Good afternoon
Not all that much happening in equity markets today…they are generally just green…and the same for bonds, which in my view, are defying gravity…
Base metals are looking quite strong today
Gold seems to bottom out and is bulding a nice little base. Gold ETF still see outflows, but at a reduced pace. Will the next move be inflows?? That would be very positive I think. Gold is trading at 1756 US$ currently!!
Strike Energy - came out of supsension with good news today! The well has reached total depth of just over 5000m…and has foudn what tehy wanted to find: A strong gas colum, with relatively high porosity and high enough - but not ultra-high -pressure, all of which augurs well for the testing to be done over the enxt 4 weeks or so. People I have spoken to are very happy and expect, if anything, an increase of resource estimates. they also expect enough clarity to enable a Fina Investment decision ( FID ) some time this European summer! People are also of the view, that the geological enviroment tehy have found at West Erregulla 4 supports STX´s view , that Erregulla South ( which is 100% owned by STX ) is also gas-bearing ( the upside here is at least a doubling of resources for STX ). Without going into too much technical detail, which none of us does understand anyway, I think this validates STX as a takeover target or alternatively, as a significant, Western Australia-based, potential gas producer. They can change the landscape by enabling completely new , energy-intensive industries in WA, which are badly needed to reduce the overwhelming dependance from iron ore. The enxt triggers will be etst ersults, a new resource estimate, FID and also the potential announcement of a JV-partner for Proejct Haber, the urea project. All of the above should enable our company to increase in value!!! Broker estimates I have seen have not been increased as yet - staying at around the mid-forties….But they are also talkingabout potential upside to this valuation!
For now, many investors are sitting on nice profits, and there might be a lack of new buyers. But institutional investors no doubt are watching this one . the market cap is now large enough with 600 mill A$ / the board is top-class / upside is still substantial/ and teh stock continues to be de-risked and is now coming into a risk-profile, which should enable institutional investment. I will continue to hold - still difficult to find stories with similar upside, at a very much reduced risk-profile!
Marvel Gold - the old Graphex…..the story comes back to it´s origin! To remind you, the company has so far delineated a resource of 900.000oz at 1,2g gold/t, which is still a bit skinny to develope it. But recent drilling results have been very positive, with regards to size as well as grade of the deposit, and should most probably add to this resource. I think the company is well on the way to establish a 1.1-1.2 mill oz resource, and they are not finished yet! The market cap of 27 mill A$ at the current price of 0,053 A$ makes them look cheap, based on the gold deposit. I saw some Canadian broker research recently, which quoted an average resource value of 60 Can$/oz gold. IF MVL can prove, that tehy are well on the way to establish a stand-alone operation in Mali, their valuation should move in that direction.
But this leaves the old graphite project in tanzania valued at nothing!! As you might remember, there is an approx 9 mill$ loan oustanding to a North American Private Equity fund, secured by this project. So anything beyond that valuation will acrue to MVL shareholders. Looking at the recent run-up of share prices in stocks like EcoGraf or Black Rock, with similar projects, there is very substantial upside to 9 mill $…possibly several times this amount. And I feel much more positive towards the country: The new Prime Minister makes all the right noises…attracting investment, getting the mining-related problems with Barrick and otehrs in order, replacing some of the old guard. We have ssen this before - but Tanzania is on it´s knees, and soomething has to happen to get this country out of it´s mess!
So - at least an interesting one to watch - the upside is speculative, but could be substantial I am a reasonably large shareholder, still.
Have a nice evening!
WS