SP Angel Morning View -Today’s Market View, Friday 21st March 2025

Gold holds below record highs as US economic slowdown fears persist

MiFID II exempt information – see disclaimer below

Beowulf Mining* (BEM LN) – Capital raise to complete Kallak PFS

Power Metal Resources* (POW LN) –Athabasca Basin uranium drilling looms

Orezone (ORE CN) – Margins hit by higher Burkina Faso royalties and power costs

Pensana (PRE LN) – Interims highlight Longonjo funding progress with the team securing £3m term loan as cash hits $0.3m

Tesoro Gold (TSO AU) – Positive drilling results to boost show resource at Ternera

Gold ($3,030/oz) holds below record highs as US economic slowdown fears persist

• Gold prices hit record highs of $3,057/oz yesterday, as US treasury yields slid in the wake of the FOMC meeting.
• The 10 year has subsequently bounced back above 4.2%, but the trend in yields and the dollar continues lower.
• This is supporting gold prices, which are also benefiting from continued trade tensions as focus shifts to April 2^nd.
• Thursday showed a beat in existing home sales and in line jobless claims, allaying concerns about growth aired at the FOMC.
• Focus remains on the labour market, with the Fed raising unemployment expectations.
• Meanwhile, China continues to add US Treasury bills, likely in preparation of another move to defend the Yuan.
• China’s PBoC has been a major buyer of gold through 2024 and ytd, buying consistently since November.

Iron ore ($99/t) slides as China looks to shutter unprofitable steel mills on weak demand

• Iron ore prices dipped below $100/t as China steel demand concerns continue to weigh on prices.
• Singapore futures are down 4% this week, whilst Chinese prices have hit their lowest levels since January.
• Traders have been disappointed by Chinese demand this quarter, given it’s historic seasonal strength amid peak construction season.
• Bloomberg reports Chinese officials are considering compensating steelmakers to close old and inefficient mills.
• The economic planning agency is pushing steelmakers to reduce production to ease the ongoing glut in steel, with expectations of 50mtpa capacity cuts coming.

Exploration – China increases state funding for mineral exploration and mining

• China is stepping up its move to dominate and weaponise critical minerals against the US particularly with regard to high-tech minerals.
• The nation has long sought after control of its mineral supply chains to ensure supply for its factories.
• China now appears to be planning to future-proof its high-tech ambitions and control supplies of more specialist critical commodities.
• Many provinces are now expanding exploration at home and abroad as they compete to grow their preferred high-tech sectors.
• China’s rapid move into EV manufacturing required major investment the Lithium, Cobalt and Rare Earth Element supply chains including the acquisition and development of new mines, smelters and refineries.
• Western explorers and geologists have found and sold successive discoveries to Chinese miners and processors with relatively few Chinese geologists and explorers seen on the ground.
• Thousands of small-scale and often informal Chinese miners have developed mines across Africa with many expelled for disobeying local laws.
• The US is slowly reacting to secure more critical minerals with Trump openly negotiating to secure mineral deals though US state funding for supply chains is far short of Chinese investment.
• The FT reports China has spent CNY100bn ($13.8bn) in investment in geological exploration annually since 2022 marking the highest three-year period in a decade.
• China funnelled $57bn in loans to 19 low- and middle-income countries from 2000-2021 to secure long-term strategic mineral control on mineral deposits through jvs and SPVs. (Mining.com)
• China also invested $10bn in H1 2023 into metals and mining investment (Mining.com)
• China’s equity investments and construction contracts are estimated at >$21bn under its Belt and Road Initiative, according to Griffith University and the Green Finance & Development Center (Fudan).
• China has also restricted exports of: gallium, germanium, antimony, graphite and tungsten as domestic demand rises and in reaction to US restrictions on technology transfers.
• China has also moved to block foreign companies from investing, even indirectly, in mining tungsten, rare earths and uranium in China.
• Approval is also required from the state council, China’s cabinet, for any foreigner to enter a rare earth mining area. This serves to protect knowledge on their reserves, resources and processing IP.
• China also moved, last year, to make it easier to explore and mine farmland in China

Russia – Ships surveying sub-sea cables

• A Russian captain crashing a container ship into a US tanker carrying USAF avgas.
• A fire at a critical sub-station for Heathrow Airport.
• Russian attacks on Ukrainian businesses in Europe.
• Coincidence or are Kremlin’s agents at work?

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

Economics

Geopolitics – is the Map of the Middle East about to be redrawn?

• Will Turkey control Syria?
• Have Iran’s supply routes through Syria been severed?
• Will Hezbollah lose its ability to rule Lebanon?
• Will we see regime change in Iran and reduced funding for Hamas, Hezbollah, Houthis and other terrorist groups?
• Will Gaza Will become a dark historical memory – news reports suggest Somaliland may take Gaza refugees?

European nations are holding discussions to increase their financial and military contribution to Nato amid rising risks of a unilateral US withdrawal from the alliance. (FT)

• The UK, France, Germany and the Nordics are said to be among countries engaged in informal but structured talks over a potential plant that may be presented to the US at the Nato’s annual leaders’ summit in the Hague in June.
• The proposal is expected to be focused on increasing European defence spending commitments and building up military production capacities to convince Trump to agree to a gradual handover.
• It is estimated that it would be a 5-10 year job for Europeans to be able to replace most of US assistance.

China – Imports of US cotton, cars and energy products collapse in the first two months of the year as the government implements retaliatory tariffs.

• Chinese purchases of cotton were down ~80%yoy, large engine autos -70% and crude oil and LNG down >40%.
• All goods were subject to new Chinese import tariffs.

Japan – Inflation slows down but at a slower pace than expected.

• CPI came in at 3.7% in February, down from 4% in January, while the measure excluding volatile food was 3.0%, down from 3.2% and 2.9% forecast.
• The data comes days after the central bank voted to leave rates unchanged at 0.5%.
• The bank opted to wait and see the effect of a series of tariffs due to take affect in the beginning of the month.
• Latest BOJ projections point to core inflation measure to average 2.7% this fiscal year (March YE) and 2.4% next.
• The yen strengthened on the news slightly but has fallen since then and currently trading around 149.4.

UK – The central bank left rates unchanged at 4.5%, in line with expectations, in a 8 to 1 MPC vote.

• The vote split shows a hawkish bias with two members who supported a cut at the previous three meetings called for no change while one member who backed a 50bp reduction also supported little change this time.
• One member who supported a 25bp cut scaled back her February call for a 50bp move.
• Yields climbed on the decision and traders slightly trimmed their expectations for two rate cuts this year.
• “There’s a lot of economic uncertainty at the moment… We still think that interest rates are on a gradually declining path… We’ll be looking very closely at how the global and domestic economies are evolving,” BOE Governor Bailey said.

Heathrow airport closed today due to fire at Heathrow’s main electrical substation

• The fire was put out relatively quickly but restoring
• You would have thought the nation’s largest airport would have some form of back-up power supply?
• Over 1,350 flights have already been cancelled affecting 220,000 passengers as a result of the power outage.
• The disruption is estimated to cost £130m a day.
• How can the UK government allow Heathrow to build a third runway if they can’t even manage their electricity supply?

Ukraine – What will happen when Trump is outmanoeuvred and politically humiliated by Putin?

• How will trump will take this humiliation?
• Will Trump escalate support for Ukraine enabling the destruction of sufficient Russian infrastructure fuelling its offensive forces?
• Does Ukraine as have the determination and stamina to withhold Russian forces till Russia is unable to hold its ground?
• Does Russia’s use of horses and donkeys to carry ammunition suggest a shortage of vehicles?
• Are Russian forces refusing to follow orders in some areas?

Russia – The central bank is likely to hold rates at 21% for s third meeting in a row later this afternoon.

• Although, slowing inflation, stronger currency and signs of labour market improving may see monetary authorities to start easing in April-June.

Currencies

US$1.0828/eur vs 1.0871/eur previous. Yen 149.34/$ vs 148.61/$. SAr 18.235/$ vs 18.166/$. $1.293/gbp vs $1.297/gbp. 0.629/aud vs 0.631/aud. CNY 7.250/$ vs 7.239/$

Dollar Index 104.034 vs 103.641previous

Precious metals:

Gold US$3,029/oz vs US$3,041/oz previous

Gold ETFs 87moz vs 87moz previous

Platinum US$980/oz vs US$994/oz previous

Palladium US$951/oz vs US$956/oz previous

Silver US$33.0/oz vs US$33.6/oz previous

Rhodium US$5,875/oz vs US$5,700/oz previous

Base metals:   

Copper US$9,844/t vs US$9,975/t previous

Aluminium US$2,639/t vs US$2,676/t previous

Nickel US$16,155/t vs US$16,325/t previous

Zinc US$2,909/t vs US$2,929/t previous

Lead US$2,038/t vs US$2,080/t previous

Tin US$34,805/t vs US$34,975/t previous

Energy:           

Oil US$72.2/bbl vs US$71.4/bbl previous

• Crude oil prices continued to bounce off last week’s lows on the impact of tighter US sanctions on Iran and an OPEC+ plan for additional output cuts to compensate for recent overproduction by Kazakhstan and Iraq.
• US Henry Hub natural gas prices fell after the EIA reported a surprise 9bcf w/w build to 1,707bcf, with storage inventories edging down to 26.8% below last year and 10% below the 5-year average.
• The UK’s GB Energy announced its first major project to invest £180m to put rooftop solar panels on around 200 schools and 200 NHS sites, with the first panels expected to be in place by the end of this Summer.

Natural Gas €44.7/MWh vs €43.6/MWh previous

Uranium Futures $65.3/lb vs $65.1/lb previous

Bulk:   

Iron Ore 62% Fe Spot (China CFR) US$99.7/t vs US$100.6/t

Chinese steel rebar 25mm US$480.4/t vs US$481.8/t

HCC FOB Australia US$174.0/t vs US$175.3/t

Thermal coal swap Australia FOB US$100.8/t vs US$102.5/t

Other:  

Cobalt LME 3m US$33,610/t vs US$36,170/t

NdPr Rare Earth Oxide (China) US$61,315/t vs US$61,408/t

Lithium carbonate 99% (China) US$9,863/t vs US$9,947/t

China Spodumene Li2O 6%min CIF US$805/t vs US$810/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$435/t vs US$435/t

Europe Vanadium Pentoxide 98% US$4.9/lb vs US$4.9/lb

Europe Ferro-Vanadium 80% US$24.1/kg vs US$24.1/kg

China Ilmenite Concentrate TiO2 US$300/t vs US$300/t

Global Rutile Spot Concentrate 95% TiO2 US$1,543/t vs US$1,543/t

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

Brazil Potash CFR Granular Spot US$335.0/t vs US$335.0/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

Tesla experiencing record high trade-ins as things continue to go wrong for Elon Musk

• A record number of Tesla’s have been traded in in the US amid a wave of protests against CEO Elon Musk and his work as an adviser to President Donald Trump.
• Tesla cars from 2017 or newer accounted for 1.4% of all the vehicles traded in in the month to 15^th March, up from 0.4% in March last year.
• The EV maker has also been removed from the Vancouver International Auto Show, with organisers citing safety concerns surrounding the increasing number of protests being held across the US targeting Elon Musk.
• Tesla has also been forced to recall 46,096 Cybertrucks in the US, nearly every unit produced before February 2025 to fix an exterior panel that could detach while driving.
• Tesla’s stock is down nearly 50% this year, amid rising competition, an aging vehicle lineup, and the backlash against CEO Elon Musk and his relationship with Trump.
• However, Tesla and Musk have remained upbeat and expect the business to return to growth this year, after a small drop in 2024.

€800m battery material plant to be built in Finland

• Finnish Minerals Group and Beijing Easpring Material Technology will begin construction on a cathode active material (CAM) plant in Kotka, Finland.
• The plant with have a first-stage capacity of 60,000t a year for lithium-ion batteries.
• Construction will start in the spring of 2025, and the goal is to launch commercial production in 2027.

Company News

Beowulf Mining* (BEM LN) 18.5p, Mkt cap £7.2m – Capital raise to complete Kallak PFS

• Beowulf has undertaken a conditional placing and subscription to raise c.£1m gross proceeds.
• The Company is undertaking a larger capital raise, via a rights issue of Swedish Depository Receipts, alongside a retail offer in the UK.
• Beowulf is aiming to raise in aggregate up to £4.5m.
• A retail offer of £700k is being offered to the UK investor base.
• In the meantime, Beowulf has entered into a Bridging Loan agreement with their underwriters for £760k to provide sufficient working capital through the completion of the raise.
• The net proceeds of the Capital Raise will be used to continue advancing Kallak, through the delivery of the PFS and EIA.
• If fully subscribed, the funds will enable the Company to submit an application for the environmental permit for Kallak.
• Funds will also provide working capital through to 1Q26.
• Management have committed to subscribe for £167k worth of shares, with CEO Ed Bowie subscribing for £75k.

*SP Angel acts as Nomad and Broker to Beowulf Mining

Power Metal Resources* (POW LN) 13.5p, Mkt cap £15.6m –Athabasca Basin uranium drilling looms

CLICK FOR PDF

• Power Metal Resources provides an update from their uranium joint venture in Canada.
• The JV’s Reitenbach property has been subject to geophysical surveys and fieldwork.
• The Company reports the identification of ‘multiple prospective target areas on Reitenbach, which was subject to systematic fieldwork during the summer of 2024.’
• The Fermi JV suggests Reitenbach holds multiple basement sources of uranium, reinforced by radon anomalism, alongside encouraging lead isotope readings and down-ice uranium dispersion.
• The property has been expanded by 27.5% through claim staking.

Conclusion: Power Metals and their JV partner have been laying strong ground-based exploration foundations to delineate drill targets. They will now begin drilling in the coming quarter, and are expected to be continuously drilling through to October.

*SP Angel acts as Nomad and Broker for Power Metal Resources

Orezone (ORE CN) C$0.94, Mkt cap C$485m – Margins hit by higher Burkina Faso royalties and power costs

• Burkina Faso miner Orezone produced 119koz Au in 2024, vs 141koz 2023.
• Company reports AISC of $1,447/oz for 2024 vs $1,127/oz 2023.
• Higher AISC reflects ‘higher-than-anticipated government royalties and power costs.’
• Adj. EBITDA reported at $117m, vs $120m in 2023, whilst average realised gold price at $2,384/oz vs $1,940/oz 2023.
• Free cash flow fell to $11.7m vs $36m in 2023.
• Orezone continues to invest in the Phase II hard rock expansion, spending $41m in CAPEX over the year with first gold expected 2025, aiming to boost production to 170kozpa, up 50%.
• $39m in debt repaid to Coris Bank over the year, alongside a $47m equity placing to Nioko Resources.
• Company initiated a 30,000m drilling programme to boost the scale of Bombore.

Pensana (PRE LN) 29p, Mkt Cap £81m – Interims highlight Longonjo funding progress with the team securing £3m term loan as cash hits $0.3m

• Interim results for the period ending December 2024 include:

• PAT -US$2.9m (1HFY23: -$3.5m);
• Administrative expenses -$2.5m (1HFY23: -$3.5m);
• FCF -$5.9m (1HFY23: -$12.0m) including -$4.4m in capex spent (1H23: -$10.4m).
• Most of the capex was directed to early construction activities at the Longonjo Project.
• Balance sheet wise, closing cash balance stood at $40k with $15.4m in short term debt represented by the $15m Angolan Sovereign Wealth Fund (FSDEA) facility.
• The Company drew down on $14.6m of the FSDEA facility as of Dec24.
• Management drew down on the facility fully post the reporting date with cash position of $286k as at the date of the approval of the financial statements.
• The facility was repayable on 30 September 2024; while the loan was not formally extended the Directors do not expect the loan to be called.
• The team expects the loan to get restructured as part of the agreed Longonjo project funding.
• The Company agreed a 12-month £3.0m term loan with a UK based investment house this month and had access to £1.7m under the existing Directors loan (maturity of 31 July 2025).
• Interim accounts highlight the need for additional funding to settle existing project related contractor payables, general working capital needs as well as potential refinancing of the $15m FSDEA loan in the event that project funding is not achieved.
• The Company announced earlier this week approvals for ~$268m in project funding.
• Funding includes debt portion of $160m ($81m AFC and $79m ABSA) as well as a $15m FSDEA bridge loan (already provided), further $38m FSDEA commitment in equity and convertible loan and $55m from AFC in the form of a convertible loan.
• Funding is subject to conclusion of definitive documentation and the fulfilment of other conditions including restructuring of the FSDEA bridge loan.

Tesoro Gold (TSO AU) A$0.032, Mkt cap A$60m – Positive drilling results to boost show resource at Ternera

• Tesoro reported drilling results from their Ternera project in Chile, as part of their wider extensional and infill drilling at El Zorro.
• The Company notes the intersection of a newly identified zone at the northern end of the existing 1.3moz MRE.
• Highlights include:
  • ZDDH0370: 68m at 1.18g/t Au from 33m, including 12m at 3g/t Au from 68m.
  • ZDDH035: 26.97m @ 2.00g/t Au from 105.25
  • And to the southern part of the deposit, extensional drilling included, 4.70m @ 7.95g/t Au from 59.20m from hole ZDDH0365.
• Company now intends to delineate additional gold resources to this northern extension zone

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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