General - Tietto - Liontown - Horizon

Good afternoon

markets are having a little break ahead of the weekend…equities slightly weaker, base metals the same, bonds as well!

The week to the 10th of Feb saw all time record of inflow into equity funds - 58 bill US$, mainly into US-equities and into the tech sector! Bank of America indicator for sentiment has reached “extremely bullish” - may people are using this as a contra-indicator.

Platinum got the headlines this week, as some investors are playing it as a green metal because of it´s use in fuel cell technology, which is very small at this stage, but has a lot of people talking about it. The precious metal made new 6-year highs and I have to say, it´s looking great on the charts! Gold is continuing to see outflows from the ETF´s - every day this week!

Liontown - the long-time muted change of MD has happened! Tony Ottaviano became CEO and MD - previously a senio manager for BHP and RIO. The market is pretty happy with him, and some people I know in Perth, also! Sounds like a good choice, as they develope their major lithium deposit in Australia! LTR are probably not dirt cheap - but not unreasonable, like most other lithium stocks!

Tietto - announced some more positive drilling results. The new program is in full swing, and many results are still outstanding. The PFS is still on track for delivery by the end of this Quarter.

Horizon Gold - I am a little disappointed by their new resource update today, which incorporates recent infill drilling results. Swift and Swan indicated underground resource is 150.000oz at 6,7g/t, while the open pit , indicated resource is 323.000oz at 2,4g. I had expected lower grades than the previously stated, inferred resource - but still a little bit higher than today´s numbers. Nevertheless - highly profitable ounces at current gold prices, especially, if they plan to toll-treat the ore, as previously planned. I guess the enxt step will be to see numbers from an updated scoping study, using the indicated resources, which should indicate the value of this resource. I fear for now, the share price might languish somewhat. I will talk to them next week to get a feel fore what the new MD is planning to drive the project forward!

Despite some good moves in oil, base metals, and precious metals this week, the market was pretty tired and is waiting for some inspiration!

Have a nice weekend!

WS

General - Northern Star - Mineral Resources

Good afternoon

the world is a casino! And financial markets even more so…as we have seen in the recent GameStop-episode. Dangerous stuff..and equity markets - in parts - are not necessarly exhibiting the underlying value, but the black-and-white bets by a social media crowd! I have to say, though, that hedge funds are not much better, and some of them got what they deserved…when a company shows a short position of more than 200% of tradable shares, you must be a mad gambler to be short!!! And when the Top 15 best paid hedge fund-managers earned a combined 23 bill US$ last year, you know, that changes cannot be that far away!

I reckon that one should have a healthy cash position, some gold , and some farmland alongside a well diversified share portfolio!

Infaltion as measured by the CPI is not raising it´s ugly head as yet!

Base metals are having a very strong day indeed today - I guess financial investors are pushing it as tehy reposition their portfolios….gaining some exposure to huge spending programs around the world. Copper up by 2% in the moment, nickel and zinc by 1.2%. Co and Ni making new, recent highs ( copper is up by about 6% this year already, nickel up by 12% ). Base metal stocks have been consolidating in Australia so far in 2021 - I think that consolidation might well be behind us now.

The entire precious metals complex, led by platinum, is up strongly today as well. And last but not least ( and a negative for mining companies! ), oil is making new recent highs again today.

Mineral Resources - came out with an excellent results! Mining Services doing well, iron ore doing extraordinary well - which is no surprise, given these fantastic prices. Lithium was breaking even last half at the EBITDA-level, which is a good effort, with spodumene trading below 500 US$. But I cannot become very inspired at current all time high prices - they are a high cost producer of iron ore, and at the top of the market, I do not want to buy something which is of significantly inferior quality compared to the big boys!

Northern Star - and the same applies here! Good result, with Pogo starting to deliver very nicely. But tehy are so large now, that I find it very hard to see them at more than just gold exposure. Furthermore, among the larger producers in Australia, you know that I am much more supportive of Evolution, as their cost base is much lower! In general, the gold space is very tired in the moment - so I see little enthusiasm to deploy fresh funds in gold stocks in the moment!

As the Quarterly reporting season has just finished 10 days ago, there is very little happening on the news-front in the moment. Probably a good time to accumulate a few resources stocks ex gold, for now!

Have a nice evening

WS

General - Genex Power, we are finally done!

Good afternoon

generally strong earnings continue to support the market…but for my feeling, we are quite overbought…need a bit of consolidation in these equity markets!

Interesting interview with Stan Druckenmiller in youtoube…this master of investment sees signifant inflation risks coming up, is very long commodities ( for as long as interest rate are not rising too much ) and is cautious on many techs…but he still likes the big techs like Amazon, Google, Microsoft on valuation grounds and because of ever-growing cloud business. He much prefers Asia ( China Taiwan South Korea ) to the US , partially because of US monetary policy and them printing money like never before, without that money going into companies actually investing!

Base metals are having a strong day, and gold is currently managing well to hold above 1800 US$ again! Oil ( Brent ) is higher once again - at 59,50 US$/barrel, we are almost back to 60$!! Another factor for potentially rising inflation around the world!

German Factor Orders are down by 1.9% - economists were surprised, but I don´t think the market was. How could you not have been, considered lockdown etc?? Unfortunately, I will have to leave before US labor market numbers will be announced in 30 min.

Not much news on the micro front except for one important one ( well, for me that is ! )

Genex Power - done! The very complex financing, incl several parties incl new equity, has been done! Took much longer than expected…! Today, the Queensland government signed up on the funding for the transmission line from the new project, to be connected to the consumer! The government increased funding by 15 mill A$ to a total of 147 Mill A$. The company does not say, but I guess the little caveat is, that GNX / or better Powerlink, the operator, will be responsible for servicing the line, which will elad to a few hundred thousand $ in extra cost per annum. But that´s not important! All other financiers have been waiting for this funding to fall into place! I think we will see consecutive announcements now over the enxt few days, for all indicative proposals ( all subject to funding of the transmission line ) to become definite!! This is major good news, and I would not be surprised, if this true green development would find many buyers over the enxt few days, to potentially overshoot valuations, which are generally in the mid-thirties for Genex!

Have a nice weekend!

WS

General - Centaurus - Vulcan - Gascoyne - Saturn

Good afternoon

and here we go again….equity markets moving higher, driven by lower Initial Jobless Claims in the US, as well as strong Durable Goods Orders, and Factory Orders - and despite still rising bond yields. Some positive results - for example from Paypal - also helped.

But the above did not help the gold price…it´s currently down by 47$ to only 1786 US$…( as the A$ is also weaker, not too bad though at 2356 A$/oz, which si still very healthy for the good producers at least! )I hope, that the 1780-level holds it! The strong US$ is not helpful, also not for the base metals, which are treating water only. Iron ore recovred, based on a bad Quarterly from Vale, which produced 2 millt less iron ore than expected.

Centaurus Metals - announced a new resource for their Brazilian project: 58,6 millt at 0,95% Ni inferred, of which 20 millt at 1,12% Ni or 223.000t are indicated. Grades sound low - but this is open pittable stuff, and 80% of the resource is above 200m of depth! At a potenbtially very reasonable stripping ratio, and with so far good metallurgical results, this is very positive. The company has 24 mill A$ in cash and 5 mill to be received from in-the-money options next Quarter, tehy will continue to drill this thing full steam ahead. In a month or two, we will see the scoping study - first time to get a good feel for the economics. But the deposit will grow, and I am continuing to hold this stock. As we all know, EV´s are booming, and with them, the use of nickel from sulphides like this one. Not many new projects around, which look doable like this one, and CTM and PAN are my nickel stories!

Vulcan Energy - the German/Australian company raised 120 mill in an upscaled placement, only to tarde 18% higher!!! Looks like beside of the Australian iron ore baroness Gina Rhinehart, most stock has been taken by ESG finds, which are attracted by the potential carbon-free production of lithium. But these guys understand very little from mining and processing..I think the risks are very high here, and the project will take many years in my opinion to produce - if ever. I would not want to be long here! Liontown continues to be my lithium stock - much saver, mauch cheaper, and much more boring!

Foran - announced the start of a record-30.000m drilling program for their Canadian project. I have no doubt, that this will lead to increased resources, and a higher valuation subsequently….and certainly much newsflow over the next few month.

Saturn Metals- announced some excellent drilling results from their Australian gold project, Apollo Hill: 12m with 5,7g / 2m with 63g / and many 10-20m intersections from 1.2g to 2.1g are much better than recent results, which led to the resource upgrade at the relatively low grade of 0,8g gold/t. But before I turn a buyer, tehy will have to come up with more results like this…

Gascoyne - have understood, what the market wants: A larger project, or at least much longer mine life! Nobody is interested in 80.000oz of production for 4 years or so - no matter how cheap the stock is! The company announced a doubling of their exploration budget for this year, to 6,3 MillT. This is good news and I think tehy will have good chances to increase resources - but in teh current enviroment, I want to see more prove of the idea! A good step in the right direction - pity, that the gold price is little reason for enthusiasm!

Have a nice evening!

WS

General - Pacific Nickel - Tietto - Foran - Marvel Gold

Good afternoon

investors are nervous - but nervous enough to sell, it seems! Good earnings results from the very large end - Amazon and Google - are contravening the general feeling, that many stocks are expensive! And there certainly is a lot of doubt around, whether the virus can be beaten by the summer, as many had expected a few month ago! I think it´s fair to say, and no secret, that the world won´t grow as strongly this year, as we all had expected only recently.

Ultra-low interest rates are still helping equities, and certainly also the general economy. I heard today of a case, where a very normal person bought a flat in Munich, financing it with a loan carrying interest at 0,5% fixed for 10 years!

Having said this, equities are mixed to slightly stronger- no huge changes today - and base metals recovered nicely from a weaker morning session, There is some optimism around, that the Biden will be able to push through his stimulus program. The US$ is stronger, and that´s putting some pressure on gold.

Oil ( Brent ) is approaching 60 US$! That´s pre-corona-level! Yet oil companies around the world are trading far below pre-corona levels. Their valuations are being questioned , following some pretty heafty cuts in dividends. Still - I think there is value…whether it´s some oil majors, or midsized, well managed companies like Beach Petroleum in Australia ( which are debt-free, growing, and not that sensitive to the oil price, as they mainly produce gas ). I am privately holding some Royal Dutch, and Beach Petroleum among the producers.

Foran Mining - are trying to continue their recent run, as the new MD impresses, and as the upscaled placement to raise 25 millCan$ was heavily oversubscribed. There are not many serious copper-developers out there - and certainly not with assets in North America, close to a smelter! I continue to own a large position here, even though I had to take a few of the top for riskmanagement reasons.

Pacific Nickel - I had recently started writing about them - very small and very speculative nickel ore developer on the Solomon Islands. Like some other companies before, they have more recently discovered, that operating in this country is all but easy! They might well lose one of their properties - even though the prime ministers office seems to be of the opinion, that this was an “error”. The mere fact, that some strange and chaotic action like this is possible, tells you how hard it is. The stock is suspended, and might be for another 1-2 weeks or even longer, uintil there is more clarity on the legal side . Still - potential rewards are also high here. For now, we can only sit on the side lines at watch!

Marvel Gold - updated the market. Their Tabakorole project in mali had increased a few month ago to 910.000 oz at 1,2 g. That´s not having critical mass as yet - but has been increased from about 500.000 oz at 1g! Drilling is ongoing there, and we should see more results over the next few weeks. The company is very bullish on this project and given very positive, metallurgical results out the other day, this could well develope into a stand-alone operation ( which it has to, as there is no neighbour! ). But from what I hear, we could well see another 500.000oz or so in resources. To make such a project viable, I think at leat 7-8 years mine life at 100.000 oz p.a. are necessary - but that´s not out of question at all. In the moment, 900.000 oz somehwere in the bush in Mali are not worth all that much - but 1.5 mill oz, with nice metallurgy, would suddenly be worth 100 mill A$ or more. So the next few month are very important for them….The company has about 5.5 mill A$ in cash, which shoulde be enough to find out, whether this thing is viable. In the meantime, we could also have some fun with the old graphite asset in Tanzania! We have been following this drama for a while…and after all the disappointment, it´s valued at zero by everybody. But given the massive upswing in EV sales over the last few month, everybody is upgrading numbers and we could see a very strong market for battery materials for a few years to come. At his stage, the project is a wild card for me - but it could actually be worth a good deal of the 21 Mill A$ market cap, which Marvel has as at today.

I have a position, and I think they are cheap!

Tietto - bought anotehr 3% of it´s Abujar project in the Ivory Coast from the JV partner, and now have 88%. That should be a small positive…I can only guess, that more drilling results should be announced over the next few weeks and finally, the pre-feasibility study to be released this Quarter should be a trigger for TIE.

Have a nice evening

WS