Chinese Tomb sweeping holiday now over - there is nothing like a traditional holiday to slow markets

• Copper and other LME metals traded well in China with traders running prices over $9,500/t
• A new mood of optimism seems to be in the air following Chinese officials comments indicating that inflation was under control and that tightening of monetary policy may not be so marked.
• The rise in LME metals prices appears to ignore the likely rise in ECB interest rates tomorrow
• Codelco, the world's largest copper miner, comments that Chinese moves are a worry and that this along with high levels of copper inventory in China may force copper prices lower.
• Copper miners are reported to be unanimous in their public and positive view of the longer term outlook for copper. However reports of rising copper hedging may indicate some caution over short-medium term concerns over the Chinese economy.
• We are perhaps more cautious than others on a longer term view

Russian state moves to remove all ministers from Russia's largest state companies

• The move is designed to improve corporate governance and to eliminate conflicts of interest with the state (FT)
• This may serve to help floatations such as Alrosa, the Russian state-linked diamond miner in London

ECONOMIC NEWS

Dow Jones Industrials -0.05% at 12,393.90

Nikkei 225 -0.32% at 9,584.37

HK Hang Seng +0.60% at 24,295.58

China - More monetary tightening in China. The People's bank of China yesterday boosted the one year lending rate by a quarter point to 6.31%. Expectations are that Consumer prices are now at 5.2% How many more rate rises this year is now the important question.

Japan - Two day policy meeting starts today. The Central Bank is widely expected to further extend stimulus in an effort to limit the impact of the earthquake on the economy.

Europe - Central Bank policy meeting tomorrow. Expectations are that Jean Claude Trichet will announce plans for monetary tightening and a rate rise, the first in 3 years, designed to control escalating euro zone inflation.

Portugal - Debt auction today is expected to try and raise 1bn euros in a sale of 6 and 12 month bills. General market consensus is that a bailout is imminent.

Ivory Coast - Conflicting reports are emerging this morning. Initial reports suggested that incumbent President Gbagbo was in the process of negotiating his surrender as forces loyal to Alessane Outtara seized the Presidential palace in the commercial capital Abidjan. However Sky News is now reporting that Gbagbo is remaining defiant and will not hand over power despite the city being overrun and his forces apparently standing down. Further clarity will hopefully emerge throughout the day.

• Even if Gbagbo steps down the regional divide facing the country will mean that in order to maintain stability the ruling party will have to act swiftly and decisively to try and calm the violent sentiment that has emerged of late. The UN will play a crucial role in stamping out the regional violence that has characterised the post election stand off.

UK - Figures released yesterday showed that the UK services purchasing managers' index rose to a 13 month high in March, raising hopes that growth in Q1 will

US - US budget talks appear to be breaking no ground. Failure to meet a consensus could potentially mean that the federal government could potentially shut down on Friday night. President Obama has called for politicians to start "acting like grown ups."

Yemen - Protests in the country have left 3 people dead as a number of high ranking military personnel back demonstrations. Escalating violence will prompt contagion fears in the region.

Australia - ANZ has estimated that the Australian mining industry will require about US$155bn of Cap Ex over the next 5 years to develop and expand new projects.

Currency - The dollar is slightly weaker against it's most traded counterparts today and yen is has weakened to six month low against the dollar on the expectations that the bank of Japan will maintain stimulus programs longer than those of other central banks.

US$1.429/eur vs $1.417eur yesterday. Yen85.17/$ vs 84.28/$ SAr6.69$ vs 6.74/$ $1.633GBP vs 1.614/GBP

COMMODITY NEWS

Precious metals:

Gold US$1,456/oz vs US$1,434/oz on yesterday - Prices have moved up this morning to another record high as concerns remain over the sovereign debt crisis in Europe coupled with global inflationary concerns. Prices look set to benefit in the near term from the continued geopolitical concerns and uncertainty in North Africa and the middle east and the uncertain outlook on bailout requirements in Europe.

• DRD Gold has announced that gold production in Q1 2011 will decline about 3%.

• SPDR gold trust holdings remain at 1,212.75 (38.990moz) Current value US$55,869bn

Platinum US$1,798/oz vs US$1,785/oz yesterday -

Palladium US$791/oz vs US$783/oz yesterday -

Silver US$39.37/oz vs US$38.49/oz yesterday -

Rhodium US$2,375/oz vs US$2,375/oz yesterday -

Base metals:

Copper US$9,515/t vs US$9,373/t yesterday - Prices are up for second day today on speculation that continuous interest rate rises may well soon end in China improving the outlook for demand.

• Pan Pacific Copper has announced plans to cut production in the April through to September period by 12%.

Aluminium US$2,661/t vs US$2,642/t yesterday -

Nickel US$25,815/t vs US$25,495/t yesterday -

Zinc US$2,419/t vs US$2,433/t yesterday -

Lead US$2,786/t vs US$2,757/t yesterday -

Tin US$31,930/t vs US$31,730/t yesterday -

Energy:

Oil US$122.12/bbl vs US$120.80/bbl yesterday - Prices have moved up this morning on the back of concerns that violence in Yemen could well intensify and lead to contagion problems in the region. Figures released yesterday show that crude oil supplies fell by 2.8m barrels last week suggesting that demand is recovering.

Gas US$4.226/MMBTU vs US$4.284/MMBTU yesterday - Prices are off today as warmer weather in the US dampens demand for heating fuel. Weather patterns in the US have shifted considerably according to experts and the prospects of a prolonged period of favourable weather is impacting the market.

Uranium US$59.00/lb vs US $62.30/lb last week - Prices have come off around 5% since the Japan earth quake according to UXC, as demand for the fuel has been negatively impacted. The market is likely to remain volatile over the coming months as governments continue to act cautiously with regard to nuclear programs and safety inspections.

Other:

Ferrochrome - Metals Bulletin has reported that Nippon Steel and Sumikin Stainless Steel corp has settled its April-June prices with South African miners 10c higher at US$1.43/lbs. Reports suggest that the apparent recovery in the US and Europe had prompted miners to look for a 20c increase. The April -June price is effectively flat from the same period last year as a result of demand prospects from Japan.

Stainless Steel - Global stainless steel melting activities have climbed by 24.9% to a record of 30.7million tonnes bucking the 3 year trend of declining of stainless steel production according to the International Stainless Steel forum.

• In Asia activity rose to 8.6m tonnes an increase of 20.8%
• Japan increased production of stainless steel to 31.5% (Prior to the earthquake)
• Indian production rose to 17.6%

COMPANY NEWS

Aurum Mining (AUR LN) 3.75p, mkt cap £2m - raises £2m in share placing

• Aurum Mining have announced the raising of £2m at 3 pence per share
• Aurum mining is to use the funds to progress with its newly acquired gold joint venture in Spain with Ormonde Mining and to help fund potential further deals.
• Ormonde Mining previously received a geological report on its gold properties by independent consultants, CSA Global (UK) outlining significant gold potential and priority drill targets within the company's gold properties in Salamanca.
• This report indicates that Ormonde's permit area incorporates all the major features of classic intrusion related gold systems, with such systems hosting a considerable number of large scale, lower grade gold deposits in various parts of the world, including Mokrsko in the Czech Republic (>3.2 Moz), Dublin Gulch, Yukon (3.9 Moz) and Fort Knox, Alaska (3.8 Moz). Within the permit area, sheeted vein systems have been identified covering around 10km2.
• There are a number of targets within the tenement packages with exploration returning some encouraging gold assay results from limited drilling and sampling.
• The company may also gain compensation following the disposal of the Andash project in Kyrgyzstan.
• Management are also looking for further assets to develop within the business.

*Fairfax act as nomad and broker to Aurum Mining and have acted as placing agent for this placing

Angel Mining (ANGM LN) mkt cap 4p, mkt cap £19m - draws down $8m in equity draw down facility

http://www.angelmining.com/

• Funds are to be used primarily for the completion of work at the Black Angel lead zinc mine
• Instillation of the cable car and other work through the winter. The cable car should be commissioned by October. The cable car should enable the teams to accelerate progress.
• Funds are also for drilling and blasting of the underground cavern in preparation for the process plant
• Management still have to finalise the full funding package for around $80m to complete the mine.
• The $25m facility should effectively de-risk the project for shareholders

Conclusion: the drawdown of $8m of funding is a significant move as it enables the company to significantly advance the project in preparation for the preparation of the process plant and larger scale underground development.

Baobab Resources (BAO LN) 47p mkt cap £93m - IFC commits to support Tete jv with US$1.3m of funds

• The IFC, Baobab's joint venture partner in its Tete iron ore project has committed to its pro-rata contribution of US$1.3m
• The IFC hold 15% of the Tete project directly and are a significant shareholder in Baobab Resources.
• IFC funding is seen as casting a seal of approval over the company's activities in Mozambique. The organisation is a financing arm of the World Bank and requires companies to pass strict compliance, management and administrative hurdles to qualify for investment on an ongoing basis.
• In a second release Baobab have announced a £12m increase in their Equity Line Facility. The drawdown facility works on the average daily trading volume in the three days trading prior to the notice of draw down. The company can then specify a minimum acceptable price to limit the price at which the shares are sold at.

Conclusion: Shareholders should feel confidence in the ongoing commitment of the IFC to dedicate funds to the Tete Project and the company. For the IFC to support Baobab's projects indicates that the projects have good potential to succeed and generate ongoing returns for shareholders and local communities.

Glencore IPO already said to be oversubscribed by bankers close to the deal

• Cornerstone investors are said to have asked for
• Glencore plans on selling more than $12bn worth of stock in its London listing based on a $60bn target valuation
• The value of the business is lifted by a recent surge in the value of its investment holdings which were worth around £20bn last week.
• A $12bn raising would make this the third largest fun raising in Europe following $17bn for Enel and $13bn for Deutsche Telekom.

Sable Mining (SBLM LN) 23.5p, mkt cap £213m - Lubu coal in-situ coal tonnage 786mt in Zimbabwe

• Sable Mining has announced that its geologists estimate its coal resources to be in excess of 786mt
• The Lubu coal project is located in North-Western Zimbabwe
• Investment into the region has been held back recently my the gazetting of new BEE proposals for 51% local ownership by the Zimbabwean government

Sundance (SDL AX) 49p, mkt cap $1.3bn - Cameroon iron ore project capex est US$4.6bn

Mining this week:

Angle Mining (ANGM LN) 5p, mkt cap £23m - First gold imminent. Moves to raise A$8m in medium term note

Anglo Pacific (APF LN) 327p mkt cap £356m - Company admitted to the FTSE 250

Buy

China Minmetals bids $6.3bn for Equinox following the collapse of its bid for Lundin Mining

Cluff Gold (CLF LN) 116.5p mkt cap £153m - New exploration license granted in Mali

Coal of Africa (CZA LN) 84p mkt cap £444m - Vele Integrated water license granted

Mantra Resources (MRU AX) 6.68, mkt cap A$898m - ARMZ revised offer terms

New offer A$7.02/s (A$6.87/s + A$0.15 special unfranked dividend)

Pan African (PAF LN) 11.75p mkt cap £170m - Government awards mining license on Manica

Ormonde Mining* (ORM LN) 10.13p mkt cap £25m - Consolidation of 100% of Barruecopardo

Corporate - BUY - TP 19p

Antofagasta (ANTO LN) - to remain focussed as a copper company with gold and molybdenum by-products

Allied Gold (AGLD LN) 40p, mkt cap £131m - Trading Halted on the ASX pending release on capital placement

Carbine Resources (CRB AU) 37p, mkt cap A$37m - Geochem show further 1.2km of gold anomalies

Kirkland Lake Gold (KGI LN) 890p mkt cap £602m - Reserve and resource update adds ounces

Sable Mining (SBL LN) 23p mkt cap £213m - Acquisition of iron ore project in Sierra Leone

Zanga Iron Ore Company (ZIOC LN) 155p, mkt cap £429m - resource grows to 4.0tbn from 3.3tbn

Medusa Mining* (MML LN) 465p mrt cap £853m - Drilling at Co-O returns further spectacular grades

Corporate - Buy - TP 549p

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