SP Angel . Morning View . Monday 02 08 21
Tin and Rare Earths continue to lead as iron ore and steel prices pull back
Aura Energy* - (LON:AURA) – Quarterly report highlights progress with Tiris uranium project
Beowulf Mining* (LON:BEM) – £100k investment in Vadar
Caerus Mineral Resources (LON:CMRS) – Option agreement with Bezant Resources
Caterpillar – (NYSE:CAT) – Cost inflation hits shares despite rise in quarterly earnings
CGN Mining (HK:1164) – CGN Mining signs deal to acquire 49% of Ortalyk from Kazatomprom for US$435m
Power Metal Resources* (LON:POW) – Significant expansion of exploration ground in the KCB
Kavango Resources (LON:KAV) – Significant expansion of exploration ground in the KCB
Rambler Metals and Mining* (LON:RMM) – Ming Mine drilling and underground development showing encouraging signs of potential for resource expansion later this year
Scotgold Resources* (LON:SGZ) – Cononish operations update
Strategic Minerals* (LON:SML) – Progress report on Southern Minerals’ claim against CV Investments
Tertiary Minerals* (LON:TYM) – Zambian exploration license option
Trans-Siberian Gold (AIM:TSG) (LON:TSG) – Quarterly production update
Vulcan Energy (ASX:VUL) – Vulcan Energy locks in 5-year deal with Renault
IGTV: China fearing failure in metals pricing tactic: https://youtu.be/RK4HQPrs60s
Covid – Can China maintain control over the spread of the new Delta variant?
China will almost certainly be underreporting its covid cases as the state controls and censures all media on Coronavirus infections.
Pollution, high levels of smoking, poor diet and general health combined with a shortage of available western-style medical facilities in many areas may make Covid infection worse in China than in many Western nations.
China has fully vaccinated some 223m people but has given 1.65bn doses indicating around 59% of the population should have been vaccinated by now. (China’s population is 1.44bn)
The efficacy of the Sinovac vaccine is 65.9% and is 87.5% effective at preventing hospitalisation according to a new study published in the New England Journal of Medicine.
Sinopharm efficacy is stated at 79% by the WHO and 79% effective against hospitalisation.
Chinese methods for containing the new Covid Delta variant should be effective but may still have some impact on the Chinese economic recovery, hence recent downgrades to China’s 2021 GDP estimates.
Dow Jones Industrials +0.44% at 35,085
Nikkei 225 -1.80% at 27,284
HK Hang Seng -1.91% at 25,812
Shanghai Composite -0.41% at 3,398
Economics
China – Growth momentum pulled back at the start of Q3/21 the latest set of PMI data shows.
Slowing growth may see government and monetary policy authorities stepping in with more stimulus programmes as local coronavirus outbreaks weigh on sentiment.
Caixin/Markit manufacturing PMI released this morning highlighted the weakest expansion in the sector in 15 months.
A measure of new orders dropped to the lowest in 15 months.
Relatively subdued demand translated into broadly unchanged employment with inflationary pressures easing as both input costs and output charges gains slowed.
Manufacturing PMI: 50.4 v 50.9 in June and 50.8 est.
Services PMI: 53.3 v 53.5 in June and 53.3 est.
Composite PMI: 52.4 v 52.9 in June.
Caixin Manufacturing PMI: 50.3 v 51.3 in June and 51.0 est.
Spain – Manufacturing sector growth remained strong in July, albeit, slightly lower than forecast.
“July’s data again provided a positive picture overall of manufacturing growth, with the sector again supported by strong demand trends and the ongoing reopening of the economy,” Markit commented on data.
On a less positive side, the survey showed that businesses dialled back their outlook to the lowest in six months amid rising Covid-19 infections around the world.
Manufacturing PMI: 59.0 v 60.4 in June and 59.5 est.
Italy – Manufacturing expanded at the pace close to record highs in July, only slightly hindered by supply delays and capacity pressures.
“Overall, July data pointed to another stellar performance,” Markit wrote.
Manufacturing PMI: 60.3 v 62.2 in June and 61.5 est.
India – The nation accelerate the pace of vaccinations to 4.8m doses a day, up 23% on the previous week.
India administered more than 472m jabs since the rollout started in mid-January.
That translates into ~8% of the population having now been fully vaccinated and more than 27% having received a first shot.
Eurozone - CPI Estimate +2.2% vs Jun +1.9%
Jobless Rate 7.7% in June Vs. 8.0% in May
Core CPI Estimate +0.7% yoy in July
EU flash GDP 2% qoq vs -0.3% and 13.7% yoy vs -1.3%
South Korea - Business confidence 97 in July vs 98 in June
Industrial production rose 2.2% in June vs -1.0% in May and 11.9% yoy in June vs 15.3% yoy in May
Manufacturing output yoy 12.1% in June vs 15.3% in May
Retail sales rose 1.4% in June vs -1.8% in May and rose 1.6% yoy in June vs 3.1% in May
Japan - Unemployment 2.9% in June vs 3% in May
Industrial production rose 6.2% in June vs -6.5% in May and 22.6% in June vs 22.1% in May
Retail sales up 3.1% in June vs -0.3% in May and 0.1% yoy in June vs 8.3% in May
Germany - Q2 flash GDP 2.7% qoq vs 0,2% and 9.2% yoy vs -3.1%
Currencies
US$1.1886/eur vs 1.886/eur last week. Yen 109.58/$ vs 109.58/$. SAr 14.620/$ vs 14.620/$. $1.396/gbp vs $1.396/gbp. 0.738/aud vs 0.738/aud. CNY 6.461/$ vs 6.461/$.
Commodity News
Precious metals:
Gold US$1,807/oz vs US$1,830/oz last week
Gold ETFs 100.6moz vs US$100.5moz last week
Platinum (AIM:ZERO) US$1,057/oz vs US$1,059/oz last week
Palladium US$2,674/oz vs US$2,662/oz last week
Silver US$25.47/oz vs US$25.58/oz last week
Base metals:
Copper US$ 9,781/t vs US$9,790/t last week
Aluminium US$ 2,611/t vs US$2,601/t last week
Nickel US$ 19,725/t vs US$19,740/t last week
Zinc US$ 3,039/t vs US$3,000/t last week
Lead US$ 2,399/t vs US$2,354/t last week
Tin US$ 34,950/t vs US$34,780/t last week
Energy:
Oil US$74.8/bbl vs US$75.6/bbl last week –
Oil prices fell during early trading today on worries over China's economy after a survey showed growth in factory activity slipped sharply in the world's second-largest oil consumer, with concerns compounded by a rise in oil output from OPEC producers
China's been leading economic recovery in Asia and if the pullback deepens, concerns will grow that the global outlook will see a significant decline
China's factory activity growth slipped sharply in July as demand contracted for the first time in more than a year, in part on high product prices, a business survey outlined this morning, underscoring challenges facing the world's manufacturing hub
The weaker results in the private survey, mostly covering export-oriented and small manufacturers, broadly aligned with those in an official survey released on Saturday that showed activity growing at the slowest pace in 17 months
Also weighing on prices, a Reuters survey found that oil output from OPEC rose in July to its highest since April 2020, as the group further eased production curbs under a pact with its allies while top exporter Saudi Arabia phased out a voluntary supply cut
It has also been confirmed that the US will not lock down again to curb COVID-19 but "things are going to get worse" as the Delta variant fuels a surge in cases, mostly among the unvaccinated
India's daily gasoline consumption exceeded pre-pandemic levels last month as states relaxed COVID-19 lockdowns while gasoil sales were low, signalling subdued industrial activity in July
Elsewhere, the US and Britain confirmed that they believe Iran carried out an attack on an Israeli-managed petroleum product tanker off the coast of Oman on Thursday that killed a Briton and a Romanian, and pledged to work with partners to respond
Natural Gas US$3.971/mmbtu vs US$3.971/mmbtu last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$177.2/t vs US$191.6/t
Chinese steel rebar 25mm US$828.3/t vs US$840.7/t
Thermal coal (1st year forward cif ARA) US$95.4/t vs US$96.5/t - Chinese coal futures fall as plan to restart mines is unveiled
Authorities in Inner Mongolia approved restarting production at 38 open-pit coal mines in order to boost China’s supplies, according to the NDRC.
Thermal coal futures on the Zhengzhou Commodity Exchange fell as much as 7.9% on Monday, although prices are still 60% higher than a year ago.
Shares also fell: Shanxi Coking -9.9%, Yanzhou Coal -10%, China Coal -8.4%.
Coking coal swap Australia FOB US$204.0/t vs US$208.5/t
China Illmenite Concentrate TiO2 US$359.8/kg vs US$359.8/t
Uranium - Exelon (NYSE:EXC) Generation, an owner and operator of the Byron and Dresden nuclear power plants in Illinois, US, will be closing down its two facilities (~4.1GW capacity) and is filing the Post Shutdown Decommissioning Activities Report with the Nuclear Regulatory Commission.
The Company has further added that it may have to shut its Braidwood (~2.4GW) and LaSalle (~2.3GW) nuclear facilities as well in the next few years.
Exelon blamed lack of progress on clean energy legislation in the state arguing current market policies give fossil fuel plants an unfair competitive advantage.
Other:
Cobalt LME 3m US$52,500/t vs US$52,500/t
NdPr Rare Earth Oxide (China) US$96,343/t vs US$95,557/t
Lithium carbonate 99% (China) US$13,155/t vs US$13,154/t
China Spodumene Li2O 5%min CIF US$780/t vs US$760/t
Ferro-Manganese European Mn78% min US$1,824/t vs US$1,848/t
China Tungsten APT 88.5% FOB US$305/t vs US$300/t
China Graphite Flake -194 FOB US$515/t vs US$515/t
Europe Vanadium Pentoxide 98% 9.7/lb vs US$9.7/lb
Europe Ferro-Vanadium 80% 40.75/kg vs US$40.75/kg
Spot CO2 Emissions EUA Price US$57.9/t vs US$57.9/kg
Battery News
Biden wants US automakers to pledge 40% EVs by 2030
The US government has asked US automakers to back a voluntary pledge of at least 40% of new vehicle sales being electric by 2030 as it seeks to reduce carbon emissions.
The Biden administration will set out proposed revisions to vehicle emissions standards which would cover 2023 to 2026. The 2026 requirements are expected to exceed the Obama-era 5% annual improvements for fuel economy and are a big improvement on Donald Trump’s 1.5% annual increase.
The deal has not yet been agreed with car makers, but discussions are going on and automakers should work on aligning with the country’s target.
Australian government to invest AU$25m for EV charging stations
Funding from the Australian federal government’s Future Fuels Fund will be used for the installation of over 400 public fast-charging stations for EVs across the country.
19 projects, totalling AU$24.55m have been approved for geographic regions covering 14 of Australia’s most populous cities.
Each region will have at least eight new stations installed, which will be capable of charging at least two vehicles concurrently.
Amp Energy India secures $100m for 1.7GW renewables project portfolio
Copenhagen Infrastructure Partners (CIP) has signed an investment agreement with Amp Energy India to enable joint equity investments of over $200 million in renewable energy projects in India, with CIP committing $100 million as part of this agreement.
Amp Energy India have targeted and initial 1.7GW portfolio of renewable energy projects to deliver green energy to commercial and industrial customers – the portfolio will comprise of 900MW late-stage PV and wind-solar and 800MW early-stage projects.
Company News
Aura Energy* - (LON:AURA) 5.63p, Mkt Cap £22.6m – Quarterly report highlights progress with Tiris uranium project
Aura Energy’s quarterly report for the 3 months to 30th June, released on Friday, reiterates the progress reported earlier this week on advancing its Tiris low-emission uranium project in Mauritania as well as the company’s efforts to secure the reinstatement of its ASX listing.
The company is aiming to release an updated mineral resources estimate for Tiris, shortly to incorporate drilling data from the Sadi area which was not in the previous estimate.
Aura Energy is also evaluating the by-product potential of vanadium at Tiris “with the target of delivering a by-product credit for the Tiris cash cost, potentially lowering the overall operating costs”.
Evaluation of opportunities to further reduce the operating and capital costs of Tiris are underway as is “a net emissions study … with encouraging findings produced.”
Elsewhere, the Häggån Battery Metals project remained on care-and-maintenance while Aura is continuing its compensation claim against the Swedish Government in relation to its exploration expenditure for uranium at Häggån and the Government’s August 2018 decision to ban uranium mining.
Work continued on the prospective transaction for the Tasiast South gold project in Mauritania
Aura Energy anticipates that its “Rights Issue, Loyalty Options Entitlement Rights Issue and placement are anticipated to provide $5.8m to the Company, which will be used to expedite the development of the zero emission Tiris Uranium Project, well positioning Aura to capitalise on the current uranium market, as the world continues to shift towards a decarbonised energy system”
Conclusion: Aura Energy is progressing its Tiris uranium project in Mauritania with an updated mineral resources estimate expected shortly and revisions to the capital cost estimates reported in 2019 in hand to reflect current conditions and the impact of vanadium by-product credits on the operating costs. Operations in Sweden are suspended currently although the company is continuing to pursue its compensation claim against the government. Corporate activity includes a $5.8m funding via a rights issue and placement and continuing efforts to secure a reinstatement of the company’s ASX listing.
*SP Angel are Nomad and Broker to Aura Energy
Beowulf Mining* (LON:BEM) 3.75p, Mkt cap £31.2m – £100k investment in Vadar
Beowulf reports that it has invested a further £100k in Vadar Minerals, increasing the Company’s ownership in Vadar from 48.4% to approximately 49.4%.
Vadar has been unable to commence the planned summer drilling programme as it awaits final approval of its licence applications, due to ministerial delays associated with Covid and parliamentary elections.
On July 30th, Vadar submitted its licence renewal applications for Mitrovica and Viti on time and these applications were approved by the pre-board process and are ready for signature by the ICMM Board. Vadar expect the licenses to re-issued, and the eophysics programme at Mitrovica undertaken in Q3 and Q4 2020 and the building of access roads and drilling platforms ahead of the planned drilling on the lead-zinc targets at Wolf Mountain and gold targets at Majdan Peak.
Vadar hopes that the licences will be approved by the ICMM Board in late September, allowing Vadar to use two diamond drill rigs to complete the planned drilling programme prior to the onset of Winter.
Vadar has also submitted an application for a new exploration licence area which has been approved by the pre-board process and is ready for signature by the ICMM Board.
The application covers an area of 87 square kilometres, extends to the north and northeast of the Mitrovica Project, and includes several areas with significant alteration associated with Oligo-Miocene magmatics along with associated gossans and evidence of historical artisanal workings.
The licence encompasses the extension of a distinct northwest trending zone of lead-zinc-silver ("Pb-Zn-Ag") mineralisation from the Stan Terg deposit through the Wolf Mountain target.
Plans are being drawn up for a comprehensive ground based and airborne drone exploration programme in spring 2022.
At Wolf Mountain and Majdan Peak, the Vadar team is preparing to drill about 3,300m in Autumn.
*SP Angel act as Nomad and Broker to Beowulf Mining
Caerus Mineral Resources (LON:CMRS) 27.5p, Mkt Cap £12.9m – Option agreement with Bezant Resources
Caerus Minerals reports that it has concluded a binding option agreement with Bezant Resources which grants Bezant an exclusive option to assess all Caerus’s unexploited hard-rock mining assets.
Under the agreement, Bezant may “identify one or more of Caerus' assets to be converted into a Mine Development Project(s) under a Joint Venture”.
Bezant would then assume responsibility “to lead the design, finance, construction and operation phases of an open-pit or underground mining operation” and Caerus is entitled to “receive 70% of Joint Venture cash flow until Caerus' expenditure during the pre-mining exploration phase has been reimbursed”.
The company says that “The Agreement complements the existing programme with Jubilee Metals Group, which covers metal recovery from surface mining residues within Caerus' licence areas under the Company's waste to revenue strategy”.
CEO, Martyn Churchouse, explained that “We are delighted to engage with Bezant at a time when the market demand for copper is so vibrant and is forecast to remain so for many years. This partnership will run in parallel with our Agreement with Jubilee Metals Group and will allow us to pursue a dual strategy of exploring new underground and mineable resources whilst exploiting the value of our stockpiles of copper and gold-bearing waste. Both Bezant and Jubilee are recognised experts in their sectors and are therefore natural partners with which to progress our ambitions.”.
Caterpillar – (NYSE:CAT) US$206.75, Mkt cap US$113bn – Cost inflation hits shares despite rise in quarterly earnings
Caterpillar shares pulled back on Friday as logistic issues combined with raw material price rises and other inflation pressures.
The company has raised prices twice this year but reports that higher input costs, wages, transport, R&D etc. will likely hit yearnings in the current quarter.
The challenge for Caterpillar is to keep production lines going to fulfill strong order books driven by growth in the mining and construction sectors.
CGN Mining (HK:1164) HKD0.64, Mkt cap HKD4.22bn – CGN Mining signs deal to acquire 49% of Ortalyk from Kazatomprom for US$435m
CGM Mining Company Limited has signed a deal to acquire 49% of Ortalyk from Kazatomprom.
Kazatomprom will retain control and a 51% stake in the uranium business.
The two groups have previously agreed to build a new nuclear fuel assembly plant (Ulba-FA) at the Ulba Metallurgical Plant provided CGN agrees to take the offtake.
‘Ortalyk LLP owns a 100% interest in the Central Mynkuduk Deposit and fulfilled exploration and trial production at the Zhalpak Deposit, which contain JORC-compliant aggregate mineral resources of approximately 40,413 tonnes of uranium (at 31 December 2019)’ according to World Nuclear News.
Power Metal Resources* (LON:POW) 2.1p, Mkt cap £23.6m – Significant expansion of exploration ground in the KCB
Kavango Resources (LON:KAV) 6p, Mkt cap £22m
(Kanye Resources is a 50:50 joint venture between Power Metal Resources and Kavango Resources)
Power Metal and Kavango report a significant expansion of exploration ground in the Kalahari Copper Belt, through the project’s local operating company Kanye Resources.
The acquisition of eight prospecting licenses increases the strategic ground held by the South Ghanzi project by 229% to 4,257km2- making the project one of the largest license footprints on the KCB.
Four licenses are in roximity to the town of Ghanzi in the central zone of the Botswana KCB, bought by Shogwe Resources for $200k.
The remaining four licenses are near the town of Mamuno on the Namibian border, bought from Vinmarsh Enterprises for $230k.
Cash acquisition costs have been funded equally by Power Metal and Kavango from existing cash resources.
*SP Angel act as Nomad and Broker to Power Metal
Rambler Metals and Mining* (LON:RMM) 26.13p, Mkt Cap £30.9m –Ming Mine drilling and underground development showing encouraging signs of potential for resource expansion later this year
(Rambler owns 100% of the Ming Copper-Gold Mine)
CLICK FOR PDF
Rambler Metals and Mining has issued a progress report on its 15,000m drilling programme which started in February and where it has now completed 7,354m of core-drilling and aims to complete the balance of the programme by the end of the year.
The drilling, which initially focussed on providing more detailed infill information on the Lower Footwall Zone on the 510-535m level and has since progressed to infill drilling at the 760m level, will support an updated mineral resources estimate “at the end of 2021 … and in H1 2022 to update the mine plan and Reserve statement”.
The company explains that “The 760 level contains a substantial portion of the LFZ production scheduled over the next 18-months” so that the drilling currently underway “will progressively increase the confidence in the mine plan with drill data at less than 50 m spacing for Indicated confidence that reduces risk in mine design, grade and ground control”.
CEO, Toby Bradbury, confirmed that the drilling is “confirming the presence and grades of zones identified for near-term mining as part of the production ramp-up, the intersection of new zones and extended zones have the potential to further add to an already large high-grade deposit … [and that] … Higher than anticipated grades in development headings are helping to supplement tonnes at a time that we are still in the redevelopment phase for Ming Mine.”
He explained that this “has multiple benefits as it reduces waste handling, increases copper production and assists with operating cost reduction”.
Among the drilling results highlighted in today’s announcement are:
A 34.3m wide intersection averaging 1.14% copper from a depth of 156.7m in hole R21-620-01 and including a 6m wide section averaging 1.65% copper. The hole also contained further intersections of 10.3m averaging 1.13% copper from 216.7m depth and of 3m averaging 1.91% copper from 307m depth; and
An intersection of the Lower Footwall Zone of 24.05m averaging 1.02% copper from a depth of 169.10m in hole R21-620-03 which also included 22.4m averaging 1.33% copper from 211.60m depth and 5m averaging 1.74% copper from 256m. Each of the intersections included higher grade sections; and
A 9.15m wide intersection averaging 1.06% copper from 144.35m in hole R21-620-05 which also contained 13.13m averaging 1.09% from 159.87m; 10.30m averaging 1.01% copper from 201.7mm and is now “targeting inferred mineralisation outside of known ore body”.
The company confirms that “In addition to the new drilling intersections, underground development towards the Upper and Lower Footwall Zones in the lower mine has returned strong mineralisation ahead of the planned stoping areas. In the short-term, development will continue as per the schedule so that the mine continues to build the necessary ready to drill inventories to allow for steady ore production. This new mineralisation will be evaluated for mining as we retreat from the stoping levels”.
The drilling on the 620m level is providing the improved drilling density required to convert “Inferred mineral resources to Indicated or Measured confidence levels” which may permit larger zones to be “incorporated into the production plan”.
Today’s announcement also contains the encouraging news that “In the process of drilling towards 760 level in the LFZ, we have intersected a new zone of massive sulphide mineralisation … [which] … looks to be an extension of the Ming North Lower zone … [and the announcement explains that … This massive sulphide zone is typically characterised with higher copper and gold grades”.
Current drilling is helping to investigate the down-plunge extension of this zone and “Once completed, further work will be invested into further defining on the up-plunge extension”.
As the mine development work builds up “development towards LFZ 735-760mL has mined 4,130 tonnes of ore averaging 1.58% copper. The block model used for planning had this material averaging <0.5% copper="" it="" was="" included="" in="" the="" inferred="" mineral="" resource="" category="" and="" planned="" as="" waste="" this="" is="" first="" time="" rambler="" has="" mined="" lfz="" material="" at="" depth="" company="" encouraged="" that="" model="" accurate="" terms="" of="" location="" actual="" mining="" occurring="" higher="" grade="" i="">”.
Additional positive results have been reported from development of the Upper Footwall Zone, which forms part of the planned production for the next 18 months and where “recent mine development has intersected the zone before the current modelling predicted it would”. Stoping in the Upper Footwall Zone is expected to start in Q4 this year.
Conclusion: Drilling aimed at a revised mineral resources estimate is now approximately half completed and infilling the information to upgrade existing inferred resources and include them in an update at the end of 2021 and a revised mine plan in H1 next year. Based on the results reported today, evidence appears to be building for meaningful resources expansions.
Meanwhile, as development proceeds, a new zone of massive sulphide mineralisation, thought to be an extension of the gold-rich Ming North Lower Zone has been encountered and its down and up-plunge extent is to be investigated with further drilling. Development into the LFZ at the 760 level is verifying the interpreted extend of the mineralisation and showing that grades are better than predicted suggesting that some of the material previously interpreted as waste could now be mined as ore.
*SP Angel act as Nomad and broker to Rambler Metals & Mining
Scotgold Resources* (LON:SGZ) 63p, Mkt Cap £35m – Cononish operations update
Mining operations continued uninterrupted in July reporting stronger mined tonnages and higher grades.
Additionally, ore thickness is reported wider than expected in one of mined sections.
The second mining truck is arriving at the end of August and to be integrated into production in September improving equipment availability and flexibility of mining operations.
Remediation works as well as proactive inspections at the processing plant have been completed in July with the facility demonstrating over 90% nameplate capacity milling rates in the last 10 days of the month.
The Company completed the second concentrate shipment in July with another 25t delivered to refiners.
Conclusion: The team is continuing to improve flexibility of mining operations and ramping up processing rates at the plant towards sustainable nameplate Phase I 3ktpm capacity.
*SP Angel act as Nomad and broker to Scotgold Resources. A number of SP Angel analysts have visited the Cononish gold mine
Strategic Minerals* (LON:SML) 0.4p, Mkt Cap £7.2m – Progress report on Southern Minerals’ claim against CV Investments
Strategic Minerals reports that the Receiver appointed to deal with the affairs of CV Investments has reported that it holds approximately US$7.4m in unencumbered cash as of 30th June.
Strategic Minerals’ subsidiary, Southern Minerals Group has an arbitrated claim of US$21.9m against CV Investments.
The announcement explains that it is unlikely that “the receivership will be completed before the end of this year” and that the “Receiver identified the potential to realise between US$10-15m from additional claims”.
Strategic Minerals’ Managing Director, John Peters, said that the Receivers’ Report “highlights the possibility of a partial recovery of SMG's arbitrated claim on CV Investments” but he cautioned that “It is currently not possible for the Company to quantify either the potential settlement amount, if any, or its likely timing”.
Prudently, therefore, “the Company has not factored the receipt of any such proceeds into its financial plans”.
Conclusion: Reports from the Receiver of CV Investments raise the possibility that Southern Minerals may recover a part of its US$21.9m arbitrated claim against CVI but the amount, if any, and the timing are uncertain and Strategic Minerals confirms that it is not relying on funds from this source in its plans
*SP Angel acts as Nomad and Broker to Strategic Minerals
Tertiary Minerals* (LON:TYM) – 0.27p, Mkt cap £3.1m – Zambian exploration licence option
Tertiary Minerals has announced that its Zambian subsidiary, Luangwa Minerals, has secured an option agreement with a Zambian company, Mwashia Resources, to acquire a joint venture interest of up to 90% in five copper exploration licences covering more than 1,500km2.
The agreement covers licence 27069-HQ-LEL, known as ‘Jack’s Licence’ plus rights to option four other licences in an area underlain by rocks of the Roan Supergroup which hosts copper mineralisation in the Central African Copperbelt of Zambia and the DRC.
Previous exploration reported copper mineralisation along “an 18km long open-ended soil geochemical anomaly”and reported drilling intersections include:
“14m at 1.04% copper from 113m depth in RC drill hole KJD14;
13.8m at 0.96% copper from 112m depth in diamond drillhole KJD1
7m grading 1.56% copper from 322m depth in diamond drill hole KJD7”.
Executive Chairman, Patrick Cheetham, explained that “This agreement is primarily aimed at the Jack’s Licence but gives us an exclusive six-month look-see and the right to enter into option agreements on the same fixed terms over a further four areas that were selected by Mwashia on the basis of their prospective geology and historical exploration results”.
He also said that Mwashia Resources’ principal, “is well connected in the Zambian mining industry being a director of African Mining Consultants whose most recent success was as consultant to Ivanhoe Mines during their discovery of the Kamoa-Kakula copper deposit in the Democratic Republic of Congo”.
Conclusion: Tertiary Minerals is acquiring an option over prospective copper licences in Zambia, where previous exploration has shown intersections of copper mineralisation up to 14m wide with grades of around 1% copper. We look forward to further results as the exploration programme develops.
*SP Angel act as Nomad and Broker to Tertiary Minerals
Trans-Siberian Gold (LON:TSG) 118p, Mkt Cap £108m – Quarterly production update
Q2/21 Asacha Gold Mine production amounted to 8.2koz (Q1/21: 9.4koz), down 12.4%yoy.
Lower production was driven by lower processed grades (5.7g/t v 6.5g/t in Q1/20).
H1/21 production came in at 17.6koz (H1/20: 18.3koz).
H1/21 gold revenues were up ~11% at $32m reflecting stronger gold price (+4%) and higher gold sales (+7%).
Following the Company’s takeover by Horvik, shares in TSG will be delisted from AIM on 9 August.
Vulcan Energy (ASX:VUL) A$9.75, Mkt cap A$1.06bn – Vulcan Energy locks in 5-year deal with Renault
Renault has signed a 5-year deal with Vulcan Energy whereby Vulcan will supply 5,000-17,000tpa of lithium from 2026.
Vulcan is also committed to sell lithium hydroxide from its German project to LG Chem and has signed an MoU with Stellantis for further lithium sales.
Rio Tinto’s decision to build Jadar in Serbia does not come soon enough for many European car makers and battery manufacturers who are racing to catch up with Chinese electric vehicle production. Jadar lithium production is planned for 2029.
Vulcan plan to produce from two lithium brine projects in the Upper Rhine Valley in Germany and from the Salton Sea in California.
The extraction of underground brine is relatively simple but can be variable in their flow and composition as brines are impacted by the varying composition of their host rock and porosity.
The brine wells may need adjusting and ‘fracking’ to maintain flows adding to capital and operating costs presenting challenges for brine operators.
Vulcan’s presentation of July 2021 shows 90% lithium recoveries from initial test work indicating the early stage of the project and suggesting a degree of uncertainty in the in the overall recovery.
The presentation also shows the composition of its Brine indicating higher concentrations of Mg in the Upper Rhine Valley Brine and higher concentrations of Na, K and Sr and Ba in the Salton Sea brines in California.
We understand from contacts who do currently process lithium for battery manufacturers that the production of high-end battery grade LiOH and Li2CO3 is adversely affected by deleterious elements, such as Na, Cl, K, Mg, and B.
The purification of heavily contaminated brines is also seen as environmentally disadvantageous due to their high power and fresh water consumption.
Vulcan appears to be planning on producing Lithium Hydroxide LiOH in Germany which is good if the LiOH produced close to new battery manufacturing planst.
LiOH is dangerous to transport and can easily move into a solid phase rendering its onward processing more difficult and power consumptive.
If further processing of this material is required to remove further impurities before battery use then the production of LiOH can be a significant issue.
Conclusion: This is a brave and maybe slightly desperate move by Renault to lock in European raw material supply as required by EU regulations on local content.
There are relatively few prospective new lithium producers in Europe limiting options open to battery manufacturers and automotive assemblers.
In the raw materials game of musical chairs, there seem to be relatively few seats available for when the music stops and battery production ramps up.
Recent Interviews:
IGTV: Stock picks in the small-cap mining space:
Evolution of Chinese construction and implications for commodity demand: https://youtu.be/jB2nURL8uPw
VOX Markets: 10/06/21: https://audioboom.com/posts/7884446-john-meyer-talks-about-cornish-metals-empire-metals-anglo-american-ncondezi-energy-mkango-r
BBC: Catalytic converters https://www.bbc.co.uk/sounds/play/p09jl6c9
*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts.
We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.
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
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, Tungsten, Spodumene, Ferro-Manganese, Graphite
Asian Metal
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.
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%
Click this link to unsubscribe.
{~AO9269123908913868983842996