SP Angel Morning View -Today’s Market View, Thursday 7th September 2023

Metals soften as US dollar strength limits Chinese buying capacity

MiFID II exempt information – see disclaimer below

Andrada Mining (ATM LN) – Drilling results from the Lithium Ridge prospect, Namibia

Chaarat Gold (CGH LN) – H1 results indicate that proposed sale of Kapan expected to be completed by the end of September

Condor Gold* (CNR LN) – Interim report confirms continuing buyer interest in La India as exploration reveals further potential along the Cacao trend

Cornish Metals* (CUSN LN) – Appointment of Chief Development Officer

Liontown Resources (LTR Au) – Block trade at premium to Albemarle’s takeover offer fuels bidder speculation as spodumene M&A heats up

Rainbow Rare Earths (RBW LN) – Results from Uberaba phosphogypsum

Serabi Gold (SRB LN) – Exploration results from the Matilda Copper Project

Tertiary Minerals* (TYM LN) – BUY– Additional details on Storuman project update

Vale to invest $9bn in base metal investment in Indonesia

• Vale is eyeing further Indonesian expansion, with $9bn going towards base metals development.
• The Company is planning a high-pressure acid leaching nickel plant, according to CEO of local unit Naidoo. (Reuters)
• The Sulawesi project is partnered with Zheijiang Huayou Cobalt for two plants.
• Vale is eyeing a 60ktpa nickel and 5ktpa cobalt output from Sorowako and 120ktpa of nickel from Pomalaa.

Copper slides as dollar rally continues as China construction enthusiasm wanes

• Copper prices fell below $8,300/t for the first time since August 22^nd.
• The sharp move higher in the dollar is weighing on the metal, with a weaker yuan reducing the buying power of copper’s largest customer.
• Import and export data continues to show weaken domestic demand.
• SANY Heavy Industry, China’s largest construction equipment producer, noted domestic demand remains weak and is expected to stay muted through 2023. Revenue for the domestic sales fell 27% in H1 yoy.
• The Yangshan copper premium is showing signs of exhaustion, peaking at $61/t as import demand for refined products weakens.
• Copper imports in August fell 5% yoy but rose 5% mom.
• January-August copper imports are down 10% yoy but concentrate imports for August hit their highest on record.
• Smelters continue to churn out supply in China, up 15.5% yoy to 989kt on higher TCRC charges and a glut of concentrate.
• Supply continues to flow from CMOC’s TFM mine in the DRC, where concentrate had been stuck over a dispute with Kinsasha.

Gold prices slide as US Treasury sell-off continues and dollar pushes higher on

• Spot gold prices fell to $1,915/oz yesterday before ticking up to $1,920/oz.
• The move follows a push higher in US Treasury yields as US ISM services data shows continued strength in the economy.
• Fed officials continue to leave the door open to hikes come November, despite the market pricing in a pause in September.
• The jump higher in yields came despite the Bank of Canada’s decision to pause and Poland slashing rates by 75bp vs 25bp expected.

Nickel prices rise as Indonesia delays mining leases

• The relatively new raft of Chinese nickel smelters which were forced to set up in Indonesia to access local supply are increasingly being forced to look for nickel pig iron ore in the Philippines.
• One suspects the Chinese might be pretty upset at this action and we wonder what the Indonesian’s will extract from local Chinese smelting companies to ease the situation.

Economics

US – PMI data

• US Services PMI 50.5 vs 51 expected and 52.3 in July
• ISM non-manufacturing PMI 54.5 vs 52.5 expected and 52.7 in July

China – Exports fall less than expected but still show significant decline on last year’s Covid elevated numbers

• Exports down -8.8% in August mom vs -9.2% expected and -14.5% in July
• Imports down -7.3% vs -9% expected and -12.4% in July
• Trade balance stands at $68.4bn vs $73.9bn expected and $90.6bn in July.

China boosts iron ore imports in anticipation of construction rebound

• Chinese iron ore imports climbed 14% vs July, as steel mills continue to produce at elevated levels.
• Tangshan steel mills are ramping up production following air quality control in July.
• Steel margins are shrinking as iron ore prices rise.
• Hot metal production climbed to 2.46mt, up 2% mom and 7% yoy.
• However, steel exports climbed 35% yoy, given weak domestic demand.

Currencies

US$1.0712/eur vs 1.0735/eur previous. Yen 147.52/$ vs 147.42/$. SAr 19.237/$ vs 19.225/$. $1.247/gbp vs $1.257/gbp. 0.638/aud vs 0.638/aud. CNY 7.326/$ vs 7.312/$.

Dollar Index continues to strengthen to 104.92 vs 104.70 previous.

Commodity News

Precious metals:

Gold US$1,918/oz vs US$1,924/oz previous

Gold ETFs 89.7moz vs 90moz previous

Platinum US$908/oz vs US$923/oz previous

Palladium US$1,205/oz vs US$1,208/oz previous

Silver US$23.07/oz vs US$23/oz previous

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

Base metals:

Copper US$ 8,344/t vs US$8,442/t previous

Aluminium US$ 2,191/t vs US$2,194/t previous

Nickel US$ 20,250/t vs US$20,915/t previous

Zinc US$ 2,454/t vs US$2,474/t previous

Lead US$ 2,230/t vs US$2,226/t previous

Tin US$ 26,110/t vs US$26,325/t previous

Energy:

Oil US$90.3/bbl vs US$89.8/bbl previous

• Crude oil prices edged higher as the API reported that US crude stocks fell by 5.5mb (-1.4mb expected) w/w, providing further evidence of the OPEC+ strategy of draining global supplies to support prices.
• European energy prices fell on news that talks between Chevron and LNG unions in Australia will continue for another day, prompting workers to put their threatened strikes on hold.
• EU natural gas storage levels rose just 0.2% w/w to 92.5% full (vs 82.2% 5-Yr average), with all EU nations reporting storage levels above 90% storage to lift overall storage to 1,052TWh.
• The US Interior Department is cancelling leases sold in a January 2021 auction of parcels in the Arctic National Wildlife Refuge’s Coastal Plain that was mandated by Congress in 2017 on environmental grounds.

Natural Gas US$2.51 3/mmbtu vs US$2.567/mmbtu previous

Uranium UXC US$60.75/lb vs US$58.50/lb previous

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$116.3/t vs US$116.1/t

Chinese steel rebar 25mm US$530.8/t vs US$531.5/t

Thermal coal (1st year forward cif ARA) US$121.5/t vs US$125.3/t

Thermal coal swap Australia FOB US$162.0/t vs US$166.1/t

Coking coal swap Australia FOB US$261.0/t vs US$261.0/t

Other:  

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

NdPr Rare Earth Oxide (China) US$71,661/t vs US$71,456/t

Lithium carbonate 99% (China) US$26,276/t vs US$26,326/t

China Spodumene Li2O 6%min CIF US$2,780/t vs US$2,830/t

Ferro-Manganese European Mn78% min US$1,034/t vs US$1,036/t

China Tungsten APT 88.5% FOB US$305/mtu vs US$305/mtu

China Graphite Flake -194 FOB US$650/t vs US$650/t

Europe Vanadium Pentoxide 98% 6.9/lb vs US$7.0/lb

Europe Ferro-Vanadium 80% 30.85/kg vs US$31.05/kg

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

Spot CO2 Emissions EUA Price US$89.1/t vs US$89.2/t

Brazil Potash CFR Granular Spot US$355.0/t vs US$355.0/t

Battery News

BMW to introduce hydrogen powered iX5 to Australia

• BMW Australia is to introduce three hydrogen fuel-cell electric iX5s to Australia in 2024 to demonstrate its technological advancements in hydrogen power.
• The hydrogen SUVs will sit alongside its battery-electric cars as part of a broader shift away from the traditional internal-combustion engine.
• The iX5 is powered by a hydrogen fuel-cell powertrain consisting of two tanks made from carbon-fibre-reinforced plastic (CFRP) storing up to 6kg of hydrogen under 700 bar of pressure, a fuel cell that produces 125kW, an electric motor and a battery pack. BMW says the total vehicle output is 295kW.
• The German automaker believes that hydrogen fuel will serve a greater purpose for larger vehicles and commercial transport requirements in the future.

Tesla to introduce bidirectional charging to EVs by 2025

• During the recent Tesla Investor Day, the company confirmed that all their EVs will have bidirectional charging by 2025.
• “We’ve found ways to bring bidirectionality while actually reducing the cost of power electronics in the vehicle,” SVP for Powertrain and Energy Engineering Drew Baglino said. “And [with] all things Tesla, the goal is usually to get more for less.”
• Bidirectional charging enables an EV’s DC power to be converted back to AC power for external usage.
• Ford introduced it with the F-150 Lightning, and it has seen users use their EV to power their homes in blackouts or to sell energy back to the grid.
• If millions of EVs are connected to the grid, they would act as a network of energy storage systems that would harness renewable energy and feed it back to the grid to cover peak demand.

India EV sales hit record number

• India EV Inc. is set to surpass 1m units for the second year in a row and eclipse 2022’s record sales of 1,024,781 units.
• Most India’s EV sales currently are two-wheelers and three-wheelers, with 552,439 and 356,837 vehicle sales respectively, but demand is slowly growing for electric passenger vehicles.
• Prime Minister Modi has announced that the government is actively working on several incentives to support the EV industry in India.
• One major development is the potential introduction of a new policy that would reduce import taxes on EVs for companies committed to local manufacturing.
• Under this policy, manufacturers could import fully assembled EVs into India with a reduced tax rate of up to 15%, compared to the current tax of 100% for cars costing over $40,000 and 70% for others.

Australia to examine potential to encourage EV owners to plug into Solar power

• The University of Queensland is to examine how best to persuade EV owners to plug into Solar power.
• We expect the economics will point towards relatively small subsidies to persuade home and business owners to install solar for EV charging.
• The move should save substantial costs in upgrading grid and generation capacity particularly in a nation with substantial strong sunshine.
• Australia now has around 130,000 EVs rising to 180,000 expected by the year end with EV sales accounting for 6.4% of all new vehicle sales in H1 2023.

Company News

Andrada Mining (ATM LN) 7.2p, Mkt cap £112m – Drilling results from the Lithium Ridge prospect, Namibia

• Andrada Mining has released results from the first 14 reverse circulation (RC) drill holes of a 24-holes (1,900m) scout drilling programme at its Lithium Ridge prospect located around 35km southeast of its Uis tin mine in Namibia.
• “All drill holes intersected mineralised pegmatites” and the initial results confirm that “the targeted pegmatites continue at depth and, these analytical results confirm the presence of significant lithium mineralisation within multiple pegmatites”.
• The initial results cover a strike length of over 4km and the company confirms that the holes were angled at 60⁰ and says that “the intersections are assumed to be an indication of apparent thickness, which is greater than true thickness”.
• Among the results highlighted in today’s announcement are:
  • A 63m wide intersection at an average grade of 0.80% Li₂O, 0.12% tin and 66ppm tantalum from a depth of 17m in hole ATNN-01, including a 35m wide section at an average grade of 1.05% Li₂O from 44m depth; and
  • A 27m wide intersection at an average grade of 1.24% Li₂O, 0.14% tin and 116ppm tantalum from a depth of 31m in hole ATNN-02, including a 19m wide section at an average grade of 1.50% Li₂O from 33m depth; and
  • A 14m wide intersection at an average grade of 1.80% Li₂O, 0.08% tin and 70ppm tantalum from a depth of 8m in hole ATNN-08, including an 11m section at an average grade of 2.13% Li₂O from 9m depth; and
  • A 17m wide intersection at an average grade of 1.29% Li₂O, 0.09% tin and 77ppm tantalum from a depth of 23m in hole ATNN-14, including an 11m section at an average grade of 1.78% Li₂O from 23m depth.
• Explaining that the “initial results further highlight the mineral potential of our mining licenses and the Erongo region in general. We have found high-grade mineralisation within all our license areas over the last 12 months with indications that there is more to be found at depth … [Chief Executive, Anthony Viljoen expressed confidence that] … the second batch will show similar results as per the results from the channel samples over the remaining 2 km”.
• The channel sampling, which was announced in late August, “comprised 129 separate channel lines … over 99 individual pegmatites” as well as “detailed geological mapping of the pegmatites in the areas between existing datasets obtained in 2022”.
• Mr. Viljoen said that the results “indicate intersections at higher lithium grades than those recorded at Uis and are commensurate to similar hard-rock resources globally  … [and he said that the company’s exploration over the last year gave] … indications that there is more to be found at depth”.

Conclusion: Initial RC drilling at Lithium Ridge has demonstrated continuity of pegmatite-hosted lithium mineralisation at depth.  We await the results of the remaining 10 holes of the initial scout drilling programme and of Andrada Mining’s plans for follow-up exploration with interest.

Chaarat Gold (CGH LN) 5.35p, Mkt Cap £44m – H1 results indicate that proposed sale of Kapan expected to be completed by the end of September

• Reporting its results for the six months ended 30^th June, Chaarat Gold produced 11,155oz of gold (2022 – 12,815oz), 22,463 oz of silver (2022 – 226,129 oz), 765.9t of copper (741.5t) and 2,522t of zinc (2022 – 2,804t) from its own production sources.
• The company reports that, on a gold equivalent basis, production declined by 11.7% to 26,523oz (H1 2022 – 30,022oz) “consisting of 21,410 oz from own ore and 5,113 oz from third-party ore (vs 23,458 oz from own ore and 6,564 oz from third-party ore in H1 2022)” and ascribes this to “to lower stope availability”.
• On an all-in-sustaining-cost (AISC) basis, costs rose by 9.5% to US$1,556/oz (2022- US$1,420/oz) “due to inflationary pressure and lower gold production”.
• The company says that “Third-party ore treated was 58.8kt for H1 2023 vs 63.5kt for H1 2022” with overall mill throughput 7.6% lower at 345,000t (2022 – 373,400t).
• Lower production levels contributed to a 30% decline in revenue to US$35.3m (H1-2022 – US$50.4m) and to “Group adjusted EBITDA in H1 2023 of US$-0.2 million (H1 2022: US$4.9 million) reflecting lower adjusted EBITDA contribution from Kapan of US$2.3 million (H1 2022: US$8.1 million) and corporate and Kyrgyz Republic costs of US$2.5 million (H1 2022: US$3.2 million)”.
• Chaarat Gold confirms that the previously announced US$55.4m sale of its Kapan mine is expected to be “complete by the end of September 2023”, subject to shareholder approval.  The sale “comprises US$5.0 million payable in cash and US$50.4m being satisfied by way of the buyer taking an assignment of intra-group payables due to Chaarat Kapan”.
• The company also confirms that discussions continue with Xiwang regarding “a potential investment … of $150 million into the Company’s wholly-owned subsidiary, Chaarat Zaav CJSC, in the form of a joint venture focused solely on the Tulkubash project”.
• “The currently discussed structure envisages that approximately US$35 million invested would be used to repay the convertible loan notes with the remaining US$115 million to be used to develop Tulkubash”.

Condor Gold* (CNR LN) 21.25p, Mkt Cap £42m – Interim report confirms continuing buyer interest in La India as exploration reveals further potential along the Cacao trend

(Condor Resources holds 100% of the La India gold mining project)

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• In its report for the six months to 30^th June 2023, Condor Gold confirms continuing “significant interest” from potential buyers for its assets based around its fully permitted, and construction ready La India gold development project in Nicaragua.
• The company has “hosted 2 site visits in connection with the sale of the assets in Nicaragua during the first half of the year. There are currently 5 non-binding offers” and eight companies are under NDAs.
• Operationally, site clearance of ground to accommodate the processing plant and associated structures and stockpile areas has continued while exploration of the area west of the Cacao deposit produced encouragement in the form of “an isolated high-level chalcedonic rock chip sample” which assayed 0.66g/t gold which “indicates continuity of the hidden, deep-seated high-grade mineralised Cacao deposit to the west”.
• Condor Gold says that its prospecting along the Cacao belt supports “the theory that there is a major, fully preserved epithermal system running underneath the plains of Sebaco … [where] … the epithermal gold mineralisation in the Sebaco graben is almost fully preserved, in places several hundred metres below surface, and locally further hidden under alluvium”.
• Exploration also identified assays of up to “6.29 g/t gold from a 0.5 m thick quartz breccia in artisanal mine workings at the Twin Hills (Dos Gemelos) prospect … [confirming] … mineralisation along the Cacao trend some 2 km east of the Cacao deposit”.
• Exploration on the Rio Luna concession in central Nicaragua returned assays of “26.1 g/t gold and 200 g/t silver from new artisanal mine working at the southern end of the main El Paraiso vein trend on the Rio Luna Concession … [which] … extends the strike length of medium to high-grade mineralisation on the El Paraiso structure from 3.5 to over 4 km”.
• The interim accounts report a loss of £0.97m for the six months ending 30^th June (2022 – £1.37m loss) and a 30^th June cash balance of £0.58m.  Condor Gold subsequently raised an additional £1m via “the exercise of warrants by Galloway Limited, a company wholly owned by Burnbrae Group Limited, which is, in turn, wholly owned by Jim Mellon, Condor’s Chairman, increasing Galloway’s shareholding to 23% of Condor Gold”.

Conclusion: Condor Gold confirms continuing buyer interest in its Nicaraguan projects and we look forward to further news on progress of the sale process.  We are also encouraged that exploration, including of the Cacao trend where down-faulting seems to have preserved a largely intact epithermal gold system beneath cover, continues to deliver results suggesting the potential for meaningful resource expansion.

*SP Angel acts as a broker to Condor Gold

Cornish Metals* (CUSN LN) – 13.25p, Mkt cap £71m – Appointment of Chief Development Officer

Valuation 48p/s

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• Cornish Metals has announced the appointment of a former mining equity research analyst and Head of Investor Relations and Communications at SolGold plc, Mr. Fawzi Hanano, as Chief Development Officer.
• Mr. Hanano is described as “a finance professional with over 20 years of experience in the natural resources sector gained in the mining industry and at global investment banks … including Goldman Sachs, UBS, HSBC, Macquarie and Berenberg”.
• Welcoming him to the team, CEO, Richard Williams explained that “Fawzi’s role will be to increase institutional investor awareness of the progress we are making at South Crofty as we commence dewatering the mine and approach delivery of the South Crofty Feasibility Study, the importance of tin to the energy transition and for responsibly sourced Critical Minerals, as well as planning ahead to future capital raising for project construction”.

Conclusion: Today’s announcement provides further evidence of the expansion and strengthening of the management team as Cornish Metals works towards reopening the historic South Crofty tin mine in Cornwall, where a Feasibility Study is expected to be complete by the end of 2024, and explores the exploration potential of the nearby United Downs area.

*SP Angel acts as Nomad and Broker to Cornish Metals. An SP Angel analyst formerly worked in the South Crofty tin mine in the 1980s and holds shares in Cornish Metals.

Liontown Resources (LTR Au) A$3.03, Mkt Cap A$6.6bn – Block trade at premium to Albemarle’s takeover offer fuels bidder speculation as spodumene M&A heats up

• Liontown shares jumped to $3.020/share on sizeable volumes in Australian trading.
• The Company’s management accepted a bid at $3/share in cash on Monday.
• The trading is fuelling speculation of a bidding war over the Company, which holds the sizeable Kathleen Valley lithium spodumene project.
• Speculators are suggesting that Gina Reinhart is taking a more substantial interest in the company, given her c.5% in the Company.

Conclusion: The past 12 months’ slowdown in lithium prices has weighed on asset valuations in the sector, triggering a recent wave of consolidation which we expect to accelerate as majors such as Albemarle and Pilbara Minerals sit on healthy cash piles and look for growth opportunities. Hard-rock lithium assets in development such as those held by Kodal Minerals*, Savannah Resources* and Atlantic Lithium* are expected to see continued interest as a wave of M&A looks set to engulf the space.

**SP Angel acts as Nomad to Atlantic Lithium, *SP Angel acts as Nomad and Broker to Savannah Resources *SP Angel acts as financial advisor and broker to Kodal Minerals.

Rainbow Rare Earths (RBW LN) 16.7p, Mkt cap £100m – Results from Uberaba phosphogypsum

(Rainbow has an MoU with Mosaic over the Uberaba phosphogypsum stacks in Brazil)

• Rainbow Rare Earths reports results from assays at the Uberaba phosphogypsum stacks in Brazil.
• The results show an average grade of 0.58% total rare earth oxides. This is better than the 0.44% seen at Phalaborwa project.
• More importantly, the mix of REE metals contains Neodymium and Praseodymium (NdPr), Dysprosium (Dy) and Terbium (Tb).
• The NdPr runs at around 25% of the REE basket at Uberaba vs ~29% at Phalaborwa.
• The results indicate the Uberaba stacks have similar characteristics to Phalaborwa which id probably down to their carbonatite phosphate rock origins and similar processing.
• Management are working towards a PEA ‘Preliminary Economic Assessment’ which will require some resource definition, metallurgical testing and

Conclusion:  While these are good results from a REE grade perspective there is much that we don’t know about the Uberaba phosphogypsum.

The tonnage is said to be considerably larger in size than Phalaborwa which is good, but we don’t know what metallurgical challenges might be present in the Uberaba tailings.

Having said that, Rainbow has a strong metallurgical team and should be able to produce a REE carbonate for sale at somewhere between 30-60% of the contained REE value though China inc. is likely to increase processing charges to disrupt any challenge to its dominance in REEs as it is doing in the graphite space right now.

Rainbow might be able to counter this through the use of K-Tech’s CIX and CIC processing technology and we await the result of pilot-plant testing on the Phalaborwa carbonate material to see how well the K-Tech flow sheet works on the separation of REEs from carbonate material.

Serabi Gold (SRB LN) 24p, Mkt Cap £18m – Exploration results from the Matilda Copper Project

• Serabi Gold has reported results from its initial drilling campaign of 9 holes totalling 3,204m at the Matilda Copper project in Brazil which it is exploring in alliance with Vale.
• The drilling “focussed on the strongest part of the Matilda coincident copper / gold / silver soil anomaly with six drill holes along two drill sections spaced 400 metres apart… This initial focus area is also a semi-coincident magnetic susceptibility high … potentially associated with potassic (magnetite) alteration”.
• Drilling tested “a small part of a northwest-southeast trending magnetic structure which extends over 1,200 metres … To date, only 400 metres of this trend has been tested by the two drill sections”.
• The company confirms that a “further 3,200 metre Phase 2 drill programme commenced in August 2023 to test the geochemical / geophysical trend along strike, and secondary targets generated from the interpretation of the drilling to date”.
• Additional exploration will include geophysical work, planned to start this month, comprising “deep penetrating Induced Polarisation (“IP”) and Audio-Magnetotelluric (“AMT”) geophysical programmes … [which] … have been designed to complement the drilling”.
• Among the drilling results highlighted in the announcement are:
  • Partial results from hole 23-MT-004 which intersected 59.45m at an average grade of 0.49% copper and 0.13g/t gold from a depth of 29.45m, including 6.93m at a grade of 0.95% copper and 0.28g/t gold from 78m depth; and
  • An intersection of 13.81m at an average grade of 0.47% copper and 0.10g/t gold from a depth of 200.95m in hole 23-MT-006
• CEO, Mike Hodgson said that the “new drilling results confirm the presence of good grades of copper mineralisation and opens new perspectives for the future of the Company. The results demonstrate that the Serabi tenement portfolio is located in a very fertile area of the Tapajós and the limited historic exploration activity provides a significant first mover advantage for the Company”.
• He confirmed that the “Exploration Alliance with Vale is working extremely well and both teams continue to collaborate closely, to improve the understanding and definition of the copper system”.
• Mr. Hodgson outlined the challenges of the early stages of the exploration at Matilda explaining that “We are still in the process of understanding the copper system at Matilda and while younger porphyry systems provide some reference, the Matilda system is Proterozoic in age and formed under considerably different conditions. This fact brings challenges but at the same time opens new perspectives in terms of the potential of our exploration ground”.

Conclusion: The initial drilling work at Matilda has prompted Serabi Gold and its partner, Vale, to start a second phase of drilling to follow-up the potential strike and depth extension beyond the 400m tested so far of an anomalous zone measuring 1,200m x 800m.

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

Tertiary Minerals* (TYM LN) 0.13p, Mkt cap £2.5m – BUY– Additional details on Storuman project update

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• Tertiary provides additional comments on the Swedish government’s decision to annul their previous rejection of the Storuman Fluorspar project’s exploitation concession.
• Management confirms expectations that primary focus today remains on allocating resource to copper exploration over their highly prospective Zambian licences.
• The original decision to block the exploitation concession for Storuman followed concerns regarding Sami Village reindeer herding and the project’s tailings dam.
• The Government now considers the development of the Storuman deposit as equal to the national interest of Sweden as reindeer husbandry.
• The fluorspar project is 100% owned by Tertiary and located 25km from a bulk rail terminal.
• A 2010 scoping study on the project provided the following economic highlights:
  • 18-year LOM with a < 3 yr payback at a 24% IRR
  • NPV8 of $33m with an initial capex of $46m,
  • Average annual net operating cash flows in the first five years of $17m
• We recognise that the scoping study will need updating given cost inflation over the past 12 years.
• The asset holds a 2011 JORC-compliant resource of 27.7mt @ 10% CaF2.
• Fluorine, which is sourced from fluorspar, offers Tertiary the opportunity to tap into the lithium-ion battery market owing to its use in the electrolyte component of the battery.

*SP Angel acts as Nomad and Broker to Tertiary Minerals

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

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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.

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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%