Market Update

General - Panoramic/Horizon - Strike

Good afternoon

only a short report today, as I will be out of office for most of the day…

US reporting season is starting this week, battling with some very strong pcp-numbers, as the tax-cuts came in last year. Will interest rates continue to drive markets, or will the attention switch to corporate profits?????

Iron ore prices reach a new high in China today - strong steel production.

RIO will need at least another 1.8 bill$ to develope their giant copper underground mine in Mongolia - ground stability issues. Need additional 2 year approx to bring it into producton - now target 2022/2023. Lower grades at Kenencott and Escondida continue to put some pressure on existing production.

Macquarie stays cautious on nickel for the short term - BUT stainless steel ( especially the nickel rich 300-series ) is still strong in China, which led to nickel making new highs currently In US$ terms. It has cleared resistance in US$ as well as in A$ - in A$ terms, it´s trading at the highest level since mid-2018 - in the moment at 19813 A$/t!!! Having said his, I have to admit, that the nickel price feels a bit overbought in the moment.

Panoramic - they enjoy these strong nickel prices. As I said the other day - company is driving development of Savannah North + drilling the ventilation shaft at the same time, as they ramp up production from the old Savannah ore body to full production. This is cash consuming…so good prices for now and hopefully a few more month are important to get cash in the door, before production increases from first ore from Savannah North late this year, and hopefully, cash will be coming in from the sale of North American platinum assets. Longer term, PAN are very cheap anyway - but we need to get to full production first! By the way - when nickel last traded at above 20.000 A$, PAN share price hit a high of 66 ct…Ok, we have had a few comissioning problems, but that does not change the long term picture!

51% owned Horizon Gold reported pretty exciting exploration stuff on their recent base metal find Altair today - not much response in the market, though, which is surprising. Horizon is probably pretty cheap on it´s existing gold resource alone, with gold continuing to trade above 2000 A$/oz. Also note, that HRN announced a resource increase for the gold deposits the other day, including some higher grade material, which might be worth trucking to a plant.

Strike - have encountered some hard formation to drill through…300m of it have been completed, 200m still to go…total depth now 3617m. Drilling seems to go a bit easier from here - so we will NOT reach the most important zone this week - maybe on the weekend. No drama - but for us, a few additional days to wait for the hopefully good news…Total depth is planned 4230m - then running wireline logs. Next week will be the week. The next formation is sandstone - easy to drill - so by the end of next week, we should have reached total depth and wireline logging will start to deliver flow rates ( well, if the gas is there! )

Have a nice day!


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