purchasing managers indicated a slowdown in the manufacturing sector for the same month.

However, production delays in places like Indonesia and Chile have limited the supply of copper coming to markets, taking the edge off the expected surplus. Copper stored in warehouses licensed by the London Metal Exchange are at the lowest level since 2008, according to CQG data.

In other markets, nickel prices continued to march higher, rising 4 per cent on the London Metal Exchange to take total gains for the year to 50 per cent.

The LME's three-month nickel futures contract has leapt from $US13,900 a metric ton at the end of 2013 to rise 5.1 per cent Monday to $US20,925 a ton -- its highest level since February 2012 -- thanks to a ban on ore exports from Indonesia, the world's largest producer of the metal.

Concerns about possible sanctions against Russia, the world's second-largest nickel producer, were then compounded last week by a production outage at Vale's Goro nickel processing plant and mine in New Caledonia.

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Chinese bid for PanAust fires up copper stocks
BARRY FITZGERALD THE AUSTRALIAN MAY 14, 2014 12:00AM
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A POTENTIAL $1.4 billion-plus takeover bid for PanAust from Chinese state-owned Guangdong Rising Assets Management has triggered a mini-boom in the valuation of mid-tier copper stocks.

PanAust soared 54c, or 34 per cent, to $2.12 in response to the disclosure that GRAM — the company’s major shareholder with a 23 per cent interest — had initially proposed a $2.20-a-share takeover bid, then increased it to $2.30 a share.

The proposal was rejected by PanAust on the basis that the higher offer was still “materially below’’ the level at which the board would be prepared to recommend to shareholders.

The 45 per cent premium suggested by the higher offer highlighted the willingness of yet another Chinese state-owned enterprise to pay up big to secure copper assets. It follows last year’s $850 million acquisition by Chinese interests of the Northparkes ­copper mine in NSW, and the more recent deal for MMG to ­acquire the Las Bambas copper project in Peru for $US5.8bn.

There was an immediate ­effect of the GRAM move on the market value of other ASX-listed copper producers. OZ Minerals surged 10 per cent to $4.10 and its 19 per cent-owned Sandfire gained 7.5 per cent to $6.02.

While the GRAM offer remains only a proposal, Brisbane-based PanAust has agreed to give it access to due diligence information (upon execution of a confidentiality agreement), to “assist it to materially improve its indicative offer price’’.

“At this stage, there is no takeover offer from GRAM that is capable of acceptance by the company’s shareholders and there is no certainty that one shall eventuate,’’ PanAust warned.

The bid comes as the group’s long-serving and founding managing director, Gary Stafford, has flagged his retirement sometime within the next 18 months.

He said that the ball was now in GRAM’s court. “I wouldn’t choose to call it hostile. They want it to be a friendly transaction, if indeed there is a transaction,’’ Mr Stafford said.

PanAust is a copper/gold producer in Laos and recently secured a stake in the big Frieda River copper/gold deposit in Papua New Guinea. The company has previously issued production guidance for (calendar) 2014 of 65,000-70,000 tonnes of copper and 160,000-165,000 ounces of gold from its operations in Laos.

After heavy capital investment in recent years, the group’s flagship operation in Laos is set to increase annual copper production to more than 90,000 tonnes, which would provide cashflow to help develop Frieda River, and possibly a development project in Chile.

Frieda River is one of the world’s biggest undeveloped copper resources, with PanAust only picking up its 80 per cent interest earlier this year in an $US80m deal with Glencore Xstrata, due to be completed in September.

China’s strategic interest in gaining a foothold in one of the world’s next generation of big copper producers like Frieda River is cited by analysts as one of the reasons why GRAM has decided to make a pitch for control of PanAust.

GRAM first came on to the share register in 2009, taking up the shares at a modest discount to the market price when the then post-financial crisis equity markets were normally demanding 50 per cent discounts or more.

Last month analysts at Citi — in the absence of takeover talk — upgraded their price target for PanAust to $1.67 a share.