SP Angel Morning View -Today’s Market View, Friday 9th May 2025

Copper holds higher ground as China copper inventories continue to slide

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Cornish Metals* (CUSN LN) – Royal visit to South Crofty tin mine for the official reopening of the New Cook’s Kitchen shaft

Franco Nevada  (FNV US) – Steady portfolio contributions as optimism increases over Cobre Panama restart

Lundin Gold (LUG CN) – Results and Special Dividend

MP Materials (MP US) – 1Q25 highlights record separated NdPr oxide production and first sales of magnetic precursor material

Sibanye Stillwater (SBSW US) – Results as Keliber lithium project CAPEX increased

Copper ($9,450/t) holds higher ground as China copper inventories continue to slide

• Copper prices have held their recent move higher, hovering around the $9,500/t level.
• The move comes as Chinese buyers returned from their May Day holiday.
• This was reflected in a further slide in Shanghai copper inventories, down 60%mom in April.
• Shanghai inventories saw their sharpest withdrawal on record last month.
• The Yangshan import premium has jumped again, suggesting rising demand for imports from Chinese buyers.
• On the supply side, Chilean copper giant Codelco boosted production by 15%yoy in March, producing 123.2kt over the period.
• Escondida boosted output by 19%yoy to 120.6kt.
• Collahuasi output slid 29%yoy to 35.2kt.

De Beers’s lab grown diamond brand Lightbox to close

• The race to the bottom has been fierce and surprisingly rapid for LGDs ‘Lab Grown Diamonds’ with DeBeers electing to close its Lightbox brand.
• It takes 750kWh to produce a 1ct diamond.
• Assuming a cost of 10c/kWh the power cost is $75/ct.
• Add in the need to grow a larger LGD for the cutting of a 1ct diamond and the cutting cost and you are looking at around ~$250/ct
• LGDs are also used for cooling semiconductors and for the windows in ballistic missiles.
• China’s PLA military are connected to Zhonghan Diamond Co and Henan Huanghe Whirlwind Co according to sources.
• Fortunately, the damage done to the natural diamond market by the influx of cheap LGDs feels temporary.
• After all you could always buy a near-identical stone of cubic zirconia for a lesser price.
• We believe the inherent value of ethically mining natural diamonds will recover with LGDs relegated to costume jewellery and industrial and military applications.

Conclusion: The development of Lightbox as a brand was always a strange move for DeBeers given its dependence on large-scale diamond mining. Lightbox was not able to help support prices for natural mined diamonds and appeared to lacked sufficient scale.

Economics & politics

China – Exports climb stronger than expected in April although shipments to the US slump hit by trade prohibiting tariffs.

• Shipments expanded 8.1%yoy, beating the 2% increase forecast.
• Exports to the US were down 21%.
• Imports were little changed (-0.2%).
• China and US representatives meet this weekend in Geneva to discuss potential resolution to trade barriers as tariffs likely to significantly cut trade between two nations that amounted to ~$690bn last year.

UK – The BOE cut rates by 25bp to 4.25%, although, surprisingly it was a split decision with two members voting to hold rates unchanged.

• The guidance reiterated for “gradual and careful” easing in light of volatility in the global economy.
• “Inflationary pressures have continued to ease so we’ve been able to cut rates again today… The past few weeks have shown how unpredictable the global economy can be… That’s why we need to stick to a gradual and careful approach,” Andrew Baily said.
• Hawkish comments saw the pound climbing and markets cutting expectations for another rate cut in June to around 20% from 50% before.
• Two members voted for a larger 50bp rate cut while five supported a 25bp move.
• The BOE updated its GDP and inflation estimates upgrading growth for 2025 to 1% from 0.7% while lowering it to 1.25% from 1.5% for 2027.
• CPI is seen peaking at 3.5%, lower than a previous forecast of around 3.75% and reaching targeted 2% in 1Q27, nine months earlier than forecast in February.

South Africa – ANC loses court case the DA brought against their citizenship Act which stripped South African citizenship from holders of dual passports

• The South African Constitutional Court ruled the legislation was against the Constitution after six-years of petitioning by the DA ‘Democratic Alliance’.
• The victory means that ~2m people who had lost or could have lost their South African citizenship due to possession of a other citizenship can keep their South African citizenship.
• The ANC also lost a case in the High Court in Pretoria ordering President, Cyril Ramaphosa to produce records on his decision to sign National Health Insurance Act into law in 2023.
• Ramaphosa claims he did not apply his mind properly to the matter. The records may or may not show how much attention he paid to the matter.
• The case was brought by healthcare schemes and doctors with the intention to overturn the NHI Act.

Currencies

US$1.1246/eur vs 1.1291/eur. Yen 145.23/$ vs 144.43/$. SAr 18.176/$ vs 18.302/$. $1.326/gbp vs $1.328/gbp. 0.640/aud vs 0.642/aud. CNY 7.256/$ vs 7.237/$

Dollar Index 100.41 vs 100.09 previous

Precious metals:         

Gold US$3,342/oz vs US$3,349/oz previous

Gold ETFs 88.7moz vs 88.7moz. previous

Platinum US$988/oz vs US$979/oz. previous

Palladium US$989/oz vs US$963/oz. previous

Silver US$32.8/oz vs US$32.5/oz. previous

Rhodium US$5,375/oz vs US$5,375/oz. previous

Base metals:   

Copper US$9,427/t vs US$9,480/t previous

Aluminium US$2,418/t vs US$2,395/t previous

Nickel US$15,541/t vs US$15,685/t previous

Zinc US$2,643/t vs US$2,623/t previous

Lead US$1,969/t vs US$1,933/t previous

Tin US$31,698/t vs US$31,775/t previous

Energy:           

Oil US$63.5/bbl vs US$62.9/bbl previous

• WTI crude oil prices climbed above $60/bbl for the first time this month after the US-UK trade agreement improved market sentiment towards a speedy resolution to the current US tariff disputes.
• US Henry Hub natural gas prices were flat after the EIA reported a 104bcf w/w build to 2,145bcf (+101bcf exp), with storage inventories now 16.1% below last year but 1.4% above the 5-year average.
• Kazakhstan’s Energy Ministry announced plans to continue to pump ~1.74mb/d of crude oil in May, the same level as April, which remains significantly in excess of its voluntary OPEC+ production quota of ~1.4mb/d.
• APA plans to reduce activity by 25% to 6 rigs by end-June and reduce FY25 capex by $150m due to current low prices, but maintains 463kboe/d average production guidance due to efficiency gains in Permian drilling. Similarly, ConocoPhillips also cut its budget by 3.5% to $12.45bn while leaving output guidance unchanged.

Natural Gas €35.6/MWh vs €34.6/MWh previous

Uranium Futures $69.8/lb vs $69.8/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$98.2/t vs US$99.8/t

Chinese steel rebar 25mm US$469.5/t vs US$469.8/t

HCC FOB Australia US$187.5/t vs US$188.5/t

Thermal coal swap Australia FOB US$105.0/t vs US$104.8/t

Other:  

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

NdPr Rare Earth Oxide (China) US$57,065/t vs US$56,966/t

Lithium carbonate 99% (China) US$8,760/t vs US$8,877/t

China Spodumene Li2O 6%min CIF US$735/t vs US$755/t

Ferro-Manganese European Mn78% min US$995/t vs US$995/t

China Tungsten APT 88.5% FOB US$373/mtu vs US$363/mtu

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

Europe Vanadium Pentoxide 98% US$5.2/lb vs US$5.2/lb

Europe Ferro-Vanadium 80% US$24.3/kg vs US$24.3/kg

China Ilmenite Concentrate TiO2 US$287/t vs US$287/t

Global Rutile Spot Concentrate 95% TiO2 US$1,513/t vs US$1,513/t

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

Brazil Potash CFR Granular Spot US$357.5/t vs US$357.5/t

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

China Gallium 99.99% US$395.0/kg vs US$395.0/kg

Battery News

BYD targeting 50% sales to be outside of China by 2030

• According to a report, BYD plans to sell half its cars in overseas markets by 2030.
• The Chinese automaker believes it now has the right products to replicate its success in China in other global markets.
• BYD sold 4.27m vehicles last year, with nearly 90% sold in China.
• BYD’s 2025 target is to sell 5.5m vehicles, with 800,000 in overseas markets.

Company News

Cornish Metals* (CUSN LN) 7.8p, Mkt Cap £95m – Royal visit to South Crofty tin mine for the official reopening of the New Cook’s Kitchen shaft

• Cornish Metals reports the unveiling of a plaque for the re-opening of the New Cook’s Kitchen shaft at the South Crofty tin mine in Cornwall.
• Management hosted Her Royal Highness, The Princess Royal at the mine who had tours of the:
  • Offices consisting of a brief on the geology of South Crofty
  • Water Treatment Plant, which included an overview of the treatment process
  • Underground mine, including travelling via the mine shaft cage
  • Winder House, consisting of a brief on the new Winder
• The NCK ‘New Cook’s Kitchen’ Shaft has been reopened to enable the re-entry and refurbishment of the mine at its lower levels.
• The mine is also being dewatered to enable access to the lower levels.
• Cornish Metals recently raised £57.4m including a £28.6m from the UK Government’s National Wealth Fund.

Conclusion: It is great to see Royal and Government support for the reopening of the South Crofty tin mine. The Princess Royal took time to meet the miners during and after her underground tour. Its not everyday you see a Royal sporting a hard hat along with the orange and yellow overalls and the rest of the health and safety kit required for underground mining.

*SP Angel acts as Nomad and Broker. The SP Angel analyst formerly worked in the South Crofty tin mine in the 1980s and holds shares in Cornish Metals

Franco Nevada  (FNV US) $165, Mkt cap $32bn – Steady portfolio contributions as optimism increases over Cobre Panama restart

• Streamer and royalty company Franco Nevada reports $368m in revenue, selling 126.6koz GEO.
• This compares to 122.9koz GEO same period last year.
• Main contributions from portfolio included Candelaria and Hemlo, alongside the ramp up of the Tocantinzinho, Greenstone and Salares Norte mines.
• Over the quarter, the Company acquired a stream over the Discovery Silver Porcupine Complex in Canada (4.25% NSR for $300m) for a total financing package of $449m.
• The Company also purchased a precious metals stream over Sibanye Stillwater’s Western Limb operations for $500m.
• Quarterly dividend of $0.38/share.
• Management notes they are ‘well capitalised to take advantage of its strong deal pipeline.’

Lundin Gold (LUG CN) C$60, Mkt cap C$15bn – Results and Special Dividend

• Lundin Gold produced 117koz over 1Q25, milling 398kt at 10.4g/t Au and 88.5% recoveries.
• This compares to 112koz same period last year, processing 413kt at 9.5g/t.
• Company reports free cash flow of $171m on revenues of $356m.
• AISC reported at $909/oz.
• Company expects to meet full year guidance of 475-525koz at $935-995/oz AISC.
• Lundin has declared a quarterly dividend of $0.3/share and a variable dividend of 50% of normalised free cash flows, at $0.15/share.
• Additionally, Lundin has declared a special dividend of $0.41/share, or $100m.

MP Materials (MP US) US$24, Mkt Cap US$3.9bn – 1Q25 highlights record separated NdPr oxide production and first sales of magnetic precursor material

• Revenues US$61m (1Q24: $49m).
• Adjusted EBITDA -$3m (1Q24: -$1m).
• PAT -$23m (1Q24: $16m).
• Adjusted diluted EPS -$0.12 (1Q24: -$0.04).
• Materials segment delivered $56m in revenues (+14%yoy) helped by an increase in sales of separated REOs as more concentrates are used in house for downstream processing.
• Concentrate sales were down 6.3kt at $4,808/t (-33% and +12%).
• Separated NdPr sales climbed to 0.5kt at $52/kg (+246% and -16%).
• Materials segment EBITDA $4m (-49%) amid higher costs associated with the higher proportion of separated RE products and ongoing ramp up in midstream run rates.
• Magnetic precursor products segment recognised its first quarterly revenue from its recently commissioned facility for production of NdFeB magnets in Forth Worth, Texas, Independence.
• Revenues $5m (1Q24: -).
• EBITDA $0.5m (1Q24: -).
• The Company had $198m in cash and $561 in short term investments with $916m in debt for $157m in net debt (Dec24: $65m).

Sibanye Stillwater (SBSW US) $5, Mkt cap $3.5bn – Results as Keliber lithium project CAPEX increases

• Sibanye reports adjusted EBITDA of $222m over the quarter.
• SA gold operations contributed $98m in EBITDA, whilst SA PGM operations contributed US$137 EBITDA.
• Gold production of 141koz over the quarter, selling at an average price of $2,832/oz and AISC of $2,392/oz.
• SA PGM operations sold 376koz 4E PGMs over the quarter at average price of $1,362/oz and AISC of $1,331/oz.
• US PGM underground operations remain lossmaking, whilst the recycling and Reldan operations contributed $4m and $7m in EBITDA respectively over the quarter.
• Total CAPEX for 2025 guided at $1bn, vs $1.05bn last year and $1.13bn 2023.
• CAPEX most heavily weighted to SA PGM operations ($356m) and Keliber lithium project (€300m vs precious estimate of €215m).
• Total Keliber CAPEX increased from €667m to €783m, with €508m spent to date.

*An SP Angel analyst has visited Sibanye’s Stillwater Mine

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                                                            

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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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