The market is down 18. The SFE Futures were down 31 this morning.

The Dow closed down 137 on Friday on weak Chinese GDP numbers for March (announced on Friday in our session) and amid renewed concerns about Spain’s finances and higher borrowing costs (10 year bond yields up again). US economic data released on the day was also mixed. March CPI was in line with market expectations, but the Michigan Consumer Sentiment Index data was below expectations hurt by recently released lower than expected March jobs data.

The S&P 500 Index fell 1.25% to finish at 1,370. European equity markets were down on Friday after euro-zone debt concerns. The Stoxx Europe 600 dropped by 1.5%. Metals prices were sold down. Gold down by $20 to $1660.20 and Silver down by 3.49% to $31.40. In base metals Copper fell 3.49%. The Aussie dollar fell to $103.58.

Main points:

  • Linc Energy (LNC) has signed commercial terms deed with Golden Concord Holdings for a joint venture into China. GCL will take $120m private placement in LNC for 5% of the issued capital. The venture will aim to commercialise construction in China on its first multi-gasifier UCG operation within 6 months.
  • Flinders Mines (FMS) has launched an appeal of an injunction granted in Russia to Elena Egorova a minority shareholder in suitor Magnitogorsk Iron & Steel Works that has threatened their $554m takeover deal. Magnitogorsk has also filed an appeal against the injunction after an arbitration court denied a motion to have the injunction lifted. FMS has not received any alternative offers.
  • Paladin Quarterly production numbers came in at 1.77Mlb U3O8 which was 10% below Patersons estimates of 1.96Mlb U3O8. We retain a SELL recommendation and a 128c target price.
  • Cape Lambert (CFE) says it has signed a binding pact to secure rail and port infrastructure for their Marampa project in Sierra Leone from iron ore producer African Minerals. CFE is also getting ready for an IPO listing of Marampa in London. The project is expected to contain a mineral resource of 680m tons. 
  • Dexus Property Group (DXS) has announced the sale of their US Central Portfolio for US$770m. The company says it is also undertaking a $100m on-market buyback and a revised distribution policy. Proceeds from the sale will be used to repay debt and engineer a restructure of US debt.
  • M2 Telecommunications (MTU) has acquired Primus Telecom for $192.4m. The combined group will benefit from each others strengths and will ensure MTU is prepared for opportunities presented by the NBN. MTU will conduct an $83.1m capital raising.
  • Ivanhoe Mines (IVA) has released their Merlin Feasibility Study which estimates the Merlin Project will cost $345m. The project financials with after tax cashflows are $1.09bn with a NPV of $397m. IVN is expected to scale back work on Mount Dore Copper project as the capital costs for have increased.
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