Market Update

General - Sheffield

Good afternoon

Industrial Production in Euroland was weak in Quarter 1....

Europe is just soooooo p...ed off with Trump following the cancellation of the Iran-agreement! Nobody seems to worry about the Saudi Arabia role in all these Mideast-conflicts...Ah yes - I forgot - they are buying American weapons! Oil is filling their coffers once again, and they can replace all these weapons being destroyed in Jemen. I do not believe, that oil will be going through the roof...."somebody" will supply enough of it !...On an other issue, it looks like Mr.Cohen has received a lot of money over the last 2 years for "consultancy-work" - some from large corporates, wanting an inside into Washington action, and apparently ( but unconfirmed ) from Mr.Vekselberg....The Cohen-investigation could be still good for a few, wonderful stories, I think!

The US- Ambassodor in Germany is off to a flying start with some extremely tactless remarks......everybody loves him already!

It´s really amazing and very sad what happened to the German-American friendship! I guss following would emerge in a poll, asking : Whom do you regard as being friendly with Germany, the US or Russia

1970: 79% US / 3% Russia / 18% undecided

2000: 77% US / 7% Russia / 16% undecided

2005: 70% US / 9% Russia / 21% undecided

2018:  58% US / 16% Russia / 26% undecided...and I might well be conservative here!

All the above numbers are pure gusswork - but I could well imagine, that they might be representative. This is what Bush / Iraq war and Trump have done to the relationship!

Surprisingly, metals as well as equities looking all green today...

Sheffield Resources - I received a very good research report on them today, by RBC. They value SFX at 1.50 A$ on the basis, that tehy will have to raise 130 Mill A$ at a 15% discount to todays price to bring the project into production, using a 10% discount rate. Just imagine, that Iluka takes them out ( nearly debt free, with an estimated 400 mill$ free cash generation next year, and falling production from 2020, just as SFX´s project could be up and running ) - for them the company would not only be worth something like 2.50 A$ - it would also conserve their dominant market position. We all know, that  Aboriginal approval is holding the project back...but while this is a risk, I have not seen a project in Australia falla way, unless it was in really sacred land, because of this issue. I am very hopeful, that SFX will have all approvals in place by 30th of June....that should see an immediate rerate of the stock, and open the doors for a takeover or alternatively, a large offtaker/trader taking a sizeable in the project, or the company. Well, I hope! But this is a classy project, and lots of players are watching!

Public Holiday all over Europe tomorrow...have a good time!

WS

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