SP Angel . Morning View . Tuesday 17 08 21
Gold, Tin and copper lead metals higher as Covid cases rise in US and China
IGTV: Mining sector: where now as Gates & Bezos move in?: https://youtu.be/3is7kRMb7yk
VOX Markets: 11/08/21: https://www.voxmarkets.co.uk/articles/john-meyer-on-bluejay-bluerock-bushveld-alba-minerals-efe74e1
Altus Strategies* (LON:ALS) - BUY – Valuation under review – $34m to secure the first revenue generating royalty with more deals to follow
Ariana Resources (LON:AAU) – Arzu South drilling results
BHP (LON:BHP) - BHP to drop London listing and agrees deal to merge its oil & gas business with Woodside Petroleum in all-share deal
Glencore (LON:GLEN) – Glencore signs partnership with Britishvolt for its UK gigafactory
Phoenix Copper* (LON:PXC) – Interim results and projects update
Premier African Minerals* (LON:PREM) – Raising £1m to fund Zulu feasibility study
Sunrise Resources (LON:SRES) – Early stage results from CS Project concrete trial
Tirupati Graphite (LON:TGR) – Acquisition of Mozambique graphite projects for A$12.5m (£6.6m)
CITIC raises forecast for NdPr to CNY800,000 ($125,000)
CITIC Securities have raised their forecast price for NdPr to CNY800,000 ($125,000) for this year
The forecast suggests rare earth metal prices for the key magnet raw materials could continue to rise.
CITIC reckon China’s ‘14th Five Year Plan will restrict mining of its domestic rare-earth resources and apply high pressure to the environmental protection of the ‘Black’ (unregulated) supply side. For the first time on record, it will unify and clarify regulations, greatly increasing penalties for companies that violate them.’
Investors may wish to consider Rainbow Rare Earths* and Mkango Resources* for exposure to rare earth projects
Gold hits weekly highs amid concern of rising infections and signs of slowing economic recovery
Gold looks once again to test $1,800/oz as treasury yields ticked lower amid concern that the spread of the Delta variant poses a threat to the global economic recovery.
We expect rising Covid-19 cases in the US and China to dampen prospects for rapid economic recovery causing policymakers to maintain stimulus programs for longer.
Gold has also been buoyed by a drop in US consumer confidence, reducing expectations of an early tapering by the Fed.
China’s slowing factory output also adds to wider global concerns that Covid’s impact on major economies is starting to make itself following sustained recoveries.
Focus today will be on US retail sales data which could encourage the Fed to continue its asset purchasing programme at record levels.
Gold saw sharp losses last week including a $60/oz ‘flash crash’ driven by strong US jobs data
Fed Chief J Powell is due to speak later today, with any clues on the timeline for tapering stimulus expected to be a key driver in the price of gold.
Dow Jones Industrials +0.31% at 35,625
Nikkei 225 -0.36% at 27,424
HK Hang Seng -1.97% at 25,666
Shanghai Composite -2.06% at 3,455
Economics
US – Boston Fed President Eric Rosengren (non-voting member) would support slowing down purchases of assets in a September meeting if labour data continues strong.
“If we get another strong labor market report, I think I would be supportive of announcing in September that we are ready to start the taper program,” Rosengren said in an interview to CNBC yesterday.
“I think we are likely to meet by the September meeting the criteria that we laid out… The obvious question mark remains whether problems with the delta variant start to slow down the labor market... o far we haven’t seen that.”
NY Empire State manufacturing index 18.3 in August vs 43.0 ion July
China – The government pledged to prioritise employment with fiscal and monetary policies as the labour market remains under pressure, Bloomberg writes.
The cabinet called for all departments to make employment the top priority of economic and social development as part of the 14th five-year plan period that end in 2025.
The urgency is being further highlighted by slowing economic growth momentum on the back of re-emergence of new infections in many provinces.
House price index rose 4.6% yoy in July vs 4.7% in June
Retail sales pulled back to 8.5% yoy in July vs 12.1% in June
Industrial production fell to 6.4% in July vs 8.3% in June
Unemployment rose 5.1% in July vs 5% in June
Fixed asset investment rose 10.3% year to date and 12.6% yoy
Foreign direct investment was 25.5% year to date and 28.7% yoy
Japan - Preliminary Q2 GDP rose 0.3% vs -0.9% in Q1
India - Wholesale price index rose 11.16% in July and 12.07% yoy
UK – The number of people employed continued to recover climbing to 32.3m in three months to June with a further 182k added in July.
Weekly earnings have also increased posting a 8.8%yoy rise in three months to June, up on 7.4% in May and 8.6% forecast.
Unemployment rate pulled back slightly to 4.7% in three months to June, down form 4.8% in May, despite an increase in labour force participation during the period.
Although, the real test will come in September when the government withdraws its furlough programme, Bloomberg writes.
As of 30 June, 1.9m people remained on the scheme down from 2.4m in the previous month and a peak of 5.1m in January.
Peru - New Peruvian government seeks to unlock copper wealth through ‘pragmatic’ approach with international mining firms
The newly elected Peruvian socialist government has aimed to ease fears of an interventionist shift in its approach to natural resource mining.
Ivan Merino, Minister of Energy and Mines, has stated that ‘all companies are happy, so far’, but has called for a ‘new social face’ and ‘a new pact’.
The administration has highlighted the need to free up the 60 mining projects currently in development from restricting red tape.
Merino believes the deposits between Apurimac and Cuzco contain enough mineral to equal Chile’s production, the dominant global supplier of copper.
Current developments involve proposals to lift taxes and to streamline the ‘bureaucratic triangle’.
Afghanistan – What will happen to Afghanistan’s mineral wealth?
The speed of the Taliban advance across Afghanistan suggests the people and their local leaders were more than happy to see President Ghani and his corrupt government gone.
Like most nations many Afghans also preferred to see the occupying nation evicted.
Many leaders within The Northern Alliance which had supported President Ghani appear to have switched sides but may return to fight the Taliban if the Taliban reinstate hard line Sharia rule is enforced.
China, which has held back from overseas conflict since the Korean war, may buy its way into Afghanistan for its mineral deposits and strategic influence in the region.
China is in many respects well placed to exploit minerals in the region, though relatively little geology has been done to date.
But the Ghani government arrested a Chinese spy ring in December terminating oil and gas contracts with China and sought to renegotiate the terms of a significant mining concession signed >10 years ago.
The Chinese spy ring was being used to hunt down Uighur Muslims with the help of the Haqqani network, a terrorist outfit linked to the Taliban.
Even Afghan officials who had cooperated with China on the detention and deportation of Uighurs were shocked at China’s duplicity. (foreignpolicy.com)
Anecdotal reports from the DRC also suggest that China sometimes uses extreme force on local villagers if it’s nationals are captured or killed when mining overseas.
Western nations are generally reluctant to authorise this form of state-sponsored retribution to protect commercial interests these days.
Conclusion: Afghanistan’s future is difficult to forecast. It is such a complex nation of disparate groups and warlords influenced by its many neighbours and their self interests. All we can predict is that the region is likely to remain unsettled for some time. We doubt the world will see much new mineral production from the region for some time.
Currencies
US$1.1768/eur vs 1.1790/eur yesterday. Yen 109.19/$ vs 109.33/$. SAr 14.932/$ vs 14.769/$. $1.380/gbp vs $1.385/gbp. 0.728/aud vs 0.734/aud. CNY 6.484/$ vs 6.479/$.
Commodity News
Precious metals:
Gold US$1,794/oz vs US$1,776/oz yesterday
Gold ETFs 100.4moz vs US$100.3moz yesterday
Platinum US$1,022/oz vs US$1,015/oz yesterday
Palladium US$2,582/oz vs US$2,632/oz yesterday
Silver US$23.89/oz vs US$23.56/oz yesterday
Base metals:
Copper US$ 9,437/t vs US$9,426/t yesterday
Aluminium US$ 2,631/t vs US$2,596/t yesterday
Nickel US$ 19,490/t vs US$19,555/t yesterday
Zinc US$ 3,040/t vs US$3,003/t yesterday
Lead US$ 2,316/t vs US$2,319/t yesterday
Tin US$ 35,890/t vs US$35,400/t yesterday
Energy:
Oil US$69.1/bbl vs US$69.3/bbl yesterday
Oil prices fell slipped in early trading today negating earlier gains, as expectations that major producers will not boost supply any time soon were outweighed by worries over slowing demand amid a spike in the Delta variant of coronavirus infections
Economic data out of China for July was bearish for the oil market and prices
The country's industrial production rose by 6.4% in July - well below expectations
So was the reading for the retail sales, as China felt last month the impact of flooding due to a typhoon in several areas and the start of a new COVID-19 wave
Government response to the virus spreading include lockdowns and suspension of public transportation services and flights, which has already started to dent fuel demand in recent days
China also reported the lowest refinery throughput in July since May 2020, as independent refiners cut on fuel production amid lower second-half import quotas and weakening profit margins
The Chinese refinery throughput last month saw its first decline since March 2020, when COVID-19 hit demand
The Chinese data adds to the bearish US consumer sentiment report from Friday when the University of Michigan reported that "Consumers reported a stunning loss of confidence in the first half of August"
The preliminary consumer sentiment index is at its lowest since 2011
The weak Chinese and US data goes some way in supporting the IEA's latest downgrade to demand for the months ahead as a resurgent delta coronavirus variant is impacting demand across the world
Natural Gas US$3.918/mmbtu vs US$3.820/mmbtu yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$160.7/t vs US$161.7/t
Chinese steel rebar 25mm US$813.7/t vs US$817.9/t - China steel output hits 15-month low as carbon-crackdown comes into effect
Bloomberg calculates that steel production in China has hit a 15-month low as Beijing seeks to limit carbon emissions
China produced 86.79m t of crude steel last month, down 7.6% from June and 8.4% from July 2020 according to the National Bureau of Statistics.
Average daily output saw a decrease of 11% from June, with 62% Fe iron ore fines settling around the $165/t mark.
The China Iron and Steel Association is seeking to crack down on companies ‘with poor environmental performance, high energy consumption and outdated technology and equipment’.
It is expected that steel production in the second half of this year will also be hit by China’s slowing manufacturing growth and the continued semiconductor shortage will is limiting the auto manufacturing industry.
Thermal coal (1st year forward cif ARA) US$106.5/t vs US$103.0/t
Coking coal swap Australia FOB US$199.0/t vs US$199.0/t
China Ilmenite Concentrate TiO2 US$358.59/t vs US$358.9/t
Other:
Cobalt LME 3m US$52,500/t vs US$52,500/t
NdPr Rare Earth Oxide (China) US$95,083/t vs US$95,698/t
Lithium carbonate 99% (China) US$15,115/t vs US$14,818/t
China Spodumene Li2O 5%min CIF US$870/t vs US$860/t
Ferro-Manganese European Mn78% min US$1,748/t vs US$1,751/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% 9.7/lb vs US$9.8/lb
Europe Ferro-Vanadium 80% 40.25/kg vs US$40.25/kg
Spot CO2 Emissions EUA Price US$67.8/t vs US$68.0/t
Battery News
UK sets out plans for world-leading hydrogen economy
Business and Energy Secretary Kwasi Kwarteng has revealed details of the UK government’s plans to create a world-leading hydrogen sector in the UK over the next decade.
The UK’s first Hydrogen Strategy will drive some of the commitments made by Boris Johnson in the 10 Point Plan for a green industrial revolution – the UK will work to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030, which could replace natural gas power in 3 million homes.
The government’s approach is based on the previous success with offshore wind, with early government action and strong private sector backing which has earned the UK a world leading status.
As part of the strategy, the government has launched a public consultation on types of support for hydrogen projects that could bring the costs down – along the same line as its contracts-for-difference (CfD) scheme that incentivises investment in renewable energy.
The £240m Net Zero Hydrogen Fund, which is to support the commercial development of hydrogen plants, will also be reviewed.
“Today’s Hydrogen Strategy sends a strong signal globally that we are committed to building a thriving low carbon hydrogen economy that could deliver hundreds of thousands of high-quality green jobs, helps millions of homes transition to green energy, support our key industrial heartlands to move away from fossil fuels and bring in significant investment.” said Energy & Climate Change Minister, Anne-Marie Trevelyan.
The UK hydrogen economy could be worth £900m and create 9000 jobs by 2030, potentially rising to £13bn with around 100,000 jobs by 2050.
Chinese clean energy stocks buck wider downtrend as Beijing protects renewable energy
China’s CSI New Energy index has seen a 55% rise over the past quarter, marking a stark contrast to the Hong Kong Hang Seng Tech index which has fallen 12%.
Companies that form part of China’s plan for a ‘modernised socialist economy’ look set to enjoy protection from Beijing as they crack down on polluting industries and monopolistic tech giants.
Investment officers from UBS see the ‘energy and green-tech’ sectors in China as set to benefit from looser governmental regulation.
A senior portfolio manager at Manulife is seeking exposure to green sectors such as renewable energy and battery metal lithium.
Company News
Altus Strategies* (LON:ALS) 57.26p, Mkt Cap £46m – $34m to secure the first revenue generating royalty with more deals to follow
BUY – Valuation under review
The Company is acquiring an effective 0.418% NSR royalty on the producing Caserones Copper-Molybdenum Mine in Chile.
Altus together with EMX Royalty (EMX CN, Mkt Cap C$300m) incorporated a 50/50 JV that will buy a 43% interest in SLM California that holds 1.944% NSR royalty for a total of US$68.2m.
Altus will effectively acquire 0.418% NSR on Caserones copper and molybdenum production for a cash consideration of US$34.1m.
Royalty is estimated to generate ~$3.2m (post tax) per annum attributable to Altus (using ~$9,000/t copper price and ~145ktpa CuEq).
Altus is planning to fund the deal using a bridge loan from La Mancha, a major cornerstone investor with a 35% interest in the Company, to the tune of $29m with the balance covered by existing cash balances.
La Mancha debt facility will bear a floating interest rate of 3m Libor plus 7% over the first three months and Libor plus 9% thereafter.
The facility will be senior secured against shares in the Altus subsidiary holding an interest in the JV used to acquire Caserones NSR royalty.
The Company is planning to refinance the facility by mid February2021.
The transaction is expected to close 1 September 2021.
Caserones hosts a large, open pit porphyry copper-molybdenum deposit owned and operated JX Nippon Mining & Metals of Japan.
Operations include conventional crushing, milling and flotation facilities for production of copper and molybdenum concentrates as well as dump leaching and SX-EW processing capacities for production of copper cathodes.
The mine has been in operation since 2015 following a development capital investment of US$4.2bn.
2020 production amounted to 127kt copper (~105kt concentrate + 22kt cathodes) and 2.5kt molybdenum (concentrate) affected by Covid-19 related restrictions.
2019 production was stronger and came in at 146kt copper (concentrate + cathodes) and 2.8kt molybdenum (concentrate).
Current mine plan envisages 17 years remaining at ~145ktpa CuEq along with excellent exploration potential to improve on the current life of mine.
JX Nippon has recently announced plans to accelerate exploration around the mine to potentially expand production and further extend the mine life.
The team is currently reviewing other royalty generating opportunities focused in gold and copper space.
Conclusion: The deal marks acquisition of the first revenue generating royalty in a long life copper mine validating Altus’ royalty business model and increasing exposure to the metal central to the global decarbonisation effort. La Mancha supports the acquisition providing most of the required funding on favourable terms and allowing the team to fast track acquisition process. The deal is structured in partnership with EMX Royalty, a NYSE and TSX listed royalty company with a global portfolio of assets in the precious and base metals space, that may benefit future deal flow for the Group.
The team is currently considering additional cash paying royalties on gold and copper operations that would help to diversify revenue streams among projects and jurisdictions reducing risk profile of the Group and driving cost of funding for future deals lower.
*SP Angel acts as Nomad and Broker to Altus Strategies
Ariana Resources (LON:AAU) 4.5p, Mkt Cap £49m – Arzu South drilling results
Ariana Resources has reported drilling results from the Arzu South area at its 23.5% owned Kiziltepe mine in Turkey.
The company says that the results confirm “the opportunity to expand the open-pit at Arzu South, particularly at the NW end and also at further depth” and that it has decided, in conjunction with its joint-venture partners Proccea Construction and Ozaltin, to “urther extend its drilling programme”.
Among the results highlighted in today’s announcement are:
13.9m at an average grade of 1.67g/t gold and 17.5g/t silver from a depth of 56.6m in hole KTP-D01-21 which also contains 5.0m averaging 2.70g/t gold and 27.6g/t silver from 46.6m depth; and
8.2m averaging 2.49g/t gold and 43.5g/t silver from 135.2m depth in hole KTP-D10-21; and
5.1m averaging 2.16g/t gold and 44.2g/t silver from 136.1m in hole KTP-D59-21.
The company describes Arzu South as “the most significant area of gold and silver mineralisation within the Kiziltepe Sector”.
The company clarifies that “Mining of the Arzu South vein system … commenced in November 2016 and was completed in August 2020, following the extraction of 656,000 tonnes of ore at an average grade of 4.17g/t Au and 59.6 g/t Ag.”
Ariana Resources explains that “Further work since late 2019 has continued at Arzu South with the aim of increasing the confidence of the remaining mineral resources sufficiently to allow re-permitting of the open-pittable area. This work is now largely completed, and the results presented here represent the final input for a total re-evaluation of Arzu South's remaining resources, which are to be assessed for further open pit expansion and/or underground development.”
Ariana Resources confirms that it is working on a revised mineral resource estimate for Kiziltepe based on all of the drilling completed up to the end of June 2021 and Dr. Kerim Sener, Managing Director, said that “ We are… very encouraged to see the opportunities for pit expansion and to bring Arzu South back into operation. Being the highest-grade vein system overall at Kiziltepe, this is an important development.”
Dr. Sener also said that “Further work, including engineering, will be undertaken following the completion of an updated Mineral Resource Estimate. Encouragingly, we have both identified and confirmed the presence of additional narrow but potentially higher-grade veins in both the hanging wall and footwall of the main Arzu South vein, which furthers the opportunity to build an enhanced resource”.
BHP (LON:BHP) 2,474p, Mkt cap £132bn - BHP to drop London listing and agrees deal to merge its oil & gas business with Woodside Petroleum in all-share deal
BHP has agreed to merge its oil & gas business with Woodside Petroleum in an all-share deal that sees BHP shareholders own 48% of a combined company.
Combining the businesses is forecast to generate more than $400m in annual savings, the companies said in a joint statement.
BHP is also looking to replace its oil and gas assets with nickel, copper and potash as decarbonisation shift increases demand
BHP CEO Mike Henry commented: “The merger of our petroleum assets with Woodside will create an organisation with the scale, capability and expertise to meet global demand for key oil and gas resources the world will need over the energy transition”
The combined business will produce 200m barrels of oil equivalent per year based on financial 2021 net production.
The miner also announced on Tuesday that it would end its existing dual listing, unifying under its existing Australian parent and drop its London listing.
It is expected that BHP will ramp up a programme of mergers and acquisitions for raw material opportunities exposed to the growing EV sector.
We see BHP moving more into nickel and copper to meet new demand from EVs and wind farms.
Glencore (LON:GLEN) 327p, Mkt cap £43bn – Glencore signs partnership with Britishvolt for its UK gigafactory
Glencore has announced the acquisition of a stake in Britishvolt, a UK start up planning to build a domestic gigafactory.
The mining and trading group will supply the Northumberland-based Gigafactory with cobalt used for electric batteries.
Britishvold is planning to invest £2.6bn in a new Gigafactory in Northumberland
Britishvolt’s founder, Orral Nadjari, has praised Glencore’s ability to secure ‘responsibly sourced raw materials’ and sees them as the best alternative in an industry dominated by China.
Glencore will supply 30% of cobalt used by Britishvolt between 2024 and 2030.
The Gigafactory will target a 30GWh/year, providing 300,000 battery packs per year. Production is aimed for 2023.
Phoenix Copper* (LON:PXC) 76p, Mkt Cap £88m – Interim results and projects update
(Phoenix holds 80% of the Empire mining property in Idaho)
CLICK FOR PDF
Phoenix Copper reports a group consolidated interim loss of US$199,481 (2020 loss US$569,759) for the six months to 30th June 2021 while also reporting “our first ever Company profit since Phoenix was formed … [with] … a profit for the six months ended 30 June 2021 of $235,467 (2020: loss of $265,976)”.
The company reports a reduction of 65% in administration expensed to $295,368 (2020: $540,391) and a 30th June 2021 cash balance of $22.88m.
Phoenix Copper highlights the £18.4m (US$25.4m) fundraising in March “which was significantly larger than we had hoped for, has enabled us to move ahead with our flagship project, the Empire heap leach SX-EW copper cathode oxide open pit, and to accelerate the exploration of the historically mined deeper high grade sulphides below the oxides at Empire” as well as exploration of the Red Star silver project, the Horshoe and Navarre Creek prospects.
Chairman, Marcus Edwards-Jones, highlighted the progress on the flagship Empire heap leach / SXEW oxide copper project as well as on the exploration of the underlying sulphide mineralisation which fuelled the Empire mine’s historic production history during the first half of the 20th century.
Chief Executive, Ryan McDermott, confirmed the previously announced submission of the operational plan for the oxide pit to the Bureau of Land Management for permitting approval and reiterated the company’s feasibility model which concludes that the investment of US$52m of pre-production capital into the 10-year Empire oxide pit pays back within 2 years at a copper price of US$3.60/lb.
Mr. McDermott also confirmed the start of drilling, during July, to investigate the underlying sulphide mineralisation following earlier drilling in 2017 “that confirmed the presence of higher-grade sulphide mineralization in the skarn structures at depth” and the completion of a further 5 drillholes in 2018. Mr. Edwards-Jones explained that the company is “eagerly … [awaits]…assay results from the first drill core sent to the laboratory in late July” which included “a 12.6 metre section of intense sulphide mineralisation, and we hope the next holes we plan to drill there this summer give similar grounds for optimism”.
At the Red Star silver prospect, results of a recently completed ground magnetic survey are expected in the coming weeks and a “diamond drilling program is scheduled to commence in Q3 2021” to follow up the potential of the existing inferred polymetallic resource estimate of approximately 114kt at an average grade of 173g/t silver, 0.85g/t gold, 3.85% lead, 0.92% zinc and 0.33% copper.
The recently announced extension to Phoenix Copper’s land holding at Navarre Creek located some 5km to the NW of the Empire mine site, by a further 1,157 acres (47%) to 3,577 acres (1,477 hectares) follows encouraging preliminary results from electro-magnetic (EM) surveying. The company’s published drilling plans for 2021 include 2,300m of reverse-circulation drilling allocated to Navarre Creek which the company has consistently compared to the geological setting of the Carlin belt in the neighbouring state of Nevada.
The company’s Redcastle cobalt project, which lies adjacent to First Cobalt Corporation’s Iron Creek project in the Idaho Cobalt Belt of Lemhi County will be explored under joint venture terms by First Cobalt allowing Phoenix Copper to focus its attention on its projects in and around the Empire site.
Setting the wider scene for the company’s commodity portfolio, Mr. McDermott said “I expect to see the metals markets, particularly copper, continue to perform well as the manufacturing and fabricating sectors increase production on new and high demand. The recently approved $1 trillion U.S. infrastructure bill, which includes projects requiring significant quantities of metal, should also keep prices on an upward trend as the projects are engineered and get underway”.
Conclusion: Supported by a successful fundraising in March, Phoenix Copper is advancing the development of its oxide copper project at the historic Empire mine and has now submiied its operating plan to the BLM. Phoenicx is also continiuing to explore the underlying sulphide mineralisation at Empire and exploration of the adjacent Red Star, Horseshoe and Navarre Creek properties. We look forward to the results as they become available.
*SP Angel act as Nomad for Phoenix Copper
Premier African Minerals* (LON:PREM) 0.19p, Mkt Cap £40m – Raising £1m to fund Zulu feasibility study
Premier African Minerals has raised a further £1m to fund its Definitive Feasibility Study (DFS) of the Zulu Lithium project which lies within the Fort Rixon greenstone belt in Zimbabwe.
The funds are raised via the placing of 500m new shares at a price of 0.2p/share
We estimate that the additional shares, which have been issued under the existing authority of the Company, represent approximately 2.6% of the company’s enlarged capital.
Outlining the DFS work to be completed, the company confirms that its exploration team is in place and says that “airborne geophysics and other remote sensing has been commissioned and we have high expectations for both additional Lithium, Caesium and Tantalum pegmatite discovery and other potential”.
*SP Angel have an agreement with Premier African Minerals as a result of the acquisition of Northland Capital Partners
Sunrise Resources (LON:SRES) 0.25p Mkt Cap £8.1m – Early stage results from CS Project concrete trial
Sunrise Resources has reported that commercial scale concrete pours using material from its CS Pozzolan-Perlite project in Nevada have been conducted by an un-named “large Cement & Ready- Mix Company” and the strength tests after seven days “exceed the 24-day target strengths”.
The tests are being undertaken as part of the Cement and Rady-Mix company’s due diligence into the suitability of the CS project’s material.
Executive Chairman, Patrick Cheetham, said that “Interest in using the CS natural pozzolan in concrete continues to grow and a number of additional companies have requested samples in recent weeks, no doubt driven by the bleak long-term outlook for coal fly ash supplies in the USA”.
He also explained that “we believe that the US$1.2 trillion infrastructure spending stimulus recently passed by the US Senate and embraced by President Joe Biden, together with Biden's climate plan will give further impetus to pozzolan demand and so we are looking at possibilities to grow our business by acquiring additional pozzolan deposits favourably located for other regional centres of concrete demand in the western United States”.
As well as the promising initial strength tests for the use of pozzolan in concrete the company also reports that tests on horticultural grade perlite from the project has now been completed and the “Most recent customer trial … [is] … considered very successful.”
Conclusion: Initial strength tests of concrete made on a commercial scale from pozzolan sourced from Sunrise Resources’ CS Project are showing better than expected results.
Tirupati Graphite (LON:TGR) 111.5p Mkt Cap £95m – Acquisition of Mozambique graphite projects for A$12.5m (£6.6m)
Tirupati reports that it has entered into a binding acquisition agreement for the acquisition of the entire issued share capital of Suni Resources, with holds the Mozambique portfolio of graphite assets of ASX listed Battery Minerals Limited.
Assets include the construction initiated Montepuez Graphite Project and the advanced feasibility study stage Balama Central Graphite Project.
The Acquisition includes all associated assets, infrastructure, permits, licenses and intellectual property on both projects for a total consideration of AU$12.5m (circa £6.6m) in a cash and shares deal.
The two projects are spread over a combined 18,500 hectares permit area adding mineral resources of over 152mt at 8.5% TGC.
At Montepuez, pre-development work and a DFS has been completed which has resulted in a development plan for 100,000t of annual graphite concentrate capacity in two equal stages.
The projects graphite product basket is a mix of jumbo, large and small flake, complementing Tirupati's existing mix of predominantly jumbo and large flake graphite products from Madagascar.
The c.60-70% medium and small flake graphite anticipated from the projects are preferred by certain end users in the lithium-ion battery anode and are a feed stock for micronized graphite.
Tirupati expects to further optimise the project development plans using its extensive and proven expertise in developing graphite projects in order to minimise investment and optimise operating costs while looking to retain the plans to implement 2 x 50,000 tpa modules
The Acquisition is subject to shareholder approval of Battery Minerals and approval of the transaction by the Ministry of Mineral Resources and Energy in Mozambique.
Subject to the satisfaction of conditions, the Company will acquire from Battery Minerals 100% of the issued share capital of Suni Resources all related intellectual property relating to the Montepuez Project and Balama Central Project and will be assigned the shareholder loans owed by Suni Resources to certain Battery Minerals group companies amounting to c.AU$29m for a total aggregate consideration of AU$12.5m.
Of the agreed consideration, AU$1.5m shall be settled in cash at completion while the balance of AU$11m shall be settled by the issue of 5,667,288 ordinary shares in the company at an issue price of £1.03 per share, being a 10% discount to the 5-day VWAP prior to the date of entry into the acquisition agreement in two equal tranches, the first 2,833,644 TG Shares to be issued on completion of the Acquisition and the second 2,833,644 TG Shares to be issued eight months after the completion date
Shishir Poddar, CEO of Tirupati Graphite, said: “strategically, the Montepuez and Balama Central deposits are world class and will add 152 million metric tonnes at 8.5% TGC of resources to our existing c.25 million tonnes of resources in Madagascar, a c.6X addition on in ground resource tonnage with a c.12X addition on the contained graphite.”
Recent Interviews:
IGTV: Mining sector: where now as Gates & Bezos move in?: https://youtu.be/3is7kRMb7yk
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: 11/08/21: https://www.voxmarkets.co.uk/articles/john-meyer-on-bluejay-bluerock-bushveld-alba-minerals-efe74e1
04/08/21: https://audioboom.com/posts/7918741-john-meyer-talks-about-china-cora-gold-kodal-minerals-power-metals-rambler-metals
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