Market Update

General - Metro Mining

Good afternoon

equities continue their recent race! But now the market is bidding up the travel sector around the world!

Gold is slowing down and feels like it is loosing it´s momentum for now! ETF inflows are continuing to slow…We could see a reaction, but the ultra-low interest rate enviroment will continue to see interest in gold - and obviously, recent government/central bank action around teh world will and should also continue to make gold as the only currency, not backed by a government or a central bank, very much on the radar screen.

Base metals are slightly stronger, especially copper.

Consumer Confidence is still very low in Germany, but strongly rising.The same in the US - at least for their expectations. New Home Sales in the US much stronger than expected.

Not all that much to report from the micro-side…only

Metro Mining - had their AGM today. Management was very cautious on the shorter term price outlook for bauxite. I share that view in the short run - Aluminium is not doing well, as the end product from bauxite, and the intermediate product, Alumina, has been under pressure therfore as well. But Chinese imports ( and that´s where 100% of MMI´s bauxite goes ) continue to rise strongly. I emphasize, how vulnerable the massive rise of China´s dependence on bauxite from Guinea is - this is a very difficult country, also having elections later this year. For now, excellent production numbers are making up for a good deal of price weakness, as well as much lower freight rates. But obviously, Guinea-product is benefitting more form it than Australian product, due to the much longer transport. Production for MMI in April was roughly 240.000t vs 150.000t in the previous year, and May has been forecast today to produce 450.000t vs 310.000t last year. So the mine is going extraordinary well, despite corona impact. This should reduce production costs. But in light of the uncertain price outlook for Bauxite, the company has not pushed the button as yet on the ( fully financed ) mine expansion.

Metro have a very strong balance sheet with net cash - so no trouble at all is expected here. Alumina prices seem to be past the worst - and I think, that you should buy straw hats in winter! This is a very well-run company….

Have a nice evening

General - Strike - Panoramic

Good afternoon

well the new week has started as the old week finished…equities on the run! DAX with new, recent high, ASX as well as Nasdaq and probably S&P ( as measured by their respective futures - it´s Memorial Day in the US today )….more of the recent story: Looking for bargains and late movers!

Base metals with very little action today, as London markets are closed as well.

German IFO-Institute confidence numbers are looking strong - not for current conditions, but looking forward.

Gold ETF holdings are making a new high - but weaker inflow than more recently. Gold feels a bit vulnerable in the short term?

Panoramic - the long awaited rights hissue and placement is here! Company is raising 90 Mill A$ - 28 m in a placement, and 61 Mill in a rights issue to existing holders, on the basis of 1.15 new shares for one existing share. Certainly this is disappointing…but if you are halfway positive on nickel, I think you will need to take it up! Western Areas, the prominent Australian nickel producer, is taking a 19,9% stake via the placement and priority underwriting of the rights issue. The existing largest shreholder, Zeta Resources, which has not been good for minority shareholders, will get diluted to between 14-and 18% of the company, which is very good news. They will also have to give up on the chairmanship, as Nick Cernotta becomes Independent Chairman. Funds will be spent on all debt repayment, the full development of Savannah North including the ventilation shaft, and care and maintenance costs. Unfortunately, only 1 mill$ have been earmarked for exploration - but this could certainly change. I think that the planned mine life could be much longer than 7 years, and a say 12-15 year mine life would add a new dimension.

The question , whether you should take up the rights issue ore not, is relatively easily answered, in my opinion: As recently as 6 month ago, IGO ofered the equivalent of 45-48ct/share in a takeover offer, which was turned down. The offer valued PAN at 320 millA$+ - the rights issue price values the company at 241 mill A$. The long term outlook for Panoramic has not changed dramatically, in my view….and in the press as well as from analysts, Western Areas is being cheered for a great little deal!

I am very hopeful, that shareholders will vote down the sale of the remaining 22.5% shareholding in Horizon Gold at 20ct to Zeta. The money is not neded that badly in the moment. While the management of Horizion ( led by Zeta ) in my opinion is scandalous, the stock is worth a lot more than 20ct!!!!

Strike Energy - the company last week released a principal agreement with AGIP, an experienced pipeline operator in Australia, and owned by Li Ka-Shing, Honhkongs wealthiest man with an estimate 29 bill US$ net worth. AGIP will build and operated all necessary infrastructure to process the gas, produced by STX in Western Australia. The cost of capital for AGIP is dramatically smaller than for STX, and I believe, that by using them, this is the cheapes alternative for STX, partnering with deep pockets at a very competitive pricing for their services. I understand, that JV-partner Warrego will also be able to use AGIP´s services, should they want to. STX will no move full steam ahead I believe to drill the next well, and get a better understanding of the total size of West Erregulla, and subsequently, to drill two more wells. This will keep the pressure on Warrego to continue to find development-dollars: I think that´s also good strategy - this project in one hand is much easier to handle, and in this case, 1+1 should add up to at least 2, and probably 3! It would be very psoitive, if both companies cold agree on a merger, and I think the recently made offer of 1.2 shares in Strike for 1 share of Warrego, continues to be a fair offer. It would/should result in a furtehr re-rating of both companies! I am now waiting for the date of the start of drilling the second well as next catalyst for Strike to move higher. We are not even close to full value for Strike, I believe!

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

General - Carawine - Horizon

Good afternoon

following from a weak start, European equities are recovering - taking the lead from the US - and are now slightly green.

Base metals got a hit early in Asia today, when somebody just hammered nickel at the close of Asian trading. They are now looking slightly better - but still down on the day. Obviously, the market is still very uncertain about the enxt 12 month outlook for the world economy. Interesting, though, that stainless steel production in China, as well as other steel production, have already recovered big time in China.

Gold is looking a bit better, after having been sold quite heavily yesterday - currently at 1735 US$. Gold ETF´s so far saw a much smaller inflow this week than more recently.

Carawine - I have mentioned them before - don´t own any for the fund, as tehy are pretty small with 14 mill A$ market cap. They have three relatively large JV´s: RIO is spending 5 mill$ , Fortescue 6 mill$ to earn 80% interests in their respective Paterson´s projects, very prospective for copper / gold and home to the recent Winu discovery of Rio, and the Haverion deposit of Greatlands/Newcrest. Independence have to spend another 5 mill$ , to get to 70% of their Fraser Range JV, where Independence have the Nova Nickel Mine. Perhaps the most interesting asset is the 100% owned property in Victoria, where CWX have had multiple, strong exploration results with good gold grades. They believe, that the ore body shows all the hallmarks for a copper/gold Porphyry deposit, which tend to be very large. I think CWX is giving you 4 shots for your money - in relation to their market cap, that´s very good. The compüany could do with some cash at some stage , even though tehy are financed for the next drilling program. The otehr negative is, that in Victoria, their exploration will only start again in October. CWX have a very strong share register, and I think tehy are worth accumulating during the coming, probably quiet period.

Horizon Gold - this is the one in the very junior space I am most bullish on. The downside: They are/will be controleld by Zeta Resources, which has not been good for us as a major shareholder of Panoramic. I have done very conservative numbers again on them today, and as I mentioned the other day, tehy are a real sleeper. Ther mineable deposits at Gum Creek in Western Australia have a few hundred thousand ounces in mineable gold - how much exactly need sto drilled out. To upgrade the inferred resources here to indicated resourecs needs anotehr 1 mill A$ in drilling - which the company does not have. I have constantly tried to pressure the company into finally doing the necessary rights issue, to raise just 2 Mill A$ ( 1 year headoffice + the drilling program ), but nothing has eventuated so far. So the major shareholder is the clear downside here…and that is real. But the upside is massive. My conservative calculations have resulted in a NPV of 67ct/share, only using 5 years mine life and 125.000 oz at 4g average grade for this result, trucking 200.000t p.a. to the next available plant. There are several options around to toll treat this material. Potentially, much larger tonnage could be trucked to Westgold´s plant, and the potential mining reserve could easily be double of what I have been using. I have not done the numbers for this scenario - but surely they would exceed 1$/share at today´s gold price. I seem to be the only buyer of this stock just about - but one day, they will come out of their sleepy mode! the funds don´t really bother, because the market cap is low ( 19 mill A$ ), and some don´t like the corporate situation. But even if you discount the stocks underlying value by 50%, there is still good money to be made here. The rights issue, which has to happen in the near future, could provide a good buying opportunity and also some more liquidity in the stock.

There has not been much corporate news today and yesterday - the only important news in my universe came from Strike, but I only want to comment on that, once I ahve had the opportunity to speak to the company on Monday!

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

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - Strike / West African / Mining Services

Good afternoon

yet another strong day for equities. IF investors are right, and interest rates will stay low for years ( or better: IF central banks / governments can keep interest rates low ), then equities are still very cheap…BUT IF inflation is coming - or worse, stagflation - and they cannot keep interest rates at current levels, the long-awaited second leg will come!

Even though I am running a slightly more defensive strategy than usual in my fund - I am never using options/futures, having an unsually high cash position of 11% currently, I tend to believe in the first scenario. At least that´s what the market is telling me! Amazing!

Gold is heaving a volatile day, within a relatively small range today…so far….at about 5 pm European time, it´s trading at 1745 US$ and basically unchanged…but it has problems to go higher in A$ in the moment.

Base metals are slightly up, the oil price continues to run - just below 36 US$ for Brent in the moment.

Strike Energy and the potential takeover target, Warrego Energy have a bit of a fight on in the moment about the size of what they have found in Western Australia….Strike´s estimate of the resource is higher than Warrego´s - but I am not exactly sure, what Warrego wants to achieve here. Strike are the operator, and so far, their modeling of everything surrounding the West Errgulla fas field has been exemplary - I have no reason to question their resource estimate. But as always: The proof is in the pudding - in this case, the next appraisal well. I hope, that the JV will announce the start of drilling soon.

West African - I have done a few numbers on the most aquisitive Western African producer, that´s Endeavour, and West African Resources. I have used yesterday´s closing price of EDV, 32 Can$, and arrive at following numbers: ( for ease, I have not used EV/EBIDA, but market cap / EBITDA. That´s favouring WAF in the moment - but in 6 month time, WAF will be net cash positive, while EDV will probably have a little bit of debt left ):

EDV is trading at market cap / EBITDA multiples of 5,4x / 6.1x / 7.9x for the next three years. If they were to aquire WAF at a premium of 50% ( using paper ), their ratios would fall to 4.3x / 5x / and 6x for the next three years. Very compelling, isn´t it?!! Larger, cheaper, more exploration upside, lower costs….I am not sure, though, wheather 1,20 A$ in paper would be enough to get them - but not completely unrealistic, given the markets aversity to single-mine stocks! Today, EDV are up another 3%, making the numbers even more compelling

The gold market is very very active, money is being raised, and cash flow is strong for most producers - so I think the undervalued mining services sector is worth revisiting. Stocks like Perenti ( the old Ausdrill ) and Swick ( the drilling company ) are still substantially below their pre-corona prices - and I think there is very little reasong for it. No doubt, that earnings will suffer a little in the current Quarter ( more so for the driller, I guess, as some exploration had to stop temporarely ) - but the market in their underlying commodities is so strong, that activity in 2020/21 will be very strong for the service companies.Stocks like Perenti/Macmahon/Swick ( all of which I own in my fund ) are trading at 3x EV/EBITDA or even lower - I think that´s very good value.

Most will be having a long weekend in Europe - enjoy it!

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

General - Chalice

Good afternoon

iron ore continues to rocket , as Brazil´s presidents still neglects corona. Related, possible supply issues are a major worry for steel producers, while Australia has just 10 new cases versus 15.000 in Brazil! I think it will be a question of time, when we will have calls for a new mining-super tax for iron ore producers. The three big boys are generating approx 40 bill A$ in EBITDA at current prices!! An additional 5/$ in the form of royalties or other ways, would increase government earnings by approx 3 bill A$, while it would leave these companies extremely profitable!! But the market would obviously not like this at all - so a word on caution, as FMG for example are trading at a new all time high today. The net worth of Andrew Forerst & Family is now about 15 bill A$ - not a bad job in just 15 years! Who dares, wins!

Gold continues to power ahead - currnetly at 1761 US$ or 2733 A$ - driven by large ETF-inflows. A good finish on Thursday/Friday drove a 1.5 mill oz net inflow last week , worth about 2.5 bill US$. Gold equities definitely broke out today.

The oil price is up by 3$ to 35,50 US$ for Brent! That´s a the highest since early March, when it broke down from 50$.

Chalice - the AFR is writing today, that Robert Friedland, the famous Canadian mine developer, put 15 mill A$ into the stock in the last placement. All rumour for now - but if true, it would create a large North American following, I think! But unless he bought more, we might not know for a while, as 15 Mill A$ would be just under 5%!

During our afternoon, Moderna in the US reported sime success in developing a vaccine, which is depressing the gold price ( 1729 US$ ) , but has put a rocket under share prices otherwise! The same for base metals - they are up by 3-4% today. Gold stocks are holding unchanged from the US close on Friday.

Platinum/Palladium are very strong today, as the economy in China seems to regain some strength, and Impala has to close a mine for 19 corona cases - most probably, very temporary.

Not much micro news out 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