SP Angel Morning View -Today’s Market View, Friday 2nd May 2025

Copper continues to flow out of LME warehouses as US premiums attract flow 

MiFID II exempt information – see disclaimer below

Empire Metals* (EEE LN) –Updated Presentation shows key upcoming milestones

Ivanhoe Mines (IVN CN) – Results show Kamoa ramp up continues as focus shifts to exploration and Kipushi/Platreef expansion

Kavango Resources* (KAV LN) – Resource definition drilling highlights widespread gold mineralisation in shear zones

Northern Graphite (NGC CN) – Year-end results statement highlight insufficient sales volumes and prices to overcome finance costs

Taseko Mines (TKO CN) – 1Q25 earnings drop on lower production at Gibraltar with Florence on target for first copper later this year

Copper – $9,362/t metal continues to flow out of LME warehouses as US premiums attract flow

• LME stats show another 400t of copper, 2,000t of aluminium, 100t of zinc, 100t of lead and 1,512t of nickel flowing out of LME warehouses today.
• The withdrawal takes LME copper stock to 197,700t representing 2.7 days of demand or 0.74% of total copper use last year.
• SHFE stocks are also down at 116,753t
• Comex stock rose 2,592t to 146,550t yesterday with US imports rising by 255,000t (78.1%) so far this year.
• Further examination of the ICSG data published this week suggests the ISCG remain overoptimistic on their production assumptions due to the potential for mine disruption to hit target production.
• This combined with new demand to bolster national grid systems in China, the US and Europe suggests a more finely balanced market with potential for a deficit by the year end in our view.
• Disruption to manufacturing from Trump tariffs may impact demand making the outlook increasingly difficult to forecast today.

Gold ($3,261/oz) edges higher in muted trading as dollar and Treasury yields slide before non-farm payrolls

• Gold prices have bounced following yesterday’s 2% sell-off but remain lower after April’s surge higher.
• ETF outflows suggest traders and investors are taking profits following the sudden rally amid Trump’s trade war escalation.
• Thawing tensions between China and the US are reducing gold’s appeal, whilst Treasuries have rallied following Trump’s U-turn on sacking Jerome Powell.
• Focus shifts to today’s employment data, following weaker-than-expected ADP numbers and GDP data.
• The dollar index remains below 100, amid sterling, euro and yen strength.
• China is currently on holiday for May Day, limiting appetite from the metal’s main current buyer.

Economics

US House of Representatives overrule California’s 2035 EV legislation

• The US House of Representatives have voted to bar California’s landmark plan to end the sale of gasoline-only vehicles by 2035 that has been adopted by 11 other states.
• The House backed legislation to repeal a waiver granted by the Environmental Protection Agency (EPA) under former President Joe Biden in December, allowing California to mandate at least 80% EVs by 2035.
• California believes that the legislation was essential to cutting pollution and is set to contest the ruling.
• Automakers have been urging government intervention, claiming the rules were not feasible.
• The Alliance for Automotive Innovation, which represents General Motors, Toyota, Volkswagen, Hyundai and other major automakers had warned that manufacturers would be “forced to substantially reduce the number of overall vehicles for sale to inflate their proportion of EV sales.”

US – Labour numbers are out this afternoon marking the first month of employment data post reciprocal tariffs implementation.

• Lower than expected employment numbers may see the Fed opting for a rate cut as early as June (currently July is consensus).
• Estimates are for a 138k reading, down from 228k), and 4.2% jobless rate.
• Apple shares are down in after trading hours (-2.8%) as sales in China dropped more than expected.
• Amazon issued an operating income forecast that missed expectations with share down 2.3% in post market trading.

China – Commerce Ministry said it is “evaluating” talks with the US raising hopes for an easing in trade barriers.

• In a Friday statement the ministry reported that it had noted senior US officials repeatedly expressing their willingness to talk to Beijing about tariffs.
• “The US has recently sent messages to China through relevant parties, hoping to start talks with China,” the ministry added.
• “China is currently evaluating this.”

Iran – President Trump announced secondary sanctions on anybody buying oil or petrochemicals from Iran.

• Trump accused Iran of financing militant groups through the Middle East and wants to prevent Tehran from developing a nuclear weapon.

Ukraine – The US and Ukraine sign the minerals agreement allowing the US preferential access to any new deals in the mineral resources space.

• The agreement allows to setup a fund to attract global investment into Ukraine with the US getting first claim on profits.
• Shortly after signing the deal, the US administration approved its first sale of military equipment including air defence systems.
• Separately, the US said it will be looking to organise direct negotiations between Moscow and Kyiv over the next 100 days.

Currencies

US$1.1325/eur vs 1.1306/eur previous. Yen 145.21/$ vs 144.41/$. SAr 18.442/$ vs 18.692/$. $1.331/gbp vs $1.330/gbp. 0.642/aud vs 0.639/aud. CNY 7.271/$ vs 7.271/$

Dollar Index 99.943 vs 99.952 previous

Precious metals:         

Gold US$3,262/oz vs US$3,231/oz previous

Gold ETFs 89.0moz vs 88.9moz previous

Platinum US$972/oz vs US$962/oz previous

Palladium US$955/oz vs US$941/oz previous

Silver US$32.6/oz vs US$32.1/oz previous

Rhodium US$5,375/oz vs US$5,375/oz previous

Base metals:   

Copper US$9,362/t vs US$9,214/t previous

Aluminium US$2,438/t vs US$2,415/t previous

Nickel US$15,265/t vs US$15,445/t previous

Zinc US$2,620/t vs US$2,606/t previous

Lead US$1,965/t vs US$1,961/t previous

Tin US$30,225/t vs US$31,450/t previous

Energy:           

Oil US$62.2/bbl vs US$60.5/bbl previous

Natural Gas €32.5/MWh vs €32.3/MWh previous

Uranium Futures $68.9/lb vs $67.7/lb previous

Bulk:

Iron Ore 62% Fe Spot (China CFR) US$99.8/t vs US$99.8/t

Chinese steel rebar 25mm US$465.1/t vs US$465.1/t

HCC FOB Australia US$187.0/t vs US$187.0/t

Thermal coal swap Australia FOB US$101.5/t vs US$101.3/t

Other:  

Cobalt LME 3m US$33,700/t vs US$33,700/t

NdPr Rare Earth Oxide (China) US$56,524/t vs US$56,524/t

Lithium carbonate 99% (China) US$9,036/t vs US$9,036/t

China Spodumene Li2O 6%min CIF US$785/t vs US$785/t

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

China Tungsten APT 88.5% FOB US$363/mtu vs US$363/mtu

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

Europe Vanadium Pentoxide 98% US$5.2/lb vs US$5.2/lb

Europe Ferro-Vanadium 80% US$24.3/kg vs US$24.3/kg

China Ilmenite Concentrate TiO2 US$285/t vs US$285/t

Global Rutile Spot Concentrate 95% TiO2 US$1,513/t vs US$1,513/t

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

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

Germanium China 99.99% US$2,825.0/kg vs US$2,825.0/kg

China Gallium 99.99% US$395.0/kg vs US$395.0/kg

Battery News

CATL become first battery maker to meet Chinese “No Fire, No Explosion” Standard

• The world’s largest battery maker became the first company to meet China’s latest “No Fire, No Explosion” national safety standard.
• The legislation will come into effect on July 1^st 2026 and will require batteries to prevent fire and explosion after internal runaway occurs.
• Battery makers must past new tests to meet the certification, including impact testing and rapid fast-charging cycles.

Company News

Empire Metals* (EEE LN) 11p, Mkt Cap £71m –Updated Presentation shows key upcoming milestones

• Empire Metals have uploaded an updated corporate presentation: CLICK LINK
• Empire is developing the large-scale Pitfield Titanium Project in Australia.
• The Company highlights their district scale discovery, with recent AC drilling showing higher grades over wide intercepts, including 51m at 7.9% TiO2 and 148m at 6.5% TiO2.
• This compares to their JORC exploration target of 26.4-32.2 billion tonnes at 4.5% to 5.5% TiO2.
• Focus remains on the flowsheet for Pitfield, with bulk sapling and metallurgical processing continuing to derisk the project.
• Management also highlights the start of discussions with industry players to discuss suitability for premium pigment and titanium sponge markets.
• Infill drilling will be used to support the delivery of a JORC MRE this year.
• The Company is also aiming to design and commission a metallurgical test facility for fast-tracking product development.

*SP Angel acts as nomad and broker to Empire Metals

Ivanhoe Mines (IVN CN), C$13.5, Mkt Cap C$18.2bn – Results show Kamoa ramp up continues as focus shifts to exploration and Kipushi/Platreef expansion

• Ivanhoe reports US$226m in adj. EBITDA over 1Q25, up from US$136m in 4Q24.
• Kamoa Kakula recorded 133kt of copper in concentrate, vs 133.8kt 4Q24.
• C1 reported at $1.69/lb vs $1.75/lb prior quarter.
• Kamoa guidance maintained for 2025 at 520-580kt, before ramping up to 600kt in 2026.
• 500ktpa direct-to-blister smelter now complete, undergoiong commissioning.
• Project-95, to boost recoveries at Phase 1 and 2 concentrators to 95%, due for completion 1Q26, to boost output by 30ktpa.
• Kipushi produced 43kt Zn over the quarter as ramp up continues, guiding for 180-240kt 2025 and 250kt Zn 2026.
• Platreef first production expected 4Q25, with phase 2 due for completion 4Q27, boosting production to 450koz PGMs.
• Platreef phase 4 expected to produce 1moz PGMS, 25kt Ni and 15kt Cu.
• Western Forelands exploration continues with five rigs, MRE update due in the coming weeks, including all drilling since December 2023, followed a subsequent MRE update next year.
• Company’s JV in Kazakhstan sees Ivanhoe commit to funding $19m in exploration activities over an initial two-year period. Exploration activities began during 1Q25.
• Ivanhoe has also recently expanded exploration efforts in Zambia, over a 7,757km2 licence package, due to commence after the wet season ends this quarter.

Kavango Resources* (KAV LN) 0.84p, Mkt Cap £26m – Resource definition drilling highlights widespread gold mineralisation in shear zones

• Zimbabwe gold producer/explorer Kavango Resources reports assay results from Prospect 3 at the wider Hillside Project.
• Kavango sees the Prospect 3 target as holding potential for open-pit mining of selected mineralised zones, then progressing to an underground operation.
• Kavango has completed 34 holes at the Prospect within a 100m x 150m grid, to a depth of 60-105m for a total of 2,109m.
• Drilling was spaced 25m x 25m between collars.
• Kavango notes that drilling has identified six mineralised gold bearing shear zones, with mineralisation in two primary areas: ‘hard and competent’ m-thick shear zones hosted in diorite-granodiorite, and secondly along the contact zone between the metasedimentary rocks to the south and diorite-granodiorite to the north (lower-grade, narrower and more finely disseminated).
• Drilling intersected 65 ‘significant gold intersections’ grading 1g/t Au, with highlights including:

o  NSDDIR012: 8.3m at 1.1g/t Au from 58m

o  NSDDIR015: 0.6m at 7.8g/t Au from 52m and 0.9m at 5.6g/t Au from 57m

o  NSDDIR016: 2m at 1.45g/t Au from 58m (hole ended in mineralisation)

o  NSDDIR018: 1.7m at 7.1g/t from 29m and 3.2m at 2.2g/t Au from 43m

o  NSDDIR025: 7.8m at 1.35g/t Au from 29m.

• Kavango used a 0.7g/t cut-off grade.
• Kavango now plans to conduct a new diamond drilling programme over 2,750m to test grade continuity and structure along strike and at depth.
• Kavango is waiting for the completion of metallurgical test work and has begun structural surveys have also begun at Hillside.
• Management also highlights the potential for a potential spiral decline and sub-level long hole open stoping at Prospect 3, should mineralisation continue at depth.

Conclusion: Kavango has now completed its comprehensive shallow drilling programme at Prospect 3, as it works towards delivering a maiden resource for the Project. Today’s assay results have presented Kavango with a 150m wide, 650m long target area hosting a known six mineralised shear zones. Management highlights the target remains open along strike in both directions, and at depth, with further drilling now being conducted to test the extent of the mineralisation.

*Two SP Angel Analysts recently visited Kavango’s Hillside mines and licenses in Zimbabwe. An SP Angel analyst holds shares in Kavango

Northern Graphite (NGC CN) C$0.1c, Mkt cap C$12.7m – Year-end results statement highlight insufficient sales volumes and prices to overcome finance costs

• Northern Graphite have told the market they may be forced to place Lac des Iles, the only operating graphite mine in North America, on care and maintenance without near-term access to funding.
• They go on:

• • “we sold near-record volumes and continued to broaden our market reach,”
  • “We now have sufficient data to support an expansion of our LDI ‘Las des Iles’ pit, which is good news considering that demand for our product continues to strengthen.
  • But none of this will matter if we cannot secure financing to extend the pit before we run out of ore by the end of this year.
  • We are doing everything in our power to respond, but like many in our industry, we are operating in a capital environment that remains extremely difficult.
  • Without near-term access to the funding, we may be forced to place Lac des Iles, the only operating graphite mine in North America, on care and maintenance.
  • The world needs more graphite, and Northern is positioned to deliver it, but we cannot do it alone.”

• Management shut down the LDI plant for two months to accelerate repairs and maintenance and to increase throughput capacity.
• The team are looking for government support in Canada and the US to speed up development of the battery anode supply chain.

• • Sales rose 33% to $22.7m yoy
  • Sales volumes rose 45% to 12,442t yoy.
  • Average realized sales price fell 8% to US$1,306/t due to inventory spot sales for cash management purposes.
  • Cash costs were stable at US$1,041/t of graphite concentrate sold
  • Operating loss C$0.3m vs a gain of $1.9m in 2023
  • Including C$5.4m of non-cash charges brings the Op loss to $7.5m
  • Finance costs rose to C$16.0m vs C$6.6m in 2023 due to a loss on extinguishment of C$4.4m on the Company’s royalty liability due to an update of the LDI production plan and related revenue forecast, increased interest rates on the Company’s senior debt and no capitalization of interest while the Okanjande graphite project in Namibia is under care and maintenance.
  • “These increases were partially offset by modification gains on the Company’s royalty liability and senior debt of $520,000 and $346,000, respectively, due to changes in the anticipated timing of royalty and interest payments. Almost all of the finance costs were non-cash items.”
  • Overall net loss of C$38.8m for 2024.

• Cash used in operating activities was C$1.2m.

• • “The Company’s lender and royalty holder have waived all defaults as of April 29, 2025 effective December 31, 2024.”
  • Discussions continue with respect to amending the terms of the senior secured loan and royalty financing to better align them with project timelines that have shifted with markets that are evolving at a slower pace than forecast.
  • As of December 31, 2024, in line with June and September 30, 2024, the Company continued to report its senior secured loan ($25.1 million) and its royalty financing ($14.8 million) as current liabilities as the Company has not met the following covenants related to these instruments:
  • Senior secured loan – As at December 31, 2024, the Company had not met some of the covenants relating to the amended and restated credit agreement dated November 29, 2023, including the payment of accrued interest of $3.5 million (US$2.5 million), maintaining, at all times, on a consolidated basis, positive working capital, and maintaining, at all times, on a consolidated basis, a minimum cash balance of US$750,000.
  • Royalty Financing – As at December 31, 2024, the Company had not made royalty payments for 2024 totalling $2.1m.
  • Cash and Working Capital
  • Cash and equivalents were $0.4 million as at December 31, 2024, compared to $3.1 million as of December 31, 2023; and
  • The Company’s working capital optimization efforts on inventories and receivables were offset by the above noted senior debt and royalty classification to current liabilities ($39.9 million in total), resulting in a negative working capital balance of $37.4 million as at December 31, 2024.”

• Graphite Market Outlook
• Non-battery demand for graphite expected to remain strong through 2025, particularly in North America.

• • Large and jumbo flake graphite has become increasingly scarce as China curtailed mining capacity amid elevated inventories of anode material, effectively removing Chinese supply of these flake sizes from the market.
  • Force majeure declared at Balma in Mozambique further squeezed supply
  • Demand is expected to remain resilient while supply remains tight with new tariffs on natural and synthetic graphite imports from China.
  • US graphite producers are calling for anti-dumping tariffs on imports of Chinese graphite of as high as 920%
  • Canadian graphite remains exempt from tariffs under the terms of the USMCA ‘United States-Mexico-Canada Agreement’.

Conclusion: The 8% fall in their received graphite price US$1,306/t vs stable cash costs of US$1,041/t despite the 45% increase in volume was insufficient to cover the C$16m of financing costs. If management can cut costs all round while raising production volume and sales there may be some hope for the business.

Taseko Mines (TKO CN) C$3.1, Mkt Cap C$954m – 1Q25 earnings drop on lower production at Gibraltar with Florence on target for first copper later this year

• 1Q25 production 20.0mlbs (1Q24: 29.7mlbs) on the back of lower processed grade and recoveries at the Gibraltar Mine, BC.
• Throughput grade and recoveries averaged 0.19% and 67.5% (1Q24: 0.24% and 79.0%).
• Recoveries were affected by processing of more weathered material from stockpiles while challenging ground conditions delayed access to higher grade ore in the pit.
• Higher grade material is now expected to be processed in Q3 rather than Q2.
• Gibraltar 2025 guidance cut by 10mlbs (~8%) from previous forecasts of 120-130mlbs.
• Sales 21.8mlbs at an average price of $4.24/lb (1Q24: 31.7mlbs and $3.89/lb).
• C1 costs averaged US$2.26/lb (1Q24: $2.46/lb)
• Florence In Situ Leaching Copper Project, Arizona, development is 78% complete.
• First copper cathode is guided for later this year followed by production ramp up in 2026.
• The operation is expected to run a 75mlbs copper cathode and have a 22y LOM.
• SX/EW plant, surface infrastructure and the wellfield drilling are tracking to plan.
• In the wellfield, drilling is nearly complete and the last two wells will be constructed in May.
• Revenues were C$139m (1Q24: C$147m).
• EBITDA was C$34m (1Q24: C$50m).
• PAT -C$29m (1Q24: C$19m).
• FCF -C$76m (1Q24: C$7m) including C$80m spent on Florence.
• Copper collar hedging programme in place with a minimum copper price of $4.0/lbs locked in for 81mlbs for the remainder of 2025.
• Company had C$121m in cash as of quarter end and C$279m in undrawn revolving credit facilities.

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

SP Angel                                                            

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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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