Market Update

General - Sheffield

Good afternoon

Equities are digesting their recent gains today…the US are a little stronger so far by late afternoon.

Snowflake is set to rise on it´s debut today. IPO range has been increased from 75-85 US$ to 100-110$, and was fixed at 120 US$ - valuing them at 33 bill US$. The stock has not opened as yet - looks like it will do so at 230 US$ - for a company with 248 mill US$ revenue in the first half of 2020!! That´s what I call exhuberance!

Base metals are well supported, still profiting from positive mood in China, and are slightly up.

Gold is edging higher, currently at 1967 US$ or a boring 2680 A$/oz…it has barely changed since late August. Having said this, I think all Australian producers would be very happy for this price to stay, as it is!

Retail sales were a bit lower than expected in the US today.

In the absense of much news today, I had another look at good old

Sheffield Resources - which in my opinion, is a deep value play , as tehy are awaiting FIRB approval. This is the major obstacle to development of their zircon/ilmenite mine in Northern Western Australia - well, for the market it seems to be. I would be very very surprised, if they would not get approval for the JV with Yansteel, a 6 bn US$ revenue, steel producer in China. Australian relations with China have clearly deteriorated, ove rthe Australian call ( stupid ) for an intenational enquirie into the origins of the virus in Wuhan. Just imagine the Chines asking for such an enquirie, if it ahd happened in the US! Anyway - I think the risk for this project to not get FIRB approval from the Australian government, has to be very low.

Just to remined you: Yansteel are paying 130 mill A$ in equity for 50% of a JV, which is to operate and own the Thunderbird Mine.Additional to this, they have taken a 9,9% placement in Sheffield for approx 12,9 mill A$ at 0,375 A$/share, which repesented a massive premium, when the deal was done in early August - but also a 35% premium to tdays price of SFX at 0,28 A$. The transaction also valued the projext at 261 mill A$ for 100% - so 130.5 mill for each partner. Yansteelt also agreed to a longterm off-take agreement for the ilmenite produced by the JV. So as at today, SFX have about 17 mill A$ cash in the bank. SFX will incur some costs for early works on the project,a nd for finalising a revised feasibility study ( as a remineder, the old FS arrived at an NPV of just under 1 bill A$! )Cash + 130.5 mill A$ for 50% of the JV amount to approx 147 mill A$ vs today´s market cap of 97 mill A$! I really think, that the market is discounting the stock too heavily for the risk of FIRB approval. The valuation at deal terms with Yansteel is approx 42ct - the valuation at the old NPV, of which I do not expect a material change ( lower capex - lower operating costs - but lower revenue? ) is more like 1,20 A$! The big trigger for SFX will be FIRB, which I would expect within the next 3 month. It is important to remember, that the project will not be worthless, if tehy do not get it - but you have 400%+ upside from current levels over the next 2-3 years. I am holding a large position in SFX, and I think it should be smart to accumulate stock at current levels.

Have a good evening, and enjoy the ride + the last few days of summer!

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General - Strike/Warrego - West African - Panoramic

Good afternoon

stronger equity markets yet again today…China economic numbers were leading the way : Retail Sales up 0,5% YoY - positive for the first time. Industrial Production +5,6% YoY…government stimulus and loose credit rules are certainly helping. Macquarie believes, that strong, early indicators are pointing to continued, strong metals and minerals demand into 2021….Strong manufacturing numbers for the US, but while positive, lower growth in IP than expected.

Base metals are seeing little change today except for zinc, which is up by 1,7% currently. Gold continues to react to the US$ - early on, strong gold and weak $ - now stronger $ and slightly weaker US$ against Euro.

Gold stocks in Australia seem to have ended their consolidation phase. Stocks have been up strongly over the last two days, and are actually trading at levels, which are pointing to renewed interest - despite of lacklustre inflows into gold ETF´s, which have come down to a trickle .

Strike Energy / Warrego - pre-spud activities are ongoing for West Erregulla3 in the moment, as drilling is expected to start some time this week. This is tsrating to create some interest in the stocks. The drilling is hoped to confirm a 1 trillion cubic feet resource…

West African Resources - made a new closing high today…Finally, the market is waking up and it looks like West Africa as region is starting to be re-priced from levels, which were impacted by the recent coupe in Mali. Quite a few stocks in this space experienced a rebound, as seen in Endeavour ( new all time high yesterday ), Oklo, Tietto, Marvel Gold etc. The prolonged and intense takeover battle for Cardinal also has helped to restore some confidence, even though that is probably over, as directors have finally accepted the Shandong bid for their stock. That should hand back fresh cash back into the hands of several gold funds, giving them some need to re-invest.

Panoramic - like many others, they presented at the RIU Explorer Conference today, and updated on their exploration efforts at- and around Savannah. I think this has put the very substantial upside to PAN´s resource back into perspective…massive turnover of 45 mill shares in PAN, which is still only valued at a market cap of 200 mill A$ vs say Mincor at 400 mill A$!

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

General - Capital raisings - Strike Energy

Good afternoon

Nvidia is buying Softbank´s ARM for 40 bill us and some other &A deals worth a total of 70 bill are driving equity markets higher today, especially in the US. Looks like Oracle will be buying Tik-Tok.

Australian listed company Starpharma could have a spray against the coronavirus ready by the first half of 2021! It could be applied before and after an infection.

Macquarie Bank is feeling the coronavirus as well and is expecting 35% lower earnings!

Macquarie analysts have changed their view for the shorter term outlook for nickel to the positive. Very strong stainless steel numbers from China have led them to this view. Also, nickel ore production from the Phillippines is looking weak.

Base metals are slightly up today, following a strong day on Friday ( nickel the stand-out, up by 1,3% currently ). Gold is also looking much improved, as the US$ is weakening again.

De Grey Mining have raised 100 mill$ ( ! ) in a heavily oversubscribed placement…I would not buy them at current levels. Where is the upside to something which is capped at 1.8 bill A$ or so already?? There must be much mainstream money buying this thing!

Saturn Metals also completed a 13.7 mill$ placement - that´s probably a better story in this gold price enviroment!

Breaker also announced a heavily subscribed result of their SPP, raising 2.7 Mill$ from it, following a placement of 23 mill A$ at the same price of 24ct. They will definitely have enough money now to prove, that tehy have a viable mine on their hands! Part of the capital raise is subject to approvel at the AGM, but that should not be a problem. For the first time, the company should have funds now for an intensive, 2 year drilling program.

Strike Energy - announced, that the planned sell-down of acreage to Talon has been consumated. Talon will have 45% of teh Walyering gas exploration asset, by spending 6 mill A$ on drilling in the first half of 2021. Strike has already discussed potential off-take with energy users and believes, that Walyering could be brought into production quickly and at low cost, if successfull. This is only a sideshow for Strike, but could be quite valuable in it´s own right.

Have a nice evning!

General - Carawine - Resolute

Good afternoon

Trump has been bullsh….g the US public on Coronavirus - that will bring his appauling handling of the corona virus back into focus.

Labor market in the US softher than expected.

Producer Price Index in the US pinting to some inflation in progress….that helped gold to get off the ground - now up by 15$ to 1960 US$ - and also the Euro - the US$ is now trading at 1.195 against the Euro. - and also base metals, which were pretty weak early this morning , about unchanged early afternoon, and slightly weaker at 5pm our time. Gold and base metals are mirrowing price changes of the US$ in the moment

Vale is closing Goro for good. This nickel mine has been a major desaster for them, and for previous owner Inco - costing billions for both companies. The effect on the nickel market is limited - 20.000 or 30.000t p.a. and much smaller, that what NPI production is doing in Indonesia. But the ramp-up of EV-production is starting to have a meaningful impact…and Goro produced the “real” nickel, not NPI.

Lagarde does not currently see the need to do more.

Equity markets quite volatile today - opened strong, now slightly weaker except for NASDAQ…

Resolute - workers at Syama are on strike with regards to some COVID-related sackings. I think a strike could be tough for RSG , as the plant is pretty sensitive and to clsoe it down would create quite a difficult situation, I believe. It´s also coming at a time, when the company is ramping up it´s by far most important asset…not good at all. The stock has a bad Karma for me…I know that this is very irrational - but it just does not feel right somehow!

Carawine - I listened to a Zoom-call today. Good story, at a relatively low market cap of 22 mill A$ - but with only about 1.5 mill A$ in cash. Four project areas: Victoria, where they have the Jamieson project, and where they are hunting - like a lot of explorers - for a new Fosterville. They have had multiple strong intersections here for gold, and this has been the main project being explored by themselves. 67m with 3g/ 43m with 4,2g / 11m with 10g / 101m with 1,4g give the wrong expression, perhaps - they sound like a poetntially large project. But what they have found so far ( I believe, and I am not a geologist ) would not amount to say 500.000 oz or something like that, i.e. warranting a stand-alone operation. But they are tying to find ( and have strong indications of- ) a porphyry ore body at depth, which , if found, could be very much larger. So this is very interesting! The second group of projects is in the Paterson Province, where they have two JV´s - one with RIO, spending 6 mill A$ for 80%, one with Fortescue, spending 5,5 mill$ for 75%. This is obviously still very hot ground - only yesterday Newcrest announced 300m at 0,99g gold and 0,07% copper from Haverion. Thirdly, tehy have a JV with IGO in the Fraser Range, where IGO is earning 70% by spending 5 Mill A$. And not lastly, CWX just announced a larg ground aquisition in the Tropicana belt, where previous exploreres have done limited work, but had some good drilling results.

A lot of interesting irons in the fire for a small company - and they certainly need money to fund this, which they have never really had. I would like these guys to raise 5 mill$ to be able to do some meaningful work! Looking at their cash position, that cannot be far away - but in the meantime, the stock might well trend higher. So I think for private money, it´s worthwhile to have a foot in the door here - for insto´s it´s too small to buy some in the market.

Have a nice evening

General - Tietto - Chalice - Apollo Cons

Good afternoon

I have to be short today…5-hour briefing from Palantir to start soon, a company I invested in 13 years ago ( !!! that´s what I call ((unvoluntary )) long term investing! ) and which will IPO on24th of September!

Early in the day, markets were spooked by the disppounting news of Astra zeneca with regards to the trials of their corona virus vaccine - but this was put into perspective by many commentators later on.

Equities are recovering today - let´s hope, that the US will hold up as well! Futures are looking strong by mid-afternoon European time. Overall, I can only agree with most commentators: This is the setback, which had to happen! Even it continues for another 5% or so - I think the basic story has not changed…and that is for interest rates staying extraordinary low for a long time to come!

Base metals are mixed - while copper recovers a little today, nickel and zinc are marginally down in the moment!

Gold was trending weaker in Europe, but as the US is starting to be alive, the price recovers again - currently at 1944 US$ and in A$ unchanged from the level it ahs been trading at recently - 2676 A$/oz. Inflow into Gold ETF´s continues - but a amuch slowe pace than until a few weeks ago.

The US$ has been hoilding to slightly recovering of late - I am not too sure, wheather we have seen all the weakness here. My feel is, that the recovery of the Euro is not over yet!

Macquarie initiated on Chalice today…next price target for them is 1,80 A$. They can see a 270.000 oz palladium / platinum producer coming, with 20.000t plus nickel + gold as by-product. While I am a holder and while I am positive on the story - it must be a bull market! I have rarely seen an analyst of a major investment bank in Australia making such a call at this stage of development - or betterr said, at this stage of exploration! As we all know, there is not even a resource as yet and won´t be for some time! On the other side, I think it´s positive, if an analyst is daring to make a real call these days - in the end, that´s what they should be paid for!

Mincor - announced a very nice intersection of 21m with 6,6% nickel from Cassini North. Crtainly an unusual hole, and probably only he beginning. Still, a 400 mill A$ valuation for them is probably a little ambitious at this stage of development! As we all know from bad experience - it´s sometiems not that easy to produce nickel! If I plot Mincor against Panoramic at a 166 Mill A$ market cap, I know where the upside is!

Apollo Consolidated - as you might remember, they are holding a royalty over production from Roxgold´s Seguela deposit in Ivory Coast , which as at today, should be worth about 15 mill A$ to AOP. Roxgold announced drilling results yesterday from that asset…19m at 26g and 12m at 32g are certainly outstanding results - from a satellite deposit. The DFS foir Seguela will be done in the first half of 2021 - and with results like the above, the resource can only grow. The resource fully owned by AOP in Australia is correctly priced in the market at a market cap of 87 mill A$ = roughly 60 US$/oz resource. But firstly, I assume this resource to continue to grow - secondly, it´s in Australia, where resources tend to be assigned a higher value - and lastly, the market cap in my opinion does not take into account the 20 mill + A$ cash in the bank, as well as the royalty on Seguela, which is still growing in value and should be worth 20 mill A$ or more, if Roxgold can continue this kind of drilling success! So 50ct for Apollo should not be that hard to see! I continue to hold them and if I had not enough gold in ym fund already, I would buy more!

Tietto - held a zoom conference today, which was very impressive. The company will soon ( from second trance of the recent placement ) have more than 65 mill A$ cash in the bank . They will announce a new resource estimate sometime in 4 weeks time, and gathering from the presentation, they are very confident of being able to show a nice increase of the current, 2,2 mill oz resource. Some people believe, that it will be 3 mill oz…we will find out - more important is I guess that tehy will substantially increase the indicated resource for the AG deposit, which is their high grade deposit at around 2 g open pittable resource. Rightly so, they made a big fuss of the superb , metallurgical results - 80% recovery from gravity, and 98% overall - that´s outstanding. Alongside what will probably be a relatively low stripping ratio, and also relatively soft rock ( 30% less energy costs than most ), these results augur very well for a very positive outcome of the pre-feasibility study, due in the first half 2021. The recent, large placement was done at 62ct - stock is currently trading at 56ct and is cheap!

Have a nice day!

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