General - Genex - Resolute

Good afternoon

no big changes today in equities, bonds, base metals and gold….the US$ is trading at it´s recent high….

Gold ETF´s continue to see outflow every day….I think a sustained increase in the gold price we will only see, once this changes. Holdings have now fallen every day for nearly two month.

Durable Goods Orders in the States were down about 1% vs expected + 0,5%, while PMI´s are holding up at a high level.

Oil is stronger on the back of a 400m container ship being stuck in the 280m wide Suez Canal!

A bit of bad news today from some stocks:

Genex Power - they falied to raise the planned equity from an Australian company with a Chinese parent company. It looks like Foreign Investment Review Board had some requests and conditions attached to it´s approval, which the Chinese did not want to accept. At the same time, the agreements with debt providers, as well as the construction company were running out, and in the following, construction costs would have increased. I think the company moved the right way and bit the bullet: To raise the funds on their own! This is all not too bad - but the price of the additional equity raising at 20ct got to be disappointing for long standing shareholders like myself! Anyway - better to get over and done with quickly - and go it alone! The company raised 34 Mill$ in a placement at 20ct today ( I understand with some very good shareholders ) , and is conducting a 11-for-20 rights isue for all shareholders at the same price. Big raiding, big cash demand on existing holders! Not everybody will have the cash to do this….The capital raising is fully underwritten.Retail shareholders will be allowed to apply for up to 50% extra additional to their entitlement.

In a way, this is disappointing and significant dilution. This is expensive equity at such a large discount! But the fact, that GNX will keep 100% of the project, is good news for shareholders. This is a proejct, which will egnerate a lot of cash with extremely small operating costs. There is now NOTHING in the way anymore to make Firm Investment Decision ( FID) , and construction will start very quickly, probably in May .The smaller equity contributor, J-Power from japan, will contribute 25 mill A$ as planned at a price of 0,234 A$.

I have not seen research based on this new development as yet - but I do not assume a large change of NPV. Probably, the longer term value of GNX stays in the mid-thirties. But with this large rights issue, the stock will definitely come under pressure. I will take up my rights …I think there is little choice for existing holders, that to do so, given the steep discount and large dilution, if you don´t.

Resolute - this is the next bad news…the government of Ghana revoked the mining permit for Bibiane, which RSG decided to sell recently for 100 mill$. I think it´s save to assume, that this is now not going through. The sale had been a real positive for the company, as it was at a much better valuation than expected. Now Bibiani might be worth zero! We do not know as yet, why the government revoked the permit - normally, Ghana has been a good and trusted partner for mining companies. I guess we will find out more soon! The stock is down by 25% in London trading, which seems very harsh. However - I am not sure, just how badly the company needed the 100 mill from the sale…I would not rule out a capital raising to keep bankers happy!

Have a nice evening

WS

Two-day Update - General - Tietto - Strike/Warrego - Mineral Resources - Predictive- Marvel -Pacific Nickel

Good afternoon

generally, a relatively quiet day today! Equities are edging slightly higher, as technology shares are helped by a stronger bond market.

There is some bargain hunting in oil today, and base metals are slightly up ( copper ) to reasonably strong ( zinc ). The US$ continues to trade around 1,19 gainst the Euro….and precious metals are slightly lower.

Australia´s East Coast is seeing major flooding…heavy rain is expected to continue until Wednesday! I am sure, that some mines will be affected in NSW and Queensland. Not sure , how badly Evolution´s Cowal Mine and Newcrest´s Cadia have been affected - I think it might be a litlle less worse than in Sydney and at the coast - but bad enough! And more rain to come! Not the best ground conditions to drive with a 200t truck out of a big hole!

Strike/Warrego - the wireline logging performed in the secondary and tertiary target of the well did not result in any joy for us! The net pay is smaller that being hoped for, and the overall permeability is as well, making it harder to produce from it. But the main target is still to come - the rig is currently drilling at 4400 m and I guess will get to total depth within the enxt 10 days! That´s when we want to see excitement!

Mineral Resources - started production from their latest iron ore mine, Wonmunna, only 5 month after starting construction…and should reach name plate of 5 millt p.a. some time next Quarter! The mine can easily be expanded to 10 millt p.a…..production costs should be below their older mines and should be extremely profitable at current iron ore prices. But the price is under pressure - not sure, whether it will hold here. For enviromental reasons, China is clamping down on too polluting steel production currently, reducing the demand for iron ore. Not sure, where this will end for the iron ore price!

sorry, this was yesterday, which I did not activate to be sent….Here is today´s report:

Equities are not doing anything serious today…they are generally slightly weaker. The new lockdown over Easter in Germany does not help European markets. Bonds, as you might expect, are stronger today.

base metals are weaker, as China is believed to think about releasing some strategic stockpiles of aluminium. The same could hit other metals, people fear. Copper is down by about 1%.

Tietto - released another round of high grade hits from drilling their Ajubar project in Ivory Coast. Nice grades, but usually reasonably narrow at 1 m or so. It will be interesting to see, what the Prefeasibility study comes up with as a mineable resource. The next resouirce update is due at the end of next Quarter, the final feasibility in September or so.

Marvel Gold - announced some more drilling results from their Tabakorole project in Mali, increasing the grade probably with results of 15m at 2g gold/t, 6m at 5.8g and 28m at 1,5g. They also discovered a new zone of mineralisation with 16m at 2g, potentially increasing the size of the resource. They have multiple targets left to drill and hopefully, tehy are well on teh way to a resource of 1.5 mill ounces by the end of this year. This would be needed, I guess, to end up with a reserve of 1 mill oz eventually to enable a start-alone operation and a new gold mine here.

Also, we should hear more about the plans for the Tanzanian graphite project some time next month, which could be exciting giving valuations of similar projects in MOzambique and Tanzania paid by the market.

Pacific Nickel Mines - following uncertainty surrounding their title to their two properties in the Solomon Islands, the company got relisted the other day. The government confirmed title for one, while there is a court hearing coming up as to the validity of the second. This has very little chance of success - but without wanting to sound arrogant, you never know in these countries! Markets for nickel ore are still looking good and the material is still wanted by Chinese NPI-producers. It´s speculative, but with a lot of upside. One for the punters….

Predictive Discovery - funny name, as very few things in mining are for sure…and certainly not discoveries! But for sure, these guys have made one! Backed by the same, Australian-owned drilling company Capital Drilling, as Marvel Gold, PDI is active in Guinea, another West African country - better known for it´s iron ore project Simandou. Guinea is a difficult place to do business in - reportedly very corrupt. But PDI could be up to something big here, so I think it might be worth the risk. It all started about a year ago, when the company reported drilling results from it´s Kaninko Gold project: 46m with 6,6g / 42m with 2,9g / 50m with 1,5 g met with a lot of excitement. The latest results a few days ago were including 45m with 5,4g / 65m with 2,7g / 19m with 4,8g and 74m with 1,3g gold/t, most of them starting close to surface. These results are from an area 3km away from the first discovery. The length of mineralisation in the hoels, the grades and the location let people believe, that the maiden resource due this summer could already exceed 1 mill oz, and people are talking about a potential multi-million ounce project .

The other day, the potential was kind of validated by two senior board appointments: Francis Harper, Chairman also of Tietto, and previous Chairman of West African, and Andrew Pardey, 5year CEO of Centamin, and also on the board of Marvel Gold. Mr.Pardey has had senior management roels at mines operating in Guinea as well.

I think one should have a foot in the door here! the company had 13.7 mill A$ cash at the end of December - so despite an active drilling program, a placement should be some time away.

Have a nice evening

WS

General - Strike/Warrego - Apollo Consolidated - Foran - Marvel

Good afternoon

don´t fight the FED…that´s what we have all learned over the last 20 years or so…but it does not have to be right forever! Despite Powells extremely dovish comments last night ( or because of them! ? ) the US 10 year moved to a new, recent low at a yield of currently 1,74%…yields are approaching levels last seen in Jan 2020….FED will keep it´s benchmark at zero for at least until late 2023….that should give us 2 years of commodity bull market . The US economy is growing by 6,5% with short term interest rates at ZERO! God knows where all this will end! I bought some physical gold and will buy more into the bod-induced dip - despite god-ETF´s holdings still falling relentlessely!

Equity markets are slightly stronger today - base metals have been strong earlier on, but are roughly unchanged by late afternoon, while gold is under pressure from weak bond markets.

Unsurprisingly, tech continous to be under pressure as well.

Palladium is having another very strong day - now very close to all time high. The combined Pall/Plat price is at a new all time high today…and if I include Rhodium, it´s looking even better for producers of PGM´s! What a pity, that Panoramic had to sell it´s PGM-asset! I guess listed seperately, it would be worth a lot of money today…

Strike Energy / Warrego - great announcement today - very good progress today. They have not reached the main target zone as yet, but as the well showed a 35-40 m net gas columne, the JV is testing this zone now, before drilling to final depth of close to 5000m ( currently at 4248 m ). It might be a little early to say this - but the current drilling looks increasingly like it will increase resources, not only validate previous drilling. I think with the additional testing, the well will take another 3 weeks for final results.

Apollo Consolidated - have sold their African royalty for 20 mill A$. I have little doubt, that it will be worth more down the track - but AOP is now in a position financially, with more than 30 mill A$ cash on hand after tax ( and probably more like 33 mill A$ ) , that tehy will never need fresh equity again until they make a decision to mine! I can´t remember, when their next resource estimate is due - I guess by the middle of this year. AOP have survived the sell-off in gold very well, but they are still on the cheap side.

Marvel Gold - excellent drilling results from Tabakorole in Mali, yet again: 40m at 1g gold/ 33m at 1,1 g / 31m at 1,1 g / 10m at 2 g are the sort of results the market wants to see from them. Even better would be slightly better grades! Nevertheless, these results will increase size as well as grades of the current resource . Results from 20 more holes, plus a few diaomond hoels are either in progress, or at the labatory already - so no more results are expected shortly - probably with the Quarterly. As I indicated above - I would love to see grades slightly higher - but very positive metallurgical results ( some of them have already been announced ) and a low strip ratio can make up for this. I think at current gold prices, MVL is a good way down the track to have a developable gold asset on their hands. I think plans for the Tanzanian graphite asset are alos making progress - an IPO is definitely an option. It might have been complicated by the death of the Tanzanian prime minister today - things like this always create some uncertainty. But with a market cap like today of 25 mill A$, I think the eitehr of the two projects in MVL is worth this - and both potentially more! So make up your choice - you have either gold, or graphite for free here! I find it nice to have the option, and bought a few more the other day.

Foran Mining - announced some more drilling results from Mcilvenna Bay today: 16,4 m of continous mineralisation incl 8.7m with 3,53% copper eqv / 17m continous incl 2.8m with 4,8% copper are not as outstanding as the last round of results, but certainly very positive. The drilling program is in full swing with 3 rigs, and I think we can be sure, that the indicated resource of Mcilvenna Bay will continue to grow. At current copepr prices of 4$+/lb, the stock is very cheap still, despite the nice run they have had!

Have a nice evening

WS

General - Northern Star/Silver Mines - Venturex - Evolution - Foran

Good afternoon

Retail Sales as well as Industrial Production in the US were much weaker than expected last Quarter…alleviating concerns in bond markets. But not the reason for the small sell-off in base metals, which took place hours before these numbers. I have no idea, why that happened…but later, Nornickel announced, that their large mines in Siberia, which are affected by flooding, will be be impacted by much longer than expected. This lead to a strong uplift of nickel, and palladium prices .

Little action in bonds today, but equity markets are generally stronger.

Volkswagen staged theri “battery day” yesterday, outlining very ambitious plans and making everybody bullish for EV´s. But they are also convinced, that lithium-ion batteries will not be the final story.

Northern Star - will fall out of the Junior Gold Miners Index, because of it´s size since the merger with Saracen. 4% of the company is held by the ETF, I believe. Silver Mines will be included in the Index, triggering an estimated 20 mill shares of buying.

Evolution - there were a few midsized takeovers in gold yesterday…Newmont, Gran Colombia etc. Evolution made an add-on aquisition , buying a company, which surrounds their Red Lake Mine for 350 mill Can$. They have an excellent ground position, and a mill - 75.000 oz yearly production , starting late 2021 make a lot of sense for EVN. This is not a major story, I guess - but very useful . Very hard for me to comment - I had not even heard the name of the company before! But Jake´s track record in aquisitions is a very good one…I am sure, that he has done something sensible here. I will report more on it, when I hear something…

Venturex - quite sensational, what´s happening here….Apparently - and not officially announced as yet - Mineral Resources have bought out the majority of Northern Star´s stake at 40ct/share! And if talk in Perth is right, this is a friendly move! Bill Beamont, ex MD and founder of NST, in bed with Chris Ellison, founder and MD of Mineral Resources - these two are absolutely outstanding. And Mick McMullen, the ex CEO of Stillwater ( before it got taken over ) and Detour ( before it got taken over! ) as Managing Director! These guys are planning something big! They will not end up running a smaller, Western Australian copper mine - this is only the start! I think one should have a foot in the door here…If these guys do halfway as well as they have done in their respective , previous companies( in the case of Ellison, he still runs it ), this will be a billionen $ company in the not too distant future!

Foran Mining - announced some excellent drilling results from McIlvenna Bay…26m of continous mineralisation ( 5m with 8% copper eqv/ 21m with 2,12% copper eqv ) are excellent, to say the least. Drilling is in full swing - so many more results expected"! This is exactly what they need to potentially justify a much higher valuation. Their mining resource is on the way to 20 millt I had to sell a few, once again, as the holding has hit my internal 5% weight cealing…but I think we can see a lot more here, with copper trading above 4$/lb despite today´s 2% fall!

Have a nice evening

WS

General - Sheffield

Good afternoon

a not so volatile day so far in equity markets! But tech´s are down again, driven by a very weak bond market. US 10-year bonds are making a new recent low, yielding 1,63% in the moment. This is obviously not good for gold…it´s fighting to hold the 1700-mark late afternoon in Europe. And the slightly stronger US$ does not help, either!

The PPI in the States rose strongly - depending on what you look at, between 2.5 and 2.8%. This is about in line with expectations, but the strongest rise since 2018

Base metals are mixed today - not that much action.

Sheffield - the JV with Yansteel is now formally as well as practically done and dusted! 130 mill have been paid! The updated and changed bankable feasibility study should be finished by the end of April - a few weeks later than I had hoped for. As I commented earlier, it´s very hard for the market to asses the real value of this thing. Indications are for a NPV of around 1.50 A$ for SFX, according to Bridgestreet research - but at this stage, this got to be a bit of guess-work. Financing discussions with Taurus and NAIF are very advanced - I am expecting NAIF to get a larger part of the financing, which would be great, as it´s a lot cheaper than Taurus. This should be fun over the next 2 month or so! SFX is one of my TOP-holdings.

Not much out there in terms of micro-news in the moment!

have a nice weekend!

WS