Market Update

General - Saturn - Horizon - Liontown - Bellevue

Good afternoon

the market is woried today by massive corona-numbers from South America, and the US…Trump has not bothered to talk to his health-advisors for the last 2 weeks. I am of the strong believe that this guy is mad - at least completely irresponsible! Corona-infections in some parts of the US are continuing to rise at a disturbing pace. Equities will probably end the day 2-3% down!

German IFO Institute business confidence continues to rise

Biden is leading the polls by a wide margin!

Base metals are down a little today, while gold is continuing to rise - even in A$ now, at 2564 A$/oz, represnting a June high. Corona-fears are driving it…and certainly the massive money-printing exercise by just about every government in the world! Contacts are also telling me, that there is massive interest in placements from North America, and still large appetite from Chinese corporates for deals!

Bellevue - announced some very good metallurgical results today: 97,8% recoveries from gravity + leaching, and results from 73,6% to 91,7% from gravity only. That is excellent, and is pointing to low costs for a plant Nevertheless - one of my favourite stories in Australia is becoming expensive now! At a market cap of 800 mill A$, with 2,2 mill oz in inferred resources, they are all but cheap now. While I can clearly see the potential to go to say 3 mill oz in the not too distant future, and say 1 mill oz in indicated resource at around 11g/t average grade, too much future is being bulit into the share price now.

Saturn Metals - have placed new shares at 50ct to Dundee Corp - bringing their cash balance to about 5 mill A$ ( more than they have ever had ), and Dundee´s shareholding to 9,9% of the company. Dundee recently bought a stake, when Peel Mining sold down. The Canadians are a renowned and smart group - good for Saturn! Saturn looks like being able to show 1 mill oz in resources, soon, but at very low grades of about 1g/t. That is easily feasible tehse days, with an A$ gold price of nearly 2600 A$. But at 50 mill A$, they are cheap - but not ultra-cheap. Worth holding, I think!

Horizon gold - announced a new shareholder loan from zeta, their main shareholder. I don´t like this at all…zeta is running them like their private feefdom. the new loan is extening the old 300.000$ loan to the 30th of September, and increases it to 800.000 A$. I want Horizon to raise proper funds and drill out their infererd resource….this story makes me furious! I hope that shareholders will succeed to vote down yet anotehr sale of Panoramic´s shareholding to Zeta next week. I know, that their is large support for this, and hope, that we will have enough voting power to smash them! This continues to be a very cheap stock - but I can understand, if investors don´t like the corporate situation here.

So what is still cheap?

I think Dacian and Apollo Consolidated still are, and probably Tietto….Dacian is heavily hedged for the next year - but their story is as much on the gold price, as it is on bringing additional reserves into the mine plan…every additional year of production is worth around 10ct/share. Apollo is grossly undervalued based on it´s 1 mill oz , Western Australian project. There is also more to come from exploration -they have announced good results several times recently. Except for more than 20 Mill in cash, they have a royalty, which is worth 15-20 mill A$, which would bring their EV down to a very cheap 40-45 mill A$!

And last but not least, Tietto is also adding ounces, and could potentially hit 3 mill oz in resources later this year. Ivory Coast is not Australia - but the valuation gap to our local stocks is still massive! Even if they just miss the 3 mill oz mark with the next resource estimate - they are cashed up and will continue drilling.

Liontown - Chairman Tim Goyder has once again added a meaningful purchase to his already very large holding. Respected broker Bell Potter have initiated coverage the other day, with a 19ct valuation. As I said previously - buy straw hats in winter!

Have a nice evening

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General - Western Areas - Oz Minerals - Osino - Evolution

Good afternoon

party boy Djocovic, this dickhead, was infected with corona virus…what an idiot!!

It gets a bit boring - but equity markets are strong again today! The Nasdaq is now up by 13.5% this year! the S&P is down by just 2,5% in the moment….while European markets are down by about 10-12% on average, Australia down by 11%.

PMI in the US as expected, but in Europe, better than expected and above 50. The most important German economic advisors see a bad recession this year with -6,5% GDP, but a 4.9% increase next year.

Base metals except for zinc are marginally stronger, and gold is having another strong day, currently at 1767 US$/oz…the all time high from 2011 is in sight…and given what is happening around the world, probably a question of time, when we will see it being eclipsed! But in A$, it is not moving higher…still around 2540 A$/oz.

Western Areas - have made what could be a very large nickel/copper discovery in the Gawler Craton in the west of South Australia. The area has been targeted as a an area of potentially large base metals deposits, but had gone quiet ove rthe last 2-3 years. But 200m of intersection with 2-5% sulphides - grades not known as yet - and with an EM anomaly, which indicates, that it will be there much deeper as well, got the market very excited today! The company added about 100 mill A$ in market cap….one hole is no reserve, but it looks VERY promising. Panoramic moving up by 10% today as well - are investors expecting WSA to make a paper bid for them? I have no idea, but certainly possible. PAN are technically in an interesting situation, with the stock trading just above the recent, large capital raising at 7ct….I think we would deserve to be in for som fun here!

Oz Minerals - will expand Carapateena with a 1.25 bill$ block cave. This will not affect earnings of OZL until 2025…but it secures a very long term future of this excellent company into at least the mid-20thirties…probably at costs sub 1$/lb. The company remains Australia´s only, serious copper producer, with nice leverage to gold.I do not own any, but I probably should!

Osino Resources - just written about them yesterday, and they announced a 15 mill Can$ capital raising late yesterday, at 1,10 Can$ + a 1:2 free option, exercisbale within a year at 1,50 ! My wifes cousin is making hayhile the sun shines…I am sure, that he has his previous, very successfull venture Auryx in mind, which developed into an excellenmt gold mine. But the fruits were hanging too high for them then - it would have been really difficult to raise the financing for a small company. So - while this comes as a surprise, it certainly puts Osino on a very sound footing, and gives them ample shots for drilling a 2 mill oz+ deposit ( hopefully ) in Namibia!

Evolution - tehy are having a bit of a quiet time, marketwise! When tehy got included in the MSCI recently, the share price exploded - only to come back to erath, when tehy announced some problems at their smallest mine, Mt.Carlton. I think the current level is fair value for EVN at this stage,a nd tehy will probably move with the gold price. They have indicated, that outside of Mt.carlton, the Quarter will be a good Quarter. But at their largest mine, Cowal, they are currently only treating ore from the stockpile, which has been well flagged - but we have seen numerous example of analysts not listening, to what comapnies tell them. But closer the the 3rd Quarter 2020, things should get a bit more exciting: Cowal reservbe statement ( and first reserve from undergound, which should be large ), drilling results from underground Ernest Henry, and more clarity about what I think will be a bright future for Mungari shoudl be announced. I am also believing, that their first venture outside of Australia, Red lake will come up with many pleasant news. So give them the benfit of the doubt, and be a little patient here. I think you will be rewarded later this year!

Have a nice evening, and enjoy the ride!

General - Ramelius - Prairie Mining - Cassini - Osino

Good afternoon

Corona cases are still racing ahead in the Americas…not good…California and Florida with rising numbers! And Germany is fighting a big outbreak at a slaughterhouse in Paderborn, which infcted more than 1300 workers.

The financial market watchdog in Germany under scrutiny of having missed to find out what´s happening at Wirecard! I wished these guys would evaluate the big boys, and not waste their time with small boys like my firm! But 1.9 bill Eur gone missing can happen , can it????

500 “party-people” in Stuttgart rioting in the Streets - for no apparent reason and without a specific cause. Inequality issues coming to mind - or are tehy just under some emotional prssure because of corona? I fear it´s anger of people being left behind. And to some degree I can even understand them. If some super-rich people like Mr.Thiele are trying to blackmail the German taxpayer to put more money ( or less voting rights in return for a 9 bill bailout! ), just to add afew hundred mill Euro´s to their 9 bill Euros net worth, I could become very angry! Irresonsible ultra-capitalists like him are not good for what we call in Germany the social peace!

European equities are seeing some profit-taking - finally giving in to earnings-pressure on most companies? But the US are slightly firmer, once again - especially NASDAQ.

Not much happening in base metals today - but gold is trading around 1750 US$ all day. Inflows in Gold ETF´s have increased quite markledly last week, following two quieter weeks previously. I guess they have mainly been responsible for pushing gold out of it´s recent trading range. And we are seeing the same trading pattern again today: Some profit-taking during early European hours, but strong interest , once the US wakes up…and by now, it´s trading at 1757 US$!

There has been some concern about virus outbreaks in Africa - some countries like Tanzania seem to be very complacent ( well, perhaps tehy have no other choice? ).

Ramelius - continue to perform very well operationally - guidance for the current Quarter has been increased to above 80.000oz, from 65-70.000 previously. The company is continuing to build a nice cash position, probably approaching 200 mill A$. Guidance for next financial year is 250.000 oz. I think some of tehse Australian producers have run a bit hard….When I see Ramelius at EV of about 1.5 bill A$ or Bellevue at 700 mill A$, I think valuations are getting up there at an A$ gold price of 2540 A$/oz. When I compare this to West African at an EV of less than 700 Mill A$, I know where the value is! And good value is also with some smaller companies, like Tietto, Apollo Consolidated , Horizon , Dacian and others! Mind you - I am a holder of Bellevue - but I am inclined to take profits.I am also a holder of the other names except for Ramelius, which I have missed unfortunately!

Prairie Mining - has been in volatility interruption all day in Poland today so fra. A newspaper report in Poland speculates about somebody financing PDZ´s litigation against the Polish State, which could cost 10-20 mill A$. The pre-market price seems to be nearly 0,24A$….

Cassini - have received a takeover bid from Oz Minerals, their JV-partner! All other assets except for the JV-stake will be left with Cassini shareholders, and will form the basis of a new company, which will be listed. OZL are paying 15ct in shares + 1ct cash for the reminder. That´s a good eal for Cassini holders, I think, giving them relief from having to find financing for something. which is not viable at current base metal prices, and some years away from production ( probably 3-4 years ). The ex-JV interests are probably worth 3-4 ct at this stage, and include some interesting exploration ground not far away from Chalice´recent Julimar discovery. Shareholders will have the chance to vote about the proposal at an EGM. The board of CZI is supporting the transaction.

Osino Resources - the Canadian company continues to profit from several buy-recommendations. They are certainly not cheap for what they have in Namibia - but many experts can see the potential. If Osino can live up to that, there is certainly much more left in it, and Namibia is one of the ebst countries to be active in in Africa. The weak currency is also helping operating costs, which generally are very low ( Otjikoto for exmple, previously owned by a company run by the current Osino-management, had cash operating costs of below 400 US$/oz last Quarter ). Recent broker research valued them at potentially 2 Can$/share. I declare my interest…as in many other companies I am talking about in this blog !

Have a nice evening

Schröder Equities GmbH

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General - Graphex

Good afternoon

Bolton and Trump are fighting it out…I think both are not peticular trustworthy!

a relatively turbulent day in Europe - DAX-member Wirecard seems to have problems to locate 1.9 bill Euros on their bank-accounts! Where is smoke, there is fire….stock is down 70% or so in the moment….taking the German market down a liitle with it.

Gold is exhibiting the same tendency as in the last few days: slightly weaker in Europe, it starts to recover, once the US is awake…

Labor market in the States still very weak ( and weaker as expected )…

Internet businesses continue to profit from a ( structural ) move to digital…Zalando doing very well over here, Temple & Webster booming in Australia, for example…

But Corona remains a major worry…US cases still increasing by a massive 20-25.000/day….South America still extremely negative as well, with Brazil/Peru/Chile cases continuing to explode…and massive outbreaks like the one in Germany the other day show the inherent risks in Europe, which otehrwise seems to have a relatively good handle on it by now - including the UK.

Graphex - we had to wait a long time…but finally and hopefully, it´s coming good…even though in a very unexpected way! The large PE investor, which had planned to finance the Chilalo Graphite Project in Tanzania, shied away from finalizing the financing because of ( mainly ) corona, but also a difficult situation in Tanzania. Phil Hoskins has done a great job in convincing the PE-guys, that the debt owed to them, will be ringfenced and is now only guaranteed by the project itself. If Graphex should be able to sell it for more than 6,2 Mill US$ ( which I think is a chance ), additional proceeds will go to Graphex. In return, the PE gets a few Graphex shares. This is very positive, and saves the company from potentially going belly-up!

I think even more positive, is the move in direction of Grahpex. The largest shareholder, Capital Drilling, has brought a very nice deal to Graphex: Some advanced gold properties in Mali. We will get more detail on them in due course - but I think the two main assets now are very valuable, and further to some exciting, historical drilling results, the company has already started a new drilling program. I will touch on the gold assets some time later ( there is ample time, as the trading suspension will not be lifted for another month or so). All deals/proposals will have to go through a General Meeting to be held on the 20th of July. Once all transactions ( incl a placement and a 1:1 rights issue for shareholders at 2ct ) have been consumated, the company will have 413 mill shares…at the rights issue price of2ct, the market cap will only be 8 mill A$, with 5 millA$ in cash. For a company, which holds two excellent, advanced exploration properties in West Africa, and has the option to receive more than 6,2 mill US$ for the old graphite asset, this should prove very cheap…I would rather believe, that an initial, appropriate market cap could well be 25 mill A$ for the compnay - with further upside depending on drilling results, and the gold price. I have a substantial interest in Graphex myself, and I will certainly keep you posted on developments here.

I think Phil Hoskins has done a terrific job under the circumstances, and while we have lost a lot of money here, there appears real potential from these transactions to make a lot of it back!

Within my core portfolio, I have four., relatively large problem situations . I think Sheffield has made great progress by employing a top bloke, giving them much more credibility / Graphex has completely restructured and changed direction, leading them into a great, new asset. Metro have always done everything I expected of them, and its production of bauxite in Australia is going gang busters - but unfortunately, and thanks mainly to Corona, their product price has much deteriorated. The company is still profitable, though, at current prices and the enxt leg up should defintely be warranted as well. The fourth situation is Panoramic, and we have spoken in depth about the problems they have encountered. But financially, they are in a strong position now - fundamentally, I strongly believe in their long term value…but given the large dilution , we will not see old prices of 40-50 ct again anytime soon…but again, we will make quite a bit of our losses back over the next year or tow!

have a nive evening

Schröder Equities GmbH

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80538 München

Tel. +49-89-4613440-0

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eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - Breaker

Good afternoon

the market is not quite sure, where to go from here…The FED was pretty cautious in Powell´s statement last night, despite the rocketing retail sales number. Good on one side - and supportive for gold - as there is no end in sight for cheap money, but the market is a little concerned by the outlook, which seems to be, that a full recovery will take quite some time.

The virus is far from being under control, as shown by recent outbreaks in China, or by today´s news of 400 new infections in a meat processing factory in Germany…not to talk about South America, where cases seem to increase in a big way. And so many smart, large investors are very cautious, if not bearish….on the other side, we have this mountain of liquidity and billions of cash waiting on the sidelines…At least it´s difficult to see, where much selling should be coming from.

So far today and towards the close of European markets, equities are climbing higher higehr here, while the US market is pretty flat.

Base metals are slightly up today execpt for nickel, which is a touch weaker…oil as measured in the price for Brent seems to establish itself around 40 US$, which is not a great price ( especially not for the shale producers ), but something most producers could live with.And lastly gold, which is stuck in a trading range but has found lots of new friends as the only currency not to be inflated by central banks…Overall, a positive mood for our sector, but missing fresh stimulus.

Not much news out today…except for

Breaker Resources - announced some excellent drilling results, especially from underground beneath the existing open pit resource: 4.6m with 12.5g / 2.5m with 12.1g / 2,6m with 10.6g and 6.8m with 4.8 g certainly indicate strong underground potential. The company is adament, that tehy are sitting on a mineable resource, whereby some concern in the market, that the resource might not hold together, are holding the share price back. The jury is out on this one - if mineable, Breaker are certainly cheap on the basis of ounces/market cap. Very good to see strong turnover in the market today…

Have a nice evening