Market Update

General - Berkeley - what happened with conference-stocks??

Good afternoon

the election in Australia was  not any good! so far, no party has a majority.....some counting from voters living outside of Australia still to continue this week....much not much change seems to be probable.

The Brits continue to make good friends in Osborne is suggesting to cut the tax-rate for corporates to 15%!!! UK becoming a tax-paradice....we Europeans will love them for this! Remains to be seen, how they would finance that....I am loosing more and more respect for what´s happening in this country, which has had such a high standard of political culture in history....

The Americans are celebrating Independence Day today....

Gold continues to be marked higher....the Brexit situation, even looser monetary conditions, and therefor ultra-low interest rates around the world are still driving it - gold-ETF inflows continue to be strong - and the best of it: It does not feel like it wants to stop!

I think the worldwide debt-situation is no problem at just needs the Central Banks around the world to cancel all debt they have bought, and bingo: The world looks great again!!!So don´t worry - we will all be happy!

Commodities continue their dream run. Probably there is the same thing behind it, which drives equities: Long term, one can see good value in them - in the short term, cash has to go somewhere! So far this year, we have seen following changes, based in US$:

Iron ore / yes, iron ore! ) + 34% / Zinc + 34% / Steel Rebar + 30% / Gold + 27% / Oil + 17% /  Nickel ( yes, nickel!!! ) + 16% / Copper + 5% / Lead + 4% 

Nickel is the strongest metal today, up by nearly 4% so far, driven by comments from the new Government in the Philippines, to audit all mining operations for enviromental safety and compliance. Currently, the vast majority of nickel ore to China is coming from this country, and the enviromental secretary commented, that so far, less tha 1/3 of minines in the country do comply with international standards.

Berkeley - 3% of the company traded in a block trade today in London, which triggered some interest. The stock is trading at a new all time high, as the company will announce the optimization results of the feasibility study in the next few days!

As there is not that much news out today, I looked at our last resources conference on the 4th of March, and the performance of the presenters since then. Some interesting numbers:

West African Resources          + 166%

Gascoyne Resources              + 90%

Perseus Mining                        + 69%

Berkeley Energia                     + 58%

Evolution Mining                      + 52%

Genex Power                           + 52%

Finders Resources                   + 50%

Panoramic Resources              + 13%

Strike Resources                      + zero

Highfield Resources                 - 22%

Peak Resources                        - 28%

Obviously, the performance of the gold stocks is not all that surprising - except perhaps the extent of it - in light of the gold price. Berkeley´s performance is surpising in light of the weak uranium price - but it´s a worldclass story. Genex Power has been extremely bombed out at the time of the conference, and is still extremely cheap. Finders, I guess, is a very pleasant surprise, given the state of the copper market - but they are a producer now. Strike has taken a bit longer - again - to prove the concept, as commerciality of their gas project has not been reached yet. Highfield surpises me the most, on the negative side - but I guess the weak performance of potash does not help here, as well as the political situation in Spain. And lastly, Peak Resources, with their world class Rare Earth project, is very disappointing so far. I think all of these stocks are still very sexy investments - but the upside is certainly much better with the underperformers, as their stories are all still intact.

Have a good evening


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