Far East Capital Newsletter
Newfield is ramping up production of a rich diamond project
16 Sep 2023

In This Issue

Newfield is ramping up production of a rich diamond project

Sentiment improved a little over the week as optimism has begun to filter back into the psychology. We have started to see some better economic signals from China. Iron ore prices have ticked 8% higher over the week. Gold prices are holding their own. Inflation concerns have started to moderate, but the higher oil prices might work in the opposite direction.

The leading indices relevant to the resources sector finished the week on a strong note (see the iron ore price), which was good to see, but they are still below resistance lines of downtrends. A number of stocks looked like they want to go higher at the end of the week, but maybe that was a relief rally. There is no fundamental reason why stocks should fall further, other than the procession of new capital ratings. We are just waiting for reasons to buy.

Uranium seems to be stirring up more interest in recent days with the spike above US$60/lb. This is another commodity that represents a supply risk with Russia accounting for nearly half of the world's share of uranium conversion and enrichment, but if the bottleneck is the processing of uranium, rather than the supply of uranium itself, then maybe there is not a real reason for the uranium price to spike. Nevertheless, brokers and press articles are bullish.

Newfield Resources (NWF) is an emerging diamond producer in Sierra Leone that almost no-one has heard of. The share price has taken a haircut like the rest of the junior sector, falling from 42c in September 2022, to 15c last week. Volume has been almost non-existent. The Company is seeking to address that, hence the visit to our office last week. It wants to start appearing on people's radar. So, take this as an introduction. 

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