SP Angel . Morning View . Wednesday 03 11 21
EV metals rise despite China lockdowns, food shortages, Evergrande crisis
Altus Strategies* (Altus Strategies PLC (AIM:ALS, TSX-V:ALTS, OTCQX:ALTUF)) - BUY – 125p – Shallow high grade drilling results at Diba
Anglo American (Anglo American PLC (LSE:AAL)) – Duncan Wanblad appointed as CEO
Empire Metals* (Empire Metals Ltd (AIM:EEE)) – Drilling confirms significant gold anomaly at Nugget Patch
KEFI Gold and Copper* (KEFI Gold and Copper plc (AIM:KEFI)) – Tulu Kapi mining license reconfirmed; State of Emergency declared in the country
Mkango Resources* (Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)) – Mkango increases stake in pioneering REE recycler
Cornish Metals* (Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF)) – Latest drilling at United Downs intersects multiple structures and high grades
Greatland Gold (Greatland Gold PLC (AIM:GGP, OTC:GRLGF)) – Identification of Havieron analogues in recently acquired tenements
Kodal Minerals* (Kodal Minerals PLC (AIM:KOD)) – Kodal buys in 10% minority interest in Bougouni lithium project in Mali
China – China facing Covid lockdowns, food shortages from flooding, power restrictions and the Evergrande debt crisis
Tangshan city has been ordered to cut production as pollution rises. Tangshan city is a major area for production of cement and steel.
China is locking down again in response to Covid.
50% of Beijing’s flights cancelled due to Covid restrictions
Beijing has banned entry to those coming from cities/countries with a single confirmed case.
China has reported 93 new locally transmitted cases. Total cases at 1000 (Tuesday data)
Speculation that China may be preparing to invade Taiwan – we sincerely hope this is not the case
Chinese vaccines were said to be relatively ineffective in the fight against Covid though a new Chinese vaccine is reported to be 92% effective against the Gamma variant and 59% effective against the Mu variant
China has advised families to stockpile food for winter after Summer flooding destroyed crops
Recent flooding in China has exacerbated fears of food shortages in China this winter.
The recent rains follow on from torrential flooding earlier this year which caused China to buy in food stocks on international market.
Extreme weather in Shandong including tornados have hit vegetable crops while flooding in Henan province destroyed much of the wheat harvest over the summer.
Evergrande faces imminent series of interest payment deadlines
Chinese property developments fell 13.5% yoy in September followed similarly by sales measured by floor space
Production of cement fell 13% and steel output fell 14.8%. Was this really due to anti-pollution and lower coal-fired power generation?
Evergrande faces $8.1bn in interest and principal payments for its dollar-denominated bonds before 2022-end. (FT)
Evergrande had cash and cash equivalents of $13.6bn in June.
Chinese high-yield bond market yields stood at 23.5% on Monday.
Central China Real Estate and Yango Group made last-minute interest payments yesterday. (SCMP)
Sinic Holdings will default if it fails to meet a deadline this month.
Copper rallies on low inventories rising 1.4% to $9,661.
LME stocks remain near 1998 lows at 32kt. Shanghai stocks remain down 80% from May.
Antamina protestors lift blockade in Peru
In Chile copper production fell 6.9% yoy to 451,000t
Codelco raising its 2022 premiums in China over LME cash prices by 20% to US$105/t from US$88 last year in line with other regional premiums
Dow Jones Industrials +0.39% at 36,053
Nikkei 225 -0.43% at 29,521
HK Hang Seng -0.30% at 25,025
Shanghai Composite -0.20% at 3,499
Economics
Global equities near record levels before Fed meeting
MSCI all-country world equity index remains 0.01% off record peaks.
Asia stocks remain 13% lower than Feb. peaks following Beijing’s regulatory rout and the property sector’s ‘deleveraging’ efforts. China’s rising covid cases are adding to concerns.
The Fed meets today at 6:00pm GMT. The Fed is expected to begin to taper this month as CPI continues to rise.
A $15bn/month taper is expected by the market.
Focus will be on hints of a timeline for a rise in interest rates. Analysts are divided over the potential for a 2022 rate hike or a delay to 2023.
10-yr yields – 1.525%. DXY – 94.01
Gold hovers around the $1,780 with losses pared by a subdued dollar.
JP Morgan global composite 54.3 3 in October vs 54.1 in September
US FOMC tonight, we feel the US will hold back on any rate rise given significant uncertainties in China for now
ISM 60.8 in October vs 61.1 in September
Markit 58.4 in October vs 60.7 in September
Construction spending fell 0.5% vs 0.1% in September
US annual inflation rose 5.4% driven largely by energy prices which rose 22.4%,
Uni of Michigan consumer sentiment index has declined 17poitnts since Apr.
China – Private sector growth picks up in October with both manufacturing and services posting stronger numbers, although, news over new restrictions are likely to cool growth momentum moving forwards.
Official Manufacturing PMI 49.2 3 in October vs 49.6 in September
Caixin China 50.6 3 in October vs 50.0 in September
The Official China nonmanufacturing index 52.4 3 in October vs 53.2 in September
More provinces in China are fighting Covid-19 than at any time since the start of the pandemic in Wuhan in 2019, Bloomberg writes.
Caixin Services PMI: 53.8 v 53.4 in September and 53.1 est.
Caixin Composite PMI: 51.5 v 51.4 in September.
ASEAN - Manufacturing PMI 53.6 in October from 50.0 in September
Japan - Manufacturing PMI 53.3 in October vs 51.5 in September
Taiwan - Manufacturing PMI 54.7 3 in October vs 55.2 in September
South Korea - Manufacturing PMI 50.2 in October vs 52.4 in September
Oct South Korean CPI rose 0.1% (Spt0.5%), yoy 3.2% (2.5%),
India - Manufacturing PMI 55.9 in October vs 53.7 in September
UK - Manufacturing PMI 57.8 in October vs 57.1 in September
EU - Manufacturing PMI 58.3 in October vs 58.6 in September
Inflation rose to 3.4% annualised in October as energy costs rose 17.4%,
Germany - Manufacturing PMI 53.6 in October vs 55.0 in September
Retail sales fell 2.5% in September vs 1.2% in August
France - Manufacturing PMI 53.6 in October vs 55.0 in September
Poland - Manufacturing PMI 57.8 in October vs 58.4 in September
Russia - Manufacturing PMI 51.6 in October vs 49.8 in September
Turkey - Manufacturing PMI 51.2 in October vs 52.5 in September
South Africa - Manufacturing PMI 53.6 in October vs 54.7 in September
Brazil - Manufacturing PMI 51.7 in October vs 54.4 in September
Canada - Manufacturing PMI 57.7 in October vs 57.0 in September
Mexico - Manufacturing PMI 49.in October vs 48.6 in September
Freight - Baltic Dry Cargo index – fell 20% last week marking a 30% fall through October
Capesize vessel rates fell US$1,220 to US$34,815/day for 150,000t cargoes.
Avis stock doubles on earnings beat and short squeeze
Avis shares soared 100% on an earnings report of $10.74 Q3 EPS.
Net income soared from $45mn in 3Q20 to $674mn Q321. Revenue up 96% over prior year quarter.
A rise in Avis’ earnings reflects the US economy’s rebound in travel demand.
Volumes soared on the news. 20.5% of Avis’ float was short, triggering short sellers to cover and exacerbating the upwards move.
The move is reminiscent of stratospheric rises in previously downbeat ‘meme-stocks’ including AMC and GME.
Currencies
US$1.1587/eur vs 1.1597/eur yesterday. Yen 113.86/$ vs 113.71/$. SAr 15.351/$ vs 15.382/$. $1.361/gbp vs $1.365/gbp. 0.745/aud vs 0.747/aud. CNY 6.397/$ vs 6.400/$.
Commodity News
Precious metals:
Gold US$1,784/oz vs US$1,792/oz yesterday
Gold ETFs 98.1moz vs US$98.1moz yesterday
Platinum US$1,049/oz vs US$1,061/oz yesterday
Palladium US$2,028/oz vs US$2,053/oz yesterday
Silver US$23.57/oz vs US$23.97/oz yesterday
Rhodium US$14,100/oz vs US$14,100/oz yesterday
Base metals:
Copper US$ 9,661/t vs US$9,465/t yesterday
Aluminium US$ 2,731/t vs US$2,705/t yesterday
Nickel US$ 19,725/t vs US$19,455/t yesterday
Zinc US$ 3,345/t vs US$3,325/t yesterday
Lead US$ 2,386/t vs US$2,374/t yesterday
Tin US$ 37,390/t vs US$36,615/t yesterday
Energy:
Oil US$83.3/bbl vs US$85.0/bbl yesterday
Oil prices fell in early trading today as industry data pointed to a large build in crude oil and distillate stocks in the US as pressure mounted on OPEC+ to increase supply
US President Joe Biden, speaking at a climate summit in Glasgow, blamed a surge in oil and gas prices on a refusal by OPEC nations to increase production
OPEC+ meets tomorrow to review its policy and is expected to reconfirm plans for 400kbopd monthly increases
US crude and distillate fuel stocks rose last week while gasoline declined, according to the API
Crude stocks rose by 3.6MMbbls for the week ended 29 October
Gasoline inventories fell by 552kbbls, and distillate stocks rose by 573kbbls
Analysts polled by Reuters had expected crude oil inventories to have risen last week
In a sign that high prices are encouraging more supply elsewhere, BP announced that the Company will ramp up investments in its onshore US shale oil and gas business to US$1.5bn in 2022 from US$1bn this year
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
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$5.541/mmbtu vs US$5.293/mmbtu yesterday
Natural gas futures are gaining ground for the first time in four sessions as overseas supply shortages converged with forecasts for colder weather and stronger domestic demand by mid-November
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$96.5/t vs US$99.6/t – iron ore prices continue to fall, halving since their summer high
Chinese steel rebar 25mm US$795.6/t vs US$812.3/t - Spanish steelmaker Acerinox sees rise in profit on strong demand
Acerinox’s net profit rose 12x 1Q21-3Q21 to $432mn from $31mn.
On track for best annual results in 51 years.
Rising energy costs offset by booming global demand for stainless steel and alloys, despite inflated prices.
Thermal coal (1st year forward cif ARA) US$101.0/t vs US$1,000.0/t
Thermal coal swap Australia FOB US$137.0/t vs US$149.5/t
Coking coal swap Australia FOB US$345.0/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$112,169/t vs US$112,109/t
Lithium carbonate 99% (China) US$27,436/t vs US$27,422/t
China Spodumene Li2O 5%min CIF US$1,550/t vs US$1,510/t
Ferro-Manganese European Mn78% min US$2,184/t vs US$2,221/t
China Tungsten APT 88.5% FOB US$315/t vs US$315/t
China Graphite Flake -194 FOB US$625/t vs US$615/t
Europe Vanadium Pentoxide 98% 7.8/lb vs US$7.9/lb
Europe Ferro-Vanadium 80% 32.65/kg vs US$32.65/kg
China Ilmenite Concentrate TiO2 US$387/t vs US$387/t
Spot CO2 Emissions EUA Price US$66.0/t vs US$67.0/t
Battery News
UK + India plan globally connected power grid in electrification drive – this is going to use more aluminium and copper
Britain and India announced plans at Cop26 to connect the world’s power grids.
This would spread excess renewable energy to areas with deficits.
The initiative was backed by 80 countries (including US) and is seen as a fundamental route to 1.5 warming cap.
Dubbed ‘One Sun One World One Grid’ – aims for a connected network of solar power grids.
Connecting global grids across extreme distances will require extreme quantities of metals including copper, nickel and tin.
Goldwind announce 12MW Offshore Wind Turbine
Goldwind has launched a 12MW offshore wind turbine, along with several new onshore models of as part of the company’s launch of a new generation of medium-speed permanent magnet smart wind turbines.
The first units of the GWH 242-12MW offshore wind turbine series are expected to be rolled out in 2023.
For now, Goldwind is only targeting the Chinese offshore wind market with the 12MW model.
COP26 – Global leaders sign deal to end deforestation
More than 100 global leaders have pledged to halt and reverse deforestation and land degradation by 2030, supported by $19bn in funding to invest in protecting and restoring forests.
The agreement, announced in a joint statement on Monday, was backed by the leaders of countries including Brazil, Indonesia and the Democratic Republic of Congo, which collectively account for 85% of the world's forests.
The Declaration on Forest and Land Use will cover forests totalling more than 13m sq miles, according to a statement released by the UK prime minister's office on behalf of the leaders.
The world lost 99,600 sq miles (258,000 sqkm) of forest in 2020, according to WRI's deforestation tracking initiative Global Forest Watch – an area larger than the United Kingdom.
Biden announces plans to cut global methane emissions
US president Joe Biden has unveiled a multinational plan to control methane, setting out measures to cut global methane emissions by 30%, from 2020 levels, by 2030.
The Global Methane Pledge is an alliance of nearly 100 countries including two-thirds of the global economy and half of the top 30 major methane emitting countries – China, India and Russia have not joined the pact.
The pledge was first announced by Biden in September and officials have since been working to increase the number of signatories behind the pledge.
Company News
Altus Strategies* (Altus Strategies PLC (AIM:ALS, TSX-V:ALTS, OTCQX:ALTUF)) 73p, Mkt Cap £59m – Shallow high grade drilling results at Diba
BUY – 125p
The Company is reporting drilling results as the team restarted the ~17,500m drilling programme following the end of the rainy season at its 100% owned Diba gold project in western Mali.
Selected intersections from two Diamond Drilling holes include:
21.9g/t over 10.2m from 28.0m including 72.2g/t over 3.0m from 31.0m (21KSDD-001);
2.03g/t over 25.4m from 43.4m including 3.23g/t over 12.3m from 56.5m (21KSDD-001);
1.43g/t over 26.7m from 17.3m including 4.38g/t over 2.1m from 29.0m (21KSDD-002);
Both holes are located within the Diba MRE testing the extension of the high grade domain.
The plan is to complete 1,100m of DD (7 holes) and 9,000m of RC (60 holes) drilling focused on both infill and step out drilling testing along strike and down dip extensions.
DD drilling should also provide oriented core for a better structural understanding of the deposit as well as offer data on variations between oxide, transitional and fresh rock domains.
Additionally, the team is planning 2,500m of Air Core drilling testing satellite targets adjacent to the Diba deposit.
Conclusion: Shallow infill drilling returns high grades at the wholly owned Diba Gold Project as the team restarts drilling following the end of the rainy season. The Company is continuing with both infill and step out drilling at the project with a view to grow the existing MRE (403koz at 1.22g/t) and the latest Diba PEA.
*SP Angel acts as Nomad and Broker to Altus Strategies
Anglo American (Anglo American PLC (LSE:AAL)) 2,804p, Mkt Cap £38bn – Duncan Wanblad appointed as CEO
Anglo American has named South African Duncan Wanblad as its new chief executive, replacing Mark Cutifani who is stepping down after nine years in the role.
Mr Wanblad is currently head of strategy and business development and holds a degree in Mechanical Engineering from the University of Witwatersrand in South Africa.
Mr Wanblad will have to deliver on his predecessor’s road map to make Anglo American carbon neutral by 2040, including an ambition to reduce its Scope 3 emissions by 50%.
Mr Cutifani will remain an employee until June 2022 in order to support the transition.
Empire Metals* (Empire Metals Ltd (AIM:EEE)) 1.55p, Mkt cap £5.6m – Drilling confirms significant gold anomaly at Nugget Patch
Empire reports the results of the recently completed drilling programme at the Central Menzies Gold Project in Western Australia, over which Empire holds an option to acquire a 75% interest.
Drilling focused on two mineralised trends known as Nugget patch and Teglio, prioritised form previous exploration work.
At Teglio, 14 RC holes were drilled for a total 1,189m with highlights including:
Hole CMRC21-001 7m @ 0.50 g/t from 34m
Hole CMRC21-002 3m @ 0.36 g/t from 46m
Hole CMRC21-005 3m @ 0.86 g/t from 45m
Hole CMRC21-013 3m @ 0.47 g/t from 44m
At Nugget Patch, a further 13 holes were drilled for 1,190m with highlights including:
Hole CMRC21-015 1m @ 4.44 g/t from 48m
Hole CMRC21-016 2m @ 0.81 g/t from 61m
Hole CMRC21-020 3m @ 0.53 g/t from 7m
Hole CMRC21-020 2m @ 1.51 g/t from 49m
Hole CMRC21-023 2m @ 1.18 g/t from 50m
Hole CMRC21-026 2m @ 0.9 g/t from 43m
Drilling at Teglio showed shallow gold mineralisation in CMRC21-001 and CMRC21-002, coinciding with the southern end of a recently defined and coherent gold-in-soil anomaly at Teglio North which extends over some 800m strike length.
The southern line a Teglio also intersected significant gold anomalism, and soil sampling shows this trend may continue further to the south before the Teglio trend goes under transported cover.
Drilling at Nugget Patch showed a consistent NNW-trending zone of oxide gold mineralisation was confirmed along the western flank of the Nugget Patch prospect. The gold anomaly extends for the full 500m strike length tested in this programme and remains open to the north and south.
Empire say further drilling is warranted along the western flank of the Nugget Patch trend and adjacent to the historical Teglio mine shaft based on the results of the initial RC drill programme.
Planning of follow-up work has commenced and further announcements regarding the details of this programme and the timing will be made shortly.
*SP Angel acts as Nomad and Broker for Empire Metals
KEFI Gold and Copper* (KEFI Gold and Copper plc (AIM:KEFI)) 1.1p, Mkt Cap £24m – Tulu Kapi mining license reconfirmed; State of Emergency declared in the country
The Company reports that the mining license for the Tulu Kapi Gold Project was reconfirmed by the Ministry of Mines and remains in good standing.
The tenure is up to 2035 with a potential to extend past that should the Project prove successful in expanding ore reserves and mine life.
The Ministry of Mines highlighted the Company will need to agree project funding by 31 January 2022.
The team reiterated its plan to agree funding in December this year for the project commissioning in 2023.
Separately, the government declared a nationwide State of Emergency on the eve of 2 November taking effect immediately and lasting up to six months.
The decision is driven by the news of rebels from the Tigray conflict region are reported to have advanced further south taking control of strategic towns of Dessie and Kombolcha in the neighbouring Amhara region.
The Tigray People’s Liberation Front are said to potentially move troops towards the capital, Addis Ababa, that is ~250km further south.
Conclusion: The Ministry of Mines provides the Company more time to finalise project funding following a resolution of the recent security incident at Tulu Kapi to 31 January 2022 with the team remaining focused to close financing before YE. At the same time the government introduced a nationwide state of emergency as the fighting with Tigray rebels expanded in neighbouring regions potentially complicating funding discussions.
*SP Angel act as Nomad and Broker to KEFI Gold and Copper
Mkango Resources* (Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)) 31p, Mkt Cap £46.5m – Mkango increases stake in pioneering REE recycler
(Mkango’s 41.6% interest in HyProMag is held via 100% owned subsidiary, Magnito Limited, which has an option to increase its interest in HyProMag up to 49%)
Mkango has increase its interest in rare earth magnet recycler HyProMag from 25.0% to 41.6% following the exercise by HyProMag of its right to convert into shares of HyProMag the £200,000 convertible loan which formed part of the £500,000 financing package completed in January 2020.
Cash retained by HyProMag will be used to support the scale up of the patented Hydrogen Processing of Magnet Scrap (HPMS) technology.
HyProMag is pioneering the commercialisation of short loop magnet recycling via HPMS technology – a patented process for extracting and demagnetising neodymium iron boron (NdFeB) alloy powders from magnets embedded in scrap and redundant equipment.
The development of domestic sources of recycled rare earths via HPMs is particularly important given the UK has no domestic source of primary rare earths.
Rare earths from HyProMag’s recycled production require 88% less energy compared to the conventional production of magnets and generate an estimated 98% saving in human toxicity.
HyProMag's strategy is to establish recycling facilities for NdFeB magnets at Tyseley in Birmingham and other locations to provide a sustainable solution for the supply of NdFeB magnets and alloy powders for a wide range of markets.
William Dawes, Chief Executive of Mkango stated: " We are very pleased to increase our interest in HyProMag, which has the technology, team and network of partnerships to unlock the supply chain for rare earth magnet recycling. We look forward to supporting its future growth as it scales up to commercial production and developing new opportunities for collaboration in the recycling sector.”
“Recycling is a key component of Mkango's "mine, refine, recycle" strategy and will become an increasingly important part of the rare earth supply chain in the UK, Europe and elsewhere."
*SP Angel acts as Nomad and Broker for Mkango Resources
Cornish Metals* (Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF)) – 14.65p, Mkt cap £39.7m – Latest drilling at United Downs intersects multiple structures and high grades
Cornish Metals has announced results from the two most recent holes drilled at its United Downs project in Cornwall. Drilling is continuing.
Explaining that the “intercepts in the latest holes do not appear to be part of UD Lode itself but represent new sub-parallel zones of mineralisation”, CEO, Richard Williams, said that this “is the first time we have encountered high-grade zinc mineralisation, which occurs as coarse black sphalerite, and also note the high silver grades associated with the copper-rich zones”.
Mr. Williams confirmed that “Additional drilling is required to understand the geometry and scale of these zones”.
He said that the “continued discovery of new mineralization by the current drilling underscores the prospective and under-explored nature of the United Downs area for near surface tin, copper, zinc and silver”.
The results include:
A 1.61m wide intersection averaging 1.23% copper, 0.46% tin and 14g/t silver from a depth of 215.41m in hole UD21-006; and
Multiple intersections in hole UD21-008 with 0.99m averaging 1.81% copper, 0.06% tin, 0.58% zinc and 74.9g/t silver from 153.02m depth as well as 1.62m from 160m depth at an average grade of 9.75% tin, 0.06% zinc and 0.6g/t silver, 28.88m from 164.57m depth averaging 1.50% copper, 0.05% tin, 0.28% zinc and 63.4g/t silver and 4.81m from 287.39m depth at an average grade of 0.56% copper, 0.24% tin, 8.99% zinc and 27.1g/t silver.
The wide intersection from 164.57m depth in hole UD21-008 includes higher grade sections of
6.72m from 167.49m deep at an average grade of 3.67% copper, 0.07% tin, 0.80% zinc and 202.4g/t silver; and
4.01m from 187.61m depth at an average grade of 1.16% copper, 0.03% tin, 0.04% zinc and 14.7g/t silver; and
1.18m at an average grade of 2.48% copper, 0.02% tin, 0.14% zinc and 26.4g/t silver from a depth of 192.27m
The company explains that the “True thicknesses of the mineralised intercepts are estimated to range between 20-50% of the drilled lengths. Further drilling is required to establish true thickness of the structures”.
Copper mineralisation underpinned mining to depths of up to 500m at the United Mines, 200m to the south of the current area of interest at United Downs and at the Consolidated Mines 400m to the north “between the early 1700s and the 1870s” while the “Mount Wellington and Wheal Jane mines exploited similar structures located along strike from the historic mining at United Downs, where tin, copper and zinc mineralisation was mined and processed until 1978 and 1991, respectively”.
Mining at Mount Wellington, which forms part of Cornish Metals’ lease area extended to depths of around 200m while it reached around 500m at Wheal Jane.
The high-grade intersections reported in today’s announcement appear consistent with historic mining results dating back as far as the 18th century and indicate the potential for a mining renaissance in an area once considered to have been part of Britain’s industrial heritage rather than its future.
In a separate announcement today, Cornish Metals reports that the TSX Venture Exchange has granted final approval for a restructuring of the deferred consideration to be paid to the vendors of the South Crofty mine and associated mineral rights.
Galena Special Situations Master Fund and Tin Shield Production were issued 7m shares on 29th October 21 will now receive fixed payments linked to “project related milestones” and as a result are to be issued US$4.75m payable in shares “upon closing of either the financing for the dewatering of the mine at the South Crofty tin project, and / or any interim financings (up to 10% of the gross proceeds of such interim financings)” followed by a further US$5m, also payable in shares “upon a decision made by Cornish Metals to proceed with the development and/or construction of a mine either at the South Crofty tin project or at the United Downs property”.
Conclusion: Recent drilling at United Downs is intersecting multiple mineralised structures, including high copper grades and, for the first time is encountering high grades of zinc as well a silver. The complexity of the geology and interrelationship between the different mineral phases will require further drilling to resolve, however in our opinion, intersections in excess of 25m wide carrying 1.5% copper and over 60g/t silver more than justify continued exploration. Drilling is continuing and we look forward to the next results.
* SP Angel acts as broker and financial advisor to Cornish Metals.
Greatland Gold (Greatland Gold PLC (AIM:GGP, OTC:GRLGF)) 17.4p, Mkt Cap £682m – Identification of Havieron analogues in recently acquired tenements
Greatland Gold reports that two priority exploration targets with geophysical gravity and magnetic signatures analogous to those observed at the company’s Havieron copper/gold deposit have now been identified within the newly acquired exploration areas which were announced on 16th September and are located some 1-200km southeast of Havieron..
The Paterson South Target One and the Canning application Target Two both comprise “a strong gravity and near coincident magnetic anomaly” as was observed at Havieron “and follow-up exploration is warranted”.
The company says that its next task will be to “to confirm the historical gravity data and remodel the gravity and magnetic data, with the aim of targeting drill holes for one or both targets”.
CEO, Shaun Day, said that neither target has previously been drilled and that “As with Havieron, the new targets sit under cover and remain untested, which allows Greatland to apply our proven record of discovery and exploration success to identify prospective Telfer, Winu and Havieron style mineralisation. We consider these bullseye targets significant and exciting additions to our growth portfolio as we seek to discover further tier-one gold-copper deposits in the Paterson province”.
Conclusion: The recently acquired additional exploration ground in the Paterson Province is already yielding targets which exhibit similarities to Havieron. This provides Greatland Gold an opportunity to deploy its exploration expertise from that project to new, undrilled targets in an emerging province which is attracting increasing exploration interest including from, among other Greatland Gold’s partner at Havieron, Newcrest Mining, which also has a joint venture with Antipa Minerals at Wilki, and from Rio Tinto at its wholly-owned Winu project and in association with Antipa at Citadel and at Antipa’s wholly owned Minyari Dome project.
Kodal Minerals* (Kodal Minerals PLC (AIM:KOD)) – 0.36p, Mkt cap £57m – Kodal buys in 10% minority interest in Bougouni lithium project in Mali
Kodal Minerals report it has acquired the 10% minority interest in concessions from the original owners Gorutumu Mining SARL and Triumvirat Mining Company SARL.
The two companies originally held the licenses hosting the Bougouni lithium project.
Kodal are paying US$600,000 in cash to each company totalling $1.2m to acquire the remaining 10% interest giving Kodal 100% ownership of the licenses on which the Bougouni project sits.
Note the government of Mali retains a 10% interest in all mining concessions in Mali as part of its conditions for the award of a mining license.
Kodal have also agreed a Net Smelter Royalty of 0.6% over all production from the vendor’s relevant concessions.
Bougouni Lithium project: Kodal continue to monitor progress on its Mining Licence application
Bougouni lithium project key stats:
220,000tpa of 6% spodumene concentrate over an initial 8.5 years
71% recovery rate of contained lithium based on laboratory metallurgical recoveries of 75%;
>USD$1.4bn of total revenue at $680/t starting H2 2021 and rising 2%pa
2mtpa throughput with DMS and conventional flotation circuit. Recoveries are acceptable with the DMS on its own.
USD$431/t C1 cash costs or USD$466/t inc. royalties and sustaining capital.
US$117m Capex est. plus contingency:
1.7 year payback est.
LoM production of 1.94mt of concentrate. Sales >$1.4bn assuming spodumene concentrate sales price of $680/t increasing 2% year-on-year;
58% IRR pre-tax
51% IRR post tax
US$300m NPV7% pre-tax
US$200m NPV7% post-tax
.
Conclusion: Today’s cash and NSR deal lends greater confidence in the future development of the Bougouni lithium project. Firefinch, Kodal’s near neighbour has a market valuation of A$565m (US$422m) and has a joint venture deal with Ganfeng whereby Ganfeng has agreed to acquire a 50% of the Goulamina lithium project.
Firefinch’s Goulamina project has an ore reserve of 52mt grading 1.51% Li2O and a mineral resource of 109mt grading 1.45% Li2O.
Kidao’s Bougouni project hosts a total resource of 21.3mt grading 1.11% Li2O with 11.6mt at 1.13% Li2O indicated and 9.7mt at 1.08% Li2O inferred.
*SP Angel acts as Financial Advisor and Broker to Kodal Minerals. The analyst holds shares in Kodal Minerals.
Recent Interviews:
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
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