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Today's Market View - Atalaya Mining, Bluejay Mining, AEX Gold Inc and more...

Adriatic Metals* (LON:ADT1) – Two permits received at Vares AEX Gold Inc (LON:AEXG) – Quarterly results and development progress Atalaya Mining (LON:ATYM) 191.5p, Mkt Cap £263m – Robust quarterly performance on the back of record quarterly production at Proyecto Riotinto Bluejay Mining* (LON:JAY) – Bluejay wins ability to reclaim VAT paid to HMRC

Condor Gold PLC - Today's Market View -

SP Angel . Morning View . Thursday 19 11 20

Metals tick back as markets absorbs recent price rise

 

Adriatic Metals* (LON:ADT1) – Two permits received at Vares

AEX Gold Inc (LON:AEXG) – Quarterly results and development progress

Atalaya Mining (LON:ATYM) 191.5p, Mkt Cap £263m – Robust quarterly performance on the back of record quarterly production at Proyecto Riotinto

Bluejay Mining* (LON:JAY) – Bluejay wins ability to reclaim VAT paid to HMRC

Condor Gold* (LON:CNR) – CEO presents at Canadian Mining Symposium

Cornish Metals* (CVE:CUSN) – United Downs drill results show high-grade copper and tin

Panthera Resources (LON:PAT) – Additional targets identified at Bido

Power Metal Resources* (LON:POW) / Katoro Gold (KAT LN) -– Haneti mobilising RAB drilling

URU Metals* (LON:URU) – URU appoints Justin Cochrane to its Advisory board

Versarien* (LON:VRS) – Graphene inhibits spread of COVID-19 according to independent report

 

Expect Disruption to metal production from ongoing COVID and reduced expenditure on maintenance and expansions

Caution within many metal producers and the focus on COVID-19 issues is likely to lead to a greater risk to commodity supply next year.

Reduced maintenance capex, social distancing rules and a degree of ongoing absenteeism raises the risk of failures and slowing production in many mines and process plants.

Low metals prices through the first half combined with uncertainty over the outlook for demand next year caused many miners to cut back on all non-essential expenditure, delaying expansion plans and deferring capital-intensive maintenance projects.

Bushveld Minerals* is a good example of a management team which moved fast to use the lock-down in South Africa to bring forward essential maintenance but defer non-essential expenditure.

The availability of new financial facilities should now give management the option to restore expansion plans if demand for vanadium continued to rise in China and new orders come in for vanadium for VRFB battery instillations.

Many other mines are now trying to restore production to meet higher prices while having deferred costs on maintenance expenditure.

Rambler Metals* announced the full restructuring of its facilities and balance sheet this week to enable the Ming mine to restore production in accordance with a new mine plan led by Toby Bradbury who we credit for the turnaround of Shanta Gold.

Many miners are looking to catch up with strengthening demand for metals from manufacturing and stimulus plans.

Rising prices reflect an improving outlook for consumption as well as a lower US dollar environment and likely inflation.  

Conclusion:  Supply shocks and recovering demand are likely to lead metals prices to jump higher next year in a rerun of the recovery seen from end-2008 to end 2010 when copper prices rose to $10,097/t.

Copper may continue to lead prices higher on new demand for EV charging, for additional cabling to wind and solar farms and to support local grid infrastructure led by stimulus funding.

We expect industrial metals to also push higher as supply shocks serve to push more metals into potential supply/demand deficit next year.

 

Goldman sees bull run in commodities as best hedge against inflation (Reuters)

Goldman Sachs forecasts a return of about 27% over the next 12-months on the GSCI index with a 19.2% return for precious metals, 40.1% for energy, 3% for industrial metals and a negative 1% return on agriculture.

The bank maintained its target of $2,300/oz for gold and $30/oz for silver on near-term inflation and on demand for silver from new solar instillations

Goldman reckons base metals and agriculture have more near-term upside than oil on recovering demand from China.

We see China as continuing to buy in produce to replace crops lost in flooding along the Yangtze River and to compensate for the inability to replant crops till the floodwaters recede.

 

Investors pile into ‘green funds’ on Biden win

There has been heavy investing in green funds as investors bank on Biden to boost the renewable and alternative industry.  (Reuters)

Investors poured €1.9 bn into European renewable energy investment funds from July-September, 11 times the amount from the same time in the year before.   

Net flows into all energy funds deemed ESG-compliant topped a record $1.79 bn in October, against $871m for traditional energy funds, according to fund tracker EPFR. 

The RENIXX Renewable Energy Index, which tracks the 30 largest renewable energy companies worldwide, has more than doubled in 2020. 

The S&P500 energy sector index meanwhile has decreased 41% due to a slump in oil prices. 

 

Battery metal sales surge in September

The Mining.com EV Metal Index reached record highs in September, the index showed $315m of battery metals were sold during the month.

This is compared to ~$210m in August and ~$75m in April at the height of the pandemic. The previous high was ~$245m in December 2019.

Cumulative sales YTD have past $1.5bn, wiping out reductions earlier in the year and leaving the index on track for a record year.

In September, all metal tracked (lithium, graphite, cobalt and nickel) posted monthly records.   

 

Recent interviews:

VOX - 18/11/20: https://www.voxmarkets.co.uk/media/5fb6391dbc74c922485f4f70/?context=/listings/LON/ALS/multimedia/

IGTV: US Election, China growth policies Solgold*, Mkango*, Rainbow Rare Earths*: https://youtu.be/YKk5-kVpVGE

EV revolution, gold and other ideas (Interactive Investor): https://www.youtube.com/watch?v=ja0IdjszfCc

Metals Markets: Are they totally dependent on stimulus? (IG TV): https://youtu.be/TOiSwRpgfKM

*SP Angel act as nomad or broker or nomad and broker to companies mentioned in the above videos.

 

APEX survey rankings for SP Angel commodity forecasts: 2nd in Gold, 2nd in Copper, 2nd in Nickel, 1st in Tin, 5th in Iron ore.

The survey takes forecast from 21 analysts from commodity traders, banks, economics and specialist commodity forecasters

 

Dow Jones Industrials -1.16% at 29,438

Nikkei 225 -0.36% at 25,364

HK Hang Seng -0.53% at 26,402

Shanghai Composite +0.47% at 3,363

 

Economics

COVID-19 vaccines:

Phase 2 results show the Oxford University/Astra Zeneca vaccine offered a strong immune response and is safe in older adults.

Phase 3 trials of the vaccine are underway with results expected before the end of the year.

A fifth Chinese COVID-19 vaccine has been approved to start Phase 3 efficacy trials, according to FT.

The vaccine is reported to be using a “recombinant subunit”, a small piece of virus DNA that has been amplified by bacterial or yeast cells, to get an immune response.

The approach is reported to involve less chances of adverse reactions but can mean less immunity that other options.

The treatment is being developed by Anhui ZhifeiLongcom, a subsidiaryof Shenzhen-listed Chongqing Zhifei Biological.

The Company is planning to start overseas trials in Uzbekistan this month and then expand tests to Indonesia, Pakistan and Ecuador with a target of recruiting 29,000 participants.

 

IMF estimates the combined fiscal and monetary stimulus delivered by advanced economies at around 20% of their respective national GDP.

Middle income countries in the developing world are reported to have offered 6-7% GDP.

The poorest countries provided only 2% of their much smaller national output leaving those countries exposed the most to prolonged slump, potentially pushing millions of people into poverty, FT reports.

 

UK/Canada – Two nations are close to agreeing a new trade agreement to replace the existing deal Britain has under the EU membership, Bloomberg writes.

While the agreement potentially offers a major boost to UK PM Johnson in his efforts to establish a new course for Britain outside the EU, Canada is the second largest trading partner in terms of exports and imports among other Commonwealth nations, the region that combined accounted for 8% of the trade in 2019 compared to 46% with the EU and 16% with the US.

 

ECB – Christine Lagarde committed to strong monetary stimulus package for December and urged governments to offer fiscal stimulus available “without delay”.

Speaking at a European Parliament committee hearing, ECB President said European leaders need to adopt joint fiscal support as a priority with the euro area economy expected to be severely affected by the new wave of infections and restrictions, according to Bloomberg.

 

India – The nation approaches 9m COVID-19 cases after recording 45,00 new infections over the past 24 hours.

Although, sero-prevalence surveys across both urban and rural India suggest the true spread is many times higher suggesting that testing is simply not able to keep up, FT

India recorded 585 new COVID-19 related registered deaths on Thursday taking the total to more than 131,000 people.

 

Australia – Employment climbed strongly in October after tough restrictions in Victoria began to be lifted with a recovery in the rest of the economy gathering pace.

Payrolls climbed 178,800 last month compared to a 27,500 decline estimated

Unemployment rate climbed 0.1pp to 7.0% reflecting an increase in participation rate that jumped 1pp to 65.8%.

The A$ climbed on the news before giving up its gains and trading lower as markets are dialling back on risk and unwinding some of the vaccine news driven euphoria.

 

Switzerland – Gold exports fell -14.6% in October as UK shipments decline

Gold shipments from Europe’s key refining hub declined to 90.5t last month from 105.9t in September, according to customs data.

Exports to the UK fell -62% to 19.1t, whilst exports to India rose almost fivefold to 24.3t on the month prior.

 

Zambia – Mining assets will not be taken by bondholders, says Mines Minister

The Zambian Mines Ministry says that it doesn’t expect its mining assets to be taken away by bondholders, and that it has no plans to sell its shares in mining companies despite defaulting on its debt last week.

Zambia produced 646,000 tonnes of copper between January and September, up 9.5% compared to the same period last year.

 

Currencies

US$1.1839/eur vs 1.1879/eur yesterday.  Yen 103.92/$ vs 103.97/$.  SAr 15.536/$ vs 15.331/$.  $1.321/gbp vs $1.328/gbp.  0.728/aud vs 0.731/aud.  CNY 6.551/$ vs 6.585/$.

 

Commodity News

Precious metals:         

Gold US$1,859/oz vs US$1,884/oz yesterday

Gold ETFs 109.4moz vs US$109.7moz yesterday

Platinum US$938/oz vs US$941/oz yesterday

Palladium US$2,325/oz vs US$2,353/oz yesterday

Silver US$23.98/oz vs US$24.67/oz yesterday

           

Base metals:  

Copper US$ 7,061/t vs US$7,137/t yesterday

Aluminium US$ 1,991/t vs US$1,992/t yesterday

Nickel US$ 15,760/t vs US$15,830/t yesterday

Zinc US$ 2,745/t vs US$2,757/t yesterday

Lead US$ 1,960/t vs US$1,947/t yesterday

Tin US$ 18,640/t vs US$19,090/t yesterday

           

Energy:           

Oil US$44.5/bbl vs US$44.0/bbl yesterday

Brent futures fell 0.4% overnight to US$44.17/bbl and WTI declined 0.7% to US$43.53/bbl as US COVID-19 deaths past 250,000

In the US, New York’s public-school system has stopped classroom instruction while in Asia daily COVID-19 cases in Tokyo and South Korea hit new highs

Rising case numbers overshadowed news that the Pfizer/BioNTech vaccine has been found to be 94% effective in adults over 65, those most at risk of adverse consequences on catching the virus

However, Brent has recovered 0.23% this morning following news Oxford University has released preliminary data on its vaccine from the Phase 2 trial, the data showed their vaccine triggers a robust immune response in healthy adults aged 56-69 and those over 70

A report from Equinor yesterday suggested that slower demand growth due to the pandemic and a drop in global oil supply due to low investments could result in peak oil demand 2-3 years sooner than an earlier view that demand will peak around 2030

The Company has just announced its ambition to become a net-zero energy business by 2050, following other major European companies in this pledge, said in its annual Energy Perspectives report that the pandemic and its effect on the way people work and interact could challenge the earlier assumption of peak oil demand around 2030

In addition, the promises of major economies to “build back greener” could mean that more energy investments will be heading renewables’ way, driven by support from governments and the general public

COVID-19 has altered not only the way people commute and use transport, but it has also led to reduced investments in oil supply

Therefore, the 2030 peak oil demand assumption could be challenged, as “a decline in oil supply due to low investments could force that date 2-3 years earlier”

Other forecasters have also said that the pandemic is set to accelerate the timeline of peak oil demand. In its annual outlook in September, BP said that globally, we may have passed peak oil demand last year, as fuel consumption may never recover from the pandemic-inflicted decline

Even with this estimate, BP’s chief executive Bernard Looney announced at an online forum last month that “peaking of oil demand does not mean the end of oil. Oil will be around for a very, very long time.”

 

Natural Gas US$2.675/mmbtu vs US$2.743/mmbtu yesterday

Natural gas futures are trading higher on Wednesday shortly after the regular session opening which probably means one of the weather services introduced colder temperatures into their recent bearish forecasts

The EIA reported last Friday that domestic supplies of natural gas rose by 8MMcf for the week-ended 6 November

On average, the supply data, which were delayed by a day this week due to Wednesday’s Veteran’s Day holiday, were expected to show a decline of 4Bcf for the week, according to analysts polled by S&P Global Platts

Total stocks now stand at 3.927Tcf, up 196Bcf from a year ago, and 176Bcf above the five-year average

Preliminary forecasts point to another increase for the week-ended 13 November, which will be announced later today

The weather over the next two weeks is set to be much warmer than normal according to the NOAA and the ECMWF-EPS 46 day extended outlook for the US shows December will be much warmer than usual.  

Data from the EIA showed natural gas supply fell 2.4% compared to last week, dry production down 0.7%.

   

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$123.0/t vs US$122.3/t - Iron ore miners to export 7.9% more material this quarter

Top iron ore miners are estimated to ship 327.7mt of material in Q4, +7.9% QoQ and +2.3% YoY, Bernstein said in its vessel-tracking report.

Chinese steel rebar 25mm US$626.1/t vs US$626.9/t - China domestic stainless steel prices drop to 4-month lows

Domestic stainless steel prices fell sharply this week, sinking to their lowest levels since July.

Major stainless steel mills have lowered prices to generate more sales and increase market share, while buyers have scaled down their procurement rates in anticipation of lower prices.

The most-traded January stainless steel contract on the Shanghai Futures Exchange ended its trading session on Wednesday at 13,040 yuan/t, down by 635 yuan/t from 13,675 yuan/t a week earlier (Fastmarkets MB).

Thermal coal (1st year forward cif ARA) US$56.2/t vs US$55.9/t

Coking coal swap Australia FOB US$110.0/t vs US$109.3/t

           

Other: 

Cobalt LME 3m US$32,395/t vs US$32,395/t

NdPr Rare Earth Oxide (China) US$53,530/t vs US$53,123/t

Lithium carbonate 99% (China) US$5,847/t vs US$5,801/t

Ferro Vanadium 80% FOB (China) US$27.0/kg vs US$27.0/kg

Antimony Trioxide 99.5% EU (China) US$5.4/kg vs US$5.4/kg

Tungsten APT European US$220-225/mtu vs US$220-225/mtu

Graphite flake 94% C, -100 mesh, fob China US$440/t vs US$440/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,300/t vs US$2,275/t

Spodumene 6% Li2O min, cif (China) US$375/t vs US$385/t

 

Battery News

Tritium launches new scalable EV charging platform

The new platform, Modular Scalable Charging (MSC) is scheduled to hit the market in 2021 and will be available worldwide (Reuters).

The platform will enable the construction of more flexible EV charging stations with the ability to add battery storage.

The next-gen DC fast charger will enable drivers to add 46 miles to their range in just 10 minutes.

Tritium’s customers include Ionity, a JV between BMW Group, Ford motor, Hyundai, Mercedes, VW, Audi and Porsche which aims to build a high power charging network across Europe.

50kW, 75kW, 175kW fast chargers and 350kW high powered charger are available for commercial enterprises, fleets and network operators.

 

Company News

Adriatic Metals* (LON:ADT1) 126p, Mkt cap £255m – Two permits received at Vares

Adriatic has received an Urban Planning Permit for the Veovaca project area from the Federal Ministry of Spatial Planning, which involved seeking opinions from significant stakeholders regarding the project.

Having now received approval of the Reserves Elaborate, the Environmental Permit and the Urban Planning Permit, the Company will now immediately apply to the Federal Ministry of Energy, Mines and Infrastructure for the Exploitation Permit.

In addition, Adriatic has received a Preliminary Water Permit for the Rupice project, from the Sava River Water Agency. This is a necessary step in order to obtain the required Environmental Permit for Rupice- which is under final review.

This news follows October’s announcement that Adriatic has entered into binding agreements for a US$28m financing, comprising a $20m private placement of 8.5% unsecured convertible debentures to Queen’s Road Capital (QRC) investment and a subscription by the European Bank for Reconstruction and Development (EBRD) for £6.2m (~$8m) in ordinary shares of the Company at a price of £1.175 per share.

The recent round of financing allows the company to progress at its Vares Silver Project, where the company released a pre-feasibility study earlier this month.

*An SP Angel mining analyst has visited Adriatic Metals operations in Bosnia

 

AEX Gold Inc (LON:AEXG) – 44.5p, Mkt cap £78m – Quarterly results and development progress

AEX Gold reports a loss of C$4.6m for the three months ending 30th September 2020 (2019 – C$2.6m loss).

The results reflect increased exploration activity at the company’s Nalunaq project where surface drilling started in August and was completed “in the second half of October, with eleven drill holes for a total of 2,191 metres drilled.”

“The Main Vein was identified in six of the eleven holes drilled, with some of the intersects yielding the thickest interceptions (1.50 meters) ever recorded at Nalunaq”.

Among the early results of this drilling, announced on 21st October were:

 A 1.5m intersection of the Main Vein at an average grade of 4.2 g/t and 1.35m at 6.6 g/t

Previous drilling showed:

0.25m at 120.4 g/t

0.67m at 46.10 g/t

0.50m at 19.75 g/t

0.44m at 16.6 g/t.

Further results from the drilling are expected during the current quarter.

Commenting on the results, Eldur Olafsson, CEO, said that “Following the successful $72.7 million fundraise and AIM listing in July 2020, the Company was able to leverage its strong cash balance and the remaining months of Greenlandic autumn to front-end surface drilling initially planned for 2021”.

Mr Olafsson also said that “the launch of the request for proposal process for underground development contractors, and front-end engineering and surface drilling all provided significant advancement to the project during Q3 and puts us in an excellent position ahead of our onsite development activities in 2021”.

The company reports a 30th September cash balance of C$68.7m.

 

Atalaya Mining (LON:ATYM) 191.5p, Mkt Cap £263m – Robust quarterly performance on the back of record quarterly production at Proyecto Riotinto

Atalaya Mining reports increased revenues,  EBITDA and profits during Q3 as production of copper in concentrate builds up to a new record of 14,695 following the completion of the expansion of the Proyecto Riotinto operation.

Quarterly operating revenues of €65.8m during the 3 months to 30th September (2109 - €44.4m) bring year to date revenues to €183.6m (2019 - €139.2m) while year-to-date EBITDA increased by approximately 7% to €44.4m with Q3 EBITDA of €22.3m “driven by higher copper concentrate sold in addition to higher copper prices”.

Atalaya Mining confirms that “profit for the period amounted to €12.2 million … compared with €6.9 million for Q3 2019 … Profit margin was lower mainly due to depreciation increasing … [to €8.4m for the quarter (2019 - €3.7m) and €22.2m for YTD (2019 - €10.9m)] … significantly as a result of the plant expansion at Proyecto Riotinto”.

Cash flow from operations increased by 14% during the quarter to €18.8m and by 33% YTD to €41.8m and after capital investment, free cash flow increased to €12.5m during the quarter and to €22.2m on a year-to-date basis.

Ayalaya Mining explains that cash outflows as investment of €6.3m during the quarter and €19.7m for the YTD “is mostly related to sustaining capex and work on tailings dams”.

Cash costs of US$1.94/lb of payable copper for the quarter and US$1.93/lb YTD are broadly in line with the US$1.92/lb recorded for Q3-2019 and slightly above the 2019 YTD level of US$1.85/lb. Atalaya Mining attributes “This small increase … [in quarterly cash costs to] … unfavourable FX rates and to a lower extent in maintenance and processing costs”.

All-in sustaining costs of US$2.29/lb for the quarter and US$2.27/lb YTD (2019 – US$2.25/lb and US$2.12/lb respectively) were “impacted by additional investments in sustaining capex and higher capitalised stripping costs”.

The company is maintaining its full year 2020 cost guidance in the range US$1.95-2/05/lb for cash costs and US$2.20-2.30/lb on an all in sustaining basis and indicates that “Production guidance remains at 55,000 to 58,000 tonnes of contained copper. The Company expects production to be at the lower end of the range”.

The company warns that “In light of the recent new cases … [of Covid19] … in Spain, the Company has further reinforced its measures to protect against the pandemic”.

Conclusion: Increased production following the successful expansion of Proyecto Riotinto is driving increased revenues and EBITDA while costs remain stable. The company is maintaining both its production and cost guidance for 2020 while cautioning that production is likely to be at the lowere end of the published 55-58,000t range.

 

Bluejay Mining* (LON:JAY) 10.32p, Mkt cap £100m – Bluejay wins ability to reclaim VAT paid to HMRC

BUY - Valuation 27.4p

Bluejay Mining report the First-Tier Tribunal (Tax Chamber) has decided to allow the Company's appeal against HMRC's 2016 decisions to deny it credit for input VAT.

“This decision is subject to a possible further appeal by HMRC to the Upper Tribunal. If HMRC chooses to make such an appeal, then it must do so within 56 days of the delivery of the First-Tier Tribunal's decision. Any such appeal must be based on an error of law. The findings of fact made by the First-Tier Tribunal are final.”

Conclusion: Bluejay will get a material amount of VAT back in this case with any future appeal defining if the company can reclaim VAT for future years.

We note it is relatively unusual to win against HMRC indicating the strength of Bluejay’s case.

*SP Angel act Nomad and broker to Bluejay.

 

Condor Gold* (LON:CNR) 46p, Mkt Cap £54.2m – CEO presents at Canadian Mining Symposium

Mark Child, CEO of Condor Gold, the Nicaragua-focused gold exploration and development company, last week spoke at the Canadian Mining Symposium.

The presentation can be found here: https://vimeo.com/480882949

*SP Angel act as sole broker to Condor Gold

 

Cornish Metals* (CVE:CUSN) – C$0.08, Mkt cap C$11m – United Downs drill results show high-grade copper and tin

Cornish Metals continue to report high-grade copper and tin intersections in drilling at the new United Downs discovery in Cornwall.

Drilling now shows multiple zones of copper and tin mineralisation extending >750m vertically and along strike where the team have identified at least five new zones of copper and or tin mineralisation

The discovery of high-grade copper and tin was made by Cornish Lithium when drilling for lithium in brines.

6.91m grading 0.81% copper from 622m down hole

14.69m grading 8.45% copper and 1.19 tin from 91m*

2.45m grading 0.90% tin from 513m depth

1.60m grading 0.98% tin from 636m

4.04m grading 4.44% copper and 2.06% tin from 639m

2.94m grading 0.95% tin from 770m and 1.88m and         0.90%

Cornish Metals hold title over the United Downes licenses within their exploration tenements with agreement that Cornish Lithium can extract lithium-bearing brines.

The mineralisation is found between the historic United Mine and the Gwennap copper tin mining district and is thought to be similar to that mined at the Wheal Jane and Mount Wellington mines were both considered to be rich mines in their day.

The high-grade mineralisation looks like it should run close to the decline at the old Wheal Maid mine which could make accessing the mineralised lode underground quicker and simpler depending on the conditions of the decline today.

Processing of ore from the newly discovered lode could be done at South Crofty which is fully permitted for mineral processing and is about 7 miles from the United Downs site

Conclusion: Cornish Metals have made the most significant metalliferous discovery in Cornwall in recent years. The location of the discovery could enable quick and relatively low cost access through the Wheal Maid decline with high-grade ore trucked to the South Crofty plant site.

While more holes need to be drilled to confirm the economic potential of the discovery, historic production from the nearby mines suggests good potential for a sufficient copper and tin resource to potentially support a new mine in the area.

*SP Angel have two mining analysts/engineers who previously worked in tin mines in Cornwall. The author of this comment previously worked in the South Crofty tin mine, rock drilling, shovelling, tramming etc… SP Angel acts as broker and financial advisor to Cornish Metals.

 

Panthera Resources (LON:PAT) 9.75p, Mkt Cap £7.7m – Additional targets identified at Bido

Panthera Resources reports that a recent site visit to plan the geochemical soil sampling programme at its Bido project in Burkina Faso has established two additional targets of active artisanal mining within the area of the planned geochemical work and a further area of quartz veining to the northeast at an area known as the Beredo target.

The company reports that “several hundred artisanal miners” are working in an area measuring approximately 170m x 170m at the area known as ‘Tiekouyou Rush’ where “the miners appear to be targeting a hard-rock gold source comprising quartz veins and altered “dolerite”.

Panthera Resources considers that “This is encouraging as higher ore grades are required by local artisanal miners when compared with soft saprolitic, alluvial, or laterite hosted mineralisation”.

At Beredo, quartz veining “appears to extend in a north-northeast direction trending from the area of proposed soil sampling. A detailed review of historical data in this area towards the Bido Vein is currently underway”.

The planned geochemical soil sampling work is reported to be starting today and “is expected to be concluded in late January 2021 and we are currently evaluating a planned geophysical programme as a follow-up” in order to assist in the planning of future drilling targets.

Commenting on the developments at Bido, Managing Director, Mark Bolton, said that “ “The identification of the two new targets, before the commencement of the gold in soil survey, adds further weight to the growing importance of the Bido Project for Panthera. At Bido, several high priority targets have already been identified including Somika Hill, Kwademen, and Kwademen South”

Conclusion: The discovery of additional targets at Bido is encouraging and we await the results of the geochemical work with interest while observing that identification of gold mineralisation as a result of following the activity of artisanal miners is a well-established and effective exploration technique.

 

Power Metal Resources* (LON:POW) 1.78p, Mkt cap £15.2m -– Haneti mobilising RAB drilling

Katoro Gold (LON:KAT) 2.1p, Mkt Cap £7.5m

(Power Metal Resources holds 35% of the Haneti nickel project alongside Katoro Gold which holds 65%)

Power Metal reports that mobilisation of a drilling rig is underway for 2000m maiden drilling programme of shallow reverse-air-blast (RAB) drilling at its 35% owned Haneti project in Tanzania where the company targeting nickel and platinum group metals (PGM) mineralisation.

The initial RAB programme of 50 drill holes to around 40m depth aims to establish “profiles across the three target areas in order to provide enhanced information of the subsurface shape and orientation of the ultramafic bodies being targeted and to allow for the optimisation of a planned follow-on diamond drill programme”.

Haneti is located over an area of around 5,000km2 approximately 88km north of the city of Dodoma in central Tanzania.

The drilling will focus on the Mihanza Hill, Mwaka Hill and Igari Hill where the “Haneti-Itiso Ultramafic Complex ('HIUC'), …sporadically crops out over a strike length of 80 km through the centre of the tenement holding”.

Power Metal explains that “The Haneti area was first explored in 1931 by a private prospector who collected a nickel‐rich magnetite sample at Mihanza Hill. Later trenching uncovered a few discontinuous green‐stained veins rich in nickel‐silicates and containing several percent nickel” and that this work was followed up during the early 1960s with mapping, trenching and rock chip sampling by the Geological Survey of Tanzania.

Later mapping during the early part of the 21st century was followed up with airborne geophysics over Mihanza Hill and Mwaka Hill and a consulting geological report “identified the nickel, copper, platinum, palladium anomaly at Mihanza Hill as a drill ready target. This report suggested that the Itiso‐Haneti Ultramafic body may fit the Chonolith-Type Nickel exploration model which would imply that the main ultramafic belt may have small discrete sulphide bodies associated with it”.

Conclusion: Initial drilling of the Haneti project area follows up sporadic exploration undertaken since the 1930s and more recent targeted work, including geophysics which highlighted the potential for nickel and PGM mineralisation. If the RAB work is successful, it is likely to be followed by diamond drilling. We await the results with interest.

*SP Angel act as Nomad and broker to Power Metal Resources plc formerly African Battery Metals

 

URU Metals* (LON:URU) 240p, Mkt cap £3.6m – URU appoints Justin Cochrane to its Advisory board

URU Metals has appointed Justin Cochrane to it’s Advisory Board.

Mr. Cochrane is President and CEO of Conic Metals Corp., a global nickel and cobalt royalty and streaming company.

He has 20 years of royalty and stream financing, M&A, and corporate finance experience and previously served as President & COO of Cobalt 27 Capital Corp.

Justin was formerly Executive VP and Head of Corporate Development for Sandstorm Gold Ltd.

URU is looking to drill and potentially develop the giant Zebediela sulphide nickel project in South Africa

The project is on the northern limb of the Bushveld igneous complex and lies adjacent to and up-dip from Ivanplats Platreef mine.

Zebediela is also ~15 km along strike from Anglo Platinum's Mogalakwena Mining Complex and has a NI-43-101 resource of >1,600mt grading 0.245% Nickel.

The project could potentially produce >500,000tpa of nickel from an open-pit making this one of the world’s largest undeveloped nickel sulphide resources.

The company intends to drill a new higher-grade ore zone which shows 0.56% nickel over >4 m width with PGE credits for 3.01% equivalent nickel grade.

*SP Angel acts as Nomad and broker to URU Metals

 

Versarien* (LON:VRS) 36.80p, Mkt cap £62m – Graphene inhibits spread of COVID-19 according to independent report

Versarien has revealed results from an independent report on the use of Versarien’s modified graphene to inhibit SARS-CoV-2 virus.

A team at Ankara University used Versarien Hybrid Graphene Nanoplatelet/Metal Oxide Powders to inhibit viral infection and possess anti-viral activity towards SARS-CoV-2.

The doped materials were produced using technology from Gnanomat, a Versarien subsidiary, and were then separately dispersed in a phosphate buffer solution by Ankara University.

The material was then provided to an external Biosafety Level 3 laboratory for testing. 

Results show rapid Inactivation of SARS-CoV-2 by Silicon Nitride, Copper, and Aluminum Nitride.

See: https://doi.org/10.1101/2020.06.19.159970

“Testing was carried out on VeroE6 cells containing SARS-CoV-2 and viral copy numbers were analysed in real time to demonstrate the level of SARS-CoV-2 inhibition of the aqueous suspensions of GNA-22 and GNA-24, compared to control samples not exposed to these modified graphene materials.

 Initial results showed a log 4 reduction of SARS-CoV-2 using GNA 22 (approximately 99.99% inhibition) and a log 2 reduction using GNA 24 (approximately 99% inhibition).  These results were statistically highly significant with a p-value of less than 0.0001.

 The Report concludes that the results show that GNA22 and GNA24 significantly inhibited viral infection and suggests that these materials possess antiviral activity towards SARS-CoV-2.”

Conclusion: Graphene continues to demonstrate remarkable properties. This latest ant-viral test indicates to us that graphene when applied to materials in face masks and on surfaces should help to stop the spread of the Coronavirus and hopefully other viruses going forwards.

The report shows how effective graphene can be in the inhibition of SARS-CoV-2 viruses and this could lead to its application on surfaces in busy public spaces such as airports, stations, shops and offices as well as to face masks.

*SP Angel act as Nomad and broker to Versarien. The analyst has visited Versarien graphene manufacturing facilities

 

Analysts

John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] - 0203 470 0474

Joe Rowbottom – [email protected] - 0203 470 0486

 

Sales

Richard Parlons –[email protected] - 0203 470 0472

Abigail Wayne – [email protected] - 0203 470 0534

Rob Rees – [email protected] - 0203 470 0535

Grant Barker – [email protected] – 0203 470 0471

 

 

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London

W1S 2PP

 

*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

Bloomberg

Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt

LME

Oil Brent

ICE

Natural Gas, Uranium, Iron Ore

NYMEX

Thermal Coal

Bloomberg OTC Composite

Coking Coal

SSY

RRE

Steelhome

Lithium Carbonate, Ferro Vanadium, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

DISCLAIMER

This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.

Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.

Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%


 

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