SP Angel . Morning View . Monday 09 08 21
Commodities pull back after strong US NFPs last week
Aura Energy* (LON:AURA) – Completion of gravity survey at Tasiast South expected to allow reinstatement of ASX trading
Bluejay Mining* (LON:JAY) – BUY, Valuation 37.7p – KoBold Metals signs US$14.5m deal to earn into Disko nickel project in Greenland
Caerus Mineral Resources (LON:CMRS) – Completion of Cypriot gold project acquisition
China Molybdenum (CVE:603993) - China Moly to double production of copper and cobalt at Congo mine with $2.5bn investment
Core Lithium (ASX:CXO) – Up to A$140m equity raise along with a Ganfeng offtake agreement to cover Finnis development capex
Piedmont Lithium (ASX:PLL) - Piedmont given 60-day mining moratorium by North Carolina officials in blow to development plans
Power Metal Resources* (LON:POW) – Exploration progress at Australian gold JV
SolGold* (LON:SOLG) – Company welcomes Presidential decree on Ecuador’s mining policy
Shanta Gold (LON:SHG) – High grade West Kenya Project drilling results
W Resources (LON:WRES) – La Parilla performance improves in July
IGTV: China fearing failure in metals pricing tactic: https://youtu.be/RK4HQPrs60s
Evolution of Chinese construction and implications for commodity demand: https://youtu.be/jB2nURL8uPw
VOX Markets: 04/08/21: https://audioboom.com/posts/7918741-john-meyer-talks-about-china-cora-gold-kodal-minerals-power-metals-rambler-metals
Gold ‘flash crash’ on better than expected US employment figures
Gold prices dropped $60 in minutes on Friday on rising expectations that the Fed may soon start paring back its massive monetary stimulus.
Spot gold and silver slumped 4% and 7% respectively following better than expected US employment figures, although both metals pared losses but still down ~2% on the day.
Gold prices have been falling on investor concerns that an improving economy and rising inflation will cause the Fed to pull back on support – despite no official comments from J Powell as of yet.
Expect investors to be watching CPI numbers due this week, as strong inflation numbers could increase the probability of an early interest rate hike – a move traditionally bearish for bullion.
Iron ore futures fall more than 5% in Asia on falling steel output
Iron ore futures dropped more than 5% in both Dalian and Singapore on Monday, with the China Iron and Steel Association reporting that daily output from major steel firms fell 3% in late July.
The report supports news coming out of Beijing that the Chinese government is seeking to curb production below last year’s record output in order to meet climate goals.
Mysteel have also commented that they expect July’s production figures to be the first year-on-year decline this year.
Iron ore in Dalian closed 4.8% lower, its weakest since November 2020, while prices in Singapore fell 5.9% to the lowest since early April.
Copper - Zambian mines switch to emergency generation after blackout
A power blackout on Sunday hit Africa’s second largest copper producer, forcing mining companies to turn to emergency diesel generators in order to sustain operations.
The country’s state owned power company said it experienced a system failure although was working to ensure “all systems are restored as quickly as possible”
Konkola Coper Mines said the company had been affected by the power outage, as did the Mopani Copper Mines.
Tin – where is China’s SRB when you need them to alleviate the shortage of tin in Shanghai?
Shanghai SHFE tin warehouse stocks fell to just 2,193 of deliverable stock on Friday with another 1,744t on warrant.
There are just 2,245t of tin held in official LME stocks today of which 1,000t was cancelled on Friday and scheduled to be delivered.
Dow Jones Industrials +0.41% at 35,209
Nikkei 225 CLOSED at 27,820
HK Hang Seng +0.41% at 26,286
Shanghai Composite +1.07% at 3,495
Economics
US – Jobs report came in stronger than expected on Friday highlighting improving growth momentum in the labour market.
The data is likely to add fuel to the debate on how quickly officials should start to reduce the assets purchases programme, Bloomberg reports.
Although, payrolls still remain 5.7m down of pre-pandemic levels.
10y Treasury yields climbed higher on Friday on the back of the report hitting 1.3%, up 8bp on the day.
S&P 500 closed at another record high at the end of last week while tech heavy Nasdaq pulled back from record levels reached on Thursday to close slightly lower.
Gold and silver continued to slide on Monday with prices slipping below $1,750/oz and $24/oz, respectively, down ~$60/oz and $1.4/oz on Thursday levels.
NFPs (‘000): 943 v 938 in June and 870 est.
Unemployment Rate (%): 5.4 v 5.9 in June and 5.7 est.
China – Inflation picked up more than forecast in July amid higher commodity prices and stronger demand.
Core consumer prices that exclude volatile food and fuel costs came in at +1.3%yoy, the most in 18 months.
News over an increase in new Covid cases as well as slowing economic growth momentum in general is likely to weigh on consumer prices moving forwards.
Trade data released over the weekend showed strong readings in both exports and imports, although, the pace of growth is slowing and was below market estimates in July.
CPI (%yoy): 1.0 v 1.1 in June and 0.8 est.
PPI (%yoy): 9.0 v 8.8 in June and 8.8 est.
Exports (%yoy, US$): 19.3 v 32.2 in June and 20.0 est.
Imports (%yoy, US$): 28.1 v 36.7 in June and 33.3 est.
Factory gate inflation, a measure of producer prices, grew by 9% as measured by the producer price index matching highs seen in May and is an increase on expected growth of 8.8%.
The figures reinforce expectations that China’s economy will struggle to continue expansion amid strains from high raw material prices and global supply chain bottlenecks.
Higher oil and thermal coal prices have also dampened growth prospects for Chinese manufacturers.
China’s customs data is showing some weaking on imports of crude oil, iron ore and copper at higher price levels.
Iron ore imports have fallen for a fourth consecutive month, with July’s imports down 21% from last year’s record of 122.65m tonnes as the authorities crack down on less energy efficient production.
China corporate crackdown developing momentum following ‘spiritual opium’ comment against the online gaming sector
Chinese regulators are pushing business to more to serve Communist Party goals (WSJ)
But Regulators are still trying to figure out how to best serve their CCP leaders with policies that are going to be difficult to enact
Eg:
Supporting margins for small and medium sized enterprises while reducing the wealth gap between rich and poor,
Holding back house price inflation while encouraging more building and affordable housing.
Rebuilding flood damaged areas.
Giving preferential treatment (loans) to businesses using technology to improve their products,
metallurgical industries and other key sectors.
Germany – June trade data climbed despite persisting supply bottlenecks bringing some relief after weak economic data reported last week.
Exports (%mom): 1.3 v 0.4 (revised from 0.3) in May and 0.3 est.
Imports (%mom): 0.6 v 3.3 (revised from 3.4) in May and 0.4 est.
Russia plans to tax metal producers in 2022
Putin announced on Friday plans to raise a tax on metal producers next year, labelling the levy a ‘mineral extraction tax’.
The Russian president called for ‘new higher taxes on mineral extraction’ which ‘concerns the metals industry’.
The raise, planned from January 1, would mark the third increase in tax on the Russian metals and mining industry since January 2021.
The measure is planned to tackle shortages of raw materials in the Russian domestic market whilst also providing a boost to the post-pandemic budget.
Currencies
US$1.1756/eur vs 1.1822/eur last week. Yen 110.23/$ vs 109.77/$. SAr 14.650/$ vs 14.487/$. $1.387/gbp vs $1.392/gbp. 0.735/aud vs 0.739/aud. CNY 6.477/$ vs 6.466/$.
Dollar hits 4-month high against the euro on expectations of a hawkish shift from the Fed
Traders have extended bets on the dollar following strong U.S. jobs data on Friday with speculation that the Federal Reserve will start tapering asset purchases this year.
Analysts are also expecting a raising of rates to follow the asset-buying reduction as early as 2022.
The dollar has extended gains, with ‘U.S. payrolls’ being described as a ‘game-changer’ by analysts.
It is expected that a continued uptick in the dollar will be further encouraged if U.S. yields continue to rise.
Friday’s U.S. jobs data saw an increase in non-farm jobs of 943,000 in July, a considerable jump from the expectations of economists polled by Reuters who predicted 870,000.
The U.S. consumer price report expected on Wednesday will be key for the dollar rally’s extension as investors continue to speculate over the transitory nature of inflation.
The report will also impact the price of gold following its 6% dip on Monday. Gold prices have been hit by a combination of hawkish Fed sentiment, a strong dollar and stop loss sales triggered amid low-volume Asian trading markets.
Commodity News
Precious metals:
Gold US$1,746/oz vs US$1,800/oz last week
Gold ETFs 100.5moz vs US$100.6moz last week
Platinum (AIM:ZERO) US$983/oz vs US$1,007/oz last week
Palladium US$2,629/oz vs US$2,664/oz last week
Silver US$23.92/oz vs US$25.17/oz last week
Base metals:
Copper US$ 9,468/t vs US$9,579/t last week
Aluminium US$ 2,587/t vs US$2,606/t last week
Nickel US$ 18,890/t vs US$19,540/t last week
Zinc US$ 2,990/t vs US$3,025/t last week
Lead US$ 2,290/t vs US$2,344/t last week
Tin US$ 34,450/t vs US$34,750/t last week
Energy:
Oil US$69.1/bbl vs US$71.9/bbl last week
Oil prices have fallen c.2% in early trading today, extending last week's losses on the back of a rising US dollar and concerns that new pandemic curbs in Asia, especially China, may set back the global recovery in fuel demand
New restrictions in China, the world's second largest oil consumer, continues to weigh on the outlook for demand growth
The restrictions include flight cancellations, warnings by 46 cities against travel, and limits on public transport and taxi services in 144 of the worst hit areas
China reported 125 new COVID-19 cases today, up from 96 on Sunday
While the number of cases appears low, it comes just as the summer travel season peaks
In Malaysia and Thailand, infections continue to hit daily records of more than 20,000
Oil also fell as the US dollar rallied to a four-month high against the euro after Friday's stronger than expected US jobs report spurred the view that the Federal Reserve may move more quickly to tighten US monetary policy
Natural Gas US$4.169/mmbtu vs US$4.160/mmbtu last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$164.2/t vs US$166.4/t
Chinese steel rebar 25mm US$814.1/t vs US$817.9/t
Thermal coal (1st year forward cif ARA) US$98.5/t vs US$97.5/t
Coking coal swap Australia FOB US$198.0/t vs US$197.0/t
China Ilmenite Concentrate TiO2 46% US$358.96/t vs US$359.6/t
Other:
Cobalt LME 3m US$52,500/t vs US$52,500/t
NdPr Rare Earth Oxide (China) US$96,094/t vs US$96,279/t
Lithium carbonate 99% (China) US$13,430/t vs US$13,456/t - Lithium miners dismiss concerns over new CATL sodium-ion batteries
Participants in the lithium mining industry have dismissed the limited range of CATL’s new EV battery designs.
It is expected that lithium-ion batteries will retain their dominance in the EV industry, which is expected to grow more than 14x, with 145m EVs expected to be driven by 2030.
CATL’s batteries will contain no nickel, lithium or cobalt and have been offered by the Chinese company as a solution to the limited supply and soaring prices of the three battery-making ingredients.
Paul Graves, chief executive of Livent Corp, a lithium supplier of Tesla and BMW, has rejected the idea that ‘sodium ion batteries will ease the demand for lithium’.
Adamas Intelligence predicts sodium-ion battery usage to grow 15% by 2035, however the minerals consultancy company expects this growth to impact the lithium-ion phosphate (LFP) batteries as opposed to the lithium-ion market.
Albermale Corp, currently the world’s largest producer of lithium, predicted the CATL batteries will be used in large utility batteries but EVs will rely on lighter and more powerful lithium batteries for the foreseeable future.
China Spodumene Li2O 5%min CIF US$830/t vs US$830/t
Ferro-Manganese European Mn78% min US$1,746/t vs US$1,756/t
China Tungsten APT 88.5% FOB US$305/t vs US$305/t
China Graphite Flake -194 FOB US$515/t vs US$515/t
Europe Vanadium Pentoxide 98% 9.8/lb vs US$9.8/lb
Europe Ferro-Vanadium 80% 40.75/kg vs US$40.75/kg
Spot CO2 Emissions EUA Price US$64.0/t vs US$64.4/t
Battery News
AGL signs deal with Wärtsilä for 250MW South Australia battery project
Australian energy retailer AGL has contracted Finnish technology company Wärtsilä to supply a battery energy storage system (BESS) for a 250MW / 250MWh project.
The project will be AGL’s first grid-scale battery project and one of Australia’s largest BESS projects to date.
Wärtsilä has indicated that the order will be worth around $120m and is the first order that AGL has placed after agreeing with AGL to supply up to 1000MW of grid-scale BESS alongside tech rival Fluence.
In a press release, Wärtsilä said that the projected is expected to become operational by 2023.
UK provides funding to Siemens Gamesa and GRI for offshore wind facilities
The UK government has offered grant funding Siemens Gamesa and GRI Renewable Industries to develop factories in the Humber region.
Siemens Gamesa will use the grant to expand its offshore blade plant in Hull by 41,600sqm, more than doubling the size of the manufacturing facilities. The expansion represents an investment of £186m and is planned to be completed in 2023.
GRI Renewable Industries will use the funding to build facilities at the Able Marine Energy Park, in Hull, with £78m investment in an offshore wind turbine tower factory, creating up to 260 direct jobs.
The funding comes from the Offshore Wind Manufacturing Investment Support scheme, which was announced by Prime Minister Boris Johnson last year as part of his Ten Point Plan to build factories that will develop components for next generation wind turbines.
Company News
Aura Energy* - (LON:AURA) 5.1p, Mkt Cap £19.8m – Completion of gravity survey at Tasiast South expected to allow reinstatement of ASX trading
Aura Energy reports the successful conclusion of a gravity survey covering its three licences at Tasiast South in Mauritania, located around 35km along strike from Kinross Mining’s 400,000ozpa Tasiast gold mine.
Managing Director, Peter Reeve explained that the survey, which is the “first of the planned field surveys, gravity surveying over the entire greenstone area … will guide future exploration, as we continue to advance this highly underexplored project, which represents some of the best under-explored greenstone belt targets in the world”.
The survey provides improved insight into the geology and structural controls within an area “of almost no outcrop” and “is expected to define the greenstone belt, lithologies and structures permitting the planning of follow-up bedrock sampling and deeper drilling”.
The company explains that the successful completion of the gravity surveying meets the previously announced exploration expenditure commitment given to the ASX to allow the Exchange to “be in a position to reinstate Aura's securities to trading on the Official List”.
Conclusion: Aura Energy has completed gravity surveying over its Tasiast South licences in Mauritania which provides important information to guide future exploration and also meets expenditure commitments given to the ASX as part of Aura Energy’s plan for readmission to ASX trading.
*SP Angel are Nomad and Broker to Aura Energy
Bluejay Mining* (LON:JAY) 11.90p, Mkt cap £116m – KoBold Metals signs US$15m deal to earn into Disko nickel project in Greenland
BUY - Valuation 37.7p
Bluejay Mining report the signing of a deal whereby KoBold Metals can earn up to 51% in the Bluejay’s Disko project in Greenland.
KoBold Metals is backed by Breakthrough Energy Ventures, a US private equity group backed by Bill Gates, Jeff Bezos, Jack Ma, Michael Bloomberg and Ray Dalio.
Equinor, Norway’s state-backed energy company also recently invested in Kobold Metals backing it’s use of Artificial Intelligence and machine learning to hunt for minerals.
The deal enables Kobold to earn into a 51% stake in the Disko project allowing Bluejay to maintain its 49% stake through proportionate funding after Kobold have spent US$14.5m.
Bluejay will also earn a 10% management fee on all eligible exploration expenses for the duration of the Beluga investment.
Experts reckon the Disko/Nuussuaq licenses could contain one of the largest occurrences of Nickel-Copper-Cobalt in the world with Anglo American also acquiring licenses surrounding Bluejay’s licenses.
We believe, the deal reflects the pressing need to discover and develop new nickel deposits in the Western world with Kobold developed to focus on the discovery of such metals.
Around US$80m worth of work has already been done on the Disko/Nuussuaq licenses by Falconbridge, Cominco and Bluejay but with limited drilling to date.
The work has mainly focussed on following high-grade surface samples such as a large boulder assaying 7% Ni, 3% Cu & 2ppm PGE as well as geophysical surveying which show the area to be akin to the Norilsk-Talnakh nickel deposits in Siberia.
Seven large magmatic Ni-Cu-PGE conductor targets have been confirmed with the two largest being 5.9km x 1.1km and 4.8km x 800m.
Dr. Peter Lightfoot, who was in the Falconbridge discovery team at Disko in the late 1990s and now leads the ‘Magmatic Systems’ busines at Kobold is focussing on identifying areas of metal accumulation utilising Kobold technology.
Lightfoot reckons “It is geologically demonstrable that a major nickel-copper-cobalt mineralising system is in place at Disko”.
Geology: The Disko-Nuussuaq Property is centred in a region of extensive contaminated and metal-depleted volcanic centres where there is evidence for the equilibration of flood basalt magma with crustal sulfur with potential for the concentration of magmatic sulphides in shallow sub-volcanic intrusions.
Previous exploration data provides a good platform for for KoBold to utilize its proprietary technology to target the source of mineralisation.
Magmatic nickel mineralising system need:
Pathways/conduits
Energy
Source of metals and sulphur
Trapping/accumulation of metal-being sulphides
All of which have been demonstrated to be present across the Disko/Nuussuaq license area.
Norilsk comparison:
High Mg, olivine rich magmas (2-5+km thickness)
Proximity to large, crustal-scale faults & magma conduit systems
Sulphide/sulphur bearing country rocks
Prolonged episodes of assimilation of siliceous crustal rocks (contaminated lava, containing shale/sandstone)
Chalcophile element depletion in crustily contaminated rocks (contaminated lava has lost Ni, Cu, PGE, evidence that sulphide melt has segregated from magmas prior to eruption. Mass balance supports that 12-16 million tons of nickel are missing from the lava sequence).
Kobold Metals is mandated by its investors to develop strong, secure, and ethically sourced critical commodities required by western industry to drive the green revolution and the electrification of a modern society.
The team are using disruptive, innovative, in-house developed machine learning and artificial intelligence data technologies, TerraShedSM and Machine Prospector®. Algorithms in TerraShedSM interrogate data with a range of techniques to predict the composition of the subsurface and has been listed as one of the 100 most promising private artificial intelligence companies in the world.
While last year’s planned exploration and drilling at Kangerluarsuk and Disko-Nuussuaq was delayed by Covid the Kobold team will use remote sensing to propose a number of drill targets.
The drill program will hopefully accelerate to start in Q2 next year.
The deal:Kobold will earn 51% of the Disko licence holding through a two stage earn-in commitment:
Stage I: US$3.4m for the advanced geological and geophysical evaluation of Disko/Nuussuaq to refine drill-targets using Beluga’s proprietary technology by December 2022,
Stage II: US$11.6m in drilling expenditure or 15 pre-agreed drill holes within the Disko licence area to be completed by December 2024,
Bluejay can maintain its 49% stake by pro-rata funding after Stage II and can also take back control if Kobold does not complete its stage II fundingby end 2024,
Deals: Bluejay has signed three deals with major partners since end-2020 bringing $40m worth of exploration expenditure into the group:
$20m with Rio at Enonkoski;
$5m Black Shales Finland
$15m with Kobold today
Bluejay also singed an offtake agreement on the Dundas Ilmenite project worth a minimum of $52mpa in sales on 250ktpa of production, assuming ilmenite at $210/t.
Management fees & financing: Bluejay has US$1.5m in management fees coming from Kobold plus 10% from the Rio Tinto jv and a further 10% from the black shales deal in Finland.
Earnings from these fees should enable Bluejay to continue to operate without the need to return to the market for financing anytime soon.
We expect the Dundas project to be financed through a combination of Multilateral, governmental, offtake and project finance funding.
Conclusion: This is a nice deal for Bluejay. It gives the team income from working on the project, retains a significant stake and offers potential for further uplift on the potential discovery of a significant nickel-copper system at Disko.
Bluejay will likely receive US$1.5m from its management fee will does not need to co-fund till after Kobold has spent its agreed US$15m.
The signing of a deal with Kobold lends Bluejay significant credibility as a working partner and adds to Bluejay’s jv with Rio Tinto in Finnland in attracting major players into funding exploration on Bluejay properties. This is KoBold’s first partnership with a junior exploration company.
The development of Kobold Metals and its funding by major US investors highlights how seriously industry leaders are taking the need to find more battery metals.
Bluejay shares represents an opportunity to invest directly alongside Kobold Metals in exploration, discovery and potential development of the Disko/Nuussuaq area.
*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Enonkoski mine site in Finland. The analyst holds shares in Bluejay Mining.
Caerus Mineral Resources (LON:CMRS) 21.5p, Mkt Cap £10.8m – Completion of Cypriot gold project acquisition
Caerus Minerals confirms the completion of its acquisition of the private Cypriot company, Gold Mines (Cyprus} Limited (GMCL) for £300,000.
The transaction has been funded from the proceeds of the previously announced “recent disposal of the Black Pine nickel-cobalt project and associated licences”.
The transaction follows due-diligence which “has strongly confirmed the potential for both copper-gold VMS and gold oxide mineralisation” in an area of historic mining which shows “excellent potential for discovery of further high-grade, copper-gold Volcanogenic Massive Sulphide ("VMS") and epithermal gold deposits”.
The company says that the 3 licences held by GMCL at Anglisides, Pano Lefkara and Layia “not only show prominent evidence of unmined resources, but also metal-bearing dumps, tailings and waste stockpiles on-surface”.
CEO, Martyn Churchouse, confirmed that the acquisition of GMCL is consistent with the company’s “Brownfield acquisition policy and 'Waste to Revenue" strategy” and allows “Caerus to continue building the foundations of a Mineral Resource” and advance its agreement with Jubilee Metals Group to treat and recover “residual metals from surface materials together with the more recent agreement with Bezant Resources for the future mining of hard rock resources”.
China Molybdenum (603993 CN) CNY7.20, Mkt cap CNY141bn - China Moly to double production of copper and cobalt at Congo mine with $2.5bn investment
China Molybdenum Co. announced on Friday its plans to inject $2.51bn at its Tenke Fungurume mine in the DRC.
The investment reflects soaring prices of copper and cobalt and the company’s intentions to profit from the post-pandemic recovery.
The investment will boost three ore production lines, increasing copper and cobalt output by 200,000t and 17,000 pa respectively.
The infrastructure developments are expected to be completed by 2023.
The company last month announced a separate expansion project at the site which is set to add 88,500 tonnes of copper cathodes and 7,280 tonnes of cobalt annually.
It is expected that the expansion will increase Chinese battery companies’ supply of DRC cobalt which is currently predominantly exported to Europe.
Core Lithium (ASX:CXO) A$0.36, Mkt Cap A$423m – Up to A$140m equity raise along with a Ganfeng offtake agreement to cover Finnis development capex
The Company announced a fully underwritten placement to raise A$91m at 31c per share.
A non-underwritten share purchase plan is also announced allowing existing shareholders to subscribe for up to A$15m at 31c.
Separately, the Company secured a 75ktpa binding offtake agreement for Finniss spodumene concentrate over 4 years and a A$34m equity investment with Ganfeng Lithium.
Ganfeng will invest at a 33.8c per share price reflecting a 10% premium to 10d VWAP and taking a ~6% interest in Core (adjusting for underwritten placing shares only).
The offtake is subject to the equity investment that in turn is subject to the Core shareholder approval and regulatory approvals in China.
Additionally, equity investment is conditional on securing binding arrangements for a minimum total financing of not less than A$80m covering most of project development capital cost.
The Offtake provides for pricing referenced to the market price for 6.0% Li2O spodumene concentrate, adjusted for actual Li2O content, and includes an agreed floor price.
Ganfeng may terminate the offtake if commercial production does not start by 1 December 2023.
The offtake comes on top of the 75ktpa offtake with Yahua that in total cover ~85% of the envisaged 175ktpa Finniss production rate.
Yahua signed a 5-year LiOH supply agreement with Tesla in Dec/20 and also holds an equity interest in Core (~6% before the current placing announcement).
The Company released an updated FS in Jul/21 for 1.0mtpa operation to produce 175ktpa of 5.8% spodumene concentrate over 8-year life of mine.
The Finniss Lithium Project is estimated to host 3.2mt at 1.4% Li2O (open pit domain) and 4.2mt at 1.3% Li2O (underground domain) in mineral reserves.
C1 Operating Cost (FOB) estimated at US$364/t for a combined open pit and underground mining operation.
Development capex estimated at A$89m (~US$62m) involving straightforward crushing/DMS and not using milling and flotation stages.
Using US$743/t (FOB) spodumene price, the project is estimated to generate NPV8% (post tax) and IRR (post tax) of A$170m (~US$120m) and 47%, respectively.
The project is located in Northern Territory, Australia, and only ~90km by sealed road from Darwin port.
The team is planning to commence construction in H2/21 with first production targeted for late 2022.
Piedmont Lithium (ASX:PLL) A$0.78, Mkt cap A$1.22bn - Piedmont given 60-day mining moratorium by North Carolina officials in blow to development plans
Piedmont has been ordered to allow officials 60-days to rework local regulations before the lithium miner applies for the crucial zoning variance it needs for production.
The resolution was approved unanimously by Gaston County commissioners and stated that Piedmont ‘cannot be trusted without adequate local controls to protect the health, safety and welfare’ of the local community.
Officials worry the mine could impact groundwater supplies whilst also increasing noise and light pollution.
It is unknown whether the moratorium will impact Piedmont’s recently announced plans to gain state approval by mid-2022.
Locals are concerned by Piedmont’s plans to engage in open pit blasting techniques twice a day.
Piedmont’s plans for the area to provide the U.S. EV industry’s largest supply of lithium has concerned local officials, with the county’s attorney stating that the size of the mine ‘was never anticipated in (Piedmont’s) development regulations’.
Strains with the six-member board have intensified and investors have become wary of the mine’s high-profile advertising campaigns, lack of regulatory approval and continued delays to the production timeline.
Piedmont’s CEO Keith Phillips has thanked the Gaston County Board of Commissioners ‘for their leadership in creating this framework and review structure where the county and company can move forward together’.
Phillips believes the moratorium is ‘not intended to stop mining but to give the county time to perform their due diligence’.
The moratorium caused the share price to fall 1.6% after hours on Friday.
Power Metal Resources* (LON:POW) 2.10p, Mkt cap £25m – Exploration progress at Australian gold JV
Power Metal provides an update of its Red Rock Australasia project (RRAL), of which it owns 49.9% with the other 50.1% being owned by Red Rock Resources.
RRAL holds extensive gold exploration interests near the historic mining centre of Ballarat in the Victoria Goldfields, Australia.
Ongoing historical data compilation has led to the discovery of multiple overlooked historic mines located within the land package, which are now being designated for follow up ground-based reconnaisance and prospecting programmes.
A number of ground-based programmes are currently in progress, including a extensive soil sampling programme targeting the possible southern extension of the Ballarat Mines.
The soil sampling programme utilises a portable X-ray fluorescence spectrometer that focuses on arsenic distribution as a pathfinder to gold mineralisation at Ballarat, resulting in several high-tenor kilometre-scale anomalies which trend along strike, south of the Ballarat Mines.
Exploration so far has enabled RRAL to identify three drill ready targets, with more expected to be identified in the coming months- with up to three drill programmes anticipated for later in the year.
Power Metal also provide a corporate update for RRAL, with the team deciding that the best commercial path forward for the entity is a London-based listing, with updates expected in the coming months.
*SP Angel act as Nomad and Broker to Power Metal
SolGold* (LON:SOLG) 26.2p, Mkt Cap £586m – Company welcomes Presidential decree on Ecuador’s mining policy
Solgold has welcomed the announcement from Ecuador’s President, Guillermo Lasso, setting out the Ecuadorian Government’s policy for the development of the mining industry providing “a solid plan that includes clear principles of respect for mining rights that are consistent with President Lasso's government's objective to create a favourable environment for increased investment into the mining sector in order for Ecuador to benefit from the nation's significant mineral wealth”.
The Government’s plan aims to develop “an efficient, environmentally and socially responsible mining industry in Ecuador, to promote national and foreign investment and to implement the best practices for the exploitation of these resources … [and provides] … the necessary framework to guarantee security of title, respect pre-existing mining rights and will involve an inter-institutional strategy for the eradication of illegal mining with its associated negative environmental and social impacts, in favour of legal and responsible mining”.
Andrew Taunton of Solgold said that the Government initiative sends “an extremely positive message to investors, to industry, to the country and especially to its rural communities that Ecuador needs to, and can develop its untapped natural resources effectively and responsibly”.
Mr. Taunton confirmed Solgold’s willingness to work in partnership with Government to develop Ecuador’s mineral potential explaining that “SolGold welcomes this unequivocal declaration from Ecuador's President that mining carried out in a controlled and responsible manner must be an increasingly important pillar of Ecuador's economic development for the foreseeable future”.
Conclusion: In recent years Ecuador has increasingly recognised the benefits to the nation of a vibrant mining industry. The recognition in the Presidential decree of the role of international investors in building that future should see Solgold, as a major explorer in the country and the developer of the 2.6bn tonne Alpala copper/gold deposit, continue as an active participant in building Ecuador’s mining industry.
*SP Angel act as Financial Advisor to SolGold.
Shanta Gold (LON:SHG) 13.4p, Mkt Cap £140m – High grade West Kenya Project drilling results
The Company released drilling results from ~3,400m completed across 13 holes in May and June at the high grade West Kenya gold project in Jenya.
Results mostly cover Phase 1 drilling focused on 0-200m depth completed in June as well as first Phase 2 of the ongoing programme targeting areas 200-450m below surface.
Selected results include:
7.0m at 4.2g/t from 77.4m (Bushiangala)
8.5 at 4.0g/t from 159.5m (Bushiangala)
3.6m at 6.0g/t from 214.3m (Bushiangala)
3.0m at 4.3g/t from 136.8m (Isulu)
2.8m at 12.8g/t from 207.7m including 0.5m at 60.2g/t (Isulu)
3.0m at 6.3g/t from <50m (Isulu)
4.m at 706.3g/t including 0.5m at 5,643g/t (Undisclosed)
It is estimated that the true widths of the mineralized zones are approximately 60-70% of the widths intersected in the drill holes.
The Company is expecting to release an updated MRE that would include results of Phase 1 drilling by early September.
Drilling is set to accelerate later this month with a third rig to be mobilised at site in August.
The ongoing drilling programme at the Isulu and Bushiangala gold deposit is focused on infill meters to upgrade existing Inferred Mineral Resource into the Indicated category dow to a depth of 600m across the drilling phases.
The team is on track to complete 35-40% of total planned drilling at West Kenya by the end of 2021.
Including today’s results, 35% of total planned drilling for 2021 has now been reported.
W Resources (LON:WRES) 7.25p, Mkt Cap £8.4m – La Parilla performance improves in July
W Resources has announced that, following regaining access to higher ore grades in late June, its La Parila mine in Extremadura, Spain was able to improve the production of tungsten concentrates in July by 43% compared to June to 58.3t. Tin concentrate output was, however, 33% lower at 9.8t.
The company says that it recorded its highest monthly tungsten recovery rate at 58% in July and also achieved the “highest monthly plant utilisation rate to date at 91%”.
The operational progress resulted in W Resources exceeding a “Monthly revenue milestone of US$1m … in July 2021”.
W Resources explains that the lower tin concentrate level “in July but is expected to increase significantly in August as approximately 5 tonnes of tin that fell below shipping spec from July's production is quickly reprocessed for shipment in the electrostatic separator”.
Chairman, Michael Masterman, welcomed the recent operational improvements and said that “This is a trend we are seeing continue into August 2021 as we work towards reaching our target of 1,000t of concentrate in 2021; with a clear focus of increasing the production run-rate towards our T2 Target of 675t per quarter”.
The company confirms that “Previous annual production guidance was between 880t and 1,000t of concentrate. W now expects annual production will be towards the upper end of this range for the twelve months ending 31 December 2021”.
Conclusion: After completing the water containment dam and regaining access to higher grade ore in late June, La Parilla’s tungsten concentrate production has picked up during July and the company expects the improvements to continue with 2021 concentrate production now expected to come in towards the upper end of the current 880-1,000t guidance range. Tin concentrate production dipped in July as approximately 5 tonnes of the material required reprocessing to reach the required specification but the company implies that it has resolved the issue and says it expects tin output to pick up again in August.
Recent Interviews:
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.
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