Market Update

General - St Barbara - Perseus

Good afternoon

In 2017, the US budget was a deficit of 460 bill US$ for the year incl September…in 2018, it was 552 bill US$….in 2019, it is

Widespread chaos in Chile, as the government has declared State of Emergency for Santiago, and many other places. Apparently, the superficial reason behind the chaos seems to be an increase of underground tickets from 1 Euro to 1,04 Euro - showing, that some very negative sentiment is cooking below the surface… in Chile….as it is in Venezuela, in Ecuador, in Argentina, in Mexcio, in Brazil at varying degrees. The continent seems to be in trouble…and we all know, how important it is for some base metals, and especially copper. So far, miners have joined the chaos only to a very limited degree…and they are the ones, who get high salaries anyway in comparison to average workers. But there are certainly risks, that copper production could be affected.

Perseus -announced a new board member today, David Ransom. Most probably, a great win - David has been running the mining side of Acorn, a large fund manager, until recently and has been one of the most respected fundmanagers in Australia. Very knowledgeable, and very likeable! Great person, and should be a plus for PRU. Probably more important was their Quarterly, also out today…66.000oz at 922US$AISC was a good result - Edikan producing at 1027 US$ and Sissingue at 709 US$. Yaoure remains on track and on budget for first production by the end of 2020. Yaoure will provied a step-change for the company, and will be their

St Barbara - announced a pretty rough cut in guidance on Friday, by about 10% in terms of ounces, and by 12-14% in terms of costs. The main reason for the cut of production ís the Gwalia extension project, which impacts negatively on production at Gwalia, as there is lmited air-availibility, until the new ventitaltion shaft has been completed. Forecasts for sustaining capex as well as growth capex have also increased slightly…overall I fear there is no hurry to buy this one! Cash & Bullion decreased by 7 mill US in the Quarter - but that is after spending 23 mill on Yaoure. Cash is ok at this stage to get Yaoure done - and with continued cash generation from production, it should continue so, especially, as the company expects the 1st half of calendar year 2020 to deliver stronge grades from existing mines. PRU have been a consistent performer and this should not change!

have a nice evening

General - Chalice

Good afternoon

Retail Sales in the US slightly down vs expected slightly up

Gold is holding in A$ at 2211A$/oz…Platinum/Palladium in A$ new high of 3942 A$/oz combined price….but economically much more important, iron ore is under some pressure, following production numbers from RIO and Vale, which were both slightly better than expected.

ETF-holdings of gold fell yesterday, after 20 days of consecutive inflows. Positive equity markets probably weakening the interest in gold.

Base metals were very soft earlier on, but are recovering a bit in the afternoon…before especially nickel got sold down by 2.5% despite another strong fall of LME stocks and an ever increasing backwardation. Citigroup, which has a highly rated analyst team for metals, is indicating, that they see a large speculator manipulating prices and fear for more short term weakness. Copper down 1,1% despite several mine-disruptions by strike/blockades.

Global exploration expenditure has been falling slightly this year - Australia is taking over Canada as the largest explorer in terms of$. No surprise, looking at big budgets of mid-cap miners! Especially gold exploration strong in Oz - good for little Swick Mining, which nobody wants

Chalice - have given up recent gains over the last few days, as profit-taking has hit the gold sector. I think a good opportunity t build positions here! 12ct cash backing - 33 mill$ are more than solid ! Chalice are exploring for nickel in the Kimberleys, and probably more significant for now, gold in Victoria. CHN have a very good ground position there, and had seome strong, initial results. Tim Goyder has done it a couple of times in his life, most recently with Liontown and Strike , and within Chalice, has realised about 100 mill$ in asset sales over the years, of which a very significant part has been paid back to shareholders. A large drilling program is starting these days in Victoria - given the proximity to Kirkland´s Fosterville, any success will be reflected strongly in the share price.

have a nice evening

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General - Evolution - West African - Greath Panther/Troy - Oceana

Good afternoon

Trump is trying to save his…. - suddenly imposing sanctions on Turkey, just days after opening the door for them to invade Syria!

The IMF has cut the growth forecast for this year from 3.2 to 3%, and next year from 3.5 to 3.4%…notas bad as I would have feared, and I think on the optimistic side of what we will see!

First Quarterlies in the States look at least ok - with J.P.Morgan a standout.

Gold ETF´s…o.k. don´t want to bore you..but the 21st day of inflows…price is holding…in A$ terms, it´s 2210 A$/oz

Palladium - new high again today…platinum also up…the combined price in A$ hitting a new all time high of 3873 A$/ot Plat+Pall

Nickel had a tsrange move late yesterday - down by a staggering 100$T/t in late trading. It recovered strongly today by 380 $/t as we speek, scratching the 17.000 US$/t mark again.

Evolution - you can se what the A$ does to Australian miners..new all time high of net mine cash flow 207 mill A$ last Quarter, despite an unusually average Quarterly Report! Costs moved up quite strongly from AISC of 915 A$ to 1018 A$/oz - or All-In-Costs of 1330 vs previous Quarter 1213 A$/oz. 20$ of this rise are due to higher royalties, payable on the higher gold price - about 30$ are because of a wall-instability at Mt.Rawdon - still, leaves 50$ higher costs. Some of this can be explained by lower by-product credits, as copper has been weaker during the Quarter. The company had record net mine cash flow from Cowal and from Ernest Henry, it´s two flagship mines - but Mt.Wawdon was weak ( see above ), as was Mt.Carlton, which went through a phase of difficult ground conditions.

EVN have kept production guidance unchanged at 725-775.000oz - but AISC guidance has been increased by 50 A$ to 940-990 A$/oz - based on higher gold royalties and higher costs at Mt.Rawdon. I wonder, whether this might be a little optimistic? EVN are constantly working on reducing costs - but I have no doubt, that a few items are pushing North like labor costs, water etc…

Drilling of the new underground resource at Cowal has now ( as the exploration decline has been developed ) moved into full swing, delivering some good results.

In any case - a very good Quarterly, positioning them again within the most competitive gold producers world wide - but this time, a touch below expectations due to the cost increases. Nevertheless - Jake made strong hints as to an increased dividends for the current year, planning to pay out 50% of free cash generation.

West African Resources - interesting move today: Morgan Stanley became a substantial shareholder today - 42.835 mill shares of those are held by Morgan Stanley Nominees for someone…representing 4,92% of the company and just below the threshold of reporting a seperate, substantial shareholder notice. Interesting! Who is the beneficial owner??

Troy / Great Panther - once a difficult mine, always a difficult mine? This word works in 80 out of 100 instances - certainly for Troy, which recently had a wall failure fllowing numerous other problems, and now a fatality….and Great Panther just reduced guidance for Tucano ( which we all know from the old days at Beadell ) , also due to instabilities of a pit wall. Recently, when TRY annunced to be debt-free, I was almost tempted back into them…I am not tempted anymore!! And as successull, as our early investment in beadell has been years ago - Tucano hardly ever lived up to expectations, and this got worse, when new management took over a while ago from Peter Bowler! What a smart move of him to exit this story back in 2014…as did we and most of our clients!

Oceana - Quarterly production report was about 15% down on previous Quarter…not good at all! New guidance is 460-480.000oz for this calendar year, at 1040-1090 US$/oz AISC. That compares to previous guidance of 500-550.000 oz at 850-900 US$/oz. Copper guidance is also down by nearly 30%. Main reason for the downgrade is the ongoing closure of Didipio in the Phillippines, which continues to be subject t a blockade. The relatively low-cost operation is an important source of earnings for OGC, and the ongoing problems there are a major negative. Not that OGC have done anything wrong in the country - the mining operation I believe is being managed very responsibly - but the country remains one of the more difficult places to operate a mine!

Have a nice evening

Schröder Equities GmbH

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80538 München

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eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - Metro - Saturn

Good afternoon

Chinese import- as wella s export numbers down and weaker than expected…

Syrian war seems to escalate…thank´s, Mr.Trump! Europe under pressure…Hard t believe, that Turkey is a NATO member…but what is NATO these days?? Probably hardly worth the paper it´s written on…a hawk running it, and countries like the US, England and worst of all, Turkey, as members…

Industrial Production in Europe wa stronger last month - but that probably remains a short episode!

Investors doubt the merits of the trade mini-deal, and even, whether it will be signed…lot´s of time for tweeds left!

Unsurprisingly, metals and equities weaker today, even though both went to limit the losses as the day progressed. Gold more or less unchanged, as I am writing! Another day of inflows into gold-ETF´s…but we are getting used to this…20th consecutive day…but let´s see it in perspective: Inflow of 120 mill US$ is really miniscule in the overall sceem of things these days. At this stage, still only a trickle!

Gold stock were sold down in the US on Friday - and even more so in Australia today, with falls of 5% -7% being the norm. The sector is now back to levels worth accumulating….Even if the “trade agreement” holds - the real story behind gold is monetary policy, and the US budget deficit. I am still amazed, that nobody is talking about it…Trump´s tax cuts are a gigantic failure, as growth is way below what is needed to stabilize the numbers!

I was unaware of just how negative the outcome of Mrs. Warren as President would be for fossile fuels…in case of her becoming the candidate, and even more so, the president, you would not want to be near anything close to it in the States!

Metro Mining - announced most details of their final feasibility study today, and a production outlook. First production…is expected to go from 3.5 millt of bauxite last year, to 4 millt next year…and 6 millt in 2021.

The company will install a new Floating Terminal, capable of loading a minimum of 6 millt p.a.. A new conveyor system will also be built, and when operating at capacity, the system will be able to load much bigger numbers, than required. this will give Metro spare capacity to make up for wheather-related, or other interruptions to shipping, should they arise. Total cost will be about 51 millA$ - that apprx 10% more, than originally expected - but the original number included a loading system, which had no spare capacity.

The company expects 18% cost improvement vs the current operation - theoretically, that would be about 8$ t….4-5 $ from being able to load larger ships ( with lower freight rates ), the rest being economies of scale. Metro are talking about “ up to 18 month” payback from the “incremental” production - that would be on the addtional 2.5 millt produced! MMI should produce something like 90 mill$ in free cash p.a., once the expansion is up and running - vs about 35-38 mill from the current operation ( these numbers are befor head office and financing costs of say 7-8 mill A$ ). Importantly, the expanded operation will place MMI within the lowest 25% of the cost curve for bauxite landed in China!

We had expected, that the company would announce the debt-financing for the project at the same time as the feasibility study - that has not happened and might disappoint a few investors. But the company expects debt to be fixed soon, alongside with the announcement of a few remaining details of the feasibility study. My birthday is on the 17th of Nov, being also the day of my arrival back in Germany from an Australia-Trip…I am pretty sure, that we will have this announced before then! In the meantime, this company is trading at less than 2.5x free cash before tax, based on the expanded operation! Extremely deep value!

Saturn Metals - announced a new resource estimate today, 781.000oz at 1,0g gold , an increase of 96.000 oz. 3000.000 oz at 1,0g of this resource are in the indicated category, and increase of 250%. The new estimate I think might be a little disappointing….even though the indicated resource has increased quite considerably. But 18 month of work and 28.000m of drilling had ben completed ahead of the new estimate…obviously, it´s hard work to add many ounces. However - too early to call it a failure, as exploration is open in most directions, and more recently my impression has been, that they started to get a better handle on where to add higher grades. Drilling is already in progress. One to watch - but I fear not one to buy as yet. I would like to see better grades!

Have a nice evening

Schröder Equities GmbH

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80538 München

Tel. +49-89-4613440-0

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Geschäftsführer: Wilhelm Schröder

General - Panoramic - Metro - West African

Good afternoon

Giuliani´s friends ending up in jail…in their pocket a one-way ticket to wherever - “just get out of here”! When I read with whom Giuliani did business over the years, I would not lke to be seen with him in public!!

Hopes for at least a mini-trade deal continue to rise…European stocks strong today, also driven by an excellent result from SAP: Base metals slightly stronger - gold uninspiring today, being under pressure from goldilocks!

Metro Mining - have finally gained some attention…if not from analysts, at least from the Mining Journal. Stock is moving a little - but 12 month ago, we thought that they were cheap at 20ct - since then, a lot of good production performance, and the stock is still trading at 14ct! Final feasibility announcement + financing shoudl be the next trigger - I would definitely think by the end of this month. Stcok has still easy potential to double…

Panoramic - Quarterly out…from the production side ( and I fear, that is the most important thing! ) shitty as expected…Development of Savannah North going very well - more than 1000m developed last Quarter, and now only 70m away from the orebody. I can only guess - but would think, that less than 300 m left to develope ( remember, twin decline so you have to double up meters, and a decline does not go deeper in a straight line! ). So in 3-4 weeks, they should be in ore - as expected and as reiterated today ( company says cautiously: in November ). Part of last Quarters problems ( the seismic event ) should be positive for this Quarter, as production from the old ore body will be much improved, for as long as nothing unexpected happens…and has we have seen from yesterday´s drilling results, grades from early mining in the new ore body are excellent. So the current 20 mill A$ are most probably close to the lows - I think by the end of the Quarter we shouldf find out, that no cash has been burnt. Potentially, 4.5 millCan$ also coming in from the conditional sale of the Canadian PGM-asset. I have not confirmed the following from the company, but I would think, that production of around 1900-1950t will be possible - which would be a large improvement. In the last Quarter, they burnt about 13.5 mill A$ - on sales of only 1140t of nickel ( one shipment will leave tomorow - Production for the Quarter was 1350t of nickel ).

The large hole to accomodate underground ventilation is also making very sound progress. At the current rate of progress, it will be finished in the 1st Quarter 2020…the company is conservative and says: June Quarter.

One very exciting development: The Australian reports today, that Independence Group have bought 3.9% of Panoramic! IGO have enough cash t do what they want with PAN…and perhaps it´s a great thing to have a largest shareholder, who will most probably not sell cheap! I am not sure, whether they would let go for 70ct…

West African - the strong move over much of September drove the share price up from 45ct to 55ct - all of that has been given up! The up-move has been driven by a strong presentation at Beaver Creek, good infull drilling results, good construction progress and Index inclusionc- the evaporation of it has no reason than no fresh news ( and one, large seller…yesterday, 13 mill shares changed hands ). Underground drilling might have already started again - if not, it will soon - and I would be surprised, if we would not see some good results goimng forward. The stock is back to a great buying level of 45ct now - and I think any potential takeover would have to be pitched at atn absolute minimum 75ct for at least some sort of chance of success!

have a nice weekend!

Schröder Equities GmbH

Seitzstr.7a

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