Today's Market View - Atlantic Lithium, Anglo Asian Mining, Centamin, and more...

SP Angel . Morning View . Thursday 13 10 22

Gold rangebound ahead of US inflation data

MiFID II exempt information – see disclaimer below

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.

Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* – Mining License application submitted for Ewoyaa

Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF)* - BUY – Robust production delivered in Q3/22 with Zafar startup reiterated for 2023

Antofagasta Gold (TSX-V:AN)- Chilean rail operator to resume copper transport service following suspension on flurry of robberies in Antofagasta region

Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) – Solar power plant cutting back on diesel requirements at Sukari

Culpeo Minerals Ltd (ASX:CPO)* – Proposed equity raising of $2.14m

GoldStone Resources (AIM:GRL)* – Director fee conversions

Kenmare Resources plc (LSE:KMR) – Q3 production report highlights higher output and stronger pricing

Serabi Gold (AIM:SRB, TSX:SBI)* – Q3 delivers best quarterly performance of the year and keeps Palito on track to deliver 30,000oz annual production guidance

Gold weakens as traders weigh up PPI numbers and brace themselves for US inflation data today

• Gold slid again to hover around the $1,665/oz mark, erasing October gains which took bullion up to $1,727/oz.
• US Producer Price growth for September came in hotter than economists anticipated, expected to feed into the Fed’s decision to maintain their current aggressive rate hike schedule, despite international monetary chaos.
• US CPI numbers are due this afternoon, the data point which has provided the Fed’s primary guidance in recent months.
• 2 75 basis point hikes, one in November and one in December, are all but priced in by the market.
• The Fed’s comparatively fast approach to tackling inflation through rate hikes has seen the Dollar soar against other currencies, weighing on the price of gold.
• Analysts expect focus to shift from shorter-term US inflation data-watching to more structural datapoints going forward, namely American rental costs and wage acceleration.
• A Fed pivot, expected to provide major relief to the gold price, is not anticipated before the New Year.

Copper prices stay rangebound despite Chinese copper buyers scrambling for physical supply

• Copper prices continue to hover around the $7,500/7,600/t mark.
• Prices are surprisingly flat considering premiums paid by Chinese buyers hit 15-year highs today. (Shanghai Metals Market)
• The Yangshan premium rose to $137.5/t, its highest since 2007.
• Copper inventories in Shanghai have fallen 57% from September highs, however LME inventories have risen almost 24% over the same period.
• There is some speculation that the LME is receiving rejected copper deliveries from Russian producers, explaining the jump in deliveries vs extreme tightness in China. Aurubis, Europe’s largest copper smelter, are reported to be asking for a massive $228/t premium over LME copper prices for next year up from $123/t in 2022 (Reuters).
• Aurubis, Europe’s largest copper smelter, are reported to be asking for a massive $228/t premium over LME copper prices for next year up from $123/t in 2022 (Reuters)
• Management expect continuing high copper demand for copper, low inventory levels, and high energy and transport costs.

Dow Jones Industrials -0.10% at 29,211

Nikkei 225 -0.60% at 26,237

HK Hang Seng -1.25% at 16,492

Shanghai Composite -0.30% at 3,016

Economics

China – Some local governments in China are buying properties in bulk from developers or encouraging state owned businesses to do so in an effort to help struggling sector, Bloomberg cites the Securities Times report.

• Suzhou and Jinan cities’ governments plan to buy 10,000 and 3,000 new units, respectively.
• Cities including Huzhou in Zhejiang province have asked state owned companies to buy houses from struggling developers.
• A prefecture in Xinjiang also encouraged state owned businesses to acquire new houses and convert them into subsidized housing.
• Another indicator of the construction industry health, sales of excavators are reported to have dropped 25%yoy last month marking the 18th consecutive month of declines.

State-backed property developer in China defaults as crisis persists for the world’s second largest economy

• CIFI Holdings, a Chinese developer backed by the state, failed to deliver on its 6.95% convertible note due last week. (Bloomberg)
• The Company blames delays in remittance of offshore cash holdings following China’s recent Golden Week holiday.
• However, the fact that CIFI is a state-backed entity is cause for concern, with investor faith in Beijing’s ability to contain the property collapse coming under further scrutiny as a result.
• CIFI enjoys state guarantees for domestic funding, thus highlighting the depth of China’s property sector liquidity crisis.
• Fitch downgraded the builder from BB- to CC yesterday, the company has subsequently withdrawn from the ‘rating process,’
• The news follows Moody’s decision to withdraw property giant Evergrande’s credit rating earlier this week.
• The self-inflicted deleveraging and subsequent bubble bursting of the Chinese property sector has been a major headwind for the country’s metals demand, compounded by Beijing’s Zero-Covid policy.

Chinese banks extended CNY 2.47tn in new loans in September vs CNY 1.25tn in August ahead of market expectations for CNY 1.8tn

• Much of this additional borrowing may be to help property developers finish unfinished apartment blocks to unlock frozen mortgages payments
• Support for businesses struggling with zero-Covid lockdowns and restrictions may also be on offer
• Total Social Financing increased to CNY3.53 tn in September vs CNY 2.43tn in August and market forecasts of CNY 2.72 tn.

Covid is far from over in China

• Repeating lockdowns, underperforming vaccines, inadequate healthcare services.
• Not only is the Chinese Communist Party testing the patience of the nation with the threat of more lockdowns but it now risks a post-pandemic epidemic of epic proportions.
• Western nations have reopened following effective vaccination campaigns with a very large proportion of the population having survived direct exposure to earlier variants of Covid.
• In theory, later variants should become less deadly, but the latest Omicron variants are so quick to transmit and to also infect within the host that previously unexposed peoples risk higher mortality rates. To clarify, the very rapid infection within the host is said to pose a greater risk to people who have not developed any previous immunity to other Covid variants.
• China, may well become trapped within an ongoing cycle of lockdowns as it struggles to keep covid mortality levels within acceptable limits and within the capacity of its limited healthcare system.
• The risk of high covid mortality rates and threat of persistent and ongoing lockdowns is the single largest threat facing the CPC.
• We have to hope the President Xi does not use an invasion of Taiwan to distract China from the ongoing threat from Covid.

US – Markets will be closely watching US inflation data this afternoon with estimates for core CPI (ex energy and food) to pick back up in September.

• Weaker than expected inflation print is likely to be taken as good news raising hopes for the Fed to slowdown future rate hikes and leading to a pick up in risk on sentiment.
• Headline CPI and core CPI are estimated to come in at 8.1% and 6.5% respectively in September, compared to 8.3% and 6.3% in the previous month.

Biden weighs up US import ban on Russian metals following military escalation in Ukraine

• Reuters reports a potential US import ban of Russia’s aluminium.
• Prices jumped close to 7% on the news whilst shares of Rusal fell 8% in Hong Kong on the news.

Fed continues to press ahead with rate rises – but is this about more than just controlling inflation as the Fed reaches further than HIMARS or MLRS.

• Policy makers feel the need to be in control, and are expected by many to be in control of events over which they have very little control.
• But the Fed does have power – power to adjust rates and drive huge monetary flows into and out of the US dollar.
• The Fed therefore has a great deal of control over liquidity and investment in global markets.
• Only nations with draconian monetary controls like Russia and China can slow these money flows and even they still suffer as money leaks out of their economies into the US dollar.
• Core CPI forecast to rise by 0.5% in Spetember
• PPI today rose 0.4% in September vs -0.2% in August and 8.5% yoy in September vs 8.7% yoy in August
• Core PPI rose 0.3% in September vs 0.3% in August and 7.2% yoy.

South Korea - BoK raises rates by 0.5% to 3%

Japan – BoJ governor to keep loose monetary policy to support economic recovery. The yen fell to 146/USD

• BoJ intervention to support the Yen cost close to $20bn in September.
• Historically the BoJ has made long term profits on its interventions – so don’t bet against the BoJ on a longer term basis.
• Eco Watchers outlook survey 49.2 in September vs 49.4 in August
• Reuters Tankan index fell to 5 for October vs 10 in September

India - Industrial production fell 0.7% yoy in August vs 2.4% in July

• Manufacturing output fell -0.8% in August vs 3.2% in July
• CPI yoy up 0.5% (0.5%), yoy 7.4% (7%).

France – A third of the nation’s gas stations were left short of supply after French refinery workers decided to remain on strike after staff representatives and oil major TotalEnergies SE (NYSE:TOT, EPA:TTE) did not agree on an increase in wages, Bloomberg writes.

• The Company issued a statement offering to pay its employees a one-time bonus equivalent to a month’s salary and that it told unions it was willing to consider pay rises based on this year’s inflation rate.
• The TotalEnergies offered a 6% increase for next year, while unions are demanding a 10% increase.

Zambia - Finance minister pushes on with debt restructuring

• Zambia is pursuing the G-20 Common Framework mechanism to restructure its $12.8bn worth of liabilities.
• The Country has recently secured a $1.2bn IMF assistance package alongside assurances from bilateral creditors to restructure the nation’s debt.
• Zambia’s finance minister aims to ‘push very hard’ to complete the debt restructuring by year end, in order to ‘make Zambia once more a respectable participant in the world economy.’
• Zambia’s relatively new government is looking to boost investment into the mining sector to help boost the country’s finances.

Currencies

US$0.9693/eur vs 0.9722/eur yesterday. Yen 146.79/$ vs 146.08/$. SAr 18.369/$ vs 18.175/$. $1.107/gbp vs $1.103/gbp. 0.627/aud vs 0.628/aud. CNY 7.194/$ vs 7.166/$.

Dollar Index 113.42 / +1% on week

Australian dollar continues weakness as exports to China fail to rebound

• The Australian dollar is now down over 21% against the dollar since March.2021 highs, with CPI lower than other major economies at 6.1% yoy.
• The Aussie dollar, however, is the 3rd-best performing currency excluding the USD ytd.
• Australian exports to China have weakened alongside the country’s embattled property sector.

Commodity News

LME - Elliott Investment Management and Jane Street gain judicial ruling to begin legal proceedings against LME in London court

• The funds are claiming US$456m and US415m over the loss of profits following the cancellation of nickel trades in March this year.
• The ruling will also allow other funds to begin proceedings against LME

Precious metals:

Gold US$1,669/oz vs US$1,670/oz yesterday

Gold ETFs 96.6moz vs US$96.7moz yesterday

Platinum US$879/oz vs US$897/oz yesterday

Palladium US$2,130/oz vs US$2,157/oz yesterday

Silver US$18.96/oz vs US$19.22/oz yesterday

Rhodium US$13,750/oz vs US$13,900/oz yesterday

Base metals:

Copper US$ 7,519/t vs US$7,566/t yesterday

Aluminium US$ 2,300/t vs US$2,224/t yesterday

Nickel US$ 22,250/t vs US$22,000/t yesterday

Zinc US$ 2,927/t vs US$2,917/t yesterday

Lead US$ 2,026/t vs US$2,017/t yesterday

Tin US$ 19,835/t vs US$20,100/t yesterday

Energy:

Oil US$92.5/bbl vs US$94.6/bbl yesterday

Crude oil prices edged lower as inflation reports out of the US and EIA forecasts of lower crude demand growth curtailed bullish supply views, ahead of the IEA monthly outlook report.

European energy prices experienced a spike this morning on local reports of “security situations” at the Nyhamna and Ormen Lange gas facilities in Norway.

No other information is available at present.

Natural Gas US$6.545/mmbtu vs US$6.609/mmbtu yesterday

Uranium UXC US$49.50/lb vs US$49.50/lb yesterday

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$93.9/t vs US$95.4/t

Chinese steel rebar 25mm US$571.5/t vs US$575.2/t

Thermal coal (1st year forward cif ARA) US$270.0/t vs US$230.0/t

Thermal coal swap Australia FOB US$405.0/t vs US$390.0/t

Coking coal swap Australia FOB US$293.0/t vs US$283.0/t

Other:

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

NdPr Rare Earth Oxide (China) US$95,596/t vs US$95,940/t

Lithium carbonate 99% (China) US$71,541/t vs US$71,101/t

China Spodumene Li2O 5%min CIF US$5,610/t vs US$5,610/t

Ferro-Manganese European Mn78% min US$1,197/t vs US$1,201/t

China Tungsten APT 88.5% FOB US$32.0/kg vs US$32.0/kg

China Graphite Flake -194 FOB US$855/t vs US$845/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$316/t vs US$317/t

Spot CO2 Emissions EUA Price US$66.0/t vs US$66.1/t

Brazil Potash CFR Granular Spot US$650.0/t vs US$650.0/t

Battery News

Company News

Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* 33.6p, Mkt Cap £204m – Mining License application submitted for Ewoyaa

• Atlantic Lithium reports that its subsidiaries have lodged the initial documents in support of its Mining License application for the Ewoyaa Lithium Project.
• The company notes that the application includes the submission of the Company's recent PFS, which forms part of the necessary required documentation.
• Highlights from the PFS at Ewoyaa, based on a 2.0mtpa include:
• LOM 12.5 yrs at 255,000tpa SC6
• Capex $125m
• C1 and AISC costs are estimated at $278/t and $460/t SC6 after by-products.
• Post-tax NPV8% of US$1,328m
• Post-tax IRR of 224%
• LOM average EBITDA of $248m
• Payback 4.9 months $278/t
• Average long-term SC6 costs US$1,359/t
• Atlantic Lithium continues to progress the design phase of the project while also targeting a MRE upgrade before delivering a DFS in 2023.

*SP Angel acts as nomad to Atlantic Lithium

Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF)* 64p, Mkt Cap £73m – Robust production delivered in Q3/22 with Zafar startup reiterated for 2023

BUY

• Q3/22 production amounted to 14.3koz GE (Q3/21: 16.3koz GE) including:
• 11.1koz gold (Q3/21: 12.8koz) comprised of 10.5koz in gold dore from heap and agitation leaching circuits and 0.6koz in flotation concentrate;
• 0.6kt copper (Q3/21: 0.6kt) including 0.2kt from SART and 0.4kt flotation concentrate;
• 45koz silver (Q3/21: 37koz).
• Lower production is largely driven by a weaker output at the agitation leaching plant (5.5koz v 7.3koz) that accounted for ~40% of GE output and registered lower processed grades and gold recoveries.
• YTD production came in at 43.1koz GE (9m/21: 48.5koz GE).
• Development wise, the Company reports good progress at the Zafar underground project that is expected to come online next delivering polymetallic ores for the flotation plant.
• Mine design is well advanced and geotechnical drilling for development works has been completed.
• Underground mining equipment has been selected with Epiroc to supply drilling rigs and Caterpillar to provide mining and loading equipment.
• Following successful acquisition of three new licenses that expanded its landholding by ~50% to ~2,500sq km and increased the Group’s exposure to copper, the team is continuing to work on a strategy aimed at incorporating new properties in future growth plans.
• FY22 guidance remained unchanged at 54.0-58.0koz GE.
• The Company had $15.3m in cash and no bank debt on the balance sheet along with $15.5m in unsold inventories of gold and copper (H1/22: $21.1m and $15.6m, respectively).
• Closing cash balance accounts for a $4.0m final 2021 dividend payment as well as $0.8m investment in Libero Copper & Gold and $1.2m payment to Azergold in respect of historical exploration data on Garadagh and Xarxar.

Conclusion: Gedabek delivered robust production of 14.3koz GE with the team reiterating its annual guidance for 54.0-58.0koz GE. Zafar development works continued at pace with first polymetallic ore targeted for 2023. Gedabek operations continued to cover Zafar development works, dividend payments as well as investments in Libero and acquisition of historical drilling data from Azergold.

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

CVE:AN 1,084p, Mkt cap £11bn - Chilean rail operator to resume copper transport service following suspension on flurry of robberies in Antofagasta region

• Chilean state rail operator FCAB is set to resume copper transport operations today after a group of miners called on the government to boost security.
• The railway was forced to halt services following repeated thefts on copper concentrate products from miners including BHP and Codelco.
• Thefts have been a persistent problem for copper producers in Chile, with a special police unit brought in in 2018 to tackle the issue.
• Rising prices and the Chilean economic slowdown has encouraged bandits in the region to ramp up robberies.
• Over 20 tonnes of copper cathode was recovered by police services in Coquimbo and Arica with robbers mainly targeting the northern region of Chile.
• The running of the FCAB (Ferrocarril de Antofagasta a Bolivia) railroad is said to be a condition of the peace treaty between Chile and Boliva.
• The ‘War of the Pacific’ (Saltpeter War or Guano war) between Chile, Bolivia and Peru ended in 1883 when Chile took over the region around Antofagasta and a chunk of Peru.
• Part of the reason for the war was the introduction of taxes by Bolivia on nitrates transported on the railroad which were being mined in the Atacama at the time.
• The FCAB was floated on the London Stock Exchange in 1888 making it one of London’s oldest companies.
• The railroad runs from the port of Antofagasta in Chile to La Paz in Bolivia with various branches to connect with copper mines along the route, including the giant Collahuasi mine at 4,815m above sea level.
• The railroad started in 1872 .

Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) 86p, Mkt Cap £966m – Solar power plant cutting back on diesel requirements at Sukari

• Centamin reports that its 36MW solar power plant at the Sukari gold mine in Egypt is entering the final stages of commissioning and is already delivering meaningful economies on the use of diesel.
• The company says that the plant is “saving up to 70,000 litres of diesel per day and averaging a reduction in diesel consumption of 22 million litres per annum” and delivering “Potential US$20 million in annual cost savings at current diesel prices”.
• Commissioning is expected to be completed during Q4 and the associated reductions in CO2 emissions are projected to be around 60,000tpa.
• Centamin explains that additional measures to further reduce the mine’s reliance on diesel include continuing discussions with the government and power utilities for the supply of 30-50MW from the grid.
• The company explains that at the 50MW level use of grid power which is available close to the site “creates the potential to fully displace the use of diesel for power generation at Sukari”.
• CEO, Martin Horgan, explained that “Delivery of this critical project is instrumental to our ongoing commitment to reduce our reliance on diesel fuel, minimise greenhouse gas emissions and realising material cost-savings. The solar plant and potential to integrate grid power will contribute materially to our environmental stewardship philosophy and our strategic objective of maximising returns for all stakeholders”.

Conclusion: Centamin’s implementation of solar power at Sukari cuts exposure to the volatility of diesel pricing and offers scope to reduce CO2 emissions and annual diesel consumption by 22m litres following completion of the commissioning in the current quarter. Further plans are under discussion to eliminate diesel power generation through access to grid power.

Culpeo Minerals Ltd (ASX:CPO)* A$0.135, Mkt cap A$8.1m – Proposed equity raising of $2.14m

• Culpeo reports it has initiated its advisors to proceed with an equity raising to fund exploration at its Lana Corina and Quelon Projects in Chile.
• The company seeks to raise $2.14m before costs to fund ongoing exploration at Lana Corina, where previous exploration has produced exciting results to date.
• Significant intersections previously reported from the project include:
• CMLCD002 - 257m @ 0.95% Cu, 81ppm Mo from 170m
• CMLCD003 - 173m @ 1.05% Cu, 50ppm Mo from 313m
• CMLCD005 - 81m @ 1.06% Cu, 145ppm Mo from 302m

*An analyst at SP Angel holds shares in Culpeo Minerals

GoldStone Resources (AIM:GRL)* 5.9p, Mkt Cap £29m – Director fee conversions

TP – Under Review

• GoldStone reports that certain of the company Directors have agreed to convert outstanding fees to shares in order to preserve cash within the Company for working capital purposes.
• A total of US$239,250 has been converted, at 5.9p, the mid-market closing price on the 11th of October.

*SP Angel acts as broker to GoldStone Resources (AIM:GRL)

Kenmare Resources plc (LSE:KMR) 400p, Mkt Cap £379m – Q3 production report highlights higher output and stronger pricing

• Kenmare, operating the Moma Titanium Minerals Mine has released its third quarter production report, ending 30th Sept 2022.
• Run of mine increased both month-on-month (+4%) and year-on-year (3%) to 10.4mt.
• Heavy Mineral Concentrate production rose 26% on the month and 7% on the year to 443,900t.
• Primary zircon production at 17,300t, up 10% on the month and 27% on the year.
• Ilmenite production at 304,700t, down 3% on the month and up 25% on the year.
• Rutile production at 2,600t, down 4% on the month and up 24% on the year.
• Total shipments in Q3 2022 were 285,600t an 11% decrease compared to Q3 2021 due to reduced shipping capacity and poor weather conditions.
• The company notes that one of its two transshipment vessels, the Bronagh J, left site in early May 2022 for its five-yearly dry dock maintenance work reducing significantly Kenmare’s shipping capacity in Q2 and Q3 2022.
• Total cash operating cost guidance is expected to be at the top of the guidance range principally due to inflationary pressures
• Ilmenite prices have fallen to CNY 2,275/t to from CNY 2,535/t 12-months ago in China.
• “Although demand for Kenmare’s zircon products remains robust, the zircon market has been exhibiting similar dynamics to the pigment market. Demand in China is weak and European ceramics producers have been impacted by higher energy costs. Prices in the spot market in China moved significantly above prices in the rest of the world but have declined in recent weeks, and this will result in lower prices for Kenmare’s concentrates products sold to China. However, zircon supply remains constrained and prices outside of China are stable, which benefits Kenmare as the majority of its primary zircon is sold in Europe.“ according to Kenmare.

Conclusion: In terms of production, Kenmare’s performance was relatively strong in the third quarter, and following this, the company expects production of finished products to be at or around the bottom of its 2022 guidance range

Serabi Gold (AIM:SRB, TSX:SBI)* 24.5p, Mkt Cap £17.6m – Q3 delivers best quarterly performance of the year and keeps Palito on track to deliver 30,000oz annual production guidance

• Serabi Gold (AIM:SRB, TSX:SBI) reports the production of 8,542oz of gold during the 3 months to 30th September bringing YTD output to 24,021oz and keeping the company on course to meet its 30,000oz annual production guidance.
• CEO, Mike Hodgson, reported “excellent mine output from Palito, which has been made possible through the development of new sectors during the first half of the year, and the overdue arrival of much needed new fleet, which hampered the operation in the latter part of 2021”.
• The quarter’s production includes 570oz of gold from the treatment of 2,600t of ore from the Coringa project which was processed at Palito’s mill.
• Development work at Coringa included 600m of on-lode development with channel sampling results from the 320 level, reported in August, including:
• “0.63 metres @ 108.34g/t Au” from development of the V1N vein; and
• “0.33 metres @ 171.67g/t Au” from development of the V3S vein; and
• “0.63 metres @ 93.80g/t Au” from development of the V3S vein; and
• “0.32 metres @ 179.00g/t Au” from development of the V3S vein on 340 level; and
• “0.25 metres @ 302.37g/t Au” from development of the V3S vein; and
• “0.94 metres @ 57.94g/t Au” from development of the V3N vein.
• The company also reiterates drilling results from the Zonta Vein at its Palito gold mine in Brazil which it reported in September and describes as a “an orebody that we had previously identified with limited surface drilling but had never properly drill tested”.
• The Zonta Vein is the most westerly vein at Palito lying around 100m west of the Senna Vein, currently in production, and the company says that “Once developed, Zonta will be the most westerly production vein at Palito”.
• Among the results previously reported and highlighted in today’s announcement are:
• An intersection of 0.55m at an average grade of 55.99g/t gold from a depth of 397.15m in hole PDD-0289; and
• 0.75m averaging 34.75g/t from 217.00m in hole PUD-0793; and
• A single metre intersection averaging 36.46g/t gold from 223.55m in hole PUD-0801; and
• 1.20m at an average grade of 10.65g/t gold from 300.80m in hole PUD-0803 which is the deepest intersection encountered so far at Palito; and
• A single metre at an average grade of 10.69g/t gold from 234.45m in hole PUG-009.,
• Mr. Hodgson also commented on the company’s exploration of the Matilda prospect where 3 drill holes “confirmed a copper gold molybdenum porphyry discovery”. He said that the prospect has sparked interest from “mid-tier and major mining companies” which have visited the site and that Serabi Gold is “continuing to evaluate the best options for the Company to move Matilda and other regional targets forward over the coming months”.

Conclusion: Announcing what it describes as strong Q3 results, Serabi Gold reports increasing gold production through the year from its Palito mine complex and confirms it is on track to achieve its 2022 production guidance of 30,000oz of gold as well as confirming progress on the development of the Coringa project and exploration success with the discovery of a copper/gold/molybdenum porphyry at its Matilda prospect.

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

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.

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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%