SP Angel . Morning View . Monday 27 02 23
Gold weakens as US inflation data continues to surprise to the upside
MiFID II exempt information – see disclaimer below
Lithium exploration opportunity – Ghana – private financing
- Hard rock spodumene outcrop on licenses indicate good potential for lithium discovery in highly prospective region of Ghana
- Drilling to start shortly to test for lithium below surface of weathered outcrop
- Company is also looking at additional downstream processing in Ghana in co-operation with European lithium refinery company
- Potential for joint venture with listed company or LSE IPO
*SP Angel’s role is limited to making introductions and interested parties should be aware that investment in a private company can present certain risks not present in listed companies (e.g. limited or no liquidity and no rules compelling disclosure of information to investors). This offer is open to professional investors only and is not offered to retail investors
Adriatic Metals PLC (LSE:ADT1, ASX:ADT, OTCQX:ADMLF) – 2022 Drilling establishes continuity of mineralisation at Rupice NW and sets up 2023 programme.
Empire Metals Ltd (AIM:EEE) – Kaolin Mineralisation identified at Eclipse-Gindalbie
Horizonte Minerals PLC (AIM:HZM, TSX:HZM, OTC:HZMMF) – Drawdown of US$50m of debt for Araguaia ferronickel project construction.
Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF) – Update on $3.5m placing
Oriole Resources PLC (AIM:ORR) – CLICK FOR PDF – Further high-grade rock chip samples from the CLP, Cameroon
Premier African Minerals Ltd (AIM:PREM) – Latest drilling results from the Zulu Lithium project, Zimbabwe
Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB) – Suspended – Application for creditor protection and update on operations resumption due tomorrow
Shanta Gold Limited (AIM:SHG, OTC:SAAGF) – Updated mineral reserve and resources estimates
Thor Explorations Ltd (TSX-V:THX, AIM:THX, OTC:THXPF) – Exploration drilling west of Segilola intersects quartz-hosted gold mineralisation
Gold slides after US Friday PCE data shows continued inflationary pressures
- Gold fell further to $1,811/oz on Friday before climbing to $1,818/oz over the weekend.
- The dollar index climbed on stronger consumer spending on Friday, which highlighted economic activity climbed 1.8% in January, its largest jump since March 2021.
- Stronger-than-expected PCE data, supported both the dollar and US Treasury yields, which climbed to 4 month highs as the 10-year hit 3.96%.
- Yellen, US Treasury Secretary, noted that more work is needed to fight inflation, with Fed officials stating ‘it’s going to take more effort on the part of the Fed to get inflation on that sustainable downward path to 2%.’
- Gold has historically weakened when US Treasury yields climb, with the dollar-denominated metal also struggling against a stronger greenback.
Thermal coal prices for low-grade rise as India and China boost imports
- Low-grade Indonesian coal has climbed over the past week in price over signs of stronger Chinese and Indian import demand.
- Prices climbed 7.7% from their 13-month lows, marking the first weekly gain since December 23rd. (Reuters)
- Lower grade coal comes at a discount to Australian and South African exports.
- India is ramping up stockpiles over concerns of a hotter summer demand period, with the Country invoking emergency measures last week to ramp up output from power plants.
Iron ore exploration budgets hit 7-year highs as prices remain buoyant
- S&P Global data shows iron ore exploration budgets jumped 4% yoy to $713m for 2022.
- Exploration climbed 32% in 2021 for ferrous exploration.
- Iron ore exploration remains 24% of its 2012 total spend.
- Australia saw iron ore exploration budgets fall, whilst Brazil saw budgets increase to their highest level since 2013.
US Government increases pressure on Russian mining sector with fresh round of sanctions
- The US Treasury department has targeted Russia’s metals and mining industry with its latest round of sanctions.
- It has imposed a 200% ad valorem tariff on imports of aluminium from Russia as of March 10th.
- Additional sanctions have been introduced, aimed at ‘impeding the ability of President Putin’s regime to raise capital to support the war,’ the Treasury statement read.
Dow Jones Industrials -1.02% at 32,816
Nikkei 225 -0.11% at 27,423
HK Hang Seng -0.26% at 19,958
Shanghai Composite -0.28% at 3,258
Economics
US – Inflation data comes in hotter again
- PCE Inflation climbs to 5.4% yoy (vs expectations of 4.9%)
- PCE Core rose t0 4.7% yoy (vs expectations of 4.1%)
- Goods prices rose 4.7% yoy
- Services up 5.7% yoy
- Food prices rose 11.1% yoy
- Energy prices rose 9.6% yoy
Japan- CPI hits 41yr high for January
- All item CPI rose 0.3% to 4.3% vs expectations of 4.5% yoy
- CPI Core rose 0.2% to 4.2% yoy (in line with expectations)
Germany – Consumer confidences rises for March
- German Gfk Consumer confidence rose from -33.8 to 30.5, below expectations of -30.0.
- Income expectations rose from -32.2 to -27.3.
- Propensity to buy rose from -18.7 to -17.3.
Currencies
US$1.0553/eur vs 1. 0583/eur last week. Yen 136.18/$ vs 134.91/$. SAr 18.388/$ vs 18.290/$. $1.196/gbp vs $1. 213/gbp. 0.672/aud vs 0. 678/aud. CNY 6.964/$ vs 6. 942/$.
Dollar Index 105.12 vs 104.68 last week.
Commodity News
Precious metals:
Gold US$1,818/oz vs US$1,829/oz last week
Gold ETFs 92.5moz vs US$92.5moz last week
Platinum US$911/oz vs US$939/oz last week
Palladium US$1,404/oz vs US$1,425/oz last week
Silver US$20.82/oz vs US$21.17/oz last week
Rhodium US$11,500/oz vs US$11,500/oz last week
Base metals:
Copper US$ 8,726/t vs US$8,909/t last week
Aluminium US$ 2,355/t vs US$2,381/t last week
Nickel US$ 24,579/t vs US$25,361/t last week
Zinc US$ 2,978/t vs US$3,023/t last week
Lead US$ 2,113/t vs US$2,060/t last week
Tin US$ 25,651/t vs US$26,848/t last week
Energy:
Oil US$82.8/bbl vs US$83.2/bbl last week
Natural Gas US$2.628/mmbtu vs US$2.486/mmbtu last week
Uranium UXC US$51.70/lb vs US$51.70/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$130.4/t vs US$130.4/t
Chinese steel rebar 25mm US$648.6/t vs US$641.9/t
Thermal coal (1st year forward cif ARA) US$144.0/t vs US$144.0/t
Thermal coal swap Australia FOB US$199.0/t vs US$197.0/t
Coking coal swap Australia FOB US$370.0/t vs US$375.0/t
Other:
Cobalt LME 3m US$34,180/t vs US$35,690/t
NdPr Rare Earth Oxide (China) US$99,544/t vs US$99,375/t
Lithium carbonate 99% (China) US$52,457/t vs US$54,040/t
China Spodumene Li2O 5%min CIF US$5,820/t vs US$5,840/t
Ferro-Manganese European Mn78% min US$1,311/t vs US$1,316/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$342/t
Spot CO2 Emissions EUA Price US$101.2/t vs US$102.7/t
Brazil Potash CFR Granular Spot US$495.0/t vs US$495.0/t
Battery News
Company News
Adriatic Metals PLC (LSE:ADT1, ASX:ADT, OTCQX:ADMLF) 165p, Mkt cap £478m – 2022 Drilling establishes continuity of mineralisation at Rupice NW and sets up 2023 programme.
- Adriatic Metals reports that its 2022 drilling programme at Rupice NW in Bosnia and Herzegovina was able to demonstrate the continuity of massive sulphide type mineralisation and that its 2023 campaign of infill drilling is targeted at establishing the up-dip and down-dip limits and delivering an indicated resource estimate.
- Outlining its exploration plans for 2023, the company says that it will drill “23,700m of diamond drilling from 86 holes, using four drill rigs, …for Rupice NW and regional targets in 2023, together with geophysical surveys, surface sampling and detailed mapping”.
- The company reports recent drilling results, including those of BR-25-22, BR-27-22, BR-29-22, BR-30-22 and BR-32-22 which are located on a single section line 180m northwest of the Rupice Mineral Resource (RMR) and drilled down-plunge of the previously reported hole BR-04-22 (32.50m at 657.0 g/t AgEq).
- Among the results highlighted in today’s announcement are:
- Intersections of both the NW Upper Zone and the NW Main Zone in hole BR-25-22 which drilled an 8.40m wide interval of the NW Upper Zone at an average grade of 24.9g/t silver, 1.68% zinc, 0.93% lead, 0.23g/t gold, 0.14% copper and 3.5% barite (BaSO4)from a depth of 162.10m as well as a 43.20m wide intersection of the NW Main Zone which averaged 148.2g/t silver, 7.14% zinc, 5.82% lead, 0.85g/t gold, 0.60% copper and 49.5% barite from 256.80m depth; and
- A 41.20m wide intersection of the NW Main Zone which averaged 93.0g/t Ag, 3.65% Zn, 2.10% Pb, 1.14g/t Au, 0.33% Cu and 36.8% barite from 263.80m depth: and
- A 33.40m wide intersection, also of the NW Main Zone, which averaged 120.1g/t Ag, 8.26% Zn, 4.34% Pb, 1.45g/t Au, 0.31% Cu and 42.6% barite from 170.20m depth: and
- A 23.00m wide intersection of the NW Main Zone which averaged 181.00g/t Ag, 4.64% Zn, 3.13% Pb, 0.90g/t Au, 0.22% Cu and 45.8% barite from 277.00m depth.
- Hole BR-26-22, which is “located 100m northwest of the RMR and drilled down-dip of the previously reported hole BR-23-22 (28.90m at 695.0 g/t AgEq), BR-20-22 (30.30m at 932.0 g/t AgEq) and BR-09-22 (11.80m at 1,212 g/t AgEq). Drilling intercepted
- A 14.80m wide interval of the NW Upper Zone which averaged 191.2 g/t Ag, 4.08% Zn, 2.45% Pb, 0.95 g/t Au, 0.40% Cu, and >50.0% Barite from 148.20m depth as well as a 5.70m wide section of the NW Main Zone averaging 96.4 g/t Ag, 2.76% Zn, 1.27% Pb, 0.41 g/t Au, 0.08% Cu and 35.7% Barite from 253.10m and a second interval of the NW Main Zone averaging 231.5 g/t Ag, 4.95% Zn, 2.47% Pb, 0.62 g/t Au, 0.17% Cu and 38.2% Barite, from 266.00m.
- Managing Director, Paul Cronin, said that the “new exploration results validate the continuity, grade and thickness of Rupice NW, with the added bonus of multiple expanding mineralised horizons”.
- He said that “We are looking ahead to future where Vares is the hub for multiple Adriatic mines. In 2023, we will drill test the Droskovac, Semizova Ponikva and Rupice West prospects and commence systematic grassroots exploration of Vares East.”
Conclusion: Adriatic Metals plans to build on its demonstration of the continuity of massive sulphide mineralisation with a 23,700m programme of 86 holes in 2023. We look forward to results as they become available.
*An SP Angel mining analyst has visited Adriatic Metals operations in Bosnia
Empire Metals Ltd (AIM:EEE) 2.36p, Mkt Cap £8.4m – Kaolin Mineralisation identified at Eclipse-Gindalbie
- Empire provides an update on its 770m RC drilling programme at the Eclipse-Gindalbie Project in Western Australia.
- Previous drilling campaigns had highlighted evidence of kaolinite-rich clays.
- The drill programme covered 9 holes and targeted both gold and kaolin mineralisation at the historical and under-explored South Gippsland #3 mine.
- Of the seven holes drilled for kaolin, three reported white kaolin intercepts:
- 40m at 21.12% Al2O3 from 8m to 48m downhole (23GPRC_005)
- 12m at 20.87% Al2O3 from 4m to 16m downhole, 22m at 21.47% Al2O3 from 18m to 40m downhole (23GPRC_005)
- 11m at 20.80% Al2O3 from 13m to 24m downhole (23GPRC_006)
- Empire drilled two holes to target gold mineralisation, with one hole recording significant mineralisation:
- 1.5m at 5.04 g/t Au from 47m to 48.5m and 1.5m at 1.73 g/t Au from 49.5m to 51m downhole.
- Kaolin is used across industry, acting as a feedstock for high-purity alumina production utilised for lithium-ion batteries, alongside extensive uses in paper, adhesives, rubber, refractories, plastics, brick and ceramics.
- Going forward, Empire will focus on the metallurgical quality of the white kaolin samples collected, to analyse key factors for the potential of a deposit.
*SP Angel acts as nomad and broker to Empire Metals
Horizonte Minerals PLC (AIM:HZM, TSX:HZM, OTC:HZMMF) 145.5p, Mkt Cap £391m – Drawdown of US$50m of debt for Araguaia ferronickel project construction.
- Horizonte Minerals reports the drawdown of a second tranche of US$50m of its senior debt facility for the construction of the Araguaia ferronickel project in Brazil.
- The latest drawdown is part of the US$346.2m facility and the company comments that “To date US$465 million capital expenditure has been awarded which includes the majority of the key long lead items”.
- “The remaining Project capital commitment is comprised of US$18 million for process related equipment, US$19 million for overall site construction with the balance being costs that relate to materials and operational readiness in the lead up to first production”.
- Earlier this month, Horizonte Minerals reported that the project was 40% complete and on schedule and budget for the delivery of initial production in Q1 2024.
Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF) 13p, Mkt Cap £34m – Update on $3.5m placing
- Mkango reports it has received approval for the placing of 28,000,000 common shares of no par value at an issue price of £0.125/share following the £3.5m gross on Feb 13th, 2023.
- The Company has received final approval from the TSXV to issue the shares pursuant to the Placing.
- The shares have a statutory hold period in Canada up to the 28th June 2023.
- An aggregate of 1,400,000 warrants have also been issued, exercisable for a period of 12 months and an exercise price of £0.125/warrant.
*SP Angel acts as nomad and broker to Mkango Resources
Oriole Resources PLC (AIM:ORR) 0.14p, Mkt cap £3.8m – CLICK FOR PDF – Further high-grade rock chip samples from the CLP, Cameroon
- Oriole Resources reports an exploration update for its 4,091 km 2 Central Licence Package in Cameroon.
- Following January’s rock chip sample results of up to 134g/t, the Company has tested an additional 27 selective rock chip samples across a 3km long corridor of sheared and strongly altered quartz-feldspar porphyry and quartz veins.
- The samples, all taken from Mbe, returned up to 64.3g/t Au.
- Outcropping rocks across the 3km-long and 70m-wide Mbe anomaly were targeted with best results of:
- 64.3g/t Au
- 50.8g/t Au
- 16.2g/t Au
- The team targeted samples from shear veins, extensional veins, alongside the host-altered quartz-feldspar porphyry, with each returning anomalous gold.
- Going forward, Oriole is currently completing a ground-based geophysics programme at Mbe to analyse the vein structures at depth as the Company continues to advance its geological model.
Conclusion: The highly under-explored, district-scale CLP continues to deliver high-grade gold samples for the Oriole team, with evidence of mineralisation across both the quartz veins and host rocks presenting the opportunity for a potential gold resource at the prospect. The licence is well-supported by local infrastructure and we look forward to further updates from the Company as it advances its ground-based geophysics programme at the project.
*SP Angel acts as Broker to Oriole Resources
Premier African Minerals Ltd (AIM:PREM) 0.7p, Mkt Cap £154m – Latest drilling results from the Zulu Lithium project, Zimbabwe
- Premier African Minerals reports further results from its programme of mineral resource drilling at its Zulu lithium project in Zimbabwe.
- The results come from “the area planned to be mined under operation of the Pilot Plant and will constitute a portion of the Mineral Resource update required to support the DFS”.
- Among the higher-grade results reported today are:
- An intersection of 5m averaging 1.49% Li2O and 79ppm Ta2O5 from a depth of 84.24m in hole ZDD-047; and
- An intersection of 4m averaging 1.52% Li2O and 40ppm Ta2O5 from a depth of 106.08m also in hole ZDD-047 which also contains 8.77m averaging 1.00% Li2O and 73ppm Ta2O5 from 118.23m depth including a 3 metre wide interval averaging 1.66% Li2O and 80ppm Ta2O5 from 123m; and
- An intersection of 3m averaging 1.08% Li2O and 75ppm Ta2O5 from a depth of 119.36m in hole ZDD-048, which also includes a shallower intersection of 9.12m averaging 0.86% Li2O and 68ppm Ta2O5 from a depth of 47.06m
- An intersection of 9m averaging 1.41% Li2O and 35ppm Ta2O5 from a depth of 19.94m in hole MDI-GT-01A which also intersected 2.28m averaging 0.53% Li2O and 32ppm Ta2O5 from a depth of 44.68m and 2m averaging 0.75% Li2O and 33ppm Ta2O5 from a depth of 53.59m; and
- Intersections of 32.51m averaging 1.56% Li2O and 129ppm Ta2O5 from a depth of 184.26m in hole ZDD-151 which also intersected 16.31m averaging 1.49% Li2O and 95ppm Ta2O5 from a depth of 267.55m; and
- An intersection of 2.15m averaging 1.18% Li2O and 79ppm Ta2O5 from a depth of 110.30m in hole ZDD-154.
- CEO, George Roach, commented that “We continue to see good intersections within the main spodumene rich pegmatite that are both encouraging for the long term and supportive of our decision to commence operations with the large-scale pilot plant as we have done”.
Conclusion: The drilling at Zulu continues to intersect lithium mineralisation in the area expected to provide material for the pilot plant. We look forward to seeing the drilling results reflected in a mineral resource estimate.
Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB) Suspended – Application for creditor protection and update on operations resumption due tomorrow
- Rambler has applied for an Initial Order for Creditor Protection from the Supreme Court of Newfoundland and Labrador via the Companies’ Creditors Arrangement Act (CCAA).
- The Initial Order includes a stay of creditor claims and proceedings in favour of Rambler.
- It also enables court approval of a 13-week cash flow plan and Debtor in Possession financing necessary to support the operation as the CCAA process progresses.
- Grant Thornton will be appointed as court-appointed monitor of Rambler and its entities.
- Rambler continues to consider its available transactional and restructuring options.
- Rambler’s Canadian subsidiary, RMMCL, has agreed a conditional DIP agreement for a loan totalling US$5m with RMM Debt Ltd Partnership, subject to court approval.
- The loan will be secured by RMMCL’s assets, with Rambler acting as a guarantor. The funds will be used to continue operations through the CCAA process.
- Rambler has completed its critical maintenance work, targeting the access ramp, auxiliary ventilation and maintenance on mobile equipment in particular. Relining of the SAG and ball mills was also advanced.
- The Company expects full operation to begin tomorrow, on 28th February at its Ming Mine.
*SP Angel act as Nomad and Broker to Rambler Metals & Mining. An SP Angel analyst holds shares in Rambler Metals & Mining
Shanta Gold Limited (AIM:SHG, OTC:SAAGF) 10.6p, Mkt Cap £109m – Updated mineral reserve and resources estimates
- Shanta Gold has announced updated reserve and resources estimates for its Tanzanian and Kenyan deposits totalling 3.67moz.
- The new reserve estimates, effective 31st December 2022, show a total of 625,000oz of gold within the Tanzanian operations with 394,000oz at an average grade of 2.85g/t at New Luika with an additional 231,000oz at an average grade of 3.01g/t at Singida.
- Around 60% (236,000oz at an average grade of 2.89g/t gold) of the reserves at New Luika are within the underground operating area with the balance of 158,000oz at 2.03g/t gold, open-pittable.
- The reserves at New Luika are contained within an overall mineral resource of approximately 13.3mt at an average grade of 2.4g/t (1.03moz) of which approximately 74% (8.55mt at an average grade of 2.78g/t) is classed within the ‘Measured’ and ‘Indicated’ classes of JORC (2012).
- Mineral resources at Singida amount to 1.66mt at an average grade of 2.36g/t gold (885,000oz) of which just over 50% (5.5mt at an average grade of2.6g/t gold) is ‘Measured’ and ‘Indicated’.
- Mineral resources at Kakamega and Ramula in Kenya total 1.76m oz including 1.29moz at Kakamega of which 722,000oz are classed as ‘Measured’ and ‘Indicated’ with the balance ‘Inferred’ and 470,000oz at Ramula, of which 417,000 are ‘Measured’ and ‘Indicated’.
- CEO, Eric Zurrin, commented that “Over the past 5 years … Shanta's group-wide compliant resources have increased threefold from 1.2 million ounces ("Moz") to 3.7 Moz today”.
- He also said that “During 2022, Shanta has once again extended the life at NLGM with new reserves, now through to Q1 2028 from Q4 2026 (when measured at the end of 2021). This marks the fourth consecutive year in which we have extended the mine life by at least another year through successful exploration”.
- Mr. Zurrin explained that exploration spending in Tanzania was “less than half of that incurred in 2021 due to priority over Singida construction funding” but that in 2022, with Singida moving into production, “ur exploration focus will pivot back to mine life extension”.
Conclusion: Exploration in Tanzania is expected to focus on mine life extension in 2022 as Singida makes the transition from development to production.
Thor Explorations Ltd (TSX-V:THX, AIM:THX, OTC:THXPF) 16.5p, Mkt Cap £106m – Exploration drilling west of Segilola intersects quartz-hosted gold mineralisation
- Thor Explorations reports that exploration approximately 15km west of its Segilola gold mine in Nigeria has identified geochemically anomalous levels of gold and that initial exploratory drilling intersected 2m at an average grade of 227g/t gold from a depth of 80m in hole SGD238.
- Other holes, SGD235 and SGD236 intersected 3.1m averaging 14.32g/t gold from 28m depth and 2m averaging 6.24g/t gold from 46.5m depth respectively.
- The company explains the geological setting of the exploration area saying that it is “mostly amphibolitic rocks that contrast with the more gneissic terrain that is developed at Segilola itself … [and that] … sampling has defined an area measuring approximately 3km along strike and 1km wide that is oriented in a north-westerly direction”.
- The initial drilling “targeted the depth extensions of a mineralised quartz vein that had been exposed at surface and produced rock chip results of over 30g/tAu. Mineralisation is developed within a narrow, sub-vertical quartz vein that occupies a highly deformed zone that is characterised by weakly disseminated pyrite and intense silica-carbonate-sericite alteration”.
- Future drilling is expected to “test both the strike length and depth potential of this system”.
- CEO, Segun Lawson, explained that the exploration “results are the culmination of systematic and persistent exploration work leading to the discovery of this high-grade mineralisation. Importantly, it demonstrates the significant exploration potential outside of the immediate Segilola mine precinct.
- He said that “Our strategy is to develop the Western Prospects together with other such opportunities located within a 25km radius of Segilola, to provide a pipeline of high-grade material that will extend the current 4 years of production at Segilola”.
Conclusion: The discovery of additional mineralisation around 15km from the Segilola mine in Nigeria, which is expected to produce 85-95,000oz of gold in 2023, provides a promising follow-up exploration target within reach of the existing process plant.
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*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)
+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
Sources of commodity prices
Gold, Platinum, Palladium, Silver - BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel - Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt - LME
Oil Brent - ICE
Natural Gas, Uranium, Iron Ore - NYMEX
Thermal Coal - Bloomberg OTC Composite
Coking Coal - SSY
RRE - Steelhome
Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite - Asian Metal
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