Today's Market View - Condor Gold; Conroy Gold & Natural Resources; IronRidge Resources; Vast Resources and more...

SP Angel . Morning View . Tuesday 30 03 21

Metals tick lower as US dollar rises to quarter end

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Aura Energy* - (AIM:AURA) – Half-year results and project updates

Condor Gold* (AIM:CNR) – Progress of infill drilling at La India

Conroy Gold & Natural Resources (AIM:CGNR) – New zinc anomaly on the Longford-Down Massif

Gemfields (AIM:GEM) – 2020 results show extent of the damage inflicted by the Covid19 pandemic

IronRidge Resources* (AIM:IRR) – High-grade gold intersections at Zaranou

Vast Resources* (AIM:VAST) – Updated Baita Plai mine plan

Palladium – Nornickel mine flooding causes funds to cover short positions on PGMs

• Norilsk has warned that the flooding could result in the mine losing some 10% of global production.
• Palladium prices ticked back on the news that Norilsk may borrow palladium from the Russian state stockpile to cover its commitments.
• Nornickel has stopped the inflow of water at its Oktyabrsky mine and plans to restart full production in early May.
• The Taimyrsky mine will also restart in June. Both mines produce some 9.3mtpa of pgm ore.

Gold prices pull back as Biden unveils ambitious vaccination plan

• Gold prices continued to decline on Tuesday, falling their most in three weeks as President Biden prepares to unveil major spending plans along with reporting marked progress with the States’ vaccine rollout.
• Gold is heading for its first quarterly decline since 2018 as vaccine optimism has dented safe-haven asset’s appeal.
• Biden said that 90% of US adults will be eligible for Covid-19 vaccines by the 19th of April, boosting risk appetite and fuelling hopes that the world’s largest economy can recover more swiftly than expected.
• The dollar surged on the encouraging developments in the US - hitting a one-year high against the yen, with the dollar index climbing to a four month high.
• A stronger US dollar makes dollar denominated metals more expensive to holders of other currencies.
• Longer-dated Treasury yields hit a 14-month high on Tuesday, further dampening gold’s appeal by outshining non-yielding bullion as a safe haven asset.

US dollar index rises to 93 its highest level since November and a one-year high vs the Yen as US Treasury yields rise

• The US dollar climbed towards the quarter end as US Treasury yields rose to 1.767%.
• Over 92m people have received a first vaccine dose in the US with 52.6m having received two doses.
• Biden had offered 100m doses by the end of his first 100 days in office. He has since raised this target to 200m vaccinations
• 2.76m vaccine doses are being administered a day in the US.
• The UK has now vaccinated >50% of its population with a combination of AstraZeneca and Pfizer vaccines.
• European vaccination rates vary between 6% for Bulgaria to 19% for Estonia.
• Hungry which is giving the Russian Sputnik vaccine has vaccinated 27% of its population.
• Metals: The stronger dollar is suppressing all metals except for iron ore and lead
• We expect the US dollar to generally weaken under the weight of new stimulus spending as American’s buy in overseas products.
• The combination of a weaker US dollar and a strong increase in recovery / demand for commodities in the US should help lift metals prices..

No.1 in Copper: “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”

No1. In Gold: “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”

The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020

Economics

Suez Canal block brings China’s dominance of minor metals supply into focus

• The recent jam in the Suez canal has added to shipment delays affecting some minor metals who are highly dependent on supplies out of China, which has sent some metals soaring to multi-year highs.
• The China-to-Europe sea route for container freight has been one of the main routes affected by the disruptions, with Europe the final destination of many minor metals.
• The blockage has added to the logistical disruptions in the manganese flake market, sending prices to two and a half year highs last week.
• Prices of 99.7% electrolytic manganese flake climbed to their highest level since August 2018 at $2,820-3,040/t from the previous assessment of $2,750-2,850/t – with one trader telling Fastmarkets “Supplies were already thin before the blockage and this has exacerbated the problem,”
• Tungsten APT prices have also rallied on the delays, with a supplier in Asia commenting “The European market is very short of material and soon it will be even shorter.”
• Tungsten APT prices have risen 17.85% since the beginning of the year, when the price was $230-235 per mtu- a stark contrast to 2020 where prices traded under pressure through most of the year amid weak demand.
• Antimony supply has been cut due to Suez delays, due to China being responsible for 78% of global output.
• According to Fastmarkets, traders have been looking for replacement units of antimony in Rotterdam to cover for those that have not arrived from China.
• Similarly, China accounts for around 90% of global magnesium smelter production, with some container ships carrying the material making detours to Europe around the Cape of Good Hope.
• Magnesium prices have found support from Suez-related delays, although robust stocks in Rotterdam have meant that prices are not expected to rise drastically.
• Prices of 99.9% magnesium in Rotterdam was $2,600-2,700/t on March 26, slightly up from $2,550-2,650/t the week before.
• Tantalite basis 25% min Taa2O5 up +27.3% YTD.
• Cobalt up +52.7% YTD (Fastmarkets MB)

We are seeing major and minor disruption to logistics as the world recovers from COVID-19 and changes from combustion engines to electric vehicles.

• First, the now freed, stuck container carrier in Suez
• Second, a shortage of containers in the right locations – that will get worse with the Suez blockage
• Third, the Semiconductor shortage – we note China has been ahead of the game in setting up new chip foundries
• Fourth: and the most major part of the disconnect happens as European manufacturers ramp up EV production and the Chinese allocate raw materials to Chinese manufacturers in preference to Western automakers
• Western automotive manufacturers are worried that China is going to squeeze supplies with respect to critical raw materials as seen when China restricted rare earth supply to Japan.
• Major manufacturers are lobbying hard and asking EU, US and UK politicians to help ensure there is raw material supply.
• This is likely to help direct low cost loans into critical material mining and processing projects, such as the US Exim Bank $208m LoI loan offer to BlueJay Mining* and the possible development of a rare earths refinery at Teesside, Yorkshire.

Mozambique: Workers flee as Islamic militants take over Pemba

• We have first-hand recordings from people fleeing the Amarula Hotel in Palma.
• Over 180 people were trapped in the hotel compound in a three day siege.
• DAG mercenaries are said to have rescued many from the hotel.
• Other security services employed by Total are said to have failed to have responded in time
• 17 vehicles were ambushed in a convoy that left the Amarula hotel. Seven people died in the surviving vehicles. Another 45 expats are thought to have died in the other vehicles.
• The Mozambique military appear to be lacking in their ability to push back the militants who appear to have overtaken Palma.
• Around 500,000 people are said to have been forced to flee their homes in the region as the militants indiscriminately kill locals and expats alike.

Currencies US$1.1752/eur vs 1.1784eur yesterday. Yen 110.15$ vs 109.58/$. SAr 14.918/$ vs 15.006/$. $1.376/gbp vs $1.378/gbp. 0.764/aud vs 0.764/aud. CNY 6.568/$ vs 6.557/$.

Commodity News

Precious metals:

Gold US$1,705/oz vs US$1,726/oz last yesterday

Gold ETFs 100.0moz vs US$100.1moz yesterday

Platinum US$1,181/oz vs US$1,185/oz yesterday

Palladium US$2,557oz vs US$2,657/oz yesterday

Silver US$24.56/oz vs US$24.85/oz yesterday

Base metals:

Copper US$ 8,837/t vs US$8,923/t yesterday

Aluminium US$ 2,263/t vs US$2,294/t yesterday

Nickel US$ 16,330/t vs US$16,330/t yesterday

Zinc US$ 2,816/t vs US$2,828/t yesterday

Lead US$ 1,972/t vs US$1,958/t yesterday

Tin US$ 25,450/t vs US$25,510/t yesterday

Energy:

Oil US$64.9/bbl vs US$63.6/bbl yesterday

• The closure of the Suez Canal led to a moderate price rally last week, which came after a significant decline in oil prices triggered by new and stringent lockdowns in Europe
• The impact of the Suez Canal blockage on oil markets has been marginal due to the low volumes of crude oil passing through the canal (less than 5% of global supply).
• Now the shipping channel has been unblocked, the markets have priced in a short delay as more than 400 ships remain stuck, waiting to pass the waterway
• The total amount of damage remains to be seen, but we expect oil tankers not to change their shipping routes as this is likely to increase costs and risks
• The incident, on the other hand, may lead to increased investment in the capacity expansion of the SUMED pipeline, which currently stands at around 2.5MMbopd, running from the Ain Sokhna terminal in the Suez Gulf to offshore Sidi Kerir in Alexandria on the Mediterranean Sea
• OPEC+ is scheduled to hold a meeting this week to decide on its production policy in May
• While multiple factors may impact the group's decision, the markets already priced in an expected rollover of current cuts through May
• Platts data for February 2021 concluded that current global oil demand stands at c.92MMbopd while global supply stands at 91MMbopd, of which some 25.7MMbopd are produced by OPEC.
• Given the uncertainty about the global demand recovery, OPEC+ is expected to continue to roll over its current cuts through May
• Yet, if OPEC+ decides to roll over current cuts, the question remains whether Russia, and perhaps Kazakhstan will continue to be allowed to increase production to pre-agreed levels, given the expected rise in demand in May
• Russia is set to increase its production by 125,000bopd in April from 9.18MMbopd in February
• The group is also expected to emphasise compliance levels especially for countries that failed to meet their output quota in recent months such as Iraq and Nigeria

Natural Gas US$2.650/mmbtu vs US$2.571mmbtu yesterday

• Natural Gas prices moved higher in early trading today as the supply chain disruption of the Ever Green generated LNG supply disruptions
• The weather is expected to be much warmer than normal throughout the US Midwest
• If it were not March and early April, this weather would generate significant cooling demand and potentially draws during the injection season
• US demand continues to decline as the heating season comes to a close
• Natural gas in storage was 1,746Bcf as of Friday 19 March, according to the EIA. This represents a net decrease of 36Bcf from the previous week
• Expectations were for a 10Bcf draw according to survey provider Estimize
• Stocks were 263Bcf less than last year at this time and 78Bcf below the five-year average of 1,824Bcf
• At 1,746Bcf, total working gas is within the five-year historical range
• According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal in the US and Europe over the next 8-14 days which should boost demand

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$161.4/t vs US$157.3/t

Chinese steel rebar 25mm US$743.4/t vs US$729.6/t

Thermal coal (1st year forward cif ARA) US$72.0/t vs US$72.2/t

Coking coal swap Australia FOB US$125.0/t vs US$125.0/t

Other:

Cobalt LME 3m US$51,000/t vs US$51,750/t

NdPr Rare Earth Oxide (China) US$89,520/t vs US$89,674/t

Lithium carbonate 99% (China) US$12,789/t vs US$12,811/t - BMW to source lithium from US-based Livent in €285m contract

• BMW has announced that it has signed a multi-year contract with Livent which will see the miner supplying the automakers battery cell manufacturers from 2022 onwards.
• Livent will supply BMW from its brine resource in northern Argentina, using sustainable mining techniques.
• BMW has commissioned a study with the University of Alaska Anchorage and University of Massachusetts Amherst to investigate the impact of lithium mining on local water resources and the surrounding ecosystems.
• The automaker expects half of its global sales to come from electric vehicles by 2030.

Spodumene 6% Li2O min, cif (China) US$510/t vs US$455/t

Ferro Vanadium 80% FOB (China) US$35.0/kg vs US$35.0/kg

Ferro-Manganese high carbon 78% Mn US$1,665/t vs US$1,625/t

Tungsten APT European US$270-278/mtu vs US$270-275/mtu

Graphite flake 94% C, -100 mesh, fob China US$550/t vs US$560/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,525/t vs US$2,525/t

Battery News

Company News

Aura Energy* - (AIM:AURA) 9p, Mkt Cap £14.6m – Half-year results and project updates

• Aura Energy reports a loss of A$1.7m for the six months ending 31st December 2020 (2019 - Loss of A$1.2m) in a period when “business activities were largely on hold pending discussions to settle the ongoing legal disputes and a recapitalisation plan for the company”.
• Aura Energy attributes the increased net loss to “higher consulting charges, offset by lower finance charges and share registry costs”.
• The company’s main Tiris uranium project in Mauritania saw “No activity” during the period, while the Haggan battery metals project in Sweden “remained on care-and-maintenance” although the transaction for the west African gold exploration assets “continues, albeit at a slower pace”.
• The protracted legal disputes have, however been resolved with a major restructuring of the Board which leaves Peter Reeve as managing director and the Chairmanship with non-executive director, M Rogers.

Conclusion: The re-structuring of the Board and resolution of the long-running legal disputes provides encouragement that as Covid19 constraints are eased Aura Energy may be able to make progress on the Mauritanian and Swedish projects.

*SP Angel are Nomad and broker to Aura Energy

Condor Gold* (AIM:CNR) 47.5p, Mkt Cap £62.0m – Progress of infill drilling at La India

• Condor Gold reports that it has now completed the first 40 holes (2,170m) of its closely spaced infill drilling programme within the area of the starter pits at the La India mine development in Nicaragua.
• The infill drilling, on a grid of 25m spacing is aimed at improving geological confidence in the orebody modelling and should, in our opinion, facilitate detailed planning for the early part of the operations within both the northern and southern starter pits.
• The company has previously reported the completion of 25 holes (1,273m) of infill drilling within the northern pit and today’s announcement confirms that “Drilling is nearing completion on the Southern Starter Pit with 15 holes for 897 m completed, also including four RC-twin holes” as was the case with the drilling on the northern pit.
• Condor Gold confirms that it has now received results “for a total of six drill holes which are all located at the northern end of the Northern Starter Pit, two of which (LIDC404 and LIDC405) have been previously reported”and the company highlights:
• An intersection of 17.9m, representing a true width of 17.4m,at an average grade of 3.27g/t gold from a depth of 24.55m in hole LIDC406; and
• An intersection of 7.65m (7.5m true width) at an average grade of 3.55g/t from a depth of 19.0m in hole LIDC412
• Chairman and CEO, Mark Child said that “A drill intersect in LIDC406 of 17.90 m (17.4 m true width) at 3.27 g/t gold from 24.55 m drill depth, including 2.1 m @ 15.1 g/t gold is highly encouraging and adds considerable confidence to the geological model, the mineral resource and reserve calculation and mine plan”.
• Mr. Child also confirmed that this intersection was located within the northern starter pit and “is within the fully permitted main La India open pit mineral reserve” and the announcement explains that hole LIDC406 “tested a zone where the main mineralized structure bifurcates into two close spaced vein stacks, both of which are strongly brecciated along the structure. Shallow level artisanal mining activity was intersected, but it has only stoped a 0.8 m width of the upper structure”.
• Condor Gold makes clear that, although the scope of the infill programme is kept under review to respond to the results received, it expects to drill another 265m to complete the 25m spaced programme and that “Following completion of the drilling in the Southern Starter Pit, the next stage in the infill drilling programme is to twin drill an additional 14 RC drill holes (1142 m of drilling) that are located within the La india mineral resource pit shell”.

Conclusion: The infill drilling should provide increased confidence in the geometry, tenor and orientation of the mineralisation in the starter pits at La India and help to ensure a smooth transition into the production phase and we look forward to further news on the development schedule as results from the rest of the infill drilling become available.

*SP Angel act as sole broker to Condor Gold

Conroy Gold & Natural Resources (AIM:CGNR) 30p, Mkt Cap £11.4m – New zinc anomaly on the Longford-Down Massif

• Conroy Gold reports that geochemical soil sampling over the northern, Aughnagurgan, area of its licence area on the Longford-Down Massif in Ireland has identified anomalous levels of zinc over an area measuring approximately 0.8 x 0.9km.
• The company says that ten of sixty-five samples recovered, assayed in excess of 1,000ppm (0.1%) zinc and that the “results also indicated the presence of a range of associated elements including; lead, cadmium, manganese and nickel”.
• Commenting that the area has “has an established history of base metal mining”, the company confirms that it is planning a follow-up drilling programme as the next stage of its exploration.
• The company’s Chairman, Professor Richard Conroy, confirmed that its “primary focus remains on the district scale gold trend which it has discovered in the Longford-Down Massif within its 800km2 licence area and on bringing in a mine at the Clontibret deposit where we have already an existing JORC compliant gold resource of 517,000 ounces”.
• Prof Conroy also disclosed that “We have recently signed a letter of intent with Demir Export A.S. for a proposed joint venture on an earn-in basis over the twelve licences held by Conroy Gold in the Longford-Down Massif. Demir Export is a long established mining company with interests in iron, coal, gold and base metals, including zinc and copper, in Turkey”.

Conclusion: The identification of a zinc-in soil anomaly at Aughnagurgan is encouraging is to be followed up with drilling. The proposed joint venture with an established Turkish mining company allowing Demir Export AS to earn an interest in the licences at Longford Down should inject additional financial resources into the exploration effort and advance the possible development of the 0.5moz Clontibret gold resource.

Gemfields (AIM:GEM) 6.88p, Mkt Cap £82.0m – 2020 results show extent of the damage inflicted by the Covid19 pandemic

• Gemfields reports a reversal of 2019’s US$39.1m net profit with the impacts of the Covid19 pandemic pushing Gemfields into a 2020 loss of US$93.2m as the inability to bring its ruby and emeralds to traditional auctions since February 2020 cut revenues by 84% to US$34.6m (2019 – US$216.2m).
• The pandemic led to the suspension of operations at both the Kagem emerald mine in Zambia and the Montepuez ruby operation in Mozambique for much of the year although earlier this month the company announced its plans to resume mining at both operations with an intention to restore full scale production by the end of April.
• As a result of what the company describes as the “unprecedented challenges in 2020” the company’s 31st December 2019 net cash of US$25.4m was eroded leaving net dent of US$12.6m by 31st December 2020.
• Chairman, Martin Tolcher, explained that “With no ruby auctions taking place during the year” the Montepuez operation “has sufficient inventory to support one mixed-quality ruby auction” while the Kagem emerald mine “presently has sufficient inventory to support one higher-quality and one commercial-quality emerald auction”.
• All significant capital expenditure remains suspended at both operations pending improvements in the business.
• Looking ahead, Chief Executive, Sean Gilbertson, confirmed that “Our strategy remains focussed on consolidating our position as a world-leading supplier of responsibly sourced African emeralds, rubies and sapphires”.
• We observe that the extended suspension of operations in both Zambia and Mozambique must have had a major impact on the host communities which will now doubt welcome the planned resumption of activities scheduled for the end of April although it is encouraging to learn that “We have been able to continue paying our employees and suppliers, limiting redundancies throughout the Group and continuing our significant contributions to the host country economies in which we operate We have been able to continue paying our employees and suppliers, limiting redundancies throughout the Group and continuing our significant contributions to the host country economies in which we operate”.

IronRidge Resources* (AIM:IRR) 19.7p, Mkt cap £89.2m – High-grade gold intersections at Zaranou

• IronRidge reports high-grade drill intersections at its Zaranous project in Côte d'Ivoire, West Africa.
• RC and AC drill results received for 4m composites over the Mbasso, Ehuasso and Yakassé targets include:
• Mbasso:

- ZAAC1112: 4m at 21.4g/t Au from 24m

- ZAAC0979: 12m at 6.1g/t Au from 36m incl. 4m @ 17.9g/t Au

- ZAAC0807: 52m at 0.4g/t Au from surface

- ZAAC1026: 12m at 1.5g/t Au from 48m incl. 4m @ 3.3g/t Au

- ZAAC0952: 4m at 4g/t from 60m

- ZAAC1093: 36m at 0.4g/t from 0m

- ZAAC1004: 32m at 0.4g/t from 0m

- ZAAC1106: 39m at 0.3g/t from 8m incl. 4m @ 1.2g/t

• Yakassé:

- ZARC0100: 36m at 3.7g/t from 124m incl. 4m @ 1.4g/t, 4m @ 6.9g/t and 4m @ 23.01g/t

- ZARC0126: 36m at 0.5g/t from 132m incl. 4m @ 1.9g/t and 4m @ 1.0g/t

• Ehuasso:

- ZARC0107: 64m at 0.5g/t from 40m incl. 4m @ 2.4g/t and 4m @ 1.8g/t

- ZARC0121: 24m at 0.9g/t from 68m incl. 4m @ 1.2g/t, 4m @ 1.7g/t and 4m @ 1.4g/t

- ZARC0121: 12m at 1.4g/t from 232m incl. 4m @ 2.0g/t and 4m @ 2.2g/t

- ZARC0111: 32m at 0.4g/t from 148m incl. 4m @ 1.4g/t

• New drilling results at Mbasso confirm the mineralisation potential of the target, with good continuity confirmed in up to five interpreted structures over a 2.1km strike in 160m spaced AC drill traverses.
• The Mbasso-Coffee Bean-Ehuasso targets cover a combined strike of 8km, centralised over the robust Coffee Bean magnetic anomaly, with high-grade drilling results to date over the multitude of targets providing the company with the potential for a considerable mineralised structure at Zaranou.
• The planned drill programme across the Mbasso, Ehuasso, Ebilassokro and Yakassé targets has now been completed for a total of 51,539m, of which 31,216m in 611 AC holes and 20,323m in 110 RC holes were drilled. All 4m composite samples have now been received and reported herewith, with the final 1m primary sample assays pending.
• Vincent Mascolo, Chief Executive Officer of IronRidge, commented: "Ongoing results from the current drilling programme have confirmed significant mineralisation potential at the Mbasso target. "Our 'early ounces' strategy continues to target weathered oxide mineralisation, with initial observations suggesting it continues to average depths of 50m and up to 90m, which we believe is indicative of simple mining and processing at low operational and capital costs.”

*SP Angel act as Nomad to IronRidge Resources

Vast Resources* (AIM:VAST) 0.11p, Mkt Cap £23m – Updated Baita Plai mine plan

• The Company released an updated mine plan for the Baita Plai polymetallic operation in Romania.
• Updated production plan involves a 65% increase in mining capacity under the new mechanised mine plan compared to the old labour intensive approach.
• Mined ore will be pre-treated using XRT processing and sorting circuit to upgrade the feed to the mill allowing to leave processing plant capacity unchanged.
• The new mine plan includes the acquisition of three Load Haul Dump trucks, jumbo drill rig, two long hole drill rigs and a Tomra XRT processing circuit.
• The Company is planning to bring expand onsite international management to support the new General Manager with new hires including Underground Mine Manager, Processing Plant Manager, a Health & Safety Manager as well as other superintendent level support.
• New plan capex is estimated at $4.5m and will be funded from existing financial resources.
• The plan is based on a 15y mine life using 3.7mt in mineral inventory with mining and milling rates of ~260ktpa and ~160ktpa, respectively, and in-situ grade of 1.27% Cu, 1.10% Zn, 0.61% Pb, 0.49g/t Au and 62.08g/t Ag.
• The team is being planned focused on the downdip extension of the Antonio skarn from 19 level to 22 level and is expected to start in June 2021.
• Additionally, exploration drilling to confirm historic drill hole data on the Antonio North skarn expected to start in early 2022 to further expand the existing MRE.
• The latest MRE stands at 608kt at 1.11% Cu, 0.30% Zn, 0.29% Pb, 0.45g/t Au and 66.89g/t Ag with an exploration target pf 1.8-3.0mt at 0.50-3.00% Cu, 0.20-0.80g/t Au, 40-80g/t Ag along with Zn and Pb.
• At steady state the mine is estimated to produce ~4.4kt CuEq, generate $35m in gross revenue (ex royalty and transportation; at $7,800/t Cu, $1,650/oz Au and $20.5/oz silver), ~$20m EBITDA and $16m post-tax FCF.
• The operation will be gradually ramping up over the next 18m with the highlighted capital progressively deployed during the period.
• Loaders and trucks as well as jumbo drill rig are expected to arrive on site in Apr/21 while long hole drill rigs are due in Nov/21 and Aug/22; XRT sorting circuit expected in Oct/21 with installation targeted by Dec/21.
• The team is expecting the operation to be FCF positive in H2/FY22 (Nov/21-Apr/22) with plant processing ~50kt and producing ~1.2kt CuEq; over the next 13 months (Mar/21-Arp/22) the plan is for 95kt milled in the plant, ~1.9kt Cu, ~$18m in gross revenue (~$8,950/t Cu) and ~$2.5m in FCF pre-tax; the latter accounts for ~$2.1m in equipment capex highlighted above.
• The team is planning to update the market on Baita production and sales on a semi-annual basis.

Conclusion: The team is planning to ramp up mining capacity suing more efficient mechanised equipment with lower mined grades to be upgraded in the XRT circuit to deliver upgraded mill feed into the plant. First new underground mining equipment is expected to arrive in April with XRT planned to be installed by YE21 allowing to ramp up mining rates. Additionally, new Company will be bringing in new international operational management to help with implementation of the plan. Programme is reported to be covered by existing financial resources.

*SP Angel acts as Broker to Vast Resources

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk - 0203 470 0474

Joe Rowbottom – Joe.Rowbottom@spangel.co.uk - 0203 470 0486

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk - 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk - 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk - 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 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

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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.

MiFID II - Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here https://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).

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%