SP Angel . Morning View . Tuesday 07 12 21
Base metals climb as China signals easing curbs on real estate
Atlantic Lithium* (Atlantic Lithium Limited (AIM:ALL)) formerly IronRidge* (IRR LN) – Scoping study update increases post-tax NPV to US$789m for Ewoyaa
Bluejay Mining* (BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)) – Dundas bulk samples sent for customer evaluation
Cornish Metals* (Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF)) –– Drilling at United Downs continues to intersect multiple mineralised structures
Eurasia Mining* (Eurasia Mining PLC (AIM:EUA)) – Agreement with ERDC
Gemfields (Gemfields Group PLC (AIM:GEM)) – Record Kagem emerald auction
Hummingbird Resources (Hummingbird Resources PLC (LSE:HUM)) – Pasofino raises $5.5m to deliver Dugbe FS in Q2/22
Metal Tiger (Metal Tiger PLC (AIM:MTR, OTC:MRTTF, ASX:MTR)) – change of controlling interest in Kalahari Metals
Shanta Gold (Shanta Gold Limited (AIM:SHG, OTC:SAAGF)) – Production guidance revised down to 55-57koz on equipment supply issues
Tertiary Minerals* (Tertiary Minerals PLC (AIM:TYM)) – Rock chip sampling results from the Pyramid Project
UK - EV sales double diesels in November
EVs accounted for c. 20% of new vehicle registrations in Nov. (Society of Motor Manufacturers and Traders)
21,726 100% electric models registered vs 11,118 diesels.
31.3% few vehicles registered during the month vs the pre-pandemic average – analysts point to the semiconductor shortage as the primary factor.
Copper strengthens on PBOC’s plans to inject liquidity into Chinese economy
Monetary policy easing by China’s central bank saw copper prices rally slightly to $9,527/t.
Increased fiscal stimulus is expected to largely offset slower growth from China’s property sector.
The PBOC is releasing $188bn in long-term liquidity from 15th Dec.
Shanghai copper stocks at 36,110t, down 84% from May highs of 229,179t. (Reuters)
China copper imports at highest since March, rising for 3rd month as industrial production hit by power shortages.
Further upwards momentum in copper prices has been limited by concerns over the Omicron variant.
MMG (Minmetals) to end copper production from Las Bambas mine in Peru this month due to local protests, blockades of supplies to the mine.
The communities want 8% of the mine’s profits to go into a fund for community projects
Some 70 communities live along the 450km road from Las Bambas to the port with communities looking for compensation for dust affecting farmland along the route and contracts in the logistical chain.
Las Bambas should produce some 400,000tpa of copper cathode but may now produce just under 300,000t this year. This is a huge blow for the copper market.
A rail line would cost $9.2bn and take 5 years but we suspect the villages along the route would still look for some form of additional compensation making the financing of the line virtually impossible.
When the mine is closed the protestors will feel the heat from communities which have been benefitting from the mine
We note Zijin Mining bought Monterrico Metals (Rio Blanco) for £95m in 2007. Violence at the mine site stalled the project in 2009. Nothing appears to have happened since.
Nickel strengthens on rising China imports and low inventories
LME nickel stocks hit 111kt in Nov. vs 265kt 6 months earlier.
China nickel imports up 96% Jan-Oct vs same period last year to 208kt. (Reuters)
Sept. and Oct. China refined nickel imports of 35.5kt and 34.5kt respectively highest monthly level since Dec. 2017.
Raw material imports inc. NPI up 21% y-o-y over Jan-Oct.
Intermediate nickel product imports up 29%.
China nickel imports from Russia at 17.3kt in Sept. and Oct. more than total imports between Jan -Aug. (Reuters)
China’s domestic supply has been hit by Jinchuan Group’s maintenance closure alongside Jilin Jien’s transition to nickel sulphate production from refined production.
Analysts also point to power outages across China limiting production capacity.
Dow Jones Industrials +1.87% at 35,227
Nikkei 225 +1.89% at 28,456
HK Hang Seng +2.70% at 23,980
Shanghai Composite +0.16% at 3,595
Economics
China – President Xi held a meeting of the party’s Politburo on Monday resulting in an easing of real estate curbs lifting shares in local property developers.
Evergrande’s shares jumped >8%. The group is set to restructure its debt including its offshore public bonds and private debt.
Investors await news on the payment of $82.5m of interest due.
The central bank earlier cut the reserve ratio requirement by 0.5pp for local banks improving the liquidity position of lenders and allowing more supply of credit.
The PBOC played down any expectations that it was the start of an easing cycle saying the cut is a “regular monetary policy action”.
China export growth slows in Nov. as imports accelerated past expectations
China’s exports up 22% Nov. vs Nov. 2020 to $325.53bn – down from 27% growth in Oct.
Imports rose by 31.7% in Nov. vs Nov. 2020 to $253.81bn – up from 20.6% growth in Oct.
Much of the import growth stemmed from a 200.3% y-o-y increase in coal and lignite imports – value up 770% to $5.87bn. (SCMP)
Crude oil imports up 80.1% vs last year – value of $25bn in Nov. – volume down 8% to 41.79mt.
Nat gas value up 170% to $7.54bn in Nov. – volume up 17% to 10.73mt.
China’s total Nov. trade surplus at $71.72bn.
China’s trade surplus with US dropped to $37bn in Nov. from $41bn in Oct. (SCMP)
China threatened the US with retaliation against the decision to declare a diplomatic boycott of the Winter Olympics.
US athletes will be fee to compete while US officials will be staying home citing concerns over human rights abuses.
Germany – Industrial production grew more than expected in October after contracting in August and September, Bloomberg reports.
Capital good output that includes auto production was up 8.2%mom accounting for all of the expansion in industrial production.
The report suggest output at automakers may be on a recovering path.
Automakers may post another significant contribution in November with early data from the German Association of the Automotive Industry reporting a 16.7%yoy growth last month.
That follows Volkswagen’s latest quarterly earnings report that showed that production in Q4 may recover towards levels seen in the first half of the year.
Industrial Production (%mom): 2.8 v -0.5 (revised from -1.1) in Sep and 1.0 est.
Industrial Production (%yoy): -0.6 v -0.4% (revised from -1.0) in Sep and -2.9 est.
EU - Construction PMI rose to 53.3 in November vs 51.2 in October
The ECB should stick with its ultra-supportive stance as long as the current bout of surging consumer prices appears to be temporary, the IMF says
Germany – Construction PMI fell to 47.9 in November vs 47.7 in October
Mexico - Consumer confidence rose to 45.8 in November vs 44.1 in October
UK – Construction PMI rose to 55.5 in November vs 54.6 in October
UK Property prices also posted a 8.2%yoy increase in November reaching ~£273k supported by short supply, low mortgage rates and a strong labour market, Halifax data showed.
Business investment in the UK is expected to rebound strongly in 2022 due to generous tax incentives and the need to upgrade assets that have been neglected as a result of uncertainties related to Brexit and the pandemic (FT).
Australia – The central bank kept rates unchanged at 0.1% and reiterated its commitment to continue with weekly bond purchases (A$4bn/week) until mid-February at least.
The central bank will review bond buying programme using three criteria including “the actions of other central banks, how the Australian bond market is functioning, and, most importantly, the actual and expected progress towards the goals of full employment and inflation consistent with the target”.
This leaves the RBA options open on whether to extend the programme is necessary.
The central bank highlighted a recovery in the labour market but noted only gradual pick up in wages growth.
The A$ is trading higher this morning amid a broader more positive risk sentiment in the market.
Russia – The US and European countries are weighing baking sanctions if Russia invades Ukraine.
Zimbabwe – 11-month gold production rises 45% YoY
Zimbabwe’s Jan-Nov gold output climbed to 25,361kg vs 17,494kg produced a year earlier.
Zimbabwe generates most of its foreign exchange earnings from mining, with major contributions from gold, platinum and chrome.
Currencies
US$1.1291/eur vs 1.1287/eur yesterday. Yen 113.70/$ vs 113.18/$. SAr 15.881/$ vs 16.009/$. $1.328/gbp vs $1.324/gbp. 0.710/aud vs 0.702/aud. CNY 6.368/$ vs 6.371/$.
Commodity News
Precious metals:
Gold US$1,782/oz vs US$1,782/oz yesterday
Gold ETFs 98.0moz vs US$98.2moz yesterday
Platinum US$952/oz vs US$938/oz yesterday
Palladium US$1,865/oz vs US$1,795/oz yesterday
Silver US$22.42/oz vs US$22.38/oz yesterday
Rhodium US$14,000/oz vs US$14,000/oz yesterday
Base metals:
Copper US$ 9,540/t vs US$9,410/t yesterday
Aluminium US$ 2,609/t vs US$2,596/t yesterday
Nickel US$ 20,030/t vs US$19,675/t yesterday
Zinc US$ 3,185/t vs US$3,127/t yesterday
Lead US$ 2,207/t v US$2,212/t yesterday
Tin US$ 38,770/t vs US$38,660/t yesterday
Energy:
Oil US$74.3/bbl vs US$71.6/bbl yesterday
Oil prices increased c.5% yesterday on hopes that the Omicron coronavirus variant would have a less damaging economic impact if its symptoms proved mostly mild and as some OPEC member countries signalled confidence in the market
Reports in South Africa said Omicron cases there had only shown mild symptoms and the infectious disease official, Anthony Fauci, confirmed "it does not look like there's a great degree of severity"
Global benchmark Brent has risen 38% this year, supported by output curbs led by OPEC+, though it has fallen from a three-year high above US$86/bbl in October
Iraq's Oil Minister confirmed he expects oil prices to reach over US$75/bbl, according to state news agency INA
He added that OPEC is trying to "positively contain" the energy market
On Sunday, Saudi Arabia raised January official selling prices for all crude grades sold to Asia and the US by up to 80 cents from the previous month
Last week OPEC+ decided to continue increasing monthly supply by 400,000bopd in January, even after a slide in prices driven by Omicron concerns
Oil was also buoyed by diminishing prospects of a rise in Iranian oil exports after indirect US/Iranian talks on saving the 2015 Iran nuclear deal broke off last week
Meanwhile, the World Petroleum Conference devoted to future technologies and low-carbon strategies commenced in Houston yesterday with top executives from energy companies affirming the need for more oil for decades to come
Natural Gas US$3.761/mmbtu vs US$3.805/mmbtu yesterday
US natural gas futures fell over 10% yesterday, falling to the lowest level since August on forecasts for warmer-than-expected winter temperatures
The leg lower builds on last week’s more than 24% loss, which was natural gas’ worst week since February 2014
The contract for January delivery traded at US$3.68/mmbtu
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
Uranium UXC US$46.05/lb vs $46.35/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$106.9/t vs US$103.6/t
Chinese steel rebar 25mm US$756.7/t vs US$753.7/t
Thermal coal (1st year forward cif ARA) US$106.5/t vs US$106.5/t - China Nov. coal imports hit highest yearly level
China Nov. coal imports 35mt vs 27mt in Oct. (General Administration of Customs)
China imports up 10.6% since Jan. at 292.32mt.
The ramp up in imports reflects increased demand as the winter heating season gets underway.
Australian coal cargoes (778kt) were cleared by Chinese customs in Oct. having been held at ports for over a year.
The unofficial import ban on Australian coal has been held in place.
Domestic coal output up following Beijing’s intervention.
Coal inventories at Chinese power plants hit 146mt a fortnight ago and eye all-time highs this month.
Thermal coal swap Australia FOB US$148.0/t vs US$151.5/t
Coking coal swap Australia FOB US$285.0/t vs US$285.0/t
Other:
Cobalt LME 3m US$69,320/t vs US$67,050/t
NdPr Rare Earth Oxide (China) US$134,653/t vs US$134,586/t
Lithium carbonate 99% (China) US$29,914/t vs US$29,899/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$1,891/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% 8.2/lb vs US$8.1/lb
Europe Ferro-Vanadium 80% 32.55/kg vs US$32.55/kg
China Ilmenite Concentrate TiO2 US$381/t vs US$384/t
Spot CO2 Emissions EUA Price US$89.9/t vs US$88.9/t
Battery News
BMV EV sales to rise to two million by 2025.
BMW has just sold its millionth electric vehicle with around 70% sold as hybrids.
The company is aiming for at least 50% of global sales to be fully electric by 2030
Toyota selects location for first US battery plant
Toyota will build a $1.29bn EV battery plant in North Carolina, the company announced on Monday.
The facility will be capable of producing Li-ion batteries for 200,000 vehicles when production begins in 2025 – the new plant will initially produce batteries for Toyota’s hybrid vehicles and intends to produce batteries for EVs long term.
The company has plans to eventually expand battery production to up to 1.2m vehicles per year.
Toyota said it settled on North Carolina due to “renewable energy availability as well as support from local stakeholders, including governments, utilities, partners, and others.”
The project will create almost 1750 jobs in the state.
Zhangjiakou city to deploy hydrogen buses for 2022 Winter Olympics
China, the world’s largest greenhouse gas emitter has vowed to host a “green” Olympics.
Zhangjiakou city, which is hosting events such as alpine skiing and snowboarding, will deploy 655 hydrogen-fuelled buses.
The city currently has two operational hydrogen plants, with a combined production capacity of 6t per day, and eight refuelling stations.
Company News
Atlantic Lithium* (Atlantic Lithium Limited (AIM:ALL)) 24p, Mkt cap £129m – Scoping study update increases post-tax NPV to US$789m for Ewoyaa
Formerly IronRidge* (LON:IRR)
Atlantic Lithium reports the results of an updated scoping study on the Ewoyaa Lithium Project in Ghana, resulting in a significant improvement in project economics and life of mine (LOM)
The scoping study update is based on the upgraded MRE which increased total increased total resources to 21.3Mt at 1.31% Li2O (278,000 tonnes of contained Li2O).
The Current MRE is based on approximately 56,500m of drilling with an additional 28,000m of infill resource and extensional drilling completed not included in the MRE and with assays pending.
The study update increases the project’s LOM operations to 11.4 years from an initial 8, producing 300,000tpa of 6% Li2O spodumene concentrate.
Capital costs have risen very slightly to $70m from $68m, using develop a conventional open cut mining operation from surface.
Total operating costs have risen to $314/t SC6 vs $246/t SC6 previously reflecting increase in contract mining costs.
Highlights from the updated scoping study at Ewoyaa, based on a 2.0mtpa include:
Pre-tax NPV8% of US$1,227m
Pre-tax EBITDA of US$2,024m
Post-tax NPV8% of US$789m
Post-tax IRR of 194%
Average EBITDA of US$178m per annum
Costs: US$247/t of spodumene concentrate, after by-product credits
Price: US$900/t assumed for 6% spodumene concentrate
Payback is expected to be 0.51 years
Recovery rates remain unchanged at 72% for the P1 Fresh ore and average 51% for the P2 All Material
In addition to spodumene production, the study updates incorporates two additional revenue streams – a saleable DSO fines product and a saleable feldspar by-product.
When taking into account by-product processing and by-product credits, the effective operating cost for the project is now projected to be $249/t vs $249/t previously.
DSO Fines Saleable Product: 3.05mt of production over LOM, assuming a selling price of $65/t in the updated study.
Feldspar Production: 3.27mt over LOM, assuming a selling price of US$65/t in the study.
The project benefits from easy access to the major Accra-Takoradi highway within 1km of the site which provides access to the port of Takoradi which is 110km west of the site. Easy access to infrastructure and power also complements the impressive resource.
Longer term, the project is set to benefit from significant exploration upside potential from the historic Egyasimanku Hill deposit (1.5Mt @ 1.66% Li2O, non-JORC) and surrounding 560km2 portfolio.
Atlantic Lithium is targeting a resource upgrade to a minimum total resource of 24Mt with a view of supporting a plus 12 year mine life for the PFS study. It is estimated that every additional year of production will add up to c. US$60m in post-tax NPV per annum.
Conclusion: Atlantic Lithium’s updated scoping study demonstrates the elevated economic potential of Ewoyaa as a result of an extended LOM based on solid exploration results, higher spodumene prices, and an improved processing flow sheet. The project remains one of the world’s better spodumene concentrate deposits with its low costs and costal location in Ghana.
*SP Angel acts as Nomad to Atlantic Lithium
Bluejay Mining* (BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)) 9.3p, Mkt cap £90m – Dundas bulk samples sent for customer evaluation
Bluejay Mining report the completion of pilot plant processing on the Dundas project ilmenite ore.
The ore was pre-sieved in Greenland to remove larger stones. There is very little clay in the beach material making the first sieve relatively easy.
The high-grade ilmenite concentrate is now being shipped to potential future customers via Bluejay’s Asian distribution partner which we believe is a major trading house.
The operation of the pilot plant has de-risked the concentration process, validated the flow sheet and given the team important experience ahead of larger-scale mine development.
The market for ilmenite concentrates is thought to remain relatively tight with prices around 4% higher than seen in August this year.
While prices have pulled back in recent weeks due to the slowdown in China we see significant potential for prices and demand for titanium mineral sands to rise next year.
Bluejay recently appointed Peter Davies as Project Manager for the Dundas mine.
Davies is an experienced mining engineer with experience in mineral sands and titanium dioxide pigment operations.
Peter formerly worked at the Tiwest, Antwerp Titanium Dioxide Pigment Operation, run by Tronox.
Bluejay also recently appointed a global investment bank to act as a lead arranger for the financing of the Dundas project.
Conclusion: Bluejay continue to work towards the development of the Dundas titanium mineral sands mine. We see substantial value in the mine and in the exploration joint ventures in Greenland with KoBold Metals and in Finland with Rio Tinto.
*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Enonkoski mine site in Finland. The analyst holds shares in Bluejay Mining.
Cornish Metals* (Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF)) – 27p, Mkt cap £75.6m – Drilling at United Downs continues to intersect multiple mineralised structures
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Cornish Metals has announced results from its latest drillhole, UD21-11A, at United Downs in Cornwall showing five parallel zones of “high-grade copper/tin/silver mineralisation” at depth beneath the old United Downs mine which produced high grade copper ore during the 18th and 19th centuries.
The company explains that this is the third drillhole to pick up the down-dip extension of the United Downs mineralisation and that “High grade mineralisation has now been confirmed over a 500m strike length and is open along strike and to depth” following previous results from holes GWDD-001 and 002.
Drilling continues with the next hole “planned to test this mineralisation a further 400m along strike to the east”.
The results from UD21-11A reported today include:
A 2.53m wide intersection from a depth of 652.55m at an average grade of 4.61% copper, 0.05% tin and 32.4g/t silver, including 0.78m from 653.57m depth averaging 10.40% copper, 0.09% tin and 73.0g/t silver; and
A 2.26m wide intersection averaging 1.47% copper, 0.15% tin and 4.4g/t silver from 670.85m depth; and
A 2.73m wide intersection averaging 4.45% copper, 0.12% tin and 25.7g/t silver and including 0.82m at an average grade of 6.26% copper, 0.32% tin and 29.8g/t silver from 678.42m; and
2.58m averaging 2.08% copper, 0.67% tin and 12.9g/t silver from 701.16m including a narrower, higher grade segment of0.3m averaging 11.25% copper, 0.77% tin and 65.3g/t silver from 702.96m; and
0.68m averaging 0.03% copper, 0.70% tin and 0.3g/t silver from 751.25m depth.
The company points out that “tin grades … [start]…to appear in the deeper intersections, which adds weight to our theory that the whole United Downs area is prospective for tin beneath the old copper mines”. This feature of zonation is recognised elsewhere in the Cornish mineral field including “at South Crofty, just a few kilometres to the west”.
Cornish Metals says that “Drill holes UD21-009, (100m east of UD21-008) and UD21-010, (drilled above UD21-008) were drilled to test the extension of mineralisation encountered in UD21-008 … Although neither hole returned any mineralisation of note, this has improved the structural understanding of the area to the south of UD Lode and the Company is currently awaiting a renewal of the General Permitted Development Order ("GPDO") in order to continue drilling in this area and at UD Lode”.
Additional drilling is currently “testing the polymetallic Trenares Target … located immediately south of Mt Wellington Mine within the United Downs project area” and a second drill rig “has been moved to test targets on the southern flank of Carn Brea … located 1.5km southeast of the South Crofty tin project and … [which] …has potential to host tin-bearing lode structures in the vicinity of the historic Great Flat Lode mining district”.
We note that, at this stage, Cornish Metals is not reporting zinc assays from the drilling of UD21-11A which were featured in the announcement of results from UD21-008 and wonder whether this is a result of constraints in the laboratory pipeline or whether the recent drilling extends deeper than a zone of zinc enhancement.
Commenting on the results from UD21-11A, CEO, Richard Williams, said that Cornish Metals’ management “believes that these latest intersections clearly demonstrate the potential for United Downs to host a copper/tin/silver Mineral Resource … [and confirms] … that high grade mineralisation continues beneath the historic United Mines …[and] … validates the exploration potential we believe exists throughout Cornwall and within our mineral rights holdings”.
Conclusion: The drilling at United Downs is continuing to intersect multiple mineralised structures, including high copper grades and is now picking up improving tin grades as it extends deeper into the zone of copper enrichment. The complexity of the geology and interrelationship between the different mineral phases will require further drilling to resolve, however the continuing intersection of high copper and tin grades with silver validate continued exploration. Drilling is continuing and we look forward to the next results.
* SP Angel acts as broker and financial advisor to Cornish Metals. One of our Analysts holds shares in Cornish Metals.
Eurasia Mining* (Eurasia Mining PLC (AIM:EUA)) 21.94p, Mkt Cap £626m – Agreement with ERDC
Eurasia Mining have singed a cooperation agreement with the ERDC, ‘Far East and Arctic Region Development Corporation’.
The ERDC falls under the remit of the Russian Ministry for the Development of the Far East and Arctic.
The cooperative agreement should enable Eurasia to obtain further state support along with tax and non-tax benefits for projects within the agreement.
Eurasia state “Due to their location in the Arctic Zone of the Russian Federation, the Kola Projects have been included in and will be significantly enhanced by the ERDC Agreement.”
“Investor support in the Arctic is granted and managed through ERDC and the management company "The Capital of Arctic LLC", a joint venture of the Government of the Murmansk Region and ERDC that has the state mandate for business development and support of investment projects in the Arctic.
The implementation of a special economic regime in the Arctic promotes private investment in mining, creation of new and modernization of existing industrial facilities and the development of new mines.
The regime should assist with land use rights for all Eurasia's projects in the Arctic and investment and business support for Eurasia and incentives such as a a 50% reduction in the NDPI, mineral resources mining tax and a partial repayment from the budget of social security contributions, so that the effective current rate of social security contributions would be 7.6% as well as other non-tax benefits.
The ERDC should also help with the contracting of hydropower for to further Eurasia’s ESG credentials
The 10-year term of the ERDC Agreement could see some RUB3bn (US$40m) of financial support to help generate >200 jobs in the Artic.
*SP Angel act as Nomad and Broker to Eurasia Mining
Gemfields (Gemfields Group PLC (AIM:GEM)) 13.75p, Mkt Cap £155m –Record Kagem emerald auction
Gemfields reports that it has realised US$37.8m from the sale of emeralds from its Kagem mine in Zambia in a series of five ‘mini-auctions’ attracting 58 companies, held between 1st November and 6th December.
The company says that all the 32 lots it offered for sale were sold and that the revenue was “an all-time record for Kagem auctions”.
The auction included “higher quality emeralds as well as a selection of special pieces … [including the]… Chipembele, the 7,525 carat 'rhino emerald'” which was purchased by a long-standing customer, Ershed Gemstar, which also bought “an ultra-fine 935 carat emerald crystal which is expected to yield notable gems”.
In addition, a “mineral specimen containing approximately 100 emerald crystals set in host-rock was also offered at the auction … [but was] …. not sold”. The mineral specimen, known as “the "Goliath" mineral specimen, …was mined at Kagem in 2010 and weighs some 33 kilograms” including the host rock.
The company confirmed that “Gemfields' 39 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 749.7 million in total revenues”.
Managing Director, Adam Banks, said that “Our end-of-year emerald auction has been one of the most hotly contested auctions in Kagem's history. As a result, the auction set new records for both the highest revenue and the highest average price per carat achieved at any Kagem auction”
Hummingbird Resources (Hummingbird Resources PLC (LSE:HUM)) 14.3p, Mkt Cap £56m – Pasofino raises $5.5m to deliver Dugbe FS in Q2/22
Pasofino Gold, a JV partner earning into the Dugbe Gold Project in Liberia, raised US$5.5m through a non-brokered private placement.
$4.5m of the raise was provided by ESAN, a leading Turkish mining company.
Equity raise proceeds will be used to continue works on the Feasibility Study for the Dugbe Gold Project that is on track for Q2/22 completion.
Pasofino has an earn-in agreement for a 49% stake in the Project, with Hummingbird maintaining a controlling interest of 51%.
Metal Tiger (Metal Tiger PLC (AIM:MTR, OTC:MRTTF, ASX:MTR)) 20.75p, Mkt Cap £35m – change of controlling interest in Kalahari Metals
Metal Tiger reports that the Company has received consent from the Minister of Mineral Resources for the change of controlling interest in Kalahari Metals Limited, with Metal Tiger set to transfer 1.1% of the Company’s interest in KML to Cobre, increasing Cobre’s interest to a controlling 51% position.
In exchange, Metal Tiger will receive 445,368 Cobre shares, increasing the Company’s interest to 26,452,331 Cobre shares – approximately 17% of Cobre’s issue share capital.
Metal Tiger will be interested in an additional 8,311,765 shares following Metal Tiger’s participation in the Cobre Fundraise which is due to be settled imminently which would result in MTR holding approximately 21% of Cobre Limited
Shanta Gold (Shanta Gold Limited (AIM:SHG, OTC:SAAGF)) 9.3p, Mkt Cap £97m – Production guidance revised down to 55-57koz on equipment supply issues
The Company reported operational issues due to the supply of an unreliable emulsion and underground charging units in Q4/21 at the New Luiika Gold Mine in Tanzania.
The team has now restored emulsion product quality and fixed the underground production charging units.
Although, due to highlighted challenges the Company had to reprioritise mining sequence focusing on underground ore development rather than higher grade prepared for blasting stopes.
FY21 production guidance revised to 55-57koz, from 60-65koz targeted previously.
Tertiary Minerals* (Tertiary Minerals PLC (AIM:TYM)) – 0.19p, Mkt cap £2.3m – Rock chip sampling results from the Pyramid Project
Tertiary Minerals has announced results from rock chip and grab sampling undertaken during detailed mapping of the Pyramid project in Nevada.
The company says that most “of these new samples were collected over a wide area along the recently established zone of silver mineralisation at the North Ruth target. North Ruth has a target strike length of at least 530 metres”.
The sampling included 4 high grade silver samples with grades of “1,286 g/t, 889 g/t, 522 g/t and 513 g/t” as well as 4, different, samples which reported gold grades of “2.72 g/t, 1.67 g/t, 1.30 g/t and 1.20 g/t”.
Tertiary Minerals’ Managing Director, Patrick Cullen, explained that the results increase “our understanding of the North Ruth target over a series of work programmes. This has allowed us to identify mineralised structures with increasing confidence, as reflected in these results”.
He confirmed that he had “been on site with our geologist in Nevada over recent days, examining previous work and planning for an upcoming drill program and I look forward to providing updates”.
Conclusion: Early stage exploration mapping and sampling at the North Ruth target in the Pyramid project area has produced high silver and gold grades from rock chip and grab samples and assisted in the geological understanding and targeting of a future drilling programme. We await further news as further exploration results become available.
*SP Angel act as Nomad and Broker to Tertiary Minerals
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
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This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.
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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.
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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%
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