Market Update

Draghi - Genex Power - Evolution Mining

Good afternoon

so, Draghi is getting out the bazooka! At least! Increasing interest rates for banks parking funds over night to - ( yes, Minus!! ) 0,4% ( do you actually call negative interest rates "interest rates"? we might start calling them rather "penalty rates" or something like that....), benchmark interest rate cut to zero, monthly bond-buying increased from 60 bill to 80 bill Euro´s, and corportate bonds are now included! Great thing - instead of having the nusance of having to place new corporate bonds with clients, investment banks now just have to call EZB to get it done!! I am waiting for the day, when they start to buy issues of mining-dreadfuls!

As you would expect, equities are very strong, European bonds are as well - the US$ is very strong and was putting some pressure on gold + metals initially - but they are now essentially unchanged, and the Euro is even much stronger - based probably on Draghi´s comments, that this is it! More negative interest rates, more money printing got to be good for gold.....

Iron ore is correcting from this crazy price of 62$/t - but yesterday´s 58 US$ are still a very good price!

Genex - as I said before - I am very pleased with the positive acceptance of this little, ugly and unwanted duckling, at our recent conference in Zurich! Left completely behind in Australia, they are quietly progressing the project. There are several milestones/progress reports to be expected over the next 2-3 month, which will hopefully get even Australian investors enthused:

 - The connection agreement with the current owner of the existing power line, to get the solar-project off to a start - very important, as they have some competition here, I believe

- The deliovery of the feasibility study for the solar-project

and perhaps most importantly: The Australian government is working on a 5 bill$ fund to invest at very preferential terms in energy-projects in the Northern part of Australia. The way it looks today, the fund might be investing in subordinated debt, behind "normal" project financing, potentially significantly reducing the amount of equity needed for these projects.  This could get the pumped hydro project off to a flying start. NOBODY in Australia owns Genex Power - NOBODY is writing any research on them. I have little doubt, that both will change over the next 6 month, and you should be invested before that happens - IF you are a small enough investor to move into this little puppy !

Evolution Mining - their share price is a real surprise to me , and I think provides everybody with a great buying opportunity! I can see no reason, why the stock has been under quite a bit of pressure lately, other than the build-up of a reasonable short position, and some limited weakness  of the A$ gold price ( from a high of 1760, it retreated to a low of about 1670 A$ yesterday, and about 1700 A$/oz as I am writing ). Readers will be aware, that I know Jake Klein very well - but I think every unbiased reader will agree with me, that the management team has done a great job here over the years. I think EVN will add a lot of value via the drill rig over the next 6 month or so. Aussie investors have been chasing the second- and third-liners over the last 2 weeks  - I think it´s time to look at the quality side again! 5.2 mill oz in reserves equal only 336 US$/oz reserves, and just above 2000US$market cap/oz production are cheap, if you produce gold within the lowest Quartile of worldwide costs, and exploration starting to deliver!

Have a nice evening




Wilhelm Schröder


Schröder Equities GmbH


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