Today's Market View - Alien Metals, Arc Minerals, Mkango Resources, and more...

SP Angel . Morning View . Wednesday 07 09 22

Metals sag on weak Chinese trade data and rising US dollar

MiFID II exempt information – see disclaimer below

Alien Metals Ltd (AIM:UFO, OTC:ASLRF) – Rod McIllree strengthens board as Executive Chairman

Arc Minerals Limited (AIM:ARCM)*– Anglo American is looking for a Senior Project Geologist to work on-site in Zambia

BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)* – Bluejay completes drill program at Enonkoski for joint venture with Rio Tinto

Bluerock Diamonds PLC (AIM:BRD)* – Interims highlight 44% yoy increase in value per carat sold in first half

Diamond Fields Resources Inc (OTCMKTS: DFIFF) – Burkina Faso drilling identifies new gold zone within the Cascades Gold Project

Keras Resources PLC (AIM:KRS)* – Diamond Creek raises phosphate production to meet new demand

Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)* – CoTec provides £500k funding

Premier African Minerals Ltd (AIM:PREM) – Resource drilling at the Zulu Lithium project, Zimbabwe

Thor Mining PLC (AIM:THR, OTC:THORF, ASX:THR) – Progress report on Australian and US exploration projects

Copper slides on strengthening dollar despite record low Chinese inventories

• Copper prices erased yesterday’s gains, sliding back below $7,584/t as the dollar resumed its rally.
• The dollar index has soared to 20-year highs as US Treasury yields continue to rally and investors look to the greenback as a safe-haven.
• The downward move comes despite record-low Chinese copper inventories at 142,200t and sliding Peruvian output.
• Chinese imports jumped 26% yoy in August and 9% yoy between Jan-Aug – domestic production capacity has been hit by power limitations.
• LME copper premiums hit 9-month highs, pointing to a tightening of global supply.
• Optimists continue to look to China’s renewed stimulus efforts as a potential tailwind to the metal.

Gold prices retreat on dollar’s relentless rally and climbing Treasury yields

• Gold fell below $1,700/oz from a weekly high yesterday of $1,726/oz.
• The dollar’s march past 20-year highs has been a sustained headwind for the metal.
• The Federal Reserve’s aggressive rate hiking program has supported the currency alongside Treasury yields.
• Higher Treasury yields reduce the incentive to hold non-interest-bearing gold.
• Positive services data from the US has encouraged traders to bet on a continuation of J Powell’s aggressive quantitative tightening programme.

Eurometaux warns of ‘existential’ threat to European metal production as energy crisis intensifies

• The EU’s metal producing association has warned of permanent closures to the continent’s smelting capacity as gas prices soar.
• The EU has lost 50% of its zinc and aluminium production capacity to date.
• A letter to Ursula Von Der Leyen has been signed by 40 industry executives to ‘take emergency action to preserve the strategic electricity-intensive industries.’

US and EU ramp up Russian aluminium and nickel imports despite Putin’s invasion of Ukraine

• US imports of Russian nickel up 70% between March-June. (Reuters)
• EU aluminium imports up 13% from Russia over the same period.
• The EU and US imported c.$2bn worth of aluminium and nickel from Russia over the past 5 months.
• The increase in key metal imports from major producer Russia comes despite a swathe of logistical sanctions on Russian industry and exports introduced by the West.
• The Rouble continues to rally against the Euro, up over 40% from pre-invasion levels, as Putin starves Europe of gas.
• Germany’s top aluminium smelter to cut output 50% amid rising costs
• Aluminium producer Speira GmbH has reported that it will reduce production in Germany by 50%, while other industry groups warn of further closures over the winter months.
• The plant in Neuss has a capacity of 230,000tpa of aluminium, making it one of the largest plants in Europe.
• France’s largest aluminium smelter, Aluminium Dunkerque, has cut output by 20% to 285ktpa due to the rising cost of power.
• Given the energy crisis developing in Europe we are surprised that this smelter is operating at all.

Iron ore prices edge higher on China stimulus demand optimism

• Iron ore prices bounced to $97/t following the PBC’s decision to cut the foreign exchange RRR to 6% from 8% next week.
• Chinese policymakers continue to make efforts to shore up the stumbling economy, with September seasonally strong for construction.
• The Chinese government is accelerating efforts to boost its economy before the key 5-year Party Congress in mid-October.
• Chinese Iron ore imports rise 5.4% in August on month prior
• China imported 96.2mt of iron ore & concentrates in August, up on the month prior but down 1.3% YoY.
• Imports totalled 723mt from January to August, down 3.1% over the same period last year.
• The 5% increase monthly is largely attributed to blast furnace maintenance in July.

China drought bolsters rising coal prices in hit to power-desperate Europe

• Despite record droughts in China over the first half of 2022, low rainfall in July and August has slashed hydropower output across the country.
• Southern China has seen rainfall of 135mm since 1st July vs an average 464mm from 2014-2021. (Reuters)
• Coal prices have rallied to 10-month highs as Chinese utility producers seek hydropower alternatives.
• China accounts for >50% of coal combustion demand, causing further price hikes for European utility firms switching from currently uneconomical gas prices.

Vale Indonesia inks $2bn deal with Chinese metal producers for nickel processing plant

• Major nickel miner PT Vale Indonesia has signed a $2.1bn deal with steelmaker China Baowu and Shandong Xinhai Technology Co. Ltd, a processor, manufacturer, and distributor of metal products.
• The groups have agreed to develop a major processing plant on Sulawesi Island in Indonesia.
• Completion is expected by 2025.
• The JV is expected to produce ferronickel amounting to 73kt-80kt of nickel content pa. (Vale CFO Bernardus Irmanto)

Dow Jones Industrials -0.55% at 31,145

Nikkei 225 -0.71% at 27,430

HK Hang Seng -1.13% at 18,985

Shanghai Composite +0.06% at 3,246

Economics

Global economy contracts for the first time since June 2020 despite further easing in cost inflation, J.P.Morgan Global Composite PMI shows.

• The index fell to 49.3 in August, down from 50.8 in July, with both manufacturing and services recording declines.
• Outlook remains challenging with new business orders down in August marking a first drop in a 25-month long series of expansion.
• Manufacturing new orders dropped while new work in services eased toa 25-month low.
• Inflation wise, input costs increased at the slowest pace for almost 1.5 years while the rise in selling prices was the weakest since Apr/21.
• Global services 49.2 in August vs 51.1 in July
• Global composite 49.3 in August vs 50.8 in July

US – A contraction in private sector accelerated in August led by a sharp drop in the services’ activity, although, inflationary pressures are easing, according to S&P Global PMI data.

• The composite index fell to 44.6 from 47.7 in July.
• New orders are down at the quickest pace since May 2020.
• Employment growth cooled to the weakest pace since January.
• On a positive note, input cost inflation slowed to the lowest pace since January 2021.
• S&P Global Services PMI (Final): 43.7 August v 44.1 previous estimate.
• S&P Global Composite PMI (Final): 44.6 August v 45.0 previous estimate.
• ISM nonmanufacturing index 56.9 in August vs 56.7 in July
• S&P US services fell to 43.7 in August vs 47.3 in July
• Composite 44.6 in August vs 47.7 in July

China – A recovery is losing momentum as trade data slows more than expected August.

• With headline numbers including effects of high inflation, real growth would have been even lower.
• Weak data highlights both overseas demand growth concerns as well as poor domestic consumption outlook.
• Exports (%yoy): 7.1 August v 18.0 July and 13.0 est.
• Imports (%yoy): 0.3 August v 2.3 July and 1.1 est.

Taiwan - CPI 2.7% yoy in August

EU – Construction PMI 44.2 in August vs 45.7 in July

Germany – Weak industrial production numbers follow up on a drop in orders reported yesterday as the sector battles with high input costs and logistical challenges.

• Production at energy intensive industries dropped nearly 7%yoy in five months since the Russian invasion of Ukraine, FT reports.
• Gas use in power generation in Germany dropped 18%yoy in H1/22 on the back of an increasing cost of gas supplies.
• Nuclear power electricity generation halved because of the shutdown of three of six nuclear power plants as part of the phaseout of nuclear energy.
• Meanwhile, generation from coal and renewables climbed by 17%yoy and 18%yoy, respectively.
• Total amount of power generated increased marginally by 1.3%yoy.
• Industrial Production (%mom): -0.3 July v 0.4 June and -0.6 est.
• Industrial Production (%yoy): -1.1 July and -0.5 June and -2.1 est.
• Construction PMI 42.6 in August vs 43.7 in July
• German new car registrations rose 3.2% in August vs -12.9% in July
• Holland - CPI rose 2% in August vs 2.1% in July and 12% yoy in August and 10.3% in July

UK – House prices rebounded in August with London posting the strongest growth in six years, according to Halifax.

• Prices climbed 0.4%mom recovering from a 0.1% drop the previous month.
• On year-on-year basis, prices were up 11.5%, little change from 11.8% in July.
• London and Wales were the strongest regions for sales, with prices in the capital climbing 8.8%yoy, the most in six years, Wales registering a 16.1% growth.
• Growth comes despite climbing mortgage rates that hit the highest level since 2016 led by six interest rate hikes by the central bank since December with another 50bp increase expected next week.
• PMI 49.2 in August vs 48.9 in July

Currencies

US$0.9905/eur vs 0.9969/eur yesterday. Yen 144.06/$ vs 141.49/$. SAr 17.360/$ vs 17.084/$. $1.150/gbp vs $1.159/gbp. 0.672/aud vs 0.678/aud. CNY 6.972/$ vs 6.942/$.

US Dollar index – 110.52 / +0.28% on week

Commodity News

Precious metals:

Gold US$1,699/oz vs US$1,715/oz yesterday

Gold ETFs 99.5moz vs US$99.7moz yesterday

Platinum US$859/oz vs US$858/oz yesterday

Palladium US$2,002/oz vs US$2,071/oz yesterday

Silver US$18.05/oz vs US$18.38/oz yesterday

Rhodium US$14,200/oz vs US$14,000/oz yesterday

Base metals:

Copper US$7,584/t vs US$7,733/t yesterday

Aluminium US$ 2,245/t vs US$2,296 yesterday

Nickel US$ 21,250/t vs US$21,458/t yesterday

Zinc US$ 3,110/t vs US$3,214/t yesterday

Lead US$ 1,878/t vs US$1,904/t yesterday

Tin US$ 20,875/t vs US$21,585/t yesterday

Energy:

Oil US$91.5/bbl vs US$95.4/bbl yesterday

Natural Gas US$8.017/mmbtu vs US$8.767/mmbtu yesterday

Uranium UXC US$51.80/lb vs US$52.40/lb yesterday

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$97.0/t vs US$94.8/t

Chinese steel rebar 25mm US$581.3/t vs US$584.3/t

Thermal coal (1st year forward cif A RA) US$312.0/t vs US$312.0/t

Coking coal swap Australia FOB US$270.0/t vs US$273.0/t

Other:

Cobalt LME 3m US$51,955/t vs US$51,955/t

NdPr Rare Earth Oxide (China) US$83,547/t vs US$84,630/t

Lithium carbonate 99% (China) US$69,204/t vs US$69,504/t

China Spodumene Li2O 5%min CIF US$5,110/t vs US$5,010/t

Ferro-Manganese European Mn78% min US$1,233/t vs US$1,231/t

China Tungsten APT 88.5% FOB US$333/t vs US$333/t

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

Europe Vanadium Pentoxide 98% 7.3/lb vs US$7.3/lb

Europe Ferro-Vanadium 80% 31.75/kg vs US$31.75/kg

China Ilmenite Concentrate TiO2 US$228/t vs US$329/t

Spot CO2 Emissions EUA Price US$72.1/t vs US$73.8/t

Brazil Potash CFR Granular Spot US$860.0/t vs US$860.0/t

Battery News

• EV charger Tritium raises $135m to progress fast charger production
• The EV charging manufacturer announced Tuesday it has raised $135m in new funding to help it work through its backorders while boosting production ability.
• Tritium is described by electrek as a pioneer in DC fast charging (DCFC). The manufacturer introduced the world’s smallest footprint DC fast charger in 2013.
• The EV tech company has 7,400 chargers across 41 countries as the need for charging continues building.
• EV charging is classified into three levels. Level 1 is the slowest charging time while level 3 is the fastest; this is also referred to as DC fast charging, or DCFC.
• Tritium plans to use the new funds for developing new products and supporting its expansion.

Company News

Alien Metals Ltd (AIM:UFO, OTC:ASLRF) – 0.61p, Mkt cap £31m – Rod McIllree strengthens board as Executive Chairman

• Alien Metals has appointed Rod McIllree, formerly CEO and Chairman at Bluejay Mining as Executive Chairman.
• McIllree was responsible for very substantial value creation at Bluejay following his reversal of the Dundas and Disco projects into the company.
• The team will focus further attention on the value of the Munni Munni pgm assets as well as Elizabeth Hill and the potential for production from the iron ore assets in Western Australia.

Arc Minerals Limited (AIM:ARCM)* 3.05p, Mkt Cap £35m – Anglo American is looking for a Senior Project Geologist to work on-site in Zambia

(Arc holds 72.5% of Zaco and 66% of Zamsort in Zambia. The Cheyeza license is 66% owned by Arc Minerals through its holding in Zamsort.)

(Arc holds 75% in Alvis-Crest (Proprietary) Limited which holds two licenses in the Kalahari Copper Belt, known as Virgo covering >210km2, around 10km south east the recently commissioned Khoemacau Copper in Botswana.)

• Investors are waiting for confirmation from Anglo American on the completion of its due diligence process on the agreed joint venture with Anglo American in Zambia.
• Anglo’s due diligence process was delayed due to the temporary closure of the Zambian Cadastre (the government office/system for licensing mineral rights) by the Zambian Ministry of Mines and pending confirmation of certain information relating to the exploration licenses.
• Arc Minerals, duly extended the 90-day exclusivity period for Anglo American to allow sufficient time to conclude the due diligence.
• Recent intel tells us that other significant explorers are miners are actively signing up agreements on licenses close to Arc Minerals in Zambia suggesting to us that if Anglo do not complete their due diligence in time that other offers will be ready and waiting.
• We also note that Anglo American are looking to recruit a Senior Project Geologist for their ‘GDG’ Group Discovery and Geosciences team which they see as a competitive differentiator for Anglo American.
• “GDG contributes to achieving Anglo American’s Purpose of re-imagining mining to improve people’s lives. The Senior Project Geologist will be a key member of the Zambia exploration team, collaborating to safely drive a balanced portfolio of superior value opportunities towards discovery.”
• The successful candidate will:
• “Pursue excellence and innovation in effective exploration of sediment- hosted Cu and related systems, via application of a strategic and systematic mineral systems approach. Participate in the planning and execution of generative discovery programmes and preparation of technical proposals and progress reports. Integrate and analyse multi-disciplinary datasets in multiple dimensions at appropriate scales, delivering synoptic and practical recommendations.
• Identify and evaluate possible new opportunities at different exploration scales and stages, applying both technical and commercial / business approaches. Support the development, classification and prioritization of the portfolio of opportunities, including critical input into strategic planning and tactics development.
• Collaborate in the development and continuous improvement of the management of multidisciplinary geoscientific data. Participate in effective data compilation, generation, integration and interpretation; and selection and application of appropriate exploration tools. Etc, etc,etc….”

Conclusion: Anglo appear to be gearing up for something in Zambia. This role is most likely to involve work on Arc Mineral’s licenses but could also involve other areas of exploration. Either way, Anglo appears to be moving back into Zambia after pulling out in the late 90s.

*SP Angel acts as Nomad and broker to ARC Minerals

BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)* 6.05p, Mkt cap £63m – Bluejay completes drill program at Enonkoski for joint venture with Rio Tinto

(Bluejay has a staged $20m jv with Rio Tinto and holds 100% of Enonkoski Ni-Cu-Co, Hammaslahti Cu-Zn-Au-Ag and Outokumpu Cu-Co-Zn-Ni-Au-Ag projects)

• Bluejay Mining reports the completion of the first drill program at Enonkoski, Finland in its joint venture with Rio Tinto .
• The program focused on follow-up drilling at Muhelampi,2.5km from the historic Laukunkangas Ni-Cu-Co mine and Laukunlampi. Both targets were drilled by the JV in 2021.
• Three new diamond drill holes plus one drill hole extension covered some 1,648.20m from May to July.
• The ToB ‘top of bedrock’ dril programme focused on the testing the large Muhola mafic intrusion with 61 ToB drill core samples analysed.
• Downhole electromagnetic surveying has also been performed.
• The Kiislampi intrusion close to the historic Hälvälä mine is also to be mapped and sampled to improve geological understanding on this priority target.
• “The ToB results from Tieaho once again show how cost-effective the method can be, with only four drill holes drilled through the till cover at Tieaho confirming a previously unknown mafic intrusion in close vicinity of a historic mafic intrusive hosted nickel-copper-cobalt mine.”
• Laukunlampi, where the intrusion extends to >600m depth appears to have greater volume with assay results showing more mafic rocks in the last 50 metres of the hole making this a potential new target.
• ENON0024 at Muhelampi showed 302m did not intersect any mafic or ultramafic rocks and may have passed underneath the main Muhelampi mafic intrusion indicating it is shallow.
• ENON0025 and ENON0026 and one drill hole extension M421115R305 to 456m were completed at the Laukunlampi with sulphidic pyroxenite or sulphide dissemination over 35m intersected.
• Drill hole ENON0025 to 606m depth intersected similar sulphidic pyroxenite shows the intrusive rocks become more mafic towards the end of the hole as indicated by a rising chromium oxide and magnesium oxide and also in the magnesium oxide/aluminum oxide ratio in the last 50m of the hole.
• “The ToB sampling also identified a new mafic intrusion east of the main Muhola intrusion. At Kiislampi the ToB sampling confirm the mafic intrusion, the southern parts of the intrusion seems to be overlain by mica gneiss and partly thick overburden cover. The ToB results also confirmed the existence of a mafic intrusion at the Tieaho target.”

Conclusion: The results of the drill program give clues to the geologists about the potential for significant nickel, copper and other metal accumulations.

*SP Angel acts as nomad and broker to Bluejay Mining

Bluerock Diamonds PLC (AIM:BRD)* – 8.3p, Mkt cap £1.9m – Interims highlight 44% yoy increase in value per carat sold in first half

• BlueRock Diamonds report an 18% increase in the number of tonnes processed to 260,000 in the first half of the year.
• Processing of some lower-grade stockpiled material saw grades fall 20% to 3.22cpht resulting in a 7% fall in production to 8,214cts.
• Fortunately, the per carat sales price rose 44% to $629/ct due to improved market conditions and better-quality stones recovered from fresh kimberlite ore.
• Management have been working to open-up the Main Pit moving 1.1mt of waste to increase fresh kimberlite ore production.
• Sales rose to 45% to £4.1m vs £2.8m yoy on higher diamond prices
• Operating losses rose to £783,000 vs £539,000 due to the cost of moving so much waste material and a lower tonnage of fresh kimberlite material into the plant reducing the overall grade.
• A substantial foreign exchange gain of £968,390 helped to reduce the loss in the first half to just £23,000 vs £513,000 a year earlier as the rand depreciated to 16.26/USD.
• Management have adjusted guidance to:
• Throughput: 620,000-670,000t for 2022 from 770,000-750t and 875,000-970,000t for 2023 from 1,000,000t previously.
• Carats: 20,000-24,000cts for 2022 from 24,500-30,000cts for 2022 and 35,000-41,000cts for 2023 from 43,000cts previously
• Grades: 3.25-3.5cpht for 2022 from 3.5-4.0cpht for 2022 and 4.0-4.3cpht for 2023 from 4.3cpht previously.
• Value per carat: $500-600/ct from $500-550/ct for 2022 and $500/ct for 2023 from $450/ct previously
• Revenues: $10.0-14.4m from $12.0-16.5m for 2022 and $17.5-20.5m from $19m in 2023 previously

Conclusion: BlueRock were unfortunate to suffer such an extended wet season this year as South Africa suffered catastrophic floods. Management had prepared for wet weather but the use of low-grade stockpiles for an extended period was unexpected and reduced sales while wet weather also delayed the movement of waste material required to access more fresh, higher grade ore. While BlueRock is better prepared for wet weather going forward the save operation of trucks and mining equipment on wet and slippy kimberlite ore will always slow the mining of fresh ore through the wet season.

*SP Angel act as Nomad and broker to Bluerock Diamonds. The analyst holds shares in BlueRock Diamonds.

Diamond Fields Resources Inc (OTCMKTS: DFIFF) C$0.15, Mkt Cap C$27m– Burkina Faso drilling identifies new gold zone within the Cascades Gold Project

• In a release to the Vancouver market on 6th September, Diamond Fields Resources announced results from its initial, 4,975m reverse-circulation drilling programme at the Cascades Gold Project in Burkina Faso.
• The company explains that “The Cascades Gold Project incorporates: the Wuo Land Licence (the Labola Project) where a maiden Mineral Resource was reported by DFR in December 2021; and the contiguous 243 square kilometre Wuo Land 2 licence”.
• The project, which came with the acquisition of Moydow Holdings, “has an indicated gold resource of 264,000 ounces ("oz") of gold ("Au") @ 1.52 grams per tonne ("g/t") and an inferred resource of 371,000 oz Au @ 1.67 g/t Au”.
• The recent drilling supports “the presence of a significant new gold zone within the Wuo Land 2 area – the TT-13 target” where 1,068m of drilling was completed, with highlighted results including:
• A 10m intersection at an average grade of 1.55g/t gold from a depth of 45m in hole CS22-RC-027; and
• A 4m wide intersection averaging 2.10g/t gold from 25m in hole CS22-RC-028 as well as a 16m intersection at an average grade of 1.26g/t gold from a depth of 38m; and
• A 9m wide intersection at an average grade of 1.08g/t gold from a depth of 27m in hole CS22-RC-029 which also intersected 10m at an average grade of 1.81g/t gold from 56m depth
• The company also reports that “infill drilling has added important further definition to DFR's geological model based on historical drilling. High grade mineralisation intersected in the Western Zone in CS22RC-003 including 104-107, 3 metres @ 12.52 g/t Au from assays”.
• The mineralised intersection in hole CS22-RC-003, which is located in the Daramandougou target area, occurs “in a zone of quartz veining where the host metasediment unit transitions from sandstone to greywacke dominated lithology” and helped to test “a greater than 100 metre gap in drilling at the southern end of the Western Zone at Daramandougou between hole DRA21-014 drilled by Moydow in 2021 and LBLC08-006 drilled by High River Gold in 2008”.
• Diamond Fields says that it is working to “upgrade more than twenty new geological targets to drill ready status” and CEO, John McGloin, explained that the “discovery of a new gold zone at Cascades shows the effectiveness of the exploration process our experienced team have implemented as well as the significant potential to grow the Project's resource”.

Conclusion: Diamond Fields’ initial drilling at the Cascades Gold Project shows the potential of the expanded licence area and we look forward to further news as the exploration continues.

Keras Resources PLC (AIM:KRS)* 6.25p, Mkt cap £5m – Diamond Creek raises phosphate production to meet new demand

(Keras holds 100% of the Diamond Creek phosphate mine in Utah, USA. Keras also holds an 85% interest in Societé General des Mines for the Nayéga manganese project in Togo)

• Keras Resources is ramping up production at its Diamond Creek organic phosphate mine in Utah, USA to meet new demand.
• The team are extending their summer mining campaign to meet new demand from California at higher price levels.
• The coarse #10 mesh product is selling particularly well with an approximate 40% increase in expected monthly sales to 700t to ensure sufficient product in this size fraction is available.
• The mine should produce an additional 2,500t of run of mine ore for downstream milling to supplement ore already in stock.
• Keras has already sold 700t of phosphate product in August from 500t expected, mainly to distributers in the Central California Valley with firm commitments for similar monthly tonnages through to May 2023 with new repeat orders from clients.
• Pricing of synthetic, non-organic, fertilizers has risen worldwide helping to lift organic phosphate prices and increasing margins in the sector.

*SP Angel acts as nomad and broker to Keras Resources

Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF)* 12p, Mkt Cap £26m – CoTec provides £500k funding

• CoTec has agreed to advance a further £500,000 by way of a convertible advance note, while Mkango has agreed to extend CoTec's exclusivity period with respect to the proposed transaction, until 30 November 2022.
• On the 30th May 2022, Mkango announced that CoTec had provided the company with a two-year, unsecured convertible note with 5% interest, convertible into Mkango shares at 27p each, providing Mkango with additional working capital as it advances financing discussions for Songwe Hill and Pulawy – for a total £2m.
• CoTec may extend exclusivity to 31 December 2022 by completing the £2m convertible note to Mkango by 15 October 2022.
• CoTec describes itself as an ESG-focused company investing in innovative technologies that have the potential to fundamentally change the way metals and minerals can be extracted and processed. The Company is committed to supporting the transition to a lower carbon future for the extraction industry, a sector on the cusp of a green revolution as it embraces technology and innovation.

*SP Angel acts as nomad and broker to Mkango Resources

Premier African Minerals Ltd (AIM:PREM) 0.36p, Mkt Cap £81m – Resource drilling at the Zulu Lithium project, Zimbabwe

• Premier African Minerals reports recent results from its resource drilling programme at the Zulu lithium project in Zimbabwe, where it has now completed almost 26,000m of drilling in support of its DFS (Definitive Feasibility Study)
• Premier African Minerals also confirms that work on the construction of the pilot plant is progressing well and remains on course for commissioning during Q1 2023.
• The project is located within the Fort Rixon greenstone belt where the company is investigating steeply dipping lithium-bearing pegmatites “along the contacts between serpentine and metamorphosed volcano-sedimentary sequences over a strike length of several kilometres”.
• The company says that the “thickest pegmatite, north and south of the Machakwe river, is rich in spodumene, petalite and lepidolite while the thinner footwall pegmatites tend to be lower in Li-grade but carry good tantalum and rubidium grades”.
• Today’s announcement discloses results from four drillholes, ZDD-104, -111, -112 & -114 which are to be “incorporated into the revised Mineral Resource update required to support the DFS”.
• Premier African Minerals draws particular attention to the results from ZDD-114 which intersected:
• 23.72m at an average grade of 1.51% Li2O and 93ppm Ta2O5 from a depth of 111.98m down the hole and included higher grade sections of:
• 1m at an average grade of 2.33% Li2O and 82ppm Ta2O5 from 114.40m depth; and
• 2m at an average grade of 2.07% Li2O and 147ppm Ta2O5 from 123.40m depth
• Hole ZDD-104 intersected 7.44m at an average grade of 1.04% Li2O and 53ppm Ta2O5 from 208.24m depth and including higher grade assays over single metre sections within the broader mineralised zone as well as
• Deeper intersections of 2.20m at an average grade of 0.90% Li2O and 91ppm Ta2O5 from 255.05m depth; and
• 5.00m at an average grade of 1.79% Li2O and 74ppm Ta2O5 from 268.30m depth
• Hole ZDD-111 returned mineralised intersections of:
• 2.16m averaging 0.96% Li2O and 186ppm Ta2O5 from 209.32m depth; and
• 2.87m at an average grade of 0.95% Li2O and 47ppm Ta2O5 from 219.68m.
• Hole ZDD-112 reported mineralisation of
• 8.00m at an avetage grade of 1.37% Li2O and 39ppm Ta2O5 from a depth of 16.80m including sections of 4.00m, from 114.40m depth, which averaged 1.85% Li2O and 32 ppm Ta2O5 and of a single metre averaging 1.63% Li2O and 38ppm Ta2O5 at 174.80m depth.
• All the reported intersections also contain rubidium at grade ranging from 793ppm to as high as 2,875ppm.
• The company reports a backlog of assaying with samples building up on site and at the laboratory and says that “a temporary suspension has been imposed on the Resource drilling. Three drill rigs remain on-site and will continue Resource drilling in the next 10 days to more targeted area of the Resource”.
• We caution that the steeply dipping to vertical orientation of the pegmatite structures which dip at “70° to 90° to the west” may mean that down-hole width intersections may not reflect the true widths of mineralisation which should become apparent as the individual results are incorporated into geological and resource modelling.

Conclusion: Resource drilling for the DFS has been temporarily suspended at the Zulu Lithium project to help ease the backlog of samples for assaying. Results reported today, however, show some wide intersections in excess of 1% Li2O which we look forward to seeing reflected in the DFS mineral resources estimates.

Thor Mining PLC (AIM:THR, OTC:THORF, ASX:THR) 0.55p, Mkt Cap £11.1m – Progress report on Australian and US exploration projects

• Thor Mining reports that it plans to start a 2,000m initial drilling programme to test extensions to known uranium and vanadium mineralisation at its Wedding Bell and Radium Mountain projects in the Uravan Mineral Belt, USA, during September.
• Commenting on increased interest in uranium and the company’s enthusiasm for the initial drilling campaign, Managing Director, Nicole Galloway Warland, explained that “We are seeing an increase in the uranium price as it becomes clear that many countries, including the UK, USA and Japan, are revisiting nuclear power as a response to rising energy prices driven by the Ukraine war and as a 'green baseload energy' source to meet decarbonization goals”.
• The company says that results “from the recently completed 3000m RC drilling program at Sterling Prospect, Ragged Range Project … [in Western Australia] … are pending due to delays with the laboratory”.
• Interpretation of a close-spaced aeromagnetic survey covering the eastern part of Ragged Range is in progress where “Key areas of interest include Kelly's copper-gold prospect and lithium prospective ground associated with the Split Rock Super Suite”.
• Also in the Ragged Range project area, “One drill hole was drilled beneath the nickel gossan at Krona Prospect testing a modelled conductor identified from the … Electromagnetic survey … [and a] … downhole electromagnetic survey (DHEM) was subsequently completed with data interpretation underway”. Assay results from the drilling are still being processed..
• Thor Mining also confirms that discussions have started with potential joint-venture/ earn-in partners to progress the wholly-owned Molyhil tungsten/molybdenum/copper project located 220km NE of Alice Springs, NT.

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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

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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.

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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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