Market Update

General - Beadell- Kingsgate - Australian Agriculture

Good afternoon

PPI in the States is rising by more than expected - now 2,5% YoY. Jobs-numbers pretty good....

Nero is throwing out his top police man - two days efore he is meant to be questioned, one day before the Russian Foreign MInister arrived, and a few days after asking for increased resources to check on Russian relaionships with the election team. Can it get more obvious???

German tax receipts over the enxt 3 years  expected to be 55 bill Euro´s higher.....politicians calling for tax cuts of 15 bill Euro p.a., further supporting the German consumer. We also have an election year - the pressure on germany to do something for the demand side increases, given record export numbers.

Base metal investors have had enough - all pretty strong today, for a change, contrary to iron ore and steel.

oil prices moving higher, as inventories are expected to continue falling this year, especially, if OPEC continues with restrictions on production for longer than June.

Finally, a bit of very limited profit-taking for European equities today.

Kingsgate - lost the MD last week chairman becoming Executive Chairman, until a new man has been found. Does nothing to increase investor-confidence!!!

Australian Agriculture AAC - Australia´s largest cattle producer is finally benefitting from the revised strategy, to slaughter themselves, and market quality beef directly. For the first time in years, the company is making serious money, and the new facilities are functioning as they should. AAC are seeing strongly rising Waguy-beef production, with higher margins. AAC shoudl continue to profit from their stretgy, and increasing beef demand from China. Goold longterm story - buy into weakness.

Beadell - have today announced to go ahead, as expected, to odify/enlarge their plant to be able to treat sulphide ore, not only oxidised ore, as so far. The feasibility study for the project shows a NPV5 of 127 Mill US$ - good number, as it´s additional to the existing production. BUT tehy have used a Real/US$ exchange rate 7% more favourable than today, and a 1250 US$ gold price. The capital cost of 27 Mill US$ I think will have to come 100% from debt, as the company has little free net cash.This has been expected for some time, is no surprise, and does not change my cautious view, even though it should make production of Tucano more stable and reliable, as well as increase mine life.

Have a nice evening