SP Angel Morning View -Today’s Market View, Friday 16th February 2024

China kickstarts construction with 8,200 ‘whitelisted’ residential developments

MiFID II exempt information – see disclaimer below

Albemarle (ALB N) – Earnings highlight unsustainably low lithium prices as EV demand continues to rise

Anglo Asian Mining* (AAZ LN) – Libero Copper & Gold update

Atlantic Lithium* (ALL LN) – Piedmont Lithium corporate update highlights progress at Ewoyaa lithium project in Ghana

Beowulf Mining* (BEM LN) – Planned equity raise to support development of Kallak Iron Ore and graphite anode materials projects

Bushveld Minerals*(BMN LN) – SPR $12.5m investment and operational update

Golden Metal Resources (GMET LN) – Analysis of historical data points to follow-up lithium brine targets in the Kibby Valley Basin, Nevada

Orosur Mining* (OMI LN) – £0.5m equity placing

Petra Diamonds (PDL LN) – Sales tender results

SolGold* (SOLG LN) – Revised Cascabel pre-feasibility study delivers capital cost savings and enhanced NPV compared to study in March 2022

South32 (S32 LN) – US$2.16bn zinc project in Arizona

Sylvania Platinum (SLP LN) – Increased MRE for Northern Limb PGM assets

Xtract Resources (XTR LN) – Long-stop date extended on disposal of Manica gold project in Mozambique

Uranium – Cameco expects high uranium prices to ‘persist for years to come’

• Cameco, Canada’s largest uranium producer, has stated it expects structurally higher uranium prices going forward.
• CEO Gitzel said in an interview that growing nuclear demand will see nuclear life extensions, reactor refurbishments and new nuclear builds over the next decade.
• He also noted limited supply growth, highlighting Kazatomprom’s production miss and widespread mine depletion.

US imports of Russian uranium rose 43% to a record $1.2bn last year

• US policymakers proposed a ban on Russian imports with the bill held up in the Senate which appears reluctant to approve an outright ban on Russian material.
• Congress tried to apply a ban on Russian uranium imports in December with Russian uranium imports jumping to $193.2 in the month.
• Russia remains the top supplier of uranium into the US by value but is 4^th by volume highlighting the import of enriched uranium.
• Russia has the world’s largest uranium complex accounting for around 50% of global enrichment capacity with US reactors seen as highly dependent on Russian imports.

Economics

US – Retail sales came in below expectations marking the sharpest drop in nearly a year leading to a pullback in the US$.

• Although, bond yields climbed back up following an initial drop as investors continued to trim their positions in government debt amid first rate cut timing revisions.
• Voting FOMC member and Atlanta Fed President Raphael Bostic said it may take “some time” to hit rate cut threshold, Bloomberg reports.
• “The evidence from data, our surveys, and our outreach says that victory is not clearly in hand, and leaves me not yet comfortable that inflation is inexorably declining to our 2% objective,” Bostic said yesterday.
• “I require more confidence before declaring victory in this fight for price stability.”
• Retail Sale (%mom): -0.8 v 0.4 (revised from 0.6) December and -0.2 est.
• Retail Sales ex Auto and Ggas (%mom): -0.5 v 0.6 December and 0.2 est.
• Retail Sales Control Group (%mom): -0.4 v 0.8 December and 0.2 est.

China – China kickstarts property development with >8,200 residential developments ‘whitelisted’ by local authorities

• China Inc. is kickstarting construction and completion of >8,200 residential developments through the ‘whitelisting’ of projects by local authorities (Reuters).
• The new whitelisting scheme only started on 26 January, enabling banks to coordinate with other financial institutions to complete whitelisted developments.
• Over CNT91bn ($12bn) of funds have already been committed for these newly ‘whitelisted’ property developments
• State bank projects:
  • Postal Savings Bank of China – approved loans for CNY5.7bn ($793m) of financing.
  • Industrial and Commercial Bank of China – >2,000 project applications
  • ABC ‘Agricultural Bank of China’ – >2,700 project applications with ~10 new projects whitelisted for ~CNY5bn of loans
  • CCB ‘China Construction Bank’ – >2,000 project applications – >CNY20bn (US$2.8bn) on ~100 new ‘whitelist’ projects.
  • Bank of Communications – > 1,442 project applications
  • BoC ‘Bank of China’ – reported 110 projects totalling CNY55bn with 75 projects approved for a total CNY40bn of finance.
• Other banks working on loans for whitelisted development are:
  • China Everbright Bank – CNY10.7bn in loans on 20 projects.
  • China Resources Land (formerly Shimao Group )
  • China Everbright Bank
  • China Citic Bank
• Provincial governments have ‘whitelisted’ residential projects which they see as financially sound and fit for loan support under housing ministry guidelines (SCMP).
• Local governments in 170 cities have put forward 3,218 projects for consideration.
• China Inc. appears to have found a mechanism prioritising the better development schemes for funding by state and non-state banks and financial institutions.
• It will be interesting to see how the profits and losses on these schemes are apportioned with the original developers, eg Evergrande, Country Garden and others.

UK – Retail sales climbed at the strongest pace in nearly three years in a reversal following a collapse in December.

• Separately, Labour wins Kingswood and Wellingborough in midterm elections overturning significant Conservatives’ majorities.
• Results deliver the most by-election losses of any Conservative administration since the WW2.
• The losses add to pressures on the current administration ahead of general elections expected later this year.
• Retails Sales (%mom): 3.4 v -3.3 (revised from -3.2) December and 1.5 est.
• Retail Sales ex Auto (%mom): 3.2 v -3.5 (revised from -3.3) December and 1.7 est.

Currencies

US$1.0767/eur vs 1.0733/eur previous. Yen 150.25/$ vs 150.04/$. SAr 18.897/$ vs 18.997/$. $1.258/gbp vs $1.255/gbp. 0.652/aud vs         0.650/aud. CNY 7.194/$ vs 7.194/$.

Dollar Index 104.40 vs 104.63 previous.

Commodity News

Precious metals:

Gold US$2,005/oz vs US$1,995/oz previous

Gold ETFs 83.1moz vs 83.2moz previous

Platinum US$899/oz vs US$899/oz previous

Palladium US$956/oz vs US$963/oz previous

Silver US$22.98/oz vs US$23/oz previous

Rhodium US$4,350/oz vs US$4,325/oz previous

Base metals:

Copper US$ 8,385/t vs US$8,241/t previous

Aluminium US$ 2,224/t vs US$2,241/t previous

Nickel US$ 16,360/t vs US$16,450/t previous

Zinc US$ 2,367/t vs US$2,335/t previous

Lead US$ 2,051/t vs US$2,042/t previous

Tin US$ 27,350/t vs US$27,340/t previous

Energy:

Oil US$82.7/bbl vs US$81.1/bbl previous

• US natural gas prices slumped to multi-year lows as the EIA reported a smaller-than-usual 49bcf w/w draw to 2,535bcf, with storage levels jumping to 11.2% above last year and 15.9% above the 5-year average.
• The state-owned Gabon Oil Company has exercised its sovereign right to acquire Assala Energy, thereby pre-empting the Maurel & Prom and Carlyle $730m share purchase agreement announced in 3Q23.
• Macquarie has divested its 50% non-operated interest in the onshore Australia Mereenie oil & gas field to New and Zealand Oil & Gas Horizon for $55m cash plus up to $12m in contingent payments. The upfront cash payment for both companies is being funded by debt facilities from Macquarie Bank secured against the asset.

Natural Gas €25.3/MWh vs €25.2/MWh previous

Uranium Futures $102.3/lb vs $102.3/lb previous

Bulk:

Iron Ore 62% Fe Spot (cfr Tianjin) US$128.8/t vs US$128.6/t

Chinese steel rebar 25mm US$569.9/t vs US$569.9/t

Thermal coal (1st year forward cif ARA) US$91.9/t vs US$91.5/t

Thermal coal swap Australia FOB US$123.5/t vs US$123.0/t

Coking coal swap Australia FOB US$310.0/t vs US$310.0/t

Other:

Cobalt LME 3m US$28,550/t vs US$28,550/t

NdPr Rare Earth Oxide (China) US$55,466/t vs US$55,466/t

Lithium carbonate 99% (China) US$12,303/t vs US$12,303/t

China Spodumene Li2O 6%min CIF US$1,000/t vs US$1,000/t

Ferro-Manganese European Mn78% min US$1,060/t vs US$1,057/t

China Tungsten APT 88.5% FOB US$305/mtu vs US$305/mtu

China Graphite Flake -194 FOB US$565/t vs US$565/t

Europe Vanadium Pentoxide 98% 5.8/lb vs US$5.8/lb

Europe Ferro-Vanadium 80% 27.55/kg vs US$27.55/kg

China Ilmenite Concentrate TiO2 US$320/t vs US$320/t

Spot CO2 Emissions EUA Price US$61.2/t vs US$59.4/t

Brazil Potash CFR Granular Spot US$290.0/t vs US$290.0/t

Battery News

Chinese vehicles likely to come under more scrutiny in UK as popularity grows

• The UK Trade Remedies Authority (TRA) has said it is ready to investigate the business practices of Chinese EV makers, if instructed by the UK government.
• Concerns have been raised of Chinese companies leveraging their government-backed financial muscle to effectively sell their cars at a loss, or at least at a minimal profit, to offer cheaper EVs than European and British car makers.
• The EU launched a major investigation into this matter in 2023, but the UK has yet to start similar proceedings.
• Ursula von der Leyen said at the time “The electric vehicle sector holds huge potential for Europe’s future competitiveness and green industrial leadership…Wherever we find evidence that their efforts are being impeded by market distortions and unfair competition, we will act decisively.”
• The EU is particularly enticing for Chinese automakers thanks to the 10% tariff, compared to 27.5% in the US.
• France has acted decisively, restructuring regulations around EV purchase grants to effectively exclude Chinese vehicles.

US positioned to almost double battery storage connected to grid

• The total battery capacity installed on the US grid is predicted to expand from 17.3GW at the end of 2023 to 31.1GW by the end of the year – an 80% yoy growth.
• US electricity generation is expected to grow by 3% in 2024, with solar power being the leading source of growth.
• It is predicted that 36GW of solar capacity will come online in 2024 and a further 43GW will come online in 2025.
• With increases in renewable power generation, the installation of BESS has become a priority for governments to stabilise the grid.

Company News

Albemarle (ALB US) US$120, Mkt cap US$14bn – Earnings highlight unsustainably low lithium prices as EV demand continues to rise

• Lithium major Albemarle described prices as ‘unsustainable’ in an earnings call, noting that new projects are currently not incentivised to come online following the 90% price crash.
• Albemarle expects through-cycle prices must be between $20k-30k/t LCE to incentivise necessary supply, with $20k/t the minimum price to support over 100 projects.
• The statement follows Wesfarmers yesterday noting they do not anticipate prices to remain at these levels given the weak margins for downstream operations.
• Albemarle expects lithium demand to grow by 2.5x by 2030.
• LCE demand in 2023 was projected by ALB at 1.2mt LCE vs 800kt in 2022, rising to 1.8mt LCE in 2025 and 3.7mt LCE in 2030.
• Chinese battery makers have been drawing down on oversupplied inventories of lithium products – an end to this is expected to mark the bottom of this current lithium cycle.
• EV sales continue to grow, rising 33% in 2023 in China, with EV lithium cathode demand reported at 352kt LCE last year – up 40% yoy.
• Total EV passenger demand in 2023 was c.550kt LCE. (Bloomberg)
• BloombergNEF expect EV adoption to support a 15% CAGR to 2030.
• Australian spodumene exports jumped 15% from Port Hedland in January mom, with Japan and China both ramping up imports to refining capacity.
• BloombergNEF expects China’s NEV sales to rise 24% in 2024 amid supportive tax measures and aggressive pricing discounts.

Anglo Asian Mining* (AAZ LN) 56p, Mkt Cap £64m – Libero Copper & Gold update

• Michael Sununu, NED, resigned from the Board of Libero Copper & Gold.
• The announcement follows the Company’s interest in the Libero falling to 5.7% which is lower than the 9.9% threshold that allows Anglo Asiana Director seat on the Board of Libero.
• The interest came down as a result of its dilution following a series of equity placing that Anglo Asian did not take part in.
• The Company initially held ~20% in Libero.

Conclusion: Anglo Asian NED is stepping down from the Board of its investee Company following a dilution of its interest in Libero Copper & Gold. The Company is currently focused on its exciting organic growth pipeline in Azerbaijan aiming to commission a series of projects in coming years significantly ramping up production and pivoting its output mix towards copper.

*SP Angel acts as nomad and broker to Anglo Asian Mining

Atlantic Lithium* (ALL LN) 18.73p, Mkt Cap £122m – Piedmont Lithium corporate update highlights progress at Ewoyaa lithium project in Ghana

(Ewoyaa Ownership: 40.5% Atlantic, 40.5% Piedmont, 6% MIIF Sovereign Wealth fund, 13% government of Ghana)

• Piedmont Lithium corporate update says Ewoyaa advancing through approvals process with Final Investment Decision anticipated in 2025
• Piedmont and Atlantic are currently co-funding modest project development costs in advance of FID Pursuing financing options non-dilutive to Piedmont.
• Piedmont’s ramp up of lithium production in North America continues with record quarterly production in Q4’23
• The business is expects to make operating cost improvements on completion of key capital projects
• Piedmont see their offtake agreement with Atlantic lithium as giving strong leverage to anticipated recovery in lithium prices

*SP Angel acts as Nomad to Atlantic Lithium. Two mining analysts from SP Angel recently visited the Ewoyaa mine site in Ghana and drove onto Takoradi to check the quality of the road to port. Our analysts also visited the Ministry of Minerals Commission and MIIF, the Ghana Minerals Income Investment Fund.

Beowulf Mining* (BEM LN) 1.35p, Mkt Cap £16m – Planned equity raise to support development of Kallak Iron Ore and graphite anode materials projects

• The Company today announces it plans to raise c.£7.5m through a capital raise to fund the development of its Kallak iron ore project alongside the ongoing GAMP PFS.
• The capital raise is intended to be undertaken via a preferential rights issue of Swedish Depository Receipts and a PrimaryBid offer.
• The Rights Issue will target c.£6m pre related transaction costs.
• UK investors will be able to partake via the UK Issue, targeting £1.5m.
• Underwriting commitments have been secured of c.£3.75m, and management intend to subscribe for c.£75-100k of the issue.
• The aforementioned underwriters have agreed to enter a short-term Bridge Loan of c.£760k to enable continued workstreams whilst the capital raise is ongoing.
• A General Meeting is planned to be held on 5^th March to approve the issue of new shares in line with the planned capital raise.
• Use of Proceeds:
  • Completion of Kallak Iron Ore PFS and EIA in 3Q24 to support DFS in 2025.
  • Advance Grafintec workstreams for GAMP PFS and EIA, alongside additional testwork.
  • Low-cost exploration at Vardar
  • Repayment of Bridge Loan and general working capital

Conclusion: Beowulf intends to raise capital to fund the further development and derisking of its high-grade iron ore concentrate project Kallak in northern Sweden, alongside its Graphite Anode Materials Plant in Finland. Kallak is well-positioned to supply the rapidly growing green steel market, set to benefit from high-grade premiums over market prices. Appetite for funding such projects has been highlighted recently by Cargill’s agreement with Nordic Iron Ore and their Blötberget project, which Beowulf’s Kallak compares favourably. Additional metallurgical testwork aims to confirm the potential to produce a high-grade concentrate and will be used for the delivery of a PFS and EIA to lead into environmental permitting and a DFS next year. Upside remains with the Kallak South deposits, which hold the potential to add tonnage and LOM to the Project. Developments in the graphite market have encouraged Grafintec to explore an upgraded PFS with additional processing measures to maximise product value. We look forward to updates on the progress of the capital raise.

*SP Angel acts as Nomad and Broker to Beowulf Mining

Bushveld Minerals*(BMN LN) 1.4p, Mkt Cap £30m – SPR $12.5m investment and operational update

• The Company updates on the status of the $12.5m Southern Point Resources (SPR) equity investment.
• The Company has now received an additional R76m (~$4m) from SPR in the form of an interest free loan to be repaid once SPR completes the $12.5m transfer.
• In total, the Company has now received a total of R116m (~$6m) from SPR as an interest free loan.
• SPR reiterated its commitment to complete the equity investment no later than 28 February.
• Operationally, Vametco and Vanchem lost 3d and 11d of production in January due to the delayed settlement, respectively,.
• Vametco is currently shutdown for maintenance and is expected to restart shortly.
• Vanchem is running at near full capacity.

Conclusion: A positive update should serve as further evidence of a SPR continuing commitment to the $12.5m equity investment with the target for the transaction completion reiterated for no later than end of February.

*SP Angel act as nomad and broker to Bushveld Minerals

Golden Metal Resources (GMET LN) 14.75p, Mkt Cap £12.6m – Analysis of historical data points to follow-up lithium brine targets in the Kibby Valley Basin, Nevada

(Power Metal Resources (POW LN) 0.73p, Mkt cap £15m holds 62% of Golden Metal Resources)

1. Golden Metal Resources reports that a review of historical data covering its Kibby North and Kibby South lithium brine project in Nevada has shown “strong lithium mineralisation encountered in both brines and clays in Marquee drillhole KM22-02, located only 250m from Golden Metal’s Kibby South Licence boundary”.
2. The company says that examination of historical geophysical information has shown that “the main target conductor was never adequately tested by … [drillhole] … KM22-02 (due to drilling rig limitations for the then operator). This conductor is believed to be the main lithium brine target within the entire Kibby Basin”.
3. “Golden Metal is reviewing all exploration options available to determine the optimal way to push the Lithium Properties forward”.
4. CEO, Oliver Friesen confirmed that “Equipped with these new findings, we are actively working behind the scenes with our technical team and management to determine next steps for our promising Lithium Properties”.

Orosur Mining* (OMI LN) 2.9p, Mkt Cap £6m – £0.5m equity placing

• The Company raised £500k through a placing of 16.9m shares at 2.95p.
• In addition, the Company issued one unlisted warrant for every new share with an exercise price of 4.43p before 21 February 2026 expiry.
• Proceeds will be used to fund exploration.
• The Company held ~£1.4m in cash before the placing.

*SP Angel acts as Nomad and Broker to Orosur Mining

Petra Diamonds (PDL LN) 41p, Mkt Cap £85m – Sales tender results

• Petra Diamonds has announced that its 4th diamond sales tender of FY 2024 realised US$47.8m from the sale of 428,860 carats bringing YTD sales to 2,088,481 carats realising US$235.6m (2022 – 1,778,051 carats realising US$278.5m).
• Average prices for the tender were US$112/carat bringing the YTD average to US$113/carat.
• The company says that “Like-for-like rough diamond prices improved by 4.0% on Tender 3 FY 2024, with higher prices achieved across all size categories, barring the 5 to 10.8ct size range where prices were largely flat compared to the previous tender. Average like-for-like prices were down 9.2% year-to-date compared to the equivalent four tenders of FY 2023”.
• Petra Diamonds also confirms that the “results exclude a 14.76ct exceptional colour and clarity blue gemstone recovered from the Cullinan Mine which the Company intends to sell on a standalone tender basis expected to close towards the end of this month”.
• Average prices achieved in the 4^th tender include US$98/carat for production from the Culinan mine, US$101/carat for the Finsch mine and US$220/carat for the Williamson mine.

SolGold* (SOLG LN) 6.58p, Mkt Cap £181m – Revised Cascabel pre-feasibility study delivers capital cost savings and enhanced NPV compared to study in March 2022

• Solgold has released highlights of its revised pre-feasibility study for the development of its Cascabel copper/gold project in Ecuador by a phased, underground block-caving operation with an initial 28-year mine life.
• The new study, which updates an earlier pre-feasibility level study released in March, 2022 describes the pre-production investment of US$1.55bn generating an after-tax NPV_8% of US$3.2bn and IRR of 24% from the production of an average of 123,000tpa of copper, 277,000ozpa of gold and 794,000ozpa of silver with peak annual copper output of 216,000 tonnes.
• On a net cash cost basis, including the by-product credits from gold and silver, the average cost of copper production over the mine’s life is reported to be US$0.25/lb with life-of-mine costs on an all-in-sustaining (AISC) basis of US$0.69/lb.
• Sustaining capital costs over the mine’s life amount to an additional US$2.57bn.
• The new plan is based on a revised mineral resource and reserve estimate containing 3.01bn ‘Measured and Indicated’ resource at an average grade of 0.35% copper, 0.28g/t gold and 0.94g/t silver (reported as 0.52% on a copper equivalent basis).
• The resource includes a ‘Proven and Probable’ ore reserve of ~540mt at an average grade of 0.60% copper, 0.54g/t gold and 1.6g/t silver containing 3.2mt of contained copper, 9.4moz of gold and 28moz of silver.
• The company explains that 85% of the reserve tonnage falls within the high-confidence, ‘Proven’ classification of the CIM reporting codes.
• Solgold also clarifies that the “Mineral Reserves have been estimated for a block caving method and take into account the effect of mixing indicated material with dilution from low-grade or barren material originating from within the caved zone and the overlying cave backs … [and that the reserve] … represents only 18% of the Measured and Indicated Resource estimate”.
• The company confirms that its Tandayama America (TAM) project, located 6km NE of the Alpala deposit at Cascabel “is not at a PFS level and is, therefore, not included in the Cascabel Project economics presented … or in the PFS mine plan. The Company will begin the additional metallurgical testing, waste rock characteristic testing, geotechnical, hydrogeology, and detailed mine planning required to finalize planning efforts”.
• Following a two-year ramp-up, the new, phased, mine plan “the initial cave will achieve a production rate of 12Mtpa. The initial cave will extract high-grade ore, averaging 1.5% CuEq for the first ten years of operation.  Extraction of this high-grade material will not sterilize surrounding lower-grade ore. The mining operations will be expanded by an additional 12Mtpa, increasing to a total annual production rate of 24Mtpa in year 6 of mine production”.
• We note that this phased approach is more nuanced than previous development plans which envisaged a mining rate of 25mtpa in the earlier, March 2022 pre-feasibility study and of 50mtpa in the Preliminary Economic Assessment of March 2019.
• The latest analysis is based on higher commodity prices than the March 2022 study of US$8,488/t for copper (previously US$7,937/t) and US$1,750/oz for gold (previously US$1,600/oz rising to US$1,700/oz in 2029).
• The new study delivers on its objective of reducing the project’s initial capital cost with pre-production expenditure of US$US$1.55bn (previously US$2.75bn) and overall capital costs of US$4.12bn (previously US$4.88bn).
• The combination of higher, but in our view, realistic, metal prices and lower capital costs contributes to an increase of around 10% in the projects NPV_8% to US$3.2bn (previously US$2.9bn).
• We expect that, in line with normal practice, the full detailed study will be available within 45 days, and we look forward to the opportunity to examine the detailed analysis behind the headlines released today.

Conclusion: Solgold’s revised pre-feasibility study, incorporating a phased development approach and new mineral resource and reserve estimate at Cascabel’s Alpala deposit, has achieved a US$1.2bn saving in the cost of pre-production expenditure and around US$0.75bn of savings in the life of mine capital cost compared to the earlier, March 2022, study, helping to deliver an enhancement of ~10% in project NPV.

*SP Angel acts as Broker to SolGold

South32 (S32 LN) 150p, Mkt cap £6.9bn – US$2.16bn zinc project in Arizona

• In its report for the six months to 31^st December, released yesterday, South32 announced that it is proceeding with the US$2.16bn development of the Taylor zinc-lead-silver deposit at its Hermosa project in Arizona.
• The company says that the “investment is a major milestone for our business, that further reshapes our portfolio towards commodities critical to a low-carbon future”.
• In a presentation, available on the company’s website 2024-half-year-financial-results-presentation-0x1fcc580d8a9fb710.pdf (south32.net) South 32 explains that the Taylor development is a “Potential top 10 global zinc producer14 with annual average steady state production of ~290kt ZnEq and an initial operating period of ~28 years”.
• The project is expected to be a “First quartile cost … [zinc producer] … underpinned by a large, highly efficient underground mine with favourable orebody geometry that enables concurrent mining from multiple independent areas”.
• South 32 expects Taylor to deliver all-in-sustaining costs, net of lead and silver credits of US$0.16/lb of zinc production.
• The US$2.16bn initial capital cost of the project is reported to deliver an after-tax NPV of US$686m and IRR of 12%.
• The company’s presentation highlights zinc’s role as a “critical metal needed to support the global energy transition” with an expected 35% demand increase between 2023 and 2040.

Conclusion: South 32 is proceeding with a major underground zinc mine development in Arizona

Sylvania Platinum (SLP LN) 54p, Mkt Cap £144m – Increased MRE for Northern Limb PGM assets

• Sylvania reports a revised Mineral Resource Estimate for its Volspruit Project.
• Volspruit North JORC MRE increased 10% of indicated tonnage to:
  • 16.42mt at 2.52g/t 4E Indicated containing 1.3moz 4E
  • 1.23mt at 2.45g/t 4E Inferred containing 96koz 4E
• Volspruit South:
  • 10.6mt at 2.1g/t 4E
• Grades and tonnages improvement at Volspruit North reflect a more constrained geological model whilst higher grades at Volspruit South reflect a remodelling of the ore body.
• The Company intends to gain authorisations for water permits, on-site processing and social labour.

Xtract Resources (XTR LN) 0.93p, Mkt Cap £8m – Long-stop date extended on disposal of Manica gold project in Mozambique

• Xtract Resources report the extension of the long-stop date on the disposal of the Manica gold project to 23^rd February to allow for the completion of administrative matters.
• Xtract is selling its 23% stake in the project to its partner MMP for up to $15m in cash in regular staged payments till 1 March 2027.
• Xtract should also receive $3.325m in cash to terminate Xtract’s mining collaboration agreement with MMP.
• A General Meeting is required by Xtract to approve the Manica sale with a circular published on 13 February.
• Colin Bird, executive Chairman at Xtract said:
  • “The Manica Project will be transitioning to the complex ore phase which has not yet been fully scoped or technically and financially modelled. We do not want to be exposed to this risk, particularly in exciting copper times for our Company.”
• Xtract are focussing on their Western Foreland, exploration and small mine opportunities in Zambia.
• “Two projects in the Xtract copper portfolio in NW Zambia hold a pivotal position in the Western Foreland geological architecture and present a significant potential opportunity” according to Bird.

Conclusion:  While we support management strategy to advance their copper exploration and small mine opportunities, we remain extremely concerned over Xtract’s claims to the Kalengwa copper project. It is alleged that Kalengwa is held by another party and we understand that a high-court injunction has been issued in Zambia against Xtract or its directors in relation to the Kalengwa copper project.

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

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

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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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%