SP Angel Morning View -Today’s Market View, Wednesday 22nd May 2024

Iron ore prices strengthen to $121/t as China property sentiment improves

MiFID II exempt information – see disclaimer below

American West Metals (AW1 AU) – Latest drilling data from the Storm copper project in Nunavut, Canada

Caledonia Mining (CMCL LN) – Blanket mine mineral resources update

Cornish Metals* (CUSN LN) – Acquisition of additional land for the rejuvenation of South Crofty

Golden Metal Resources (GMET LN) – Expanding the area of the Garfield exploration project

Kingrose Mining (KRM AU) – Exploration funding from BHP for Scandinavian campaigns

Oriole Resources* (ORR LN) – $220k received for legacy Turkish asset sale

Solaris Resources (SLS CN) – Termination of Zijin equity investment as Canadian authorities block deal

Sovereign Metals* (SVML LN) – Trial mining to start with pilot mining pits and rehab programs in Malawi

Sunstone Metals (STM AU) – Limon trenching shows visible, nuggety gold

Iron ore prices strengthen as China property sentiment improves

• Shanghai 62% Fe prices rose above $120/t again as iron ore prices rose again, up $20/t over the past three months.
• Rebar futures have climbed to two-month highs in China, reflecting restocking on expectations of an uptick in construction activity.
• Beijing has put forward plans to buy unsold residential properties and convert them into public housing.
• 1bn CNY worth of extra funding looser mortgage rules prospects are also fuelling buying.
• Note China steel mill margins are still negative, with crude steel output down 3% yoy over the first four months of the year.

Copper cools from highs as speculators continue to pile in with bullish positions

• LME copper has cooled from recent lofty heights, back to $10,700/t after touching $11,000/t.
• The short squeeze triggered on COMEX took various physical traders by surprise, forcing a rerouting of physical cargoes to COMEX.
• Bloomberg reports that speculative LME positions hit their most bullish in seven weeks yesterday, with net long contracts at 87,325.
• Long only positions are currently their highest on record, whilst short only positions have risen to three week highs.
• Weak demand indicators from China persist, with reports that 60% of copper rod producers have cut/stopped production on slowing sales. (Mysteel)
• Inventories in Shanghai are at their highest level since 2018.
• China copper production up 9% yoy in April at 1.136mt, up 29% over same period average past five years.

Gold holds just off record highs as Fed minutes in focus whilst ETF buying picks up

• Gold prices have continued to hover around $2,415/oz following an explosive move higher on Friday.
• We note that ETF inflows have finally begun, with physical ETF holdings increasing for the past 5 days consistently.
• Net ETF sales ytd remain down 4.73moz, however 77.5koz have been added over the past 24 hours.
• We see a resurgence in gold ETF buying from US retail investors as the next major catalyst for bullion, which may be triggered as yields fall on Fed rate cut prospects.

Tungsten – Nuclear Fusion – Tungsten wall enables French tokamak to set new record in fusion plasma

• French physicists have been able to sustain hot plasma for linger and at higher energy and density levels through the use of a tungsten wall (qz.com).
• The tokamak was able to sustain plasma at 50 million Celsius for six minutes.
• This is seen as a substantial advance on the road to nuclear fusion.

Economics

US – Federal Reserve Governor Waller wants to see several more months of low inflation before cutting rates

Japan – Exports jump 8.3% yoy in April to Y8981nm

• Seasonally adjusted exports rose 0.9% mom to Y8843bn
• Exports were driven by hybrid vehicles and semiconductors and semiconductor manufacturing equipment
• Imports rose by 8.3% yoy to Y9443bn lifted by a weaken Yen raising import costs.
• Seasonally adjusted imports fell -0.5% mom to Y9403bn
• Crude oil import prices rise 17.7% yoy in Yen terms vs a 2.6% yoy increase in US dollars
• Trade balance deficit rose to -Y463bn.
• Seasonally adjusted the trade deficit expanded to -Y561bn.

UK – CPI fell to 2.3% yoy in April from 3.2%

• Core CPI also pulled back to 3.9% yoy from 4.2% but remains above expectation
• CPI goods fell to -0.8% yoy.from  0.8% yoy.
• CPI services to 5.9% yoy from 6.0% yoy.
• The cost per unit of imported goods from China is helping to lower inflation while inflation remains strong in services
• While the BoE may feel disappointed it feels like there is nothing new in these numbers.
• Inflation in UK services has been strong for many years with overall inflation lowered by cheap Chinese goods imports.
• If China ever raises the cost of its export products then the West will be in for a massive inflationary shock which will inevitably lead to severe recession as policymakers fight to contain the inflationary impact.
• Consider if China raised the value of the Yuan against the US dollar lifting the cost of its export products, while effectively reducing the cost of its imports this would be highly inflationary for countries which rely on importing substantial Chinese manufactured goods.
• UK public borrowing hits three-year high at £20.5bn overshooting £19.3bn expected by economists and £16bn forecast by the Office for Budget Responsibility.

NZ – RBNZ  holds interest rates at 5.5%

• The RBNZ also expects to raise rates to 5.7% in Q4 and then to lower rates to 5.4% in Q3 2025
• The bank sees significant risk from persistent non-tradeable inflation, eg persistent inflation in services sectors
• Maybe the RBNZ are saying what many other central banks fear to speak?

Nigeria – raises interest rates to a record high to counter inflation

Currencies

US$1.0857/eur vs 1.0873/eur previous. Yen 156.41/$ vs 155.66/$. SAr 18.132/$ vs 18.127/$. $1.275/gbp vs $1.267/gbp. 0.666/aud vs 0.669/aud. CNY 7.240/$ vs 7.231/$.

Dollar Index 104.67 vs 105.27 previous.

Precious metals:         

Gold US$2,416/oz vs    US$2,437/oz previous

Gold ETFs 81.0moz vs 80.7moz previous

Platinum US$1,048/oz vs US$1,088/oz previous

Palladium US$1,019/oz vs US$1,011/oz previous

Silver US$31.79/oz vs US$32/oz previous

Rhodium US$4,725/oz vs US$4,725/oz previous

Base metals:   

Copper US$ 10,696/t vs US$10,948/t previous

Aluminium US$ 2,709/t vs US$2,631/t previous

Nickel US$ 21,000/t vs US$21,524/t previous

Zinc US$ 3,127/t vs US$3,077/t previous

Lead US$ 2,351/t vs US$2,326/t previous

Tin US$ 34,180/t vs US$34,251/t previous

Energy:           

Oil US$81.8/bbl vs US$84.2/bbl previous

• Crude oil prices edged lower as the API reported an unexpected 2.5mb w/w build to US crude stocks compared to expectations for a 3.1mb decline.
• European energy prices were unchanged with French nuclear reactor operating levels rising 4% w/w to 67% of 61.4MW capacity and Gazprom reporting stable supply of 42.4mcm/d (~1.5bcf/d) via the Ukraine.
• Norway announced April production figures of 2.1mb/d liquids (+5.3% above forecast) and 12.2bcf/d (+7%), though natural gas production is down 5.3% y/y.

Natural Gas €33.7/MWh vs €31.3/MWh previous

Uranium Futures $92.2/lb vs $91.3/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$121.5/t vs US$117.0/t

Chinese steel rebar 25mm US$538.7/t vs US$538.0/t

Thermal coal (1st year forward cif ARA) US$120.0/t vs US$111.0/t

Thermal coal swap Australia FOB US$140.0/t vs US$140.5/t

Hard Coking Coal Australia FOB US$326.0/t vs US$326.0/t

Other:  

Cobalt LME 3m US$27,830/t vs US$27,830/t

NdPr Rare Earth Oxide (China) US$54,077/t vs US$55,421/t

Lithium carbonate 99% (China) US$14,296/t vs US$14,322/t

China Spodumene Li2O 6%min CIF US$1,210/t vs US$1,210/t

Ferro-Manganese European Mn78% min US$972/t vs US$972/t

China Tungsten APT 88.5% FOB US$365/mtu vs US$365/mtu

China Graphite Flake -194 FOB US$470/t vs US$470/t

Europe Vanadium Pentoxide 98% 5.1/lb vs US$5.1/lb

Europe Ferro-Vanadium 80% 26.35/kg vs US$26.35/kg

China Ilmenite Concentrate TiO2 US$321/t vs US$325/t

Ilmenite prices continue to pull back to US$321/t from a high of $326-332/t in April

• Demand is reported to be weak for titanium slag material in China with ferrotitanium producers reducing inventory in April following a substantial increase in sales in March

China Rutile Concentrate 95% TiO2 US$1,402/t vs US$1,405/t

Spot CO2 Emissions EUA Price US$68.9/t vs US$68.4/t

Brazil Potash CFR Granular Spot US$305.0/t vs US$305.0/t

Battery News

EVs show way ahead despite dip in sales

• The growth rate of the EV market has slowed, with global EV sales growth reaching 33.5% in 2023 and expected to be around 10% in 2024.
• Traditional automakers like GM, Ford, and Hyundai are facing sluggish EV sales, despite recent investments in EVs.
• We see the slowdown in EV growth as temporary, with ICE vehicles expected to gradually diminish in favor of EVs over the next five to 10 years.
• Increasing availability of renewable energy will serve to reduce running costs, particularly for overnight charging.
• Significant advances battery technology are coming through with new developments in fast charging and power density set to deliver a significant increase in performance.
• Lower maintenance costs from simpler drive trains, regenerative breaking, more efficient motors, higher voltage systems and the addition of ultracapacitors to enhance battery life will all contribute to better vehicles.
• Autonomous driving options combined with greater passenger and load space offering greater room for fresh design concepts..

Nissan pauses plans for EV production in US, Automotive News reports

• Nissan Motor Co has paused plans to build electric vehicles in the United States.
• Nissan has adjusted its development schedule for some battery-powered sedans and asked suppliers to stop related development activities until further notice.
• The pause in production plans is due to weaker-than-expected demand for electric vehicles.
• Global automakers are pulling back from ambitious electrification plans to focus more on hybrids and gas-powered models.
• In March, Nissan announced plans to accelerate its global EV transition, including seven new models for the U.S. by 2026 and establishing an EV manufacturing hub in the country.

Surge in Chinese-made EV imports sparks protest in Canada

• Imports of Chinese-made Teslas, especially Model Y vehicles from Shanghai, have surged in Canada, with 44,400 cars arriving at Vancouver’s port last year.
• This influx has sparked protests from Canadian auto-industry players, who urge Prime Minister Justin Trudeau to impose higher tariffs to protect the local industry.
• Canada currently imposes a six percent tariff on Chinese-made vehicles and allows consumers to use a federal rebate program for purchasing foreign-manufactured EVs.
• About 30% of EV buyers who requested Canada’s federal rebate in the past year bought a Tesla, totaling approximately 51,000 cars.
• Canada aims for 60% of all new light-duty vehicles sold to be zero-emission by 2030 and 100% by 2035, but some believe this target is too aggressive.
• The disparity between Canadian and US EV policies is expected to draw increasing attention and may influence future policy decisions.

Company News

American West Metals (AW1 AU) A$0.14, Mkt Cap A$75m – Latest drilling data from the Storm copper project in Nunavut, Canada

Aston Bay Holdings (BAY CN) C$0.14, Mkt cap C$31m – (American West Metals are earning into 80% of the Storm copper project)

• In a release to the ASX yesterday, American West Metals reports the intersection of visible copper in reverse-circulation (RC) drilling of its 2024 exploration campaign at the Storm Copper Project on Somerset Island in northern Canada.

• “Samples for the first batch of drilling are at the laboratory with assay results expected in the coming weeks”.

• The announcement highlights the intersection of “thick new zones of copper mineralisation” including:
  • “36.6m of visual copper sulphides from 79.3m downhole” in hole SR24-02 at the Cyclone North prospect; and
  • “47.2m of visual copper sulphide mineralisation including a 10m interval of very strong visual copper sulphides from 36.6m downhole” in hole SR24-03 at the Gap prospect; and
  • “30.5m of visual copper sulphide mineralisation from 29m downhole” in hole SR24-04 also at the Gap prospect
• Holes SR24-03 and 04 “are located midway along 4km of prospective structures between the Cirrus copper deposit and the high-grade Thunder prospect … [and the company says that] … the structures are largely untested by drilling and present as a high-priority target for further copper mineralisation”.
• The announcement also explains that the drilling results “continue to demonstrate the strong correlation between Moving Loop Electromagnetic (MLEM) targets and copper mineralisation, with an extensive suite of of additional geophysical targets … [identified as priorities] … for drilling in 2024”.
• The company confirms that initial, Phase 1, MLEM surveys in the Storm area have been completed and “the deep search phase (>250m depth) of the programme is now underway”.
• Managing Director, Dave O’Neill, explained that the drilling “has clearly demonstrated that the southern graben area can host multiple high-grade copper deposits. This vast fault network remains largely untested, highlighting the exceptional exploration upside and resource growth potential of this area”.
• Mr. O’Neill, confirmed that the MLEM geophysical work is progressing quickly and said that the deeper phase work aims to assess the “potential for the discovery of sedimentary copper deposits of similar style to the major Central African copper belts”.
• American West Metals is earning an 80% interest in Aston Bay’s* 100% owned Storm Copper and Seal Zinc Projects located on western Somerset Island in Canada’s Nunavut province with staged expenditure of C$10m over 7 years.

Conclusion: We look forward to the assay results from the latest drilling to provide insight into the grade characteristics of the mineralisation encountered and to further news as the exploration season progresses.

*SP Angel has previously raised funds for Aston Bay Minerals

Caledonia Mining (CMCL LN) 850p, Mkt Cap £163m –Blanket mine mineral resources update

• Last Wednesday, 15^th May, Caledonia Mining issued an updated mineral resources estimate (MRE) for its Blanket Gold mine in Zimbabwe.
• Reported at a cut-off grade of 1.5g/t and at a gold price of US$2,150/oz, the new NI 43-101 compliant resource contains:
  • Measured resources of 6.16mt at an average grade of 3.72g/t gold containing 0.74moz; and
  • Indicated resources of 9.11mt at an average grade of 3.59g/t containing 1.05moz; and
  • Inferred resources of 8.82mt at an average grade of 3.74g/t containing 1.06moz
• The resource includes reserves of 7.68mt at an average grade of 3.29g/t and a contained gold content of 812koz of which 220koz is within the higher confidence ‘Proven’ category.
• The new MRE increases the NI 43-101 compliant ‘Measured and Indicated’ contained gold resource by over 60% compared to the previous, March 2022 estimate, to 1.79moz with an additional 26% rise in ‘Inferred’ resources to 1.06m oz.
• Commenting on the updated resource, estimate which reflected the “excellent results” of the 2023 drilling campaign, CEO, Mark Learmonth, said that “Blanket’s mine life is estimated to 2034 based only on the updated mineral reserves estimate, thus securing the future of our flagship asset and demonstrating its continued prospectivity and potential at higher production levels”.
• He added that “Management believes that the inferred mineral resources may, based on past successful conversion rates, further extend the life of mine past 2040”.
• Based on previous resource estimates and production data, we estimate that since the beginning of 2020, the Blanket mine has added approximately 1.2moz to its ‘Measured & Indicated’ resources while processing approximately 300,000oz of its in-situ gold inventory to produce around 280,000oz.

Conclusion: Blanket’s latest resource has delivered an increase of more than 60% to its ‘Measured & Indicated” resource inventory opening the way for a possible extension of the mine’s life into the 2040s.  We estimate that, over the last four years, Blanket has replenished its mineral resource inventory at almost 4x the rate it has depleted it through mining.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe

Cornish Metals* (CUSN LN) 6.95p, Mkt Cap £35m – Acquisition of additional land for the rejuvenation of South Crofty

Valuation under review

CLICK FOR PDF

• Cornish Metals reports that it has acquired around 7.7 acres (~3.1 hectares) adjacent to its South Crofty mine in Cornwall where the company is working to resume tin production at the mine which was mined from the late 16th century prior to closure of the mine in 1998.
• The additional land increases the company’s total surface late holding “to 28.5 acres (11.5 ha) … [including] … the location of the North Winder for New Cook’s Kitchen shaft, South Crofty’s main production shaft, as well as a large area adjacent to the proposed site of the project’s permitted processing plant”.
• Interim CEO, Ken Armstrong, explained that “The land will provide additional space for future site works as well as opportunities for potential operating cost savings, renewable energy initiatives and improved overall property security”.
• Mr. Armstrong said that “the enlarged surface footprint for South Crofty now removes reliance on existing right-of-passage agreements and allows the Company complete control over the timing for refurbishment of the North Winder”.
• Earlier this month, Cornish Metals released the highlights of a Preliminary Economic Assessment (PEA) which, based on a tin price of US$31,000/t described pre-production capital expenditure of US$177m generating an after-tax NPV_8% of US$201m and IRR of 29.8% from the production of up to 5,000 tonnes per year and total production of 49,310t of tin, in concentrate, from the processing of almost 3mt of pre-concentrated ore averaging 1.83% tin over a 14-years mine life.

Conclusion: Acquiring additional land at South Crofty as Cornish Metals works to resume tin production.  We look forward to publication of the detailed PEA report for insights into the reopening plan.

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

Golden Metal Resources (GMET LN) 15.25p, Mkt Cap £16.3m – Expanding the area of the Garfield exploration project

1. Golden Metal Resources reports that it has expanded its land holding over the Garfield exploration project in Nevada through the staking of an additional 44 mineral claims which extends the project area by 3.68km² (~67%) to 9.18km².
2. The staking of additional land, which covers “a dense cluster of historical copper (plus gold/silver/uranium) datapoints, including old mineshafts, pits and adits” follows the company’s announcement in April that a ground magnetic geophysical survey had identified anomalies over the same areas as previously identified copper-in-soil geochemical anomalies over its ‘High-Grade’ and ‘Power-Line’ zones.
3. A geophysical interpretation included in today’s announcement suggests the possibility that the ‘High-Grade’ and ‘Power-Line’ zones could coalesce at depth which, if verified by follow-up exploration, could expand the scale of the potential host geology.
4. The company explains that it secured the extra ground on the basis of “growing evidence that a buried copper porphyry system may exist at Garfield, and to secure the ground given the exploration rush occurring within the western Unites States in the search for new copper porphyry discoveries”.
5. Golden Metal Resources says that “prospecting of the newly acquired ground has confirmed the potential for extensive copper mineralisation across a wide area based on outcropping visual copper mineralisation … [and that it] … continues to finalise the follow up exploration plans for Garfield which will be announced in due course”.
6. CEO, Oliver Friesen, confirmed that, following a recent site visit and the securing of the additional ground, “We are in the process of finalising next steps to explore for a buried copper porphyry at Garfield”.

Conclusion: Expanding the area of the early-stage project at Garfield covers areas of historic mining and we look forward to the company’s exploration plans.

Kingrose Mining (KRM AU) A$0.06, Mkt cap A$40m – Exploration funding from BHP for Scandinavian campaigns

• Kingsrose Mining has entered ‘exploration alliance agreements’ with BHP to support campaigns in Norway and Finland.
• BHP will fund US$20m for regional generative exploration over 4 years over ‘belt scale areas’ in Norway and Finland.
• They will then hold the right to progress an earn in for up to 75% through the funding of US$36m over 7 years.
• Following the second stage Earn-in phase, BHP will then hold the option to progress to a ‘Joint Venture’ phase which will see the two parties fund progression, or dilute Kingsrose below 10%, converting their interest to a 2% NSR royalty.
• Kingsrose will be entitled to charge a management fee to BHP to cover overhead costs.
• BHP will hold right of first refusal for any equity interest sales in the JV Company.
• Kingsrose will advance their Penikat and Rana projects independently.
• To date, Kingsrose has identified various nickel-copper exploration targets, having secured a 3,800km2 land package over two belts.
• The Group will target the Central Lapland Greenstone Belt, which hosts Agnico’s Kittila mine and the recently-discovered Ikkari deposit by Rupert Resources.
• Anglo holds the Sakatti Ni-Cu-PGE project and Boliden’s Kevitsa mine also sits in the region.
• Sampling in Norway returned base and precious metal readings from gabbro-hosted sulphide quartz veins, with grades up to 8.5% Cu, 2g/t Pd, 2g/t Au and 63g/t Ag.

Conclusion: It is very promising to see BHP step up to fund junior explorers on a more substantial scale. The Major is building on the success of their BHP XPlor programme (Kingsrose was one of several successful candidates) as it looks to expand its exploration potential across major mineralized belts. Scandinavia holds exciting potential for additional discoveries and BHP’s involvement with Kingsrose highlights their ambitions to look further afield for their next development story.

Oriole Resources* (ORR LN) 0.38p, Mkt cap £15m – $220k received for legacy Turkish asset sale

• Oriole has received US$220k relating to a transaction for its interest in the Turkish Hasançelebi and Doğala mining projects in Turkey.
• Oriole expects to receive an additional $80k in June for a total consideration of $300k.
• Oriole will use the proceeds to continue to progress their exploration efforts in Cameroon.
• The Company had not ascribed any carrying value to the resource-linked success-based and Royalty Sale agreements on the Oriole balance sheet.
• The sale was triggered this month by Bati Toroslar, who sold the Hasançelebi project to a third-party Turkish company.

Conclusion: Oriole’s balance sheet has long been reinforced by a series of legacy assets from which they continue to extract value. Today’s announcement reflects their ability to source cash from their Stratex-era interests, supporting non-dilutive financing as they continue to progress their exploration programmes in Cameroon. Exploration for gold continues in Cameroon, with infill soil sampling ongoing at Mbe to delineate drill targets.

*SP Angel acts as Broker to Oriole Resources

Solaris Resources (SLS CN) C$5.2, Mkt cap C$800m– Termination of Zijin equity investment as Canadian authorities block deal

• Solaris, which is developing the Warintza Project in Ecuador, has been forced to terminate its minority equity investment from Zijin.
• The decision follows a four month review from the Canadian regulator, which denied approval.
• The Company also considers the equity transaction ‘no longer reflects market value.’
• The Warintza Project in Ecuador holds combined indicated and inferred resource of:
  • 1.466mt at 0.52% CuEq for 7.6mt CuEq.
• The indicative starter pit outlined by the Company points to:
  • 287mt at 0.79% CuEq for 2.27mt CuEq.
• Solaris has now raised C$35m in an equity offering to progress development of the Project.

Conclusion: The decision from the Canadian regulator to block Zijin’s investment into Solaris, whose project is located in Ecuador, should ring alarm bells for TSX-listed mining companies with international assets. We echo Solaris CEO’s comments that ‘Canada’s critical minerals policy is counterproductive in relation to foreign assets.’ We are confident our own regulator would show more pragmatism in relation to assets in foreign assets, especially given the shortage of globally significant copper development projects.

Sovereign Metals* (SVML LN) 29p, Mkt Cap £160m – Trial mining to start with pilot mining pits and rehab programs in Malawi

(Sovereign currently holds 100% of the Kasiya project. The government has a right to a 10% free carry in the project. Rio Tinto acquired an initial strategic interest of 15% for a $40.6m with an option to increase it to 19.99% within 12 months from 17 July 2023)

STRONG BUY – Valuation 55p

• Sovereign Metals report they are starting their pilot mining and land rehabilitation programs at the Kasiya rutile and graphite mine site in Malawi.
• The pits are designed to trial both hydro-mining and dry mining methods.
• Wet and dry processed material will be placed into the pits to see how well it settles and how quickly land may be rehabilitated for the restoration of farming.
• The team expect the trials will shorten the time to complete the DFS while enabling better optimisation and planning particularly with the rehab programs.
• Sovereign will process material from a 150,000m3 test pit at its Lilongwe laboratory in Malawi.
• This pit will be backfilled to test the rehab and restoration for agricultural land.
• Other pits will be used for water storage, excavated material storage, and demonstration of multiple rehabilitation approaches.
• The scale of the pit requires substantial waster, environmental and community permissions from the Malawi Environment Protection Authority (MEPA), National Water Resources Authority (NWRA) and the Ministry of Mines.
  • Test Pit: A substantial test pit of 120m by 110m will be excavated to a depth of 20m, allowing optimisation of hydraulic and dry mining excavation methods.
  • Stockpiles: The excavated material will be temporarily stored in 4 stockpiles, namely all dry mining material, wet slimes, in a pond, and two sizes of sand fractions from the hydraulic mining.
  • Backfilling and Grading: The material will be placed back into the pit, and all areas will be graded.
  • Rehabilitation: Sovereign will construct eight small rehabilitation demonstration pits covering a combined area of 100m by 130m.
  • Water: Eight boreholes will supply water to a temporary water storage pond close to the test mining pit.

Conclusion:  Kasiya is a huge, multigenerational, mine where the work and decisions made now will have long-term impact. This combined with the expertise in the team at site means there is a level of testing, optimisation, detail and planning which we do not normally see at this stage of a mining project. Rio Tinto’s active presence and funding is helping this work to be done the highest of standards.

*SP Angel act as Nomad and broker to Sovereign Metals. The analyst has recently visited the Kasiya mine site with no ill effects in this site visit.

We are told the tap water in Lilongwe is good quality and we thoroughly recommend Malawi coffee beans and macadamias.

Sunstone Metals (STM AU) A$0.011, Mkt cap A$40m – Limon trenching shows visible, nuggety gold

• In an announcement to the ASX, Sunstone Metals reports trenching results from its Limon project in southern Ecuador.
• The Limon project forms part of the company’s broader Bramaderos project which includes the 2.7moz gold equivalent porphyry gold/copper/silver resource at Brama Alba located approximately 2.7km SW of Limon.
• The results reported today include:
  • A 14.95m wide intersection in trench LM-05c at an average grade of 4.8g/t gold and 2.1g/t silver, including a 6.2m wide section averaging 10.7g/t gold and 3.5g/t silver
• The result comes from duplicate samples which were previously reported (in April) with grades of 2.8g/t gold and 2.1g/t silver and the company explains that “Individual duplicate results over intervals of 1.0m returned results up to 69.9g/t gold … [and that] … Visible gold was identified from panning samples from this trench … and suggests nuggety gold”.
• Forthcoming drilling at Limon is expected to focus initially on “the Central Shoot and Western target … [where Managing Director, Patrick Duffy said ] trenching results show high grade gold with associated silver”.

Conclusion: Trenching results from Sunstone Metals’ Limon project in southern Ecuador is prompting initial drilling of the ‘Central Shoot and Western target’. We await further news as the exploration proceeds.

No.1 in Base Metals: SP Angel mining team awarded No 1. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q1 2024

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%