Market Update

General - Tietto - Carawine - Warrego - Piedmont - Liontown - Resolute

Good afternoon

Chinese Industrial Company profits rose again in August, setting the scene for a strong day in equities, following on from recent weakness and the general comment, that there is no way around investing in equities, as interest rates will stay low for a long time to come!

Base metals are also stronger, and once the US was awake, gold was heading higher as well, despite holdings of gold ETF´s falling again on Friday.

Tietto - announced some very good drillinng results on Friday - the best being 21m at 7,3g gold/t from 173m. The 61.000m drilling program has been finished ( but drilling will continue ), which will result in a new ( and hopefully above 3 mill oz! ) resource estimate in mid-October! The stock was down last week on some pretty strong turnover - the second Tranche of the placement settled recently, and a sub.underwriter to this placement has been rumoured as seller.Obviously, this new estimate is very important - it will also be very important to see a reasonable amount of the resource being classified as “indicated” - as opposed to only “inferred”. But whatever happens - there is a lot of work left to do, and I do not believe, that the forthcoming estimate will be the last one!

Carawine - the company has completed the expected placement! 6 Mill A$ have been raised in a heavily oversubscribed transaction at 20ct. For teh first time in it´s short history, this successfull explorer has sufficient cash now to do a systematic, 3 millA$ p.a. exploration program over it´s highly prospective ground in Victoria and Western Australia! Provided the gold price holds, there is only one way for this stock, I believe.

Warrego - announced the previously rumoured offtake agreement with very high quality client Alcoa today, to take 42TJ/day of gas starting 1.1.2024 from the Strike/Warrego JV. This is additional to the offtake by Strike a while ago, to supply Wesfarmers ( equally high class customer ) with 25TJ/day - both agreements are in place for many years. Both companies did not disclose the sales price - rumour is for the low 3s for Strike, and low 4s for Warrego, with escalation clauses. These agreements should make potential bank financiers for the project very happy. As you know, the JV is currently drilling to put more certainty to the size of the resources. Full results will take another 6 weeks or so - but I would expect some earlier news as to the progress and perhaps initial results/indications. Both companies will need some more cash - Warrego definitely, and Strike probably, to be able to drill not only the next 2 appraisal wells, but also the next well early in 2021, which will be an exploration well and which could greatly enhance the value to both companies.

Piedmont - what a boomer! They have signed a 5 year offtake agreement with Tesla, and as you would imagine, this is an absolutely buzzword for this little company! The feasibility study will need at least another 12 month - but the stock shot up by nearly 90% ( and had gone up by 40% before!!!???) to a market cap of 317 mill A$. Well - that was before the ADR started trading in New York! It traded as high as 40$ - but is currently traing at 27.50 US$/ADR , on turnover of 10.5 mill shares - for a market cap of 322 mill US$ or 455 Mill A$ - that´s up another 50% or so from the Australian close!!!!

Liontown - while PLL is expensive now, Liontown ( and others ) appear very cheap in relation! LTR have the 4th largest hard-rock lithium resource in the world - and on top of the size, it appears also to be a quality-project. I could well imagine, that otehr car- or battery producers will want to secure their supply of lithium…so while it won´t be Tesla, somebody else might come out of the bushwork! Owning Kathleen Valley, as well as the Julimar look-alike project near Perth, I think we might have some fun ahead here as well.

Resolute - managed to avoid further strike-action and agreed to a deal with the Union - I am sure, that it will increase labor costs , but this has not been mentioned. The company has cut guidance by 15.000oz - this is a lot for a 9-day strike! Might they be hiding some other problems and made use of this opportunity? Not really sure…but I repeat, that this company does not feel well for me…despite the price below 1$, I would call it a hold because of lingering uncertainly surrounding Syama.

Have anice evening

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General - Strike - Chalice

Good afternoon

markets are bouncing! There is little doubt, that we will continue to get used to this short term volatility, I fear! With Trump always good for a surprise, elections coming up soon in the US, and the world right in the middle of the second corona-wave ( and probably more waves coming, before somebody will discover a vaccine!), nothing will be smooth!

Equities are making up some of the lost ground today in Europe, and are slightly up in the US. The support is - once again - coming from the tech sector.

Base metals are also bouncing - copper is nearly back to the recent high from 2 days ago, zinc also up by 1,2%, but nickel is lagging , managing only a 0,5% rise by mid afternoon.

Gold is still mirroring the US$, which is very slightly up - so gold is very sllightly down! Interesting, that yeesterday , which saw the largest fall in gold in more than a month, saw the largest inflow in Gold ETF´s in a year, according to Bloomberg.

The Tesla Battery Day presentation is only starting at 1.30 Californian time, so only in a few hours and too late for this report.

Strike / Warrego - as expected, the JV has now started drilling the very important West Erregulla well. Important to get a better fel for the size of the discovery, which has already been confirmed! Watch this space - but I think it will be definitely 2 month or even more, before we know, as a 5000m well needs a lot of time!

Chalice - this is hot indeed! The company has discovered several, very large anomalies, which look substantially larger than the original one, which led to the discovery of the Julimar Ni/Cu/PGM/gold discovery. Realistically, it´s way too arly to quantify this - but geologists are very excited indeed! They are talking about this disovery of a new province / a Voisey Bay or Olymic Dam- style ( in terms of size ) discovery, or one of the largest disovery for a few decades! But to havee you not too excited - an anomaly is just that, and drilling results will have to follow. Also, the main anomaly is within State Forest, and the company doees not yet have approvals to conduct even not-ground-disturbing xploration there. They are commenting, though, that they are in positive talks with the relevant authorities. Generally, Western Australia is obviously very supportive of mining.

One thing is for sure - this thing is very large - just how large, and how economically feasible, only much further work will tell. In the meantime, I continue to hold a slightly reduced position - waiting also for the results of 50 as yet unreported drillholes!

Have a nice evening!

General - not much to report amidst widespread weakness!

Good afternoon

European banks are getting a hammering today, following this money laundring report - if it´s true, it will cost them a lot of money, and some more heads will roll! This, the Supreme Court fight in the US, and incrasing corona numbers everywhere are depressing equities! US banks are also down 4-5%

The US$ is strong at a recent high of 1,174 Euro, dragging gold down, which is trading at 1899 US$ ( after being as low as 1882 ) and at 2635 A$/oz. The same applies to the base metals - down by 1.5-and 3%.

Commodity investors are awaiting the Tesla-battery day tomorrow with interest!

There really is not much to report today otherwise…

Have a nice evening

General - Tietto - Chalice - St.Barbara

Good afternoon

The Leading Index in the US rose by 1,2% vs expected 1,3%, while Consumer Confidence rose by more than expected.

Car companies fell in Germany, as the European Comission is calling for stricter emission targets .

Not that much action in European stocks , and so far, not much change in the US either - but quadruple witching hour later today. This could be interesting in light of super-large positions from Softbank, and RobinHood-investors.

No big changes in gold, currencies, or base metals except for nickel, which slips below 15.000 US$ again.

Chalice - completed a well-attended site-visit of Julimar on Thursday. There is not much to see, but I guess it gives investors the opportunity to look at their exploration results in detail. The stock was up strongly again and was trading at a new high, when it was suspended pening new exploration results! It does not feel like anything negative coming up - so I am very curious to see the announcement on Monday or Tuesday!!

St Barbara - had a ground fall ( I have no idea, what that is vs a rock fall?? ), which will result in 8.000 oz being lost this Quarter - but according to the company, will be recovered fully in the Dec-Quarter. The reasing was seismic activity, which is a word I do not like. But as they described it, it was a very minor event, only involving 30t of rocks - which is nothing. Nevertheless, it highlights the risks of underground mining at this depth!

Tietto - very highly regard investor 1832 Asset Mgt became a substantial shareholder. This is a bit of a sleeper - their next resource statement is keenly awaited and should give us further clues as to the quality of their asset, which could hold 3 mill oz at the next estimate, but is far from being closed off and still has significant potential going forward. Tietto are extremely cashed up with no more capital raisings to come until the decision to mine!

Have a nice weekend!

Schröder Equities GmbH

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Geschäftsführer: Wilhelm Schröder

General - Virus in Australia - Western Australia - Liontown

Good afternoon

US labor market numbers were about in line with eexpectations. The market is still bad, bad numbers are ( very ) gradually improving..

Equity markets overcame a bout of selling today, and recovered to be just marginally down in late afternoon. Base metals the same - copper is now green, while nickel is still down 1% from being very weak earlier on. And teh same applies to gold - from a day´s low of 1933 US$, we are now back to 1947 US$/oz.

I think Australia is getting a bit crazy about the virus…having had about 40 new cases/day for more than a week now ( yes 40, having 24 mill inhabitants!!!) , the country is still having in place some very tough measures, especially in Victoria. Between all states, it remains extremely difficult and in fact almost impossible, to travel. Western Australia, though, which is just about corona-free, is therefor pretty loose. Restaurants are open, air planes within the State are packed, and reportedly, you do not feel any change at all. Western Australia has always been very remote…Property prices are going up, wages are going up, developers are sold out…a real boom. It´s driven by iron ore, gold, and other metals - but also by many people profiting big time from punting the market. Many people have taken money out of their pension funds, and are speculating. So the boom is partially fundamentally driven - but also by various government initiatives, which should be stopped. I think it will soon be hard to find labor for the mines - and it already is hard to find drill rigs for drilling from surface, and increasingly so for underground rigs. Many companies are flush with cash - the producers are anyway, but advanced explorers like De Grey, Bellevue and many others have raised significant amounts of cash and are under pressure to spend it on massive drilling programs!

Companies like Perenti, Macmahon or among the smaller ones, Swick Mining, are very cheap. They will not stay cheap for long , I think.

This means: Costs for mining companies, especially those active in Western Australia, will undoubtedly rise! Labor, drilling etc…just energy is not going up - even the oppeosite, partially thanks to a rising A$, but also because of a consistently depressed oil price. Gas has always been cheap anyway - shortages are only expected in 2-3-4 years time.

Corona numbers are not good in Germany, as they are rising by 1500-to 2000 cases/day, seeing a rising trend after the end of the summer holidays and the start of school. Numbers in France and Spain are bad. Both countries have about 10.000 new cases/day in the moment, while Italy is doing much better. Peru is one of the mining countries doing particularly bad, and obviously, countries like the US, Brazil, India are still a problem.

Liontown - are going from strength to strength. A few things are coming up here: Firstly, the feasibility study for their massive lithium project in Western Australia should be out within a month, and previous indications are for an improvement from the previous study. Also, lithium has moved back into investors spectrum more recently. I think today´s valuation of 327 mill A$ is justifyable, based on the lithium project - pending the feasibility study, which will give us betetr knowledge and numbers. Secondly, they are progerssing work on the Moora Project, also in Western Australia, and 85km from Chalice´Julimar discovery, inhibting many similarities. Chalice is currently capped at nearly 500 mill A$, and has made new highs the other day. Moora could be worth anyting - god knows. But on a long term view, Kathleen Valley, their lithium project, will probably be worth more than the current share price anyway - so Moora is effectively “for free”. I think the market has realized the potential value in Liontown - but any good news from Moora will probably let them run further. On top of the above fundamentals, there might be a little bit of corporate speculation in the share price. IGO have not made a secret at all of their desire to move into the direction of battery materials, and has put their 30% stake of Tropicana ( worth 1 bill A$ or so ) on the market. This would give them ample powder to ahve a go at Kathleen Valley, which has been shaping up as a world class asset. I continue to hold a very reasonable position in LTR.

In the absence of much micro news, I had a fresh look at the performance of the companies, which presented at our recent conference in Zurich, in late February. I have not taken into account placements etc - but I have also included rights issues. The 13 companies presenting in Zurich, have seen a 100,5% increase in share price…even if I exclude the stand-out performer, Chalice Gold, the participants have still gone up by 58% in A$ terms ( which also has increased vs the Euro by 2% since then ).

Not a bad performance! If you owned the Earth Exploration Fund ( which is within the top 10% of resources funds ), you would have made 20% - if you owned the Blackrock World Mining Fund, which I think is the No.1 performer this year, and which profited greatly from holding the large caps, ( which all have big time iron ore exposure), you would have made 27% in the same time. Even top-performing gold funds like Earth Gold, Precious Cap or Nestor Gold have all made between 45- and 50%, and did not beat the performance of presenters!

Mind you, it has not always been this good over the years!

And lastly, my own fund, Nestor Australien, which holds most stocks from the conference, is up by more than 20% since the conference, and for this year as well as over 5 years, is in the top 5% of Australian funds.

All the above fund- numbers, by the way, are in Euro´s.

I thought that these numbers are remarkable at a time, when everybody is talking about tech! Resources have been good, too!

Have a nice 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