Market Update

General - Cardinal/Gold Fields - St Barbara/PEX - Paringa

Good afternoon

coking coal prices ( from 150 to 176 US$/t ) and thermal coal prices ( from 80 to 88 $/t ) have immediately responded to the infrastructur problems caused by Cyclone Debbie in Queensland. Good for some, bad for others! But it shows, that there is not that much supply overhang, if any at all!

Gold is toying again with strong chart resistance...feeling good , despite a US$, which is tredning higher again. Base metals are slightlöy stronger as well, as I am writing this late afternoon.

The recent tendency, that larger gold producers are rather buying into exploration stories, than just take over producers, is intensifying:

Cardinal Resources - Gold Fields Ltd  have bought a fully diluted 10.35% stake in the company, via shares and options. Cardinal has a large resource of 4 mill oz, and potential to 6 mill ounces, at relatively low grade, and not that straightforward metallurgy, which looks managable...but with a 1.2g-ore body, might not be the easiest project. Very recent drilling results have been much better grade - perhaps GFI have done their homework and came to the conclusion, that overall grades can be improved.

Peel Mining - St Barabra have taken a 3 mill$ placement in the company, which I do not know that well. A Western Australian , polymetallic project seems to have the most potential.

Paringa Resources - very interesting announcement from Alliance Resource Operating Partners, which is the largest coal operator in PNL´s part of the US - they are placing 500 mill US$ worth of bonds...will be interesting as well, to see the terms on the 7th of April. This will increase their liquidity to 200 Mill US$ + very substantial credit lines. The EV of PNL is about 100 mill US$ today....Analysts have speculated in the past, that Alliance might want to further consolidate the sector, and remove a potential competitor....for say 145 Mill US$ they can have my shares! Let´s wait and see - this is all pure guesswork, but as you know, the NPV of PNL´s both projects is substantially higher than this.

Have a nice evening


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