SP Angel Morning View -Today’s Market View, Friday 11th April 2025

Gold soars to new record highs as dollar slumps on escalating US/China trade war

MiFID II exempt information – see disclaimer below

Bushveld Minerals* (BMN LMN) SUSPENDED – Intention to appoint liquidators

Galileo Resources (GLR LN) – Appointment of Alistair Ford as a non-exec.

Gemfields Group (GEM LN) – Weak gemstone market triggers net loss and US$30m rights issue

Lundin Gold (LUG CN) – Higher production on positive grade reconciliation

URU Metals* (URU LN) – Analysis of airborne geophysics highlights potential for multiple zones and potentially stacked sulphide mineralisation

Gold ($3,222/oz) soars to new record highs as dollar slumps on escalating US/China trade war

• Gold prices rose 3% yesterday and are up another 1.2% in the spot market, hitting highs of $3,227/oz.
• The dollar continues to slide, on sustained Yen strength amid a rush to haven assets.
• The Yen has reached September highs against the dollar as investors look to rotate out of US assets amid ongoing concerns over the Trump administration.
• ETF holdings are rising, hitting highest levels since 3Q23 at 88.6moz, jumping sharply overnight as investors rotate out of US Treasuries, which saw a sharp sell-off over the week.
• Trump’s trade war with China continues to escalate, with Trump raising tariffs again.
• We suspect the recent rise reflects concerns over US Treasuries as a safe haven asset, with yields rising despite cooler inflation data and further signs of labour market weakness in the US.

China looks to rare earths to counter Trump tariff imposition

• China has added seven rare earths to its list of restricted exports.
• Beijing moved to restrict exports on rare earth elements last Friday, with the country controlling 90% of processing capacity globally.
• China’s dual-use watch list saw exports of antimony, gallium and germanium banned last year.
• Bismuth was added in February, pushing prices from $6/kg to $40/kg.
• China banned exports on rare earths in 2010 to Japan, causing prices to jump sharply.
• Analysts are watching for potential bans on rare earths again as Trump ratchets up tariff pressure.
• We see Mkango*, Ionic Rare Earths, Rainbow, MP Materials and Lynas as clear beneficiaries of any potential export restrictions.

Iron ore edges higher as Beijing stimulus resurface amid tariff shock

• Iron ore prices are creeping back to $100/t having fallen to $95/t.
• The move lower followed concerns over slowing global growth from tariffs.
• However, the rebound followed increased expectations of a stimulus boost from Beijing, with reports of a meeting with top government officials surfacing.
• China’s likely policy response includes further devaluation of the Yuan, further stimulus boosts and financial market support.

The World has Changed – but the sky has not fallen in on our heads

• Economists often ask ‘has the world changed’. This week the world changed, and we all need to adapt to survive and benefit from the political upheaval.
• China is akin to a ‘Slave economy’ where its people are substantially underpaid and its leaders exercise punishing levels of control.
• For example: the CCP recently directed local party officials to stop predatory fines on entrepreneurs on spurious allegations, eg. state sponsored extortion.
• The Chinese prime minister, also avowed “resolute steps to prevent unauthorised cross-jurisdictional and profit-driven law enforcement”
• Remember how Jack Ma and other Tech entrepreneurs simply ‘disappeared’ when the CCP felt it might be losing some control.
• SKY TV interviewed a US factory manager at American Apparel who was concerned over the rising cost of cotton thread, elastic and other inputs from China.
• But the manager should have been focused on the opportunity to produce garments without excessive competition from China.
• The businesses which navigate the disruption caused by 145% tariffs on Chinese goods will hopefully thrive in the new US market.
• Restoring confidence will be important but if the US gets behind Trump the economy should recover from the disruptive impact of the tariffs very soon.

Potential for inflation-driven recession in the US

• Higher inflation and the potential for recession in the US look inevitable but we feel the recession may be short lived as manufacturers recast their supply chains.
• US agrees sensible tariff deals with the EU, the UK, India, Mexico, Canada, Brazil and a few others then China may become less of an issue.
• Bonds: remember Trump and others keep referring to the crushing cost of the interest bill on US government debt
• Trump needs to sell US bonds and while his proposal for 10-year zero-coupon Treasuries sounds farfetched maybe it will morph into something more acceptable for the refinancing of US government debt

Trump – 90-day delay to tariffs averts some economic disruption and gives time for nations to renegotiate tariff regime

• The delay also gives Trump time to reassess his tariff scheme given recent equity and bond market reactions.
• Israel: Trump’s public meeting with Netanyahu set the stage for future negotiations where Netanyahu offered to equalize Israel’s deficit with the US.
• We wonder if the script was in some way pre-agreed as a strong hint to the nations which are lining up to negotiate with Trump.
• China new 125% tariff on US goods to 125% is said to be ‘face saving’ but is largely irrelevant though it will add to overall disruption.
• Vietnam an Cambodia, which can almost be seen as proxies for Chinese manufacturing will be interesting to watch key as many Chinese companies can easily reroute goods through their facilities.
• Vietnam has already pledged to crack down on illicit transshipments of Chinese goods but we suspect a few bags of cash and the trade will resume.

Coal – US supporting coal to help US Tech companies to stay ahead of China on AI

• It currently takes 5-7 years to get a large-scale power connection in the US due to existing power generating restrictions.
• Enabling older coal-fired generators to extend their lifespans will help manufacturers to refurbish, repower and restart old factories.
• China has been smart in planning more hydro and coal-fired power plants alongside substantial low-cost wind and solar power.
• China recognises low-cost power and a stable grid in will benefit local producers, help the economy and insulate against other low-cost labour jurisdictions.
  • The liquidation of Bushveld Minerals today is testament to this, see comment below.

ii / interactive investor – video interviews:  

• Is China losing its grip on African mining, inc. Sovereign Metals*, Kefi*, Atlantic Lithium*, Goldstone*, Kodal*, Yellow Cake, Kazera Global, Aterian*: 
• Gold, inc. Goldstone*, Kefi, 
• Trump tariffs, China and critical metals, inc. Aterian*, Atlantic Lithium*, Sovereign Metals*, Yellow Cake, Kazera Global
• Five mining stocks to watch:  , inc. Sovereign Metals*, Kazera Global, Yellow Cake, Thor Explorations, Kodal Minerals*

*SP Angel acts for Sovereign Metals and Kodal Minerals

Sharepickers: Gold & Copper Small Caps: https://audioboom.com/posts/8693044-john-meyer-here-s-some-gold-copper-small-caps

• Gold, copper, 13:05 Orosur*, 13:38 Oriole*, 15:25 Resolute, 16:44 Goldstone*, 17:46 Antofagasta, 18:23 Central Asia Metals, 19:56 Kavango, 20:52 Power Metal Resources, 24:25 Kefi*, 25:18 Tertiary Minerals*
• Video:  https://www.youtube.com/watch?v=KG6furFO3n4X

* SP Angel act as nomad and or broker

Economics

US – The administration clarified that the latest round of tariff hikes on Chinese imports to 125% comes on top of an already existing tariff of 20% linked to the supply of fentanyl into the US.

• This takes total import levies to 145%.
• Separately, CPI numbers released yesterday came in below estimates in March with a lower reading for the core measure welcome, in particular.
• Markets and regulators to watch closely the effect of enacted tariffs most of which came into effect in Aptil.
• CPI (%mom, Mar/Feb/Est): -0.1/0.2/0.1
• Core CPI (%mom, Mar/Feb/Est): 0.1/0.2/0.3
• CPI (%yoy, Mar/Feb/Est): 2.4/2.8/2.5
• Core CPI (%yoy, Mar/Feb/Est): 2.8/3.1/3.0

Risk sentiment is weak in the light of further escalation in US/China trade relations and general trade policy uncertainty with US equity futures in the red this morning and safe haven assets like gold, Japanese Yen and Swiss Franc extending gains.

• Yen is testing is approaching 140 levels while Franc is at its strongest in a decade and up >10% YTD.
• Gold is renewing its all time high having hit >US$3,245/oz earlier today.
• S&P 500 and Nasdaq futures are off 0.2% today on top of 3.5% and 4.3% declines registered on Thursday.
• VIX is climbing as well reaching 44, up 7%, also pointing to increasing markets’ nervousness.

China – Beijing announced today that it will take US imports tariffs rate to 125% up from previous 84%, according to the Customs Tariff Commission of the State Council statement. (CNBC)

• New rates will come into effect from 12 April.
• The statement added that China is unlikely to further hike rates.
• “Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the announcement read.
• “If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it.”

Currencies

US$1.1340/eur vs 1.1004/eur previous. Yen 143.20/$ vs 146.65/$. SAr 19.314/$ vs 19.342/$. $1.305/gbp vs $1.286/gbp. 0.622/aud vs 0.616/aud. CNY 7.322/$ vs 7.342/$.

Dollar Index 99.858 vs 102.628 previous.

Precious metals:         

Gold US$3,208/oz vs US$3,113/oz previous

Gold ETFs 88.6moz vs 88.2moz previous

Platinum US$950/oz vs US$936/oz previous

Palladium US$927/oz vs US$923/oz previous

Silver US$31.4/oz vs US$31.0/oz previous

Rhodium US$5,425/oz vs US$5,300/oz previous

Base metals:   

Copper US$9,150/t vs US$8,931/t previous

Aluminium US$2,397/t vs US$2,380/t previous

Nickel US$15,180/t vs US$14,680/t previous

Zinc US$2,677/t vs US$2,630/t previous

Lead US$1,909/t vs US$1,897/t previous

Tin US$31,105/t vs US$31,425/t previous

Energy:           

Oil US$64.0/bbl vs US$64.6/bbl previous

Henry Hub Gas US$3.52/mmBtu vs US$3.70/mmBtu yesterday

• The EIA’s March STEO report has reduced forecast global oil consumption growth by 0.4mb/d to 0.9mb/d in 2025 and by 0.1mb/d to 1mb/d in 2026, reflecting a diminished m/m macroeconomic outlook. Taken together with the OPEC+ unwinding, the EIA lowers Brent oil price forecasts to $68/bbl in 2025 and $61/bbl in 2026.
• US Henry Hub natural gas prices were stable as the EIA reported a 57bcf w/w build to 1,830bcf (+61bcf exp), with storage inventories falling back further to 19.7% below last year and 2.1% below the 5-year average. The EIA expects US LNG exports to increase to over 15bcf/d in 2025, driven by faster ramp-up of two new facilities.
• Mubadala plans to acquire a 24.1% stake in Kimmeridge’s Texas Gas EagleFord shale gas and Commonwealth LNG businesses. Texas Gas has current production of 0.5bcfe/d that is set to grow to 1.5bcfe/d by 2031, while FID is anticipated this year on the proposed 9.3mtpa LNG facility in Louisiana with expected start-up in 2029.

Natural Gas €33.8/MWh vs €35.3/MWh previous

Uranium Futures $64.4/lb vs $64.4/lb previous

Bulk:   

Iron Ore 62% Fe Spot (China CFR) US$99.1/t vs US$98.5/t

Chinese steel rebar 25mm US$467.0/t vs US$466.2/t

HCC FOB Australia US$184.0/t vs US$179.5/t

Thermal coal swap Australia FOB US$99.8/t vs US$98.5/t

Other:  

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

NdPr Rare Earth Oxide (China) US$58,862/t vs US$59,385/t

Lithium carbonate 99% (China) US$9,533/t vs US$9,534/t

China Spodumene Li2O 6%min CIF US$805/t vs US$805/t

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

China Tungsten APT 88.5% FOB US$358/mtu vs US$358/mtu

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

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

Europe Ferro-Vanadium 80% US$24.2/kg vs US$24.2/kg

China Ilmenite Concentrate TiO2 US$283/t vs US$283/t

Global Rutile Spot Concentrate 95% TiO2 US$1,506/t vs US$1,506/t

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

Brazil Potash CFR Granular Spot US$347.5/t vs US$347.5/t

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

China Gallium 99.99% US$390.0/kg vs US$390.0/kg

Battery News

EU and China to discuss minimum prices on EVs as alternative to tariffs

• The European Union and China have discussed removing European tariffs on Chinese EVs, and have floated the idea of minimum prices on imported vehicles instead.
• EU trade commissioner Maros Sefcovic spoke with Chinese Commerce Minister Wang Wentao this week and both sides have agreed to look into setting minimum prices, an EU spokesperson said.
• The EU increased tariffs on Chinese-built EVs to as much as 45.3% in October 2024, but was willing to continue negotiations with China to reach the best outcome.

Tesla stops taking orders in China for two imported models

• Tesla has suspended taking new orders for Model S and Model X vehicles on its Chinese website, both models which are imported to from the US.
• The automaker did not give a reason for the move, but it might just be to do with the ongoing tariff war between the two nations.
• China has imposed tariffs of 84% on US goods in response to Trump’s levies on Chinese imports that now total 145%.
• President Trump pulled back tariffs on other nations, offering a 90-day negotiation window, but has held firm on the tariffs imposed on China.

Company News

Bushveld Minerals* (BMN LMN) SUSPENDED – Intention to appoint liquidators

• The Board is planning to appoint liquidators to recover any value left in the business for creditors and other stakeholders.
• Unfortunately, the business rescue plan looking at the remaining value of the business has now been delayed and is expected mi-April.
• Vametco mining and processing operations are not yet back on stream as was previously expected by the end of 1Q25.
• All head office staff had their employment terminated.
• The most likely outcome of the business rescue currently is a sale of the business.
• In the event of a sale, proceeds are likely to be directed solely towards paying secured creditors.
• Nominated Advisor is resigning once liquidators are appointed.
• Trading on AIM will be cancelled unless a replacement Nominated Advisor is appointed while the Company is reporting there is no current intention to find new Nominated Advisor.

Conclusion: Challenges to turnaround the primary vanadium production business have been proven to be too much amid persistently low market prices and a weakening global growth outlook with the Company looking to appoint liquidators to dispose of South African operations to pay its secured creditors.

The South African government considers Chinese people to be economically disadvantaged within their BEE legislation. Perhaps the government might now consider South African workers to be economically disadvantaged by excessive, state-supported competition from China.

*SP Angel act as nomad and broker to Bushveld Minerals

Galileo Resources (GLR LN) 0.82p, Mkt Cap £10m – Appointment of Alistair Ford as a non-exec.

• Galileo Resources has appointed Alastair Ford to the board as a non exec director.
• Ford is currently also a non-exec director at Great Western Mining and Xtract Resources Plc and is the Mining and Commodities editor at Vox Markets.
• Alistair was the mining correspondent for the Investors’ Chronicle and was instrumental at Minesite.com which was prominent though the last mining boom and its aftermath.
• Galileo Resources recently completion of Phase 3, (2,213m RC) drilling at its 75% owned Shinganda copper project in western Zambia where it is planning further work.
• The Phase 3 work extended the shallow oxide copper-gold mineralisation at the Shinganda outcrop to an area of 350m x 150m within the large Shinganda Splay Fault zone that runs intermittently > 20km.
• Results include: 
  • 22m @ 0.34% Cu from 18m depth in RC hole SHRC010
    • Inc. several one metre sample intervals assaying up to 1.13% Cu and 0.16% Co in separate holes
• More than half of the known and projected Shinganda Splay structure remains untested by drilling with further drilling looking to identify structural mineral trap sites related to pressure shadows surrounding the magnetic highs in this extensive IOCG ‘iron-oxide copper gold’ setting.

Conclusion: We are keen to see plans for the next round of drilling at Shinganda and hope the results will show further meaningful intersections of copper mineralisation.

Gemfields Group (GEM LN) 4.75p, Mkt Cap £68m – Weak gemstone market triggers net loss and US$30m rights issue

• Gemfields reports total revenue of US$213m over 2024, and EBITDA of US$41m. (US$262m and $83m respectively in 2023)
• Company reports a loss from operations of US$98m , with net debt rising to US$80m from net cash of US$11m in 2023.
• Gemfields reports plans to raise US$30m via a Rights Issue, backed by major shareholders Assore and Rational.
• The rights issue will be offered at 4.22p/share, on a 10 new shares for every 21 existing shares basis.
• Assore and Rational will also enter into pre-funding agreements to lend US$8.7m and US$4.6m respectively.
• The bridging loan will provide immediate working capital whilst the rights issue is completed.
• Gemfields operates the Kagem emerald mine in Zambia and Montepuez ruby mine in Mozambique.
• Additionally, they own the Fabergé brand.
• Management highlights market challenges including:
  • Oversupply of Zambian emeralds at discounted prices
  • Lower-than-expected ruby premiums at MRM
  • Weaker wider gemstone market amid economic slowdown in China and geopolitical turbulence

Lundin Gold (LUG CN) C$48, Mkt Cap C$11.6bn – Higher production on positive grade reconciliation

• Lundin Gold, operator of Fruta del Norte in Ecuador, report Q1 production data.
• Company processed 400kt ore at 10.4g/t Au and 88.5% recoveries.
• Produced 117koz over the period, vs 111.6koz same period last year on higher feed grades and recoveries.
• Average gold price realised over the quarter at $3,081/oz.
• Management notes maintenance was brought forward to 1Q25, whilst higher mill head grade expected through 1H25 before moderating 2H25 from mine sequencing adjustments.
• Company focused on optimising performance following integration of Plant Expansion Project.

URU Metals* (URU LN) 4.65p, Mkt cap £2.4m – Analysis of airborne geophysics highlights potential for multiple zones and potentially stacked sulphide mineralisation

(URU Metals holds a 73.81% interest in Zeb Nickel Corp. URU Metals acts as a technical advisor to the project)

• URU Metals reports the completion of a high-resolution airborne geophysical survey over the Zebediela project area by Xcalibur Airborne Geophysics.
• The survey, at no cost to the company, was run for gravity and magnetic data with a view to better understanding underlying geological structures.
• The data confirms key aspects of the geological model for Zebediela including the presence of a long-lived ultramafic magmatic plumbing system connecting the Uitloop I and II bodies.
• The survey also highlights several major NE-SW fault zones, which are seen a part of a regional fault network, that likely acted as magma conduits and trap sites for sulfide mineralisation.
• The data strengthens Zeb Nickel’s exploration thesis that multiple zones of sulfide mineralisation – disseminated, semi-massive and potentially massive – are vertically stacked and  associated with a feeder system similar to the Platreef Project and Nkomati Nickel Mine hosted in the Uitkomst Intrusion.
• The data will be sent to a consulting geophysical company for further interpretation for drill targeting within Zone 2 and Zone 3.
• The aim is to delineate higher-grade Ni-Cu-PGE mineralisation in Zone 2 along with potential massive sulfide zones in Zone 3 which looks similar to the Uitkomst deposit.

Conclusion:  Structural interpretation of the data should direct the URU team for their next drilling campaign for the potential identification of higher-grade mineralised zones.

*SP Angel acts as Nomad and Broker to URU Metals

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                                                            

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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