SP Angel . Morning View . Tuesday 02 11 21
Funds buying Gold as collapse in iron ore prompts caution in other metals
AEX Gold (AEX Gold Inc (AIM:AEXG, TSX-V:AEX)) – AEX makes good progress on drilling at the Nalunaq gold mine in Greenland
Gold Star Resources (Golden Star Resources Ltd. (USA) (NYSE:GSS)) – Recommended cash offer at $3.9/share
GoldStone Resources (AIM:GRL)* (GoldStone Resources (AIM:GRL)) – Final Phase of plant construction begins as company eyes first gold pour
IAM Gold (CVE:IAG) – Convoy from Essakane gold mine in Burkina Faso attacked
IronRidge Resources* (IronRidge Resources Ltd (AIM:IRR)) – Demerger and A$7.2m raise for Ricca Resources
Oriole Resources (Oriole Resources PLC (LSE:ORR)) – Identification of priority targets for follow up soil sampling in Cameroon
Rambler Metals and Mining* (Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB)) – Repayment of Riverfort and YA II PN convertible
Scotgold Resources* (Scotgold Resources Limited (AIM:SGZ)) - BUY – Cononish on course to hit Phase 1 production capacity by YE
Serabi Gold (AIM:SRB, TSX:SBI)* (Serabi Gold (AIM:SRB, TSX:SBI)) – Senior management changes see return of key member of the Palito and Sao Chico development team
Shanta Gold (Shanta Gold Limited (AIM:SHG, OTC:SAAGF)) – Singida update with first gold reiterated for early 2023
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
Base metals are seeing more caution from investors as iron ore prices collapse on lower steel production in China
Covid infections are rising again in China leading to new lockdowns and further travel restrictions
Chinese vaccines are less effective than Pfizer and AstraZeneca though to be fair none of the vaccines do much to slow the spread of the Coronavirus
The key benefit of the vaccines is in lowering the hospitalisation rate.
Problem is Chinese cities have suffered terrible pollution for years which combined with high rates of smoking may create greater susceptibility to hospitalisation by Covid. (we are now outside our pay grade – see SP Angel Healthcare team).
Steel mills have been hit by power rationing and restrictions in many provinces.
Mills may also be taking a more cautious stance as the Evergrande debt crisis plays out
Evergrande has significant ongoing payments to make alongside several other highly indebted property developers in China.
Evergrande says it has restarted work at 40 development sites. We suspect this is finishing off old sites rather than construction of new sites.
The very large number of uncompleted and unoccupied apartments in China is a significant issue for the government which has been trying to redress the issue.
Copper subdued as traders cautious on China economic outlook and Fed meeting
3-month LME copper softens to $9,465/t as pessimism increases over the health of the global economy.
Volumes are low as traders wait for a move from the Fed, with a potential raise in rates bearish for copper’s price.
Codelco offered 2022 premiums to Chinese customers at $105/t, up 19.3% from $88/t this year. (Reuters)
On-warrant LME copper inventories remain low at 31,745t. Shanghai copper stocks remain down 80% from May at 49,327t.
China iron ore futures near year low at $93.75/t as inventories soar
Iron ore spot prices fell $9.5/t to $107/t yesterday after hitting their 10% limit.
Australian and Brazilian shipments have stabilised at higher levels, increasing 1mt to 24mt by 1st Nov (Mysteel)
Iron ore inventories at 45 ports jumped 4.05mt to 146.5mt though downstream consumption has fallen on Beijing’s steel production controls.
Steel rebar hit it’s 8% trading limit in a fall to 4,230CNY/t with HRC falling 6.6% and stainless-steel futures fell a further 1.2%.
Prices have been hit by weak demand from China’s faltering developer sector, climate-related output measures.
The US and EU announced plans yesterday to ‘restrict access to our markets for dirty steel, from countries like China’.
The EU commissioner for trade requires China’s steel to ‘meet conditions for market orientation’ and ‘the standards for low-carbon intensity products.
Magnesium: we suspect part of China’s retaliation will be to further restrict production and export of magnesium which is essential for certain ‘critical’ aluminium alloys.
China produces around 87% of magnesium and 95% of European magnesium demand.
The Chinese authorities have severely restricted production in recent weeks to save power and reduce pollution and effectively have EU aluminium alloy producers by the proverbials.
Dry bulk rates in freefall as Baltic Dry Index hits 3-month low
Vessel rates across the dry bulk sea freight index have hit a 3-month low.
Average capesize daily rates fell $1,220 to $34,845. These are used to transport 150,000t cargoes of iron ore and coal.
Rates have halved from early October highs for various vessels.
Falling rates are contributed to by sliding steelmaking ingredient prices as mill demand weakens.
Lithium Americas joins bidding war for Millennial Lithium (TSX-V:ML) with $400m rival bid
Lithium Americas yesterday announced plans to buy Canadian lithium miner Millennial for c. $400mn.
The bid comes after both CATL and Ganfeng made moves to purchase the company.
Millennial has the potential to add 24,000t of battery-grade LCE for 40 years. (Company statement).
Millennial shares rose 27% on the news.
Lithium America offered C$4.67. CATL had offered C$3.85.
CATL has been given until Nov. 16th to revise its offer. (Reuters)
Dow Jones Industrials -0.74% at 35,491
Nikkei 225 -0.96% at 28,820
HK Hang Seng -0.35% at 25,538
Shanghai Composite -1.23% at 3,518
Economics
US – US equities pause after hitting new record highs ahead of the Fed monetary policy meeting.
Equity indices were propelled higher by a series of strong quarterly earnings.
Of nearly 300 companies in the S&P 500 index nearly 90% have either met or exceeded estimates, Bloomberg reports.
Shipping hubs continue to struggle with backlogs as containers pile up at seaports from Singapore to Greece’s Piraeus, Bloomberg reports.
Close to Singapore, the backlog is reported to be >20% above normal with 53 container ships anchored off the financial and cargo-transit hub, the highest level since Bloomberg started tracking the data in April.
In port Klang in Malaysia the queue is reported to be ~15% above normal with Tanjung Pelepas at ~30%.
Jakarta’s container hub of Tanjung Priok was 6.7% above normal, and Manila’s 6.5% higher.
In the US, the dual ports of Los Angeles and Long beach kept at least 79 vessels waiting off the coast (~2% above normal).
Eurozone – October manufacturing sector growth rates revised lower, although only marginally, on a pullback in German PMIs (57.8 v 58.2 estimated previously) on the back of supply bottlenecks.
October Final Markit Manufacturing PMI: 58.3 v 58.5 estimated previously.
Peru - Peru’s largest copper mine halts operations on protests
Peru’s Antamina copper-zinc mine has suspended production since Sunday.
A roadblock organised by locals over the mine’s supposed failure to support the community.
Antamina is owned 33.7% by BHP, 33.75% by Glencore, 22.75% by Teck and 10% by Mitsubishi. It is the country’s top copper producer.
The Company has called for ‘the government and its authorities to act to re-establish order.’
Antamina produced 302,958t of copper Jan-Aug – up 25.6% this year.
The mine’s taxes represented 4% of total tax revenue for Peru.
Long-lost ‘Island of Gold’ Srivijaya found in Indonesia
Explorers have found a great haul of golden artifacts in a muddy bottom of the river Musi river in Indonesia near Palembang, ~270 miles from Jakarta.
Divers probing the muddy river bottom have hauled up hundreds of figurines, temple bells, tools, mirrors, coins and ceramics. They have found golden sword hilts and gold-and-ruby rings, carved jars and wine jugs and flutes shaped like peacocks. (Live Science).
Artifacts date from the 7th-10th centuries coinciding with the rise and fall of Srivijaya as a successful trading port.
Currencies
US$1.1597/eur vs 1.1568/eur yesterday. Yen 113.71/$ vs 114.44/$. SAr 15.382/$ vs 15.345/$. $1.365/gbp vs $0.003/gbp. 0.747/aud vs 0.750/aud. CNY 6.400/$ vs 6.403/$.
Commodity News
Precious metals:
Gold US$1,795/oz vs US$1,787/oz yesterday – continuing strong interest from funds building long positions on the prospect of low interest rates for longer and a weaker US$
Gold ETFs 98.1moz vs US$98.3moz yesterday
Platinum US$1,061/oz vs US$1,031/oz yesterday
Palladium US$2,053/oz vs US$1,955/oz yesterday
Silver US$23.97/oz vs US$24.38/oz yesterday
Rhodium US$14,100/oz vs US$14,100/oz yesterday
Base metals:
Copper US$ 9,465/t vs US$9,482/t yesterday
Aluminium US$ 2,705/t vs US$2,736/t yesterday
Nickel US$ 19,455/t vs US$19,475/t yesterday
Zinc US$ 3,325/t vs US$3,382/t yesterday
Lead US$ 2,374/t vs US$2,384/t yesterday
Tin US$ 36,615/t vs US$36,755/t yesterday
Energy:
Oil US$85.0/bbl vs US$83.7/bbl yesterday
Oil prices settled higher yesterday as expectations of strong demand and a belief that OPEC+ will not ramp up production quotas helped reverse initial losses caused by the release of fuel reserves by China
A Reuters poll showed that oil prices are expected to hold near US$80/bbl as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel
Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and OPEC+, sticking to gradual, monthly production increases of 400,000bopd, despite calls for more oil from major consumers
The increase in OPEC's oil output in October fell short of the rise planned under a deal with allies, as involuntary outages in some smaller producers offset higher supplies from Saudi Arabia and Iraq
OPEC+ is expected to stick to the 400,000bopd increase at Thursday’s meeting, with members Kuwait and Iraq in recent days voicing their support for it, saying those volumes were adequate
US President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery, part of a broad effort to pressure OPEC+ to raise supplies
In the US, Exxon and Chevron are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year
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
Natural Gas US$5.293/mmbtu vs US$5.408/mmbtu yesterday
Natural gas futures are trading slightly lower for a third session as traders continue to digest the latest weather forecasts that suggest a warm November after an initial cold spell
Gains are also being capped by a rise in production as well as a tightening in the supply deficit
Worries about Europe being undersupplied this winter are also being dampened by the pledge from Russia to supply the area with gas
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$43.8/lb vs $46.1/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$99.6/t vs US$104.1/t
Chinese steel rebar 25mm US$812.3/t vs US$825.8/t
Thermal coal (1st year forward cif ARA) US$100.0/t vs US$101.5/t
Thermal coal swap Australia FOB US$149.5/t vs US$148.5/t
Coking coal swap Australia FOB US$348.0/t vs US$348.0/t
Other:
Cobalt LME 3m US$56,545/t vs US$56,545/t
NdPr Rare Earth Oxide (China) US$112,109/t vs US$112,852/t
Lithium carbonate 99% (China) US$27,422/t vs US$27,412/t
China Spodumene Li2O 5%min CIF US$1,510/t vs US$1,470/t
Ferro-Manganese European Mn78% min US$2,221/t vs US$2,239/t
China Tungsten APT 88.5% FOB US$315/t vs US$315/t
China Graphite Flake -194 FOB US$615/t vs US$605/t
Europe Vanadium Pentoxide 98% 7.9/lb vs US$8.0/lb
Europe Ferro-Vanadium 80% 32.65/kg vs US$32.75/kg
China Ilmenite Concentrate TiO2 US$387/t vs US$387/t
Spot CO2 Emissions EUA Price US$67.0/t vs US$68.6/t
Renewables News
Tesla signs 3-year supply contract with Ganfeng Lithium
China’s Ganfeng has agreed to supply Tesla with batter-grade lithium products alongside its GFL International subsidiary. (Reuters)
Tesla joins LG Chem, Volkswagen, and BMW in inking long-term contracts with Ganfeng.
The contract will last from Jan 1st 2022-31 Dec. 2024.
Ganfeng is the world’s top lithium producer.
A filing seen by Reuters reveals sales amounts and the contract value will reflect Tesla’s purchase orders.
Ganfeng produced 15,000t of lithium carbonate, 27,000t of lithium hydroxide, 1,600t of lithium metal in 2020.
Ganfeng boosted output capacity to 43,000t/yr, 81,000t/yr, 2,000t/yr for lithium carbonate, lithium hydroxide and lithium metal respectively at June end.
It hopes to boost capacity to 200,000t/yr of LCE in 2025 and subsequently increasing this to 600,000t/yr further down the line.
Ganfeng plans to have doubled lithium hydroxide output in 2021.
Ganfeng’s Q3 net profits are up 507%, 9-month net profits up 648%.
Their shares have risen 60% this year.
Indian Prime Minister pledges India will reach net zero by 2070
India will meet a target of net zero emissions by 2070, the country’s prime minister, Narendra Modi, has told the COP26 global climate summit.
India had been one of the last remaining major economies to hold out on a net zero commitment.
Modi also announced short term commitments, promising that India would have 50% of its power generated from renewable sources by 2030.
India will also look to increase its non-fossil energy capacity to 500GW from 150GW by 2030.
The 2070 net zero target is some way behind the 2050 commitment made by the US and Europe and the 2060 commitment made by China and Saudi Arabia, but it is in line with what climate experts have modelled as the most feasible scenario for India to achieve net zero.
Equinor unveils floating wind concept for 1GW ScotWind plans
Equinor have revealed its preferred floating wind foundation design for its 1GW ScotWind plan should it win its bid.
Equinor said that the system, dubbed "Wind Semi", is a semi-submersible wind turbine foundation, that has been designed with flexibility, specifically to allow for fabrication and assembly based on local supply chain capabilities.
The “Wind Semi” has several features making it particularly suited for harsh waters, and solutions that can maximize the opportunities for the Scottish supply chain.
Increased dependability: By introducing a passive ballast system, the Wind Semi has a simple substructure design, reducing the risk of system failure and the amount of maintenance needed
Simpler, more robust design: A flat plate design that is free from bracings, heave plates and complicated nodes that are prone to fatigue cracking
Flexibility towards the supply chain: With a harbour draught of less than 10m, the Wind Semi’s turbine integration can be assembled at most industrialized ports. The Wind Semi’s simpler flat plate design enables the substructure to be built in blocks that can either be fabricated locally and/or shipped from other locations.
“At 1GW, this project would be over 30 times bigger than Hywind Scotland (30MW), the UK’s and Equinor’s first floating project and have the potential to not only position Scotland as a leader in deepwater technology but also create opportunities for both existing suppliers and new entrants to the offshore wind sector” said Equinor’s vice president for Floating Offshore Wind
Hywind Scotland was the world’s first floating wind farm, beginning production in 2017.
Company News
AEX Gold (AEX Gold Inc (AIM:AEXG, TSX-V:AEX)) 32p, Mkt Cap £57m – AEX makes good progress on drilling at the Nalunaq gold mine in Greenland
AEX Gold provides an update on its portfolio of exploration licenses in Greenland.
AEX has completed approximately 7,000m of diamond drilling in the Valley Block, with 90% of drill holes reaching target depth and intersecting the Main Vein.
Core samples have been logged and sent for testing, and the company expects to begin receiving results before the end of the year.
Four drill rigs capable of drilling through winter remain on site, targeting additional Main Vein intersections.
The company has made infrastructure improvements to the camp, bridge, and other aspects of the site, which enables year-round access and operations.
AEX has contracted Halyard Inc to complete an engineering study focused on the process plant and surface infrastructure, which is expected to be completed by the end of the year.
The team have completed field work over the wider gold and strategic mineral licenses, including geophysical, sampling and prospecting.
Greeenland Mineral License and Safety Authority has confirmed that it has awarded the Kobberminebugt licence to AEX, which will be granted once the government has signed the licence document.
The Kobberminebugt licence has attractive iron oxide copper gold and copper perspectivity, and will increase the Company’s total licence portfolio to 4,090km2
Eldur Olafsson, CEO of AEX, commented: “We continue to progress the Nalunaq Project, with drilling completed and the Main Vein strike rate supporting our geological model. Our disciplined and strategic approach is focussed on quality of metres drilled and we anticipate commissioning an updated CPR in the first half of 2022 to reflect the latest drilling results.”
“We continue to be extremely excited by the wider exploration potential of our assets, including significant gold projects as well as discoveries made in strategic minerals that include copper, platinum group metals, graphite and rare earths. The Board looks forward to being able to demonstrate the potential value of its non-gold assets in due course.”
AEX has recently update both its Corporate and exploration presentations, both of which can be found here: https://www.aexgold.com/investors/presentations/
Gold Star Resources (Golden Star Resources Ltd. (USA) (NYSE:GSS)) $3.7, Mkt Cap $425m – Recommended cash offer at $3.9/share
Chifeng Jilong Gold Mining bid in an all cash deal for Golden Star Resources offering $3.9/share or ~$470m on a fully diluted, in the money basis.
The offer represents a 24.1% premium to the closing price on Friday.
All directors and officers of Golden Star as well as La Mancha, its largest shareholder, that collectively hold ~33% of the Company support the deal and recommended other shareholders to vote in favour of the transaction.
The transaction will be subject to the approval of ~67% Golden Star investors with the special shareholders’ meeting planned to be held prior the end of the year.
The transaction is expected to close in January 2022.
Chifeng is an international precious/base metals mining company listed on the Shanghai Stock Exchange with market capitalisation of $4.3bn and reported revenues ~$660m in 2020; the Company operates five mines including the Sepon gold/copper mine (2021e production 250koz gold and 7kt copper cathode) in Laos.
Golden Star is an established gold producer running the Wassa underground gold operation in the Western Region of Ghana.
Wassa hosts 1.1moz (2.94g/t) in mineral reserves and 11.7moz (3.53g/t) in mineral resources.
The Company guided for 145-155koz at $1,150-1,250/oz AISC in 2021 (2020: 168koz at $1,003/oz) reflecting temporary challenges with the supply of high grade material from the underground on a delay to the commissioning of the new paste fill plant and weaker than planned development metres primarily due to operator availability caused by Covid-19 related issues.
The mine plan based on the latest reserves statement envisaged 177kozpa at $881/oz AISC over six year mine life.
Organic growth potential is highlighted by the PEA on the Southern Extension zone additional 11 years in life of mine at an annual average production rate of 294kozpa and $778/oz AISC; PEA estimated the extension zone to deliver NPV5% post tax $783m and IRR of 53% using $1,585/oz gold price.
The offered $3.9/sh price translates into ~$560m EV and implies Chifeng is paying ~$515/oz in reserves, ~$160/oz in M&I resources and ~$3,200/oz in normalised production (~177kozpa as per Reserve mine plan); using consensus EBIDTA22 of ~$140m, EV/EBITDA acquisition multiple comes in at ~4.0x that does not look too demanding given nearly a 12moz resource and path to organic production growth.
GoldStone Resources* (GoldStone Resources (AIM:GRL)) 12.8p, Mkt Cap £60m – Final Phase of plant construction begins as company eyes first gold pour
CLICK FOR PDF
GoldStone reports that it has completed the cold commissioning and has commenced the final phase of hot commissioning of its newly constructed 1 tonne elution plant, along with the electrowinning plant and smelting plant at the Homase Mine.
As a result of the successful commissioning of the New Plant, the Company will be resuming normal mining operations shortly and will update the market on first gold production and the Company’s updated production schedule over the coming weeks.
With respect to the Gold Loan, the company report that it will not be deemed in default under the US$3 million secured gold loan in relation to the payment due at the end of October 2021.
Interest will continue to accrue at the default rate of 17%, and AIMS has agreed that the Company is able to settle both the October and November 2021 instalments by the end of November 2021.
With respect to mining, an assessment made by the board in September month showed that the grade and tonnes mined to date are within expectations and at a total cash cost, pre-tax, of under US$600 per ounce.
GoldStone maintains its guidance of 50,000ozpa within the first 12-months of production, an increase of 300% from the original production schedule.
Emma Priestley, CEO of GoldStone Resources, commented: “Despite the many setbacks encountered this year, the construction of the elution plant and smelt house began on the 17 September 2021. To construct and commission an elution plant of this size and complexity within six weeks is a great achievement for the Homase Mine.
Conclusion: GoldStone’s decision to construct its own plant internally enables the company to strip, elute, electrowin and thereafter smelt doré bars without reliance on third parties or need to pay toll treatment. The deferring of the payment to AIMS under the conditions of the Gold Loan enables the company to use cash reserves to commence the final phase of hot commissioning of the elution plant rather than repay loans.
*SP Angel acts as Broker to GoldStone Resources
IAM Gold (CVE:IAG) C$3.44, Mkt cap C$1.7bn – Convoy from Essakane gold mine in Burkina Faso attacked
Militant action appears to be escalating in Burkina Faso following the attack of a six vehicle convoy.
The Essakane mine site remains secure with no disruption to its operation.
IAM Gold say that two people from the 33 in the convoy remain unaccounted for.
IronRidge Resources* (IronRidge Resources Ltd (AIM:IRR)) 21p, Mkt cap £118m – Demerger and A$7.2m raise for Ricca Resources
IronRidge provides an update for Ricca Resources, the entity into which the company’s gold assets will be transferred and demerged.
Ricca will receive an initial start-up capital injection of A$7m as part of the agreement for the transfer of the gold assets from the Company to Ricca
Cannacord Genuity Australia has agreed to be underwrite a A$7.2m proposed rights issue, which will act as an initial start-up cash injection for Ricca.
Eligible IronRidge shareholders will also receive a priority offer to participate in the Ricca Rights Issue at A$0.10 cents per Ricca share.
IronRidge shareholders will receive an in-specie distribution of 1 Ricca Share for every 8 IronRidge Shares held at the In-specie Distribution Record Date, currently scheduled to be 23rd November 2021.
Following the demerger, IronRidge will have a closing cash balance of A$14.2m before costs with an issued capital of 143,436,062 Shares.
IronRidge’s gold assets are located in Côte d’Ivoire and Chad, and the Company’s most advanced project is the Zaranou gold project which includes high-grade gold drilling intersections along 8km strike including:
6m at 6.44g/t gold from 132m
6m at 15.11g/t gold from 26m
4m at 5.16g/t gold from 110m
Vincent Mascolo, Chief Executive Officer of IronRidge, commented: “Canaccord’s commitment allows us to fast track the demerger in preparation for a fresh start to activity on the ground in 2022. Significant opportunities exist for Ricca across a broad portfolio of West African gold projects as the precious metals complex looks to be entering a new phase of growth. We believe that Ricca offers a new and exciting separate investment opportunity for IronRidge shareholders to capitalise upon this growth. Further updates on the proposed demerger will be provided in coming weeks.”
*SP Angel acts as Nomad to IronRidge Resources
Oriole Resources (Oriole Resources PLC (LSE:ORR)) – 0.42p, Mkt cap £8.5m – Identification of priority targets for follow up soil sampling in Cameroon
Oriole Resources reports that, following regional mapping and stream-sediment sampling, it has identified five priority targets for regional scale geochemical soil sampling within its 90% owned 3,592 km2 Central Land Package (CLP) in central Cameroon.
Sampling of a pilot area covering the eastern part of the Ndom and Mbe permits on a 400mx200m grid “is expected to be completed before the end of the year, with initial gold results expected in early Q1 2022. Sampling over the remaining grids will continue into early 2022, and further testing over Priority 2 gold zones will be subject to ongoing results”.
The company explains that “the CLP licences were initially targeted by the Company's technical team due to their apparent proximity to the dominant regional structure, the TBSZ, … [the Tcholliré-Banyo shear zone] … a major southwest-northeast-trending splay off the larger-scale Central African Shear Zone. The TBSZ and its associated shears, thrusts and faults are (according to academic literature) thought to be one of the significant structural controls for gold and other mineralisation in the region”.
Three of the five priority targets are reported to be centred over the TBSZ and CEO, Tim Livesey explained that “multiple gold anomalies identified within a number of coincident drainage basins associated with these trends, gives us great confidence that this new exploration district has the potential to yield multiple targets along these gold corridors, as we expected following our early prospectivity work in 2019 … We are now able to rapidly move the exploration programme forward to further define areas of interest”.
Conclusion: Oriole Resources is following up early-stage mapping and geochemical stream sediment sampling of prospective gold targets in central Cameroon with a more detailed programme of gridded geochemical soil sampling over 5 high-priority target areas covering a regional shear zone interpreted as a structural geological control to mineralisation.
Rambler Metals and Mining* (Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB)) 27. 5p, Mkt cap £40m – Repayment of Riverfort and YA II PN convertible
(Rambler owns 100% of the Ming Copper-Gold Mine)
CLICK FOR Flash note PDF
CLICK FOR PDF
In a release issued late yesterday afternoon, Rambler Metals reported that it has now repaid the outstanding balances of the convertible loan from Riverfort Global Opportunities and YA II PN, including the 10% early repayment premium, in its entirety.
The total repayment, which uses part of the “proceeds of the Loan Note provided by Newgen Resource Lending Inc. as announced on 29 October 2021”, amounts to US$1.1m.
In a separate announcement, also issued yesterday afternoon, the company reports the resignation of a non-executive director, Ms Belinda Labatte, who is leaving to become the full-time CEO of Lomiko Metals (TSX-V:LMR).
Non-Executive Chairman, Brad Mills, thanked Ms Labatte for her five years’ service to the company and said that “The board will consider the vacancy on the board in due course.”
In a separate announcement this morning, the company reports the award of 1.8m options to directors and senior staff. The award included 400,000 options to CEO, Toby Bradbury, 250,000 options to CFO, Eason Chen and 200,000 to each of the Vice-Presidents, Messrs Peter Mercer, Tim Sanford and Raphael Mwangobola.
Conclusion: The loan notes to Riverfort and YA II PN have been repaid, as planned and previously disclosed, from the proceeds of the Newgen financing which was announced on Friday. The conclusion of the financing with Newgen provides Rambler Metals the required financial resources to accelerate the Ming Mine redevelopment programme towards delivering multiple production faces and the planned 1,350tpd processing rate as well to continue 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
Scotgold Resources* (Scotgold Resources Limited (AIM:SGZ)) 69p, Mkt Cap £41m – Cononish on course to hit Phase 1 production capacity by YE
BUY
The high grade Cononish gold/silver mine produced ~64t of concentrate containing ~600oz gold and >2,450oz of silver last month.
The first ball mill relining was completed in October paving the way to ramp up throughput rates through the remainder of the year.
Gold production is expected to accelerate towards Phase 1 capacity (~973oz per month) until the end of the year.
November/December guidance is for 1,300-1,950oz of gold for two months combined.
In addition, gravity gold production is continuing on track for delivery to the refiners.
October marks a third consecutive month when the mine showed operating profit.
The Company is working on the 2022 mine plan and strategic initiatives to increase production including mapping new cut and fill stoping areas and adjustments at the processing plant to achieve higher throughput rates.
2022 plan will be announced early next year.
Separately, Nat le Roux announced he is stepping down as Non-Executive Chairman, a position he held since Mar/15, but will remain on the Board as Non-Executive Director; Nat holds ~42% interest in the Company.
Peter Hetherington, a Non-Executive Director, will be replacing Nat as Non-Executive Chairman.
Conclusion: Debottlenecking initiatives implemented by the team sees Cononish ramping up production with the mill delivering ~600oz in October despite being a week offline due to maintenance relining works. The Company expects the mine to reach Phase 1 production capacity (~970ozpm) by year end yielding 1,300-1,950oz in the final two months.
*SP Angel act as Nomad and broker to Scotgold Resources. A number of SP Angel analysts have visited the Cononish gold mine
Serabi Gold* (Serabi Gold (AIM:SRB, TSX:SBI)) 73p, Mkt Cap £55.3m – Senior management changes see return of key member of the Palito and Sao Chico development team
Serabi Gold reports the departure of, Chief Operating Officer, Roney Almeida, and the appointment of Mr. Helio Tavares as General Manager – Projects and Operations.
· Thanking Mr. Almeida for “his dedication and the professionalism he has brought to Serabi over the past three years” CEO, Mike Hodgson wished “him well in his future endeavours”.
· Commenting on the appointment of Helio Tavares, who will report to him directly, Mr. Hodgson explained that he will be re-joining Serabi having been previously “responsible for the redevelopment of Palito in 2013 and construction of the Sao Chico operation” and serving as General Manager at Palito for five years.
· In his new role, we imagine that Mr. Tavares will have an important part to play in the Coringa mine development where previous announcements indicate that the Serra ore zone is likely to be intersected by the underground development during the current quarter.
Mr. Hodgson also confirmed that “The Board has elected to discontinue the position of COO at this time and those responsibilities will be shared between myself and Helio”.
Conclusion: The appointment of a key member of the original development team at Palito and Sao Chico as General Manager overseeing projects and operations should provide a smooth management transition following the departure of the COO.
*An SP Angel analyst has visited Serabi’s gold mining operations in Brazil
Shanta Gold (Shanta Gold Limited (AIM:SHG, OTC:SAAGF)) 12.8p, Mkt Cap £134m – Singida update with first gold reiterated for early 2023
The team reiterated project construction remains on track with first production targeted for early 2023 adding a second operating mine to the Group’s portfolio.
Singida represent the near term source of growth taking average annual production past +100koz mark in 2023.
The team completed ~1,500m of phase one grade control drilling improving confidence in the strength in the near term production profile at Singida.
Crushing circuit is in transit with expected site delivery this or next month.
Mill site preparation works to start in Dec/21 with installation scheduled for May/22.
Tailings storage facility design is completed with all permits received to commence construction.
Key infrastructure items including power, water, buildings and fencing are progressing on track.
Jiten Divecha joins Shanta as Tanzanian General Manager bringing 20 years of experience in the industry having previously worked as Operations Manager for African Barrick Group in Tanzania.
No.1 in Copper: “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”
No1. In Gold: “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”
The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020
Analysts
John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490
Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484
Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk - 0203 470 0474
Joe Rowbottom – Joe.Rowbottom@spangel.co.uk - 0203 470 0486
Sales
Richard Parlons –Richard.Parlons@spangel.co.uk - 0203 470 0472
Abigail Wayne – Abigail.Wayne@spangel.co.uk - 0203 470 0534
Rob Rees – Rob.Rees@spangel.co.uk - 0203 470 0535
Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
SP Angel
Prince Frederick House
35-39 Maddox Street London
W1S 2PP
*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)
+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
Sources of commodity prices
Gold, Platinum, Palladium, Silver
BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel
Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt
LME
Oil Brent
ICE
Natural Gas, Uranium, Iron Ore
NYMEX
Thermal Coal
Bloomberg OTC Composite
Coking Coal
SSY
RRE
Steelhome
Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite
Asian Metal
DISCLAIMER
This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.
This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.
This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.
This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.
Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.
Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.
SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).
SPA is registered in England and Wales with company number OC317049. The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP. SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.
MiFID II - Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.
A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).
SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%