Market Update

Resources Conference 2017 - Prairie Mining - Lucapa

Good afternoon

We would like to invite you to our yearly Australian Resources Conference in Zurich, 24th of February, Hotel Baur au Lac. As always, the attending companies are inviting all interested investors and other interested followers. Please pass on the information to your colleagues as well!

Please register by clicking this link:

Australian Resources Investment Conference

This year, following companies will attend:

Evolution Mining / Perseus Mining / Panoramic Resources / Prairie Mining / Genex Power / Graphex Mining / Breaker Resources / Peak Resources / Finders Resources / Energia Minerals

Market Update

Oh my god...this guy in the States is a narciss with a childish, huge ego...once this is getting hurt, it´s getting dangerous! And he does not have to worry about otehr things than the numbers of viewers wtaching him...This is a nightmare. Everything seems possible....and volatility in politics will go through the roof! And no doubt, we will see a lot of "alternative facts" over the next year or so...other people would call that "fake facts"!

I already begin to wonder, for how long he will be there!? Scandals/ him stepping down because he is getting bored and frustrated / his republican backers not backing him anymore / people rioting in the streets...all of this is possible over the next few years. You should own some gold...and probably rather 10% than 5%! It´s on the way to 1300!

Trump´s confirmation to build bridges and roads to make America Great Again are supportive for metal prices today, along with a weaker US$.

Europe is experiencing the coldest Jan in 5 years, driving up power prices here.

Mining stocks in London strong again today....Antofagasta is making anew, 18-month high, while Glencore ( at 3.22 ) is approaching a 4-year high! What a change - I would have never dared to touch them at 75p only less than 12 month ago! From near bancrupcy to paying 1 Bill in dividends.....

Prairie Mining - excellent coal quality confirmed from test results! Not only does their coal attract a price at least in line with the benchmark - it would also attract a premium price for location, as transport costs from Poland to Germany/Central Europe will be a lot lower than from Australia or the US...This is a very overlooked coal story, as the time frame is probably too long for "normal" investors. But history shows, that Ian Middlemas is not really a developer of assets - rather a trader. And this company, holding two quality assets in a good country, with all infrastructure in place, will attract interest from larger players. The potential of PDZ is massive - and the MD will show that to you at our conference in Zurich on the 24th of February.

Lucapa Diamonds - the very positive Quarterly has not really been a surprise, as all production numbers had been know before. Cash generation has been excellent, as the subsidiary is sitting on 14 Mill US$ in cash - part of which will be paid out soon. The market is waiting for positive exploration success, which is the only thing missing - but the stock is only priced for alluvial production, anyway. Three drill rigs will be working soon.

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

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General - Paringa - Kingsgate - Finders - Oceana

Good afternoon

For the first time in years, China actually increased the ( debt-driven ) growth-rate to 6,7% in the last Quarter. Retail Sales up by 10.9% have been the main driver, but Industrial Production at 6.0% and Fixed Asset Investment at 8.1% ( the metal-intensive contributors to growth ) have been positive as well.

Surprisingly, metals are trading weaker across the board - probably some profit-taking ahead of the inauguration of this US-lunatic, and ahead of the weekend. This is despite a slightly weaker US$. Gold is still fighting with 1200 US$....

More talk about aquisitions in the Australian gold mining sector. St Barbara, Northern Star, Resolute are all actively seeking aquisitions - but there is also a shortage of sizeable targets. Dacian keeps on being mentioend - but tehy are not dirt-cheap, as is West African Resources ( Resolute are being mentioned here, as well as B2Gold, who have a nice gold asset very close by ).

Kingsgate - reported about their last month of gold production at Chatree, which after 15 or 16 years of operation did not have it´s operating license renewed ( for probably scandalous reasons! ). Productionw as a very strong 19.300 Oz - costs for the Quarter will be reported as part of the Quarterly Report soon. In any case, the company is now debt free, with about 38 mill A$ in cash. Market cap today is 62.6 mill A$ - that´s cheap, taking into account the Chilean silver asset, which probably will need slightly better silver prices to get off the ground. Last but by no means least, tehy still own the plant in Chatree - and that´s a large and good plant. It´s not too hard to see scenarios, under which Kingsgate could be worth double the market cap....The only - and significant - caveat: The Australian, institutional market just hates the chairman! If Ross shoudl decide to make way after something like 15 years at the top, the stock would bounce. I think KCN are a good investment at current levels. I still do not own any - but I continue to think about it!

Finders Resources - restructured their financing, following the placement a few month ago. Their subsidiary is now 73.5% owned ( from 72 % ), total debt of it is 91 Mill US$, which is to be paid back over 3 years. Hedging requirement is 6.500t p.a. over the three years, so roughly 20-25% of production - not too bad. Costs will be interesting to see, once the Quarterly comes out. As I said yesterday - stock is cheap, and very cheap, if you believe ( like I do ), that copper will go back to 3$/lb over the next 3 years.

Oceana - their newest mine, the Haile Mine in the US, poured it´s first gold bar. The plant will now progressively be comissioned and ramped up. This is a large part of the de-risking process, and being located in the US, this will be a highly rated asset. OGC are well managed, and are de-risking themselves from country risk in the Phillippines.

Paringa - the stock is making new highs - and is still looking cheap! I understand, that permitting for their US coal mine might actually be coming through in February - that´s a few month earlier than I was expecting, and would be nice surprise. Also soon, expect a resource update to more than 50 millt, and an update of the feasibility study not later than March - incorporating Seam No.11, which had not been included in teh first study, as it has not been known then! That is all very good news in a rising coal price enviroment, and a new president ( oh my god, I find it hard calling him that!! ) pushing the coal industry. Analysts are valuing the stock at 85ct to 1.10 A$/share - that is without seam No.11, which should be material, and with large discounts applied to their potential second mine in the area. Given the news-flow over the enxt few month, the positive enviroment, the excellent and proven management and the large discount to potential valuations, I am very happy to recommend to buy the stock. having said this, I have sold a few today - but this is entirely due to risk management and my large position in the stock.

I will have to finish this early today - will have to go horse riding with my girls in the afternoon, freezing my a..e off! Enjoy the 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

General - Finders - West African

Good afternoon

a stronger US$ has set the tone today for generally weaker metal prices. Gold is fighting with the 1200-level, equities are largely unchanged, while bonds are weaker, yet again.

US-economic numbers have been pretty good - the labor market is strong, and housing numbers have been positive as well.

The world is saying goodbye to Ohbama, who has at least been one of the nicest US-presidents in recent times - well, in my opinion. this is certainly going to change tomorrow!

The A$ continues to trade pretty strongly, making new, recent highs against the Euro. Labor market figures in Australia have been quite positive.

Finders Resources - the company came out with a production update - all looking good, the new plant has been fully ramped up despite the current wet season in Indonesia, and has been producing at a rate of just under 25.000t this Quarter so far. Production of LME-copper last Quarter has been 6150t - costs will be disclosed in the Quarterly, which will be announecd prior to the end of this month. The main reason for the sharp jump in the stock today has been confirmation - against some negative rumours - that all is going well, and the subsequent cleaning up of a large sellin order of 7.5 mill shares. Finders should normally be worth something in the mid-twenties - any indication of the furtehr success with fine-tuning of the plant, exploration success or better copper prices should get it there.

West African Resources - got the mining permit for their planned gold mine in Burkina Faso. That has never been in doubt - but we have seen so many delays and problems with mining permits around the world, that this announcement is certainly a positive for the stock. But while development of the mine should be done also at lower gold prices, but this would certainly not help. But as you know, I am bullish for gold this year...we will find out! WAF are on track for finishing the bankable feasibility study "in the first Quarter" - well, I hope that we will see this announcement some time in February. Resolute has been touted previously as a potential aquirer of the proejct or the company - once the feasibility study has been announced, the company will be the most vulnerable.

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 - Nickel - St Barbara

Good afternoon

Core CPI in the US up to 2,2%....in Europe it´s rising as well....and the labor market is showing first signs of getting tight, as wages are increasing....as I said before - inflation might well suprise as a little this year!

How about US$ bonds yielding 2.4%, with inmflation at 2.2% - and even worse, German 10-years trading at 0.34% - and inflation at 1.7%????? Real yield is a very far cry from becoming a problem for the gold price. But bonds will turn out to be the second big surprise this year - the current yields are unsustainably low, especially, if Trump should be able to kick-start the US economy. For me, there is a real chance, that inflation will gradually increase to 3%...that should get some interest into gold - and Yellen will probably continue to be pretty dovish.

Funny enough, and despite all the negative talk around, nickel ist just about the best performer in the base metal space so far today - up by 0.8%, followed by zinc, copper and lead - all slightly green. Macquarie today has downgraded their nickel price forecast by 2000$/t for the next few years. I think that´s fairly bearish, and too conservative, as they also see yearly supply-deficits for the next few years, slowly but surely eating into stocks. And the wildcard anyway will be the impact of financial investors - if they increase commodity investments, the entire sector will go up, as none of the metals is massively oversupplied these days. So on balance - the easíng of the Indonesian export ban is clearly a negative, and will probably limit the upside for nickel - but it still does not make me bearish for nickel.

St Barbara - surprised with an even better Quarter! Last Quarter had been great - this one was even better! Grade is king - that´s certainly true for SBM! Only 200.000 t have bene mined this Quarter, but the grade at 11.9g/t has been exceptional, and has been substantially abover the reserve grade. In so far, these stunning results cannot be extrapolated. AISC were a stunning 716 A$/oz , for nearly 71.000 Oz produced. The company has increased guidance now by 10.000 oz to 255-265.000oz for the financial year - implying 117-127.000 oz for the half. To a degree, this might just be conservative - but it also shows, that the company does not see these very high grades as sustainable. Just two years ago, the company was on the brink of bancrupcy - now they are in 31 mill net cash + 22 in bullion...and cash generation is 200 millA$+ p.a.. The second operation, Simberi, continues to be a high cost operation with limited mine life, and did not generate any free cash in the Quarter. Unless they have exploration success, I value it a very little! SBM have done fantastic job operationally ( the mine is 1600m deep!! ) - but I think they will only perform in line with the gold price.

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

Good afternoon

to be honest, I do not really understand, what May wants...the only interesting part for me in her speach has been the announcement, that the Upper-as well as Lower House will have to vote on the agreement. We will see, what comes out of it....Free Trade agreement with the US? Putin best friend with Trump? Europe weakened? That can´t be the plan of Mr.Trump, and not May´s either...we will find out more over the next few month!

Investor Confidence is Germany is very strong - Car Sales in Europe as well.

The large US gold-ETF saw inflow on Friday for the first time since 9.11.2016! Quite incredible....And gold is moving higher today, 1213 US$ as I am writing. Trump calls the US$ expensive...well, I am sure, that he is one of the smartest economists around!!! It would certainly help his currency, if he stopped getting involved in European politics.....

Even while the US$ has been weak today, the base metal complex is under some pressure. Funny enough, Nickel is holding up well, again! The market seems to be fairly complacent with regards to Indonesia´s announcement - or investors believe, that the conditions applied to nickel ore exports will keep most of the stuff in Indonesia! I have to admit, that anything else would be extremely stupid, as the ban has done excatly, what it was meant to do: Get foreign investment, and upgrade nickel ore to a higher value export good.

The market in iron ore astounds us all...I think 83,60 US$ as of yesterday represents a new high, at a time, when Australian ports are counting record export numbers, as is Brazil! There was some profit-taking in Asia earlier on, but the contract is now trading only 1% down. The numbers involved for the large 3 Australian producers are absolutle amazing: Compared to 60 US$t ( that is the upper range of what sensible analysts from Macquarie see as fundamentally acceptable ), Fortescue is making an additional 10-11 Mill$ extra PER DAY! At current prices, tehy could well be debt-free by 30th of June!!!!!RIO and BHP almost double that!! No wonder, that the Aussi-$ is trading so high at 0,7533 against the US$ in the moment, as Iron ore is the most valuable export good for Australia. Still, given possible trade-frictions between China and the US, and diminishing interest rate differentials, we should be close to the top of the trading range ( Jenniger Hughes in the FT commented on that today ).

Unfortunately, nothing much to report from the micro-side!

Have a nice evening