Market Update

General - Panoramic - Genex

Good afternoon

a nice finish today for what has been a good week! The change feels bloody good!!!!

A bit of profittaking is creeping in now - but European equities are still having anotehr good day so far…Manufacturing numbers in Germany indicate reducing growth, but overall, a healthy picture. More worrying perhaps is the political situation in Germany in the moment!

Don´t ask me, why gold got hammered in a few minutes early this afternoon -

Base metals very strong today - Chinese short-covering continuing? Copper up 3% in the moment, nickel up 3.5%….Great timing for the development update from:

Panoramic Resources - making good progress on restarting Savannah.. All on track for first shipment in January! Plant comissioning starting in October, increase of tailings facility finished in November, recruiting well advanced - all going at least to plan! The larger listed stocks in Australia, WSA and IGO, have seen strong price movements this week ….PAN has some room left! And longer term, assuming nickel will go to 7.50 US$ next year, the stock can still double. There are very limited vehicles to invest in nickel in Australia - and into serious base metal miners in general. The institutional market will love to have something like Panoramic back in production! One can feel the urgency and the enthusiasm in the company - great for Peter Harold to be a producer again very soon! Get going - we are well set! And who is not, should move soon…

Genex - received development approval for the hydro project from the local authority. No major deal - but these things can take time, if you are unlucky. The main story, though, will be an off-take agreement for the power. Very hard, how long this will take, but one thing is for sure: The local labour government of Queensland is very supportive, and is pushing very hard for renewables, giving me hope, that such an agreement could be in place in the enar future. Once this is done, the company can seriously talk to financiers, which are needed to complete the financing on top of the NAIF-( conditional on off-take - ) approved 516 mill A$ of subordinated debt. Euroz is currently having a price target of 80ct for the stock, with a bull-target of 1.50 A$, if everything goes right!

Graphex - the only analyst follwing the stock, industry veteran Chris Baker, sees a 12 year mine-life, and therefore, has an NPV10 after tax of 412 mill US$ or 560 Mill A$ for this project! Even taken into account, that the Tanzanian government will most probably get 16% of the project for free, the remaining NPV would still be 25x higher than the current market cap. There will be more dilution from fresh equity - but looking at these numbers, I would be very surprised, if any equity raising would take place at current levels! I am fully aware of the fact, that these numbers sound rediciolous - but i honestly believe, that they are indicative of the underlying value of this thing - otherwise, I would not own so much stock!!

Have a nice weekend!

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General - Graphex

Good afternoon

big day today for Australian large cap gold miners…all up by at least 5%. You ask why? No idea! Some of them might have been a bit oversold, and I think some people believe, that the gold price has bottomed. Let´s hope so!

Bonds are weak again ( US 10 years at 3,09%, close to this year´s high ), equities very strong in Europe following the news, that China wants to cut tariff rates on imports. The US$ is weaker, helping the metals slightly higher following a few good days in the market. Could it be, that investors are concentrating more on the existing, still reasonably positive economic situation, and so much on the possible escalation ( and the impact ) of the trade war.

Quite positive labor market numbers in the States

Graphex - that was the big news for me today: They released the results of the updated feasibility study. In one word - to good to be true! Post tax-NPV10 of 273 Mill US$…post tax IRR of 130%, post tax payback 0,84 years!!!! Pre-production capital of 44 mill US$ for Stage 1 ( 58.000t of graphite for two years ) and then another 32.5 mill US$ for Stage 2 ( tobring total capacity to 100.000t ). Based on reserves only mine-life of 6.3 years - but the project has inferred resources for another 10years. The company is currently drilling, to transfer more resources into the mine plan. These numbers are crazy - NPV10 post tax of about 375 mill A$ for a market cap of 16.6 mill A$ as at today!!

There is no doubt, that this will be severely diluted - firstly, the government will get 16 - perhaps 20% - of the project for free. Secondly, the incoming financier - whoever that is - will want a significant part of the upside as well. I do not know, whether these guys will invest at project- or company-level. But in any case, they will have to pay a premium to today´s price of Graphex. Ecen if I dilute this NPV by a very very hefty 75% - I would be more than happy with an NPV for Graphex equivalent to 5-6x the current share price, post all financings!

The market is totally negligent, when it comes to Tanzania…this will only change , once GPX will have a completed financing. I am of the believe, that this will not be far away - the private equity guys have worked on it for some time, and now all the numbers are out! I am hoping for another announcement to that regard within the next 4-6 weeks, and before that, an exploration update.

Have a nice evening

General - Sheffield - Gascoyne - Antipa

Good afternoon

I think we are definitely in the wrong sector…speculators moved first into crypto-currencies, now into Cannabis…who would have thought 20 years ago, that Coca-Cola would seriously look at selling Cannabis-Drinks! Unfortunately, we only have iron ore, nickel, baucite, graphite etc on offer here! But at least some of our stuff is deep value, probably contrary to all these drug-stocks!

Metal prices are having a volatile day…the only metal being strong throughout the day has been nickel, currently up by 1.3%,while copper is consolidating the big jump from yesterday - but it´s currently also up by 0,5%

Sheffield - very nice announcement today….they will receive a loan of 95 mill$ from the Nortehrn Australian Infrastrcture Fund , 30 mill$ for project development and 65 mill$ for infratsructure like roads, LNG plant, and port facilities. Excellent news about the 30 mill, but also the balance - SFX had previously thought about outsourcing tehse things, which would have increased operating costs vs owning them , as they will be able to now. The big news is stille xpected shortly - all government approvals following full validity of Native Title. I hope and believe, that there is a lot of room left in the share price!

Antipa - more good news from them: Good drilling results from their asset North of Telfer, just 15km away, like 12m with 7g; 10m with 3,6g; 6m at 2,6g etc…on top of a lot of similar results at this property before. Shaping up to be something worthwhile…but spending 3 mill$ this Quarter, which leaves them with 3.5 mill$ in the bank…

Gascoyne - 3m with 987g/t of gold - that´s what I call a great drill hole! But at this location, they have only drilled two hoels so far - so this could be a one-hole wonder. Only drilling will show. But in any case - a good indication of the prspectivity of the area surrounding Dalgaranga. The company should be sitting on more than 20 mill$ cash now, following the 10 mill$ placement - and from the end of next month on, the comapny should be in commercial production. At this stage, there is nothing which would make them believe to have a grade problem!

Have a nice weekend!

Schröder Equities GmbH

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Tel. +49-89-4613440-0

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eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - West African - Antipa - Gascoyne - Regis

Good afternoon

risk-off is continuing to be the story amidst all this tariff-action. Today, markets are happy with “only” 10% tariff instead of 25%, as hoped for by the hawks. But god knows, what will be next!

Metals are bouncing nicely, driven by copper, but also nickel, which was hit teh hardest yesterday. some investors believe, that China might increase infrastructure spending to bolster the local economy, which in turn would increase metal demand.

So far, the world economy is still running quite nicely - people are surprisingly sanguine, while all this erratic action is going on - and let´s not forget, that basically all metals are in short supply these days, or at least finely balanced. LME stocks, which admitetdly are only one indicator of many, are falling alomst daily for all metals - inclding a large fall in copper today.

“President” Duterte in the Phillippines is talking down mining again…he is loudly sthinking about leaving Phillippino soil untouched for a while….we all know from last year, how extreme he can be - so we have to take his comments with a pinch of salt, but not ignore them.

West African Resources - my favourite gold developer came out with a very positive announcement today! They have requested debt-funding proposals from a range of financiers around the world, and received 14 non-binding offers , ranging from 160-215 Mill US$! The company is now shortlisting a handful of preferred financiers, to do detailed due diligence etc, with firm proposals expected late this year 2018. They reiterated a few details from the feasibility study: 211.000 oz on average p.a. for the first 5 years, at AISC of 550 US$/oz, followed by 5 years at 100.000 oz….payback of the 185 Mill US$ in pre-production capex within 16 month, at a gold price of 1300 US$! At 1200 US$, and on my roough numbers, these guys will need about 30 month to pay back all debt, and earn their market cap!! The company is also working on plans to even improve these great numbers - one of them is to potentially shorten mine life to only 8 years, bring forward more production and therefore increase the NPV. And exploration is far from being closed off, as recent results show - not to talk about regional upside, and not to talk about potential synergies with neighbouring miners like B2Gold! In my opinion, WAF are an absolute no-brainer…but nobody wants to know in the moment! I would have thought, that nobody expected WAF to potentially develope this asset without any further equity! Having said this, tehy might well do raise some more equity, as I guess, that this would improve the financing terms, and hence the NPV of the project. Currently, the company has 40 mill A$ in cash - that´s a lot of money. But I am sure, that WAF will want to keep exploring full speed, especially, once the wet season is over….Whatever happens, and I certainly don´t know - the company will only need a very limited amount of additional equity , if any, to bring this great reserve into production.

Gascoyne -finally, some good news?? Firstly, the company updated on operations yesterday…in the September-Quarter so far, 10.500 oz ahd been produced, an an average grade of 0,8g …production is continuing to ramp up, guidance for the December-Quarter is unchanged at 25.000 oz, and reaching commercial production sometime in that Quarter as well. This will be ainly driven by grade improvement, as the plant continues to run very well. Secondly, the company reported some good interesections from drilling at Dalgaranga ( lowih grades of 1,2-1,6g over long intervals , ranging from 6m to 35 m; and also from their second proejct, Glenburgh - better grades, but only 3-4-5m-intersections. BUT today, stock got suspended, pending the release of some drilling ersults from Dalgaranga!!! This can only be positive, and must be very positive, as there should be a very good reason to suspend the stock in the middle of the ongoing SPP. I guess the results will be announced tomorrow and could finally turn the stock!

Antipa Minerals - announced very promising results from an IP-survey today. Normally, not all that exciting…but as you might remember, they are in highly prospective elephant country, and RIO plus others have pegegd all available ground in the area. RIO is running a major exploration effort in this area, just North of Newcrest´s Telfer Mine. I ahve been a shareholder here for some time - the exploration story was always hot, and delivered lots of positive hints - without ever delivering the “Big One”. This could get them much closer…worth a punt…

Regis - management change!!!! Mark Clark, excellent Executive Chairman, who has learned his job as a No.2 of Nick Girogetta, and has been running RRL for 10 years or so, is resigning from his job and from the board! That is definitely a loss! The successor, Jim Beyer, seems to be a very experienced executive - recently MD of Mt Gibson, and before that, GM of Boddington and Pajingo gold mines - but I do not know him, and to be as good as Mark Clark, will not eb easy. james Mactier, who used to run the Macquarie bullion operation in Perth ( and very sucecssfully, I might add ), is becoming the new, non-ex Chairman of Regis. He is certainly a good choice!

Have a nice evening

Schröder Equities GmbH

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80538 München

Tel. +49-89-4613440-0

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eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - Panoramic - Black Dragon

Good afternoon

The US and China want to hold new tarde talks…major good news. The otehr good news is, that the Turkish Centralbank increased interest rates by 625 basis points - expected was 300 b.p., leading to a reversal of the Turkish Lira and some relief for Emerging Markets generally. And even more good news…following Friday´s strong increase in US labor costs, US CPI today was lower than expected, bolstering bond markets, and weakening the US$…base metals and gold are having another good day.

Yesterday, rather disappointing numbers for Chinese car sales were published - actually falling slightly YoY and subsequently, Macquarie cut it´s forecast for sales in 2018 to a meagre plus of 3% only. A very positive number, though, was a substantial plus of 64% for EV´s, despite lower subsidies since June on the purchase of these cars. EV-market share in China has been an astounding 5% - Macquarie increased their full-year forecast for Chinese EV sales to 1.05 million, from 900.000. China is clearly driving the EV-revolution! A friends of mine earlier this week joined a JP Morgan research tour in Germany, visiting a few car producers as well as a leading battery research facility. The most interesting outcome for me was, that the scientists did not see an alternative for lithium-ion batteries in the foreseeable future!

Panoramic Resources - have sold Lanfranchi for 15 mill A$ in cash. Ultra bulls for nickel might not like it, but I think it´s excellent news. PAN have taken out of Lanfranchi what they could…a lot of mobile equipment etc. PAN has tried quiet intensively to increase reserves of Lanfranchi, without much success. I guess one could find more ore - but not easy, and certainly not assured at all. Savannah is really the main asset, and PAN management can now fully concentrate on it. PAN does have about 30 mill$ in cash, plus an undrawn credit line of 40 mill$ to bring Savannah back on. Capex is 10 mill for the plant, 10 mill for the ventilation shaft, and 3 mill for various…and certainly working capital for the 3 month ramp-up period. I guess, that PAN might only draw about 25 mill of the Macquarie-loan, or even a bit less. The plant refurbishment etc is in full swing - I would hope for an update, before the Quarterly will be published in late October. The sale of Lanfranchi is a major derisking event - you can always have delays , when you restart an operation, and develope fresh underground access. This sale now makes it a safe assumption, that PAN are fully financed until free cash flow, even if something unexpected would see a delay of a month or so.

The other interesting aspect is, that you got to be very bullish on nickel to pay 15 mill$ for Lanfranchi! The buyer is Black Mountain, a private equity group. Macquarie yesterday forecast a nickel price of 16.000 by year end, based on this year being another year of demand exceeding supply. Macquarie as well as Norilsk, Scott Mackenzie and Aneka Tambang are all expecting further deficits as well.

Black Dragon Gold - this is a relatively new story…I had originally invested about 12 month ago , when it was purely listed in Canada, and when it was a restructuring under new, Australian management. In the meantime, the company got also listed in Australia. Beside of some expereinced Australians, Paul Cronin, a past CEO of succesull Anatolia Energy ( Uranium ) , is the CEO. At least equally important, they have a Spanish General Manager ( experienced ex-RIO Spain executive ) and on the board, the Spanish ex CEO of succesfull gold producer Rio Narcea, which some of you might remember. The companies gold asset is near Oviedo, in the North West of Spain, At a cut-off grade of 3g t, the proejct has about 700.000 oz at 6g, and will be developed as an underground resource. In the old days, under Rio Narcea´s ownership, the project was planned as an open-pit, which prooved difficult to be licensed. BDG believe, that as a pure underground mine, permits will be much easier to get. We all know Spain a little bit…no easy country for miners to operate in, despite a long history in mining, and despite many active mines. 40 km from BDG´s project, there is an operating gold mine, which has operated for many years, and received an extension of their mining lease 2 years ago. So it can be done, and it´s paramount, that at least part of the management is Spanish.

The other day, BDG announced some very nice high grade, long intersections, and some geologists believe, that the current resource could be doubled. A very interesting one, with a tiny market cap of just 15 mill$ - but obviously, not for the fainthearted, and I know a few experienced investors, who have turned it down as an investment preposition. Anyway - some smart money is in it - opinions do divert, thanks god! I am holding a small position, and in my opinion, so should you!

Have a nice evenin

Schröder Equities GmbH

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80538 München

Tel. +49-89-4613440-0

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eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder