Market Update

General - Oceana - Beadell - Newcrest - Oz Minerals

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

Donald I, King of USA, is starting to p.ss off even his allies....this guy is completely out of his brain...But it´s good to see, that our special friend Boris Johnson claims to be better informed about the travel-ban than the US embassy in London. I guess he might have "alternative facts"!!

Goldmans warn on frictions that raise near-to medium-term US$ denominated costs....

German CPI rises by 1.9%, the highest increase since 2013....

European economic confidence rises to 6-year high

Metals are mixed to slightly better today, holding up ok despite a strong US$

Oz Minerals - an excellent Quarterly out today, as the company produced more copper and gold than expected. Costs remained in line, despite the better production, indicating some cost pressure. The company published a new mine plan for the next few years, increasing copper production, but cutting gold production forecasts. This in turn leads to higher costs in the next 2-3 years, as gold as a by-product is reducing the cash costs of copper production. Nevertheless, this is pretty positive, unless you are mega-bullish for gold. For the next few years, all cash generated will flow into the development of Carapateena, while maintaining most of the current 690 Mill A$ in cash ( and no debt! ). Still, you have to be considerably more bullish then the analysts on copper, to make the stock a buy at today´s price of above 9$/share.

Beadell Resources - that was not a great Quarter....Cash & Bullion decreased by 8 mill A$, despite production of 42.400 oz at AISC of 709 US$....That looks a bit funny to me...In the end, what counts, is cash in the bank, and the last Quarter will have had some high grade production included. Guidance for this year is about in line with what last year has shown: 140-150.000 oz at 830-930 US$ AISC. Costs are negatively impacted by the strong Brazilian Real. I am not to sure about this Quarterly and the guidance - there have been some problems in mining, and even more so in recovery rates....My gut feeling is not good here...I just don´t trust them ( I would like to point out: This is very subjective !!!). Analysts see the Quarterly more positive than I do - but they might well be positioning their firms for fee-based work....As I said above - I find it hard to reconcile production of 42.300 Oz at 709 US$/oz AISC with a cash balance reducing by 8 Mill$. They certainly did not spend 20-30 mill A$ on capex last Quarter....

Newcrest - had a good Quarter in line withe xpectations, producing 615.000 oz of gold and 25.000t of copper, at a very respectable 751 US$/ oz AISC. But the stock is definitely not cheap. As the largest and most liquid , Australian gold producer, they will always attract a premium, but more than performance in line with the gold price cannot be expected from Newcrest. The rising copper price has been instrumental in cutting total costs of gold proeuction - so similar to EVN, better than expected copper prices will continmue to have a positive effect on earnings and cash flow.

Oceana - a good Quarterly from them! Didipio did not have a great Quarter, though costs have been excellent- but the NZ-operations were very positive on production as well as on costs. Overall, AISC have been 708 US$ for the year - and 372 US$b ( !!! ) for the Quarter. For 2017, the company is guiding for roughly same production at same costs as for 2016, which places them under the cheapest producers! The new mine Haile in South Carolina has just produced it´s first gold, and will contribute an additional ca.160.000oz at just above 500 US$ AISC - this is clearly an excellent asset in the US, which will be rated highly. The new project should drive costs down further, to the guidance of 600-650 US$ overall. OGC´s quality is certainly better than most! The problems in the Phillippines have quietened down, and Hailie is reducing the risk-profile of Oceana. The company is one of the very few, well-managed and good-quality Australian gold miners with a reasonable risk-profile.

Have a nice evening

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General - Berkeley - perseus

Good afternoon

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

US economic numbers out today painted a mixed picture, with a lot of underlying strength in the economy. Price pressure was limited - but I guess that might change, as labor costs are on the rise especially.

A serious trade war seems to be developing between US and Mexico...hopefully, this will not tell us what´s going to happen with us and Asia....that could be a serious threat not only to world growth, but also to US growth, even though Trump does not seem to realise this. The guy is completely out of his brain...and taken that into account, I just cannot believe, nor understand, that the gold price is falling. I think gold should be bought with the ears pinned back....

German Import Prices advanced by 3.5% (!!!!!) in December. This was the largest increase in 5 years, following a 1.9% rise in Nov. Clearly, inflation is increasing in Europe, and alongside Trump-trouble, that will trigger a lot more buying for gold. German bonds pretty much got a hammering recently, but at just 0,47% yield for the 10-year, they are still VERY expensive, in my view. Lock in your mortgage, if you can....Hard to believe, that banks are still charging us up to 0,5% in negative interest for cash being held on accounts...that is clearly unsustainable!

Chinese New Year holiday has started...we will have to do largely without Chinese players! It will be interesting to see, what happens in 10 days time on their return...traditionally, metal markets are rather cautious before this long break, and tend to go stronger once it´s finished.

Panoramic - Zeta, the largest shareholder, increased it´s holding by 5 mill shares to now 25.98% . Good to see the largest shareholder having faith in the company - still, not 100% sure, whether I like that! Nickel has taken a bit of a bath lately, and whether Indonesian ore exporters will be able to export again or not, the vast majority of nickel production is loosing money down here - even the most modern, Chinese pig iron producers will have a problem in making some cash here.

Northern Star - are still being backed by Blackrock in a major way. They increased the shareholding to 17%! I would not feel very comfortable with that, as pointed out yesterday - but who knows, perhaps I am wrong with my cautious view on the stock!

Perseus - Aussi gold stocks got a beating today - but PRU especially so, and I have to say: Understandably so! The Quarterly was as bad as foreshadowed in the recent update, but the guidance was taken lower substantially by 25% to around 100.000oz for the current half. I had expected some sort of downgrade, but not that badly! A combination of reduced grade, but especially the mining of much more oxide- and transitional or, than fresh ore contributed. And for the next few month, some of these issues will persist, resulting in this heavy downgrade. The company has looked at their way of resource estimate, and as they have found the hard way via mining, it has been incorrect! This has been rectified now, and consultants are working on a new resource estimate, as well as on a resulting, new mine plan. The future does not necessarely have to look bleak - I guess once the company digs into deaper part of the pits, the amount of fresh ore and better grades will turn out to be correctly estimated. But this cannot taken for granted, given recent experience. If you want to be on the safe side, wait for the new mine plan, to be announced by the end of next month. I am sure, that PRU are working high speed on it, to have it completed by the time of their presentation at our conference on the 24th of Feb.

Cash is starting be a little worry....during this Quarter, the cash balance will dive below 20 Mill$, which is not a lot for a mining company with a large operation. PRU are debt free, so I am not too worried...but if we should have another horrible Quarter like the one just finished, they might have to raise some fresh money at the time of a very depressed share price. I do not expect this to happen - but the recent history of PRU has been pretty volatile. Perseus are currently talking to Macquarie about a credit-line, which would remove the risk of a new issue.

Berkeley - they ahve done just so well! The stock made a new all time high today - not a bad effort, considered that BKY are developing a uranium mine, which is trading just above all time lows! The stock is still a long way below real value, I think - and still, if the stock continues to trade as strong as now, the company got to be tempted to finance a larger part of the development by fresh equity. Don´t get me wrong - I have heard no rumours, just thinking loud here. If tehy get a great off-take deal with somebody large, this could eliminate all speculation in that regard. But it never hurts to take a few of the top, when you have easily doubled your money!

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

Blackrock on gold - BP on energy

Good afternoon

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

Australia has been quiet today- Australia Day! All markets closed....

This has been published by Blackrock today:

From BlackRock: Russ discusses the signs that inflation is rising faster than many expect, and what that means for your portfolio.

Like the proverbial frog that does not notice the rise in water temperature until it’s too late, investors seem to be experiencing a similarly stealthy rise in inflation. Changes in headline inflation measures suggest a gentle firming in prices. However, underneath the surface there is evidence that inflation may continue to rise past the steady 2% nirvana that central banks prefer. Consider the following:

Housing costs are now rising at the fastest pace in nearly a decade.

Housing is a major component of core inflation, i.e. inflation without volatile food and energy prices. The main housing component in the Consumer Price Index (CPI) is Owners’ Equivalents Rent (OER). As overall housing costs make up over 40% of core inflation, this is a key metric to watch. Last December OER rose over 3.5% from the previous year, the quickest pace in nearly 10 years (see the accompanying chart).

Medical inflation is not as contained as many had hoped.

A few years back it seemed that medical costs were finally under control. That conclusion now appears premature. CPI for medical care has been rising at roughly 4% year-over-year for the past six months. With the exception of a brief period in 2012, medical costs have not been rising at this rate since early 2008.

Wages are rising.

One of the defining aspects of this recovery has been persistently sluggish wage growth, even in the face of a strong labor market. That is slowly changing. While still muted by historical standards, average hourly earnings are rising by 2.9% year-over-year, the fastest pace since the spring of 2009. A potential bolster to the trend: 20 states raised their minimum wage rates as of the first of the year.

Consumer inflation expectations are also starting to tick higher.

Up until recently consumer expectations for inflation remained muted. This was arguably a function of plunging oil and gasoline prices, which seem to exert an oversized importance in consumer perceptions of inflation. With oil and gasoline more stable, expectations are changing. The University of Michigan’s one-year inflation expectation survey is now at 2.6%, up 0.4% from the previous month.

None of this signals ’70s style inflation; it does suggest inflation may surpass still modest market based expectations. While 10-year inflation expectations, measured by the Treasury Inflation Protected Securities (TIPS) market, recently rose to 2.05%, they remain well below the 2.6% level reached in early 2013, a time when core inflation was roughly 50 basis points lower than it is today.

To the extent realized inflation and inflation expectations continue to rise, investors may want to consider several themes in their portfolios: a preference for TIPS over nominal Treasuries, an overweight to financial stocks, typically beneficiaries of higher interest rates, and an underweight to bond market proxies, such as utilities and consumer staples. Finally, should inflation expectations rise faster than nominal rates, gold is likely to continue to merit a place in most portfolios.

The SPDR Gold Trust ETF (NYSE:GLD) fell $0.63 (-0.55%) in premarket trading Thursday. Year-to-date, GLD has gained 4.30%, versus a 2.70% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #3 of 32 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of BlackRock

Interesting stuff!! Unfortunately, gold is falling again today....it seems to be highly correlated with bonds...even though real yields are not rising...

Consumer Confidence in Germany is still very high! Labor market in the US is still strong, even though numbers out today have been slightly negative vs expectations. Trump has started his "infrastructur-program" by allowing two pipelines to be built, and one big wall....the first 30 bill US$ or so in spending are on their way....We ripped down our wall years ago - he is building new ones....not only between Mexico and the States, but also walls between many people....

BP published their yearly energy-bible...interesting ( www.BP.com ): They are basing their forecasts on the expectation of 3.4% growth , driven by China/India ( about 50% of worldwide growth ) and other developing/emerging markets.That results in GDP more or less doubling to the year 2035. They are forecasting a 30% increase in energy consumption until 2035 - all sources will grow from today, driven by alternative energy, but also nuclear ( 2.6% growth p.a. ) , gas ( 1.6% ), oil, and even coal ( 0.2% p.a. ). While they see growth of carbon emissions halving vs the last 10 years, they still see the need for incentives, to improve on that measure. But certainly interesting to see, that they believe in coal - seeing the peak of consumption taking place at asbout 2025 and very small contraction thereafter. But BP believes, that fossil sources of energy will shrink to 75% of the total by 2035, from 86% today. This should result in ongoing dampening of oil prices, and they forecast, that the market share in oil will move more strongly to cheap producers like the Middle East, and to production from shale formations. Nothing too much to worry for natural resources companies - but some adoption in long term strategy might be needed.

Have a nice evening!

General - Evolution - Resolute - Northern Star - Highfield

Good afternoon

metals finished extremely strong yesterday - but some profit-taking around today! No apparent reason for this - I think metals have had a great run, recently, and there is some profit-taking around. I fear it´s notable, that nickel has not had the recovery the other metals have seen...

Equities are very strong indeed..again, not really sure...perhaps a belated reaction to relatively strong economic numbers around the world? Or just a lack of alternatives in light of weakening bond markets?

Gold has come under pressure late yesterday, as the US gold ETF has seen some 100.000oz leaving the fund, reversing the recent trend. It´s also under a bit of pressure from very positive sentiment today for equities - I do not believe, that rising interest rates are a threat to the gold price yet, as real yields ate still either negative, or dismally low.

Lots of speculation surrounding possible strike action at Escondida. Union demands and company offer are a mile apart - the union is recommending strike to it´s members. As you will know, Escondida is the largest copper producer worldwide, and wage negotiations there set the wage for about 15 other mines in Chile.

German 10year bonds are trading at the highest yield ( 0,46% vs last years low of - 0,17% ) in 12 month.

German Business Confidence deteriorates from a 3-year high - some fear of trade sanctions or Trump doing something else stupid!

Evolution Mining - an excellent Quarter from my favourite gold miner! Record production of 217.800 oz at AISC of 900 A$! Neadless to say, that tehy "comfoartably" achieve guidance for the full year 2016/2017, as usual! Record production at the largest mine, Cowal, at 815 A$ AISC; stunningly low costs at Mt Carlton of AISC of 604 A$ have been the highlight on production, while Edna May continues to struggle. Exploration at Cowal delivers again, and while the feasibility study for a large cut-back is not finished as yet, management expressed confidence in an extension of mine life to 2032!!! Ernest Henry contributing as well, and big time. The mine is not operated by EVN - but they bought the gold production, and part of the copper as well. The mine produced only 14.200oz - but at a negative ASIC of 114 A$/oz, after by-product credits from copper!! Due to the nature of the transaction, EVN receives payment for copper more or less immediately, while gold revenue is being received in the following Quarter. This means, that an additional 23 Mill A$ from last Quarters production will be received in the current Quarter - and EVN only had access to the cash flow from 1.11.2017, i.e. just 2 month in the Quarter. Company is extremely happy about Ernest Henry - and a rising copper price could drive costs of gold production even lower. Ernest Henry has a mine life of at least 11 years.

Evolution has proven now for several years, to be Australia´s most reliable gold producer, and now a very low cost producer by world standards - I think they deserve a premium for that and have further upside at the current gold price! The company looks capable of generating 400 mill A$ in free cash p.a. before tax at current gold price.

Northern Star - this has been the other star performer of recent years, and you can see the difference: A reasonable Quarter, but you can see them struggling to continue with good, free cash generation. Their mines are just not that fantastic, and analysts are struggling to justify the current valuation. Mine life got to be a question mark, even though they have proven to be strong brownfield-explorers. The company continues to trade like having a 10 years mine life - but proven mine life is just 4 years at best....These comments might not be paying credit to the excellent management of the company, which would not be fair - but the asset-quality is just not nearly as good as EVN´s - so very hard work! I would be rather cautious of NST - the valuation includes many IF`s!

Resolute - at first glance, a good Quarter from Syama, at least on the cost side - but at second glance you will find, that mill feed was coming from stockpiles, which greatly reduces the costs. Mill throughput and recovery were actually sub-par - and the company warns, that volatility in recovery rates will continue, while stockpiles are being treated. They also warn on lower grades this Quarter for the Australian operations. Resolute are not a bad story, either - and following the placement last year at nearly 2$, their balance sheet is more than healthy with about 250 mill A$ in net cash. But I reckon in the longer term, they could do with the aquisition of a low-cost producer, to employ their cash....

Highfield Resources - as expected, their Quarterly was meaningless...everybody waiting for mine approval, and since March 2016! The ministry has contacted all relevant bodies for somemnts some time ago - all cam abck with questions etc before Christmas. HFR then received a list of questions back - none of which were new, or worrying. HFR have three month to anywer, but will be a lot faster than that - I expect them to answer everything in detail by mid-February. This should be the very very very last step in the approval process....but given the problems with the Spanish bureaucracy, nobody would want to commit to some timing. I am still very long the stock, as I believe, that business and common sense will prevail in a country with massive unemployment. HFR have a great project, and interest in potash production is rising again, as can be seen in the great performance of Potash Corp, or Kali+Salz in recent times....One day we will wake up, and HFR have received the all-important letter - but I admit, that waiting is a terrible game!

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

Resources Conference in Zurich 24th of Feb - register here - General - MacMahon - Peak - West African - Western Areas

Good afternoon

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

still strong PMI in Europ, even stronger in the US - housing market strong enough -The positive run of economic numbers around the world is continuing.

Trump cancels the Asian/US Trade pact....McCain believes, that this is a big mistake. Australia´s PM has the right answer - well, let´s potentially replace the US by China! Great idea! At least in tactical terms! Minister of Defence loves the NATO - Trump regards it as "obsolet". "Millions of Illegals" have voted for Clinton, manipulating the election. It´s really frightening!! I am taking bets for Trump not surviving in his job for more than 2 years. The guy is a joke - albeit a dangerous and very sad one...As the FT points out today - if the White House is obviously lying, how can you possibly trust them at a time of crisis????? I stopped believing the American Government after 2003 - but I guess most people have done so until Trump came around the corner! "Alternative Facts" is the new word for the "Truth", as we have known it!

I can only repeat - put some gold under your matress, or into a vault! Europeans ( mainly Germans? ) are doing so - the German XETRA Gold ETF has had by far the largest money inflow last week - 544 mill US$. Still relatively small against the US Gold ETF - but the downturn there has been stopped, and small money is flowing in as well.

May is loosing in the courts - BREXIT will most probably be slowed down! Good on her...we Germans don´t like the POMs anymore since last summer ( well except for these beautiful princesses! )

Iron ore and Steel strong again - holding amazingly above 80 US$/t....mining stocks in London and North America very strong indeed today, as RIO is profiting from the sale of Hunter Valley thermal coal assets for 2.35 Bill US$ to state-backed, Chinese Yancoal.

Cobalt is starting to run - mainly driven by investor interest, for now. If there is one metal, with good demand-growth, and very high risk of supply-disruption, it got to be cobalt. While most nickel producers have it as a by-product ( but sort of meaningful ), the majority of supply is coming from wonderful Democratic Republic of Congo....and electric cars cannot do without it. The vast majority of batteries is using cobalt...

Macmahon Holdings - one of the larger, Australian earth-movers has received a unconditional, final ( knock-out )bid from largest shareholder CIMIC, the subsidiary of German/Spanish Hochtief AG. The company has been in strife for some time now - I think one should end this saga and accept. The sector has been consolidating it´s strong run for a while now - could be right for another move. Look at good old Ausdrill, or Swick Mining ( in which I have a holding for the fund ). Good drilling company, family-controlled, and very streamlined like most other companies in the sector, which have survived the last few, tough years!

Peak Resources - getting ready for the upturn! The feasibility study will be finished in late March/early April - I believe, that we will see progress from the pre-feasibility study in terms of capital as well as costs. Testing of recovery via a leaching process for Neodynium and Praesodynium has resulted in more than 90% recovery for these very valuable Rare Earth Elements, and the site of the refinery has been found in the UK, as reported earlier. The stock is doing very little...next move will be up! Listen to them at our conference in Zurich...should be a good story!

West African Resources - Clarus from Canada updated research, valuing them at 63ct. This does incorporate some exploration success - but in any case, at 32ct, they are very cheap. Clarus is modelling 150.000 oz p.a. at AISC incl exploration of 790 US$/oz for them. This project will find one or two aquirers, I believe. Unfortunately, not coming to this years conference, because of time constraints. They will be a winner...well, I hope so, as I have a reasonable position in my fund.

Western Areas - good Quarterly! They generated about 17 mill A$ in free cash from their mining activities- not a bad effort in light of the nickel price last Quarter ( which was 10% higher on average than today ! ). Does not augur very well for the current Quarter. I think they are cheap - but I would want to wait with buying, until we have more clarity as to Indonesian- and Phillippino government- action.

have a nice evening and enjoy the bull market!!

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