Market Update

General - Berkeley - Troy - Fortescue

Good afternoon

Equities still on the march - but finally, bonds have been weaker the last two currencies are not doing much today.

More discussions about Italian banks...a few little asset sales don´t really help to plug a 360 Bill Euro-hole! You would not believe it, but I am opening up a second bank account for my firm, to have the cash at two different banks....and this is also the view of a senior auditor/accountant here in Munich, who does the same for his firm! I have never ever thought about doing this before - not even in the Lehman-crisis!

Unsurprisingly, the A$ is making new, recent highs against the Euro - and also against the USD. It looks like it can go to 0.78 A$/US$ and against Euro, 1.40 A$/eur might be a good target.

Nickel stocks going through the roof in Australia today....nickel hit 10.500$/t yesterday in London - now some profit-taking , trading at 10315 US$/t right now. Copper also very strong, not holding the very high, earlier levels, and zinc is trying to go higher as well. Gold is also recovering from a low of 1328 during Asian trading, to 1342 US$ early afternoon European time. The bull market can continue...but one liitle word of caution: Holdings in the large gold ETF actually fell yesterday by 500.000 oz.

Iron ore rocketing again, as are steel prices in China...nobody believes, that iron ore prices of close to 60$/t are sustainable - I guess we all agree! But some of the mroe bearish estimates will be wrong as well...Thermal Coal is also moving, backed by rising, Chinese imports, as some Chinese production has gone out of the market.

Berkeley Resources - suspended, pending the announcement of the feasibility study for their Spanish uranium mine. Funny enough, it´s trading on AIM - that market indicates a price of 71ct, about 10% higher than in Australia. Feels like the study will be a good one! we should know more latest by Friday.

Troy Resources - oh no, not them again! As everybody thought that they had turned the corner, they surprised with a negative production warning today, after market. Production has been hampered by heavy rain, but also some grade control issues, as I understand it. They have managed to word the announcement that way, that it´s hard to understand!! We have had so many issues with them, so many doubt, that this time, there is some bad luck involved. But don´t we say: The luck is with the able? Does this say, that bad luck is with the unable??? it almost seems that way here. Probably it´s too late to sell anyway, as the stock should be down tomorrow.

Fortescue - confirms, what some analysts had gathered from port numbers: They had a great Quarter, beating the guidance for the year to 30.6. by 4.5 millt to produce a total of 169.5 millt of iron ore. I can only repeat, what I have said before: This is one of the best managed mining companies, I know - certainly operationally...At these rates, they are just printing money...more than 3 bill A$ in EBITDA last year, and this year...and as the only way to get some money out of the company for major shareholder and Chairman Andrew Forrest, is to pay dividends. Be assured, that those will be very nice in the next few years! They could well be 8% or so in 2 years time, once debt has been further reduced.

Have a nice day


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