Market Update

General - FAR - Middle Island - Cardinal Resources - Talisman - Manas Resources - Nestor Australien - Chalice

Good afternoon

so Johnson is the new foreign minister of the UK - almost an insult to have a liar as foreign minister...Otherwise I have to say, that Mrs.May seems to be a very respectable person to run the country - hard nut, but making the right noises. One thing is for sure: She should not expect too much compromising from us....I hope, that Cameron never turns up again - but I am sure, that before long, he will appear on some advisory board of Goldman´s....

Australian job numbers were strong and helped  the A$ a little higher.

Base metals still want to go higher...zinc up 1%, nickel up 1% ( Macquarie substantially increasing the forecast deficits in supply for 2016 and 2017, even before disruptions from potential mine-closures in the Philippines ), copper and lead up a little. But gold is being hit again today - trading just above 1320 as I am writing. The upward trend is running at 1300 - so that better holds - but I think it will. It needed a breather...and while equities are going higher every day, investors are led to believe, that everything is absolutely wonderful!

FAR - JV-partner Conoco ( 35% ) sold it´s stake in FAR´s Senegalese asset for 430 Mill US$ U valuing FAR´s stake at 241 Mill A$. Adding their approx 80 mill$ in cash, that´s about in line with the market cap. A bit disappointing, even taking into account, that major companies are not the best sellers of assets, usually. Stock reacted negatively today...and I think they are quite sensitive to the oil price, which is not positive in the moment. Talk is, that deap water assets like FAR´s need 50 US$ to be developed....which should be conservative, once the oil field can produce in a few years time. But obviously, it´s much nicer to make a positive decision, when oil prices are above the needed level. In general, I believe, that oil could well tarde between roughly 45- and 50$ for WTI for some time, as prices above 50$ should see US shale producers turn on the tap again.

Middle Island - they are certainly doing something to underpin the stellar performance they have had this year! They bought the Sandstone Mine in W.A.of the receiver ( the deal was negotiated around Christmas, when nobody wanted it, but only settled in April ). They bought it incl of a 600.000t plant, and have enough cash to develope the asset to a feasibility study. At this stage, it looks like tehy need only 8-9 mill$ to refurbish the old plant. Today they announced some progress from a review of old exploration results, and some re-assaying resulted in two holes giving them 22m with 23g / 8m with 56g / 5m with 26g from underground drilling, in depth of 200-300m. The holes will be followed up shortly by some more drilling and could end up forming a nice, add-on underground resource. MDI won´t be a major story, at least not from Sandstone - but they could well make some money back for some very old backers, who bought them in the IPO many years ago! I would expect some nice drilling results, before they will end up raising some more cash - but that could be some time away.

Cardinal Resources - another very nice drill hole today:   If they continue this way, their resource will easily make it to developement! As you know, the grades so far looked like a 1-1.2g ore body, and even though it will be rather large - 2-3 mill oz? - and with a low stripping ratio, that is still on the slim side. Today they reported 75m with 2,88g, 66m with 1,54g / 47m with 1.26g / 30m with 2.08 g / 29m with 1.72g / 24m with 1.12 g and 15m with 2.,19g. They are the type of holes they need to increase the overall grade!

Talisman - is coming back to life, on the back of some renewed interest in base metal stocks, and a nice run for the JV-partner Sandfire. I am still expecting SFR to bid at some stage for TLM, to get rid of a junoir partner, and a better share price makes a bid more probable. The JV has now applied for a mining license, which should not take too long to get in W.A.. The resource is just 10km away from SFR´s plant, which could increase production and could well do with longer reserves.

Manas Resources - I believe, that some punters in Switzerland might have some left in this nano-cap....Resolute is gradually increasing it´s shareholding over 7%...interesting one

Chalice - their shareholding in FF in Canada is going through the roof....FF today up by another 15% or 1.30 Can$ ( last trade and on 7.7 mill shares turnover today ) Chalice underlying NTA, consisting of 37 mill A$ cash and 32.5 mill shares in FF, is 75 mill A$ ( after tax on any profits on selling FF )....they are capped at last trade Australia at 52 mill A$. The discount should be 20% at worst - if any, for a company, which has done two significant transactions over the last few years, and has made big profits on both....You can be assured on a big pay-out to shareholders, as they have done before, on top of the currently operating buy-back.


Last but not least - a link to some analyst, who has analized our Nestor Australien fund - I think a very fair assessment.   As at today, Nestor is trading at 191.62 = + 24.33% this year,, and more importantly, up by about 11% over three years - we are catching up big time!

Have a nice evening


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