SP Angel Morning View -Today’s Market View, Tuesday 8th August 2023

China Rare Earth exports rise as demand steadies following downturn

MiFID II exempt information – see disclaimer below

Asiamet Resources (ARS LN) 1.25p, mkt cap £26m – BKM project financing progress report

Atlantic Lithium* (ALL LN) 22.9p, Mkt Cap £138m – Infill and extension drilling shows high-grade results. Green minerals press speculation in Ghana.

Cornish Lithium (Private) – $67m investment from UK Infrastructure Bank, TechMet and US PE fund.

Glencore (GLEN LN) 439.5p, Mkt cap £57bn – Half-year results and confirmation of commitment to proceed with Teck Resources merger

KEFI Gold and Copper* (KEFI LN) 0.6p, Mkt Cap £32m – Tulu Kapi Project update

Kore Potash* (KP2 LN) 0.6p, Mkt Cap £19m – EPC proposal update and a $1.0m raise

Tirupati Graphite (TGR LN) 32p Mkt Cap £33m – Quarterly production and business update

Rare Earths – China rare earth exports pick up as demand steadies

• China’s trade data shows rare earth exports rose 49% yoy to 5,426t.
• The volume marks the highest since March 2020, rising for the past four months.
• Buyers had become concerned that China would limit NdPr exports following their restriction of Gallium and Germanium.
• Interestingly, Lynas management noted plans to hold additional inventory of rare earth oxides in anticipation of an ‘inevitable uptick in the market.’

Tin – Myanmar tin ban expected to be buffered by soaring inventories and weak end-user demand

• Antaike is forecasting a tin ore shortage in China following the stoppages in Wa-ruled areas of Myanmar.
• The research house is forecasting a 6kt shortage this year – Myanmar exported 30kt of tin ore last year to China. (50% of total imports)
• Antaike forecasts that the ban may last just three months.
• However, analysts do not expect a significant additional price spike following tin’s 12% rally this year.
• Bullish positions in LME more than doubled since April, with LME tin inventories more than tripling.
• Indonesia boosted refined tin output by 33% this year.
• Monthly tin concentrate production is rising, up 25% in May vs Jan, with refined output up 14% over same period.
• Semiconductor demand is also weakening, with TSMC noting sales sliding 10% in 2023.
• Electronics demand is expected to see accelerated weakness going into the end of the year.

Copper prices extend weakness as China data disappoints and property concerns resurface

• Copper prices sold off again this morning to $8,440/t following a fresh round of disappointing China data and the default of Country Garden on two minor bond coupons.
• Exports fell 14.5% in July, defying expectations, imports down 12.4% and trade surplus at $80.6bn.
• YTD imports down 7.5% , with both domestic demand and export growth both showing weakness.
• Economists expect exports to continue to slow into year end, with domestic demand also expected to remain weak.
• Unwrought copper and copper production imports to China fell 2.7% yoy, flat mom at 451kt in July.
• Copper demand remains weak over the summer weakness period.

Economics

China – Trade collapsed more than forecast in July in blow to recovery with weak numbers pointing to dire state of both overseas and domestic markets.

• Exports (%yoy): -14.5 v -12.4 June and -13.2 est.
• Imports (%yoy): -12.4 v -6.8 June and -5.6 est.
• Foreign exchange reserves stood at US$3.204tn in July vs US$3.193tn in June

Country Garden, the largest developer in China by sales, missed coupon payment on two international bonds due on Sunday, in a sign of growing liquidity pressures

Country Garden saw its equities tumble on bond default (FT)

• Country Garden has missed two dollar bond coupons due last Sunday with bonds due in Feb/26 and Aug/30 now trading at 13c and 11c on the dollar, respectively.
• The coupons were worth a total of $22.5m.
• The Company also pulled a $300m share placement at the last minute last week and came out with an odd announcement that it is planning to buyback its stock from the open market.
• Country Garden holds liabilities worth $194bn, stating that its cash reserves have tumbled on weak sales and refinancing environments.
• An index tracking China mainland developer is down 16% from levels reached at the end of July on speculations of Beijing-backed stimulus.
• State developers are conducting far higher equity valuations, however, with Yuexiu Property and China Resources Land holding PE ratios of eight.

Italy – Government approves one-off 40% windfall tax on banks

• What else would you expect from a nation where banks accept Parmesan cheese as collateral
• It’s better than crucifying Christians and feeding slaves to the lions.

Ghana – speculation over a new higher 10% royalty risks turning off investment

• Governments should think rationally and carefully about the impact of raising sales taxes.
• Royalties come off the top line and severely disadvantage local miners when margins tighten.
• There are many new spodumene discoveries in the world and capital will naturally flow to nations which offer stability, confidence and help nurture nascent industries.
• Many miners will strike a deal with individual governments at the time of major investment which is where the bankers can step in to demand more  Erta Ty and equitable returns.
• Ultimately, any delay to a project hits its value so let’s hope the Ghana government is prepared to compromise on a fair deal.

Ebola – Emergent BioSolutions receives BARDA procurement contract worth up to $704m for Ebola treatment

• Last week, Emergent BioSolutions (EBS.NY) was awarded a contract worth up to $704m by the Biomedical Advanced Research and Development Authority (BARDA), a US government agency,
• The contract covers the advanced development, manufacturing scale-up, and procurement of Ebanga™, an antibody-based antiviral treatment for Ebola virus disease.
• The 10-year contract consists of a base period of performance with two option periods for advanced development valued at c.$121m, and option periods for procurement of Ebanga™ treatment over five years valued at up to $583m.
• If all option periods are exercised, the total contract value will be valued at up to c.$704m.
• Conclusion: The contract highlights the significant funding the US government can provide to support its biosecurity objectives.
• BARDA funding can support the development of treatments which have a limited commercial market in the US but are necessary for ensuring national preparedness in the event of a disaster, such as an Ebola outbreak.
• Ebola is a highly contagious and often fatal illness with an average case fatality rate of c.50%.
• Whilst there have been several outbreaks, particularly in central and west Africa, there are limited effective treatment options are available.
• The development of treatments against the virus remains a high priority due to its potential as a biological weapon.
• Note, Ebola highly unlikely to become pandemic as it disables its victims too quickly for widespread contagion.

Quote of the week from Rod DeSantis: “If you want to protect life, it’s a bottom-up movement . . . ” on the abortion issue in the US

Currencies

US$1.0985/eur vs 1.0987/eur yesterday. Yen 142.85/$ vs 143.30/$. SAr 18.787/$ vs 18.503/$. $1.276/gbp vs $1.273/gbp. 0.653/aud vs 0.658/aud. CNY 7.213/$ vs 7.193/$.

Dollar Index 102.26 vs 102.23 yesterday.

Commodity News

Precious metals:

Gold US$1,934/oz vs US$1,937/oz yesterday

Gold ETFs 90.9moz vs 91.1moz yesterday

Platinum US$918/oz vs US$930/oz yesterday

Palladium US$1,239/oz vs US$1,262/oz yesterday

Silver US$23.18/oz vs US$23.59/oz yesterday

Rhodium US$4,100/oz vs US$4,100/oz yesterday 

Base metals:

Copper US$ 8,434/t vs US$8,545/t yesterday

Aluminium US$ 2,215/t vs US$2,235/t yesterday

Nickel US$ 21,055/t vs US$21,312/t yesterday

Zinc US$ 2,467/t vs US$2,503/t yesterday

Lead US$ 2,125/t vs US$2,150/t yesterday

Tin US$ 27,545/t vs US$27,700/t yesterday 

Energy:           

Oil US$84.8/bbl vs US$86.3/bbl yesterday

• Crude oil prices edged lower on weak Chinese data ahead of the peak season for construction and manufacturing activity that typically commences in September.
• Woodside has agreed to sell a 10% interest in the ~8mtpa Scarborough gas project to LNG Japan for $500m effective 1/1/22, which is expected to amount to $880m in 1Q24, with the first LNG cargo targeted for 2026.
• Sir Keir Starmer has said Labour would not tear up the 100 new drilling licences in the North Sea that Rishi Sunak plans to grant, saying he would  only ban the granting of new licences to explore oil and gas fields.
• Following on from the initial 12MW pilot installed in 2020, Dominion Energy announced that its $10bn 2.6GW Coastal Virginia offshore wind farm development was on budget and on track for completion in late 2026, with federal approval to commence works expected from the US Bureau of Ocean Management (BOEM) in 2H23.

Natural Gas US$2.715/mmbtu vs US$2.599/mmbtu yesterday

Uranium UXC US$56.25/lb vs US$56.25/lb yesterday

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$101.9/t vs US$105.1/t

Chinese steel rebar 25mm US$521.5/t vs US$527.4/t

Thermal coal (1st year forward cif ARA) US$123.0/t vs US$115.0/t

Thermal coal swap Australia FOB US$144.0/t vs US$142.0/t

Coking coal swap Australia FOB US$236.0/t vs US$236.0/t

Other:  

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

NdPr Rare Earth Oxide (China) US$65,572/t vs US$65,573/t

Lithium carbonate 99% (China) US$35,004/t vs US$35,850/t

China Spodumene Li2O 6%min CIF US$3,610/t vs US$3,710/t

Ferro-Manganese European Mn78% min US$1,049/t vs US$1,045/t

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

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

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

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

China Ilmenite Concentrate TiO2 US$311/t vs US$313/t

Spot CO2 Emissions EUA Price US$90.5/t vs US$92.4/t

Brazil Potash CFR Granular Spot US$352.5/t vs US$345.0/t

Battery News

WeLion planning IPO as automakers embrace next generation batteries

• Chinese battery maker WeLion is planning to go public as automakers begin to embrace next-gen EV batteries.
• WeLion supplies Nio with 150kWh semi-solid state battery packs for its ES6 sports utility vehicle – the vehicle has a range of 1000km.
• The cell has an energy density of 360Wh/kg, WeLion CEO Li Hong said. That’s higher than the estimated 300Wh/kg of Tesla’s 4680 battery.
• The company is targeting a 20-fold surge in sales by 2025.
• To meet its ambitious sales goal, WeLion is building four more battery production facilities in China to boost its annual capacity to 30GWh by 2025, from 6GWh now.

Japan targeting faster EV charging to encourage adoption

• Japan is looking to accelerate the adoption of EVs by doubling the output of EV chargers.
• The Ministry of Economy, Trade and Industry has announced plans to set new standards for quick chargers used in EVs and plug-in hybrids.
• Under the new standards, operators will be required to increase the output of quick chargers to at least 90kW by 2030 – more than double the current average output.
• In high traffic areas and places with heavy demand, chargers with an output of around 150kW are being planned.
• The aim of increasing the output of chargers is to shorten recharging times and make EVs more convenient for drivers and by reducing the time it takes to recharge, it is hoped that more people will consider owning an EV.

Company News

Asiamet Resources (ARS LN) – 1.25p, mkt cap £26m – BKM project financing progress report

• Asiamet Resources has issued a progress report on its project financing for the BKM copper project in Kalimantan.
• The company advises that site visits by the independent technical expert, SRK and by “a potential lead bank” have recently been completed as part of the due diligence process.
• “It is envisaged the PLF … [potential lead financier] … will work together with top tier Indonesian banks on the overall debt financing package for the BKM copper project”.
• Site visits reviewed logistics arrangements, the geological aspects of the project as well as “all aspects of the BKM project feasibility study update … [and] … community engagement and ESG development”.
• Today’s announcement also highlights “Growing interest from Chinese Engineering, Procurement and Construction (“EPC”) contractors and proposed project partners introduced through China based advisor, Zenith Capital. Engagement with Indonesian EPC and Engineering, Procurement, Construction and Management (“EPCM”) groups”.
• Asiamet Resources also comment on “escalating interest in securing the copper cathode off-take for the BKM project. Several leading international metals trading groups are advancing their due diligence to provide indicative term sheets for pre-payment financing tied to copper cathode off-take”.
• In March, the company published an updated capital cost estimate of US$236.5m for the BKM Copper Project and said that it expected to generate savings from optimising the project.
• CEO, Darryn McClelland, said that the site visits had established “the financiers’ expectations for engagement of project execution contractors … [and he also said that] … Several different project financing models involving the supply of equipment and/or construction services as well as partnering to financially support development of the project are being discussed” with potential Chinese suppliers”.
• Mr. McClelland highlighted the scarcity of new copper projects and said that “the BKM copper heap leach project is strategically positioned to deliver LME grade A copper cathode into a supply constrained Asian market …  [and explained that the parties are] … targeting completion of all requirements for first stage credit approvals before the end of this year”.

Conclusion: We look forward to further news of progress on financing the BKM over the coming months.

Atlantic Lithium* (ALL LN) 22.9p, Mkt Cap £138m – Infill and extension drilling shows high-grade results. Green minerals press speculation in Ghana.

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

• Atlantic Lithium have responded to press speculation in Ghana in relation to potential new government legislation on ‘green minerals’ including lithium.
• Speculation suggests the government may impose a sliding scale royalty scheme with royalties exceeding gold royalties at certain price levels.
• The state’s carried interest is also expected to rise modestly from the current rate required from gold miners.
• We understand the government is keen to see downstream processing in Ghana but we are also told miners should be allowed to export lithium concentrates till a refinery is built.
• This follows a similar pattern to the gold industry where gold miners were allowed to export gold concentrates and dore but are now required to refine gold in Ghana.
• The government of Ghana has an underlying right to buy all minerals produced in country and like most other nations is understandably keen to see value added in country.
• Management are in regular and ongoing discussion with the Minerals Commission for the early development of the Ewoyaa lithium mine.
• Livista, a European refinery company, is currently considering a site which it has been offered close to the port of Takoradi for the construction of its first non-European lithium refinery.
• Infill and Extensional drill results:
• Management report results from the latest 5,444m of infill and exploration drilling at Ewoyaa as part of a larger 18,500m drill program.
• Two SP Angel mining analysts were recently at site to see Geodrills’ magnificent EDN2000HC automated drill rig churning out reverse circulation chippings with round the clock supervision and logging of drill chips.
• Drilling is designed to increase the proportion of ‘Indicated Resources’ from lower confidence ‘Inferred resources’ at Ewoyaa South-2 for future mine scheduling and resource growth.
• Intersections include:
  • 23m at 1.75% Li2O from 184m
  • 15m at 1.3% Li2O from 68m
  • 14m at 1.27% Li2O from 48m
  • 9m at 1.57% Li2O from 263m
  • 14m at 0.99% Li2O from 6m
  • 11m at 1.22% Li2O from 65m
  • 13m at 0.97% Li2O from 96m
  • 10m at 1.22% Li2O from 202m
  • 9m at 1.33% Li2O from 94m
  • 11m at 0.98% Li2O from 106m
• Seismic survey using passive seismic is being demobilised due to limitations with not all known pegmatites identified by the survey.
• The survey did identify a 10m wide pegmatite, an extension of a known pegmatite though the survey generally saw limitations on targets less than 20m true thickness.
• The team see greater value in drilling now the seismic survey has shown how the structures run.
• Broader exploration will continue to use soil sampling, geophysics and auger drilling ahead of RC drill testing.

Conclusion:  The government of Ghana is treading carefully with its new ‘Green minerals’ legislation. Ministers do not want to risk losing out on investment at a critical time for the ‘Green metals’ industry by imposing overly harsh royalty, ownership and export regimes which could cause investment to move to other countries for lithium and other green metals supplies. Ewoyaa remains on track to be Ghana’s first lithium mine and is currently waiting on the government to settle on its new ‘Green minerals’ regime for its mining license.

*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 and see the infrastructure for the potential new Livista refinery site. Our intrepid analysts also visited the Ministry of Minerals Commission and MIIF, the Ghana Minerals Income Investment Fund.

Cornish Lithium (Private) – $67m investment from UK Infrastructure Bank, TechMet and US PE fund.

• The UK Infrastructure Bank has invested £24m into Cornish Lithium to help advance its Cornish lithium projects.
• EMG, a PE fund from the US, has invested an additional £24m whilst TechMet, Cornish Lithium’s largest shareholder, has also invested an additional $7m into the Company’s equity.
• EMG has AUM of $14bn and targets the energy and minerals sectors.
• Techmet has now invested $30m into Cornish Lithium, backed by the US Government.
• Cornish Lithium will also offer up to £6.9m in equity to retail through Crowdcube.
• The funds will be used to develop the Trevalour hard rock project to ‘construction-ready status’, with funds also being directed towards engineering design work for a demonstration-scale geothermal waters extraction facility.
• Cornish Lithium is aiming to extract 8,000t pa lithium hydroxide from the repurposed china clay (kaolin) pit at Trevalour. They are aiming to complete the feasibility study to progress the project.
• At the brine project, funds will be used to drill additional exploratory boreholes, with ‘detailed engineering studies required,’ according to management.
• The investment indicates a hunger within the UK for the supply of hard-rock lithium mineral for refining so Li-ion battery producers can meet local content rates for the future export of EVs into Europe.

*An SP Angel Analyst has visited Cornish Lithium’s geothermal brine assets

Glencore (GLEN LN) 439.5p, Mkt cap £57bn – Half-year results and confirmation of commitment to proceed with Teck Resources merger

• Reporting interim results for H1 2023 “Against the backdrop of a normalisation of commodity market imbalances and volatility” Glencore reports a 20% decline in revenue to US$107bn (H1 2022 – US$134bn) and a 50% lower adjusted EBITDA of US$9.4bn (H1 2022 – US$18.9bn).
• The company says that “Net income attributable to equity holders was $4.6 billion ($12.1 billion in H1 2022), down 61%”.
• Industrial activities, including mining and energy products contributed US$7.4bn (79%) of the adjusted EBITDA (H1 2022 – US$15.0bn or 79%) with a contribution of US$2.0bn (H1 2022 -US$3.7bn) from the Group’s marketing activities.
• Metals and mining contributed 41% (US$3.06bn) of the industrial EBITDA (H1-2022 – US$5.88bn or 39%) of industrial EBITDA. A further US$4.53bn was generated by the in-house coal businesses in Australia, South Africa and S America.
• Within Glencore’s metals and mining operations copper operations generated US$2.12bn of EBITDA (H1 2022 – US$3.29bn) from 4% lower production down to 488kt vs 510kt in same period 2022.
• Zinc operations, including Kazzinc provided a further US$0.59bn of EBITDA (H1 2022 – US$1.22bn).
• The overall contribution of nickel operations was a negative EBITDA of US$20m reflecting an EBITDA loss of US$252m from Koniambo which offset positive performance in Australia.
• Chief Executive, Gary Nagle confirmed that despite initial rejection of its merger offer to Teck Resources, “we remain willing to pursue the … merger … [and]… we have submitted an alternative proposal to acquire Teck’s steelmaking coal business”.
• He also said that “Glencore is fully committed to ensuring that a transaction with Teck would benefit Canada and is open to working with Teck to identify a comprehensive suite of commitments for the benefit of all relevant stakeholders”.
• Looking to the future, Mr. Nagle said that “Moderating inflation and supportive government policy in China across key end-user sectors, are bringing a more positive macroeconomic backdrop in H2 2023. Low metal inventories, higher production costs, geopolitical uncertainty and energy transition demand are all supportive of above-average real-term prices through the cycle and into the longer term”.

KEFI Gold and Copper* (KEFI LN) 0.6p, Mkt Cap £32m – Tulu Kapi Project update

• The Company commented on the earlier announcement by the Ethiopian Government to declare a state of emergency in the neighbouring Amhara region in Ethiopia.
• The current conflict area in the Amhara region, specifically at Gondar, is located ~700km from the Tulu Kapi Gold Project in the Oromia region.
• Nevertheless, the team highlighted that security of the project area has been running “red zone” (higher risk category) protocols deposite the Project area typically rating as “green” (low risk) to ensure secure onsite operations and protect the timing of the Project launch.
• All project funding partners are reported to remain well informed of onsite developments with detailed monthly security reports provided an independent third party experts (Constellis) covering local and regional security status.
• The latest report read “KGM’s approach to security at the Project site and the transport routes in and out, are sensible, pragmatic and in line with security best management practice”.
• The team is currently finalising project funding with the schedule for community resettlement preparations to start Q3/23 ahead of procurement and construction start in Q4/23.

*SP Angel acts as Nomad and Broker to KEFI Gold and Copper

Kore Potash* (KP2 LN) 0.6p, Mkt Cap £19m – EPC proposal update and a $1.0m raise

• PowerChina International completed a review of the Kola Potash Project design and construction schedule.
• Results show that further engineering design works must be completed before PowerChina and its subsidiary SEPCO Electric Power Construction present an EPC proposal to the Company.
• Additional design areas include the underground mine, mineral processing jetty and transhipment operations, energy transportation and storage, conveyor systems and material handling.
• Further works will cost in excess of $10m to complete with the Company agreeing with PowerChina that the Company’s contribution to additional costs will be capped at a maximum of $5m and the balance to be covered by PowerChina.
• The Company will need to make an initial payment of $1.0m with the remaining amount to be paid in three tranches between 25 October 2023 and 12 months from the date the Company signs the EPC contract (Jan/24 exp).
• PowerChina and SEPCO are reported to have already mobilised some personnel at site with works to be ramped over coming months.
• SEPCO provided an updated schedule regarding further works and EPC proposal:
  • Site visits during the months of August 2023 and September 2023;
  • Completion of all of the engineering design works before end December 2023;
  • EPC Contract offer to be made to the Company during January 2024;
  • Kore Potash and SEPCO scheduled to sign the EPC contract before the end of January 2024.
• Separately, the Company completed a $1.0m raise through a combination of new shares and convertible loans.
• New shares raise $0.8m through an issue of 124m new shares at 0.5p each.
• Convertible loan notes have been issued to David Hathorn, the Chairman of the Company, for $0.2m.
• Notes bear a zero interest and will be converted into 31m new shares at 0.5p once approval for the conversion is approved at a General Meeting to be held in due course.
• If not approved, convertibles are repayable within three months from 24 July 2023.
• Halequin Investments, a substantial shareholder in the Company (10.8%), is subscribing for 31m new shares (ie 20% of total $1m).
• Oman Investment Authority (19.4% shareholder) and Sociedad Quimica y Minera (15.7% shareholder) will be offered the opportunity to subscribe for new ordinary shares over the coming 21 business days.

Conclusion: Following the completion of the Kola Potash Project design and construction schedule, PowerChina concluded that additional design works will be required to be carried before the EPC proposal is presented that will cost the Company a maximum of $5m. The Company agreed to postpone most payments to after the signing of the EPC contract with an immediate payment of only $1m. Revised EPC proposal is expected to be presented in Jan/24 followed by the singing of the contract same month that in turn paves the way for the project funding proposal by the Summit Consortium (within six weeks of EPC terms finalisation).

*SP Angel acts as Nomad and Broker to Kore Potash

Tirupati Graphite (TGR LN) 32p Mkt Cap £33m – Quarterly production and business update

• Tirupati Graphite provides an operational and financial update for Q1 (ending June 30^th).
• Production for the period was 2,371t vs 822t over same period last year.
• Q1FY24 sales stood at 2,772t vs 803t over the same period last year.
• The ramp up is a result of the completion of the Vatomina and Sahamamy projects, which have a combined annual capacity of 30kt.
• Tirupati is targeting 2kt monthly production of flake graphite.
• Management expects to reach c.50% capacity utilisation this quarter and 75% capacity in Q3.
• Production and sales expected exceed last year’s full 12m revenue of £2.89m before the end of this month.
• The Company is working on improving cash resources through non-dilutive working capital arrangements.
• Management acknowledges that there is no current ‘supply-deficiency of flake graphite’, they comment that ‘it is clear from forecasts that supply will increasingly fail to keep up with growing demand.’

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

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.

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%