Market Update

General - Prairie Mining - Strike Energy - Genex Power - Oklo Resources

Good afternoon

the CPI in teh US has risen by 2.7% over the last 12 month! That´s a pretty strong number, and even CPI ex energy at 2,2% has been strong. Given that interest rates ( until today at least! ) are still close to zero, pretty astounding, in fact! Manufacturing numbers quite strong, again, and Retail sales up, in line with expectations.

Metals are having a good day again, iron ore and steel continue to surprise on the upside.

Prairie Mining - came out with a very positive scoping study after the market closed. Trading in London as well as in Poland cannot be suspended, hence the stock is trading there - and it´s currently doing so at a more than 42% premium to the last close of 47ct in Australia - on several million shares turnover! The scoping study is calling for: 2.6 millt of yearly production of premium quality, hard coking coal for a 25 year mine costs of 47 US$/t, delivering a yeraly EBITDA of 282 Mill US$. Very low capital intensity to build the thing, of 197 US$/t and a total of approx 500 Mill US$ delivering a NPV8 of 1,16 Bill US$ after tax...that´s about 1.5 bill A$ at todays exchange rate for this project alone, against a market cap at the closing price of 47ct of 71 Mill A$. If I assume a 200 mill A$ equity portion for the financing, that still equals a potential share price of 5.5x todays price in 5 years time. And that leaves Jan Karskithe large thermal coal project completely aside, having a NPV of more than 1 bill$ itself! can see why investors seem to jump over each other to get into this neglected story! I declare my substantial interest in the stock and might even be a seller over the next few days, depending on price, for risk management reasons - but this stock should be taken over at some stage, and certainly not under 1$/share! Also interesting, that the share price of neighbouring Bogdanka, the thermal coal producer, has been pretty strong this year. PDZ and the China Land are currently working on the Bankable Feasibility study for Jan Karski, with a target for completion by mid-year. PDZ have had 13 Mill A$ in cash as at 31.12 and planned to spend 2.3 mill in the current Quarter.

Genex - also came out with an update of their small, 50 Mw starter solar project. Back testing over the last few years has given them a potential return of up to 15.2 Mill A$ p.a. in EBITDA - with a rising bias, as electricity prices are going up. If I extrapolate this to the planned, larger project in solar - an additional 270 MW - total EBITDA could be close to 90 Mill A$ p.a. - against potential debt of a total of 600 mill A$, once all would have been built. Using 5% interest rate, and paying back the debt over 10 years, would leave free cash flow of nothing - but 90 Mill A$ p.a. thereafter for 15 years ( 25 years is  the usual maturity of a solar plant ). And all that without any government subsidies/financing/grant. I dare to say, that teh stock is very cheap based on solar alone...and the hydro project is the real jewel in their crown! I have sold a few today - but again, only for risk-management reasons!

Strike - published a new presentation today, concentrating on teh desperate energy/gas situation in Australia. It has never been looking hotter for STX...but the missing link is still the most important ingedient: demonstrating commercial flows from their massive resource!!! Bloomberg today is reporting, that industrial users in Australia find it impossible, to source contracts below 9A$ for gas - that´s much higehr than originally planned for by Strike. The only question I am asking myself here is, whether the company has to test a new approach in terms of techniques used, and also in terms of  new management!? I am still holding a large position here as well.

Oklo Resources - stock shot up by another 25% to 25ct today, valuing them at 60 Mill A$. A pretty good market cap for a project, which only has seen auger drilling so far! But the company has defiend 2 km of strike length so far, which certainly is exciting - and exciting is also the neighbourhood of B2Gold and Randgold. Chalice have bought a substantial shareholding in OKU, and talk in Perth is, that Resolute have also bought a shareholding. I have to say, that at 60 mill$, the company has to prove a bit! When I compare this to West African, with a bankable feasibility study completed to produce 150.000 oz pa, and a market cap of 94 mill , I know which one I´d buy!

Have a nice evening!