Dalradian Resources (LON:DALR) – Curraghinalt results show 94% gold recovery with a simplified flowsheet
Metminco* (LON:MNC) – Completion of Colombian acquisition
Metal Tiger (LON:MTR) – Wide mineralisation encountered in drilling at T3
Solgold* (LON:SOLG) – Exploration identifies new “Moran” prospect
Equities are trading higher this morning as bookmakers’ odds dropped to around 26%, nearly half the percentage seen a week ago.
• The pound is slightly up today after hitting a five-month high of US$1.4687 in the previous session and appreciating 3.4% over the past five days.
• The Japanese yen is up 0.2% against the US$, extending this month’s increase to around 6%.
• The US$ index is off 0.1% while gold remained relatively flat.
• Crude climbed past the US$50/bbl mark yesterday and is holding onto its gains today as US oil inventories are reported to have declined last week.
Dow Jones Industrials +0.14% at 17,830
Nikkei 225 -0.64% at 16,066
HK Hang Seng +0.61% at 20,795
Shanghai Composite +0.94% at 2,906
FTSE 350 Mining +0.31% at 9,427
AIM Basic Resources -0.36% at 1,879
Economic News
US – In her testimony to a Senate Committee, Janet Yellen expressed a cautious outlook on the US economy highlighting “considerable uncertainty” over the pace of recovery given weak employment and investment data.
• “The latest reading on the labour market and the weak pace of investment illustrate one downside risk – that domestic demand might falter.”
• As such the cautious approach to monetary policy normalisation is likely to remain meaning chances of a rate hike in Jul are fading.
• The probability of a rate increase during the next meeting came down to 10.0%, down from 15.7% a week and 48.2% a month ago.
• At the Jun FOMC meeting, 6 of 17 members expected a single rate hike this year compared to only one person back in Mar. Market commentators speculate Janet Yellen might be one of those six members.
Date Index Period Actual Expected (Bloomberg) Previous
Wednesday Existing Home Sales May 1.8%mom 1.7%mom
Thursday Weekly Jobless Claims 270k 277k
Markit Manufacturing PMI 50.9 50.7
Friday Durable Goods Orders/Core May -0.4%mom/0.1%mom 3.4%mom/0.5%mom
Capital Goods Orders May 0.3%mom -0.6%mom
Source: Bloomberg
Currencies
US$1.1277/eur vs 1.1336/eur yesterday. Yen 104.42/$ vs 104.44/$. SAr 14.717/$ vs 14.703/$. $1.467/gbp vs $1.472/gbp.
0.749/aud vs 0.749/aud. CNY 6.581/$ vs 6.577/$.
Commodity News
Precious metals:
Gold US$1,268/oz vs US$1,283/oz yesterday
Gold ETFs 61.2moz v 60.9moz yesterday
Platinum US$981/oz vs US$987/oz yesterday
Palladium US$553/oz vs US$547/oz yesterday
Silver US$17.25/oz vs US$17.43/oz yesterday
Base metals:
Copper US$ 4,717/t vs US$4,613/t yesterday
Aluminium US$ 1,638/t vs US$1,634/t yesterday
Nickel US$ 9,270/t vs US$9,205/t yesterday – Philippines’ nickel ore shipments to China may be affected by an appointment of a new environment department head who heavily criticized mining industry in the past.
• Philippines shipped 3mt of ore to China in May making it the highest level in seven months and accounting for 97% of the nation’s total purchases.
• New president taking the office on Jun 30 said to review all mining claims and separately referred to problematic mining in Surigao province, one of the sources of ore for China.
Zinc US$ 2,044/t vs US$2,010/t yesterday
Lead US$ 1,724/t vs US$1,716/t yesterday
Tin US$ 17,070/t vs US$16,950/t yesterday
Energy:
Oil US$50.9/bbl vs US$50.3/bbl yesterday
Natural Gas US$2.752/mmbtu vs US$2.716/mmbtu yesterday
Uranium US$26.40/lb vs US$25.75/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$48.4/t vs S$48.1/t – Prices climbed to the highest close in more than a month led by an increase in steel prices.
• Dalian iron ore price climbed 2.1% to CNY 382/t ($58/t) today.
• Rebar prices were up 1.9% to CNY 2,122/t on SHFE.
• Hot rolled coil increased 2.1% to CNY 2,307/t on SHFE.
Thermal coal (1st year forward cif ARA) US$57.3/t vs US$59.4/t yesterday
Other:
Tungsten - APT European prices stood at $200-220/mtu vs $205-222/mtu last week – tungsten prices slide
Company News
Dalradian Resources (LON:DALR) 56 pence, Mkt Cap £121.3m – Curraghinalt results show 94% gold recovery with a simplified flowsheet
• Dalradian Resources have announced that metallurgical test work, which forms part of the feasibility study due for release this autumn, has shown that an overall gold recovery of 94.3% is achievable “with a simplified processing circuit that allows for a coarser grind size and reduced process equipment.”
• The company is “proceeding on processing by single stage grinding, flotation and CIL on the flotation concentrate. Secondary grinding and gravity concentration have been removed from the processing flowsheet.”
• Dalradian also notes that there may be scope to improve upon this rate of recovery and is conducting further test work to “further refine the metallurgical response”.
• The recently released resource estimation report, prepared by the consultants, SRK, for the Curraghinalt deposit reports a measured an indicated resource of approximately 2.1m oz of gold at an average grade of around 11.6 g/t with an additional inferred resource of 2.3m oz at an average grade of approximately 10.1g/t. An improvement on the recovery rate of 94% reported so far at these high resource grades should further enhance the economics of what is already proving to be a robust project.
• In our view, the opportunity to simplify the flowsheet should offer scope to keep the capital costs of the processing plant down.
Conclusion: The metallurgical results indicate that a simple, probably relatively low cost, processing plant is likely to be appropriate for Currghinalt. We look forward to the release of the feasibility study later in the year.
Metminco* (LON:MNC) 0.155 pence, Mkt Cap £6.0m – Completion of Colombian acquisition
• Metminco has announced the settlement of its acquisition of Minera Seafield in Colombia has now been completed and that it has issued 350million new shares to the vendor, RMB Australia Holdings. It has also reimbursed total of A$165,000 to RMB for expenses incurred during the period up to the end of April. A final reconciliation of expenses is to occur within one month.
• The Colombian assets are advanced exploration/development stage gold projects located in the Cauca gold belt which hosts a number of significant gold deposits including Anglogold Ashanti’s 33m oz La Colosa deposit and Gran Colombia’s 12m oz Marmato gold mine.
• The assets currently contain NI 43-101 compliant resources, defined by the previous operator, of 1.88m oz at the Miraflores project and a further 0.92m oz at the nearby Dosquebrados project.
• Managing Director, William Howe commented that the acquisition enables “Metminco to become a near term gold producer, whilst complementing our ongoing activities in Peru and Chile.” Mr Howe went on to say “The immediate focus will be on the development of the highly attractive and technically robust Mitaflores Gold Project.”
• Metminco is looking at an accelerated feasibility study building on partially completed technical studies undertaken by the previous operator prior to entering administration in September 2014. Although Metminco is reviewing this pre-existing information and considering an underground mining approach in preference to the open-pit mine favoured by Minera Seafield, the existence of the underlying data represents a great opportunity to deliver an accelerated development programme.
Conclusion: The completion of the Colombian acquisition, following the recently announced funding agreement for the company’s Los Calatos project in Chile, is an important milestone towards Metminco’s evolution as a mine developer
*SP Angel act as joint-broker to Metminco
Metal Tiger (LON:MTR) 3.1 pence, Mkt Cap £17.4m – Wide mineralisation encountered in drilling at T3
• Metal Tiger’s partner on its 30% owned T3 copper silver project in Botswana has announced initial drilling results from the latest programme.
• The results show wide zones of mineralisation, including 7.9m averaging 1.03% copper and 11 g/t silver from a depth of 260.6m in hole MO-G-07D, with a second intersection of 5.6m at 1.05% copper and 21.5 g/t silver from a depth of 290.4m in the same hole. Other intersections include:
o 41.00m averaging 1.55% copper and 21 g/t silver from a depth of 132m in hole MO-G-08D and 22.0m at 2.29% copper and 29 g/t silver from 174m in the same hole and
o 21.61m at 1.66m copper and 24 g/t silver from 165m in hole MO-G-09D and 3.37m averaging 6.08% copper and 113g/t silver from 213.63m depth
o The company reports that “21 diamond drill holes have either been completed or are in progress within the Phase 1 resource area. All holes completed to date (MO-G-01D to MO-G-18D) have intersected copper mineralisation within the target sequence. A further 13 holes are planned to establish the initial resource estimate.”
o In addition to the drilling results, “further soil samples … identified a new 4km long copper / zinc anomaly to the west of the Phase 1 resource area, extending the zone of soil anomalies > 12km along the T3 Dome.”
Conclusion: Drilling and other exploration in Botswana is progressing with encouraging results both in terms of intersecting mineralisatrion within the Phase 1 target area and extending the area of interest through identifying additional geochemical anomalies.
Solgold* (LON:SOLG) 2.95p, Mkt Cap £28.1m – Exploration identifies new “Moran” prospect
• Solgold reports that its continuing mapping and sampling work at the Cascabel project have identified a “classically zoned outcropping and visually mineralised porphyry system at the Moran Prospect approximately 1.2 km north of the Alpala North West centre of the Alpala trend at Cascabel.”
• The zone as defined so far, consists of a 300m x 300m outcropping area of mineralisation which shows characteristics of the “strong copper gold mineralisation at Alpala. The mineralisation at Moran exhibits visible chalcopyrite (copper sulphide) in quartz and magnmetite veins in fractured magnetic diorite intrusive host rock”.
• The new discovery also shows copper, zinc and lead mineralisation in association with quartz/carbonate veins which atypically7 associated with “the peripheral zones around the copper gold rich cores of many South American copper gold porphyry systems” .
• The Moran area, which is the 11th target so far identified at Cascabel, overlies a strong magnetic anomaly at a depth of 350m which is interpreted to shallow to the north towards the outcropping mineralisation.
• Detailed soil augur sampling, mapping rock chip and channel samoling is continuing as a precursor to planned drilling in late 2016.
• Solgold also report that samples from holes CSD-16-015R2 and CSD-16-017 are at the laboratory awaiting assay and that holes “18 and 19 will be sited after consideration of the results of the updated magnetic modelling and the preliminary evaluation of the Moran Prospect”.
Conclusion: Solgold’s exploration has identified a number of near surface or outcropping zones of mineralisation as well as deeper mineralisation within the Cascabel project area. The latest discovery, the Moran Prospect, exhibits characteristics of classical South Amercian copper / gold porphyry deposits and maintains the momentum which Solgold has established of expanding the scope of the Cascabel project.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has visited the Cascabel project