Market Update

Newcrest - Crusader - Finders - Pilbara - Genex

Good afternoon

Gold is testing the 200-day moving average to the downside today...after having failed to move through restistance at 1300 10 days or so ago. Pity - it felt so good back then! Yellens comments did not help last week, and the enxt move by the EZB will be to tighten somewaht as well. The two large gold stock ETFs in the States saw a combined 400 mill US$ in outflow in the week to Thursday, the 15th of June.

Soth Africa is intensifying the enriching-process of a very few by increasing the level of black ownership in mining projects by 4% to 30%. The market is asking, when they will change that to 35%?????? The country seems to have put the worst electricity problems behind itself - most probably for the short term. Now people are seeing water usage being rationised...

Other metals are pretty strong today, despite some disappointing US housing market numbers on Friday. From China, though, we saw some solid numbers late last week.

There is nothing stopping European equity markets this week...very strong again today, probably on the back of a decisive win by Macron´s new movement on Sunday in parliamentary elections, while Theresa May does everything she can to undermine her negotiating position in BREXIT talks, starting today. 

Newcrest - took another placement in Solgold today - 40 Mill US$ at 41ct, bringing their position to 15% of the company. They must really like Ecuador, and Cascabel - which I can understand. Not sure about the market cap, though - the company is capped at more than  600 mill Sterling now.

Crusader - Stratex has clearde the due diligence now, and the two companies are now going the formal way of a friendly merger. I am sure, that it will go through - the price is right, and the emrged entity will have some cash to play with. For Crusader shareholders, this is like a placement at a premium - even though that premium is coming down. At todays share price of Stratex, the valuation of Crusader stock is 14.5ct/share.

Finders - the company update shareholders last week on production. In April, the mine produced 2174t of copper at 1,03 US$/lb cash costs - in May, 2401t were a new recoed for the mine, at 0,98 US$/lb cash costs. Fair to say, that the mine is doing well. Porduction on a monthly basis exceeded nameplate for the first time, at costs 7% belwo feasibility study. At the time of reporting, June was shaping up well also. Stock is cheap - but there is just no interest in smaller resources stocks in the moment!

Pilbara Mines - is one of the more advanced and upcoming producers of Lithium from a hard rock mine in Australia. The company has now raised 100 Mill US$ in bonds, and last week completed a 80 Mill$ placement of equity. The stocks in the sector are still not running again - so there is probably no hurry. Technical issues have plagued qute a few companies - this is the main reason, why Macquarie have upgraded their forecast prices for Lithium for the next few years. I am still watching, but am not really involved in this segment. Stocks like MIN, ORE, GXY or PLS, to name a few of the more advanced delopers/producers, are on my watch list. I thought it was interesting to see in PLS, that the placement was done at a small discount only, and was slightly increased in size due to good demand. 

Genex - the company had a few positive announcements recently: Firstly, construction of their first, 50 MW solar plant is going to plan and will start producing electricty by year end. More importantly, the Government will build and finance the power line, which is necessary to transport the electricity from Solar Stage II ( 270 MW ) and the all-important pump-hydro project ( 250 MW ). THis is major good news, as GNX would have had to do this themselves, or find somebody to do it. It will save them 7-8-9 Mill A$ p.a. in costs as well, as the government will charge them less to use it, than a private operator would. The only - and not unimportant question is, how long the government will need to build this thing. Normally, I would say a long time - but the political pressure to stabilize the power system in Australia is massive, and it´s in everybodies interest to have the line finished by 2019. That´s when Solar Stage II could be up and running.

Also last week, the long awaited Finkel-comission findings of an independent review  and proposals for Australia´s energy systems were announced. the comission explicitly pointed out the need for energy storage, and specificially, for pump-hydro projects to secure the energy system. A few days later, Josh Frydenberg, the Minister for Resources and Energy, pointed out the same, specificially pointing to the Kidston project of Genex.  Don´t ask me, why the stock is not day, it will!!!



Have a nice evening