SP Angel . Morning View . Monday 01 11 21
Gold (NYSE:GLD) rising ahead of the Fed policy announcement
Altus Strategies* (Altus Strategies PLC (AIM:ALS, TSX-V:ALTS, OTCQX:ALTUF)) – BUY, 125p – Start of 35,000m drilling programme at Tabakorole
Aura Energy* (Aura Energy Ltd (ASX:AEE, AIM:AURA)) – September quarterly report discusses expansion potential of Tiris uranium project
Galan Lithium (Galan Lithium Ltd (ASX:GLN)) – Permits received from Ministry of mines for Stage 1 pilot plant at Hombre Muerto West in Argentina
KEFI Gold and Copper* (KEFI Gold and Copper plc (AIM:KEFI)) – Tulu Kapi development timeline update
Power Metal Resources* (Power Metal Resources PLC (AIM:POW)) – Power Metal acquires Pilot Mountain project in Nevada
Mkango Resources* (Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)) – Mkango closes Talaxis transaction to acquire 100% of Songwe Hill and Maginito
Rambler Metals and Mining* (Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB)) – Closing of US$22m debt financing for the Ming Mine redevelopment
Rockfire Resources (Rockfire Resources PLC (LSE:ROCK)) – Preliminary results from the Copperhead project
W Resources (W Resources PLC (AIM:WRES)) – Regua mining licence
VOX Markets: 27/10/21: https://audioboom.com/posts/7968108-john-meyer-dicusses-china-the-baltic-dry-index-afritin-bushveld-condor-gold
IGTV: 08/10/21: How high energy prices are pushing up metals: https://youtu.be/em4zwo2i4Cs
Copper recovers on low LME inventories report Chilean output hits 7-month low
LME inventories remain near their 1998 lows of 14,150t with cash premiums of $312.50 on 3-month contracts highlight tight supplies.
China factory activity grew at fastest pace in 4 months as power limitations eased driving demand higher.
Chile’s September copper production hit its lowest since February on labour disruptions and weakening grades.
Copper output fell 6.9% y-o-y in Sept. to 451,128t, down 3.4% from August and 1.9% yoy on strikes at several mines. Codelco’s Andina mine suffered a 1-month strike.
The market is heading for an approximate 5mt deficit by 2030 unless there is very substantial new investment in the development and discovery of new copper mines.
Gold US$1,787/oz - prices rise despite strong dollar and looming Fed meeting
The dollar has firmed around a 2-week high.
Futures on the Ged funds rate priced a 90% change of a 0.25 pt tightening by June 2022.
US CPI has continued to rise, increasing the likelihood of a Fed taper sooner rather than later.
Biden US$3.5tn Social Spending Bill but down to US$1.75tn
US Fed Reserve FOMC committee meets to review monetary policy this week.
Leaving rates unchanged should be a catalyst for commodity price appreciation
World’s first portal cut using Komatsu’s continuous mining machine has started at Hillgrove’s Kanmantoo copper mine in South Australia
The machine removes the need to drill and blast.
The continuous mining technology is also being tested at Vale’s Garson mine in Ontario and has previously been trialled at Newcrest’s Cadia mine in New South Wales, Australia.
Dow Jones Industrials +0.25% at 35,820
Nikkei 225 +2.61% at 29,647
HK Hang Seng -1.03% at 25,117
Shanghai Composite -0.08% at 3,544
Economics
China – Growth in the manufacturing sector picked up in October, but only marginally with power cuts, material shortages rising costs continuing to weigh on production.
Caixin Manufacturing PMI: 50.6 v 50.0 in September and 50.0 est.
China official PMI, fell to 49.2 in Oct.vs 49.6 Sept. (SCMP)
China’s official non-manufacturing PMI fell to 52.4 in Oct. vs 53.2 in Sept.
A composite index combining manufacturing and services fell to 50.8 from 51.7
September manufacturing grew at its weakest pace since March 2020.
Input costs are reported to have climbed at the sharpest rate since Dec/16 while the pace of output charges inflation also accelerated notable since September.
New business orders climbed to the strongest in four months largely driven by domestic demand with foreign orders dropping for a third consecutive month with a number of survey respondents citing difficulties securing sales and shipping products overseas.
Employment in the sector pulled back, albeit, at a reduced pace.
Environmental curbs, power rationing and soaring raw material costs have hit output.
1/3rd of companies surveyed by China Logistics Information Center registered ‘insufficient demand’ as the primary cause for lower production.
Output prices hit 61.1 on one index, its highest level since 2016.
China’s production index is at its lowest level since 2005 (ex. GFC + Feb, 2020 Covid outbreak) (Pinpoint Asset Management)
Export orders fell for a 3rd straight month.
Input prices rose at fastest pace since Dec. 2016.
Economists expect China’s growth to slow 5.5% in 2022 vs an expected growth of 8.2% this year (Reuters)
Analysts expect the PBC to reduce Chinese banks’ required cash reserves in Q1 2022. (Reuters)
China – iron ore, coking coal, rebar, HRC and stainless prices fall on Dalian exchange
Iron ore prices fell 5.7% to $96.68/t on the Dalian Commodity Exchange as Iron ore stocks at China ports rose 2.1mt to 142mt. (Steelhome)
Dalian coking coal futures fell 9% to 2,165CNY/t.
Coke prices down 6.8% to 2,898CNY/t,
Rebar steel down 3.9%
HRC down 4.2%.
Stainless steel futures for December down 2.0%.
Tangshan steel, cement and coking plants were ordered to cut output by local officials on a heavy-pollution alert.
Beijing is looking to implement an online platform this month to monitor/police long-term coal contracts.
Germany – Consumer spending closed Q3 on a weak note with retail sales seen pulling back in September.
Retail Sales (%mom): -2.5 v 1.2 (revised from 1.1) in August and 0.4 est.
Retail Sales (%yoy): -0.9 v -0.9 (revised from 0.4) in August and 1.8 est.
Switzerland - Manufacturing PMI 65.4 in October vs 65.5
US and EU look to streamline steel and aluminium trade in break from Trump-era tariffs
A join statement from the US and EU stated: ‘the US will allow duty-free importation steel and aluminium from the EU at a historical-based volume’.
The EU will also ‘suspend related tariffs on US products.’
The partnership intends to work towards reducing the industry’s carbon intensity as well as issues with global overcapacity.
Trump’s Section 232 placed 25% tariffs on steel and 10% on aluminium whilst also reducing volumes of EU metals into the US.
Reuters reports annual volumes over 3.3mt will be subjected to tariffs.
The US imported 5mt of steel annually from EU before Trump’s tariffs in 2018.
Currencies
US$1.568/eur vs 1.1669/eur last week. Yen 114.44/$ vs 113.56/$. SAr 15.345/$ vs 15.219/$. $1.367/gbp vs $1.380/gbp. 0.750/aud vs 0.754/aud. CNY 6.403/$ vs 6.389/$.
Commodity News
Precious metals:
Gold US$1,787/oz vs US$1,796/oz last week
Gold ETFs 98.3moz vs US$98.3moz last week
Platinum US$1,031/oz vs US$1,020/oz last week
Palladium US$1,995/oz vs US$2,009/oz last week
Silver US$23.77/oz vs US$23.94/oz last week
Rhodium US$14,100/oz vs US$14,100/oz last week
Base metals:
Copper US$ 9,482/t vs US$9,572/t last week
Aluminium US$ 2,736/t vs US$2,707/t last week
Nickel US$ 19,475/t vs US$19,355/t last week
Zinc US$ 3,382/t vs US$3,319/t last week
Lead US$ 2,384/t vs US$2,385/t last week
Tin US$ 36,755/t vs US$35,800/t last week
Energy:
Oil US$83.7/bbl vs US$84.8/bbl last week
Oil prices fell in early trading today as China's release of gasoline and diesel reserves eased concerns over tight global supply, while investors took profits ahead of OPEC+’s meeting on Thursday that could increase future production targets
The drops came after China said in a rare official statement that it had released reserves of the two fuels to increase market supply and support price stability in some regions
Behind the selling was China's release of fuels reserves, which reflected Beijing's intention to stabilise oil prices, just like coal prices
Money managers cut their net long US crude futures and options positions in the week to 26 October, the US Commodity Futures Trading Commission (CFTC) confirmed on Friday
US President Joe Biden has urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure OPEC+ to increase oil supply
Focus will now turn to the next OPEC+ meeting on Thursday
Consensus expects the group to stick to its plan to add 400,000bopd of supply each month until April 2022
Saudi Arabia has cautioned that, with an unclear demand picture, there could be a 'huge uplift' in global oil stocks in 2022
Natural Gas US$5.408/mmbtu vs US5.789/mmbtu last week
Gas prices in the UK and continental Europe fell by up to 20% on Friday on further signs Russia will increase exports to the region after restricting supplies for months
Russian President Vladimir Putin has instructed Gazprom to ship more gas westward yesterday sending fuel prices lower across Europe
Gazprom’s underground storage sites in Western and Central Europe are almost empty at a time of year when they would normally be brimming
US natural gas prices also reversed course yesterday, dropping 7.5% after rising 5.5% on Wednesday
This followed an inline build in natural gas inventories
The weather is expected to be colder than normal throughout the mid-West over the next 6-10 days but then turning milder throughout most of the West Coast.
There are no significant tropical disturbances in the Atlantic that are treating to become a tropical cyclone over the next 48-hours
The EIA expects Henry Hub prices will decrease after the first quarter of 2022, as production growth outpaces growth in LNG exports, and will average US$4.01/mmbtu for the year
US exports of LNG are establishing a record high this year, a new record high anticipated for next year
The EIA expects LNG exports to average 9.7Bcf/d this year (3.2Bcf/d more than the 2020 record high of 6.5Bcf/d) and to exceed annual pipeline exports of natural gas for the first time
The year-on-year increase in LNG exports coincides with slight growth in US natural gas production
US dry natural gas production is expected to average 92.6Bcf/d this year, which is 1.1Bcf/d more than in 2020 but 0.3Bcf/d less than in 2019
Uranium UXC US$46.1/lb vs $47.8/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$104.1/t vs US$110.3/t - Iron ore prices continue to fall on weak China steel figures
Iron ore prices in Asia continued to decline on Monday as the latest economic figures from China signalled a slowdown in the steel and manufacturing industries.
The steel industry purchasing managers index dropped to 38.3 in October vs 45 in September.
The official manufacturing PMI fell to 49.2 in October vs 49.6 in September – hurt by persistently high raw material prices.
Steel production curbs in China and an energy crisis which sent coal prices to record highs has sent the market in to disarray.
Iron ore inventories at Chinese ports expanded for a fifth week to the highest since April 2019, while daily withdrawals are at multi-year lows, according to Steelhome.
Iron ore futures in Singapore traded 3.2% lower at $103/t on Monday afternoon, heading for the lowest close in six weeks.
Chinese steel rebar 25mm US$825.8/t vs US$834.6/t
Thermal coal (1st year forward cif ARA) US$101.5/t vs US$112.0/t
Thermal coal swap Australia FOB US$148.5/t vs US$174.0/t
Coking coal swap Australia FOB US$348.0/t vs US$372.0/t
Other:
Cobalt LME 3m US$56,545/t vs US$56,545/t
NdPr Rare Earth Oxide (China) US$112,852/t vs US$115,041/t
Lithium carbonate 99% (China) US$27,412/t vs US$27,469/t
China Spodumene Li2O 5%min CIF US$1,470/t vs US$1,430/t
Ferro-Manganese European Mn78% min US$2,239/t vs US$2,258/t
China Tungsten APT 88.5% FOB US$315/t vs US$315/t
China Graphite Flake -194 FOB US$605/t vs US$595/t
Europe Vanadium Pentoxide 98% 8.0/lb vs US$8.0/lb
Europe Ferro-Vanadium 80% 32.75/kg vs US$32.75/kg
China Ilmenite Concentrate TiO2 US$387/t vs US$387/t
Spot CO2 Emissions EUA Price US$68.6/t vs US$69.2/t
Battery News
CATL breaks ground for 50GWh lithium-ion battery manufacturing base
CATL broke ground on its new lithium-ion battery manufacturing base in Yichun, China’s Jiangxi province, it announced via its WeChat account.
The Yichun battery project involves an investment of 13.5bn yuan ($2.1bn) and is expected to feature an annual production capacity of 50GWh lithium-ion batteries.
Yichun has the world's largest, known reserve of lepidolite, the most abundant lithium-bearing mineral, amounting to around 2.5 million tons of proven lithium oxide.
Gotion High-Tech, another Chinese EV lithium-ion battery supplier, began work on its own lithium-ion battery project in the lithium resource-rich city as well, which is scheduled to go into operation at the end of 2022.
UK to invest in large-scale floating offshore wind ports
The UK government is setting aside up to £160m for the development of new large-scale floating offshore wind ports and factories in Wales and Scotland.
The new funding will support the Prime Minister’s plan to deliver 1 GW of energy through floating offshore wind by 2030 – nearly nine times more than the current capacity worldwide.
The UK is already a global leader in floating offshore wind.
ScotWind 1, has also been launched with a 10GW target of additional capacity and the INTOG oil and gas decarbonisation round could add a further 4GW of projects.
Commercial scale floating wind projects are expected to make up 60-70% (ORE Catapult estimate) of the total ScotWind round capacity.
Siemens Gamesa sings $400m agreement with Vietnam’s BCG Energy
Siemens Gamesa Renewable Energy has signed a preliminary agreement to supply wind turbine gear worth up to $400 million to Vietnam's BCG Energy, Vietnam's government said on Monday. (Reuters)
The memorandum of understanding is part of the Vietnamese firm's move to develop wind turbines with capacity of over 500 megawatts.
Company News
Altus Strategies* (Altus Strategies PLC (AIM:ALS, TSX-V:ALTS, OTCQX:ALTUF)) 74p, Mkt Cap £59p – Start of 35,000m drilling programme at Tabakorole
BUY – 125p
The Company reports of the start of a combined 35,000m RC,AC and auger drilling programme at the Tabakorole gold project in southern Mali.
The programme includes:
5,000m of RC infill drilling focused on the north-west extension of the deposit.
15,000m AC and 15,000m auger step out drilling testing satellite targets.
The AC and auger programmes are designed to test earlier stage geochemical anomalies, to generate tighter targets for potential deeper follow up AC, RC or diamond drilling.
The programme is being funded by Marvel, the JV partner on the project, that is in the Stage 3 of the earn in process taking its interest to 70% on spending of $3m and ~$150-200k payment to Altus.
Altus holds 49% of the Project and a 2.5% NSR royalty on Tabakorole gold production.
An updated MRE was released on the project in October demonstrating +1.0moz gold inventory (26.5mt at 1.20g/t for 1,025koz).
*SP Angel acts as Nomad and Broker to Altus Strategies
Aura Energy* (Aura Energy Ltd (ASX:AEE, AIM:AURA)) 14p, Mkt Cap £57m – September quarterly report discusses expansion potential of Tiris uranium project
Aura Energy’s report for the three months to 30th September 2021 provides a progress report on the Tiris uranium project in Mauritania and highlights the reinstatement of trading for the company’s shares on the ASX which occurred on 23rd September following a protracted suspension.
At Tiris, the company issued an updated DFS incorporating revised capital cost estimates to reflect 2021 costs as well as a 10% increase in the mineral resources estimate “bringing the total JORC Resource to 56 Mlbs (at a 100 ppm U3O8 lower cut-off grade)”.
The revised DFS, announced in August, confirmed an operating cost estimate of US$25.43/lb of U3O8 production, including contract mining costs of US$7.16/lb, on a cash basis and US$29.81/lb on an all-in-sustaining basis and estimates that based on a 15 years mine life and treating 1.25mtpa of ore to produce an average of 823,000lbs of U3O8 annually, at a uranium price of US$60/lb the project is expected to generate an after tax NPV8% of US$79.9m and IRR of 22% and pay-back in 4 years confirming the Tiris project as “as a low capital cost development opportunity”.
Continuing exploration and water well drilling and hydrological studies continue and assay results from the vanadium study which offers a potential second revenue stream are “expected before the end of the 2021 calendar year”.
Aura Energy has also secured a US$10m “Offtake Financing Agreement” with Curzon Uranium Trading which “complements the Uranium Offtake Agreement executed with Curzon in January 2019[1], for the sale of 800,000 pounds or uranium production at fixed prices, 750,000 pounds at market linked pricing, and a further 1.05 million pounds of uranium production available to Curzon as optional volumes at fixed and market pricing, with the average price above US$44 per pound U3O8”.
Describing “The September 2021 Quarter was a monumental period for Aura”, Managing Director, Peter Reeve, said that “With the sentiment towards uranium and nuclear power shifting rapidly amongst investors, we see considerable potential to further expand our resource, production throughput and undertake further offtake finance agreements”.
Thanking shareholders for their continuing support he said that “we look forward to an exciting period to come as we continue to advance Tiris to near term production and capitalise the rapidly growing demand for carbon free energy”.
Conclusion: The September Quarterly report highlights the potential to expand the mineral resource and production of the Tiris uranium project as sentiment towards nuclear power shifts.
*SP Angel acts as Nomad and Broker to Aura Energy
Galan Lithium (Galan Lithium Ltd (ASX:GLN)) A$1.45, Mkt cap A$419m – Permits received from Ministry of mines for Stage 1 pilot plant at Hombre Muerto West in Argentina
Galan Lithium reports it has received permits from the Ministry of Mines in Catamarca to build its Stage 1 pilot plant at its Hombre Muerto West lithium brine project in Argentina.
The project has 2.3mt of lithium carbonate equivalent grading a high - 946mg/l
The mineral resource inventory hosts 3.0mt grading 858mg/l
PEA: production 20,000tpa
Op costs US$3,518/t Li2CO3 eg carbonate
Capex US$338m +30% contingency
The company has cash of A$62m
Hombre Muerto West is located on the Argentine side of the, so-called, South American Lithium Triangle in Argentina.
40% of global lithium production comes from brines in the Atacama and Hombre Muerto Salara
Livent (LTHM $28.2, Mkt cap US$4.6bn) which was part of FMC and listed in the US in March 2019 operates the Fenix lithium mine in the Salar Del Hombre Muerto in Argentina.
The Fenix lithium mine started in 1998.
KEFI Gold and Copper* (KEFI Gold and Copper plc (AIM:KEFI)) 1.2p, Mkt Cap £25m – Tulu Kapi development timeline update
The Company updates on its negotiations with the Ministry of Mines regarding the Tulu Kapi development schedule following a security incident in September/October.
The Company reports that the team has responded formally and also provided detailed briefings with the Ministry with regards to the temporary suspension of site access for the project development.
The site access is expected to have been restricted for around two months with necessary security assessment work to be carried over the next month.
The team estimates the former development timeline is being delayed by three months with project development activities expected to commence in December 2021 with project commissioning planned to start in 2023.
*SP Angel act as Nomad and Broker to KEFI Gold and Copper
Power Metal Resources* (Power Metal Resources PLC (AIM:POW)) 1.8p, Mkt Cap £22.8m – Power Metal acquires Pilot Mountain project in Nevada
Power Metal reports that its wholly owned subsidiary Golden Metal Resources has exercised its option to acquire a 100% interest in the Pilot Mountain project in Nevada, USA.
Power Metal will issue 8,118,920 new Ordinary Shares at a price of 2.5p for a total of US$1.65m to Thor Mining, with the shares subject to a minimum 6 month hold period, while also paying Thor $115,000.
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 will issue Thor Mining with a further US$500,000 of consideration in new Ordinary Shares if Golden Metal publishes a JORC or 43-101 compliant resource at Pilot Mountain which increases against current declared levels by 25% across total indicated and inferred categories within two years after the Agreement date.
Paul Johnson, Chief Executive Officer of Power Metal Resources commented: “Pilot Mountain is a project I am familiar with having served on the board of Thor Mining PLC (AIM:THR, OTCQB:THORF, ASX:THR) 2016-2018 when various work was undertaken at the Project and much operational progress secured. A visit to site in November 2016 clearly demonstrated the scale of the project and our recent work as part of the due diligence process has highlighted dual upside potential from exploration and development perspectives. We hope to articulate much more on our recent findings and forward plans shortly.”
*SP Angel acts as nomad and broker to Power Metal Resources
Mkango Resources* (Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)) 32.3p, Mkt Cap £47.7m – Mkango closes Talaxis transaction to acquire 100% of Songwe Hill and Maginito
Mkango reports it has received final approval from the TSX Venture Exchange in respect of the transaction announced on 5 August 2021 whereby Mkango has acquired the 49% interest of Talaxis in Lancaster Exploration (which owns the Songwe Hill Rare Earths Project in Malawi) and Talaxis' 24.5% interest in Maginito Limited, which holds a 25% interest in rare earth magnet recycler HyProMag Limited for common shares in the Company aggregating to 54,166,666 Shares.
As a result of the Acquisition, Mkango owns 100% of the shares of Lancaster and 100% of the shares of Maginito.
Mkango has also received final approval from the TSX Venture Exchange in respect of the issuances of 2,916,666 Shares to Mr Derek Linfield, Chairman of Mkango, and 1,666,666 Shares to Resource Early Stage Opportunities Company.
Following the completion of the transaction, Talaxis will own 69,452,381 Shares, representing approximately 32.4% of Mkango.
Mkango has entered into a lock-in deed with Talaxis which states that for so long as it holds 10% or more of the Company's Shares, Talaxis will not, during the first 12 months following the Acquisition, sell or transfer any of its Shares, other than pursuant to certain limited exceptions.
Restoring 100% ownership over Songwe Hill brings Mkango's structure in line with peers, providing greater transparency for investors while increasing ownership of Maginito to 100% provides greater exposure to HyProMag and the rare earth recycling market, which the board expects to have substantial growth potential.
Mkango expect the consolidation to provide greater integration between the mining, separation and recycling businesses and increasing synergies along the value chain.
The completion of the transaction means Talaxis is no longer required to finance the completion of a Feasibility Study for Mkango's Songwe Hill.
*SP Angel acts as Nomad and Broker to Mkango Resources
Rambler Metals and Mining* (Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB)) 26.25p, Mkt cap £29.0m – Closing of US$22m debt financing for the Ming Mine redevelopment
(Rambler owns 100% of the Ming Copper-Gold Mine)
In what CEO, Toby Bradbury described as “a significant milestone” in the redevelopment of its Ming mine in Newfoundland, on Friday evening Rambler Metals announced that its had completed its planned US$22m loan-note financing with Newgen Resources.
The 3-year secured financing, which attracts interest at a rate of 8% plus the greater of the US$ 3 month LIBOR rate or 1.75% is in three tranches:
US$12.4m on the date of announcement, 29th October;
A second US$1.8m tranche on 5th November and
A third tranche of US$7.8m by 31st December 2021.
The first tranche “includes rollover of the existing senior debt of US$5.0 million from a fund advised by West Face Capital Inc. …and bridge loan of US$1 million … plus 5% early repayment premium”.
Dr. Bradbury acknowledged the support of both Newgen and West Face Capital and described the loan financing as enabling the completion of “the redevelopment of the Ming Mine … [to] …bring the operation into an efficient and sustainable production in the near term”.
He also acknowledged the continuing support of “our suppliers and business partners” over the time required to close the financing.
Also on Friday, Rambler Metals issued its financial results for the 6 months to 30th June 2021 reporting an operating loss of $2.1m (H1 2020 – loss of $6.6m and a pre-tax loss of $4.8m (H1 2020 – loss of $7.6m).
The company reports that it generated a positive operating cash flow of $0.7m compared to an operating cash outflow of $3.2m in H1 2020.
Improved copper and gold prices increased revenue for the period by 5.5% to $13.4m while unit cash costs improved to $3.01/lb (2020 -$3.06/lb).
Commenting on the results, Dr. Bradbury emphasised that Rambler Metals has focused on “remedial works, improving equipment availability, and mine redevelopment”.
He said that “We have invested $8.4 million in capital development and property, plant and equipment in H1 2021 compared to $3.3 million in H1 2020” and said that ”most of the remedial works have been completed by the end of Q3 2021 and our equipment availability has increased significantly compared to the first quarter of this year”.
“By the end of Q4 2021, we are targeting completion of the development for 735L and 760L of the Lower Footwall Zone and 770L and 790L of the Upper Footwall Zone, and financial results are expected to continue to strengthen as operational efficiencies improve and revenues increase with access to multiple ore production areas”.
Conclusion: Interim results show operational and financial progress as the Ming Mine redevelopment programme starts to deliver. The conclusion of the loan financing provides the financial resources to accelerate the programme towards delivering multiple production faces and the planned 1,350tpd processing rate as well as continuing the exploration which is expanding the mineralisation footprint and delivering improved grades at depth.
*SP Angel act as Nomad and broker to Rambler Metals & Mining
Rockfire Resources (Rockfire Resources PLC (LSE:ROCK)) 0.86p, Mkt Cap £8.5m – Preliminary results from the Copperhead project
Although assay results for the first two drillholes at the Copperhead project in northern Queensland have still to be received, Rockfire Resources reports that it has identified more than 1,200 individual veins bearing the copper mineral, chalcopyrite, in its first three drillholes.
The company says that it has observed “copper and molybdenum sulphides…in all four holes completed to date” and that “As a result of our increasing knowledge of the deposit, the fifth cored drill hole (BCH005), which is currently in progress will be the deepest hole drilled into the system to date”.
Photographs of drill core which accompany today’s announcement PowerPoint Presentation (londonstockexchange.com) show chalcopyrite mineralisation and the company explains that “Individual copper-bearing veins range in width from 1 mm to 2.5 cm and occur up to 6 veins per metre”.
The company confirms that its drilling is “targeting the discovery of the main porphyry source as the Company drills deeper into the mountain”.
Chief Executive, David Price, explained that “With each hole drilled, our knowledge of the Copperhead porphyry system is increasing. Structural recordings of copper and molybdenum-bearing veins are providing information and vectors for planned future holes”.
Conclusion: Today’s announcement mirrors a similar one issued after the completion of the first two holes in late September. Visually encouraging mineralisation will need to be verified by assay results which we await with interest.
W Resources (W Resources PLC (AIM:WRES)) 6.65p, Mkt Cap £8m – Regua mining licence
W Resources has announced the receipt of a mining licence for its Regua tungsten project in Portugal which the company describes as a “high-grade, development-ready tungsten project with low capital cost”.
The updated mineral resource estimate for Regua shows a total of 4.47mt at an average grade of 0.27% tungsten trioxide “including an indicated resource of 3.74 Mt at a grade of 0.28% WO3 ” which W Resources describes as “circa three times that of the ore grade at La Parrilla … [W Resources’ operating tungsten mine in Spain] … and an inferred resource of 0.72 Mt at a grade of 0.21% WO3”.
The company plans to now submit its environmental study for Regua during Q4 2021 and says that “Plant design and procurement activities were near completion in advance of construction activities which had to be rescheduled until the COVID-19 restrictions were lifted and the mining licence awarded”.
W Resources says that, if there are no Covid19 related delays, it expects to start production at Regua “in H2 2022, with annual production estimated to reach circa 1,000 tonnes of tungsten concentrate per annum”.
Conclusion: Approval of the mining licence at Regua clears the way for submission of the environmental permit applications which, if approved, as W Resources expects, should lead to initial production during H2 2022.
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
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W1S 2PP
*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)
+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
Sources of commodity prices
Gold, Platinum, Palladium, Silver
BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel
Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt
LME
Oil Brent
ICE
Natural Gas, Uranium, Iron Ore
NYMEX
Thermal Coal
Bloomberg OTC Composite
Coking Coal
SSY
RRE
Steelhome
Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite
Asian Metal
DISCLAIMER
This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.
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Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.
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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%