SP Angel – Morning View – Friday 09 08 19
Nickel prices rise on Indonesia ban speculation
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Rambler Metals & Mining* (LON:RMM) 1.3p, mkt cap £16.9m – A new quarterly throughput record in Q2 2019
Rare Earths recycling research
The University of Birmingham https://www.birmingham.ac.uk/news/latest/2019/08/Rare-earth-metal-recycling-pilot-project-launched-at-University-of-Birmingham.aspx has announced that it has been awarded €4m by the EU’s Horizon 2020 programme to set up a pilot plant for the recycling of rare-earth metals from scrap. “The facility will focus on recycling magnets made of neodymium, boron and iron. These are found in hard disk drives, household appliances, electric vehicles and wind turbine generators, and are increasingly important in the transition to a green, low carbon economy”.
Dow Jones Industrials
HK Hang Seng
FTSE 350 Mining
AIM Basic Resources
UK – The UK economy contracted 0.2% between April and June, its worst performance since 2012 according to the Office for National Statistics.
The worse-than-expected contraction came as a surprise following a boost to economic growth in the first three months of the year on the back of Brexit stockpiling.
The pound weakened after the data was released, adding to fears of recession.
Italy – Italian bond yields rose this morning on talk of a collapse in the ruling coalition (Financial Times)
Italian prime minister Giuseppe Conte said yesterday he would begin proceedings to recall parliament, following a request for a no-confidence vote by Matteo Salvini, leader of the League party and Conte’s coalition partner.
The future of the coalition between Conte’s Five Star Movement and the League party has come to the fore following the failure to find a working majority for a parliamentary motion on the trans-Alpine rail link with France.
Italian debt is under pressure, with two-year government bond yields rising 17 basis points to 0.225%, while 10-year debt yields rose by 21bp, indicating a drop in price.
Moves in Italian bond yields have raised the spread between Italian 10-year government bonds and German 10-year Bunds by as much as 2.339%, suggesting the perceived risk of Italian debt is increasing.
Germany – German export fall, import rise highlights recession risk (Financial Times)
Germany’s imports rose 0.5% in June, a larger increase than predicted, the statistics office said today.
Exports fell by 0.1% from a month earlier, an 8% drop from the same month last year.
A smaller trade surplus adds less to Gross Domestic Product, sharpening concern over the German economy.
US$1.1190/eur vs 1.1219/eur yesterday. Yen 105.96/$ vs 106.09/$. SAr 15.064/$ vs 15.015/$. $1.213/gbp vs $1.218/gbp. 0.681/aud vs .677/aud. CNY 7.053/$ vs 7.044/$.
Gold US$1,502/oz vs US$1,499/oz yesterday
Gold ETFs 77.1moz vs US$77.0moz yesterday
Platinum US$864/oz vs US$860/oz yesterday
Palladium US$1,426/oz vs US$1,421/oz yesterday
Silver US$17.01/oz vs US$17.05/oz yesterday
Copper US$ 5,764/t vs US$5,753/t yesterday
Aluminium US$ 1,777/t vs US$1,768/t yesterday
Nickel US$ 15,735/t vs US$15,715/t yesterday
Zinc US$ 2,270/t vs US$2,273/t yesterday
Lead US$ 2,065/t vs US$2,029/t yesterday
Tin US$ 16,890/t vs US$16,830/t yesterday
Oil US$57.5/bbl vs US$57.5/bbl yesterday
Natural Gas US$2.110/mmbtu vs US$2.110/mmbtu yesterday
Uranium US$25.30/lb vs US$25.30/lb yesterday
Iron ore 62% Fe spot (cfr Tianjin) US$92.2/t vs US$89.3/t
Chinese steel rebar 25mm US$564.4/t vs US$571.7/t
Thermal coal (1st year forward cif ARA) US$66.2/t vs US$65.8/t
Coking coal futures Dalian Exchange US$208.0/t vs US$208.2/t
Cobalt LME 3m US$28,500/t vs US$28,300/t
NdPr Rare Earth Oxide (China) US$44,459/t vs US$44,507/t
Lithium carbonate 99% (China) US$8,296/t vs US$8,305/t
Ferro Vanadium 80% FOB (China) US$40.0/kg vs US$40.0/kg
Antimony Trioxide 99.5% EU (China) US$5.4/kg vs US$5.4/kg
Tungsten APT European US$210-225/mtu vs US$210-225/mtu
Jay Leno praises electric cars as ‘the future’
Television personality Jay Leno has been singing the praises of electric cars this week, calling them ‘the future’ (Electrek).
Rambler Metals & Mining* (RMM LN) 1.3p, mkt cap £16.9m – A new quarterly throughput record in Q2 2019
Rambler Metals reports that its Nugget Pond mill achieved a record quarterly throughput of ore from its Ming copper/gold mine in Newfoundland during the quarter ending 30th June 2019.
In total, 112,679 tonnes of ore were processed at an average grade of 1.40% copper and 0.60g/t gold exceeding the 98,411 tonnes of ore processed at an average grade of 1.33% copper and 0.58g/t gold during the previous quarter ending 31st March 2019 - which was itself a record.
Head grades are edging higher and CEO, Andre Booyzen, commented that “Given the productivity improvements in the mine, which have provided access to better grade material in both the Lower Footwall Zone and the Ming Massive Sulfide deposits, we are now turning our attention to increasing the overall feed grade delivered to the mill”.
We observe that, in the past, the company has stated that throughput of 1,250tpd was an objective ahead of its longer term plans to expand to 2,000tpd throughput and reporting that “Daily production during the quarter averaged 1,309 dry tonnes per day with a monthly peak of 1,339 dry tonnes per day in June. On July 22, the mill achieved a new one-day record throughput of 1,493 dry tonnes per day” establishes a solid platform for this expansion.
The increased mill throughput resulted in the production of 5,425 tonnes of copper gold concentrates which is a 13% increase on the previous quarter and the highest level of concentrate output since at least early 2016.
Year to date throughput of 211,090 tonnes of ore at an average grade of 1.36% copper and 0.59g/t gold keeps Rambler Metals on track to achieve its previously published 2019 production guidance of milling between 400-450,000t of ore at an average grade of 1.3-1.5% copper. Although the gold grade is running marginally below the guidance range of 0.7-0.9g/t we estimate that precious metals represent only around 15% of overall revenue.
The company also discloses that work on the new tailings disposal facility, capable of sustaining processing rates “in excess of 1,400 dry tonnes per day … will be in place and operational by August 31”. The work was “completed ahead of schedule”.
Mr. Booyzen summarised saying that “This last quarter’s mine and mill performance has demonstrated effectiveness of the focus on continuous improvements that were started in late 2018 and still continue” and when on to undertake that “We will keep improving mining production and the average grade of ore produced so that saleable copper production continues to increase”.
Conclusion: The company has maintained and exceeded its 1250 tpd target for throughput during Q2 and H1 2019 and remains on track to meet its published production guidance for the full year. The emphasis on accessing higher grades should help maintain the rising trend of concentrate production which continued on a rising trajectory during the quarter.
*SP Angel act as Nomad and broker to Rambler Metals & Mining
John Meyer – 0203 470 0490
Simon Beardsmore – 0203 470 0484
Sergey Raevskiy – 0203 470 0474
James Mills – 0203 470 0486
Richard Parlons – 0203 470 0472
Abigail Wayne – 0203 470 0534
Rob Rees – 0203 470 0535
Prince Frederick House
35-39 Maddox Street London
*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
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt
Natural Gas, Uranium, Iron Ore
Bloomberg OTC Composite
Lithium Carbonate, Ferro Vanadium, Antimony