SP Angel Morning View -Today’s Market View, Friday 12th May 2023

Commodities look for direction amid uncertain monetary policy and economic growth outlook

MiFID II exempt information – see disclaimer below

Celsius Resources* (CLA LN) – CLICK FOR PDF – Celsius Terminates convertible facility

Ironveld Plc (IRON LN) – Operations update as Rustenburg smelter complex nears Q2 sales

Oriole Resources* (ORR LN) – CLICK FOR PDF –  Update on Salary Sacrifice Scheme

Sibanye-Stillwater (LON: 0A56) – Sibanye-Stillwater reports the laying of the foundation stone for the new Keliber lithium refinery in Finland

South African rand crashes as US Ambassador accuses the ANC of supplying weapons to Russia

  • The US has cited evidence that South Africa loaded weapons onto a sanctioned Russian vessel which is known to be a weapons-delivery ship.
  • We suspect the Wargames with the Russian navy off the coast may have also played a part
  • Markets expect swift US retribution against the ruling ANC party in South Africa.
  • But there are also other reasons for the rand collapse:
    • ESKOM stage 6 load shedding and potential for outright grid collapse
    • Commodity price falls, particularly iron ore which is now US$98.5/t vs US$103.4/t yesterday
    • Greylisting of South Africa by the FATF, the Financial Action Task Force, a global money laundering and terrorist financing watchdog
  • The rand is now 13.4% down YTD against the US dollar and 17.5% lower YTD against the British Pound.
  • While the increase in Loadshedding is tough for the economy and crippling for some businesses, many companies and consumers have their own power backup.
  • Bushveld Minerals* draw power from the grid but have recently negotiated to receive preferential treatment for their Vanchem facility. Bushveld’s Vametco operation also has a direct connection to the grid which means it does not suffer from load shedding in the same way as municipalities. .
  • A very rough estimation indicates a 1% fall in the ZAR/USD rate could add ~$1m to Bushveld’s EBITDA for 2023 though any further interruption to power supplies at Vanchem could offset the benefit.

*SP Angel acts as nomad and broker to Bushveld Minerals

Gold $2,010/oz – Prices hold lower as dollar strengthens but US economic concerns begin to mount

  • Gold prices have weakened slightly from earlier week levels of $2,040/oz.
  • Data yesterday showed rising jobless claims in the US and the lowest rise in producer prices for two years.
  • The chances of a Fed pause in June are holding around 90%.
  • However, swaps markets are expecting several rate cuts towards the end of the year, reflecting wider market concerns of recession.
  • Richmond Fed President noted that inflation remains stubbornly high and New York Fed chief Williams emphasised the Fed would not be easing imminently.

Copper extends losses as market focuses on Chinese demand weakness

  • Copper futures sold off 3.7% yesterday, touching sub-$8,200/t levels before settling around the $8,225/t mark.
  • Chinese consumer prices rose at their slowest pace since early 2021, reflecting the muted reopening drive following the Zero-Covid policy.
  • Chinese consumer inflation fell to close to zero in April, with producer prices seeing deflation.
  • LME warehouses currently have their highest level of inventories since March 2020.
  • The copper-to-gold ratio has hit its lowest level since January 2021, reflecting weaker demand for copper and rising demand for gold as safe haven plays outweigh bets on economic growth.
Dow Jones Industrials -0.66% at 33,310
Nikkei 225 +0.90% at 29,388
HK Hang Seng -0.58% at 19,629
Shanghai Composite -1.12% at 3,272


 US – New jobless claims jumped ot a 1.5 year high las week suggesting the labour market conditions may be softening.

  • Claims climbed 22k to 264k for the week ended May 6 marking the highest level since October 2021.
  • The less volatile four week average rose 6k to 245k, the highest since Nov/21.
  • Separately, concerns over the health of regional lenders remained as another bank saw a sharp sell on Thursday.
  • PacWest Bancorp recorded a 23% drop in its share price yesterday as the lender reported its deposits dropped by nearly a tenth in the first week of May.
  • The lender tried to calm down markets saying that it had $15bn of immediate liquidity which is ~290% higher than its $5.2bn of total uninsured deposits.

China – to export deflation as manufacturers overproduce into falling local demand

  • The Chinese economy just hit the buffers.
  • Data alongside anecdotal evidence suggests the ramp up of manufacturing post Covid Lockdown has been met with poor local demand.
  • Discounted goods will be increasingly sold into international markets indicating a return to the export of product deflation around the world
  • Worse still, a proportion of Chinese workers are reported to be paid per unit produced indicating that the threat of lower production will hit local demand.
  • Total Social Financing collapsed to CNY 1,220bn in April vs CNY5,380bn in March
  • New bank loans also fell to CNY 718.8 bn vs CNY 3,890 bn indicating ‘trouble at mill’
  • The big question is, will Beijing provide new stimulus to restore economic activity or will it allow the economy to slow and risk social unrest
    CPI (%yoy): 0.1 v 0.7 March and 0.3 est.
  • PPI (%yoy): -3.6 v -2.5 March and -3.3 est.
  • Food prices slowed to 0.4% yoy in April having risen 2.4% yoy in March,
  • Non-food prices, rose 0.1% yoy in April vs 0.3% yoy March.
  • Consumer demand appears to be recovering in China
  • PPI fell due to weakening local and global demand and lower commodity prices.

SMIC, the largest contract chipmaker in China, recorded the sharpest decline in revenues in more than ten years on the back of weak demand for consumer electronics, FT writes.

  • Q1/23 sales amounted to $1.45bn marking a ~21%yoy drop.
  • The Company provided a dim outlook for 2023 saying it had not spotted signs of a full market recovery expecting sales to be down 10-15% this year.

UK – Economic growth remains weak in line with BOE expectations that were guiding for a stagnation in both Q1 and Q2 before accelerating into the year end.

  • GDP climbed 0.1%qoq in Q1/23, unchanged from the rate in the previous quarter.
  • Growth was driven by an expansion in January with output contracting in February and March weighed down by weak services sector.

Turkey – Muharrem Ince, an opposition candidate in the coming presidential elections, withdrew from the contest clearing the way for the main opposition leader to secure a potential victory.

  • Ince was Erdogan’s main opponent in the previous election in 2018.
  • Kemal Kilicdaroglu who is representing a six-party coalition has been in a tight race with Erdogan with latest polls putting him ahead of the current President at 49% to 44%.
  • Both general and presidential elections to be carried this Sunday and in case no candidate secures >50% will see voting proceeding into a second round on 28 May.


US$1.0933/eur vs 1.0926/eur yesterday. Yen 134.82/$ vs 134.46/$. SAr 19.456/$ vs 18.925/$. $1.254/gbp vs $1.258/gbp. 0.670/aud vs 0.673/aud. CNY 6.943/$ vs 6.937/$.

Dollar Index 101.97 vs 101.82 yesterday.

Commodity News

Precious metals:

Gold US$2,012/oz vs US$2,026/oz yesterday

Gold ETFs 94.2moz vs US$93.8moz yesterday

Platinum US$1,095/oz vs US$1,107/oz yesterday

Palladium US$1,560/oz vs US$1,591/oz yesterday

Silver US$24.04/oz vs US$25.04/oz yesterday

Rhodium US$7,400/oz vs US$7,400/oz yesterday


Base metals:   

Copper US$ 8,255/t vs US$8,337/t yesterday

Aluminium US$ 2,223/t vs US$2,234/t yesterday

Nickel US$ 22,135/t vs US$22,130/t yesterday

Zinc US$ 2,543/t vs US$2,589/t yesterday

Lead US$ 2,099/t vs US$2,121/t yesterday

Tin US$ 24,895/t vs US$25,675/t yesterday



Oil US$74.8/bbl vs US$77.0/bbl yesterday

Natural Gas US$2.152/mmbtu vs US$2.193/mmbtu yesterday

Uranium UXC US$53.40/lb vs US$53.70/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$98.5/t vs US$103.4/t

Chinese steel rebar 25mm US$537.8/t vs US$543.1/t

Thermal coal (1st year forward cif ARA) US$117.5/t vs US$131.0/t

Thermal coal swap Australia FOB US$160.0/t vs US$161.5/t

Coking coal swap Australia FOB US$245.0/t vs US$245.0/t



Cobalt LME 3m US$34,930/t vs US$34,930/t

NdPr Rare Earth Oxide (China) US$65,967/t vs US$66,163/t

Lithium carbonate 99% (China) US$27,294/t vs US$27,316/t

China Spodumene Li2O 5%min CIF US$3,990/t vs US$3,990/t

Ferro-Manganese European Mn78% min US$1,328/t vs US$1,327/t

China Tungsten APT 88.5% FOB US$325/mtu vs US$325/mtu

China Graphite Flake -194 FOB US$775/t vs US$775/t

Europe Vanadium Pentoxide 98% 7.6/lb vs US$7.8/lb

Europe Ferro-Vanadium 80% 32.25/kg vs US$32.25/kg

China Ilmenite Concentrate TiO2 US$332/t vs US$332/t

Spot CO2 Emissions EUA Price US$95.8/t vs US$93.3/t

Brazil Potash CFR Granular Spot US$385.0/t vs US$385.0/t

Battery News

German imports of Chinese electric cars triples

  • The market share of electric cars shipped to Germany from China more than tripled in Q1’23
  • 28.2% of passenger cars with electric motors imported into Germany came from China, compared with 7.8% in Q1’22
  • This is yet another example of automakers struggling to keep up with China’s accelerating EV market – Nissan recently expressed concern that China’s domination of the EV market has put other automakers under pressure.

Wind turbines generate more electricity than gas in UK for first time

  • Research from Imperial College London has revealed that 1/3 of UK electricity was generated by wind farms in Q1’23
  • 32.4% came from wind farms in the first quarter of the year compared with 31.7% from gas-fired power plants, according to the report.
  • Renewables, including wind, solar, biomass and hydro, provided almost 42% of Britain’s electricity, with 33% coming from fossil fuels like gas and coal.
  • The remaining electricity came from nuclear plants and imports via power links with other countries.

Company News

Celsius Resources* (CLA LN) 0.99p, Mkt Cap £34m – Celsius Terminates convertible facility

(Celsius has agreed to sell a 30% economic ownership of MCB copper mine for US$43m implying a valuation of >$143m on consummation of the deal)

Click Link for SP Angel research report PDF note – MCB project NPV@8% US$463m, IRR of 34.3%

  • Celsius Resources has terminated the outstanding ‘Advance Payment Credit’ facility with Lind Partners.
  • The company has agreed to repay A$882,500 to Lind Partners to settle and terminate the facility.
  • Celsius will no longer be required to issue 38.2m options to Lind Partners are a result of the termination of the facility.
  • Such facilities are useful for short term financing but are seen by many investors are offering the potential for excessive dilution.
  • Celsius recently reported a set of very impressive results from drilling on its MCB Copper Gold Project in Philippines.
  • Results from shallow drilling included:
    • 51.3m @ 0.93% copper and 0.06g/t gold from 7.7m down hole
    • 101.5m @ 0.90% copper and 0.18g/t gold from 9m
    • 131.1m @ 0.93% copper and 0.23g/t gold from 11m
  • The Celsius team are in the process of preparing documentation and approvals for the application for a Mineral Production Sharing Agreement.
  • Management recently agreed an initial binding agreement to fund ~US$43m for a 30% economic interest in the MCB Project and comply with the 60% Filipino legal ownership as required in the MPSA application.
  • We expect Celcius’ cash balance to be around A$2m following the repayment of the Lind facility.

*SP Angel acts as broker to Celsius Resources..

Ironveld Plc (IRON LN) 0.35p, Mkt cap £12.5m – Operations update as Rustenburg smelter complex nears Q2 sales

  • Ironveld reports that refurbishment work at its Rustenburg smelter complex is nearing full completion.
  • The Company expects first shipments of high purity iron, titanium slag and vanadium slag in Q2 2023.
  • Ironveld is bringing its Granulator plant back into production owing to market demand for a granulated final product vs a cast product.
  • The smelter will operate with two furnaces through to July 2023 when the third furnace will be brought online.
  • The Company does not expect a material delay in its plan to hit full production by Q3 2023.
  • For Ironveld’s Limpopo project, a 30-year lease has been signed with the Government of South Africa for 155ha of land, where the Company is looking to develop a smelting operation on the Altona licence.
  • As regards the BurnStar Hydrogen Project, Ironveld’s subsidiary has now progressed the final agreement with the BurnStar group.
  • The plant is expected to be installed and fully operational by the end of this year.
  • For the Company’s mining operations, activities have continued as planned, and a 30 year lease agreement has been renewed with the South African government for 312ha.
  • The Company expects first product sales of DMS grade magnetite ore directly from the mine in the middle of this year.

Oriole Resources* (ORR LN) 0.2p, Mkt cap £5.7m – CLICK FOR PDF –  Update on Salary Sacrifice Scheme

  • Oriole Resources has issued an additional 2,116,259 shares in line with its salary sacrifice scheme.
  • The shares issuance is in relation to £7k of gross salary foregone in April.
  • Board members will receive the shares at a 25% premium to the price agreed on November 2 2022.

*SP Angel acts as Broker to Oriole Resources

Sibanye-Stillwater (LON: 0A56) US$7.81, Mkt cap US$5.8bn – Sibanye-Stillwater reports the laying of the foundation stone for the new Keliber lithium refinery in Finland

(Sibanye-Stillwater hold 79% of Keliber with the Finnish Minerals Group (Finland) holding 20%).

  • The new Keliber lithium refinery is designed to produce the greenest primary lithium for the European battery market.
  • Total capital cost is estimated at €588m with €231m planned for this year
  • While the €231m is already financed the remaining €357m is expected to be debt financed.
  • Sibanye-Stillwater currently owns approximately 79% of the Keliber project while the Finnish Minerals Group (which manages the Finnish State’s mining industry shareholdings), owns 20%.
  • The refinery is expected to employ >300 people over a 16 years.
  • Sibanye-Stillwater, run by Neal Froneman, has substantial expertise in PGM smelting and refining and is a major recycler of PGM autocatalysts.
  • The Keliber mine and refinery plans to produce battery-grade lithium hydroxide from its own mined ore reserves.
  • Production of 15,000tpa of lithium hydroxide monohydrate
  • Reserves: 12.7mt
  • Resources 17mt
  • IRR¨20% based on US$26,043/t for LiOH
  • IRR 27% based on US$37,000/t for LiOH
  • NPV €887m based on US$26,043/t for LiOH
  • NPV €1,720m based on US$37,000/t for LiOH
  • Capex €588m
  • Operating cost
  • €6,751/t LiOH at steady state

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


John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474


Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London


*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.

Sources of commodity prices  
Gold, Platinum, Palladium, Silver BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt LME
Oil Brent ICE
Natural Gas, Uranium, Iron Ore NYMEX
Thermal Coal Bloomberg OTC Composite
Coking Coal SSY
RRE Steelhome

Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite Asian Metal


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