European Metals (LON:EMH) – Completion of drilling programme at Cinovec
FinnAust Mining* (LON:FAM) BUY Target Price 15p – Very pure ilmenite (titanium) concentrate purity produced in test work
Kibo Mining (LON:KIBO) – Scoping study approval for Mbeya Coal to Power Project
Medusa Mining (ASX:MML) – Medusa mine development
Orosur Mining (LON:OMI) – Q2 results
Tethyan Resources (LON:TETH) – Results of first hole at Rudnitza prospect in Serbia
FTSE 100 hit new record high on the back of a weaker pound with miners leading gains.
The pound gapped down 1.6% against the US$ briefly touching 1.1986 this morning as the government indicated the nation is prepared to withdraw from the single market completely to keep controls of its national borders.
Mrs May will be giving a speech regarding the Brexit strategy on Tuesday.
The US is celebrating the Martin Luther King Day with markets closed today.
Gold is up 0.5% trading above $1,200/oz amid increased volatility in FX markets.
Iron ore futures hit daily limit on the Dalian Commodity Exchange extending 13% gain recorded last week.
Supporting moves in the iron ore market, steel prices posted strong gains with rebar up 5.5% and hot rolled coil up 4.2% in China today.
Dow Jones Industrials -0.03% at 19,886
Nikkei 225 -1.00% at 19,095
HK Hang Seng -0.96% at 22,718
Shanghai Composite -0.30% at 3,103
FTSE 350 Mining +1.46% at 16,686
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Economic News
US – Retail sales ended the year on a strong note led by auto sale.
In addition to car dealerships, other seven of 13 major categories posted gains.
FY16 sales climbed 3.3% beating the previous year’s increase of 2.3%.
Previous reports pointed to record auto sales posted in FY16 with 17.55m units shipped in 2016.
Japan – Factory prices deflation slowed in Dec marking the slowest pace since the run of negative price changes started in early 2015.
PPI (%yoy): -1.2 v -2.2 in Nov and -1.4 forecast.
UK – Philip Hammond, the Chancellor of the Exchequer, warned the EU that the UK may become a low tax jurisdiction should the nation be excluded from the single market.
The currency is on track for the lowest close since May/85.
Italy – Sovereign bond yields edged higher this morning following the decision by DBRS to cut the nation’s credit rating by one notch to BBB (high) from A (low).
Explaining the downgrade, the agency mentioned a lack of political support for economic reforms, high level of non-performing loans in the banking system and slow economic recovery.
Lower rating is set to increase the cost of funding for local lenders with estimates suggesting banks hold around €350bn in Italian sovereign bonds, accounting for around 10% of their total assets.
South Korea – Local authorities are seeking an arrest warrant for Jae-Yong Lee, Vice Chairman of the Board of Samsung Electronics.
Prosecutors accuse Mr Lee of bribery amid allegations of unlawfully donated funds to close to former President aides to secure the state backing over the merger of two Company’s affiliates.
Currencies
US$1.0597/eur vs 1.0636/eur last week. Yen 114.12/$ vs 114.69/$. SAr 13.632/$ vs 13.550/$. $1.204/gbp vs $1.219/gbp.
0.746/aud vs 0.749/aud. CNY 6.898/$ vs 6.900/$.
Commodity News
Precious metals:
Gold US$1,203/oz vs US$1,196/oz last week
Gold ETFs 57.0moz vs US$56.9moz last week
Platinum US$985/oz vs US$974/oz last week
Palladium US$749/oz vs US$756/oz last week
Silver US$16.83/oz vs US$16.76/oz last week
Base metals:
Copper US$ 5,891/t vs US$5,826/t last week
Aluminium US$ 1,811/t vs US$1,791/t last week
Nickel US$ 10,310/t vs US$10,215/t last week
Zinc US$ 2,787/t vs US$2,727/t last week
Lead US$ 2,287/t vs US$2,208/t last week
Tin US$ 21,080/t vs US$21,090/t last week
Energy:
Oil US$55.3/bbl vs US$55.9/bbl last week
Natural Gas US$3.464/mmbtu vs US$3.387/mmbtu last week
Uranium US$23.00/lb vs US$23.00/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$81.8/t vs US$77.0/t
Chinese steel rebar 25mm US$492.7/t vs US$489.6/t
Thermal coal (1st year forward cif ARA) US$66.9/t vs US$68.1/t last week
Premium hard coking coal Aus fob US$184.7/t vs US$184.9/t
Other:
Tungsten - APT European prices $191-200/mtu vs $187-198/mtu
Company News
European Metals (LON:EMH) 40.5 pence, Mkt Cap £52.4m – Completion of drilling programme at Cinovec
European Metals has announced that it has now completed 17 drill-holes totalling 6081 metres at Cinovec. The programme is “planned to confirm and delineate near surface lithium and tin mineralisation that would provide initial feed to the mill … [and to assist in] … the conversion of resources from the Inferred to Indicated category, and delivery of material for metallurgical testing”.
The company reports assay results from the latest two holes while results from a further 5 holes are “expected to be delivered by the end of January.”
Hole CIW-23, located in the central part of the Cinovec Main mineralisation intersected 261.1m at an average grade of 0.50% Li2O, described as “the best lithium interval to date”, while hole CIW -10, on the western edge of the mineralisation intersected 223.9m at an average grade of 0.43% Li2O. “Between 116 and 119 the drill intersected a historic backfilled stope after mining high grade tin-tungsten quartz veins in the 1960’s.”
Hole CIW-10 was drilled at an angle of 75⁰ towards the west and intersected the contact between barren porphyry and mineralised granite, containing between 5% to 15% of the lithium mica mineral zinnwaldite, at a depth of 213m.
The company comments that “When all the results are received, we will upgrade the block model and finalise the resource estimate for the Pre-feasibility study. We expect further conversion of inferred to indicated resources to occur as part of this re-modelling.”
European Metals has also announced the appointment of a mining engineer, Mr Richard Pavlik as General Manager of the company’s Czech subsidiary , Geomet s.r.o. Mr Pavlik has “almost 30 years of relevant industry experience in the Czech Republic” including a role as “Chief Project Manager and Advisor to the Chief Executive” of the major Czech coal producer OKD.
Conclusion: We look forward to the results of the updated block model for Cinovec when all the assay results from the drilling programme become available.
FinnAust Mining* (LON:FAM) 6.9p, Mkt Cap £42.4m – Very pure ilmenite (titanium) concentrate purity produced in test work
BUY Target Price 15p
FinnAust report the production of very pure ilmenite concentrate in recent test work done by Allied Mineral Laboratories.
“The heavy liquid separation conducted on the -2mm sand fraction produced a very pure ilmenite concentrate
Analysis of the potential ilmenite product from this concentrate continues to suggest the suitability of the Pituffik ilmenite for direct use in the sulphate process and upgrading to sulphate slag and chloride slag”
The results of this test work are good news and should enable the engagement of a marketing expert to lead the company’s negotiations to place expected concentrate production from Pituffik.
In a further update FinnAust have also placed further samples with SGS Laboratories in Cornwall for processing.
Pituffik remains on track to produce its maiden ilmenite resource in February / early March 2017.
The team plan to generate a much larger bulk metallurgical sample through this coming field season to better confirm the marketability of the Pituffik concentrate product.
See link below for latest company video presentation by rocket Rod
https://www.youtube.com/watch?v=SKgETC0kMAA&feature=youtu.be
*SP Angel act as nomad and broker to FinnAust and acted for FinnAust in this placing
Kibo Mining (LON:KIBO) 5.8 pence, Mkt Cap £20.9m – Scoping study approval for Mbeya Coal to Power Project
Kibo Mining reports that Tanzania’s National Environment Management Coulcil has “approved and accepted both the Mbeya Coal Mine and Mbeya Power Plant Environmental and Social Impact Assessment (“ESIA”) scoping reports.”
The company describes the approval as the conclusion of the second stage of the three stage statutory ESIA approval process which “paves the way for final ESIA certification of both the Mbeya Coal Minea and the Mbeya Power Plant.”
CEO, Louis Coetzee, commented that “We expect Stage 3 … to be completed in a shorter time frame than usual, given the fact that the preparation work for an accelerated conclusion was done whilst awaiting approval of the scoping reports.”
Medusa Mining (ASX:MML) A$0.46, Mkt Cap A$94.5m – Medusa mine development
Medusa Mining upgraded guidance for 2016 gold production last week reducing expected gold production to to 85,000-95,000oz from 105,000-115,000oz
Unit costs naturally rise as production falls with the AISC rising to $1,200 -1,350/oz from $1,00-1,100/oz.
The September quarter results were as expected but December suffered from a slow recovery in ore grades.
This combined with higher mine-shaft maintenance lowering ore tonnages served to reduce the ore and grade available to the mill.
The team at the CoO mine are mid way through their capital program which involves higher level of maintenance to ensure the mine can meet its capacity targets.
Underground development continues apace maintaining a rate of 4,500m per quarter for new development.
Maintenance to the L8 shaft will continue into the March quarter slowing up hoisting capacity
The final electronic components for the E15 shaft arrived two months late due to shipping issues as the Hanjin shipping company went bust. Medusa’s freight managers managed divert the container of components through air freighting the kit into the Philippines.
Medusa’s recently updated new ore resources and reserve statement shows 2.77mt of ore grading 10.8 g/t for 0.96moz of contained gold vs 3.5mt grading 10.2 g/t gold (1.15m oz) at June 2015. The good bit is the grade of the resource is rising while more drilling will need to be done to expand the resource again. Approximately 57% of the gold ounces in the resource are classified as “indicated” with the balance “inferred” see our last comment for further explanation.
Conclusion: We estimate that Medusa are running around one quarter behind as a result of the shaft maintenance and the delay to the electronic components with the capital programme now due to complete in September. The cash balance is likely to fall below the A$19.6m seen at end September.
Orosur Mining (LON:OMI) 16.8 pence, Mkt Cap £16.7m – Q2 results
The company reports that it produced 6852 oz of gold during the quarter ended November 2016, bringing production for H1 2017 to 16,802 oz (H1 2016 – 20,643 oz). Cash operating cost for the quarter was US$914/oz (Q2 2016 US$858/oz) and for the half year was US$783/oz (2016 H1 – US$916/oz).
The company successfully commenced production at its first underground stope on the San Gregorio West (SGW UG) mine in late November 2016 both on schedule and on budget.
Prior to the planned closure of the Arenal underground mine, an additional 90,000 tonnes of ore at an average grade of 1.4g/t gold not previously in the mine plan was produced and this deferred “higher grade production from SGW UG.”
The company has previously reported encouraging results from exploration drilling in and around the San Gregorio underground mining area “successfully intersecting gold mineralisation in every hole.” “The Company plans to accelerate exploration in open pit targets around the San Gregorio plant” after the receipt of additional permits “to drill seven RC/DD hole (1600m) in the Arenal-SG corridor to test the occurrence of what could be a relatively large deposit.”
The company holds net cash of US$5.15m as of 30th November 2016.
Tethyan Resources (LON:TETH) 3.5 pence, Mkt Cap £5.1m – Results of first hole at Rudnitza prospect in Serbia
Tethyan Resources reports that it has completed an initial four-hole diamond-drilling programme at the Rudnitza copper-gold porphyry project in the Suva Ruda exploration licence in Serbia. Tethyan holds an option to purchase 100% of the permit from local interests for €6m in cash plus an undisclosed percentage of the capital costs required to build a mine.
The assay results of the first hole, which was drilled at an angle of 85⁰ towards the south-east, show an intersection of 567 metres at an average grade of 0.28% copper and 0.45 g/t gold from the surface. The hole was terminated at a depth of 584.6m. Results from the remaining holes in the programme are still awaited.
In detail, there is a higher grade intersection, between 122m and 160m, of 38m grading 1.18% copper and 0.38g/t gold which may represent a zone of supergene enriched mineralisation.
The Suva Ruda permit area was identified by Phelps Dodge in 2004. Phelps then “drilled 7 widely spaced drill holes over an area of 1.2km by 0.8km.” Tethyan Resources’ hole “RDD-001 was drilled very near to the site of one of the earlier Phelps Dodge drill holes which had reported 144m grading at 0.4% copper and 0.4 g/t gold but had been completed at 244m still in mineralisation.”
Conclusion: Tethyan Resources first drill hole has intersected copper gold mineralisation from the surface and has confirmed and extended the depth extent of mineralisation first reported by Phelps Dodge. We look forward to the results of the remaining drill-holes as they become available.