General - Bellevue - Tietto

Good afternoon

is there a change in perception on interest rates coming? More and more I am reading about central banks around the world disovering, that low interest rates don´t do their job: To increase growth! If that perecption should gain acceptance, it could herald bad news for equities, as well as for gold!

But I don´t believe in a change as yet…if interest rates should rise, the world will be f…ed! It´s more important probably to come to some kind of a trade agreement,and to stop this de-globalisation - at least for the sake of economic growth.

In any case: Difficult times ahead!

The top 5 German forecasters cut their expectation for growth for next year to 1% from 1.8% - but they are seeing downside risks from this number. Looking at the world as at today, I think they might be pretty optimistic with this number! As I said above - we need an end to the trade war, which is undermining confidence big time in the moment! And a raft of crazy tweets don´t help, as is Boris…as is Hongkong…as is Syria…as is Yemen…….

Equities continue their march downwards…the rather shocking PMI in the States has really done some harm! As I said the other day - what will happen to the US-budget deficit, if the States go to zero growth????And nobody is talking about it, yet! Impeachment is grabbing all the headlines.

As you would imagine, gold is profiting - as are platinum/palladium, the latter will probably finish the day at a new closing high close to 1700 US$! In A$ terms, it definitely will, as the A$ is trading below 0,67 US$ again.

Funny enough, base metals are holding their ground today - nickel is even up by 2% today, as LME stocks fell another 4400t to 147.700t today. This is despite some bearish talk about stainless steel stocks/prices in China, and big & rising supply of NPI. For my little Panoramic, 17500 US$ = 7,94 US$/lb or 11.87 A$/lb are absolutely fantastic prices - for as long as Savannah North will perform. For the Quarter just ended, the bad production numbers for July/August let me expect nothing good….the important test will be, when tehy reach the new ore body in November, and when numbers should start to improve!

Tietto - finally, they got what I was missing so far: Some long intersections! 20m with 14.8g and 82m with 3,14% incl 26m with 9.5g are teh kjind of results, which bring tons to the resource. So far, they have had many intersections with nice grades, but only 1-2 m . The company is drilling full steam ahead , prior to a new resource estimate late this year. Tietto is one of the more hopeful explorers, and substantial additions to the current resource of 15.7 m t at 2,1g will be very valuable, and drive them into a feasibility study.

Bellevue - as expected, more exciting drilling results also from them: 3.8m with 14g gold as an extension of previous, excellent results from the Deacon Lode are important. Other results within the Deacon Lode are expected - visible gold in the drill core. The resource is open in all directions, I ahve no doubt about substantial extensions to their already large resource will come, eventually driving it to hopefully 2.5 mill oz at very high grades.

Have a nice evening

WS

General - Gold - Nickel

Good afternoon

just deleted my work…so today´s comment might be a little shorter!

Looks like Australia´s Morrison has done , what seems to be a habit by Australian prmiers: If the US president asks, you follow like a dog….exhibting the difference between an ally and a vasall…The Trump story is getting wilder by the day. The loss of moral, ethics, and the truth under his presedency reaches a new level! What happened to this country,which once was the second best democracy ( behind - probably - England ) and our closest ally???

Manufacturing is looking weak around the world - the US PMI fell to a 10-year low today, weaker than all expectations! Equities had been halfway positive until this number came out - Europe quite weak now, and US Futures have also turned down 100 points in the Dow within minutes…bonds jump, gold jumps…nickel 1% up / copper and zinc down 2%. I wonder, whether tehse numbers will make Trump even harsher in his dealings with China, or whether he will see the need to save the economy? I guess he does not want to go into an election with a recession on his hands…

Gold - after breaking support yesterday, we could well see a test of 1400-1420 US$…that would mark a 50% correction of the recent rise. Still big inflows into gold ETF´s, and ample reason to own gold….from gepolitics, low interest rates to a ballooning US budget deficit ….these things, I fear, will stay with us for a while! Anyway - since the PMI in the US came out, the chart break looks increasingly like a bear-trap , with gold trading at 1484 US$ now and rising!!!!

Nickel - LME stocks have been falling from about 450.000t in 2015 to a low of 144.000t a few eeks ago. Since then, they have been pretty volatile - reaching a high of 167.000t in mid-September, but falling by a very large 5800t today to 152.000t….pretty positive for prices. But Macquarie´s research makes me think today…NPI production in China/Indonesia very strong this year, and NPI prices at a large discount. Obviously, we have the early days of a diverging price for different types of nickel. We need to hope, that high quality stainless steel continues to grow at the expense of low-quality steel, and that EV´s really take off the way many are expecting. The release of the new Porsche EV sports car seems to be a step in the right direction - apparently, an absolutely fantastic car - but expensive! More important will be, how the market accepts the first VW mass market EV!

The A$ is making fresh lows - below 67 against the US - and looking at charts, will at some stage test the low 60ties level. Similar to the Euro - also making fresh, recent lows and now looking to test the old lows around 1.05. This price action would be congruent with gold testing 1400-1420 as well. So at least in terms of the textbook, could well happen!

Have a nice evening

WS

General - Exploration stocks

Good afternoon

Trump is becoming even wilder in his tweets - is he under pressure, and more so, than we believe??

He is also chatting about eliminating China from US-financial markets…the next step of escalation in the trade war.

China´s Manufacturing PMI is still slightly negative, but better than expected, while the Dallas Fed Manufacturing Outlook has been positive. Equities are quite strong today - metals generally strong ( nickel, lead and zinc up by about 2%, while copper a liitle weaker ).

Gold has been relatively weak today - the US$ has been strong, and equities are strong. Gold has not had a decent corection, since it started running a few month ago - so perhaps this is happening now. But holdings of Gold ETF´s continue to rise strongly, and are close to an alltime high, indicating much more investor interest. And as we all know, there is ample reason to buy gold, from politics in the US, to geopolitical instabilities, a possible recession in many countries, ultral-low interest rates and continued record budget deficits in the States. As I am finishing, gold has broken support at 1480 and is tarding at 1476 US$/oz!

There has been a real lack of fresh info on the mircroside recently. Companies have been pre-occupied with the ened to publich their Annual Reports - a myriad of them being done in the last few days. And for mining and exploration companies, the Quarter is just finished - so Quarterly Reports will come out soon. usually, companies save some fresh info for their Quarterlies, unless it´s so significant, that it has to be published immediately.

But one theme has been interesting over the last few days/weeks: Exploration stocks are getting a real hearing! Companies like CARAWINE, CHALICE, LEFROY, DEVEX to mention a few, have been very active. Interest is focussing on potentially large scale exploration progress in areas surrounding some big, existing resources - like in Victoria, where Kirkland have had their amazing success, surrounding Cadia in New South Wales, or in the case of Lefroy, next to Goldfields big disovery in Western Australia. Some companies have seen spectacular rises in valuation, like STAVELY MINERALS, which jumped 600% from recent lows to a market cap of 180 Mill A$ ( the market had given little attention so far to some steady progress, but got really excited about a recent drill hole containing 32m with nearly 6% copper, 52g silver and 1 g gold/t ), and ALKANE, which doubled to 370 Mill A$ market cap ( based on a drill hole of 500m containing 0,48g gold and 0,2% copper , indicating a phorphyry-stile deposit ).

I think it´s time to put a foot in the door here…but whatever you do: Do not buy those ( generally ) which have already put of a few hundred%, and not only one stock….and watch out for those, which have raised funds recently and are cashed up for drilling!

Have a nice evening

WS

General - Strike - Panoramic

Good afternoon

turmoil…Johnson and Trump under pressure…in my opinion, the transcript of the phone call just shows, that the old fox is not stupid! Will be very hard to topple that guy!

New Home Sales in the States very strong…but Europe continues to look very fragile, even though we have had no fresh dramas today from the macro-front!

The US$ strong again - metals are recovering from slightly weaker to slightly up in late afternoon, following some constructive gestures by China, and positive comments from Trump re trade agreement.

Gold is under a little pressure today - mainly in US$, though.

Strike Energy - Nev Powers, who has done an outstanding job until last year as CEO of Fortescue, and is one of the most highly regarded mining executives in Australia, has become a non-executive director. He also owns about 10 mill shares in Strike. I guess, that he is happy to support the current chairman ( I have heard, that they are good friends ) - but obviously, he is also putting his money where his mouth is, and by becoming director, he must be happy to hold on to them for the long term!

Panoramic - the rights issue is finished - thanks god, as it should remove the pressure from the stock. The shortfall was 20%, which is relatively low. Nevetheless - I guess today´s high turnover might well relate to the shortfall. Nickel is holding above 17.000 US$/t, and the Australian $ continues to be weak - and on top of that, we have this PGM-story, which I spoke about the other day ( by the way - I checked with Macquarie research - they value it at zero )….a great setting to make money for PAN! Now we need to see Savannah North to reach ore, and ramp-up quickly from November on.

Still not much to report, I fear!

Have a nice evening

WS

General - Horizon Gold

Good afternoon

the demise of Thomas Cook did not help today - but main reason for weak equity markets in Europe today have been very weak PMI´s. I think recession in German is now a done deal! Manufacturing is clearly under pressure! The Euro fell after the numbers were announced, and is trading at the lowest level since May 2017.US PMI is looking much better ! At 51, it´s a little stronger than expected.

Despite the strong US$, gold is advancing a little and is trading at 2250 A$/oz currently. Gold stocks in the States are having another strong day…

Metals are weaker as well - only nickel is up again . Platinum / Palladium continue their big run.

More M&A at the junior end….Osisko bidding for Barkerville, paying with paper in a pre-market 338 mill CAN$ valuation.

Horizon Gold - the small company had a pretty big run in the recent run-up of gold, from 15ct to 42ct…But more recently, the stock has come back again to the current 30.5ct. I guess the market is anticipating a capital raising at some stage, and given the cash holding of 1.9 mill A$ as at the 30th of June, probably rightly so - definitely before Christmas. The market cap of 23.3 mill A$ I think is a sexy entry point, though. HRN have a resource of 1.39 Mill oz, of which 2/3rd are free milling - the rest is refractory ore, and at this point, I am not valuing it. But especially the two open-pittable high grade resources, Swan and Swift, with a combined 410.000 oz at 7 g / t gold resource, are subject to mining studies, using a standalone plant, but also processing by neighbouring plants. This could generate pretty meaningful cash flow. I am just speculating here ( the company has not released the potential size, nor any other parameters ) , but assuming 200.000t of yearly mining rate, and trucking + toll-treatment at say 1700 A$ total cost , could result in something like 40.000 oz of production and at current, elavated gold prices, cash flow of 22 mill A$ p.a. ! I have no idea, how much the pre-production cap ex might be - but even a 15 mill $ number would still make it a highly attractive proposition! These numbers really just for giving you a feel - they are highly speculative at this point. I would expect some more - at least preliminary - numbers from the company before year end. But in any case, I think the stock could easily re-visite recent highs over the next few month, given the very low valuation for ounces in the ground, and good exploration potential for base metals and gold. I have a small holding in HRN.

I fear not much to report today!

Have a nice evening

WS

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