Market Update

General - Metro Mining - Regis - Crusader

Good afternoon

Manufacturing PMI for China a little weaker again - only just in growth territory. I am on kids-duty from now - so please check the US PMI yourself, which will be published later this afternoon.

The new NAFTA agreement between US/Mexico/Canada inspires markets positively today. European equities are stronger, metals are seeing some weakness - China not helping I guess

Metro Mining - there has been a large seller throughout September, selling 5.5 mill shares - it appears as they have finished. Aluminium, but especially Alumina- prices holding up very well - the majority of MMI´s sales is priced as a percentage of Alumina, which has been great so far, and is also looking good for the enxt 12 month. Margins should be better than expected at this important first year of production, which consisted mainly of ramping up and fine-tuning. I think in terms of cash flow, this is one of the cheapest, established miners in my universe - might well be the cheapest. The company is still not very well known, and bauxite is also not a widely followed commodity. I think now is the time to buy more, below 20ct.

Regis - have dropped teh takeover bid for Capricorn, as their major shareholder Hawke´s Point has not agreed - their acceptance was one condition of RRL´s bid. Maybe they will come back at a later stage - for now, the deal is off! In my opinion, this asset is certainly worth less on a stand-alone basis. Have Hawke´s POint ( a private equity fund ) have pokered high and lost? Looks that way. For the patient inevstor, CMM is probably approaching buying-levels again. Just makes too much sense for RRL to own this one - even though it´s not a great asset.

Crusader - have run into trouble! Stock was suspended on AIM because tehy have failed to raise fresh equity in September, which seems to be necessary to ensure an orderly operation. Company sais, that they are in discussions with equity-and debt providers, as well as on asset sales. What a desaster! Watch this space….but any of the above actions are very unpleasant, if your back is against the wall - and a bloody big rock in front of your nose!

Unfortunately, not much to report today….

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

Italy - Zambia - Metals

German CPI rose by 2.2% vs expected 1.9%/ German unemployment at all-time low of 5,1% /…weak US pending home sales….equipment orders in the US weak ex defense, but FED is pretty positive. Second GDP estimate confirms 4.2% growth last Quarter.

BREXIT is getting many headlines - no deal in sight! Some experts believe, that a hard exit could cost the UK 2-4% of growth, while it could cost Europe up to 1%. No winners here! German GDP estimates have been reduced by a well regarded thinktank to 1,7% this year from 2,2%…Italy throwing Europe further into disarray? The heavily indebted country yesterday announced a new budget, planning for a 2.4% deficit - a slap into the face of the European Comission, which only allows 2% at worst. Italian bonds getting a hammering today! Not suprisingly, the Euro is weak today, loosing about 1% against the US. European equities are also weaker - especially banks, on the bank of the Italian “crisis”. Metals are holding very well - especially considered the currency - some are even up a fraction. ! LME stocks continued to fall across the board.

Zambia increases the roaylties on copper , which range from 4-6%, by 1.5% from 1.1.2019. If copper prices move beyond 7.500 US$/t, the royalty will increase to a flat 10%. Zambia is a big producer, FirstQuantum, Barrick and Glencore affected.

As we go into the weekend, the $ has given up some of it´s gains, and metals are strengthening - up by 1% for copper, 1.3% for nickel, and nearly 5% for zinc! Nice finish!

Nothing much from teh micro-side today!

have a good weekend!

General - Sheffield - Syrah - Apollo

Good afternoon

ahead of the rate decision in the States, equity-markets are marginally higher in Europe, as are bonds, as are the metals. All this is happening, as the UN laughes about Trump. I have to say, though, that he reacted pretty cool to that!

Copper premiums for cash delivery in Europe as well as in Asia indicate a tight market, as well as the ever falling LME stocks.. As Bloomberg said today - investors are undecided here to look at the current, strong demand - or at the potential negative effects on world growth from the tariff-war.

Apollo Minerals - have not spoken about them for a while, as nothing much happened! But action is starting now: Following inspections , planning and approvals from authorities, the company is now starting to re-install mining services into the old Salau Tungsten Mine in France. Activities include widening of the portal, installation of Ventilation and cabling, construction of walls and gates within the mine, and removal of waste, piping and any hazards. This will take about two month, and following a final health and safety inspection, the hotly waited exploration programm can start! Hugo Schumann will love it - action, at last…it has taken some time! I have little doubt, that there are many low-hanging fruits there - exploration will get us some good news flow! But probably 3 month to go!

Sheffield - done! The Mining Lease has been granted! The only important thing missing - and that´s probably imminent as well - is the Federal Enviromental Approval - company states, that this should be announced next few days. Then then company will be able to talk the M&A side of things…outright takeover, participation at project level, or going it alone after raising an estimated 130 mill A$ - all possible! We should know by the end of this year! As one analyst pointed out: The project has an NPV of 750 mill A$ in SFX´s hands - in the hands of Iluka or RIO, the NPV could easily double, as their cost of is dramatically cheaper, and they could also double production from day 1, as tehy would easily be able to manage the higher capex. The currently expected mine life is 40 years…

Syrah - another smalls etbakc, even though a small one. Some mining consumables they need could not be delivered as needed, leading to slightly lower production this month than last. Not nice, as they have had their fair share of hickups anyway - but not a big deal, and temporary. The chart is rockbottom - not for widows, but the stock could be a good buy down here.

Have a nice evening

General - Royal-Nickel-craze

Good afternoon

as equities are slowly grinding higher throughout the day, metals are recovering as well.

US consumer confidence is very strong indeed!

Amazingly enough, Barrick and Randgold are moving higher. I think this is crazy - but anyway - it will certainly encourage other miners to do the same.

Just a thought….St Barbara reiterated, that they are continuing to look at aquisitions in Africa and North America, with the latter being the preferred location. My little West African would exactly fit for them - just the right size to better employ SBM`s very lazy balance sheet, and at the same time, big enough to make a very meaningful difference. Also, SBM are extremely proven underground miners!

Oil continuing to move, and Brent is trading solidly above 80 US$…not good for the miners!

Macquarie have adjusted their commodity price forecasts. They are most bullish vs today´s prices on nickel - but also continue to like copper, even though they marginally trimmed their forecasts for the shorther term. Large increase for Alumina going forward - the most bearish they are for Lithium.

Royal Nickel - this unbelievable story continues…stock is now up by 10x, since they found these incredible nuggets in the Beta Hunt Mine in Western Australia. Not bad, considered, that they had actively tried to sell the asset! I have to dig a bit - but the only company except for Goldfields I can see with a substantial ground position in the area is Lefroy Exploration, which is an interesting company in its own right. They were actively exploring in the area, intrigued by the discovery Goldfields had made there about 2 years ago, very close to their existing operation at St.Yves. I have forgotten the numbers - but Goldfields are spending a high double-digit million$ amount their per year on exploration. And now this newest find by their neighbour, RNC….By the end of this week, total number of shares outstanding will have been turned over twice! We will watch this story with interest! But in my opinion, avoid to get sucked into playing this stock…

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

gold takeovers - Regis - Horizon - Lynas - West African

Good afternoon

big action in the golds today: Barrick is making a paper-bid ( effectively an agreed merger ) for Randgold! ABX got to be one of the biggest value-destructors in the sector - and they have been one of the most active aquirers. They have also been one of the most active sellers - helping for example Northern Star and Evolution to become great companies…Why the hell should you be a shareholder of ABX???

Markets are pretty quiet today, at least in terms of movements…equities slightly down, and metals are giving up some of the very strong gains from Friday. The US$ is weakening, helping gold back up above 1200 US$.

Business Confidence in Germany still positive, but sliding a bit…no surpise, I guess! Draghi is expecting a pick-up in Euro-inflation.

Regis making a paper-bid for little known stock Capricorn, bidding paper at a 90% premium for the advanced explorer. Market cap of CMM before the bid was 45 mill$ -interesting to see, that a leading company is coming down now to the minnows! CMM have a 1.5 mill oz resource at 0,9g gold/t near Newman in Western Australia….Notwithstanding proximity to Regis´operations, I would know one ore two stocks, which offer more value in my opinion! And finally, Beadell also getting a bid, from Great Panther Silver ( whoever that is - don´t know them ), also in paper. A new team trying to get the act together in Brazil? Probably, BDR have nearly completed the hard bit - now shareholders being raped again?? Great Panther has a relatively long list of institutional shareholders - so probably, the company is not that bad.

Horizon Gold, which you might remember was a spin-off from Panoramic, finally is making progress on the exploration front. Announced a good drill hole the other day, and a few really nice ones today. PAN are still a 50.1% shareholder, and manage this small company. Market cap only 10.7 mill$, with a little more than 5 mill$ cash by the end of the current Quarter. They have a resource of 1,25 mill oz at 2,25g - part of which is refractory. The current results of 8m at 19.7g; 6.6m at 11g plus several other, high grade intersections at a property, for which PAN have stated a resource target of between 300-900.000 oz could become significant for this asset, which always needed a few hundred thousand oz extra to make it work. At 10 mill market cap or 5 mill EV, tehre is certainly no upside at all being priced in…The stock could very easily double, if more drilling comes in….we certainyl would be very happy, as most PAN shareholders ( like ourselves! ) subscribed for HRN in the IPO at 40ct. Just look at Capricorn as at above, to get a feel for possible upside…More or less impossible to buy a meaningful amount down here - stock closed 14ct bid - 22ct offer…but at least good for existing shareholders.

Lynas - oh no! The rumoured government review of LYC´s operation in Malaysia has now been confirmed. Apparently, the review committee will be chaired by a long term opponent of the project. While LYC seem to have done everything to the text book, you might remember the emotional discussion of the proejct, before it went into production. Let´s hope, that something like this does not eventuate again - the company does deserve a lot of credit for what they have done over the years. As we say in Germany - one has seen horses throwing up ! Expressing, that the impossible can happen…it certainly can happen in Malaysia, as we have seen before.

West African Resources - just watched Richard Hyde´s presentation in Beaver Creek…very good presentation, unbelievably cheap stock. And looking at ABX buying out Randgold, you wouild have to say, that West Africa comes back en vogue and certainly into perspective again. Any takeover of WAF would need to be pitched at 60ct+ to have a chance of success. Richard pointed out, that there are still several opportunities to reduce AISC from the current 551 US$/oz, and to increase the NPV of the project again - not to talk about exploration! The company ahs had only 2 drill rigs working during the wet season…once over, he will resume with several drill rigs. Expect, though, that underground reserves at M1 will mainly be drilled from the decline, once establihsed. Decline construction will start in October, to ensure, that underground ore will supplement open pit material immediately once plant is operational. The mine is targeted to start production in 2 years time - but I think comissioning could be some time earlier. Financing will be done in the near future! You will not make multiples by investing here ( unless they find another M1 undergound! ), but in terms of risk/return, this is one of my strongest bets.

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