Market Update

General - Sheffield - OZ Minerals

Good afternoon

Manufacturing in New York state very weak, business confidence in Germany at two-year low…I think if Trump would stop pressuring the FED, they might actually refrain from raising rates! But politically, tehy are almost pushed to show independance! Fundamentally, I think they should at least pause - all indicators are trending down, and very quickly so! I have one fear, though: That the market is weak because of significant, political uncertainty, and not so much because of the interest rate tightening. Hower - NO increase would at least give us some respite.

European Union agreed, that CO2 emissions of cars have to fall by 37.5% until 2030. VW immediately stated, that they would need to sell 40% of all new cars by 2030 as EV´s, and that current plans would have to be intensified.

Sheffield - placement stock has been issued and it emerged, that BlackRock and Commonwealth Bank funds between them took almost 17 mill shares out of a total of 25 mill shares. The positive view: Two of the most professional resources investors took the majority - the negative view: Very limited interest! I think both views are correct! Every day, we can see in the market how little interest there is currently outside of the top blue chips…risk-adverse stocks are relatively wanted ( if anything! ). BlackRock with 9,85% of the company could be material in giving some potential aquirer a good start…At least, no retail investor can winge now, that he did not get the opportunity to buy - the stock is trading at the placement price! Macquarie, by the way, is using a more or elss flat zircon price of 1580 US$ for the enxt few years incl 2022. On that basis, SFX will be an absolute screamer!

Acacia - yesterday it became public, that the English Serious Fraud Office is looking at Acacias activities in Tanzania. I always thought, that it was surprising, how quickly Barrick negotiated to pay them 300 mill$! The SFO is investigating possible corruption .

Oz Minerals - had a call with them today, to find out the state of new projects mainly. Carapateena is on track for commercial production in Q4 2019 - all going to plan. Roughly 450 mill A$ left in capex - that should be no problem, because that´s the cash held in the bank as at 30.9.2018 - and Prominent Hill, their existant mine, is printing cash in the moment - free cash flow after tax should be in the vicinity of 400 mill A$ in 2019. The company has stated, that tehy are planning to pay a div, develope Carapateena, and still be debt free. Carapateena as wella s Prominent Hill have growth options….Beside of those two - let´s call them existent - projects, the growth pipline is pretty full as well - though the big spending is still not decided, and will be from 2020 onwards. Brazil sounds very promising - two copepr mines for combined 50t of yearls copepr production look possible by 2022 - but potentially, more growth from them as well. And one gold mine by the same year - CebtroGold in Brazil. I would personally not be szrprised, if that would be dievsted at some stage? OZL see themselves very much as a copepr producer, with gold a welcome by-product. and last, but by no means last, the West Musgrave project in Australia, in JV with Cassini Resources, could produce 25-30.000t of copepr and 10-25.000t of nickel p.a.The scoping study was talking 750 mill A$ in capex…but again, some time away. PFD by the middle of next year, DFS by the middle of 2020.

OZL are a very well managed company, and with a yield of 2.3%, a more than sound balance sheet ( which some would call very lazy! ), and excellent management, I think they are a great bet on copper for conservative investors.

As you can see - not much to report!

Have a nive evening


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