Market Update

General - Metro - Bellevue - Lynas - Liontown

Good afternoon

China numbers out today…..mixed, but I guess overall in line with markets expectations: Fixed Asset Inv + 6,1%; Retail Sales + 8,2%; Industrial Production 5,3%; Property In +11,6%. Nickel pig iron ( NPI ) production in Jan/Feb up by 13% - making use of good prices for nickel, but also supplying strongly rising stainless steel production. Overall, those numbers should not be a surprise - nobody expected China to be as strong as a bull earlier this year. But metal markets don´t like the weak IP numbers - and we saw a large increase of LME copper stocks today. In the US, jobs numbers were just very slightly weaker than expected.

Gold is down by 1%

Xi/Trump meeting delayed…

interesting today: The most profitable, German bank is Volkswagen Bank - 2.6 bill Euro profit! Car leasing is a profitable business! The only question: Who will buy all these Diesel´s, once the leasing expires? I wonder about their provisioning…

Merkel does three remarkable things: German budget for defense will not be increased as much as planned…the gas pipeline under the Baltic Sea with Gazprom will be built ….and it looks like Huawei will get a chance to get part of the 5G network…Trump will love her for all of this - but China is more important than the US ( in it´s current state ) for us!? Brave - but I think her moves are all necessary.

Perhaps we should do the same as many Central Banks around the world…buy some more gold!

The risks for equity markets from the political side might well be on the rise again…don´t forget to reduce your equity exposure, following an unusual, and liquidity-driven start to the year!

Metro Mining - unrelated to them, the Malaysian government detailed their plans, to allow Bauxite exports again, following a complete stop in 2016. Local bauxite mines then were found to be completely negligent to enviromental issues. ALL mines, which plan a re-start, will now have to receive Enviromental Approval to do so. It is expected, that each approval will take at least 6 month to complete. So for 2019, the threat of renewed competition is removed. As bauxite demand from China continues to grow, this is a great enviroment for MMI to secure additional offtake agreements for the planned doubling of production. The feasibility study for this is expected shortly, and alongside a resumption of mining soon ( once the wet season in tropical, Northern Australia is finished ) , there is a fair bit of interesting newsflow to come. The stock is very cheap , and I am holding a very reasonable position.

Liontown - announced the probably extension of their Buldania lithium resource in Western Australia. Their second project delivered very good sampling and surface results, which indicate, tha the current resource could be much larger than anticipated. There is much debate surrounding lithium in the moment. I think in the short term, there is definitely enough of it around - but it appears questionable, whether current developments will be sufficient to feed a very strongly growing market from LI-ion batteries for electric vehicles from 2022-2023 onwards. As you might remember, LTR have one fairly advanced lithium project in Australia, for which a scoping study delivered a very favourable outcome.

Bellevue Gold - announced some more excellent drilling results from their Tribune- and Viago lodes. Very much back on the envelope, and assuming further drilling, both lodes have sbstantially extended their footprint and delivered excellent garde intersections, similar to what has been found earlier and which is now forming part of the inferred resource of 1.5 Mill oz at +11g gold/t. Just extrapolating the additional meters, the resource could grow by another 500.000 oz at similar grades - without closing anything off. And 27 mill A$ in the bank give them easy room to continue at the recent, agressive pace - 4 drill rigs working for Bellevue ! I was surprised this morning, that the stock did not go up on the basis of these results. The stock has had a good run ove rthe last 12 month - and there is a fair amount of options outstanding. But I think one should continue to accumulate the stock be fore the next resource statement sometime in the 2nd Quarter - I guess not before May, and rather June.

Lynas - some positive noises over the last few days from the Malaysian government as well as from an analyst call of Lynas, that the parties are getting closer to do a sensible deal on both types of Lynas´s tailings. The government wants Lynas to export these tailings…but as Malaysia gets the investmnet, the jobs and the tax-income, how could/should possibly another country just accept the debris, without any economic benefit??? I hate political markets, and especially with regards to Malaysia…I do not own any stock in the moment, but if I would be a holder, I would keep them! Perhaps there is some light at the end of the tunnel for Lynas. I think it would be well deserved, as management has done a good job over the last few years.

Have a nice evening


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