Metals rise on lower dollar and encouraging China data
MiFID II exempt information – see disclaimer below
Asiamet Resources (ARS LN) – Project status update as financing discussions progress
Tirupati Graphite (TGR LN) – Half-yearly results
Metals rise on lower dollar and encouraging China data
- Base metals rose across the board as the dollar fell to a five-month low.
- Copper rose to $8,717/t before paring gains to $8,645/t.
- Tin rose 1.5% to $25,250/t whilst nickel rose 1.5% to $17,000/t.
- Iron ore is also pressing higher, rising to $140/t in the Singapore market.
- The rally in metals follows a positive China industrial profit report, which shows manufacturing improvements whilst soft demand is boosting calls for easing monetary policy.
- Metals are also pricing in potential restocking in advance of the Lunar New Year lull.
- However, a Beijing-backed research house expects steel demand to fall by 1.7% in 2024, with exports also expected to decline.
Gold prices hit all time high in London as rate cut enthusiasm mounts
- The London Bullion Market Association reports its benchmark gold price hit an all time high of $2,069/oz yesterday.
- Spot prices climbed to $2,088/oz yesterday as the dollar and US Treasury yields fell to five-month lows.
- The move reflects continued expectations of Fed rate cuts in 2024, with softer PCE data last week supporting wagers.
- Traders are pricing in an 80% chance of a cut by March 2024.
- US 10-year yields held below 3.8% yesterday before ticking higher this morning.
| Dow Jones Industrials | +0.43% | at | 37,545 | |
| Nikkei 225 | +1.15% | at | 33,681 | |
| HK Hang Seng | +1.75% | at | 16,627 | |
| Shanghai Composite | +0.54% | at | 2,914 |
Economics
Currencies
US$1.1046/eur vs 1.1007/eur previous. Yen 142.63/$ vs 142.31/$. SAr 18.575/$ vs 18.414/$. $1.270/gbp vs $1.270/gbp. 0.683/aud vs 0.678/aud. CNY 7.145/$ vs 7.138/$.
Dollar Index 101.45 vs 101.77 previous.
Commodity News
Precious metals:
Gold US$2,077/oz vs US$2,068/oz previous
Gold ETFs 85.4moz previous vs 85.4moz
Platinum US$1,015/oz vs US$998/oz previous
Palladium US$1,159/oz vs US$1,198/oz previous
Silver US$24.47/oz vs US$24/oz previous
Rhodium US$4,425/oz previous vs US$4,425/oz
Base metals:
Copper US$8,676/t previous vs US$8,611/t
Aluminium US$2,383/t previous vs US$2,341/t
Nickel US$17,006/t previous vs US$16,926/t
Zinc US$2,647/t previous vs US$2,635/t
Lead US$2,095/t previous vs US$2,077/t
Tin US$25,644/t previous vs US$24,866/t
Energy:
Oil US$79.1/bbl previous vs US$80.8/bbl
Natural Gas €34.0/MWh previous vs €34.6/MWh
Uranium UXC US$91.00/lb previous vs US$86.35/lb
Bulk:
Iron Ore 62% Fe Spot (cfr Tianjin) US$136.1/t vs US$135.8/t
Chinese steel rebar 25mm US$580.7/t vs US$580.6/t
Thermal coal (1st year forward cif ARA) US$99.8/t vs US$99.8/t
Thermal coal swap Australia FOB US$138.5/t vs US$138.5/t
Coking coal swap Australia FOB US$322.0/t vs US$322.0/t
Other:
Cobalt LME 3m US$29,135/t vs US$29,135/t
NdPr Rare Earth Oxide (China) US$61,641/t vs US$61,574/t
Lithium carbonate 99% (China) US$12,118/t vs US$12,105/t
China Spodumene Li2O 6%min CIF US$1,340/t vs US$1,340/t
Ferro-Manganese European Mn78% min US$1,062/t vs US$1,057/t
China Tungsten APT 88.5% FOB US$305/mtu vs US$305/mtu
China Graphite Flake -194 FOB US$610/t vs US$610/t
Europe Vanadium Pentoxide 98% 6.1/lb vs US$6.1/lb
Europe Ferro-Vanadium 80% 26.25/kg vs US$26.25/kg
China Ilmenite Concentrate TiO2 US$316/t vs US$316/t
Spot CO2 Emissions EUA Price US$75.8/t vs US$75.4/t
Brazil Potash CFR Granular Spot US$310.0/t vs US$310.0/t
Company News
Asiamet Resources (ARS LN) – 0.8p, mkt cap £18m – Project status update as financing discussions progress
- Asiamet provides an end of year update on its BKM copper project in Indonesia.
- The Company is progressing the debt financing for the project and is set to make a submission to the prospective Lead Bank Credit committee early in 2024.
- The Lead Bank will act as lead arranger for the debt financing of BKM .
- Management notes positive initial engagements with a major Indonesian bank and anticipates strong support from the Indonesian banking sector.
- Product offtake discussions are also ongoing, with prepayment providers currently conducting due diligence on the project.
- One indicative offtake term sheet has been received to date, with the process expected to accelerate as the debt financing discussions advance.
- Asiamet’s BKM feasibility study points to an 156kt Cu produced over 10 years for an NPV8 of $163m post tax at a 21% IRR.
- To further boost the Project’s feasibility, Asiamet is reviewing potential alternative heap leach facility locations alongside optimized open pit mine designs.
- Engineering, Procurement and Construction firms have been engaged to progress the BKM Copper Project, and commercial proposals have been received.
- The Company expects these EPC discussions to support lower-cost sourcing, potentially reducing CAPEX requirements.
- Management is aiming to begin early engineering works in 1Q24.
- As regards permitting, the Company is set to finalise terms for the use of the forestry access road to site – the final item needed for the change of forestry concession.
- Furthermore, an environmental consultant has been secured for the project environmental and social assessment, expected to be completed in 1H24.
- A report on power supply options is expected to be delivered in 1Q24, with biomass being targeted for lower costs.
- Specialised consultants are also being engaged for exploring options for concentrate logistics.
- A pyrite copper concentrate is being explored for production from the primary resource which lies below the leachable copper resource included in the FS.
- This holds the potential to boost overall copper recoveries whilst delivering pyrite to local processing facilities targeting the domestic HPAL nickel industry.
Conclusion: Today’s announcement provides an encouraging update on Asiamet’s progress towards construction of its BKM copper project in Indonesia. Debt financing discussions are advancing and the engagement of a major Indonesian bank as lead is promising. We look forward to updates as these discussions progress early next year. The Company is completing more detailed engineering reviews to further derisk the project as project financing accelerates.
Tirupati Graphite (TGR LN) 16.6p Mkt Cap £17m – Half-yearly results
- Tirupati Graphite report their Interim Results for the period ending 30th September 2023.
- The Company is developing two graphite projects in Madagascar, targeting capacity of 30ktpa.
- Over the six-month period, production increased 160% to 4,508t from 1,731t same period 2022.
- Cost of production increased to £525/t whilst achieved basket price stood at £658/t.
- The Company reports a gross operating profit of £780k.
- Corporate and Administrative costs increased to £1.83m vs £1m in the same period 2022.
- As regards the Montepuez project, US$13m has been spent to date of the total $52m CAPEX for the first 50ktpa module.
- Montepuez OPEX for the first 50ktpa is expected at US$360/t of concentrate, excluding government royalties.
- Tirupati notes ‘increased inquiries from around the world for supplies of its products’ following the China graphite export ban was announced.
- Management has engaged Development Finance Institutions for various project financing requirements.
- In Madagascar, two pre-concentrate units will be added to support a targeted steady-state production of 2kt per month.
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%”
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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
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Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534
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Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
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| Sources of commodity prices | |
| Gold, Platinum, Palladium, Silver | BGNL (Bloomberg Generic Composite rate, London) |
| Gold ETFs, Steel | Bloomberg |
| Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt | LME |
| Oil Brent | ICE |
| Natural Gas, Uranium, Iron Ore | NYMEX |
| Thermal Coal | Bloomberg OTC Composite |
| Coking Coal | SSY |
| RRE | Steelhome |
| Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite | Asian Metal |
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