SP Angel . Morning View . Tuesday 29 11 22
Copper prices rise as China stamps on street protests, traders brace for Jerome Powell speech tomorrow
MiFID II exempt information – see disclaimer below
Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* – Continued positive infill and extensional drilling at Ewoyaa
BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)* – Update on the Enonkoski nickel-copper-cobalt jv with Rio Tinto in Finland
Bushveld Minerals Limited (AIM:BMN, OTC:BSHVF)* – VRFB manufacturer CellCube in talks to build Australian gigafactory
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF)– Resource increase at Ity as 2022 drilling campaign demonstrates continuity of mineralisation
Oriole Resources PLC (AIM:ORR)* – Update on Cameroonian exploration work and strategic plan going forward
Sibanye-Stillwater* (JSE: SSW) – €588m CAPEX approved for Keliber lithium project
Oxford Mining Club – thank you for drinks at the Lansdowne Club last night
- A big thank you to the Oxford Mining Club for organising drinks at the Lansdowne Club last night.
- No sense of doom a gloom but a realisation that all is not well in China right now.
- We see the Chinese authorities as clamping down on any dissent with velvet gloves for now but we also growing unrest across China due to increasingly obvious censorship.
- The blurring of crowds at the football in Qatar to hide their lack of facemasks is adding to the frustration of the many Chinese people being forced in and out of lockdown.
Indian steel imports from Russia hit 4-year high as Putin diverts commodities on Western sanctions
- Russian steel exports to India grew from 34kt in the first 7 months of 2021 to 149kt over the same period this year.
- Indian steel exports jumped 14.5% yoy as Covid restrictions had eased this year and the country took advantage of cheaper Russian goods.
- India has also ramped up coking coal imports from Russia from 2mt last year to 5/6mt this year.
Vale Indonesia hopes to begin production at nickel HPAL plant by 2025
- PT Vale Indonesia is aiming to complete construction of its high-pressure acid leaching plant by 2025.
- The HPAL plant will produce EV-standard nickel for battery making.
- The JV alongside Zhejiang Huayou Cobalt has invested over $4.29bn into the plant.
Gold remains flat as traders brace themselves for Jerome Powell this week
- Gold has been rangebound for the past week around the $1,755/oz mark.
- Traders are currently weighing bets on the extent of Jerome Powell’s hawkishness this week, with the Fed chair due to make a speech tomorrow.
- Hawkish sentiment has been brewing, with the Fed likely to hammer home the message that interest rates are required to be held higher for longer into 2023.
- 2-year and 10-year US treasury yields have continued to ease as the market priced in expectations of a 50bp hike in December.
- A correction in yields closer to September levels is expected to put pressure on gold prices, although the continued sell-off in the dollar may balance that headwind.
Dow Jones Industrials -1.45% at 33,849
Nikkei 225 -0.48% at 28,028
HK Hang Seng +5.02% at 18,167
Shanghai Composite +2.31% at 3,150
Economics
China – Markets gained on expectations Chinese authorities may dial back on strict covid restrictions amid rising public discontent.
- Protests are reported to have broken out in at least 18 cities.
- State media did not report on the recent protests reiterating the benefits of Beijing’s zero Covid policy
- The nation reported ~37,500 cases on Thursday, down slightly from the record ~38,800 the day earlier.
- Although, the expectation is that the number is likely to rise further if restrictions are eased.
- One of indicators of economic activity and ease of travel, a number of metro passenger trips in 15 big Chinese cities, was down 41%yoy accelerating from a decline of 24%yoy a week before.
- Separately, the Chinese financial regulator lift a ban on property developers raising funds in equity markets late on Monday.
- The news sent property developers’ equity prices up today.
Spain – In a welcome news, inflation growth ticked lower for a fourth consecutive month in November as well as coming in weaker than expected.
- The slowdown was driven by declines in power and fuel costs and an only moderate increase in clothing, Bloomberg reports.
- Although, the underlying inflation that excludes energy and food picked up to 6.3%.
- CPI (EU Harmonised, %mom): -0.5 v 0.1 October and 0.1 est.
- CPI (EU Harmonised, %yoy): 6.6 v 7.3 October and 7.1 est.
Germany – Regional inflation data show a slight slowdown in inflation growth rates, albeit, only marginal with headline rates remaining at historically elevated levels.
- National inflation data is expected later in the day with estimates for the CPI (EU Harmonised) to come in at 11.3% this month, slightly lower on 11.6% in the previous monthl.
UN predicts global shipping activity to fall further in 2023 as economic growth falters
- The UNCTAD predicts global shipping activity will continue to slow next year on the impact of rising interest rates, war in Ukraine and lingering pandemic impacts.
- The United Nations Conference on Trade and Development projects maritime trade growth to fall to 1.4% this year and flatline next year following 3.2% in 2021 and 3.8% in 2020.
Currencies
US$1.0368/eur vs 1.0406/eur yesterday. Yen 138.21/$ vs 137.96/$. SAr 17.022/$ vs 17.132/$. $1.203/gbp vs $1.209/gbp. 0.672/aud vs 0.670/aud. CNY 7.163/$ vs 7.201/$.
Dollar Index: 106.21 /-1.38% on week
Commodity News
Precious metals:
Gold US$1,753/oz vs US$1,757/oz yesterday
Gold ETFs 94.3moz vs US$94.3moz yesterday
Platinum US$1,001/oz vs US$989/oz yesterday
Palladium US$1,875/oz vs US$1,855/oz yesterday
Silver US$21.19/oz vs US$21.36/oz yesterday
Rhodium US$13,300/oz vs US$13,300/oz yesterday
Base metals:
Copper US$ 8,052/t vs US$7,932/t yesterday
Aluminium US$ 2,382/t vs US$2,361/t yesterday
Nickel US$ 25,795/t vs US$25,255/t yesterday
Zinc US$ 2,955/t vs US$2,929/t yesterday
Lead US$ 2,139/t vs US$2,128/t yesterday
Tin US$ 22,520/t vs US$21,910/t yesterday
Energy:
Oil US$84.8/bbl vs US$81.0/bbl yesterday
Natural Gas US$7.309/mmbtu vs US$6.620/mmbtu yesterday
Uranium UXC US$50.35/lb vs US$50.35/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$100.4/t vs US$98.9/t
Chinese steel rebar 25mm US$543.1/t vs US$539.6/t
Thermal coal (1st year forward cif ARA) US$229.0/t vs US$229.0/t
Thermal coal swap Australia FOB US$375.0/t vs US$361.0/t
Coking coal swap Australia FOB US$248.0/t vs US$248.0/t
Other:
Cobalt LME 3m US$51,955/t vs US$51,955/t
NdPr Rare Earth Oxide (China) US$91,546/t vs US$91,090/t
Lithium carbonate 99% (China) US$78,498/t vs US$78,107/t
China Spodumene Li2O 5%min CIF US$6,110/t vs US$6,110/t
Ferro-Manganese European Mn78% min US$1,280/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% 7.7/lb vs US$7.7/lb
Europe Ferro-Vanadium 80% 31.75/kg vs US$31.75/kg
China Ilmenite Concentrate TiO2 US$315/t vs US$313/t
Spot CO2 Emissions EUA Price US$81.2/t vs US$81.3/t
Brazil Potash CFR Granular Spot US$530.0/t vs US$530.0/t
Company News
Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11)* 42p, Mkt Cap £256m – Continued positive infill and extensional drilling at Ewoyaa
- Atlantic Lithium has released assay results for further 10,679m of exploration and infill diamond drilling at its Ewoyaa Lithium Project in Ghana.
- Highlights outside of the current MRE include:
- GRC0785: 35m at 1.48% Li2O from 111m
- GRC0760: 27m at 1.71% Li2O from 155m
- GRC0775: 20m at 1.85% Li2O from 72m
- GRC0777: 24m at 1.43% Li2O from 108m
- Highlights within the current MRE, at the Ewoyaa Main and Ewoyaa Noth-East deposits, include highlights:
- GDD0090: 63.6m at 1.86% Li2O from 14.3m
- GDD0089: 68m at 1.37% Li2O from 15m
- GRC0756: 60m at 1.36% Li2O from 29m
- The highest grade of 6.78% Li2O has been confirmed in previous hole GDD0071 over 1m from 31m.
- Approximately 37,000m of results from the 47,000m drilling programme reported to date.
Conclusion: Atlantic Lithium continue to report broad, high grade intersects at its Ewoyaa Lithium Project. We expect results from the 47,000m programme to an increase in scale and improvement in confidence when the company updates their MRE. Aside from further drill results, we look froward to news on progress regarding the recently submitted Mining License.
*SP Angel acts as nomad to Atlantic Lithium
BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF)* 5.00p, Mkt cap £52m – Update on the Enonkoski nickel-copper-cobalt jv with Rio Tinto in Finland
- Bluejay Mining provide an update on the Enonkoski nickel-copper-cobalt jv with Rio Tinto in Finland.
- Bluejay recently started a ground gravity survey at the Makkola-Hälvälä target at the 15-km long Enonkoski Project area.
- The idea is to use this to generate new drill targets at an mine where nickel-copper-cobalt mineralisation has been previously drilled into.
- Results from this year’s exploration are being interpreted in with encouraging results and follow-up work programmes being planned for next year.
- Work at the Laukunlampi intrusion highlights a new interesting target area for further exploration with Ni-Cu sulphide droplets and sulphide dissemination intercepted in the drill holes.
Conclusion: Work is progressing in Finland towards the development of new drill targets for testing in 2023. The methodical working through of geophysics, soil sampling and other groundwork appear to indicate a number of promising areas to target for drilling next year.
*SP Angel acts as nomad and broker to Bluejay Mining. The analyst holds shares in Bluejay Mining
Bushveld Minerals Limited (AIM:BMN, OTC:BSHVF)* – 5.19p, Mkt cap £67m – VRFB manufacturer CellCube in talks to build Australian gigafactory
(Bushveld Minerals* owns 27.6% of CellCube)
- Vanadium Redox Flow Battery maker CellCube and energy storage developer North Harbour Clean Energy (NHCE) are reportedly in talks to develop a factory in Australia with 1GW/8GWh annual production capacity.
- The two groups have signed a cooperation agreement for the construction of an assembly and manufacturing line of long-duration energy storage (LDES) assets like flow batteries to participate in the Australian electricity market.
- According to NHCE, the initial production capacity will be at least 40MW/160MWh before scaling up to 1,000MWh/8,000MWh per year.
- NHCE has recently signed an agreement with Australian Vanadium, who hope to be in a position to supply vanadium electrolyte for a vertically integrated flow battery business in the country from extraction and processing upwards.
*SP Angel acts as nomad and broker to Bushveld Minerals
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) 1,679p Mkt Cap £4.15bn – Resource increase at Ity as 2022 drilling campaign demonstrates continuity of mineralisation
- Endeavour Mining has announced a 17% increase in the measured and indicated mineral resource estimate at its Ity gold mine in Cote d’Ivoire to 5.2m oz.
- The new estimate, of 100.6mt at an average grade of 1.62g/t replaces the 31st December 2021 estimate of 89.5mt at an average grade of 1.56g/t with an increased tonnage estimate at a higher grade.
- The company describes drilling of over 51,000m within a 20km radius of the processing plant at Ity during 2022 mainly “focused on extending resources at several near mine deposits including Walter-Bakatouo, West Flotouo, Delta Extension at Le Plaque and Yopleu-Legaleu, delineating potential deposit extensions at Colline Sud, and on assessing the potential of new greenfield targets including Gbampleu, and Delta South East”.
- Endeavour Mining confirms that the 2022 drilling programme “successfully demonstrated that all 7 of the previously thought independent deposits located around the Ity intrusive are in fact a continuous mineralised system. This finding has resulted in the creation of a single resource model for the area which is expected to greatly improve mine planning capabilities”.
- Approximately 20% of the updated resource (1.08moz at an average grade of 1.80g/t gold) is hosted within “sheared clastic sediments in the southern part and skarns in the northern part of the deposit” of the NE trending West Flotouo deposit which has been defined within over a 1km strike length “and the mineralisation remains open along strike and at depth”.
- Additional resources of over 0.51m oz have been estimates at the Walter (10.2mt at an average grade of 1.56g/t), with a further 0.47m oz at each of the Bakatouo (6.8mt averaging 2.14g/t) and Ity Flat (7.0mt averaging 2.09g/t) deposits.
- The company also reports a new discovery at the Gbampleu prospect located 22km south of the plant at Ity where reverse circulation and diamond drilling over a 1.3kmx0.6km north/south trending geochemical anomaly has “confirmed high grade mineralisation … over 450 meters along strike”.
- Among the results from Gbampleu are an intersection of 43.25g/t gold at an average grade of 11.32g/t gold from a depth of 175.8m in hole GP22-051.
- Welcoming the resource upgrade at Ity, Sébastien de Montessus, President & CEO, confirmed that “all three of our flagship assets, Sabodala-Massawa, Houndé and Ity, boast M&I resources above 5 million ounces each, with exploration remaining an integral part of our capital allocation strategy as it underpins our ability to maintain long mine lives and continually optimise our portfolio”.
- He also confirmed that the Ity mine “continues to perform well as it is on track to beat its full-year production guidance of 255—270koz and its AISC guidance of $850—900 per ounce”.
- Today’s announcement follows the recent release announcing the discovery of a 3m oz resource at the Tanda- Iguela project, also in Cote d’Ivoire where Endeavour Mining has outlined an indicated resource of 14.9mt at an average grade of 2.33g/t gold containing 1.1moz and an additional inferred resource of 32.9mt averaging 1.8g/t containing a further 1.9moz of gold.
- VP Exploration & Growth, Patrick Bouisset, welcomed the new geological interpretation showing “a continuous mineralised system” at Ity and said that “we believe that we are well-positioned for continued success in 2023 as we look to delineate further resources. In addition to discoveries made in both the near-mill area and in the Le Plaque area, we are very excited about the discovery made at Gbampleu where several high-grade and thick lenses of mineralisation were identified”.
Conclusion: The expansion of the mineral resource at Ity and the recognition that seven deposits previously thought to be independent are in reality part of a single system follows the recent announcement of a new 3moz gold discovery at Tanda-Iguela in eastern Cote d’Ivoire is likely to attract interest in the exploration potential of Cote d’Ivoire
Oriole Resources PLC (AIM:ORR)* 0.128p, Mkt cap £3.4m – Update on Cameroonian exploration work and strategic plan going forward
- Oriole provides an update on exploration work, both underway and scheduled, for its Cameroonian assets, Bibemi and the Central Licence Package.
- Grassroots exploration work at the Bibemi and CLP projects for the 2022/23 field season is currently underway.
- Bibemi
- A Bakassi Zone 1 site visit and pit optimisation is currently underway – the Company hopes to upgrade a portion of the JORC Exploration Target announced in October to a MRE at JORC Inferred status.
- The competent person’s statement is being finalised now and the MRE is expected by year end.
- The Company plans an infill geophysics programme for H1-2023 targeting Bibemi’s remaining three licenses alongside additional resource-expansion efforts.
- An infill geophysics survey during H1-2023 aims to target a number of identified open-ended anomalies at the Lawa East and West prospects at the Bibemi licenses.
- CLP
- Oriole has nine contiguous licenses as the Central License Package, six East and three West.
- Rock-chip sampling and mapping is currently underway over c.48km2 at Mbe, one of five licenses within the Eastern CLP block.
- Soil sampling at Mbe had previously identified a c.12.5km by 3km-wide gold-mineralised corridor.
- The Company has identified the selection of 495/835 unanalysed samples at Mbe with the potential for analysis to potentially extend mineralisation. This can be expected in 1Q23 alongside ground-based geophysics results.
- Oriole is using ground-truthing work and previous anomalous geochemical data at the Ndom license, also in the Eastern CLP, to explore for potential lithium-bearing pegmatites.
- Anomalous lithium-in-soil values up to 84ppm have been identified at the Eastern CLP licenses in association with a porphyritic granite.
- Similar studies are being executed at the newly-granted Gamboukou licence to identify potential pegmatite and aplite dykes within the granite.
- The Company has also secured an additional license immediately south of Ndom for gold, lithium, and other exploration studies.
- Oriole’s license package at the CLP is currently 4,091km2 .
- Oriole is currently in discussion with the Mining Ministry of Cameroon following the temporary suspension of 3 of the Western CLP licenses as both parties look to resolve ongoing land access issues.
Conclusion: We look forward with anticipation to the results of Oriole’s work to upgrade the Bibemi JORC Exploration Target to a JORC MRE, potentially the first internationally accredited MRE for orogenic gold targets in Cameroon. The 2022/2023 field season currently underway should enable Oriole to further expand their understanding of both the Bibemi and CLP licence package assets and continue to identify future targets.
*SP Angel act as a broker to Oriole Resources
Sibanye-Stillwater* (JSE: SSW) ZAR 4,651, Mkt cap ZAR 131bn – €588m CAPEX approved for Keliber lithium project
- Sibanye reports it has approved capital expenditure of €588m for the Keliber lithium hydroxide project in Finland, of which it owns an 85% controlling interest.
- Construction begins with the Kokkola lithium hydroxide refinery, followed by the four initial open cast and three underground mining operations that will supply ore to the centralised Päiväneva concentrator.
- Concentrate produced at the Päiväneva concentrator is planned to be trucked 66km to the Kokkola refinery which is s forecast to produce an average of 15,000tpa of battery grade lithium hydroxide.
- Keliber plans to raise €104m in equity by the end of next January, as well as at least €250mn of debt to fund project construction.
- Since February, Capex estimates for the project have risen ~25% and opex costs ~60% to €6,750 – though lithium hydroxide prices have risen to $75,000/t.
*An SP Angel mining analyst has visited Sibanye’s Montana operations.
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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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