Today's Market View - Base Resources, Rambler Metals & Mining, Tertiary Minerals and more...

Base Resources (LON:BSE) – Toliara, Ranobe ore reserve shows high-grade ilmenite, rutile, leucoxene and zircon Rambler Metals & Mining* (LON:RMM) – Latest high-grade results from the Ming Mine drilling Rio Tinto to spend US$4bn on new iron ore projects in Australia (Bloomberg)

3M - Today's Market View - Base Resources, Rambler Metals & Mining, Tertiary Minerals and more...

SP Angel . Morning View . Wednesday 27 11 19

New US China trade deal hopes overshadow poor industrial profits data

MiFID II exempt information – see disclaimer below 

Base Resources (LON:BSE) – Toliara, Ranobe ore reserve shows high-grade ilmenite, rutile, leucoxene and zircon

Rambler Metals & Mining* (LON:RMM) – Latest high-grade results from the Ming Mine drilling

Rio Tinto to spend US$4bn on new iron ore projects in Australia (Bloomberg)

Strategic Minerals* (LON:SML) –Tax rebate for Cornwall Resources’ Redmoor exploration

Tertiary Minerals* (LON:TYM) – Issue of convertible


World Steel Association: global steel output falls 2.8% y-o-y in October (Reuters)

  • Weak economic growth has weakened demand of the metal key for construction and infrastructure.
  • Steel output in China dipped 0.6% in October, partly due to capacity cuts to improve air quality.
  • Indian production fell 3.4% compared to October last year, and South Korea’s production was down 35% (Hellenic Shipping News).
  • Output fell 8.7% in the European Union as companies have announced production cuts this year of at least 15mt.
  • However, global steel production was up 3.2% in the first ten months of this year compared to 2018, driven by gains earlier in the year by China.


Audi cuts 9,500 jobs to fund EV investment (Autocar)

  • The automaker will lay workers off over the next five years in order to free up €6bn for investment in EV technology.
  • Audi employs 62,000 people in Germany, meaning 15% of its workforce will be gone by 2025.


Dow Jones Industrials +0.20% at 28,122

Nikkei 225 +0.28% at 23,438

HK Hang Seng +0.15% at 26,954

Shanghai Composite -0.13% at 2,903

FTSE 350 Mining +1.33% at 18,796

AIM Basic Resources -0.66% at 2,079



Global trade volumes contracted 1.1%yoy in September hurt by a series of protectionist policies.

  • It is a fourth consecutive annual decline with trade activity remaining in limbo for nearly a year now.
  • US imports were down 2.1%yoy while imports in China were off 6.9%yoy.
  • Meanwhile, bilateral trade between the US and China has been contracting at double-digits since the end of last year.


US – President Trump suggested talks with China on Phase One of a deal were near completion after two sides are reported to have held telephone conversations earlier.

  • Meanwhile, the row over alleged human rights abuses against Uighur Muslims and other minority groups in mass detention between the US and China continues.
  • Additionally, US legislators have recently passed the Hong Kong Human Rights and Democracy Act that among other things requires the US government to impose sanctions against Chinese and Hong Kong officials responsible for human rights abuses in Hong Kong.
  • China denied any allegations saying the Act amounted to interference in an internal Chinese matter.
  • Consumer confidence unexpectedly slowed this month coming in close to the lower end of this year’s range.
  • Weaker confidence index is reported despite low unemployment levels, strong equity markets and ongoing nationwide growth in house prices, Bloomberg reports.
  • A separate report showed house sales totalled 733k (annualised) in October beating estimates and when combined with 738k recorded in September marking two best months in more than 12 years helped by low borrowing costs.
  • Property prices also increased more than forecast stabilising after a slowdown recorded since mid-2018 and supported by stronger demand.
  • Conference Board Consumer Confidence: 125.5 v 126.1 (revised from 125.9) in October and 127.0 forecast.
  • House Prices (%yoy): 2.10 in September v 2.02 in August and 2.01 forecast.


China – Industrial profits drop by the most on record in October on the back of slowing domestic demand and falling producer prices.

  • This also marks a third consecutive month that earnings growth came in negative.
  • With PPI falling 1.6% in October and deflation expected to continue this week, outlook for industrial profits remains weak.
  • Industrial Profits (%yoy): -9.9 v -5.3 in September.


France – Consumer confidence unexpectedly climbed in November hitting the strongest level in over two years.

  • Households became more optimistic about their financial situation and their ability to make significant purchases.
  • The release is a welcome news supported by President Macron earlier initiatives to reduce taxes by around €17bn targeting low-income households in particular.
  • Consumer Confidence: 106 v 104 in October and 103 forecast.



US$1.1007/eur vs 1.1018/eur yesterday.  Yen 109.17/$ vs 108.92/$.  SAr 14.748/$ vs 14.819/$.  $1.286/gbp vs $1.288/gbp.  0.678/aud vs 0.678/aud.  CNY 7.024/$ vs  7.040/$.


Commodity News

Gold US$1,459/oz vs US$1,457/oz yesterday

Gold ETFs 81.2moz vs US$81.2moz yesterday

Platinum US$903/oz vs US$900/oz yesterday

Palladium US$1,804/oz vs US$1,805/oz yesterday

Silver US$17.04/oz vs US$16.92/oz yesterday


Base metals:   

Copper US$ 5,964/t vs US$5,888/t yesterday - Rio’s Mongolian copper project to go ahead (FT)

  • Mongolia’s mining minister said that Rio Tinto’s ongoing $7bn expansion of the Oyu Tolgoi underground copper mine will not be stopped.
  • Once completed, Oyu Tolgoi will be one of the largest copper producing facilities at over 500,000tpa.
  • Despite allowing the expansion to proceed, the Mongolian government will seek to improve the terms of the 2015 deal.
  • The government will seek to lower the interest rates on loans it has used to fund development resolve tax issues and ensure Rio builds a power plant.
  • Mongolia owns 34% of the mine, the rest is held by Rio Tinto-controlled Turquoise Hill Resources.

Aluminium US$ 1,760/t vs US$1,740/t yesterday

Nickel US$ 14,430/t vs US$14,555/t yesterday

Zinc US$ 2,299/t vs US$2,277/t yesterday

Lead US$ 1,953/t vs US$1,921/t yesterday

Tin US$ 16,365/t vs US$16,450/t yesterday



Credit rating agencies focusing on ESG risks in the fossil fuels industry (FT)

  • Last week, Moody’s said it was considering stripping ExxonMobil of its AAA rating, due to risks in its adjustment to a lower-carbon economy.
  • ESG concerns are most acute in the fossil fuels sector, as companies have come under increasing pressure from regulators, activists and investors.
  • According to the top rating agencies, the world’s effort to hit emissions targets will pose a threat to the industries creditworthiness.
  • Last year Moody’s identified 11 sectors, with a combined $2.2tn in rated debt, as being in danger of a downgrade owing to concerns over carbon.
  • Other rating agencies are focusing on ESG, as S&P Global bought the sustainability research arm of the Swiss asset manager RobecoSAM and Fitch introduced ESG “relevance scores” earlier this year.
  • Market players say that a lack of data is the biggest hurdle when evaluating which companies in the fossil fuels space are making the best progress in terms of ESG.


Oil & Gas - Activity builds momentum across the sector

  • UK listed E&P’s are seeing a resurgence in equity capital support over the past few months, despite the current ESG aware environment – it seems natural resources and ESG box ticking can co-exist…
  • Today’s Union Jack placing follows Reabold Resources (RBD LN) £24m fundraise announced last month primarily for the same West Newton conventional field onshore UK
  • Further institutional support has been demonstrated by the £10m raise and IPO of Longboat Energy, or Faroe Petroleum mark II, to build a new full-cycle North Sea E&P
  • The past 12 months has seen the acquisition of Faroe Petroleum (FPM LN) by DNO (DNO ASA); a £380m bid for Eland Oil & Gas (ELA LN) by Seplat Petroleum (SEPL LN); and a £242m bid for Amerisur Resources (AMER LN) by Geopark

Oil US$64.3/bbl vs US$63.6/bbl yesterday - Oil edged back from two-month highs this week as ambiguous signals from the US-China trade talks continue to hinder global trade prospects

  • News of an OPEC+ production cut extension into the mid-2020s and a more stringent export control system for Nigeria and Iraq added some short-term bullish sentiment to oil markets, but both Brent and WTI have since fallen back into their respective comfort zones
  • Prices were up slightly on Tuesday morning as a little OPEC-driven optimism returned to markets
  • US crude futures were up 0.8% at US$63.8/bbl on the New York Mercantile Exchange

Natural Gas US$2.550/mmbtu vs US$2.473/mmbtu yesterday - Natural gas prices fell yesterday but held support near an upward sloping trend line

  • This comes as warmer than normal weather is expected to cover most of the US during the next 8-14 days according to the National Oceanic Atmospheric Administration 
  • There is one tropical disturbance in the lower Atlantic that NOAA projects 10% chance of turning into a tropical cyclone over the next 48-hours

Uranium US$25.90/lb vs US$26.00/lb yesterday



Iron ore 62% Fe spot (cfr Tianjin) US$86.5/t vs US$88.5/t

Chinese steel rebar 25mm US$613.6/t vs US$613.5/t

Thermal coal (1st year forward cif ARA) US$64.0/t vs US$63.7/t

Coking coal futures Dalian Exchange US$186.6/t vs US$187.3/t



Cobalt LME 3m US$36,000/t vs US$36,000/t - Glencore's Mutanda mine in Congo shuts down a month early (Reuters)

  • Operations at the world’s largest cobalt mine have been suspended prematurely due to difficulties procuring sulphuric acid.
  • Glencore informed workers via a letter that the suspension will be effective from Monday.
  • The miner announced in August that it would suspend the mine at the end of the year for two years, putting the mine in care and maintenance.

NdPr Rare Earth Oxide (China) US$40,573/t vs US$40,482/t - Rare earths miner Lynas to announce funding plan for US refinery by the end of February (mining.com)

  • The Australian company is finalising plans with its partner, Blue Line Corporation, to build a rare earths plant in Texas.
  • Lynas controls 10% of the global rare earths market and signed a memorandum of understanding in May to set up a rare earth separation facility in the US.
  • Lynas was part of the delegation that visited Washington last week to promote closer ties between the two nations around minerals, as China continues to account for more than 80% of global supply (Reuters).
  • The facility would be the world’s only large scale heavy rare earth refinery outside of China.

Lithium carbonate 99% (China) US$6,620/t vs US$6,605/t

Ferro Vanadium 80% FOB (China) US$29.5/kg vs US$29.5/kg

Antimony Trioxide 99.5% EU (China) US$5.2/kg vs US$5.2/kg

Tungsten APT European US$225-245/mtu vs US$225-245/mtu

Graphite flake 94% C, -100 mesh, fob China US$540/t vs US$540/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,550/t vs US$2,550/t


Company News

Base Resources (LON:BSE) 12.25p, Mkt Cap £143.0m – Toliara, Ranobe ore reserve shows high-grade ilmenite, rutile, leucoxene and zircon

Base Resources report their in-house maiden mineral ore reserve for Ranobe at Toliara in Madagascar .

The project has an ore reserve estimate of 586mt grading 6.5% heavy minerals for 38mt in-situ heavy minerals.

The table below shows a good proportion of rutile, zircon and leucoxene, a fine grain altered titanium mineral.

  • Base kindly repeat detail from their recent Pre-Feasibility Study in today’s press release estimating a Post-tax [email protected]% of US$671m and a revenue to cost of sales ratio of 3.06.
  • The challenge for the Base team will be in the project execution with the construction of new road and bridge infrastructure and careful government and community relations.
  • We hope Toliara will not suffer similar issues to Rio Tinto at their QMM mineral sands operations near Fort-Dauphin in Madagascar
  • The Base team have a good track record in Kenya where they are recognised for having succeeded in a difficult jurisdiction.
  • Site activity is currently suspended pending further discussions with the Madagascar government though this may not result in any real delay to the project as on-site work for the DFS is done.
  • The site suspension is not good for the significant number of local employees being trained to work at the Toliara project and on the local community programs which Base has been organising and funding and which have also been suspended.
  • Base is looking to ship first ilmenite in 2021 but will need to come to some accommodation with the people of Benetse who feel they should protect the tanindraza, land of their ancestors.
  • Base has spent some $400,000 so far on community projects including water wells and significant local charity support and will spend >$500,000 a year when production starts.

Conclusion: Toliara looks like a fair project on the reserve below. Base Resources are definitely the right team to overcome the inherent government, security and logistical challenges of the region.

Rambler Metals & Mining* (LON:RMM) 2.35p, mkt cap £30.5m – Latest high-grade results from the Ming Mine drilling

  • Rambler Metals & Mining has released results from a further 1,992m of drilling completed at the Ming copper/gold mine in Newfoundland between 1st September 2019 and 15th November 2019. The results follow previously announced results of over 10,000m of drilling completed between October 2018 and September 2019 which were released on 4th November.
  • The drilling has investigated down-plunge extensions to the Ming North Zone (MNZ) where results from 1,481m of drilling were reported yesterday as well as from the 1807 massive sulphide zone where 511m were completed during the current phase of work.
  • Investigation of the MNZ has disproved previous geological interpretations that the massive ore zone thinned to uneconomic widths at depth and, on the contrary, the recent work has “tested the MNZ below the 745 level and has proven the continuation of high-grade copper mineralization to the 890 level … .  This zone remains unbounded and open at depth.”
  • Among the results highlighted in the announcement are what President and CEO, Andre Booyzen, describes as “the highest grade and longest downhole intersections seen since the mine commenced operations in 2011”. The results from the MNZ include:
  • A 74.45m wide intersection (19.4m true width) averaging 8.98% copper, 2.16g/t gold and 14.23g/t silver from a depth of 317m in hole R19-745-08. The intersection includes a 27.77m wide section averaging 11.97% copper, 3.14g/t gold and 19.23g/t silver from 331m depth and a second intersection of 19.3m width from 367.7m depth at an average grade of 14.85% copper, 2.94g/t gold and 21.57g/t silver.
  • Hole R19-745-06 intersected 15.6m (7.3m true width) at an average grade of 2.51% copper, 1.58g/t gold and 9.03g/t silver from187.4m; and
  • Hole R19-745-07 intersected 4.55m (1.3m true width) at an average grade of 2.26% copper, 1.96g/t gold and 21.0g/t silver from253.63m
  • As well as the down plunge extension, the company notes that mineralisation in the MNZ “has also been traced up-plunge, with stopes defined up to the 620 level just below the historic pre-1982 workings”.
  • The massive, pyrite-chalcopyrite-sphalerite, sulphide 1807 Zone “has been mined continually since 2012 from the 304 level down to the 735 level. Limited underground drilling currently shows the zone to narrow up-dip of the 304 level to uneconomic mining widths”.
  • The current drilling has, however, indicated that the zone, which comprises sulphide mineralisation up to 6m thick, is “unbounded and open at depth”. The announcement highlights  results from hole R19-735-01 which contains multiple mineralised horizons “approximately 130 metres down plunge of the previous deepest hole drilled in the 1807 zone” including:
  • A 7m wide intersection (1.6m true width) averaging 1.84% copper, 8.35g/t gold and 40.83g/t silver from a depth of 117m; and
  • A 5.43m wide intersection (0.6m true width) averaging 2.02% copper, 1.80g/t gold and 20.57g/t silver from a depth of 129.57m; and
  • A 10.94 wide intersection (1.8m true width) averaging 1.84% copper, 1.22g/t gold and 20.79g/t silver from a depth of 176.6m; and
  • A 14m wide intersection (1.5m true width) averaging 1.33% copper, 5.42g/t gold and 63.16g/t silver from a depth of 117m.
  • The company’s previous announcement, issued on 4th November, indicated that an updated mineral resource and reserves estimate was expected to be released during the first quarter of 2020 and we envisage that the results of this drilling will have a beneficial influence on the new estimates.
  • Commenting on the significance of the results, Mr. Booyzen explained that “The Ming North zone has, in the span of less than 18 months, gone from an exploration conceptual target to become an integral part of the short and long term mine production plan. This newest drilling continues to justify our faith in pushing the exploration drilling of this zone deeper”.

Conclusion: Drilling continues to intersect some of the highest grade mineralisation yet encountered at the Ming mine and provided confirmation that the grades and mineralised thicknesses appear to be improving with depth on both the MNZ and 1807 Zones. The drilling has also expanded the lateral and depth extension of the known mineralisation and provided additional data for updating the mineral reserve and resources estimates. We look forward to the new mineral resource and reserve estimates during Q1 2020.

*SP Angel act as Nomad and broker to Rambler Metals & Mining


Rio Tinto to spend US$4bn on new iron ore projects in Australia (Bloomberg)

  • The company plan to invest $749m to bring the Western Turner Syncline Phase 2 project into production from 2021. It will also extend the life of operations around the Tom Price mine.
  • The project will have the potential to produce 30mt of iron ore per year (Australian Financial Review).
  • While the project is only focused on replacing production that will be lost from older mines, Rio also have the opportunity to boost volume from its $2.6bn Koodaideri development.
  • Demand for Australian iron ore is supported by infrastructure projects in China.
  • Along with Rio, BHP and Fortescue Metals Group are both investing roughly $3bn each in projects which will increase output of higher-quality materials.


Strategic Minerals* (LON:SML) 0.575p, Mkt Cap £8.4m –Tax rebate for Cornwall Resources’ Redmoor exploration

  • Strategic Minerals reports that the UK’s HMRC has granted a rebate of £248,155 as a research and development refund for its wholly owned subsidiary, Cornwall Resources’ (CRL) exploration of the Redmoor tin/tungsten project in Cornwall.
  • The company points out that the rebate is “well in excess of January’s payment due to New Age Resources for purchase of CRL”.
  • Executive Director, Peter Wale, expressed appreciation of HMRC’s continued support which “continues to supplement our progress at Redmoor”.  Mr. Wale also said that “From a cash flow perspective, it is also reassuring that CRL is able to provide revenue to fund its own purchase.”

Conclusion: Additional funds in the form of a tax rebate for exploration completed at Redmoor assists in financing the continuing work and also validates the work undertaken by CRL at Redmoor.

*SP Angel acts as Nomad and Broker to Strategic Minerals


Tertiary Minerals* (LON:TYM) 0.21p, Mkt Cap £1.0m – Issue of convertible

  • Tertiary Minerals has confirmed the issue of a previously announced convertible with a face value of £263,000 to help fund planned exploration work at its recently acquired Pyramid Gold and Paymaster Polymetallic projects in Nevada.
  • The convertible, issued to Bergen  Global Opportunity Fund, has a purchase price of £232,000 and forms the initial tranche of a wider issue, announced on 20th November, totalling a nominal £653,000.
  • The convertible has a 24 months term, a zero coupon and is “convertible into ordinary shares of the Company (the “Shares”), in whole or in part, at the option of Investor.”
  • The conversion price  “will be, at Investor’s election: (a) 95% of the average of five daily volume-weighted average prices of the Shares on AIM during a specified period preceding the relevant conversion or (b) 135% of the average of the daily volume-weighted average prices of the Shares for the 20 consecutive trading days immediately prior to 19 November 2019.”
  • Tertiary Minerals has “the right to repurchase the initial Convertible Security for cash at 100% of its nominal value (and without a fee or penalty) within 120 days of the issue date of the initial Convertible Security” and is to issue 17m share as a “commencement fee” plus a further 18m share “to collateralise the investment” and “has agreed that it will issue 22,000,000 warrants with an exercise period of 48 months from the date of issue (the “Warrants”) to the Investor entitling the Investor (or any subsequent holder of the Warrants) to subscribe for one Share per Warrant at the exercise price equal to 0.33588 pence”.

*SP Angel act as Nomad and broker to Tertiary Minerals



John Meyer – 0203 470 0490

Simon Beardsmore – 0203 470 0484

Sergey Raevskiy – 0203 470 0474



Richard Parlons – 0203 470 0472

Abigail Wayne – 0203 470 0534

Rob Rees – 0203 470 0535


SP Angel                                                            

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


Oil Brent


Natural Gas, Uranium, Iron Ore


Thermal Coal

Bloomberg OTC Composite

Coking Coal




Lithium Carbonate, Ferro Vanadium, Antimony

Asian Metal


Metal Bulletin


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