Market Update

General - Peak Energy - Genex Power

Good afternoon

base metals, as well as steel and iron ore, continue to trade at very high levels - yet resources-equities are a bit tired! Large caps like BHP, S32, Antofagasta etc are still very well supported - but there is little demand astill for small caps! They need more general confidence to really take off - but this will come with every week the underlying commodities are staying strong!

More investors/analysts are now convinced, that a mixture of supply-discipline, and rising manufacturing in China and the US are now giving us a good base for rising demand for industrial metals in 2017!

coal prices have eased a little, but are still trading at very healthy levels, and substantially higher than anybody would have expected just a few month ago.

I remain convinced, that we are in for a great time in resources - at least for the next year or so.

And equities in general still continue their upeard trend unabated - even the Italian situation cannot hold them back. I think the market might be a little complacent here - 2.200 bill Euro in debt, 360 bill Euro in non-performing loans, and 36% unemployed under 25 years are a hefty mix in Europe´s 3rd largest economy.

The only problem remains with gold - little inclination here for investors to add to positions. It´s interesting, though, that there does not seem to be any big selling pressure in gold stocks anymore. I am also starting to get more positive here, and while I have not added any positions, the relative strength of gold miners is carefully being watched!

Peak Resources - is making progress. They have today announced the planned site for their rare earth plant, in Northern England. Close to infrastructure, close to chemical producers, and in an enviroment, which is strongly supportive of new foreign investment at the time of a looming Brexit...Surprisingly, rare erath prices are still in the doldrums. Over the last few weeks they have advanced a little - but this is rather a stabilisation than a new trend - for now. On the slightly negative side, the feasibility study will take an additional month or two, to incorporate the processing plant in the new location. I am not worried about this at all, as I am used to these things rather taking longer just so often - but it certainly does not help!

Genex Power - have closed their debt-fainancing for the solar plant. Up to 110 Mill A$ for capex, as well as 8.8 Mill A$ as a government grant have been fixed. I guess there will be 10 MillA$ in equity needed, mainly for working capital. This is all excellent news, but lately, it has been expected. I think the market now is expectinmg some kind of a placement, as the hydro-power project is currently valued at just about zero. It remains to be seen, whether teh company will do that, or sell part of the project to an incoming partner - but I doubt the latter. We will find it before Christmas, I guess!

Have a nice 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

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 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 - Berkeley - Genex - Prairie Mining

Good afternoon

well late yesterday the correction started...but given the massive rises we have seen, the correction is a very modest one, at least until now...Most of these things are trading at the second highest price this year...most metals are just giving up, what they made yesterday. I had feared for something more substantial than this. However, it might still come!

The gold price , unfortunately, under renewed pressure from a stronger US$...

Stronger 3rd Quarter GDP-numbers in the States: 3.2% vs 3% expected, Personal Consumption + 2,8% vs expected 2.3%....no inflation, GDP Price Index + 1.4% vs expected 1.5%

Very interesting piece of research from Macquarie yesterday, confirming, that the recent rally is not just Trump- or speculation driven, but at lease to some degree, from better demand around the world:

metal demand growth expectation for 2016 in Jan 16 demand growth expect in Nov 2016

Copper 1.9% 2.2%

Alu 2.6% 3.8%

Zinc 1.5% 1.6%

Nickel 1.3% 8,0%

Steel - 0,7% 0,2%

Iron Ore - 1,9% 0,6%

Some of these changes appear to be small - but in fairly balanced markets, a change in demand by 1% can be very substantial! And I guess demand expectations for 2017 will certainly be higher again, since China is humming along quite well, and since we have some strange phenomenon called Trump ruling the world´s largest economy now!

Prairie Mining - English Broker Mirabaud came out with an update on them...They only value the Lublin coal project, as no numbers are available as yet for the new, coking coal project. They want to see a scoping study first, which is starting now, and should be available in may/June 2017.Mirabaud are using 130 US$/t for coking coal long term, and 75 US$ for thermal coal long term - I think that makes sense. While thermal coal estimates might be a bit on the high side, the company would probably get better prices than world market due to it´s much lower transport costs vs say Australian coal to Germany.

Very hard to say, what the new project could be worth....Infrastructur is in place, transport would be close, demand in Europe good for coking coal...and Polish labor costs are cheap. So the value of their coking coal project on top of Lublin, would certainly be a 3-digit number.

The next bit of news will be a JORC-compliant resource estimate early in the new year. Following that, we should see a lot of important news-flow from the feasibility study on Lublin, and the scoping study for Debiensko.

Berkeley - London broker W.H.Ireland today increased it´s valuation target for BKY to 1.28 Sterling = 2.10 A$, based on a furtehr de-risking of the project, as the equity placement of 30 Mill $ is out of the way, and as first production ahs been sold forward at 43,75 US$/t. Personally, I think using an uranium price of 65 US$ long term might be a bit rich - but at 55 US$, the valuation would still be above 1.65 A$....Not bad for a project, which will most probably be the lowest cost producer in the West, and in a save jurisdiction ( well, if something like this does exist these days....). In the longer term, there is additional, substantial upside potential from exploration ( Zona 7 + Zona7-type of established targets ), and using a lower discount rate than 10%, once the asset is producing!

Genex Power - I am hearing from Australia, that an outright sale of solar projects , once government grants have been accepted, would not go down well ( very understandable! )! So Genex would not go down that path, but raise some more equity at some stage in the next month or two?! In any case - I am also hearing, that the government in Canberra, as well as the local government in Queensland, have learnt a lesson from the massive problems we have seen in South Australia over the last few month regarding imbalances/outages of the power system, and are extremely supportive of this new hydro project. I understand, that meetings at highest level have already taken place, or will so in the near future. This would increase the chances for getting a favourable price-guarantee, similar to the solar project, which in turn would enable a VERY high percentage of the project to be financed via grants, subordinated government debt, etc.. In suche a case, even valuations like the recent ones from broker Canaccord could look conservative as they are assuming the raising of substantial amounts of fresh equity.

The stock has become a little quiet - next news should be financial close for the solar project within a couple of weeks, to underwrite the current market cap without showing anything for the main project, the hydro-pwer plant - and I still believe GNX to represent a fantastic opportunity!

Have a nice evening - I will be in South Africa for a few days

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 - West African - Berkeley - Lucapa - Strike - Paringa

Good afternoon

industrial profits in China rose more than expected, and Chinese authorities approve a 36 bill US$ rail project around Bejing...this is driving metals even higher. Base metals, iron ore and steel are trading at new, recent highs - some of them at multi-year highs. There is a lot of speculative interest in these things - but there also is some fundamantal backing.

By contrast, thermal coal has been down 15-20% over the last few days, as Chinese mines have been allowed to go back to full production some time ago.

Major mining stocks in London are more or less unchanged today - equity investors are obviously seeing current price levels for many commodities as temporary. I am quite sure, that they are right - but then, none of the traded stocks have actually hit levels, which would mirror current spot prices.

West African Resources - have hit another 9m with 94g , and some more, positive holes. Some of the succesfull drilling ahs been outside of the current resource, and one of the best holes ended in strong mineralisation, extending the deepest intersections so far further down. The company is on track for resource estimate some time before Christmas - unless they want to announced it alongside the full feasibility study, which will be announced in January. WAF are still one of my favourite gold stories.

Berkeley - announced, that the recent letetr of intend with a major metal trader has been changed to represent a firm off-take agreement now. That ´s good news - but they also doubled the amount to 2 mill pounds over 5 ears at 43.75 US$/lb vs the current spot market at 18 US$/lb., Very good news for them, increasing the pressure on other´s to do simular deals. They will soon have to make the choice, how much they actually want to sell...many analysts expect long term prices to go up.

Berkeley expect to have cash costs of 16 US$/lb - so the forward sales give them a nice margin. So far, tehy have sold 10% of full production p.a. for the first few years - I guess they would be happy to go to 40-50%, if someone also commits to invest directly into the project, or the company, to enable full financing of the project. Exploration results should also be available relatively soon. The stock appears well supported at current levels, and good results would hopefully see BKY test recent highs.

Lucapa Diamonds - received the awaited 5-year exploration license for exploration of kimberlites, over an area of 3000 sqkm. They have a mining license for alluvial production in place. This exploration license will now allow them to go full steam ahead on exploring for the "real" source of the diamonds.

The diamond market has been improving over the last 9 month or so, and the discovery of an economic kimberlite would make them a sure takeover-target. At current levels, LOM are well supported by their existing production of high-value diamonds. The new plant to discover oversized diamonds is now in full operation, and I am also hoping for one or the other positive surprise here.

Strike Energy - ok ok I am always writing the same...or just about the same. Company updated re operations today, which have made real progress. For three weeks now pumps have delivered continously, and if that continues as expected, I am very hopeful for some good news ( = commercial flows ) to be reported before Christmas. The stock is solidly trading above the rights-issue price of 7ct, and I would expect 100% take-up ( existing shareholders can ask for more than their 1:14 entitlement ). Once out of the way, I am hoping for a swift recovery, and as I said above, positive news before Christmas. Even though the stock has been a real dog in anotherwise buyoant resources sector, I am still a very convinced shareholder!

Paringa - the company is currently on a road-show....my feeling is, that they might well use the much improved market in general, and in PNL specificially, to raise some more money. They will need some more equity to bring the 40 Mill US$-project into production, and also to include the recently discovered, new coal seam into the equation. Valuations in the market are still around 1$...and in my opinion, this stock is much less risky than many others - the main risk being financing risk. If they would raise say 20 mill$ at current levels, this risk would be very much minimized. Long term targets, for once the company will have developed their second mine as well, are much higher than the current 1$ - so one of the larger companies in the area, especially Alliance Resources, must be very tempted to buy this emerging competitor, before they actually do emerge as a significant, new source of supply for the local power industry. I am still holding my quite sizeable position.

Have a nice evening, and let the bull market roll on - but expect some correction ! Nothing goes up in a straight line!

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 - a few interesting AGM´s today

Good afternoon

German business confidence stronegr than expected today...In the absence of the majority of US-investors, no change of recent trends....

Amazing, and as I have to admit, a bit frightening...I am talking about sky-rocketing base metal prices...which are all making new highs today in London.

in A$ this year long term

Zinc + 67% 9-year high

Copper + 23% close to 5 year high

Nickel + 30% 15-month high - 30% to go to reach previous 3-year high

Lead + 25% 9-year high

Tin + 45% 2-year high - 15% to go to reach 5-year high

The numbers for this year are very similar in US$ terms - longer term, the prices are not at the same amazing levels, as in A$, as the A$ has been falling 25%+ since the last bull market in metals...and, as you know, costs have been falling....and still, there not many projects on the horizon. As one could witness at RIO´s AGM today - the talk in the mining industry, and certainly for major producers, is maximising profits and margins, as opposed to growth a few years ago. I have no doubt, that this will change - give it 12-18 month, and these guys might well change their mind. But you knopw as well as I do, that it takes a long time to develope projects these days - in 90% of situations, it also takes much longer, than initially thought! So we will have a nice bull market ahead of ourselves for a few years to come - whatever these very overbought base metals will be doing in the short run!

All this is provided, that the world does not go under. I have no doubt, that it will - my personal opinion is, that the Trump-experiment will fail big time - but that´s probably a few years away, and in the meantime, we might as well go for the ride and make the most of it! The Trump-trade is on big time, and as you can see in the relentless run of the major miners and the metals, big money is piling into a sector, which has been under-owned for years!!

These numbers for the base metals above are incredible - and I can only repeat, that small caps have done absolutely nothing as yet, compared to what they could-and will be doing!

The only casualty is gold...and the more I think about it, the short term will be bleak for gold. I hope, that I am wrong, and that this is a bear-trap only....but I fear, that we will be going lower - which will provide a fantastic buing opportunity for the longer term.

Kingsgate - interesting AGM today. As at today, the company is free of any net-debt....Chatree is humming like a train, on track to produce a stunning 17.500 oz this month.-... until year end, when the concession to operate the plans runs out, they will have 18 mill$ in cash or slightly more, according to the chairman´s speach today. He also reports about multiple approaches they have had as to their project Nueva Esperanza in Chile, which is mainly silver, and has a NPV of 160 Mill US$ at slightly higher silver prices than today. If I value this project at just sa 40 Mill US$ = about 50 mill A$, and add the expected 18 Mill in cash, that leaves the Thai operations valued at minus 13 Mill A$.....The upside is, that something will happen to Chatree, as it should...Let´s face it: KCN have done nothing wrong in Thailand other than to f..k up government relations ( admittedly, that´s something one should not do!! ). But they are still the owner of the land , on which the mine is located, and a large plant....that could be worth 300-400 mill A$, provided they get the essential operating license back + new exploration licenses, or just 20-30 mill A$, if they have to dismantle the plant!

In my opinion, an excellent punt....downside minimal - several times upside....and not all that much gold price risk in this stock, unless gold + silver fall dramatically. Having said this, I am not a shareholder

Evolution AGM today as well - guidance for the year has been left unchanged at 800-860.000oz production at 900-960 A$ AISC. Production is frecast to continue to slightly increase, and costs continue to slightly fall....Let´s face it: A sustainable business like EVN will make a lot of money out of it´s gold mines at the current 1600 A$/oz....the very strong copper price is helping as well ( about 20000t p.a. from recent aquisition Ernest Henry ), and exploration is delivering at Cowal, Mt.Carlton, Mungari and the Tennant Creek JV....and yet the market will not be too interested, if gold falls further. I fear, that the music is playing elsewhere in the moment, and I would hold off buying any gold stocks for the moment. It does not help to be the best of a group of swimmers swimming against a strong tide!! Not even a South African Life saver will succeed in such an enviroment...

Panoramic - also had their AGM. Not much new here - the company cannot really talk much about Savannah, until the new feasibility study is out. It is stille xpected to be finished in December - but until it will be signed off by directors, we will have Christmas, also entering the major holiday period in Australia. We might have to be patient until the 3rd week of January - in any case, well in time for this year´s conference in Zurich on the 24th of February. By the way, you can already pencil in this date - Evolution and Panoramic will definitely be there, and we will fix the other companies next week. You will know many of them, but we will also have a few new names around!

Last word, and I know, that I am pushing it hard ( and I am having a substantial position in the stock! )...just ahve a clsoe look at Foran Mining, if you ahve not bought any so far...it´s really one of the more unusual situations I have seen in my career...Using the parameters from the companies PEA ( which is slightly more demanding than an Australian PFS ) , the NPV8 as at today´s metal prices is approx 550 mill can$, vs an EV of 25 Mill Can$ today.! This is crazy stuff...and don´t get me wrong - I do not believe, that the stock will go up by 20x - but can you tell me a reason, why this thing should not trade at say 100 mill = roughly 20% of NPV????

have a nice 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 - Kasbah/Tin - gold broken through support.....

Good afternoon

very strong durable goods orders in the States are driving the US$ higher, bonds into another very weak day, and gold through chart support at 1200 today!

The Euro needs to fall another 0,5% for the US$ to break to the upside...metals are under a little bit of pressure as well...but given recent stellar performance, this is just a blip.And while I am finishing this email, metals are having a very strong bounce and are all trading 1-2% higher!!

Gold is looking ugly! very ugly...I just cannot believe this...there is more reason than ever to own gold in this uncertainy world...but it has to go lower, before it can go up again. Obviously, the world is believing, that Trump will jump-start the US economy...and I actually think, that this might be the case - in whatever sea of tears this might end. But for now, the Dow is making new highs, commodities are booming, bonds are being hammered , the US$ very strong- all of them are having a strong direction as well as momentum - and every single of these moves is very negative for gold. Good old Stan Druckenmiller has been right to sell his gold in the election night!

The larger miners had another very strong day...BHP and RIO more than doubled now from the lows this year, while First Quantum ( up by 7.3x ), Teck ( 8.5x ), S32 ( 3.3x ), Whitehaven ( 8,8x ) or OZL ( 2.5x ), Vedanta ( 4.3x ) put in unbelievable performances. I think it´s fair to say, that the junior end has been left behind big time. Small picks like Finders Resources in copper, Foran Mining or Heron in zinc, Panoramic in nickel, or the coal stocks Prairie Mining and Paringa, have been left behind - institutional investors are so far largely ignoring these. That will hopefully change! The above are just examples of stocks I own - there are many other examples.

I have had a closer look at the tin market for the first time in many years, driven by Kasbah Resources, which is shaping up to be one of the very few producers of the smallest base metal, in the western world. Well - listed in Australia - but their asset is located in Marocco. I had been invested in KAS many years ago, and finally, these guys have delivered a feasibility study recently, which looks doable. It´s calling for a mine life of 10 years, production of 4.000t of Zn p.a. at AISC of 11.500 US$/t tin. The company owns 75%, alongside Japanese partners. The NPV of the 75% stake at the current tin price of 21.000 US$ is 95 Mill A$, the IRR is just above 30%. The total investment of 78 Mill US$ has been impossible to arrange for little Kasbah, and the company entered into a friendly takeover with Asian Mineral Resources, which is another investment I have been holding years ago. ASN is listed in Canada, and controlled by Pala Investment. Pala has in the past not always been good for minority shareholders, but via the merger, which is share-based ( paying 1.3 shares in ASN + 0,4 options, exercisable at 4ct ), they can profit from the financial muscle of Pala.

Asian Minerals are the owners of a nickel mine in Vietnam, which is on care & maintenance like so many , small nickel mines around the world. The combined market cap of KAS + ASN will be about 40 mill Can$ - pretty sexy vs the project´s NPV of just under 100 Mill Can$ at today´s tin price.

Tin is looking very strong, probably as strong as zinc. LME stocks are at an all time low, while producer stocks have been falling for 5 years as well....and the use of tin, mainly as solder in the electronics industry, is rising very slowly. The metal also has a few interesting hightech applications. Industry body, ITRI in London, has recently forecast prices of 30.000$/t for tin in 2018/2019, based on ongoing production deficits of 10-15.000t p.a. this year and next ( world production is about 400.000t only p.a. ).

Asian Minerals are buying themselves a new lease of life...and their nickel operation is a nice call option for me on the nickel price. I will do some work on this later - for now, I believe, that the tin asset alone is worth having a good look. Finally, the World Bank, Lion Selection Group are shareholders of KAS, and will be pretty strong, independant shareholders of ASN after the merger, which can only be good for small shareholders.

Have a nice 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