Brief Australia: Pressure on the RBA Mounts and more

In this briefing:

1. Pressure on the RBA Mounts
2. New J. Hutton Exploration Report (Week Ending 22/02/19)

1. Pressure on the RBA Mounts

The pressure is building on the RBA to cut rates as the construction data proves much weaker than expected in the second half of 2018; pointing to sub-trend GDP growth over the year ahead.  The RBA may cling to their outlook for stable rates, for the time being, citing recent strength in the labour market, and hopes of a rebound in infrastructure spending. But they will feel the heat as market commentators bay for their blood if the economy continues to struggle through the year.  The relatively weak AUD appears to be reflecting the heightened concern over the weak housing market, but it remains difficult to short, considering the potential for a US-China trade deal, Chinese policy stimulus, rising confidence that the UK will avoid a cliff-edge hard Brexit, dovish noises from the Fed, and stronger commodity prices and global risk appetite.

2. New J. Hutton Exploration Report (Week Ending 22/02/19)

• Azumah Resources (AZM AU) rated a Speculative BUY
• 99.5m at 2.2g/t Au complements ‘discovery hole’ (75m above) – 93.1m at 2.3g/t Au
• DDHs from current programme targeting down-dip from existing intercepts
• Key drill results expected over next few weeks
• 1Moz Reserve, 2.5Moz Resource
• US$1,77M NPV_5%, 1.6yr payback.
• US$886/oz AISC (all-in sustaining cost)
• Azumah Resources (AZM AU) , Emmerson Resources (ERM AU), Xanadu Mines (XAM AU), Kingston Resources (KSN AU), Oklo Resources (OKU AU), Blackham Resources (BLK AU), Dacian Gold Ltd (DCN AU), De Grey Mining (DEG AU), Austar Gold (AUL AU), Strategic Minerals PLC (SML LN), Asiamet Resources Ltd (ARS LN), Landore Resources Ltd (LND LN)