Market Update

General - Newcrest - Strike - Pilbara

German business confidence is faltering…negative GDP- growth in 2.Quarter?? Mr.Draghi is watching…and bonds are stronger again! This was the case until US-figures came out: Durable Goods Orders strong, labor market strong - so bonds are ending the European day more or less flat.

Facebook continues to hammer out fantastic numbers, with Wahtsapp advertising and Libra potentially giving them further growth.

Nothing was stopping equities - until Draghi spoke, painting the economy in very dark coloures, but took no action - triggering a lot of profit-taking.

Metals are mixed…copper is stronger, while nickel is very weak today…a large, Chinese stainless steel producer has cut prices because of weaker demand. Gold is holding up well - fighting with 2050 A$/oz and has a volatile session, following bond-moves.

Pilbara - released their full Quarterly today…not good. Costs are high at 528 US$/t for C1-costs - i.e. they should be loosing money at cuurent prices for lithium spodumene, their product ( current prices seem to be around 600 US$ ). Recovery of the plant is only 55% and hence, they will use the current weak demand for spodumene to modify the plant in the current Quarter, to try to improve recoveries. They are targeting better recoveries etc to result in costs of 320-350 US$/t by the end of next year. I believe it, when I see it - they have had their fair share of problems so far…Given market conditions, the Stage 2-expansion of Pilgangoora will be on ice for a while - in the moment, they accnot seven sell all product from Stage 1. The expected sell-down of part of their mine to a corporate makes good progress, as the company states. This is the wildcard: It might well be possible, that a corporate is willing to pay a big premium to secure long term access to a large lithium mine/ reserve…otherwise, I would stay away - don´t like the current cash-burn!

Newcrest - good Quarterly out today, especially from Cadia in Australia…they surprised on ounces as well as on costs…But you know my concerns here: Cadia has had a few issues over the last 12-18 month - tailings dam problems as well as seismic events, and this mine presents a large part of their profits/ NAV. The stock is also more expensive than Evolution - no reason for most funds to pay up for Newcrest because of the size and marketability - EVN are large enough for most players. Management is paramount - and that´s better in EVN!

Fortescue - excellent Quarterly with record production very low costs below 13 US$/t …7.70 US$/t in Depreciation and Amortisation. Total costs sipped to China are about 30 US$ - average price received over the Quarter was 87 US$. This is a oney printing machine…as one can see in huge dividends being paid. Another pay-out most probably to come in August…They are not staning still as well: About 29 mill US$ exploration in the Quarter, expenditure into new mines ( partially replacing one of their mines in a few years time ), improving revenue mix from blending ore to achieve higher grades. They continue to manage their business very well! But the iron ore price is certainly the largest variable…and in the moment, it´s coming under pressure ( but still higher than last Quarter´s average ). Vale is slowly but suely ramping up production again - and the state of the steel market is a bit uncertain as well. While the stock has retraced from recnt highs on profit-taking ( shareholders also received 102ct/div since August of last year ! ), it might be a bit premature to buy Fortescue. The guidance is for a slight rise in production in the current year, at C1-costs of 13.50 US$ - not much change from last year and very steady

Strike - our little Strike is continuing to run with record turnover…The Chairman bought another 1 mill shares at 10ct. I do not believe, that this a lot of money for him - but he is certainly not the type of guy who buys something just out of sympathy! They have gas for sure - how much, and at which potential flow rate, will be determined by wireline logging over the next few days!

Have a nice evening!”