Market Update

General - Graphex - Oz Minerals -Perseus

Good afternoon

Mr.Johnson wants to suspend the parliament of the worlds oldest democracy…

Amidst all the curent uncertainty, equities are under some pressure today - bonds up again, as is gold. Late in the European day, US equities are dragging our market here close to zero - and up quite nicely in the States. the It´s quite incredible, how nickel is defying weakness in other base metals, once again…it´s trying to regain the 16000 US$-level - and is trading only 500 A$/t below the recent 8-year high in A$ terms at 23.000 A$/t! I think I might have to buy a few more Panoramic! They will have their day in the sun as soon as the market will see more improvement at Savannah ( which I am anticipating ) , removing the risk of a further capital raising!

Cobalt has probably seen the lows - it´s up nearly 20% over the last few days from recent lows, as Glencore´s mining suspension for a Congolese mine should balance the market.

Graphex - announced a nice increase of their indicated resource, which now stands at 10,5% TGC for 1.1 Millt of containe dgraphite. There is substantial upside to this resource - but the above is more than needed already for the financing of the mine, equivalent to more than 10 years mine life. The company points out, that as part of doing the final feasibility study, the resource will convert to a reserve. The final feasibility study is expected for early November now. Originally, it should have been out 3-4 month earlier - but sometimes things take longer in Africa. I am 100% sure, that the delay is not an indication for a less favourable outcome, as some might suspect - especialls in light of the current, terrible share price. It´s not reflective at all of the strong progress teh company has made over the last 12 month, despite the delays mentioned above. the financing stands, and the resource increase satisfies an important condition of the financing. The enxt steps will be final documentation from the government, and off-take arrangements. I have added a few shares here and there - but in the moment, there seems to be a larger selelr out there, depressing the stock. Just a little reminder, that the NPV of Graphex is nearly 10x higher than the share price! I do not know, when this little thing will be turning - but I think investors are well advised to accumulate stock at this depressed level. I think the current malaise of lithium producers has some impact on graphite hopefuls as well - but Graphex will be producing for the building material industry in China mainly.

Oz Minerals - a solid result from Australia´s best copper producer. Headline numbers appear weak - but a significant amount of copper concentrate has been produced, and will only be sold in the current Quarter.. Prominent Hill continues to do well, and in line with guidance for the full year. Carapateena will produce first concentrate before the end of the year, probably in November. This mine has been develoepd from existing cash + cash flow, and despite a significant amount of exploration and corporate developement, the company remains substantially net cash positive - some would say: Undergeared. OZL have a large pipeline of new projects and pre-feasibility / feasibility studies ongoing in Australia , as wella s in Brazil, incl the Cassini JV, on which I will elaborate more tomorrow. OZL has expansion studies ongoing for Prominent Hill, as well as Carapateena…

Perseus - a good result today, in line with expectations. The company has net cash of 80 Mill A$ following the exercise of options, and solid cash generation last year. The company still is a relatively high cost producer, with all-in costs probably around 1200 US$ - hence a good stock to own in the current gold enviroment. Edikan could also profit a lot from higher gold prices, extending it´s mine life. And last but not least, production growth is pretty outstanding in Australia, thanks to Yaoure coming into production in late 2020, if all goes to plan. Because of necessity, PRU had to run a reasonable tight ship over the last few years -that could be an advantage in an enviroment, where not only the gold pricce is rising, but also costs. But the gold price feels very good, momentum is on our side - and I think PRU are relatively correctly valued vs other Australien gold producers - but also at lower quality than the strong names. However - at current levels, and despite having had a good run, they still offer good exposure to a rising gold price for the next 6 month or so. After that, the market might well concentrate on comissioning risk at Yaoure.

Have a nice evening


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