Market Update

General - Oz Minerals - Panoramic - Genex - Bellevue

Good afternoon

so it looks like the FED will help us again in July - at least that´s the indication from yesterday´s hearing…

CPI ex food and energy rises a much stronger than expected 2,1% YoY, driving bonds down a bit despite Powell´s comments.

Equities reacted mildly positive on the FED - but as it looks, the market had already assumed relatively dovish comments from Mr.Powell…The continuing Iran-saga does not help, and oil is making a new , recent high.

Metals are generally flat - nickel is stronger, though, which follows a very strong close yesterday for all base metals, and especially nickel. It´s trading at the highest since early April, and is even stronger in A$- terms. Gold cannot hold todays highs, but is still strong at 1414 US$/oz in the moment, profiting from the low-interest rate enviroment.

South African gold production falls at the strongest pace ever so far this year.

OZ Minerals - updated today on their Brazilian operations. I do not want to go into all the details here, as they are very small vs the Australian activities. But it´s important to say, that OZL is paying it´s school money in Brazil! In my opinion, they have overpaid for the Avanco-aquisition…The compnay is at pains to stress, that they have bought a lot of country-expereince, and very prospective ground. That may well be true - but you could gain that cheaper than for 400 mill - that´s what they paid for it. Not a major desaster -but this has not been the best action performed by the otherwise very highly regarded team! I have seen many companies burning their fingers in Brazil…not an easy country!

Panoramic - came out with early production report for the June-Quarter. Much improved, but not there yet! Recoveries, ore milled, metal production, grade - all up more or less strongly. But mining rates are not quite where the company wants them to be. During the Quarter, 1520t of nickel have been produced . Very positive is, that development of Savannah North is going much better now, after a few contract miners had arrived - it´s up by 38% vs previous Quarter. Also, drilling of the 4.1m hole down to 900m or so to build a vent rise is now finally making better rogress - but it will take well into the calendar year 2020 to have this finished.- company expect it to be completed early in the June Quarter. Panoramic have 26 mill A$ in cash, of which some is restricted. The 9 mill Can$ for the sale of Thunder Bay North in Canada, should come in by Sept/Oct, which would be good - especially, as the asset has been valued at zero by analysts before. There remains the need for the aquirer to raise sufficient equity - currently they have 6 mill$. The full Quarterly will be out in late July.

Some people saw the extension timetable for the vent as pretty negative, because they assume the vent rise being paramount to the mining of Savannah North, which is incorrect. The ongoing development of this orebody should be advanced enough by early in the Dec-Quarter, to deliver nickel ore to the plant, without the vent shaft being finished. However, to reach the full 100% of planned production I think does depend on the ventilation shaft being completed. Especially at the current state of operations - production from the old ore body, but at the same time, development of Savannah North + drilling of the vent rise costing money - it´s great to see the nickel price so strong! I have no doubt, that PAN will reach the planned production levels - but it´s a gradual path to get there. Once at final production rates, the stock can easily double over the next 12 month - certainly also depending on the nickel price

Genex - finally, the NAIF financing is there! The Northern Australian Infrastructure fund approved a loan of up to 610 mill A$ for GNX´s hydro-project. It is believed, that the loan will be done just a little margin above of what the government pays for it. The analyst of Morgan´s assumes debt at 2,5% interest rate, fixed for at least 25 years. That is certainly a very preferential loan!! The financing is a major step forward for GNX - but a few issues are remaining to reach financial close: 1.The transmission agreement is taking longer than expected. The counterpart here is the Queensland gvernment, which has stated the strong support a few times. I believe the hurdles to be largely of bureaucratic nature. 2. Board approval from Energy Australia for the offtake-agreement and 3. the expected government grant of 40-50 mill A$, which has been hoped for already and could be announced any day. It has been disappointing to see relatively large turnover in the stock, and for it to trade below 30ct, still…it´s always the same: Every placement is having a few opportunistic subscribers!

Even Morgan´s analyst, who is the most conservative of the 4 analysts following it, has a valuation now of 36ct - that´s about 40% higher than today´s price.

Bellevue Gold - have today announced their next resource increase by 270.000 oz to 1.8 mill oz at a 3.5g cut-off grade. Importantly, they also announced a resource of 1.6 mill oz at average grade 13.3g/t , which is indicative of the robustness of the resource, and should also indicate a strong conversion ratio from resources to reserves. The resource increase came from the Viago and Tribune lodes only. There is a strong likelihood, that further resource increases from these lodes, as well as from the Bellevue Surrounds will be announced by the end of this year. Also interesting to note is, that the company has had many sniffs from the surrounding area - none of those have lead to resources for now, but should do, once these areas have seen more drilling. The company has 6 drill rigs currently running full steam ahead - expect more good hits to come from this extremely active drilling program, as well as solid upgrades to the indicated resource status. The company has 20 mill A$ cash in the bank - enough to keep this pace going until at least the end of the year. One should expect another eauity raising by December or so - possibly after the next resource increase. I think Bellevue are positioning themselves increasingly as a takeover target for the larger, Australian gold miners ex Newcrest , all of whom are keen to grow at reasonable prices , without decreasing their asset-quality. BGL are ok for both these conditions!

Have a nice evening


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