SP Angel . Morning View . Wednesday 16 11 22
Gold trades higher on lower US$ as risks of direct NATO/Russia confrontation subsides
MiFID II exempt information – see disclaimer below
Anglo American PLC (LSE:AAL) – De Beers reports continuing strength in rough diamond demand
Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* – Vince Mascolo Shortlisted for 'Mining CEO of the Year Award'
BeMetals Corp (TSX-V:BMET)* – Core drilling underway at Pangeni, Zambia
Beowulf Mining PLC (AIM:BEM)* – Kallak North Scoping Study on track for Q4 completion
East Star Resources PLC (LSE:EST) – 1,000m of RC drilling completed at the Talairyk HREE Project testing historical data
Libero Copper Corporation (TSX-V:LBC) – Soil sampling expands potential size of the Mocoa Cu-Mo Project
Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF)* – holds a 20% interest in Libero Copper & Gold
OZ Minerals Limited (ASX:OZL) – Trading halted ahead of “potential change of control”
Pilbara Minerals Ltd (ASX:PLS) – Pilbara sells 5.5% spodumene concentrate shipment at US$7,805/dmt eq. $8,575/dmt for 6% SC6
Thor Explorations Ltd (TSX-V:THX, AIM:THX, OTC:THXPF) – Latest drilling results from the Douta gold project, Senegal
Gold holds as dollar sell-off stabilises and traders weigh up next catalyst
- Gold prices have held around the $1,780/oz for another session, following a major sell of in the Dollar from multi-decade highs.
- The Dollar index bounced from lows of 105 yesterday, ticking higher to 106.25.
- US 10 Year treasury yields eased to 3.774%, their lowest level since mid-October, before rebounding to 3.821%.
- However, a minor reversal in the dollar and yield’s sell off has yet to weigh on gold prices, with both remaining well below their peak early in November.
- Gold traders find themselves in a confusing scenario, in which peak inflation sees lower rates, supporting gold prices but running counter to the narrative of gold as an inflation hedge.
- Gold prices have been well supported by record developing country central bank purchases.
- The weaponization of the dollar through sanctions have pushed countries such as Russia and potentially China to diversify their central reserves.
Copper ticks lower following major rally on renewed demand optimism and dollar weakness
- Copper prices eased to around $8,350/t this morning, having risen over 9% from last week to a 5-month high.
- A perfect storm of a significant dollar reversal alongside both a positive property stimulus package and an easing of zero-covid policy were supportive of copper prices.
- The metal has pared some of those gains but remains well above its recent average closer to $7,600/t.
Nickel prices hold gains as market braces for Indonesian tariff hikes
- Nickel prices have enjoyed a major rally, settling around $28,600/t on renewed supply concerns.
- The metals price had taken a hit on weakened stainless steel demand from China.
- However, talk of a hike on both ferronickel and NPI exports from Indonesia has been a primary driver of the metal’s recent rally.
- Prices have also been supported by expectations of a ramp up in production from China’s steel mills, after the recent round of stimulus measures from Beijing.
- We expect demand for nickel to continue to rise on demand for stainless steel products required for finishing hundreds of thousands of apartments in China.
Iron ore rallies for fourth day as optimism persists on Beijing’s property support package
- Iron ore prices have rallied 12% since last Thursday, climbing to $97/t in Singapore.
- China’s state-backed paper, Securities Times, reports that Chinese banks are expected to cut loan prime rates again this year in a bid to prop up the ailing property sector.
- Western financial institutions have described the latest 16-point plan as ‘game-changing’ (Citi), however we question whether previous levels of growth in the sector will be achievable in the short/medium term.
- Property sales have fallen 23% yoy in October and GDP growth has been well short of 5.5% targets, with Q3 adding 3.9%. (FT)
- Steel mill activity is reportedly ramping up on the back of the announcement, with low stockpiles of iron ore in warehouses pushing prices higher (Minmetals)
- Chinese officials are seemingly favouring stability over rapid growth now, with an NDRC spokeswoman stating, ‘stabilizing growth will be put in an even more important position.’
Dow Jones Industrials +0.17% at 33,593
Nikkei 225 +0.14% at 28,028
HK Hang Seng -0.58% at 18,237
Shanghai Composite -0.45% at 3,120
Economics
US – Producer prices inflation came in softer than expected building on top of CPI report released last week and adding to expectations that Fed may start dialling back its pace of interest rate hikes.
- PPI (%mom): 0.2 v 0.2 (revised from 0.4) September and 0.4 est.
- PPI (%yoy): 8.0 v 8.4 (revised from 8.5) September and 8.3 est.
- Core PPI (%yoy): 6.7 v 7.1 (revised from 7.2) September and 7.2 est.
Biden’s $20bn deal with Indonesia to boost battery metals demand with coal phase-out
- The US, Japan and Indonesia have agreed a $20bn deal to boost Indonesia’s efforts to reach net-zero yesterday.
- Indonesia will look to boost renewable investment and retire is huge fleet of coal-powered utilities.
- However, Bloomberg forecast it will cost $2tn for Indonesia to reach net-zero by 2050.
- Indonesia’s IESR is targeting solar power, with the country currently holding 210MW of solar panels, less than the Artic Circle according Bloomberg.
- The Country is rapidly becoming a major hub for battery metals production and refining, aiming to develop itself as a global battery hub.
China – Property prices see significant fall as slowing economy, redundancies and falling export orders reduce new buying
- China's new home prices fell 0.4% mom in October vs -0.3 non September
- Prices also fell 1.6% yoy in October, recording the biggest fall in seven years
- Poor property sector data led regulators to provide support for the industry including a 16-point plan announced earlier this month.
- Among new measures, the plan includes an extension to a year end deadline for lenders to cap their ratio of property sector loans.
Covid spread will disrupt Chinese economy on relaxation of zero-Covid policies
- Have senior Chinese officials decided to relax their zero-Covid policy?
- Are officials ‘relaxing’ the party line, now 20th National Congress of CCP is done, despite Xi’s insistence on sticking with Zero-Covid?
- Or is there a degree of official disobedience against the new Politburo in Beijing after watching Xi’s consolidation of power and Hu Jintao’s public removal from the party congress?
Residents protest over lockdown fears in Guangzhou as covid spreads through city
- Haizhu district, Guangzhou saw unusual and significant rioting and damage yesterday as officials ordered residents to stay at home
- Covid infections passed 5,000 yesterday as officials moved to enforce some elements of President Xi’s zero-covid policy.
- Chinese officials are struggling to balance rising anger at strict lockdowns with containing the virulent spread of Omicron
- China claims to have some 17,595 cases according to ‘our world in data’ highlighting a rapid rise in cases from 1,194 cases a month ago.
- The rise in cases gives us an indication of the rapid spread of the virus even if the absolute numbers are probably underreported.
- We expect China to lose control of the Omicron variant due to its greater transmissibility, increased risk for reinfection and ability to evade historic covid vaccination.
- If and when Omicron spreads through China we expect widespread disruption as health services struggle and workers take time out to care for relatives.
UK – Strong inflation numbers along with higher wage growth rates released yesterday raise chances of a 75bp rate hike at the next BOE meeting.
- The main driver behind the acceleration in annual inflation to the highest in more than 40 years was the price in utilities.
- Price of electricity, gas and other fuel increased by 24.7%mom as the government’s universal energy price cap of ~£2,500 came into place in October.
- Food prices continued to see unusually strong monthly gains climbing 2%mom last month taking the annual rate to 16.2%.
- CPI (%mom): 2.0 v 0.5 September and 1.8 est.
- CPI (%yoy): 11.1 v 10.1 September and 10.7 est.
- Core CPI (%yoy): 6.5 v 6.5 September and 6.4 est.
Australia – Wage growth rate hit the highest level since early 2012 beating market estimates suggesting the central bank is likely to continue with monetary tightening.
- The central bank hiked the benchmark rate by 25bp in early November and is now expected to hike by another 25bo in December.
- Wage Price Index (%qoq): 1.0 v 0.8 (revised from 0.7) Q2 and 0.9 est.
- Wage Price Index (%yoy): 3.1 v 2.6 Q2 and 3.0 est.
Indonesia proposes forming OPEC-like group for nickel producing countries
- Indonesia has reportedly made the proposal to Canada when Indonesian Investment Minister Bahlil Lahadalia met Canada's International Trade Minister Mary Ng on Tuesday.
- Indonesia and Canada are the first and sixth largest nickel producers, respectively.
- In a statement, Bahlil said "Through this collaboration, we hope that all nickel producing countries can benefit an evenly distributed value addition,"
- The Canadian minister responded saying the two countries could explore such collaboration and that both shared a vision on optimising natural resources in a sustainable way.
- Since 2020, Jakarta has banned exports of unprocessed nickel ore to attract investment into domestic processing, enabling it to capture more value down the EV supply chain.
IEA Monthly Electricity Report points to growing utilisation of renewable energy
- OECD saw total net electricity production of 972.9TWh in Aug.2022, +0.6% yoy.
- Electricity production from renewables up 2.4% yoy to 282.6TWh.
- Hydropower electricity production down 0.4% yoy, wind down 8.6% yoy vs solar output up 23.4% yoy for August at 63.9TWh.
- Renewables accounted for 29% of the OECD’s electricity mix in August.
- Nuclear electricity production down 7.7% yoy at 144.1TWh in August.
- Combustible fuel electricity production up 2.5% to 572.6TWh, accounting for
- Natural gas generation up 8.9% yoy whilst coal power production down 6% yoy for August.
Grain export giant warns of wheat supply concerns as inventories remain at historically low levels
- Grain export giant GrainCorp has warned that volatility and disruption triggered by Russia’s invasion of Ukraine is weighing on global food security.
- Supply chain disruptions from Russia’s blockade of the Black Sea is adding to previous bottlenecks triggered during the pandemic.
- Global grain inventories are at low levels both seasonally and historically.
- Government wheat stocks are seeing consistent depletion in emerging markets, with India’s warehouses at 50% of the levels seen in 2021.
Currencies
US$1.0408/eur vs 1.0410/eur yesterday. Yen 139.35/$ vs 139.44/$. SAr 17.278/$ vs 17.197/$. $1.189/gbp vs $1.182/gbp. 0.678/aud vs 0.675/aud. CNY 7.074/$ vs 7.035/$.
Dollar Index: 106.12 /-3.08% on week
Commodity News
Precious metals:
Gold US$1,777/oz vs US$1,780/oz yesterday
Gold ETFs 94.1moz vs US$94.3moz yesterday
Platinum US$1,019/oz vs US$1,031/oz yesterday
Palladium US$2,096/oz vs US$2,059/oz yesterday
Silver US$21.65/oz vs US$22.14/oz yesterday
Rhodium US$13,550/oz vs US$13,550/oz yesterday
Base metals:
Copper US$ 8,358/t vs US$8,455/t yesterday
Aluminium US$ 2,453/t vs US$2,475/t yesterday
Nickel US$ 28,665/t vs US$29,505/t yesterday
Zinc US$ 3,113/t vs US$3,163/t yesterday
Lead US$ 2,207/t vs US$2,197/t yesterday
Tin US$ 24,200/t vs US$22,100/t yesterday
Energy:
Oil US$93.7/bbl vs US$92.7/bbl yesterday
- Crude oil prices were volatile as traders priced-in the potential risk to global oil supplies if the Russia-Ukraine war escalated following reports of two people being killed near the border in Poland, which is now believed to be from a missile fired from within the Ukraine at an incoming Russian missile.
- European energy prices were also volatile during the day but remain steady with no reports of any damage to pipelines transiting Russian gas through Ukraine, and shipment orders indicating stable 42mcm/d flows today.
Natural Gas US$6.005/mmbtu vs US$6.061/mmbtu yesterday
Uranium UXC US$50.60/lb vs US$50.75/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$95.7/t vs US$94.4/t
Chinese steel rebar 25mm US$550.7/t vs US$550.0/t
Thermal coal (1st year forward cif ARA) US$202.0/t vs US$208.0/t
Thermal coal swap Australia FOB US$332.0/t vs US$312.0/t
Coking coal swap Australia FOB US$312.0/t vs US$312.0/t
Other:
Cobalt LME 3m US$51,955/t vs US$51,955/t
NdPr Rare Earth Oxide (China) US$91,179/t vs US$91,900/t
Lithium carbonate 99% (China) US$81,496/t vs US$82,297/t
China Spodumene Li2O 5%min CIF US$6,110/t vs US$6,110/t
Ferro-Manganese European Mn78% min US$1,285/t vs US$1,285/t
China Tungsten APT 88.5% FOB US$31.7/kg vs US$31.7/kg
China Graphite Flake -194 FOB US$880/t vs US$880/t
Europe Vanadium Pentoxide 98% 7.5/lb vs US$7.5/lb
Europe Ferro-Vanadium 80% 31.75/kg vs US$31.75/kg
China Ilmenite Concentrate TiO2 US$317/t vs US$319/t
Spot CO2 Emissions EUA Price US$80.0/t vs US$78.2/t
Brazil Potash CFR Granular Spot US$570.0/t vs US$570.0/t
Battery News
China expected to account for 60% of global EV sales, according to BNEF
- China’s EV market continues to grow in terms of global market share – from 26% in 2015, 48% in 2021, to 56% in H1 22, according to data from Bloomberg New Energy Finance.
- The group are forecasting a surge in sales that would push China’s sales over 60% in the second half of this year.
- There are now almost 250 battery EVs for sale in China’s passenger car market, and average range has increased 42% since 2018.
- Lithium-iron-phosphate (LFP) batteries continue to take more market share, accounting for half of all new models on the market.
- These models contain no cobalt or nickel and are therefore cheaper, although the range in such vehicles is typically lower.
EVs – US and European startups looking to undercut Chinese manufacturers with lower cost sodium ion or lithium sulfur battery cells
- US and European battery technology companies are rushing to demonstrate new battery technologies according to a report on Reuters
- The technology companies, including Nyobolt (UK), Faradion (UK), Theion (Germany), Lyten (US). Faradon was recently acquired for £100m by Reliance New Energy Solar (India)
- While many of these batteries will work with lower cost commodities investors should note that the low density of lithium combined with its electrochemical properties are likely to ensure lithium remains as the preferred metal for EV batteries for many years to come in our view.
Company News
Anglo American PLC (LSE:AAL) 3,364.5p, Mkt Cap £45bn – De Beers reports continuing strength in rough diamond demand
- Anglo American reports that the ninth De Beers sales cycle of 2022 realised US$450m on a provisional basis and that the previously reported provisional sales of US$500m for the eighth sales cycle of 2022 have now been confirmed as US$508m.
- The latest provisional sales figures are US$20m ahead of the US$492m reported for the equivalent ninth sales cycle of 2021 and bring sales so far in 2022 to approximately US$5.4bn which, we estimate, maintains 2022 sales at the highest level achieved by this stage of the year for more than 5 years at levels of around 20% ahead of the equivalent stage in 2021.
- De Beers Chief Executive, Bruce Cleaver, said that “We saw good demand for our rough diamonds during Cycle 9 with sales reflecting what is traditionally a quieter time for the diamond midstream ahead of polishing factories reopening in India following the Diwali holidays”.
- In a separate announcement issued today, Anglo American says that it “has sourced the supply of 100% renewable electricity for its operations in Australia from 2025 … [which]…will effectively remove all Scope 2 emissions from Anglo American's steelmaking coal business in Australia from 2025 ”.
- Anglo American’s Group Director of Corporate Relations and Sustainable Impact, Anik Michaud, said that “Combined with the agreements we already have in place for all our South America operations, from 2025 we expect to be drawing 60% of our global electricity requirements from renewable sources”.
Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* 46.2p, Mkt Cap £285m – Vince Mascolo Shortlisted for 'Mining CEO of the Year Award'
- Atlantic Lithium report the late Vince Mascolo has been shortlisted for the award of ‘Mining CEO of the year’
- Vince was a founder of Atlantic Lithium, which started out life as IronRidge Resources with a series of iron ore projects in Gabon.
- Mascolo transformed the company from its focus on iron ore into gold and lithium in West Africa
- The promising gold assets in the Ivory Coast and Chad are held in Ricca Resources which was demerged on 21 December 2021 with plans to list in due course.
- Atlantic’s prize asset are the Grasscutter West, Ewoyaa North and Ewoyaa Main lithium deposits in Ghana which are generating consistent and impressive lithium grades in spodumene.
- Management have currently defined 30.1mt grading 1.26% Li2O at Ewoyaa with a JORC ore reserve of 18.9mt at 1.24% Li2O.
Conclusion: Vince Mascolo built an expert team at Atlantic enabling remarkably business continuation following his passing. The team continue to advance Vince’s good work.
*SP Angel acts as nomad to Atlantic Lithium
BeMetals Corp (TSX-V:BMET)* – C$0.115, Mkt cap C$20m – Core drilling underway at Pangeni, Zambia
- In an announcement to the Canadian exchange, BeMetals reports that it has completed its planned programme of aircore drilling at its Pangeni copper project in Zambia and has now started a follow-up campaign 6-8 cored drillholes to test six targets defined by the aircore work.
- The drilling is expected “to be completed before year end, and their analytical results … [should be available] … early in 2023”.
- A total of 3,619m of aircore drilling was funded jointly by BeMetals and the Japanese agency, JOGMEC to follow up last year’s drilling which included the successful intersection of copper-bearing Katangan Supergroup sediments on the Q Prospect with an intersection of 4.14m at an average grade of 0.62% copper in hole Q3-C1 and intersections of 5m averaging 0.58% copper and 3.37m averaging 0.51% copper in hole D7-C1 at the D Prospect.
- President and CEO, John Wilton, explained that “Three of our targets are related to potential extensions of prospects where we previously intersected significant copper mineralization (Q, D, and SW Prospects) and the remaining three are newly generated or have been defined with data from the 2022 and prior aircore drilling information”.
- Mr. Wilton said that BeMetals’ current geological interpretation of the “D and SW Prospects … [is that they are] … related to basement hosted copper mineralization similar in style to Barrick Gold’s Lumwana copper mine in Zambia while the Q-Prospect, and potentially P and G targets, are in Katangan host units with similar geological settings to First Quantum Minerals (TSX:FQM)’ Sentinel mine some 130 kilometres to the northeast of Pangeni”.
- The company explains that its “D5-06 target represents a potential extension of mineralization first discovered at the D-Prospect near the end of 2019 … [and is] … an important target area for further exploration” with mineralisation defined so far extending over “at least 1.2 kilometres along the interpreted strike”.
- South of the D prospect targets, the “newly defined, stand-alone copper targets on the P, G and K aircore lines … are currently interpreted as being potentially hosted … [in] … Katangan … [age] … units … with copper anomalies of 699, 473, 1,447 and 495ppm respectively” identified by the aircore drilling.
Conclusion: BeMetals is building on the results of its recently completed programme of aircore drilling at Pangeni with a core-drilling campaign covering six holes into the most promising targets. We await further news as the drilling proceeds.
*SP Angel act as broker to BE Metals
Beowulf Mining PLC (AIM:BEM)* 4.1p, Mkt Cap £34m – Kallak North Scoping Study on track for Q4 completion
- Beowulf provides and update for its Kallak Iron Ore Project in Sweden, with the project’s Scoping Study on track to be completed this quarter.
- The study will provide detailed insight into how to deliver a ‘net zero’ project and develop a sustainable mine.
- Beowulf contracted Vulcan Technologies to complete a Marketing Study for the Kallak concentrate, with Vulcan specialising in metallurgical test work programmes that have yielded world class blast furnace operational results.
- Previous clients of Vulcan include Rio Tinto, Teck, Roy Hill and Vedanta.
- We expect the study to evaluate Kallak as a supplier of high-quality concentrate to Sweden’s budding fossil-free steel sector.
- H2 Green Steel closed its latest funding round in October, raising €260m to build a green hydrogen-powered steel plant in northern Sweden.
- Kallak which hosts a particularly clean concentrate that should enable steel makers to reduce carbon emissions, improve energy efficiency and reduce waste leading to cleaner and greener steel production.
- The project is also ~120km southwest of the giant Kiruna iron ore mine which LKAB claims to be the first source of green iron in the Europe.
- We see Beowulf as perfectly positioned to service the Swedish Green steel industry given the high-quality magnetite product and close location to H2’s facilities which reduces the overall scope 3 emissions for H2.
- It is Beowulf’s intention to apply for the Environmental Permit for Kallak North in Q4 2023, with work currently progressing.
*SP Angel acts as nomad and broker to Beowulf
East Star Resources PLC (LSE:EST) 3.7p, Mkt Cap £7m – 1,000m of RC drilling completed at the Talairyk HREE Project testing historical data
- The Company completed ~1,000m of RC drilling in 30 boreholes at the Talairyk HREE Project in East Kostanay, Kazakhstan.
- The programme covered the southwestern part of the Ionic Adsorption Clay hosted deposit.
- Drilling was designed to test historical results (grades, widths, strike) as well as provide samples for metallurgical studies.
- Historical GKZ reports suggests that elevated grades of yttrium oxide and other REOs occur in broad kaolinitic clay zones that average ~20m in thickness and lie close to surface (~7m overburden) similar to the IACs of South China.
- 90% of boreholes intersected kaolinitic clay zones (average thickness 32m) that are believed to host high value heavy rate earth elements.
- Samples are currently being tested with a pXRF gun to determine the sampling intersections to be sent to laboratory assay and leach test work over the winter period.
Libero Copper Corporation (TSX-V:LBC) C$0.20, Mkt Cap C$15m – Soil sampling expands potential size of the Mocoa Cu-Mo Project
Anglo Asian Mining PLC (AIM:AAZ, OTC:AGXKF)* holds a 20% interest in Libero Copper & Gold
- The team identified large 2km by 800-1,000m Cu-Mo soil geochemical anomaly located next to the Mocoa Copper-Molybdenum porphyry deposit in Putumayo, Columbia.
- The anomaly extends more than 500m to the north and south along a ridge line beyond the limits of the current Mocoa deposit resource area.
- Elevated copper in soil samples extends for an additional 2km south of the main Cu-Mo soil anomaly.
- Results expands the footprint and potential size of the deposit outside of the forest reserve in areas that have not been previously drilled.
- The team continues to progress systematic exploration on the Mocoa project including soil sampling and mapping across the entire property.
*SP Angel act as Nomad and broker to Anglo Asian Mining
OZ Minerals Limited (ASX:OZL) A$26.3, A$8.8bn – Trading halted ahead of “potential change of control”
- Shares of OZ were placed on a trading halt early on Wednesday ahead of a potential change of control transaction.
- In August, OZ rebuffed BHP’s A$8.3m buyout offer.
Pilbara Minerals Ltd (ASX:PLS) A$4.9, Mkt Cap A$14.8bn – Pilbara sells 5.5% spodumene concentrate shipment at US$7,805/dmt eq. $8,575/dmt for 6% SC6
- Pilbara Minerals intends to accept the highest bid for a carbo of 5,000dmt auctioned on the BMX platform.
- Delivery of the product is expected from mid-December 2022.
- Last month, Pilbara accepted a pre-auction bid for a spodumene concentrate cargo ahead of its tenth scheduled digital auction of US$7,100/dmt was accepted for a shipment of 5,000dmt on a 5.5% basis.
- Pilbara Minerals has also announced its intention to pay a dividend, targeting 20-30% of free cash flow.
- We note the company’s cash balance of A$1.4bn at 30 September 2022.
Thor Explorations Ltd (TSX-V:THX, AIM:THX, OTC:THXPF) 16.25p, Mkt Cap £101m – Latest drilling results from the Douta gold project, Senegal
- Thor Explorations has released results from its continuing programme of reverse-circulation drilling at the 70% owned Douta gold project in eastern Senegal where it has already identified an inferred mineral resource of 15.3mt at an average grade of 1.73g/t gold containing 511,000oz at the Makosa deposit.
- The current drilling is “designed to both upgrade parts of the existing resource and to specifically target potentially higher-grade parts of the deposit” which is located within the Kéniéba inlier which hosts producing operations both within eastern Senegal and in neighbouring Mali.
- Explaining the geological setting, the company says that “At Makosa, zones of gold mineralisation are developed either within a sheared gabbro intrusive or within a steep north-westerly dipping sequence of meta-sedimentary rocks that are in close proximity to the gabbro. Higher grade zones or shoots are expected to occur along east-west oriented structures that cut across the main north-east trend of the mineralisation”.
- Among the drilling results from the southern part of the Makosa resource area highlighted in today’s announcement are:
- An intersection of 7m at an average grade of 8.96g/t gold from a depth of 67m in hole DTRC-561 which includes a single metre at an average grade of 52.7m implying that the balance of the intersection averages approximately 1.7g/t gold; and
- An intersection of 4m averaging 13.82g/t gold from 44m depth in hole DTRC-540; and
- An intersection of 10m averaging 3.80g/t gold from 59m depth in hole DTRC-539; and
- An intersection of 17m averaging 1.22g/t gold from 15m depth in hole DTRC-536; and
- Another intersection also of 17m averaging 2.02g/t gold from 80m depth in hole DTRC-550 which includes one metre averaging 7.7g/t gold which, as with the intersection in hole 561, suggests that the balance of the intersection also averages around 1.7g/t; and
- An intersection of 5m averaging 4.8g/t gold from 74m depth in hole DTRC-560; and
- An intersection of 10m averaging 2.7g/t gold from 31m depth in hole DTRC-555
- The results appear to show that although high grades can be encountered in relatively short individual sections more generally the mineralisation is at a lower tenor over wider intersections which explains the company’s incentive to investigate the “potentially higher-grade parts of the deposit”.
- President and CEO, Segun Lawson, explained that the higher-grade parts of the deposit are “thought to be related to cross-structures” and he also confirmed that “we continue to encounter strong mineralisation from the surface, and at relatively shallow depths. We are continuing this theme of shallow drilling along the entire strike length of the deposit, with the objective of delineating a high grade, shallow, mineable deposit”.
- Thor Explorations also confirms that the potential to add further resources through drilling at the Mansa and Maka prospects which are located northeast of Makosa and have “returned encouraging results … [which] … will be fully tested in forthcoming drilling programs.”
Conclusion: A continuing programme of reverse circulation drilling at the Douta project in eastern Senegal is currently directed at identifying shallow, higher-grade, mineralisation, possibly within cross structures, as well as extending the mineralised envelope beyond the current inferred resource at Makosa. We await further news as the drilling progresses.
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.
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
DISCLAIMER
This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.
This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.
This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.
This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.
Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.
Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.
SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).
SPA is registered in England and Wales with company number OC317049. The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP. SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.
MiFID II - Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.
A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).
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%