Market Update

General - Strike - Berkeley - Perseus - Peak

Good afternoon

The US$ is reversing more than yesterday´s losses agsinst Euro - and subsequently, European equities are recovering. Economic optimism in Europe fell slightly in Germany, but is at a 11-year high in Europe overall! German infaltion increased to 1.8%, very close to the 2% wanted by the ECB.

Metals can hold the ground today - not bad, given the strong US$!

US secoond Quarter growth got revised up to 3%.

Berkeley - The Oman state fund invests 65 Mill US$ at 50p into the company, giving them enough to finance the mine! They are getting about 28% of the company, and have options at an average of 85p to add another 8%. Given the terrible state of the uranium market, this is an excellent outcome - very limited dilution, and at a 10% premium to the share price. 6 month ago, I would have hoped for better, but at about 20 US$ spot for uranium, this is very positive. The contract price for uranium - and I would hope, that they will get that - is currently 35-40 US$ lb. The stock is cheap - but who wants uranium? We have heard the uranium story for so long...the market looks good, but has been for some time without doing anything for the spot price!

This is also good news for Anglo Pacific, the London-based royalty company - they will get 1% of gross revenue over life time, and own 20 mill shares in BKY.

Strike Energy - sometimes, waiting pays...that is currently the case in Finders, which is steadily rising, and definitely in Strike, which today announced the "technical success" of their massive gas resource in South Australia.Gas/water production and the gas content of the 35m thick coal seam have been established, and the company is VERY happy with it. This is a major step forward to prove the commerciality of the resource! But this is not enough as yet to get somebody to pay big amounts like 150 mill$ or so for a major stake of the project - and I think this will be teh way forward. As indicated before, the company is now confident enough to spend the approx 8 mill$ for a new well, Jaws, which will be drilled in March 2018 or so, using all the information gathered so far, and ideally suited to commercially produce from the field. This is the big price - and will be the next major step to realise the substantial value in Strike. All very technical unfortunately - but I think we will see more performance from Strike in the short term. 

There is a very high chance of Strike now getting South Australia government grants to help spending for Jaws - but every $ has to be matched by equity. So I would not rule some kind of transaction later this year - placement, convertible bond or whatever will look suitable at the time.

The fun has just started! Stock has moved 25% today from bombed out levels - we are only back to where we were 5 month ago, and fundamentals are much better now. Will be interesting to see some research tomorrow!

Perseus - a terrible reult on the surface, but many one-offs, write-offs etc in there. What is important for me is, that the company produced 18 mill A$ in operating cash flow in the half year to June, based on 100.000 oz of production ( vs 76.000 in the first half ). The production rate will further improve in the current year, The company is guidning for 250-285.000 oz, which is implying 225-255.000 oz from Edikan - the balance from Sissingue, which is on track to produce from March 2018, and will not only give them a second mine in a second country, but will also lower their average costs . With gold trading above 1300 US$, this company will produce a nice amount of cash - I think about 65 Mill A$ in 2018 financial year.

The bankable feasibility stduy for the next, major leg in growth for PRU, Yaoure, is making good progress and is on target for Dec 2017 finiah. So far, all parameters are in line or are better than waht the company expetced at the time of the takeover. As I said yesterday - PRU are wonderfully sensitive to the gold price - 100 US$ would increase cash flow by 50%.

Peak Resources - the stock is suspended today, and the announcement of the capitalraising is imminent. I dearly hope, that management can tell us something about the situation in Tanzania - that will make the difference between a very good punt at 4ct, or an ultra-cheap investment. This is a very good Rare Earth project, but in one of the worst countries in the moment. For many years, tanzania has been a very reasonable place for miners - this has changed recently. The government will not see a single $ of foreign investment, if tehy don´t become more sensible. Past experience shows, that tehy will learn this relatively quickly!

Have a nice evening