SP Angel Morning View -Today’s Market View, Monday 22nd January 2023

22% growth in EVs in 2024 should drive strong demand for battery metals

Marginal lithium projects cut production on weak spodumene and carbonate prices

MiFID II exempt information – see disclaimer below

Beowulf Mining* (BEM LN) – Update on Kallak Iron Ore Project as Swedish government reiterates support

Bushveld Minerals* (BMN LN) – SPR investment update

Empire Metals* (EEE LN) – Further Pitfield drilling results and £3m equity placing

Keras Resources* (KRS LN) – Deal with Phosul to build 11,000tpa of organic phosphate production

Oriole Resources* (ORR LN) – BCM due diligence sampling programme returns gold grades up to 256g/t

Pan African Resources (PAF LN) – Six Month Results to 31^st December 2023 confirm production guidance

Shanta Gold (SHG LN) – 2023 exceeds both production and cost guidance

SolGold* (SOLG LN) – Cascabel pre-feasibility study nearing completion

Versarien* (VRS LN) – Sales of Graphene-Wear products open up new markets for Versarien> placing raises £400,000

EV market heading for 22% growth in 2024

• Global passenger sales are expected to reach 16.7m in 2024 – and increase of 21% (Bloomberg NEF)
• Global EVs saw a growth of 33% in 2023, but due to various global factors though the rate of growth is now expected to slow.
  • China is slowing due to market saturation in the wealthier regions and tougher economic conditions overall.
  • European sales are expected to be relatively flat as companies hold back on high volume production before CO2 regulations tighten in 2025.
  • In the US, it has become more difficult to qualify for IRA tax credits slowing growth further.
• 2024 will see the emerging markets continue to grow – India, Thailand, and Indonesia all saw good growth in 2023.

Marginal Australian spodumene projects continue to suffer in threat to lithium supply as spot prices remain weak

• Liontown Resources, which is ramping up production at the Kathleen Valley project, announced a project funding update last night.
• The Company’s A$760m debt funding package has been terminated on the back of lower independent spodumene forecasts used by the creditors.
• The announcement follows Core Lithium’s update earlier this month on their strategic review, with management shuttering operations and processing stockpiles following the 85% fall in spodumene prices.
• Both projects include underground mining, with high OPEX weighing on their funding options going forward.
• Sayona Mining is currently undertaking a strategic review of its NAL project, which has already been shut twice on weak spodumene pricing over the past decade.
• Lithium remains a rapidly accelerating commodity in terms of demand and volatility is expected as the market reaches balance. We remain positive on the long term fundamentals of the commodity and expect pricing to stabilise higher over the next decade on an average basis.
• We highlight low-cost development projects Barroso, owned by Savannah Resources*, and Ewoyaa, owned by Atlantic Lithium*, whose AISC are guided at US$409/t and $675/t respectively.

*SP Angel acts as Nomad/Broker or both to Atlantic Lithium and Savannah Resources

Copper – Glencore and Trafigura are reported to be looking to renegotiate copper concentrate contracts lower to potentially US$60/6c/lb

• Chile estimates its copper production to rise 5.7% to 5.63mt this year
• Global copper production rose 5.8% to 22.79mt last year

Australian nickel operations continue to close as green premium fails to materialize

• Andrew Forrest’s Wyloo is closing its WA nickel operations six months after he paid $760m for them.
• Kambalda is set to go on care and maintenance alongside the Cassini and Long and Durkin mines.
• Wyloo will now be unable to satisfy its offtake agreement with BHP.
• The announcement follow’s BHP’s announcement of a review over its WA nickel operations amid a challenging pricing environment.
• FQM also announced plans to slow operations at their Ravensthorpe project this month.
• IGO announced in December it may be forced to write off the $1.3bn it paid for the Western Areas nickel assets two years ago.
• South32 have announced plans to initiate a strategic review at their Cerro Motoso project.
• All eyes on Glencore’s Murrin Murrin project next, which produced 15.6kt in 1H23
• Australian producers are bemoaning the lack of differentiation between their nickel products and more pollutive Indonesian laterite projects using HPAL processing techniques.

Cape Town Indaba / 121 – 2024 looks to be a surprisingly big and busy year at the 121 and Mining Indaba

• We are 100% full with investor meetings at the 121 conference in Cape Town and are now busy organising many more meetings later in the week
• We will also be on a panel of judges for the Investment Battlefield at the Mining Indaba on Wednesday between 2:00 and 3:00 at the main Indaba.
• This is looking like an exceptionally busy year with many more investor meetings than in previous years.
• There appear to be more family offices and other investors and fewer traders than last year with investors already asking for our best stock ideas.
• Well done to the 121 team at Hyve Group who are now managing the event.
• Given the disastrous management of Indaba by previous owners it’s good to see a more professional team step in.

Economics

China – Nonferrous metal production rose 7.3% in December to 6.59mt and 7.1% to 74.7mt in 2023

Aluminium output rose 4.9% yoy to 3.59mt in December in China according to the National Bureau of Statistics

• Aluminium production rose a further 3.7% to hit a record 41.59mt representing around 60% of global output.
• China has a national capacity cap of 45mt with estimated production capacity at 44.43mt according to Antaike
• Recent expansion of capacity has been in northern Inner Mongolia with Yunnan suffering hydropower issues due to drought through the summer.

 Currencies

US$1.0897/eur vs 1.0871/eur previous. Yen 148.05/$ vs 148.31/$. SAr 19.140/$ vs 19.004/$. $1.270/gbp vs $1.267/gbp. 0.659/aud vs 0.658/aud. CNY 7.196/$ vs 7.195/$.

Dollar Index 103.26 vs 103.45 previous.

Commodity News

Precious metals:

Gold US$2,024/oz vs US$2,027/oz previous

Gold ETFs 84.5moz vs 84.5moz previous

Platinum US$899/oz vs US$913/oz previous

Palladium US$930/oz vs US$944/oz previous

Silver US$22.17/oz vs US$23/oz previous

Rhodium US$4,550/oz vs US$4,600/oz previous

Base metals:

Copper US$ 8,366/t vs US$8,343/t previous

Aluminium US$ 2,171/t vs US$2,169/t previous

Nickel US$ 16,015/t vs US$16,250/t previous

Zinc US$ 2,462/t vs US$2,472/t previous

Lead US$ 2,104/t vs US$2,089/t previous

Tin US$ 25,425/t vs US$25,500/t previous

Energy:

Oil US$78.0/bbl vs US$79.3/bbl previous

Natural Gas €26.7/MWh vs €28.4/MWh previous

• Natural gas prices continued their downward slide as the market looked through last week’s cold spell to warmer forecasts for the rest of this month that could fail to significantly reduce ample gas storage inventories.
• The US Baker Hughes rig count was up 1 unit to 620 rigs last week (-151 or 20% y/y), with oil rigs down 2 to 497 units (-116 y/y) and gas rigs up 3 to 120 units (-36 y/y) with 2 rigs added in the Marcellus Basin to 29 units.
• Chevron plans to sell its natural gas business in Canada that produces 40kboe/d from c.235,000 acres of the Duvernay Shale in central Alberta, which could reportedly generate $900m in sales proceeds.
• ShaMaran Petroleum plans to consolidate its interest on the Atrush Block in Kurdistan by acquiring TAQA International’s 47.4% interest in the oilfield and subsequently selling a 25% operated equity interest to HKN Energy (private), which operates the adjacent Sarsang block. ShaMaran will retain a 50% interest in Atrush.

Uranium Futures $106.0/lb vs $106.0/lb previous

Bulk:

Iron Ore 62% Fe Spot (cfr Tianjin) US$129.6/t vs US$129.1/t

Chinese steel rebar 25mm US$572.0/t vs US$572.7/t

Thermal coal (1st year forward cif ARA) US$96.3/t vs US$100.0/t

Thermal coal swap Australia FOB US$122.0/t vs US$125.5/t

Coking coal swap Australia FOB US$321.0/t vs US$321.0/t

Other:

Cobalt LME 3m US$29,135/t vs US$29,135/t

NdPr Rare Earth Oxide (China) US$55,792/t vs US$55,805/t

Lithium carbonate 99% (China) US$12,020/t vs US$12,023/t

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

Ferro-Manganese European Mn78% min US$1,062/t vs US$1,060/t

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

China Graphite Flake -194 FOB US$590/t vs US$590/t

Europe Vanadium Pentoxide 98% 6.0/lb vs US$6.0/lb

Europe Ferro-Vanadium 80% 28.75/kg vs US$28.75/kg

China Ilmenite Concentrate TiO2 US$316/t vs US$316/t

Spot CO2 Emissions EUA Price US$65.2/t vs US$67.5/t

Brazil Potash CFR Granular Spot US$295.0/t vs US$295.0/t

Battery News

Mandatory battery passports for EVs sold in EU by 2027

• EV engine batteries will receive a digital ‘battery passport’ to provide detailed information about the raw materials prior to manufacturing, as well as post-manufacturing details, such as capacity and condition.
• The ‘passport’ is part of the new EU Battery Regulation, which requires the battery manufacturer to disclose carbon emissions from the production process.

Scottish Power to spend £5.4bn on upgrading energy cables

• The Scottish energy group is tendering £5.4bn in contracts to upgrade and expand the electricity network in central and southern Scotland.
• Scottish Power want to upgrade ageing electricity transmission lines to allow more renewable energy to be transported to the UK from Scotland.
• Around 80 to 85GW of clean energy could be connected to the British transmission system.
• Electricity demand in the UK is expected to increase by 50% by 2035 as more there are more EVs on the road and homes switch from gas boilers to electric heat pumps.

Company News

Beowulf Mining* (BEM LN) 1.6p, Mkt Cap £18m – Update on Kallak Iron Ore Project as Swedish government reiterates support

• Beowulf provides an update on their high-grade magnetite iron ore project Kallak in northern Sweden.
• The Government made a statement to Court late last week, endorsing their decision to award the Exploitation Concession in 2022.
• The Government emphasizes their support given ‘it is important that Sweden has commercial goods an iron of the kind found in Kallak.’
• The reiteration of commitment to the Project followed the submission of an application for legal review made following the Concession approval in 2022.
• This was followed by an oral hearing in September, and a subsequent additional submission made.
• The challengers to the decision are two Sami Villages and the associations for the protection of the environment who argued the Government did not have the legal right to make the decision.
• The Court will now consider the various arguments and make a decision in 1H24 – we emphasise that the Government reiterated their support for the Project at the hearing last week.

Conclusion: It is reassuring to see the Swedish Government’s commitment to the Kallak Project, their decision to grant the exploitation concession, and Sweden’s need to be a global player in the Green Steel transition. Neither Beowulf nor their local subsidiary Jokkmokk are parties to the current legal action. Beowulf continues to progress the Environmental Impact Assessment towards the Environmental Permit application, both of which are expected to further highlight the soundness of the project and reinforce the Government’s 2022 decision.

*SP Angel acts as Nomad and Broker to Beowulf Mining

Bushveld Minerals* (BMN LN) 1.55p, Mkt Cap £35m – SPR investment update

• Bushveld Minerals reports that management remain in regular communication with SPR ‘Southern Point Resources’ on the late transfer of funds.
• SPR. despite previous assurances has informed the Company the delay is due to one of its institutional funding partners defaulting on an agreement with SPR to commit the funds to satisfy SPR’s obligations to Bushveld Minerals.
• SPR is working with its partners to provide an alternative source of funding to resolve the default as soon as possible.
• Bushveld received a loan of ZAR40m (~US$2m) from SPR on Friday, on an interest free basis to be repaid once SPR provides Bushveld with the entire US$12.5m agreed under the SPR subscription agreement.
• Until the entire US$12.5m is received SPR remains in default of the Subscription Agreement.
• Management reckons around two weeks of production will be lost in January due to the delay in payment from SPR.
• The Board anticipates Bushveld to have sufficient working capital to sustain the business until the end of February 2024, at reduced production levels.
• SPR reckon the full US$12.5m will be paid no later than the 28 February 2024.

• Bushveld elected to suspend certain operational activities reducing production while deferring creditor payments to manage working capital while waiting for SPR funds to clear through.

*SP Angel act as nomad and broker to Bushveld Minerals

Empire Metals* (EEE LN) 12p, Mkt Cap £70m – Further Pitfield drilling results and £3m equity placing

(Empire holds 70% of Pitfield, Century Minerals, which is run by two geologists holds the other 30%. One of these geologists works for Empire.)

• Empire provides analytical lab results from its Pitfield RC drilling programme in Western Australia.
• The Company has received results for the entire 40-hole programme completed last month.
• Management notes that all holes ended in TIO2 mineralisation and was present in every metre of all holes drilled.
• Drilling shows higher grade sections are associated with shallow sandston irch beds.
• Highlights from the recent campaign include:
  • RC23TOM002: 168m at 6.91% TiO₂ from 12m;
  • RC23TOM003: 180m at 6.14% TiO2 from 0m;
  • RC23COS004: 154m at 5.50% TiO₂ from 0m;
  • RC23COS005: 148m at 6.18% TiO2 from 6m.
• Given the concentration of mineralisation in the altered sandstone beds, Management will target further exploration in these high-grade zones.
• Further RC drilling is expected to begin later this quarter, targeting further known areas of sandstone-rich beds and additional targets along the magnetics-gravity anomaly.
• The Company also notes it is expanding mineralogical and metallurgical test work to better understand the economic potential of the deposit.
• Additionally, the Company reports it has raised £3m via an equity placing. The Company has placed 27,272,728 at 11p to a ‘strategic’ Saudi Arabian investor, alongside existing shareholders.
• TransOceanic is backed by leading Saudi engineering and construction industry participants in the Saudi Arabia natural resources sector, and Management expects them to support the acceleration of the development of the Pitfield Project.
• The funds will support RC drilling costs and planned diamond core drilling for the above-mentioned petrological, mineralogical and metallurgical studies.
• As regards metallurgical work, Empire is looking to begin process design work to maximise beneficiation and recovery of a ‘high-value’ TIO2 product.

 *SP Angel acts as nomad and broker to Empire Metals

Keras Resources* (KRS LN) – 3.10p, Mkt cap £2.5m – Deal with Phosul to build 11,000tpa of organic phosphate production

(Keras holds 100% of the Diamond Creek phosphate mine in Utah, USA)

• Keras Resources report the signing of a 50:50 five-year deal with Phosul, a specialised organic fertilizer company with granulator operations in Idaho, USA.
• The 5tpa plant will produce a trademarked Phosul® granulate comprising 80% of Keras’ high grade organic rock phosphate from the Diamond Creek mine.
• The plan is for Keras to sell around 11,000tpa into the jv at its production cost.
• Keras has also agreed to acquire an 8.4 acre property with 77,000sqft of recently constructed undercover warehouse infrastructure for USD700,000 close to Delta town, around 80 miles south-west of its Spanish Fork operations.
• Keras will continue to produce its dry phosphate products as well as the new Phosul® JV granulates at the Delta Facility enabling greater sales if the market allows.
• Terms: 

o   US$270,000 loan bearing zero interest for the construction and commissioning of the granulator plant.

o   Keras will remain the owner of the granulator plant which should commission by end April.

o   Loan to be repaid at end of the initial 5 year JV term, or at the end of the JV if renewed.

o   Operating expenses shared 50:50.

o   Keras to sell 50 mesh rock phosphate to the JV (~11,000tpa) at production cost.

• An 11,000tpa of production more than doubles production from the Diamond Creek phosphate mine were sales were 4,606 tons last year.
• The 8.4-acre Delta facility is costing $700,000 and has three relatively new warehouses  with 77,000sqft covered area, more than twice the size of previous facilities so Keras can keep the phosphate dry..
• A local logistics / trucking group have mining and processing operations in the Delta area enabling reduced price back-haul trucking rates from the Diamond Creek mine to the new Delta headquarters.
• The acquisition is being funded by loans from The Diane H. Grosso Credit Shelter Trust with a four-year convertible of GBP 300,000 at 7%pa and conversion at 4 pence per share in Keras stocks.
• A four-year promissory note of US$ 350,000 at a 7%pa repayable after 4 years, secured by the Property where Keras has the right to repay the loan  without penalty, after two 2 years.
• Granulated products: Keras’ market research and client feedback has directed its move into granulated dry rock phosphate products to match synthetic fertilizers.
• Phosul’s Phosul® granulate which contains ~ 80% of Keras’ PhosAgri product added to Phosul’s marketing experience should extend sales in the US.

• Manganese: Keras sold its Nayega received a $1.7m payment from the Togo government last year along a 1.5% royalty advisory fee plus 6.0% of gross revenue generated from the Nayéga mine for the lesser of 3.5 years or 900,000t of beneficiated manganese ore produced and sold from Nayéga”.
• The deal with the Togo government should give nearly $0.9m a year at a price of $3.5/dmt for manganese and production of 7,480tpa equating to some $2.6m over three years.
• Indonesian manganese ore was selling for ~$4/dmt last year indicating potential for $3m in royalties over three years. If manganese prices rise to $6/dmt the value of the deal to Keras should rise to around $4.4m assuming production of 7,480tpa and to $14m if production runs at 23,375tpa.

Conclusion:  Keras continues to ramp up organic phosphate production in the US. Phosul® granules are sell for $40.67 per 25lb bag on AliExpress and $75 per 50lb bag on Amazon. 11,000t of Phosul® should sell for around $36m including sales charges and taxes.

*SP Angel acts as nomad and broker to Keras

Oriole Resources* (ORR LN) 0.5p, Mkt cap £19m – FLASH NOTE –  BCM due diligence sampling programme returns gold grades up to 256g/t

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• Today Oriole reports the results of a recent due diligence review at the Mbe gold project in Cameroon, completed by BCM International in relation to the Group’s conditional earn-in agreement.
• The review saw BCM’s geologists collect 639 in-situ pit and rock-chip samples over the targeted 3km anomalous gold zone.
• The intention of the review was to test a more widespread range of host units, as opposed to distinctive high-grade targets.
• The Group has now identified a shear-related porphyritic unit trending to the northeast. The unit is highly silicified and gold mineralisation is identified in cross-cutting east-northeast trending mineralised structures.
• 155 samples recorded gold grades equal to or greater than 1g/t Au and 232 samples graded 0.2-0.99g/t Au.
• Highlights include:

o   Outcropping rock chip samples: 256g/t Au, 133g/t Au, 75g/t Au, 33g/t Au and 23g/t Au

o   Pit sampling: 25g/t Au, 24g/t Au, 10g/t Au and 8.75g/t Au.

• High-grade gold zones were noted to be contained within smoky quartz veins and the strongly silicified quartz-feldspar porphyry units.
• As a result of these positive results, BCM notified Oriole last week the earn-in agreement terms at Mbe have been satisfied.
• Consequently, Oriole expects to receive the $1m signature (less $50k already received) from BCM before the end of February 2024.
• BCM will now hold the right to earn up to 50% in the Mbe project through the expenditure of $4m.

Conclusion: Oriole has now concluded both earn-in agreements with Ghanian mining contractor BCM at their Bibemi and Mbe gold projects. BCM’s decision to execute the earn-in agreement following the due diligence review provides a key vote of confidence in the Project, and this marks an exciting stage in the development of Oriole Resources towards Cameroon’s first gold producer.  Going forward, the Group will begin district-scale exploration at the underexplored Mbe, alongside resource definition and expansion at Bibemi, which currently hosts Cameroon’s first JORC-compliant gold resource.  We look forward to a substantial amount of exploration news flow to come from the Oriole/BCM JV, including drilling and more widespread sampling programmes.

*SP Angel acts as Broker to Oriole Resources

Pan African Resources (PAF LN) 15.64, Mkt cap £300m – Six Month Results to 31^st December 2023 confirm production guidance

• Pan African Resources produced 98,458oz of gold during the six months to 31^st December 2023 (2022 92,307oz) at an all-in sustaining cost (AISC) of ~US$1,300/oz “below the FY2024 guidance of US$1,350/oz”.
• Underground operations at Barberton were the largest contributor to production with 36,779oz followed by the Elikhulu tailings retreatment operation (28,106oz) and the Evander underground mine (21,307oz) with the balance from the Barberton tailings retreatment and surface mining at Evander.
• The company is maintaining its FY 2024 production guidance in the range 180-190,000oz but says that “given the excellent production performance in the Reporting Period, revised guidance may be considered in due course”.
• It also confirms that “Production for FY2025 is expected to be significantly higher, following commissioning of the MTR project, which will add approximately 50,000oz/yr to Group production, increasing annual output by some 25%”.
• Pan African Resources ascribes an increase in its senior debt to US$60m (June 2023 – US$18.9m) to “capital expenditure of US$23.2 million incurred on the MTR Project and the dividend of US$22.1 million paid to shareholders in December 2023”.
• The Project is, however, “progressing on time and capital expenditure is in line with the project’s budget … [and] … with commissioning being on track for the latter half of the 2024 calendar year and steady state production expected by December 2024”.
• Commenting on the progress of the MTR project, CEO, Cobus Loots, said that commissioning of the “Project towards the end of this calendar year will further increase the Group’s production with approximately 50,000 oz per year of high margin ounces”.
• The company also confirms that the 24 to 26 level underground expansion at the Evander mine “remains on track … [with development started to] … to access 25 and 26 Level mining areas … [and] … Equipping of the existing 17 Level underground ventilation shaft, with a hoisting capacity of up to 40,000 tpm … expected to be completed during FY2024, improving efficiencies and eliminating the existing cumbersome conveyor system”.
• Pan African Resources says that “Dewatering of Evander’s 7 Shaft Egoli project is ongoing. Once dewatered to below 20 Level, reserve delineation drilling will commence to further define the ore payshoot and its grade variability”.

Shanta Gold (SHG LN) 13.1p, Mkt Cap £138m – 2023 exceeds both production and cost guidance

• Shanta Gold reports that following production of 27,865oz of gold during the final quarter, 2023 output was 100,571oz exceeding the company’s guidance range of 90-98,000oz.
• The New Luika Gold mine (NLGM) contributed 71,248oz (~70%) of the total with the remaining 29,323oz coming from Singida, which poured its first gold on 30^th March 2023.
• Costs, on an all-in-sustaining basis (AISC), were “US$ 1,138/oz, compared with AISC guidance of US$1,200 – 1,300 /oz” at the group level.
• Shanta Gold’s 2024 guidance is for gold production in the range 100-106,000oz of gold at an AISC between US$1,300-1,350/oz.
• Guidance for New Luika is in the range of 70-74,000oz at an AISC between US$1,300-1,350/oz while Singida is expected to produce 30-32,000oz at an AISC between US$1,275-1,325/oz.
• The company comments that the increased 2024 AISC “is driven by approximately US$50 /oz of additional on-mine exploration at NLGM and Singida, higher royalties derived from forecasted higher selling prices, and a non-cash inventory adjustment “.
• Addressing the expected cost increase, CEO, Eric Zurrin, confirmed that Shanta Gold’s “2024 focus is to ensure long-term sustainable production meaning further investment into the assets through exploration”.
• The increased on-mine exploration activity includes plans to drill around 15,000m at each of NLGM and Singida in 2024.

SolGold* (SOLG LN) 7.58p, Mkt Cap £231m – Cascabel pre-feasibility study nearing completion

• Solgold has issued a progress report outlining its project development and exploration activities in Ecuador and the roles of its directors, including some of the recently appointed members, on its Board Committees.
• CEO, Scott Caldwell, said that pre-feasibility work on development of the company’s principal project, Cascabel, is “nearing completion” and, as previously disclosed, is adopting a lower risk, phased development path “with several project optimizations expected compared to the 2022 Cascabel PFS, including lower capital costs”.
• In December, the company said that it expected to release its pre-feasibility study “early in the first quarter of 2024”.
• The previous, March 2022, pre-feasibility study described the investment of US$2.7bn of pre-production capital to develop a 30-year underground mine treating 25mtpa of ore generating an after-tax NPV8% of US$2.9bn and IRR of 19.3% with a further US$2.1bn of additional capital required over the life of the mine.
• We note that the 2022 study already adopted a more conservative development strategy to that which had been described in the Preliminary Economic Assessment (PEA) of March 2019 which had envisaged a 50mtpa project at a pre-production cost of ~US$2.4bn and overall capital cost of over US$10bn over a 55-year life.
• The company has also commented on its exploration programme where January has seen progress on the Blanca Nieves project approximately 10km north of Cascabel where Solgold recently discovered the La Florida epithermal gold target.
• In early December, Solgold reported the discovery of high-grade gold and silver in rock samples from surface veins and breccias and described La Florida as potentially hosting a high-grade ‘boiling-zone’ within the epithermal system and speculated on possible links with the nearby target at Cielito.
• Solgold confirms that “Exploration activities are expected to continue over the course of 2024, focusing on advancing new target areas and prospects for new discoveries”.
• Following the AGM on 20^th December which saw the retirement of some directors and the election of Adrian van Barneveld to the Board, Solgold says that he will be joining the Audit & Risk and Environmental Social Governance Committees and will Chair the Remuneration Committee.

Conclusion: We welcome the evolution of the more risk averse project development strategy for the development of Cascabel and look forward to the release of the updated pre-feasibility study for technical insights into the project and details of the risk amelioration measures for the project’s development as well as the steps proposed for reducing the capital expenditure.

*SP Angel acts as Financial Advisor to SolGold

Versarien* (VRS LN) 0.10p, Mkt Cap £0.51m – Sales of Graphene-Wear products open up new markets for Versarien> placing raises £400,000

• Versarien, the advanced materials engineering group based in the Forest of Dean, Gloucestershire reports a new deal to take its products into the Americas.
• The company has announced an important sales agreement to supply Graphene-Wear products into Colombia, Brazil and the US.
• The company is working with ‘Go to Gym’ Sportswear led by Juan Manuel Goenaga.
• Graphene-Wear products are engineered with the latest graphene technology to offer unparalleled comfort, durability, and performance in sports kit.
• Versarien has already seen success in South America with use of its high-tech materials with sportswear brand BiaBrazil which has integrated of Versarien’s Graphene-Wear technology into a new range of women’s and men’s activewear garments.
• Athletes wearing these products benefit from enhanced thermal transmittance, increased moisture management and faster drying rates.
• Funding: management also report the raising of £400,000 by way of an equity placing at 0.08p/s.
• Use of Proceeds:  corporate and working capital purposes pending the sale of assets and income from rising sales of graphene-Wear products, including ‘Go To Gym’ whose produces are being sold in th Americas.
• Versarien, subsidiary, Gnanomat is also entering into an agreement to co-develop advanced materials with IRPC, a Thai petroleum and petrochemical company.
• Management are busy restructuring the business to focus on the key graphene products while selling off non-core assets. The South Korean assets should be sold this year but may raise less upfront cash than expected.

Conclusion:  Graphene as a material has taken longer than expected to refine and commercialise. Versarien management are leading the way in product development with strong potential to expand into new markets with its Cementene™ concrete modifier and other products. One potential high-growth market is in  graphene enhanced Li-ion battery anodes where, we believe, there is substantial opportunity for value creation.

*SP Angel acts as Nomad and Broker to Versarien

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

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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.

DISCLAIMER

This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.

Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.

Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

MiFID II – Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).

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%