SP Angel Morning View -Today’s Market View, Tuesday 18th February 2025

Copper holds higher amid Freeport Indonesia output disruption

MiFID II exempt information – see disclaimer below

Adriatic Metals (ADT1 LN) – US$50m equity raise to fund ramp up and expansion plans

Anglesey Mining (AYM LN) – Examining the energy storage potential at Parys Mountain

Anglo American (AAL LN) – Agreement to sell nickel business

Antofagasta (ANTO LN) – 2024 results show improved margins and strong revenue growth

BHP (BHP LN) – H1 results highlight India’s position as the world’s fastest growing economy and its role in driving commodity demand

Great Southern Copper (GSCU LN) – Completion of Phase 1 drilling at Cerro Negro

Great Western Mining* (GWMO LN) – Exploration results from the Walker Lane belt, Nevada

KEFI Gold and Copper* (KEFI LN) – Hawiah VMS Project mineral resource grows 26%

Power Metals Resources* (POW LN) – Acquisition of Fortin River Project

Sylvania Platinum* (SLP LN) – Interim results as Thaba JV commissioning on time

Copper ($9,398/t) holds higher amid Freeport Indonesia output disruption

• Copper prices have held their recent move higher, amid tariff concerns from the Trump administration and signs of improvement from Chinese demand.
• Freeport Indonesia report they are currently running at 40% of normal capacity owing to export restrictions.
• The Company notes that they are seeing concentrate stockpiles building up.
• Elsewhere, BHP state its intentions to continue investing internally for copper growth, as opposed to M&A.
• Chinese officials are working to limit expansions for smelters, following substantial overexpansion and subsequent compression of TCRC fees.
• Analysts expect further consolidation of the copper smelting industry from larger Chinese players as profitability issues continue.
• China’s mined output fell to 1.7mt from 1.94mt in 2023 vs 2022.

Economics

Ukraine/Russia – European leaders meeting in Paris could not agree on the best way to progress with security guarantees for Ukraine amid US/Russia drive to launch ceasefire talks.

• Germany, Italy, Poland and Spain expressed a reluctance to send troops, although, the UK earlier offered their forces for a potential peacekeeping mission (FT).
• France proposed a “reassurance force” to be stationed behind future ceasefire lines while Germany called discussions “completely premature” and Italy said that it was “the most complex and least likely to be effective” of various options.
• Inconclusive talks of major partners of Ukraine against Russia’s aggression come as US and Russian representatives meet this week in Saudi Arabia exploring conditions to a potential ceasefire.
• Us Secretary of State Marco Rubio, National Security Adviser Mike Waltz, and Steve Witkoff, Trump’s Special Envoy to the Middle East, started the meeting with Sergei Lavrov and Yuri Ushakov, Russia’s Foreign Minister and Foreign Policy Adviser today.

Germany – Investors sentiment picked up in February as the nation heads to elections polls over the weekend.

• ZEW Expectations (Feb/Jan/Est): 26.0/10.3/20.0
• ZEW Current Situation (Feb/Jan/Est): -88.5/-90.4/-89.4

UK – The pound is up slightly following strong employment and labour earnings growth.

• Pay growth picked up to the highest level in eight months and unemployment unexpectedly dialled back (Bloomberg).
• Number of employed surprisingly climbed in January, although, outlook remains weak with high NI contributions and a hike in minimum wages coming into effect in April and expected to weigh on the sentiment.
• Av Weekly Earnings (3m %yoy, Dec/Nov/Est): 6.0/5.5(revised form 5.6)/5.9
• Av Weekly Earnings ex Bonus (3m %yoy, Dec/Nov/Est): 5.9/5.6/5.9
• Unemployment Rate (Dec/Nov/Est): 4.4%/4.4%/4.5%
• Employment Change (Jan/Dec/Est): 21/-14(revised from -47)/-30

Argentina – $LIBRA meme crypto project that was promoted by President Milei driving valuation to a north of $4.5b before collapsing to under $200m is causing the biggest crisis for the new administration (FT).

• Milei later pulled his endorsement for the project.
• “I’m a techno-optimist . . . and this was proposed to me as an instrument to help fund Argentine projects… its true that in trying to help out those Argentines, I took a slap in the face,2 Milei said in a televised interview commenting on the scandal.
• Local equity index lost more than 5% on the day while the currency fell 2% against the US$.

Currencies

US$1.0466/eur vs 1.0479/eur previous. Yen 151.96/$ vs 151.88/$. SAr 18.433/$ vs 18.415/$. $1.262/gbp vs $1.259/gbp. 0.636/aud vs         0.636/aud. CNY 7.281/$ vs 7.256/$.

Dollar Index 106.942 vs 106.817 previous.

Precious metals:         

Gold US$2,910/oz vs US$2,901/oz previous

Gold ETFs 83.7moz vs 83.7moz previous

Platinum US$989/oz vs US$988/oz previous

Palladium US$986/oz vs US$981/oz previous

Silver US$32.5/oz vs US$32.3/oz previous

Rhodium US$4,650/oz vs US$4,650/oz previous

Base metals:   

Copper US$9,409/t vs US$9,442/t previous

Aluminium US$2,641/t vs US$2,636/t previous

Nickel US$15,330/t vs US$15,410/t previous

Zinc US$2,869/t vs US$2,848/t previous

Lead US$1,987/t vs US$2,001/t previous

Tin US$32,845/t vs US$32,480/t previous

Energy:           

Oil US$75.3/bbl vs US$75.0/bbl previous

Natural Gas €47.7/MWh vs €49.9/MWh previous

Uranium Futures $66.4/lb vs $66.4/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$107.0/t vs US$106.6/t

Chinese steel rebar 25mm US$486.2/t vs US$488.0/t

HCC FOB Australia US$188.5/t vs US$188.0/t

Thermal coal swap Australia FOB US$105.0/t vs US$105.0/t

Other:  

Cobalt LME 3m US$21,550/t vs US$21,550/t

NdPr Rare Earth Oxide (China) US$59,544/t vs US$59,811/t

Lithium carbonate 99% (China) US$9,958/t vs US$9,991/t

China Spodumene Li2O 6%min CIF US$815/t vs US$815/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$1,005/t

China Tungsten APT 88.5% FOB US$338/mtu vs US$338/mtu

China Graphite Flake -194 FOB US$430/t vs US$430/t

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

Europe Ferro-Vanadium 80% US$24.8/kg vs US$24.8/kg

China Ilmenite Concentrate TiO2 US$295/t vs US$296/t

Global Rutile Spot Concentrate 95% TiO2 US$1,543/t vs US$1,543/t

Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t

Brazil Potash CFR Granular Spot US$317.5/t vs US$317.5/t

Germanium China 99.99% US$2,725.0/kg vs US$2,725.0/kg

China Gallium 99.99% US$385.0/kg vs US$385.0/kg

Battery News

BYD launches new “God’s Eye” driving assistance system and plans solid-state installation by 2027

• Last week was a busy week for China’s BYD, with the launch of its latest advanced driving assistance system (ADAS), named “God’s Eye.”
• The new system will enable all BYD vehicles to be equipped with high-end intelligent driving technology, including the companies $9,550 Seagull hatchback.
• The God’s Eye ADAS will be available in three variants with up to three LiDAR sensors.
• BYD has been criticised for how its intelligent system has lagged behind other EV start-ups in China.
• The automaker possibly has the largest data pool for developing an ADAS, training it on a mileage of 72 million km perday across 2024.
• BYD Chairman Wang Chuanfu also claimed at the event that the company has 110,000 engineers, with 5,000 of them being intelligent driving R&D engineers.
• The BYD Chairman highlighted that in the next 2 to 3 years, intelligent driving will become an indispensable configuration for buying a car.
• At the end of the week the company also announced that it expects to start mass demonstration as well as installation of solid-state batteries in 2027, with the goal of achieving mass installation by 2030.

Company News

Adriatic Metals (ADT1 LN) 203p, Mkt cap £685m – US$50m equity raise to fund ramp up and expansion plans

• Adriatic, who are currently ramping up the Vares polymetallic operation, announce a US$50m equity raise at A$3.9/shr.
• The Company will use the funds to ‘fast-track the Vares Processing Plant expansion’ and ‘de-risk ramp up to nameplate production, anticipated in 2H25.’
• Adriatic is looking to boost the Vares Processing Plant from 0.8mtpa to 1.3mtpa for US$25m worth of CAPEX.
• The US$50m will provide additional liquidity on top of the current US$46m in cash.
• The Company will order long lead items for the expansion of the processing plant and will commence studies to assess the potential for expanding underground production.
• A US$19m quarterly debt repayment is due to Orion 31^st March 2025.

Anglesey Mining (AYM LN) 0.75p, Mkt Cap £3.6m – Examining the energy storage potential at Parys Mountain

• Anglesey Mining reports that it is collaborating with “an innovative energy storage company”, RheEnergise, to examine the potential to implement new energy storage technology in the 300m deep Morris Shaft at Parys Mountain.
• RheEnergise’s technology uses “traditional pumped energy storage technology … [with] … a high-density fluid which is 2.5 x more dense than water … used in a closed loop … [as a potential source of ] … renewable energy … on the Isle of Anglesey and also a reliable source of clean energy for future mining and mineral processing operations”.
• Today’s announcement explains that “The parties have agreed to work together to secure non-dilutive funding to support the project through the various stages of development, from feasibility study to construction and commissioning, including de-watering of the Morris shaft”.
• CEO, Rob Marsden, confirmed that RheEnergise “has shown that it is able to deliver demonstration projects here in the UK … [and said that the] … infrastructure and mothballed assets at Parys Mountain provide an ideal site at which to place a commercial scale plant”.
• Mr. Marsden confirmed Anglesey Mining’s focus “on delivering a polymetallic underground mine at Parys Mountain … [and said that]… Securing a source of consistent green power on site …is key to the strategy of de-risking the incremental development of the mine”.

Conclusion: Collaboration with a specialist energy storage company may help provide renewable energy to a future underground mine development at Parys Mountain. We await developments with interest.

Anglo American (AAL LN) 2,477p, Mkt Cap £33bn – Agreement to sell nickel business

• Anglo American reports that it has reached agreement for the sale of its Brazilian nickel operations at Barro Alto and Codemin to MMG Singapore Resources for up to US$500m.
• The “agreed cash consideration of up to $500 million comprises an upfront cash consideration of $350 million at completion; the potential for up to $100 million in a price-linked earnout; and contingent cash consideration of $50 million linked to the Final Investment Decision (FID) for the development projects” at Jacare and MorroSem Boné.
• Commenting that the agreed sale was the culmination of “highly competitive process”, Chief Executive, Duncan Wanblad, said that it marked “a further important milestone towards simplifying our portfolio to create a more highly valued copper, premium iron ore, and crop nutrients business”.
• Coming the day after the company announced that proposals to demerge the platinum business are to be put to shareholders at the AGM on 30^th April, Mr. Wanblad explained that “today’s agreement, together with those signed in November 2024 to sell our steelmaking coal business, is expected to generate a total of up to $5.3 billion of gross cash proceeds”.
• He said that Anglo American is working to “create a much simpler, more resilient and agile business that will enable full value transparency in the market”.
• We note that the simplification process has accelerated since BHP made overtures to acquire Anglo American in April last year.  No doubt Anglo American’s management will be aware that the accumulating cash pile and simplification of the business carries the risk of attracting interest from other potential predators.

Antofagasta (ANTO LN) 1,880p, Mkt Cap £18bn – 2024 results show improved margins and strong revenue growth

• Announcing results for the year to 31^st December 2024, Antofagasta reports a 5% rise in revenue to US$6.6bn (2023 – US$6.3bn) and an 11% increase in EBITDA to US$3.4bn (2023 – US$3.1bn).
• Improved revenues reflect robust copper prices with the positive commodity pricing combining with the impact of cost control initiatives to lift EBITDA and improve EBITDA margins to 51.8% (2023 -48.8%).
• Pre-tax underlying profit declined by ~8% to US$1.6bn with the positive impacts of improved copper prices and revenues “offset by higher depreciation and amortisation … primarily related to the increase in amortisation of mine development and new mine fleet equipment at Centinela, along with the commencement of the Los Pelambres Phase 1 Expansion Project in 2024”.
• The financial results reflect the production of 664kt of copper, 186,900oz of gold and 10,700t of ,molybdenum at a net cash cost of US$1.64/lb of copper “broadly in line with 2023”.
• The company is maintaining its previously announced 2025 production and cost guidance of 660-700,000t of copper production with “Cash costs before by-product credits and net cash costs … expected to be between $2.25/lb and $2.45/lb and between $1.45/lb and $1.65/lb, respectively”.
• Antofagasta proposes a final dividend of 23.5¢/share (US$231.7m) bringing the total for the year to 31.4¢/share (309.6m) representing “a total pay-out of 50% of underlying earnings”.
• The company says that “Full year capital expenditure was $2.4 billion in 2024, with major capital projects in line with plan and reflecting the impact from the depreciation of the Chilean peso during the year”.
• Capital cost guidance for 2025 “is expected to be $3.9 billion … as development expenditure peaks on the Centinela Second Concentrator and as we advance other growth projects at Los Pelambres and Centinela during the year”.
• Welcoming “another year of strong revenue growth and cash flow generation … [CEO, Ivan Arriagada, described the 51.8% EBITDA margin as] … at the top-end of our peer group of pure-play copper producers”.
• Mr. Arriagada said that Antofagasta is “encouraged by the outlook for copper as demand remains strong and global constraints, such as grade decline, ore hardness and capex inflation, are steadily limiting existing supply expansions”.

Conclusion: Antofagasta has reported strong results for 2024 and continues to expect modestly improved production volumes at lower unit cost in 2025. We look forward to another positive year of performance from the group.

BHP (BHP LN) 2,077p,Mkt Cap £106bn – H1 results highlight India’s position as the world’s fastest growing economy and its role in driving commodity demand

• Reporting on what CEO, Mike Henry, described as “a strong financial performance for the half-year” BHP announced attributable profit for the six months to 31^st December 2024 of US$4.4bn (2023- US$0.9bn) and underlying EBITDA of US$12.4bn (2023- US$13.9bn.)
• Closing net debt of US$11.8bn compares with US$12.6bn in H1 2024 and US$9.1bn at the end of June 2024.  Gearing is reported at 19.2%.
• BHP has declared “an interim dividend of 50 US cents per share – a total of US$2.5 billion” (H1 2024 – 72cents or US$3.7bn).
• Mr. Henry highlighted BHP’s continuing investment strategy highlighting the “US$3.2 billion in potash and copper” as well as the “US$2.0 billion formation of Vicuña Corp, a 50/50 joint venture with Lundin Mining to develop the combined Filo del Sol and Josemaria copper projects in an exciting prospective region in Argentina”.
• He confirmed that “demand for BHP products remains strong despite global economic and trade uncertainties, with early signs of recovery in China, resilient economic performance in the US and strong growth in India”.
• BHP confirms global economic growth of 3.2% in 2024 and comments that service growth outstripped industrial activity leading to a slowing of “commodity demand in many economies”.
• The company expects global growth of around 3% in 2025 and 2026 but cautions that “the impact of policy on trade and inflation remains a key uncertainty, particularly for the United States and its trade partners”.
• India “is likely to remain as the fastest growing major economy … [and] … continues to be a bright spot for commodity demand”.
• In China BHP reports annual growth of 5% in 2024 and says that it “is expected to draw upon policy support to rebalance its economy and improve domestic demand in the near term”.
• Setting a wider context for commodity demand the “trajectory of the world population growing from eight billion today to 10 billion in 2050, with more people living in cities, together with the energy transition and the growth of data centres and AI, will compound the need for more metals and minerals”.

Conclusion: BHP is maintaining its full year production guidance across its product groups and highlights India’s growing significance in driving commodity demand.

Great Southern Copper (GSCU LN) 1.4p, Mkt Cap £7.2m – Completion of Phase 1 drilling at Cerro Negro

• Great Southern Copper reports the completion of its Phase 1 drilling campaign at its Cerro Negro copper/gold/silver target within its Especularita project located 170km from the port city of Coquimbo, and 130km from Antofagasta Minerals’ copper concentrate port at Los Villos in Chile.
• The campaign comprised 9 diamond drill holes totalling 1,002.6m and targeted “high-grade, structurally-controlled high-sulphidation style Cu-Ag mineralisation … beneath the Mostaza open pit” as well as depth and strike extensions of mineralisation exploited in previous mining.
• Today’s announcement explains that mineralisation was intersected in each of the Phase 1 holes with visible copper mineralisation observed over widths up to more than 20m in the core with photographs included in the announcement showing the copper minerals chalcocite (Cu₂S) and bornite (Cu₅FeS₄).
• Samples from the drilling have been sent for assay with “results for initial holes are anticipated in the coming weeks”.
• The company confirms that “Planning and permitting for the next phase of drilling is in progress. Work is likely to include metallurgical testing”.
• CEO, Sam Garrett, explained that “Geophysics surveys are also being considered to assist with exploration for buried extensions and repetitions of the high-grade mineralised lenses and for deeper porphyry type copper mineralisation”.

Conclusion: Phase 1 drilling at Cerro Negro intersected visual copper mineralisation in all nine holes drilled. We await assay results from over the coming weeks with interest.

Great Western Mining* (GWMO LN) 0.016p, Mkt Cap £1.7m – Exploration results from the Walker Lane belt, Nevada

• Great Western Mining provides an update on their M5 Prospect, where they have recently conducted further exploration.
• The Company has completed soil geochemistry and IP surveys over the gold and copper target.
• The IP survey was intended to assess prospectivity of the ground below the main ridge, and assess potential for continuation to the northeast.
• Results suggest a chargeability-resistivity pair aligned along the M5 ridge, correlating to the soil sampling results.
• Soil sampling returned 26/118 samples over 5ppb Au, with six samples showing copper over 75ppm.
• The M5 prospect is situated over an 850m long northeast trending ridge and consists of mafic intrusions in an altered volcanic package.
• Today’s results will further support the delineation of drill targets and their prioritisation.

*SP Angel act as Broker to Great Western Mining, an SP Angel Analyst has visited Great Western’s Nevada claim blocks

KEFI Gold and Copper* (KEFI LN) 0.53p, Mkt Cap £42m – Hawiah VMS Project mineral resource grows 26%

• The Company released an updated mineral resource at Hawiah and Al Godeyer (12km away from Hawiah) VMS deposits in Saudi Arabia.
• The Hawiah Polymetallic Deposit recorded a 25% increase in tonnage terms and 14-23% in contained metal terms.
• Infill drilling also increased Indicated category 161% which now accounts for 85% of the total, double from ~43% reported previously.
• Updated Hawiah MRE stands at 36mt at 0.82% Cu, 0.86% Zn, 0.64g/t Au and 10.0g/t Ag including:
  • 31mt at 0.85% Cu, 0.88% Zn, 0.67g/t Au and 10.3g/t Ag in the Indicated category and;
  • 6mt at 0.69% Cu, 0.74% Zn, 0.51g/t Au and 8.4g/t Ag in the Inferred resource.
• Total contained metal increased to 297kt Cu (+16%), 310kt Zn (+14%), 745koz Au (+20%) and 12moz Ag (+23%).
• Most of growth in the resource is driven by the expansion of Crossroads Extension Lode at depth.
• Previous MRE stood at 29mt at 0.89% Cu, 0.94% Zn, 0.676g/t Au and 10.1g/t Ag.
• Open pit domain accounts for ~13mt with an underground resource at ~24mt.
• Mineralisation wise, the split is:
  • Oxide accounted for 1mt at 2.15g/t Au and 8.11g/t Ag;
  • Transition for 3mt at 1.24% Cu, 0.72% Zn, 0.73g/t Au and 13.05g/t Ag;
  • Sulphide for 32mt at 0.82% Cu, 0.90% Zn, 0.58g/t Au and 9.77g/t Ag.
• The Al Godeyer MRE was also updated and currently stands at 2mt at 0.93% Cu, 0.53% Zn, 1.21g/t Au and 7.37g/t Ag.
• This compares to the previous estimate of 1.4mt at 0.60% Cu, 0.54% Zn, 1.39g/t Au and 6.60g/t Ag.
• Infill drilling allowed better definition of the high grade zone and high grade copper intersections increased the fresh zone copper grades.
• Gold assumptions raised to $2,300/oz from $1,820/oz with COGs raised as well.
• The team is planning to commence drilling at the recently secured Umm Hijlan EL to define expansion to the resource along strike with the programme to kick off 2Q25.

Conclusion: Extensive drilling programme at Hawiah and Al Godeyer VMS Projects expands the size as well as confidence of the resource with increased Indicated category to be used for future Reserves estimation. The team is planning to launch new drilling programme testing southern on strike extension of the Hawiah VMS system at the newly secured Umm Hijlan Exploration License with works to start 2Q25 allowing to further grow the resource of the third largest base metals development project in Saudi Arabia. KEFI earlier launched a strategic review of the 15% stake in GMCO JV owning Saudi Arabia projects with the focus remaining on closing funding and start of development works at the Tulu Kapi Gold Project in Ethiopia.

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

Power Metals Resources* (POW LN) 14p, Mkt cap £17m – Acquisition of Fortin River Project

• Power Metal Resources has acquired via staking the Fortin River Project in Saskatchewan, Canada.
• Recent geophysical survey results show the potential presence of a 1.7km wide meteor impact crater.
• This holds prospectivity for uranium mineralisation, similar to the Carswell Crater where 62mlb has been mined.
• Limited exploration has been conducted at the property.
• Going forward, POW will analyse additional geophysical data to determine the location of fault structures potentially correlated to uranium mineralisaiton.
• POW then intends to conduct further geophysical surveys for the summer 2025 season.

*SP Angel acts as Nomad and Broker for Power Metals

Sylvania Platinum* (SLP LN) 47p, Mkt Cap £121m – Interim results as Thaba JV commissioning on time

• South African PGM producer Sylvania reports interim results for the six month period to 31st December 2024.
• Sylvania produced 39.4koz 4E PGM ounces over the period, up from 38.4koz the six months prior on stronger feed grades.
• The Company generated revenues of $46.7m for the period, EBITDA of $9.9m and net profit of $7.2m.
• Revenue increased 17% on higher ounce production and an increase in USD basket prices.
• Cash balance at 31st December of $77.5m, vs $107m at HY1 FY2024.
• Sylvania is debt free.
• Share buyback announced on 31st January has seen $0.87m shares repurchased at average price of 41p/shr.
• Company declares a $3.3m interim dividend of 0.75p/shr.
• Sylvania increases 2025 production guidance from 73-76koz to 75-78koz following ‘solid HY1 FY2025 production.’
• Thaba JV reportedly on schedule for first production May 2025 with all phases of the chrome and PGM benficiation plants on track.
• Lesedi profitability expected to improve towards the end of 3QFY25 on higher grades and the commissioning of the new host-mine ROM plant.

*An SP Angel analyst holds shares in Sylvania Platinum

LSE Group Starmine awards for 2024 commodity forecasting:

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

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

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

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

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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