SP Angel . Morning View . Wednesday 1 09 21
China to expand role of Strategic Reserves as battery metals hit new highs
Pre-IPO financing opportunity for new gold mine development in Ghana
We are raising funds for an advanced gold project in Ghana with good upside exploration potential
The project offers potential to fast-track gold production using a low-cost heap leach.
Management are experienced and are looking to IPO within 18 months.
Please contact us if you are interested in pre-IPO funding of the opportunity
Altus Strategies* (LON:ALS) – BUY, 125p – Drilling confirms parallel mineralised structure at Tabakorole
Botswana Diamonds (LON:BOD) – Drilling underway at Thorny River
Eurasia Mining* (LON:EUA) – Eurasia reports ongoing progress on low-cost platinum group metals projects in Russia
Greatland Gold (LON:GGP) – Initial drilling results from Juri
Noront Resources (CVE:NOT) - Australian mining billionaire Forrest raises bid for Noront Resources
Phoenix Copper* (LON:PXC) – Initial results from deep sulphide drilling at Empire
Power Metal Resources* (LON:POW) – Option agreement signed to acquire Pilot Mountain Project in Nevada, USA
Rambler Metals and Mining* (LON:RMM) – Timetable of debt financing
Scotgold Resources* (LON:SGZ) – Management look to raise gold production outlook for Cononish mine
China - Inflation vs Raw materials and Energy prices. China has a dilemma to deal with.
The government is trying to protect and preserve struggling Small and Medium Sized enterprises due to their importance in employment and recent low margins.
Margins in SMEs are being squeezed by rising raw materials prices, higher shipping and other logistics costs.
They are also looking to expand employment and to ‘level up’ the difference between rich and poor – one way will be to raise salaries but that would be inflationary?
China is also restricting hydropower power to aluminium smelters causing prices to rise. The authorities may even introduce a new energy tax for smelters raising costs further.
President Xi has ordered a review of the Strategic Reserve ‘SRB’ in a statement issued on Monday – we suspect the SRB will become larger and more active.
Xi wants China to build a ‘unified strategic and emergency reserves system’ stressing the need for improving reserves system as China begins metals auction
China began the auctions of 150,000t of metals this morning, marking the 3rd round of state auctions this year.
Beijing is trying to cool raw material prices to protect manufacturers and infrastructure projects from ‘irrationally high’ prices in aluminium, copper, and zinc.
China will have now auctioned 420,000t of metal from its Strategic Reserves Administration in the past 2 months.
On Monday Xi called for China to build a more efficient strategic and emergency reserves system.
A state readout from the meeting described the need for ‘strength in national reserves and emergency responsibility capabilities that match the status of a big country’.
China has also been buying reserve supplies of hog and coal.
Shanghai nickel prices continue rally, hitting record highs, amid low inventories and strong demand
The Shanghai Futures Exchange has recorded another record high in the price of nickel.
The most-traded October contract hit $23,197.89/t, up 21% ytd.
3m LME October contract hit $19,810/t, up 17% this year.
Nickel prices are enjoying a perfect storm of strong post-lockdown demand as well as the continued disruption to supply chains which have encouraged buyers to make unusually advanced orders.
The rising role nickel plays in the EV sector is also considered to be playing a role in the ascension of the metal’s price, with analysts expecting global nickel demand seen rising by c.18% in 2021.
Inventories at SHFE warehouses also hit records yesterday, with lows of 4,455t, an 89% decrease ytd.
LME inventories are falling further, with stockpiles at 194,466t – their lowest since Jan2020.
Some speculators have pointed to the roll a short squeeze may have had in the recent price movement, with traders moving to cover their short positions with nickel units.
Negative factors that may potentially dampen the hot nickel market range from China’s production curbs in the stainless-steel industry to the continuation of a semiconductor chip shortage in the auto manufacturing industry.
Gold prices stable before US jobs data offers a potential clue to Fed taper
Spot gold prices are steady this morning at $1,815.60/oz whilst the dollar hovers around 3-week low.
Investors are cautious in allocating capital to the precious metal with fears an earlier-than-expected Fed taper could reduce its attraction.
Analysts estimate a ‘print above 1m jobs will put the taper back front and centre and be bearish for gold’. Alternatively, they estimate that a number closer to ‘700,000, or lower, will alleviate those concerns and be supportive of gold’.
A Reuters poll of various economists found a consensus estimation of nonfarm payrolls increasing by c. 750,000.
A dovish hint at the Jackson Hole conference saw gold prices move1.4% to the upside as J Powell highlighted the need to be ‘cautious.’
There is a consensus of a hawkish shift in the Fed however, as inflation targets have been met and previous employment data have been on the stronger side. This has been reflected in holdings of the SPDR Gold Trust, which fell 0.2% yesterday to its lowest since April 2020.
Significant outflows have been recorded across ETFs, with the Gold Miners ETF (GDX) recording $91.7m in outflows week-over-week.
Dow Jones Industrials -0.11% at 35,361
Nikkei 225 +1.29% at 28,451
HK Hang Seng +0.53% at 26,017
Shanghai Composite +0.62% at 3,566
Economics
China – Caixin PMI numbers show China factory activity contracted in August
The Caixin PMI Index dropped to 49.2 vs 50.3 in July.
Factory activity contracted for the first time since April 2020 as fresh virus outbreaks disrupted production.
The drop was largely due to lower production, a deterioration in supplier performance, higher raw material prices and an increase in transportation costs, according to Caixin.
The data indicates slowing growth momentum in China after the government imposed strict measures to bring new virus cases under control last month.
Supply chain disruptions and Covid restrictions limit Asian factory productivity
Pandemic-induced supply chain disruptions have made their presence felt on Asian factory activity over the past month.
Factory activity in Vietnam, Indonesia and Malaysia was severely disrupted as rising Delta variant cases caused a resurgence of lockdowns in the global manufacturing hubs.
China’s August factory activity marked a contraction for the first time in 1.5years as the country was hit by supply bottlenecks, soaring raw material costs and Covid curbs.
Japan, South Korea, and Taiwan were hit with slowing manufacturing activity amid a continuation of semiconductor shortages.
The region contrasts with the highly vaccinated European manufacturing countries who are expected by analysts to maintain consistent growth.
Most concerning is China whose PMI breached the mark that distinguishes between growth and contraction, far below market expectations.
India has also been restricted by pandemic-related issues weakening both demand and output, with August seeing considerable lay-offs in the manufacturing industry.
Europe’s factory backlog hits record high on global supply chain squeeze
European factories saw unfilled orders rise to an unprecedented level in August as companies struggled to meet demand amid widespread supply chain issues.
The shortfall of manufacturing production relative to orders surpassed a 24-year record seen in July.
Shortages of parts and raw materials and a lack of shipping capacity are proving worse than initially expected and threatening the economic recovery in Europe.
The supply chain crunch was initially thought to be temporary, however the surging delta variant keeps paralysing factory production in Asia and disrupting shipping.
Manufactured are being forced into bidding wars to get space on vessels or to procure key raw materials.
China’s determination to stamp out covid outbreaks means that even a small number of cases can cause major disruptions to trade.
The government temporarily closed part of the world’s third busiest container port at Ningbo for two weeks after a single case of the delta variant.
The cost of sending a container from Asia to Europe is about 10 times higher than in May 2020, according to the Drewry World Container Index.
Eurozone – Inflation rises to decade high of 3% in August
August PMI 61.4 vs 62.8 in July and flash reading of 61.5
CPI Inflation in the eurozone has risen to its highest level in almost a decade, jumping 3% YoY in August, up from 2.2% in July.
Consumer prices have not risen as fast in the 19-country bloc since November 2011 when the ECB raised interest rates for the region.
The price increases were driven by the economic rebound from the impact of the pandemic, higher energy costs and bottlenecks in supply chains.
In the past year, energy prices have risen 15.4%, food alcohol and tobacco prices climbed 2% and industrial goods prices increased 2.7%.
The highest inflation rates of between 4.5% - 5% were in Estonia, Lithuania, and Belgium.
UK – House prices surge in August despite ending of stamp duty holiday
UK house prices rebounded strongly in August, increasing 2.1% - the second-largest gain in 15 years and following a 0.6% decline in July.
The rises suggests that underlying demand and a shortage of homes for sale are underpinning the market as the stamp duty tax break on purchases is withdrawn.
The annual pace of growth accelerated to 11% from 10.5%, according to Nationwide.
Mortgage approvals fell for a second month in July but remained well above pre-pandemic levels.
Chilean copper royalty bill passes major test in senate mining committee
A royalty bill that would significantly increase Chile’s tax burden on copper miners gained approval from the country’s senate mining committee on Tuesday.
The bill will now go to debate at the senate floor as lawmakers look to reduce the burden from an initial version passed in the lower house in May.
Chilean officials have been looking to increase their tax revenue from the copper mining industry following the pandemic.
The country is also set to introduce a new constitution in November which will increase controls regarding water, mineral and community rights.
The Chilean mining industry has criticised the bill, which tax brackets dictated by the price of copper.
Mining firms have pointed to the bill’s potential to undermine their competitiveness and centre-right politicians have expressed a desire to temper the bill.
The bill would create the heaviest tax burden among global copper-producing countries.
Currencies
US$1.1809/eur vs 1.1827/eur yesterday. Yen 110.26/$ vs 109.85/$. SAr 14.452/$ vs 14.616/$. $1.375/gbp vs $1.379/gbp. 0.733/aud vs 0.734/aud. CNY 6.464/$ vs 6.460/$.
Commodity News
Precious metals:
Gold US$1,816/oz vs US$1,816/oz yesterday
Gold ETFs 99.8moz vs US$99.7moz yesterday
Platinum US$1,014/oz vs US$1,015/oz yesterday
Palladium US$2,478/oz vs US$2,499/oz yesterday
Silver US$23.85/oz vs US$24.17/oz yesterday
Base metals:
Copper US$ 9,388/t vs US$9,519/t yesterday
Aluminium US$ 2,699/t vs US$2,711/t yesterday
Nickel US$ 19,520/t vs US$19,655/t yesterday
Zinc US$ 2,989/t vs US$2,994/t yesterday
Lead US$ 2,264/t vs US$2,266/t yesterday
Tin US$ 33,810/t vs US$33,800/t yesterday
Energy:
Oil US$72.1/bbl vs US$73.3/bbl yesterday
Despite the COVID resurgence, OPEC+ has forecasted that the oil market will become increasingly tight this year
According to the groups estimates, global inventories are set to fall by 825,000bopd over the next four months
The JTC meeting today takes stock of the oil market and makes recommendations, if any, to the ministerial meeting scheduled for Wednesday afternoon in Vienna
The ministers of the OPEC+ group are set to discuss market developments and possibly consider whether the planned monthly increases in production by 400,000bopd are warranted, in light of signs that global oil demand recovery could falter with the spike in the Delta variant coronavirus cases
OPEC also sees growing demand despite the COVID resurgence, according to its latest Monthly Oil Market Report (MOMR)
Global oil demand is expected to average 96.6MMbopd this year and exceed 100MMbopd in the second half of 2022, OPEC said in the report on 12 August, keeping its estimates from a month ago unchanged despite the COVID resurgence in major economies, including China and the US
OPEC+ may find next year more challenging to manage the oil market because supply is forecast to exceed demand by an average of 2.5MMbopd if the group continues easing the cuts as planned and unwind all of the supply it has been holding from the market
The surplus would lead to global inventories rising by 913MMbbls in 2022, according to Bloomberg
Natural Gas US$4.422/mmbtu vs US$4.333/mmbtu yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$146.8/t vs US$156.4/t - Iron ore futures slide 8% as demand concerns intensify
Chinese iron ore futures saw an 8% dip this morning as a weak spot price and concerns over steelmaking restrictions dampen enthusiasm.
Although steelmaking restrictions have not yet come into place, mills have been limited from increasing their stock supplies of iron ore by Beijing officials.
Dalian futures for January fell 8.6%, continuing a sell-off initiated in July.
Weakness in the iron ore market has dragged down steel futures, with Shanghai bourse down 4%.
A slowdown in China’s factory activity amid supply bottlenecks and Covid-19 restrictions is expected to weigh on a potential rise in iron ore.
Chinese steel rebar 25mm US$812.9/t vs US$815.1/t
Thermal coal (1st year forward cif ARA) US$114.7/t vs US$109.0/t
Coking coal swap Australia FOB US$213.5/t vs US$213.5/t
China Ilmenite Concentrate TiO2 US$370.50/t vs US$370.8/t
Other:
Cobalt LME 3m US$50,430/t vs US$50,430/t
NdPr Rare Earth Oxide (China) US$93,438/t vs US$93,506/t
Lithium carbonate 99% (China) US$17,790/t vs US$17,339/t - Scramble for lithium escalates as prices see 35-week consecutive highs
Demand for lithium is at record highs with current prices reflecting buyers’ desperation for the key battery mineral.
A recent auction by mining firm Pilbara saw 10,000t of spodumene concentrate acquired for US$1,250/t – almost double its current market price.
Chinese data from August 19 shows battery-grade lithium carbonate hit 100,000y/t this year, with some lithium battery materials growing at c. 1,000y/day.
With China the global leader of li-ion tech, escalating prices highlight the country’s reliance on imports of lithium products.
Domestic Chinese lithium producers, such as Tibet Everest, Tibet Mining and Jiuwu Hi-Tech have all seen at least a doubling in share price in recent months, showing investors’ appetite for locally sourced lithium.
Lithium giant Ganfeng’s recent merger with Canadian Millenium Lithium saw a 122% mark-up to the Millenium’s average stock price at the time, showing the lengths companies are willing to go to acquire lithium supplies.
The VC of China Nonferrous Metals Industry Association stated in a recent interview that ‘the overseas deployment of lithium mines’ is ‘conducive to the guarantee of our raw material supply’.
2016-2020 has seen a per annum increase of 19% in registrations for Chinese lithium mining companies, with China now home to 330 lithium mining-related companies.
China Spodumene Li2O 5%min CIF US$930/t vs US$930/t
Ferro-Manganese European Mn78% min US$1,754/t vs US$1,757/t
China Tungsten APT 88.5% FOB US$305/t vs US$305/t
China Graphite Flake -194 FOB US$535/t vs US$530/t
Europe Vanadium Pentoxide 98% 9.3/lb vs US$9.5/lb
Europe Ferro-Vanadium 80% 38.75/kg vs US$38.75/kg
Spot CO2 Emissions EUA Price US$71.6/t vs US$67.2/t
Battery News
Shell plans to install 50,000 integrated EV chargers
Following the acquisition of on-street charging specialist, Ubitricity, in February this year, Shell is looking to fund the installation of 50,000 integrated chargers across the UK by 2025.
Ubitricity specialises in providing on-street chargers that are integrated into existing streetlights or bollards, delivering accessible chargers to city residents who do not have access to off-street parking and as such are unable to install domestic chargers.
The Climate Change Committee (CCC) has recommended that 150,000 public chargers should be installed by 2025 as part of the effort to encourage the energy transition.
Shell also reiterated its plans to expand Ubitricity as part of a wider strategy to also accelerate the roll out of fast chargers at its forecourts and a wider charging network at supermarkets and other commercial sites – the company said it was aiming to expand its EV charging network from more than 60,000 charge points today to around 500,000 by 2025.
Company News
Altus Strategies* (LON:ALS) 80p, Mkt Cap £61m – Drilling confirms parallel mineralised structure at Tabakorole
BUY – 125p
Altus reports that drilling at its 49% owned Tabakorole Gold Project in southern Mali, approximately 280km south of Bamako, has confirmed a new parallel zone of gold mineralisation, to be known as the Parallel Zone.
The new mineralisation is reported to remain open laterally beyond 120m of known strike length and also at depth.
Among the drilling results from the Parallel Zone which are highlighted in today’s announcement is an intersection of 24m averaging 2.4g/t gold from a depth of 35m in hole 21TBKDD021.
The company also confirms that the recent drilling has
Demonstrated a potential increase in the strike length of the Northwest Zone f a further 150m and also a potential grade increase; and
Identification of additional mineralisation beyond the existing known extent of the Central Zone with “potential improvement of grade in this zone”; and
A potential increased strike length for the Southeast Zone of around 150m.
Chief Executive, Steven Poulton, said that “The discovery of this parallel, shallow and high-grade gold zone has significant implications for the potential of the Tabakorole gold project … [and that]… the results are anticipated to contribute to an updated Mineral Resource Estimate, expected later this month”.
The current estimate shows 7.3mt classified as indicated at an average grade of 1.2g/t gold (290,000oz) with a further 16.6mt classified as inferred also at an average grade of 1.2g/t (620,000oz).
Conclusion: The identification of an additional zone of mineralisation plus the increased extent of the previously known zones at Tabakorole should be reflected in the revised mineral resources estimate expected later this month.
*SP Angel acts as nomad and broker to Altus
Botswana Diamonds (LON:BOD) 1.13p, Mkt Cap £8.9m – Drilling underway at Thorny River
Botswana Diamonds reports that it has started a programme of eight reverse-circulation drill holes to test the area between the areas of wider kimberlite dyke development known as the River and River Extension ‘blows’.
“The objective of the exploration programme in the Thorny River project area is to discover additional blows and the objective of this specific drilling programme is to determine the extent of the connection between the two recently discovered blows”.
The River Extension is located within 100m to the east of the River Blow and the drilling programme is expected to be completed within two weeks.
The company explains that the area, known as the Zebediela Kimberlite Field “chiefly consists of a series of consistently diamondiferous kimberlite dykes with a strike length of 20-km. On this dyke, there are number of blows being Kudu, Sugarbird, Sugarbird Pass (all part of the Klipspringer diamond mine) and Marsfontein. The four blows have been mined-out, with the latter being mined by a De Beers / SouthernEra joint venture with a payback of three and a half days. Marsfontein is 3.5 km west and on strike from the Company's discoveries”.
Conclusion: Drilling at Thorny River should clarify whether the zones of mineralised kimberlite known as the River and the River Extension are linked. We await the results with interest.
Eurasia Mining* (LON:EUA) 23p, Mkt Cap £647m – Eurasia reports ongoing progress on low-cost platinum group metals projects in Russia
Eurasia Mining report significant progress at their West Kyltim alluvial platinum group metals mine in Russia.
The mine has three washing plants in operation and is stripping several open pit areas to give greater operational flexibility.
The team are on track to connect the mine site to grid power and to commission the electric dragline as announced on 11 August.
Eurasia see their production costs as in the lowest quartile for PGM producers.
Nyud (75%) and Moroshkovoe open pit licenses are in process and at an advanced stage.
‘Block modelling and open pit optimisations are now complete for 6 out of 9 Rosgeo JV projects.’
Monchetundra DFS is reported to be in the final stages of its development further to the successful completion of geotechnical and other studies being done by an engineering arm of Norilsk Nickel.
Wardell Armstrong International has visited the sites and audited the stored Monchetundra drill core with quality control done by Gipronickel, CKE and other contractors.
Metallurgical testing has been done by Mekhanobr Engineering which has completed process designs for >250 mining-and-processing operations.
*SP Angel act as Nomad and Broker to Eurasia Mining
Greatland Gold (LON:GGP) 18.65p, Mkt Cap £720m – Initial drilling results from Juri
Greatland Gold has reported results from the first four holes drilled at its Juri Joint Venture with Newcrest Mining in the Paterson province, Western Australia.
The initial drilling totalled 4,958m testing five targets in nine holes “including five holes at the Goliath, Outamind and Los Diablos targets on the Paterson Range East licence and four holes at the Parlay and Saddle Reefs targets on the Black Hills licence”.
The company highlights:
An intersection of 3.5m at an average grade of 1.88g/t gold from a depth of 226.5m in hole BHD001 which tested a pyrite vein stockwork zone at the Saddle Reef target; and
A metre wide intersection at an average grade of 1.49g/t gold from a depth of 651m in hole GLD001A representing the first gold identified at the Goliath prospect. The intersection is within the contact zone between sediments “probably of the Puntapunta formation” and mafic intrusive rocks.
Assay results are still pending for a further five drill holes and the company is planning a programme of ground electro-magnetic geophysics during September “to further refine and model various Juri JV targets”.
CEO, Shaun Day, said that “With Newcrest funding the exploration programme, our Juri JV programme presents an opportunity to deploy our proven expertise and potentially deliver further exploration upside”.
Conclusion: Initial drilling at Juri has intersected gold mineralisation at both the Saddle Reef and Goliath targets and results have still to come in for five further holes. We await the results
with interest.
Noront Resources (CVE:NOT) C$0.75, Mkt cap C$344m - Australian mining billionaire Forrest raises bid for Noront Resources
Andrew Forrest’s Wyloo Metals has revised its bid for the Canadian nickel miner Noront Resources as it competes with BHP.
The revised bid is 27% higher than the offer from BHP.
BHP proposed a $257.81m bid in July, with Wyloo offering to either keep Noront public or buy out the remaining shares not under its control.
The fierce competition between the two firms highlights the long-term attraction nickel resources offer to mining firms looking to benefit from ‘electric metals.’
Wyloo’s bid sits at a 192% premium to the Noront’s May closing price before Wyloo’s initial offer.
The nickel miner’s shares rose 28% on the news.
Phoenix Copper* (LON:PXC) 66p, Mkt Cap £86m – Initial results from deep sulphide drilling at Empire
(Phoenix holds 80% of the Empire mining property in Idaho)
CLICK FOR PDF
Phoenix Copper has reported the first results from of its deep drill holes to investigate the underlying sulphide mineralisation beneath the oxide zone at the historic Empire mine in Idaho.
To date, 967m of the planned 4,500m programme has been completed
The hole, KXD21-02, passed through approximately 170m of oxide mineralisation within the confines of the planned oxide pit and into the underlying sulphides which underpinned the historic production at the mine during the period from the late 19th century until the 1940s.
The hole reached a final depth of 241m in “unmineralized rock”.
The company says that “Assays within the shallower oxide zone include 5.0 m of 19.3 g/t silver and 0.77% copper, including 1.7 m of 1.1% copper, 1.08% zinc, 2.0 m of 0.78 g/t gold, 64.09 g/t silver, and 0.98% copper that included 0.8 m of 1.10 g/t gold, 80.70 g/t silver, 1.44% copper, and 0.5 m of 258 g/t silver and 1710 ppm tungsten”.
The additional oxide mineralisation “occur just inside the proposed oxide pit boundary and will be included in an updated oxide resource calculation in Q4 2021”.
Intersections within the underlying sulphides include:
2m at an average grade of 2.28% copper, 0.38g/t gold and 34.38g/t silver from a depth of 185.9m; and
0.5m averaging 8.38% copper, 1.31g/t gold and 120g/t silver from 187.5m depth.
“Other notable intercepts include 0.2 m of 60.7 g/t silver with 3.61% zinc, and 0.2 metres of 68.40 g/t silver with 2.61% lead and 4.50% zinc”.
The company says that the first hole of the planned 4,500m deep sulphide drilling programme “KXD21-01 was abandoned at a depth of 68 metres due to interference with underground workings”.
Other holes within the programme, KXD21-03 to 05 have also been completed, and assay results are awaited.
CEO, Ryan McDermott, confirmed that “The mix of metals in the recent assays from KXD21-02 highlights the polymetallic nature of the Empire ore zones. The high-grade nature of the sulphide veins encountered in this drill hole are particularly important as they are verification of the 6% to 8% smelter grades reported from pre-WWII production”.
He also explained that elevated levels of copper, gold, silver, lead and zinc and anomalous levels of tungsten and molybdenum “are consistent with the values anticipated by … [the company’s consulting geologist] … Nigel Maund in his 2019 Empire Mine report "A REPORT ON A FIELD VISIT MADE TO THE EMPIRE Cu - Au - Ag - (Zn) PROJECT, IDAHO, USA", … [which details evidence]… for an underlying molybdenum/tungsten porphyry at Empire”.
Conclusion: The first completed hole of Phoenix Copper’s programme to investigate the deep level sulphide mineralisation at Empire has intersected high grade copper and verified key elements of the underlying exploration model which envisages deeper level porphyry mineralisation. The planned programme is currently around 20% complete with assays from a further three holes awaited. We await further news as the programme proceeds.
*SP Angel act as Nomad for Phoenix Copper
Power Metal Resources* (LON:POW) 1.925p, Mkt cap £24m – Option agreement signed to acquire Pilot Mountain Project in Nevada, USA
Power Metal reports that the Company’s wholly owned subsidiary Golden Metal Resources have signed a Strategic Option Agreement allowing Golden Metal to acquire a 100% interest in the Pilot Mountain Project in Nevada, USA.
The Pilot Mountain Tungsten-Copper-Silver-Zinc Project is a 5,908 acre land package located approximately 200km southeast of Reno, in Nevada.
The project is centred around four existing mineral deposits including Garnet, Good Hope, Gunmetal and Desert Scheelite all which possess significant skarn-style tungsten-copper-silver-zinc mineralisation.
The Desert Scheelite and Garnet deposits host a combined JORC compliant resource of 12.53Mt at 0.27% Tungsten Trioxide for 34.3kt of contained tungsten metal plus significant silver, copper and zinc.
There is currently no domestic US primary tungsten production, despite tungsten being classified as a strategic mineral by the US. The project is therefore potentially a key strategic metal deposit in the United States.
Production viability was reinforced with a scoping study completed in 2018 on the Project that indicated the potential for an initial 8-year mine life from an open pit at Desert Scheelite supplemented by production from Garnet.
Metallurgical testing yielded strong results including the successful production of two saleable concentrates (scheelite, and copper/silver) from a coarse grind treated by floatation or by flotation and wet high-intensity magnetic separators.
Golden Metal believe there is the significant potential to build on the current the Pilot Mountain Mineral Resource through exploration.
The Project hosts significant resource upside through the upgrading of existing but under drilled targets, as well as the potential for discovery of new zones of skarn-style mineralisation located under post-mineral alluvial and basaltic cover.
Under the option agreement, Power Metal now has a 60 day Option Period to undertake detailed Project due diligence and during which it may exercise the Option.
Upon Option exercise, Golden Metal will acquire a 100% interest in Pilot Mountain, with Power Metal set to pay US$115,000 in cash to Thor Mining and US$1,650,000 payable through issue to the THR of 48,118,920 Ordinary Shares at an issue price of 2.5 pence per share.
In addition, Power Metal will issue to Thor Mining 12.5 million warrants to subscribe for Ordinary Shares with an exercise price of 4p per Ordinary Share and life to expiry of 3 years from the Option Exercise date
Power Metal plans to spin-out Golden Metal into a new listing on the London capital markets, and assuming Option exercise Golden Metal will hold 100% interests in Pilot Mountain together with the Garfield and Stonewall projects.
*SP Angel acts as nomad and broker to Power Metal
Rambler Metals and Mining* (LON:RMM) 20.25p, Mkt cap £27.1m – Timetable of debt financing
(Rambler owns 100% of the Ming Copper-Gold Mine)
Yesterday, Rambler Metals and Mining confirmed that the technical due diligence programme for Newgen Resource Lending’s previously announced debt funding has now been completed.
The necessary legal documents and other are being prepared and the “closing of this debt financing was scheduled to occur at the end of August 2021 and is now expected to close on or before 30 September 2021”.
CEO, Toby Bradbury, said that the company “is looking forward to the finalisation of the debt financing arrangement with NewGen, which will allow the Company to focus on the opportunities and upside identified in the ongoing mine development. By the end of the fourth quarter of this year, sustainable access to multiple mining headings will be created, significantly reducing mining risks and providing for improved operational and financial performance”.
Conclusion: News of progress with the debt financing follows the news last week of progress with the drilling programme at the Ming mine which is now around 60% complete and running ahead of schedule. The results are improving the confidence in the ore to be mined over the next 18 months which should enhance mine-planning as the Ming Mine presses ahead to its initial goal of a sustainable, long-term 1,350tpd processing rate.
*SP Angel act as Nomad and broker to Rambler Metals & Mining
Scotgold Resources* (LON:SGZ) 72.75p, Mkt Cap £41m – Management look to raise gold production outlook for Cononish mine
Scotgold Resources are adapting their mining method to advance gold production at the mine.
Processing: The team are also raising their targeted process plant capacity to ~4,000t per month through a series of debottlenecking initiatives.
Optimisation of the gravity circuit will then then enable the production of Scottish gold doré bars which should sell for a significant premium..
The process plant is now running at 90t/d brining the plant to around 70-73% operating capacity despite suffering an unplanned six-day shutdown in early August.
Mining: Amending the mining process to a vertical cut and fill process is enabling the mine to catch up with process plant capacity while work continues to open up more underground workings to improve operational flexibility.
Cononish produced 450oz of gold and 1,900oz in 50t of concentrate grading 333g/t in August.
Scotgold continues to hire new staff locally as the mine moves to reduce its reliance on contractors and reduce double handling and other manual processes in order to reduce costs.
Cash Flow: The mine should be cash flow positive as production revenues now exceeded operating costs.
Conclusion: Scotgold appears to have enacted a relatively quick and remarkable turnaround. We look forward to new production estimates from the mine sometime soon.
The mine can be seen in the BBC Gold Town series BBC2: https://www.bbc.co.uk/iplayer/episode/m000tkv3/gold-town-series-1-episode-3
*SP Angel act as Nomad and broker to Scotgold Resources. A number of SP Angel analysts have visited the Cononish gold mine
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: 18/08/21: https://audioboom.com/posts/7926110-john-meyer-on-diamonds-gold-including-bluerock-petra-cora
11/08/21: https://www.voxmarkets.co.uk/articles/john-meyer-on-bluejay-bluerock-bushveld-alba-minerals-efe74e1
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