Market Update

Perseus - Beadell - Genex - Gryphon

Good afternoon

well markets are telling us, that BREXIT-worries are a thing of the past! let´s hope, that this is right - even though I am fearing for the gold price to have an initial, negative repsonse. I hope, that this will be only a temporary blip within an overall, very positive trend.

The A$ has been a beneficiary of BREXIT-speculations, being a save heaven bet - but I think it also might stay relatively strong in the event of a surprise in the UK. The latest noise from the RBA has been rather hawkish, so short term interest rate cuts are probably not going to happen.

Metals have done rather well the last few days, despite some indications, that the mini China boom from earlier this year is calming down.

Gryphon - is falling victim to the renewed interest in Western African gold developers, receiving a friendly bid from Teranga. TGZ itself is not without it´s enemies - but given recent perfomance of it´s share price, it would probably be unfair to call this marriage one between ugly ducks! The GRY-assets are sizeable, and the management is very much unliked - so perhaps this is a deal to be done. But not everybody is happy with GRY´s assets, as they are split over numerous open pits - not 2- or 3 nice, big pits, as miners tend to like them. TGZ has been subject to some comments in the past, saying, that m´management is ripping the company off. I have no real pleasure in reading Annual Reports - but I could not find much evidence of this in the last one at least. TGZ is offering 0.169 TGZ for one share of GRY, valuing it at about 18.8ct vs current share price of 17ct. 

Genex - advanced one step further by appointing UGL as the contractor to build it´s solar plant Stage1, for 50MW. The tender has been highly competitive, with 7 companies bidding. The large advances of solar energy over the last few years is indicated by the fact, that old solar plants in Australia received 1.60$/Watt production - that has decreased to 28ct/Watt for recent projects. The capital cost alone should be under 5ct/Watt. GNX-´s project is one of the larger ones, and hence, might be even cheaper. We will find out in the near future, with project financing the next big step, and commencement of construction during the 4th Quarter, and production late 2017.

The big one remains the hydro-project, for generating capacity of 450 MW! The stock got hammered over the last 2 weeks - obviously, their broker has handled the significantly oversubscribed placement at 16ct not very well, and the stock is trading just below that. Should be a good buying opportunity! The BFS for the hydro project is on target to be finished in the 3rd Quarter, and the very important government funding ( has been applied for just now ) will be announced in September.

Beadell - announced more good drilling results from AB1, which will deliver additional oxide-ounces. ( 13 with 10g/ 48m with 5g / 22m with 6.7g / 21m with 6g / 50m with 7.6g and so on ).The market is telling me, that the current Quarter is not going well - otherwise I cannot explain the fact, that the share price is fairly disappointing vs many other gold producers. The relatively strong , Brazilian currency of late is not helping costs - still, at 311 Mill A$ market cap the stock is cheap vs most others.

Perseus - the same could be said for PRU. The company is doing a 102 millA$ equity raising at 50ct - a 61 Mill$ placement, and a 1:10 entitlement to existing holders. The company is forecasting 222.000 oz of yearly production for 7.5 years from Edikan, at 865 US$/oz All-In-Site-Costs. If they can deliver on that, the stock is very cheap at current gold prices - but I have to admit, that the updated guidance for this half ( at the lower end of previously released ounces, and at the upper end of previously announced costs ) does not increase my confidence. Taking into account my expectation of a stay-in vote in England, I am a bit cautious and want to wait for the Quarterly Report , due next month. The company is currently ( and I should say: expectedly ) losing money - but AISC will fall from close to 1400 US$/oz this half, to around 1200 US$ next year, and 1000 US$ the year after.. But to invest more now, you have to be a believer! As I said above - I want to have some positive indications, that the grade problems are over - after that, I would be looking forward to some exciting exploration in Yaoure, for which part of this capital raising is being done.

Have a good evening


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