SP Angel Morning View -Today’s Market View, Monday 16th September 2024

Gold hits new high on increasing expectations for a 0.5% Fed rate cut

MiFID II exempt information – see disclaimer below

Atlantic Lithium* (ALL LN) – Minerals Commission comments on delays to project

Gemfields Group (GEM LN) – Emerald auction results

Kavango Resources* (KAV LN) – Drilling results from third hole at the Hillside gold project, Zimbabwe

Ionic Rare Earths (IXR AU) – Operations update

Lucara Diamonds (LUC CN) – Karowe yields another >1,000 carat diamond

Neometals (NMT AU) – EU supported equity funding

Power Metal Resources* (POW LN) – Uranium focused JV update

Red Rock Resources (RRR LN) – Regulatory changes in Cote d’Ivoire prompt withdrawal of licence applications

Rockfire Resources (ROCK LN) – Raising £450,00 to progress the Molaoi zinc project in Greece

SolGold* (SOLG LN) – Progress report on Cascabel and exploration update

Sovereign Metals* (SVML LN) – Seller declaration

Thor Explorations (THX LN) – Acquisition of the Guitry Gold Project

Gold – spot prices hits new high of $2,588/oz this morning

Gold futures now at $2,615/oz

Key drivers:

• Fed rate cut expectations – larger cuts expected 50bp cut now expected on Wednesday
• Most other nations will follow Fed rate cuts lower
• Weaker US dollar
• BoE and BoJ policy decisions to follow this week
• Carry trade implications
• ECB Q2 labour cost, Eurostat trade balance data today for July and NY Empire State Manufacturing Index data for September later today.
• Benchmark 10-year US Treasury bond yield just over 3.6%.
• Chinese investor concerns over local banking and finance industries
• China interest rate cut and weaker Yuan/RMB
• India post harvest buying ahead of wedding season
• Jewellers stocking up ahead of Christmas – maybe not at these prices
• Potential for Russian financial collapse

EVs account for 1 in 7 new vehicle sales globally in July

• In July, fully electric vehicles made up 14.9% of all car sales globally, with about 783,000 EVs sold that month (New AutoMotive’s Global Electric Vehicle Tracker)
• Year-to-date EV sales reached 10.6m by July, a 16.3% increase compared to the same period in 2023.
• China and the US led global EV sales growth, with China seeing a 20% drop in petrol and diesel car sales, offset by increased EV and hybrid sales.
• The UK, Belgium, and Norway reported positive trends, with the UK reaching its second-best EV market share and Belgium surpassing 30%.
• Despite growth, the UK is at risk of missing its 2024 target for EV market share under the ZEV mandate, with current EV sales projected to fall short of the 22% target.
• The automotive industry is calling on the UK government to strengthen EV incentives and improve public charging infrastructure to meet long-term EV goals.

Ethiopia ban on gasoline and diesel vehicles to drive demand for hydropower

• In January, Ethiopia became the first country to ban the import of gasoline and diesel vehicles, pushing drivers to make the switch to EVs.
• The ban was part of a bold economic strategy to reduce fuel imports, which cost over €6bn in 2023, and address a foreign currency shortage.
• Ethiopia has an abundance of low-cost hydropower with only 10% of its potential developed. So far the dams contribute some 90% of Ethiopian electricity.
• The Grand Ethiopian Renaissance Dam constructed between 2011 and 2023 has a planned installed capacity of 5.15GW. The Dam currently has around 1.6GW of capacity.
• Ethiopia’s ambition is being driven by Prime Minister Abiy Ahmed to merge economic strategy with environmental policy but the nation has fallen behind with few public charging stations.

Zambia – Ivanhoe Mines moves into Zambian exploration

• Ivanhoe Mines is reported to have recently signed an MOU with the Zambian mining ministry and government for exploration within Zambia.
• The MOU sets out how Ivanhoe proposes to develop resources in cooperation with the Zambian government and its communities.
• The Ivanhoe team plan to use much of the same exploration techniques and methodology which led to the discovery and development of the giant Kamoa-Kakula copper mine in the DRC.

SharePickers: Video: This is Why Gold is Rising and It Will Probably Continue: https://www.youtube.com/watch?v=EsA7ICSVku8

• Podcast: https://audioboom.com/posts/8547593-john-meyer-this-has-one-of-the-lowest-risk-profiles-i-ve-seen-for-a-long-time

Economics

US – The Fed policy announcement on Wednesday will mark the start of the easing cycle with questions over the quantum for the first rate cut.

• Markets are currently assigning a slightly higher chance of a 50bp move.

China – Worse than forecast economic data released over the weekend to add to calls for more government stimulus and sees markets revising growth expectations lower.

• Incoming data also points to challenges in reaching the official target of around 5% GDP growth rate in 2024.
• Slowdown reported over both industrial production and consumer spending.
• The property sector remains a drag on economic activity with investment, sales and prices continuing to fall.
• Unemployment in urban areas climbed to 5.3%, up from 5.2% in July and the highest since February.
• Industrial Production (%yoy, Aug/Jul/Est): 4.5/5.1/4.7
• Retails Sales (%yoy, Aug/Jul/Est): 2.1/2.7/2.5
• FAI (%YTD, Aug/Jul/Est): 3.4/3.6/3.5
• Property Investment (%YTD, Aug/Jul/Est): -10.2/-10.2/-10.2
• Residential Property Sales (%YTD, Aug/Jul/Est): -25.0/-25.9/NA
• New Home Prices (%mom, Aug/Jul/Est): -0.73/-0.65/NA
• Used Home Prices (%mom, Aug/Jul/Est): -0.95/0.80/NA

Japan – The yen broke through 140 level for the first time since 2023 as market expectations for increasing rate differential between the US and Japan.

• That is below 141 hit in early August that coincided with a general risk sell off on carry trades’ implications from appreciating yen.
• The BOJ is to hold its policy meeting this week with expectations for no change in the 0.25% rate.
• Inflation data is due before that with estimates to point to a pick up in both headline and core measures.

Currencies

US$1.1111/eur vs 1.1075/eur previous. Yen 139.88/$ vs 141.38/$. SAr 17.663/$ vs 17.748/$. $1.316/gbp vs $1.313/gbp. 0.672/aud vs 0.672/aud. CNY 7.097/$ vs 7.103/$.

Dollar Index 100.76 vs 101.13 previous

Precious Metals

Gold US$2,582/oz vs US$2,565/oz previous

Gold ETFs 83.3moz vs 83.1moz previous

Platinum US$992/oz vs US$986/oz previous

Palladium US$1,073/oz vs US$1,051/oz previous

Silver US$30.9/oz vs US$30.0/oz previous

Rhodium US$4,800/oz vs US$4,825/oz previous

Base metals:   

Copper US$9,266/t vs US$9,244/t previous

Aluminium US$2,494/t vs US$2,434/t previous

Nickel US$16,050/t vs US$16,125/t previous

Zinc US$2,916/t vs US$2,856/t previous

Lead US$2,050/t vs US$2,039/t previous

Tin US$31,900/t vs US$31,570/t previous

Energy:           

Oil US$72.0/bbl vs US$72.3/bbl previous

• The Baker Hughes US rig count rose 8 units w/w to 590 rigs last week (-51 or 8% y/y), with oil rigs up 5 to 488 units (-27 y/y) and gas rigs up 3 to 97 units (-24 y/y), as Pennsylvania lost 2 more rigs to 14 units (-7 y/y).
• Media reports that the Peruvian government has stepped in with a financial aid package for Petroperu, which was unable to service debts that ballooned following construction of the over-budget Talara refinery.

Natural Gas €34.6/MWh vs €35.7/MWh previous

Uranium Futures $79.6/lb vs $80.0/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$91.6/t vs US$92.7/t

Chinese steel rebar 25mm US$473.1/t vs US$472.7/t

Thermal coal (1st year forward cif ARA) US$115.3/t vs US$115.3/t

Thermal coal swap Australia FOB US$133.0/t vs US$134.0/t

Coking coal Dalian Exchange futures price US$172/t vs US$157.4/t

Other:  

Cobalt LME 3m US$24,300/t vs US$24,300/t

NdPr Rare Earth Oxide (China) US$58,122/t vs US$58,216/t

Lithium carbonate 99% (China) US$9,933/t vs US$9,926/t

China Spodumene Li2O 6%min CIF US$740/t vs US$740/t

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

China Tungsten APT 88.5% FOB US$330/mtu vs US$330/mtu

China Graphite Flake -194 FOB US$440/t vs US$440/t

Europe Vanadium Pentoxide 98% 4.6/lb vs US$4.6/lb

Europe Ferro-Vanadium 80% 24.55/kg vs US$24.55/kg

China Ilmenite Concentrate TiO2 US$321/t vs US$320/t

China Rutile Concentrate 95% TiO2 US$1,374/t vs US$1,373/t

Spot CO2 Emissions EUA Price US$64.4/t vs US$72.4/t

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

Germanium China 99.99% US$2,625.0/kg vs US$2,575.0/kg

China Gallium 99.99% US$445.0/kg vs US$445.0/kg

Battery News

US House approves legislation to restrict tax credits for EVs with Chinese battery technology

• The US House of Representatives has passed a bill restricting electric vehicle tax credits that could jeopardise licensing deals between American auto makers and Chinese EV battery companies.
• Currently, consumer EVs using batteries made in China are already prohibited from receiving tax credits from the Inflation Reduction Act (IRA).
• However, that law permitted manufacturers licensing Chinese technology to build batteries in the US to receive the credits and also allowed for joint ventures that met certain conditions.
• Ford, General Motors and reportedly Tesla have been in talks for licensing deals with Chinese battery giant CATL.
• The legislation follows the increase of Section 301 tariffs, which included the quadrupling of tariffs on Chinese EVs, as well as increases on lithium-ion batteries and other ‘clean energy’ products like solar panels.
• The Biden administration locked in these tariff hikes on Friday, with the US Trade Representative’s office saying that the 100% tariff on Chinese EVs, 50% on solar panels and 25% on steel, aluminium, EV batteries and key minerals would come into effect on 27^th September.
• A 50% duty on semi-conductors will also come into effect in 2025.

Lucid announces affordable EV plans, aiming to challenge Tesla

• Lucid Motors has unveiled new details about its upcoming Gravity SUV at a recent Technology and Manufacturing Day event, signalling its intent to expand into the SUV market.
• The Gravity SUV, expected to launch later this year, will feature Tesla’s North American Charging Standard (NACS), giving it access to Tesla’s Supercharger network.
• Gravity offers impressive specs, including 440mi of range and more than 800bhp, with prices starting around $80,000 but potentially exceeding $250,000 for higher-end models.
• Lucid also hinted at a more affordable midsize crossover EV, set for production in 2026, which will start under $50,000 and offer competitive range with a smaller battery.
• The company’s shift towards affordable EVs positions it as a direct competitor to Tesla, with Lucid’s CEO emphasizing a focus on all-electric vehicles over hybrids.

Company News

Atlantic Lithium* (ALL LN) 12.97p, Mkt Cap £84m – Minerals Commission comments on delays to project

(Ewoyaa Ownership:  Atlantic 62.9% falling to 40.5% if Piedmont fund their share of Ewoyaa, Piedmont 18.2% rising to 40.5% on project funding, MIIF Sovereign Wealth fund 6%, Ghana 13%)

(Piedmont are contracted to pay $70m + 50% of the total Capex to raise their stake to 40.5%. Total cost would be $135m to Piedmont on a $200m capex.)

• The Minerals Commissioner, Martin Ayisi, has said “the Ewoyaa project that envisaged annual lithium production of around 360,000 tons risked being halted.” Mining.com.
• Mr Ayisi goes on: “It will cost Atlantic lithium around $650 to produce a ton of lithium concentrate and with the price just above $700, it’s worrying for us,”.
• Construction which had been planned to start in July has since been delayed till Q1 2025 due to delays in parliamentary ratification as the government sought broader consultation.
• The Ewoyaa project also needs an operating permit from the sector regulator before construction can start.
• Ewoyaa recently received approval for its Environmental Protection permit from Ghana’s EPA ‘Environmental Protection Agency’.
• The local Traditional Council has also appealed to the President of Ghana to speed up the final permitting before the end of the president’s tenure.

*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

Gemfields Group (GEM LN) 11.75p, Mkt Cap £136m – Emerald auction results

• Gemfields reports that an auction of emeralds from its 75% owned Kagem mine in Zambia, which took place between 27^th August and 13^th September, sold 28 of the 46 lots offered realising a total of US$10.8m at an average price of US$4.47/carat.
• We note that in a similar auction of Kagem emeralds held in August/September 2023, all 43 lots offered were sold realising a total of US$25.5m at an average price of US$7.51/carat.
• Putting this into context, Gemfields’ Managing Director of Product & Sales, Adrian Banks said that the “luxury-good, diamond and gemstone markets are experiencing distinct headwinds as conflicts, elections, economic uncertainty in China and broader economic turbulence take their toll”.
• He said that “Today’s overall result is weaker than expected, exacerbated in part by a competing emerald producer scheduling their own auction to finish in early September 2024, in the middle of ours, and selling through their emeralds at what customers reported as low prices”.
• Mr. Banks expressed the “hope that market conditions improve as we work towards the auction of higher-quality emeralds scheduled for November 2024”.

Kavango Resources* (KAV LN) 1.15p, Mkt Cap £18m – Drilling results from third hole at the Hillside gold project, Zimbabwe

• Kavango Resources reports that hole NSD-003 drilled between holes 001 and 002 at its Hillside gold project (Prospect 3) in Matabeleland, southern Zimbabwe has “intersected multiple zones of mineralisation associated with quartz veins” including:
  • 5m at an average grade of 1.80g/t gold from a depth of 104.40m with a higher grade section of 0.40m at an average grade of 5.79g/t gold at the top of the intersection.
• The result follows intersections in previous holes of the programme of:
  • 7.2m at an average grade of 9.95g/t gold from a depth of 50.64m and a second 2m wide intersection of 2.12g/t gold from 86m depth in hole BRDD-001; and
  • “8.20m @ 2.93 g/t gold from 66.69m in NSDD002 … [which included] … 0.35m @ 13.82 g/t gold from 68.39m
• Chief Executive, Ben Turney, said that “These results take us a step closer to defining a first bulk minable target at Hillside. The widths and grades at Prospect 3 are encouraging, as is the proximity of gold mineralisation to surface”.
• He said that “We are delighted to have achieved success in all three holes … [and confirmed that] … Our drill rig will now test further targets at Prospects 1, 4, & 6. Once this work is complete, we expect to return to Prospect 3 for drilling aimed at establishing a mineral resource. Our goal will be to define a maiden minable gold resource at Hillside that Kavango can bring into production in H1 2025”.
• In a separate announcement today, Kavango Resources reports a loss of US$1.7m for the six months to 30^th June (2023 – US$1.4m loss) and a closing cash balance of US$1.8m.
• Subsequently, Kavango Resources raised an additional US$2.6m in August via a “convertible loan note to Purebond Limited”.
• In addition to the activity at Hillside, the interim results reports on drilling at the Nara project, also in Zimbabwe, where the company has drilled an initial six holes following up artisanal mining activity and an IP geophysical survey which identified “Several new, previously unknown Induced Polarisation (“IP”) anomalous zones … in addition to further extensions of the existing structures already hosting mines and artisanal workings”.
• In the Kalahari Copper Belt of Botswana, where Kavango Resource holds 18 prospecting licences (>6,000km²), geophysical work has identified “linear features in the regional gravity, that may indicate the presence of basement highs … [which] … are considered prospective sites for Cu-Ag mineralisation”.
• The geophysics has defined “over 90 targets, with 10 priority targets selected for the Phase 1 drill programme, and which have subsequently been enhanced by Gradient Array Induced Polarisation (“IP”) surveys on target areas that are interpreted to be underlain by lower DKF … [D’Kar Formation] … stratigraphy”.

Conclusion: The latest drilling from the Hillside prospect 3 in Zimbabwe supports previous results and although drilling is now moving to Prospects 1,4 and 6 emphasis will then return to prospect 3 in order to help establish the resource potential. We look forward to further news as the exploration programmes develop at Hillside, elsewhere in Zimbabwe and in Botswana.

*An SP Angel Analyst holds shares in Kavango

Ionic Rare Earths (IXR AU) A$0.01, Mkt Cap A$39m – Operations update

• Magnet Recycling FS is nearing completion.
• The study will assist in further de-risking the project and to be followed by offtake contracts’ discussions, construction funding and FID for the commercial plant.
• The Company anticipates commercial scale production as early as 2026.
• Amid challenging REO pricing environment, the Company is implementing a cost reduction programme.
• Identified initiatives once implemented expected to reduce operating costs by 60% per month.
• Cost cutting areas include a reduction in executive renumeration, headcount reduction, and lower operating and capital costs following the completion of demonstration plant trials at Ionic Technologies and the Makuutu Heavy Rare Earths Project.
• The Company also secured A$1.2m R&D Tax Incentive with a further A$0.5m pending.

Lucara Diamonds (LUC CN) C$0.445, Mkt Cap C$205m – Karowe yields another >1,000 carat diamond

• Following the announcement of the recovery of a 2,492-carat diamond from its Karowe mine in Botswana in August, Lucara Diamonds yesterday reported the recovery of a 1,094 carat diamond from Karowe.
• The company explains that the latest discovery “bears striking similarities to the 692 carat diamond … [also] … announced in August 2023, which was polished by HB Antwerp and yielded polished diamonds that sold for in excess of USD13 million”.
• The company confirms that “The newly recovered 1,094 carat diamond, … [which is] … the sixth stone in excess of 1,000 carats recovered by Lucara, continues the Company’s track record of unearthing large, high-value stones from the EMPKS ore type in the South Lobe of the Karowe Mine”.
• Commenting on the latest discovery, CEO, William Lamb, said that it is “a testament to Karowe’s remarkable potential and further validates our investment in the underground expansion project”.
• He said that “As we progress with our underground development, we’re increasingly confident in Karowe’s capacity to produce these legendary diamonds well into the future, cementing our position in the high-end diamond market”.

Neometals (NMT AU) A$0.1, Mkt Cap A$67m – EU supported equity funding

• EIT RawMaterials will provide Novana with a €0.5m grant in exchange for a 1.1% interest in the holding Company, Recycling Industries Scandinavia (RISAB), implying a €50m pre money valuation.
• Novana is commercialising Neometals’ patent pending vanadium recovery process through a development of a vanadium recovery plant (VRP1) in Finland.
• The facility is designed to produce high purity V2O5 from vanadium bearing steel slag in Pori, Finland.
• Neometals holds a 88% interest in Novana through RISAB.
• On completion of the investment, Novana will formally start a project funding selection process for €400m in total commitments (targeting 40%/60% equity/debt split).
• EIT RawMaterials holds an option to subscribe for additional €10m I exchange for ~20% in RISAB at the earlier of 18m post initial investment completion or a binding agreement for the project funding equity share (~€160m)

Power Metal Resources* (POW LN) 15p, Mkt Cap £17m – Uranium focused JV update

• The Company reports that a SPV for its portfolio of uranium licenses has been formed.
• All required workstreams regarding the due diligence are now complete and the preparation of definitive legal transaction documents is nearing finalisation.
• Parties to the JV agreed to extend the exclusivity period for the transaction to 27 September to complete outstanding administrative tasks.

*SP Angel acts as Nomad and Broker for Power Metal

Red Rock Resources (RRR LN) 0.05p, Mkt Cap £2.4m – Regulatory changes in Cote d’Ivoire prompt withdrawal of licence applications

• Red Rock Resources reports that it has abandoned an application for three exploration licences covering ~1,129km² in northern Cote d’Iviore “due to a regulatory change limiting the number of licences per applicant to four in total”.
• The company confirms that it already “holds two licences and two applications totalling 1,404.86 sq km in an area around the capital, Yamoussoukro”.
• Chairman, Andrew Bell explained that “There was little warning of the gazetting of new regulations which limited us and other applicants to four licences”.
• Mr. Bell said that “We have now signed an agreement with Guardian Metals PLC under which we will manage the process of licence application for them in Côte d’Ivoire and assist in the development and management of exploration programmes … [for] … fees of up to £10,000 plus small additional amounts in respect of our services and will have an option over 25% of any licence granted”.
• He described “This response to the regulatory change … [as] … a positive development, giving us cost-effective exposure to a wider range of projects, and opening the prospect of Further discussions with Guardian”.

Rockfire Resources (ROCK LN) 0.12p, Mkt Cap £3.8m – Raising £450,00 to progress the Molaoi zinc project in Greece

• Rockfire Resources has announced that it has conditionally raised £450,000 through placing 450m new shares at a price of 0.1p/share.
• There will also be a retail offer raising an expected additional £0.25m with funds from both the placing and retail offer being deployed “to continue development of the Company’s Molaoi zinc/silver/lead project in Greece.“
• Earlier this month, the company announced a 5-fold increase in the resource estimate for Molaoi to 15m’Inferred’ tonnes at an average grade of 9.96% on a zinc equivalent base which it said “places Molaoi within the top 20 undeveloped zinc resources globally in terms of tonnage, grade and zinc equivalent metal content”.

SolGold* (SOLG LN) 9.9p, Mkt Cap £302m – Progress report on Cascabel and exploration update

CLICK FOR PDF

• SolGold has provided a progress report on its Cacabel project in Ecuador and on some of its exploration activity on other projects in the country.
• The company highlights preparations for geotechnical drilling for Cascabel’s tailings storage facility where equipment is expected to mobilise during Q4 2024 with recent work focussed on finalising the programme and securing access for the equipment.
• Continuing dialogue with internationally recognised engineering consultants aims to “identify opportunities for improvement in the recent Pre-feasibility Study outcomes for Cascabel”.
• The company’s pre-feasibility study, published earlier this year, describes an underground block-caving operation with an initial 28-year mine life 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.
• Solgold has also “renewed option agreements with land and concession owners in areas identified as potential infrastructure zones for the Project’s development that were due to expire earlier this year”.
• As well as describing the work at Cascabel, today’s announcement outlines continuing exploration work at the Cielito Norte Target located around 8km northwest of Cascabel in the Blanca Nieves project area.
• Cielito Norte is situated “between two key vein systems: the northeast-southwest El-Cielito vein system to the south and the northwest-southeast La Florida vein system to the east”.
• The company describes this geological setting as “unique” and says that the “vein systems are interpreted to lie on the margins of a significant porphyry target”.
• Work to date has identified extensive geochemical soil anomalies within an area of 3.4km x 1.8km “with notable anomalies in gold (Au), silver (Ag), antimony (Sb), arsenic (As), and mercury (Hg), predominantly between 1,300 and 1,700 meters above sea level” which Solgold says “underscores the robustness of the mineralized system”.
• Referring to the difference in elevation between the recent geochemical anomalies and those previously identified, Solgold says that there is “potential for hosting higher-grade epithermal Au-Ag mineralization for a vertical extent of at least 250 meters … [and that it will] … focus on delineating the vertical and lateral extents of these promising mineralized systems and potential related porphyry systems”.
• At the company’s Porvenir project in southern Ecuador, Solgold is advancing its permitting work through “the consultation phase … during calendar Q4 2024, followed by the submission of the application to the Ministry of Environment in calendar Q1 2025”.
• The company published its pre-feasibility study for the project in March and in July announced that it had secured a US$750m gold-streaming agreement with Franco Nevada and Osisko.

Conclusion: Solgold is progressing geotechnical evaluation of tailings disposal for its Cascabel project while seeking further optimisation of the PFS.  Earlier stage exploration at the Cielito Norte target approximately 8 km NW of Cascabel has identified potentially significant geochemical targets which may extend the scope of the project while in Southern Ecuador Solgold is advancing its permitting work in consultation with its host communities.

*SP Angel acts as broker to Solgold

Sovereign Metals* (SVML LN) 30.6p, Mkt Cap £183m – Seller declaration

(Sovereign currently holds 100% of the Kasiya project. The government has a right to a 10% free carry in the project.

Rio Tinto acquired an initial strategic interest of 15% for a $40.6m and has also bought another A$0.7m of stock to raise its stake to 19.9%)

STRONG BUY – Valuation 55p

• Sprott Inc. reports it has sold 3,620,671 shares in Sovereign Metals from some of its sub funds.
• The fund management group reports it has reduced its holding to 6.70% from 7.88%.
• Sprott has held Sovereign Metals since 2020 and we believe has gradually reduced its holding over the past 12 months.
• Funds sometimes sell stocks when the respective values becomes disproportionate within the fund or if they suffer redemptions.
• Alternatively, the fund manager may see greater value in buying junior gold stocks in the current environment.

Conclusion:  We note the stock sale by Sprott but do not feel there is any change in the potential value of the Kasiya rutile and graphite project. We view the current price as a positive opportunity for new buyers. We also believe the recent share price fall was not as a result of share sales by Sprott.

*SP Angel act as Nomad and broker to Sovereign Metals. The analyst has recently visited the Kasiya mine site. We highly recommend the Malawi coffee beans sold in Lilongwe airport.

Thor Explorations (THX LN) 19.5p, Mkt Cap £128m – Acquisition of the Guitry Gold Project

• The Company is acquiring a 100% interest in the Guitry Gold Exploration Project in Cote d’Ivoire from Endeavour Mining.
• Guitry is an advanced exploration project covering 295sqkm in the south of the country hosting a number of gold in soil geochemical anomalies that were only partially drill tested.
• Historic drill intersections include 12m grading at 10.4g/tAu, 16m grading at 7.90g/tAu, 24m grading at 2.02g/tAu and 16m grading at 2.25g/tAu.
• The team is planning to launch a drilling programme to delineate maiden 500-1,000koz MRE before YE25.
• Thor is paying $100k in cash on completion and a 2% NSR.
• The deal is subject to certain conditions precedent including Minster of Mines’ approval.
• Additionally, the Company signed an option agreement with Goldridge Resources to earn up to an 80% in the Boundiali Exploration Permit, an early stage exploration tenement located in northwest Cote d’Ivoire.
• The terms of the earn-in include a minimum exploration programme over 36 months and an option fee payment of $150k payable within the first 24 months to earn an initial 51% interest.

No.1 in Base Metals: SP Angel mining team awarded No 1. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q1 2024

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                                                            

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.

DISCLAIMER

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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