Market Update

General - Genex - Prairie - Oceana - Liontown

Good afternoon

I forgot to release yesterday´s report…here it is - please find today´s report at the end!

A strong US$ leads to some selling in metals today…all a bit weaker, incl gold, even though LME-stocks continue to be on the retreat. But no major moves are expected until we have more clarity on Chinese/Us-negotians. Also, the Government shut-down in the US is still looming n the horizon, with no solution in sight right now.

Interesting experiment in Spain: They have increased minimum wages by a staggering 22%. The more important sectors of the economy are tourism, automotive and farming. I guess tourism will not be so much impacted, automotive probably not, either ( because I think very few would have received only the minimum wage ), but I guess farming might be hurt a bit.

A few announcements today relating to yet another one-in a hundred years event, the flooding in Northern Queensland. Australian Agricultural could be one of the mosthit companies - they do not know exact extent of the damage, but it seems certain, that a few thousand cattle have been killed. Incitec Pivot, fertilizer producer, has reported damage and production problems. Resolute reports no material impact on their operation in ravenswood, while Evolution has had temporary outages in Mt Carlton and some more minor issues in Ernest Henry ( “controlled” operations ). I assume, that the sun did not shine all that much on GNX´s solar power planT Weather is back to normal now everywhere…There has been quite a bit of damage to rail lines, roads and ports - but I guess that it will be covered by insurance.

None of the gold miners expect any change in guidance. I am sure, that coal production will have been impacted a little more …mainly because of the closure of the Abbot Point harbour….but again, nothinmg dramatic has been announced as yet from anyone.

Genex - some 8.5 Mill Management-Options expired at 25ct, and were not taken up . Instead, the company placed these 8.5 mill shares at 25ct, to raise just over 2 Mill$. Management did not have the funds to take up their options ( they own nearly 20% of the company already ). I understand, that the majority of the sahres have been placed with very few institutions. The company does not need the money now - but once the Term Sheet with Energy of Australia has become a binding transaction, the company will probably need a very limited of equity to close the entire financing. The problem with the stock is, that the market does not have enough detail on the transaction to enable a valuation. I am sure, that this will change, once the Term Sheet has become a deal! Some more patience required - but I am sure it´s worth it!

Have a nice evening


Good afternoon, again!

Double-whammy! Shutdown looks like beeing avoided, and also positive noises about the treade war today! Once iin a while, double whammies come out positively!

oil is trying a new breakout, currently at 63.12 US$, metals are weaker again - equities are having another strong day!

Oceana - announecd some very strong drilling results from their WKP prospect near Waihi in NZ.The company calls it a new, possible major discovery. 10m with 43g; 9m with 21g; 10m with 19g - certainly remarkable. Company will spend another 8-10 mill$ on exploration here this year.

Liontown - excellent drilling results from their Kathleen Valley property: Multiple intersections of between 1.5- and 2.4% LiO2 from large diameter drilling for metallurgical test work. The company is suspended today for an expected placement/rights issue. Good news to bring it out of the way! And certainly nobody can accuse them of coming to Zurich cum placement! We will get all the info soon - it sounds like an excellent project - the only question: Do we need more lithium? I guess LTR will try to shed some light on this as well. Their timing might be good - for the moment, there is certainly enough of ita round, but this could change quite a bit over the enxt few years. The current, reasonably negative sentiment does not help financing of new projects, and the current teething problems of most, new operations does not help either. I have ehard the view, that many of the early projects have been badly planned, and are paying the bill of the early-mover! In any case - this should be a good project, and I am a small shareholder.

Prairie Mining - takes Polish government to courtor compensation - 2.6 bill A$ in compensation wanted! That´s about the NPV of both projects. The gloves are off - I think that´s about time after being treated badly and most probably cheated by the government! I guess the doors might be opining up for a sensible deal here. 4.5 mill shares traded in Poland today - I can see no further news - at the equivalent of 39ct Australian. Coking coal prices are still looking very strong at around 200 US$/t, even though Macquarie sees downside here. The NPV´s of both projects had been calculated at substantially lower prices. One note of caution: Polish newspaper reported this, but not confirmed by the company as yet. This got to be a good punt - if anything, I think JSW might see the need to bring this story to a ( positive ) end - and IF that is what´s happening, it won´t happen at 40ct!

Have a nice evening


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