Market Update

General - Liontown - Panoramic - Graphex - Bellevue

Good afternoon

Lagarde to become ECB-boss? That would be good news, I think - once the news broke, European equities went a little stronger.

ETF Gold holdings rise again..despite the little setback in the price of gold. They have increased by just under 4 mill oz since late May to teh highest since 2012.

Not much macro-news out today…

Equities continue their positive run today - don´t ask me, why metals are so weak! nickel is down again, holding just above 12.000 US$ in the moment. Gold is a little stronger - in A$, just short of 2000 AS$/oz again.

I had some more conversations with Australian contacts re Sheffield and Metro…the more I talk about them the more I become assured, that both stocks represent extremely deep value. If you have not read it, you might want to have a look at yesterday´s report.

Panoramic - are selling the Thunderbird PGM-project in Canada. Macquarie had valued it at Zero - PAN have it in the books at 4,5 mill A$. Hence teh sale price of 9 mill Can$. One little problem, though: The sale is conditional mainly on the buyer to raise the money first! In any case - there is a good chance, that they will sell it, while analysts have not valued it before. PAN continue to have good upside from PGM´s via their Australian apnton project, which is much larger, and strategically of more interest, as it´s close to Savannah, their existing mine. The forthcoming Quarterly will be important for teh short term performance of PAN - obviously, there are some doubts in the market as to they went over the Quarter. Whatever the Quarter will look like - I have no indication otehr than the share price, that it will be bad , PAN remain a good medium story with very stronge xposure to the battery-nickel market. As we can see in the case of lithium, the EV-market needs some time to ramp up to meaningful numbers, but in the emantime, a very strong market for stainless steel continued to support the price.

Liontown - They continue to hold up at around 11ct, which is a great effort, given the general weakness in lithium stocks. This tells me 2 things: The market anticipates continued corporate interest in lithium assets, and 2. the forthcoming resource estimate should be very nice at up to 60 millt at 1,4% of LIO2

Graphex - a reserach update following site visit from their house broker, Bridge Street, reads very well…Their analyst was pretty happy with senior government meetings incl the Minister of Mines, and also confident of GPX conevrting some of the inferred resources to indicated, one of the conditions of financier Castlepeak. The new estimate should come out this month. There have been some delays to the DFS, which will now be announced in October, about 3 month late. It appears, that reasons for this are outside of the companies control. He has a valuation of 163 A$, even including a large equity raise from Castlepeak and existing shareholders at only 23ct ( which I fear, is not that unrealistic! ). I continue to hold a serious position in GPX and am convinced, that the detailed work of MD with his financiers will continue to derisk the project. A bit of help is also needed from a sensible government - but all indications are, that Tanzania is very keen to get the project off the ground!

Bellevue Gold - broker Cannacord have inceased their valuation of BGL to 1$ from 80ct amid signs, that there is a lot of resource-growth left. They expect an increase of 250-400.000oz at 9-10g/t , which is a little lower than the current resource garde of 11.8g, but would still be excellent. It will be hard to continue the meteoric resource growth from the last 12 month, but Cannacord expect a number of 2.5 mill oz or higehr in 12-18 month. This expectation does not appear unreasonable to me.

Have a nice evning

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General - Sheffield - Metro

Good afternoon

Trum and Xi agree on a standstill, and further talks…Kim is fast becoming Trumps best friend…

German labor market finally shows signs of weakness…

Chinese PMI not looking any good…

Equities show some relief from alittle progress in the trade war - base metals are litle changed except for some profittaking in nickel - gold is weakening, but so far holding abover the recent break-out.

Iron ore at 120 US$!

And not to understimate: it´s 1st of July - the potentially terrible time of tax-loss selling is behind us !!!!! In a market, which is at an all time high, I am sure, that this has played a not

Sheffield Resources - the stock finally moves away from the absolutely crazy lows…but it´s still crazily cheap, I think! The amendment of the final feasibility study to get rid of the ilmenite treatment process, and to replace it by increased revenue from zircon, should be available “early 3rd Quarter” which I assume to be in July. Savings from the capex should be around 75 mill $, replaced by some small capex-increase for increased zircon capacity - I guess the new number will be around 300 mill US$. Today´s announcement about the sale of primary ( = untreated ) ilmenite should add to the total revenue number from the feasibiliyt study, as increaseed zircon production ( which has a much higher price ) had resulted until now in roughly unchanged revenue We will now have to add a number for the primary ilmenite. Also, costs will have fallen from not processing the primary ilmenite - even further increasing the return from the project.

The original feasibility study was talking of an IRR in the mid-twenties - this should now increase to something like mid-30ties…not bad, for a globally signifcant project in a market, where zircon production is set to fall from the exhaustion of several mines in the next few years! Also, and as the company has demonstrated, there is very significant upside in the area from exploration, which looks set to manifest the asset base of Sheffield as a major, zircon/ilmenite-producing province for decades to come. Just too good for major producers to ignore!

I have no doubt, that the feasibility study will show, that this company is extraordinary cheap, and that prices of above 1$/share as little as 7 month ago where no fluke. These much improved numbers will certainly also help to make anybody in the data room very positive!! The stock is now trading at just 39ct or a market cap of 101 mill A$, with the NPV being somewhat higher than the original 670 A$ NPV10 - probably even approaching 900 mill A$. And in the current market for bonds, in a very save jurisdiction like Western Australia, this stock might actually be valued at something like NPV6- or 7 - adding another large number on top of the current NPV-estimate, once in production. Yes - this thing is potentially tarding at 1/7th of it´s potential value!

Metro Mining - I bought additional 1 Mill shares today for my fund. This is another extraordinary opportunity! The Bauxite price is at least holding up - probably trading higher than say 6 month ago - as is the Chinese price for alumina, which acts as a benchmark for prices received for much of MMI´s current production! The company today announced another sales contract with a large, Chinese alumina producer for 420.000t of bauxite, bringing total fixed sales to 90% of this years production! The Chinese buyer will change part of it´s semelting capacity to enable the treatment of MMI´s bauxite - a strong indication for the tightness of chinese bauxite supply. Smeltingh companies hate to adjust their process!

I can only guess MMI´s cash costs for this year…but I think it´s conservative to assume a margin of at least 15 $/t for production. At 3.3 millt of production for calendar 2019, this equals 52 mill A$ in cash inflow from operations! This places the stock at just 3x cash generation incl debt! Remember also, that the final feasibility study to increase production from 3.5 to 6 millt p.a. will be announced soon - some time this month, I assume. This will lead to further pressure on costs, and will probably incerase the margin to 20$/t - certainly over time. The capex of 35 mill ( ? ) will easily be done from cash generation, as per my numbers above….Theoretically, the stock would be trading at just a little abvove 1x cash flow…that´s very crazy! And this is not some mining-hopeful - this is an existent producers, with capable management and a good track record.

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

Graphex - Resolute - Strike

Good afternoon

not that much happening in bonds, equities, currencies and metals today. Nickel mover through the 100-day moving average..

Trump has great relationships with just about everybody - certainly Putin, certainly Merkel…I think this believe might be very subjective!!! What a dickhead….

Strike Energy - continuing to drill ahead at about 2500m…all going according to plan. A secondary gas target zone will be drilled through enxt week, but the primary target is still some time and some meters away. Planned total depth is 5200m - I guess that will take 3 weeks or a few days longer. But the moment of truth for West Erregulla is getting closer…let´s keep our fingers crossed!

Resolute - in my eyes, a major announcement today: Underground ramp-up of Syama continues, and is going much better than I would have expected, following the very slow 1st Quarter. The mine is now producing at more than 80% of planned capacity - that sounds very promising. Automatisation of the underground mine is in poarts working already - teh rest is planned to be fixed over the next few month. But no doubt - this is a major de-risking announcement! I think the timing is ok to buy a few more, with limited risk, given the stock is easily worth 1.60 A$, once it allw orks 100%.

Graphex - so far, there has been only one, very small boutique-broker writing research on it - today, Patersons also initiated. Patersons is not Macquarie, but a reasonable, Perth-based brokerage. They value Graphex in a sensible report at 60ct, discounting their expected value of 1.20 A$/share by 50% because of the uncertainties still to be fixed with the Tanzanian government. If you want the report, let me know.

Have a nice weekend!

General - Lynas - West African

Good afternoon

Euro area economic confidence hits the lowest level in 3 years…German inflation stays very ( too ) low. US jobless market showing signs of weakness…Consumer spending is slowing there as well. Pressure on Trump is increasing .

Germany finally realizes, that the threat from the ultra-right is worse than the threat from the ultra-left….

Very quiet day in Europe ahead of G-20…nickel the standout in metals, up another 210$ currently no news really - I think the relativeyl short position might be getting smaller!

Lynas - Japan shows the Germans and Americans, how supply of battery metals can be assured: The existing Japanese consortium extends it´s loan facility of I think 500 Mill US by 10 years to 2030 - reduced interest rates from 3.5% to 2.5%, minimal repayment until 2025, no cash sweep, voluntary payments without penalty at any time!!! Absolutely fantastic conditions. In return, Japan gets preferential delivery of Rare Earth. This is a very positive announcement - I am surprised, that LYC did not put on a few cents. Japan Inc has cemented preferential supply from the ONLY sizeable producer of Rare Earth outside of China!!

West African Resources - updated on their development: 45% complete, all on budget in terms of time and money, initial underground development going faster than expected ( but very early days ), 99% of construction contracts complete, 95% of engineering. well done!

Otherwise - can´t be bothered - too hot and also a little frustrating!

Have a good evening!

General - Venturex - Graphex

Good afternoon

markets are relatively quiet today, ahead of the G-20 meeting on the weekend…Gold is consolidating the recent, strong rise, while nickel is having another positive day, probably helped by production problems atone of Glencore´s larger mines.

The strike at Codelco´s large copper mine, Chuquicamata, is continuing and is also affecting El Abra, owned by Freeport, because of road blackages by striking workers.

AnotherAustralian small cap fund manager with 450 mill A$ or so under management is closing down…I can only assume, that they own one or the other esourcxes company as well…

Durable Goods Orders in the States relatively weak - Cap Goods Orders ex transportation were relatively strong. But the last few economic numbers from the States indicate, that growth over there is definietly slowing down. This is rather a question of trade plotics, than interest rates , in my opinion!

Graphex - the company issued a long statement today, explaining why they have not enered into any off-take agreements. Basically, the company believes, that it´s not very worthwhile to enter into such a greement at a stage, where the mine is not even in construction yet. In tendency, I agree with them - most of tehse agreements with Chinese offtakers are probably not worth the paper tehy are written on! And Graphex make very clear, that their thinking is aligned with their major financier, Castlelake, What is important, though, is teh fact, that Graphex has had numerous meeting with a large number of potential off-takers in Vhina, most of which are very keen to get their hands on GPX´s unique product for flame retardent products in the buiding industry - prices for which command a large premium to graphite used in the battery industry.I fear we need some more patience here, while the company is finishing the bankable feasibility study this Quarter, and until the Tanzanian government has satisfied all demands made by financiers. They are on a good path - but time is as always not a thing, which African governments believe to be in short supply!

Venturex - the second drill hole has been announced, drilled only about 15m from the first, very succesfull hole. This one was nearly as good - 63m with 1,89% copper and 10m with 10.8% Zn from 45m will increase the indicated resource, once again - given the close proximity to the existing resource, the tonnage will be li ited. Still - this is a project on the cusp of getting the final investment decision, and every little bit helps at this point! The mineralisation should also continue into eastern direction.

Have a nive evening - I am sitting here in shorts without a shirt ( not a nice sight, in fact!! )- no air conditioning, as usual in Germany, and 35 degrees!