Market Update

General - Panoramic - Foran ( sorry, again! ) - Chalice

Good afternoon

ECB is signalling, that an end to Quantitive Easing might get closer ...this is driving the Euro higher - well, a little bit. And it´s good for metals, which are having a pretty good day so far. A big trade worth 500 Mill US$ though erased coppers gains within the first 10 min of US-trading, while zinc ( big rise in cancelled warrants ), tin and nickel are very strong is gold, trading at 1334.60$ currently. Cobalt with yet another high - if I see it correctly, it´s trading at 80.000 US$/t or 36 US$/lb!!

European equities are having another good day...

Lithium stocks got another hammering today. Some of them, like Galaxy and Pilbara, are now trading 20% below recent highs - another weak day, and I will be tempted to get back in. The expansion news from SQM ( and from Orocobre the other day ) are certainly negative - but these Brine-Projects need a long time to ramp up. SQM´s project for example will only have ramped up fully at least 5 years from today...and for now, lithium prices are still very sexy. So while these expansion plans are definitely negative for longer term valuations, they will not have such a massive impact for the next few years.

Chalice - their Quarterly was out today. cash + investments are worth 45.5 mill versus market cap of 47 mill A$ their interesting, canadian project is only valued at about 1.5 mill$. This is a joke. Tim Goyder is a pretty smart guy - he hates to waste money, and the massive drilling program planned has a very good chance of delivering tangible value, in my opinion. This stock is very low riks, hence has got good upside from any success with the drill-bit.

Foran Mining - are continuing their run, hampered only by a few stale bulls, who have bene holding for a long time, and by some profit-taking from my fund, as the holding has reached the internal limit of 5% of the fund...but that´s no major selling, just taking a few of the top. The other day, a new analyst report was published, calling the stock to 1.80Can$, based on pretty conservative price assumption for copper and zinc. It´s not hard to see a 3$ valuation for investors, who are bullish on the sector, as am I.! This is not my official valuation, though - any company with financing and building an operation ahead of it, got to be valued at a significant discount. But even a 50% discount still let me arrive at valuations very much higher than the current 54ct! Good fun ahead - and if the current exploration delivers, the stock will really spring to life. Some results should be expected before the end of February! The next trigger after that could be another announcement re the technica agreement with Glencore, as they have 60 days from about mod December to finiah a comprehensive review of the project.  I am very happy to stick to such a large holding within my fund!

Panoramic - will be interesting to see their Quarterly shortly...I would expect some sort of progress-information on their final feasibility, which is currently being refined. Perhaps we also get some indications on a the financing, which will enable PAN to bring Savannah back into production. The terms for long term offtake agrements have been strengthening throughout the year, and the ferocious appetite shown by Japanese and Chinese companies for battery metals will affect nickel sulphides as well. So I see no urgence to push the button, and would much prefer the company to eveluate all possible avenues, including offtake with battery manufacturers etc.. Enough Nickel is still around these days - but by the early 20ties, that will be a different story. My hope is for a development decision let´s say by the 3rd Quarter, to be back in production by mid 2019. That wold give them production until at least 2028 - and most probably, for long thereafter. Also in PAN I am maintaining a large position in my fund. At the current level of nickel just below 13.000 US$/t, and an exchange rate of 80ct A$/US$, this thing can be financed, and produce profitably - but every other 1000 $ in the nickel price should increase earnings by roughly 50%. That´s fantastic leverage ! The stock should be able to test the recent high at 50ct again over the next few month - but in the longer term, I am hoping for a lot more here!

Have a good weekend, and enjoy the snow! Much better than 45 degrees in Eastern Australia!


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