SP Angel . Morning View . Thursday 19 01 23
Copper hits $9,500/t on reports of traders buying up physical metal
MiFID II exempt information – see disclaimer below
BHP Group Ltd (LSE:BHP, ASX:BHP) – Operations review leaves production and cost guidance intact after H1 delivers record iron ore production
Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) – Sukari meets 2022 production and cost guidance and looks to increase production in 2023
Kodal Minerals PLC (AIM:KOD)* - BUY – CLICK FOR FLASH NOTE - Hainan Mining agrees to fund Kodal’s Bougouni lithium project for $100m + $17.75m subscription in shares at 0.5p
Kore Potash PLC (AIM:KP2, ASX:KP2, JSE:KP2)* – BUY, 5.0p Expect financing proposal to cover the full cost of building the Kola potash mine and associated infrastructure
Resolute Mining Ltd (ASX:RSG, LSE:RSG) – Resource expansion at Syama North
Scotgold Resources Limited (AIM:SGZ) – Review of 2022 operations and 2023 guidance
Copper retreat from $9,500 in volatile trading on speculative positioning and China optimism
- A series of major short positions were liquidated yesterday on copper futures market, causing a surge in buying and taking the LME price past $9,550/t in volatile trading.
- Prices have since retreated to $9,250/t but remain strong following a swing into backwardation as Chinese buying pressures limited exchange inventories, still hovering close to 15 year lows.
- Shanghai prices have risen 4% this year vs LME’s 8%, with Chinese copper smelters moving to export more refined supply as logistics remain strained by soaring Covid cases.
- Positive demand boosts continue in China, with a major record spending budget approved in China for investment into the State electricity grid.
- The deterioration of China’s property market has seemingly reached a trough, with quarterly housing sales improving from a 60% yoy fall in Q2, 2022 vs a Q4 yoy change in 2022 of -28%.
- Home sales by value fell 27% in 2022 yoy, with real estate development investment falling 10% and residential investment falling 9.5% yoy.
- A peak in pessimism has been followed by China’s rapid reopening and a swathe of stimulatory announcements from Beijing to shore up both the economy and the property sector, with metals rallying since November as a result.
- The Australian Dollar, traditionally a leading indicator of Chinese growth, has also rallied since November.
- Trafigura has taken a large supply of LME warehouse stocks, according to Reuters.
- However, copper stockpiles on ShFe are at their highest level since March, the Yangshan copper cathode premium has fallen 80% since October and Chinese fund managers remain relatively neutral vs bullish foreign funds.
- Antofagasta reported a 10% fall copper production last year at 646,200t with output expected at 670,000-710,000t this year and $1.9bn of capex spend to get there.
- Trafigura is reported to be planning on taking copper off the LME and is possibly behind the 26,000t of cancelled warrants. LME physical copper stocks are at 83,325t worth around $800m
- Antapaccay (Glencore) copper mine in Peru operating at reduced capacity due to road blockades and political protest with no concentrate exports
- Antapaccay should have produced some 155,000t of copper last year
- Las Bambas has also seen transport of concentrates impacted by intermittent blockades, while last week, Minsur also temporarily suspended operations at its San Rafael mine..
Chilean Government votes against $2.5bn iron ore project over environmental concerns
- Chile’s government ministers have rejected Andes Iron’s Dominga project over the ‘unique ecological value’ of the area.
- Local Delano and Garces families are looking to appeal against the decision.
- President Boric has his ‘green agenda’ at the core of his government’s policy, with the decision a reflection of that.
- Chilean business authorities have expressed their concerns over the decision, with the project anticipated to produce 12mt of iron conc. and 150koz Cu conc. pa.
Gold holds strength on weak retail sales and further hopes of Fed slowdown
- Gold prices have held the $1,915/oz mark as US Treasury yields weaken again on trader bets of cooling Fed rate hikes.
- US retail sales fell alongside producer-price inflation in the most recent round of data yesterday.
- Further recessionary signals are fuelling Treasury bond buying, pushing down yields and supporting gold prices, which bear no interest.
- Despite gold’s price strength, ETFs cut holdings for the 8th straight day, suggesting profit taking, with ETFs slicing 0.2% this year to 93.9mt vs a 5% rally in prices.
Peruvian demonstrators march on Lima on calls for ‘Great National Protest’ to topple new President
- Peruvian farmers are calling for the resignation of new President Boluarte following weeks of demonstrations.
- Peru has been gripped by instability since Castro was removed in early December.
- Protests in the South are disrupting mining operations, with inventories building up as transportation links face disruptions.
Aluminium giant Alcoa (NYSE:AA) bullish on metal demand on the back of China reopening
- Alcoa’s CEO notes China’s reopening ‘really does bode well for demand’ of metals, on a call with analysts yesterday.
- The Company hopes the combination of looser Covid restrictions and property stimulus measures should provide a strong tailwind for metals prices this year.
Dow Jones Industrials -1.81% at 33,297
Nikkei 225 -1.44% at 26,405
HK Hang Seng -0.21% at 21,633
Shanghai Composite +0.49% at 3,240
Economics
US - MBA mortgage applications index shows notable increase on last week
- December PPI fell -0.5% beating the consensus
- Core PPI also fell 0.1%
- Retail sales fell -1.1%
- Sales ex-auto fell 1.1% in December
China – Premier Li comments at Davos suggest the nation might move towards more normal economic policies aligning while engaging the West bodes
- As always we wait to see what they do and take Li’s Davos comments with a large pinch of salt.
Japan - BoJ kept interest rates the same by unanimous vote
Germany - German economy is now expected to contract by 0.3% this year (BDI industry association).
- German government is looking for 0.2% growth
- Government also forecasts inflation at 6.0% in 2023 vs previous forecast of 7.0%.
- German investor sentiment (ZEW) climbing into positive territory in January for the first time since the war, rising to +16.9 from -23.3 in December.
Currencies
US$1.0817/eur vs 1.0848/eur yesterday. Yen 128.32/$ vs 129.69/$. SAr 17.153/$ vs 16.952/$. $1.234/gbp vs $1.233/gbp. 0.690/aud vs 0.703/aud. CNY 6.776/$ vs 6.760/$.
Dollar Index 102.25 vs 102.23 yesterday.
Commodity News
Precious metals:
Gold US$1,915/oz vs US$1,913/oz yesterday
Gold ETFs 93.9moz vs US$93.9moz yesterday
Platinum US$1,045/oz vs US$1,050/oz yesterday
Palladium US$1,724/oz vs US$1,758/oz yesterday
Silver US$23.52/oz vs US$24.23/oz yesterday
Rhodium US$12,250/oz vs US$12,250/oz yesterday
Base metals:
Copper US$ 9,255/t vs US$9,434/t yesterday
Aluminium US$ 2,616/t vs US$2,642/t yesterday
Nickel US$ 28,435/t vs US$27,945/t yesterday
Zinc US$ 3,361/t vs US$3,354/t yesterday
Lead US$ 2,173/t vs US$2,220/t yesterday
Tin US$ 28,450/t vs 0US$28,585/t yesterday
Energy:
Oil US$84.2/bbl vs US$86.9/bbl yesterday
Natural Gas US$3.283/mmbtu vs US$3.471/mmbtu yesterday
Uranium UXC US$49.50/lb vs US$49.50/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$123.8/t vs US$121.6/t
Chinese steel rebar 25mm US$620.8/t vs US$622.3/t
Thermal coal (1st year forward cif ARA) US$176.0/t vs US$170.0/t
Thermal coal swap Australia FOB US$328.0/t vs US$330.0/t
Coking coal swap Australia FOB US$317.0/t vs US$313.0/t
Other:
Cobalt LME 3m US$49,000/t vs US$49,000/t
NdPr Rare Earth Oxide (China) US$106,623/t vs US$106,874/t
Lithium carbonate 99% (China) US$66,040/t vs US$66,195/t
China Spodumene Li2O 5%min CIF US$5,970/t vs US$5,970/t
Ferro-Manganese European Mn78% min US$1,336/t vs US$1,340/t
China Tungsten APT 88.5% FOB US$325/mtu vs US$325/mtu
China Graphite Flake -194 FOB US$885/t vs US$885/t
Europe Vanadium Pentoxide 98% 9.0/lb vs US$9.0/lb
Europe Ferro-Vanadium 80% 36.75/kg vs US$36.75/kg
China Ilmenite Concentrate TiO2 US$343/t vs US$344/t
Spot CO2 Emissions EUA Price US$84.0/t vs US$84.2/t
Brazil Potash CFR Granular Spot US$510.0/t vs US$510.0/t
Company News
BHP Group Ltd (LSE:BHP, ASX:BHP) 2,764p, £59bn – Operations review leaves production and cost guidance intact after H1 delivers record iron ore production.
- In its operational review for the 6 months to 31st December 2022, BHP confirms its existing production and cost guidance from what it describes as continuing ‘reliable operational performance’ during the second quarter of its financial year.
- CEO, Mike Henry confirmed that the Western Australian Iron Ore operations (WAIO) “delivered record production for the half year through strong supply chain performance, supported by the ongoing ramp-up at South Flank”.
- He also commented that the copper operation at Escondida in Chile increased output “despite road blockades in Chile in the December quarter” and that the copper operation at Spence “continued to ramp up”, while “Olympic Dam's ongoing smelter performance saw near-record material processing and record gold production”.
- Commenting on the wider industry context, Mr. Henry said that “BHP believes China will be a stabilising force when it comes to commodity demand in the 2023 calendar year, with OECD nations experiencing economic headwinds. China's pro-growth policies, including in the property sector, and an easing of COVID-19 restrictions are expected to support progressive improvement from the difficult economic conditions of the first half. China is expected to achieve its fifth straight year of over 1 billion tonnes of steel production.”
- During the half year to 31st December WAIO delivered a 2% increase in production compared to 2021 of 129.7mt with the company’s guidance for the full year to June 2023 remaining intact at 246-256mt.
- The record output of WAIO is attributed to “continued strong supply chain performance, including improved car dumper utilisation, and lower COVID-19 related impacts than the prior period … partially offset by wet weather impacts in the September 2022 quarter”.
- BHP confirms that the ramp-up of the South Flank operation to its 80mtpa capacity “by the end of the 2024 financial year remains on track”.
- Copper production over the six months rose by 12% compared to last year to 834,400t dominated by 510,700 from Escondida with Pampa Norte, Olympic Dam and Antamina contributing 147,300t, 104,100t and 72,300t respectively.
- Full year copper production guidance remains intact in the range 1,635,00-1,825,000t although the company indicates that Escondida is expected to produce at the “Low end” of the expected 1,080,000-1,180,000t range “as a result of lower than expected concentrator feed grade and throughput. Production is weighted to the second half of the year, with concentrator feed grade expected to improve compared to the December 2022 half year”.
- The company says that, at the Spence copper operation, “we continue to closely monitor previously identified Tailings Storage Facility (TSF) anomalies. We have reduced the volume of water in the tailings facility and continue to work with the local regulatory agencies, including on the implementation of a remediation plan for the TSF. The SGO concentrator continues to operate with no impact to production or market guidance. Spence is expected to reach an average of approximately 270 ktpa of production for four years”.
- Metallurgical coal production “production increased by five per cent to 14 Mt (27 Mt on a 100 per cent basis) driven by an improvement in underlying truck productivity, in particular for the autonomous fleets following completion of the transitions at Goonyella and Daunia”.
- While confirming that it is maintaining its metallurgical coal production guidance for the year in the range 29-3tmt, BHP says that “Full year production is trending to the low end of the guidance range … as a result of significant wet weather”.
- Wet weather also adversely affected the production of thermal coal which declined “by 24 per cent to 5 Mt” with “continued labour shortages … [and] … planned wash plant maintenance during the December 2022 quarter” also contributing to the reduced production levels.
- BHP spent US$156m on exploration over the six months with initial “greenfield exploration activities in southern Colombia” and continuing exploration “in Australia, Canada, Chile, Ecuador, north-west Mexico, Peru and the south-west United States”.
- Among the exploration projects highlighted, BHP says that it has deployed six drilling rigs at the Oak Dam project in Australia as it moves to the “next stage resource definition” and has “acquired a 19.9 per cent interest via a placement in Brixton Metals, providing exposure to a large block of ground prospective for copper in northern British Columbia, Canada” while it has terminated its earn-in agreement with Luminex “over the Tarqui copper project in Ecuador“.
- Comment on its corporate portfolio highlights the agreement, yet to be ratified by shareholders but endorsed by Oz Minerals’ board, to acquire Oz Minerals, which owns the Carrapateena copper project in South Australia and on its continuing support of the Kabanga Nickel project in Tanzania where it will now own a 14.3% interest with an option to increase its stake to 51%.
Conclusion: BHP reports a solid H1 of its FY 2023 with production guidance maintained across all commodity products and record H1 output from its WA iron ore operations. BHP says that it expects China to exceed 1bnt of steel output for the fifth consecutive year and more widely to acta as a stabilising force in global commodity demand.
Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) 112.5p, Mkt Cap £1,350m – Sukari meets 2022 production and cost guidance and looks to increase production in 2023
- Centamin reports that its Sukari mine in Egypt produced 109,564oz of gold during the 3 months to 31st December 2022 brining full year output to 440,974oz and achieving the company’s full year guidance in the range 430-460,000oz.
- Quarterly costs of US$997/oz on a cash basis and of US$1,445/oz on an all-in-sustaining (AISC) basis bring annual cash costs to US$913/oz and AISC to US$1,399/oz meeting the guidance range of US$900-1,000/oz on a cash basis and AISC range of US$1,275-1,425/oz.
- Capital expenditure during the year of US$224.3m included “the commissioning of the 36Mw Sukari solar plant” and the “underground transition to owner-operator, accelerated open pit waste stripping campaign and Sukari mining concession exploration”.
- Centamin indicates that during 2023 it expects to produce between 450-480,000oz of gold, weighted towards H2, at a cash cost of between US$840-990/oz and AISC between US$1,250-1,400/oz and to incur capex of US$225m.
- The company attributes the 2% production increase in Q4 mainly to “the transition to owner mining in the underground and improved flexibility in the open pit” while explaining that lower Q4 output compared to Q3 “was as per the mine plan and reflected the mining in higher grade areas of the underground in Q3”.
- In the open-pit, the total volume of ore and waste moved “in Q4 increased by 20% YoY to 36.4Mt (FY: 136.4Mt) a new quarterly record, resulting from improved productivity, as well as increased waste moved as part of the accelerated waste stripping programme”.
- Underground operating performance improved during Q4 “as the new underground equipment was delivered and commissioned” with 233,000t of ore production at a grade of 4.25g/t gold representing “a 61% increase in ore tonnes YoY and a 14% decrease in grade YoY”.
- The underground ore mined included 138,000t of ore from stopes at a grade of 5.79g/t and 95,000t of development ore at 2.01g/t gold with ore sourced from the Ptah, Amun, Horus and Bast zones.
- The Sukari plant treated 3mt of ore at an average grade of 1.23g/t gold during the quarter bringing the total for the full year to 12.1mt at an average grade of 1.26g/t which was an “11% increase YoY reflecting the higher open pit and underground grades mined over the period”
- Recovery rates of 88.6% for the quarter and of 88.2% for the full year are “in line with budget”.
- During the year, Centamin spent a total of US$12.2m on exploration within the Sukari concession “focused on the development of additional Mineral Resources … that can be converted to Mineral Reserves and incorporated into the mine plan in the shortest timeframe”.
- Exploration at Sukari resulted in “a second year of reserve growth” with a Proven and Probable reserve of 163mt at an average grade of 1.1g/t gold containing 6moz of gold within an overall measured and indicated resource of 11.1m oz (320mt at a grade of 1.08g/t) announced in December 2022.
- Elsewhere, a pre- feasibility study for the Doropo project in Cote d’Ivoire is expected to be completed in H1 2023 based on an indicated resource of 2.5moz of gold contained within 51.2mt at an average grade of 1.52g/t.
- Centamin confirms that it “is in a strong financial position, with net cash and liquid assets to US$156.6 million as at 31 December 2022, and after the distribution of US$28.5 million in interim dividends … [and that it] …. remains unhedged”.
Conclusion: Centamin’s Sukari mine achieved its 2022 guidance and is looking to build on this with marginally increased levels expected in 2023 as it moves to owner operation of the underground mine and improved efficiency in the open pit.
Kodal Minerals PLC (AIM:KOD)* 0.36p, Mkt Cap £61m – Hainan Mining agrees to fund Kodal’s Bougouni lithium project for $100m + $17.75m subscription in shares at 0.5p
BUY
(Kodal Minerals holds 100% of the Bougouni lithium project. The Mali government has the right to a free carry on 10 of the project and an option to acquire a further 10%)
- Kodal Minerals has accepted an offer by Hainan Mining for $100m of funding for their wholly-owned Bougouni lithium project in Mali.
- Fosun holds a 45.9% stake in Hainan Mining alongside the province of Hainan which holds around 20% of the company.
- The $100m investment is being made into a new joint venture vehicle which will be 51% owned by Hainan with the work being managed by Kodal Minerals.
- $100m is more than sufficient to advance the DMS ‘Dense Media Separation’ plant being planned by Kodal.
- Capex for the DMS is estimated at $65m leaving $35m to working capital, further extension drilling, related exploration and cover cost overruns etc….
- The DMS will start processing material from the Ngoualana resource which has separated well in DMS testing.
- The Bougouni license area contains multiple pegmatite veins offering ample opportunity for further discovery.
- Bougouni joint venture: the new Bougouni joint venture will be managed by Steve Zaninovich (Kodal operations director) who will run the day-to-day activities and oversee the construction of the DMS plant.
- Subscription: Hainan have also agreed to subscribe for $17.75m worth of Kodal Minerals shares at a 108% premium to last night’s share price giving Hainan a 14.8% stake in Kodal Minerals.
- Suay Chin also have a right to also subscribe for shares to maintain their 14.18% stake in Kodal Minerals rather than being diluted down by Hainan.
- Kodal will use the $17.75m to further define and explore their gold portfolio as well as assess other opportunities in the region.
- Construction: The new DMS plant should take around 12 months to complete with geotechnical drilling already underway for the plant foundations.
- Production: Hainan have tested some 600kg of spodumene samples in China as part of their due diligence
- Timing: The $100m of funds are expected to be paid into the new joint venture with the subscription for $17.75m worth of new shares paid at the same time. The long-stop date for the payment is 30th April.
- Conditions: The deal is subject to the creation of the internal reorganisation of Kodal Minerals to put the Bougouni asset into the joint venture subsidiary Kodal Minerals UK and Approvals from the Chinese government. The scale of the deal is relatively small by international mining standards and we think this should require approval at the regional level.
- Project value: .
- Modelling shows >$1bn of revenues over 4 years .
- NPV $420m at a 7% discount rate on a post-tax basis.
- Assumes: Lithium price of $2,080/t spodumene concentrate.
- Production of 120,000tpa
- Trucking: 10 trucks carrying 350t per day at a cost of under $100/t
Conclusion: The Hainan deal highlights the desperation of lithium processors and their client Gigafactories to lock in lithium supply. Kodal’s decision to go for a quick 12-month DMS plant has attracted >$100m of financing with a don’t-spare-the-horses deal to get lithium concentrates to China for further processing. This is a great deal for Kodal and is also a great deal for Hainan which is locking in yet another supply source for China Inc.
*SP Angel acts as financial advisor and broker to Kodal Minerals.
Kore Potash PLC (AIM:KP2, ASX:KP2, JSE:KP2)* 0.78p, Mkt Cap £26m – Expect financing proposal to cover the full cost of building the Kola potash mine and associated infrastructure
BUY – 5.0p - Click for research note pdf
- Kore Potash report ongoing progress with respect to the potential financing of the Kola potash project in the Republic of Congo.
- The discussions are said to be progressing in line with the MOU signed with the Summit Consortium in April 2021.
- Contractual terms are being negotiated prior for the EPC ‘Engineering, Procurement and Construction’ proposal for the construction of Kola by SEPCO.
- “The financing proposal for the full construction cost of Kola is expected to be provided by the Consortium following agreement on the EPC contract terms that the Company is currently finalising with SEPCO.”
- “On 19 October 2022, the Company announced receipt of correspondence from the Minister of Mines of the RoC (the " Minister ") expressing discontent with the progress towards construction of the Kola Project. The letter was received following the arrest and subsequent release, without charge, of two senior employees of the Company by the Congolese police. Neither the employees nor the Company have been informed of the reason for the arrests. The Company provided a response to the Minister on 11 November 2022. On 17 December 2022 the Company met in person with the Minister, and the discussion included a further update on the progress towards financing Kola. At the end of the meeting the Minister expressed his thanks for how the Company responded to his most recent letter and assured the Company of his and the RoC Government's ongoing support for Kore Potash and to develop the Kola Project.”
- Cash: the Company held US$5.0m in cash at end December.
- Offtake: The Kore Potash team are continuing offtake discussions with potential offtake partners who “could take all Kola production and who have expressed interest in partnering with the Company.”
- The team are currently updating the PFS to include a revised and optimised production target for the DX project and will advise on the results shortly.
- Investment: Kore invested US$1.1m in the three months to end December with US$729,000 on Kola and US$358,000 on the DX DFS Study.
*SP Angel acts as Nomad and Broker to Kore Potash
Resolute Mining Ltd (ASX:RSG, LSE:RSG) 14.18p, Mkt Cap £302m – Resource expansion at Syama North
- Resolute Mining has announced a 58% increase in the size of its mineral resources estimate at the Syama North project in Mali.
- The new estimate of 34mt at an average grade of 2.9g/t gold totals 3.18m oz of gold with approximately 58% (19.17mt at a grade of 3.0g/t) classified as ‘Measured and Indicated’ and the balance of 14.86mt averaging 2.8g/t ‘Inferred’.
- Resolute Mining confirms that the “Syama North gold deposit remains open down-dip over the entire 6km strike length. Diamond drilling is ongoing and expected to continue throughout 2023 to extend and increase Mineral Resource confidence in the deposit”.
- The drilling underpinning the estimate “has been restricted to zones within 150m of the surface to concentrate on identifying open pit extractable Mineral Resources. This was increased to 200m below surface at Central A21 where the bulk of the additional resources came from”.
- Resolute Mining says that it is currently conducting an engineering evaluation to assess “the potential of an open pit operation at Syama North … [and says that an] … open pit sulphide mining operation will complement the Syama Underground Mine and add 'flexibility' to the processing complex”.
- CEO, Terry Holohan, said that its infill drilling at Syama North “has exceeded our expectations and the drill rigs are still turning on this contiguous strike discovery of over 6km” and that the “mineralisation is close to the surface and adjacent to the areas we are currently mining”.
- He explained that the pre-feasibility enhancement study, due for publication in Q2 2023 “will initially focus on the wide zone within the A21 pit discovered in August 2022. This is a result of the recent grid drilling, which demonstrates the presence of a substantial block of mineralisation which should have a lower strip ratio than initially thought. It also remains open below the 150m depth limit drilled so far”.
Conclusion: The expansion of the Syama North mineral resource comes from shallow mineralisation close to existing mining operations and providing a broader range of feed options to the existing processing plant. Mineralisation remains open at depth along the entire 6km strike length of the Syama North project and drilling is continuing. We look forward to further insights when the pre-feasibility enhancement study is completed during Q2.
Scotgold Resources Limited (AIM:SGZ) 50p, Mkt Cap £29m – Review of 2022 operations and 2023 guidance
- The Company released its 2022 production figures along with its strategy and outlook for 2023.
- Scotgold missed its downwardly revised guidance of 2koz (down from 3.0-3.5koz) for Q4, producing 1.8koz in the quarter.
- Annual production came in at 8.6koz vs 2.6koz in 2021.
- 2023 guidance has been set at 11.5koz – 13.5koz.
- Operations: Grade mill feed for processing plant averaged 8.96g/t of gold for Q4 2022 and 10.35g/t in 2022, with recovery levels at 92% and 93% respectively.
- Scotgold notes that mining development “has continually increased as a result of improved availability of the mine fleet and capital works invested in 2022, including underground power and ventilation upgrades, resource definition and grade control drilling”
- More positively, mine design work completed in 2022 has allowed three development headings of mining, allowing the Company to drive to the first stope mining area planned for Q2 2023 as well as inclining to the 445 level to open even further development headings.
- The company is transitioning from tunnel development to long hole stoping, expected to commence in the western areas of the mine in Q2 2023 while further areas of long hole stope mining will open over 2023.
- Processing optimisation has resulted increased throughput of ore to increase gold recoveries while a tailings thickener project “will allow higher quality of tailings as well as further increased throughput of ore in the process plant once long hole stoping commences.”
- Outlook: Scotgold expect the 2023 mine plan will “facilitate predictability of higher gold grades and gold ounce production for the year” with a continued ramp up eventually achieving 2koz Au per month
- Scotgold is targeting an AISC of £610/oz in 2023 with the mine running an average grade through the processing plant of c.12g/t Au for the year.
- Funding: Lower production in 2022 means the company is working on additional funding to support delivery of 2023 mine plan.
- The Company's current cash balance is c.£350,000 with a net debt position of £12.6m.
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Analysts
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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%