Market Update

Finders - Strike - Peak - Panoramic - Genex

Good afternoon

Yellen has spoken...and has confirmed, that there is a realistic chance to "normalize" it´s behaviour gradually. That means most probably one more hike this year, and 3 hikes next year. Eypectation is still, that interest rates will not return to "normal" levels any time soon...

But the above has been more hawkish than we have seen before, and hence, the immediate reaction was to send the US$ up, and metals including gold down. Remains to be seen, how this pans out over the next few days. I think the US$ might not return to old form, and we might quickly see renewed strength of the Euro.

Gold has broken the support level of 1300 quite significantly - I fear we might now see a re-test of the 1245-1250 US$-level. 

The A$ reacted quite strongly to the weakness in commodities, especially iron ore, and is under pressure today For many companies, this should be a positive.

Finders - came out with a very positive, half-yearly report yesterday. According to those numbers,a nd at todays copper price, the company can produce 80 mill A$ in cash every year...and I believe, that by the middle of next year, we might see the company start paying dividends in a substantial way. AISC of 1.36 US$ have been published for the first time. EBITDA of 57 Mill A$ for the half year is also very impressive! Euroz, the stockbroker, have a price target of 40ct for the company, and have been the major trader in the stock today. They believe, that every year additional to the current, 6 year remaining mine life, would add 5ct to their valuation. 

Strike - that has been a very positive placement! I hate share holder pruchase plans, as they always lead to selling in the market from retail guys. This placement, without any entitlement to existing shareholders, raised 9 mill A$ at the price of 7ct. On the surface, disappointing for existing shareholders - but the net-result - that is a share price of 8.9ct today! - is the ebst thing for everybody. With a SPP, this thing would be trading at 7.5ct today! The placement has been very well received, and was heavily oversubscribed, with only 4 institutional investors taking up the bulk of the placement. I have had very positive feedback from the roadshow - investors have been impressed by the new MD and his technical top-man, both ex-Shell people, and the chairman. 

We should imminently see an announcement of a fixed agreement with Orica re their off-take agreement, debt-refinancing etc. If not, something is wrong! And within the next 6 weeks, the South Australian Government will announce the grant ( = present ) for various projects, which can improve gas availability in that state. STX are hoping for a substantial grant - that would be the next major news, before JAWS 1 will be drilled in the first Quarter, and hopefully prove commerciality of the project. Still - STX are not without risks. The gas is there - and lots of it - but we all hope, that a pathway to producing it will be defined by Jaws, as expected. If that happens, the sky will be the limit!

Peak Energy - did not manage to speak to them today - but surprisingly, the CEO resigned....Reading the announcement, and noting, that his departure is not abrupt + Darren moving to the position of non-executive drector, I think this has been a very friendly transition. The current COO, an experienced operator, but not in a MD -role, will be the transitional CEO of Peak. All a bit unfortunate, still, given the state of the company - but I will report some background tomorrow.

Genex - lots of positive nise from the government, independant scientist, and the company about government-initiatives and the future of hydro-pump in Australia. The Australian Energy Minister mentioning their project again, and somewhere at a conference, Executive Director Simon Kidston has commented, that financing would make good progress. I expect this to happen sometime this calendar year, and it would be a massive breakthrough for this small company, developing a 250 MW pumped hydro project in Australia. There is no other project coming on in teh nearer future, to my knowledge. The stock has been quiet lately - but I remain very bullish on this stock.

Panoramic - Australia´s pre-eminent resources fund, Colonial, has increased it´s shareholding in PAN by 7 Mill shares to 5.5% now. Nice vote of confidence in one of my favourite stocks! Unfortunately, nickel is receiving a bit of a hammering today, being down nearly 4% currently to just under 11.000 US$/t. Nevertheless - I am not at all woried about nickel prices anymore,as battery-demand for EV´s will strengthen overall nickel demand substantially over the next few years. If nothing, else we need some patience!

Have a nice evening! Metals are still weaker, but it looks like they want to close at much improved levels from the lows