Market Update

General - Perseus - Strike - Graphex

Good afternoon

well...markets have recovered nicely last week, while I was skiing! Metals as well as equities had a pretty massive rebound, and the UIS especially is now back in positive territory for the year, as are the metals and gold. But without any doubt, some fear has been planted, and I have read about quite a few insto´s, which took some chips off the table!

The US consumer confidence, though, is at record levels, as measured last week, right after the little meltdown in markets.

Goldman´s again confirmed their bullish view on the metals, still calling copper to 8000 US$/t by the end of this year. 

But today, and in the absence of Wall Street, and major economic news, we are seeing some profit-taking in equities as well as in metals. 

Strike Energy - have started drilling! Most probably the most advance drill rig in Australia, owned and operated by Halliburton, has now started drilling! Technical success we will know by some time in April - economic success will take longer to evaluate. But I am pretty sure, that we will get some clues on the way through! The company has worked extensively on this thing becoming a success, and Halliburton is very much incentivised, to give it their best shot, as tehy would do all of the follow-up drilling over many years. We all know, that the upside is massive - but a failure would be very negative for Strike. Most probably, their resource would still be exploited at some stage in such a case - so the company would not go under. But I am happy to take a say 50% risk for multiple upside, as I believe, that the chance of success is easily above 50%. It´s certainly worth having some - the only problem being, that I have many!

Perseus - major parts of the new plant at Sissingue have passed contractors guaranteed operating performance ( crusher + SAG mill ), and the plant is running consistently at- or above name plate. Despite of them using only low-grade oxide ore in the comissioning phase, gold recovery has also exceeded feasibility study estimates. The company is now expecting to declare "comemrcial production" by the 31st of March, but to me this is very conservative, and I would expect the plant to be in full production earlier than that, ahead of time, and withing budget of 107 Mill US$. The project was going to make reasonable returns at 1100 US$/oz - at the current price of 1350 US$, Sissingue should be a very valuable exercise before any furtehr exploration success! I guess Jeff Quartermaine will give us a good feel this Friday in Zurich!

Graphex Mining - a new research report was published on the webpage - done by their corporate broker, but not paid research . The updated valuation, incorporating the current price deck for expandable graphite in China, is 2.38 A$ ( using NPV10)  or more than 7x the current share price. As you know, the project is very advanced, and Chinese financing is most probably very close - but you also know, that the project is based in Tanzania, which has a very chequered history of mining politics, to put it mildly. China desperately needs a graphite product like the one GPX could deliver - and China is very powerful in Tanzania. This is why I hope and believe, that the project will be ticked off shortly. The above valuation does include, that Tanzania demands a 16% stake in any project for free! I think Graphex Mining , presented by MD Phil Hoskins, will be one of the most exciting companies presenting this Friday in Zurich. make sure you don´t miss it - hard to beat in terms of risk/return!

Have a nice evening

WS