Today's Market View - AfriTin Mining, Arc Minerals, Caledonia Mining, and more...

SP Angel . Morning View . Monday 07 11 22

Copper prices pause strong run as China officials double down on zero-Covid strategy

MiFID II exempt information – see disclaimer below

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.
• 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.
• IPO documentation has been prepared for listing when market conditions improve.

*SP Angel’s role is limited to making introductions and 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

AfriTin Mining Ltd (AIM:ATM, OTC:AFTTF) – Completion of Phase 1 commissioning at the Uis mine

Arafura Rare Earths Ltd (ASX: ARU) – Arafura signs rare earth supply deal with Hyundai and Kia as automakers look to diversify EV supply chain

Arc Minerals Limited (AIM:ARCM)* (ARCM LN) – Arc extends exclusivity agreement for Anglo American

Beowulf Mining PLC (AIM:BEM)* – Non-Executive Chairman appointed

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)* – New Maligreen mineral resource

Castillo Copper Ltd (LSE:CCZ, ASX:CCZ) – Quarterly report focusses on the cobalt potential of the BHA project

Coronado Global Resources (ASX: CRN) – Coronado abandons $9bn merger talks with Peabody

Cora Gold Ltd (AIM:CORA) – Sanankoro Exploration Target suggests a potential to significantly grow the existing MRE

Glencore PLC (LSE:GLEN) – Glencore saves Britishvolt pending deal with US PE and longer-term deal with Chinese or Korean firm

Green Lithium (PRIVATE-UK:GRL) – UK lithium refinery to be built in Teesside

Power Metal Resources PLC (AIM:POW)* – Good final assay drill results at Tati gold project in Botswana

Tertiary Minerals PLC (AIM:TYM)* – Tertiary Minerals confirms joint venture at its Jacks Copper Project in Zambia

Shanta Gold Limited (AIM:SHG, OTC:SAAGF) – West Kenya Phase 2 infill drilling continues to return high grade intersections

SolGold PLC (LSE:SOLG, TSX:SOLG, OTC:SLGGF)* – US$50m royalty financing

Yamana Gold (TSX:YRI, LSE:AUY) – Yamana receives superior offer for assets from Pan American Silver and Agnico Eagle

Gold prices climb on weaker dollar but remain grounded by elevated US Treasury yields

• Gold climbed to $1,681/oz, up 3.2% in their biggest jump since March 2020.
• The move tracked further weakness in the Dollar, which slid 2.4% since Friday.
• A combination of mixed US jobs data on Friday, with unemployment climbing despite strong consumer sentiment, has confused traders, allowing some freedom for gold to run.
• Gold prices remain anchored by elevated US Treasury yields, with the 10 Year hovering around 4.18% following Powell’s confirmation last week of higher for longer rates.
• Focus now turns to Thursday’s US inflation data reading, with the CPI remaining far above the Fed’s target rate.
• Investor sentiment for gold has been extremely weak for the past 7 months with consistent ETF outflows. This has been balanced by strong central bank buying.
• Publicised central bank gold buying shows countries facing hyper-inflation – Turkey and Egypt, both ramped up bullion purchases.
• India, whose rupee has fallen 8.7% this year, also ramped up purchases to over 40t.
• Iraq, whose credit default swaps on its dollar-backed debt is soaring, has also ramped up gold purchases.

Copper prices take profit following strong upward move on rumours of China reopening despite Beijing officials reiterating Zero Covid stance

• Copper jumped 9% last week to $8,140/t last week on rumours of zero-covid easing in China combined with global inventories falling to a one-year low.
• Physical copper premiums and backwardation remain relatively low, down 53% since last month, suggesting buyers are not rushing to buy physical copper.
• Beijing officials reacted to Friday’s additional speculation this morning of an end to Zero-Covid policy, vowing to ‘unswervingly’ adhere to stamping out the virus’ infection flare ups.
• This sent copper prices down 1.5% to hover around the $8,000/t mark.
• Iron ore prices and bulk shippers have also pared gains somewhat this morning, pointing to general market overenthusiasm from unfounded rumours of a China reopening last week.
• Sentiment in China-lockdown exposed assets has been dampened severely in recent months, with any slight sign of optimism seeing funds rush to chase a potential rally.

Dow Jones Industrials +1.26% at 32,403

Nikkei 225 +1.21% at 27,528

HK Hang Seng +2.55% at 16,573

Shanghai Composite +0.23% at 3,078

Economics

China – Export growth suffers first drop in over two years on weak demand

• October exports fell 0.3% YoY to US$298bn vs 5.7% expansion in September
• October imports fell 0.7% October imports fell 0.7% YoY to US$213bn vs 0.3% expansion in September.

Provinces rebel against Zero Covid policy as workers protest over in-factory lockdowns

• Chinese authorities doubled down on their zero-covid strategy this weekend despite growing protest and non-compliance
• Increasing disobedience by factory workers and their managers are making the news with certain provinces openly viewing Covid as less serious than Beijing.
• Despite this President Xi appears to be cracking down on non-compliant officials and provinces.
• But the cost of large scale lockdowns and economic disruption are causing officials to question and to soften local lockdown policies.
• Omicron is so very virulent that anything less than total lockdown is bound to fail and Chinese vaccinations have very poor efficacy in preventing the spread of Covid.
• The risk is that Omicron will overwhelm China’s healthcare system with a high number of severe cases.
• The combination of an inadequate healthcare system, high levels of smoking and decades of air pollution is a worrying combination for officials.
• Remember pictures of bodies left in the streets of Wuhan in early 2020.
• While Chinese censors control the official stats we suspect cases will run out of control with a relatively high mortality rate across all age groups if China drops its Zero-covid strategy.
• Despite this we expect many regional provinces may apply lockdowns more flexibly as workers become less compliant and more rebellious, though lots of mini, local lockdowns are likely to prove just as disruptive as the larger and more comprehensive lockdown strategy before them

US – Strong nonfarm payrolls released on Friday suggested the labour market remained tight, although, the pace of wages growth slowed and the jobless rate ticked up.

• The US$ initially climbed after the data was released, but pulled back as market participants digested the report, Reuters reports.
• The fed funds futures on Friday priced in a 53% chance of a 75bp interest rate hike and a 47% probability of a 50bp move.
• NFPs (‘000): 261 v 315 September (revised from 263) and 193 est.
• Unemployment Rate (pp): 3.7 v 3.5 September and 3.6 est.
• Av Hourly Earnings (%yoy): 4.7 v 5.0 September and 4.7 est.

Germany – Industrial production unexpectedly increased through in September despite evidence of surging energy prices.

• Industrial Production (%mom): 0.6 v -1.2 August (revised from -0.8) and 0.1 est.

UK – Property prices dropped for a second consecutive month posting a 0.4%mom decline in October, Halifax data showed.

• This follows a 0.1%mom drop reported in the previous month.
• “There’s no doubt the housing market received a significant shock as a result of the “mini” Budget which saw a sudden acceleration in mortgage rate increases,” Halifax commented on the data.
• Mortgage approvals and demand for borrowing have been declining as mortgage affordability is challenged by higher rates and falling real income levels.

Italy – New government prevents 35 migrants from disembarking

• The migrants were not viewed as vulnerable.
• The move marks a potential turning point in the management of the migrant crisis into Europe.

South Korea seeks three-year grace period on US electric vehicle tax law

• South Korea is pleading with US lawmakers to implement a three-year grace period on the U.S. Inflation Act in order to enable Korean automakers to keep receiving EV subsidies in the US.
• Biden’s $430bn bill excludes Hyundai and Kia as they do not yet make EVs in North America – though both have plans to do so.
• The US government introduced a $7,500 consumer tax credit to EVs built in North America, however Hyundai wont have a plant there until 2025.
• Hyundai also said they will invest more than $10bn in the US by 2025 strengthen collaboration with U.S. firms in advanced technology, such as robotics, autonomous driving and artificial intelligence among other fields.
• The law leaves foreign automakers at a huge disadvantage, and South Korea has three of the world’s largest EV battery manufacturers that have announced $25bn in US investment since Biden took office.
• Hyundai sold 44,544 BEVs in Q3 2022 – more than Ford and General Motors.

Airfares expected to fall in 2023 as airlines add to capacity (Reuters)

• Singapore Airlines reckons the reintroduction of parked planes will cause fares to fall as airlines chase passenger numbers
• The news follows record quarterly sales and strong growth in passenger yields in the second quarter despite Chinese zero Covid restrictions.

World Puddle Jumping Championships

• This year’s World Puddle Jumping Championship was won by Luna, age 3, from Kingsthorpe.
• If only our politicians could do something this useful

Currencies

US$0.9963/eur vs 0.9771/eur last week. Yen 147.13/$ vs 147.79/$. SAr 17.913/$ vs 18.295/$. $1.137/gbp vs $1.122/gbp. 0.644/aud vs 0.635/aud. CNY 7.237/$ vs 7.264/$.

Dollar Index 111.15 / -0.39% on week

Commodity News

Precious metals:

Gold US$1,674/oz vs US$1,646/oz last week

Gold ETFs 94.4moz vs US$94.7moz last week

Platinum US$960/oz vs US$931/oz last week

Palladium US$1,887/oz vs US$1,844/oz last week

Silver US$20.57/oz vs US$19.77/oz last week

Rhodium US$13,500/oz vs US$13,600/oz yesterday

Base metals:

Copper US$ 8,038/t vs US$7,716/t last week

Aluminium US$ 2,344/t vs US$2,299/t last week

Nickel US$ 23,500/t vs US$23,250/t last week

Zinc US$ 2,936/t vs US$2,783/t last week

Lead US$ 2,031/t vs US$2,014/t last week

Tin US$ 18,785/t vs US$17,820/t last week

Energy:

Oil US$97.5/bbl vs US$96.3/bbl last week

• Crude oil prices edged lower in early trading as Chinese health officials reiterated their commitment to a COVID-Zero strategy over the weekend, which has already reduced the country’s FY22 oil demand by c.0.4mb/d.
• US natural gas prices jumped following a storm in the Pacific Northwest bringing a cold snap across the West, while European energy prices continue to decline on milder-than-usual weather reducing heating demand.
• The US Baker Hughes rig count rose by 2 to 770 rigs last week, with oil rigs up 2 at 613 rigs and gas rigs down 1 at 155 rigs.

Natural Gas US$6.888/mmbtu vs US$6.113/mmbtu last week

Uranium UXC US$50.60/lb vs US$51.00/lb last week

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$86.7/t vs US$81.9/t

Chinese steel rebar 25mm US$531.1/t vs US$526.1/t

Thermal coal (1st year forward cif ARA) US$208.0/t vs US$225.0/t

Thermal coal swap Australia FOB US$350.0/t vs US$365.5/t

Coking coal swap Australia FOB US$316.0/t vs US$314.0/t

Other:

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

NdPr Rare Earth Oxide (China) US$89,330/t vs US$88,999/t

Lithium carbonate 99% (China) US$79,382/t vs US$78,812/t

China Spodumene Li2O 5%min CIF US$6,100/t vs US$6,100/t

Ferro-Manganese European Mn78% min US$1,230/t vs US$1,207/t

China Tungsten APT 88.5% FOB US$31.7/kg vs US$31.7/kg

China Graphite Flake -194 FOB US$875/t vs US$875/t

Europe Vanadium Pentoxide 98% 7.5/lb vs US$7.5/lb

Europe Ferro-Vanadium 80% 31.95/kg vs US$31.95/kg

China Ilmenite Concentrate TiO2 US$310/t vs US$309/t

Spot CO2 Emissions EUA Price US$76.3/t vs US$74.0/t

Brazil Potash CFR Granular Spot US$600.0/t vs US$595.0/t

Battery News

Company News

AfriTin Mining Ltd (AIM:ATM, OTC:AFTTF) 4.2p, Mkt Cap £61m – Completion of Phase 1 commissioning at the Uis mine

• Afritin reports that it has now completed the commissioning of its Phase 1 plant expansion at the Uis mine in Namibia.
• The company now expects to expand its production of tin concentrate from the mine by around 50% from a rate of 780tpa to 1,200tpa over the next three months (470tpa of contained tin increasing to 720tpa of tin).
• The expansion project, which started in September last year, “consists of a modular expansion of the current processing plant … Specifically, it involves the expansion of the crushing and screening circuits ("the dry plant") and construction of a fines ore stockpile prior to the concentrator. The expansion of the dry plant will allow the operation to increase the feed rate of ore to the plant by approximately 50%, while the new stockpile provides buffer capacity before the concentrator”.
• CEO, Anthony Viljoen, confirmed that the expanded “beneficiation plant is performing well, and the production ramp-up from pre-expansion levels is going according to plan”.
• He also explained that the “potential production of lithium and tantalum by-products is also expected to benefit from the expansion of the throughput capacity of the plant, since these minerals will be extracted from the existing processing streams … [which should help with Afritin’s strategy to drive] … costs down whilst expanding our mineral resource base, production volumes and product portfolio of tin, lithium and tantalum with the concomitant increase in revenue streams”
• “The Company has initiated a further expansion of the current plant to produce a saleable tantalum concentrate. In addition, successful bench scale tests for the production of a lithium concentrate will be followed by the construction of a lithium pilot plant at the mine site”.

Conclusion: The commissioning of the expanded Phase 1 plant at Uis is a milestone for Afritin and is expected to help in the production of by-product lithium and tantalum to reduce the costs of tin production.

Arafura Rare Earths Ltd (ASX: ARU) A$0.34, Mkt cap A$586m - Arafura signs rare earth supply deal with Hyundai and Kia as automakers look to diversify EV supply chain

• Australian firm Arafura Rare Earths has signed a binding supply deal for 1,5kt of Rare Earth Oxide per annum with Hyundai and its subsidiary Kia.
• The NdPr supply contract is signed over 7 years from when Arafura’s Nolans project in the Northern Territory begins production.
• Arafura also reports it signed an agreement with Hyundai to begin negotiations for a strategic investment.
• Arafura signed a non-binding agreement with GE for offshore wind turbines in July.

Arc Minerals Limited (AIM:ARCM)* 2.98p, Mkt Cap £34m – Arc extends exclusivity agreement for Anglo American

(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.)

• Arc Minerals has extended the exclusivity agreement previously agreed with Anglo Exploration Zambia Ltd for a second time.
• The new agreement will run to 8th February 2023.
• Arc’s press release says “following the re-opening of the Zambian Mining Cadastre office on 19 October 2022, the Cadastre published a schedule that it will start receiving new applications for licenses from 21 November 2022. As a result of the Cadastre process and this new timeline Arc has extended the exclusivity period under the Letter Agreement (the "Agreement") with Anglo Exploration Zambia Ltd ("Anglo") to 8 February 2023, pursuant to which the parties intend to form a joint venture with respect to the Company's copper projects located in the North-Western province of Zambia (the "Joint Venture").”
• The relatively new President Hakainde Hichilema, known as HH, was elected in August 2021 overthrowing Edgar Lungu who had previously jailed HH on illegitimate charges of treason.
• President Hichilema was previously CEO of Coopers and Lybrand Zambia from 1994–1998 and Grant Thornton Zambia from 1998–2006.
• The president has been busy unwinding corrupt practices and corruption in Zambia including allegations of corruption within the Zambian Ministry of Mines.

Conclusion: Now the Zambian Cadastre is open again for new license applications we expect Anglo’s lawyers to be able to verify the licenses and ownership information they require to consummate the agreed deal with Arc Minerals

*SP Angel acts as Nomad and broker. An SP Angel analyst has driven across the Zambian copper belt, flying the British flag, to visit Arc’s licenses West of Solwezi.

Beowulf Mining PLC (AIM:BEM)* 4.2p, Mkt Cap £44m – Non-Executive Chairman appointed

• Beowulf reports that Sven Otto Littorin has stepped down as Non-Executive Chairman of the Company and that Mr Johan Röstin is appointed to the Board as Non-Executive Chairman of the Company, effective immediately.
• Mr Röstin was the CEO of ferry operator ForSea for three years, 2017-2020, and before that the CEO of Copenhagen Malmo Port AB, 2009-2017.
• Mr Röstin has significant experience in infrastructure, logistics, capital investments and permitting processes, and has held Board, executive and senior management positions during his career.

*SP Angel acts as nomad and broker to Beowulf

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)* 915p, Mkt Cap £116m – New Maligreen mineral resource

• Caledonia Mining reports an updated mineral resources estimate for its wholly-owned Maligreen deposit in Zimbabwe.
• The new estimate, prepared in compliance with Canadian NI-43-101 standards, reports a measured and Indicated resource of 8.03mt at an average grade of 1.71g/t gold (442,300 oz of contained gold including approximately 126,000oz classed as measured) plus an additional 6.17mt classed as inferred at an average grade of 2.12g/t gold (420,300oz).
• The estimate supersedes the pre-existing estimate of 15.59mt at an average grade of 1.88g/t (940,000oz), all of which was classed as inferred, and follows reviews of the pre-existing geological work on the project which Caledonia Mining acquired in November 2021.
• Chief Executive, Mark Learmonth, confirmed that further evaluation of the Maligreen project is continuing “in line with other strategic and capital priorities for the business into the future as we build an attractive project and exploration pipeline in Zimbabwe”.
• He clarified that the updated estimate “improves the geological confidence of approximately half the Mineral Resources from Inferred to Measured and Indicated Mineral Resources supports our confidence in the project and its geological prospectivity”.

Conclusion: Upgrading the Maligreen resource helps to broaden Caledonia Mining’s project portfolio in Zimbabwe and demonstrates the benefits to be gained by detailed re-examination of existing geological data, which we imagine is a very cost-effective path to improving the quality of the mineral resource inventory.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe

Castillo Copper Ltd (LSE:CCZ, ASX:CCZ) 1.03p, Mkt Cap £13m – Quarterly report focusses on the cobalt potential of the BHA project

• Castillo Copper reports that its main focus during the 3 months to 30th September 2022 has been on investigating the cobalt potential of its BHA East project area in New South Wales.
• Metallurgical test work on drill cores from the Seven Sisters prospect, announced in August, showed that copper, cobalt and gold could be liberated “to produce a potentially viable concentrate”.
• The company confirms that it intends to “increase the confidence in the current inferred Mineral Resource Estimate which stands at 21,556t cobalt (64Mt @ 318 ppm Co) and 44,260t copper (63Mt @ 0.07% Cu)”.
• Drill targets identified during the quarter include “two lower cobalt-rich zones that are interpreted to host higher grade mineralisation than has been modelled to date” at the Fence Gossan, Reefs and Tors Tank prospects.
• Elsewhere, “preliminary metallurgical test-work on samples extracted from … [drillcore] … at the Big One Deposit … [in Queensland] … produced a concentrate … with confirmed upgrades ranging from 5x to 10x for copper metal. The best result for copper comprised: 0.72% head-grade to 7.2% post-test-work”.

Coronado Global Resources (ASX: CRN) A$2.11, Mkt cao A$3.5bn – Coronado abandons $9bn merger talks with Peabody

• Coronado Global Resources has abandoned talks with Peabody Energy Corp.
• Peabody cited the hike in coal royalty rates in Queensland as the reason for calling off the talks.
• Queensland new royalty rates:
• A$0.20c for coal prices >A$175/t (US$113/t)
• A$0.30c for coal prices >A$225/t (US$145/t)
• A$0.40c for coal prices >A$300/t (US$194/t)
• Coronado now see high thermal coal prices as lasting for an extended period and recently reported a special dividend of $225m equating to US$0.1342/s.
• The company, which operated the Curragh coal mine in Queensland is now looking to move into thermal coal from its previous focus on coking coal.
• Management previously held merger talks with Arch Resources earlier this year.

Cora Gold Ltd (AIM:CORA) 4.3p, Mkt Cap £12m – Sanankoro Exploration Target suggests a potential to significantly grow the existing MRE

• The Company released an Exploration Target Estimate within 8km of the Sanankoro Gold Project in southern Mali.
• The Exploration Target is estimated at 26.0-35.2mt with a grade range of 0.58-1.21g/t for a potential of 490-1,370koz.
• This is in addition to the current Mineral Resource Estimate of 24.9mt at1.15g/t for 920koz.
• The target includes 12 areas with three of those accounting for over 50% of the estimate (Target 3, Target 5 & 6 and Selin-Bokoro West Extension).
• The target will be used to guide future exploration programme to grow the existing mineral resource.
• The estimate includes the area within 8km of the flagship Sanankoro Project and was prepared by CSA Global.
• The Company reports that DFS work is ongoing with a status update due this quarter.

Glencore PLC (LSE:GLEN) 540p, Mkt cap £69bn – Glencore saves Britishvolt pending deal with US PE and longer term deal with Chinese or Korean firm

• Britishvolt has been given a temporary reprieve from administration by Glencore (The Times).
• Glencore has rescued the business with the intention of bringing in a US Private Equity firm to support the company till a longer term buyer can be found.
• The UK government refused to allow Britishvolt to draw down £30m out of a £100m bridging finance due to failure to start building the battery plant.
• Lars Carlstrom, a former founder and CEO left after he was discovered to have been convicted of tax fraud.
• Britishvolt won £850m of funding from the UK Automotive Transformation Fund in July.
• The new factory was due to start production of Li-ion batteries for more than 30,000 vehicles a year from 2027 and employ >5,000.

Green Lithium (PRIVATE-UK:GRL) – UK lithium refinery to be built in Teesside

• Green Lithium has outlined its plans to build and operate a large-scale lithium refinery in Teesside and provide battery-grade lithium hydroxide to UK and European markets.
• The refinery has an annual production target of 50,000tpa of lithium hydroxide, translating to ~1m EVs annually.
• The company intends to prioritise ESG, targeting net zero on Scope 1 and 2 emissions by 2035 whilst working with supply chain partners to minimise Scope 3 emissions.
• With respect to emissions, GL note the refining process at Teesside will have a carbon footprint 80% lower than the traditional processes currently used internationally, with a carbon intensity of only 3.3kg of CO2 emitted per kg of lithium hydroxide produced compared with the international average of 16.2kg.
• In May 2022, Green Lithium announced it has reached an agreement with Trafigura, who plan to supply lithium feedstock required for the refinery.

Power Metal Resources PLC (AIM:POW)* 1.4p, Mkt Cap £22m – Good final assay drill results at Tati gold project in Botswana

• Power Metal reports that it has received final assay results from the Company's recently completed drilling programme at the Tati Project, in Botswana.
• Of the results outstanding, gold mineralisation was intersected in five out of six holes, with highlights:
• Hole CHRC0006 - 2m @ 23.17 g/t Au from 25m, including 1m @ 40.63 g/t Au from 26m
• Hole CHRC0007 - 2m @ 6.59 g/t from 5m, including 1m @ 11.27g/t Au and 1m @ 11.16g/t from 54m
• Previously reported results include:
• Hole CHRC0001 - 1m @ 10.2g/t Au from 33m
• Hole CHRC0002 - 1m @ 5.6 g/t Au from 15m
• Hole CHRC0003 - 3m @ 16.8 g/t Au from 5m, including 1m @ 47.2 g/t Au from 6m
• Power Metal comments that drilling has confirmed gold mineralisation over a strike length of 175m, with mineralisation remaining open towards the northwest, southeast and downdip.

*SP Angel acts as nomad and broker to Power Metal

Tertiary Minerals PLC (AIM:TYM)* 0.24p, Mkt cap £3.75m - Tertiary Minerals confirms joint venture at its Jacks Copper Project in Zambia

• Tertiary announced on Friday its 96% owned subsidiary Tertiary Minerals Zambia (TMZ) has executed its JV agreement with Mwashia Resources for the Jacks Copper Project.
• The JV agreement follows a deal struck between TMZ and Mwashia in August 2021.
• Tertiary describes Mwashia as being a valued local partner ‘instrumental in the tribal and stakeholder engagement process’ fundamental to the Company’s drilling programme at Jacks.
• The agreement will see the formation of a new Zambian firm, Newco, which will be owned 90% by TMZ and 10% by Mwashia.
• Newco will own and operate the Jacks Project in Zambia.
• TMZ/Tertiary will fund Newco and they will have the option to purchase Mwashia’s 10% stake for $3.5m.
• Tertiary will pay $30,000 to Mwashia in line with the option agreement.
• The Company also holds options over four additional licenses held by Mwashia in Zambia.
• Tertiary’s Executive Chair Patrick Cheetham states the JV ‘cements our relationship with Mwashia and provides a mechanism for TMZ to move to 100% ownership of Jacks in the future.’

*SP Angel act as Nomad and Broker to Tertiary Minerals

Shanta Gold Limited (AIM:SHG, OTC:SAAGF) 10.3p, Mkt Cap £107m – West Kenya Phase 2 infill drilling continues to return high grade intersections

• The Company released a drilling update at the ongoing infill programme at the high grade West Kenya Gold Project in Kenya.
• At the Isulu and Bushiangala deposits, Phase 2 infill drilling programme is nearing completion with ~63,740m of planned 75,000m completed.
• Assay results from the latest set of diamond drill holes continued to return narrow but high grade mineralised intervals.
• At the Kimingini exploration target, located 8km south east of the Isulu-Bushiangala deposit, current drilling is aiming to infill two modelled zones with ~1,300m completed over Q2-Q3/22.
• Assay results from five diamond drill holes returned lower grade intersections compared to Isulu-Bushiangala including:
• 0.7m at 2.20g/t from 128m;
• 12.7m at 2.45g/t from 195m including 4.0m at 6.64g/t from 204m;
• 1.7m at 0.69g/t from 218m,
• 1.0m at 1.27g/t from 199m.
• At the Ramula camp, assay results referred to ~1,100m of infill drilling of the 6,000m programme.
• Results returned a series of good intersections in the ~150-300m downhole depth range.

SolGold PLC (LSE:SOLG, TSX:SOLG, OTC:SLGGF)* 17.96p, Mkt Cap £386m – US$50m royalty financing

• Solgold has agreed a US$50m royalty financing with Osisko Gold Royalties (TSX:OR) to help progress the development of its Cascabel copper/gold project in northern Ecuador.
• The agreement grants Osisko a 0.6% net-smelter return on the Cascabel licence area which hosts the Alpala and Tandayama-America resources and other promising targets currently at the pre-resource stage.
• Liam Twigger, Solgold’s Chair, explained that the agreement “removes the financing overhang that has encumbered SolGold and provides an accretive and attractive financing solution. SolGold can now devote its complete attention to the Strategic Review Process which is currently underway to maximize shareholder value”.
• The recently appointed director, Dan Vujcic, added that “Working with Osisko, a party, like SolGold, with big aspirations is exciting and is testament to the relationships that can be forged on the back of owning a Tier 1 project in a commodity essential to the global shift to decarbonization”.
• Solgold’s pre-feasibility study, released in April, showed that pre-production capital investment of US$2,746m followed by post-production sustaining capital of a further US$2,136m at Alpala is expected to generate an after-tax NPV8% of US$2,907m and an IRR of 19.3% using base case commodity prices of US$3.60/lb for copper, US$1,700/oz for gold and US$19.90/oz for silver.
• The study envisages a 25mtpa underground mining operation using block-caving is producing an average of 132,000tpa of copper, 358,000ozpa of gold and 1mozpa of silver over an initial 26 years mine life.

Conclusion: The royalty agreement provides additional financial resources for Solgold to continue its strategic project review at Cascabel which we await with interest.

*SP Angel acts as Financial Advisor to SolGold

Yamana Gold (TSX:YRI, LSE:AUY) 411p, Mkt cap £4.7bn – Yamana receives superior offer for assets from Pan American Silver and Agnico Eagle

• Yamana received an unsolicited binding proposal from Agnico Eagle and Pan American Silver in a cash-and-stock offer of $5.02/share.
• Gold Fields is not looking to raise its May offer
• The proposal sees Pan American look to acquire all of the outstanding common shares of Yamana for US$1bn in cash, 153.5m Pan American shares and 36.1m common shares of Agnico Eagle.
• If the deal were to go ahead, Pan American would acquire Yamana whilst Agnico Eagle would secure the Company’s Canadian assets, including the Malartic mine.
• The two companies offer suggests a total valuation of $4.8bn for the assets, with Yamana describing the offer as ‘superior’ to Gold Field’s offer in May.
• Yamana states it has notified Gold Fields that the new offer from Pan American and Agnico constitutes a ‘superior proposal’.
• A special meeting of Yamana shareholders will take place on Monday 21st to discuss the Gold Fields offer.
• The deal reflects gold producers’ hopes of expansion in South America as problems continue to mount in South Africa both geologically and politically.
• Gold Fields announced today it will not raise its offer for Yamana Gold (TSX:YRI, LSE:AUY), believing its offer is ‘strategically and financially superior’ to the Canadian team’s proposal.

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

W1S 2PP

*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

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Sources of commodity prices

Gold, Platinum, Palladium, Silver - BGNL (Bloomberg Generic Composite rate, London)

Gold ETFs, Steel - Bloomberg

Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt - LME

Oil Brent - ICE

Natural Gas, Uranium, Iron Ore - NYMEX

Thermal Coal - Bloomberg OTC Composite

Coking Coal - SSY

RRE - Steelhome

Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite - Asian Metal

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