Market Update

General - Independence - St Barbara

Good afternoon

The Americans imposing sanctions against Russia, with only one aim: To support the American energy industry - well, that´s the interpretation many are believing in. What a joke! As one of the reasons for the sanctions, they are citing Russians influencing the US-election. According to Trump, they did not interfere.....

Australian CPI was 0,2% only QoQ, vs expected 0,4%. The A$ initially sold off, but recovered most of the ground now.

Base metals except for copper saw some profit-taking this morning, but are trading almopst square now except for copper, which is up by nearly 2% again. We are approaching 6500 US$/t, which I think could be a big hurdle. As I am finishing this, all the bease metals except for zinc are in the green! Very strong indication for me, that they could not only hold recent, strong gains, but even managed to put on a few cents!

Independence Group - a pretty bad Quarterly out today. Resource downgrade by about 15% (!) for the Nova nickel project, production guidance for it cut as well, with higher operating costs. Tropicana Gold more or less as expected, but not fantastic, either. It´s a good asset, but not oustanding, and while Nova had been seen as an outstanding asset, it has been disppointing for a few Quarters now. I have never really liked the stock - I still don´t like it. With all the buy-recommendations surrounding the stock, it´s not one which I need to own.

St Barbara - Quarterly out...most had been known before. Another excellent Quarter from this cash machine! But cash generation will come down now for a while, as Gwalia should revert to the average reserve grade slowly, but surely. Also, more capex to be done this year, and we still don´t know, what is going to happen with their Solomon Island-asset in the longer term. Good company, well managed, and with net cash of 161 mill A$, which should grown by about 110-120 mill in the current financial year to June 2018. They should either pay a big div - or buy something sensible. The latter might be difficult to do! 

Have a nice evening