EM CEEMEA CREDIT: First Quantum: Streaming agreement, credit positive
(FMCN; NR/Bneg/Bneg)
- We view the prepayment as credit positive given FMCN’s significant debt pile (net debt of $5.45bn). The proceeds are expected to be used for GCP, capex and debt repayment.
- FMCN structuring a prepayment stream agreement with Royal Gold. Royal Gold to pay FMCN $1bn in advance. FMCN is to deliver gold to Royal Gold linked to copper production at Kansanshi mine.
The terms of the transactions are as follows:
- FMCN to deliver gold to Royal Gold in the following manner
- 75oz per mn Ib of copper produced at Kansanshi until 425k oz has been delivered.
- 55oz per mn Ib of copper produced at Kansanshi until between 425k – 650k oz has been delivered.
- 45oz per mn lb of copper produced at Kansanshi thereafter.
- In addition to the $1bn upfront payment Royal Gold will pay 20% of the spot price per oz and increasing to 30% if certain conditions are met.
- 75oz per mn Ib of copper produced at Kansanshi until 425k oz has been delivered.
- For the FY25 FMCN has guided for 160-190k tonnes of Copper prod’n at Kansanshi. Which will result in around 26.5-31.4k oz being delivered to Royal Gold. For the FY25 FMCN has guided for 135-155k oz of gold production so forwarding selling c.20% of FY25 gold production.
- The transaction is unsecured, but benefits from certain guarantees from Kansanshi.
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USDCAD TECHS: Trend Outlook Remains Bearish
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.3674/3776 20- and 50-day EMA values
- PRICE: 1.3607 @ 16:12 BST Jul 4
- SUP 1: 1.3557 Low Jul 03
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
The trend needle in USDCAD points south and this week’s move down reinforces current conditions. S/T gains between Jun 16 - 23 appear to have been corrective. Key support and the bear trigger is 1.3540, Jun 16 low. Clearance of this level would resume the downtrend and open 1.3503, a Fibonacci projection. Pivot resistance is at the 50-day EMA, at 1.3776. A clear break of this average would signal scope for a stronger recovery.
AUDUSD TECHS: Bull Cycle Remains In Play
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6603 High Nov 11 ‘24
- RES 1: 0.6590 High Jul 01
- PRICE: 0.6548 @ 16:05 BST Jul 04
- SUP 1: 0.6521 20-day EMA
- SUP 2: 0.6468/6373 50-day EMA / Low Jun 23 and a reversal trigger
- SUP 3: 0.6357 Low May 12
- SUP 4: 0.6275 Low Apr 14
The trend set-up in AUDUSD remains bullish and the pair is holding on to its recent gains. The latest break higher maintains the bullish price sequence of higher highs and higher lows, the definition of an uptrend. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 0.6603 next, the Nov 11 2024 high. Key short-term support has been defined at 0.6373, the Jun 23 low.
EURJPY TECHS: Northbound
- RES 4: 171.88 High Jul 19 ‘24
- RES 3: 171.28 1.382 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 2: 171.09 High Jul 23 ‘24
- RES 1: 170.61 High Jul 03
- PRICE: 170.22 @ 16:04 BST Jul 04
- SUP 1: 169.04 Low Jul 02
- SUP 2: 167.87 20-day EMA
- SUP 3: 167.13 Low Jun 20
- SUP 4: 165.66 50-day EMA
EURJPY traded higher on Thursday resulting in a print above 170.47, the 76.4% retracement of the Jul 11 - Aug 5 sell-off. A clear break of this price point would strengthen bullish conditions and signal scope for extension. This would open 170.28 next, a Fibonacci projection. The trend is overbought, a pullback would unwind this condition. Support to watch lies at 167.87, the 20-day EMA.
