SP Angel Morning View -Today’s Market View, Monday 31st July 2023

Weak Chinese PMI adds further evidence of the need for pro-stimulus measures

MiFID II exempt information – see disclaimer below

Atlantic Lithium* (ALL LN) – Quarterly report highlights positive DFS on Ewoyaa lithium project in Ghana

Aura Energy* (AURA LN) – Quarterly report highlights the injection of additional equity to progress Tiris and Häggån projects

Bluejay Mining* (JAY LN) – Bluejay to receive £3.85m worth of stock in Metals One for Black Schist project in Finland

Chaarat Gold (CGH LN) – Convertible loan notes and Xiwang equity investment updates

Lynas Rare Earths (LYC AU) – Sales slide as China ramps up production and magnet demand weakens

Patriot Battery Metals (PMET CN) – Lithium Pegmatite MRE reported at 109mt @ 1.42% for CV5

Serabi Gold (SRB LN) – Indigenous communities confirm their support for Coringa mine development

Tertiary Minerals* (TYM LN) – Forest permits received for exploration at Mukai and Mushima North

Yellow Cake (YCA LN) – Quarterly operating update shows rising uranium prices as Niger poses supply threat

Pre-IPO financing for High-Purity Alumina project

Li-ion batteries use a separator membrane made out of High-Purity Alumina

• High-Purity Alumina (HPA) is an inert chemical with high thermal stability. It gives good heat resistance and insulation making it ideal as a coating for separator membranes.
• The project alumina has been shown to be suitable for Li-ion batteries, LED lighting and synthetic sapphire for smartphones and tablets,
• The resource contains a JORC inferred resource sufficient for 10,000 – 20,000tpa of HPA >30 years
• The process uses an innovative process flowsheet combining commercial proven technologies with recent metallurgical tests producing 99.995% alumina.
• CRU estimate demand for HPA powder could reach 187,000t in 2028 from 19,000t in 2018 and substantial demand growth led by Li-ion battery and LEDs.

*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.

VOX Markets:  

31/07/2023: https://audioboom.com/posts/8341813-john-meyer-on-lab-grown-diamonds-bushveld-minerals-power-metals-res-wh-ireland

24/07/2023: https://audioboom.com/posts/8338437-john-meyer-on-improved-liquidity-plus-cornish-metals-beowulf-rainbow-rare-earths-solgold-sove

*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts. We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.

Copper prices rise as optimism holds over China property rebound and Codelco supply issues

• LME copper prices are on track for their best month, rising to $8,670/t on enthusiasm over China property sector.
• Slowing inflation raising the potential for easing rate hikes in the US combined with a spike in China property equities and bonds over a potential rebound in activity have provided a supportive tailwind to copper prices.
• The dollar’s rally has also fizzled slightly, allowing copper to resume its uptrend.
• Codelco warned that it expects production below previous guidance at 1.31-35mt vs 1.35-1.45mt
• The major has cut guidance on an accident at El Teniente. Copper output slid 14% yoy in H1 to 633kt.
• Codelco’s production costs rose 41%. Weather and operational problems continue to weigh.
• Majors continue to scramble for copper exposure, with Glencore moving to acquire the Mara copper project in Argentina from Pan American Silver after Vale sold a 13% stake in its base metals business late last week. (Reuters)

Gold prices hold steady as traders look towards key US data points this week

• Gold prices have held around the $1,955/oz mark following a volatile period of Central Bank meetings last week.
• 10-year yields are holding around the 4% mark, having registered one of their largest session moves this year on last week’s stronger-than-expected US jobs data.
• Expect US employment data on Friday to provide a further catalyst to gold prices, with the labour market taking center stage now that inflation is cooling across western economies.

Economics

US – Further evidence showing slowing inflationary pressures in June was released on Friday.

• PCE (%mom): 0.2 v 0.1 May and 0.2 est.
• Core PCE (%mom): 0.2 v 0.3 May and 0.2 est.
• PCE (%yoy): 3.0 v 3.8 May and 3.0 est.
• Core PCE (%yoy): 4.1 v 4.6 May and 4.2 est.

China – Official PMI numbers that track performance of larger companies suggest overall economic momentum remained weak through H1/23

• Manufacturing sector recorded a fourth consecutive monthly contraction, although, the pace of a decline slowed down.
• Growth in the services sector pulled back with the housing sector continuing to weigh on the recovery.
• Construction was the only services sector that showed shrinking confidence, according to the National bureau of Statistics.
• Manufacturing PMI: 49.3 v 49.0 June and 48.9 est.
• Services PMI: 51.5 v 53.2 June and 53.0 est.
• Composite PMI: 51.1 v 52.3 June.

Eurozone – Growth improved in Q2/23 after posting falling and stagnating over the previous two quarters despite central bank rates at their highest in decades.

• On a less welcome front, measures of headline and core inflation came in strong in July suggesting the ECB will have to keep tightening monetary conditions further.
• GDP (%qoq): 0.3 v 0.0 (revised from -0.1) Q1/23 and 0.2 est.
• GDP (%yoy): 0.6 v 1.1 (revised from 1.0) Q1/23 and 0.5 est.
• CPI (%yoy): 5.3 v 5.5 June and 5.3 est.
• Core CPI (%yoy): 5.5 v 5.5 June and 5.4 est.

Germany – Retail sales came in lower than expected in June although the change was estimated from stronger than previously thought May numbers.

• Retail Sales (%mom): -0.8 v 1.9 (revised from 0.4) May and -0.3 est.

Italy – Growth in the country unexpectedly slipped into a negative territory in Q2/23 on the back of a decline in domestic demand while net exports failed to contribute to growth, Bloomberg writes.

• Weak GDP numbers reflect the effect of higher borrowing costs, weakening global export demand and the rollback of fiscal support.
• GDP (%qoq): -0.3 v 0.6 June and 0.0 est.
• GDP (%yoy): 0.6 v 2.0 (revised from 1.9) June and 0.9 est.

UK – The central bank will announce its interest rate decision this Thursday with expectations for a 25bp hike to 5.25%.

• The decision will follow announcements from the US Fed and ECB last week both increasing rates last week.
• UK headline inflation has been trending lower recently, although, continuing to run at significantly than targeted levels while growth rates in core inflation and labour earnings proved to be stickier than expected.

Australia – The central bank is likely to raise rates by 25bp to a peak of 4.35% as stronger labour market is outweighing recent welcome signs of disinflation.

Russia/Ukraine – Russian missile strike on Kryvyi Rih, the hometown of Ukrainian President Zelensky, kills two people and injures 20.

• The strike follows a drone attack on two office towers in Moscow City over the weekend that prompted the temporary closure of one of capital’s airports.
• Two drones that hit offices were brought down using electronic jamming, while a third was shot down by air defences in Moscow region.

Currencies

US$1.1024/eur vs 1.0872/eur last week. Yen 142.01/$ vs 139.13/$. SAr 17.620/$ vs 17.882/$. $1.286/gbp vs $1.279/gbp. 0.669/aud vs 0.664/aud. CNY 7.145/$ vs 7.155/$.

Dollar Index 101.75 vs 101.87 last week.

Commodity News

Precious metals:

Gold US$1,955/oz vs US$1,949/oz last week

Gold ETFs 91.7moz vs 91.7moz last week

Platinum US$937/oz vs US$944/oz last week

Palladium US$1,239/oz vs US$1,229/oz last week

Silver US$24.36/oz vs US$24.32/oz last week

Rhodium US$4,100/oz vs US$4,100/oz last week 

Base metals:   

Copper US$ 8,676/t vs US$8,620/t last week

Aluminium US$ 2,232/t vs US$2,219/t last week

Nickel US$ 22,233/t vs US$21,959/t last week

Zinc US$ 2,511/t vs US$2,481/t last week

Lead US$ 2,163/t vs US$2,157/t last week

Tin US$ 28,740/t vs US$29,010/t last week

Energy:           

Oil US$84.3/bbl vs US$83.7/bbl last week

• The US Baker Hughes rig count was down 5 units to 664 rigs last week (-103 or 13% y/y), with oil rigs down 1 to 529 units (-76 y/y) and gas rigs down 3 to 128 units (-29 y/y).
• North Sea Transition Authority (NSTA) analysis has calculated the carbon intensity of domestically produced UK gas at 21kg CO2/boe versus an average imported LNG carbon intensity of 79kg CO2/boe.
• Following the sale of its Norwegian E&P business last year, Centrica announced on Friday that it has put on hold the sale of its UK North Sea natural gas fields as the assets are now considered a key part of its portfolio.
• The Morning Energiser has transferred to Edinburgh this week, please feel free to contact David Mirzai if you would like to catch up over a coffee while he’s in town (other beverages are available).

Natural Gas US$2.662/mmbtu vs US$2.614/mmbtu last week

Uranium UXC US$56.15/lb vs US$56.23/lb last week

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$115.1/t vs US$115.3/t

Chinese steel rebar 25mm US$538.4/t vs US$537.2/t

Thermal coal (1st year forward cif ARA) US$133.3/t vs US$133.3/t

Thermal coal swap Australia FOB US$148.0/t vs US$148.5/t

Coking coal swap Australia FOB US$237.0/t vs US$237.0/t

Other:  

Cobalt LME 3m US$33,420/t vs US$33,420/t

NdPr Rare Earth Oxide (China) US$65,468/t vs US$66,068/t

Lithium carbonate 99% (China) US$37,880/t vs US$38,522/t

China Spodumene Li2O 6%min CIF US$4,040/t vs US$4,060/t

Ferro-Manganese European Mn78% min US$1,095/t vs US$1,090/t

China Tungsten APT 88.5% FOB US$310/mtu vs US$313/mtu

China Graphite Flake -194 FOB US$675/t vs US$675/t

Europe Vanadium Pentoxide 98% 7.6/lb vs US$7.5/lb

Europe Ferro-Vanadium 80% 31.85/kg vs US$32.05/kg

China Ilmenite Concentrate TiO2 US$312/t vs US$311/t

Spot CO2 Emissions EUA Price US$100.2/t vs US$99.7/t

Brazil Potash CFR Granular Spot US$340.0/t vs US$340.0/t

Battery News

Battery or vape causes recycling lorry fire

• Council leaders have urged people not to put batteries or vapes in their rubbish bags after a fire broke out on a recycling lorry in Stroud, Gloucestershire.
• “After the contents of a bin had been deposited and compacted, the crew heard an explosion and saw smoke coming from the back of the truck,” a spokesperson said.
• The fire service identified that the fire was caused by a battery or e-cigarette.
• According to a joint investigation by the Bureau, Sky News and the Daily Telegraph, over 168m disposable vapes are bought every year in the UK.
• With over half of single-use vapes being binned, approx. 10t of lithium is ending up in landfill, enough for around 1200 EVs.

Industry calls for urgent support of EVs as uptake slows

• While electric car registrations grew 32.7% in the first six months of this year, equating to an additional 37,719 cars over the same period in 2022, much of that is due to the easing of the chip crisis and other supply issues.
• EVs held 0.9% of the market in 2019, rising to 4.4% in 2020, 7.2% in 2021 and 14.4% in 2022 – it sits at 16.1% to date.
• Private EV registrations are down about 20% yoy – just 13% of Volkswagen ID 5s, 21% of Tesla Model Ys and 41% of Ford Mustang Mach-Es this year have been sold to private customers.

Chinese battery firms ramp up investment in South Korea to get US EV tax credits

• Chinese battery materials firms have announced projects, with South Korean partners, worth at least $4.4b this year to try to meet US EV tax credit rules aimed at lowering reliance on China’s supply chains.
• The US Inflation Reduction Act (IRA), requires at least 40% of the value of critical minerals used in an auto battery to be sourced from the US or a free trade partner to qualify for a $3,750 tax credit per vehicle.
• The IRA, designed to wean the US off the Chinese supply chain for EVs, will also eventually bar tax credits if any EV battery components were manufactured by a “foreign entity of concern”, a provision aimed at China.
• South Korea has a free-trade agreement with the US that would likely make batteries manufactured in the South Korea and later installed in US-manufactured EVs eligible for the federal tax credits.
• Tax credits for South Korea-China JV battery firms could become more complex, as the US Treasury Department has not yet provided a concise definition of “foreign entity of concern” and how it would be applied.
  • China’s Ningbo Ronbay New Energy Technology said last week that Seoul had approved its plan to add 80,000t in cathode materials production capacity to its South Korea facility that can currently produce 20,000t a year.
  • The company said its products produced in South Korea are compliant with IRA requirements on key minerals and can take advantage of the benefits of tariff policies applying to exports to European and US markets.

Company News

Atlantic Lithium* (ALL LN) 22.9p, Mkt Cap £138m – Quarterly report highlights positive DFS on Ewoyaa lithium project in Ghana

(Piedmonth can earn into up to 50% of the Ewoyaa lithium project through the expenditure of around 70% of the project capex)

BUY

• Atlantic Lithium report their end-June quarterly report.
• The company has also appointed Aaron Maurer as Head of Operation Readiness indicating the company’s preparations for production.
• Keith Muller highlights “the DFS considers 94% of the ore processed over the Life of Mine as Reserves, with Inferred Resources excluded from the first five years of operations, providing greater confidence in the viability of the Project.”
• Capex: The first year of Modular DMS is expected to produce c. 38,000t of spodumene concentrate and 170kt of lower-grade secondary product with early modular DMS revenues of ~US$170m intended to cut peak capex.
• Piedmont is expected to find ~70% of the US$185m capex with Piedmont  providing the first US$70m and then 50% of capex thereafter.
• Offtake:  50% of Ewoyaa offtake remains available and could easily fund Atlantic’s capex requirement several times with a pre-payment deal as one of the proposed options.
• Management await the granting of the Mining Lease from the Minerals Commission, hopefully this current quarter.
• We believe the President of Ghana has previously indicated his support for a relatively quick start of production indicating that permits to start mine construction might not be too far away.
• Cash: Atlantic have spent some A$7m over the past 12 months with A$1.5m in the past quarter and A$5.7m contributed by Piedmont under their farm-in arrangement.
• The company held A$15.3m in cash at end June
• DFS project economics:
  • Throughput: ~2-2.7mtpa
  • Total mined ore 30.6mt
  • Spodumene concentrate production: ~300,000tpa (SC5.5 and SC6)
  • Price assumption US$1,587/t with $1,200/dmt long term pricing for SC6% FOB Ghana Port
  • NPV8 post-tax: US$1.5bn
  • IRR: 105%
  • Payback: 19 months
  • Free cash flow: US$2.4bn
  • EBITDA: US$316mpa
  • Revenue US$550mpa
  • C1 Op costs US$377/t
  • AISC US$610/t
  • Capex: US$185m
  • LOM: 12 years
  • LOM revenues increased to $6.6bn

Conclusion:  Atlantic appear to be making good progress on the Ewoyaa lithium project in Ghana. We look forward to the award of the mining license from the Minerals Commission and to the start of construction later this year.

*SP Angel acts as Nomad to Atlantic Lithium. Two mining analysts from SP Angel recently visited the Ewoyaa mine site in Ghana and drove onto Takoradi to check the quality of the road to port. Our intrepid analysts also visited the Ministry of Minerals Commission and MIIF, the Ghana Minerals Income Investment Fund.

Aura Energy* (AURA LN) 10.25p, Mkt Cap £59m – Quarterly report highlights the injection of additional equity to progress Tiris and Häggån projects

(Aura holds 85% of the Tiris Uranium Project, Mauritania)

• Aura Energy’s quarterly report for the 3 months to 30^th June, published today, highlights the raising of A$10.67m comprising A$10m in equity to new and existing shareholders and an additional A$0.67m in the form of a Share Purchase Plan.
• The additional funds are being deployed to “advance development across Aura’s project portfolio” including the Tiris uranium project in Mauritania where the company is completing the Front End Engineering Design (FEED), which is scheduled for completion during Q4 2023, and pursuing financing and offtake options as well as seeking to progress the Häggån Project in Sweden.
• Aura Energy reports a 30^th June cash balance of A$11.27m providing it the financial resources to progress both projects.
• At Tiris, work included optimisation of the “recovery of U₃O₈ within the leaching, ion exchange, and precipitation circuits are designed to optimise the production profile” presented in the Enhanced Feasibility Study which envisages annual production of 2mlbs of U3O8 from the 29.6m lbs contained in ‘Measured and Indicated’ mineral resources.
• Total capital investment at Tiris of US$178m is expected to deliver an after tax NPV_8% of US$226m and IRR of 28% at a US$64/lb U3O8 price with an upside case using a price of US$79/lb in which the same capital expenditure delivers an NPV_8% of US$347m and IRR of 35% over a 17 year mine life.
• Commenting on increasing global interest in uranium to “increase or upgrade nuclear generation capacity”, Aura Energy says that the “growing sentiment towards nuclear energy is starting to impact the uranium spot price, which reached US$57/lbs during June 2023 – approximately 14% higher than 12 months prior”.
• At Häggån, “work progressed on the preparation of a Scoping Study, examining the potential to extract battery metals such as vanadium and other strategically important minerals. Completion of the scoping study is expected to be in Q3 2023”.
• Aura Energy says that “It is clear that the Swedish Government is taking a pragmatic and deliberate approach to determine the solution that will be implemented to decarbonise the Swedish economy. Sweden is currently a leader in fossil-free energy supply, but the government recognises that energy demand will increase substantially over the coming decades.”

*SP Angel acts as Nomad and Broker to Aura Energy

Bluejay Mining* (JAY LN) 1.37p, Mkt cap £15m – Bluejay to receive £3.85m worth of stock in Metals One for Black Schist project in Finland

(Bluejay Mining holds 100% of the Hammaslahti and Enonkoski projects)

• Bluejay Mining report that following the IPO of Metals One on the AIM market in London that it will receive £4m in cash and shares in Metals One.
• The consideration also includes deferred consideration and warrants, subject to certain conditions being satisfied.
• Bluejay holds ~29% of Metal One on Admission made up of 62.5m shares plus £150,000 in cash payable within eighteen months  and one day or an extra  3m shares in Metals one.
•  A further 20m Metals One shares will be issued to Bluejay at any time such that Bluejay’s subscription will not exceed 29.99% of Metals One.
• A warrant over another 7,500,000 shares is also to be issued to Bluejay at an exercise price of £0.05 exercisable for a period of 5 years from Admission.
• Metals One have raised £2.2m at 5p/s resulting in £1.71m to the company after IPO fees and commissions.
• The market capitalisation of the company at 5p is £10.42m.
• Director subscription: Bluejay Mining directors have also bought £30,000 of Bluejay Mining shares at 1.75p.
• While the directors’ subscription in Bluejay is at the same price as the last placing the subscription price represents a 28% uplift on Friday’s close.
• The directors were prohibited from buying shares at the time of the last placing.

Conclusion:  Bluejay directors are backing their company with some additional cash in a show of support. The listing of Metals One helps to bolster Bluejay’s balance sheet and offers the potential to add further upside to Bluejay depending on the results of exploration work to be done on the Black Schist projects in Finland. Metals One is led by Alistair Clayton, a geologist, who formerly worked on the assets has been successful in other areas and Jonathan Owen, a mining engineer.

*SP Angel acts as nomad and broker to Bluejay Mining. The analyst has visited the historic Enonkoski mine site and holds shares in Bluejay Mining

Chaarat Gold (CGH LN) 8.0p, Mkt Cap £55m – Convertible loan notes and Xiwang equity investment updates

• The Company provides an update on the status of convertible loan notes repayment and discussions with Xiwang International Company regarding a potential equity investment.
• The team is negotiating an extension to the 31 July 2023 maturity date for its secured convertible loan of $31.7m (including accrued interest).
• The Company has 10 days to agree an extension with technical event of default to be declared after that under terms of convertible loan notes.
• Xiwang and the Company are continuing discussions regarding new timeline for completion of the $250m equity investment (at 20p/share for a 60% stake in the Company) under the preliminary investment agreement announced earlier this year.
• Xiwang earlier notified the Company that it requires an extension to the agreed deadline of 30 July 2023 to complete due diligence and all internal approval process requirements.

Lynas Rare Earths (LYC AU) A$6.7, Mkt cap A$6.3bn – Sales slide as China ramps up production and magnet demand weakens

• Lynas reports REO sales revenue for the quarter fell to A$157m vs A$237m in the previous quarter.
• Volume sales fell to 4,050 REOt vs 4,914REOt in the previous quarter.
• Management notes low demand and prices from PrNd markts due to weak magnet demand in Japan, noticeably from the factory automation industry.
• The Company also notes an oversupply of La-Ce.
• Mt Weld delivered record quarterly concentrate production, however.
• Full plant commissioning at the Kalgoorlie Rare Earths Processing Facility commenced during the quarter.
• Lynas notes they ‘will hold additional inventory directly’ as a result of low market pricing and Kalgoorlie ramp up.
• Dysprosium prices are reported to have improved and the company notes sustained positive demand for heavy rare earths from traction motors.
• The Company is monitoring China production quotas for a guide to supply going forward.

Patriot Battery Metals (PMET CN) C$15.32, Mkt Cap $1.6bn – Lithium Pegmatite MRE reported at 109mt @ 1.42% for CV5

• Patriot Battery Metals releases the first Mineral Resource Estimate for the CV5 Spodumene Pegmatite project.
• The MRE is based off 163 core holes over 57,385m.
• It stands at 109.2mt @ 1.42% Li20 using a 0.40% Li20 cut-off for 3.835mt LCE.
• The resource has been modelled over a single, continuous pegmatite body ranging from a true thickness of 8m to 130m.
• The resource is now the largest lithium pegmatite resource in the Americas.
• Management emphasises that there is ample room for expansion at the resource, with the CV5 section remaining open at strike and to depth on either side.
• Patriot also has known spodumene pegmatite clusters at the CV4, CV8, CV9, CV10, CV12, and CV13, which they may be able to include in the resource. The remaining 2023 drill campaign is expected to support an upgraded resource in 2024.

Conclusion: Patriot’s 20-month drill programme has delivered an impressive spodumene lithium resource at high grades and tonnage. We note that a portion of the mineralised body is overlain by a ‘shallow glacial lake’, whose depth ranges from 2m to 18m. This has limited additional drilling towards the top section of the resource and will require draining for eventual mine development. It will be interesting to see how this plays out with permitting authorities in Quebec, although the Company does not seem to envisage any issues.

Serabi Gold (SRB LN) 23p, Mkt Cap £17m – Indigenous communities confirm their support for Coringa mine development

1. Serabi Gold has reached agreement with local indigenous community representatives for the development of its Coringa mine in Brazil.
2. The agreement, with the “Kabu Institute … and the Mantino Indigenous Association … who together represent all of the communities of the Baú Indigenous Territory …  [also sets out] … the steps to be followed to complete the consultation process”.
3. Serabi Gold explains that the agreement is “the culmination of an extended period of engagement with the indigenous communities to fully understand and provide assurances regarding their expectations about the project”.
4. “Over the next 180 days the Parties will complete all remaining aspects of the consultation process in compliance with Convention No 169 of the International Labour Organisation”.
5. CEO, Mike Hodgson, explained that the agreement with the indigenous communities represents a “significant step forward for the development of Coringa … [and he confirmed that] … there is a willingness from all Parties” … [to complete the remaining studies and consultation] … as quickly as possible”.
6. Acknowledging that “the past 18 months has generated some uncertainty regarding Coringa and Serabi’s ability to develop the project and realise its full potential … [Mr. Hodgson said that he hoped that] … others share my view that this agreement significantly reduces this uncertainty and provides a strong platform for the Company to move forward with confidence”.

Conclusion: Agreement with the host communities is an important step forward in delivering the Coringa mine development and we look forward to further news on its progress as the consultation and operational work proceeds.

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

Tertiary Minerals* (TYM LN) 0.1p, Mkt cap £2m – Forest permits received for exploration at Mukai and Mushima North

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• Tertiary has received its required permissions to begin soil sampling at the Mukai and Mushima North project licences.
• The two projects enjoy a data sharing agreement with FQM, and exploration to date has been delayed by permission delays from the Forest Department in Zambia.
• Mushima North holds two primary targets, C1 and A1.
• A1 hosts a 1.7km copper anomaly with supporting arsenic and zinc anomalies in line with Copperbelt-style mineralisation.
• C1 holds a wide gravity anomaly and coincident copper soil anomalies identified by BHP, with recent analysis of historic drill cores encouraging further exploration.
• Mukai lies adjacent to FQM’s Trident Project and west of Arc’s JV with Anglo-American.

Conclusion: The receipt of exploration approval for Mukai and Mushima North was the final hurdle before Tertiary could get fully underway with their exploration programmes across their five licences in Zambia. The Company’s primary target now is completing soil sampling programmes at Mushima North, Mukai and Konkola West, which hold the most exciting targets of the portfolio. We look forward to updates from the campaign and the release of potential drill targets as and when they are generated.

*SP Angel acts as Nomad and Broker to Tertiary Minerals

Yellow Cake (YCA LN) 419p, Mkt cap £847m – Quarterly operating update shows rising uranium prices as Niger poses supply threat

• Yellow Cake reports that the uranium spot price has risen from $50.65/lb to $56/lb on 30^th June 2023.
• It notes that spot market activity has improved in the market with 14.4mlb U₃O₈ transacted in Q2 vs 12.6mlb transacted in Q1.
• However, volumes remain low on a year on year basis following Sprott’s slowdown in purchases.
• YCA’s NAV sits at £4.50/share at the end of the period using a $56/lb uranium price.
• Sprott’s uranium fund now stands at 61.75mlb U₃O_8.
• China’s uranium capacity is expected to increase to 18% of total electricity generation by 2060.
• India is looking to increase capacity from 3.2% today to 9% by 2047.
• The Company expects uranium contracting and the threat of restrictions of Russian nuclear fuel catalysed by US legislation to be supportive of uranium prices going forward.
• Niger is a major supplier of uranium ex-Kazakhstan, with supply concerns mounting following a military coup last week.

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

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London

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

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

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.

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%