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Today's Market View - Altus Strategies, Beowulf Mining, Goldstone Resources, Jubilee Metals Group, SolGold and W Resources

Today's Market View -  Altus Strategies, Beowulf Mining, Goldstone Resources, Jubilee Metals Group, SolGold and W Resources

SP Angel are the No. 1 broker for AIM mining stocks in London

Altus Strategies* (LON:ALS) –  BUY – Exploration launched at Prikro Gold Project, Cote d’Ivoire
Beowulf Mining (LON:BEM) – Beowulf report 55% of capital now held in the form of Swedish Depository Receipts
Goldstone Resources (LON:GRL) – Reassessment of historic drill core at Akrokeri
Jubilee Metals Group (LON:JLP) – Kabwe construction underway. Hernic project produces 2,101PGM ounces in May
SolGold* (LON:SOLG) – Epithermal gold mineralisation identified at Cisne Loja
W Resources (LON:WRES) – Further drilling results from Tarouca

Brazil presidential decree next week to overhaul mining rules
• Brazil’s President Michel Temer plans to issue a decree next week to overhaul the rules for mining permits, bypassing Congress after it failed to approve similar changes last year
• Aims to cut red tape and attract international investment to the mining sector, where permits to open new mines can sometimes take a decade or more to obtain
• The decree, which is set to be signed at a June 12 ceremony, would open up roughly 20,000 exploration areas where permit applications have stalled or been abandoned, one source said

LME targets new diversified metals contracts
• The London Metal Exchange plans to launch around 15 new contracts next January, including cash-settled cobalt and hot-rolled coil steel contracts, with head of market development, Robin Martin, noting “we will put in place the technical capabilities by November and then we’ll launch them in January”.
• Martin told a panel discussion that the recent trade tensions including US tariffs on aluminium and steel, bolstered the need for new contracts.
• Another focus area for the LME included metals in the electric vehicles revolution, with accelerating demand for battery metals including lithium, cobalt, nickel, graphite and manganese. LME chief executive told the annual LME Asia Week forum “the battery industry is a big part of metal contracts now trading, as a result of the increasing popularity of electric cars”.
• “The LME will introduce a new platform by the end of the year to make it quicker and easier to launch new products. The range of new products should be launched over the next 18 months”.

Ford truck sales rise for 13th consecutive month
• Ford vehicle sales rose 0.7% yoy in May with rising sales of trucks and SUVs offsetting a sharp fall in car sales.
• Truck sales rose 9.4%, F-Series sales up 11.3% including the F-150 and the Raptor, Transit sales up 12.4%.
• E-Series sales dropped 27.5%.
• SUV sales increased 0.5%,
• Lincoln brand SUVs rose 13.7% to 7,295 vehicles
• Ford brand SUVs fell 0.7% to 74,406 vehicles.
• Ford branded car sales fell 11.7%
• Lincoln brand car sales fell a whopping 36.5%.
• The generational shift to SUVs from passenger cars continues with F-Series truck sales continuing to post gains

Martin Ryan, Director – Business Development of ATS is walking 400km to raise funds for Self Help Africa
• Ryan was a director of ATS ‘All Terrain Services’ which provides catering services to many mine sites in tough locations and is infamous for its Thursday curry nights.
• Their work and dedication to local communities as well as their ability to feed teams of hungry miners in remote places made ATS the go-to catering company in Africa.
• Ryan is perhaps best known for establishing Ryan’s Irish Pub in Accra, Ghana. One of few bars selling genuine Guinness in Africa.
• Self Help Africa operates agriculture-based projects which are similar to initiatives Ryan was involved albeit on a much bigger scale.
• Self Help's agriculture-based projects are very similar, if on a far greater scale, to the projects Ryan was involved with in his time at ATS and it is these types of projects that are known to make a longer-term difference.
• Ryan is hoping to raise €20,000 through his 400km walk which may be the first leg of a potential hike around the entire Irish coast.
• You may support Ryan through:

Dow Jones Industrials  +1.40% at 25,146
Nikkei 225  +0.87% at 22,823
HK Hang Seng  +0.64% at 31,459
Shanghai Composite  -0.18% at 3,109
FTSE 350 Mining  +0.00% at 20,447
AIM Basic Resources  +1.28% at 2,561

LSE suffers a technical glitch this morning that delayed morning auction that establishes the opening stock prices.
• The auction has been completed and trading resumed since then.

US – PM Shinzo Abe meets with US President Trump in the White House to discuss the planned US summit with North Korea scheduled for mid-June.

Germany – Factory orders unexpectedly dropped for a fourth month in April providing further evidence of a slowing growth momentum.
• In particular, declines in domestic and euro area demand weighed on the headline number while orders from outside the Eurozone climbed.
• The euro is up 0.34% against the US$ this morning on the back of hawkish comments from the ECB officials.
• Both Jens Weidmann, president of Germany’s central bank and a member of the ECB’s governing council, and Peter Praet, chief economist at ECB, expressed their confidence that inflation would move towards the target despite the latest soft patch of economic data.
• Yields on 10y German debt was up 10bp to 0.46%.

UK – House prices growth slowed in three months to May reflecting “a relatively subdued UK housing market”, Halifax said.
• Housing market has been challenged by high valuations, slower economic growth and pressured consumer budgets as well as Brexit related uncertainty.
• Halifax House Price (3m %yoy): 1.9 v 2.2 in April and 1.9 forecast.
• David Davis is reported to have been close to resigning from his Brexit minister position amid no clarity on the UK stance over the plan to exit the EU, Reuters reports.
• Ten months before Britain is expected to leave the EU, the government office is struggling to get ministers to agree on the backstop plan, an arrangement to keep Britain in the EU customs union after a transition period should there be a delay in a Brexit delay.
• Davis argued that no fixed end-date to the temporary arrangement might delay Brexit indefinitely.

Venezuela – Stated owned PDVSA oil company is experiencing month long backlogs in delivery of crude to main oil export terminals.
• More than 24mmbbl of crude supply is being delayed, equivalent to as much as PDVSA shipped in April, as the Company is reported to have informed some customers of a potential force majeure on its contracts.
• As of June 7, more than 80 tankers were waiting in Venezuelan waters, half of them to load crude and refined products for exports, according to the plan.

US$1.1819/eur vs 1.1753/eur yesterday  Yen 109.99/$ vs 110.05/$  SAr 12.731/$ vs 12.750/$  $1.345/gbp vs $1.342/gbp  0.765/aud vs 0.765/aud  CNY 6.391/$ vs 6.390/$

Commodity News
China is working to change global commodities trading — to its own benefit
• In the last few months, Chinese exchanges have opened up some commodity futures for international traders in a bid to overtake longstanding benchmark prices — many of which are set in Europe and the U.S. — reflecting ambitious plans by the world's second-largest economy to expand its influence overseas
• Those opened up include  crude oil futures on the Shanghai International Energy Exchange, iron ore futures on the Dalian Commodity Exchange and palm olein futures on the Asia Pacific Exchange (APEX), the last being a new largely Chinese-backed exchange based in Singapore
• Meanwhile, there is scepticism in the international trading community over the viability of Chinese yuan-denominated crude oil and iron ore futures due to the fact that the currency is not fully open to the world

Precious metals:         
Gold US$1,299/oz vs US$1,299/oz yesterday
   Gold ETFs 74.7moz vs US$74.7moz yesterday
Platinum US$909/oz vs US$905/oz yesterday
Palladium US$1,018/oz vs US$996/oz yesterday
Silver US$16.72/oz vs US$16.58/oz yesterday
• While typically tracking the price movement of gold, physical demand for silver is expected to follow industrial use and India’s expanding middle class, as China transitions through a structural change. BI estimates from Metals Focus data show silver is heavily reliant on industrial applications, which make up a cumulative 54% of global demand of 971 million ounces in 2018. Jewelry follows at 20% and physical investments at 17%. Silver use in photography continues to diminish, sitting with 4% demand.
• Industrial demand for silver is expected to be driven by autos and electronics, climbing to a new high of 520 million ounces in 2018, up 1.4% from 513 million ounces last year. Improving manufacturing outlook combined with higher vehicle production, as global vehicle output has risen 3.2% annually since 2010, will drive capacity utilisation, allowing automakers to consume more silver in electronics.
• Robust growth may well offset falling silver demand for photovoltaic solar panels caused by substituting lower-cost material, and lower solar-energy policy support across China. Pressure to reduce solar-panel costs remain a key issue for manufacturers. The silver intensity in a solar cell is forecast to fall 56% to 40 milligrams by 2027 due to paste-and-screen innovations, according to the International Technology Roadmap for Photovoltaic.
• At the same time, global silver demand for jewelry is expected to rise to 193 million ounces in 2018. While weakening demand in China due to a structural market change, higher demand will be driven by an expanding middle class in India, the world’s largest market for silver jewelry.
Base metals:   
Copper US$ 7,282/t vs US$7,150/t yesterday
• LME copper extends gains for the sixth consecutive day, the longest streak this year, as labour tensions rise at the world’s top producer. The red metal climbed +0.6% in London, while gaining +1.7% on the ShFE as the union at Escondida mine in Chile and owner BHP Billiton are scheduled to hold talks next week on their work contract expiring July 31.
• Supply from the major producer could be hampered as striking risk remains high as union demands are unlikely to be accepted, according to Shanghai-based analysis.
• With global tensions diminishing and gold prices stagnating, copper has become the most expensive relative to gold this year, fueling bullish signals on global growth. Gold remains on track for its first quarterly loss in a year amid strengthening dollar and estimates for tightening monetary policy.
Aluminium US$ 2,350/t vs US$2,341/t yesterday
• Innovative new aerospace technologies are expected to have a big impact on aluminium demand as CEO Constellium unit notes space programs are a “really exiting” growing sector.
Nickel US$ 15,735/t vs US$15,775/t yesterday
Zinc US$ 3,181/t vs US$3,209/t yesterday
Lead US$ 2,533/t vs US$2,522/t yesterday
Tin US$ 21,025/t vs US$20,660/t yesterday
Oil US$75.8/bbl vs US$76.0/bbl yesterday
Natural Gas US$2.906/mmbtu vs US$2.909/mmbtu yesterday
Uranium US$23.75/lb vs US$23.75/lb yesterday
Iron ore 62% Fe spot (cfr Tianjin) US$66.0/t vs US$65.5/t
Chinese steel rebar 25mm US$669.9/t vs US$665.0/t
• Steel futures rise to the highest level in three months in China on broadened environmental checks across industrial facilities while inventories continue to decline. Reinforcement bar on the Shanghai Futures Exchange climbed +2.5%, the biggest intraday gain in five weeks, to 3,869 yuan ($605)/tonne.
• The Asian nation is ramping up a new campaign enforcing manufacturers to clean up operations and improve environmental protection. The government will be conducting inspections, each lasting a month, on industrial plants across 10 provinces, according to their statement May 25. The government have initiated inspections in Guangzhou, Yunnan and Inner Mongolia.
• Chinese analyst notes “environmental checks are only going to get stricter going forward. There’s also more uncertainty in the duration of production curbs, and the government ay choose to spring new policies”.
Thermal coal (1st year forward cif ARA) US$87.0/t vs US$87.6/t
Premium hard coking coal Aus fob US$197.9/t vs US$195.8/t

Tungsten APT European US$342-347/mtu vs US$340-345/mtu
Cobalt LME 3m US$83,750/t vs US$86,750/t
Lithium - SQM pick of ex-Chairman Ponce as adviser 'imprudent': Chile finance minister
• Chile’s finance minister on Wednesday described as “imprudent” the appointment by lithium miner SQM of its former Chairman Julio Ponce as a strategic adviser, in light of an agreement with the state that he distance himself from the firm
• The move has sparked criticism from politicians from both the governing coalition and opposition, as well as the business community
• Finance Minister Felipe Larrain said that the contract drawn up between SQM and the government to end a royalties dispute would have to be checked to determine if the appointment of Ponce as adviser was compliant

Company News
Altus Strategies* (ALS LN) 7.5p, Mkt Cap £13.2m – Exploration launched at Prikro Gold Project, Cote d’Ivoire
• The Company started exploration works at the 100% owned Prikro Gold Project (370km2) in eastern Cote d’Ivoire.
• The team secured the license in March this year.
• The exploration programme will focus on previously identified structural targets in areas adjacent to small scale artisanal mining licenses.
• The license hosts prospective Birimian age meta-sedimentary greenstone belts which are known to host economic gold deposits in Cote d’Ivoire and other parts of West Africa.
• Initial phase of works would include mapping, rock ship and grab sampling coupled with stream sediment sampling of key drainages at the license.
*SP Angel acts as Nomad and Broker to Altus Strategies plc

Beowulf Mining (LON:BEM) 5.4p, Mkt Cap £31m – Beowulf report 55% of capital now held in the form of Swedish Depository Receipts
• Beowulf, which has the Kallak magnetite project in Sweden and Aitolampi graphite project in Finland report they that some 54.84% of their stock is now held in the form of Swedish Depository Receipts.
• The remaining share capital of Beowulf is held in the UK.
• The company recently raised £1.5m through the issue of 30m new shares at 5p/share representing around 5.3% of the enlarged capital of the company.
• The new funds are to be used to further the company’s scoping study of the Aitolampi graphite project in Finland and continuing exploration of the company’s other graphite projects; the continuing drilling of the Atvidaberg polymetallic exploration licence in Sweden: and the continuing evaluation of the Kallak magnetite project also in Sweden.
• Beowulf have invested SEK77m in the Kallak project to date and the project’s application for a mining license has met the requirements of the prescribed process in accordance with the Minerals Act and the Environmental Code, and in compliance with Swedish law.
• Furthermore the company has also providing a ‘Big Picture’ Study by Copenhagen Economics as well as a Heritage Impact Assessment.
Conclusion: The effective transfer of stock into the Swedish market shows interest in the company in Sweden and suggests to us that there is potential for the company to work through issues which may be holding up the issuance of a mining license on the Kallak magnetite project.

Goldstone Resources (LON:GRL) 2.2p, mkt cap £5.4m – Reassessment of historic drill core at Akrokeri
• Goldstone Resources reports that re-logging of core in 19 holes drilled by previous holders of the historic Akrokeri gold mine in Ghana has identified high grade mineralisation with assay results of up to 51g/t gold over a width of 1m in hole PAR001 below or adjacent to the old mine.
• Among the results reported today from previous drilling as well as Goldstone’s own drilling of holes 12AKDD004 and 006 are:
o A 1.2m wide intersection at an average grade of 11.4g/t gold from a depth of 58.8m in hole ABD010;
o A 3.0m wide intersection at an average grade of 4.62g/t gold from a depth of 116m in hole ABD003, which includes a 0.5m wide intersection averaging 24.8g/t;
o A 1.0m wide intersection at an average grade of 51.01g/t gold from a depth of 50.0m in hole PAR001 which also includes a number of other gold-bearing intersections  up to 3m in length at grades varying between 1g/t to 17.7g/t gold
o A 2.2m wide intersection at an average grade of 1.69g/t gold from a depth of 116.1m in hole 12AKDD004 which also intersected 2.1m at an average grade of 6.1g/t from a depth of 309m; and
o A 3.7m wide intersection at an average grade of 1.98g/t gold from a depth of 105m in hole 12AKDD006
• The historic Akrokeri underground gold mine in Ghana is located 12km along strike to the north of Anglogold’s large Obuasi gold mine and records of the Ghanaian Geological Survey reported by Goldstone show that between 1904-1909 Akrokeri produced 75,000oz of gold at an average grade of approximately 24g/t.
• Goldstone is finalising a plan to re-open Akrokeri with targeted gold production within 24 months and is also seeking to reopen the old Homase open pit which is located within 1.5km of Akrokeri.
Conclusion: Reassessment of previous drilling has shown high grade gold mineralisation at the historic Akrokeri gold mine in Ghana prompting the company to target a reopening of the mine within two years. We look forward to further announcements describing the proposed scale of the operation and economic analysis.

Jubilee Metals Group (LON:JLP) 2.6p, mkt cap £34m – Kabwe construction underway. Hernic project produces 2,101PGM ounces in May
(Jubilee holds a 29% interest in BMR (formerly Berkeley Mineral Resources)
• Hernic: Jubilee Metals Group report rising production of Platinum Group Metals from their chromite processing operations at Hernic in South Africa.
• The operation has now produced some 4,000oz of PGM metals in its first two months of operation with 2,101oz of PGMs produced in May. The news shows good progress towards the PGM plant capacity of 2,500oz per month.
• PGM recovery costs are forecast to be <US$400/oz with an operating margin of >40%.
• Hernic is a ferrochrome producer which like most ferrochrome smelters has ignored the potential for PGM recovery for many years due to processing technology issues.
• Jubilee is Hernic’s exclusive partner in the recovery of these PGM metals from chrome tailings and PGM rich surface material.
• Further material is to be delivered for processing this month from PlatCro to expand production by >20% through the second quarter.
• DCM: A fine chrome recovery circuit is also being built at the  Dilokong Chrome Mines ‘DCM’ where Jubilee has the right to a 50% share of all earnings generated from the toll-refining of chrome ore and recovery capacity of 1,100oz PGMs per month.
• The team have switched over to using hydro-mining from mechanical reclamation of DCM tailings. The move is part of the instillation of the integrated fine chrome recovery circuit which is the pre-cursor to the platinum recovery circuit at DCM.
• Kabwe ‘BMR’ joint venture (Zambia): construction of the Kabwe project is underway with initial focus on the zinc leach circuit.
• The company will provide further clarity on the project following their presentation to the Zambian Mining Department later this month.
• PlatCro: Jubilee have awarded a transport contract for the delivery of PlatCro PGM material  to Northam Platinum for the recovery of the PGM's adding a further revenue stream to the group. PlatCro is a Northam Platinum's Eland Platinum operation
Conclusion: Sales look set to rise significantly for Jubilee this year as PGM recoveries rise at Hernic, the group commissions its zinc recovery circuit at Kabwe in jv with BMR. There is also progress at DCM and at PlatCro which should add further to revenues going forward.
*the analyst writing this note has previously visited the Hernic ferrochrome smelter in South Africa

SolGold* (LON:SOLG) 24.4p, Mkt Cap £414m – Epithermal gold mineralisation identified at Cisne Loja
• SolGold has announced that first pass stream sediment geochemical sampling at its Cisne Loja concessions in southern Ecuador has resulted in the discovery of outcropping epithermal style gold mineralisation and associated alteration zones.
• Rock chip sampling of the mineralisation returned assay results ranging up 15.25g/t gold and 23.6g/t silver and “numerous” samples returning assays in excess of 1g/t gold of which fifteen are tabulated in today’s announcement. The mineralisation is reported to be “similar in style to the large 14m oz Fruta del Norte Project (Lundin Gold) in Ecuador”.
• In total, 178 rock chip samples were taken from “multiple zones of epithermal veining over a combined estimated true width of 860m”.  Maps published with today’s announcement show a number of zones of epithermal veining in the El Cisne 2A project area which is one of three concession areas held by Solgold’s wholly owned subsidiary, Green Rock Resources.
• The company plans to follow up the initial exploration success with a programme of soil sampling over a grid “to help determine the extent of the epithermal system along with possible trenching and rock channel sampling.”
Conclusion: Following the recent announcement of new copper exploration targets at La Hueca, Solgold’s exploration team have now also found promising gold mineralisation at Cisne Loja. Although these are still early stage exploration targets, deploying the Ecuadorean exploration expertise it has acquired at Cascabel into other, wholly owned, projects elsewhere in the country is uncovering new opportunities for Solgold.
*SP Angel act as UK broker to SolGold

W Resources (LON:WRES) 0.47p, Mkt Cap £25.5m – Further drilling results from Tarouca
• W Resources has reported additional results from the recently completed 1515m reverse-circulation drilling programme at its Tarouca tungsten and tin prospect in Portugal. Tarouca is located some 20km south of the company’s Regua project.
• The drilling rig has also completed 2000m on the company’s Sao Martinho gold project in central Portugal, where assay results are expected during the September quarter, and has now been redeployed to the Azeiteiros copper projectfor a further 2000m programme to investigate target anomalies during June and July.
• Results from Tarouca are to be incorporated in a new resource model “with a view to prepare a trial mine application later this year.”
• Among the results highlighted in today’s announcement are:
o A 3m wide intersection at an average grade of 1.165% tungsten trioxide from a depth of 51m in hole TARC014
o A 1m wide intersection at an average grade of 2.851% tungsten trioxide from a depth of 20m in hole TARC011
o A 1m wide intersection at an average grade of 0.189% tungsten trioxide from a depth of 49m in hole TARC015 which also intersected a further 1m averaging 0.139% from a depth of 64m.
o Commenting on the results of the drilling, Michael Masterman, Chairman of W Resources noted that the drilling had provided a clearer understanding of the geological structures at Tarouca and said “We have intersected some very high-grade tungsten zones at Tarouca and are increasingly confident that this project can provide additional high-grade feed to our Régua mine development”.
o We note that, unlike results from Tarouca reported during April, most of the intersections reported today are only 1m wide and therefore represent narrower true widths of mineralisation which may prove complicated to model from a mineral resource point of view. However, the relatively high grades intersected in some holes may, as Mr. Masterman suggests, provide supplementary feed to a possible future operation at Regua. We look forward to the mineral resource estimate once the modelling has been completed.


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