Market Update

General - Breaker - Lucapa - St Barbara - Gleneagle ( well, a bit of a joke ) - Marindi

Good afternoon

It looks like Escondida will start work again tomorrow. Workers will go back to the old contract, buit without receiving a bonus. the same negotiation as we have just - unsuccesfully - finished, will start again on 1.6.2018 - probably not a good outcome for BHP and RIO, as the copper market will have tightened up by then, making the companies more vulnerable. The mine will have lost 160.000t of production by now, and probably some more to come, as the ramp-up to full production will take a few weeks, I guess. 

Today is a clear risk-off day in the markets. Equities weak, metals weak, US$ weak , bonds stronger on the back of Trump´s failure to get his own party to vote through the healthcare vote on Friday. Strong durable goods orders in the States on Friday, and a stronger than expected IFO-institute number for business confidence in Germany today( indicating strong manufacturinga s well as services sectors ), fail to make an impact. Merkel´s party, the Christian Democrats, whin a provincial election by a strong margin over Social Democrats, while Germany´s new right-wing party AFD gets only 6%.

A$ gold price hits 1650 - that´s the highest since Nov 20 of last year

Many Queensland-based mining operations have been closed down today in anticipation of Cyclone Debby hitting the coast tomorrow close to Ayr, which is about 80 km North of Evolution´s Mt Carlton Mone ( which is about 60-70 km from the coast ). Debby is the worst cyclone since 2011, and is expected to hit the coast wind wind of up to 250 km/h. The bad news for mining might not be so much the wind, rather the accompanying, heavy rains. Some thermal coal operations, mainly from Glencore, are likely to be impacted.

Gleneagle Gold - a few of you might have been caught with this stock, which represented one of my worst recommendations ever, many years ago. You will be glad to hear, that this failed gold miner has turned into a cannabis stock, and has more than trippled recently - new name is Zelda Therapeutics. Now the bad news...we have had multiple share consolidations, and if you held 1.000.000 shares originally, you are now only holding only 3636 shares....In other words: your holding is still just about worthless...

Marindi - bad news here...the company followed up on it´s great drill hole for lithium...and the excellent results could not be confirmed. There does not seem to be continuity of the resource. They have to start from scratch now - or be successfull in their court case against Kidman. I hate to be dependant on a court case - that´s even worse than to be investing on politics!

St Barbara - have made the decision to invest 100 mill A$, mainly in additional ventilation, to drive their Gwalia Mine down to 2.000m, and potentially deeper. An additional 200m depth would require another an additional 30-35 Mill A$. This orebody is very rich, so the company can and should invest here...Still - amazing - when I started working back in 1985, Sons Of Gwalia was the first, halfway sizeable mine to go into production, on the forefront of the 1985/1986 gold mining boom in Australia. Back then, it had a 5 year mine life - today, 32 years later, I think they have a mine life of 7 years!

Lucapa Diamonds - announced an infererd resource for their alluvial diamond operations In Angola. The market was a little disappointed with the grade - but to be honest, I am surprised, that it´s possible at all to put a resource to an alluvial operation. In my experience, this is more an exercise of trial-and-error - and this is the erason, why the stock is tarding on such a low multiple. All good, in my opinion - the stock will only get re-rated, if they get a sniff for the kimberlite, which hosts all these wonderful stones.

Breaker Resources - the company is continuing to close the gap between good drilling results, and a resource....more good drilling results from 20x40m infill drilling, and some extensional as well. A lot of mineable intersections at good width between 1-2 g, but also some very nice stuff up to 8g. BRB have not mentioned as yet, when tehy will have their fisr resource ready to go - but my feeling is anyway, that this might be premature, as the resource has not been closed off as yet - not at depth, and not at strike - so potential is still here for a large resource. 2.2 km are a very nice strike length anyway - but it could still double, as the anomaly is 6km long. Ample funds left to keep on drilling - so no need as yet to have something definite !

Have a nice evening