SP Angel . Morning View . Thursday 15 12 22
Metals pull back on Fed 0.5% rise and prospect of higher rates for longer to combat inflation
MiFID II exempt information – see disclaimer below
Bluerock Diamonds PLC (AIM:BRD)* – BlueRock plant confirms 90,000tpm throughput is achievable as strip ratio falls to just 1:1
Horizonte Minerals PLC (AIM:HZM, TSX:HZM, OTC:HZMMF) – Confirmation that the Araguaia ferronickel project remains on schedule and budget
Kobold Metals (Private) – Kobold invests $150m into Mingomba jv with EMR Capital
Pilbara Minerals Ltd (ASX:PLS) – Pilbara sells 5.5% spodumene concentrate shipment at US$7,552/dmt eq. $8,299/dmt for 6% SC6
Red Rock Resources PLC (AIM:RRR) – US$0.5m exploration funding
Thor Mining PLC (AIM:THR, OTC:THORF, ASX:THR) – Assay result from Ragged Range amended following QAQC error at laboratory
Tungsten West PLC (AIM:TUN) – Environment Agency grants licenses at Hemerdon
Vulcan Energy Resources (ASX:VUL) – Vulcan delays output target by a year on supply chain issues
European car sales jump 17% as supply chain bottlenecks ease
- November car deliveries in Europe rose 17% yoy, albeit against depressed 2021 levels.
- Total sales remain down 6% vs last year’s Jan-Nov period.
- The industry notes order books for 2023 remain full, with the global semiconductor shortage seemingly easing.
- However, VW has noted that EV demand has ‘gone off track’ recently as Europe struggles with sky high energy prices.
- The catchup in auto sales is off a relatively low base.
China slashes steel output as economic slowdown accelerates whilst Rio remains optimistic of 2023 iron ore demand
- A trifecta of virus controls, property slump and winter pollution curbs are adding to the Chinese steel industry’s woes.
- November steel output fell 6.5% to 74.5mt vs October, its weakest production month this year.
- Housing demand continues to dominate the steel industry, with consistently weak sales weighing on steelmakers’ profits.
- Despite weakening monthly data, Rio Tinto expects ‘more stability’ in China’s iron ore demand next year as stimulus measures are fed into the housing sector.
- The Company notes recovering steel margins, and they note a ‘fairly constructive outlook’ for China in 2023.
Copper prices stabilise despite weak Chinese economic data, Chilean government’s concerns of a 2023 surplus and road blockages in Peru
- Copper prices continue to hover between $8,500/t and $8,400/t, shrugging off further hawkishness from the Fed and weaker economic data from China.
- Expectations of supply disruption in Peru may be supporting prices.
- Copper inventories have risen 6.2% over the past week, having slumped 13% from mid-November.
- However, inventories are 40% lower than seasonal average.
- Yangshan premium has stopped its sell-off, having slumped 63% since October. Higher premiums for cathodes suggest stronger physical demand.
- Copper futures still in remain in contango, suggesting short term supply is more positive. However, the market continues to focus on 14 year low inventories and continued rising demand from the renewable sector.
- Chile’s state-owned Chilean Copper Commission has slashed its copper price projections for 2023 on rising supply, stating that ‘the supply of the metal would grow by around 3.9%’. Their projection has been altered to $8,660/t.
- It expects Chile’s production growth to hit 7.5% in 2023.
Gold slides as market digests Powell’s comments of higher Fed rates for longer
- Having spent the last week hovering around $1,810/oz, gold prices have eased 1.5% to $1,790/oz following J Powell’s press conference yesterday.
- The Fed hiked an expected 50bp, however it was Powell’s commitment to holding its borrowing costs higher throughout 2023 that is hurting bullion.
- Traders had been betting on a Fed pivot in the first two quarters of next year, which would have likely supported gold and further weighed on the dollar. This did not materialise.
- 10-year UST yields fell 2.4% on Powell’s initial statement but the market has since rebounded somewhat and remain grounded at the 3.5% level. Yields are historically negatively correlated to the gold price.
- The Dollar index rebounded 50 basis points from 6-month lows.
Dow Jones Industrials -0.42% at 33,966
Nikkei 225 -0.37% at 28,052
HK Hang Seng -1.55% at 19,369
Shanghai Composite -0.25% at 3,169
Economics
US – Fed hikes interest rate by a further 0.5% to target range of 4.25% - 4.5%
- Jerome Powell indicates US economy could still avoid recession with lower inflation readings making a soft landing more possible.
- The danger of run away inflation appears to be passing though the Fed still wants to raise rates to limit inflation further.
- US CPI rose by just 0.1% mom in November vs 0.4% mom in October and slowing the CPI rate to 7.1% yoy in November vs 7.7% in October.
- Core CPI excluding food and energy rose 0.2% mom in November vs 0.3% mom in October and 6% yoy in November vs 6.3% yoy in October.
- The Fed revised its expectation for where interest rates will end 2023 to 5.1%, up from 4.6%.
China – Increasing evidence that China is allowing Covid to rip through the population
- Relatively little vaccination and almost no effective vaccination against Omicron in China means the virus will bypass most of the controls left in place.
- India is the proxy for China as the Indian government did little other than send people home during periods of high transmission.
- The act served to accelerate the spread of Covid through the Indian villages and cities.
- India was slow to implement a vaccination program, starting on 16 January 2021 with only 10% of Indians vaccinated by 1 May 2021.
- India ranks 145th in its Covid mortality rate at 377 per 1m of population largely due to the high proportion
- Total social financing jumped to a massive CNY1,990bn in November from CNY907.9bn in October
Japan - PPI rose 0.6% in November vs 0.8% in October and 9.3% yoy in November vs 9.4%
South Korea - Unemployment climbed to 2.9% in November vs 2.8% in October
Europe - Cash calls rise to 5-year highs across Europe as companies brace for recession
- Bloomberg reports over $63bn was raised in rights offerings by over 440 European companies in 2022, highest since 2017, as companies look to shore up their balance sheets before an expected recession.
- Firms are looking to reposition their balance sheet following a rapid rise in interest rates to tackle inflation.
- Analysts expect further share offerings into next year to pay short term bond maturities in anticipation of weakening European consumer demand.
- The theme will reflect a transition away from widespread share buybacks towards an increasing rate of share issuance as the cost of capital remains elevated.
ECB expected to hike rates by 50bps as inflation shows signs of peaking
- A poll of economists by Reuters indicates the ECB will hike rates by half a percentage point from 1.5% after 75-basis-point hikes at each of its two previous meetings, mirroring the US Fed's change of pace on Wednesday.
- EU ZEW economic sentiment index improved to -23.6 in December vs -38.7 in November as European industry worked out how to manage on less gas and higher energy prices.
Germany - ZEW economic sentiment index fell to -23.3 in December vs -36.7 in November as industry moved off gas and back onto diesel, coal and other power sources.
- CPI fell -0.5% mom in November vs 0.9% mom on October and 10% yoy in November vs 10.4% in October.
- The fall in German CPI shows that inflation can and is pulling back and that the West is not about to collapse into hyperinflation.
UK – CPI 0.4% mom in November vs 2% mom in October and 10.7% yoy in November vs 11.1% yoy in October
- Core inflation rose 0.3% mom in November vs 0.7% in October ), yoy 6.3% (6.5%), the UK also has a retail price index RPI, 0.6% (2.7%), yoy 14% (14.2%), a lot of benefits and other government payments are based on this.
India - Wholesale price index 5.85% yoy in November vs 8.39% yoy in October
Ghana’s President alleges gov of Burkina Faso has given Wagner Group a mine
- Ghanaian President Nana Akufo-Addo claims that Burkina has given Wagner a mine near Ghana’s southern border as payment for fighting insurgents in the country.
Peru announces 30-day national emergency as violent unrest spreads
- Peru’s Boluarte has declared a suspension of basic rights under a ‘national emergency’ for the next 30 days.
- Violent protests, roadblocks and vandalism have spread across urban areas of the Country following the arrest of President Castillo.
- The new President Boluarte is looking to hold elections this time next year, in a bid to cool protests.
- Copper miners are reporting disruptions from transportation affecting their ability to ship mined goods and access supplies.
Serbia - Serbian prime minister sees no chance for Rio Tinto’s lithium project
- Ana Brnabic, the Serbian prime minister does not see a way forward for Rio's Jadar lithium project which had its licenses revoked earlier this year.
- The project has been stalled on large-scale local protest on environmental issues.
- We suspect no other company will be able to develop this project due to technical challenges and ongoing local opposition.
Currencies
US$1.0627/eur vs 1.0636/eur yesterday. Yen 136.39/$ vs 135.35/$. SAr 17.344/$ vs 17.162/$ $1.233/gbp vs $1.238/gbp. 0.679/aud vs 0.686/aud. CNY 6.971/$ vs 6.943/$.
Dollar Index: 104.13 vs 104.03 yesterday.
Commodity News
Precious metals:
Gold US$1,779/oz vs US$1,810/oz yesterday
Gold ETFs 94.0moz vs US$93.8moz yesterday
Platinum US$1,010/oz vs US$1,038/oz yesterday
Palladium US$1,889/oz vs US$1,935/oz yesterday
Silver US$23.12/oz vs US$23.76/oz yesterday
Rhodium US$12,400/oz vs US$12,600/oz yesterday
Base metals:
Copper US$ 8,392/t vs US$8,529/t yesterday
Aluminium US$ 2,429/t vs US$2,459/t yesterday
Nickel US$ 28,480/t vs US$28,415/t yesterday
Zinc US$ 3,230/t vs US$3,321/t yesterday
Lead US$ 2,156/t vs US$2,178/t yesterday
Tin US$ 24,100/t vs US$24,485/t yesterday
Energy:
Oil US$82.0/bbl vs US$80.7/bbl yesterday
- Crude oil prices edged higher even as the Fed reiterated yesterday that inflation in the US remains elevated and that higher rate hikes in the future could not be ruled out.
- The EIA flipped to a 10.2mb US crude inventory build last week with strong builds of 4.5mb to gasoline and 1.4mb to distillate stocks, inclusive of a 4.7mb SPR release, with refinery utilisation down 3.3% to 92.2%.
- European energy prices were flat as Germany prepares to receive its first floating storage and regasification unit, or FSRU, which is expected to start flowing gas from LNG tankers next week.
Natural Gas US$6.450/mmbtu vs US$6.618/mmbtu yesterday
Uranium UXC US$48.35/lb vs US$48.35/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$109.1/t vs US$108.2/t
Chinese steel rebar 25mm US$577.3/t vs US$575.1/t
Thermal coal (1st year forward cif ARA) US$250.0/t vs US$250.0/t
Thermal coal swap Australia FOB US$378.5/t vs US$377.5/t
Coking coal swap Australia FOB US$275.0/t vs US$275.0/t
Other:
Cobalt LME 3m US$51,955/t vs US$51,955/t
NdPr Rare Earth Oxide (China) US$98,411/t vs US$98,230/t
Lithium carbonate 99% (China) US$75,673/t vs US$75,977/t
China Spodumene Li2O 5%min CIF US$6,110/t vs US$6,110/t
Ferro-Manganese European Mn78% min US$1,313/t vs US$1,314/t
China Tungsten APT 88.5% FOB US$320/mtu vs US$320/mtu
China Graphite Flake -194 FOB US$880/t vs US$880/t
Europe Vanadium Pentoxide 98% 7.9/lb vs US$7.9/lb
Europe Ferro-Vanadium 80% 33.25/kg vs US$33.25/kg
China Ilmenite Concentrate TiO2 US$323/t vs US$325/t
Spot CO2 Emissions EUA Price US$91.5/t vs US$94.8/t
Brazil Potash CFR Granular Spot US$530.0/t vs US$530.0/t
Battery News
Hydrogen - Alice Harrison, at Global Witness, said hydrogen heating was “like making dog food with caviar, in that it’s impossibly expensive and in limited supply” (FT).
Ford & CATL considering JV on Michigan EV battery plant
- Bloomberg reports Ford and top Chinese lithium-ion battery manufacturer CATL are considering building a battery plant in Michigan or Virginia.
- The facility will make lithium iron phosphate batteries (LFP) for Ford's electric models.
- Ford would own 100% of the plant while CATL would operate the factory and own the technology to build the cells – allowing the facility to qualify for production tax credits under the U.S. Inflation Reduction Act.
- Rising battery raw material costs is leading to the higher adoption of lower cost chemistries such as LFP, though these cells typically weigh more and have less energy density per kilogram.
- Figures released yesterday by Bloomberg show LFP material costs $19,700/t, while NMC 811 material costs $48,500/t.
- On an annual basis, material costs for all EV battery chemistries are up at least 50% year-on-year.
Northvolt (Private) appoint ex-SAP chief executive as Chairman
- Northvolt have appointed Jim Hagemann Snabe, chair of Siemens and former chief executive of software company SAP as its next chair.
- The company’s first gigafactory came online in Sweden late last year and looking to ramp up to 60GWh – enough to supply 1m EVs per year.
- After its two facilities in Sweden, Dwa and Ett, the company is reportedly considering building its next factory in Germany or the US.
Company News
Bluerock Diamonds PLC (AIM:BRD)* – 5.5p, Mkt cap £2.3m – BlueRock plant confirms 90,000tpm throughput is achievable as strip ratio falls to just 1:1
- BlueRock report the attainment of some key milestones through the past quarter as the new management team sort the mine out.
- A two month test of the Kareevlei process plant confirms throughput of around 90,000t per month is achievable with no significant loss of in wet weather.
- “Replacement of the grids and other components in the plant should increase throughout and improve reliability and quality (size) of diamond production.”
- If the mine were to process 90,000tpm grading 4.4cpht at $400/ct sales would be 47,520cts worth $19m for the year.
- Our current modelled assumptions are for 69,198tpm grading 3.8cpht at $400/ct for $12.6m
- Costs: management carried out a detailed review on costs and have identified areas where costs can be further reduced. Costs are a key area of concern given higher fuel prices through 2022.
- Strip ratio: the strip ratio fell to 1:1 from 4.3:1 which is great news from a mining cost and efficiency perspective.
- Grade: grades recovered to 4.4cpht through the quarter.
- Larger stones: BlueRock recovered a 10.2ct diamond in the quarter. The board has also decided to only announce the specific value of larger diamonds which fetch >$50,000 on tender going forward.
- BlueRock sold three larger rough diamonds in the November tender;
- 10.19ct for $101,947 at $10,001/ct
- 8.77ct for $68,000 at $7,753/ct
- 8.59 for $85,000 at $9,892/ct.
- Attempted diamond heist: An attempted diamond heist of the Kareevlei diamonds being transported to Kimberley was intercepted with no loss or injury. Security has been enhanced.
- Diamond prices: prices softened in the second half according to Rapaport though experts ‘anticipate a release of pent-up’ demand from Chinese consumers as Beijing releases its zero covid policy.
- China has just woken up to a very substantial decline in its birth rate and we suspect has dropped its zero covid policy due to concerns over its worsening demographics than other factors.
- 0.50ct prices fell 1.5% mom and 9.5% yoy while 1.0ct diamond prices fell by 3.18% mom and 5.6% yoy. Lower unit production costs combined with higher margins for retailers selling ‘lab-grown’ diamonds is also thought to be eating into demand for natural diamonds.
- Loan note: Discussions are ongoing with Tim Leslie and M Poole for the repayment of the loan note due 16 October 2022.
- Debt: BlueRock currently owe ZAR55m to Teichmann which is ZAR25m over the agreed ZAAR30m facility.
- TZA, the contractor has not exercised its rights in the event of a breach and there are ongoing discussions with TSA to obtain further support to enable Kareevlei to continue operating.
Conclusion: Gary Teichmann and his team are working hard to make the Kareevlei diamond mine work. We look forward to further positive news through December and into the new year.
*SP Angel acts as nomad and broker to Bluerock Diamonds. The analyst holds shares in BlueRock Diamonds.
Horizonte Minerals PLC (AIM:HZM, TSX:HZM, OTC:HZMMF) 144.5p, Mkt Cap £381m – Confirmation that the Araguaia ferronickel project remains on schedule and budget
- Horizonte Minerals has confirmed that construction of its Araguaia ferronickel project in Brazil is approximately 28% complete and with the project remaining on schedule to deliver initial production in Q1 2024.
- The company also verifies that the project construction is on budget “with approximately 75% of capital expenditure, over US$415m, awarded to date”.
- Among the elements of the project, Horizonte Minerals says that “construction of the main 125 kilometre, 230kV powerline to power the process plant, is advancing along four work fronts. Pre-assembly of the tower structures is ongoing with drilling and concreting of the tower foundations progressing to schedule. Construction of the main substations at the mine site and connection point has commenced”.
- Civil engineering activities include the completion of “the reinforced primary crusher wall” as well as the “electric arc furnace foundations … [and ] … the furnace baseplate, which is already on site, is due to be mounted in the coming weeks, marking the beginning of the electro-mechanical instillation phase”.
- In parallel with the construction, Horizonte Minerals is progressing its environmental programme with “over 140 individuals of 55 … [animal]… species …rescued … [and relocated] … through this program”.
- Efforts to conserve plant species though the collection of seedings and seeds are supported by the expansion of the “biodiversity conservation centre” … [is now] … largely complete … [and expected] … to deliver 50,000-60,000 native tree seedlings per year for rehabilitation and the generation of new green corridors”.
- The company’s training programme for local workers “has delivered over 20 accredited training courses (12 completed to date), with over 200 graduates, 32% of whom are female and 14% are youth. In just seven months since inception” and 28 of the programme’s graduates are now employed at Araguaia.
- Welcoming the progress, CEO, Jeremy Martin, said that “Araguaia is expected to bring significant social and economic benefits to our host communities and local stakeholders” and also said that “We are also very pleased to have drawn from the Senior Debt facility, a core part of the overall funding package of Araguaia”.
Conclusion: Accelerating progress at Araguaia maintains the project timetable for initial production in early 2024 while remaining on budget
Kobold Metals (Private) – Kobold invests $150m into Mingomba jv with EMR Capital
- Kobold Metals is investing $150m in a joint venture on the Mingomba project in Zambia with EMR Capital.
- Mingomba, which is located on the boarder with the DRC on the Zambian Copper Belt just north of Chingola is said to host the world’s highest-grade undeveloped large deposit of copper
- EMR estimate Mingomba contains 247mt grading 3.64% copper for some for 9mt of contained copper and a potential production rate of some 160,000tpa.
- The EMR Capital team is run by Owen Hegarty who founded Oxiana which developed the Sepon mine in Laos before merging with Zinifex in 2008 to become OZ Minerals.
- EMR Capital which also operates the Lubambe copper mine in Zambia amongst other assets in Australia the US, Chile the UK, Spain and Indonesia.
Pilbara Minerals Ltd (ASX:PLS) A$4.03, Mkt Cap A$12bn – Pilbara sells 5.5% spodumene concentrate shipment at US$7,552/dmt eq. $8,299/dmt for 6% SC6
- Pilbara sold two cargoes for a combined total of 10,000dmt via its digital Battery Material Exchange, with deliveries expected from late January 2023.
- Last month, Pilbara accepted a pre-auction bid for a spodumene concentrate cargo of US$7,805/dmt for a shipment of 5,000dmt on a 5.5% basis.
- We note the company’s cash balance of A$1.4bn at 30 September 2022.
Red Rock Resources PLC (AIM:RRR) 0.34p, Mkt cap £5m – US$0.5m exploration funding
- Red Rock Resources, which is exploring for gold in Kenya, DRC and Burkina Faso as well as near Ballarat in Australia, reports that a US-based institutional investor, Diversified Metals Holdings, is to make an initial investment of US$0.5m.
- “Following this initial subscription … [Diversified Metals Holdings] … may make an additional advance of US$1,000,000 … within the next 18 months”.
- Welcoming the investment, “especially given the headwinds facing natural resource exploration companies generally at present” Chairman, Andrew Bell confirmed that “the Agreement does not obligate the Subscriber to make further subscriptions beyond the initial subscription, the Subscriber is incentivised to fund additional amounts under the Agreement, and once an investment decision is made, the Agreement facilitates that process”.
- Mr. Bell said that Red Rock Resources “is at an important juncture, as it awaits the signing of the arbitral award in the Democratic Republic of Congo, where it seeks from the buyer of certain assets partially owned by the Company, $7.5m of the consideration due to be paid. The Company separately seeks the enforcement of its existing judgment for $2.5m against its former partner in respect of that portion of consideration already paid” and he expressed confidence in a positive outcome for the company.
Thor Mining PLC (AIM:THR, OTC:THORF, ASX:THR) 0.28p, Mkt Cap £8.1m – Assay result from Ragged Range amended following QAQC error at laboratory
- Thor Mining has announced that an assay result from its reconnaissance reverse-circulation (RC) drilling programme at the Kelly’s prospect in the Ragged Range project in the eastern Pilbara, WA which was reported, on 4th November as a 4m wide intersection between 194-198m depth averaging 12.2g/t gold in hole 22RC052 was erroneous and “has subsequently reported <0.01g/t Au”.
- The company explains that the error resulted from an internal standard sample at the Bureau Veritas Kalgoorlie laboratory being accidentally swapped with the test sample in an error in the Quality Assurance / Quality Control procedure at the external laboratory.
- Thor Mining says that the “information for this error, which was supplied by email from the Bureau Veritas Kalgoorlie Laboratory to Thor, is stated as:
- "We found the cause of the elevated Au in this sample to be due to a sample swap with an internal standard from a second batch that was assayed in the same fire as the third batch of RRRC0052
- containing RRRC003867. Unfortunately, due to human error at the QAQC stage this swap was not picked up during the initial assays resulting in the erroneous result being reported."
- Commenting on the original, erroneous, result Thor Mining says that “Based on the location down the hole of the intercept (contact between Euro Basalt and Porphyry), the position of the intercept relative to the historic drill intercept 1.52m @ 22.97g/t Au DDHK2 and the high-grade nature of the historic intercept, plus visible sulphide-rich quartz chips; there was no reason for Thor to question this assay result”.
- The company also says that it “considers this is not an acceptable practice by the laboratory, for the original Au error but also the delay in reporting the error to Thor”.
- Thor Mining says that “Bureau Veritas is re-assaying … [the] … full sample batch (relating to 22RRC049 to 22RRC052) to ensure accuracy and integrity of data. We anticipate these results in January 2023”.
- Bureau Veritas is an established and well-regarded, widely used laboratory and the events reported by Thor Mining will, no doubt, have prompted a tightening of its internal procedures.
Conclusion: We recognise that even the most rigorous QAQC protocol cannot fully eliminate human error in the assay process and we commend Thor Mining for its prompt action. No doubt difficult conversations have occurred with the laboratory and we await the results of the re-assay in January.
Tungsten West PLC (AIM:TUN) – 15p, Mkt cap £26.6m – Environment Agency grants licenses at Hemerdon
- Tungsten West reports that the UK Environment Agency (EA) has granted a permit for the Mine Waste Facility at the Hemerdon tungsten mine in Devon and that the EA has also awarded an Open Pit Water Abstraction Licence.
- The company says that “Two further abstraction permits … [are] … expected in early 2023 … [and that an] … Updated Mineral Processing Facility permit, taking into account the revised processing plan in the new Feasibility Study, is on track and is progressing through the approval process”.
- The awards announced today are “two of the four permits required to restart mining at the Hemerdon Mine” and the Mineral Processing Facility permit and the remaining abstraction licence are both expected in Q1 2023.
- Executive Vice-Chairman, Mark Thompson, confirmed Tungsten West’s commitment “to upholding and adhering to international best practice in mining operations, environmental conservation and safe working practices … [and said that the] … approval of these two key permits demonstrates continued significant progress for the Company on its journey in recommencing production at Hemerdon”.
Conclusion: Approval of two of the four key permits required for the resumption of production at Hemerdon helps to open the way for the reopening of the mine in the second half of next year. We await the award of the remaining two licences and the outcome of the updated feasibility study for the reopening of the Hemerdon tungsten mine with interest.
Vulcan Energy Resources (ASX:VUL) A$6.52, Mkt Cap A$935m – Vulcan delays output target by a year on supply chain issues
- Vulcan Energy’s chief executive told Reuters this week that he expects 40,000 tonnes of lithium hydroxide output reached by the end of 2026 rather than 2025 as first announced amid supply chain problems currently affecting global markets.
- The company now expects to extract 18,400t of lithium in its first year of operation in 2025 which follows a DFS expected in early 2023.
- Vulcan has made progress this year developing its in-house sorbent technology (VULSORB™), with variations of sorbent tech used by other brine producers including Albemarle for the extraction of lithium from high-grade brines in the Atacama. Albemarle acquired Sorbent Technologies in 2008 for $22.5m.
- The sorbet acts like a molecular sieve material to adsorb target elements from gasses or liquids and enables lithium to be extracted from high-grade brines.
- The sorbent enables the production of a pure lithium chloride eluate which can be further converted into lithium hydroxide through electrowinning.
- Brines need to be pre-treated to reduce sorbent destruction, to generate the best PH, salinity and heat for optimal lithium recovery.
- Vulcan claims to improved performance and lower water consumption with its it’s proprietary sorbent technology versus other commercially available sorbents as tested by the Company on live brine from it’s geothermal energy plant at Natür3lich Insheim.
- Vulcan also claim the manufacturing process for it’s sorbent material is environmentally benign with many of the reagents recycled and the potential for Vulcan to use its own lithium to make future sorbent once in production.
- The company claims to produce a high grade, low-impurity lithium hydroxide (LiOH) from its pilot plant.
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*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 - LME
Oil Brent - ICE
Natural Gas, Uranium, Iron Ore - NYMEX
Thermal Coal - Bloomberg OTC Composite
Coking Coal - SSY
RRE - Steelhome
Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite - Asian Metal
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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%