SP Angel . Morning View . Monday 06 12 21
Gold posts gains on Omicron variant news
Adriatic Metals (Adriatic Metals PLC (LSE:ADT1, ASX:ADT, OTCQX:ADMLF)) – high-grade mineralisation intercepted northwest of Rupice
Alphamin Resources (Alpha Financial Markets Consulting PLC (AIM:AFM)) – Alphamin unaffected by kidnappings in Kivu province
Bacanora Lithium (Bacanora Lithium PLC (AIM:BCN, OTC:BCLMF)) – Ganfeng acceptance level update
Beowulf Mining* (Beowulf Mining PLC (AIM:BEM)) – JV terms signed for anode materials production in Finland
Botswana Diamonds (Botswana Diamonds PLC (AIM:BOD)) – Annual results flag the potential transition to becoming a diamond producer at Ghaghoo
Castillo Copper (Castillo Copper Ltd (LSE:CCZ, ASX:CCZ)) – Exploration update
KEFI Gold & Copper (KEFI Gold and Copper PLC (AIM:KEFI)) – Government forces gain upper hand in the conflict
Pan African Resources (Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF)) – Pan African lists on A2X Markets in South Africa
SolGold* (SolGold PLC (LSE:SOLG, TSX:SOLG, OTC:SLGGF)) – Drilling moves towards a resource estimate for Cacharposa
Chinese wind capacity reaches 300GW
China’s installed wind capacity has now reached 302.2GW, according to Windpower Intelligence, the data and research division at Windpower Monthly.
Of the projects WPI registered as newly coming online, eight of the world’s 11 largest were in Chinese waters – the eight Chinese offshore wind farms saw a combined capacity of 2.7GW added to the country’s total capacity.
The rush in capacity growth confirms industry predictions that developers in China would rush to commission projects before feed-in tariffs are scrapped at the end of 2021.
The UK currently has approx. 24GW of capacity, Europe has approx. 220GW (as of Feb 2021) and the US has around 120GW of installed capacity.
In terms of capacity, the wind power sector in expected to record an increase from 756GW at the end of 2020 to 2,126GW by 2030 (Power Engineering International)
According to Lynas Rare Earths a 3MW direct drive turbine consumes close to 2t tonnes of rare earths permanent magnets with the market for wind turbines expected to account for approximately 30% of the global growth in the use of rare earths magnets from 2015 to 2025.
Electric vehicles also use around 1-2kg of NdPr in their permanent magnet motors. BEV sales may rise to 25m by 2030 along with a further 5.8m PHEVs by 2030 (Deloitte).
Permanent magnets represent some 70-80% of the total market for NdPr with 26,000t of NdPr coming out of China representing almost all of the market.
We recommend Mkango Resources (MKA LN)* and Rainbow Rare Earths (RBW LN)* as key UK AIM-listed rare earth mining project companies.
Copper weakens on Omicron concerns and strong dollar
Copper hovers around the $9,400/t mark, subdued by strong dollar index up 0.2% today.
Chinese copper stocks hit 169.6kt in Chinese warehouses – record low.
MMG Ltd. announced plans to shut production at Las Bambas by mid-December. (Reuters)
LME stocks down 70% from Aug. highs.
Net long positions on COMEX cut to 13,382, lowest since Aug. with short positions of 39,240 at their highest since June.
Zinc – European smelters suspend operations over high gas prices
The zinc market is in unexpected trouble with high gas prices causing the suspension of a number of European smelters.
Prices rallied following Nyrstar’s decision to slash production by 50% on soaring power costs for smelters.
Analysts expect disruptions and elevated power prices to continue through the winter, supporting the key galvanizing ingredient.
Glencore announce plans last week to suspend zinc production at its 100kt/pa plant, citing high power costs.
Smelter power costs have risen close to $1,000/t on high gas and power prices in Europe.
Diamonds – Engagement ring spending roars back (Rapaport)
Spending on engagement rings has bounced back to pre-pandemic levels, largely thanks to millennial buyers paying more, according to a survey by The Knot.
Dow Jones Industrials -0.17% at 34,580
Nikkei 225 -0.36% at 27,927
HK Hang Seng -1.76% at 23,348
Shanghai Composite -0.50% at 3,589
Economics
China - Evergrande nears $260m default. Covid cases rise
HK index hit a 14-month low as Evergrande’s imminent crisis added to risk-off sentiment.
The Guangdong government has stepped up efforts to restructure the property giant’s debts.
Developers China Aoyuan and Sunshine 100 both missed bond repayments.
Evergrande stock hit an 11-year low, falling 16% when creditors demanded a $260m payment.
The company stated there was ‘no guarantee’ it’d be able to pay the $82.5m payment due today, the last day of its 30-day grace period.
We believe Evergrande has entered a state-managed debt-asset restructuring process.
Hong Kong announced its 4th Omicron variant this weekend, indicating there may be many more cases in circulation.
China’s central bank to slash RRR to boost economy
The PBOC will cut China’s banks’ reserve requirement ratio (RRR) by 0.5%.
The move will release $188bn of long-term liquidity from Dec. 15th. (SCMP)
China’s ailing property sector is weighing on the country’s aims for rapid growth alongside other factors such as population demographics and raw material costs.
Covid – Omicron: China may, at some point, allow the virus to circulate through its population.
If the Chinese authorities feel Omicron is a good variant to allow to circulate then we should prepare for further logistical disruption as the authorities move to control the spread of the virus and as increasing numbers take time off work to recover from the illness.
China forms state-owned group to strengthen supply chains
State-funded, China Logistics Group hopes to become a ‘global supply chain organizer’.
It aims to boost domestic and international trade links, cross-border e-commerce, and freight. (CCTV)
The group was created by a merger of China Railway Materials, China National Materials, Transportation Group, Huamao International Freight, China Logistics and China National Packaging.
The merger reflects damaging supply chain disruptions caused by the pandemic.
The logistics giant will operate 3m vehicles over 5 continents.
US – US jobs climbed the least this year in November, although, on a positive note unemployment rate pulled back strongly while more people returned into labour force, people either employed or looking for work.
The report comes only days after the central bank highlighted increasing inflationary pressures potentially supporting accelerating the winddown of its asset purchases as well as a possibility for earlier-than-expected interest rate increases.
Jobs still remain 3.9m below pre-pandemic levels.
NFPs (‘000): 210 v 546 (revised from 531) in Oct and 550 est.
Unemployment Rate: 4.2% v 4.6% in Oct and 4.5%.
Labour Force Participation: 61.8% v 61.6% in Oct and 61.7% est.
Av Hourly Earnings (%mom): 0.3 v 0.4 in Oct and 0.4 est.
Av Hourly Earnings (%yoy): 4.8 v 4.8 in Oct and 5.0 est.
Germany – Factory goods orders slump driven by a drop in investment goods in overseas markets.
Low material availability, high transportation costs and a new wave of Covid-19 infections dampen busines investment.
The data comes on top of weak business confidence reported in late November that showed the sentiment dropped for a fifthe straight month to its lowest since April.
Factory Orders (%mom): -6.9 v 1.8 (revised from 1.3) in Sep and -0.3 est.
Factory Orders (%yoy): -1.0 v 10.3 (revised from 9.7) in Sep and 5.5 est.
UK – Omicron cases reach 246
Doctors in South Africa report that most Omicron Covid variant cases are mild.
The data is encouraging according to Anthony Fauci, the US health chief
Our health care analyst Vadim Alexandre predicted that Covid would mutate into a more dominant and less severe variant.
The evolution of the Omicron variant appears to be in accordance with this prediction.
Perth Mint November gold sales soar 94%
Perth Mint Nov. gold sales hit 115,872oz vs 59,750oz in Oct – up 38% from Nov. 2020.
Silver sales up 13.2% m-o-m and 36% y-o-y.
Perth Mint refines 90% of gold mined in Australia.
The mint’s new Australian Kangaroo serious coincided with a jump in physical gold appetite according to the Mint’s general manager.
Ecuador - Cornerstone Capital Resources has issued an announcement concerning a decision of Ecuador’s Constitutional Court
Ecuador’s Constitutional Court has invalidated “the environmental registration granted by the Ministry of Environment (ME) to Ecuador’s state mining company ENAMI EP for the initial (prior to drilling) exploration phase in the “Los Cedros” Protected Forest (Bosque Protector) at the Rio Magdalena project” in NW Ecuador where it is alleged that “no prior consultations with local communities had taken place”.
We feel it is encouraging for the future of the evolving mining industry in Ecuador that it’s regime is applied rigorously - even to the state-owned mining company.
Currencies
US$1.1287/eur vs 1.1293/eur last week. Yen 113.18/$ vs 113.40/$. SAr 16.009/$ vs 15.976/$. $1.324/gbp vs $1.327/gbp. 0.702/aud vs 0.706/aud. CNY 6.371/$ vs 6.370/$.
Commodity News
Precious metals:
Gold US$1,782/oz vs US$1,768/oz last week
Gold ETFs 98.2moz vs US$98.4moz last week
Platinum US$938/oz vs US$946/oz last week
Palladium US$1,795/oz vs US$1,801/oz last week
Silver US$22.38/oz vs US$22.31/oz last week
Rhodium US$14,000/oz vs US$14,000/oz last week
Base metals:
Copper US$ 9,410/t vs US$9,540/t last week
Aluminium US$ 2,596/t vs US$2,636/t last week
Nickel US$ 19,675/t vs US$20,100/t last week
Zinc US$ 3,127/t vs US$3,210/t last week
Lead US$ 2,212/t vs US$2,259/t last week
Tin US$ 38,660/t vs US$39,100/t last week
Energy:
Oil US$71.6/bbl vs US$71.4/bbl last week
Oil prices are trending higher this morning on news that Saudi Arabia raised prices for its crude sold to Asia and the US, and as indirect US-Iran talks on reviving a nuclear deal appeared to hit an impasse
Yesterday, Saudi Arabia raised January official selling prices for all crude grades by up to 80 cents from the previous month
The price hikes were implemented despite a decision last week by the OPEC+ to continue increasing monthly supply by 400,000bopd in January
The next regularly scheduled meeting of OPEC+ is set for 4 January 2022
Expectations were that OPEC+ would opt for a pause in the monthly increases because of the still high uncertainty over the Omicron COVID variant, the SPR releases led by the US, and an anticipated oil surplus early next year
With still little information on the new variant and whether it escapes vaccine protection, OPEC+ looks ready to take further action, if necessary, but it is showing it is not over-reacting to Omicron
Initial reactions to the rollover of the production policy suggest that OPEC+ could also believe that global demand will remain resilient during the winter season
Natural Gas US$3.805/mmbtu vs US$4.258/mmbtu last week
US natural gas futures are currently down for a fourth session due to mild weather
For Asian liquefied natural gas futures remain steady, albeit at historically high prices
For Europe, prices are still trending up amid low inventories, worries over pipeline supplies from Russia and forecasts for a colder-than-usual winter
For the US, natural gas futures are trending lower as milder-than-usual weather is forecast for December
Outside of modest increases in LNG feed gas demand, the sharp move higher Friday occurred despite notable further deterioration in the fundamental picture for natural gas
European prices continue to hold up on last week’s news that Germany's energy regulator has suspended the approval process for the Nord Stream 2 pipeline last week
Vladimir Putin continues to exert pressure on Europe with declining gas flows amid the onset of the Northern Hemisphere winter
Uranium UXC US$46.35/lb vs $46.35/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$103.6/t vs US$102.3/t
Chinese steel rebar 25mm US$753.7/t vs US$750.5/t
Thermal coal (1st year forward cif ARA) US$106.5/t vs US$105.5/t
Thermal coal swap Australia FOB US$151.5/t vs US$155.0/t
Coking coal swap Australia FOB US$285.0/t vs US$268.0/t
Other:
Cobalt LME 3m US$67,050/t vs US$67,050/t
NdPr Rare Earth Oxide (China) US$134,586/t vs US$134,611/t
Lithium carbonate 99% (China) US$29,899/t vs US$29,905/t
China Spodumene Li2O 5%min CIF US$2,310/t vs US$2,310/t
Ferro-Manganese European Mn78% min US$1,891/t vs US$1,892/t
China Tungsten APT 88.5% FOB US$313/t vs US$313/t
China Graphite Flake -194 FOB US$695/t vs US$695/t
Europe Vanadium Pentoxide 98% 8.1/lb vs US$8.1/lb
Europe Ferro-Vanadium 80% 32.55/kg vs US$32.55/kg
China Ilmenite Concentrate TiO2 US$384/t vs US$385/t
Spot CO2 Emissions EUA Price US$88.9/t vs US$89.7/t
Battery News
Japanese shipping giant enters offshore wind market
Japan’s Mitsui O.S.K. Lines Ltd., one of the largest shipping companies in the world, have agreed to jointly evaluate offshore wind development opportunities in Japan, with Scotland’s Flotation Energy plc.
The agreement will build on the 2GW of offshore floating wind projects that Flotation Energy is currently developing.
Mitsui O.S.K. will jointly develop a local supply chain and Flotation Energy will manage overall project development, the companies said.
Flotation Energy has delivered around 3GW of offshore wind in the UK, including the world’s largest operating floating offshore wind farm, the 50MW Kincardine wind farm in Scotland.
Flotation is currently involved in the development of 17GW of projects around the world including Japan, Taiwan, Australia and the UK.
GM planning JV for battery production in North America
GM has announced plans to establish a JV with South Korean materials company, Posco Chemical, to produce cathode materials for their Ultium batteries in North America by 2024.
The move is part of GM's $35bn investment in electric and autonomous vehicle development by 2025.
“[The JV] with Posco Chemical is a key part of our strategy to rapidly scale U.S. EV production and drive innovation in battery performance, quality and cost," GM Executive VP for Global Product Development, Doug Parks said in a statement.
Thyssenkrupp and Infinity Lithium look to green hydrogen in lithium production
Infinity Lithium to collaborate with Thyssenkrupp AG to utilise green hydrogen in bid to produce lithium. (Reuters)
The partnership will begin a trial at a Thyssenkrupp facility in Germany.
Company News
Adriatic Metals (Adriatic Metals PLC (LSE:ADT1, ASX:ADT, OTCQX:ADMLF)) 137.5p, Mkt cap £365m – high-grade mineralisation intercepted northwest of Rupice
Adriatic continues to explore northwest of the Rupice Mineral Resource, with the latest round of diamond drilling results providing the following highlights:
Drillhole B12-21: 24.7m at 514g/t AgEq (181g/t Ag, 9.0% Zn, 4.6% Pb, 0.9g/t Au, 0.3% Cu, 67% BaSO4, 0.1% Sb) from 295.1m
Drillhole B16-21: 7.1m at 1123g/t AgEq (662g/t Ag, 11.3% Zn, 7.6% Pb, 3.4g/t Au, 0.7% Cu, 62% BaSO4, 0.3% Sb) from 350m
Drillhole Br-19-21: 15.8m at 508g/t AgEq (280g/t Ag, 4.8% Zn, 4.0% Pb, 1.9g/t Au, 0.3% Cu, 74% BaSO4, 0.1% Sb) from 346.2m
Adriatic comments that the stratigraphic sequence and mineralisation style at Rupice Northwest appears to be the same as that seen at Rupice, with mineralisation at the southern and south-eastern parts of Rupice remaining open.
Adriatic is currently evaluating whether mineralisation to the north-west is a continuation of the main Rupice orebody, or a structural repetition.
The company intends to explore at Rupice throughout the winter season, and has commenced the construction of civil earth works on the Rupice Surface Infrastructure site and the access road construction.
Drilling over the winter will primarily be focused on continued step-out and definition drilling within the Rupice Northwest area to better define the mineralised strike, as well as the up-dip and down-dip extents.
Alphamin Resources (Alpha Financial Markets Consulting PLC (AIM:AFM)) C$0.93, Mkt cap C$1.13bn – Alphamin unaffected by kidnappings in Kivu province
We hear that Alphamin are unaffected by the recent kidnapping of Chinese nationals in South Kivu, DRC.
Officials report some eight Chinese nationals were kidnapped in Mukera along with two soldiers.
The kidnapped Chinese nationals have been working as buyers embedded into artisanal mining co-operatives – a risky job at the best of times.
The threat of kidnapping and militant action is said to remain severe in the province with a number of armed groups operating in the area.
Kidnappings have increased in the region with foreigners seen as particular targets. The militants are known for extreme and seemingly random acts of violence.
Bacanora Lithium (Bacanora Lithium PLC (AIM:BCN, OTC:BCLMF)) 66p, Mkt Cap £255m – Ganfeng acceptance level update
Ganfeng International Trading report 44.1% acceptance on its offer to acquire Bacanora Lithium.
Adding the 44.1% acceptance to Ganfeng’s 28.9% stake gives Ganfeng a total of 72.9% acceptance.
If the number of acceptances plus Ganfeng’s stake exceeds 75% then Bacanora will be delisted from AIM and will re-registered as a private company.
The deal also needs to clear Mexican Antitrust Clearance Conditions.
The timetable for the Offer is currently suspended as a result of the Mexican Antitrust Clearance Condition to the Offer not having yet been satisfied or waived.
Ganfeng also holds a 50% interest in the Bacanora’s flagship Sonora lithium project in Mexico.
We remain wary of the mining and processing issues relating to lithium clay deposits, though we feel Ganfeng, as the world’s largest lithium metal producer, has the technical and financial muscle to succeed where many other companies might fail.
Beowulf Mining* (Beowulf Mining PLC (AIM:BEM)) 8.75p, Mkt cap £81m – JV terms signed for anode materials production in Finland
Beowulf reports that its 100% owned Finnish subsidiary, Grafintec, and Epsilon Advanced Materials Private Limited, have signed a Joint Venture Heads of Terms for the establishment of an anode materials production facility to be located in Finland.
The proposed plant will supply battery/ cell manufacturing companies in Europe, complementing Epsilon Advanced Materials' growing anode materials business in India.
The plant will be built in two phases, Phase 1 with a production capacity of 10,000tpa and Phase 2 which will add 40,000tpa of anode material.
Earlier this year, Grafintec was granted funding by Business Finland a part of the BATCircle2.0 consortium, with funds used to develop a Bankable Feasibility Study for the plant in Finland, including a detailed strategic marketing and commercialisation plan, based on a comparable plant being developed by Epsilon Advanced Materials in India.
The aim of the BATCircle2.0 consortium is to create a competitive and sustainable European battery industry through collaboration and joint research between companies and research organisations.
Under the JV, Grafintec (which will own 49% of the JV) and Epsilon Advanced Materials (which will own 51% of the JV) will work on the study with the ambition of creating a sustainable value chain in Finland from high-quality natural flake graphite resources to anode materials production.
The study will also evaluate leveraging renewable power, targeting net zero CO2 across the supply chain, benefiting from the significant support of Business Finland and collaboration within the Finnish Battery Cluster.
Botswana Diamonds (Botswana Diamonds PLC (AIM:BOD)) 1p, Mkt Cap £8.7m – Annual results flag the potential transition to becoming a diamond producer at Ghaghoo
Reporting an operating and post-tax loss of £0.47m for the year ending 30th June 2021 (2020 - £0.39m loss), Botswana Diamonds’ Chairman, John Teeling, highlighted the company’s evolution from a diamond exploration company to becoming a diamond producer following the conditional agreement to acquire the Ghaghoo mine announced in August.
Mr. Teeling described the transaction as “a very rare opportunity to acquire a proven deposit of good gem quality stones together with a built mine and full plant. Initial work will involve processing the dumps, mine dewatering and an updated feasibility study”.
Ghaghoo is reported to contain “an Indicated Resource of 17.9m tonnes at 35 carats per hundred tonnes (cpht) and an Inferred Resources of 6.7m tonnes at 36 cpht”.
Botswana Diamonds also explains that a restart of the Ghaghoo mine would establish infrastructure for the wholly-owned KX36 deposit, located approximately 70km south of the mine and where historic, SAMREC compliant, indicated resources amount to 8.6m carats at an undisclosed grade.
Botswana Diamonds says that it also “holds 100% of licences in the Kalahari in areas adjacent to Ghaghoo and KX36. Extensive early-stage work has been done on the ground. Assuming positive mineral chemistry on the samples recovered, a decision will be made on a drilling programme”.
The company also says that in South Africa, where it is focusing on the Thorny River deposit, close to the previously mined Marsfontein and Klipspringer mines, and its “next step is to look at the feasibility of commercial production by open cast mining”.
Botswana Diamonds reports a 30th June 2021 cash balance of £165,000 and a subsequent, October 2021 £550,000 equity raising by placing an additional 55m shares at a price of 1p/share.
Castillo Copper (Castillo Copper Ltd (LSE:CCZ, ASX:CCZ)) 1.68p, Mkt Cap £23m – Exploration update
Castillo Copper has provided a progress report on its exploration activities in Australia and Zambia.
Drilling has been completed on the Arya copperprospect in Queensland and assays are awaited. “Based on indicative field observations from the team at site, the Board is optimistic that geological interpretations will affirm the exploration potential for the Arya Prospect … [and] … If this is validated, a fuller drilling campaign will be commissioned in H1 2022”.
The option to acquire the Litchfield and Picasso lithium projects has been extended to accommodate laboratory delays in assaying over 650 samples taken as part of the due-diligence process.
In Zambia, induced polarisation geophysical surveys are progressing at the Mkushi prospect while “The Zambian geology team are working on the inaugural drilling campaign for the Luanshya Project, with 14 potential targets having been interpreted5 post the recent Induced Polarisation (IP) survey”.
KEFI Gold & Copper (KEFI Gold and Copper PLC (AIM:KEFI)) 0.88p, Mkt Cap £19m – Government forces gain upper hand in the conflict
The Company updates on the status of the ongoing military conflict between government and rebel forces.
A pushback from government forces is reported to have driven the area of major conflict back to its origin in Tigray.
Rebels have been driven out of the neighbouring states that they have recently occupied with both sides of the conflict reporting that the rebel militias are withdrawing.
Diplomatic efforts have recently intensified with mediation backed by the African Union, United Nations and major world powers.
KEFI project teams have remained on the ground ahead of project development works launch.
Project syndicate members reaffirmed their commitment to the Tulu Kapi Gold Project financing subject to compliance with standard conditions including the community and security aspects.
Earlier the Company reiterated targets to satisfy all technical conditions of the mining license by the end of Jan/22 including procurement of project funding.
*SP Angel act as Nomad and Broker to KEFI Gold and Copper
Pan African Resources (Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF)) 21.5, Mkt cap £415m – Pan African lists on A2X Markets in South Africa
Pan African Resources has taken a secondary listing on the A2X market in South Africa.
The A2X market provides an additional trading venue for a company to secondary list their shares for trade.
The company reported gold production of 201,777oz and a post-tax profit of US$74.7m for the year to end-June along with a 28.5% increase in their proposed dividend to US$28.3m (1.2667c/s)
SolGold* (SolGold PLC (LSE:SOLG, TSX:SOLG, OTC:SLGGF)) 23.85p, Mkt Cap £536m – Drilling moves towards a resource estimate for Cacharposa
Solgold has released additional drilling results from its continuing programme at Caharposa within the wholly owned Porvenir licence in southern Ecuador.
Reporting that it currently has three drilling rigs deployed at Cacharposa and “surrounding targets”. Solgold says that work “is advancing on a maiden Mineral Resource Estimate … for the Cacharposa deposit that is expected later this month”.
Today’s announcement sys that “holes 14 - 22 at Cacharposa have intersected further significant copper and gold mineralisation” and that “Hole 19 returned one of the best intersections to date with 722m @ 0.66% copper equivalent ("CuEq") from surface”.
Among the results highlighted in the announcement are:
The 722m long intersection in hole 19 which averages 0.52% copper and 0.23g/t gold from the surface and includes a 118m long section from 12m depth at an average grade of 0.80% copper and 0.52g/t gold reported as 1.13% CuEq; and
A 132m long intersection from 756m depth in hole 14 which averages 0.42% copper and 0.04g/t gold, reported as 0.44% CuEq; and
A 140m long intersection from 408m depth in hole 16 which averages 0.42% copper and 0.09g/t gold reported as 0.4% CuEq; and
A 124m long intersection from 478m depth in hole 18 which averages 0.70% copper and 0.06g/t gold reported as 0.76% CuEq; and
A 122m long intersection from 8m depth in hole 20 which averages 0.30% cpper and 0.22g/t gold reported as 0.44% CuEq; and
A 166m long intersection from 182m depth in hole 21 which averages 0.31% copper and 0.14g/t gold reported as 0.38% CuEq
Cacharposa is part of “a 1,700m long northerly-trending mineralised corridor, up to 1,000m wide” containing copper/ molybdenum and gold and the announcement explains that the “interpreted orientation of the Cacharposa intrusive complex and its associated porphyry copper gold mineralisation is subvertical, dipping approximately 75 degrees to the northwest. The true width of down-hole intersections reported are therefore expected to be approximately 55-75% of the down hole lengths”.
Assay results are awaited for holes 23-25 and drilling of hole 26 is expected to commence shortly.
Solgold explains that it expects to complete an initial mineral resource estimate for Cacharposa later this month and that “internal preliminary estimates … [are] … indicative of a significant prospective resource that appears amenable to bulk surface mining methods”.
Solgold’s Head of Exploration, Jason Ward, described the results from hole 19 as “one of the best intersections to date at the Porvenir project” and said that the start of mineralisation from surface “attests to the economic potential of this project”.
Mr. Ward also said that “with numerous other nearby mineralised targets identified, we believe the Porvenir project has the potential to become a Tier 1 copper – gold porphyry camp”.
Elsewhere in Ecuador, we see that Cornerstone has issued an announcement concerning a decision of Ecuador’s Constitutional Court invalidating “the environmental registration granted by the Ministry of Environment (ME) to Ecuador’s state mining company ENAMI EP for the initial (prior to drilling) exploration phase in the “Los Cedros” Protected Forest (Bosque Protector) at the Rio Magdalena project” in NW Ecuador where it is alleged that “no prior consultations with local communities had taken place”.
We stress that there is absolutely no suggestion at all that any of Solgold’s licences could be similarly affected and more widely we take it as encouraging for the future of the evolving mining industry that Ecuador’s permitting regime is applied rigorously - even to the state-owned mining company.
Conclusion: Recent drilling, in southern Ecuador, at Cacharposa is expected to result in an initial mineral resource estimate later this month with the company indicating that it expects to establish a resource potentially amenable to open-pit mining. The news of an imminent initial mineral resource at Cacharposa follows the publication of initial resources estimate for the Tandayama-America deposit, which lies approximately 3km north of Solgold’s flagship Alpala project, in October.
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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+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
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