ROBERT ZOELLICK didn’t disappoint yesterday morning, even for those who burned the midnight candle in the Palace Hotel on Sunday night and turned up on Day 1 looking worse for wear. And there were a few.
The former World Bank president made clear in his keynote address that he is more worried about Donald Trump ripping up international trade agreements than a shift in US security alliances.
Zoellick also warned he expected the prolonged period of low interest rates around the globe to come to an end, with fiscal policies by central banks designed to gradually return the cash rate to more historically normal levels – though with a clear eye on averting another downturn.
It prompted Zoellick to deliver the quote of the day at Diggers & Dealers.
“We tend to see central bankers as financial wizards but most are simply making it up,” Zoellick told the crowd.
Any further pick-up in interest rates will require a significant adjustment by a business community used to gouging on (relatively) cheap debt.
At the exclusive Speaker’s Luncheon later at the Palace, Zoellick also gave the select crowd of diggers and dealers some sage advice on new business opportunities.
“If anyone wants to get into a supplementary business, you should get into the money exchange business at the airport,” Zoellick said.
“I got something like 92c in the dollar. So someone is making a lot of money here.”
The Aussie was last trading around US79c.
LAST YEAR’S theme among the gold producers was the need to improve shareholder returns, particularly through dividend streams. It led to a not-unexpected cock fight among some of the more prominent local gold producers about who was looking after shareholders the best.
Fast forward a year and the theme in gold is firmly on mine reserve lives.
Unlikely our counterparts in North America, Australian gold producers have traditionally had short reserve lives, which is part of the reason ASX valuations lag those in the US and Canada.
Northern Star Resources executive chairman Bill Beament laid down the gauntlet ahead of Diggers by trumpeting a big reserve extension across his portfolio of WA mines to 10 years.
Not surprisingly, Evolution Mining executive chairman Jake Klein used his address yesterday – the last of the day – to talk up his portfolio and state his assets had an average reserve life of more than eight years.
He also repeated his call for the industry not to chase growth for the sake of growth, and produced a slide of Evolution and 19 ASX and foreign-listed peer group companies and their three-year share price returns. Of the list, 11 produced negative returns – no company names were mentioned but Klein said he was “pleased” Evolution was towards the top of the tree.
And expect everyone to start guessing where his closest peers were on the chart.
ALL THIS TALK about reserve lives doesn’t mean dividends are a thing of the past. Unless, of course, you are a St Barbara shareholder, in which case you haven’t received a cheque in the mail since 1995.
That will all change on September 28 when St Barbara pays 6¢ a share fully-franked final dividend.
The dividend, arguably the first bit of news to hit Diggers & Dealers yesterday, all but completes St Barbara’s stunning turnaround from near-collapse to debt-free success story.
As St Barbara CEO Bob Vassie quipped yesterday, “it feels like a maiden dividend” because the last one was so long ago.
Vassie presents to Diggers today and everyone will want to know more about St Barbara’s inorganic growth plan.
Instructive is that St Barbara’s dividend announcement included news of a dividend reinvestment plan, which means the cashed-up and debt-free company may not even have to spend the aggregate $30 million dividend payout. More muscle for a corporate deal.
PILBARA MINERALS boss Ken Brinsden kicked off the Diggers’ lithium program with a typically upbeat presentation on the construction progress of his company’s $234 million Pilgangoora spodumene project south of Port Hedland, and reminded everyone of the booming electric vehicle/battery market fundamentals.
Pilgangoora’s commissioning should start in the first quarter of next year as Pilbara races to join Galaxy Resources (operator of the Mt Cattlin mine near Ravensthorpe, and presenter late yesterday) as an ASX-listed spodumene producer.
Brinsden offered up an interesting slide that showed Pilgangoora’s size and grade relative to the rest of the ASX emerging lithium sector.
The only compatriots are Greenbushes (the biggest, and with a phenomenal resource grade of 2.40% Li20), Mineral Resources (1.18%), Rio Tinto’s Jadar in Serbia (1.86%) and Kidman Resources’ Mt Holland (1.44%).
It explains why Chilean lithium giant SQM made a beeline for Kidman to try to secure half of Mt Holland.
