Good afternoon

Morgan Stanley sees the A$ potentially falling to 65ct...that would hurt us over here, but would be a major driver of earnings for Australian commodity producers. Earnings for them should rise between 20-and 40% - at least theoretically driving share prices harder than our currency-losses. Main reason for MS´s bearishness is the historically very low interest rate differential between Australia and the US. The short as well as long term interest rates are allmost identical, or getting tehre - especially after the Australian Rserve Bank today indicated no short term eed to increase rates, while US-rates are clearly going up.

Glencore with a VERY bullish presentation on nickel, calling for another large deficit in 2018 of 140.000t, and very bullish on longer term demand from 2020 because of EV´s. Norilsk is a bit more cautious, only expecting a small deficit in 2018, and limited uptake of EV´s. I am a bull...so clearly believing Glencore!! Even though I feel a bit with John Lennon: with wonderful humour, he said about himself in a presentation recently: I am known for having forecast 5 of the last 3 bull markets in nickel!

Base metals looking ok so far today - slightly ahead of yesterday. Zinc stocks are making new lows, copper stocks also heading southward. As the day progresses, metals are becoming pretty strong  - probably also helped by good housing numbers in thes States.

Bloomberg reports of a 63% jump in sales of EV´s worldwide until 30.9. , driven by very strong sales in China, where EV´s are heavily subsidised, and where pollution in major cities is a major problem. For 2018, Bloomberg expects sales to break through 1 mill EV´s for the first time. Still we must not get too carried away, as really big numbers are still 4-5 years away - and only then they will have a major impact on copper/nickel., while more sensitive metals are seeing massive supply growth before then ( lithium, graphite ). 

Graphex Mining - had their AGM today and clearly indicated good progress in talks with the Tnzanian government, as well as with their Chinese financiers. The Chairman eluded to the MD visiting China again in a few weeks time - to me, that sounded like a hint of making substantial progress with the financing. I have said before, that I think GPX will have a good chance in getting their project pushed through, despite the current turmoil in Tanzania. No Western  bank would finance anything there in the moment - but Chinese banks might actually do so. China has a pretty close relationship with tanzania and is a builder of large infrastructur-projects there. Also, the type of graphite being produced by GPX - and of this kind, the best in the world - for the use as a flame retardent for building materials, is extremely sought after in China, and prices for it have increased by 50% in the last twelve month because of enviromental closures of local mines, as well as increased demand because of new building legislation. Not for widows - but I am holding a very reasonable position here.

OZ Minerals - have increased their underground reserves at their existing mine, Prominent Hill, by one year, to 2029. Resources are still 80 millt of ore, and the company expects to replace mine depletion for many years to come. The open pit at Prominent Hill will be mined out in 1Qu 2018 - thereafter, the plant will be fed with stockpiled ore ( no mining costs! ) at full capacity to 2023. Their second mine, Carapateena, will reach full production during 2020. I think OZL are good value at current levels - copper at 3.10 US$ is a fantastic price for them, and unlesswe will see a big downturn in China, copper prices will pick up again in 2-3 years time and even more so, once EV´s seriously kick in. And the recently announced feasibility study with Cassini for their Neo-Babel project, which is a few yera away, if succesfull, gives them further growth after Carapateena. If Morgan Stanley turns out to be correct with the A$ outlook, the company would make an additional 25% in net earnings...No doubt, that OZL is the best-quality exposure you can buy to copper in Australia - while:

Finders Resources - is the cheapest! Following hard on the heels of yesterday´s positive announcement on metallurgical testing, they today announced a new reserve estimate for Lerokis, which conatins 11.000t more copper than previously estimated. The high recoveries + higher tonnage can potentially add another 80-90 Mill US$ to EBITDA for FND over the next few years - and that´s for a stock with a market cap of only 140 mill US + 50 mill US or so in debt ( and making 75 mill US$ p.a. in EBITDA before these new numbers) ! This stock is soooo cheap - sounds crazy, but without the takeover-bid by these cheaky Indonesians, the stock would probably trade 10-20% higher already. Honestly - any takeover lower than 30ct has no chance, as real value of this company is 40ct+ with copper at 3$+.

Have a nice evening

WS

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 unauthorized persons