Market Update

General - Gold broken? - Oceana - Crusader - Marindi

Good afternoon

despite good manufacturing numers, and strong car sales in the US, metals in the end turned south yesterday, and are continuing to do so today.

BHP/RIO/Anglo - even Antofagasta as a pure copper play - continue their recent run - testimony to a reweighting of institutional investors of the resources-sector.

Nickel is not being helped by renewed talk about a loosening of the export ban for nickel ores by Indonesia. To be honest, I cannot imagine a straight relaxation, as so much money has been inevsted in local refineries - it would be macro-economic nonsense to do so, and it would seriously hurt foreign investment...we will see. Some talk about relaxation of rules, countered by a rising export tax...Whatever the outcome, I can only emphasize, that costs will continue to rise for nickel pig iron roduction, supporting the nickel price. But above mentioned comments are certainly creating some nervousness - nickel is down by just under 2% today in London.

Gold is looking a bit vulnerable on the charts, while gold holdings of the large gold ETF are falling very slightly.While I am writing this report, gold has broken the chart....could it go back to 1200$/oz ?? I fear on the charts, it could....The Yen might have turned the corner, and the Euro is weakening again...all bad news for us gold bulls. Trump & friends don´t seem to worry the markets enough to keep gold up....

The A$ continues to edge higher - makes sense, probably, as iron ore is holding up well, and coal prices are still rising.

Sterling is making new lows amidst talk of an agressive Brexit. Well I am going to London tomorrow - for the first time in a long time, it might actually be halfway cheap to visit!

Oceana - well Mick Wilkes startegy to be outspoken and vocal might have been right. The company reports about very constructive discussions with the government, and confirms the guidance for the year. Didipio has not been stopped at all so far, and OGC are confident of this staying this way. Overall, it sounds like the potential mine suspensions will not be eaten has hot as cooked! Good news for the miners involved - not good news for me, as I started to like this government, being a Panoramic shareholder! The latter is certainly a bit of a joke....But I am dead sure, that the mining audit has not been the last trouble we have seen from the Phillippines...

Crusader - some good drilling results, very high grade, from the Juruena district. Some of them will help moving inferred to indicated resources, some will increase overall resources. They have also gained a trial mining license, allowing them to mine 50.000 t p.a.. This is usually the way small mines are operating in Brazil. Stock has come back all teh way to the just abover the placement price...I fear that was to be expected - I do not like the Shareholder Purchase Plans used in Australia to keep small shareholders happy. They are usually selling down to just above the issue price, to take up the placement...always damaging for the share price. In my opinion, small holdersare much rather be helped by a classic, one-off placement, than by a  SPP, which tend to put share prices under pressure for weeks.

Marindi - this is an interesting, and very hot one....I have been invested for a two years or so, putting a very limited amount of money into the MD Joe Treacy, who is a genuine, experienced Australian miner. Many will know him from his days at Kagara Zinc, which went under at a time, when zinc prices were very low. He started MZN with some zinc/copper exploration assets, which still look promising, but have not delivered nything as yet, which could be brought into production in the foreseeable future. Their aquisition of a 30% interest in the excellent Reward Zinc Deposit is under consideration by Teck , which have a pre-emptive right. In case MZN will be allowed to buy it, they will need a small capital raising to pay for it - but would also gain a red-hot asset.

What is driving MZN is something which was meant to be a side-show, but is gaining substantial, speculative interest: Lithium. Kidman Resources KDR have discovered something which could be a world-class litium pegmatite deposit, and their share price has gone up 8-fold since mid-year to a market cap of 250 mill A$ today. This discovery is just 2 km from a large ground position of MZN, which has been mined historically for tantalum, which is contained in a pegmatite , also containing lithium. No modern days exploration has been carried out, and when the tantalum was produced, the lithium was completely ignored. This could be a hot stock - market cap is only 25 mill$, and you have a few options here. But this one is a punt - you have the risk of loosing half of your money as well. I have actually sold some stock today - but this is only for risk management...I like the people, and I like the multiple options in this company.

have a nice evening and endure the short attack on gold!


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