Market Update

General - Newcrest - Panoramic

Good afternoon

pretty bad labor market numbers for the US on Friday - negative Industrial Production for Germany today - base metals have been holding in the morning, but nickel is weakening now! German government reduces growth forecast for this year further to just 0,8% now. Retail Sales in the States recovered - but already weak numbers for the previous month got adjusted yet a bit weaker than tehy already were. LME stocks are down again today, and the fact, that prices are holding their ground , with all these negative economic news around, is a good indication for just how tight the market in the metals is. Following those US-figures, gold has also found some support - very little chance for interest rates to move higher anytime soon!

A lot of press about the Norwegian government fund exiting pure oil & gas producers…most of them are emphasizing ESG-reasons for this - but in fact, the Norwegians are continuing to make all of their cash by oil & gas production! And they will continue to do so…In so far it makes sense, to not leverage the dependance on oil any further, and divest pure producers over time. I do not expect any impact on share prices except for the psychological impact, as tehy will take time to sell/reduce.

Car Sales in China for “normal” cars are down 17% ( 1.22 mill vehicles in Feb ) - which is a bad number! - but for EV´s they are up by 53% in Feb to 4% market share or 49.000 vehicles.

Quite a bit of corporate activity in the small caps: Gindalbie gets a bid from Chinese JV-partner in iron ore venture; Verdant is getting a bid from CD Capital in London, which wants to develope a phosphate project in Australia. Newcrest is buying 70% of the Red Chris copper/gold mine in British Columbia. The mine produces about 30/-t of copper and 40.000 oz of gold this year, but has strong upside to those numbers, if NCM can establish an underground, block-cave mining operation, a technique, in which Newcrest is very experienced. The question is, whether this deal makes any sense in the moment….production from any block-cave would be years away, costs 1.5 bill US to develope ( pure guess and probably a minimum number ) at a time, when some good assets might still come available from the current, corporate activity surrounding gold stocks.

The Newmont / Barrick merger/takeover is off! The company instead agreed to JV their respective Nevada assets, which apparently have large synergies. That leaves only a few smaller operations for sale?

Panoramic - shareholders can apply for up to 50% oversubscription in the 1:13 rights isue at 38ct, without the guarantee to actually get them ( depending on total take-up ) . The stock will be ex rights on the 20th of March. Brokers reduced their earnings and price targets for the stock, because of additional shares on issue, and also applying slightly higher production costs going forward. Valuations I have ssen ranged from 60ct to 62ct ( which I find surprising… earnigs estimates are up to 13ct/shares in a few years time…dividends up to 9ct…that sound to me rather like prices well above 1$/share )

Australian Agricultural - the cattle company has lost an estimated 50.000 head of cattle in the recent flooding in Quennsland - a loss of approx 55 mill A$. Additional costs for feeding etc will run at about the same amount, while repairs to fences etc will be approx 8 mill A$. In one large station alone, the company has lost 90% of it´s 30.000 cattle…terrible. It is hoped, that the mustering ( starting next month ) will show, that more cattle have survived.

Have a nice evening