SP Angel . Morning View . Monday 24 01 22
Base metals pull back on potential for SWIFT action if Russian invades Ukraine
Beijing prepares to cut output by polluting industries
Lithium and Rare earths prices continue to rise
MiFID II exempt information – see disclaimer below
Fortescue Metals Group (ASX:FMG) (Fortescue Metals Group (ASX:FMG)) – FMG buys Williams Advanced Engineering for $223m
Petropavlovsk (Petropavlovsk PLC (LSE:POG)) – New CFO appointment
Polymetal (Polymetal International PLC (LSE:POLY)) – Novopet VMS project maiden MRE delivers 2.4moz at 8.0g/t
Scotgold Resources* (Scotgold Resources Limited (AIM:SGZ)) – BUY, 162p CLICK FOR NOTE - Ramping up Cononish
Shanta Gold (Shanta Gold Limited (AIM:SHG, OTC:SAAGF)) – FY21 production results highlight challenging year
Sibanye-Stillwater (JSE:SSW) – Termination of $1bn Brazilian purchase deal
Tirupati Graphite (Tirupati Graphite PLC (LSE:TGR, OTCQX:TGRHF)) – Madagascar progress update
Tesoro Resources (ASX:TSO) – New Discovery at the El Zorro Gold Project
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 holds strength as geopolitical tensions heighten, eyes now turn to Fed meeting
Gold has bounced back from a minor correction to continue trading around $1,840/oz.
High US inflation, Russia’s intensifying aggression towards Ukraine and concerns over China in Taiwan are all supporting the metal.
Analysts expect severe sanctions to be imposed on Russia if Putin overthrows the Ukrainian regime, with a wider global economic ripple effect anticipated.
US 10-year Treasury yields slid on Friday, further boosting gold’s appeal.
The US Federal Reserve meeting starting tomorrow should provide an additional catalyst to gold with expectations of accelerated rate hikes.
Bitcoin prices collapse
Prices have fallen to 33,574 from 67,582 high seen at end December
Copper falls 2.2% as traders take cautions approach to market and Beijing warns of action as heavy smog descends on city
Copper has pulled back to $9,830/t from recent highs of $10,048/t.
Shanghai copper stocks rose 16% last week.
Traders have reduced their exposure to the metal on rising risk-off sentiment in the wake of current geopolitical tensions.
Russia is estimated to control 10% of global copper reserves
Russia poised to invade Ukraine according to US and UK intelligence
The UK and the US are preparing to cut Russia off from the SWIFT system of settling banking transactions.
SWIFT is the ‘Society for Worldwide Interbank Financial Telecommunications’ and is essential for the settlement of cash transactions with banks.
Cutting Russia off from the SWIFT interbank system could cripple the economy and leave Russia trading through more basic means with China and other rallies.
Taiwan – Will China invade Taiwan while Russia invades the Ukraine?
39 Chinese warplanes entered Taiwan’s air defence zone in most aggressive move since October
Taiwan’s defence ministry warns that 34 fighter jets, 1 bomber and 4 electronic warfare planes entered the country’s air defence zone.
Yesterday’s move from the Chinese People’s Liberation Army was the most significant since 46 warplanes entered the zone on October. 4th.
Taiwan agreed this month to ramp up defence spending by $8.6bn.
Dow Jones Industrials -1.30% at 34,265
Nikkei 225 +0.24% at 27,588
HK Hang Seng -1.29% at 24,643
Shanghai Composite +0.04% at 3,524
Economics
US – Treasury bond yields indicate potential for higher interest rate rises to combat inflation
China – property developer Yuzhou elects not to repay US$105m untendered notes due Tuesday (SCMP)
The company is to relaunch an offer for the notes and is in active communication with investors.
DaFa Properties Group used an exchange offer to help repay US$184.5m due on 18th January
Risesun Real Estate Development, Shinsun Holdings and Kaisa Group Holdings have also used similar debt swaps.
Shanghai calls for ramp up in chip production facilities to support China’s EV market growth
Shanghai saw a 170% increase in EV production last year to 550,000 NEVS.
The mayor has stated the city’s intentions to ramp up investments into chip production facilities.
The government will offer 30% subsidies for investments in chip materials and equipment.
Tesla’s Shanghai Gigafactory produced 51.7% of its 936,000 total global delivered units.
Burkina Faso - President detained as soldiers appear to stage coup
Its almost normal to host a coup in Burkina Faso these days
A number of soldiers appear to have detained the president Roch Marc Christian Kaboré
Soldiers are also reported to be battling for control of several barracks after protests over recent setbacks in the ongoing war against Islamist militants in the north of the country.
Guinea and Mali have both experienced unforeseen leadership changes over the past eight months.
Ghana – Explosives truck explodes after collision with motorbike killing 17
The truck was said to be en route from a depot in Tarkwa and was 140km from the Chirano gold mine.
Cape Town – Temperature of 45.2C recorded at Table Bay beating previous 42.4C record
Anecdotal reports suggest higher temperatures have been seen to the east in Stellenbosch.
Fortunately temperatures appear to have cooled off to 18-26C today.
Currencies
US$1.1318/eur vs 1.1334/eur last week. Yen 113.76/$ vs 113.92/$. SAr 15.124/$ vs 15.157/$. $1.355/gbp vs $1.357/gbp. 0.717/aud vs 0.720/aud. CNY 6.332/$ vs 6.341/$.
Commodity News
Precious metals:
Gold US$1,840/oz vs US$1,837/oz last week
Gold ETFs 99.0moz vs US$98.0moz last week
Platinum US$1,043/oz vs US$1,042/oz last week
Palladium US$2,123/oz vs US$2,054/oz last week
Silver US$24.25/oz vs US$24.48/oz last week
Rhodium US$16,650/oz vs US$16,600/oz last week
Base metals:
Copper US$ 9,818/t vs US$9,956/t last week
Aluminium US$ 3,033/t vs US$3,095/t last week
Nickel US$ 23,260/t vs US$23,850/t last week
Zinc US$ 3,592/t vs US$3,646/t last week
Lead US$ 2,366/t vs US$2,363/t last week
Tin US$ 43,365/t vs US$43,520/t last week
Energy:
Oil US$88.4/bbl vs US$87.1/bbl last week
Oil prices rose again in early trading today on worries about supply disruption amid rising tensions in Eastern Europe and the Middle East, which could make an already tight market even tighter, while OPEC+ and continue to struggle to raise output
Both benchmarks rose for a fifth week in a row last week, gaining 2% to reach highest levels since October 2014
Prices are already up more than 10% this year on the concerns over tightening supplies
Concerns of supply disruption in Eastern Europe, the New York Times reported late on Sunday that President Joe Biden was considering deploying several thousand US troops to NATO allies in Eastern Europe and the Baltics
Russia will face severe economic sanctions if it installs a puppet regime in Ukraine, a senior UK government minister (Dominic Raab) confirmed yesterday, after the UK accused the Kremlin of seeking to place a pro-Russian leader in power there
Money managers raised their net long US crude futures and options positions in the week to 18 January, according to the US Commodity Futures Trading Commission (CFTC)
In addition, US petroleum inventories have continued to slide over the last month, while energy firms cut oil rigs this week for the first time in 13 weeks
Natural Gas US$3.912/mmbtu vs US$3.930/mmbtu last week
European natural gas prices fell last week as China prepares to flood the market with fuel that could further ease supply concerns in the continent
Benchmark futures fell as much as 8.9%, tracking weaker prices in Asia
The trading arm of Sinopec is selling spot LNG cargoes this year, according to traders with knowledge of the matter
The move indicates China is well stocked and more gas could come to Europe, helping to ease pressure from its abnormally low inventories and curtailed supplies from Russia
Uranium UXC US$45.40/lb vs $46.00/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$136.7/t vs US$135.4/t
Chinese steel rebar 25mm US$753.8/t vs US$751.5/t
Thermal coal (1st year forward cif ARA) US$108.5/t vs US$109.3/t
Thermal coal swap Australia FOB US$217.0/t vs US$211.0/t - Coal prices soar on Indonesia ban and limited alternative supply
Thermal coal prices have rallied 59% from Nov. 12th lows of $153/t to $244/t.
Prices are expected to have peaked in the short-term as Indonesia ramps up exports again.
Australia have ramped up exports by 380,000t whilst Russia’s coal exports have fallen from 13.23mt in Dec. to 9.7mt in January.
Indonesia’s short-lived coal export ban initiated on Jan. 1st is expected to result in a tight market through February.
Analysts expect the country to export 17.7mt of coal this month – 43% less than December’s 31.29mt. (Kpler)
Coking coal swap Australia FOB US$441.0/t vs US$432.0/t
Other:
Cobalt LME 3m US$72,000/t vs US$72,000/t
NdPr Rare Earth Oxide (China) US$145,693/t vs US$145,484/t
Lithium carbonate 99% (China) US$55,356/t vs US$54,014/t
China Spodumene Li2O 5%min CIF US$2,690/t vs US$2,690/t
Ferro-Manganese European Mn78% min US$1,805/t vs US$1,808/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% 9.3/lb vs US$9.1/lb
Europe Ferro-Vanadium 80% 36.25/kg vs US$35.25/kg
China Ilmenite Concentrate TiO2 US$391/t vs US$390/t
Spot CO2 Emissions EUA Price US$93.3/t vs US$93.4/t
Brazil Potash CFR Granular Spot US$810/t vs US$800/t
Battery News
Renault, Nissan and Mitsubishi to announce 2030 EV plan this week
Renault, Nissan and Mitsubishi plan to triple their investment to jointly develop electric vehicles (EVs), sources have told Reuters.
The three are expected to announce a plan to invest more than €20bn over the next five years on EV development, on Thursday this week, the sources said.
By 2030, the alliance is expected to produce more than 30 new battery EVs underpinned by five common platforms.
World’s first hydrogen tanker to ship test cargo from Australia to Japan
The world's first liquid hydrogen carrier is expected to make its maiden voyage on Friday, in a test delayed by nearly a year because of the COVID-19 pandemic.
The Suiso Frontier, built by Japan's Kawasaki Heavy Industries, arrived in Australia this week from Kobe, and is expected back in Japan in about a week.
The Hydrogen Energy Supply Chain (HESC) is a A$500m coal-to-hydrogen project backed by Japan and Australia to switch to cleaner energy and cut carbon emissions.
The partners are looking to produce up to 225,000t of hydrogen a year.
Hydrogen is seen as a way to decarbonise industries that rely on coal, gas and oil, and is key to Japan's goal to achieving net-zero emissions by 2050 – Australia aims to become a major exporter of the fuel.
Company News
Fortescue Metals Group (FMG AU) A$20.52, A$63bn – FMG buys Williams Advanced Engineering for $223m
Fortescue Metals Group has agreed to buy Williams Advanced Engineering, founded by the Williams Formula 1 racing team, for $223m.
Fortescue have made the acquisition as they look to gain access to battery technology to convert their train and truck fleets to battery.
WAE will be integrated into Fortescue Future Industries clean energy unit, and the company has already been working with FMG on a battery prototype to power an electric haul truck and is also developing an electric train project.
Elizabeth Gaines, CEO of FMG commented: “The acquisition allows us to continue to accelerate our drive to achieve net-zero emissions and to eliminate the use of diesel across our mining fleet”.
Half of Fortescue’s carbon emissions, which it has pledged to slash to net-zero by 2030, come from the 400 to 450m litres of diesel it burns a year to power its mining fleet.
Andrew Forrest, founder and chairman of FMG said the deal represented the “first merger of heavy industry with hyper advanced electrical technology”.
Petropavlovsk (POG LN) 14.4p, Mkt Cap £571m – New CFO appointment
The Company appointed Stanislav Ploschenko as the Group’s CFO with immediate effect.
Mr Ploschenko brings over two decades of experience in finance including FO positions at publicly-listed companies.
Previously, he acted as Head of Corporate Finance and then for seven years as CFO at steel and coal producer Mechel (NYSE:MTL).
Later he joined then Nasdaq-listed CTC Media (NASDAQ:CTCM) and since 2016 held different roles at East Mining Company including acting as CFO, deputy CEO and CEO.
Mr Ploshchenko holds a master's degree in international securities, investment and banking from the University of Reading (UK) as well as finance degrees from the Russian State Academy of Finance and the University of Portsmouth (UK).
Polymetal (POLY LN) 1,181p, Mkt Cap £5,591m – Novopet VMS project maiden MRE delivers 2.4moz at 8.0g/t
The Company released maiden JORC-compliant MRE on the Novopetrovsky polymetallic deposit.
The VMS deposit is estimated to host:
7.0mt at 9.1g/t GE (2.5% Cu, 4.2% Zn, 3.5g/t Au, 45g/t Ag) for 2.1moz in the Indicated category;
2.2mt at 4.3g/t GE (1.4% Cu, 1.5% Zn, 1.4g/t Au, 14g/t Ag) for 0.3moz in the Inferred category.
The value breakdown by metal is 37% Cu, 35% Au, 23% Zn and 6% Ag.
The MRE is based on 87 drill holes for a total length of ~50,500m including 82 drill holes completed in 2020-22 by Polymetal after acquisition of the asset.
The Company spent US$8m in exploration costs that including acquisition cost for the 75% brings the total project investment to $15m or $6/oz attributable ounce.
The Company acquired a 75% interest in the project in 2020 and holds a 7-year call option to buy out the remaining stake in the project from the JV partner (Rosgeo).
The project is expected to be a standard underground operation with a plant to produce conventional flotation and gravity concentrates.
Novopet is located in the Khaibullinsky district of Bashkortostan, 110 km from the city of Sibay (population of 60,000).
The location has easy access to grid-power and well-developed transportation infrastructure.
Average depth of the mineralisation is 395m and average thickness is 19m.
The deposit extends over 750m along strike and 200-400m cross-strike.
Mineralisation remains open along and across strike.
Next milestones for the project include: MRE Update (Q2/23), Maiden Ore Reserves (Q4/23), Mining License Approval (Q1/24) and PFS (Q1/25).
Conclusion: The team has done well in securing the Novopet project at a low cost and carrying an extensive drilling programme resulting in a high grade maiden MRE on the project (2.4moz at 8.0g/t). The project also more than doubles the Company’s exposure to copper.
Scotgold Resources* (Scotgold Resources Limited (AIM:SGZ)) 84p, Mkt Cap £50m - Ramping up Cononish
BUY - 162p
CLICK FOR NOTE
We release our earnings estimates and update our valuation after the Company reported Q4/21 operational results and provided reviewed Cononish production ramp up guidance earlier this month.
Production hit record monthly rates in December as underground development helps mining rates and processing plant moves closer to Phase 1 run rates
Q4/21 production totalled 1.5koz gold and 7.2koz silver with December month delivering record output since commissioning in Nov/20 delivering ~45% of quarterly production (~0.7koz).
The processing plant treated ~6.2kt during the quarter as underground development and production was negatively impacted in November by Covid-19 related issues for explosives affecting the pace of blasting and ore extraction. Issues have been addressed since then as seen by 2.5kt processed and record monthly gold production in December.
Ramp up guidance – Phase 1 3ktpm in Q1/22, 4ktpm in Q2/22, 4.5ktpm in Q4/22 and Phase 2 6ktpm end of Q1/23
The team aims to reach Phase 1 3ktpm (~1.0kozpm/11kozpa output rate) in Q1/22.
The Company has put in place a new Optimisation Phase Production plan aimed at gradually debottlenecking mining and processing plant operations to ramp up run rates from Phase 1 3ktpm capacity to reach 4ktpm by the end of Q2/22, 4.5ktpm in Q4/22 and ultimately reaching Phase 2 6kptm (~23kozpa) by the end of Q1/23.
A low cost expansion of the tailings thickener capacity (~£0.4m) should allow expand throughput to 4.5ktpm this year. Additionally, the Company is looking at an option to install an ore sorter (~£1.0m) between the existing crusher unit (already installed 6ktpm) and the mill (3ktpm) designed to upgrade the mill feed to match the existing milling capacity and avoid expansion of the mill. Fine fraction separated in an ore sorter can be used as mine backfill while lower volumes of tailings generated post mill means that currently permitted tailings can potentially support new reserves and expansion of the life of mine.
At the mine, the team is planning to access the second cut and fill stope in Q2/22 and switch to a cheaper long hole stoping in Q3/22. Mining equipment to support Phase 2 rates is in place with underground development works focussed on increasing the number of active mine faces to support higher throughput rates to be ready in Q3/21, ahead of the plant capacity expansion.
Production guidance - 1.4-2.2koz in Q1/22, 16.0-17.5kozpa rate by Q4/22 and Phase 2 23.5kozpa rate by the end of Q1/23
Based on the above guidance, we estimate ~15koz GE in CY22e (mostly gold with silver accounting for just 5% of GE) and production weighed towards H2/22.
CY23e at ~25koz GE as higher grade early bumps up output above ~23koz LOM average.
During the CY22 transitory year we estimate AISC to average ~£700/oz and move towards guided £550/oz at 23kozpa reflecting higher production run rates. Additionally, the Company is likely to connect Cononish to the power grid in CY23/24 that should further help costs lower as well as improve environmental profile of the operation.
£5m refinancing of the Bridge Barn loan improves Scotgold liquidity position and clears runway to ramp up production at Cononish
During the ramp up phase, the Company agreed a restructuring of the outstanding £7.5m Bridge Barn loan as well as agreed an additional £0.5m facility (3 year loan, 9% interest to be paid quarterly) provided by Mrs Jane Styslinger a related party of Non-Executive Director Mr Bill Styslinger, to cover working capital requirements.
A new £5.0m loan is provided by Bridge Barn, a company owned by Nathaniel le Roux (Scotgold NED and major shareholder holding >40% interest in the Company), to repay £4m along with accumulated interest.
The restructuring allows the Company to avoid repayment of £4m (plus accumulated interest) that were due in May/22 and Oct/22 offering more financial flexibility.
The loan is repayable by Jan/25, carries a 9% interest (unchanged from previous rate), to be paid quarterly and takes total outstanding debt to Bridge Barn to £8.5m with terms of the remaining £3.5m of the facility remaining unchanged.
Potential to expand the life of mine at Cononish flagged subject to drill testing on strike and down dip extensions
The Company believes there is significant potential to increase the resource of Cononish expanding the life of mine past currently estimated 8.5y. The team highlighted the presence of several areas that have not previously been tested as well as a potential for the extension of the resource along strike and down dip.
Cononish reserves currently stand at ~200koz gold and ~850koz silver (Jan/15). To reflect the LOM extension upside we estimated value contribution potential from doubling the current reserves of ~£70m using ~8y LOM, 22kozpa and AISC ~£550/oz. We adjusted it by a 0.25x factor (ie ~£17m NAV contribution) to reflect “concept” stage of the expansion and account for geological, permitting and operational risks.
Valuation: Ramping up Cononish is taking longer than expected but it looks like the team is progressively addressing mining and processing plant bottlenecks with run rates planned to accelerate through CY22 on course for Phase 2 6ktpm/~23kozpa by the end of Q1/23.
We estimate Phase 2 to generate ~£20mpa in EBITDA and ~£14mpa in FCF (+60% EBITDA margin and +30% FCF yield at 77p share price) at guided £550/oz AISC and using our long term gold price assumption of £1,350/oz ($1,900/oz at 1.4 FX).
Liquidity position has been improved with CY22 debt repayments pushed out to Jan/25 allowing the team to fully focus on ramp up schedule that is central to rerating of the Company.
Our valuation does not include any upside from a potential discovery at the Grampian Project comprising 13 licenses over ~2,900km2 across prospective Dalradian Belt with most of the ground (85%) located outside the Loch Lomond and the Trossachs national Park.
We have not included any premium for gravity gold produced from Cononish at this point either with most of production coming in the form of gold rich concentrate but that may change once gravity circuit contribution improves potentially translating into higher realised gold prices. Previous Cononish mine plan guided for up to ~25% of annual production in the form of gravity gold with the management previously reporting significant premiums offered by local jewellers for Scotland sourced gold.
We maintain our BUY recommendation with an updated 162p NAVPS reflecting latest gold price/production/costs estimates as well as Cononish LOM extension potential and highlight significant scope for rerating as the team delivers on the laid out ramp up plan.
*SP Angel act as Nomad and broker to Scotgold Resources. A number of SP Angel analysts have visited the Cononish gold mine
Shanta Gold (Shanta Gold Limited (AIM:SHG, OTC:SAAGF)) 8.8p, Mkt Cap £92m – FY21 production results highlight challenging year
Q4/21 production amounted to 12.2koz (Q3/21: 14.2koz) largely reflecting lower processed grades during the quarter.
FY21 output totalled 55.3koz (FY20: 83.0koz) close to the lower end of the revised annual guidance of 55.0-57.0koz.
Production guidance was revised from 60.0-65.0koz in December last year on the back of challenges experienced with supplied unreliable emulsion product quality and the underground production charging units.
The issue has been since rectified.
Lower production in the final quarter drove Q4/21 AISC to $1,624/oz (Q3/21: $1,480/oz).
FY/21 sales came in at 57.5koz (FY20: 83.2koz) with an average realised price of $1,801/oz (FY20: $1,495/oz) as all sales were completed at a hedge free spot gold price.
FY/21 AISC averaged $1,439/oz (FY/20: $841/oz).
The Company highlighted increased risks of labour availability amid higher cases of Covid-19 infections as well as stronger competition for workforce in the country towards the end of 2021 as the country started issuing new mining licenses and adopted more pro foreign investment stance.
The latter has also led to increased compensation levels for labour.
$4.2m of the outstanding VAT receivable was granted as a refund/offset from local tax authorities during the quarter with the total reduced to $26.8m, from $27.7m.
A further $4.3m was received in January.
At Singida, development works are ongoing with first production targeted for early 2023 with all three mining licenses having now been extended for a additionally 10 years to 2032.
Total capital expenditure including prepayments at Singida during 2021 of US$10.9 million.
At West Kenya, exploration delivered encouraging results as the team is focused on converting the Inferred resource into higher confidence category and ultimately into Ore Reserves.
Updated Group Resources and Reserves statement is expected in Q1/22.
Closing net cash position stood at $13.5m (H1/21: $19.4m) including $15.9m in cash and $2.4m in debt.
Maiden dividend paid in April 2021 and interim dividend paid in October 2021, totalling approximately US$2.8 million during 2021.
FY22 guidance is for 68.0-76.0koz at $1,050-1,250/oz AISC.
Production is expected to be weighed towards H2/22 (65%) reflecting mining of the high-grade BC crown pillar that hosts ~72kt at 8.4g/t beginning in May/22.
Q1/22 production is expected to be similar to Q4/21.
Conclusion: FY21 has been a challenging year with production coming in at ~55koz, down from 83.0koz in FY20, on the back of weaker reconciliation of mined grades from the NLGM underground operation as well as issues with 3rd party suppliers in the final quarter. The team is expecting production to recover in FY22 on higher grade material being sourced from the BC underground mine in Q2/22 leading to stronger H2/22.
Sibanye-Stillwater (JSE:SSW ) ZAR5,669, Mkt cap ZAR159bn – Termination of $1bn Brazilian purchase deal
Sibanye Stillwater said on Monday that it had terminated a $1bn deal to buy the Santa Rita nickel mine and Serrote copper-gold mine in Brazil, following a geotechnical event at Santa Rita.
The company said that the geotechnical event would have had a material and adverse impact on mining operations at Santa Rita.
As the transaction was to buy the two assets in parallel, the purchase of the Serrote copper project has also been terminated.
Santa Rita is one of the world’s biggest open-pit nickel sulphide mines and has an estimated annual processing capacity of 6.5mt of ore per annum.
Tirupati Graphite (Tirupati Graphite PLC (LSE:TGR, OTCQX:TGRHF)) 80.5p Mkt Cap £70m – Madagascar progress update
Tirupati Graphite provides a progress update for its operations in Madagascar, where the new 18,000tpa primary flake graphite plant at Sahamamy remains on track for completion by the end of calendar Q2-2022.
Upon completion, this plant will increase total production capacity in Madagascar to 30,000tpa.
The new earthmoving equipment for the 18,000tpa plant at Sahamamy, which includes hydraulic excavators, payloaders, bulldozers and area graders has arrived in Madagascar.
The remaining items, four 30 tonne articulated dump trucks, are in transit and expected to arrive on site in early February 2022.
On completion of the processing plant at Sahamamy, Tirupati will commence mine opening activities at the Sahasoa deposit area within the Sahamamy project as well as strengthening internal infrastructure to support the expanded operations.
Redevelopment of the 100-kilowatt Sahamamy hydropower plant is nearing completion and remains on track for commissioning during the current quarter.
The commissioning of the hydropower plant will substantially replace the diesel generated power currently used, reducing GHG emissions by c.50% and power costs by c.10% from the next quarter onwards.
Operations at both Sahamamy and Vatomina were restarted smoothly following the Christmas and New Year holiday period and graphite production remains in line with expectations.
Shishir Poddar, Executive Chairman of Tirupati Graphite, said: "Tirupati Graphite's growth projects across its primary graphite division remain on track to achieve total flake graphite production capacity of 84,000 tonnes per annum by the end of 2024, in line with our vision to be a world leader in the graphite space.”
Tesoro Resources (ASX:TSO) A$0.078, Mkt cap £51m – New Discovery at the El Zorro Gold Project
Tesoro reports assay results from initial surface mapping and rock chip channel sampling programs on new targets at the El Zorro project in Chile.
Results have been received for 309 surface rock chip channel samples over the Drone Hill Target and north-west of Drone Hill, where anomalous gold results have been reported delineating a new 1.5km long and up to 450m wide, surface gold trend.
Highlights include:
3.00m @ 101.50g/t Au;
1.00m @ 12.75g/t Au;
1.20m @ 12.70g/t Au
6.00m @ 1.63g/t Au.
Tesoro comment that gold mineralisation is associated with north-west trending fault system within the El Zorro Tonalite (EZT) and sedimentary rock sequences.
Tesoro Managing Director Zeff Reeves commented: “These results highlight the prospectivity of the El Zorro Gold Project to host additional gold mineralisation outside of the Ternera Gold resource. We are excited by the potential shown to the north-west of Ternera with extensive outcrops of El Zorro Tonalite having been mapped over 4km from Ternera and some very strong zones of outcropping gold mineralisation. El Zorro continues to emerge as a new gold district in Chile.”
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