Bushveld Minerals* (LON:BMN) – Deed of Settlement and Undertaking signed with Gingko and Oakleaf 115
IronRidge (LON:IRR) – Joint venture with Major Star identifies new exploration target areas in Ivory Coast
Premier African Minerals (LON:PREM) – Additional comments
Regency Mines (LON:RGM) – Alabama coal mine washes 6,000t of coal at Rosa plant
Sirius Minerals () – Sirius Woodsmith Polyhalite Mine update
Tanfield Group Plc (LON:TAN) – Takeover potential - we note stake building by Denmark-based Zoar Invest Aps to >10%
Tethyan Resources* (LON:TETH) – Funds raised to support further drilling at Suva Ruda copper project in Serbia
US equities regained much lost ground yesterday closing only marginally down with European stocks also seen recovering from lows hit yesterday morning
• Major miners are trading higher this morning (FTSE 350 Mining +0.4%), but remain 3.2% down on the Monday open.
• Gold trades close to the highest in a month amid flat US$ and Chicago Fed President comments.
• Head of Chicago Fed Charles Evans said that two interest rate hikes this year can be just about right on the back of uncertainty surrounding outlook for inflation and government spending.
• Base metals prices changes are mixed; Brent is up $0.2/bbl close to $51/bbl recovering after coming close the $50/bbl mark yesterday afternoon.
• Iranian Oil Minister said that a deal to cut production is likely to be extended, but the decision remains subject to discussion between all parties involved.
• “It seems that most of the OPEC and non-OPEC (countries) are going to extend the agreement, but time is needed to evaluat the situation and to have face-to-face meetings and discussions with other,” the Minister said.
• Iran also did not rule out its participation in the potential extension.
• Iron ore futures drop again this morning extending losses to six days now.
• Steel rebar futures climbed today following a week long decline on the back of the news that local authorities renewed their drive to cut excess steel production.
• In particular, Beijing is reported to have called a meeting with major steel producers on Monday to discuss the progress in the industry consolidation and banning low-grade steel.
Dow Jones Industrials -0.22% at 20,551
Nikkei 225 +1.14% at 19,203
HK Hang Seng +0.41% at 24,293
Shanghai Composite -0.43% at 3,253
FTSE 350 Mining +1.14% at 15,429
AIM Basic Resources -0.78% at 2,573
Economics
China – An early indicator of the manufacturing sector performance which uses commercial satellite images to track activity at the nation’s industrial sites showed an improvement in Mar.
• The China Satellite manufacturing Index supplied by San-Francisco based SpaceKnow closed to 51.8 in Mar, up from 51.1 in Feb and close to 52.0, the highest reading since 2011.
• Interestingly the index demonstrates good correlation with official manufacturing PMIs which are due later this week.
• Official manufacturing PMI is expected to remain flat at 51.6 in Mar marking the third highest reading since 2012.
• Private Caixin manufacturing data is forecast to show a slight slowdown in expansion to 51.3, from 51.7 in Feb.
France – Marine Le Pen and Emmanuel Macron are the two leading candidates forecast to secure 25% and 24% of first round votes in coming presidential elections (23 Apr), latest Ipsos polls show.
South Africa – The rand lost nearly 5% in two days on speculations President Zuma might replace the acting Finance Minister Pravin Gordhan.
• The Minister was asked to “cancel the international investment promotion roadshow to the UK and the US and return to South Africa immediately”, the statement from the president’s office said.
• Rumours that Jacob Zuma told senior leaders of the nation’s communist party about his plans to sack Gordhan have dragged the rand lower this morning.
Currencies
US$1.0861/eur vs 1.0872/eur yesterday. Yen 110.57/$ vs 110.17/$. SAr 12.986/$ vs 12.319/$. $1.258/gbp vs $1.258/gbp.
0.760/aud vs 0.763/aud. CNY 6.884/$ vs 6.874/$.
Commodity News
Precious metals:
Gold US$1,254/oz vs US$1,258/oz yesterday
Gold ETFs 58.9moz vs US$53.5moz yesterday
Platinum US$966/oz vs US$974/oz yesterday
Palladium US$788/oz vs US$809/oz yesterday
Silver US$18.06/oz vs US$17.91/oz yesterday
Base metals:
Copper US$ 5,791/t vs US$5,730/t yesterday
Aluminium US$ 1,924/t vs US$1,929/t yesterday
Nickel US$ 9,790/t vs US$9,735/t yesterday
Zinc US$ 2,760/t vs US$2,787/t yesterday
Lead US$ 2,285/t vs US$2,315/t yesterday
Tin US$ 19,845/t vs US$19,595/t yesterday
Energy:
Oil US$51.0/bbl vs US$50.4/bbl yesterday
Natural Gas US$3.031/mmbtu vs US$3.120/mmbtu yesterday
Uranium US$24.65/lb vs US$24.65/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$79.4/t vs US$82.3/t – iron ore prices reported to be turning up again after recent slide
Chinese steel rebar 25mm US$554.9/t vs US$560.0/t – China steel rebar prices recover following slippage last week
Thermal coal (1st year forward cif ARA) US$62.9/t vs US$64.2/t yesterday
Premium hard coking coal Aus fob US$150.2/t vs US$150.1/t
Other:
Tunsgten APT European US$206-216/mtu (from the 24Mar week) v US$208-216/mtu (from the 17Mar week)
Company News
Bushveld Minerals* (LON:BMN) 8.1p, Mkt Cap £57.8m – Deed of Settlement and Undertaking signed with Gingko and Oakleaf 115
• Bushveld Minerals report that they have signed a Deed of Settlement and Undertaking signed with Gingko and Oakleaf regarding the settlement, by Bushveld, of all demonstrable funding and interest that Gingko advanced to Oakleaf 115 as part of its acquisition in 2014 as a participant in the Avacap Consortium of a 10% shareholding in Vametco.
• Oakleaf 115 holds its 10% shareholding in Vametco through its 100% shareholding in Business Ventures Investments Holdings No 1833 Proprietary Limited ("BVI 1833")..
• “The signing of the DSU with Gingko is an important step in the completion of the Jaxson-Avacap agreement and, as such, a further important milestone towards the completion of our acquisition of SMC. We look forward to providing further updates as we conclude the outstanding conditions.” According to Fortune Mojapelo, Bushveld Minerals ceo.
*An SP Angel mining analyst and nomad have visited the Vametco vanadium mine and processing facilities in South Africa.
IronRidge (LON:IRR) 43.8p, mkt cap £104m – Joint venture with Major Star identifies new exploration target areas in Ivory Coast
• IronRidge reports that it has executed a joint venture agreement with ‘Major Star SARL’ over licenses in the Ivory Coast.
• The jv was first announced on 24 November last year and has been subject to a busy due diligence process since. It covers access rights to two licenses covering 800sqkm and one application covering 400sqkm.
• So far the due diligence has included 809 soil samples, 267 auger samples and 108 rock chip samples across three project areas and four target areas.
• The team have identified significant anomalism defining a 13km target corridor at Bianouan which is along strike from the giant Chirano 5moz, Bibiani 7moz and Ahafo 23moz gold mines.
• Soil samples include 800m of soil traverses grading ‘100ppb gold, individual soil samples of 7g/t and 1g/t gold and rock chip samples of 10.3g/t gold along strike from artisanal workings’.
• The press release gives a detailed evaluation of the assay results, their location and reasoning behind the target definition.
• The work looks similar in its professional methodology and reporting to that seen at SolGold though the styles of mineralisation described clearly differ due to the new geological settings.
• The team have entered into the jv with Major Star to enable IronRidge to acquire up to 100% of the projects through staged earn-in arrangements and following staged expenditure to Feasibility Study.
• The Major Star assets will be transferred to a special purpose vehicle for the joint venture following which Major Star will be issued 30% of the share capital of the jv company.
• In the event that Major Star’s shareholding becomes diluted below 5% of the issued share capital for the jv company then it is entitled to retain an NSR of 2.5% of which 40% may be acquired by IronRidge for between US$2.5m to US$3m at any time. The arrangement strikes us as eminently sensible and fair.
Premier African Minerals (LON:PREM) 0.6 pence, Mkt Cap £22.9m – Additional comments
• Following on from our comment yesterday the company concedes that our comments on the RHA tungsten mine are ‘largely correct’ other than in regard to loss of resource through the sorter where early operation is showing consistent ND values for WO3 in the sorter waste and discharge.
• Re: PREM’s 2m share (~2%) investment in Circum. Circum’s total mineral potash resource is 4.9bnt grading 18% KCI with 892mt of KCI contained. This is larger than Danikali’s resource of 1.3bnt grading 11% K2O equivalent. We should point out that Danakali’s project is in Eritrea on the coast with good transport links While Circum’s larger project is in Ethiopia which is landlocked and has greater logistical challenges.
• Re: Zulu lithium, we are advised that mineralisation is from surface and has been intersected to below 200m. We remain to be convinced on the
• Re: placing proceeds, we are also reminded that the market has been previously advised that proceeds from funds raised in PREM’s placing are to “advance further drilling at the Zulu Lithium project and completion of the maiden resource statement; · supplement exploration costs at the limestone exploration at TCT-IF in Mozambique; · general working capital as may not be met from proceeds from production at RHA Tungsten during the initial optimisation phase.”
Regency Mines (LON:RGM) 1p Mkt Cap £4.7m – Alabama coal mine washes 6,000t of coal at Rosa plant
• Regency Mines report that its 20% owned Carbon Minerals Corp ‘CMC’ has washed 6,000t of third party coal at the Rosa mine in Alabama, USA.
• The mine expects to receive a further 6,000t of third party coal to site and is negotiating a contract to wash 5,000-10,000t of coal a month.
• More importantly CMC’s mining license has been extended enabling the submission of a mining plan.
• Regency Mines agreed to pay £250,000 for its 20% stake in CMC.
• CMC acquired the Rosa metallurgical coal mine in the Warrior coal basin of Alabama with plans start mining in February for an aggregate consideration of US$1.65m payable US$25,000 monthly plus a royalty per ton produced. While mining is behind schedule at least the plant is washing coal.
Conclusion: It’s good to see coal being washed at Regency’s 20% owned Alabama coal project. Regency describes its self as a natural resources development and investing company, though it seems to report more about its investments than any potential development. It’s last announcement on its 100% owned project in Greenland was posted last September and that was on a review of the project. Given the range of opportunities presenting in the mining sector it would be good to see Regency do more mineral development rather than more passive investing.
Sirius Minerals () 18.8 pence, Mkt Cap £781m – Sirius Woodsmith Polyhalite Mine update
• Sirius Minerals report progress at its North Yorkshire polyhalite project in its latest project quarterly update.
• The company is nearing completion of site preparation works eg levelling with formal construction of the $1bn project due to start in Q2.
• The company also plans to move to the main market of the LSE, a move the company may one day regret in our opinion.
• For now the project remains on schedule and we would not anticipate any particular problems with permitting.
• We remain perplexed by economics of the planned 37km mineral transport tunnel incorporating a high-capacity conveyor. This is not much shorter than the channel tunnel though at 4.3m diameter it is a tad smaller than the channel tunnel at 7.6m.
• Interestingly Sirius Minerals reckon the cost of the tunnel and mineral transport system will be US$857m which is allot cheaper than the massive £4.7bn original cost of the channel tunnel construction which would equate to around £13bn today, but then we did get two rail tunnels and an escape tunnel under the Channel whereas Sirius only needs the one.
• We note there is no comment on the impact on the fall of sterling on the capital cost of the project, though if sterling remains weak then this should have a beneficial impact on project operating costs.
Tanfield Group Plc (LON:TAN) 14p, Mkt Cap £22m – Takeover potential - we note stake building by Denmark-based Zoar Invest Aps to >10%
• We note that Zoar Invest have raised their stake in Tanfield
• Also looks like OTK Holding have also been building a stake and are at a 10% holding
• Tanfield owns 49% of Snorkel International Holdings which is run US-based Xtreme Manufacturing based in Nevada owned by Don Ahern who runs Ahern rentals inc. one of the largest equipment rentals businesses in the US. Snorkel is an interesting business producing telehandlers and rough terrain fork lifts.
Tethyan Resources* (LON:TETH) 4.8p, Mkt Cap £6.9m – Funds raised to support further drilling at Suva Ruda copper project in Serbia
• Tethyan Resources report the company have raised £1m in new funds at a placing price of 4.5p/s to continue drilling at the Suva Ruda copper project in Rudnitza, Serbia.
• Phelps Dodge discovered the Rudnitza porphyry drilling seven holes into an area 1,200m x 800m centred on a copper porphry target with outcropping quartz stockwork
• The new drill program is for 6,000m of exploration drilling to add to the near-surface copper discovery.
• The project area is seen as around 1,500m x 500m. Previous results include:
o RDD-001 567m grading 0.28% copper and 0.45 g/t gold from surface (inc. 36m grading 1.22% from 122m) drilled at 85o
o RDD-002 86m grading 0.16% copper and 0.30g/t gold from a depth of 354m
RDD-003 285 m @ 0.31% copper and 0.33 g/t gold from 42 m (inc. 16.7 m @ 1.55 % Cu and 0.20 g/t Au from 102 m).
RDD-004 356 m @ 0.38% copper and 0.31 g/t gold from 48 m (inc. 30 m @ 1.45% Cu and 0.39 g/t Au from 102 m)
An earlier Phelps Dodge drill hole reported 144m grading 0.4% copper and 0.4 g/t gold ending in mineralisation at 244m.
Conclusion: We look forward to seeing further intersections of copper and a better understanding of the consistency, scale and potential of the project, not to mention the metallurgy.
Thinking ahead, the topography should be helpful from a mining perspective and it looks likely that deeper drilling may show even longer intersections of copper mineralisation if done.
For now shareholders should be happy to see better definition of the near surface copper mineralisation.
*SP Angel acted as broker and placing agent to Tethyan Resources