SP Angel Morning View -Today’s Market View, Friday 14th April 2023

Gold nears record high as the dollar falls on lower US inflation

MiFID II exempt information – see disclaimer below

Hudbay Minerals (HBM CN) – Acquisition of Copper Mountain in a ~$440m deal

Tertiary Minerals* (TYM LN) – Successful £250,000 equity placing to extend Zambian exploration campaign

IGTV:   23/03/23: Mining in a banking crisis – how does it work?  https://www.youtube.com/watch?v=DiL9Ea88o-w

VOX Markets Podcast:  24/03/2023: https://audioboom.com/posts/8269467-john-meyer-why-gold-is-rallying-plus-atlantic-lithium-celsius-resources

ii Interactive Investor:  Battery Metals – Four Stocks – https://www.youtube.com/watch?v=8fwy6PXUe6s&t=5s

*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts. We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.

Gold – US$2,034/oz – price holds near record highs as dollar extends weakness on falling US producer prices

  • Spot gold prices have held around $2,040/oz whilst future prices pushed past $2,060/oz.
  • A fresh drop of US inflation data, which saw US producer prices fall to 2.7% yoy in March vs 4.9% in February. The market expected 3%.
  • This has further supported the narrative that the Fed’s rate hike schedule is nearing its end, with the dollar index falling to March 2022 lows.
  • US job claims also ticked higher for the first time in three weeks, adding to fears of recession in the states. The labour market remains historically strong, however.
  • A 25bp is still expected by the market in May, however.

G-7 eyes $7.5bn critical metals investment programme in response to China dominance

  • The G-7 is considering allocating over $7.5bn to developing mines for critical minerals including lithium and nickel. (NHK)
  • The report follows the US and Japan’s agreement to boost cooperation on mineral supply chains, with the EU expected to form a similar agreement.
  • Funds are to be used for financing mines and improving mineral recovery for EV batteries.
  • The group is reportedly also looking to limit export restrictions and bypass limits imposed by Indonesia, China and India.
  • The EU is looking to label copper and nickel critical minerals legally and the Biden administration remains committed to incentivise domestic critical mineral processing.

 Copper rallies on dollar weakness despite signs of demand weakness in China

  • Copper rallied to $9,085/t, its highest level since March 23rd.
  • The move followed further weakness in the US dollar, which recorded a one year low on expectations of a more dovish Fed going forward.
  • Fundamentally, the copper supply-demeand picture remains convoluted, with Chinese copper rod and foil producers expected to slash output in April on weaker demand from power infrastructure, home-electronics and the embattled property sector.
  • March saw copper downstream users in China hit 3-year high run rates, encouraged by weaker concentrate prices.
  • However, producer run rates remain lower than 2018 and 2019.
  • Chile’s finance minister has noted that the country is willing to discuss a lower tax burden for mining firms in the new reformed royalty bill. (Bloomberg)

 Major Australian iron ore port reopens as cyclone moves inland

  • Port Headland has resumed full operations after the category 5 storm from Cyclone Ilsa headed inland.
  • The cyclone is the biggest to hit Western Australia since 2009 and has triggered mine disruptions for a number of iron ore and gold operations in the north of the State.
  • The storm is nearing Newcrest’s Telfer operations.
  • Iron ore prices saw a small bounce over concerns of supply disruption, with Tangshan data showing steel utilising rose this week, but wider growth in the industry remains weak.
Dow Jones Industrials +1.14% at 34,030
Nikkei 225 +1.20% at 28,493
HK Hang Seng +0.44% at 20,434
Shanghai Composite +0.60% at 3,338


US – S&P 500 closes at the highest since mid-February led by stronger risk sentiment on the back of weaker than expected PPI numbers.

  • Producer price inflation dropped mom in March with a core measure slowing down during the month.
  • Markets see slowing inflation as a precursor for the Fed to stop its tightening cycle and potentially start bringing rates down.
  • Minutes of the last FOMC meeting released earlier this week showed that a number of Fed officials predicted a “mild recession” starting later this year, before the economy recover over the next two years.
  • Currently, the expectations are the Fed rate to peak at just over 5% before a series of rate cuts.
  • Inflation 5.0% in March vs 6% in February
  • PPI (%mom): -0.5 v 0.0 (revised from -0.1) February and 0.0 est.
  • PPI (%yoy): 2.7 v 4.9 (revised from 4.6) February and 3.0 est.
  • Core PPI (%mom): -0.1 v 0.2 (revised from 0.0) February and 0.2 est.
  • Core PPI (%yoy): 3.4 v 4.8 (revised from 4.4) February and 3.4 est.
  • Weekly jobless claims 239k from 228k.

China – Inflation 0.7% yoy in March vs 1% in February

  • Trade surplus US$88.1bn in March vs $116.8bn for the January-February months combined
  • Chinese exports into the US, it’s largest export market, fell 7.7% – perhaps with the US reshoring more of its orders.
  • Chinese exports to ASEAN countries rose 35%, into Russia rose 136%, to the EU rose 3.4% – maybe due to catch up on unfulfilled orders
  • China is increasingly exporting higher value products to other Asian nations for low-cost assembly.

Imports of unwrought copper fell 19% in March to 408,174t

  • Imports of iron ore rose 14.8% yoy to 100.23mt filling steel mills and raising inventory levels
  • Crude oil imports rose 22.5% to 12.3mbpd,
  • Coal imports – 41mt


Germany – Inflation 7.4% yoy in March vs 8.4% in February ),


South Korea – Export prices fell 6.4% yoy in March (Feb -2.6%) and

  • Import prices declined 6.9% (-0.7%).


India – Inflation 5.66% yoy in March vs 6.44% in February

RISK vs reward

  • Banking Crises may continue if many more borrowers default
  • Ukraine conflict continues to draw funding out of the US and Western nations, propping up the Ukraine economy and funding the defence of Ukraine
  • Slowdown in the West extends into full-blown recession if US continues to raise rates to combat inflation
  • Potential for new emerging market crisis as rising interest rates tip more borrowers into default
  • OPEC is trying hard to prop up oil prices with production cuts but Russia is pumping and selling all it can to opportunist Indian and Chinese traders at discounted prices
  • BUT there is optimism:
  • Inflation rates are falling due to markedly lower energy prices. Used car prices are also expected to fall over the next few months to help inflation indicators lower.
  • Higher wages, renewed business activity, higher tax receipts from more ‘cashless’ payments (less cash under the till),
  • Efficiency gains after Covid lockdown reorganisations with unproductive employees let go and the better guys kept on. Strong employment persists.
  • Reshoring of manufacturing during China’s long lockdowns has helped western manufacturers.
  • Shipping rates now collapsed though some disruption may still persist.
  • Energy prices have remain subdued following recent pull back.

Living with a heat pump

  • It’s not difficult living with a heat pump. It chugs along in the background doing its thing, extracting heat from the ground and converting it into more heat for the house.
  • We installed two heat pumps in near-identical stone-built houses to the north of Oxford where is gets jolly cold in the winter.
  • One and a half winters on and we are in a position to make some comparisons.
  • The two houses are attached but the complete renovation of one of the properties means it has modern-standard insulation to help with its stone walls.
  • The 12kW heat pump works brilliantly in the refurbished property, in-part due to the new radiators and in part due to the insulation.
  • We installed a 16kW system into the other house which is in need of much renovation. We should have upgraded the radiators and allot less insulation but have plans for a larger renovation.
  • Here we run the radiators at a higher 50-55C rather than 45-50C and use Log burners to top up the heating in cooler weather. This works remarkably well with an 8kW log burner.
  • If you have the luxury of underfloor heating, this generally runs at an uber efficient 18-21C.
  • We recommend anyone installing such a system should do so in combination with updating and potentially expanding older radiators along with the instillation of decent insulation.
  • We have been surprised at how well this has worked in the renovated stone mill and one-day, when we renovate the main property, I hope we will be impressed again.
  • The heat pump is definitely worth installing for convenience, for no emissions at the house, for reliability, for no oil deliveries.
  • Curiously, the house also has a more comfortable feeling from running slightly cooler radiators on a more consistent basis.
  • Financially, the sky-high cost of electricity combined with the collapse in the oil price has reduced the economic benefits of the instillations but am sure better economics will return.


US$1.1065/eur vs 1.0998/eur yesterday Yen 132.51/$ vs 133.07/$. SAr 18.092/$ vs 18.319/$. $1.253/gbp vs $1.250/gbp. 0.677/aud vs 0.672/aud. CNY 6.844/$ vs 6.873/$.

Dollar Index 100.91 vs 101.44 yesterday.

  • US Dollar – President Lula of Brazil commented “Every night I ask myself why all countries have to base their trade on the dollar.” “Why can’t we do trade based on our own currencies?” at opening of new Development (BRICS) bank in Shanghai.

Commodity News

Precious metals:

Gold US$2,034/oz vs US$2,024/oz yesterday

Gold ETFs 93.5moz vs US$93.4moz yesterday

Platinum US$1,053/oz vs US$1,023/oz yesterday

Palladium US$1,507/oz vs US$1,461/oz yesterday

Silver US$25.88/oz vs US$25.52/oz yesterday

Rhodium US$7,500/oz vs US$7,500/oz yesterday


Base metals:   

Copper US$ 9,085/t vs US$8,970/t yesterday

Aluminium US$ 2,381/t vs US$2,336/t yesterday

Nickel US$ 23,905/t vs US$23,600/t yesterday

Zinc US$ 2,868/t vs US$2,809/t yesterday

Lead US$ 2,145/t vs US$2,143/t yesterday

Tin US$ 24,720/t vs US$24,265/t yesterday



Oil US$86.1/bbl vs US$87.1/bbl yesterday

  • Crude oil prices edged lower ahead of the release of the IEA monthly Oil Market Report, following divergent reports this week from the EIA and OPEC on global supply and demand dynamics.
  • The US EIA storage report detailed a build of 25bcf to 1,855bcf last week, the first weekly build of 2023, with storage levels now 33% above last year and 19% above the 5-year average.

Natural Gas US$2.007/mmbtu vs US$2.078/mmbtu yesterday

Uranium UXC US$50.35/lb vs US$50.35/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$116.3/t vs US$118.1/t

Chinese steel rebar 25mm US$590.7/t vs US$590.1/t

Thermal coal (1st year forward cif ARA) US$132.0/t vs US$132.0/t

Thermal coal swap Australia FOB US$189.0/t vs US$202.0/t

Coking coal swap Australia FOB US$286.0/t vs US$286.0/t



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

NdPr Rare Earth Oxide (China) US$71,972/t vs US$72,600/t

Lithium carbonate 99% (China) US$25,501/t vs US$26,116/t

China Spodumene Li2O 5%min CIF US$4,590/t vs US$4,590/t

Ferro-Manganese European Mn78% min US$1,367/t vs US$1,358/t

China Tungsten APT 88.5% FOB US$323/mtu vs US$323/mtu

China Graphite Flake -194 FOB US$780/t vs US$780/t

Europe Vanadium Pentoxide 98% 8.9/lb vs US$9.0/lb

Europe Ferro-Vanadium 80% 36.75/kg vs US$36.75/kg

China Ilmenite Concentrate TiO2 US$347/t vs US$346/t

Spot CO2 Emissions EUA Price US$102.2/t vs US$106.0/t

Brazil Potash CFR Granular Spot US$420.0/t vs US$420.0/t


Company News

Hudbay Minerals (HBM CN) C$7.2, Mkt Cap C$1.9bn – Acquisition of Copper Mountain in a ~$440m deal

  • Hudbay Minerals and Copper Mountain Mining Corp signed a definitive agreement pursuant to which Hudbay will takeover Copper Mountain in an all share US$439m deal.
  • Copper Mountain shareholders will receive 0.381 Hudbay shares for every share in Copper Mountain representing a 23% premium to a 10d VWAP share price as of April 12.
  • Following the deal, Hudbay and Copper Mountain will own around 76% and 24% of Hudbay, respectively.
  • Two directors from the Board of Copper Mountain will be joining the Board of Directors of Hudbay.
  • The transaction is expected to be completed in late Q2/23 or early Q3/23.
  • The deal creates the third largest copper producer in Canada with a forecast production of more than 150kt in 2023 (including ~40kt contribution from Copper Mountain), behind Teck ad Vale.
  • The combined Company is expected to generate ~US$30m in pre tax operating and corporate cost savings a year with a diversified portfolio of assets – 55% of estimated NAV in North America and 45% from South American assets.

Conclusion: Increased corporate activity in the sector reflects strong demand for copper production and resources to support exciting demand growth outlook.

Tertiary Minerals* (TYM LN) 0.15p, Mkt cap £2.7m – Successful £250,000 equity placing to extend Zambian exploration campaign

  • Tertiary has raised £250,000 before expenses via an equity placing of 178,571,428 new ordinary shares and 89,285,714 attached warrants at price of 0.14p.
  • The funds will be used to fund an extension of Tertiary’s current field programme in Zambia, with the wet season now coming to an end an targets becoming more accessible from drying roads.
  • The Company will target the Lubuila initially, before looking to Mukai and Mushima North after the approval of necessary environmental permits.
  • Patrick Cheetham, TYM’s Executive Chair, notes that the team has developed an ‘extensive database of information’ using data from their technical cooperation agreement with First Quantum Minerals.

*SP Angel act as Nomad and Broker to Tertiary Minerals

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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