Market Update

General - Goldfields/Anglo??- Sheffield - Perseus - West African - Greatland/Antipa etc

Good afternoon

Davos started and is dominating the news…pretty good Interview with Dieter Hildebrandt, the former Swiss Central Banker and now BlackRock-man, on Bloomberg.

The FT headline today is about China Growth Cut To 3-decade Low - well, I think this is trying to find some readers - I would be very happy with a 6-number this year, and the 6,4% from last Quarter were bang in line withe xpectations. Also, many headlines yesterday about the IMF cutting teh growth forecast for the world, once again, to a 3-year low…I can only say: IF we should really grow by 3.5% this year, I would be overwhelmed! Markets are currently expecting a lot less than that, I am sure - whatever economists are putting out in numbers these days. As always - they are behind the curve!

Metals are pretty flat today - nickel down a little on another increase in LME stocks today, of 2.200t to 202.668 t. No major move - but certainly a change to recent, strong de-stocking.

Rumours, that Goldfields and Anglo are going to merge…mergermania in the gold sector! These guys are all mad….in my opinion.

Sheffield Resources - signed a long tehrm deal with Woodside for the delivery of LNG for the planned Thunderbird Mine. This will deliver a cut to operating costs from the earlier feasibility study - but this is not unexpected at all, as the NAIF-fundaing arrangement was partially to be used for LNG-facilities. LNG is cleaner, more economic, and there is easily enough of it around - and major producers are more than happy to sign long term agreements. So - positive - but not unexpected at all!

West African Resources - Quarterly out today. Development of Sanbrado is in full swing - the Box Cut for the underground mine has started in earnest, lot´s of ground work for the open pit, tailings dam, mining camp etc happening with company-personell. As you know - the project is fully financed! All we wait for is really the updated feasibility study, which will be delivered late in march and will most probably show increased resources/reserves, increased plant, increased mine life, and finally, an increased NPV of this excellent project. Infill drilling yielded strong results like 21m with 15g and 14.5m with 20g….The company hinted again at it´s expectation of a substantial increase to the underground mine life from 4.5 years to possibly 7 years or so - this would add substantial value, especially, if increased plant size would drag some of this increased resource into earlier production. So not too much newsflow probably within the next 2 month except for some exploration news ( 4 drilling rigs working ) , until the important feasibiliyt update will be announced. For now, I am hoping, that the security situation in Burkina will improve again!

Perseus - hmmm…the analysts don´t seem to be reasonably happy, and I am not unhappy either - but still, I think the Quarterly was a bit disappointing on the cash flow side. The company has reduced net debt by a paltry 1 mill$ in the last Quarter - that´s much worse than the previous Quarter, and not enough to fully finance Yaoure from debt and cash flow! Sissingue was in so far very positive, as AISC was a positive 776 US$/oz despite lower than expected production ( bad wheather ). But overall, 68.000 oz at 1052 US$ AISC dont´t leave a lot of free cash generation after headoffice costs, financing costs etc. The company is guiding for around 140.000 oz at around 900 US$ AISC for the current half - if they get there, they will certainly generate very meaningful, free cash , especially with gold around 1300 US$/oz. But it remains a fact, that the last Quarter has not been as good as expected, and I would even say not as good as needed to get Yaoure off the ground!

As you might remember, there had been a flurry of activity surrounding the rumoured, massive exploration success of RIO on their Western Australian project North-West of Telfer. Most of the stocks have quietened down and came back - except for one, Greatland Gold in London is going from strength to strength. The stock is up by another 30% this year, and is now capped at 140 mill A$. I am mainly following Antipa and Carawine in Australia - they are starting to see some life again as well…could be a good time to own a few here! At some stage, RIO will have to announce something - perhaps that day is coming close?

Have a nice evening


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