SP Angel Morning View -Today’s Market View, Monday 7th October 2024

Rio Tinto in discussions to potentially acquire world’s third largest lithium producer

Gold jumps on potential nuclear test firing in Iran

MiFID II exempt information – see disclaimer below

Castillo Copper (CCZ LN) – Expansion of exploration target area in the Mt Isa belt of NW Queensland

Cora Gold (CORA LN) – Maadina Foulbe Gold Project exploration update

Ferrexpo (FXPO LN) – Q3 Production Report

Guardian Metal Resources (GMET LN) – Further drilling result from Pilot Mountain

Power Metals Resources* (POW LN) – (Power Metals* holds a 45% stake in Guardian Metal Resources)

Hummingbird Resources (HUM LN) – Pasofino $2.5m equity raise

Jubilee Metals Group (JLP LN) – Additional open-pit copper project in Zambia

Petra Diamonds (PDL LN) – Sale of Koffiefontein mine

Power Metal Resources* (POW LN) – Incubation strategy success continues with Uranium JV

Rio Tinto (RIO LN) – Confirmation of Arcadium takeover discussion

Serabi Gold (SRB LN) – Coringa project PEA update

Strategic Minerals* (SML LN) – Participation in study for the sustainable extraction of critical minerals in the UK

Thor Explorations* (THX LN) – Segilola extension drilling results justify step-out programme

West African Resources (WAF AU) – Burkina Faso update

Gold  ($2,650/oz) price jumps higher on potential nuclear test firing in Iran, defies Treasury sell-off following US labour data

• Gold prices are holding steady, despite a sharp uptick in US Treasury yields.
• Gold is sitting at $2,653/oz, having fallen below $2,640/oz.
• The US 10 year rose sharply to 4% following Friday’s non-farm payroll data, which came in well above expectations.
• The US dollar has strengthened against a basket of currencies.

Earthquake in Iran (4.5) looks like underground firing of nuclear device

• A moderate earthquake was recorded in Iran on Saturday .
• The epicentre was close to Aradan city, Semnan province at 10:45pm local time and its epicentre at a depth of only 10km according to the US Geological Survey.

Biden confirmed he is looking at airstrikes on Iranian oil terminals vs previous comments that the US support Israeli airstrikes against Iran nuclear facilities

• OPEC+ have significant surplus oil capacity which is holding oil prices back
• Despite this oil could still jump higher >$79/bbl.

US fiscal debt to rise under Kamala Harris or Donald Trump.

• Trump is seen as the bigger spender despite his Republican stance potentially spending $8tn extra
• Kamala Harris is, ironically, seen to be more conservative with around $4tn of extra spending
• Either way it’s a whole heap of extra cash.

Lithium – Rio Tinto in discussions to takeover Arcadium (mkt cap US$3.3bn)

• Rio Tinto has made a non-binding approach towards Arcadium Lithium which aims to produce 140,000tpa of LCE ‘Lithium Carbonate’ by 2028.
• Projects are in Argentina (Olaroz, Cauchari & Fenix), Quebec and Australia plus some downstream facilities in China.
• Arcadium is using evaporation ponds in Argentina along with DLE technology, which may help Rio with its Rincon DLE project.

Conclusion: The move confirms interest by yet another major miner in growing lithium production

Copper ($9,930/oz) eases as smelters look to cut production on weak TCRC fees

• Copper prices have held near $10,000/t, ticking down slightly into this week.
• Bloomberg reports that copper smelter industry players are discussing closing capacity amid low processing fees.
• A major rollout of smelter capacity in China, Indonesia and the DRC is boosting competition for ore, reducing TCRC fees charged to miners.
• A shutdown of smelter capacity could provide some upward momentum to refined copper prices as China looks to revive their economy with stimulus.
• Industry participants are expecting TCRCs between 20/40, 2/4 this year vs 80/8 benchmark levels last year.
• Chinese smelters told Bloomberg that their industry would be lossmaking at $35-40/t.
• CRU estimates a concentrate deficit of 1.2mt going forward, unless smelter capacity is curtailed.

 This is Why Gold is Rising and It Will Probably Continue:

• Podcast: https://audioboom.com/posts/8547593-john-meyer-this-has-one-of-the-lowest-risk-profiles-i-ve-seen-for-a-long-time

Economics

US – Market revises expectations for the size of the next Fed rate cut as US employment data comes ahead of expectations.

• NFPs released on Friday came in at 254k in September up on 159k the previous month with unemployment rate ticking down 0.1pp to 4.1%.
• July and August numbers have also been revised by 55k and 17k higher.
• Yields on 10y debt climbed ~15bp on Friday and are currently trading at just over 4%.
• The futures market is expecting the Fed to cut 25bp at the next meeting in November.

China – Stimulus briefing due tomorrow

• A briefing planned by China’s leading economic planner tomorrow will look at further policies targeted at stimulating new growth.
• Five senior officials from the National Development and Reform Commission will attend the briefing.
• The government has made it clear it will continue to stimulate the economy till growth is restored

Eurozone – Sentix reports some improvement on business sentiment to -13.8 in October from -15.4 in September

• The Sentix figures are still terrible indicating significant slowing in business confidence in the region.

Germany – Factory orders fall 5.8% mom

• Experts expect the economy to shrink by 0.2% in 2024 according to Sueddeutsche Zeitung
• Official estimate due Wednesday

UK – Slowing rate of wage rises may give the BoE more room to cut interest rates

UK Property prices climbed at the fastest pace in nearly two years helped by lower mortgage rates, Halifax reports.

• Real estate prices climbed 4.7% yoy in September, up from 4.3% in August.

Chancellor to present major Budget measures to the Office for Budget Responsibility on Wednesday.

• Chancellor will not cut pension tax relief in the forthcoming Budget according to The Times
• The Treasury was reported to have been looking at overhauling higher-rate taxpayer relief on pension contributions. currently set at 40%.
• But officials have apparently abandoned plans on consideration of the impact on public sector work.
• The current tax-free lump sum limit of £268,275 may be lowered with a potential cap on the 25% tax-free lump sum
• Chancellor intends to raise tax on carried interest for Private Equity but may moderate the move to keep PE firms in the UK.
• Many UK-based PE firms invest overseas with highly mobile staff and partners.
• Raising PE taxes too far may push firms and their capital out of the UK at a time when UK startups and innovators are struggling to raise capital.

Israel –The Israeli military carried out heavy overnight strikes on the Hezbollah stronghold in Beirut’s southern suburbs while rockets have been fired from Lebanon into Israel.

• The Israel Defence Forces have also issued evacuation orders for most of northern Gaza, including Gaza City, as they return to the area in what looks like a new major offensive, NBC News writes.
• Today marks one-year anniversary of the October 7 terrorist attack of Hamas militants on Israel that left nearly 1,200 people dead and more than 250 people taken hostage with nearly 100 remaining in captivity.

Burkina Faso – Authorities are considering to withdraw mining permits from some foreign companies, according to junta leader Ibrahim Traore.

• No details which licenses can bee cancelled have been provided.
• “We know how to mine our gold and I don’t understand why we’re going to let multinationals come and mine it,” Traore said in a radio address to mark two years since taking power in a coup, Reuters reports.
• London-listed Endeavour Mining, Australia-based West African Resources, Russia’s Nordgold, and Canada’s Orezone Gold Corporation operate in Burkina Faso.

Currencies

US$1.096/eur vs 1.1032/eur previous. Yen 148.41/$ vs 146.19/$. SAr 17.421/$ vs 17.453/$ $1.311/gbp vs $1.315/gbp. 0.679/aud vs 0.684/aud. CNY 7.018/$ vs 7.019/$

Dollar Index 101.86 vs 101.82 previous

Precious metals:         

Gold US$2,649/oz vs US$2,661/oz previous

Gold ETFs 83.4moz vs 83.4moz previous

Platinum US$989/oz vs US$1,007/oz previous

Palladium US$1,016/oz vs US$1,014/oz previous

Silver US$32.3/oz vs US$32.1/oz previous

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

Base metals:   

Copper US$9,964/t vs US$9,933/t previous

Aluminium US$2,668/t vs US$2,659/t previous

Nickel US$17,970/t vs US$17,840/t previous

Zinc US$3,177/t vs US$3,153/t previous

Lead US$2,162/t vs US$2,155/t previous

Tin US$33,805/t vs US$33,825/t previous

Energy:           

Oil US$78.6/bbl vs US$78.1/bbl previous

• The US Baker Hughes rig count was down 2 units to 585 rigs last week (-34 or 5% y/y), with oil rigs falling by 5 to 479 units (-18 y/y) and gas rigs up 3 to 102 units (-16 y/y), including a 3 unit drop in New Mexico (101).
• The SPA Energy team has transferred to Cape Town for the Africa Oil Week conference, please feel free to contact us if you would like to catch up over a coffee while we are in town (other beverages are available).

Natural Gas €40.6/MWh vs €39.9/MWh previous

Uranium Futures $82.2/lb vs $82.4/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$108.8/t vs US$109.1/t

Chinese steel rebar 25mm US$494.9/t vs US$494.9/t

Thermal coal (1st year forward cif ARA) US$123.5/t vs US$121.5/t

Thermal coal swap Australia FOB US$142.3/t vs US$141.4/t

Other:  

Cobalt LME 3m US$24,300/t vs US$24,300/t

NdPr Rare Earth Oxide (China) US$60,980/t vs US$60,980/t

Lithium carbonate 99% (China) US$10,330/t vs US$10,330/t

China Spodumene Li2O 6%min CIF US$740/t vs US$740/t

Ferro-Manganese European Mn78% min US$995/t vs US$995/t

China Tungsten APT 88.5% FOB US$335/mtu vs US$335/mtu

China Graphite Flake -194 FOB US$445/t vs US$445/t

Europe Vanadium Pentoxide 98% 4.6/lb vs US$4.6/lb

Europe Ferro-Vanadium 80% 24.55/kg vs US$24.55/kg

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

China Rutile Concentrate 95% TiO2 US$1,346/t vs US$1,346/t

Spot CO2 Emissions EUA Price US$62.9/t vs US$62.9/t

Brazil Potash CFR Granular Spot US$282.5/t vs US$282.5/t

Germanium China 99.99% US$2,775.0/kg vs US$2,775.0/kg

China Gallium 99.99% US$455.0/kg vs US$455.0/kg

Battery News

Company News

Castillo Copper (CCZ LN) 0.25p, Mkt Cap £3.3m – Expansion of exploration target area in the Mt Isa belt of NW Queensland

• Castillo Copper that what is described as a “comprehensive surface sampling programme … [has] … delivered encouraging results and increased the target area” at its ‘Big One’ deposit.
• Chairman, Ged Hall confirmed that “assays confirmed significant anomalous copper zones west of the known orebody, complemented with indications of incremental mineralisation to the south and east”  of the current 2.1mt resource at an average grade of 1.1% copper.
• He said that geological mapping in conjunction with the sampling “has provided the geology team with deeper insights into localised copper-bearing faulting trends. Consequently, there are now more than sufficient data points to develop a comprehensive drilling campaign that has the potential to extend known mineralisation”.
• Last week, Castillo Copper announced a conditional agreement to divest its Cangai copper project in northern New South Wales so that it could concentrate on exploration of its Queensland copper assets “commencing with the Big One Deposit”.

Conclusion: We look forward to Castillo Copper’s exploration plans for the wider priority target area at its ‘Big One’ project in NW Queensland.

Cora Gold (CORA LN) 3.1p, Mkt Cap £14m – Maadina Foulbe Gold Project exploration update

• The Company completes a multi-element analysis on recently drilled 39 RC holes at the Madina Foulbe Gold Project in eastern Senegal.
• >2,000 samples analysed by ALS laboratories showed gold associated with an Intrusion Related Gold System.
• Such systems can be significant is size, for example Morila (Mali); Donlin Creek-Fort Knox-Pogo (Yukon / Alaska); and Kidston (Australia).
• The analysis of drill holes with more than 50% of those ending in mineralisation suggest that the mineralisation is likely to continue at depth and deeper drilling will be required to test those target zones.

Ferrexpo (FXPO LN) 44.2p, Mkt cap £260m – Q3 Production Report

• Ukrainian iron ore pellet and concentrate producer Ferrexpo reports Q3 Production data.
• The Company produced 1.27mt of pellets over the period, down 14.4% qoq, and 128kt concentrate, down 32% qoq.
• Company notes challenge of importing 80% of electricity from western neighbours, alongside elevated freight rates.
• The Company is focusing on higher quality products, boosting DR pellet production to the MENA region.
• Company notes ‘significant pressure on margins during the third quarter.’
• Cash position reported around $100m.

Guardian Metal Resources (GMET LN) 28.5p, Mkt Cap £33m – Further drilling result from Pilot Mountain

Power Metals Resources* (POW LN) 17.9p, Mkt cap £19m – (Power Metals* holds a 45% stake in Guardian Metal Resources)

• Guardian Metal Resources reports results from diamond drillhole PM24-012 at the Pilot Mountain project in the Walker Lane mineral belt, Nevada.
• The hole, PM24-001, which was drilled at an angle of 66⁰ to a depth of ~114m on the Desert Scheelite deposit, intersected 39.3m at an average grade of 0.735% tungsten trioxide, 0.3% zinc, 39.7g/t silver and 0.44% copper from 66m depth.
• The intersection includes 19.8m averaging 1.219% tungsten trioxide, 0.15% zinc and 69.6g/t silver from 82.5m depth.
• The company confirms that “the vast majority of the PM24-012 high grade intercept is located within the open pit shell as envisaged in the previous scoping level mine design and presents the opportunity to … [deliver] … a material increase in the resource model within this area”.
• Drillhole PM24-003 “the first of two drillholes completed into the previously untested DSPW … [Desert Scheelite Parallel West] … zone, returned 3.5m @ 0.235% WO₃. This confirms that the DPSW skarn-zone (with a large surface expressions of circa 600m by 100m) is tungsten rich, representing another important development for the Project”.
• Today’s announcement confirms that Guardian Metal Resources “has moved the drill rig back to the area of Desert Scheelite where PM24-012 was undertaken to test for extensions of this zone in multiple directions” and expresses increasing “confidence in the existing MRE. Resource upgrade and infill represents a very important step required to enable the completion of the Pre-Feasibility Study”.
• Today’s announcement also reports that its hole PM24-002 “has confirmed the presence of what the Company believes is an arc-related porphyry molybdenum (Mo) system”.
• The company says that recent results “may be related to one large porphyry system … [and that] … permit amendments are awaited which cover multiple drillholes into the various porphyry targets at Pilot Mountain”.
• CEO, Oliver Friesen, said that “The drillholes reported today confirm that further exploration and drilling is needed to fully assess the Project’s potential, of which we believe we have just scratched the surface”.
• He said that “we are very well funded and look forward to continuing to drive this extremely exciting Project forward at a time when the U.S. needs secure supplies of tungsten”.

Conclusion: Drilling continues to show encouragement at the Desert Scheelite deposit and more widely in the Pilot Mountain project area.

*SP Angel acts as Nomad and Broker for Power Metals

Hummingbird Resources (HUM LN) 6.6p, Mkt Cap £54m – Pasofino $2.5m equity raise

• Pasofino Gold, an owner of the Dugbe Gold Project, is raising US$2.5m in new equity at ~US$0.52 (C$0.52) per unit.
• Each unit consists of one common share and one half of a warrant with a C$0.90 exercise price and a 18 months’ exercise period.
• The placing is expected to close in October pending regulatory approvals.
• Funding will be used for Project related work and cover working capital needs.
• Hummingbird Resources will not be participating in the raise and its share in the Company will be diluted to ~50.4% from current 53%.
• Pasofino is under an exclusive offer period regarding a potential US$75m takeover with interested party carrying its due diligence.
• The exclusivity period was agreed until November 7 this year.

Jubilee Metals Group (JLP LN) – 4.7p, Mkt cap £139m – Additional open-pit copper project in Zambia

• Jubilee Metals reports the acquisition of a second open-pit copper mining project in Zambia adding to its Munkayo project.
• The acquisition of ‘Project G’ follows the successful conclusion of due-diligence and increases ownership “to 65% from 51%, as previously announced” and Jubilee Metals will pay “the acquisition value of US$2.0 million in cash instead of in shares, with a commitment to invest a further US$500 000 into the upgrading of the Project G operations”.
• Today’s announcement says that “Project G will ramp up over a 6 month period to reach 3 000 tonnes per month of pre-concentrate material through a Jubilee on-site module, and delivery of an additional 350 copper units per month (4 200 per annum) to Sable for further refining”.
• The company describes the acquisition as part of its plan to achieve “an initial production capacity target of 25 000 tonnes of copper per year” in Zambia.
• In addition, Jubilee Metals also confirms that it “has increased the allocation of power under the recently announced … private power purchase agreement … to secure an additional 2MW of power in order to ensure that all of the Zambian operations are fully supplied under the LHPC agreement”.

Petra Diamonds (PDL LN) 33.6p, Mkt Cap £63m – Sale of Koffiefontein mine

• Petra Diamonds reports the receipt of statutory approvals for the sale of its Koffiefontein diamond mine and that it expects to complete the transaction before the end of October.
• The company says that “As a result of this transaction, Petra will avoid incurring closure-related costs of US$15-18 million”.

Power Metal Resources* (POW LN) 16.5p, Mkt cap £18.35m – Incubation strategy success continues with Uranium JV

• Power Metals have announced the completion of their uranium focused JV with UCAM Ltd.
• The JV will see an initial equity investment of £10m into the company’s subsidiary, earning UCAM a 70% stake in the Company.
• Power Metals will also receive an additional £4m cash payment, should the uranium subsidiary be subject to a sale transaction, ‘or other value realisation.’
• ACAM is backed by Louis Bacon of Moore Capital Management and has stakes in Amaroq Minerals’
• The company announces that the JV agreement will see the funding of at least five ‘high impact drilling programmes.’
• Power Metals holds a highly prospective licence package in the Athabasca Basin, located in northern Saskatchewan and Alberta. It is one of the world’s leading sources of high-grade uranium.
• The Athabasca hosts several operating mines, including Cameco’s McArthur River and Cigar Lake Mines and Orano’s McClean Lake operations.
• It also hosts NexGen’s Arrow Project, forecast to produce 29mlb U₃O₈ pa, holding a reserves of 4,575kt at 2.37% U₃O₈ for 240mlb contained.
• Power Metals has been laying the foundations for successful drilling campaigns with hyperspectral data, radon, soil and biogeochemical sampling, radiometric and FTMG surveys over their prospects.
• Several results from EM surveys and other fieldwork are due and should help fast-track the drilling programmes funded by today’s JV.
• Demand for uranium is expected to rise by over 120% in 2030, and 200% by 2040, with analysts seeing potential for over 200mlb worth of deficits by 2040.
• The improving economics of small modular reactors is expected to fuel demand growth, whilst over 20 countries at COP28 have committed to tripling nuclear power capacity by 2050.
• Supply is currently exposed to geopolitical fragility, with Russia and Kazakhstan dominating the enriched and mined supply chains respectively. Russia accounts for 36% of global 2024 enrichment production.
• There are currently c.60 nuclear reactors under construction, with China driving demand growth in a bid to diversify their energy supply.

Conclusion: Power Metals have continued to execute on their project incubation and value crystallisation strategy. Management has brought in a deep-pocketed backer in UCAM for the Company’s highly prospective portfolio of greenfield uranium exploration assets in a tier one mining jurisdiction. We look forward to updates regarding the now-funded drilling programmes once targets are delineated.

*SP Angel acts as Nomad and Broker for Power Metal Resources

Rio Tinto (RIO LN) 5,300p, Mkt cap £86bn – Confirmation of Arcadium takeover discussion

• Rio Tinto confirms that it has made an approach to Arcadium Lithium over an acquisition.
• They note the approach is non-binding and there is no certainty a transaction will be agreed.
• Reuters reported on Friday that talks had been held between the two, with a valuation between $4bn-6bn.
• Arcadium has fallen 55% ytd.
• The integrated lithium producer was formed after a merger between Allkem and Livent.
• They are aiming to boost production to 140kt LCE by 2028.
• Their flagship assets include brine projects in Argentina, including Olaroz and Fenix, alongside spodumene projects in Quebec and Australia alongside downstream facilities in China.
• Olaroz holds production capacity of 43ktpa, Cauchari is in study phase targeting 25ktpa whilst Fenix is producing 32ktpa LCE.
• Arcadium also holds proprietary DLE technology, which Rio will likely look to integrate into their Rincon brine asset.

Serabi Gold (SRB LN) 75p, Mkt Cap £55m – Coringa project PEA update

1. Serabi Gold has published the results of an updated Preliminary Economic Assessment (PEA) for its Coringa gold project in Brazil incorporating the use of ore-sorting technology and lower than previously anticipating trucking costs to move ore from the mine-site to the compnay’s Palito processing plant.
2. The new study, prepared by Global Resource Engineering and based on a US$2,100/oz gold price envisages the production of an average of ~34,000oz pa of gold at an all-in-sustaining cost of US$1,241/oz over an 11 year mine life from underground mining of a diluted resource of ~2.2mt at an average grade of 5.38g/t gold.
3. The project generates an after-tax NPV_10% of US$145m and today’s announcement shows a table confirming that at current gold prices of US$2,600/t NPV_10% increases to US$211m.
4. CEO, Mike Hodgson, commented that “The Updated PEA demonstrates the robust viability of our strategy and we believe there is still plenty of upside”.
5. In particular, he said that “the grade uplift of 1.6 times from ROM to sorted ore is conservative and test-work indicates this can be significantly enhanced with improvements in controlling and reducing the production of fines in the crushing circuit. This will result in better grades, reduced mass and offer the opportunity for accelerated production”.
6. Mr. Hodgson also said that the new PEA “does not consider the longer-term growth potential we believe in at Coringa, and this will be a high priority for us in 2025” and he also indicated potential to pare costs.

Conclusion: Serabi Gold’s updated PEA for the Coringa mine development envisages an 11 year mine life delivering a total of over 360koz of gold at an AISC of US$1,241/oz with potential for further improvements to the economics and longer term growth.

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

Strategic Minerals* (SML LN) 0.25p, Mkt Cap £4.5m – Participation in study for the sustainable extraction of critical minerals in the UK

• Following its recent confirmation of the priority of its wholly-owned Redmoor tin/tungsten project in Cornwall, Strategic Mineral’s reports that its operating subsidiary for the project, Cornwall Resources (CRL) is participating in a £4.5m Green Economies Centre at the University of Exeter.
• The Centre is funded by UK Research and Innovation to research the “sustainable extraction of tin, tungsten, lithium and other critical minerals, to support the UK’s transition to a green economy”.
• CRL will co-lead research on “one of the trans-disciplinary packages and will co-contribute through access to its extensive mineral rights footprint, including CRL’s Duchy of Cornwall licence, and personnel support” in collaboration with the University and Camborne School of Mines alongside other local industries.
• Executive Director, Peter Wale, explained that participation in the 4-year project would “assist CRL in its understanding of the geological nature of the area covered by its recently acquired Duchy Licence alongside investigations into the responsible extraction of potential surface stores of critical minerals”.
• Prior to the acquisition of additional licences, including those from the Duchy of Cornwall, the project hosted an ‘Inferred’ mineral resource of 11.7mt at an average grade of 0.56% tungsten trioxide, 0.16% tin and 0.50% copper based on drill core recovered in 2017/2018. Recent re-examination of these cores has identified previously unrecognised mineral structures beyond the mineral resource envelope.

Conclusion: Participation in the Green Economies Centre harnesses the expertise and resources of Exeter University, the Camborne School of Mines and industry participants in a collective effort which may help guide future exploration of the expanded project area. We await results from the collaboration with interest.

*SP Angel acts as Nomad and Broker to Strategic Minerals

Thor Explorations* (THX LN) 16p, Mkt cap £103m – Segilola extension drilling results justify step-out programme

• Nigerian gold producer Thor report an update from the drilling at their Segilola mine extension programme.
• The Company is drilling down plunge beneath the current open pit at Segilola.
• Highlights include:
  • SNMDD011: 3m at 11g/t Au from 294m (2.4m true width)
  • SNMDD012: 1.5m at 3g/t Au from 260m (1.2m true width)
• These two holes are the first two of 12, with five already drilled.
• The programme is targeting two high-grade gold shoots.
• Management believe they have confirmed this proof of concept, justifying further step-out drilling.
• Mineralisation was intercepted c.50m below the current final pit design.
• Management note that these results ‘suggest that the minimum underground mining width can be achieved at a suitable grade.’

*A member of the SP Angel research team holds shares in Thor Explorations

West African Resources (WAF AU) A$1.3, Mkt Cap A$1.5bn – Burkina Faso update

• The Company released an update this morning after President of Burkina Faso suggested that authorities may cancel some mining license.
• President did not say which licenses may be cancelled in particular.
• The Company said that it is not aware of any plans by the government to withdraw any of its mining permits.
• The team said that authorities remained supportive of the Company as seen by recent positive interactions with the government last month.
• The Company reiterated its production guidance for 190-210koz at $1,300/oz AISC.
• The stock opened down more than 25% with trading temporarily paused on the back of the news.

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.

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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