Market Update

General - Metro - Bellevue - Lynas - Liontown

Good afternoon

China numbers out today…..mixed, but I guess overall in line with markets expectations: Fixed Asset Inv + 6,1%; Retail Sales + 8,2%; Industrial Production 5,3%; Property In +11,6%. Nickel pig iron ( NPI ) production in Jan/Feb up by 13% - making use of good prices for nickel, but also supplying strongly rising stainless steel production. Overall, those numbers should not be a surprise - nobody expected China to be as strong as a bull earlier this year. But metal markets don´t like the weak IP numbers - and we saw a large increase of LME copper stocks today. In the US, jobs numbers were just very slightly weaker than expected.

Gold is down by 1%

Xi/Trump meeting delayed…

interesting today: The most profitable, German bank is Volkswagen Bank - 2.6 bill Euro profit! Car leasing is a profitable business! The only question: Who will buy all these Diesel´s, once the leasing expires? I wonder about their provisioning…

Merkel does three remarkable things: German budget for defense will not be increased as much as planned…the gas pipeline under the Baltic Sea with Gazprom will be built ….and it looks like Huawei will get a chance to get part of the 5G network…Trump will love her for all of this - but China is more important than the US ( in it´s current state ) for us!? Brave - but I think her moves are all necessary.

Perhaps we should do the same as many Central Banks around the world…buy some more gold!

The risks for equity markets from the political side might well be on the rise again…don´t forget to reduce your equity exposure, following an unusual, and liquidity-driven start to the year!

Metro Mining - unrelated to them, the Malaysian government detailed their plans, to allow Bauxite exports again, following a complete stop in 2016. Local bauxite mines then were found to be completely negligent to enviromental issues. ALL mines, which plan a re-start, will now have to receive Enviromental Approval to do so. It is expected, that each approval will take at least 6 month to complete. So for 2019, the threat of renewed competition is removed. As bauxite demand from China continues to grow, this is a great enviroment for MMI to secure additional offtake agreements for the planned doubling of production. The feasibility study for this is expected shortly, and alongside a resumption of mining soon ( once the wet season in tropical, Northern Australia is finished ) , there is a fair bit of interesting newsflow to come. The stock is very cheap , and I am holding a very reasonable position.

Liontown - announced the probably extension of their Buldania lithium resource in Western Australia. Their second project delivered very good sampling and surface results, which indicate, tha the current resource could be much larger than anticipated. There is much debate surrounding lithium in the moment. I think in the short term, there is definitely enough of it around - but it appears questionable, whether current developments will be sufficient to feed a very strongly growing market from LI-ion batteries for electric vehicles from 2022-2023 onwards. As you might remember, LTR have one fairly advanced lithium project in Australia, for which a scoping study delivered a very favourable outcome.

Bellevue Gold - announced some more excellent drilling results from their Tribune- and Viago lodes. Very much back on the envelope, and assuming further drilling, both lodes have sbstantially extended their footprint and delivered excellent garde intersections, similar to what has been found earlier and which is now forming part of the inferred resource of 1.5 Mill oz at +11g gold/t. Just extrapolating the additional meters, the resource could grow by another 500.000 oz at similar grades - without closing anything off. And 27 mill A$ in the bank give them easy room to continue at the recent, agressive pace - 4 drill rigs working for Bellevue ! I was surprised this morning, that the stock did not go up on the basis of these results. The stock has had a good run ove rthe last 12 month - and there is a fair amount of options outstanding. But I think one should continue to accumulate the stock be fore the next resource statement sometime in the 2nd Quarter - I guess not before May, and rather June.

Lynas - some positive noises over the last few days from the Malaysian government as well as from an analyst call of Lynas, that the parties are getting closer to do a sensible deal on both types of Lynas´s tailings. The government wants Lynas to export these tailings…but as Malaysia gets the investmnet, the jobs and the tax-income, how could/should possibly another country just accept the debris, without any economic benefit??? I hate political markets, and especially with regards to Malaysia…I do not own any stock in the moment, but if I would be a holder, I would keep them! Perhaps there is some light at the end of the tunnel for Lynas. I think it would be well deserved, as management has done a good job over the last few years.

Have a nice evening

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General - Cassini - Venturex - Doray/Silver Lake

Good afternoon

interesting to watch these games surrounding Boeing…mighty interests playing behind the scenes!

The English are completely out of hand…BREXIT is a never ending story and we are all sick & tired of it - but a hard BREXIT should not be underestimated!

Gold has made a solid move through 1300 US$/oz and is trading above 1850 A$ again…next target 1340 US$/oz. Base metals are flat today, following a strong upward move yesterday, especially in zinc.

Abramovich uses the recent strong performance of Norilsk to sell 500 mill US$ worth of stock in a bookbuild, which has been increased due to strong demand. Shows the underlying appetite for nickel stocks!

The Producer Price Index in the States shows no indication of inflation. Durable Goods Orders and Construction activity have been positive numbers today, and equities are having another, quite strong day - even with BREXIT dampening the enthusiasm.

The discount for lower quality iron ore continues to shrink, making Fortescue as well as smaller producers like Mineral Resources interesting once again. Fortescue is just printing money in the moment and will probably pay another very big dividend for the current half year, while the pricing enviroment allows MIN to make some money as well. Interesting also, that the premium for very high quality iron ore has more than halved.

Cassini Resources - OZ Minerals referred to their JV the other day in a presentation…results of the pre-feasibility study are getting close, incl a new resource statement. OZL are forecasting production of around 30.000t of copper p.a., and around 23.000t of nickel - that´s a pretty substantial project, and Cassini will own 30% of it, once OZL have finished the required spending to have earned 70%. It is to be expected, that OZL will be very helpful to organise financing for the junior partner, or even do the financing on their behalf themselves. In any case, the market cap of just over 30 mill A$ make Cassini a very interesting investment for the patient investor - start-up of operations is about 3.5 years away. OZ Minerals are strongly suggesting a mine life of +15 years here, and substantial exploration upside. While OZL are probably a good investment for institutional investors, I think Cassini has got some very good upside - not least in the short term, with a project update around the corner. The MD presented recently at our conference, and made a very positive impression!

Venturex - are making progress with their copper/zinc project. They ahve good backing from several groups, and are in active talk about off-take agreements and financing from those parties. They have managed to get relief from Toho Zinc with regards to an earlier off-take agreement - they gave up their right to the first 230.000t of zinc in concentrate and instead, will have the opportunity to market 280.000t of zinc, following an initial 5-year production. This gives a lot more negotiating-power back to VXR. The proposed debt:equity split will be 60:40, and the Northern Australia Infrastructure Fund could finance around 40 mill A$ of the total capital ( incl working capital, contingency etc ) of 200-210 mill A$ needed. If I calculate correctly , VXR would need around 70 Mill A$ in equity - that is a big number, but sounds doable to me. One to watch - I bought a smallish holding a few month ago to have a foot in the door.

Doray/Silver Lake - their merger got a major bosst today, as DRM´s largest shareholder, Australian fund Perennial ( holding 12% ) agreed to the merger.

Have a nice evening

Schröder Equities GmbH

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80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

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eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General

Good afternoon

corporate activity in the gold space continues with speed: Newcrest buying into Greatland Gold´s property in the Paterson province, where RIO have had their recent exploration success. 5 Mill US within 12 month in exploration spend, 65 Mill US over 6 years to get 70%. Following Solgold, Imperial yesterday, and Greatland today, the third potentially large project they invest in - especially the first two might require major capex down the track.

Newmont/Barrick claim an annual 500 mill US$ pre-tax synergies from merging their Nevada assets…big number…let´s wait and see what will actually transpire in hard facts down the track! The number sounds very big…

Don´t ask me, why metals are that strong today…perhaps it´s a culmination of things…the major producers continue to make noise about “earnings rather than growth”, interest rates looking like staying very low for longer, and also the shortage or larger projects coming on stream over the next few years…in any case, up is good! Zinc is the strongest today - up about 3.5%, followed by nickel + 2.5% and copper, up by 1.5%. Also Palladium/Platinum recovering strongly from recent profit-taking,

VW increased it´s targets for EV´s - they want to sell 22 mill EVs in the next 10 years, which represents an increase vs previous target of only 15 mill cars! They say thmeselves: The supertanker is gaining pace! The company is spending 44 bill Euros through to 2023 on electric cars…

I fear not much else worth talking about>!

have a nice evening

Schröder Equities GmbH

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80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

email: wschroeder@schroeder-equities.com

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eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - Newcrest - Panoramic

Good afternoon

pretty bad labor market numbers for the US on Friday - negative Industrial Production for Germany today - base metals have been holding in the morning, but nickel is weakening now! German government reduces growth forecast for this year further to just 0,8% now. Retail Sales in the States recovered - but already weak numbers for the previous month got adjusted yet a bit weaker than tehy already were. LME stocks are down again today, and the fact, that prices are holding their ground , with all these negative economic news around, is a good indication for just how tight the market in the metals is. Following those US-figures, gold has also found some support - very little chance for interest rates to move higher anytime soon!

A lot of press about the Norwegian government fund exiting pure oil & gas producers…most of them are emphasizing ESG-reasons for this - but in fact, the Norwegians are continuing to make all of their cash by oil & gas production! And they will continue to do so…In so far it makes sense, to not leverage the dependance on oil any further, and divest pure producers over time. I do not expect any impact on share prices except for the psychological impact, as tehy will take time to sell/reduce.

Car Sales in China for “normal” cars are down 17% ( 1.22 mill vehicles in Feb ) - which is a bad number! - but for EV´s they are up by 53% in Feb to 4% market share or 49.000 vehicles.

Quite a bit of corporate activity in the small caps: Gindalbie gets a bid from Chinese JV-partner in iron ore venture; Verdant is getting a bid from CD Capital in London, which wants to develope a phosphate project in Australia. Newcrest is buying 70% of the Red Chris copper/gold mine in British Columbia. The mine produces about 30/-t of copper and 40.000 oz of gold this year, but has strong upside to those numbers, if NCM can establish an underground, block-cave mining operation, a technique, in which Newcrest is very experienced. The question is, whether this deal makes any sense in the moment….production from any block-cave would be years away, costs 1.5 bill US to develope ( pure guess and probably a minimum number ) at a time, when some good assets might still come available from the current, corporate activity surrounding gold stocks.

The Newmont / Barrick merger/takeover is off! The company instead agreed to JV their respective Nevada assets, which apparently have large synergies. That leaves only a few smaller operations for sale?

Panoramic - shareholders can apply for up to 50% oversubscription in the 1:13 rights isue at 38ct, without the guarantee to actually get them ( depending on total take-up ) . The stock will be ex rights on the 20th of March. Brokers reduced their earnings and price targets for the stock, because of additional shares on issue, and also applying slightly higher production costs going forward. Valuations I have ssen ranged from 60ct to 62ct ( which I find surprising… earnigs estimates are up to 13ct/shares in a few years time…dividends up to 9ct…that sound to me rather like prices well above 1$/share )

Australian Agricultural - the cattle company has lost an estimated 50.000 head of cattle in the recent flooding in Quennsland - a loss of approx 55 mill A$. Additional costs for feeding etc will run at about the same amount, while repairs to fences etc will be approx 8 mill A$. In one large station alone, the company has lost 90% of it´s 30.000 cattle…terrible. It is hoped, that the mustering ( starting next month ) will show, that more cattle have survived.

Have a nice evening

General - Panoramic - Oz Minerals

Good afternoon

Vale - has been ordered to close down Onca Puma nickel mine, producing around 24.000t of Ni p.a.. This has happened a few times before, and Vale always appealed succesfully. But this time, in a changed climate post the problems in Brazil, it might well be different. Vale has been accused of polluting the nearby river.

Nickel is unchanged today, at 13.650 US$/t and at a new high of 19.400 A$/t - as are other base metals and equities. LME stocks for all base metals down again today.

Van Eck has been reducing Australian gold stocks - I guess some general outflow. A$ gold price is holding up well at 1830 A$/oz. The Aussie´s have come down a fair way from recent, over-extended highs, and most are now back in reasonable-value territory.

Panoramic - had multiple, small issues with the ramp-up, especially in February. each of them small in absolute terms - 30-40-50.000$-issues, but taking some time to get right. The biggest problem has been to get the paste plant properly running - now the case. But financing has been relatively tight. The company has therefore decided to do a placement of 5 mill$ ( some funds required by bankers before end of March ), the rest in form of a 1:13 rights issue at 38ct. If the stock comes down, great opportunity to buy more…especially in light of the strong nickel market. At current prices, the company will generate nearly 70 mill A$ in free cash p.a., once Savannah North is in production…at 38ct, that is equivalent to about 3x free cash/market cap. One issue persists: It´s not easy to get labor! I can only guess - but I would think, that this creates some upward pressure on opertaing costs going forward. Despite these current, small but very unwelcome problems, I am a firm believer in this thing…If nickel does over the next few years what I think it will do ( that is going up! ) , PAN should ultimately trade at something like 500 mill A$ market cap….or much higher, if some of the more bullish price targets for nickel come through. The only criticism some shareholders might have is, why tehy have not done a larger placement. I guess the largest shareholder has not been that keen…for them to take stock in a placement, requires shareholder approval. Overall, I think the market is crying out for more nickel exposure, and I understand, that there has been very substantial interest in the small placement.

Oz Minerals - released teh scoping study for the Carapateena expansion. The company is suggesting a block-cave, which would have substantial pre-production capex of up to 1.3 bill A$ - but alsolow cash costs of sub 1$/lb. It would more than double the mines production, and have 20 years mine life. It sounds dooable, and it sounds value-adding - but not drmatically so. OZL have a history of making smart development decisions, and I have no doubt, that they will be smart again. I guess it all depends on the copper price going forward as well. In any case - they will now continue with a pre-feasibility study, and that will take them 12 month at least.

have a nice evening

Schröder Equities GmbH

Seitzstr.7a

80538 München

Tel. +49-89-4613440-0

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email: wschroeder@schroeder-equities.com

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder