Market Update

BONDS - Breaker - Resolute - St Barbara - Prairie - Berkeley

Good afternoon

the really big story is bonds today! Bonds received a hammering today, following a bad auction of French bonds, and in an enviroment, which looked highly fragile for bonds anyway. German bunds fell through support, and yields in the moment are at the highest since Jan 2016! As teh day progresses, bonds continue to fall further....Not feeeling good!! That is an important change, and it´s reflecting on equities today. Base metals are holding - in times of rising rates, commodities as well as commodity equities tend to outperform.

Labor market numbers in the States without any surprises - services industry is doing well. Factor orders in Germany were o.k. - but not more than that . IP numbers to follow tomorrow.

Breaker - announced some more infill drilling results today - 5-20m intersections with 1-2-3-4g /t gold. Nothing to set the world on fire, but certainly adding more ounces, again. Perhaps more important, they intersected strong sulphides over good width at about 350m depth - assays are pending. The story continues to go into the right direction!

St Barbara - another good Quarter from Gwalia, and an excellent Quarter from Simberi. The company has exceeded the top range of guidance for both mines in 2016/17. Yet Simberi does have very short mine life, and at current prices, I doubt wheather SBM will go the long way and develope the sulphides - tehy would need a completely new plant for that. The cash position of SBM is now 161 Mill A$ - no debt! That´s a very long way from being a very highly leveraged mining compnay as recently as 3 years ago! Gold mining can be VERY profitable, if you have a good ore body, and if it´s well managed! More detailed news at the end of this month with the full Quarterly Report.

Resolute -bought a large exploration license in Egypt. Well - not too sure what I should thiink about that....Centamin, which is running a great mine in Egypt and has been dooing so for many years, did not bid, as the government terms are so unattractive for the mining companies. Resolute is acknowledging this, and will adress the terms with the government in the future. Money to be spent will be relatively limited - but I am not sure, wheather its a wise strategy to find something first, and discuss terms later. Governments tend to get greadyer over time - not less gready!! Hopefully, RSG will not spend 1us of millions here.... I am not that convinced of this purchase. It would have been smarter to buy West African Resources.....

Prairie Mining - the largest shareholder put a little more money in to keep the relative shareholding unchanged, following the recent placement to general shareholders. PDZ now have about 20 Miull A$ cash in the bank - that should be enough to drive forward both mine developments - certainly for the next 12 month and probably longer.

Berkeley - are getting closer to being in full development mode. Optimisations ahve cut capex again, even though by only about 1 mill$. But these things also derisk the project, hence it´s good news. We are waiting for the final straw - that is somebody getting the offtake and taking a good slice of the asset/ the company, to fully finance the mine. Given terrible uranium prices, this might not be that easy....


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