SP Angel . Morning View . Thursday 24 02 22
Gold and oil jump as Putin invades Ukraine
MiFID II exempt information – see disclaimer below
Amur Minerals* (Amur Minerals Corporation (AIM:AMC, OTC:AMMCF)) – No impact from US and European sanctions
Anglo American (Anglo American PLC (LSE:AAL)) – Threefold rise in attributable profit in 2021
Bluebird Merchant Ventures (Bluebird Merchant Ventures Ltd (LSE:BMV)) – Bluebird in discussions with former jv partner on progressing gold projects to production
Caerus Mineral Resources (Caerus Mineral Resources PLC (LSE:CMRS)) – Cypriot exploration
Caledonia Mining* (Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)) – Hedging agreement
Empire Metals* (Empire Metals Ltd (AIM:EEE)) – Flash Note – Tribute Agreement signed & drilling commenced at Gindalbie Gold Project
Eurasia Mining* (Eurasia Mining PLC (AIM:EUA)) – No impact from US and European sanctions
Talga Group (Talga Resources Ltd (ASX:TLG)) – Talga produces Europe’s first Li-ion battery anode in plant commissioning in Sweden
Tertiary Minerals* (Tertiary Minerals PLC (AIM:TYM)) – Drilling at Pyramid project expected to start in March
W Resources (W Resources PLC (AIM:WRES)) – Debt financing expected to complete shortly
IGTV: Will Rio Tinto’s monster dividend be repeated at other miners? https://youtu.be/UUshn22tyaA
Are commodities becoming weaponised? https://www.youtube.com/watch?v=jCoPpdNPMpQ
VOX Markets: 23/02/22: https://audioboom.com/posts/8036602-john-meyer-discusses-how-russia-s-invasion-results-in-higher-commodity-prices
*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 jumps to $1,953 on Russian invasion of Ukraine
The rise in gold prices reflects a major sell-off in Equities with the S&P 500 futures falling -2.3%, FTSE -2% and MSCI Asia ex-Japan -3%.
Russian forces appear to have fired multiple missiles into Ukraine cities taking out military defences.
Gold ETFs are seeing strong inflows as investors look to shore up their portfolio as Putin’s aggressions against Ukraine continued to escalate.
US bond yields have fallen on risk off trading.
Russia exports around:
Gold 9.2% of global production,
Palladium 45%,
Platinum 15%,
Oil 10%,
Copper 3.5%
Aluminium 4%
Nickel 7%,
Sanctions will disrupt supply lines though Chinese traders are expected to absorb any production that is barred from entering the west.
Copper US$ 9,968/t prices recover on potential for supply disruption out of Russia
A stronger US dollar is likely to be holding back further strength in copper prices on the Ukraine situation
Russia produces some 920kt (3.5%) of global mine production. (USGS)
Nornickel, UMMC and Russian Copper Company and Russia’s three major copper producers, will all be hit by western sanctions on financing tools.
Platinum rises to $1,125/oz on Russia supply concerns
Western sanctions are expected to hit the financing of Russian firms, including Nornickel which is a major producer of PGMs.
Nornickel produced 2.6m oz of palladium (40%) of global mined production and 10% of total platinum production.
Analysts expect the supply disruptions to add further price pressures on car prices and to continue to translate to inflationary effects across Western economies.
Dow Jones Industrials -1.38% at 33,132
Nikkei 225 -1.81% at 25,971
HK Hang Seng -3.21% at 22,901
Shanghai Composite -1.70% at 3,430
Economics
Russia – Full invasion of Russian troops across the full border along Russia, Ukraine and Belarus was launched overnight.
Cities, airports and military infrastructure have been bombed by artillery systems to prepare for on the ground advancement.
President Putin announced an operation to “demilitarise” the country.
Western nations announced that a further set of sanctions will follow President Putin’s decision to challenge Ukrainian sovereignty.
Equities with exposure to Russia are being fire sold seeing local equity markets down 30-40% this morning, USDRUB hitting 90 briefly and Russia’s CDS rates rising past 2008 GFC and 2014 Crimea related highs.
Sberbank, the largest bank in Russia, that went on a sanctions’ list this morning is down 50% and trades nearly at 25% of highs hit in Oct/21.
In London, Polymetal is down ~35%, Petropavlovsk, ~20%, Evraz ~30% and Ferrexpo ~25%.
Cost of raw materials from oil to grains climbed on fears future sanctions will disrupt the trade flow from Russia and Ukraine.
The European Commission commenting on potential sanctions said that the EU “will target strategic sectors of the Russian economy by blocking their access to key technologies and markets”.
“We will weaken Russia's economic base and its capacity to modernise,” Ursula Von Der Leyen said.
"In addition, we will freeze Russian assets in the EU and stop the access of Russian banks to the European financial market."
China - Concerns over Chinese property sector resurface as $20bn repayments loom
China’s developers face $19.8bn worth of dollar-denominated repayments on bonds this quarter. (AsiaFinancial)
The amount is double total dollar payments due in 4Q21.
With sales falling 25% yoy in December across 50 major developers, analysts’ concerns of additional economic pressure in China are resurfacing. (CRIC)
Estimates of $172bn due in deferred wages in January to workers are providing additional headaches financial headaches to developers.
Zhongliang, Ronshine China, Shiunsun Group, Yuzhou Group and KWG are all expected to default imminently.
US - Biden announces plans to support new domestic mines that avoid ‘historical injustices’
Biden has pivoted from his administration’s position of relying on the US’ allies for mining of critical minerals.
The President announced plans to invest in domestic production of critical minerals and materials.
Government-backed domestic mines will need to ensure ‘these resources benefit the community’, ‘create good-paying, union jobs in sustainable production.’
Focus on the environmental impact of the mines will also be central to Washington’s considerations.
The administration’s focus is on minerals critical to the construction of clean energy technologies as China ramps up supply dominance.
Currencies
US$1.1257/eur vs 1.1337/eur yesterday. Yen 114.68/$ vs 115.06/$. SAr 15.268/$ vs 15.033/$. $1.349/gbp vs $1.361/gbp. 0.718/aud vs 0.725/aud. CNY 6.322/$ vs 6.321/$.
Commodity News
Precious metals:
Gold US$1,953/oz vs US$1,896/oz yesterday
Gold ETFs 100.1moz vs US$100.0moz yesterday
Platinum US$1,114/oz vs US$1,087/oz yesterday
Palladium US$2,559/oz vs US$2,374/oz yesterday
Silver US$25.11/oz vs US$24.13/oz yesterday
Rhodium US$18,850/oz vs US$18,550/oz yesterday
Base metals:
Copper US$ 9,968/t vs US$9,962/t yesterday
Aluminium US$ 3,423/t vs US$3,298/t yesterday
Nickel US$ 25,275/t vs US$24,535/t yesterday
Zinc US$ 3,622/t vs US$3,599/t yesterday
Lead US$ 2,371/t vs US$2,339/t yesterday
Tin US$ 45,300/t vs US$44,500/t yesterday
Energy:
Oil US$102.4/bbl vs US$96.9/bbl yesterday
Natural Gas US$4.923/mmbtu vs US$4.504/mmbtu yesterday
Uranium UXC US$44.05/lb vs $44.00/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$139.1/t vs US$139.8/t - China iron ore slips as Beijing continues to explore price control options
Dalian iron ore futures down 0.8% to $139/t having seen a minor recovery in the past two sessions.
The move comes as the NDRC announced plans to prevent ‘excessive hoarding’ by market participants.
Stainless steel down 2.7%, steel rebar down 0.7%, HRC down 0.4%.
Chinese steel rebar 25mm US$769.9/t vs US$769.9/t
Thermal coal (1st year forward cif ARA) US$128.5/t vs US$124.2/t
Thermal coal swap Australia FOB US$237.0/t vs US$228.0/t
Coking coal swap Australia FOB US$400.0/t vs US$390.0/t
Other:
Cobalt LME 3m US$73,290/t vs US$73,290/t
NdPr Rare Earth Oxide (China) US$174,359/t vs US$175,148/t
Lithium carbonate 99% (China) US$70,611/t vs US$70,138/t
China Spodumene Li2O 5%min CIF US$2,710/t vs US$2,710/t
Ferro-Manganese European Mn78% min US$1,796/t vs US$1,808/t
China Tungsten APT 88.5% FOB US$333/t vs US$333/t
China Graphite Flake -194 FOB US$805/t vs US$805/t
Europe Vanadium Pentoxide 98% 10.6/lb vs US$10.6/lb
Europe Ferro-Vanadium 80% 42.75/kg vs US$42.75/kg
China Ilmenite Concentrate TiO2 US$395/t vs US$395/t
Spot CO2 Emissions EUA Price US$102.3/t vs US$101.3/t
Brazil Potash CFR Granular Spot US$815/t vs US$815/t
Battery News
Aluminium hits record highs on Ukraine invasion
Aluminium prices surged to record highs in London on Thursday morning as the worsening crisis in Ukraine added supply risks to a metal already in very tight supply.
Aluminium prices rose 4.8% to $3,449/t this morning, surpassing a previous record set in 2008.
Prices may rise further if sanctions are imposed on Rusal, the world’s top producer outside of China.
Rusal produced 3.8mt of aluminium in 2020, with the US and Europe accounting for 46% of the company’s revenues.
US sanctions against RUSAL in 2018 sent prices soaring about 30% in a matter of days.
Aluminium inventories on the LME sit at just 800,000t (vs. ~1.5mt in 2018), meaning sanctions against Russian aluminium producers should drive prices considerably higher and disrupt global supply chains.
New York Bight sees over $1.5bn in bids on first day
The US Government is currently holding its biggest offshore wind lease sale ever for six areas in federal waters, in the New York Bight, offshore New York and New Jersey.
The leases for the six sites could result in the US adding from 5.6GW to 7GW of offshore wind – enough to power more than 2m homes.
On the first day of the auction, the six sites saw combined bidding reach over $1.5bn – the bidding rounds resume today so we could see the price continue to rise.
The previous record price for a single offshore wind lease was $135.1m – five of the six sites are now well over this price.
The largest site, OCS-A 0539 reached $410m at the end of day one.
Leases will be offered to up to 25 bidders that BOEM pre-qualified earlier, who will also needed to meet further requirements outlined in the Final Sale Notice.
UK government awards funding to longer-duration energy storage projects
The first awards of funding for projects developing long-duration energy storage technologies have been made by the country’s government, with £6.7m pledged to 24 projects.
£68m of funding opportunities was launched by the Department for Business, Energy and Industrial Strategy (BEIS) in June 2021 through the national Net Zero Innovation Portfolio.
The funding has been reserved for two streams of projects:
Stream 1 is for demonstration projects of technologies considered close to commercialisation and aiming to accelerate that process so that they can be deployed on the UK energy system.
Stream 2 seeks to accelerate the commercialisation of innovative projects through building “first-of-a-kind” prototypes of full systems.
Stream 1 projects that received funding include a 20MW hydrogen electrolyser, a gravity-based storage system, an advanced compressed air storage system and Invinity Energy Systems 40MWh vanadium redox flow battery (VRFB).
These projects received funding ranging from £471,760 to £1m per project.
Company News
Amur Minerals* (Amur Minerals Corporation (AIM:AMC, OTC:AMMCF)) 2.0p, Mkt Cap £28m – No impact from US and European sanctions
The Company announced yesterday that after reviewing UK and US sanctions documentation the team expects no impact from those on operations and activities in Russia.
*SP Angel act as Nomad and Broker to Amur Minerals
Anglo American (Anglo American PLC (LSE:AAL)) 3,501p, Mkt Cap £47.3bn – Threefold rise in attributable profit in 2021
Anglo American has reported a 310% increase in attributable profit in 2021 with a rise to US$8.6bn (2020 – US$2.1bn).
EBITDA, on an underlying basis, more than doubled to US$20.6bn (2020 – US$9.8bn) with margins improving to 56% from the 43% level achieved in 2020.
Anglo American attributes the major factor in the improved EBITDA to price improvements in its commodity mix which the company says rose by “43% compared to 2020, increasing underlying EBITDA by $10.2 billion”.
“Higher realised prices were achieved across all of our products, with the dollar PGM basket increasing by 36%, primarily driven by rhodium which increased by 85% in the year, as well as iron ore and copper which increased by 41% and 52% respectively”.
Total capital expenditure increased to US$5.2bn (2020 – US$4.1bn) with “Growth capital expenditure increased to $1.8 billion (2020: $1.4 billion), largely due to higher expenditure incurred at the Woodsmith polyhalite project of $0.5 billion (2020: $0.3 billion) following the acquisition of the project in the first half of 2020”.
Further increases in capital expenditure are planned with US$6.1-6.6bn expected in 2022, US$6.0-6.5bn in 2023 and US$5.6-6.1bn in 2024.
Net debt improved by US$1.7bn during the year to stand at US$3.8bn by 31st December 2021 (2020 -US$5.5bn).
Chief Executive, Mark Cutifani, described 2021 as “a year of two distinct halves, we recorded strong demand and prices for many products as economies recouped lost ground, spurred by government stimulus”.
He identified “Copper and PGMs - essential to the global decarbonisation imperative - and premium quality iron ore for greener steelmaking, supported by an improving market for diamonds” as contributors to “a record financial performance”.
PGMs contributed US$7.1bn (2020-US$2.6bn) or 34% (2020 - 26%) to EBITDA with “improved mining performance at both Amandelbult and Mogalakwena” as well as “the strong performance of the converter plant (ACP) Phase A unit following its successful rebuild in 2020”.
Anglo American’s iron-ore businesses produced US$6.9bn or 33% of EBITDA (2020 – US$4.6bn or 46%) with Kumba delivering a 9% production increase to 40.9mt as Covid containment measures eased although output at Minas Rio “decreased by 5% to 22.9 Mt (2020: 24.1 Mt), due to unplanned maintenance at the beneficiation plant”.
Copper operations delivered a further US$4.0bn of Underlying EBITDA (2020 – US$1.9bn) aided by a “strong plant performance at Collahuasi … [which]… improved attributable production to a record 277,200 tonnes”.
The diamond operations of De Beers contributed US$1.1bn (2020- US$0.4bn) to EBITDA “in response to the strong recovery in consumer demand following the impact of Covid-19 in 2020”.
Conclusion: Rising commodity prices and improving demand in 2021 as the global recovery from the economic impact of Covid19 gains momentum delivered strong financial performance and improved margins.
Bluebird Merchant Ventures (Bluebird Merchant Ventures Ltd (LSE:BMV)) – 2.04p, Mkt cap £13m – Bluebird in discussions with former jv partner on progressing gold projects to production
Bluebird Merchant Ventures reports it is in discussion with its former joint venture partner, Southern Gold, with respect to its assistance in progressing the South Korean projects to production.
Bluebird has paid 200m shares for Southern Gold’s 50% jv interest in the Kochang and Gubong gold mines with a value of A$7.6m on 7 February 2022.
The Bluebird team are also revising their economic model to reflect the move to schedule the Kochang as the first mine into production.
Bluebird held negotiations last year with Southern Gold to consolidate its 50% stake in the Kochang and Gubong mines.
Management reported at the time (22/02/21) an independent valuation of US$11.05m for the 50% stake of which Bluebird has agreed to pay 90% or US$9.945m.
Bluebird had planned to start gold production at 7,000oz last year rising to 40,000oz in 2024 and then onto 100,000ozpa from 2025 – this schedule will change according to today’s announcement.
Capital costs were estimated at $28m to reopen the two mines at Kochang and Gubong.
Investors should also expect these costs to change with the prioritisation of Kochang and capital and operating cost inflation within the mining sector driven by higher oil and gas prices.
Phase 1 capex was forecast at around US$2.2m with Bluebird contributing 50% of the joint venture cost and forecast cash costs of US$576/oz.
Caerus Mineral Resources (Caerus Mineral Resources PLC (LSE:CMRS)) 14.75p, Mkt Cap £9m – Cypriot exploration
Caerus Minerals has provided a progress report on its exploration projects in Cyprus where assay results have now been received from drilling at Trouli and its extensions at the Kokkinapetra and Anglisdes projects.
At Trouli, sampling of the stockpiles from historic mining have “returned a consistent average copper grade of 1.2% Cu over more than 639 metres of trenching” with samples of tailings averaging 0.4% copper and 0.2g/t gold.
The company says that drilling “on the fringes of the Troulli deposit has extended the surface profile of both copper and gold mineralisation “ and Caerus Minerals reports assay intersections ranging between 10m to 37m in width at grades as high as 1.2% copper equivalent from six different holes, some with multiple mineralised intercepts.
At Kokkonapetra, “Drilling of the 1.5km strike length of the Kokkinapetra extension of the Troulli deposit returned extremely encouraging drill results including 0.85% Cu eq over 28.10m from surface, 1.0g/t Au over 10.8m and 0.66% Cu eq over 29.2, also from surface. Ground geophysical survey will now be conducted to better define the next round of drill targets”.
What the company describes as ‘validation drilling’ at Anglisides returned “encouraging results” and the company says that it will undertake a “more comprehensive drilling programme … with the objective of defining a high-grade resource that can be processed off-site at the future Troulli plant site”.
Caledonia Mining* (Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)) 930p, Mkt Cap £117m – Hedging agreement
Caledonia Mining reports that it has agreed a “zero cost contract to hedge approximately 25% of 2022 target gold production at Blanket via a cap and collar hedging contract for 20,000 ounces of gold over a period of 5 months from March to July 2022”.
The contract “has a cap of $1,940 and a collar of $1,825, meaning that, for the 4,000 ounces of gold per month for the period, Caledonia will receive an effective gold price per ounce of not less than $1,825 or greater than $1,940”.
CEO, Steve Curtis, explained the decision to enter the hedging agreement by pointing out that “capital expenditure phasing is heavily weighted towards the first half of 2022 as we ramp up gold production”.
Mr Curtis said that in these circumstances “the board considered it prudent to take advantage of the current strong gold price to protect the balance sheet during this phase of higher capital investment with a five-month hedging arrangement over a portion of our production”.
*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe
Empire Metals* (Empire Metals Ltd (AIM:EEE)) 1.25p, Mkt Cap £4m – Flash Note – Tribute Agreement signed & drilling commenced at Gindalbie Gold Project
Empire reports that it has signed a binding Tribute Agreement with Maher Mining Contractors for the Gindalbie Gold Project located near historic gold mining town of Gindalbie, and adjacent to Empire's Eclipse Gold Project.
The Agreement gives Empire the exclusive right to explore, develop and mine within a granted area on Maher Mining's 100% owned mining lease M27/158, which sits adjacent to the eastern border of the Eclipse licence area and extends the current area for exploration targets by over 200% to a total of 943ha.
The Company has commenced an exploratory drilling campaign aimed at testing several priority targets around historical mine workings.
Empire aims to prove that mineralisation at Gindalbie together with the Eclipse and Jack’s Dream prospects represent multiple structures within one large gold system.
Empire has commenced an RC drilling programme at Gindalbie with the main objective of testing for high-grade gold lodes within the transition and fresh rock, immediately below or adjacent to several of the historic mine shafts
At Gindalbie, RC drilling aims to extend the mineralised trend a further 2km to the southeast of Eclipse but also to understand the extent and origin of what the Company believes to be a much larger gold system.
The programme consists of 16 RC holes for 1,610m, drilled on the back of the RC drill campaign at Eclipse, which commenced on 15 February 2022.
Terms: The cost to enter into the Tribute Agreement is A$250k for an initial 6-month exploration term. An additional A$250k is payable if Empire elects to extend the exploration period by a further 18 months. Minimum expenditure commitments during the two stages of exploration are A$250k for each period.
If Empire elects to commence mining operations and subject to all statutory approvals being met, then Empire will:
Pay Maher Mining A$500k within 90 days
Grant Maher Mining a 2% NSR on all gold and other commodities produced, rising with respect to a rising gold price
Guarantee to spend not less than A$250k on exploration per annum on the Granted Area over the subsequent four years
The larger, newly combined Eclipse-Gindalbie project provides the company with an exciting, advanced gold exploration opportunity, and as a result the Company has decided not to take up the Option over the Central Menzies Gold Project.
Empire remains well funded and capable of executing a substantial amount of exploration over the coming months with over £2.1 million in current cash reserves.
Conclusion: The deal with Maher Mining consolidates Empire’s land package around Eclipse, giving the company more exposure to a highly prospective area of gold mineralisation. Further exploration offers the potential to develop a significant increase in the scale of mineralisation at the site, and the company remains well funded to commence this given the recent sale of its Georgian assets.
*SP Angel acts as Nomad and Broker to Empire Metals
Eurasia Mining* (Eurasia Mining PLC (AIM:EUA)) 11.3p, Mkt Cap £321m – No impact from US and European sanctions
The Company announced yesterday that after reviewing European and US sanctions documentation the team expects no impact from those on operations and activities in Russia.
*SP Angel act as Nomad and Broker to Eurasia Mining
Talga Group (Talga Resources Ltd (ASX:TLG)) A$1.3, Mkt Cap A$405m – Talga produces Europe’s first Li-ion battery anode in plant commissioning in Sweden
Talga Group reports production of Europe’s first Li-ion anodes during the commissioning of its new Li-ion battery plant in Sweden.
Start of production at the EVA facility was delivered on time and within budget with full commissioning to be completed late March 2022.
The product features industry leading CO2 profile for coated anode.
The group has received orders for its Talnode-C anode product from 23 battery and automotive equipment manufacturers.
Full commissioning is expected for late March with formal opening in early April 2022.
Talga is using its own coating technology to create its Talnode-C anode product.
Produced Talnode®-C will now be shipped to battery cell manufacturers for further commercial testing.
Large scale samples are being committed at higher prices than used in the DFS though the sales are not substantial for now.
Other ex-China anode developments:
Beowulf* (Beowulf Mining PLC (AIM:BEM)) are working on Li-ion battery anode products with working with Epsilon Advanced Materials on an anode materials production in Finland
Renascor* (Renascor Resources Ltd (ASX:RNU)) which has the Siviour graphite mine in South Australia is also developing a vertically integrated battery anode material manufacturing operation.
Graphene Star* (Private) we are currently working with Graphene Star on funding for its new enhanced graphite / graphene battery anode product.
Nyobolt (Private) working on silicon anodes to name just two of the many companies working in this area.
Conclusion: The news marks production of the first anode material in Europe using fully vertically integrated production process with more than 20 battery manufacturing and automotive customers now set to receive Talnode®-C for further testing and potential procurement arrangements. Talga has first-mover advantage in Europe with respect to its Talnode anode products but other manufacturers are catching up fast.
*SP Angel has previously acted as UK broker to Talga Resources. *SP Angel acted as UK broker to Beowulf. *SP Angel has previously acted for Renascor. *SP Angel is currently acting for Graphene Star
Tertiary Minerals* (Tertiary Minerals PLC (AIM:TYM)) – 0.21p, Mkt cap £3.2m – Drilling at Pyramid project expected to start in March
Tertiary Minerals has announced that it has now completed site preparation for a planned 4,000ft (approximately 1,200m) programme of reverse-circulation drilling at its Pyramid silver/gold exploration project in Nevada and that drilling is expected to start during the 2nd week of March.
The company says that “Surface mineralisation has been shown to extend over a strike extent of at least 530 metres at the North Ruth target, with grades as high as 595 g/t silver (17.35 ounces/ton) and 0.66 g/t gold intersected in exploration trenches … [and that the drilling is intended to] … establish the continuity of the silver and gold mineralisation at depth”.
Managing Director, Patrick Cullen, explained that geological mapping, and a programme of trenching and geochemical sampling has “established an exciting silver and gold target at North Ruth” and that drilling to establish “continuity and mineralisation at depth is the next step and will give guidance on the scale of the opportunity”.
Conclusion: We look forward to results from the drilling of the North Ruth target following the planned start of drilling in March.
*SP Angel act as Nomad and Broker to Tertiary Minerals
W Resources (W Resources PLC (AIM:WRES)) 2.4p, Mkt Cap £3.5m – Debt financing expected to complete shortly
W Resources has announced that plans to raise the additional debt required, which was announced at the time of its Q4 2021 results on 15th February are progressing and that documents are “being finalised and the Company expects to announce details of the successful fund raise in the next few days”.
The company has previously disclosed that heavy rainfall during December caused production delays and limited access to higher ore grades at its La Parilla tungsten mine in Extremadura, Spain.
The Q4 results showed that, as a result of the poor weather and limited access to medium and higher grade ore, quarterly tungsten concentrate output fell to 89.7t (Q3 2021 – 168.3t) and recovery rates dropped to 31% (Q3 2021 – 58%) and concentrate grades declined to 64.8% tungsten trioxide (Q3 2021 – 66.7%).
Although blasting delays and problems in “accessing medium and higher-grade ore as the open-pit was drained of water” have now been resolved, W Resources has also been facing a sharp rise of 425% in the price of its liquefied natural gas and as a result its cash resources have come under pressure.
Conclusion: Evidently, the original expectations that additional short-term debt would be available later last week have slipped and it will no doubt be encouraging to investors to hear that the issue may now be close to a resolution.
No.1 in Copper: “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”
No1. In Gold: “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”
The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020
Analysts
John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490
Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484
Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk - 0203 470 0474
Joe Rowbottom – Joe.Rowbottom@spangel.co.uk - 0203 470 0486
Sales
Richard Parlons –Richard.Parlons@spangel.co.uk - 0203 470 0472
Abigail Wayne – Abigail.Wayne@spangel.co.uk - 0203 470 0534
Rob Rees – Rob.Rees@spangel.co.uk - 0203 470 0535
Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
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*SP Angel 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