SP Angel . Morning View . Wednesday 28 09 22
Robust US economic data adds to US$ strength weighing on gold and copper
MiFID II exempt information – see disclaimer below
Arkle Resources PLC (AIM:ARK)* - Arkle Resources to complete additional drilling at Stonepark
Botswana Diamonds PLC (AIM:BOD) – Approvals for acquisition of the balance of Thorny River
KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF)* – Interims highlight strong growth pipeline of projects in Ethiopia and Saudi Arabia
Keras Resources PLC (AIM:KRS)* – Interims highlight strong progress in Utah
Largo Inc. (BioLargo Inc (OTCQB:BLGO)) – Largo Physical Vanadium announces trading on TSXV today
Oriole Resources PLC (AIM:ORR) – Interim report highlights progress in Cameroon and Senegal
Power Metal Resources PLC (AIM:POW)* – Significant conductor identified at Molopo Farms
Talga Group (ASX: TLG) – non-binding offtake signed with ACC for 60ktpa of anode material
Tertiary Minerals PLC (AIM:TYM)* – Tertiary Minerals announces start of soil sampling programme at Jacks, Zambia
Tesoro Gold Ltd (ASX:TSO, OTCQB:TSORF) – Further positive drill results at El Zorro, including 126m @ 1.08 g/t
Vulcan Energy Resources (ASX:VUL) – Vulcan Energy releases annual report and aims for Q12023 DFS
Private Equity / joint venture opportunity
- We are looking for investors / jv partners for an exploration opportunity on a newly discovered copper / moly porphyry system with two adjacent non-porphyry gold and silver deposits over 6km in South-East Asia
- 2,000m in 8 holes already drilled with intersections of visible chalcopyrite and molybdenite both disseminated and in B-veins
- Positive indications of grade at shallow depths. Total funding $2.34m to date. Current implied valuation $4.4m. Best drill result:
- 60m grading 0.4% copper, 0.2% gold plus molybdenum from 24m eg. below the leached cap
- 3m grading 0.51% copper, 9.2g/t gold, and 49g/t silver from 64m down hole
- 2m grading 0.3% copper, 6% zinc and 9g/t gold, 40 g/t silver from 33m down hole related to a massive pyrite-magnetite-sphalerite-chalcopyrite vein
*SP Angel’s role is limited to making introductions. No due diligence or verification of information supplied by the company has been performed. Interested parties should be aware that investment in a private company can present certain risks not present in listed companies (e.g. limited or no liquidity and no rules compelling disclosure of information to investors). This offer is open to professional investors only and is not offered to retail investors.
Dow Jones Industrials -0.43% at 29,135
Nikkei 225 -1.50% at 26,174
HK Hang Seng -3.00% at 17,325
Shanghai Composite -1.56% at 3,045
Economics
US – Robust economic data released yesterday including core durable goods orders and consumer confidence saw sovereign bond yields marching higher with equities posting another daily drop.
- S&P 500 breached June month lows falling to the lowest since December while the US$ continued to climb hitting new highs since early 2000s.
- Separately, house prices data showed a monthly drop in August as rising yields pushed mortgage rates higher.
- Durable Good Orders (%mom): -0.2 August vs -0.1 July and -0.3 est.
- Core Durable Good Orders (%mom): 1.3 August v 0.3 July and 0.2 est.
- S&P 20-City Price Index (%mom): -0.44 July vs 0.44 June and 0.20 est.
- Consumer Confidence: 108.0 September vs 103.2 August and 104.6 est.
UK – The pound slides sub 1.07 as IMF criticesed tax cuts announced by UK Chancellor Kwasi Kwarteng last week.
- It its latest statement the IMF said that they “do not recommend large and untargeted fiscal packages” at a time of high inflation.
- Moody’s commenting on the budget said that unfunded tax cuts were “credit negative” and were likely to weigh on growth.
Renminbi continues to weaken against the dollar to lowest in 14 years as traders expect PBOC to ease support
- The onshore yuan has slid 4% against the dollar in September.
- The dollar has strengthened against the Yuan as Fed officials retain their hawkish approach to rate hikes whilst the PBOC is moving to avoid deflation amid slumping demand.
- Analysts estimate the PBOC will ease 1-year rates to 2.45% by 2023 whereas the Fed are currently expected by the market to hike to 4.483%.
Currencies
US$0.9550/eur vs 0.9647/eur yesterday. Yen 144.75/$ vs 144.26/$. SAr 18.201/$ vs 17.903/$. $1.066/gbp vs $1.079/gbp. 0.637/aud vs 0.650/aud. CNY 7.230/$ vs 7.154/$.
Dollar Index 114.61 / +3.59% on week
Commodity News
Gold continues march lower as dollar and US Treasury yields jump again
- Gold has continued its downwards momentum, currently trading around the $1,620/oz mark.
- The gold price is down 6.75% year on year and down 21% from its March high triggered by Putin’s invasion of Ukraine.
- The dollar has extended its gains, now up 22% year on year and providing a primary headwind to gold.
- The dollar strengthened yesterday after a number of hawkish comments from Fed officials.
- 10-Year Treasury yields have climbed over 4% again, their highest since 2008 and adding further pressure to the gold price.
- A recovery in the gold price will most likely require a reversal in the dollar rally and an easing of US Treasury yields.
Copper prices extend losses as inventories climb alongside the dollar and global economic concerns mount
- Copper prices have fallen 2.33% from yesterday’s highs, settling around $7,270/t.
- The metal is edging towards its July lows as the dollar continues its relentless march higher.
- Copper inventories have climbed 16% in the last 2 weeks, cooling concerns of tight supplies in the market.
- Analysts note rising mine supplies to China and concerns over a global economic slowdown are weighing on the copper price.
- T&C charges were hiked yesterday, suggesting smelters in China have ample supplies of copper concentrate.
- Traders’ bullish bets on LME copper futures have hit 3-year lows, with short interest on the market hitting a 3-week high.
Precious metals:
Gold US$1,619/oz vs US$1,639/oz yesterday
Gold ETFs 97.6moz vs US$97.9moz yesterday
Platinum US$839/oz vs US$865/oz yesterday
Palladium US$2,052/oz vs US$2,052/oz yesterday
Silver US$18.00/oz vs US$18.72/oz yesterday
Rhodium US$14,000/oz vs US$14,000/oz yesterday
Base metals:
Copper US$ 7,221/t vs US$7,426/t yesterday
Aluminium US$ 2,088/t vs US$2,139/t yesterday
Nickel US$ 21,050/t vs US$22,340/t yesterday
Zinc US$ 2,794/t vs US$2,933/t yesterday
Lead US$ 1,756/t vs US$1,759/t yesterday
Tin US$ 20,400/t vs US$20,965/t yesterday
Energy:
Oil US$85.0/bbl vs US$85.0/bbl yesterday Crude oil prices were little changed as policy makers signalled that further interest rate increases are in store.
European energy prices retained yesterday’s gains as the scale of the damage to the Nord Stream 1&2 pipelines caused several EU nations to bolster the security oversight on their energy infrastructure.
Natural Gas US$6.695/mmbtu vs US$7.038/mmbtu yesterday
Uranium UXC US$49.20/lb vs US$49.40/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$97.1/t vs US$96.7/t
Chinese steel rebar 25mm US$571.1/t vs US$574.2/t
Thermal coal (1st year forward cif ARA) US$273.5/t vs US$273.5/t
Thermal coal swap Australia FOB US$428.0/t vs US$422.0/t
Coking coal swap Australia FOB US$272.0/t vs US$268.0/t
Other:
Cobalt LME 3m US$51,955/t vs US$51,955/t
NdPr Rare Earth Oxide (China) US$92,668/t vs US$90,856/t
Lithium carbonate 99% (China) US$68,395/t vs US$69,120/t
China Spodumene Li2O 5%min CIF US$5,590/t vs US$5,590/t
Ferro-Manganese European Mn78% min US$1,179/t vs US$1,192/t
China Tungsten APT 88.5% FOB US$32.5/kg vs US$32.5/kg
China Graphite Flake -194 FOB US$825/t vs US$825/t
Europe Vanadium Pentoxide 98% 7.2/lb vs US$7.2/lb
Europe Ferro-Vanadium 80% 30.75/kg vs US$30.75/kg
China Ilmenite Concentrate TiO2 US$315/t vs US$318/t
Spot CO2 Emissions EUA Price US$61.4/t vs US$64.7/kg
Brazil Potash CFR Granular Spot US$680.0/t vs US$680.0/t
Battery News
Cost of using public EV charging stations in UK rises 42% in four months
- It now costs £32.41 on average to charge a 64kWh to 80% from empty via a public rapid charger, up £9.60 from May and £13.60 from the same time last year.
- The rise is partly due to a 20% VAT imposed by the government on public charging, compared with the 5% on home charging.
Company News
Arkle Resources PLC (AIM:ARK)* 0.65p, Mkt Cap £2.2m - Arkle Resources to complete additional drilling at Stonepark
- Arkle Resources and Group Eleven will drill an additional, seventh hole at Stonepark in Limerick.
- Arkle and Group Eleven hold the Stonepark licenses 23.44% and 76.56% respectively.
- The hole will target a depth between 700-1100m.
- It will be a step out hole between 300-500m north of the G11-2531-01 hole reported on 16th June which pierced a prospective fault structure.
*SP Angel are Nomad and broker to Arkle Resources
Botswana Diamonds PLC (AIM:BOD) 0.9p, Mkt Cap £8.4m – Approvals for acquisition of the balance of Thorny River
- Botswana Diamonds reports that it has received the required regulatory approvals for the acquisition of the residual third party interests in Vutomi Mining whose principal assets include the mineral rights to the Thorny River diamond exploration project in South Africa.
- The acquisition consideration of approximately 57m new shares represents around 6% of the enlarged capital of Botswana Diamonds and includes the award of approximately 9.5m shares, in two tranches, to Botswana Diamonds’ director, James Campbell.
- Commenting on the receipt of the approvals, Chairman, John Teeling, said that they “will allow the company to expedite the mine permitting of Thorny River, with the initial applications having already taken place”.
KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF)* 0.57p, Mkt Cap £22m – Interims highlight strong growth pipeline of projects in Ethiopia and Saudi Arabia
- The Company released Interim results highlighting progress at its portfolio of precious and base metals projects in Ethiopia and Saudi Arabia.
- In Ethiopia, the team continued Tulu Kapi project launch preparations while remaining in close dialogue with regulatory bodies updating on the status of the project.
- Project funding is expected to be finalised at the end of October that will pave the way for the start of predevelopment works including community relocation programme over subsequent weeks.
- Tulu Kapi is guided to launch production in latter half of 2024.
- In Saudi Arabia, G&M JV (KEFI holds 30%) is progressing the Hawiah polymetallic project through the PFS that is scheduled for completion by the end of 2022.
- G&M assembled the largest exploration team in the country at a time when the government is looking to diversify the economy and fast track the development of its mining industry.
- Additionally, the Company reported that Jibal Qutman Gold Project DFS is expected to be completed in Q4/22 or Q1/23 depending on when exploration licenses are re-issued. Following DFS completion the Company is planning to resubmit mining license application in early 2023, commence construction mid-2023 and launch production at the end of 2024.
- The study is targeting an initial production plan for ~500koz over a 10 year period using 2mtpa CIL production scenario.
- Current Jibal Qutman MRE stands at 28.4mt at 0.80g/t for ~730koz with ~500koz at 0.86g/t in the higher confidence Measured&Indicated category.
- Financially, loss for the period amounted to £2.9m (H1/21: -£2.2m)
- Administration costs accounted for £1.5m (including share-based payments; H1/21: £1.7m) with losses from the G&M JV accounting for £0.9m (H1/21: -£0.1m).
- FCF totalled -£5.6m (H1/21: -£2.6m) reflecting increased working capital cash outlays and higher capex.
- The Company held £2.3m in cash (H2/21: £0.4m) following a £8m equity raise completed in April and no debt on its balance sheet as of the end of the period.
- The team is planning to hold an investor webinar in London in late Oct/22 with details of the meeting to be announced in due course.
Conclusion: The Company is finalising funding for the Tulu Kapi project that is expected to come through in October while advancing its portfolio of precious and base metals projects in Saudi Arabia through PFS/DFS stages significantly expanding its pipeline of organic growth projects. Hawiah PFS is due in Q4/22 while Jibal Qutman exploration licenses are expected to be re-issued shortly allowing the team to complete the requiredon site work for the ongoing DFS.
*SP Angel act as Nomad to KEFI Gold and Copper
Keras Resources PLC (AIM:KRS)* (KRS LN) 5.25, Mkt cap £4.4m – Interims highlight strong progress in Utah
(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 has released its interim results for the six months to 30th June 2022, with strong progress made at the company’s the Diamond Creek phosphate mine, Utah – which the company now wholly owns.
- Keras recorded gross profit of £108k over the period, vs £82k over the interims which were 6 months to 30-Sep-21.
- The company had a cash position at the end of the period of £1.04m.
- During 2021, Keras changed its accounting reference date to 31 December, in order to harmonise its year end with that of its major trading subsidiary companies operating in Togo and in Utah, USA.
- Keras continue to progress Diamond Creek, achieving record sales in August 2022 of 700t (vs 500t forecast) driven by strong demand which has resulted in an extended mining campaign.
- Guidance is 7,500 tons and 8,000 tons of phosphate product from September 2022 to June 2023 at an AISC of between $80 and $100 per ton.
- The company has set a medium-term annual sales objective of 25,000tpa of phosphate product which is expected to grow at 8% per annum in tonnage terms as well as 14% in value terms.
- In Togo, the company continue to cooperate with the authorities with the aim of receiving an exploration permit.
- The company remains well funded following a successful placing of £1.95m supported by First Uranium.
*SP Angel acts as nomad and broker to Keras
Largo Inc. (BioLargo Inc (OTCQB:BLGO)) C7.31, Mkt Cap C$469.5m – Largo Physical Vanadium announces trading on TSXV today
- Vanadium producer Largo Inc has announced the listing of Largo Physical Vanadium Corp under the ticker VAND on the TSX Venture Exchange.
- The listing of shares will enable investors ‘direct exposure to the vanadium’ and ‘raise the profile’ of the ‘key green transition metal’, the Company states.
- The shares will act as an exchange-traded investment alternative for physical vanadium exposure.
- Vanadium is a fundamental metal to green steel, long duration energy storage and other decarbonisation strategies.
Oriole Resources PLC (AIM:ORR) – 0.17p, Mkt cap £3.6m – Interim report highlights progress in Cameroon and Senegal
(IAMGOLD has the option to spend up to US$8m to earn a 70% interest in Senala)
- In its interim report for the six months to 30th June 2022 Oriole Resources reports a pre-tax loss of £0.39m (2021 – loss of £0.87m) and a 30th June 2022 cash balance of £0.43m and the company reports that it has subsequently raised a further £0.34m equity.
- Among the operational highlights of the half year, Oriole Resources reports progress on its Bibemi project in Cameroon and where geophysical exploration undertaken early in the year led to “a further 531m of targeted drilling at the Bakassi Zone 1 prospect … [resulting in] … the majority of holes … [intersecting] … orogenic-type gold mineralisation and … [demonstrating] … depth continuity to the multiple targets identified within the 12km-long surface expression. The most recent results have confirmed the importance of sub-horizontal (extensional) veins in terms of their potential for significantly increasing the grade and width of the mineralised intervals”.
- Geochemical soil-sampling over the Central Licence Package (CLP), also in Cameroon, has “identified extensive zones of gold anomalism, including a c.12.5 kilometre ('km') zone at the Mbe target” and prompted Oriole Resources to apply for additional licences covering 487km2 covering the Maboum area located “immediately east and adjacent to the existing Eastern CLP licence package. Once granted, the licence will require a similar early-stage exploration programme to enable target definition”.
- In Senegal, IAMGOLD completed its initial US$4m commitment to earn a 51% interest in the Senala project and is continuing its exploration “with an extensive c.10,000m auger programme to further understand the wider surface footprint of the Faré anomalism”.
- CEO, Tim Livesey, explained that IAMGOLD will spend a further “US$4 million before 28 February 2024 for IAMGOLD, at its election, to reach a final equity position of 70%”.
- The company explains that Senala is located within a “multi-million ounce gold district … [in the Kédougou-Kéniéba inlier on the Senegal/Mali border which hosts] … mid-tier and major gold companies, including IAMGOLD which continues to invest in its 2.5 million-ounce Boto gold project that is adjacent to Senala”.
- Oriole Resources “believes that the system at Faré has significant potential for the delivery of a substantial open-pit mining target. It is hoped that the auger programme will identify further targets proximal to the existing system footprint that could further enhance the potential at Faré or provide satellite targets”.
Conclusion: Oriole Resources’ interim report highlights the progress of its continuing exploration in Cameroon and Senegal. Recent drilling at Bibemi in Cameroon has identified additional vein sets which provide the potential to build resource tonnage more quickly than would be expected for the original sub-vertical vein set alone. IAMGOLD’s continuing exploration of the Senala prospect, adjacent to its Boto gold mine is moving into its second phase with a further US$4m of exploration expenditure over the next 18 months qualifying it to earn an additional 19% interest taking it to 70%.
Power Metal Resources PLC (AIM:POW)* 1.58p, Mkt Cap £24m – Significant conductor identified at Molopo Farms
- Power Metal reports that it has received data from its ground based electromagnetic geophysical surveys covering target areas T1-14, T1-3 and T2-3.
- POW comments that the final results have highlighted a large, significant geophysical conductor at target area T2-3, that remains open in all directions and is strongly coincident with a magnetic body identified here by the ground and airborne magnetic surveys.
- The historical airborne magnetic results at T2-3 have been further analysed and show the magnetic body occurs together with this newly identified conductor for 12km in an east-west direction.
- The company has made this target a priority to follow up and intends to drill a 600m diamond core drillhole, DDH2-3A, in order to intersect the T2-3 conductor at approximately 300-350m downhole depth.
- Last week, Power Metal reported that drilling has commenced at Molopo Farms, with diamond hole DDH1-6B underway and is targeting a large southerly dipping conductor identified by geophysics and will be located 530m directly south of drillhole KKME 1-6 and has a planned depth of 600m at an at 80° dip and 0° azimuth.
- Hole KKME 1-6 previously intersected nickel, at 1m @ 0.49% Ni from 309m, including 1.6m @ 0.72% Ni from 309.6m
- The second diamond core drillhole DDH 1-6C planned for the ongoing drilling campaign will be located 830m to the south of KKME1-6, with site preparations currently underway.
- DDH1-6C is planned to test the intersection zone between the southerly dipping conductor and the newly identified strongly magnetic E-W trending body, which is estimated to be at a depth of approximately 350m.
*SP Angel acts as nomad and broker to Power Metal
Talga Group (ASX: TLG) A$1.4, Mkt Cap A$420m – non-binding offtake signed with ACC for 60ktpa of anode material
- Talga reports that it has signed a deal with European battery maker Automotive Cells Company to supply its Talnode®-C, from the Vittangi Anode Project in Sweden.
- ACC is co-owned by automotive brands Mercedes-Benz and Stellantis, and the terms dictate Talga will supply ACC with 60,000 tonnes of Talnode®-C over a 5-year term.
- The definitive agreement is expected to include supply of ramp up volumes over 2023 - 2025, prior to the 60,000 tonne offtake supply commencing in 2026.
Tertiary Minerals PLC (AIM:TYM)* – 0.175p, Mkt cap £2.7m – Tertiary Minerals announces start of soil sampling programme at Jacks, Zambia with data from First Quantum Minerals (TSX:FQM)
- Tertiary Minerals has begun soil sampling at four areas at the Jacks in Zambia.
- Tertiary is aiming to collect c. 1,600 samples on a 200m x 40m grid.
- The area includes a 5.3sq.km zone surrounding recently discovered copper mineralisation from drilling announced June 29th.
- Infill sampling is also being carried out across a 15km soil anomaly previously identified by Cyprus Amax.
- The Company is also infill sampling two areas of Cu:Sc soil anomalies defined via previous wide-spaced soil sampling by First Quantum Minerals. High Cu:Sc ratios can indicate copper sulphide mineralisation.
- Field analysis of samples using pXRF will deliver results in real time.
*SP Angel act as Nomad and Broker to Tertiary Minerals
Tesoro Gold Ltd (ASX:TSO, OTCQB:TSORF) A$0.032, Mkt cap A$31m – Further positive drill results at El Zorro, including 126m @ 1.08 g/t
- Tesoro reports further results for three holes received from the infill and extensional drill program at the Ternera Gold Deposit, where the company currently holds a 1.1Moz resource.
- Notable intersections from hole ZDDH0300 include:
- 129.60m @ 1.08g/t Au from 193.40m
- 22.60m @ 2.51g/t Au from 193.40m
- 7.50m @ 4.16g/t Au from 206.00m
- 22.50m @ 1.48g/t Au from 292.50m
- Intersections from hole ZDDH0301:
- 22.08m @ 1.98g/t Au from 346.00m, including
- 17.86 @ 2.35g/t Au from 346.00m
- 4.36m @ 4.67g/t Au from 349.14m
- Eleven holes have been completed at Ternera with assays outstanding for six holes, with the company targeting a MRE upgrade once all holes have been completed and assays returned.
- Tesoro also reports that drilling has commenced at the recently discovered Calderillas target, approximately 5km north of Ternera where four holes are planed to be drilled.
Vulcan Energy Resources (ASX:VUL) A$7.52, Mkt cap A$1,078m – Vulcan Energy releases annual report and aims for Q12023 DFS
- Vulcan Energy has released its FY2022 annual report.
- The geothermal lithium development company with focus in Germany’s Upper Rhine Valley is aiming to produce lithium hydroxide with a net zero carbon footprint.
- Vulcan raised A$200 million through an underwritten institutional placement alongside an A$76m equity investment from Stellantis.
- The Company expects to release its Phase 1 DFS in 1Q23 for the Upper Rhine Valley Brine Field.
- Vulcan’s pilot plant has been operating since April 2021 using ‘live’ geothermal brine.
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
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*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)
+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
Sources of commodity prices
Gold, Platinum, Palladium, Silver - BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel - Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt - LME
Oil Brent - ICE
Natural Gas, Uranium, Iron Ore - NYMEX
Thermal Coal - Bloomberg OTC Composite
Coking Coal - SSY
RRE - Steelhome
Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite - Asian Metal
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