Market Update

Pilbara - Mineral Resources

Good afternoon

finally, some more action!

Metals are having a positive day...all green, and especially nickel about to hit 12.000$ again...copper through 7.000$/t, cobalt nearly back to the old high and above 74.000$/t. Looks like we will have a nice finish for the year!

Still a lot of interest in resources stocks generally, but battery-stocks especially! But I am inclined to switch a little bit from lithium stocks to "normal" base the end, nickel and copper demand will profit greatly , if the story continues to evolve, but with much less risk than say Pilbara or Kidman, to name just a some. The basic information, that tehre is a lot of lithium around in this world, is still true, and I have no doubt, that a lot of it will go into production over the next 18 month. Not unimportant is, that SQM , one of the largest ( perhaps the largest, not sure ) producers of lithium in battery form, looks like coming to a compromise with the Chilean government, to substantially increase their amount of yearly production. This could have an impact on supply/demand down the track as well.

Pilbara - announced two meaningful deals today. They will sell ore to Atlas, their neighbour, who will crush it in their existing facilities and then ship it as direct shipping ore- 100.000t p.m. starting mid 2018. They will also sell 1 millt or tantalite ore to Greenbushed for further processing, further increasing cash receipts. Tanatalite is more or less doubled in price over the last 12 month as well. Nevertheless - soo comments above! Great story, but about to get ahead of it itself.

Mineral Resources - announced a JV to produce very high grade graphite for use in batteries. Nice move downstream, and value adding! In my opinion, the further downstream these lithium producers get, the safer they get - protecting margins by downstream is something I like, and MIN is a company, which has shown multiple tiems, that tehy know, what tehy are doing, and execute well. Still - one very small warning: This area is also  new to them! MIN is one of the few companies in this space, which I still like...3.5% div-yield and rising, multiple earnings streams from mining services, all sort of lithium - product, iron ore, and now graphite. More downstream for lithium is planned as well, and all these energy-intensive businesses supported by in-house gas as the source of power, if their current takeover for AWE  goes through. There have been rumours, that this bid will be increased. I could imagine, that they pay an additional 5ct cash on top of the existing bid. I do like MIN´s long term strategy!!!

Have a nice evening!