Market Update

General - Strike - Lucapa

Good afternoon

ECB easing even further - as expected - but still some movement: equities strong, US$ strong, bonds very strong, gold strong….and base metals ( especially copper and nickel ) were strong beforehand - just what the spirit needed for the big US gold conferences!

Good mood is also helped by some indications of China - US getting a bit more accomodative.

Industrial Production in Germany weak, one again!

Following on from Citi, also Macquarie increased the gold price going forward, leading to positive recommendations for most Australian stocks - some to neutral from sell, but many “buys” as well. I think tehy are right - stocks have retreated quite considerably from their recent, very overbought prices, and are in ok-territory again - generally speaking.

Strike - their JV-partner are in the market today to raise 10 mill$ at only a small, 5% discount…from what I hear, going very easily, to mainly institutional investors…that augurs well for STX, as I have no doubt, that Strike will come to the market soon as well. Strike´s presentation today at the Good Oil Conference was very technical - very obvious, that tehy are targeting corporates with that! But people are reporting, that the Perth Basin was the only talk at the conference among investors! Strike slightly weaker today, probably on some switching into Warrego-placement. On the face of it, Warrego are quite a bit cheaper - the question really is, how much value you attach to Jaws, and the big ground position Strike is holding in W.A.. As I said yesterday - for a corporate, there would only be one target!

Lucapa - in my absence, came out with a production update. I cannot believe, that this one did not move the market! The only explanation for it is the generally weak performance of diamond stocks. LOM, though, are different, as they not only ramp up production without any further capital needs, but also produce quality diamonds, which are not affected by the weak market for smaller stones. Production for both mines hat new records for August by a long shot, and especially Lulo produced at nearly double the carat/t as planned. The only problem I have with the stock is, that I do not know what could trigger performance, if not these numbers! Broker Euroz, which is very credible, reaffirmed the price target of 61ct = 4x the current price!

Have a nice evening


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