Market Update

General - West African - Antipa - Gascoyne - Regis

Good afternoon

risk-off is continuing to be the story amidst all this tariff-action. Today, markets are happy with “only” 10% tariff instead of 25%, as hoped for by the hawks. But god knows, what will be next!

Metals are bouncing nicely, driven by copper, but also nickel, which was hit teh hardest yesterday. some investors believe, that China might increase infrastructure spending to bolster the local economy, which in turn would increase metal demand.

So far, the world economy is still running quite nicely - people are surprisingly sanguine, while all this erratic action is going on - and let´s not forget, that basically all metals are in short supply these days, or at least finely balanced. LME stocks, which admitetdly are only one indicator of many, are falling alomst daily for all metals - inclding a large fall in copper today.

“President” Duterte in the Phillippines is talking down mining again…he is loudly sthinking about leaving Phillippino soil untouched for a while….we all know from last year, how extreme he can be - so we have to take his comments with a pinch of salt, but not ignore them.

West African Resources - my favourite gold developer came out with a very positive announcement today! They have requested debt-funding proposals from a range of financiers around the world, and received 14 non-binding offers , ranging from 160-215 Mill US$! The company is now shortlisting a handful of preferred financiers, to do detailed due diligence etc, with firm proposals expected late this year 2018. They reiterated a few details from the feasibility study: 211.000 oz on average p.a. for the first 5 years, at AISC of 550 US$/oz, followed by 5 years at 100.000 oz….payback of the 185 Mill US$ in pre-production capex within 16 month, at a gold price of 1300 US$! At 1200 US$, and on my roough numbers, these guys will need about 30 month to pay back all debt, and earn their market cap!! The company is also working on plans to even improve these great numbers - one of them is to potentially shorten mine life to only 8 years, bring forward more production and therefore increase the NPV. And exploration is far from being closed off, as recent results show - not to talk about regional upside, and not to talk about potential synergies with neighbouring miners like B2Gold! In my opinion, WAF are an absolute no-brainer…but nobody wants to know in the moment! I would have thought, that nobody expected WAF to potentially develope this asset without any further equity! Having said this, tehy might well do raise some more equity, as I guess, that this would improve the financing terms, and hence the NPV of the project. Currently, the company has 40 mill A$ in cash - that´s a lot of money. But I am sure, that WAF will want to keep exploring full speed, especially, once the wet season is over….Whatever happens, and I certainly don´t know - the company will only need a very limited amount of additional equity , if any, to bring this great reserve into production.

Gascoyne -finally, some good news?? Firstly, the company updated on operations yesterday…in the September-Quarter so far, 10.500 oz ahd been produced, an an average grade of 0,8g …production is continuing to ramp up, guidance for the December-Quarter is unchanged at 25.000 oz, and reaching commercial production sometime in that Quarter as well. This will be ainly driven by grade improvement, as the plant continues to run very well. Secondly, the company reported some good interesections from drilling at Dalgaranga ( lowih grades of 1,2-1,6g over long intervals , ranging from 6m to 35 m; and also from their second proejct, Glenburgh - better grades, but only 3-4-5m-intersections. BUT today, stock got suspended, pending the release of some drilling ersults from Dalgaranga!!! This can only be positive, and must be very positive, as there should be a very good reason to suspend the stock in the middle of the ongoing SPP. I guess the results will be announced tomorrow and could finally turn the stock!

Antipa Minerals - announced very promising results from an IP-survey today. Normally, not all that exciting…but as you might remember, they are in highly prospective elephant country, and RIO plus others have pegegd all available ground in the area. RIO is running a major exploration effort in this area, just North of Newcrest´s Telfer Mine. I ahve been a shareholder here for some time - the exploration story was always hot, and delivered lots of positive hints - without ever delivering the “Big One”. This could get them much closer…worth a punt…

Regis - management change!!!! Mark Clark, excellent Executive Chairman, who has learned his job as a No.2 of Nick Girogetta, and has been running RRL for 10 years or so, is resigning from his job and from the board! That is definitely a loss! The successor, Jim Beyer, seems to be a very experienced executive - recently MD of Mt Gibson, and before that, GM of Boddington and Pajingo gold mines - but I do not know him, and to be as good as Mark Clark, will not eb easy. james Mactier, who used to run the Macquarie bullion operation in Perth ( and very sucecssfully, I might add ), is becoming the new, non-ex Chairman of Regis. He is certainly a good choice!

Have a nice evening



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