Today's Market View - Azure Minerals, Altus Strategies, Cornish Metals, and more...

SP Angel . Morning View . Monday 30 05 22

Metals rise as US dollar and warehouse stocks fall

MiFID II exempt information – see disclaimer below

Azure Minerals Ltd (ASX:AZS) – Agreement to sell Mexican assets for A$20m

Altus Strategies PLC (AIM:ALS, TSX-V:ALTS, OTCQX:ALTUF)* – Q1/22 update highlights final closure of the Newcrest deal with £0.3m collected in Australian gold operations’ royalties

Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF)* – Valuation 48p/s – Deferred consideration payment and sale of royalty

Cora Gold Ltd (AIM:CORA) – Final Sanankoro drilling results with DFS targeted for Q3/22

Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)* – non-binding term sheet signed with CoTec

Oriole Resources PLC (AIM:ORR) – Drilling resumes at Bibemi, Cameroon

Predictive Discovery Ltd (ASX:PDI) - Proposed A$60m equity raise to advance the Bankan Gold Project in Guinea

Serabi Gold (AIM:SRB, TSX:SBI)* – Preliminary results for 2021 and progress report on 2022 operations

Copper – LME and SHFE copper stocks continue to fall leading most other metal stock levels lower

• SHFE fell 23.7% or 12,890t this week to 41,546t on Friday with LME copper stocks falling a further 1,525t (1%) to 154,650t this morning with
• Lead, nickel and tin stocks also fell on the SHFE falling 9.5%, 9.6% and 5.9% respectively.
• The outflows may represent restocking by manufacturers in preparation for a return to more normal working as Covid restrictions are eased.
• Alternatively, the suspension of the nickel market on 8th March may be causing manufacturers to go direct to producers for supply cutting out the LME and SHFE markets which are now seen as potentially unreliable.

Dow Jones Industrials +1.76% at 33,213

Nikkei 225 +2.19% at 27,369

HK Hang Seng +2.07% at 21,125

Shanghai Composite +0.60% at 3,149

Economics

US – Futures are trading higher this morning with S&P regaining its May losses and on course to break a series of seven weekly declines.

• While US markets are closed as the nation celebrates the Memorial Day, market sentiment seems to be stronger driven by reports of fewer Covid-19 cases in Beijing and Shanghai.
• The US$ index dropped helping commodity prices higher as risk sentiment improved.
• Non farm payrolls are due later this Friday with markets to watch labour numbers closely to gauge the Fed’s tightening path.
• US Fed looks likely to slow rate of interest rate hikes causing US dollar to slip
• New Omicron variant is raising case numbers in the US potentially adding to Fed caution

China – Starts to loosen zero-covid lockdown in Shanghai as case numbers fall

Workers who have been locked into factories in China are demanding their freedom

• Reports of violence in factories where workers have been locked in for close to two months
• Industrial profits fell 3.5% in April vs 8.5% in March

Covid - A drop in new cases as well as calls from officials to kickstart the economy see a series of virus related restrictions loosened.

• New cases have fallen to 67 in the past 24 hours with just six newly infected people showing symptoms and a zero-covid death toll reported for a third day
• Shanghai will formally lift its lockdown on 1st June 1 in a gradual and phased process returning to full normality end June.
• In Beijing, infections dropped to 12 yesterday, down from 21 on Saturday, with several districts allowed to ease transport controls.
• The city’s ‘white list’ for ‘closed loop’ manufacturing sites will be lifted on Wednesday
• Most public transport including buses, subways and taxis will resume in three districts.
• Beijing remains in firm lockdown
• Expect higher PMI figures this week
• Longer term we reckon China needs to improve its vaccine efficacy to reduce the impact of Covid on its healthcare systems and mortality rates.

Spain – Inflation climbed more than expected in May as gains in fuel costs outpaced an easing in electricity prices.

• German inflation data is expected later today with estimates for a further acceleration beating previous high of 7.8% in April (8.1% est.).
• CPI EU Harmonised (%mom/yoy): 0.7/8.5 v -0.3/8.3 in April and 0.7/8.3 est.

Inflation – Inflation will likely revert to more normal levels next year

• Deflation is also a risk if oil and gas prices fall
• China, India and others are taking discounted Russian oil and gas displacing supplies from the Middle East, Australia, the US and elsewhere.
• While this displacement combined with the West’s emergence from Covid lockdowns caused prices to rise, we can equally expect oil and gas prices to fall next year even if sanctions on Russia remain in place.
• China may export further inflation as prices rise on shortages out of Chinese factories due to lockdown disruption
• Tesla has restored weekly output to 70% of pre-production levels at their Shanghai factory.

UK – UK government urges coal-fired power stations to delay planned closures

• The owners of coal-fired power stations in Drax, Ratcliffe and West Burton have been asked to delay closures which were planned for September (SKY News).
• £400 per household rebate / stimulus to compensate for higher energy prices funded by £5bn windfall tax on energy firms and additional government funding as part of £21bn stimulus package.

Germany – Germany accused of narrowing scope of EU embargo on Russian oil imports

• European sources told The Telegraph that Berlin wanted an exemption for deliveries via pipeline to be extended from Hungary, Slovakia and the Czech Republic to the entire bloc.
• An EU diplomat said Germany hijacked the talks in order to secure wider concessions that would benefit its own economy.
• “Initially it was about giving Viktor Orban space, but now Germany has seen it as an opportunity to help itself. Germany has pushed for this… to narrow the scope of the sanctions on Russia,”.
• Spain is backing new sanctions against Russia

Ukraine – Russia continues to blackmail the world on grain and wheat supplies out of Ukraine

• >50 countries reportedly dependent on food stocks from Russian and the Ukraine
• Russia wants Western sanctions lifted before agreeing to allow safe passage for Ukranian food exports
• Grain, wheat, sunflower oil and other shortages are fuelling inflation in countries that can least bare the cost of food and energy price inflation
• Allowing Russia to control so much of the world’s energy and food supplies does not sound like a good idea.

Russia – Localised mutinies in Russian forces are reported by British Intelligence

Scientists try to bring Australian ‘tiger’ back from extinction

• Other things to bring back from extinction:
• Pre-MiFID II research rules,
• Honest politicians,
• Proper comedy on the BBC

US – Futures are trading higher this morning with S&P regaining its May losses and on course to break a series of seven weekly declines.

• While US markets are closed as the nation celebrates the Memorial Day, market sentiment seems to be stronger driven by reports of fewer Covid-19 cases in Beijing and Shanghai.
• The US$ index dropped helping commodity prices higher as risk sentiment improved.
• Non farm payrolls are due later this Friday with markets to watch labour numbers closely to gauge the Fed’s tightening path.

China – A drop in new cases as well as calls from officials to kickstart the economy see a series of virus related restrictions loosened.

• In Beijing, infections dropped to 12 yesterday, down from 21 on Saturday, with several districts allowed to ease transport controls.
• Most public transport including buses, subways and taxis will resume in three districts.
• The number of infections has fallen for six straight days in Beijing with no cases outside of quarantine, Bloomberg writes.
• In Shanghai, cases dropped to 67 from 122 with the city allowing all manufacturing to restart on Wednesday.

Spain – Inflation climbed more than expected in May as gains in fuel costs outpaced an easing in electricity prices.

• German inflation data is expected later today with estimates for a further acceleration beating previous high of 7.8% in April (8.1% est.).
• CPI EU Harmonised (%mom/yoy): 0.7/8.5 v -0.3/8.3 in April and 0.7/8.3 est.

Currencies

US$1.0753/eur vs 1.0752/eur last week. Yen 127.24/$ vs 127.10/$. SAr 15.508/$ vs 15.646/$. $1.263/gbp vs $1.263/gbp. 0.718/aud vs 0.713/aud. CNY 6.652/$ vs 6.733/$.

Commodity News

Precious metals:

Gold US$1,862/oz vs US$1,855/oz last week

Gold ETFs 105.1moz vs US$105.1moz last week

Platinum US$963/oz vs US$952/oz last week

Palladium US$2,077/oz vs US$2,028/oz last week

Silver US$22.18/oz vs US$22.11/oz last week

Rhodium US$15,400/oz vs US$15,600/oz last week

Base metals:

Copper US$ 9,550/t vs US$9,407/t last week

Aluminium US$ 2,902/t vs US$2,878/t last week

Nickel US$ 29,725/t vs US$27,545/t last week

Zinc US$ 3,932/t vs US$3,773/t last week

Lead US$ 2,174/t vs US$2,144/t last week

Tin US$ 34,780/t vs US$33,600/t last week

Energy:

Oil US$119.4/bbl vs US$117.0/bbl last week

Crude oil prices rose over the weekend as EU members continue talks to agree on a sixth package of sanctions against Russia for its invasion of Ukraine.

OPEC+ is set to maintain existing production ramp-up plans and confirm a monthly increase of 432kb/d to oil output when they meet on Thursday. This is seen as a somewhat moot point by analysts that question if OPEC+ has even been able to realise prior increases in their monthly production allocations this year.

The US rig count fell for the first time this year by 1 to 727 rigs ahead of the Memorial Day Holiday, split between 2 lost units targeting oil and gas rigs gaining one to 151.

Natural Gas US$8.813/mmbtu vs US$8.776/mmbtu last week

Uranium UXC US$47.85/lb vs $47.65/lb last week

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$134.4/t vs US$130.2/t

Chinese steel rebar 25mm US$715.6/t vs US$703.1/t

Thermal coal (1st year forward cif ARA) US$248.5/t vs US$248.5/t

Thermal coal swap Australia FOB US$370.0/t vs US$365.0/t

Coking coal swap Australia FOB US$455.0/t vs US$487.0/t

Other:

Cobalt LME 3m US$74,000/t vs US$75,000/t

NdPr Rare Earth Oxide (China) US$142,823/t vs US$141,088/t

Lithium carbonate 99% (China) US$66,074/t vs US$65,123/t

China Spodumene Li2O 5%min CIF US$4,500/t vs US$4,500/t

Ferro-Manganese European Mn78% min US$1,866/t vs US$1,866/t

China Tungsten APT 88.5% FOB US$336/t vs US$336/t

China Graphite Flake -194 FOB US$815/t vs US$815/t

Europe Vanadium Pentoxide 98% 9.6/lb vs US$9.6/lb

Europe Ferro-Vanadium 80% 38.25/kg vs US$38.25/kg

China Ilmenite Concentrate TiO2 US$372/t vs US$368/t

Spot CO2 Emissions EUA Price US$90.0/t vs US$87.8/kg

Brazil Potash CFR Granular Spot US$1,200.0/t vs US$1,200.0/kg

Battery News

World’s first charging points for electric vessels to be installed in the UK

• The world’s first offshore charging points for electric vessels will be installed in the UK, on the Lynn and Inner Dowsing wind farms in August/September this year, according to the UK’s Department for Transport.
• The goal of the project is to design, build, and test an electric charge point situated on a wind turbine – using existing infrastructure, such as turbine platforms and electrical cables, to provide renewable power to vessels.
• The charge points are expected to enable all-electric crew transfer vessels and other offshore support vessels to connect to a 100% green energy source generated directly by the offshore wind turbines.
• This new technological innovation aims to break down the existing range barriers and thus increase the uptake by vessel owners and operators with a transition to fully electric and green propulsion systems, for retrofit and new build vessels.

SK Group to invest $195bn for semiconductors, batteries over next five years

• South Korea’s second largest conglomerate, SK Group, have announced that they will invest $195.24bn into semiconductor, battery and biopharmaceutical sectors over the next five years.
• The group, whose affiliate SK Hynix is the second biggest memory chip manufacturer globally, has said over half the investment will go towards semiconductors and materials.
• Most of the investment will be invested in South Korea to help revitalise the economy.

Saudi EV assembly plant to be first of three in kingdom

• The Lucid Motors assembly plant, to be built in Saudi Arabia, is likely to be one of three in the kingdom, investment minister Khalid Al-Falih said in a statement on Wednesday last week.
• US-based Lucid is 60% owned by Saudi Arabia’s sovereign wealth fund and plans to build its first overseas production factory on Saudi Arabia later this year.
• The plant is expected to produce up to 150,000 vehicles a year.

Tata Motors considering purchase of Ford facility in Gujarat

• Indian automaker Tata Motors has signed an agreement to potentially buy a Ford Motor manufacturing facility in the state of Gujarat as it looks to ramp up its production of EVs.
• Tata, who owns Jaguar Land Rover, already dominates India's fledgling EV market, which the government is trying to grow by offering companies billions of dollars in incentives.
• Tata will invest in new machinery and equipment at the plant and expects the facility to have production capacity of 300,000 vehicles a year.

Company News

Altus Strategies PLC (AIM:ALS, TSX-V:ALTS, OTCQX:ALTUF)* 49.0p, Mkt Cap £58m – Q1/22 update highlights final closure of the Newcrest deal with £0.3m collected in Australian gold operations’ royalties

BUY

• The Company released a quarterly operational and financial update highlighting progress on its diversified portfolio of mining royalties and projects.
• The team completed second and final payment for the Newcrest portfolio of gold royalties in Australia and Cote d’Ivoire in Feb/22.
• The deal brought in royalties on three operating mines as well as an interest in up to 15 develop and up to six exploration stage assets increasing the Company’s exposure to gold and adding scale to royalty revenue stream.
• Marvel Gold JV terms have been amended with Altus regaining a 100% in the Lakanfla gold license in western Mali, conveniently located only 5km from the Diba gold project, while the interest in the Tabakorole Gold Project in southern Mali moved changed to 30% as the partner completed another share of exploration related earn in with the Company retaining a 2.5% NSR.
• 1.0% Gross Revenue Royalty generated on the Toura Ni-Co Project in Cote d’Ivoire with a sale of the interest in the project to Firering Strategic Minerals (FRG LN 9.1p, Mkt Cap £7.9m) for €15k.
• The Company completed ~12,000m of drilling at the Diba & Lakanfla Gold Project that will be used to update the MRE and PEA in due course.
• Latest PEA Update released in Nov/20 was based on the Diba deposit only and envisaged a $20m heap leaching operation running at 57kozpa over +3y LOM and $544/oz AISC generating $140m in after tax NPV10% at $1,800/oz gold price.
• Current Diba MRE stands at ~400koz at 1.22koz in total resource (~220koz oxide and ~190koz sulphide) with ~220koz at 1.39g/t in the Indicated category.
• Financially, the Company received £0.3m from two cash paying Newcrest transaction related royalties (Ballarat Gold Mine and South Kalgoorlie Operations) with regards to the Q4/21 period.
• The Company reported a £2.3m loss for the period (Q1/21: -£1.3m) reflecting higher exploration related spend, expansions in the team of geologists, admin support and corporate team as well as borrowing costs.
• The Company held £3.2m in cash and £1.6m in listed securities as of Q1/22 with £19.4m in debt held by La Mancha and related to the Caserones royalty acquisition.

*SP Angel acts as Nomad and Broker to Altus Strategies

Azure Minerals Ltd (ASX:AZS) A$0.26p, Mkt Cap A$82m – Agreement to sell Mexican assets for A$20m

• Azure reports that it has agreed to sell its subsidiary companies that own and operate its Mexican precious and base metals projects to Bendito Resources for a combination of cash and shares valued at A$20m.
• Azure will receive at completion of the Transaction an immediate payment of A$6m in cash and a 10% equity interest in Bendito, nominally valued at A$2m.
• A second tranche of A$4m in cash and A$8m in shares is payable within 18 months of completion of the Transaction.
• The funds allow Azure to accelerate activities on the Andover Ni-Cu project in WA, where the company recently completed a maiden MRE of 4.6Mt @ 1.11% Ni, 0.47% Cu and 0.05% Co, with further growth anticipated.
• Geological mapping, surface geochemical sampling and diamond drilling (approximately 160 holes to date) have identified a >4km-long, mineralised zone at Andover.

Cora Gold Ltd (AIM:CORA) 7.3p, Mkt Cap £21m – Final Sanankoro drilling results with DFS targeted for Q3/22

• The Company reported the third and the last set of drill results from the 2022 infill and step out drilling programme at the Sanankoro Gold Project, southern Mali.
• Selected oxide intersections included:
• 12m @ 7.61 g/t Au from 18m including 2m at 27.56g/t and 1m at 17.01g/t in hole SC0639 at Selin South;
• 12m @ 2.08 g/t Au from 49m including 2m at 6.05g/t in hole SC0636 at Selin South;
• 14m @ 2.00 g/t Au from 64m including 6m at 2.94g/t in hole SC0640 at Selin South;
• 11m @ 2.42 g/t Au from 120m including 6m at 3.40g/t in hole SC0648 at Selin South;
• 13m @ 4.97 g/t Au from 61m including 2m at 26.47g/t in hole SC0650 at Zone B North;
• 4m @ 6.34 g/t Au from 26m including 2m at 12.08g/t in hole SC0658 at Target 6.
• The drilling programme included 11 AC shallow holes for ~900m and 78 RC holes for ~7,000m comprising Zone B North (~5,000m), Selin (~1,100m), Fode 1 (~500m) and target 6 (400m).
• Drilling results will be incorporated into the updated MRE and the mine plan for the DFS.
• DFS completion has been slightly moved to the next quarter (Q3/22).
• Environmental permitting will be launched in the coming weeks with the ESIA nearly completed.

Conclusion: Final results from the latest 2022 drilling programme (~7,900m) focused on infill and step out holes will be used to update the MRE (21.9mt at 1.15g/t for 809koz, ~67% in the Indicated category) and maiden reserves as part of the DFS that is planned for completion in Q3/22.

Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF)* – 25.25p, Mkt cap £70m – Deferred consideration payment and sale of royalty

Valuation 48p/s

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• Cornish Metals reports that it has issued approximately 20.3m new shares to Galena Special Situations Ltd ("Galena") and Tin Shield Productions Inc as part of its deferred consideration due for Cornish mineral rights around South Crofty.
• The shares “represent … [a] … consideration equivalent to an amount of US$4,750,000 … at a deemed price of C$0.30 per Share. The Shares are divided on a ratio of 52.5% to Galena (10,656,625 common shares) and 47.5% to Tin Shield (9,641,708 common shares) and are subject to a four month plus one day hold period from the date of issuance”.
• The company confirms that “As a result of this payment, the remaining deferred consideration payable to Galena / Tin Shield is US$5,000,000 in common shares, payable upon a decision made by Cornish Metals to proceed with the development and/or construction of a mine either at the South Crofty tin project or at the United Downs property”.
• The company closed its £40.5m funding last week providing the resources to dewater the historic mine at South Crofty and fund the feasibility study into re-opening the mine and also bringing in Vision Blue Resources, run by Sir Mick Davis, as a holder of approximately 27% of the company.
• In a separate announcement today, Cornish Metals also reports that it has sold a 1% net-smelter royalty relating to the Sleitat tin/silver project in Alaska in return for $100,000 in cash and 1m shares in the purchaser, Electric Royalties.
• The shares element of the sale is subject to a “voluntary lockup agreement whereby 50% of the Consideration Shares will be subject to a six month hold period and the balance subject to a one year hold period”.
• In our opinion, the sale of the Alaskan royalty underlines Cornish Metals’ focus on progressing its Cornish assets at United Downs and the rejuvenation of the South Crofty tin mine.

Conclusion: The injection of new funds, which closed last week allows Cornish Metals to progress investigation of a planned re-opening of the South Crofty tin mine in Cornwall to a feasibility study and has triggered a deferred payment for mineral rights due to Galena and to Tin Shield. Separately, we interpret the sale of the Alaskan royalty, also announced today, as evidence of a corporate focus on its Cornish projects at of South Crofty and United Downs which is located approximately 5 miles (8km) east of South Crofty.

*SP Angel acts as Nomad and Broker to Cornish Metals.

Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)* 25p, Mkt Cap £51m – non-binding term sheet signed with CoTec

• Mkango reports that ESG-focused CoTec have agreed to invest £2m in Mkango by way of a two-year, unsecured convertible note with 5% interest, convertible into Mkango shares at 27p each.
• The funding provides Mkango with working capital as it advances financing discussions for the Songwe Hill rare earths project and the Pulawy separation plant project in Poland.
• CoTec will also invest £1.5m into Maginito, equating to a 10% equity stake in the Company.
• Maginito holds a 42% interest in U.K. rare earth (NdFeB) magnet recycler, HyProMag with an option to increase its interest to 49%.
• Hypromag has licensed the patented technology called HPMS (Hydrogen Processing of Magnet Scrap) developed in the Magnetic Materials Group at the University of Birmingham.
• William Dawes, Chief Executive of Mkango stated: "We are very pleased to take this step towards collaborating with CoTec in the rare earths sector. The proposed investments would increase Mkango's financial flexibility, creating a strong platform to grow Maginito and for future expansion into the U.S. market, whilst the integrated development of Songwe and the Pulawy separation plant continues in parallel."

*SP Angel acts as Nomad and Broker to Mkango Resources

Oriole Resources PLC (AIM:ORR) – 0.25p, Mkt cap £4.9m – Drilling resumes at Bibemi, Cameroon

• Oriole Resources reports the resumption of drilling at its 90% owned Bibemi gold project in Cameroon.
• A fourth phase of drilling, comprising a planned 550m, is now underway to test “sub-horizontal extensional quartz veins that are believed to be a strong control on the location of gold within the shear corridor”.
• Work up to now has “focussed on a circa 1 kilometre ('km') section at the Bakassi Zone 1 prospect ('Bakassi Zone 1' or the 'Prospect') … [and] … has delivered encouraging near-surface intervals including 6.50 metres ('m') grading 3.92 grammes per tonne ('g/t') gold ('Au'), 9.20m grading 1.31 g/t Au and 5.20m grading 1.97 g/t Au”.
• The company says that further drilling will depend on results and that it is also working on technical studies “to support a two-year extension of the Bibemi licence and a report will be submitted in Q3 to support this process”.
• CEO, Tim Livesey, explained that “Structural studies carried out previously identify these cross-cutting, sub-horizontal structures as being important for controlling the location of higher-grade intervals within the shear corridor. This programme offers the potential for significant volumetric increase to the known system”.
• Oriole Resources also says that it has recently completed a geomagnetic survey covering “a total survey area of 6km2, with an investigation depth of 200m from surface” to help define further drill targets over the four prospect targets at Bibemi.

Predictive Discovery Ltd (ASX:PDI) A$0.20, Mkt Cap A$275m – Proposed A$60m equity raise to advance the Bankan Gold Project in Guinea

• The Company received firm commitments for an A$55m equity raise from institutional investors at A$0.18/sh, a 10% discount to 5-day VWAP.
• Additionally, the Company will provide each existing shareholder with an opportunity to apply for up to A$30k worth of new shares at A$0.18/sh for up to A$5m in total.
• Equity raise proceeds will be used to fund the 60,000m DD and RC drilling programme that will double the amount of drilling completed to date at the Bankan Gold Project in north east Guinea, within the Siguiri Basin.
• The programme is designed to grow and upgrade the existing Inferred resource of 72.8mt at 1.56g/t for 3.6moz.
• The team is planning to explore for NE Bankan style deposits along the 35km long north-northwest structural corridor that hosts the project.
• The plan is to deliver a Scoping Study outlining basic economic parameters of the project by the end of 2023.

Serabi Gold (AIM:SRB, TSX:SBI)* 43.5p, Mkt Cap £30m – Preliminary results for 2021 and progress report on 2022 operations

• Confirming that it “expects to publish the audited full year results in mid-June 2022”, Serabi Gold (AIM:SRB, TSX:SBI) reports a preliminary profit of US$9.95m for the year to 31st December 2021 which it says is “the best annual result for the Group and an increase of 42 per cent year on year”.
• The company explains that cash costs for the year’s production of 33,848oz of gold (2020 – 31,212oz) were US$1,090/oz (2020- US$1,075/oz) and that costs on an all-in-sustaining basis were US$1,429/oz (2020 -US$1,374/oz) “reflecting the additional US$2.45 million of mine development expenditure incurred in the year”.
• Re-iterating its previously reported 2,919oz of gold production during April 2022, which was described as “the highest monthly level so far in 2022”, Serabi Gold says that it “anticipates gold production for May 2022 will be similar”.
• Serabi Gold also confirms that it is shipping an initial 400t of ore from its Coringa development project to Palito and that it expects to begin ore-sorting tests on this material “in the coming days”.
• The sample from Coringa “will also provide a bulk sample to be processed through the Palito plant”.

*An SP Angel analyst has visited the Serabi’s gold mining operations in Brazil

SP Angel and Digbee ESG joint initiative for mining companies

https://www.uploadlibrary.com/SPAngel_JohnMeyer/DIGBEE_Press_release.pdf

• SP Angel and Digbee, a specialist ESG group, wish to announce their joint initiative in bringing ESG accreditation to mining companies in their drive to meet institutional investment and rapidly evolving ESG standards and regulatory requirements.
• We are rapidly approaching a point where a company’s ESG profile will not simply be a positive investment factor but will become a precondition to investment by many investment funds.
• The guidance and ratings process developed by Digbee is specifically designed to assist mining companies meet the new expectations and ensure directors meet their ESG compliance objectives.
• The initiative will not only quantify and score the ESG profile of qualifying companies but will also highlight ESG improvements and positive performance as companies develop.
• Importantly, the process will enable investment funds to demonstrate the positive results of their investments to their underlying investors and stakeholders which can, in turn, lead to further funding.
• It is imperative that any ESG Rating is seen to be credible. Digbee’s solution was developed to address this: it is mining specific, right sized and future looking, based on an independent assessment of a submission that is supported by evidence and approved by the company’s board of directors. It will also address investor frustration at a lack of comparable or meaningful data.
• For companies at an earlier stage of their ESG journey, recording improvements over time through the Digbee initiative is likely to prove attractive to investment funds as a demonstration of their ESG commitment permitting institutional investment at an earlier stage.
• The direction of travel is now firmly towards renewable sources of energy and a transition to environmental sensitivity. Historically, regardless of the individual facts, miners have collectively been identified as bad actors in this regard. Digbee engagement and ratings should improve the visibility of the good work being done.
• For example, installing, wind and solar generation to displace oil and gas should not only cut energy costs but also reduce carbon emissions. Sharing this energy with a local community may further reduce emissions, strengthen community engagement and lead to long-term sustainable benefits well beyond the end of the mine life. Similarly, a mine closure, thoughtfully done, can leave a positive community legacy that will stand a company in good stead when it is seeking new mining opportunities. Having a third party ESG specialist incorporate these initiatives into a rating accepted by investors will help secure the credit such initiatives deserve.

Jamie Strauss, Founder & CEO, Digbee Ltd: “We are delighted with this joint initiative with SP Angel, the number one ranked advisor to the AIM Mining sector*. SP Angel has acknowledged the importance of presenting their corporate clients to institutional investors with credible ESG disclosure as an increasing prerequisite to encourage new investment. We look forward to working together to achieve a more sustainable mining industry that is recognised for its positive actions ”

John Meyer, Mining Analyst & Partner at SP Angel “Working with Jamie Strauss and Digbee will help prepare our corporate clients for ESG-orientated investment. Mining, exploration, and development companies contribute much to local communities which combined with the potential benefits of increasingly sustainable operations is worthy of recognition. Quantifying the benefits, improvements and legacies of these operations should act a catalyst to further improvement to the benefit of all stakeholders.

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

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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%