Market Update

General - Crusader - Peak - Prairie - Genex

Good afternoon

We would like to invite you to our yearly Australian Resources Conference in Zurich, 24th of February, Hotel Baur au Lac. As always, the attending companies are inviting all interested investors and other interested followers. Please pass on the information to your colleagues as well! 

Please register by clicking this link:

Australian Resources Investment Conference

This year, following companies will attend:

Evolution Mining / Perseus Mining / Panoramic Resources / Prairie Mining / Genex Power / Graphex Mining / Breaker Resources / Peak Resources / Finders Resources / Energia Minerals


Market Update

if the French continue to have candidates like Mr.Fillon, who looks like having employed his entire family in lucrative assistant-jobs, paid for by the French state, Le Pen will win that election easily...and we would have another nightmare!

English factories saw a record increase of input prices - highest since series bagan in 1992 - not a big surprise, I guess, considered weak Sterling. Yet another strong inflation number from around the´s bulding!!!  English manufacturing numbers were also strong...their economy is going well, so far....

US manufacturing numbers very strong today, as are ADP Employment numbers.

Generally, base metals are having another good day, even though copper is down a touch as I am writing...there is strong resístance for copper to go above 6.000 US$...I guess strike/no strike at Escondida will decide on it´s fate in the short term. Workers have voted 99% for strike, and while some government mediation is now on for 5 days, the chances for a strike next week got to be very strong. Even nickel is strong today, moving swiflty through psychological resistance at 100.000 US$/t again.

Very strong equity markets today are helping investor confidence today, despite weak bonds worldwide, and I guess are the main reason for a weaker gold price. it seems to me, that gold is still very sensitive to bonds - even though I believe that in the medium term, real interest rates are much more important for gold, than nominal yields. And when you have people like this guy Bannon in the driving seat in the US, the world will continue to be full of negative surprises! I am just wondering, whether we might still be in for some short term pain, given my expectation, that Yeleln will become hawkish rather sooner than later.

Prairie Mining - announced their first resource estimate for the Debiensko coking coal asset. 310 mill t incl 93 millt of indicated of high quality coal - that´s a very sizeable resource, and larger than I would have expected - right at existing infrastructure, close to European steel mills, which import the vast majority of their coal from overseas...the patient investor will have fun here! More to learn at our Resources Conference in Zurich, 24th of Feb!

Peak Resources - announced some interesting exploration results from their rare earth asset in Tanzania, where they discovered a new area of mineralisation, consisting of high grade fluorite, a mineral, which contains rare earth, barite, niobium and phosphate. The company is now evaluating the economic significance of it. I have to admit, that it might offer some longer term upside - but the really important announcement will be in April, when they will announce the results of their bankable feasibility study.

Crusader - spoke to them today...and it might be looking better than I thought. The "scoping"study to be announced within the next month or so has to be called as such under stock exchange rules, but is actually much more than that. It will be used as a document to get financing for the small project, which is planned as a small 100.000t p.a. start-up operation, to produce 25.000oz or so due to the very high grade of the deposit. The company is working on an initial open pit, followed by some underground production. The pay-back of such a small operation might only be 12 month. Anyway - I am looking forward to see the announcement. As announced earlier, the company also believes, that a mining permit for Borborema might be recived shortly - but you ahve to atke this with a pinch of salt, as companies have been thinking that before, just to become victims of the Brazlian bureaucracy. But there might actually be an end to this long and winding road....

Genex - that has been the major disappointment today!!! Ther company has to do another capital raising, as interest rates have been on the move, and banks are now demanding 0,6% or so more in interest, than they were just 6 weeks ago, when the company did the last raising. In hindsight, they would have been better off ( and perhaps not only in hindsight! ) to raise a bit more, than the essential! Anyway - the increase in interest rates also limits the total amount they can finance, and they are now in need of another 2.5 mill$ in equity. They are raising 7.5 mill$ in a placement, and through a 1:14 rights issue to all shareholders, which includes a nice buffer. The price for this problem is very high - the company is raising the equity at the appaling price of 16ct. I am just so p...ed off with their broker, who is taking advantage of them being in this situation! I fear, that the market in the stock will come down to close to this level, as many retail investors will try to sell a few at 18ct, top take up new shares at 16ct...we will see. I am still a very strong believer in Genex, and have applied for a substantial number of shares. And if I could, I would pile in with my own money....absolute ripp-off price! 

Newsflow over the next few weeks/month will be: Closing of the financing / final feasibility study for Solar Stage II / further information on cost studies for the hydro plant, and for the additional transmission line. The Solar Stage I project is on target for production by the end of this year, Stage II could be in production by early 2019 ( once the transmission line has been built ), and the big price, the hydro-pump power station , should be producing by then end of 2019/early 2020. Malcolm Turnbull, Australia´s premier, held a big speach today about the power situation in Australia and the very important role hydro-pump would play in future plans, indicating good chances to me, that GNX are right on target to receive the hoped-for 50 mill$ government grant to develope it. I still believe, that GNX will ultimately be worth a multiple of todays price - but in the short term, we are going through some pain here!!!

Enough for today - have a nice evning!


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