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

SP Angel . Morning View . Thursday 20 10 22

US approves $2.8bn in grants to boost domestic battery supply chain

MiFID II exempt information – see disclaimer below

Private Zambian copper exploration opportunity

• We are looking for investment into a private copper explorer with four highly prospective licences in Zambia, near major mines or significant exploration targets.
• One license is contiguous with First Quantum’s Sentinel copper and Enterprise nickel mines which whom they have a Technical Cooperation Agreement.
• Historic drilling on the licence includes 0.7% copper over 1m and 0.2% nickel over 3m. Geophysics in 2021 & 2022 advanced project toward identifying drill targets.
• A large licence with multiple copper targets. Samples from small artisanal mines assayed 15.8% copper, 0.57g/t gold and 4.87% copper, 18.3 g/t gold.
• A highly prospective licence acquired in 2022 on the Western Foreland trend which hosts the giant Kamoa-Kakula mine.
• IPO documentation has been prepared for listing when market conditions improve.
• All licences are 100% owned with Zambian partners significant shareholders in the company.

Anglesey Mining PLC (AIM:AYM) – Final drilling results from 2022 campaign at Parys Mountain

Amaroq Minerals Ltd (TSX-V:AMRQ, AIM:AMRQ) – £30m fundraising

Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* – Latest drill results continue to extend known mineralisation at Ewoyaa

Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) – Strong quarterly performance at Sukari keeps production and cost guidance intact and passes 5moz of production milestone

Greatland Gold PLC (AIM:GGP, OTC:GRLGF) – Grant funding for exploration drilling in the Yilgarn, WA

KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF)* – Tulu Kapi update

Keras Resources PLC (AIM:KRS)* – Production rises at Diamond Creek as phosphate mine produces an extra 500t

Kore Potash PLC (AIM:KP2, ASX:KP2, JSE:KP2)* – EPC proposal received

Oriole Resources PLC (AIM:ORR) – Update on Oriole’s Egyptian Hodine license interest

Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:) – $142m grant awarded by United States Department of Energy

Scotgold Resources Limited (AIM:SGZ) – Cononish production, sales and operations update

Strategic Minerals PLC (AIM:SML, OTC:SMCDF)* – Cobre magnetite sales show volumes maintained despite impact of price increase

URU Metals Ltd (AIM:URU)* – Geotechnical Drilling to start at Zebediela in advance Mining Right Application

Biden approves $2.8bn package to boost domestic US EV battery supply chain, Reuters reports

• The White House awarded $2.8bn worth of grants to boost domestic EV battery production, ranging from recycling facilities to lithium processing plants.
• 20 manufacturing and processing plants received US Energy Department grants, for minerals including graphite, nickel and lithium.
• Projects span 12 states and are a further step for the US in its efforts to increase its independence of China for its battery supply chain.
• Grants include:
• Albermarle Corp (ALB.N) - $149.7m for hard-rock lithium processing in North Carolina.
• Piedmont Lithium (PLL.O) - $141.7m for lithium processing facility in Tennessee.
• Talon Metals (TLO.TO) - $114.8m for nickel processing plant in North Dakota for ore mined in Minnesota.
• Ascend Elements (Private) - $316.2m for construction of a battery parts plant.
• Lilac Solutions (Private) - $50m for a Direct Lithium Extraction (DLE) demonstration plant.
• Cirba Solutions (Private) - $75m for expansion of an Ohio battery recycling plant.
• Syrah Technologies (Subsidiary of Syrah Resources (SYR.AX) ) - $219.8m for the expansion of a graphite processing plant in Louisiana.

Why is Zijin Mining buying IAM Gold’s Rosebel gold mine in Suriname?

Do Zijin Mining share our bullish view on gold prices?

• Why would you buy an uneconomic gold mine for a cash consideration of US$360m?
• IAM Gold must be having a party to celebrate the sale of the Rosebel gold mine in Suriname.
• Can Zijin Mining cut costs through, new investment, or reducing operating costs?
• Or is Zijin using the acquisition to convert CNY into USD in a sizeable transaction?
• Does this indicate that Zijin Mining directors would prefer to convert CNY into Gold and US dollars even if the assets are loss making or marginal?
• Or do they feel they can better run the mine than IAM Gold?
• Rosebel:
• Q2 cash costs $1,37/oz and AISC $1,874/oz.
• Production ~200,000oz pa
• 2.47moz in reserves.

30 illegal miners reportedly trapped in pit belonging to AngloGold Ashanti (ASX:AGG) in Obuasi

• Local news outlets in Ghana are reporting that illegal miners have been trapped in an older pit on care and maintenance since around the 15th of October.
• The local chief has blamed the company for leaving the pits uncovered, though the company says it still has an interest in the properties.
• Locals who tried to rescue the trapped men reportedly clashed with military officers and gunfire was exchanged.
• Despite this, AngloGold say to their knowledge nobody is trapped underground.

Major fertilizer producer Yara slashes ammonia output on gas crisis costs

• Yara announced an ammonia output cut to 57% of capacity for Q3 in hit to fertilizer supply.
• Production fell 81% in Q2, with Yara citing negative margins on soaring gas costs.
• Fertilizer production is extremely gas-intensive, with a swathe of producers cutting production across Europe this summer as global food prices soared.

Dow Jones Industrials -0.33% at 30,424

Nikkei 225 -0.92% at 27,007

HK Hang Seng -1.56% at 16,254

Shanghai Composite -0.29% at 3,036

Economics

US – US Housing starts fell 8.1% in September to 1.439m units vs 12.2% in August at 1.575m units in August

• Building permits rose 1.4% to 1.564mill units in September vs -8.5% at 1.542mill units in August

Gold continues to move lower as US yields take a significant leap higher

• Gold prices have now fallen 5% from early October highs, hitting lows of $1,623/oz this morning.
• Bullion is nearing levels not seen since April 2020.
• Having eased in early October alongside gold’s strength, US 10-year Treasury yields have soared again to 4.17%, up 15% this month as their corresponding bond prices sold off.
• With the dollar rally cooling, UST yields are providing gold with a major tailwind, with investors more attracted to a 4.6% 2 Year yield from the US government vs non-interest-bearing bullion.
• Analysts point to the chaos in the UK gilt market as triggering a further sell-off in US government bonds, subsequently boosting yields and weighing on gold prices.
• Despite the combination of a government U-turn and BoE intervention, UK bond yields have risen 26%. This is thought to be feeding anxiety into the US Treasury market, with the Bank of Japan also flashing major warning signs.
• Fed officials continue to feed the market with hawkish comments, reaffirming their intentions to continue hiking rates to tame inflation.
• ‘Emerging’ market currencies are providing additional cause for concern, with both the Indian Rupee and Renmimbi continuing to weaken successively.

EU - CPI 1.2% in September vs 0.6% in August and 9.9% yoy in September vs 9.1% yoy in August

Iran - Iran’s supply of kamikaze drones to Russia puts back any semblance of Western relations

• Iran’s insistence of supplying military drones to Russia has elevated Iran existing pariah state status to extra pariah.

UK - CPI 0.5% in September vs 0.5% in August and yoy 10.1% in September vs 9.9% in August

• PPI inputs rose 0.4% in September vs -0.9% in August 20.0% yoy in September vs 20.9% in August
• output PPI 0.2% in September vs 0.1% in August 15.9% yoy in September vs 16.4% in August

Three-hour blackouts planned for January / February from 4-7pm by UK National Grid in worse case scenario

• National Grid boss John Pettigrew said blackouts would have to be imposed in the “deepest darkest evenings” in January and February if electricity generators did not have enough gas to meet demand, particularly if there is a bout of cold weather.
• Households have been asked to prepare for blackouts from 4-7pm. Buy candles, jumpers and their equivalent.
• PM: Ministers may keep Liz Truss in power so the chancellor can make further amendments / reversals to the mini budget to better balance the UK government books and protect value in the pound.
• The move should also help the Treasury to sell its next gilt auction and serve to stabilise interest rates. MPs may then elect to sack Liz Truss.
• Rumour suggests that Liz Truss has threatened to call a General Election if Tory MPs move to sack her. The Torys will almost certainly suffer severe humiliation in any near-term election.

Covid – German Covid mortality rates to 248 after Octoberfest drinking

• Germany covid mortality was 116 on 30th September vs UK covid mortality at just 17
• The statistics may suggest many things but it is possible that the rollout of the more traditional AstraZeneca vaccine early on followed by other mRNA vaccines as boosters may have given the UK population better immunity. Alternatively, lower vaccination rates in Germany combined with lower overall covid mortality to date may indicate Germany is simply catching up with the UK.
• UK 24m cases and 208,000 deaths overall vs Germany at 35m cases and 152,000 deaths overall
• We also wonder if the Octoberfest celebrations might have helped raise the spread of Covid and associated mortality.

Currencies

US$0.9777/eur vs 0.9820/eur yesterday. Yen 149.98/$ vs 149.47/$. SAr 18.344/$ vs 18.196/$. $1.122/gbp vs $1.127/gbp. 0.626/aud vs 0.629/aud. CNY 7.235/$ vs 7.224/$.

Dollar Index 112.83 / -0.46% on week

Commodity News

Precious metals:

Gold US$1,628/oz vs US$1,639/oz yesterday

Gold ETFs 95.8moz vs US$96.2moz yesterday

Platinum US$884/oz vs US$897/oz yesterday

Palladium US$1,989/oz vs US$2,025/oz yesterday

Silver US$18.40/oz vs US$18.58/oz yesterday

Rhodium US$14,100/oz vs US$14,100/oz yesterday

Base metals:

Copper US$ 7,394/t vs US$7,414/t yesterday

Aluminium US$ 2,211/t vs US$2,184/t yesterday

Nickel US$ 22,250/t vs US$22,055/t yesterday

Zinc US$ 2,891/t vs US$2,878/t yesterday

Lead US$ 1,961/t vs US$1,984/t yesterday

Tin US$ 19,275/t vs US$19,575/t yesterday

Energy:

Oil US$93.5/bbl vs US$90.6/bbl yesterday

• European energy prices edged higher as EU leaders gathered in Brussels with little consensus on the best way to protect consumers from high energy prices this Winter.
• German natural gas storage rose over the past week to 96% full, with European gas storage 94% full, compared with the 5-year average of 89%
• Near term European energy prices are equivalent to $140-$210/boe, reflecting mild weather and a strong contribution from wind energy
• Month-ahead energy prices are equivalent to $230-$260/boe, still far below the late August spike of $600/boe in Europe
• We would expect this gap to narrow as Europe starts to draw down on its gas storage as temperatures fall
• A normal winter season could reduce storage to 30% full, while a cold Winter season could reduce storage to below 10% by April
• Nobody knows how Europe will fill its storage to the same levels for Winter 2023, since Russian gas flows are ~20% of normal levels

Natural Gas US$5.551/mmbtu vs US$5.745/mmbtu yesterday

Uranium UXC US$52.25/lb vs US$51.50/lb yesterday

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$92.0/t vs US$92.4/t

Chinese steel rebar 25mm US$553.0/t vs US$557.0/t

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

Thermal coal swap Australia FOB US$393.0/t vs US$393.0/t

Coking coal swap Australia FOB US$305.0/t vs US$291.0/t

Other:

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

NdPr Rare Earth Oxide (China) US$92,950/t vs US$93,781/t

Lithium carbonate 99% (China) US$72,632/t vs US$72,741/t

China Spodumene Li2O 5%min CIF US$5,640/t vs US$5,640/t

Ferro-Manganese European Mn78% min US$1,207/t vs US$1,213/t

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

China Graphite Flake -194 FOB US$860/t vs US$860/t

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

Europe Ferro-Vanadium 80% 30.75/kg vs US$30.75/kg

China Ilmenite Concentrate TiO2 US$310/t vs US$312/t

Spot CO2 Emissions EUA Price US$66.5/t vs US$66.8/t

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

Company News

Anglesey Mining PLC (AIM:AYM) 2.5p, Mkt Cap £7m – Final drilling results from 2022 campaign at Parys Mountain

• Anglesey Mining has announced the results from the remaining holes of its 2022 infill drilling programme at its historic Parys Mountain site in Anglesey
• Results from the final two holes of the programme include:
• An intersection of 1.5m at an average grade of 1.4% copper, 9.7% zinc, 6.2% lead, 187g/t silver and 2.7g/t gold from a depth of 239.4m in hole WD-24 which also intersected 28.96m averaging 3.3% Zn, 1.7% Pb, 0.5% Cu, 71g/t Ag & 0.9g/t Au from 262.94m with higher grade sections of 13m averaging 5.2% Zn, 2.6% Pb, 0.6% Cu, 100g/t Ag & 1.6g/t Au and of 5.1m averaging 4.0% Zn, 2.3% Pb, 0.9% Cu, 118g/t Ag & 0.4g/t Au in hole WD-24 and;
• An intersection of 143.92m, from 93m in hole WD-23 at an average grade of 0.9% Zn, 0.5% Pb, 0.2% Cu, 9g/t Ag and 0.2g/t Au including 7.1m averaging 3.5% Zn, 2.7% Pb, 0.5% Cu, 25g/t Ag and 0.2g/t Au
• Samples from the drilling are to be sent for metallurgical testing to help “a trade-off study between the Dense Media Separation (DMS) and X-Ray Transmission (XRT) ore sorting pre-concentration methods”.
• The company confirms that it “will immediately commence an update to the Mineral Resource Estimate for the White Rock and Engine Zones to incorporate the additional information from the recent infill drill programme”. The current ‘Indicated’ resource estimate for the White Rock deposit is “4.7Mt, or 79% … [presumably of the total resource estimate] … prior to commencing the drilling”.
• Chief Executive, Jo Battershill, explained that now that the final assay results are available, “core will be sent to Grinding Solutions to conduct pre-concentration studies on representative samples from areas that are likely to be mined. We believe that the ability to selectively remove the unmineralized material would have a significant positive economic impact for the ongoing development studies”.

Conclusion: We await the updated mineral resources estimates and the metallurgical test results from Parys Mountain

Amaroq Minerals Ltd (TSX-V:AMRQ, AIM:AMRQ) 36p, Mkt Cap £64m – £30m fundraising

(Formerly AEX Gold (AEXG LN))

• Amaroq reports that it has raised gross proceeds of £30m at 35p/shr – a 2.78% discount to the closing price on 19 October 2022 in order to progress its suite of projects in Greenland.
• The company notes that proceeds from the Fundraising will be used to expand and delineate the resource base at Nalunaq and progress the asset towards mine construction, as well as provide funding to accelerate exploration across the Company's Portfolio.
• AEX Gold raised £42.5m at 45p/shr in July 2020.
• Last month, Amaroq reported a 50% increase in the average gold grade and a 30% increase in the contained gold within the CIM NI 43-101 Nalunaq mineral resource estimate.
• The Total Inferred Mineral Resource of 355,000t now grades 28.0g/t gold for 320,000oz of contained gold, reported according to CIM Definition Standards by SRK.
• In-Mine Inferred - 140,00ooz at a grade of 31g/t
• Extension Inferred – 180,000 at a grade of 26g/t
• Total – 320,000 at a grade of 28g/t
• Earlier this year the company formed a JV with ACAM on its non-gold assets, which the company claims are prospective for nickel, copper, zinc, lead, titanium, vanadium, graphite and rare earth minerals.

Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* 33.6p, Mkt Cap £204m – Latest drill results continue to extend known mineralisation at Ewoyaa

• Atlantic Lithium reports that it has received the latest round of assay results, this time for 1,879m of infill diamond drilling and 3,488m of infill and exploration reverse circulation completed at the Ewoyaa Main, Grasscutter East and Anokyi targets.
• Highlights within the current MRE at Ewoyaa main include:
• GDD0073: 84.5m at 1.63% Li2O from 6m
• GRC0690: 89m at 1.52% Li2O from 9m
• GDD0071: 90.5m at 1.48% Li2O from 0m
• GDD0070: 77.5m at 1.5% Li2O from 13m
• GDD0069: 71.5m at 1.49% Li2O from 25m
• Highlights outside of the current MRE include:
• GRC0688A: 67m at 1.51% Li2O from 235m
• GRC0680: 28m at 1.27% Li2O from 116m
• These latest results are part of a wider 47,000m programme with approximately 15,000m of assay results reported to date.

*SP Angel acts as Nomad to Atlantic Lithium

Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) 86p, Mkt Cap £994m – Strong quarterly performance at Sukari keeps production and cost guidance intact and passes 5moz of production milestone

• Centamin reports that its Sukari gold mine in Egypt produced 127,512oz of gold during the quarter ending 30th September bringing YTD output to 331,400oz and keeping operations on track to meet the previously indicated 430-460,000oz guidance range.
• Cash costs of US$811/oz of production during the quarter bring the YTD average to US$885/oz and also keep full year guidance of US$900-1,000/oz on a cash basis intact while all-in-sustaining cost of US$1,289/oz (YTD average of US$1,386/oz) are in line with the guidance range of US$1,275-1,425/oz.
• Capital projects, including “the underground paste-fill plant, underground infrastructure and equipment upgrades, and plant optimisation” are proceeding on schedule and in line with the adjusted guidance of US$255.5m.
• CEO, Martin Horgan, commented that “Several key milestones were achieved in the quarter, including a new record safety performance and commissioning of the Sukari solar plant which marked a material step in reducing our GHG emissions and cost base”
• He also noted that “Sukari produced its five millionth ounce of gold, and with visibility on at least the next five million ounces of production”.

Greatland Gold PLC (AIM:GGP, OTC:GRLGF) 8.25p, Mkt Cap £413m – Grant funding for exploration drilling in the Yilgarn, WA

• Greatland Gold has announced that it has been awarded A$220,000 of Western Australian Government exploration grants towards its drilling of the wholly owned Ernest Giles project in the Yilgarn Craton of WA.
• The project is located around 250km NE of Laverton and the initial priority of the drilling will be the Meadows prospect where “Previous drilling has identified favorable Archean hosts rocks for Yilgarn style shear hosted gold. Ongoing work will include airborne geophysics to better understand the geology of the entire Ernest Giles belt prior to systematic drill testing of the resultant priority targets”.
• The prospective host greenstone rocks lie beneath 120-300m of cover which the company says means that “the project has not been subject to extensive historic exploration activity”.
• The grant will help to fund “drilling and mobilisation costs, for completion before 30 November 2023”.
• Managing Director, Shaun Day, explained that “the Yilgarn craton, one of the most highly mineralised areas in the world and home to numerous gold deposits. With work advancing to finalise access, this grant then enables testing of priority targets at Ernest Giles, an underexplored and prospective part of the Greatland portfolio”.

Conclusion: Grant support from the State Government has been secured for drilling of the Ernest Giles prospect where the prospective host rocks, which lie beneath cover, have received comparatively little historic exploration interest. We await results as the exploration programme unfolds.

KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF)* 0.6p, Mkt Cap £24m – Tulu Kapi update

• The Company provided an update on the status of the flagship Tulu Kapi gold development project in Ethiopia.
• Project capital cost estimate has been revised to $320m, up ~7% on the previous target, reflecting global inflationary pressures.
• Several project funding syndicate members have indicated a willingness to increase their investment to address that revised capex.
• Separately, a condition that was key to one of the member’s participation relating to “a particular policy matter” with the Government has now been waived.
• The final proposed project finance plan has been circulated between all the syndicate members for formal sign off.
• The Company is now expecting the final approval of the finance plan in mid-November 2022, as opposed to the previously targeted end of October 2022.
• That would pave the way for the start of development works that are targeted for the end of this year.

Conclusion: Tulu Kapi capex has been revised higher to reflect industry wide inflation, although, funding syndicate participants expressed willingness to cover higher spend. In the meantime the final funding plan has been circulated between all syndicate members for an official sign that is expected mid-November this year.

*SP Angel act as Nomad to KEFI Gold and Copper

Keras Resources PLC (AIM:KRS)* 4.5p, Mkt cap £3.6m – Production rises at Diamond Creek as phosphate mine produces an extra 500t

(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 reports the production of an additional 500t of organic rock phosphate from the Diamond Creek mine in Utah.

• The mine will have produced 3,000t through the summer season including the additional 500t.
• This material has been crushed and is being loaded for transport to the Spanish Fork processing facility where it is screened and bagged for sale.
• Keras is producing 10 and 50 mesh products for the US fertilizer market with “the 10 mesh product sold to an existing offtake client and the 50 mesh will either be packaged and sold directly to customers or fed into the mill in Spanish Fork to produce 100 mesh and 350 mesh products.”
• The location of the Diamond Creek mine makes mining and transport off the mountain difficult through the winter months.
• Keras recorded gross profit of £108k for the 6 months to 30-Sep-21 with a cash position of £1.04m at end September.
• The Diamond Creek mine saw record sales in August of 700t, vs 500t forecast, driven by strong demand which has extended the mining campaign.
• Guidance is for 7,500-8,000 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.
• Organic rock phosphate is used as a soil conditioner providing phosphorous for flowering plants and was selling for $10/kg to gardeners through the summer though prices are discounted for winter at US$5-8/kg in the US.
• Keras is selling to wholesalers and blenders, and we estimate should receive around $250/t on its rock phosphate by our reckoning.
• Togo; there is still no news on the award of a mining permit for the Nayéga manganese mine in Togo in which Keras holds an 85% stake.

Conclusion:

*SP Angel acts as nomad and broker to Keras

Kore Potash PLC (AIM:KP2, ASX:KP2, JSE:KP2)* 0.8p, Mkt Cap £27m – EPC proposal received

BUY – 5.0p

• The Company reports a receipt of a letter from 12 October 2022 written by the Minister of Mines.
• The letter expresses discontent with local subsidiary companies and lack of progress with regards to the Kola Project funding.
• The letter followed the arrest and subsequent release without charge of two senior employees of the Company by the Congolese police.
• Neither of employees have been told as to the reason for their arrest.
• The Company has 30 days to respond to the letter before the Government exercises its right to take measures in accordance with existing agreements and the Mining Code.
• The team highlights that it remains in close contact with the Ministry and most recently updated the Minister on 10 October on the progress at Kola development and receipt of the EPC proposal prepared by SEPCO.
• Earlier the Company signed Heads of Agreement for Kola construction with SEPCO in the presence of the Minister confirming design parameters and timelines.
• The Company reports that funding discussions continue in line with agreed with the Minister MOU from April 2021 and signed with Summit to optimise, fully fund and build the Project.
• The team has recently received SEPCO EPC proposal that was delayed from former August target on the back of Covid related lockdowns in China.

Conclusion: An unfortunate newsflow over the letter from the Minister of Mines expressing his discontent over lack of progress with regards to the Kola project as well as an arrest of two employees that, thankfully, were later released without charge. The Company highlights that it continues to timely update the Ministry over the funding of the Kola Potash Project and is finalising the EPC proposal stage of the process that is planned to be followed by discussions over a proposed debt/royalty financing.

*SP Angel acts as Nomad and Broker to Kore Potash

Oriole Resources PLC (AIM:ORR) 0.145p, Mkt cap £3.2m – Update on Oriole’s Egyptian Hodine license interest

• Oriole Resources has a 24.94% stake in privately-owned Thani Stratex Resources (TSR).
• TSR has a 93% interest in the Hodine license in Egypt.
• In 1Q21 TSR entered an earn-in agreement with Red Sea Resources (RSR), with the latter receiving a 7% shareholding of TSR’s holding company, TDMHL.
• The agreement gave Red Star the option to earn an overall 85% shareholding by investing $2.2m in exploration by March 2023.
• Red Star’s exploration programmes have targeted the Anbat project, which TSR had reported an inferred mineral resource estimate in 2017.
• Having completed the $2.2m investment, Red Star announced yesterday it will not be exercising the option agreed in the earn-in agreement.
• Operation of the license will be returned to TSR and Red Star’s 7% shareholding of TDMHL will be cancelled.

Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:) A$58.4, Mkt cap A$1bn – $142m grant awarded by United States Department of Energy

• Piedmont Lithium has been selected for a $141.7m grant from the U.S. Department of Energy as part of the President’s Bipartisan Infrastructure Law to expand domestic manufacturing of batteries for EVs.
• The funds will be used to support the construction of a $600m lithium hydroxide plant in Tennessee that is expected to supply the US with 30kpta of the battery metal.
• When the Company’s current portfolio of lithium assets becomes fully operational, Piedmont expects to produce 60,000tpa of lithium hydroxide in the US.
• First production is targeted for 2025 and the company expected the facility to be the largest of its kind in the US.
• The Project is expected to convert spodumene concentrate sourced principally from Piedmont’s international project investments to significantly expand the U.S. supply of lithium hydroxide.
• The Ewoyaa Lithium Project in Ghana is currently being developed by Atlantic Lithium* (Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)) with support both financially and technically from Piedmont.
• Atlantic are currently nearing completion of a 37,000m drill programme with an aim to increase both resource definition and expansion.
• Results from the current drill campaign fall out of the Ewoyaa MRE, and assays to date have extended mineralisation a further 75m downdip at the Ewoyaa Main deposit.
• First production from Ewoyaa is expected in 2024.
• Lithium from spodumene remains the worlds core growth area for lithium bearing feedstock with hard rock sources seeing greater growth than brines, which are mainly processed in the Atacama, Chile.
• Production costs are also substantially lower for the conversion of spodumene into lithium carbonate equivalents according to a report by S&P Global.
• Piedmont to earn-in to up to 50% of IronRidge's Cape Coast Lithium Portfolio in Ghana through the following stages:
• Stage 1 - Piedmont has subscribed for 54,000,000 new ordinary shares in the Company at a price of 20p per share (£10.8m). Piedmont has committed a further £720,000 increasing its stake to 9.91% via placing of a further 2.88m shares at 25p.
• Stage 2 - Regional Exploration and DFS Funding to earn in up to an initial 22.5%. US$5m towards an accelerated regional exploration programme to enhance the current Ewoyaa resource; and US$12m towards completing the DFS for the project. The minimum "DFS criteria" is to deliver a 1.5 mtpa to 2mtpa run-of-mine operation for a 10-year to 8-year life of mine respectively.
• Stage 3 – CAPEX funding of $70m to earn a further 27.5% of CCLP.

*SP Angel acts as Nomad to Atlantic Lithium

Scotgold Resources Limited (AIM:SGZ) 63.5p, Mkt Cap £37.8m – Cononish production, sales and operations update

• Scotgold Resources, which operates the Cononish Gold and Silver Mine in Scotland, reports it is on track to deliver its Phase 2/Full Production in 2023.
• The Company hit total gold production of 2.0koz in Q3/22, achieving its revised guidance as updated in September.
• Scotgold lowered guidance for the Quarter owing to delays to ventilation and power upgrades which had adversely impacted the development of the waste ramp last month.
• Total gold production for the nine months to 30th September 2022 was 6.8koz of gold.
• The Company has provided Q4 production guidance of between 3,000-3,900oz of gold and remains on track to hit full production rates at a 23,500oz run rate of gold per annum.
• Q3 gold concentrate shipments of 314t in total had a sales value of £3.4m, with total shipments for the 9 month period totalling 729t at a sales value of £9.7m.
• The Cononish processing plant recorded recovery levels over 90%, processing an average grade mill feed of 10.09g/t of gold. The Company reports the process plant feed rate for October is running above the 4,000tpm rate.
• As of October 2022, Scotgold has commenced grade control drilling and underground resource definition for the placement of stopes, targeting c.6,000tpm ore mining and processing rates for the first quarter of 2023.
• The Company expects to complete risk assessments, preparation and planning to transition to long hole stoping in 1Q23, expecting this to be completed by December 2022.
• Scotgold reports construction is well under way for the tailings thickener in the processing plant, with commissioning planned for Q4/22. This is expected to boost processing plant throughput to c.5,000tpm.
• Additional optimisation of the processing plant tailings filter is planned over the next two quarters, with the Company hoping to boost throughput to c.6,000tpm for production levels of 23.5koz pa run rate of gold by the end of Q1/23.
• The Company is preparing for a 2023 resource drilling campaign with hopes of increasing the LOM beyond 8.5 years.
• Scotgold £544/oz AISC once full production is hit.

Strategic Minerals PLC (AIM:SML, OTC:SMCDF)* 0.3p, Mkt Cap £6m – Cobre magnetite sales show volumes maintained despite impact of price increase

• Strategic Minerals has reported its’ magnetite sales from Cobre, New Mexico for the 3 months ending 30th September 2022.
• Sales by its subsidiary, Southern Minerals Group (SMG) of 9,322t during the quarter realised US$US$0.65m and brought sales for the year to date to 30,642t generating US$1.98m or an average of approximately US$65/t.
• The quarterly sales reflect the July price increase with the quarterly average price received rising to approximately US$70/t from the US$62/t average for the preceding quarter and Strategic Minerals reports that “There appears to be no adverse effect on sales volumes from the price increase”.
• The company reports a 30th September cash balance of US$0.38m and explains that the decline from the US$0.43m reported for 30th June “reflects continuing activity at both the Leigh Creek and Redmoor projects”.
• At Leigh Creek, the company is continuing it is in “discussions with potential debt and equity funders … [and doing] … Initial preparatory work and maintenance … ahead of the anticipated restart of production at LCCM subject to receipt of funding”. Commenting on the funding initiative, Managing Director, John Peters confirmed that “as yet, no binding commitments have been made”.
• Commenting on progress at the Redmoor tin/tungsten project in Cornwall, Strategic Minerals explains that, with both tin and tungsten featuring on the UK Government’s Critical Minerals list, it is pursuing potential government funding to expand its current drilling plans which, we believe, are likely to include further investigation of the potential west of the existing tin/tungsten/copper resource detected as part of the Deep Digital Cornwall (DDC) programme of geophysical and geochemical studies and the company’s trenching and auger drilling work.
• Strategic Minerals says that its future drilling campaign for Redmoor “may be rapidly expanded should additional funding be forthcoming”.

Conclusion: Strategic Minerals’ price increase at its Cobre magnetite operation in New Mexico has increased average received prices from around US$62/t to US$70/t without any major erosion of volumes. Funding discussions continue for the planned resumption of copper production at Leigh Creek while drilling plans for Redmoor may be expanded if the exploration qualifies to attract UK Government financial support.

*SP Angel acts as Nomad and Broker to Strategic Minerals

URU Metals Ltd (AIM:URU)* - 220p, Mkt cap £3.6m – Geotechnical Drilling to start at Zebediela in advance Mining Right Application.

(URU Holds a 74.82% stake in Zeb Nickel (TSX-V:ZBNI, OTC:ZBNIF) Corp which holds the Zebediela Nickel project in South Africa – URU remains as the technical operator of the Zebediela Project)

• URU Metals reports the start of a Geotechnical drilling program at Zebediela to collect geotechnical data for potential future mining and process plant development..
• The dolomitic stability investigation for the proposed mining infrastructure area is required by the DMRE ‘South African Department of Mineral Resources and Energy’ as part of Zeb's Mining Right Application for its mining licenses as described in the Company's 43-101.
• The 17-hole drill program will be done by Ntamu Engineers, a South African Professional Environmental Consulting agency.
• “Drilling will follow on the back of a geophysical investigation consisting of a gravity survey to delineate areas of low densities possibly associated with dissolution cavities.”
• Holes are being drilled to a depth of 60m or 6m if encountering hard rock using inexpensive air percussion drilling. The chippings will be logged but are unlikely to be assayed.
• The work forms part of routine geotechnical investigations for any construction activities that may be situated on dolomite or limestone lithologies.

*SP Angel acts as Nomad and Broker to URU Metals

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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

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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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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