Market Update

General - Graphex - Marindi

Godo afternoon

volatility is coming down a bit..metals a little weaker, and the same for equities and bonds...The US$ is attempting to go higher, while gold is 4-5 $ weaker as well. Oil continues to tarde very volatile - followinga  very strong ady yesterday, it´s currently down 1.5%. 

Iron ore under pressure...well at 72 US$ it´s still trading way higher than anybody believed possible only very recently..anything above 60 US$ is fantastic anyway for BHP/RIO/Vale/FMG.

The A$ is pretty weak today, as are emerging market currencies...I am amazed by this...and I think the A$ is undervalued , based on current prices for commodities. Anyway - for Australien commodities producers it´s certainly great news -  nickel at 15.100 A$/t currently, copper at 7.330 A$/t, zinc at 3.442 A$/t, and lead at 2.40 A$/t are fantastic prices for them!"!! And gold at 1640 A$/oz is not that bad, really!!

Just imagine the current exchange rate, and nickel/cobalt/copper at current prices - my baby Panoramic would make very good money, IF they were in production! And my 12-month target for each of these metals is say 10% higher....It will be fun...and while PAN have moved by 300% from the low in Feb, tehy still ahve 300% ahead of them to reach the 2014-high. But they are a good example for just how quick stocks can move in the right enviroment! The easiest money is being made in the first 6 month of a bull market - but it´s also the riskiest trade!

Anyway - for PAN, that "first-move-trade" has gone anyway...for a few others, which might not be that well-known as Panoramic, this trade is still possible: Just a few names: Foran + Heron for zinc/lead/copper exposure, Peak Energy for Rare Earth exposure, Cameco for uranium exposure, or if you are really exotic, you might want to buy some Kasbah...for tin, ahead of the merger with Asian Minerals. That, by the way, could be a very interesting one. Tin is something which could be very interesting, and very hard to buy exposure to - and the mixture with a bull-vehicle for nickel I quite like! The only thing I do not like is being at the mercy of Pala Investment, which is the controlling shareholder of ASN. But through the merger, a few serious players like the World Bank are becoming sharehodlers of the merged entity. I have not done enough work on it, but it could be good story. 

Marindi - Joe Treacy, whom some of you might remember from old days at Kagara Zinc, is managing this zinc-explorer   he is a good man. Beside of some excellent exploration ground - but relatively early days - they own some very prospective litium ground next to the major find of Kidman Resources. Marindi had tried to put together a JV with Kidman, prior to them finding out, what tehy really have on their hands, and apparently, both companies came to some sort of agreement - no written contract, but some kind of understanding. MZN are now taking Kidman to court to honor this agreement, and it´s to be decided my a judge - or out of court - whether this has been a binding agreement or not. MZN obviously believe, that tehy have a strong case - if yes, it would destroy just about all value within KDR ( which ahs been valued by analysts at 300 mill$, and is capped today at 145 mill A$ ). Potentially a very big prize for Marindi, being capped at 20 mill A$. In a seperate action, MZN have done a deal to buy Australia´s largest, undeveloped zinc resource - only to be pre-empted by Teck Corp, which excersised their pre-emptive right to purchase it. MZN argues, that Teck have let themselves too much time to excersise this right... The latter case seems to be a longer shot to me, but the KDR-transaction could have more merits. Interesting is here, that KDR could loose just about everything, while MZN have nothing to loose - that sounds like potentially a very lucrative out-of-court settlement to me. But this is more one to watch - I am not a lawyer, and I have not seen the emails! In any case, I would not want to hold any Kidman!

Graphex - just reported yesterday about their mining license - today, they announced some excellent exploration results from their advanced graphite project in Tanzania, which give substance to what ahd been expected anyway - the resource will end being much larger than the current resource, which has been established previously just to be large enough to warrant a feasibility study. The big price here is still progress with the Chinese partner on a binding deal for the financing and off-take . I am hoping for some progress here before Christmas.

Have a nice evening


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