Market Update

General - Perseus - Lucapa - Strike - Prairie Mining

Good afternoon

terrible racist attack in NZ - looks like three Australians are the terrorists!

Consumer sentiment in the uS quite strong - New York State manufacturing numbers only very slightly expansionary.

Another large inflow of copper into LME stocks - they are still very low, but also at a 6-month high. Stocks of other metals fell - especially nickel with quite a large fall of 1360t today and now at a 6-year low. Surprisingly, copper slightly stronger today, as is nickel - zinc/lead down a little.

Strike Energy - Petra Capital, a small but respected broker, issued the fisrt research report on STX in a long time…available on request. They have a unriekd NPV10-valuation for the Western Australian asset alone of 450 mill A$, while they only value the original Cooper Basin project at 53 Mill A$….the latter might be very conservative…But in any case, a total valuation of 350 Mill risked and 500 mill unrisked is certainly very welcome by long suffering shareholders! I also understand, that the company has made strong progress in making sure, that tehy will get the approx 4 mill$ R&D subsidy from the government, which would represent a very important step, as otherwise, they might run into problems to pay for the 11 mill$ West Erregulla well!They have a few other options - but none of them certain. The pumping of Jaws 1 has fully restarted - they are now needing about 6 weeks to make up for the lost time, and proper flow results are expected for May.

Lucapa - discovered a large, 85ct stone at their new Mothae mine in Lesotho -but this one is not of gem-quality. Gem Diamonds sold a pink stone the other day for a staggering 660.000US$/ct - their mine is just 5 km away. Broker Euroz continues to value LOM at 61ct, with guidance for Mothae production expected shortly, and Lulo in Angola ramping up production this year. Euroz points out, that there is a two-tiered diamond market - strong demand for large, quality stones, and subdued prices for smaller stones ( both mines of LOM are producing at the quality-end of the market ). But the Argyle mine in Australia, home to most of the world´s pink stones ( 90% market share ) and 10% of world diamond production of smaller stones, will be closing down in 12-18 month, after being in production for nearly 35 years.

Perseus - the share price seems to establish itself above the all-important exercise prise of options at 44ct ( not 45, as I said the other day ) by mid-April . The proceeds of more than 50 Mill A$ woudl be extremely important for getting the Yaoure-financing done ( even though the company claims, that tehy might be able to do it without - which I doubt ). So - strong turnover at around 45ct is a key-positive for the company, with a market cap of around 500 mill A$ and potential production of 500.000 oz p.a incl Yaoure., they would be very cheap vs the market.

Prairie Mining - JSW said in a press conference today, that they will sign a term sheet before the end of April to take over control of Prairie. Stock is up by 12% on 3 mill shares traded in Poland - equivalent of 37.5ct in A$, and up to 39ct in London. After all the wait, I would be surprised, if JSW would have to pay less than 50ct/share for control? That would still be a far cry from what PDZ should be worth….but I guess both companies have to agree to a face-saving deal here! Remember, that PDZ bought the assets for less than zero!

Have a nice weekend


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