Today's Market View - Atlantic Lithium, Celsius Resources, Empire Metals, and more...

SP Angel . Morning View . Monday 30 01 23

Markets go Risk Off with US FOMC rate rise due this week as China returns to work

MiFID II exempt information – see disclaimer below

Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* – Q4/22 update highlights successful ongoing infill and step out drilling at the Ewoya Lilthium Project

Celsius Resources Ltd (ASX:CLA)* – AIM Admission

Empire Metals Ltd (AIM:EEE)* – Copper anomalism confirmed Pitfield project in Western Australia

Ferro Alloy Resources (LON: FAR) – Balasausqandiq concentrate delivery problems increase expected net loss to $3.3m despite new nickel concentrate production

Galantas Gold Corp (AIM:GAL, TSX-V:GAL, OTCQX:GALKF)* – Gairloch Project webcast

Oriole Resources PLC (AIM:ORR)* – Rock chip sampling at district-scale licence package returns 134g/t Au

Orosur Mining Inc (AIM:OMI, TSX-V:OMI)* – Second Quarter Results for 2022/23

Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) – Maintaining full year production guidance despite the impact of power supply disruption in S Africa

Premier African Minerals Ltd (AIM:PREM) – Further drilling results and pilot plant progress report from the Zulu Lithium project, Zimbabwe

Sovereign Metals Ltd (ASX:SVM, AIM:SVML) – Consistent results from 191-aircore drill holes at Kasiya rutile project in Malawi

Copper prices ease from rally as China continues to ramp up buying

• Copper prices remain around $9,250/t having hit $9,500/t in recent weeks.
• China has seen strong copper buying, with 2022 imports of refined copper standing at 3.64mt, up 300kt vs 2021.
• Mined concentrate imports hit an annual record of 25.32mt and copper scrap imports hit their highest levels since 2018.
• However, visible inventories remain near 15 year lows, despite Shanghai copper inventories jumping markedly in the run up to Lunar New Year (tradition as buyers restock before the holiday period).
• Analysts suggest China’s copper demand through its severe lockdowns have been stronger than expected, despite a slumping property market. PMIs, although contracting, remain well above 2020 lows.
• Renewable energy is also stimulating a supportive demand driver, with major Beijing-backed stimulus directed at hydropower, solar and wind, driving demand for copper wiring.

Rio Tinto working with Australian authorities to try to find missing radioactive Caesium-137 capsule in Western Australia.

• Caesium-137 or radiocaesium, is a radioactive isotope is produced in nuclear fission of uranium-235 with trace quantities from spontaneous fission of uranium-238.
• It has a relatively low boiling point of 671 °C and volatilizes easily when released suddenly at high temperature, as at Chernobyl and can travel very long distances in the air.
• It spreads easily in the environment due to high water solubility making the loss of this capsule a major and extremely concerning incident.

Tin prices have broken through $30,250/t as Chinese traders buy physical stocks

• Tin prices have moved significantly higher in recent weeks as traders moved to secure stocks of available metal.
• Chinese imports of refined tin rose dramatically last year as the nation appears to be restocking supply
• Electric Vehicle and solar panel production are strong drivers for tin demand, particularly in China where the government continues to encourage growth.
• The ITA estimate the Solar industry consumed >22,000t last year
• Electric vehicles use around three times the tin of a conventional vehicle at around 1.2kg vs 0.4kg per vehicle
• The CPC, Chinese Communist Party, aims to turn Chinese industry towards more technological and advanced manufacturing indicating greater demand for tin for circuit boards
• The suspension of the San Raphael mine in Peru due to social unrest has cut available supply.
• Sanctions and unrest in Myanmar may also hamper tin concentrate shipments into China
• Chinese smelting capacity is likely to have been hit by the extended Lunar new year shutdowns
• Indonesia is proposing to ban the export of tin ingots to encourage the development of manufacturing in country
• Indonesia only consumes 5% of its tin production and the hard-line government is not pulling its punches when it comes to banning exports to encourage inward investment

Dow Jones Industrials +0.08% at 33,978

Nikkei 225 +0.19% at 27,433

HK Hang Seng -2.91% at 22,029

Shanghai Composite +0.14% at 3,269

Economics

US – FOMC meeting to be held this week with the announcement on rates due Wednesday.

• Estimates are for a 25bp hike taking rates to 4.50-4.75%.
• NFPs to follow on Friday with expectations for job growth to have slowed to 185k, down from 223k in December, along with a pullback in labour earnings growth rate (4.3% est. v 4.6% in December).

China – A rebound of travel over the Lunar New Year boosts growth outlook.

• Gasoline and jet fuel consumption increased during the week-long break after Covid Zero policy has been dropped in December, Bloomberg writes.
• Trips exceeded those in pandemic years (2021-2022), but were still below pre-virus levels.
• Domestic air travel was up 80%yoy with a total of 9mln trips made, 72% of pre-pandemic 2019 levels.

ECB – The Governing Council to hold a policy meeting this week with an expectation for the central bank to hike rates by 50 bp this Thursday.

• Money markets are pricing in the ECB rate to peak above 3.50% by the middle of the year, up from 2% currently.

Germany – The economy contracted in the final quarter as higher inflation and borrowing costs weighed on consumer and business sentiment.

• GDP fell 0.2%qoq in Q4/22, compared to 0.5% in the previous quarter, taking the annual to 1.1%yoy, down from 1.4% in Q3/22.
• 2022 GDP growth rate slowed to 1.9%, down from 2.6% in 2021.
• Chancellor Olaf Scholtz met with his counterparts in Argentina and Chile over the weekend to help secure additional supplies of lithium for the Germany’s auto industry, according to Bloomberg.
• GDP (%qoq): -0.2 v 0.5 (revised from 0.4) Q3/22 and 0.0 est.
• GDP (%yoy): 1.1 v 1.4 (revised from 1.3) Q3/22 and 1.3 est.

Spain – CPI dropped in January, albeit, the decline was lower than expected while the annual reading came in higher than forecast.

• Core CPI continued to increase hitting a record of 7.5% highlighting strengthening price pressures.
• Stronger than expected inflation numbers support the case for ECB to continue with tightening monetary policy.

India - Energy security threatened by low coal stocks

• Power plant coal stocks in India are currently equivalent to less than 12 days of consumption.
• Railways are struggling to boost capacity despite increasing demand from generators, with railway coal deliveries up <1% in Q4-2022 despite thermal coal generation increasing 7.3% yoy in the same period.

Currencies

US$1.0888/eur vs 1.0924/eur last week. Yen 129.91/$ vs 129.67/$. SAr 17.227/$ vs 17.072/$ $1.239/gbp vs $1.242/gbp. 0.708/aud vs 0.712/aud. CNY 6.749/$ vs 6.793/$.

Dollar Index 101.91 vs 102.01 last week.

Commodity News

Precious metals:

Gold US$1,922/oz vs US$1,943/oz last week

Gold ETFs 93.5moz vs US$94.3moz last week

Platinum US$1,012/oz vs US$1,039/oz last week

Palladium US$1,644/oz vs US$1,700/oz last week

Silver US$23.62/oz vs US$23.78/oz last week

Rhodium US$12,250/oz vs US$12,250/oz last week

Base metals:

Copper US$ 9,223/t vs US$9,350/t last week

Aluminium US$ 2,621/t vs US$2,655/t last week

Nickel US$ 29,485/t vs US$29,000/t last week

Zinc US$ 3,436/t vs US$3,490/t last week

Lead US$ 2,195/t vs US$2,209/t last week

Tin US$ 30,250/t vs US$30,715/t last week

Energy:

Oil US$86.2/bbl vs US$86.4/bbl last week

• Crude oil prices pulled back on Friday based on expectations that OPEC+ will leave crude production levels unchanged when they meet virtually on Wednesday.
• The US Baker Hughes rig count was unchanged at 771 rigs last week, with oil rigs down 4 to 609 units and gas rigs up 4 to 160 rigs, while the frac spread count is separately estimated at 258 crews (vs 265 last month).
• BP’s Energy Outlook 2023 highlights that the Russia-Ukraine war has increased the importance attached to addressing all three elements of the energy trilemma: security, affordability, and sustainability.
• The Outlook also anticipates that low-carbon hydrogen will play a critical role in decarbonizing the energy system, especially in hard-to-abate processes and activities in industry and transport.

Natural Gas US$2.663/mmbtu vs US$2.895/mmbtu last week

Uranium UXC US$50.50/lb vs US$50.25/lb last week

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$126.6/t vs US$125.3/t

Chinese steel rebar 25mm US$634.4/t vs US$619.6/t

Thermal coal (1st year forward cif ARA) US$146.5/t vs US$178.0/t

Thermal coal swap Australia FOB US$266.0/t vs US$255.0/t

Coking coal swap Australia FOB US$338.0/t vs US$335.0/t

Other:

Cobalt LME 3m US$49,000/t vs US$49,000/t

NdPr Rare Earth Oxide (China) US$107,048/t vs US$106,364/t

Lithium carbonate 99% (China) US$66,303/t vs US$65,880/t

China Spodumene Li2O 5%min CIF US$5,970/t vs US$5,970/t

Ferro-Manganese European Mn78% min US$1,344/t vs US$1,349/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$344/t vs US$342/t

Spot CO2 Emissions EUA Price US$94.3/t vs US$86.4/t

Brazil Potash CFR Granular Spot US$510.0/t vs US$510.0/t

Company News

Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* 41p, Mkt Cap £250m – Q4/22 update highlights successful ongoing infill and step out drilling at the Ewoya Lilthium Project

• The Company released quarterly operations update for the period ended Dec/22.
• The Company submitted a Mining License application for the Ewoya Lithium Mine to the Minerals Comission Ghana in October.
• The team completed 47,000m of infill and step out drilling focused on de-risking and further expanding the existing Ewoya MRE (30.1mt at 1.26% Li2O).
• Assay results for ~26,400m received during the quarter confirmed good mineralisation continuity helping to potentially convert Inferred tonnages into higher confidence category and ultimately expanding the life of mine.
• Drilling results outside of the current MRE showed wide high grade results across the Ewoya Main, Grasscutter East and West, Anokyi and Kaampakrom West deposits.
• Plant FEED contract was awarded to Primero Group, an industry leading engineering group that was engaged by a number of lithium developers (Pilbara, Core, Covalent, Sigma and Alliance), in December.
• Appointed Keith Muller as its new Chief Operating Officer and Roux Terblanche as Project Manager for the Project.
• Exploration and evaluation cash spend amounted to A$5.9m during the quarter with Piedmont Lithium covering A$4.8m with A$1.5 to be reimbursed in Q1/23 as part of the project earn in agreement.
• The Company held A$19.1m in cash and no debt as YE21.

*SP Angel acts as Nomad to Atlantic Lithium. An SP Angel mining analyst recently visited the Ewoyaa Lithium Project in Ghana

Celsius Resources Ltd (ASX:CLA)* 0.88p, Mkt Cap £14.8m – AIM Admission

• Celsius Resources reports its AIM Market Admission and first day of trading.
• The Admission “follows a placing by SP Angel Corporate Finance LLP ("SP Angel") for a total of 299,375,000 Ordinary Shares at 0.8p per Ordinary Share (the "Placing Price"), raising gross proceeds of £2.4m”.
• Celsius Resources is “currently in the advanced stages of securing its major mining permits as well as further feasibility work for its flagship Maalinao-Caigutan-Biyog (MCB) Project” in Luzon, Philippines.
• In December 2021, Celsius Resources issued a summary of its Scoping Study for the MCB project which envisaged the US$253m development of a 314mt JORC compliant resource averaging 0.48% copper and 0.15g/t gold at the MCB project generating an after-tax NPV of US$464m over a 25-year mine life processing 2.28mtpa of ore from underground mining.
• The scoping study, which is based on a copper price of US$4/lb (US$8,818/t) and a gold price of US$1,695/oz, describes mining higher grades during the initial ten years of the operation with copper averaging 1.14% and gold averaging 0.54g/t helping to deliver a 2.7-year payback and an average C1 net cash cost of copper production of US$0.73/lb.
• Managing Director, Peter Hume, explained that “We have attained great strides in progressing the MCB Project closer to operations. This can be attributed to the trust and support of the Balatoc Indigenous Cultural Community, the local and national government units and agencies, as well as our shareholders, in the potential of the project and the Company. With the imminent approval of our major mining permits, we will develop and showcase the MCB project as a model for Transformative Mining for our shareholders and stakeholders”.
• He also described the company’s Opuwo Cobalt Project in Namibia as “well positioned to benefit from the rising demand for battery metals”.

Conclusion: The AIM Admission starts a new chapter in the development of the 314mt MCB copper project which is expected to process an average of 2.28mtpa of ore for 25 years from a new underground mine in Luzon.

*SP Angel are acting as broker to Celsius Resources with respect to its AIM IPO.

Empire Metals Ltd (AIM:EEE)* 1.9p, Mkt Cap £7.9m – Copper anomalism confirmed Pitfield project in Western Australia

• Empire Metals announces surface sampling results from a December 2022 field programme, confirming an extensive copper anomalism at the Pitfield Copper Project south of Mt Scratch.
• Both soil and rock samples were collected alongside surface mapping of geological features.
• The Company reports the confirmation of a copper-in-soil anomaly, extended over a 4km south of historic Mt Scratch workings.
• Rock chip samples included highlights of:
• 17.88% Cu and 125.46 g/t Ag
• 4.63% Cu and 7.15 g/t Ag
• 0.65% Cu and 3.68 g/t Ag
• The Empire team suggests the above results point to Pitfield’s potential to host multiple sediment-hosted stratabound copper deposits.
• To follow up on today’s positive results, Empire is in the process of completing a third and final phase of geological mapping and soil sampling at the project for a more defined understanding of the structural geology. The Company expects to complete Dipole Induced Polarisation geophysical surveying this Quarter with the aim of developing a maiden drill programme at Pitfield.

*SP Angel acts as nomad and broker to Empire Metals

Ferro Alloy Resources (LON: FAR) 11.15p, Mkt cap £50m – Balasausqandiq concentrate delivery problems increase expected net loss to $3.3m despite new nickel concentrate production

• An update on the planned expansion of the existing processing plant treating purchased concentrates and the receipt of Kazakhstan grant funding for a vanadium electrolyte project
• Ferro-Alloy Resources report reduced output in Q4 due to delays in the delivery of concentrate to the process plant in December.
• Increased focus on new nickel concentrate production partially offset the shortfall lowering Q4 and January trading.
• Management have signed a new regular concentrate delivery contract with an additional supplier to help prevent a repetition of the recent lack of deliveries with the new contract starting in March
• Revenue of US$6.8m are expected
• A net loss of US$3.3m is expected for the year
• Cash stands at US$4.2m vs US$2.8m in 2021
• Processing plant:
• The team are converting the process plant to convert Ammonium metavanadate (NH4VO3) into vanadium pentoxide for better pricing and demand.
• New demand for Vanadium Electrolyte for VRFB storage batteries appears to be driving Vanadium Pentoxide prices higher with ferrovanadium now trading at a large discount to the V2O5 price.
• A new Ferro-molybdenum recovery circuit has been commissioned and has nearly doubled molybdenum capacity depending on feedstock grade.
• Grant Funding (US$638,000) for the construction for the development of technology for the production of mixed vanadium oxides for use in VRFBs has been approved for release by Balausa this year and next by Kazakhstan's National Scientific Council.
• Management report the company has developed and patented technology to produce vanadium electrolyte directly from AMV ‘ammonium metavanadate’ which could lower electrolyte production costs versus conventional processes.

Conclusion: Expanding throughput along with the addition of the new nickel circuit and expansion of the molybdenum plant should lead to a significant turnaround for Ferro-Alloy this year and next. The completion of the giant Balasausqandiq vanadium project feasibility study should lead to the development of further value within the group.

Galantas Gold Corp (AIM:GAL, TSX-V:GAL, OTCQX:GALKF)* 28p, Mkt Cap £29m – Gairloch Project webcast

• The Company will be hosting a live webcast on February 1 (11am ET) to discuss the Gairloch Project.
• The team has recently secured a 217km2 license area in the northwest coast of Scotland prospective in gold bearing VMS type mineralisation.

*SP Angel act as Broker to Galantas Gold

Oriole Resources PLC (AIM:ORR)* 0.16p, Mkt cap £4.4m - Rock chip sampling at district-scale licence package returns 134g/t Au

• Oriole Resources reports high grade rock chip sample results from Mbe, its most advanced exploration licence at the district scale, 4,091km2 Central Licence Package (CLP). Oriole has nine contiguous licences across the package, with Mbe forming one of five projects in the Eastern block of licence packages. To date, exploration efforts have targeted orogenic-style gold mineralisation, with lithium prospectivity also under analysis.
• Soil sampling at Mbe had previously identified a c.12,5km long by 3km wide gold-mineralised corridor. Over Q4-2022, the team has undertaken regolith and lithological mapping over a 1:15,000 scale across c.48km2.
• Samples were taken c.60m apart, along an outcropping vein identified by Oriole in previous exploration efforts which had yielded best gold-in-soil anomalies equivalent to c.0.84g/t. Oriole believes the primary gold-in-soil anomalism is associated with a highly sheared and metamorphosed package of amphibolite, gneiss and metagranite units. Rock chip sampling targeted outcropping veins, with particular focus on quartz veins commonly associated with gold mineralisation in the region.
• Selective rock chip sampling from 49 samples yielded highlights of:
• 134.1g/t
• 131.8g/t
• 19.44g/t
• 8.26g/t
• The high-grade samples above were predominantly returned from sulphide-rich and locally brecciated quartz veins occurring either at the contact of or within pervasively altered and sulphide-rich granitic units. The high grade mineralisation is understood to be contained within a 3km-long, N-NE trending corridor up to 700m wide. The main zone of mineralised veining is believed to be over 70m wide. Sampling at Mbe failed to extend the south-westerly extent of the anomaly over 493 soil samples.
• Going forward, the team is set to begin a ground-based geophysics programme imminently at the Mbe anomaly to analyse deeper vein structures and advance the geological model of the project. The CLP also offers potential for lithium-bearing pegmatites, which the team is currently analysing at both the Ndom and Gamboukou licences. The ground-based magnetic survey will be conducted on northwest-southeast lines with 100m spacing across the entire Mbe anomalous zone.

Conclusion: Oriole’s team continues to deliver exciting results from their expansive collection of licence packages across Cameroon. High-grade rock chip samples across the 12.5km Mbe anomaly adds further confidence to the Company’s excitement of the prospectivity of orogenic gold systems at the CLP. Following the delivery of Cameroon’s first JORC inferred MRE at Bibemi, Oriole is now looking to define more precise targets over the anomalies using a geophysical survey.

*SP Angel acts as a broker to Oriole Resources

Orosur Mining Inc (AIM:OMI, TSX-V:OMI)* 8.6p, Mkt Cap £16m - Second Quarter Results for 2022/23

• Orosur’s unaudited consolidated financial statements highlight a cash balance of $3.549m at the date of this announcement.
• In Colombia, the Company is progressing its JV agreement with Monte Águila, which has invested $10m in the Anza Project, with the two companies currently in the processing of forming a new Mining Company which will hold the Anza Project’s concessions and applications.
• The new company will be split in ownership, with Orosur holding an initial 49% stake and Monte Aguila holding a 51% stake, with Monte Aguila managing exploration efforts.
• Monte Aguila will have the option to earn an additional 14% ownership of the new Company if it spends $20m in exploration expenditures. This would reduce Orosur’s holding to 35%.
• In Uruguay, the Company’s wholly-owned subsidiary Loryser is in the process of selling its Uruguayan assets and is in the process of a one-year post-closure control phase.
• Proceeds from the Uruguayan asset sales will be used to pay liabilities connected to a previously-agreed Creditors Agreement.

*SP Angel acts as nomad and broker to Orosur Mining

Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) 17.38, Mkt cap £411m – Maintaining full year production guidance despite the impact of power supply disruption in S Africa

• Pan African Resources reports the production of 92,307oz of gold during the six months to 31st December 2022 (2021 – 108,085oz) and is maintaining its 195-205,000oz guidance range for the full year.
• The Barberton mines contributed 32,022oz of the total production (2021 – 39,991oz) with a further 25,830oz from Elikhulu (2021 – 25,900oz), 24,443oz from Evander (2021 – 33,068) and 10,012oz from the BTRP (Barberton Tailings Retreatment plant which produced 9,126oz in the equivalent period to end December 2021).
• The company says that it has reached agreements with the unions “to restructure Barberton Mines underground operations” with the loss-making Consort mine being converted to “a contractor mining model, focussing on higher grade areas with reduced overheads, whilst development and exploration will continue to increase future mining flexibility and production”.
• Other operational changes involve reconfiguring the Fairview and Sheba mines “to a continuous operations (24 hour) shift cycle with productivity expected to increase commensurately”.
• CEO, Cobus Loots, explained that “Reduced gold production over the past half year can primarily be attributed to the performance of the Barberton Mines underground operations. We believe that the concrete measures being implemented at this operation will result in a significant improvement during the second half of the financial year and in the years ahead”.
• He said that the other operations “delivered in line with expectations, despite disruptions to our electricity supply and inclement weather conditions impacting operations” and said that at the Evander operation, “electricity issues impacted production by approximately 5%, reinforcing our imperative to expand our renewable energy portfolio in the years ahead. Given the improved production performance expected in the second half of the 2023 financial year, we are maintaining production guidance of 195,000oz to 205,000oz for the full year, subject to consistency in Eskom’s electricity supply”.
• Outside S Africa, exploration of the Block 12A South and Block 12A North licences in Sudan is focussing on “soil geochemistry and hard rock chip sampling programmes to further define the identified exploration anomalies” with work over the next six weeks to define higher grade stuctures identified in the initial sampling.
• The company “has successfully commissioned the first fire assay multi-element analytical laboratory within the Republic of Sudan. This laboratory will be used for the analyses of all of the Company’s exploration samples being extracted from the Block 12 exploration concessions granted to Pan African by the Sudan Ministry of Mines”.

Conclusion: Power supply issues in S Africa have been challenging during the six months to end December 2022 but Pan African Resources is currently maintaining its full year gold production guidance range of 195-205,000oz

Premier African Minerals Ltd (AIM:PREM) 0.57p, Mkt Cap £123m – Further drilling results and pilot plant progress report from the Zulu Lithium project, Zimbabwe

• Premier African Minerals reports that its programme of mineral resource drilling at its Zulu lithium project in Zimbabwe has continued to intersect multiple zones of what are described as thick zones of high grade spodumene mineralisation.
• The company also confirms that it is progressing construction of the 40tph pilot plant towards completion and that it expects the “first shipments of SC6 … [a high-purity lithium ore flotation product with approximately 6 percent lithium content …] will commence in Q1 as projected”.
• As in previous announcements, Premier African Minerals alludes to “a significant backlog of assay results” from the programme at Zulu but among the results reported in today’s announcement are:
• An intersection of 8.76m at an average grade of 1.61% Li2O from a depth of 24.38m in Hole ZDD-003, including a 3m wide intersection averaging 2.62% Li2O from 29.14m depth; and
• An intersection of 6.39m at an average grade of 1.09% Li2O from a depth of 111.34m in Hole ZDD-010, including a single metre wide intersection assaying 2.00% Li2O from 116.30m depth as well as additional mineralised intervals both above and below the main mineralised intersection; and
• An intersection of 8.22m at an average grade of 1.37% Li2O from a depth of 27.73m in Hole ZDD-016, including a 1m wide intersection averaging 2.27% Li2O from 28.73m depth and 1.11m averaging 2.49% Li2O from 34.44m as well as other mineralised horizons at both shallower and deeper intervals within the hole; and
• An intersection of 12.33m at an average grade of 1.29% Li2O from a depth of 20.25m in Hole ZDD-037, including a 1m wide intersection averaging 2.25% Li2O from 20.60m depth; and
• An intersection of 11.05m at an average grade of 1.26% Li2O from a depth of 102.26m in Hole ZDD-045, higher grade sections of 2m averaging 2.44% Li2O from 102.26m depth, 1m averaging 2.92% from 108.26m and 1.05m averaging 1.91% from 112.26m; and
• An intersection of 22.31m at an average grade of 1.41% Li2O from a depth of 120.69m in Hole ZDD-045, including higher grade intervals of 1m at an average grade of 2.27% Li2O from 121.69m depth, 1m averaging 2.35% from 128.31m, 4.0m averaging 2.31% from 134.00m and 1m averaging 2.38% from 140.00m.
• The drillhole results also include assays for tantalum pentoxide ranging to over 200ppm but typically in the range 20-80ppm
• Describing the progress on the pilot plant, CEO, George Roach, said that it was expected to produce a flotation concentrate of spodumene at a rate of 12tph however he cautioned that “Until the plant operates, it is not possible to accurately predict either the feed grade of spodumene rich material reaching the floatation circuit, nor to predict the final concentrate grade, or final tonnage production rate. That is the nature of a pilot plant” and he undertook to “provide further updates over the coming weeks”.

Conclusion: Resource drilling for the DFS continues to confirm the continuity of mineralisation in high-grade shoots at the Zulu lithium project. The company also confirms that the pilot plant construction remains on course to deliver its initial spodumene concentrate during Q1 2023 at a rate expected to be around 12tph.

Sovereign Metals Ltd (ASX:SVM, AIM:SVML) 29.5p, Mkt Cap £127m – Consistent results from 191-aircore drill holes at Kasiya rutile project in Malawi

• Sovereign reports the final batch of results from its 191-holes aircore drilling programme at the Kasiya rutile project in Malawi.
• The company says that the results confirm the “consistency of high-grade rutile and graphite mineralisation at depth” at Kasiya where Sovereign Metals has shown an indicated resource of 662mt at an average grade of 1.05% rutile with an additional inferred resource of 1,113mt at an average grade of 0.99% rutile.
• Among the results highlighted in today’s announcement are:
• An intersection of 31m at an average grade of 1.14% rutile and 1.9% graphite from surface in hole KYAC-0115; and
• An intersection of 29m at an average grade of 1.14% rutile and 1.7% graphite from surface in hole KYAC-0122; and
• An intersection of 25m at an average grade of 1.18% rutile and 2.0% graphite from surface in hole KYAC-0139; and
• An intersection of 24m at an average grade of 1.13% rutile and 4.0% graphite from surface in hole KYAC-0156; and
• An intersection of 25m at an average grade of 1.08% rutile and 5.2% graphite from surface in hole KYAC-0191
• The announcement also includes the results from 247 push-tube samples targeting “high grade Inferred mining pits and potential areas of pit extensions to bring into the Indicated category to facilitate conversion to Ore Reserves in the upcoming PFS. Overall, results are as expected and continue to confirm laterally extensive and consistent rutile and graphite mineralisation at Kasiya”.
• Results of the push-tube work include:
• 11m at an average grade of 1.70% rutile including 3m averaging 2.13% from surface in hole KYPT0233; and
• 14m at an average grade of 1.11% rutile from surface in hole KYPT0426; and
• 7m averaging 1.67% rutile in hole KYPT0235
• The company confirms that “pre-feasibility study (PFS) and Environmental and Social baseline workstreams are progressing on schedule with the targeted completion of the PFS during H1 2023”.

No.1 in Copper: “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”

No1. In Gold: “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”

The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020

Analysts

John Meyer – John.Meyer@spangel.co.uk – 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

Sales

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

W1S 2PP

*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.

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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

DISCLAIMER

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.

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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%