Amur Minerals* (LON:AMC) – All set for the 2016 field season
Bacanora Minerals (LON:BCN) – Amended mineral resource estimate for the Sonora Lithium Project
BlueRock Diamonds* (LON:BRD) – New ceo appointed
Eurasia Mining (LON:EUA) – More permits in Russia
FinnAust Mining* (LON:FAM) – presentation
Metminco * (LON:MNC) – Drilling results from TD2 target
SolGold* (LON:SOLG) – update on Ecuador earthquake
Stratex International (LON:STI) – On target for 30,000 oz of gold production from Altintepe in 2016
W Resources (LON:WRES) – Metallurgical test results from La Parilla
Lithium – Tesla – orders for the new model 3 Tesla has passed 300,000 cars
• The Model 3 is expected to roll off the production line in late 2017.
• Battery production from Tesla’s $5bn Gigafactory is expected to pass total world 2013 production in 2020, highlighting the scale of the new facility.
• More factories to serve more companies are reported to be planned.
• We ask, if the UK grid and power generators are operating close to capacity and coal fired power stations are closed as planned, just how will we generate electricity for electric vehicles.
• It feels unlikely that EDF are going complete or even start the Hinkley Point nuclear power station on time though the French government claims to be committed.
Well done to the 121 team for a very well run and attended Mining Investment Conference in London last week
• The event demonstrated growing interest within the investment community for equity and for developing ideas in the mining space
Extel survey – voting for the Extel survey is open
• Please feel free to express your appreciation for our work by voting on the Extel survey website
Dow Jones Industrials -0.16% at 17,897
Nikkei 225 -3.40% at 16,276
HK Hang Seng -0.73% at 21,162
Shanghai Composite -1.44% at 3,034
FTSE 350 Mining -1.30% at 9,770
AIM Basic Resources +0.14% at 1,846
Economic News
US – Both industrial production and consumer sentiment came in lower than forecast in Mar and Apr according to reported released on Friday.
• Numbers have been weighed down by a decline in activity in the energy sector due to a sustained period of low oil prices.
• This week economic news:
Date Index Period Actual Expected (Bloomberg) Previous
Friday Industrial Production Mar -0.6%mom -0.1%mom -0.6%mom (revised from -0.5%mom)
Manufacturing Production Mar -0.3%mom 0.1%mom -0.1%mom (revised from 0.1%mom)
Capacity Utilization Mar 74.8% 75.3% 75.3% (revised from 76.7%)
New York Manufacturing Apr 9.6 2.0 0.6
UoM Consumer Sentiment Apr 89.7 92.0 91.0
Tuesday Housing Starts Mar -0.7%mom 5.2%mom
Building Permits Mar 2.0%mom -2.2%mom
Wednesday Existing Home Sales Mar 3.5%mom -7.1%mom
Thursday Weekly Jobless Claims 265k 253k
Philly Manufacturing Index Apr 8.0 12.4
Friday Manufacturing PMI Markit Apr 52.0 51.5
Source: Bloomberg
China – Property prices continued to climb in Mar with top tier cities leading the way.
• Prices in new residential buildings climbed 4.9%yoy in Mar.
• Among best performers are Shenzhen (+61.6%yoy!!!), Shanghai (+25.0%yoy) and Beijing (+16%yoy).
• Prices were up in 40 out of 70 cities surveyed.
Japan – A 7.3 Kumamoto earthquake in Japan may see a reduction in industrial production growth in Apr due to a disruption to supply chains.
• Kumamoto hosts a large semiconductor industry as well as production facilities of manufacturers such as Sony and Honda.
Currencies
US$1.1302/eur vs 1.1259/eur yesterday. Yen 108.27/$ vs 109.28/$. SAr 14.649/$ vs 14.490/$. $1.417/gbp vs 1.416/gbp
0.768/aud vs 0.772/aud. CNY 6.480/$ vs 6.483/$.
Commodity News
Precious metals:
Gold US$1,235/oz vs US$1,230/oz yesterday –
• Gold ETFs 56.6moz vs US$56.6moz yesterday –
Platinum US$981/oz vs US$988/oz yesterday
Palladium US$564/oz vs US$562/oz yesterday
Silver US$16.16/oz vs US$16.21/oz yesterday
Base metals:
Copper US$ 4,057/t vs US$4,815/t yesterday
Aluminium US$ 1,550/t vs US$1,556/t yesterday
Nickel US$ 8,955/t vs US$8,930/t yesterday
Zinc US$ 1,882/t vs US$1,879/t yesterday
Lead US$ 1,707/t vs US$1,723/t yesterday
Tin US$ 17,160/t vs US$17,150/t yesterday
Energy:
Oil US$41.2/bbl vs US$44.0/bbl yesterday – Prices fall back as Saudis rejected to enter into a production rationing agreement without Iran.
• New demands by Saudi Arabia are reported to have caught some attendees by surprise.
Natural Gas US$1.908/mmbtu vs US$1.947/mmbtu yesterday
Uranium US$25.90/lb vs US$27.00/lb yesterday
Bulk comodities:
Iron ore 62% Fe spot (cfr Tianjin) US$57.6/t vs US$56.2/t –
Thermal coal (1st year forward cif ARA) US$43.5/t vs US$43.6/t yesterday
Other:
Tungsten - APT European prices stood at $190-200/mtu vs $175-190/mtu last week – a good pick up in tungsten prices as Hemerdon continues commissioning
Company News
Amur Minerals* (LON:AMC) 5.3p, Mkt Cap £28.1m – All set for the 2016 field season
• The team has completed the delivery of 500t of supplies, spare parts and materials to the site ahead of the 2016 exploration season.
• Newly acquired equipment including a Boart Longyear drill rig have arrived to Kun Manie.
• The 2016 field season will include 15,000m of drilling at Maly Maly Kurumkon/Flangovy (MKFL) as well as the definition of sources for industrial and potable water for future Kun Manie operations.
• Drilling will target the conversion of the available Inferred mineral resource to higher confidence categories as well as a potential expansion of the resource in a step-out exploration programme.
• The Company is planning to collect a bulk metallurgical sample for process pant design.
• The drilling programme that normally is due to start around 1 June may be brought slightly forward due to warm weather.
• Visit the website for a compilation of videos showing the use of a 350km long ice road in a delivery of supplies to Kun Mani (https://amurminerals.com/photo-gallery/).
*SP Angel act as Nomad and Broker to Amur Minerals
Bacanora Minerals (LON:BCN) 73.5 pence, Mkt Cap £71.5m – Amended mineral resource estimate for the Sonora Lithium Project
• Bacanora reports an updated minerals resource estimate for its Sonora lithium project in Mexico of 259m tonnes at an average grade of 3200ppm lithium classed as indicated and an additional inferred resource of 160mt also at an average grade of 1200ppm lithium.
• The resource is reported at a cut-off grade of 1000ppm lithium and was prepared by the consultants, SRK and is reported in compliance with the Canadian NI-43-101 standard.
• The company also reports that it has filed the Pre-Feasibility Study for the Sonora project with Sedar (www.Sedar.com) and that the report will aslo be made available on the company’s website.
BlueRock Diamonds* (LON:BRD) 16 pence, Mkt Cap £5.1m – New ceo appointed
• Adam Waugh former head of sales and trading at Brewin Dolphin till 2008 has been appointed as ceo at BlueRock diamonds.
• Waugh moves has been a non-executive director of BlueRock and is also a director of Atlas Cloud Ltd a cloud computer service provider.
• Riaan Visser, formerly ceo of BlueRock Diamonds moves to become ceo of BlueRock’s sole operating subsidiary at Kareevlei in South Africa.
• Visser is a chartered accountant based in Kimberley South Africa, close to BlueRock’s diamond mining operations and has been involved in diamond mining operations in the region since 1995.
• BlueRock is working towards improving recovery rates at its Kareevlei diamond mining operation where it is mining the K1 diamond pipe which is reported to carry a grade of 6.3 carats per hundred tonnes as an inferred resource.
*SP Angel acts as Nomad & Broker to BlueRock Diamonds
Eurasia Mining (LON:EUA) 0.7p, mkt cap £9.1m – More permits in Russia
• Eurasia Mining updates the market on receiving all the permits at its West Kytlim alluvial platinum project in South Africa.
• “RostekhNadzor (the Federal Service for Ecological, Technological and Nuclear Supervision) has approved the Technical Design Report and the mine plan. Accordingly, the Company confirms that the "mining allotment" certificate has been issued permitting the carrying out of mining works at Eurasia's first area of development at Malaya Sosnovka. With this formality all the approvals for mining have been obtained.”
• Christian Schaffalitzky, Managing Director, comments: "We are very pleased with the steady progress to production in our West Kytlim project. Mining is still targeted to commence this summer with our preparatory work still on schedule. We look forward to updating shareholders on a regular basis"..
Conclusion: We have been waiting for Eurasia Mining to move to mining for nearly 20 years. It will be interesting to see if the company is finally able to move into production though it is ironic that platinum is close to its lowest gold / platinum ratio seen through the history of the company. Platinum prices look good in Rouble terms although Russian operating costs have a tendency to catch up with US dollar based costs in time.
FinnAust Mining* (LON:FAM) 4.0p, mkt Cap £19.5m – presentation
• FinnAust have updated their presentation to include details of the Pituffik titanium mineral sands project in Greenland.
• The presentation is available on the company website and shows pictures of high-grade ilmenite, black sand with elevated grades of up to 95% ilmenite (av grade est +/-40%.
• A series of areal pictures shows raised, active and drowned beaches of mineral sands in the Pituffik project area with high grade targets in the Moriusaq Bay area.
• There are estimates of beach sand thicknesses with highest grades expected in the shallow, near shore marine environment.
• The presentation also highlights FinnAust’s strategic team supporting its work in Greenland.
* SP Angel acts as nomad and broker to the company
Metminco * (LON:MNC) 0.215 pence, MKT Cap £7.1m – Drilling results from TD2 target
• Metminco reports that its recently completed CD-96 drill-hole at the TD2 site within its Los Calatos property in Peru “confirm the potential of the TD2 target”. The hole was angled at 60⁰ towards the west (260⁰) and completed at a depth of 666 metres.
• The hole intersected two significant breccia zones between 172m to 213m and between 311m and 346m. These zones comprised “dominantly chalcedonic quartz and pyrite with strong phyllic alteration”. This combination of mineralogy is considered to be diagnostic of “the upper levels of a hydrothermal system located above a deeper seated porphyry body.”
• The lower intersection between 311m to 346m averaged 0.24g/t gold and 2.64 g/t silver and included higher grade zones of 5m averaging 0.44 g/t gold and 6.02g/t silver and 17m averaging 0.30g/t gold and 2.98 g/t silver.
• The assay results are higher than expected with the 35m long intersection noted above being “some 13 times higher than the mean gold value associated with the underlying porphyry, as intersected in the main Los Calatos deposit”.
• The results appear to vindicate the exploration model at TD2 although “the targeted porphyry hosted Cu and Mo mineralisation is expected to be deeper than anticipated. As such, further drilling will be required to test the system at depth, at which point in time the drilling of two drill holes at the TD3 target will also be considered.”
Conclusion: The results of the TD2 drilling support an exploration model that the Los Calatos deposit may indeed be larger than the current resource which supports a current study to mine a total of 134m tonnes of ore at an average grade of 0.89% copper and 0.036% molybdenum over a 22 tear period using sub-level-caving. The company has been seeking a strategic partner to assist in the development of Los Calatos; the positive evidence of additional potential to extend the resource may help to stimulate and maintain interest from potential partners.
*SP Angel act as joint-broker to Metminco
Solgold* (LON:SOLG) 3.4p, Mkt Cap 32m – update on Ecuador earthquake
• SolGold offer their sincere condolences in a comment on the Ecuador earthquake and are contributing to the earthquake relief effort.
• SolGold’s exploration activities have not seen any disruption and management expect to issue a further exploration update soon.
• We expect to see results from mineralisation seen in surface assays shortly.
• Mineralisation appears to run from surface to significant depth, though not all of this mineralisation carries significant copper, gold, molybdenum grades.
• SolGold continues to offer assistance to the government relief effort.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has visited the Cascabel project.
Stratex International (LON:STI) 2.175p, Mkt cap £10.2m – On target for 30,000 oz of gold production from Altintepe in 2016
• Stratex has announced that up to 26th March, the Altintepe project in Turkey (Stratex 45%) has sold 12,280 oz of gold and that the project “is on target to deliver the minimum expected annual production of 30,000 oz gold during 2016.”
• The sales so far have generated US$14.3m, implying an average of US$1165/oz.
• The company reports that total operating costs “currently stand at approximately US$560/oz with the contract-mining cost fixed at US$450/oz until 30th June 2016.”
• Stratex and its operating partner, Bahar Madencilik are now working to optimise the mine development schedule for the next few years.
Conclusion: The commissioning of Altintepe has moved Stratex from an explorer to a producer and given it a cash-generative platform which can underpin its other projects in west Africa.
W Resources (LON:WRES) 0.50p, Mkt Cap £19.4m – Metallurgical test results from La Parilla
• W Resources reports that metallurgical testing for its La Parilla tungsten project in Spain has shown that “End to end recoveries through the process plants circuit are estimated at 71% overall WO3 recovery.”
• The company is proposing to use gravity techniques to produce around 1300 tpa of tungsten trioxide concentrate from its “fast-track” mine at La Parilla, with capacity to expand relatively quickly to 2600tpa.
• W Resources intends to produce a 66% tungsten trioxide concentrate with acceptable levels of arsenic and other deleterious elements from its La Parilla fast-track min which is currently forecast to start production by the end of 2016.
Conclusion: The test results show a relatively high rate of recovery, however, with a low grade resource (0.096% WO3) and prices of the benchmark ammonium paratungstate continuing at historically low levels, despite a modest upturn on Friday to US$190/200 per mtu, we consider that there is a very thin margin for error on any underperformance on recovery at La Parilla.