Market Update

Australian Resources Conference 2019 - Kidman - Bellevue

Good afternoon

what a year! Definitely one to forget…

On the more positive side: The Australian BIG 5 gold miners ex Newcrest are trading at all time highs, or close to it! And we have had a few other ones, like Aurelia or Silver Lake, which came back from the ashes and had decent runs. But the excitement at the developer-end is still very limited, and seems confined to pure Australian plays. This is perhaps not that surprising - 2018 has been a bad year ( again ) for country risk, and Australia is obviously one of the lowest country-risks available!

But perhaps inspriring for the rest of the market: Voices are getting louder, which see the base metals potentially having an excellent 2019, given low stock piles, and generally, undersuplly in 2019 ( as in 2018! ). But all of this assumes, that we see at least reasonable GDP growth for the world in 2019, even though I think everybody would be very happy just with a 3 in front.

Mr.Trump is not all about charity! Surprise surprise…read the comments of the prosecutor, and you know, what he´s like:



The group of presenting companies has been fixed now:

Antipa Minerals - Breaker Resources - Cassini Resources - Evolution Mining - Genex Power - Graphex Mining - Evolution Mining - Liontown Resources - Metro Mining - Panoramic Resources - Technology Metals

The only uncertain appearance is Bellevue Gold, due to other commitments - and we might include Silver Lake instead.

I think the above list is a great mix of large & small, of base metals, gold, and battery metals, exploration & production. And we are especially proud, that Evolution Mining´s Jake Klein will present again - probably Australia´s best gold mining comapny

We will send out invitations some time in January. As always, the conference will be free for investors , and will be held in the Hotel Baur au Lac in Zurich.

Some new names, some old friends! If you miss a company from last year, or the year before, this must not necessarely have a fundamental reason - it might just be, that the relevant company will not be able to make the time table, or has nothing new to report. But certainly, it might have a fundamental reasoning behind it, as we only invite companies, which have a great future ahead - well, in our very subjective opinion!

Bellevue Gold - the stock came under some pressure lately, following a really strong performance throughout the year. The company did a highly succesfull placement at 34ct 8 weeks ago, and is now coming back to this level. Australian institutions hardly own a share. The company has established a resource of 1.040.000 oz at 12,3g gold/t, drilled out within only 11 month. Some recent drilling indicates a resource increase, and 4 drill rigs are currrently at work to have a new resoutce estimate out in the first Quarter, probably February. I think the Kirkland Gold resource estimate in late January will get the market very excited, and Bellevue is another very high grade resource , albeit in Western Australia near Leinster. I imagine, that the BIG 5 Australian´s are all watching this one - it´s not that hard to see a 150.000 oz producer at very low costs ( given the grade, perhaps at 600 US$ AISC ), with very small development capital needed. I have had them on my watchlist since my recent Australia trip, and while I have not bought any, they are approaching buying territory fast for me. Note: There are 447 mill shares outstanding, but another 115 mill ( mainly ) cheap options incl performance shares - So fully diluted, the company has a market cap of about 205 mill A$, with about 26 Mill A$ in cash for a fully diluted EV of roughly 180 mill A$. Not dirt cheap - but with strong potential to find more. Within one of the large mid-tier miners, this asset would be valued higher - and all of them would at least keep their asset quality, if they bought it!

Kidman Resources - tehy are developing their Australian lithium hard rock project with SQM, the Chilean producer ( to be in production in 2012 ). Today they announced an offtake agreement with LG Chem, for 12.000t of lithium hydroxide p.a. for 10 years - about 50% of KDR´s share. Tesla and somebody else had already been signed up for offtakes earlier. The company reports of massive interest in the offtake, from 13 or so different companies, and commented, that they probably could have done 3x this size. They also reported of very strong interest from many banks, to finance the project to a significant degree with debt. The latter is new - banks so far have been very cautious in this space, lacking expertise. And the former is detrimental to many analysts believe, that prices for lithium products will stay low/ becoming lower for some time. I have no idea, why Pilbara has been relatively weak recently - I think worth a very good look - and also Mineral Resources at current levels. Market continues to be excited about their valuation following the Albemarle transaction, but got also surprised about higher than expected capex for the JV-project.

Have a good evening! Gold looks good in US$ terms ( 1300 next target ) and in A$ terms - the old high of 1800 A$/oz looks to be tested soon? GDX has broken out - GDXJ to do so soon?


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