Market Update

General - Berkeley - Genex

Good afternoon

Chinese retail investors sontinue to be taken to the cleaners by hedge funds...the wave of specualtion has taken the iron ore future up by 33% since 11.th of April, and down again by 25% - just about the same in steel rebar! Every bubblemtends to burst - and then overshoot on the downside. The latter probably has not happened as yet - but fundamentally,a s well as on the charts, we should build a floor at around current prices.

Gold, base metals and oil are doing this today, at least so far - feels a bit like the rout could be over for now. The same for the A$, which had a fair correction from it´s surprise rally, and probably is roughly in line with fundamentals. It might well test 70ct aginst the US$ again, once prospects for another rate cut in August become clearer.

Canadian broker GMP highlights, that corporate transactions liek yesterday´s purchase of Tengke Copper Mine ( in Democratic Republic of Kongo, not really a nice place to do business ) are taking place at valuations, which imply a longer term copper price of at least 2.85 US$/lb versus todays price of 2.13 US$/lb

Berkeley Energia - raised 10 Mill US$ today from Resources Capital Fund, one of the most experienced resources private equity funds. 5 Mill US$ were raised at the equivalent of 0,625 A$, and for another 5 Mill US, RFC will be receiving a 0,375% net-smelter-royalty. A good deal for BKY, as it was done at a slight premium to the share price, and as it allows BKY to continue with some infrastructure spending in Spain, as well as agressive exploration for more Zona 7-type resources in the area. The full mine financing will be done in the second half. I expect this do be done by/in conjunction with an off-take agreement with a large consumer of uranium. I am hoping, that no furtehr equity will be needed...BKY continue to be a great story in a very volatile enviroment for resources in general!

Genex Power - have announced a very important, binding agreement with Ergo, the owner of the existing electricity network, which connects the former Kidston Gold Mine with electricity markets in Queensland. The contract governs the terms and conditions of the substation upgrade works, as well as the transmission of the 50 MW electricty from Stage 1 of Genex´project, the solar plant. This is almost an essential agreement for GNX, to be able to debt-finance the project, and to progress discussions with equity partners,"to fund all or part of the equity". All approvals are now in place - once financing will be completed ( within 6 month? ), first cash flow is planned within 12 month of construction start!

This is only the first part of GNX´s plans - the much larger, and more interesting hydro-project is being driven independently of the solar plant, which has been de-risked by today´s announcement. I would expect, that Australian investors will start to wake up now! Today´s market was a good start, with the best turnover since listing 6 month ago.

Have a good eveing

General - Gold Road - Evolution - Berkeley - Kentor - Beadell - Troy - "Sin" Mining

Golds does find a lot of resistance at 1300 US$ - tried this level again on Friday, and failed - but ounces held in the ETF are still rising - and it´s price is holding up nicely at 1728 A$/oz - but down 22$ as I am writing to 1265 US$.....The A$ has definitely turned down...and has sold off from 1.45 - to 1.55 against the Euro since 21.4.!

Chinese speculators are driving metals, iron ore and Steel Rebar down almost as quickly as they drove them up! All theses things have had a pretty horrible weak, and the rout continues today. Just oil escaped the sell-off for most of our day - but that´s also down 1% now.

The appetite for placements in the gold space is still excellent - Oklo Resources raised 10 Mill$ for it´s Mali-based gold project, and was heavily oversubscribed. The other recent West African placements, Cardinal and West African, continue to run strongly as well....

MMG Limited reportedly to be bidding for Freeport´s copper assets in the DRC - the company recently stated, that they had a war chest of up to 5 Bill US$ for aquisitions, backed by Chinese money.

Gold Road received mining approval for the Gruyere project in Western Australia. Interesting to see in this stock, that institutional investors apparently happy to buy, where corporate investors are not. This tells you something about ( some ) investors outlook, which is obviously for higher gold prices ( must be - hard to justify these prices otherwise, in my opinion ).

Evolution - I am a little proud of them hitting a new all time high today!

Berkeley - almighty BlackRock became a substantial shareholder today!

Kentor - announced some more drilling results, which were nice, but not out of the usual. I have not managed yet to get to the ground of what looks like a dismissal of previous CEO, Simon Milroy. Simon has got a few things wrong over the years - but over the last 2-3 years, seemed to be doing a good job in advancing the Australien Copper project.

Beadell Resources - new presentation out, and the announcement of some spectacular drilling results from their Tip AB open pit - the best one with 58g gold over 24m. The intersection has not been included in the recent resource uipdate, but is within the planned pit-design - and also important, it´s largely in oxide ore, which is more valuable to the company, as it extends processing with the current plant. The company is spending 7 mill$ this year on mine- and near mine exploration, and has had some pretty good success so far.

I had previously commented about the slightly disappointing Quarterly production to March.Looking into the second half, the performance will be much improved. The company is guiding for 145-160.000 oz of production this calendar year. The improved production in the Dec-half will be mainly due to Duckhead delivering - and that´s for one Quarter only. But looking behind that, I think the company should be producing 145-155.000 oz p.a anyway - as pits are getting deeper, grades should improve towards the reserve grade of above 1.4g, and drilling reports like the one today will give them the odd Quarter in between, in which they mine higher grades than this.

The balance sheet is much improved since this last ( too cheap ! ) placement, with approx 10 mill A$ in net cash. Cost guidance for thios year is better than what most analysts are expecting - AISC of 715-815 US$/oz. This year, and in the medium term, the company should generate something like 55-60 mill$ free cash from operations p.a. - that is a nice improvement, and the EV of about 340 Mill A$ does not value exploration at all. Compared to many other stocks, which have continued to run quite hard, BDR has been left behind more recently, and is showing value.

Troy - also out with a fresh presentation, which sums up this desaster....Their mine in Argentina has been a desaster and has been sold for a token, while their new mine Karouni took 6 month longer than planned! They are citing Leicester as a good teamwork like the one at Troy - well, one important difference: The former became Champion - Troy f...ed up! They boast about their 3% dividend yield story over 13 years - well, until 4 years ago!!! and since then, they raised 80 mill$ in fresh equity! They have 50 mill in net debt, 75.000 oz hedged at 1113 US/oz, a little over 2 years proven reserves, Enterprise Value of 270 Mill A$. The existing production, based on existing reserves, I would value at just 100 - 110 Mill A$ - the remaining 160 mill A$ are for exploration. Well - need I say more?

well...a little sin of the past to end up with: I stumbled across Kin Mining today ( Sin Mining??? )...they own the Leonora assets, previously owned by Navigator, before they went into administration a few years ago...Mea culpa.....this company announced a very positive scoping study ....well - not for me - I have burnt my fingers ( and yours, sorry! ) in this one too badly to ever touch it again!

Have a nice evening

Wilhelm Schröder

Schröder Equities GmbH
Seitzstr.7a
80538 München

Tel. +49-89-4613440-0
Fax +49-89-4613440-10
email: wschroeder@schroeder-equities.com
website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985
Geschäftsführer: Wilhelm Schröder

The information contained in this communication is confidential and is intended only for the use of the addressee. Unauthorised use, disclosure or copying is strictly prohibited. If you have received this communication in error, please delete it and notify us by telephone at +49-89-4613440-0, by fax at +49-89-4613440-10 or by e-mail at bscott@schroeder-equities.com immediately. Please note that this communication does not constitute and may not be construed as investment advice and / or referral to buy or sell financial instruments. Unless specified otherwise, the views expressed in this communication are solely subjective notions of the individual sender and / or the entity or individual stated as the author of any information submitted. Performance in the past may in no case be considered as an indication for future performance. Please also note that Schröder Equities GmbH and / or its officers or employees may have interests in financial instruments referred to this communication. A current list of shareholdings can be emailed on request. Furthermore, our clients are hereby informed that Schröder Equities GmbH renders advisory services to Nestor Australien Fonds, an investment fund administered by Nestor Investment Management S.A. Luxemburg. Please also note that e-mails can be intercepted by unauthorized persons.

General - Highfield - Chalice - Middle Island

Good afternoon

a weaker Chinese currency last nigt ( in fact, the weakest day since last August ) and weak prices for Steel Rebar and Iron Ore in China led to very weak prices for many metal producers last night in Australia - BHP, RIO, SFR, FMG, IGO etc etc all down 5-10% ). The legal proceedings against BHP in Brazil, where the prosecutor is asking BHP/Samancor/vale for 44 bill US in damages, did not help, either ( these figures are a joke, and in previous cases, similar situations have consequently been settled at a fraction of what the prosecutor originally asked for )

In any case - not a nice market last night - and gold trading at 1281 US$ at the time of the Australian market close did put some pressure on gold stocks as well. But as so often before over the last few month, it´s recovering nicely today, trading at 1290 US$ or at 1723 A$/oz. This is a new recent high, supported by more weakness of the A$ against the US$.

Gold holdings of ETF`s are the highest since late 2013!

Unit Labor Costs in the States increased by 4.1% - more than expected, as productivity was weak.

Mark Moebius believes, that commodities- and their producers are cheap, and that the recovery has only started. He is not really known as a commodities-man - but his word is certainly been heard in Emerging Markets!

And last but not least - TRUMP has done it! Anyway - vs Cruz, potentially the smaller desaster, as he will hopefully find it tough to beat Clinton ( this is not to say, that I like that woman! )!

Chalice - have sold their Cameron Gold Project in Kanada for 32.26 Mill shares in First Mining Finance in Canada, a 370 mill Can$-company, with liquid trading in it. That equals about 25 mill A$, and brings total cash of 37 mill A$ + 25 Mill in shares to 62 Mill A$ in assets, or 22ct/share. Even though Tim Goyder has delieverd a good deal, once a gain, I am sure, that Chalice will continue to trade at a discount - but over time, probably not as large as today´s 20% discount. I would not be surprised to see, that Chalice will return a significant amount to shareholders ( as they did previously ), once the share holding in First Mining has been sold. Chalice need to hold them for at least 4 month.

The transaction is another sign, that M&A in the small sector is hottening up!

Middle Island - years ago, I have written quite often about them, and there might be some residual shareholdings left in Europe. Back then, they were exploring the promising Reo Gold Deposit in Burkina, and they still own that. Today´s rise, though, is based on MDI´s purchase of a small, 400.000oz resource in Western Australia, called Sandstone. The asset comes with a 600.000t p.a. plant, which has been on acre and maintenance for the last 6 years, and will need 5-8 mill$ in refurbishment. The transaction has been negotiated a few month ago, but it took until now, to finish the transaction, as the seller has been the liquidator of the previous owner, making such a transaction a lengthy deal.

The exploration potential of the asset is till very good - and Rick Yeates, the MD of MDI, still has my trust. Without any doubt, MDI will need to raise a few million $ in fresh equity in due course, having to pay 2.5 mill$ for the asset within 60 days.

In any case - there is some hope now for long term shareholders of MDI!

Highfield - there is a good chance according to Australian analysts, that Highfield will be included in the small cap index of the MSCI , to be announced on the 13th of May. Wilsons HTM believe, that 16 days of average daily volume would be needed, to fill resulting Index-related demand.

Have a nice day off tomorrow,

Schröder Equities GmbH

Seitzstr.7a

80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

email: wschroeder@schroeder-equities.com

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

The information contained in this communication is confidential and is intended only for the use of the addressee. Unauthorised use, disclosure or copying is strictly prohibited. If you have received this communication in error, please delete it and notify us by telephone at +49-89-4613440-0, by fax at +49-89-4613440-10 or by e-mail to wschroeder@schroeder-equities.com immediately. Please note that this communication does not constitute and may not be construed as investment advice and / or referral to buy or sell financial instruments. Unless specified otherwise, the views expressed in this communication are solely subjective notions of the individual sender and / or the entity or individual stated as the author of any information submitted. Performance in the past may in no case be considered as an indication for future performance. Please also note that Schröder Equities GmbH and / or its officers or employees may have interests in financial instruments referred to this communication. A current list of shareholdings can be emailed on request. Furthermore, our clients are hereby informed that Schröder Equities GmbH renders advisory services to Nestor Australien Fonds, an investment fund administered by Nestor Investment Management S.A. Luxemburg. Please also note that e-mails can be intercepted by unauthorized persons.

General - Gryphon - Genex Power

Good afternoon

London is closed today - so things are a bit quieter ...but this cannot be said for the Australian market last night! Gold stocks, and also most base metal stocks, were just rocketing! And gold is now trading a few $ higher than at the Australian market´s close at 8 am! It´s fighting hard with the 1300$-level...

In A$-terms, it´s trading at round 1700 A$/oz - only 100$ below the all time high.

Chines Manufacturing PMI was still above 50 on the weekend, indicating a gradual expansion the same indication from Europe today, The US-PMI exhibited a similarly lacklustre manufacturing enviroment.

The Australian market has been very quick in looking for bargains in second-and third-teer stocks, which have put on a few strong runs recently - Gascoyne probably being teh stan-out, as it moved from 10ct at year end, to nearly 70ct today. Is there some value left at the very junior end?

I believe, that there is - but you have to be very choosy. I mentioned Crusader last week, and Panoramic - they could still be good bets. Here is perhaps another one:

Gryphon Minerals - one of the best hated gold developers in the market. Management has been very kind to itself in terms of salaries - and they have under-delivered, during years of heavy promotion. Understandably, the market hates this kind of behaviour. But my feeling is, that gold will still go higher - so one ought to look at this kind of stock. Sins might be very quickly forgotten in this very strong market, and it might pay to be a little opportunistic.

Gryphon have about 11 mill$ left in cash + liquids - enough for a few Quarters of extensive exploration. Some time ago, the company established a 3.6 Mill oz resource in Burkina, the Banfora Project. Market sources put a little bit of doubt on the quality of the resource, but in any case, it´s a large resource - whatever the history of it is! Scaling the project down to a more managable and financable project has happened over the last 2 years or so, to concentrate first on a 2 millt heap leach project, and later on , to a 2 mill heap leach + 1 mill CIL project. The latter was found to deliver the highest NPV ( 5 ) of 210 mill A$, and IRR of 42% after tax - producing 133.000 oz p.a. at 800 US$/oz AISC, and capex of 130 Mill US$. These are pretty good numbers - based on 1200 US$/oz gold price.

More recently, the company has announced a round of drilling results, showing some very high grades of between 300g and 570g/t over 1 m intervals - quarz veins, which could open up underground potential. The company has published a 3.5-4.5 mill t exploration target with 5-7g gold/t. I would take this with a pinch of salt - but without doubt, there is potential.

The stock has had a good run recently - but at an EV of 48 Mill A$, this stock is certainly cheaper and also more advanced than quiet a few of the recent high flyers. I am currently not a shareholder.

Genex Power - came out with a rather complicated announcement last week, changing the scope of their hydro-project in Queensland. Rtaher than using the second, higher pit, they are looking at a large pond on top of the tailings, which would deliver them an additional 30m in height, better economics, and lower costs per MW produced. The scale of the opertaion could also be enlarged, to production of up to 450 MW. How large the operation would be, is dependant also from the impact this operation would have - on selling prices in peak hours, and on buying prices during quieter times of demand. The company further believes, that such a project could be 80% debt-financed. The sacle,a s well as the sexy nature of the project, does find a lot of interest with infrastructur funds as well.

The next, very important step for the project would be a connection agreement with the owner of the power line, connecting Kidston with main markets. Such an agreement would substantially derisk a proejct, which otherwise, would be a lot harder to realize.

Unfortunately, I am still one of the few buyers of this stock, but believe in the quality of the project. It´s always teh same - this play is probably to uncertain for many, institutional investors - but every bit of de-risking flushes a few buyers out of the woodwork. It all depends on your willingness to take on a few risks!

Have a good evening,

Schröder Equities GmbH

Seitzstr.7a

80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

email: wschroeder@schroeder-equities.com

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - GoldGoldGold - West African - Cardinal - Crusader - Finders - Breaker - Highfield

Good afternoon

What a great finish to a good week!

Some good growth numbers out of Europe today, and weaker than expected CPI of Minus 0,2%...Personal Income in the States rising, but Personal Spending flat - and PMI, as well as Consumer Confidence, slightly falling...the confidence in the States has been undermined by Trump, Cruz, Clinton & Co....

Facebook´s great result followed by an even better one from Amazon...I have to admit, that there is something, which the US does well...

Iron ore prices in China as well as coking coal were limit up today, probably helping base metals in London today to a very strong day. The weak US$ might be helping as well...copper up 2%, zinc trying a new high, and nickel wants to move through the 200-day-moving average, as well as general chart resistance at 9450-9500 US$/t. And last but not least, oil is making new highs as well.

Perhaps we are seeing an element of hard asset buying here? Recent economic numbers from around the world except for China and not really making me feel that confident in any recovery in the moment...

But the place where I do feel confident is certainly gold...it has broken out of it´s flag, and the only remaining resistance at 1280 US$ is being tried, as I am writing...my chartist tells me, that after 12809, 1440 US$ is the target! Sounds nice to me...could be a happy weekend coming! There is still nothing better than a solid bull market in gold!

I was asked today, what one should be buying, having missed this recent run until now...I would buy a mixture of quality - Evolution - and leverage - Perseus - to participate. In Evolution, you would probably underperform a strong bull run - but it´s diversity and good management will limit the potential downside. Perseus could move like a rocket, if gold rises another 100$ - that´s depsite the disappointing Quarterly yesterday. But I have confidence in the management team to overcome the current problems this Quarter, and combined with operating a very price sensitive, high cost mine, you are buying 6 mill oz in reserves, and 23 mill oz in resources for an Enterprise Value of just 400 Mill A$ - pretty amazing! The only thing I do not like is the very long time line to develope the new asset, Yaoure - but I guess a strong share price performance and subsequently, a capital raising, could speed that up.

West African Resources - just having completed a heavily oversubscribed placement, somebody today bought 15 mill shares held by Ausdrill, which is drilling for WAF, and really helped out in a capital raising a few month ago, when nobody else wanted to buy a gold stock! Good on them, and good to see, that they made some money on helping out! WAF will need to deliver a few more good drill holes to underpin their strong share price performance - but I have high confidence in them doing that.

Cardinal Resources - announced some more drilling results today, delivering some decent high grade intersections. They are on their way to establish a large, low grade resource in Burkina. Too early to tell the grade - but it looks like 1.2 g or so, at low stripping ratio. So a little bit at the skinny side - higher grade results like today´s are very helpful. Similar to WAF, I am not sure, whether I would buy them at current prices - but I am certainly a happy holder, and if gold continues to move, we will have more fun in s peculative stocks anyway.

Crusader - Quarterly out - like every iron ore producer, going through a rough time recently - but March was break-even, and April shaping up very well, especially in terms of demand for their various product specifications. They are still confident of making some money in 2016 from Posse. But in light of the new bull market in gold, their assets in Brazil, namely Borborema and Juruena, are of much more interest. The company has been extremely tight on cash until the recent 6 mill$ placement. With money in the bank, they have now started a 6.000m diamond drilling program in Juruena, to convert resources, as well as extending them. This program should bring them much closer to their target of establishing a smallish, say 30.000oz p.a mine, which should generate 10 Mill$+ p.a. to enable proper exploration of their large, and very exciting ground holding at Juruena.

Borborema is a 1.6 mill oz reserve, and optimisation studies have started here on a smaller scale plant, than originally planned., to produce 80.000 oz or so p.a. Results should be published this Quarter. In a rising gold price enviroment, some stock like Crusader could be a good bet - and I dare to say, that having commodities-legend Jim Rogers on the board, most probably will be very useful in a bull market!

We have all had our disappointments with CAS in the past - but there is potential to make some good for us! I declare my interest in CAS...

Breaker - did a small raising at a disappointing price of 13ct - anyway, they have some more funds to drill now. Let´s not forget, that this stock is coming from 3ct not too long ago. The price of 13ct is reflective of the fact, that the big breakthrough in exploration has not been achieved as yet..even though Tom Sanders has had some sniffs! What amazes me every time he is publishing his Quarterly is the fact, that he is running his company on 500.000A$ administration costs per annum - so nearly all funds raised are going into the ground. Good on him!

Finders - the share price is profiting from better sentiment in the general resources space, but it´s a little disappointing, that the company is still probably 4 weeks away from comissioning, looking at the fotos in the Quarterly today. But the stock is very cheap, once in full production of copper very soon....Cash costs less than 1$/lb, some good hedging at just under 6000 US$/lb, and an EV of about 250 mill A$ for a quality producer of 20.000t of copper cathode sub 1$/lb should be 20-30% too cheap - it all depends on your copper price outlook!

Highfield - 99 mill$ cash left in the bank, and the 222 Mill Euro bank-financing is close to being fully documented...I guess about 30-50 mill A$ would be missing...hope fully from a corporate, or an offtaker. A scoping study to convert some of the MOP ( Kcl) to SOP ( K2SO4) is substantially completed. SOP is trading at a significant premium to Kcl. Highfield have also recruited a suitable person, who is responsible for marketing of the product. First supply agreements are expected to be concluded this Quarter.

But the main point and value driver remains permitting. The responsible ministry confirms, that it´s possible to get the much desired Enviromental Approval even under the current caretaker-government - and they point out that, under Spanish law, the Ministry has only up to 6 month to issue this approval ( or to deny it, which is highly unlikely ) This timeline expires in 4 weeks! So there is some hope, that approvals will be received before a new government will be elected in late June....The local provinces of Arragon and Navarra ( left wing, by the way ), are strongly supporting the project - but that´s no guarantee, and the Central government I guess could always find a reason for delay, if they really want to.

Highfield is still one of our largest positions - an outstanding project, and funny enough, our fund is currently holding about 8% of total NAV in companies having all activities in Spain. There is good reason for this - Highfield in potash, and Berkeley in uranium, are two worldclass assets ( by the way - Berkeley is breaking out and has ended the consolidation phase...I remind you, that BKY´s NPV , depending on your price outlook for uranium, is way above 1$/share vs 0,57 A$ share price today...)

Have a nice weekend

Schröder Equities GmbH

Seitzstr.7a

80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

email: wschroeder@schroeder-equities.com

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder