SP Angel . Morning View . Wednesday 22 02 23
US PMI highlights ongoing strong inflationary pressures driving market rates higher
MiFID II exempt information – see disclaimer below
Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF) – Equipment orders placed for Zafar and Gilar mining equipment and flotation plant expansion
Ariana Resources PLC (AIM:AAU) – Geophysics identifies additional drill targets at Kiziltepe
Beowulf Mining PLC (AIM:BEM) – Update on progress at Kallak Iron Ore Project
BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF) – Bluejay Mining report the receipt of $2m from $6m convertible facility
Conroy Gold and Natural Resources PLC (AIM:CGNR, OTC:CGDNF) – Prospecting identifies visible gold in sample taken south of Clay Lake
Hummingbird Resources PLC (LSE:HUM) – Expanded equity fund raise
Pathfinder Minerals (AIM:PFP) – Pathfinder extends date for Acumen Advisory Group to acquire IM Minerals Limited till 21 March
Rio Tinto PLC (LSE:RIO) – 2022 shows operational improvements as financial results are hit by commodity price movements
Shanta Gold Limited (AIM:SHG, OTC:SAAGF) – Ramula MRE update yield ~8% increase with ~90% in the Indicated category
Copper steadies higher on FQM production concerns and positive European demand data
- Copper climbed $100 to settle around $9,140/t over the past 24 hours, having touched $9,300/t yesterday.
- The move was triggered by FQM’s concerns over a production halt, due to start tomorrow according to a memo seen by Bloomberg.
- FQM is banned from loading and shipping copper at its 350kt/pa Cobre Panama mine, with no further storage capacity available.
- The move higher follows positive European manufacturing data, which saw the Composite PMI hit a 9-month high.
- The positive turn in Europe follows a string of stronger-than-expected data from the US over the past fortnight, dispelling concerns of an imminent recession that would undoubtedly hit copper demand.
Gold settles around six-week lows as yields continue to climb on hawkish Fed expectations
- Gold continues to bounce around $1,830/oz.
- Investors will focus on today’s Fed minutes release, which should give more guidance on the Central Bank’s rate hike plans for 2023.
- The market has witnessed a major repricing as regards Fed funds expectations this month, pushing the 10-year yield to near 4%, having wallowed around 3.36% when investors ramped up bond purchases with the expectation of peak inflation and a Fed pivot.
- A strong US economy and persistently sticky inflation has changed this, with gold losing appeal as risk-free US Treasury yields rise.
- The move has supported a stronger US dollar, with foreign buyers drawn in by more attractive US Treasuries.
Tesla eyes lithium mine takeover as miners’ valuations slide on weakening spot prices
- Tesla continuing to eye closer exposure to lithium mining, with a potential takeover bid for miner Sigma Lithium.
- This follows GM’s $650m investment in Lithium Americas last week.
- Lithium producers are currently experiencing a sell-off alongside weaker spot prices, increasing Musk and Tesla’s appetite for an upstream acquisition.
- Lithium prices have fallen 30% in China over the past three months, as auto demand tails. This was triggered primarily by the removal of EV subsidy credits from the Chinese government.
- However, lithium prices remain eight times higher yoy.
- Sentiment is weak in the lithium sector at the moment, with reports of a lithium concentrate auction in China being scrapped last week over concerns of falling demand.
- Reports are also surfacing that major battery producer CATL is slashing prices to automakers, potentially forcing lithium producers to further cut prices.
- However, analysts continue to expect a market deficit this year, with LCE demand for 2023 expected at 910kt vs supply closer to 900kt. (BMI)
Dow Jones Industrials -2.06% at 33,130
Nikkei 225 -1.34% at 27,104
HK Hang Seng -0.49% at 20,428
Shanghai Composite -0.47% at 3,291
Economics
US – Stronger than expected PMIs see equity markets falling the most in two months on expectations for tighter monetary policy.
- The S&P 500 closed 2% lower on Tuesday while more tech-weighted Nasdaq Composite fell 2.5%.
- Composite PMI hit an 8-monht high driven by strong print for the services sector while manufacturing continued to contract.
- New orders continued to slide, albeit at the slowest pace since last October.
- Foreign demand also dropped on the month although again at a slower pace, the joint-softest since May/22.
- Input cost inflation was the second slowest since October 2020 largely driven by hikes in wages with raw materials costs’ pressures easing.
- Output prices, meanwhile, continued to increase with the pace hitting the quickest level since last October as firms passed through hikes in costs to their clients.
- New jobs climbed at the fastest pace since Sep/22 with gains reported in both manufacturing and services.
- Manufacturing PMI: 47.8 v 46.9 January and 47.2 est.
- Services PMI: 50.5 v 46.8 January and 47.3 est.
- Composite PMI: 50.2 v 46.8 January and 47.5 est.
US strengthens ex-China rare earths supply chain with Japan deal
- MP Materials has agreed to ship processed rare-earth products to Japan’s Sumitomo.
- MP Materials operates Mountain Pass, with previous mined concentrate being shipped to China for processing.
- The Company’s new processing plant will enable it to ship directly to Japan for distribution to downstream users.
- Mountain Pass accounted for 15% of global mined rare earths in 2021.
Japan – The central bank conducts emergency bond buying today after 10-year market yields breached the top end of the 0.5% target.
- Markets have been increasingly pricing in that the new governor will start to winddown the current ultra-loose monetary policy.
- The BoJ said it would buy government bonds maturing in five and 10 years’ worth JPY300B and JPY100B of bonds maturing in 10 and 25 years.
Indonesia looks to accelerate OPEC-style nickel cartel
- Indonesia’s Investment Minister is planning to coordinate supply output with Australia, Brazil and the Philipinnes by forming an OPEC-style agreement.
- The Minister has, so far, failed to garner support, but the Ministry is set to continue to push ‘for the good of us producing countries.’
- Indonesia continues to progress its ambitions to become a global battery hub for EVs and the green transition, with downstreaming policies a major part of President Jokowi’s manifesto.
- Indonesia produced 1mt of nickel in 2021 vs Australia, Brazil and Philippines’ combined 630kt output. (USGS)
- The Country is moving to tax exports on nickel pig iron and ferronickel to boost investment into its refining capacity.
- China’s Foreign Minister Qin Gang reported Beijing’s plans to ramp up imports of Indonesian commodities this morning.
- Nickel remains in a supply deficit, with automakers continuing to seek upstream supply, with GM eyeing a stake in Vale’s nickel assets.
- Battery-grade nickel is set to exceed supply this year, growing 17% vs an 8% supply increase. (BloombergNEF)
Currencies
US$1.0654/eur vs 1.0681/eur yesterday. Yen 134.76/$ vs 134.77/$. SAr 18.363/$ vs 18.192/$. $1.210/gbp vs $1.203/gbp. 0.683/aud vs 0.688/aud. CNY 6.893/$ vs 6.874/$.
Dollar Index 104.09 vs 104.06 yesterday.
Commodity News
Precious metals:
Gold US$1,838/oz vs US$1,832/oz yesterday
Gold ETFs 92.6moz vs US$92.7moz yesterday
Platinum US$944/oz v US$928/oz yesterday
Palladium US$1,510/oz vs US$1,500/oz yesterday
Silver US$21.80/oz vs US$21.67/oz yesterday
Rhodium US$11,550/oz vs US$11,550/oz yesterday
Base metals:
Copper US$ 9,105/t vs US$9,145/t yesterday
Aluminium US$ 2,436/t vs US$2,485/t yesterday
Nickel US$ 26,280/t vs US$27,065/t yesterday
Zinc US$ 3,071/t vs US$3,138/t yesterday
Lead US$ 2,130/t vs US$2,164/t yesterday
Tin US$ 27,295/t vs US$26,975/t yesterday
Energy:
Oil US$82.3/bbl vs US$83.7/bbl yesterday
- US Henry Hub natural gas prices fell below $2/mmBtu for the first time since 2020 as weather forecasts have shifted milder since last week, denting sentiment that a later Winter freeze will boost heating demand.
- The Freeport LNG facility in Texas said that regulators have allowed it to restart commercial operations, but that it would take several weeks for the terminal to return to its full 2.1bcf/d export capacity.
- Carbon permit prices in the EU’s Emissions Trading System rose above €100 for the first time, as falling natural gas prices are expected to revitalise industrial production that was curbed by last year’s elevated energy costs.
Natural Gas US$1.978/mmbtu vs US$2.246/mmbtu yesterday
Uranium UXC US$51.75/lb vs US$51.75/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$129.7/t vs US$126.1/t
Chinese steel rebar 25mm US$641.9/t vs US$646.1/t
Thermal coal (1st year forward cif ARA) US$144.0/t vs US$143.5/t
Thermal coal swap Australia FOB US$197.0/t vs US$183.5/t
Coking coal swap Australia FOB US$375.0/t vs US$349.0/t
Other:
Cobalt LME 3m US$35,690/t vs US$35,690/t
NdPr Rare Earth Oxide (China) US$99,375/t vs US$99,655/t
Lithium carbonate 99% (China) US$54,040/t vs US$55,792/t
China Spodumene Li2O 5%min CIF US$5,840/t vs US$5,890/t
Ferro-Manganese European Mn78% min US$1,316/t vs US$1,319/t
China Tungsten APT 88.5% FOB US$333/mtu vs US$333/mtu
China Graphite Flake -194 FOB US$845/t vs US$845/t
Europe Vanadium Pentoxide 98% 10.1/lb vs US$10.1/lb
Europe Ferro-Vanadium 80% 39.75/kg vs US$39.75/kg
China Ilmenite Concentrate TiO2 US$342/t vs US$343/t
Spot CO2 Emissions EUA Price US$102.7/t vs US$99.7/t
Brazil Potash CFR Granular Spot US$495.0/t vs US$495.0/t
Company News
Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF) 98p, Mkt Cap £111m – Equipment orders placed for Zafar and Gilar mining equipment and flotation plant expansion
BUY
- The Company orders major equipment items for development/mining at new Zafar and Gilar underground operations as well as flotation plant expansion.
- An order underground fleet from Caterpillar and drilling machinery from Epiroc for a total of ~$10m has been completed with ~60% of the cost funded using vendor financing and the balance from existing cash balances.
- Works on expanding the existing flotation plant capacity with adding a further line to produce zinc concentrate is ongoing (completion expected by YE23).
- Plant expansion cost is estimated at $3m and will be covered from existing cash resources.
Conclusion: The Company is ramping up development works having placed orders for good quality mining and processing equipment aiming to bring two underground operations online as well as expand the flotation plant capacity adding a zinc concentrate line. Capital programme is funded through a combination of debt and available ample cash resources.
*SP Angel acts as nomad and broker to Anglo Asian Mining
Ariana Resources PLC (AIM:AAU) 2.83p, Mkt Cap £32m – Geophysics identifies additional drill targets at Kiziltepe.
- Ariana Resources reports that geophysical work across the Sindirgi Corridor at its 23.5% owned Kiziltepe mine in Turkey has identified additional drill targets “at the far northwest extensions of Arzu North and Arzu South and towards the southeast of the mined vein systems”.
- The induced-polarisation and resistivity work cover an area of 5.3km2 over a total of 15 profiles spaced at 200m intervals for a total of over 25km of survey lines.
- Ariana Resources says that “Moderate to high resistivity anomalies are well defined across known vein systems whilst higher IP anomalies suggest the presence of alteration zones near surface and potential for sulphide mineralisation below the water table” and confirms that several targets have been identified including:
- “At the northwest end of the project area … [where] … the resistivity anomaly is consistent over about 600m, suggesting a similar trend to the Banu vein” and
- “The northwest extension of Arzu North vein is confirmed with both IP and resistivity anomalies” which are planned for drill testing in 2023; and
- “A new parallel zone of high resistivity defined immediately to the northeast of Arzu North”; and
- “The two strong resistivity trends supported by moderate IP anomalies to the northeast of Arzu North, which were partly defined in earlier surveys, are confirmed with the recent survey and will be used to generate new drill targets”; and
- “several potential structures at the southeast extensions of both the Arzu South and Fidan vein systems”.
- Managing Director, Dr. Kerim Sener, said that “several pronounced geophysical anomalies exist along strike of previously mapped and drilled veins, suggesting the potential for further discoveries, particularly in the southeast part of the prospect”.
- He explained that these newly identified geophysical anomalies signal “a new area to us which has not previously received much attention from drilling in the past”.
Conclusion: Additional drill targets at Kiziltepe may ultimately extend the mineralised envelope and provide the opportunity to extend mine life or expand production. We await further news with interest.
Beowulf Mining PLC (AIM:BEM) 2.5p, Mkt Cap £20m – Update on progress at Kallak Iron Ore Project
- Beowulf provides an update on Jokkmokk Iron, its 100% owned subsidiary in control of the Kallak Iron Ore Project, Sweden.
- The Company is currently in the process of an SDR Rights Issue in Sweden, and a UK Retail Offer Primary bid to raise £9.1m gross for the development of Kallak – these close tomorrow.
- Following the completion of the raise, plans and budgets are set to be finalised for the application of the crucial Environmental Permit in Q4 2023, alongside the start of PFS work.
- Beowulf and Jokkmokk continue to engage with the local Sámi communities, with a second meeting regarding reindeer husbandry to take place next month.
- The Company plans further meetings with local stakeholders to provide information on open pit mining for maximum transparency.
- Other activities currently underway include hydrogeological investigations, water surveys, noise surveys, nature values inventory, air quality surveys and additional field surveys.
- Beowulf and Jokkmokk are also currently in discussions with suppliers of logistical solutions, mine production transport and rail and port operators.
*SP Angel acts as Nomad and Broker to Beowulf Mining
BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF) 3.9p, Mkt cap £41m – Bluejay Mining report the receipt of $2m from $6m convertible facility
Valuation 12.3p
- Bluejay Mining report the receipt of $2m of funds from the recently announced convertible facility.
- “The Purchase Price of the Subscription Shares will be equal to 10 pence per share initially. Subject to the Floor Price, described below, after an initial month, the Purchase Price will reset to the average of the five daily volume-weighted average prices selected by the Investor during a specified period immediately prior to the date of the Investor's notice to issue Subscription Shares, less a 10% discount, rounded down to the nearest one tenth of a pence if the share price is at or below 20 pence, half of a pence if the share price is at above 20 pence and at or below 50 pence, or a whole pence if the share price is at above 50 pence.”
- The convertible facility offers the potential for a further $4m of funding via the issue of further Bluejay equity at prices to be determined in accordance with the formula agreed between the two parties.
- Kangerluarsuk: Bluejay also report that funds will be used to this summer's proposed drilling campaign at Kangerluarsuk.
- The team busy finalising contracts in preparation for drilling and exploration support and plan to update the market with the further details on the planned drilling and a summary of the drill targets shortly.
- The Kangerluarsuk project is just 12km north of the former Black Angel lead, zinc, silver mine. Black Angel produced some 11.2mt grading 12.6% zinc, 4.1% lead and 29g/t silver.
- High-grade rock outcrop show: 41% Zn, 9.3% Pb, 1.2% Cu and 596 g/t Ag with chip sample assays of: 45.4% Zn over 0.4m and 41.1% Zn over 1m
- The prospect was never been drill tested by RTZ or Cominco despite the high-grade outcrop, though, to be fair, Greenland appears to be easier to work in than in previous decades.
- Global warming has effectively lengthened the operating field season in Greenland pushing back the ice cap, exposing mineralisation and making exploration easier than previously.
- While the rugged topography can make movement difficult the steep terrain also provides natural cross sections for geological examination helping the geological team.
- See presentation: http://bluejaymining.com/wp-content/uploads/2023/02/Kangerluarsuk-Slides-Final-Feb-2023.pdf
- Slides 18-21 give some indication of the magnificent and spectacular terrain encountered in the region. This is great for geology on sunny dry days but not so great when the weather turns.
- Zinc: Bluejay refer to forecasts for a chronic shortage in zinc supply with many major zinc mines largely depleted and limited new zinc mine development.
- Zinc was recently included in the US and Canadan Critical Minerals lists alongside Germanium which is often associated with zinc ores.
Conclusion: Bluejay is following on from the good work done by RTZ and Cominco at Kangerluarsuk which is located towards the south of Greenland. We have strong confidence in the ability to turn a discovery in Greenland into a mine with support from the Greenland and Danish governments so long as there are no uranium or other toxic radionuclides in tailings.
*SP Angel acts as nomad and broker to Bluejay Mining. The analyst holds shares in Bluejay Mining
Conroy Gold and Natural Resources PLC (AIM:CGNR, OTC:CGDNF) 20.75p, Mkt Cap £7.6m – Prospecting identifies visible gold in sample taken south of Clay Lake
- Conroy Gold reports that prospecting south of its Clay Lake prospect in Co Armagh, Northern Ireland, has identified visible gold in quartz samples taken from “on or close to the surface”.
- Assay results from the samples taken from Conroy Gold’s “Mines Royal (Newtownhamilton) option area … returned values of 123.0 g/t Au, 76.7 g/t Au, 44.1 g/t Au, 35.2 g/t Au and 12.8 g/t Au, respectively”.
- Conroy Gold says that it plans follow up trenching and drilling “to better assess and understand the mineralisation in the area”.
Conclusion: Early stage encouraging results from prospecting is to be followed up with trenching and drilling to help gain a better understanding of the mineralisation. We await results of the follow up exploration with interest.
Hummingbird Resources PLC (LSE:HUM) 7.3p, Mkt Cap £33m – Expanded equity fund raise
- The Company expanded the size of the placing with a number of existing institutional investors conditionally agreeing to participate ($1.4m) along with an open offer launched for existing shareholders (up to $2.4m).
- That follows the announcement earlier in February of the CIG Investment subscribing for $15m in two tranches and if the funding is completed in full would raise ~$18.8m.
- The first tranche for $3.8m has already been completed.
- The second tranche along with proposed new subscription and open offer are subject to shareholder approval due 13 March 2023.
- All funds are to be issued at 7.8p.
- The placing will be used to strengthen the Company’s balance sheet and ensure the Kouroussa Gold Mine commissioning is on target for first gold pour by the end of Q2/23.
Pathfinder Minerals (AIM:PFP) £0.50p, mkt cap £3.16m – Pathfinder extends date for Acumen Advisory Group to acquire IM Minerals Limited till 21 March
- Pathfinder Minerals (AIM:PFP) has extended the date by which Acumen Advisory Group LLC, a litigation company, can acquire Pathfinder’s mineral sands business in Mozambique held in IM Minerals Limited to 21 March 2023 from 21 February 2023.
- The £2m cash sale is contingent on shareholder approval for the disposal of IM Minerals.
- Pathfinder is looking at bringing forward the General Meeting so it can complete the transaction ASAP.
- Pathfinder has been in dispute with General Valoso and the Mozambique government over the unauthorised transfer of mineral sands licenses out of Pathfinder’s Mozambique subsidiary for some years.
- Acumen Advisory Group, a litigation and asset recovery company, has committed to bring a substantial claim against the Government of Mozambique with regard to the loss of its titanium mineral sands licenses in 2011.
Conclusion: We are hopeful that Acumen Advisory Group will secure substantial damages against the Mozambique government which if not settled could result in the seizure of Mozambique government assets such as Air Mozambique’s two Boeing 737s, two Bombardier (TSX:BBD.B) Dash 8 Q400s and two Embraer (NYSE:ERJ) 190Ars.
Rio Tinto PLC (LSE:RIO) – 6,029p, Mkt cap £78bn – 2022 shows operational improvements as financial results are hit by commodity price movements.
- Reporting on what the company described as a year of challenging market conditions, Rio Tinto reports underlying EBITDA of US$26.3bn (2021 US$37.7bn) and attributable profit of US$12.4bn (2021 – US$21.1bn).
- The company is declaring dividends of US$4.92/share for the year (2021 -US$7.93/share) which the company says represents 60% of underlying earnings (2021 79%).
- The 41% reduction in attributable profit “reflected the movement in commodity prices, the impact of higher energy and raw materials prices on our operations, and higher rates of inflation on our operating costs and closure liabilities”.
- The EBITDA is dominated by the US$18.6bn contribution of Rio Tinto’s iron ore operations with aluminium generating a further US$3.7bn, with US$2.4bn from each of its copper and minerals businesses offset by central pension and restructuring costs and central exploration and project evaluation expenses.
- “$4.2 billion of net debt at year end, compared with net cash of $1.6 billion at the start of the year, primarily reflected the free cash flow of $9.0 billion, offset by $11.7 billion of cash returns to shareholders and $3.8 billion for the acquisitions of Turquoise Hill Resources (TRQ) and Rincon Lithium Project”.
- Chief Executive, Jakob Stausholm, commented on the “uplift in our operational performance” which includes “first ore from Gudai-Darri, our first greenfield iron ore mine in the Pilbara in more than a decade” where production is ramping up to the planned 43mtpa production rate.
- Other developments in the Pilbara iron ore operations include the agreement with China Baowu Steel Group to form a US$2bn joint venture (Rio Tinto share US$1.3bn) to develop 25mtpa from the Western Range project in the Pilbara as well as the agreement with Wright Prospecting “to modernise the joint venture covering the Rhodes Ridge project in the East Pilbara … [and to] … consider development of an operation before the end of the decade with initial plant capacity of up to 40 million tonnes annually”.
- Commenting on the impact of commodity price changes during the year, Rio Tinto says that they reduced underlying EBITDA by US$8.1bn compared to 2021 “primarily from lower iron ore prices ($9,155 million) and lower London Metal Exchange (LME) copper prices and a negative provisional pricing impact ($733 million) … partly offset by a price uplift for our Aluminium business ($886 million), driven by a first-half rise in LME prices, improved product premiums and higher alumina pricing, which fell away sharply in the second half”.
- “Higher sales volumes and changes in product mix across the portfolio increased underlying EBITDA by $606 million compared to 2021. This was mostly attributable to increased iron ore sales from the ramp-up of Gudai-Darri along with higher portside sales in China, and favourable value-added product premiums for our Aluminium business”.
- Rio Tinto also says that inflation, particularly in energy prices, “reduced underlying EBITDA by $1,169 million, mainly due to higher diesel prices for our trucks, trains and ships”.
- 2022 capital expenditure of US$6.8bn is expected to increase to “around $8.0 billion (previously $8.0 to $9.0 billion) including growth capital of around $2.0 billion, depending on the ramp-up of spend at Simandou” in 2023 . “In 2024 and 2025, this rises to $9.0 to $10.0 billion per year, including the ambition to invest up to $3.0 billion in growth per year, depending on opportunities”.
- Rio Tinto says that its capital expenditure guidance “includes around $1.5 billion over the next three years on decarbonisation projects, mainly relating to Pilbara renewables: this will accelerate thereafter, bringing our best estimate to around $7.5 billion, in aggregate, out to 2030”.
- Major capital projects include the US$1.5bn Phase 2 pushback at the Kennecott copper mine in Utah which extends the mine life by a further 6 years as well as the US$7.1bn underground expansion of the Oyu Togoi copper mine and the US$2.4bn Jada lithium/borate project in Serbia.
- Exploration and evaluation costs rose “by $171 million, or 24%, to $897 million. This was mainly attributable to increased activity at the Simandou iron ore project in Guinea and the Rincon Lithium Project in Argentina”.
- The main areas of exploration expenditure “focused on copper projects in Australia, Colombia, Namibia, Peru, the United States and Zambia; diamonds in Angola; and heavy mineral sands projects in Australia and South Africa. Exploration is ongoing for nickel in Canada and Finland and in lithium across all regions, with opportunities emerging in the United States and Africa”.
- Looking forwards to 2023 operational performance within its major commodity groups, Rio Tinto indicates production guidance for iron ore of 320-350mt (2022 – 322mt) with bauxite in the range 54-57mt consistent with the 55mt production in 2022. Similarly, alumina and aluminium guidance in the ranges 7.7-8.0mt and 3.1-3.3mt respectively is consistent with the 7.5mt of alumina and 3.0mt of aluminium production in 2022.
- Mined copper output of 650-710,000t (2022 -521,000) reflects the increased ownership of the Oyu Tolgoi mine in Mongolia following the acquisition of Turquoise Hill Resources.
Conclusion: Rio Tinto is expanding its iron ore and copper operations, but financial results show impact of commodity price movements. Rising exploration and capital expenditure helps maintain project pipeline.
Shanta Gold Limited (AIM:SHG, OTC:SAAGF) 11p, Mkt Cap £113m – Ramula MRE update yield ~8% increase with ~90% in the Indicated category
- The Company released Ramula MRE update incorporating results from the 2022 drilling programme.
- Updated Ramula mineral resource (opn pit domain) currently stands at 6.1mt at 2.41g/t for 470koz including:
- 5.3mt at 2.43g/t for 417koz in the Indicated category and;
- 0.7mt at 2.27g/t for 53koz in the Inferred resource.
- This compares to the previous estimate of 6.5mt at 2.08g/t for 434koz (all Inferred).
- The Ramula target is located about 40 km northwest of Kisumu City and 40 km west-southwest from the Isulu-Bushiangala deposit.
- Ramula Camp currently includes 4 high priority targets located less than 5km from Ramula.
- The deposit remains open along strike and at depth.
- Further exploration plans include step out drilling across the four high priority targets, metallurgical testing, scoping sutdy, and infill drilling.
Conclusion: Infill drilling at Ramula yields takes the Indicated category to ~90% (from 0%) as well as slightly increases total resource reflecting better grades (+8% on ounces and 16% on grade). With mineralisation remaining open along strike and at depth the team is planning more step out drilling to potentially increase the scale of the deposit that may offer optionality to development scenarios of the West Kenya Gold Project in Kenya.
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
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.
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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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%