Lowell Resources Fund : LRT Monthly Update - January 2022

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MONTHLY UPDATE

Lowell Resources Funds Management Ltd. ABN 36 006 769 982 AFSL 345674	January 2022

January 2022 Performance Summary:

Lowell Resources Fund (ASX: LRT)

The Lowell Resources Fund estimated net asset value ('NAV') at the end of January 2022 was approximately $55.6m, compared to $57.2 million at the end of December 2021.

The NAV per unit finished the month of January at $1.896/unit (vs $1.948/unit at 31

December 2021). The traded unit price of the ASX listed LRT units at month end was $1.75/unit.

For personal

FUND OVERVIEW

Investment	Lowell Resources Funds
Manager	Management Limited
Managed since	6 February 2004
ASX code	LRT
Income	Annual
distribution

FUND SNAPSHOT 31 January 2022

NAV per unit	$1.896
No. of Units on issue	29,354,614
Market Price (ASX)	$1.75 / unit
Estimated NAV	$55.6m
August 2021 Distribution	$0.15/unit
Market Capitalisation	$51.4m

	Lowell Resources Fund NAV
3.50	vs
ASX Junior Resources Index
3.25	(rebased to 1 at December 2019)
3.00
2.75
2.50
	LRT
2.25	NAV
2.00
1.75
1.50
1.25
1.00
0.75

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MONTHLY UPDATE
January 2022

Lowell Resources Funds Management Ltd. LRT

Fund Investment Actions - January 2022

In precious metals, the Fund boosted its holdings in ASX listed west Africa-focused explorer African Gold, and participated in the pre-IPO round for Mawson Gold spin-off Southern Cross Gold. The Fund also added to its positions in Alchemy Resources and Carnavale Resources.

In precious and base metals, the Fund completed its profitable exit from Zenith Minerals, as Zenith's share price rose after refocusing on lithium and receiving positive results from the Earaheedy zinc JV.

In January, the Fund also added to its position in O&G supply company Matrix Composites & Engineering.

LRF COMMODITY EXPOSURE 31 JANUARY 2022

		Bauxite	Uranium	Helium
		0%
Mineral Sands			1%	2%	Mining Services
	Fertilisers
1%					1%
	Cash	3%
	7%
Nickel
8%
Battery						Gold & PGM
4%						48%

O&G

8%

Base Metals

15%Silver REE

1% 1%

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MONTHLY UPDATE

Lowell Resources Funds Management Ltd. LRT

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		Fund Top Holdings
		Predictive Discovery (PDI.ASX) appointed new
		MD Andrew Pardey, previously CEO of US$1.5
		billion LSE/TSX-listed Centamin plc. Paul Roberts
		will continue to lead the team which discovered the
		3.6Moz NE Bankan deposit as Technical Director.
use		Progress was made in the permitting process for
	the development of the project with the government
	of Guinea.
		Musgrave Minerals (MGV.ASX) JV partner
		Evolution Mining intersected new high grade lodes
		at West Island, including 4.3m at 41.5 t/t Au.
		Evolution has added $3-6m to its spending on the
		JV this half year and elected to take over
personal		management of the JV. On its 100% owned
	ground, MGV drilled three new gold zones on the
	Waratah trend, including 2m at 28 g/t Au. Target 14
	also returned 9m at 8.7 g/t Au.
		Azure Minerals (AZS.ASX) began its first drilling
		program at the 100% owned Barton gold project,
		including testing for along-strike extensions of
		Genesis Minerals' Puzzle North discovery which
		adjoins Azure's tenement boundary.
		Talon Metals (TL.TSX) announced it had entered
		into an agreement with Tesla Inc to supply 75,000t
		of nickel in concentrate from the company's
		Tamarack Nickel Project in Minnesota.
		Fund Top Performer
For		Pacgold Limited (PGO.ASX) share price rose
	82% in January, and moved into the top 10
	holdings for the Fund. PGO announced a
		significant expansion of the new high-grade gold
		zone below and along strike of the historical open
		pit at its Alice River gold project in Far North
		Queensland. Drill results included 17m at 9.3g/t Au
		and 6m at 6.5 g/t Au. The gold system has been
		identified over 3.5km of strike. The Fund has
		invested in the company at its seed funding round,
		at IPO and on-marketpost-listing.

January 2022

LRF Portfolio Value by Project Stage
31 January 2022
60%
50%
40%
30%
20%
10%
0%

	Company			Commodity		% of Gross
				Investments
	Cash			Cash		6.6%
	Predictive			Gold		7.6%
	Discovery
	Genesis Minerals			Gold		6.0%
	Musgrave			Gold		5.6%
	Minerals
	De Grey			Gold		4.7%
	Mining
	Azure Minerals			Nickel		4.1%
	Talon			Nickel		3.9%
	Metals
	Pacgold			Gold		3.4%
	Caravel Minerals			Copper		3.0%
	South Harz			Potash		2.5%
	Potash
	Blue Star Helium		Helium	2.4%

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MONTHLY UPDATE
January 2022
Lowell Resources Funds Management Ltd. LRT

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Performance Comparison - January 2022

Over the past 12 months, the Lowell Resources Fund's change in underlying estimated net asset value

per unit (inclusive of distributions and after fees and expenses) was 33.2%, and 87.3% pa over two

years. The Fund has outperformed the benchmark S&P/ASX Small Resources Index (XSRD), the ASX

Resources 300 Index, and the ASX 200 Index over one, two, five and ten years.

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Total Portfolio

LRT Change in

S&P/ASX Small

ASX Resources

ASX 200 Index

Performance to 30

NAV per unit incl

Resources Index

300 Index

November 2021

distributions

(XSRD)

12 months

33.2%

+22.4%

13.6%

9.4%

2 years p.a.

87.3% pa

+20.4% pa

10.7% pa

3.0% pa

5 years p.a.

22.1% pa

+11.3% pa

13.7% pa

8.5% pa

personal

10 years p.a.

13.9% pa

-3.7% pa

4.8% pa

9.5% pa

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The Fed's statements pushed the yield on the 2-year bond up 10 basis points, while the 10-year

The LRT.ASX traded unit price at the end of January was $1.75/unit, the same unit price as at the end of

December.

Market Notes

• Equity markets were volatile in January, with the S&P 500 falling over 9% at one point from 1st

January levels. US real interest rates climbed back to pre-Covid levels, unemployment in the US

dropped to a pre-pandemic 3.9% low, and the December US consumer price index rose 7% from

a year earlier, the fastest pace since June 1982.

• Excluding food and energy, so-called "core CPI" was up 5.5% on the year, the biggest growth

since February 1991. Jerome Powell called inflation a "serious threat" and said the US Fed won't

hesitate to act to rein it in, signaling it will begin lifting interest rates "soon".

For

bond reached 1.86%.

•

The US $ gold price was softer over January, but SPDR Gold Shares, the largest bullion-backed

exchange-traded fund, recorded its biggest one-day net inflow in dollar terms since listing in 2004

-- worth $1.63 billion. Holdings declined in 2021, a lacklustre year for gold prices.

• Oil markets rallied alongside rising tensions in the Russia-Ukraine conflict which caused jitters in

the market about potential supply disruptions. Futures in New York rose as much as 2.6% with the

Brent global benchmark touching $US90 per barrel for the first time in seven years in late January.

According to the Rice Report, despite OPEC having undertaken to increase supply, only two of its

members have been able to achieve that, being Saudi Arabia and Iran. There are claims that

Russia is at capacity limits and 17 other OPEC members are below the quota because they have

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MONTHLY UPDATE
January 2022

Lowell Resources Funds Management Ltd. LRT

hit their production constraints.

• • Indonesia president Widodo said that more than 2,000 mining, plantation and forest use permits had been revoked, of which 1,776 were for metals and minerals mining.
  • The nickel price hit decade highs as inventories fell for 50 straight days (the most since 2000) as Shanghai stocks neared their record low. BHP, having lost the battle for Noront nickel, invested $100m in the Kabanga early stage nickel project in Tanzania. Tesla announced an offtake agreement with Talon Metals' Tamarack nickel project in Minnesota.
  • Iron ore surged back over US$147/t.
  • Bank of America forecast the global aluminum market to be in a deficit of 254,000 tons this year, and a much larger deficit of 1.876 million tons in 2023. It expects spot aluminum prices to average $3,125/t this year, up 26% from the 2021 average. Soaring power costs from the European energy crisis have forced producers to cut output in the region. Smelters in France and Spain have reduced output by more than 590,000 tons, according to CRU Group. Chinese smelters, which produce about half of the world's primary aluminum, are also expected to curtail output.
  • Rare earth prices jumped again, increasing costs for manufacturers such as car makers. Neodymium and praseodymium - elements used in permanent magnets for cars and electric motors - rose to the highest level in more than a decade. Chinese industry regulators urged raw-material companies in the electric vehicle supply chain to absorb some of the cost increases instead of passing them on to avoid undermining EV development. China is a dominant producer of rare earths, accounting for 70% of global production, and exports rose to a record last year. The country is consolidating the sector by merging key producers to strengthen its control over the industry.
• It was feared the spread of protests in Kazakhstan could eventually cause workforce absenteeism and supply chain issues, resulting in a temporary uranium supply disruption. 46% of global mine supply of uranium is produced in Kazakhstan. Uranium supply out of Kazakhstan was already expected to be under pressure in 2022, with Kazatomprom, the world's largest producer, previously flagged ongoing supply chain issues related to COVID-19. Unrest in Kazakhstan also lent support to the copper price.
• Reportedly the world's first shipment of liquefied hydrogen began loading at the port of Hastings in Victoria, due to depart for Japan. However, experts say the extremely low temperature required for the long-distance transportation of liquid hydrogen and its lower energy density compared with LNG make it a significantly more expensive energy source.
• Lithium carbonate prices in China spiked to over US$48,000 per tonne. Mine supply is struggling to keep pace with new Gigafactory expansion and has also been hit by a plant maintenance and output limits in China alongside labour shortages in Australia. . Buoyed by a combination of a rebound in demand and the industry's inability to quickly increase supply, lithium prices soared in 2021 - carbonate jumping 431%, hydroxide 340% and spodumene 532%.
• Palladium rose to its highest in four months, with traders looking to secure supplies amid growing tensions over Ukraine as Russia, the top metal producer, massed troops near the border. Russia produces around 40% of freshly mined palladium.

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