Market Update

General - Aurelia - Liontown - Emerald - Evolution - Syrah - Panoramic

Good afternoon

German Factory Orders very weak today…Germany is not doing well at all - mainly the consumer is holding up oureconomy these days. Trade war, BREXIT and ongoing problems in the car industry are not helping at all!!

Jobs numbers in the States were much better than expected.

LME copper stocks saw an unusually large inflow today - the other´s were down again. Base metals are weaker today, giving up about 1% and 1.8% for nickel.

Gold does not like the strong economic numbers today, which led to renewed strength of the US$

Looks like heavy switching going on from Palladium to Platinum.

Goldman´s recommeded to take some profits in iron ore - I guess that lead to some selling of the iron ore majors. Not much change in equities and currencies.

Aurelia Metals - this highflyer was included in the GDXJ the other day - the resulting buying was matched by Glencore, who sold their entire stake in the company. AMI has been a great performer, which I missed - driven by a turnaround of their own mine, and a ( very lucky? ) aquisition. I would not really buy them at current levels - the next two-three Quarterlies might give a better indication how sustainable last years excellent production metrics really are.

Liontown - more strong news from their Kathleen Valley lithium asset - very good drilling results, some at 1.7% lithium. It looks like they will add substantially to their current resource of 21 millt of 1,4% Li2O. The company has stated a new exploration target of 15-22 millt at 1.2-1.5% Li2O. This is only one of two exciting projects they have - and since the recent rights-issue they have enough cash to advance thos projects and continue drilling. I realize, that there is enough lithium around for now - but that could well change over the next 3-4 years, and it will take ( my guess ) another year of resource + feasibility studies at least, 6 month for financing, and 12-15 month of construction - so this project might have pretty good timing! The company issued results of a scoping study, which values the project at 400 mill A$+. There are many i´s and when´s etc here - but the market cap of 31.5 mill A$ is very attractive. Tim Goyder as Chairman, Craig Williams ( ex-Equinox Minerals ) are two top-class guys involved here. The company has finished the 7 mill$ capital raising just a few days ago. The shortfall might have put a bit of a cap on the stock - but the 2-day turnover of nearly 40 mill shares will have gone a long way to remove the overhang. Of all the small lithium hopefuls, this is the only one I own…Like in PAGN - the end of a rights issue is the best time to buy generally - and the stock is basically trading at the rights-issue price of 2ct.

Syrah - production update out today. For the first time since starting production, they have hit/exceeded their guidance - in terms of production, sales as well as price received. In March, the company produced 19.000t of graphite - this is vs final target production of 250.000t p.a. - so we are getting there slowly but surely. Very pleasing, that recovery at 70% is also ok…The stock ahs been very strong, and not all concerns have been put to side here - but the potential price is big , the market position is excellent, and I would accumulate the stock. Of note is, that Syrah is producing different product to the likes of Black Rock or Graphex, which is good news for them , as those guys will not compete with Syrah, which will be the largest , western world graphite producer with the ability to feed the battery-market with it´s product for some time.

Emerald Resources - the company is in the early stages ( following capital raising of 28 mill$ late in 2018 ) to develope a gold project in Cambodia. Final feasibility study has been completed and showd NPV of 233 mill US$ at a gold price of 1250 US$, using a reserve of 14 millt at 2g to produce 106.000oz p.a. at AISC of 731 US$/oz. The company is currently negotiating full financing of the project. The country is not too bad, and while I think a final placement will be necessary, despite good project economics, I think the stock is worth a good look. The company announced some very good drilling results and might have found the feeder zone of the deposit. Results include 9m with 13g; 32m with 2,75g; 7m with 19g. Additional resources at better grades than reserve grade could have a big impact on the NPV and project economics.

Evolution - company has issued a site visit presentation on Cowal, the main asset of EVN. very impressive, what EVN have done with the mine since aquisition, and are still doing!! Have a look at the website for the presentation - very interesting. Cowal has substantial exploration upside, especially from the recently discovered underground drilling, which could over time replace some lower grade open pit material with high underground grades. The development of the exploration decline has recently started, and drilling from it will start in a couple of month. Could be exciting times for Cowal this year. EVN is officially talking about taking Cowal from 25.000 to 300.000 oz pa for 10 years+ at this stage - but this is largely done, at least on the drawing board. Furtehr exploration success underground could see a very substantial increase to this number. When aquisitions are too expensive, you might as well improve your existing assets and do some near-mine exploration! This is waht my favourite, Australian gold miner is doing!

Panoramic - positive update today on Savannah. Development rates are up by 55% vs February / Mining rates up by 60%; Ore milled up by 125% ; Metals recoveries improving to +80% ; second shipment gone on 22.3 and the third is scheduled for 22.4. While the comany is not where they want to have it - recoveries, development, mining + milling will improve further, this is a big improvement vs the terrible month of February, which made the capital raising necessary. The drilling of the ventilation shaft has not progressed as quickly as hoped for, and the company now expects the shaft to be finished by year end. I think this is what most analysts had pencilled in anyway. In any case - strong improvement, and furtehr initiatives have been taken or are being planned to drive Savannah into full swing. I think the little drama is behind us now. I also believe, that the company is working to do something with it´s listed subsidiary Horizon. The strong A$ gold price opens up some options like toll treating etc.. So some news to come hopefully here as well within a month or two.

As I said the otehr day - the rights issue just finished - now is the time to buy…

Have a nice evening



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