General - Evolution - Prairie Mining

Good afternoon

while Trump is getting famous as the first president, who signed a 100 bill US$ weapons deal with a totalitarian government, which supports terrorists, there are no major economic news out today. Well, we Germans are not that much better in that regard - money rules the world! Trump also to cut Mediaid and poverty-prgrams to finance tax cuts..........Make America great again!! or at least: Make the rich richer again!? That´s what it sounds like to me - but I have to admit, that I am not an expert in these US-bureaucratic programs.

Base metals are edging higher, driven by very strong markets for steel rebar, and iron ore in Asia. Gold has managed to keep the most recent upward trend active, and is trading at 1259 US$/oz currently. The US$ is weaker again.

Prairie Mining - a polish newspaper cited the boss of JSW, the main Polish producer of hard coking coal with a market cap of 3 bill A$, that they would be looking at aquisitions, listed on the Polish market. The newspaper aded, that tehy might be interested in Debiensko, PDZ´s coking coal asset. Given the market cap of PDZ today of 90 mill A$, they might as well buy the whole lot....Prairie has not commented officially on it, which would suggest, that no talks between the companies had taken place so far.

Evolution - potentially, the company will NOT be included in the GDXJ, as expected by many. The company is capped today at 2.96 bill US$, and while it has been announced, that companies with a market cap of up to 3 bill US$ would be included, it does not make any sense to include a company, which very soon might not qualify anymore. EVN would be pretty happy not to be included, as it only increases volatily into the share price, given the daily inflows/outflows into/out of the Index.

Have a nice evening

WS

General - Cardinal - KGL - Gold Road

Good afternoon

incredible, how strongly these markets are coming back today!! Metals up by 2-3%, equities 0,5-1%, and European equities strong despite continuing weakness of the US$! It looks like that might continue - at least for the currency, as Europe is doing well, and the US is caught in political turmoil!

Many are watching steel prices in China as a bellweather for economic strength - that´s looking good, and has recovered by more than 10% this week - just 3% under this years highs! 

Not to forget, oil prices have recovered very nicely this week. OPEC has done it´s bit...but I think they will also make sure, that the price does not rise too much!

A little surprising perhaps, that gold is  so resilient , following it´s recent advance, as "normal" markets are so strong. But the weakness of the US$ is certainly supporting it, as are the charts. It´s currently trading at 1253 US$ and 1682 A$, down just a little from this weeks highs. I am sure, New week - new scandal in Washington - I think we can count on that!!!!

Gold Road - Goldfields preparing a complete move here? They have bought 72 mill shares at 86ct - way above the market - to bring their holding to 10%. As you will remember, they have already secured control over the project previously. There is a stand still agreement between GOR and Goldfields - but that may be broken, if the Gold Road board agrees. At a full bid at 86ct, I think the board would be extremely tempted to agree to a full bid. This leaves a bit of headroom for players - stock is up nicely, but trading at 72ct. I could kick myself, that I have missed this stock. It might not be too late - 20% is nothing bad in these markets!

Certainly, a bid would be great news for the Aussie gold sector, freeing up cash fopr otehr stocks. Dacian in the larger developers, West African Resources in the smalelr ones, and Breaker as an advanced exploration play are coming to mind!

KGL - had their AGM yesterday. Impressive to see teh progress they have made on their copper play right in the middle of the Australian continent...not that easy, given the location, and tehy will clearly have to show a much abover average asset to get it going there - but with relatively little money, they have steadily increased the reserve potential, especially at Rockface. Simon Kidston, who got thrown out a while ago in a very unromantic way, must feel proud, as he started all this. Anyway - not a dirt cheap story, given nearly 70 mill A$ market cap - but the stock is very tioght, and more drilling results should be in train. If I would still own them, I might as well would hold on now to watch, wether they have got something real here, or wether tehy will own one of the many smaller projects waiting for better copper prices. In OZL and SFR, there are two hungry local players, who would snapp it up, if KGL can indicated good chances to become a 30-40.000t producer. Interesting to watch, even though I am not a holder....

Cardinal - one of trader´s darlings - some good drilling results, indicating, that mineralisation extends down to 600m. That´s all fine and good - but I do not think, that grades are sufficient at this stage to go underground. management is doing everything they can to suck their two, corporate holders into a bid. Gold miners just love these continous, flat and low strip-ratio orebodies - but this one has not the easiest metallurgy in town, and extraction should be more costly than for other mines, taking some sex-appeal away. Also, I would not want to be at the mercy of the current management, and I remind you, that the title to the project still is not completed! Too many potential crisises for me - especially, as the MD is one of them!

Have a nice weekend

WS

General - Crusader - Perseus

Good afternoon

Trump is getting on everybodies toes - and many are asking not "if", but "when" we will be relieved of him. Gold is very volatile, with a nice upward-bias - at least so far. But as I am writing, it´s fighting with the 200-day moving average again, which it strongly broke to the upside only yesterday ( 200 day at 1244 US$. Hopefully, we are only testing the break-out!

In any case - and that´s new - the gold price seems to react to political uncertainty ion the US - and helped by a weaker $, which is trending down for the same reasons. Fundamentally, Europe is doing better with the month - optimism is increasing.

US labor market numbers today have been positive, and might have played their part in turning base metals today, which looked very sick at lunch time, only to edge higehr ever since, and being down by about 0,5% now at 6 pm European time.

But at least, we have some news today:

Crusader - have received a takeover from Stratex International, a London-based company. STI is proposing to pay - subject to due diligence - 6.6 of it´s own shares, which would be the equivalent of 9.9pence or 17.3ct/share Crusader. STI has two assets - perhaps three: They have 12 mill A$ in cash / a surprisingly strong share register, with Blackrock as 16% shareholder / probably a good MD, Marcus Engelbrecht. He has been a previous CFO of Oceana Gold, before he managed Archipelago, which brought a gold mine into production in Indonesia, and was taken over for 250 Mill Pound, if Bloomberg records are correct. So IF this thing goes through ( so far, we just of a Haeds of Agreement ), Crusader shareholders would get a premium, and would own 81% of a company, which has 12 mill in cash. I think that would be a very positive outcome!

Perseus - update today on their Yaoure Gold Project. PRU have finished 33.000m of resource definition drilling, and a furtehr 12.000m of trial grade control drilling in the two planned pits..63% of assays have been received so far. Drilling of the planned CMA pit has generally confirmed previous expectations, while drilling of the Yaoure pit is indicating that mineralisation will be more constrained - and some of it shyowing some Pyrite ( not good for recvovery! ) - than expected by the previous owner. The market had been expecting this, and hence, has also been expecting, that not all resources as disclosed prior to the takeover, are actually there. No surprise here. I will speak top the company tmorrow and find out a little more. The new resource estimate will come out in August - I am expecting a 10-20 lower resource. The feasibility study will come out by the end of this year. 

I think this update has little market relevance.

have a nice evening

WS

General - West African Resources

Good afternoon

Trump is talking the two SS´s - shit and secrets! One should really grab him by his pu..y ! I am just astounded for how long this once respected Republican Party will support this guy....Sorry, but I just can´t help myself - I have to bash him!

Europe growing nicely, and investor sentiment is strong - but relatively weak numbers for Italy are a concern. Greece is too small to be a real concern! The pressure on Germany is increasing to start spending, or push the local economy via increasing wages!

Mixed news from the US-economy today - housing market soft, while Industrial Production very strong - climbing the most in 3 years.

The odds for German elections this autum are now 83% in favour of Angie Merkel - that´s certainly a positive for markets. And Macron is gaining credibility here. He has made a good start. Accordingly the US$ is trading at lowest since the election in Nov - but that´s not enough support to hold metals today, which are a tad weaker. 

I thought, that yesterday´s, Chinese numbers have been quite ok vs expectations - after all, credit conditions don´t seem to be too bad, and the economy in general is slowing down, but still doing very well. But a fall in growth rates usually is followed by an adjustment in inventories, exerbating the negative short term effects.

West African Resources - my favourite Western African developer came out with some excellent numbers. At their M1 deposit, they got 30m with 20 g at about 350m depth, and some more 10-15g intercepts over 15-20m . The latest hole found visible gold at about 450m depth ( assay should be out next week so so ), so far the deepest intersections and pointing to substantial underground potential. WAF have 5 drill rigs working, and soon 6 - they will continue drilling until they have closed off the ore body. Incl 15ct-options to be issued shortly, WAF have 20 mill$ in cash - the budget calls for expenditure of 12 mill until March 2018. The company had planned to announce a revised feasibility study ( incl underground ) in the 4th Quarter - I see this as highly unprobable, as it does not make sense, to come up with a study, just to tell the market, that they are still finding gold and that they see further upside. Richard has made that mistake once - he will give himself sufficient time this time around, especially, as teh company has the cash to wait until first half 2018.

In my opinion, the question here is, whether the company can increase reserves by enough to become a sustained, 200.000 oz producer - and not, whether they can extend the initial 3-year 150.000oz rate by another 3-4 years! Recent drilling has given them enough tonnage-upside to buils a reserve, which should be large enough to attract much larger companies!

Have a nice evening

WS

General - Breaker - Saracen

Good afternoon

this feels much better...hopefully, metals and metal stocks have found the bottom! Nobody is overly bullish for the short term, which is anotehr positive sign! Metals are capping off a few, good days with small dvances today, as is gold.

German GDP growth for the 1st Quarter has been a good number today, and more importantly, credit growth in China has been stronger than expected. US consumer confidence very high, while retail sales are up, but lacklustre. CPI slightly lower than expected - resulting in bonds having a strong day.

Breaker - what a great example of super-fantastic returns ( positive as well as negative! ) which are possible in tehe resources sector! The  stock is now up by a little more than 300% from the IPO back in 2012. But in the meantime, Breaker fell to a low of 2.4 ct only 2 years ago, only to put on nearly a 30-bagger to trade at 66ct today! Persistance, luck, knowledge, and very cautious handling of shareholder money have all contributed to it! I invested in the IPO, and as you can imagine , I sold all the way up ...but I am still holding a 2% of-my.fund-position, and am very happy with it. It looks like Mother Earth has been with them, and the chances of having a +1 mill oz resource by year end are very high. The best, though, is that ths must not be it! There is upside from strike extensions, and underground, and ultimately, my target for BRB is to become a 100.000 oz producer some time in the next 3-4 years. The stock is still correctly priced, and could well go higher. No reason at all to sell!

Saracen - I have never been in teh stock, which for 2-3 years until early last year has been a good performer. I was always of the opinion, that SAR were overpriced. The stock is almost halved from the top level, but fundamentally, tehy have made progress. It always has been a story of costs coming down, and tehy have not delivered on that. Sourcing ore from many different pits/resources has never been an easy task! The company has put a lot of effort and money into drilling, which has delieverd many good results over the last 12 month. They could have turned the corner, finally. I am watching this one closely.

Have a nice weekend!

WS