Today's Market View - Anglo Asian Mining; Ariana Resources;Castillo Copper; Condor Gold; IronRidge Resources and more...

Anglo Asian Mining* (AIM:AAZ) - BUY– Zafer gold discovery marks significant milestone in future mine expansion Ariana Resources (AIM:AAU) – Competition Authority in Turkey approves Ozaltin joint-venture Castillo Copper (LON:CCZ) – Broken Hill divestment under consideration to focus on the Big One project in Queensland


SP Angel . Morning View . Tuesday 19 01 21

Risk sentiment picks up ahead of Treasury Yellen speech 



MiFID II exempt information – see disclaimer below 

Anglo Asian Mining* (AIM:AAZ) - BUY– Zafer gold discovery marks significant milestone in future mine expansion

Ariana Resources (AIM:AAU) – Competition Authority in Turkey approves Ozaltin joint-venture

Castillo Copper (LON:CCZ) – Broken Hill divestment under consideration to focus on the Big One project in Queensland

Condor Gold* (AIM:CNR) – Infill drilling campaign at La India

Glencore (LON:GLEN) - Glencore sells Mopani to ZCCM

IronRidge Resources* (AIM:IRR) - BUY – Ewoyaa Lithium scoping study indicates Post-Tax NPV of US$345m

Rio Tinto (LON:RIO) – Production proves resilient in face of Covid19

Trans-Siberian Gold (AIM:TSG) – Record quarterly production and strong gold prices lift FY20 output and revenues to all time high


Sibanye-Stillwater – We are sorry to hear of the passing of Shadwick Bessit, head of its South African gold operations due to COVID-19 related complications

  • Shadwick Bessit helped steered Sibanye-Stillwater well through the pandemic with the stock reaching a new all-time high today.




US – Expect a very public and rapid unwinding of Trump policies

Biden is keen to enforce the wearing of face masks – possibly in public as well as indoors is already enforced in certain states.

Other COVID-19 measures may also be enforced.

Unfortunately enforcing the ban may act as a flashpoint for hard-line Trump supporters, so expect trouble if Biden goes for the outside mask rule.

Police forces will either struggle to enforce these new rules or will avoid their enforcement

Biden is expected to bring the US back into the Paris Accord on Climate change.

We also expect Biden to support new Offshore Wind-farm construction and the faster decommissioning of coal-fired power stations in the US

Janet Yellen, a former Fed Chairwoman and US Treasury Secretary nominee, will be seeing the Senate Finance Committee later today arguing that lawmakers need to get behind the latest President-elect Joe Biden’s $1.9tn COVID-19 relief plan.

Yellen is expected to say that low borrowing costs mean it is time to “act big”, according to Bloomberg.

Earnings season continues with results from companies including Bank of America, Morgan Stanley, Procter & Gamble, Intel, and Netflix due later today.

But: we believe Democrat feelings towards China and how to address the trade imbalance are similar to Republican thinking.

The political rhetoric toward may be a lot more diplomatic from Joe Biden but we believe the policies may be largely similar.

China knows this but may find working with Biden’s trade negotiators easier from a ‘face saving’ perspective.

China - GDP 2.3% in 2020 well short of the 6% target

Q4 GDP rose to 2.6%qoq vs 3% in Q3

Q4 GDP was 6.5% higher yoy vs 4.9% higher in Q3

Q4 capacity utilisation was 78% vs Q3 at 76.7%

Dec industrial production rose 7.3%yoy vs 7% in November

Retail sales 4.6%yoy vs 5%

Unemployment steady at 5.2%

Nonrural fixed asset investment 2.9% ytd, yoy vs 2.4%


UK – Business lobby asks Chancellor to extend economic support measures as the nation remains in a strict lockdown.

The Confederation of British Industry is calling for moving the deadline for the furlough scheme from April to end of June, postpone the cutoff date for sales tax payments and extend the business-rate holiday.


EU car sales dropped 24%yoy in 2021, the largest decline on record.

While declines slowed down in H2/20, the market recorded negative readings in all 12 months but one with sales in March through May around 50%.

Among the region’s biggest car markets, Spain posted the sharpest drop (‐32.3%), followed closely by Italy (‐27.9%), France (‐25.5%) and Germany (‐19.1%). 

The bright spot was sales of electric vehicles with EU sales of PHEVs/EVs exceeding that in China for the first time, according to BloombergNEF.


Germany – Business sentiment picked up in January reflecting vaccine optimism and downplaying temporary lockdown measures, according to ZEW Institute Survey.

The economy is firmly in deflation as final CPI numbers for December showed reflecting the effect of lower energy prices and the pandemic.

EU Harmonised CPI was down 0.7%yoy extending a run of negative readings to five months now.

ZEW Survey Expectations: 61.8 v 55.0 in December and 59.4 est.

ZEW Current Situation: -66.4v v -66.5 in December and -68.3 est.


Italy – PM Conte is facing a vote of confidence in the Senate today after securing a comfortable majority in a similar vote in the lower house of parliament yesterday.

In case Conte loses the vote, he will have to offer his resignation to President Sergio Mattarella.

Former government allies, Italy Alive, who left the coalition leading to a confidence vote procedure have pledged to abstain from the vote rather than cast votes against the cabinet, thus, lowering the threshold for Conte to clear.

Italy 2y bond yield spread over German debt is little changed this morning trading around 38.5 basis points.


Destabilising effects of COVID-19 showing as business owners and others show their frustration at pandemic lockdowns

The treat of violent demonstrations potentially destabilising governments appears to be on the rise  

Bulgaria Owners of restaurants and nightclubs forced to close in the pandemic are threatening an uprising in Bulgaria.

The threat of civil disobedience comes after police and health inspectors surprised a series of illegal gatherings.


Currencies US$1.2116/eur vs 1.2071eur yesterday.  Yen 104.00/$ vs 103.76/$.  SAr 15.082/$ vs 15.301/$.  $1.359/gbp vs $1.354/gbp.  0.772/aud vs 0.767/aud.  CNY 6.488/$ vs 6.494/$.


Commodity News

Listed metals saw >$6bn of outflows mainly from long fund liquidations

Precious metals saw nearly $8bn worth of liquidations as funds took profits and was just lower than that seen in March last year when COVID-19 hit the West.


Precious metals:  

Gold US$1,845/oz vs US$1,835/oz yesterday – prices arrest recent fall as the dollar weakens again

Strong ongoing performance in US equities on the back of the Stimulus package had drawn funds away from gold

   Gold ETFs 107.2moz vs US$107.2moz yesterday

Platinum US$1,103/oz vs US$1,078/oz yesterday

Palladium US$2,385/oz vs US$2,377/oz yesterday

Silver US$25.30/oz vs US$24.96/oz yesterday


Base metals:  

Copper US$ 7,995/t vs US$7,996/t yesterday

Aluminium US$ 1,963/t vs US$1,988/t yesterday –

Chinese output hit a record 3.27mt in December and 37.08mt for the year representing ~55% of global output (Chinese National Bureau of Statistics)

China has not restricted imports of Australian Bauxite

Nickel US$ 18,010/t vs US$18,065/t yesterday

Zinc US$ 2,668/t vs US$2,683/t yesterday - Zinc - Vedanta reopening Gamsberg zinc mine after pit wall failure in November

Lead US$ 1,993/t vs US$1,994/t yesterday

Tin US$ 21,040/t vs US$21,160/t yesterday


Oil US$55.2/bbl vs US$54.7/bbl yesterday

Whilst most oil prices are up in early trading today, it was a choppy performance in yesterday’s session as a stronger US dollar and many countries still battling rising daily COVID-19 cases weighed on market sentiment

The lockdowns in Europe and the fairly slow start to vaccination programs in many countries outweighed early on Monday good economic data out of China, which beat analyst estimates to post 6.5% GDP growth in its economy in the fourth quarter, compared to 6.1% growth expected by economists in a Reuters poll

China is also the only major economy to have posted economic growth last year, of 2.3%

All other major economies in the world are expected to have contracted in 2020, hit by the pandemic

Still, China’s economic data wasn’t enough to wipe out a cautious approach to the oil market at the start of this week, as participants are still concerned that the spreading of the virus and the lockdowns will significantly weigh on oil demand in the first quarter

At the same time, vaccination programs are likely to take months before allowing a critical mass of economically active people to contribute to global economic recovery

Elsewhere, following Saudi’s decision to unilaterally cut 1MMBopd below its latest OPEC+ quota originally set last month, Iran announced last week that the National Iranian Oil Company (NIOC) has signed US$1.2Bn-worth of contracts for eight new projects designed to significantly increase its crude oil production

Although these projects will be broadly managed by Iranian companies, they are part of a patchwork of projects that were formulated in tandem with the 25-year deal made with China in 2019, which will heavily feature Chinese companies working on a ‘contract-only’ basis, albeit lots of contracts across all business sectors across all fields

Natural Gas US$2.641/mmbtu vs US$2.603/mmbtu yesterday

With winter temperatures below seasonal norms in the northern hemisphere, there has been a rally in natural gas prices from Asia to Europe 

The spot liquefied natural gas (LNG) prices in north Asia jumped to record highs last week, while the key price marker in Europe, the Dutch Title Transfer Facility (TTF), rallied to the highest in more than two years

The natural gas markets at the start of 2021 look completely different from the beginning of last year, when milder weather and the pandemic hit to demand had dragged natural gas prices down to historic lows

This winter season, a rebound in Asian natural gas demand, supply issues at major LNG exporters, logistics issues at the Panama Channel, soaring tanker rates, and last but not least, the cold snap from Madrid to Tokyo, are pushing gas prices higher



Iron ore 62% Fe spot (cfr Tianjin) US$168.5/t vs US$168.5/t - Iron ore future sink as Rio Tinto forecasts higher shipments in 2021

Iron Ore futures sank on Tuesday, as Rio Tinto announced that it aims to expand cargoes this year amid strong Chinese demand.

Total shipments from Rio’s iron ore operations rose 1% to 330.6mt in 2020, inside the Company’s guidance range of 324-3354mt.

Rio’s 2021 shipments are forecast at 325-340mt with a median of 337.5mt.

Futures fell as much as 2.4% to $166/t in Singapore, the largest drop in over a week. The most active contract on the Dalian exchange declined as much as 3.3% (Bloomberg).

BHP and Fortescue Metals are expected to release supply data over the next few days, which is likely to shape investor expectations for iron ore in 2021.

Chinese steel rebar 25mm US$663.4/t vs US$663.6/t - China Crude steel 2020 output rose 5.2% to a record 1.05bt in the year to 10 December

Stainless steel production rose 2.9% in 2020 to 29.84mt

Thermal coal (1st year forward cif ARA) US$69.0/t vs US$69.9/t -

Coking coal swap Australia FOB US$135.0/t vs US$135.0/t



Cobalt LME 3m US$37,510/t vs US$37,510/t

NdPr Rare Earth Oxide (China) US$69,053/t vs US$68,374/t

Lithium carbonate 99% (China) US$9,248/t vs US$9,009/t - Tianqi Lithium scraps $2.5bn share sale after exchange queries plan

The company has terminated its plan to sell $2.5bn worth of shares after the Shenxzhen stock exchange queried the plan.

Tianqi planned to issue stock to controlling shareholder Chengdu Tianqi Industry Group at a 40% discount to its last closing price, in the same month that Chengdu Tianqi said that it would reduce its stake in Tianqi Lithium.

The Shenzhen exchange queried whether Chengdu Tianqi’s subscription to the private-placement plan after earlier reducing its stake constitutes a short-term transaction and if it hurts the interests of small and medium shareholders.

Tianqi commented that the cancellation of the share sale won’t impact the company’s business operation and development (Nikkei Finance).

Ferro Vanadium 80% FOB (China) US$30.2/kg vs US$30.2/kg

Ferro-Manganese high carbon 78% Mn US$1,430/t vs US$1,380/t

Tungsten APT European US$235-240/mtu vs US$235-240/mtu

Graphite flake 94% C, -100 mesh, fob China US$530/t vs US$520/t                

Graphite spherical 99.95% C, 15 microns, fob China US$2,475/t vs US$2,475/t

Spodumene 6% Li2O min, cif (China) US$395/t vs US$380/t


Battery News

Heated lithium-based batteries could make electric vehicles cheaper 

Lithium batteries that operate at a higher temperature could be cheaper and safer than other metal batteries for electric cars.  

Chao-Yang Wang and his colleagues at Pennyslvania State University have shown that the performance of lithium iron phosphate batteries improves if they are warmed up first.  

LFP batteries operated well at 60 °C because they generated far less additional heat as they discharged. 

If charged frequently but partially, cars with lithium batteries can travel great distances with little inconvenience.  


Company News

Anglo Asian Mining* (AIM:AAZ) 126p, Mkt Cap £144m – Zafer gold discovery marks significant milestone in future mine expansion


Anglo Asian Mining report the discovery of a new Copper and Gold Discovery close to their Gedabek gold mine in Azerbaijan.

The Zafer gold project was discovered following structural trends just 1.5km from Gedabek gold plant making the resource easily accessible for processing

To date 12 holes have been drilled for 7,675m of core with high grades within the drill holes of up to 6% copper, 14.6% zinc and 12.4g/t gold

Drilling shows:

113m grading 0.5% copper and 0.7g/t gold - The thickness and style of mineralisation is consistent with porphyry-type mineralisation.

The team are drilling the deposit to work up a JORC resource and to bring Zafer to production relatively quickly.

Target geophysics using ZTEM airborne geophysics show three anomalies at varying depths, including an underlying porphyry structure.

The geologists estimate Zafer is around 6mt in scale though further work may extend the size of the potential resource.

Extensions along strike from Zafer also intersect with other targets indicating a potential substantial copper, gold resource.

Metallurgy, the team will be using core from the drilling to assess the metallurgical relationship between the copper and gold within the deposit.

The Geadbek process plant has four distinct processing lines which are able to process almost any type of gold and copper mineralisation seen in the region.

Anglo Asian produced some 16,800oz of gold, 696t of copper and 33.0koz of silver in the fourth quarter of last year.

Conclusion: Zafer is an important new discovery for Anglo Asian Mining. It extends the resource and life of the Gedabek mining complex and should safeguard jobs for the people of Gedabek for years to come. Ongoing geophysical and structural work will likely identify further new discoveries along from Gedabek and Zafer potentially leading to the expansion of the mine complex in future years.

*SP Angel act as Nomad and broker to Anglo Asian Mining. The analyst has visited the Gedabek gold mine many times over the years since its planning and construction


Ariana Resources (AIM:AAU) 4.9p, Mkt Cap £55m – Competition Authority in Turkey approves Ozaltin joint-venture

Ariana Resources reports that the Turkish Competition Authority has approved the joint venture proposal for Kiziltepe which will extend the joint venture and bring in the Turkish conglomerate, Ozaltin Holdings with a 53% interest leaving Ariana and its long-term partner Proccea each with 23.5%.

The new joint venture, which was approved by shareholders in December, “involves the partial disposal of the Company's interests in Turkey in exchange for up to US$37.75 million in cash before costs and taxation”.

Managing Director, Dr. Kerim Sener, confirmed that the Competition Authority approval “marks the last significant condition precedent for the conclusion of the expanded Joint Venture”.

Dr. Sener also confirmed that “We are already well underway with a new drilling programme at Kiziltepe, testing extensions to known vein systems along strike and at depth. This programme is being undertaken with the aim of increasing the project's resources and reserves, in parallel with the expansion plans for the processing facilities at Kiziltepe”.


Castillo Copper (LON:CCZ) 3.75p, Mkt Cap £37.5m – Broken Hill divestment under consideration to focus on the Big One project in Queensland

Castillo Copper has confirmed that the potential divestment of its Broken Hill Alliance project (BHA) in New South Wales is being considered as the company focusses on advancing the exploration of its Big One copper project in Queensland.

The company says that the BHA project is close to the well-known Broken Hill silver/zinc/lead deposit but that its decision to focus on the copper exploration in Queensland has led it to conclude that “it is an opportune time to capitalise on the prevailing base and precious metal upcycle to fast-track creating additional shareholder value”.

Commenting on BHA, Castillo Copper says that “much of the tenure has been under-explored over the past two decades, which underscores the upside potential from rolling out a comprehensive exploration campaign … [and that] …  With significant resurgence of interest in groups with footprints around Broken Hill …  Castillo is considering divestment opportunities including a possible spin-off of its sizeable Broken Hill Asset into a new vehicle which could be listed in either London or Australia”.

Managing Director, Simon Paull, said that “Our commanding ground position at Broken Hill is under-explored yet highly prospective for BHT and IOCG mineralisation, with multiple drill-test targets already identified. Castillo is fortunate to have multiple high-quality assets across our portfolio and, following outstanding recent assay results at Big One Deposit, this divestment would enable the Board to focus resources on the core Mt Oxide Project”.

The company’s London-based director, Ged Hall, said that the Board “has considered the most effective way to deliver value for shareholders and we are confident that our intent to spin out this asset into a new vehicle will be well received and supported by UK investors”.

Conclusion: Considering the potential spin out of its New South Wales assets surrounding the historic Broken Hill mine provides Castillo Copper the opportunity to focus its efforts on its Big One copper project in Queensland.


Condor Gold* (AIM:CNR) 54.5p, Mkt Cap £64.8m – Infill drilling campaign at La India

Condor Gold has confirmed that it has deployed a second drilling rig to further the 4,000m infill drilling campaign at its La India Project in Nicaragua.

The programme started in December and, with six holes completed to date, is focusing on reducing the drill spacing of shallow holes in order to upgrade the minerals resources in the area planned for the high-grade starter pits at La India.

The company explains that the starter pits contain “445Kt at 4.17g/t gold for 59,700 oz gold using a 2.0g/t gold cut-off … [and that the additional closer spaced drill pattern should allow the conversion of] … a small near-by tonnage in the Inferred Mineral Resource category to the higher confidence Indicated Mineral Resource category, and its potential inclusion in the mine plan.”

The drilling should also allow some of the existing indicated mineral resources to be upgraded to the measured level providing better information for mine planning in the initial production phase.

Commenting that assay results from the initial six holes of the infill programme are still pending, Executive Chairman, Mark Child, confirmed that the deployment of the second drill rig would accelerate the programme and that “The starter pits have a maximum depth of 35m and have a relatively low strip ratio. The drill program within the La India starter pits will close-up the sample density to 25 metre by 25 metre spacing and is the final drilling ahead of extraction. Mining the higher grade will bring forward cashflow, shorten the payback period and enhance project economics”.

The company explains that “It is likely that following the infill drilling programme on La India starter pits that the two drill rigs will relocate to the permitted high grade Mestiza open pit to conduct an infill drilling programme” and that when this decision is taken it plans to make a separate statement to confirm the plans.

Mestiza contains an indicated mineral resource of 92,000t at an average grade of 12.1g/t (36,000oz) and an additional 341,000t classed as inferred at an average grade of 7.7g/t (85,000oz) so additional infill drilling to upgrade inferred resources has the potential to add high grade resource ounces to the mine-plan relatively quickly.

Conclusion: The infill drilling programme at La India provides an opportunity to firm up the detailed understanding of the resources in the early stages of operations at La India which will aid detailed mine planning for the initial high grade starter pits and potentially add additional resources through upgrading mineralisation currently classed as inferred. Although the company has yet to confirm extending infill drilling to the high-grade pit area at Mestiza, in our opinion, the opportunity to enhance resources through upgrading currently inferred tonnages is likely to be compelling.

*SP Angel act as sole broker to Condor Gold


Glencore (LON:GLEN) 279p, Mkt cap £37bn - Glencore sells Mopani to ZCCM

Glencore has announced that it has agreed to sell its stake in the Mopani copper mine in Zambia to ZCCM and signed a formal agreement “to transfer its 90% interest in Mopani Copper Mines plc ("Mopani") to ZCCM, the owner of the remaining 10% interest in Mopani”.

The transaction, which is conditional on regulatory approval in Zambia as well as shareholder approval, is for US$1 plus US$1.5bn of debt which “will remain owed by Mopani to Glencore group creditors”.

Interest on the debt will be capitalised for the first three years following completion of the transaction and is then payable at a rate of LIBOR +3%.

The outstanding principal of the debt “will be repayable under a dual mechanism whereby:

i.    3% of gross revenue of the Mopani group from 2021-2023 (inclusive), and 10-17.5% of gross revenue of the Mopani group thereafter; and

ii.   33.3% of EBITDA less tax, changes in working capital, capital expenditure, royalty payments and interest and principal (calculated under the first mechanism) payments in respect of Transaction Debt”.

Glencore retains the offtake rights for Mopani’s future copper output.

Conclusion: The resolution of long-standing issues over the ownership of Mopani leaves Glencore with offtake from the mine and holding US$1.5bn of debt in the operation.


IronRidge Resources* (AIM:IRR) 19.25p, Mkt cap £80m – Ewoyaa Lithium scoping study indicates Post-Tax NPV of US$345m

IronRidge Resources has released details of its scoping study for the development of its Ewoyaa lithium project in Ghana, with the company proposing an operation capable of treating 2.0Mtpa of ore over an initial 8-year mine life resulting in a project revenue of $1.55bn.

The study concludes that initial capex of US$68m to develop a conventional open cut mining operation from surface, producing 6% spodumene concentrate at the rate of 295,000tpa over eight years.

This gives an estimated:

Pre-tax NPV8% of US$539m

Pre-tax EBITDA of US$854m

Post-tax NPV8% of US$345m

Post-tax IRR of 125%

EBITDA of US$105mpa average

The study proposes a contract mining operation, mobile contract crushing facility and fixed conventional Dense Media Separation (DMS) processing facility.

Costs: US$247/t of spodumene concentrate

Price: US$650/t for 6% spodumene concentrate.

Payback is expected to be <1 year.

Recovery rates: currently up to 72% for the P1 Fresh ore and average 51% for the P2 Fresh after re-crushing and gravity middlings,

Further improvement in recoveries seems likely.

The project benefits from easy access to the major Accra-Takoradi highway within 1km of the site which provides access to the port of Takoradi which is 110km west of the site. Easy access to infrastructure and power also complement the impressive resource.

The proposed Ewoyaa Main Starter open-pit mining operation has a relatively low waste:ore stripping ratio of 1.5:1, and 4.4:1 over the full mine life for the entire project.

Gravity test work highlighted the potential to produce feldspar as a by-product which would be attractive to both the domestic and European ceramics industry.

Initial results indicate that around 15-20% of the material fed into the DMS plant could be recovered as a feldspar product, translating to some 300,000tpa based on a plant throughput of 2.0Mtpa.

Selling prices of US$ 25-100/t FOB Ghana port were indicated for the feldspar by-product, which could amount to additional revenue ranging from US$ 5-20mpa.

IronRidge’s commitment to supporting the EV industry supply chain’s a net zero carbon target means that the Ewoyaa project will source its power from hydroelectric plants in the region.

Further exploration is underway at Ewoyaa as IronRidge aims to grow its resource, with RC drilling being conducted to test seven robust auger defined pegmatite targets at Ewoyaa with an internal exploration target range of 2.5mt to 7.5mt, with a view of supporting a plus 10yr mine life.

Vincent Mascolo, CEO or IronRidge commented: "The Study outlines a robust 2.0mtpa operation which can deliver excellent cash flows, a very quick payback and a pre-tax NPV of over half a billion U.S. dollars from a modest 8-year operation, producing a coarse, premium DMS concentrate product.” "The Project leverages existing infrastructure, including directly adjacent HV power, a major highway within 1km of the site, and the major port of Takoradi less than 2 hours' drive away.”

Regarding further exploration: "Our resource continues to grow, and the upside of the Project is clear; further resource drilling is currently underway and, as such, we expect that the Project metrics will improve beyond the current defined Life of Mine.”

Conclusion:  Ewoyaa looks to be one of the world’s better lithium / spodumene concentrate deposits with a remarkably low cost in its coastal location in Ghana. We suspect Chinese lithium processors will be knocking on IronRidge’s door any day as they ramp up production to meet demand growth from the 174 Li-ion battery megafactories which are either planned or in expansion.

*SP Angel act as Nomad to IronRidge Resources


Rio Tinto (LON:RIO) – 5,984p, Mkt cap £74.5bn – Production proves resilient in face of Covid19

Rio Tinto, reporting its Q4 and full year 2020 under the new stewardship of Chief Executive, Jakob Stausholm, affirms its commitment to “improve Rio Tinto's approach to stakeholder engagement globally by embedding a more inclusive approach that strengthens our overall thinking, decision-making and performance … [and to] … to drive the changes necessary to help restore trust and rebuild our reputation”.

Overall, however, Rio Tinto sys that it has “delivered a strong safety and operational performance in the face of the significant global challenges of COVID-19.”

Rio Tinto reports a 2% increase in iron ore production from its Pilbara operations during 2020 with a total output of 333.4mt following production of 86mt during Q4. Iron ore shipments rose by 1% over the year to 330.6mt.

Iron ore prices increased to average US$98.9/dmt (dry metric tonne) during 2020 compared to US$85.9/dmt in 2019 with Rio Tinto reporting that “In China, the industrial sector has recovered and is now at pre-COVID levels due to the rapid deployment of stimulus. Exports continue to rise with the global economic recovery, and a policy shift to promote domestic investment and consumption is supportive of the commodity demand outlook”.

Underlining the significance of the Chinese recovery, the company says that “We continue to ramp up our port sales in China, with 5.5 million tonnes of sales in 2020 including 1.8 million tonnes in the fourth quarter. Our portside operation handles product from our operations in the Pilbara and in Canada as well as third party product, and provides blending and screening capabilities”.

Providing guidance for 2021, Rio Tinto expects to produce between 325-340mt of iron ore.

Bauxite production also rose by 2% during the year to 56.1mt while aluminium output remained steady at 3.18mt “with lower volumes from the curtailment of Line 4 at the Tiwai Point aluminium smelter in New Zealand and from the Kitimat smelter pot relining campaign, offset by the ramp-up of the Becancour smelter in Quebec”.

Aluminium prices declined from US$2,132/t in 2019 to US$1,946/t and although the company says that it “has rebounded on solid downstream demand, particularly in the automotive and packaging sectors. We remain cautious on the outlook due to an expected increase in Chinese supply and high global inventories”.

Guidance for 2021 is for alumina output in the range 7.8-8.2mt, bauxite output between 56-59mt and aluminium production between 3.1-3.3mt.

Mined copper output declined by 7% during 2020 to 527,900t, although above the previously issued guidance range, reflecting “lower grades at Kennecott as a result of planned pit sequencing and Oyu Tolgoi production phasing”.

Received copper prices increased from US$2.74/lb in 2019 to average US$2.83/lb and the company says that “Copper prices remain strong. Chinese consumption is robust, mine and scrap supply have been disrupted, and investment demand is strong. We expect global fiscal stimulus, particularly in the electrification and renewables sectors, to be copper-intensive and supportive of the outlook”.

Rio Tinto says that mined copper output for 2021 is expected to lie in the range 500-550,000t.

Conclusion: Rio Tinto has delivered strong operational performance from its iron-ore business aided by improving prices and industrial recovery in China. Copper is expected to benefit from global recovery although the company expresses caution on aluminium against a background of increasing Chinese supply and high inventory levels worldwide.


Trans-Siberian Gold (AIM:TSG) 111p, Mkt Cap £96m – Record quarterly production and strong gold prices lift FY20 output and revenues to all time high

Q4/20 production up 32% and hit record high of 15.2koz (Q3/20: 11.6koz) reflecting highest quarterly grades 10.3g/t (Q3/20: 7.4g/t).

Grades continued to trend upwards reflecting higher feed from Vein 25 with December grade averaging 11.01g/t.

FY20 production increased 3.6% to all-time high of 45.1koz (FY19: 43.5koz), at the higher end of the upgraded 44-45koz guidance.

Operations recorded limited impact of COVID-19 during 2020.

Annual sales increased 28.3% to a record high of $81.0m (FY19: $63.1m).

Average realised gold price was up 29.2% at $1,808/oz (FY19: $1,399/oz).

The Company is currently looking into causes of an accident at the Asacha underground mine recorded earlier in January.

An official investigation is being carried by a Federal Technical Inspection (RTN) in line with normal protocols in Russia that is expected to take a minimum of 30 days.

Mining operations at Vein 25 to resume post the conclusion of the RTN investigation and compliance with its findings with the Company planning to release 2021 production guidance once results of the investigation are known.

The plant is currently operating at full capacity with the feed sourced from the Main Zone of the mine.

The Company is continuing to consider potential strategic M&A opportunities reflecting strong balance sheet and liquidity position ($22m in cash as of Dec/20 and ~$20m in debt as of H1/20).

Conclusion: Q4/20 results sum up record in production and sales 2020 with increasing share of mined material at Vein feeding higher grade material to the plant and operations hitting the higher end of the upgrade guidance and capitalising on a nearly 30% increase in realised gold price.



John Meyer –  – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk - 0203 470 0474

Joe Rowbottom – Joe.Rowbottom@spangel.co.uk - 0203 470 0486



Richard Parlons –Richard.Parlons@spangel.co.uk - 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk - 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk - 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471



SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London



*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.


Sources of commodity prices

Gold, Platinum, Palladium, Silver

- BGNL (Bloomberg Generic Composite rate, London)

Gold ETFs, Steel

- Bloomberg

Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt


Oil Brent


Natural Gas, Uranium, Iron Ore


Thermal Coal

- Bloomberg OTC Composite

Coking Coal



- Steelhome

Lithium Carbonate, Ferro Vanadium, Antimony

- Asian Metal


- Metal Bulletin



This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.

Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.

Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

MiFID II - Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).

SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

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