SP Angel . Morning View . Wednesday 19 01 22
China PBoC to use monetary tool box to avoid a collapse in credit
Antofagasta (Antofagasta PLC (LSE:ANTO)) – Meets 2021 production guidance despite Chilean drought and Covid19
BHP (BHP Group PLC (LSE:BHP)) – H1 operational review reports strong iron ore production from W Australia and highlights copper and nickel exploration projects
Bluejay Mining* (BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)) – Nautical charts for safe shipping to the Dundas titanium mineral sands project
Bushveld Minerals* (Bushveld Minerals Ltd (AIM:BMN, OTC:BSHVF)) – Bushveld and Mustang agree to extend maturity date on agreement to fund VRFB-H
Centamin (Centamin PLC (TSX:CEE, LSE:CEY, OTC:CELTF)) – Meets 2021 production guidance
Kodal Minerals* (Kodal Minerals PLC (AIM:KOD)) – CEO in Mali to meet technical team and new Governor of Bougouni region
Lake Resources (Lake Resources NL (ASX:LKE, OTCQB:LLKKF)) – Targeted base case production doubled to 50ktpa LCE at Kachi
Rainbow Rare Earths* (Rainbow Rare Earths Ltd (LSE:RBW)) – Rainbow secures 70% share of Phalaborwa REE tailings project
Rambler Metals and Mining* (Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB)) – Operational advances at the Ming mine show improved production and development rates
Tertiary Minerals* (Tertiary Minerals PLC (AIM:TYM)) – £500,000 placing
URU Metals* (URU Metals Ltd (AIM:URU)) – Zeb Nickel (TSX-V:ZBNI) Corp to start trading on OTCQB market today
IGTV: IG Outlook 2022, China new year, winter Olympics may see metals prices soften: (12/01/2022): https://youtu.be/vNqDh74zW5I
VOX Markets: 12/01/22: https://audioboom.com/posts/8011559-john-meyer-on-china-s-factory-shut-downs-plus-news-from-bluejay-beowulf-atlantic-lithium
interactive Investors: FTSE 100 favourite stock: https://youtu.be/BomNRQJt-YA. 2022 outlook: https://youtu.be/SxMPiPEc_Rg
Three small-cap mining share tips for 2022: https://www.youtube.com/watch?v=9xvA_3UXXYQ&ab_channel=interactiveinvestor
*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts.
We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.
Gold – gold prices hold stable at Gold US$1,817/oz as equity markets take hit on jump in US Treasury yields
Major US equity markets fell 1% yesterday as traders ramped up bets on an increasingly hawkish Fed approach to tackling inflation.
The Nasdaq fell 2%.
2-year treasury yields, the most accurate representation of short-term rate expectations, rose over 1% - 1st time since Feb. 2020.
Analysts expect further yield rises by the expected first rate hike in March.
Rising oil prices are expected to increase inflationary concerns, prompting further measures from the Fed.
Gold continues to trade over $1,810/oz despite strengthening yields reducing its attraction.
Copper prices gain as China’s PBOC looks to provide monetary support / stimulus
Copper prices rose to Copper US$ 9,722/t despite rising inventories and a stronger US dollar
The dollar index climbed 0.5% as US Treasury yields rose on interest rate bets.
LME copper stocks climbed to 95,000t.
Dow Jones Industrials -1.51% at 35,368
Nikkei 225 -2.80% at 27,467
HK Hang Seng -0.17% at 24,073
Shanghai Composite -0.33% at 3,558
Economics
US – New York manufacturing index plunged to -0.7 in January, from 31.9 before and 25.0 expected, as measures of orders and shipments fell on the spread of the Omicron variant.
China – The central bank reiterated its dovish stance highlighting a broad set of tools available to spur growth in the economy and drive credit expansion, Bloomberg reports.
The PBOC will “open the monetary policy tool box wider, maintain stable overall money supply and avoid a collapse in credit,” Deputy Governor Lio Guoqiang said Tuesday.
The central bank will roll out more policies to stabilize economic growth, front-load actions and make preemptive moves, he said.
Chinese local governments lower economic growth targets for 2022 as property slump weighs
5 Chinese provinces have lowered their growth targets for the year. (SCMP)
China has been hit by Covid lockdowns reducing consumption, soaring raw material prices, trade tensions with the West and a property market downturn.
The provinces also announced plans to ramp up investments in ‘key projects to provide adequate growth momentum.’
Local government revenue from land-use rights has fallen to 4% growth in 2021 from over 10% in 2020.
Analysts expect a national GDP growth target of 5% to be set at the annual parliamentary convention in March.
Germany – Investor confidence dipped to the lowest in eight months in January amid a strong wave of infections in the country, although the outlook remains strong, ZEW Institute data showed.
“The main reason for this is the assumption that the incidence of Covid-19 cases will fall significantly by early summer. The more positive economic expectations include the consumer-related and export-oriented sectors and thus a large part of the German economy,” ZEW Institute said.
ZEW Current Situation: -10.2 v -7.4 in December and -8.8 est.
ZEW Expectations: 51.7 v 29.9 in December and 32.0 est.
UK – Inflation beats expectations in December that on the back of stronger employment numbers raise chances of further monetary tightening ahead.
Consumer prices climbed 5.4%yoy driven by a broad increase in the cost of food, drink, restaurant meals and furniture.
The BOE last month announced the first increase since the start of the pandemic and may move again on February 3.
10y Treasury bond yields climbed 8bp on the news reaching 1.30%, the highest since early 2019.
CPI (%mom): 0.5 v 0.7 in November and 0.3 est.
CPI (%yoy): 5.4 v 5.1 in November and 5.2 est.
Core CPI (%yoy): 4.2 v 4.0 in November and 3.9 est.
Japan - BoJ leaves interest rates unchanged at -0.1%.
The bank also confirmed it will continue to maintain quantitative easing strategy.
Russia – Russian military forces and equipment started arriving in Belarus on Monday as two states agreed to hold military drills amid acute tensions with the West over neighbouring Ukraine, Reuters reports.
US Secretary of State Anthony Blinken will meet with his Russian counterpart Sergei Lavrov for talks later this week after talks Between Russia, Nato and the US hit the deadlock.
Efforts are directed at de-escalating concerns surrounding Russia’ military build-up in and around Ukraine.
The rouble and local capital markets registered a sharp sell off over the last several days as investors assessed a potential military invasion of Ukraine and West retaliation steps.
Ecuador - Indigenous Ecuadorians request ability to consent to mining projects
365,000 people have signed a petition to be presented to Ecuador’s Constitutional Court demanding the ability to consent on extractive projects.
The petition follows similar rights granted to neighbouring Colombians and Peruvians.
President Lasso wants increased mining and private investment into the sector to boost the economy.
Lasso has also set a target of doubling Ecuador’s oil production.
Currencies
US$1.1335/eur vs 1.1400/eur yesterday. Yen 114.38/$ vs 114.79/$. SAr 15.459/$ vs 15.452/$. $1.360/gbp vs $1.364/gbp. 0.719/aud vs 0.720/aud. CNY 6.352/$ vs 6.352/$.
Commodity News
Precious metals:
Gold US$1,817/oz vs US$1,817/oz yesterday
Gold ETFs 97.9moz vs US$97.9moz yesterday
Platinum US$984/oz vs US$970/oz yesterday
Palladium US$1,892/oz vs US$1,877/oz yesterday
Silver US$23.64/oz vs US$22.98/oz yesterday
Rhodium US$16,500/oz vs US$16,500/oz yesterday
Base metals:
Copper US$ 9,722/t vs US$9,693/t yesterday
Aluminium US$ 3,034/t vs US$3,040/t yesterday
Nickel US$ 22,180/t vs US$22,200/t yesterday
Zinc US$ 3,559/t vs US$3,526/t yesterday
Lead US$ 2,337/t vs US$2,346/t yesterday
Tin US$ 42,060/t vs US$41,930/t yesterday
Energy:
Oil US$87.9/bbl vs US$87.9/bbl yesterday
Natural Gas US$4.255/mmbtu vs US$4.297/mmbtu yesterday
Uranium UXC US$46.45/lb vs $46.50/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$127.9/t vs US$126.4/t
Chinese steel rebar 25mm US$748.0/t vs US$747.5/t
Thermal coal (1st year forward cif ARA) US$111.0/t vs US$106.2/t - Super-potent methane clouds spotted over Chinese coal mines
A satellite has detected clouds of methane gas from China’s main coal-producing region, Shanxi province, which accounts for more than 10% of the world’s coal.
One plume spotted on the 21st of Dec had an estimated emissions rate of 68mt of methane an hour, while another earlier in the month had a rate of 53mt an hour, according to Kayrros SAS.
If both releases lasted an hour, together they would have the same climate impact as the annual emissions from 6,000 UK cars.
The two clouds were the second and third worse cases of methane pollution identified by satellite in China last year attributed to the nation’s coal sector.
Thermal coal swap Australia FOB US$214.0/t vs US$201.0/t - Indonesia coal exports ramp up as government restrictions ease
48 coal export vessels have been allowed to leave Indonesia so far this month. (Reuters)
The country placed a ban on coal exports at the beginning of the month.
The ban was initiated on low coal stocks; however, the energy ministry has stated stocks are ‘much better’ now.
Coking coal swap Australia FOB US$423.0/t vs US$415.0/t
Other:
Cobalt LME 3m US$70,500/t vs US$70,500/t
NdPr Rare Earth Oxide (China) US$142,083/t vs US$142,079/t
Lithium carbonate 99% (China) US$49,985/t vs US$49,983/t
China Spodumene Li2O 5%min CIF US$2,690/t vs US$2,690/t
Ferro-Manganese European Mn78% min US$1,808/t vs US$1,818/t
China Tungsten APT 88.5% FOB US$320/t vs US$320/t
China Graphite Flake -194 FOB US$805/t vs US$805/t
Europe Vanadium Pentoxide 98% 8.9/lb vs US$8.9/lb
Europe Ferro-Vanadium 80% 33.25/kg vs US$33.25/kg
China Ilmenite Concentrate TiO2 US$390/t vs US$390/t
Spot CO2 Emissions EUA Price US$90.3/t vs US$93.0/t
Brazil Potash CFR Granular Spot US$800/t vs US$810/t
Battery News
Floating wind dominates ScotWind projects
Crown Estate Scotland announced the successful bids for the first ScotWind leasing round on Monday.
17 offshore wind projects, totalling almost 25GW in capacity, were awarded seabed lease rights – well beyond the expected 10GW for the leasing round.
11 of the 17 projects awarded will use floating wind turbines, accounting for 15GW of the total 25GW.
A consortium led by Shell, ScottishPower Renewables and SSE Renewables was offered agreements for two floating wind projects totalling 5GW – MarramWind with a 3GW capacity and CampionWind with 2GW of capacity.
Currently, the world’s largest floating farm is the 50MW Kincardine, also in Scottish waters.
Tesla delay initial Cybertruck production again
Tesla is hoping to start initial production of its much-anticipated Cybertruck by Q1 2023, pushing back its plan to begin production late this year, a source told Reuters.
The delay comes as Tesla is changing features and functions of the electric pickup to make a compelling product as competition heats up in the segment.
Production had already been delayed from late 2021 to late 2022, due to supply chain issues.
"Oh man, this year has been such a supply chain nightmare & it's not over!," Elon Musk tweeted in late November.
Company News
Antofagasta (Antofagasta PLC (LSE:ANTO)) 1,448p, Mkt Cap £14bn – Meets 2021 production guidance despite Chilean drought and Covid19
Antofagasta reports that it achieved its revised 2021 production guidance of 710-740,000t of copper output producing 721,500t at an average cash cost of US$1.20/lb.
Guidance for 2022 is in the range 660-690,000t at a net cash cost of US$1.55/lb reflecting lower grades at Centinela and a continuing impact of the Chilean drough at Los Pelambres.
The company says, however, that “we have a long-term solution to the water shortage which will come in the second half of the year when our desalination plant is commissioned”.
Antofagasta says, however, that “the demand picture for copper continues to be strong as copper is essential to economic activity and green investment initiatives such as electric vehicles, infrastructure and renewable energy”.
Copper output was dominated by Los Pelambres which produced 324,700t of copper (2020 – 359,600t) plus 9,200t of molybdenum (2020- 10,900t) and 53,200oz of gold (2020- 60,300oz) from the processing of 155,500tpd (2020- 161,900tpd) of ore at an average grade of 0.66% copper (2020 – 0.70%), 0.019% molybdenum (2020 – 0.021%) and 0.044g/t gold (2020 – 0.047g/t).
The lower throughput at Los Pelambres is attributed to “water optimisation and expected lower copper grade” which also adversely affected average cash costs which increased from the US$1.27/lb in 2020.
Antofagasta expects Los Pelambres to produce 290-300,000t of copper, 40-50,000oz of gold and 6,500-7,500t of molybdenum during 2022. Net cash costs are expected to be US$1.25/lb.
At Centinela, production of 274,200t of copper in concentrates was 11% above the 153,5/lb.00t achieved in 2020 reflecting both higher grades and increased throughput although copper cathode output was 4.8% lower at 88,800t “mainly due to expected lower grades and recoveries, despite higher throughput”.
Centinela’s “net cash costs were $1.13/lb, 14c/lb lower than 2020 due to higher by-product credits driven by higher gold production offset by higher cash costs before by-product credits”.
Production guidance for Centinela is in the range 245-255,000t of copper, 130-140,000oz of gold and 2,000-2,500t of molybdenum in 2022 at a net cash cost of US$1.60/lb.
Autocoya produced 78,600t of copper (2020 – 79,300t) at a cash cost of US$2.04/lb (2020 – US$1.82/lb) with higher throughput rates of 58,500tpd (2020 – 76,000tpd) offset by lower grades of 0.34% copper (2020 – 0.38%)and lower recovery rates of 78.6% (2020 – 79.3%).
Autocoya guidance is for 75-80,000t of copper at a cash cost of US$2.30/lb,
At Zaldivar, copper production declined by 8.7% to 44,000t as a result of “expected lower grades, partially offset by higher throughput”. Cash costs for 2021 were US$2.39/lb (2020 – US$1.80/lb) “mainly due to lower grades, higher maintenance costs and the stronger Chilean peso”.
Guidance for Zaldivar’s 2022 production is 50-55,000t of copper at a cash cost of US$2.20/lb.
Antofagasta reports that the Los Pelambres Expansion Project is now 68% completed with completion expected by the beginning of 2023. “The final estimated project costs are under review, considering the impact of COVID-19, higher input and logistics costs and project workers absenteeism”.
BHP (BHP Group PLC (LSE:BHP)) 2,441p, £51bn – H1 operational review reports strong iron ore production from W Australia and highlights copper and nickel exploration projects
In its operational review for the six-months to 31st December 2021, BHP reports near- record iron-ore production from its Western Australian mines and record volumes of material at the Escondida copper mine in Chile.
As a result, the company is currently maintaining its existing production full year guidance for iron-ore as well as for energy coal and nickel and indicates that copper production “is trending towards the low end of the guidance range, reflecting lower production guidance for Pampa Norte”.
Western Australian iron ore output of 66.1mt during the 3 months to 31st December brings H1 production to 129.4mt keeping operations on track to achieve the guidance range of 249-259mt for the full year and reflecting “continued strong supply chain performance including higher car dumper performance and improved rail cycle times”.
“Total copper production decreased by 12 per cent to 742 kt. Full year production is trending towards the low end of the guidance range for the 2022 financial year … [1.59-1.76mt] …, which reflects lower production guidance at Pampa Norte, and narrowed guidance ranges for Escondida and Olympic Dam”.
At Escondida, declines in feed grades offset the record mine tonnages although “concentrator feed grade is expected to improve in the June 2022 half year as the mine sequence moves towards higher grade areas”.
Copper output at Pampa Norte rose to 136,000t (40%) “reflecting the continued ramp up of the Spence Growth Option (SGO), partially offset by the impact of planned lower ore stacking grade, which is expected to decline by approximately 10 per cent for the 2022 financial year” while “Olympic Dam copper production decreased by 56 per cent to 44 kt as a result of the major smelter maintenance campaign … [which was completed in January] … in the period”.
BHP says that it expects copper output to be weighted towards the second half of the year
Metallurgical coal production was affected by “significant La Niña related wet weather impacts during the December 2021 quarter coupled with COVID-19 related labour constraints” which resulted in an 8% decline to 18mt.
BHP is reducing its production guidance for metallurgical coal to a range of between 38mt and 41mt from between 39-44mt.
“Energy coal production increased by five per cent to 7 Mt. Guidance for the 2022 financial year remains unchanged at between 13 and 15 Mt. The divestment of our interest in Cerrejón was completed in January 2022 and Cerrejón volumes are no longer included in energy coal guidance”.
Planned maintenance at the Kalgoorlie nickel smelter as well as at the Kwinana refinery and concentrators at Leinster and Kambalda led to a 15% reduction in nickel output to 39,000t however “Guidance for the 2022 financial year remains unchanged at between 85 and 95 kt, with volumes weighted towards the second half of the financial year”.
Shaft sinking at the US$3bn Jansen potash project in Canada is now reported to be 98% complete and BHP says that the US$5.7bn, 4.35mtpa, Stage 1 underground potash project is around 3% complete with initial production targeted for 2027.
Mineral exploration expenditure of US$110m included greenfield exploration “on advancing copper targets in Chile, Ecuador, Mexico, Peru, Canada, Australia and the south-west United States. Nickel targets are also being advanced in Canada and Australia”.
Underlining its interest in copper exploration BHP discusses its “farm-in agreement for the early-stage prospective Elliott copper project covering 7,200 km2 in the Northern Territory, Australia. Under the terms of the agreement, BHP can earn up to 75 per cent interest in Elliott by spending up to A$25 million over 10 years” as well as a second farm-in agreement “with Red Tiger Resources for the Intercept Hill copper project, which borders Oak Dam in South Australia”.
Resource definition drilling is continuing at Oak Dam.
In nickel exploration, Chief Executive, Mike Henry, said that “we secured an early stage entry into a world-scale nickel sulphide resource in Tanzania” via BHP’s recently announced investment in the Kabanga nickel sulphide deposit which “is a joint venture between Kabanga Nickel Limited (84 per cent interest) and the Government of Tanzania (16 per cent)”.
Conclusion: BHP’s iron ore production from W Australia is running at near record levels with production guidance maintained for iron-ore, energy coal and nickel. Copper output is expected to come in at the lower end of current guidance following weaker H1 grades at Escondida. Exploration includes copper projects in Australia and a recently acquired nickel sulphide project in Tanzania.
Bluejay Mining* (BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)) 8.33p, Mkt cap £81m – Nautical charts for safe shipping to the Dundas titanium mineral sands project
(Bluejay holds 100% of the Enonkoski licenses with a US$20m exploration jv agreement on the Enonkoski Ni-Cu-Co project)
Bluejay Mining report the publication of the Electronic Nautical Charts by the Danish Geodata Agency to cover the key seaward approach and coastal waters for the Dundas Ilmenite Project.
The charts are based on detailed bathymetry acquired by the Dundas Titanium project for navigational and will be used through construction and production to ensure safe shipping of equipment and supplies to the mine site.
Conclusion: The charts are a further important step forwards on the road to construction and production from the Dundas ilmenite project.
*SP Angel act as nomad and broker to Bushveld
Bushveld Minerals* (Bushveld Minerals Ltd (AIM:BMN, OTC:BSHVF)) – 9.84p, Mkt cap £124m – Bushveld and Mustang agree to extend maturity date on agreement to fund VRFB-H
BUY - Valuation
(Bushveld Energy holds an indirect interest of 25.25 per cent in Enerox. Bushveld is invested in Enerox. Bushveld Minerals holds 74% of Bushveld Energy. Bushveld Energy holds a 50.5% interest in VRFB-H)
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Bushveld Minerals, Mustang Energy and the CLN holders have now agreed to an extension of the Maturity Date for the deal with VRFB Holdings Limited to 28 February 2022.
Bushveld management are “confident the new Maturity Date will provide enough time to complete the transaction and allow Mustang to become an investment partner in this exciting venture.”
*SP Angel act as nomad and broker to Bushveld
Centamin (Centamin PLC (TSX:CEE, LSE:CEY, OTC:CELTF)) 89.5p, Mkt Cap £1,056m – Meets 2021 production guidance
Centamin reports final quarter 2021 gold production of 107,549oz bringing the total for 2021 to 415,370oz meeting published guidance in the range 400-430,000oz.
Costs for the year were US$859/oz on a cash basis and US$1,211/oz on an all-in-sustaining basis.
Guidance for 2022 is in the range 430-460,000oz with cash costs expected in the range US$900-1,000/oz and all-in-sustaining costs of US$1,275-1,425/oz. Capital costs in 2022 are expected to be US$215m and include “US$25 million of deferred solar and paste-fill plant construction expenditure from 2021”.
The company expects to spend US$25m on exploration during 2022 with the main focus on “Doropo Pre-Feasibility Study (scheduled for completion in H2 2022), ABC fieldwork and drill testing, and commencing exploration on the Egyptian Eastern Desert 3,000km2 highly prospective landholding”.
The production results reflect open-pit mining of 12.4mt of ore (2020 – 15.7mt) within an overall mining volume of 110mt (2020 – 80mt) at an average grade of 0.86g/t gold (2020 – 0.97g/t) ad underground ore production of 739kt (2020 – 625kt) at an average grade of 4.95g/t (2020 – 4.99g/t).
Processed ore remained steady at 11.9mt during the year although average feed grades declined by 12% to 1.18g/t (2020 – 1.35g/t).
Capital expenditure of US$233m during the year represented an “80% increase YoY” and included what the company describes as excellent progress on the “tailing storage facilities (TSF1 and TSF2), underground development and the waste stripping programmes were progressed ahead of schedule”.
Drilling for resource and metallurgical data continued at Doropo in Cote d’Ivoire as part of the PFS work while earlier stage exploration including soil sampling at the ABC project, also in Cote d’Ivoire, “has delineated numerous new gold-in-soil anomalies” which will be i
Centamin reports a “strong financial position, with net cash and liquid assets to US$257 million as at 31 December 2021. The Company remains unhedged and debt-free”.
Kodal Minerals* (Kodal Minerals PLC (AIM:KOD)) – 0.30p, Mkt cap £48m – CEO in Mali to meet technical team and new Governor of Bougouni region
Kodal Minerals report on their twitter account the CEO is currently in Mali meeting with Kodal’s technical team.
CEO, Bernard Aylward is also presenting an update to the new Governor of Bougouni region on the company’s plans and future mining activities.
Kodal recently reported strong progress at its Bougouni Lithium Project along with the granting of the project’s mining license in November.
The license covers Kodal’s proposed open-pit mining and processing operation at Bougouni.
The technical team are currently working to update the January 2020 Feasibility Study ahead of securing funding for mine development and construction.
Kodal is also waiting on results from the Fatou gold project in Mali with results are expected this month.
*SP Angel acts as Financial Advisor and Broker to Kodal Minerals
Lake Resources (Lake Resources NL (ASX:LKE, OTCQB:LLKKF)) A$1.0, Mkt Cap A$1,204m – Targeted base case production doubled to 50ktpa LCE at Kachi
Lake Resources has expanded planned base case production to 50ktpa LCE from 25.5ktpa in the DFS and the final investment decision on the Kachi lithium brines project in Argentina.
The decision is driven by strong lithium demand outlook as well as anticipated increased resource estimate.
Updated resource/reserve, operating parameters and financial estimates will be provided closer to the release of the DFS in mid-22.
The Kachi Lithium Project hosts ~4.4mt LCE at 223 Li mg/L in total resource and is working with California-based Lilac Solutions on a DLE ‘direct lithium extraction’ technology for development of the project.
Lake’s Ap 2020 PFS showed after tax NPV of ~US$0.7bn at half the production rate and a low $11,000/t LCE price
The successful commercialisation of a Direct Lithium Extraction technology will make a huge impact on Lake Resources and a number of other lithium brine companies in the region which are working on similar technologies.
Rainbow Rare Earths* (Rainbow Rare Earths Ltd (LSE:RBW)) 16.75p, Mkt Cap £86m – Rainbow secures 70% share of Phalaborwa REE tailings project
BUY – 46p
Click link for full research note: CLICK FOR PDF
(Rainbow hold 70% of Phalaborwa with 30% to be held by Bosveld Phosphates)
(Neodymium Nd, Praesidium Pr, Terbium Tb, Dysprosium Dy. Rainbow holds 100% of the Gakara mine and associated licenses in Burundi)
Rainbow reports an amendment to the Agreement for Co-Development of the Phalaborwa Rare Earths Project with Bosveld Phosphates.
The original terms of the JV included an agreement for Rainbow’s ownership to vary from 60-85% dependent on results of the PFS, however an amended agreement signed on the 18th of Jan 2022 confirms Rainbow's shareholding in the Joint Venture at 70%, with the remaining 30% held by Bosveld.
The fixing of Rainbow’s majority stake in the Phalaborwa project gives investors more certainty in the company’s share of the joint venture.
The company reports that metallurgical test work has confirmed that the phosphogypsum at Phalaborwa is amenable to direct leaching with acid to extract the contained rare earths by utilising he technology exclusively licenced to the Company for Southern Africa from K-Technologies.
K-Tech has developed a continuous ion exchange and continuous ion chromatography processes to separate rare earth elements into specific rare earth oxides or carbonates in phosphogypsum applications.
The technology requires fewer stages than conventional rare-earth separation and provides greater flexibility for significantly lower capital and operating expenditure savings, whilst avoiding the use of toxic and highly flammable solvents and diluents as required for the more conventional Solvent Extraction.
The process will enable Rainbow to target the extraction of the key REE oxides with NdPr as a single oxide along with Tb and Dy while leaving the other metals behind in the gypsum residue.
*SP Angel acts as financial advisor and broker to Rainbow Rare Earths
Rambler Metals and Mining* (Rambler Metals and Mining PLC (AIM:RMM, TSX-V:RAB)) 32.75p, Mkt cap £46m – Operational advances at the Ming mine show improved production and development rates
(Rambler owns 100% of the Ming Copper-Gold Mine)
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Mid-morning yesterday, Rambler Metals & Mining reported its operating results for the final quarter and full year 2021 showing improvements in tonnages processed, grades, recovery rates and copper production as well as higher mine development rates.
During the quarter mine treated 66,651t of ore at a head grade of 1.75% copper to produce 4,109t of concentrate containing 1,090t of saleable copper and 155oz of gold.
This brings the total ore treated during the year to 235,903t at an average grade of 1.57% copper and concentrate production to 12,874t containing 3,418t of copper and 1,805oz of gold.
Compared with the preceding quarter to 30th September 2021, the results represent an improvement of 10% in tonnage treated and a 40% increase in both concentrate production as a result of higher head grades and recoveries and in contained copper output.
In addition to the production increases, Rambler Metals reports increases in its mine development rates of 12% during the quarter to 1,093m (over 31% of the 3,504m achieved during the year).
In conjunction with the start of stope drilling in the Lower Footwall Zone (LFZ) at the end of the month, the company expects that, by the end of the current quarter, it will have 4 ore sources in operation at the mine which it describes as “a first for the Ming Mine”.
We notice that the balance between capital development (284m) and operating development (809m) is shifting in favour of the operating development as access is established and the production faces are created providing “improved copper feed grade (22% higher than Q3 2021) as well as improved continuity of ore supply … in conjunction with first development through the high-grade Upper Footwall Zone”.
President and CEO, Toby Bradbury, said that “Q4 2021 was in all ways an improvement over each of the previous four quarters. Improved development and production from the mine have led to similar improvements in throughput and recovery at the plant”.
He added that “The improved developed state that we have been striving for in the underground has all but been achieved and will lead to a significant uplift in production through 2022” and said that, following the mineral resources update reported in December, “we are now re-running the mine design optimisation for fiscal 2022 and then life of mine. Once complete, updated production guidance for 2022 will be announced”.
He also commented on the recent announcement of the discovery of the new zone of mineralisation at the LP East Zone, not, we assume, included in the December update, and confirmed that the “Ming Mine’s mineral resources still offer great potential for further growth in both scale and quality”.
Conclusion: Improvements in throughput, grade, recovery rates and copper production during Q4 2021 are showing the benefits of the increasing underground development work at the Ming mine which is now expected to have 4 ore sources operational by the end of the current quarter. As a result, management is indicating significant production increases this year and expects to issue its 2022 production guidance when current optimisation work incorporating the December 2021 mineral resources update is complete
*SP Angel act as Nomad and broker to Rambler Metals & Mining.
Tertiary Minerals* (Tertiary Minerals PLC (AIM:TYM)) – 0.19p, Mkt cap £2.3m – £500,000 placing
Tertiary Mineral reports that it has raised £500,000 by placing approximately 294m shares at a price of 0.17p/share in order to fund drilling and other exploration work in Zambia and Nevada.
In addition, the company is raising £100,000 through a Broker Option “to provide qualified Tertiary shareholders and other qualified investors with an opportunity to participate in this fundraising”.
Warrants for every 2 shares in the placing and broker option “will be exercisable at 0.34 pence and have a term of 18 months”.
Managing Director, Patrick Cullen, explained that “We have drilling programs targeting silver and gold at Pyramid in Nevada and copper at Jacks in Zambia due to progress in the coming months. This funding strengthens our balance sheet, allowing us to expand our exploration budgets”.
Directors, including Mr. Cullen, Executive Chairman, Patrick Cheetham, and non-executive directors Mike Armitage and Donald McAlister are participating in the fund raising for an aggregate £40,000.
Conclusion: Tertiary Minerals’ fundraising provides resources for the forthcoming drilling in Zambia and in Nevada. We await the results with interest
*SP Angel act as Nomad and Broker to Tertiary Minerals
URU Metals* (URU Metals Ltd (AIM:URU)) 200p, Mkt cap £3.3m – Zeb Nickel Corp to start trading on OTCQB market today
(URU Holds a 74.82% stake in Zeb Nickel Corp which holds the Zebediela Nickel project in South Africa)
URU Metals reports the start of trading of its affiliate Zeb Nickel Corp on the US OTCQB market today.
The OTCQB is the premier venture marketplace for developing junior resource companies in the US for US investors.
The OTCQB is recognized by the Securities and Exchange Commission and is therefore subject to strict SEC regulation.
The company is expected to commence with a 3,600m diamond exploration drilling program in H2 2021.
The aim of this program is to improve the confidence in the historical NI43-101 compliant resource, as well as explore for higher grade nickel sulphide mineralisation.
URU has also recently submitted all the required documentation to the South African Department of Mineral Resources for the Mining Right for the Zebediela Project .
*SP Angel acts as Nomad and Broker to URU Metals
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