Today's Market View - AfriTin Mining, Anglo Asian Mining, Core Lithium and more...

SP Angel . Morning View . Wednesday 02 03 22

Metals continue to rise as Oil & Gas prices jump

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MiFID II exempt information – see disclaimer below

PRIVATE - Pre-IPO financing for Zambian copper exploration company

• We are raising funds for a private copper exploration company with three prospective license areas in Zambia, all near producing mines or active exploration programs by majors.
• The company has a joint venture with one major mining company and is working in cooperation with another major copper miner.
• Recent assays show 15.8% copper and 0.57g/t gold in an artisanal pit close to an historic copper mine on one license. Six significant copper soil anomalies identified in latest field work.

*SP Angel’s role is limited to making introductions and interested parties should be aware that investment in a private company can present certain risks not present in listed companies (e.g. limited or no liquidity and no rules compelling disclosure of information to investors). This offer is open to professional investors only and is not offered to retail investors.

AfriTin Mining Ltd (AIM:ATM, OTC:AFTTF)* – Surface exposures of lithium mineralisation discovered during regional exploration

Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF)* - BUY – Discovery of higher grade vein at Gosha with first ore from Hasan and Vejnaly targeted for H2/22

Aura Energy Ltd (ASX:AEE, AIM:AURA)* – Appointing advisors to help communicate the merits of the Häggån uranium project to the Swedish Government and other stakeholders

BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)* – ERMA support for Dundas ilmenite supply into EU as part of critical raw materials initiative

Cora Gold Ltd (AIM:CORA) – New surface gold discovery at contingent to Sanankoro license areas

Core Lithium Ltd (ASX:CXO) - Core Lithium / Tesla deal confirms spodumene is still preferred medium of lithium supply for battery makers

Eurasia Mining PLC (AIM:EUA) – Board statement

Hummingbird Resources PLC (LSE:HUM) – Further high grade infill drilling results reported at Kouroussa

W Resources PLC (AIM:WRES) – Additional US$5.5m debt financing

Gold at $1,932/z as investors consider sanction implications and extended inflationary pressures

• Gold ETF holdings hit 100.9moz, having enjoyed their highest inflows in 3 weeks.
• The move comes despite the dollar rallying to 20-month highs, suggesting increased demand for risk-off assets.
• Interest rates expectations downgraded to less than 50bp rise by the Fed due to uncertainty created over the Ukraine conflict
• US Treasury yields fell to 8-week lows yesterday, supporting non-interest-bearing gold.

Inflation – Oil prices jump to $112.5/bbl from $99.8/bbl yesterday as Ukraine conflict worsens

• A Significant rise in energy costs will hit margins for manufacturing and mining globally

Gas futures prices spike ~50% higher again today following a ~50% rise yesterday

• The price rises are hugely inflationary and will likely suspend further metal and metal alloy smelting across Europe.
• Consumers are protected in the UK to some degree but we expect any unhedged gas suppliers to go bust relatively quickly.
• Looks like I installed my ground-source heat pump in the nick of time (ps it is performing well).

Coal – Thermal coal futures prices jump 38% higher as utilities switch back to coal in reaction to higher gas prices

• Thermal coal prices have risen by 75% this month to record highs. Are there concerns that the West might cut off Russian gas supplies?

Metals prices jump higher as higher energy prices and Ukraine invasion disruption supply lines

Metals price movement chart

• Copperprices jumped to $10,074/t vs US$9,968/t yesterday following reports of Chile’s 2021 copper output falling 7.5%.
• Supply disruption is also expected following Putin’s invasion of Ukraine, with Russia producing 3.5% of global output in 2021. (USGS)
• Nornickel, which exported 406kt of copper last year, is forecast to be hit by sanctions targeting the financing of Russian business interests.
• Ursula von der Leyen’s plans to ramp up sanctions against Russia is triggering further anxiety about commodity supplies.
• Aluminium and zinc prices jumped on another 50% hike in gas futures prices following a 50% rise yesterday
• Russia produces 6% of global aluminium and 7% of global nickel mine supplies.
• Soaring energy costs are adding additional pressures to production of both metals, with analysts expecting further smelter suspensions to come.
• While most consumers are on long-term gas price contracts with hedged in place some will be paid to suspend production and effectively sell the gas / energy back to providers
• Iron ore prices jumped to $145.1/t in China despite official statements on China’s plan to fundamentally solve iron ore shortages
• China aims to significantly raise imports of iron ore to 220mt by 2025 indicating plans to continue to ramp up steel production (see yesterday’s comment)
• Chinese steel prices also rose to $774.7/t on recent indications of further new infrastructure stimulus
• Rare Earth prices rise again to a new high or $174,293/t for NdPr despite China failing to support Russias invasion of the Ukraine at the UN
• Lithium carbonate prices continue to rise to $73,282/t as the conflict is likely to accelerate the move electric vehicles and away from oil and gas.
• Ferro-Vanadium jumped to 47.05/kg in Europe from US$45.75/kg yesterday

Palladium price pushes past 7-month high on Russia supply disruption

• Palladium has climbed another 3% to $2,656/oz, past its 7-month peak.
• Russia produces 40% of global palladium production.
• Soaring price of the auto-catalyst metal is expected to translate to car prices.

Some other metals slipped from relatively high levels as the market focusses on metals most affected by high oil and gas prices and the impact of the Ukraine conflict

• Nickel and tin prices slipped but remain at high levels
• Tungsten prices remain steady at $335/t having risen from $307/t a year ago. The lack of movement is interesting given the conflict in the Ukraine
• Coking coal prices pulled back to $410.0/t vs US$430.0/t

Core Lithium / Tesla deal confirms spodumene is still preferred medium of lithium supply for battery makers

• The Core Lithium / Tesla deal compliments an existing off-take deal with Yuaha and Ganfeng completing the full offtake required for the project.
• Lithium demand rose 50% in 2021 with consumers competing for feedstock.
• Offtakers appear to prefer lithium in spodumene due to greater certainty of supply and flexibility for processing into hydroxide or carbonate.
• Atlantic Lithium* is progressing its hard-rock Ewoyaa Lithium project, where the company recently announced an updated Scoping Study and increased JORC resource of 21.3Mt @ 1.31% Li2O.
• Atlantic has also recently completed further drilling at Ewoyaa, a c.37,500m drilling programme completed in December 2021 which validated grade and mineralisation continuity over the project and extension targets.
• A recently updated scoping study at Ewoyaa increases the project’s LOM operations to 11.4 years from an initial 8, producing 300,000tpa of 6% Li2O spodumene concentrate.
• Savannah Resources* is developing the flagship Barroso Lithium Project in Portugal unlocking the potential of the 27mt at 1.06% Li2O hardrock spodumene resource.
• The project offers a technically low risk source of lithium for potential EU-based LiOH refining minimising lithium supply chain carbon footprint benefiting from its strategic location next to European rapidly expanding LIB and EV manufacturing capacities.
• The project demonstrates strong economics (~190ktpa con, ~$240/t ex by-products C1 FOB Portugal first 5y) with good access to infrastructure including roads, grid connection and port facilities.
• The Company is currently finalising project permitting and is well funded for the DFS work having closed a ~$10m sale of its interest in the mineral sands project in Mozambique in Dec/21 that came on top of ~£10m in cash as of Jun/21.

*SP Angel acts as Nomad and Broker to Altantic Lithium and Savannah Resources

Dow Jones Industrials - -1.76% at 33,295

Nikkei 225 - -1.68% at 26,393

HK Hang Seng - -1.80% at 22,352

Shanghai Composite - -0.13% at 3,484

Economics

US pledges a further $350m of immediate support for Ukaraine’s defence

• The $350m raises US military assistance to the defence of the Ukraine to >$1bn over past year.

Russia – Puffy-faced Putin may be seriously ill and suffering side effects of steroid treatment

• Press speculation surrounding Putin’s health and how it may be influencing his aggressive foreign policy and penchant for long tables.
• In a recent interview with Politico, Fiona Hill, a Russian expert, stated that “Putin’s not looking so great, he’s been rather puffy-faced. We know that he has complained about having back issues.
• Putin’s puffy-face and bloating around the neck is said by medical experts to be a symptom of steroid treatment potentially for a bad back or a neuro-degenerative disease (Parkinsons).
• A side effects of steroids includes the increased risk of infection along with mood and behavioural changes (The Telegraph).
• "Sometimes, when taken in higher doses, steroids can cause confusion or changes in thinking," according to Macmillan Cancer Support. "This can include having strange or frightening thoughts.".

China ramps up rail investments, on track to hit 2025 target this year

• China urban rail length increased 15% to 9,192km in 2021.
• China planned to have 10km of urban rail by 2025 but is expected to hit that in December. (SCMP)
• Both high-speed rail networks and urban rail networks are a major part of Beijing’s infrastructure investment plans.

China plans ramp up in iron ore production by 2025

• Beijing is planning to ramp up China’s overseas iron ore production from 120mt in 2020 to 220mt by 2025 and boost domestic iron ore output by 100mt to 370mt. (China Metallurgical News)
• Steel scrap consumption is aimed to increase by 70mt to 300mt by 2025.
• China consumes over 1bn tonnes of iron ore pa, importing 80% of this.
• The China Iron and Steel Association hope to ‘fundamentally’ solve limitations in the supply of steelmaking ingredients by 2035.
• Prices have rallied 5% this week despite consistent efforts by the NDRC to crack down on ‘speculation.’
• The upwards move comes as a strong official China PMI boosted demand optimism.

Russia-Ukraine conflict sparks wave of shipping cargo suspensions in further threat to supply chains

• Both MSC and Maersk, the world’s two largest container shipping groups, cancelled cargo bookings to/from Russia yesterday.
• The move follows Ocean Network Express and Hapag-Lloyd’s similar announcement.
• Shippers are concerned that they will carry the risk of exposure to western sanctions on Russia.
• The suspensions exclude food and medicines.
• The UK has banned Russian vessels from docking at its ports.
• Commercial shipping has been halted in the Sea of Azov and port operations in the Black Sea have been halted.
• Shipping rates for crude oil tankers have also doubled in the past week.
• Analysts expect severe strain on global supply chains as a result, with hiked logistics costs translating into inflationary pressures.

Ukraine – Western military experts stumped by lack of Russian airforce

• What has happened to Russia’s air force?
• Experts had predicted a massive assault by the Russian air force.
• Has the downing of a few helicopters dissuaded Russia from risking its fighter jets in the invasion of the Ukraine.
• Russia has also cancelled an attempt to send four warships through Turkish waters into the Black Sea as Turkey refuses permission under the Montreux convention.

London Underground RMT union leader Eddie Dempsey outed as supporter of pro-Russian ‘Ghost Brigade’

• 11 Labour MPs including Diane Abbott and John McDonnell along with Jeremy Corbyn who sits as an independent MP signed a ‘Stop the War Coalition statement’ criticising NATO for showing “disdain for Russian concerns” in Ukraine.
• The statement has been withdrawn on orders from Sir Kier Starmer.

Honduras – new government to ban open pit mining

• The new government, sworn in last month, has announced it will ban open pit mining and also cancel environmental permits for mining operations across the country.
• The country’s Ministry of Energy, Natural Resources, Environment and Mines commented: "The approval of permits for extractive exploitation is cancelled due to being harmful to the state of Honduras, threatening natural resources, public health and because they limit access to water as a human right,"
• In the new President’s manifesto, she pledged to limit mining and promised to pull the Central American nation "out of the abyss" caused by failed economic policies and rampant corruption.

Currencies

US$1.1089/eur vs 1.1219/eur yesterday. Yen 115.17/$ vs 115.05/$. SAr 15.478/$ vs 15.307/$. $1.329/gbp vs $1.342/gbp. 0.725/aud vs 0.728/aud. CNY 6.312/$ vs 6.314/$.

Commodity News

Precious metals:

Gold US$1,946/oz vs US$1,910/oz yesterday

Gold ETFs 100.9moz vs US$100.5moz yesterday

Platinum US$1,063/oz vs US$1,055/oz yesterday

Palladium US$2,641/oz vs US$2,517/oz yesterday

Silver US$25.24/oz vs US$24.45/oz yesterday

Rhodium US$19,500/oz vs US$19,600/oz yesterday

Base metals:

Copper US$ 10,074/t vs US$9,968/t yesterday

Aluminium US$ 3,499/t vs US$3,391/t yesterday

Nickel US$ 25,470/t vs US$24,565/t yesterday

Zinc US$ 3,819/t vs US$3,687/t yesterday

Lead US$ 2,409/t vs US$2,403/t yesterday

Tin US$ 45,605/t vs US$45,900/t yesterday

Energy:

Oil US$112.5/bbl vs US$99.8/bbl yesterday

• Oil prices surged again in early trading today as supply disruption fears mounted following significant sanctions on Russian banks amid the intensifying Ukraine conflict, while traders seeking alternative oil sources in an already tight market
• The backwardation in the Brent futures contract, when prompt prices exceed later dated supply, surged to the highest ever according to data going back to 2004
• The premium of the first-month Brent future to the sixth-month contract rose to as much as US$18.55/bbl
• Russia's economic isolation worsened as the world's biggest shipping firm Maersk on Tuesday said it would halt container shipping to and from Russia
• Major oil and gas companies, including BP and Shell, have announced plans to exit Russian operations and joint ventures
• Buyers of Russian oil are facing difficulty over payments and vessel availability due to sanctions with BP cancelling fuel oil loadings from a Russian Black Sea port
• The massed Russian assault by land, sea and air was the biggest attack on a European state since World War II, prompting tens of thousands of people to flee their homes
• Ministers of Arab oil-producing countries announced that OPEC+ should stick to its current agreement to add 400,000bopd each month to output, rejecting calls to pump more to ease pressure on prices
• Tight supply was seen in US crude oil stockpiles which unexpectedly fell 4.8MMbbls in the week to 4 February to 410.4MMbbls as overall refined product demand reached an all-time record
• This compares with a consensus forecast of a 369kbbl rise
• OPEC has forecasted that world oil demand might rise even more steeply this year
• The group has forecast an increase of 4.15MMbopd this year, as the global economy posts a strong recovery from the pandemic

Natural Gas US$4.682/mmbtu vs US$4.397/mmbtu yesterday

• UK natural gas futures have spiked 50% from yesterday following significant concerns over supply disruptions with hefty sanctions being imposed on Russia
• European natural gas rose after a raft of sanctions against Russia over its invasion of Ukraine amplified concerns about energy shortages
• Russia supplies 40% of Europe’s gas supplies, and concerns that flows could be disrupted after Moscow’s invasion of Ukraine saw the price surge almost 70% on Thursday
• But prices cooled on Friday as traders analysed US president Joe Biden’s decision to include in his sanctions package a carve-out for energy payments, a crucial source of revenue for Moscow
• Russian forces fired missiles at several cities in Ukraine and landed troops on its coast after President Vladimir Putin authorised what he called a special military operation in the east

Uranium UXC US$50.35/lb vs $48.95/lb yesterday - Uranium prices rise as US utilities firms lobby Biden to avoid sanctions on Russia’s output

• Uranium futures rallied to $50/lb for the first time in 5-months over concerns of Russian supply limitations.
• Russia, Kazakhstan, and Uzbekistan supplied c.50% of US nuclear plants’ uranium, at 22.8mlb, in 2020. (Reuters)
• US nuclear plants produce 20% of US electricity. (US EIA, World Nuclear Association)
• Biden’s sanctions on Moscow exempt uranium sales and related financial transactions, but the industry is concerned that a ramp up in sanction severity could seriously damage US uranium supply.
• Swedish power supplier Vattenfall AB has announced a decision to halt Russian uranium purchases.

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$145.1/t vs US$137.0/t

Chinese steel rebar 25mm US$774.7/t vs US$768.6/t

Thermal coal (1st year forward cif ARA) US$200.0/t vs US$127.0/t

Thermal coal swap Australia FOB US$313.0/t vs US$227.8/t

Coking coal swap Australia FOB US$410.0/t vs US$430.0/t

Other:

Cobalt LME 3m US$74,000/t vs US$74,000/t

NdPr Rare Earth Oxide (China) US$174,293/t vs US$173,501/t

Lithium carbonate 99% (China) US$73,282/t vs US$71,698/t

China Spodumene Li2O 5%min CIF US$2,720/t vs US$2,720/t

Ferro-Manganese European Mn78% min US$1,780/t vs US$1,801/t

China Tungsten APT 88.5% FOB US$335/t vs US$335/t

China Graphite Flake -194 FOB US$805/t vs US$805/t

Europe Vanadium Pentoxide 98% 11.5/lb vs US$11.2/lb

Europe Ferro-Vanadium 80% 47.05/kg vs US$45.75/kg

China Ilmenite Concentrate TiO2 US$398/t vs US$398/t

Spot CO2 Emissions EUA Price US$89.9/t vs US$93.7/t

Brazil Potash CFR Granular Spot US$820/t vs US$820/t

Battery News

US coal producer Peabody to expand into renewables

• Peabody Energy Corp, the biggest US coal producer, has revealed plans to expand into clean energy.
• The company will form a joint venture to expand solar and battery storage capacity in the Midwest.
• The JV, R3 Renewables, are looking to develop 3.3GW of utility-scale solar projects on land around retired coal mines over the next 5 years, according to a statement.
• The JV will also look to add 1.6GW of battery storage over the same time period.

Floating wind innovation centre to be developed in Aberdeen

• Technology innovation centre the Offshore Renewable Energy (ORE) Catapult and ETZ Ltd will partner to develop a £9m floating wind innovation centre in Aberdeen.
• The new centre will be located within the Energy Transition Zone, which will be adjacent to Aberdeen’s new south harbour development.
• It will look to take advantage of expected demand for floating wind on the back of the ScotWind leasing round – 17 projects totalling 24.8GW have secured option agreements in the offshore wind lease round, including 14.6GW of floating wind power.
• The centre will look to support the development of a floating wind supply chain, assist developers and suppliers with research, test, deployment and validation, and facilitate the transition of technologies from oil and gas industries.

Chinese battery manufacturer Sunwoda plans new 30GWh facility

• Battery maker Sunwoda has announced plans to invest about $1.9bn to build a 30GWh power battery production base in Zhuhai, in southern Guangdong province.
• Sunwoda's market share in China in 2021 was 1.3%, ranking 10th, according to data from the China Automotive Battery Innovation Alliance.
• Sunwoda began manufacturing automotive power battery packages and battery management systems in 2008, and started mass production of battery cells in 2018.

Company News

AfriTin Mining Ltd (AIM:ATM, OTC:AFTTF) 7.3p, Mkt Cap £79m – Surface exposures of lithium mineralisation discovered during regional exploration

• Afritin reports that its early-stage regional exploration programme of historic mining and greenfield exploration sites in central Namibia has discovered surface exposures of mineralised pegmatites containing the lithium mineral, spodumene.
• “The mineralised pegmatites have a combined strike length of approximately 2 km and occur within the adjacent fully permitted mining licence, ML 129. They occur in close proximity to an existing arterial road and fall within the operational limits of the Uis Tin Mine”.
• Afritin explains that “the Uis Tin Mine is situated, hosts a JORC (2012) compliant mineral resource containing approximately 450,000 tonnes of Li2O, with the primary lithium ore mineral identified as petalite … [and that the] … spodumene identified on ML 129 indicates the potential for broadening the range of AfriTin's strategic mineral portfolio and furthering the Company's objective of establishing an inventory of technology metals”.
• The company says that “Whilst it is an early stage discovery, and significant work is required to fully understand these results, it is nevertheless an exciting development that underpins the Company's confidence in the prospectivity of ML129”.
• CEO, Anthony Viljoen, confirmed that Afritin “intends to conduct an exploration drilling programme on this target during 2022, with the aim of adding to our existing lithium resource at Uis”.

Conclusion: The early stage identification of spodumene mineralisation will be followed up later this year with drilling to establish the additional resource potential of the newly identified pegmatite mineralisation. We look forward to further news as the exploration proceeds.

*SP Angel act for Bushveld Minerals which holds around 9.5% of AfriTin

Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF) * 102p, Mkt Cap £117m – Discovery of higher grade vein at Gosha with first ore from Hasan and Vejnaly targeted for H2/22

BUY

• The Company discovered new vein hosted gold mineralisation at Gosha.
• Surface drilling intersected a new subvertical high grade gold vein (Hasan) immediately south of the existing underground mine workings at Gosha.
• Drilling intersection included 10m at 23.24g/t from 61.0m including bonanza grade interval of 0.5m at 229.50g/t from 66.8m.
• The vein can be accessed via a short tunnel from the existing adit at Gosha lending itself for quick potential development.
• The mineralisation is currently being evaluated with the Company targeting first ore to be sourced from the vein in H2/22.
• At Vejnaly, the Company established permanent presence after authorities certified the site and underground mine as safe to access.
• The team is currently assessing underground mine workings and remaining mineral reserves as well as the state of the existing processing plant for a potential production of a gold concentrate.
• FY22 production at Gedabek is expected at 54-58koz that will be supplemented by production from Vejnaly and Gosha.
• Total FY22 production guidance will be released as the team prepares plans for Vejnaly and Gosha later in H1/22.

Conclusion: The Company reported a discovery of new high grade vein at Gosha that is expected to provide feed to the Gedabek plant in H2/22. Additionally, the team is ramping up development works at Vejnaly with a potential to restart production later in the year. At Gedabek the Company guided for lower production of 54-58koz GE that will be supplemented by production from Hasan and Vejnaly with the planned contribution to be announced later in H1/22.

*SP Angel act as Nomad and broker to Anglo Asian Mining

Aura Energy Ltd (ASX:AEE, AIM:AURA) * 15.5p, Mkt Cap £63.6m – Appointing advisors to help communicate the merits of the Häggån uranium project to the Swedish Government and other stakeholders

• Yesterday, Aura Energy reported (Microsoft Word - EU labels nuclear power green Swedish government liason v2.0 CLEAN bd (2) SPA 28.2.22.docx (londonstockexchange.com)) the appointment of a Swedish strategic communications consulting firm, Diplomat Communications, to assist its dialogue with “the Swedish Government and other relevant stakeholders in relation to advancing the Häggån Project”.
• The wholly-owned Häggån Project in Sweden has an inferred resource of 800m pounds of U3O8 including a high grade zone of 800m pounds of V2O5, and other battery metals including nickel, zinc and molybdenum.
• Pointing out that Sweden “has 6 nuclear power plants in operation, providing 40% of total power to the citizens that is carbon emission free12, however in August 2018, under a power sharing deal with the Green Party, the Swedish Government banned uranium mining”, Aura Energy says that the “Häggån Project provides a unique opportunity to support supply security in Sweden for both Battery Metals and uranium, through independent operations”.
• Aura Energy also points out that the “Swedish energy giant Vattenfall AB has suspended orders of uranium and nuclear fuel from Russia in light of the current geopolitical situation” which we presume will enhance the attractions of developing an indigenous source of supply.
• “Aura Energy looks forward to working with the current Swedish Government with the aim of changing the situation to help provide locally sourced uranium for Sweden’s nuclear power plants, export market and associated jobs with the potential for the Häggån Project”.
• Welcoming the appointment of Diplomat Communications, Chairman Phil Mitchell, said that “The Häggån Project represents a significant opportunity for Aura and we look forward to working with all parties to find a viable outcome to advance the project to production.”

Conclusion: Aura Energy is seeking to expand its communication of the merits of its Häggån uranium project as a potential supplier of uranium to Sweden’s nuclear industry and the export market with the appointment of a local, Swedish, strategic communications consulting firm.

*SP Angel acts as Nomad and Broker to Aura Energy

BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF) * 8.16p, Mkt cap £79m – ERMA support for Dundas ilmenite supply into EU as part of critical raw materials initiative

• Bluejay report the support of ERMA ‘European Raw Material Alliance’ for the supply of ilmenite concentrates from Dundas into the European Union.
• ERMA is supporting the supply of ilmenite from Greenland which is within Europe to secure the supply of ilmenite feedstock within Europe.
• Dundas ilmenite is low in impurities and is seen as suitable for both sulphate and Chloride processes and for processors located within Europe.
• “Historically, production of titanium ore and concentrate on the European continent has been sourced from long established hard-rock deposits in Norway and mineral sands projects in Ukraine.”
• “Dundas ilmenite is also suitable for the production of slag for direct use in the production of titanium tetrachloride, an intermediate for both chloride TiO2 pigment and titanium metal. “
• The recent appointment of a large commercial European investment bank to lead the arrangement of the Dundas project financing along with strong indications of interest from overseas buyers suggests the financing of the Dundas project should be relatively quick once the Bankable Feasibility Study is completed later this year.
• ERMA may help persuade European consumers to sign up the remaining 30% (132,000t) of planned production from the Dundas ilmenite mine, helping to complete the security required for the mine financing.
• Titanium is seen as a high-tech material which is strong and light with new applications in anode and coatings for robotics, drones, vehicles, fuel cells, 3-D printing etc.. as well as more traditional applications such as aerospace, bicycles, medicine, hot water elements and surgical tools.

Conclusion: Support from ERMA confirms Europe’s need for titanium feedstock as a critical material and should help confirm the financing of the Dundas ilmenite mine.

*SP Angel act Nomad and broker to Bluejay. The analyst holds shares in Bluejay Mining.

Cora Gold Ltd (AIM:CORA) 8.1p, Mkt Cap £23m – New surface gold discovery at contingent to Sanankoro license areas

• New gold mineralisation at surface discovered in previously unexplored areas of Bokoro II and Bokoro Est permits located adjacent to the Sanankoro II area.
• Assays from rock samples returned up to 0.85g/t and gold grain counts from channel sampling returned up to 75 visible gold grains.
• Reconnaissance work included termite, rock and channel sampling next to the Sanankoro II permit area that hosts flagship Sanankoro Gold Project.
• Results generated new targets for follow up exploration work.
• Separately, Cora is continuing Feasibility Study work at the Sanankoro Gold Project that remains on track for completion in H1/22 to be followed by permitting and funding.
• The team is due to start ~7,500 infill and step out drilling programme at Sanankoro this month and complete later in Q2/22.

Core Lithium Ltd (ASX:CXO) A$0.95c, Mkt cap A$1.6bn - Core Lithium / Tesla deal confirms spodumene is still preferred medium of lithium supply for battery makers

• Core Lithium and Tesla have signed a binding Term Sheet for the supply of lithium spodumene concentrate from Core’s Finniss Lithium Project in Australia's Northern Territory.
• Core will supply 110kt of spodumene concentrate to Tesla over four years.
• The deal adds to Core Lithium’s existing off-take deal with Yuaha and Ganfeng, with all of the project’s stage one spodumene production now spoken for.
• Last month, Liontown Resources (ASX:LTR) agreed to supply tesla with 100ktpa of spodumene rising to 150ktpa a year for a further four years.
• The shortage of lithium for EVs is becoming more and more prevalent, with lithium demand increasing 50% in 2021 and market participantsa downstream rushing to secure downstream supply.
• We suspect offtakers prefer lithium hosted in spodumene as it gives more flexibility, as it can be processed into either lithium hydroxide or lithium carbonate.
• Brines initially can only be processed into carbonate, and then can be further processed into hydroxide however at an additional cost.
• Lithium hydroxide is better suited in the production of the batteries with NCM 811 cathodes when compared to its alternative, lithium carbonate.
• Spodumene typically hosts higher lithium content in comparison to most brines, and we expect the trend towards battery producers requiring higher quantities of lithium hydroxide derived from spodumene will result in the declining use of lithium carbonate originating from brines in terms of market share.
• Atlantic Lithium* is currently progressing its hard-rock Ewoyaa Lithium project, where the company recently announced an updated Scoping Study and increased JORC resource of 21.3Mt @ 1.31% Li2O.
• Atlantic has also recently completed further drilling at Ewoyaa, a c.37,500m drilling programme completed in December 2021 which validated grade and mineralisation continuity over the project and extension targets.
• A recently updated scoping study at Ewoyaa increases the project’s LOM operations to 11.4 years from an initial 8, producing 300,000tpa of 6% Li2O spodumene concentrate.
• Savannah Resources* is developing the flagship Barroso Lithium Project in Portugal unlocking the potential of the 27mt at 1.06% Li2O hard rock spodumene resource.
• The project offers a technically low risk source of lithium for potential EU-based LiOH refining minimising lithium supply chain carbon footprint benefiting from its strategic location next to European rapidly expanding LIB and EV manufacturing capacities.
• The project demonstrates strong economics (~190ktpa con, ~$240/t ex by-products C1 FOB Portugal first 5y) with good access to infrastructure including roads, grid connection and port facilities.
• The Company is currently finalising project permitting and is well funded for the DFS work having closed a ~$10m sale of its interest in the mineral sands project in Mozambique in Dec/21 that came on top of ~£10m in cash as of Jun/21.

*SP Angel acts as Nomad and Broker to Altantic Lithium and Savannah Resources

Eurasia Mining PLC (AIM:EUA) * (EUA LN) 8.3p, Mkt Cap £235m – Board statement

• The Company reports that the team remains committed to deliver on the M&A strategy.
• The Board reiterated that no individual or entity identified in the sanctions is associated with eh Company.
• “Nor do the sanctions prevent the Company from executing on its M&A strategy as announced,” the Company reported.
• "The Board notes our focus on BRICS (in particular on Russia, China and South Africa) and Japan in terms of our M&A strategy. More updates are to be provided in due course ".
• Contrary to speculations none of the Eurasia's team members (being the largest shareholder group) has sold any shares in the Company.

*SP Angel act as Nomad and Broker to Eurasia Mining

Hummingbird Resources PLC (LSE:HUM) 14.9p, Mkt Cap £59m – Further high grade infill drilling results reported at Kouroussa

• Assay results were received and reported from ~5,600m of infill drilling completed at the Kouroussa Gold Project.
• This brings total number of assays received to date to ~15,000m of ~24,000m in infill drilling programme completed in 2021.
• Drill assay results continue to support the current interpretation as well as highlighting additional mineralisation zones.
• The deposit remains open along strike and down plunge.
• The Company is planning to release an updated group wide 2022 Resources and Reserves statement in Q2/22.

W Resources PLC (AIM:WRES) 2.4p, Mkt Cap £3.5m – Additional US$5.5m debt financing

• W Resources reports that “one or more funds and accounts managed by BlackRock Financial Management Inc. ("BlackRock") have agreed to increase W's existing loan facility ("Loan Facility") by an additional US$5.5 million”.
• The new debt will be used to “fund some items of Capital Expenditure at the La Parrilla mine, including additional plant and equipment, completion of the crushed ore stockpile, improved laboratories and improved buildings for both finished goods and spare part stocks as well as providing an increased working capital buffer”.
• W Resources says that the initial US$2.5m tranche of debt “should be received later this week” and that “The additional facility will, once fully drawn down, increase the total outstanding BlackRock facility to a principal of US$53 million plus accrued interest of circa US$25 million”.
• As part of the transaction “All previous share warrants totalling 54,673,473 issued to BlackRock up until February 2022 and representing 22.9% of the fully diluted share capital have been cancelled”.
• 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.
• Chairman, Michael Masterman, acknowledged that W Resources had “experienced a number of challenges over the previous four months … [but said that] … I believe the Company is now well positioned to bring about an increase in concentrate production”.
• He added that “This confidence is further underpinned by the continued support from BlackRock at this pivotal point in production at La Parrilla”.

Conclusion: Although the additional debt will need to be serviced through improved performance at La Parilla, it should help stabilise finances as W Resources seeks to get the mine back on track operationally following disruption resulting from heavy rainfall during December. The approach of summer should provide a welcome respite from the weather-related problems, and we hope to see operational statistics improving over the coming quarters.

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.

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Sources of commodity prices

Gold, Platinum, Palladium, Silver - BGNL (Bloomberg Generic Composite rate, London)

Gold ETFs, Steel - Bloomberg

Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt - LME

Oil Brent - ICE

Natural Gas, Uranium, Iron Ore - NYMEX

Thermal Coal - Bloomberg OTC Composite

Coking Coal - SSY

RRE - Steelhome

Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite - Asian Metal

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%