SP Angel Morning View -Today’s Market View, Monday 23rd October 2023

China moves to block exports of Li-ion graphite

MiFID II exempt information – see disclaimer below

Last brick in the wall financing required for Graphite miner

• Management have already mined one year of production and has already commissioned the front section of the process plant
• Process plant almost ready to commission back end of plant to get to 98% Cg
• The team have already upgraded 20 tonnes of graphite to ~94% Cg with the material ready for the polishing mill
• Almost all the capital required has been spent to developing the mine and plant to this stage
• The company is now looking for a financial backer to fund:

• • Working Capital (WIP)
  • ‘spargers’ to fit into their flotation columns to improve recovery rates ($360,000)
  • a new Solar power plant for 1.5MW capacity (€3.5m). should put the mine in the lowest cost quartile

• A liquidity event is planned for the next 3-6 months
• The mine has all permits for full production and graphite export and is debt free

*SP Angel’s role is limited to making introductions and interested parties should be aware that investment in a private company can present certain risks not present in listed companies (e.g. limited or no liquidity and no rules compelling disclosure of information to investors).This offer is open to professional investors only and is not offered to retail investors.

African Pioneer (AFP LN) – First Quantum exercises its option over copper exploration licences in the Western Foreland of NW Zambia

Anglo Asian Mining* (AAZ LN) – BUY – Gilar drilling results and development update

Europa Metals Limited (EUZ LN) – Submission of Toral mining licence application

Horizonte Minerals (HZM LN) – Progress on site at Araguaia, Brazil with review of capital costs and schedule now expected in mid Q4

Savannah Resources* (SAV LN) – BUY, 21.1p – DFS drilling commenced at Barroso

Shanta Gold (SHG LN) – FY23 production guidance is comfortably in sight on strong Q3 output

Western Gigafactory may grind to a halt China threatens to stop exports of Li-ion anode graphite material

• China’s commerce ministry will not now require export permits on key graphite products citing national security.
• The move follows the initiation of EU investigations into Chinese electric vehicle subsidies.
• China controls on exports of natural and synthetic graphite, citing national security but China had not issued a graphite anode material export license to Sweden for years
• China refines >90% of the world’s graphite into battery anode material used by every one of the world’s gigafactories
• Benchmark reckon China will produce 67% of the world’s natural graphite this year.
• The move is said to be ‘conducive to ensuring the security and stability of the global supply chain and industrial chain, and conducive to better safeguarding national security and interests’.
• China has refused to grant export permits for Li-ion battery anode graphite to Sweden since 2020. Northvolt produced its first Li-ion cells in December 2021
• Refused export permits could also impact aluminium, ferro-alloy and Electric Arc steel production globally though this is less likely.
• We believe, every gigafactory in the world depends on Li-ion anodes made from purified spherical graphite sourced in China
• Graphite demand is being driven by strong Li-ion battery demand alongside rising production in aluminium and increasing electric arc furnace activity for steel, ferro alloys, calcium carbide and phosphorous.
• China produces around 850,000tpa of graphite with Madagascar ranking second at 170,000t and Mozambique (Syrah) at 110,000t and Brazil at 87,000t.
• Russia, is the world’s sixth largest player at around 15,000t, ranking alongside Canada and just behind South Korea at 17,000t last year
• 70% of China’s graphite production now comes from synthetic graphite made from a byproduct petroleum coke and emit some 25t CO2 for every tone of anode material.

Gallium & Germanium

• If anyone doubts China’s determination three was just 1kg of Germanium exported out of China  and ‘No’ Gallium exports in September.
• While this related more to the argument over US restrictions on AI semiconductors it highlights China’s ability and resolve to curb exports.
• Fortunately, China shipped some 8.63t in July ahead of the restrictions giving the world’s chipmakers some inventory and grace.
• China exports rose 47% to 36.5t of Germanium in the first nine months
• Chinese exports of gallium fell 62% YTD 22.72t for the first nine months

Western graphite miners move to ramp up production but have no hope in offsetting China’s sudden export controls

• China’s graphite product export ban on Friday has provided some much-needed stimulus to the natural flake graphite market.
• South Star Battery Metals is reportedly looking to ramp up its Brazilian Santa Cruz, with the CEO suggesting on Friday it could skip its Phase 2 development to progress to stage 3 (50ktpa).
• The Santa Cruz Project began initial construction in 2022 and expects to see commercial production this quarter.
• Santa Cruz holds a 12.3mt reserve @ 2.4% gc for 295.4kt.
• Stefan Bernstein, GreenRoc’s* CEO, expects the export ban to push ex-China carmakers to ramp up their prices or force them to purchase batteries from Chinese battery manufacturers.’
• GreenRoc is developing the Amitsoq Graphite project in Greenland and expects to release its PEA this month.
• The Amitsoq Project holds a JORC Resource of 23mt @ 20.4% GC for a total graphite content of 4.71mt.
• Syrah’s share price rallied 40% this morning on the Australian market, on expectations the ban may support the return to full production at Balama after weak prices forced production cuts.
• Analysts at Global Graphite Advisory expect anode makers to start ramping up buying in November in advance of the December 1^st export ban.
• EVs require between 50-100kg of graphite materials.
• Graphite use in batteries has increased by 250% since 2018.
• Tesla has had a head start in securing graphite products for its anodes, securing offtake agreements with Syrah and Magnis.
• We expect other automakers to wake up and smell the coffee following Friday’s news, with similar deals from other major carmakers expected to be inked with ex-China flake graphite products.
• Recommended graphite projects:

• • GreenRoc* (GROC) with Amitsoq project in Greenland,
  • Sovereign Metals* (SVML) with their Kasiya project in Malawi, which sits at the bottom of the graphite cost curve at c.$400/t FOB.
  • Beowulf Mining* (BEM) with their Grafintec downstream anode materials production facility project in Finland alongside the Aitolampi exploration project,
  • Australian producers and developers:  Syrah (SYR AU), Renascor (RNU AU) and Talga (TLG AU).

*SP Angel acts as Broker/Nomad or both to GreenRoc, Beowulf Mining and Sovereign Metals

Copper slides again as downstream buyers in China enjoy ample supply

• Copper prices fell to c. $7,860/t this morning before bouncing to $7,900/t on normalised trading.
• LME inventories rose again to a two-year peak, having been on a steady climb since July.
• SHFE inventories also rose again.
• Both COMEX and LME are showing futures in contango, highlighting ample spot supply as physical copper flows into the market from the DRC and Peru.
• Copper bulls will be reassured to read the Freeport-McMoran CEO’s comment on copper price dynamics and supply incentives.
• Adkerson stated that the ‘new cost structure’ for copper mining requires ‘people’s historical views of copper prices’ to be adjusted. As a result the Company is going to be ‘prudent’ in investing in expansion projects.
• Adkerson notes the ‘looming deficit coming, but current prices just don’t support big new investments.’
• Inflationary pressures are forcing majors to limit investment in new projects, despite analysts expecting major deficits through to the end of the decade (despite expected surpluses in 2024).
• We share the view with Freeport that long-term copper prices will reprice to the upside, with current levels too low to incentive significant new supply to be brought online.

Gold eases from five-month high after 8% rally

• Gold prices have cooled off a five-month high on Friday, with futures closing over $2,000/oz.
• Treasury yields are coming back into focus following the pricing in of a ‘war premium’ on the back of the escalating conflict in the Middle East.
• Higher risk-free rates weigh on haven assets like gold, with investors taking advantage of the c.5% 10-year yield instead of interest-free bullion.
• The dollar has also strengthened in line with rates, weighing on greenback-denominated gold.

Economics

US – 10-year Treasury yield rises to 4.99%

Is US funding for Ukraine a form of American QE?

• A very smart accountant in the Pentagon appears to have depreciated the value of its ATACMS missiles so that it is effectively giving them to the Ukraine.
• The missiles have a range of up to 200 miles though this may not have been the version supplied.
• The ATACMS missile supplied appears to come with cluster munitions for mine clearance which is also good for devastating military air bases as it happens.
• But, while the US Congress appears paralysed without a speaker, the government still appears to find ways to support Ukraine in its ambition to retake its territory from Russia.

China debt burden mounts as local governments work to refinance hidden debnt

• Provincial and municipal governments are refinancing debt associated with US$13 tn of hidden debt by one estimate.
• Local government land sales, a major earner for local governments over the past 15 years has fallen by ~20% so far this year
• Small Chinese banks could take a CNY2tn (US$300bn) Hit From LGFV ‘Local government financing vehicle’ debts according to S&P Global Ratings
• Regional banks held ~CNY12 tn of exposure to LGFVs at end-2022 according to S&P
• Special refinancing debt issuance of CNY910bn will need to be refinanced across 20 provinces in China
• Some 20% of the 80 regional banks sampled by S&P could fall below the minimum regulatory capital adequacy ratio of 8%.
• Six local governments plan to issue refinancing CNY320 bn of bonds replacing off-balance sheet debt mainly held in in LGFVs
• The total across the nation is expected to exceed CNY1.5 tn
• PBOC expected to support local government bond sales as municipalities refinance off-balance sheet debt
• Chinese mortgage rates continue to fall in the major cities across the nation.
• The PBoC held the benchmark one-year loan prime rate at 3.45% and maintained the five-year LPR at 4.2%
• The PBoC appears focussed on supporting the Yuan currency against controlled outflows but is supported be improvement in China’s economic recovery.

Currencies

US$1.0585/eur vs 1.0572/eur previous. Yen 149.93/$ vs 149.88/$. SAr 19.069/$ vs 19.075/$. $1.217/gbp vs $1.211/gbp. 0.631/aud vs 0.631/aud. CNY 7.318/$ vs 7.318/$.

Dollar Index 106.28 vs 106.33 previous.

Commodity News

Precious metals:

Gold US$1,976/oz vs US$1,979/oz previous

Gold ETFs 86.2moz vs 86.3moz previous

Platinum US$895/oz vs US$894/oz previous

Palladium US$1,095/oz vs US$1,107/oz previous

Silver US$23.22/oz vs US$23/oz previous

Rhodium US$5,400/oz vs US$5,500/oz previous

Base metals:

Copper US$ 7,894/t vs US$7,925/t previous

Aluminium US$ 2,167/t vs US$2,174/t previous

Nickel US$ 18,515/t vs US$18,320/t previous

Zinc US$ 2,410/t vs US$2,406/t previous

Lead US$ 2,093/t vs US$2,078/t previous

Tin US$ 25,060/t vs US$25,000/t previous

Energy:

Oil US$91.4/bbl vs US$93.2/bbl previous

• Crude oil prices fell over the weekend following success in diplomatic efforts to contain the conflict between Hamas and Israel, which has cooled fears regarding disruptions to crude supplies.
• The US Baker Hughes rig count was up 2 units to 624 rigs last week (-147 or 19% y/y), with oil rigs rising by 1 to 502 units (-110 y/y) and gas rigs up 1 to 118 units (-39 y/y) as the Haynesville added 3 to 40 rigs (-30 y/y).
• Media report that JV SapuraOMV is up for sale and is expected to fetch $1.2bn for its 30kboe/d of production from two Malaysian assets, with Mubadala, Medco and Inpex all rumoured to be interested parties.
• SLB CEO Olivier Le Peuch told investors that he expects the oil and gas industry to continue to benefit from a multi-year growth cycle that has shifted from the US onshore to the international and offshore markets.

Natural Gas €49.500/MWh vs €50.900/MWh previous

Uranium UXC US$69.00/lb vs US$72.75/lb previous

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$112.1/t vs US$117.1/t

Chinese steel rebar 25mm US$534.1/t vs US$535.1/t

Thermal coal (1st year forward cif ARA) US$136.8/t vs US$136.0/t

Thermal coal swap Australia FOB US$143.5/t vs US$141.5/t

Coking coal swap Australia FOB US$325.0/t vs US$325.0/t

Other:  

Cobalt LME 3m US$33,420/t vs US$33,420/t

NdPr Rare Earth Oxide (China) US$71,402/t vs US$71,395/t

Lithium carbonate 99% (China) US$21,660/t vs US$22,204/t

China Spodumene Li2O 6%min CIF US$2,050/t vs US$2,110/t

Ferro-Manganese European Mn78% min US$1,021/t vs US$1,020/t

China Tungsten APT 88.5% FOB US$300/mtu vs US$300/mtu

China Graphite Flake -194 FOB US$635/t vs US$635/t

Europe Vanadium Pentoxide 98% 6.2/lb vs US$6.2/lb

Europe Ferro-Vanadium 80% 26.25/kg vs US$26.25/kg

China Ilmenite Concentrate TiO2 US$314/t vs US$314/t

Spot CO2 Emissions EUA Price US$85.3/t vs US$85.5/t

Brazil Potash CFR Granular Spot US$340.0/t vs US$340.0/t

EV and Battery News

Europe’s biggest battery starts up in England

• Harmony Energy Income Trust has connected Europe’s biggest battery to the UK grid.
• The 99MW project in Buckinghamshire uses Tesla’s Megapack 2XL battery technology.
• The project can store enough energy to power 450,000 homes for up to two hours.
• The company is now starting a construction on a 49.5MW battery project in Scotland.
• The UK is targeting 100% renewable by 2035 and achieving that will require back-up supplies of clean energy.
• Currently, when wind speeds surge, the network gets overloaded. Using batteries to store some of that excess power would prevent wind farms being paid to switch off to reduce supplies.

Tesla charging network delivers most electricity per day

• Tesla’s network of Superchargers distributes 200kWh of electricity per charger per day. (BloombergNEF)
• Electrify America, Tesla’s main rival, averages 135kWh.
• Despite being the leading two sole producers, China as a whole leads the way in delivering most energy across all networks.

US approves $3.5bn US Power Grid modernisation

• The US electric grid faces challenges due to extreme weather events, aging infrastructure, and increasing electricity needs.
• Much of the grid was built in the 1960s and 1970s, leading to vulnerabilities such as power outages and susceptibility to cyber-attacks.
• $3.5 bn for 58 projects in 44 states announced to enhance grid resilience and reliability approved on 18 October by the Department of Energy (DOE).
• The program aims to lower energy bills and increase clean energy adoption without passing costs to consumers, promoting cleaner energy sources and easier installation of solar panels and EVs.
• Investments in disadvantaged communities are made through Community Benefits Plans, fostering economic development, and creating good-paying union jobs.

Falling fuel sales in Norway highlight impact of Electric Vehicles on fuel sales

• Norway’s motor fuel sales saw a significant 9% decline yoy for September, attributed to the country’s high EV adoption rates.
• The fall in motor fuel sales appears to outpace the decline in US coal usage on a percentage basis.

Ford’s simple solution for EV range limitations

• Ford has applied for a patent for a backup battery pack for EVs that sits on the vehicle’s roof.
• The idea should address range anxiety, allowing drivers to have extra battery power, especially on long drives or off-roading trips.
• While bolting on an additional battery is a great idea, we wonder how users will lift the batteries into position and the EV roof will take much additional weight.

Company News

African Pioneer (AFP LN) 1.9p, Mkt Cap £3.8m – First Quantum exercises its option over copper exploration licences in the Western Foreland of NW Zambia

1. African Pioneer reports that First Quantum Minerals has exercised its option to earn a 51% interest in two of its exploration licences in Zambia and disclosed that “in light of expenditure and work to date First Quantum has been granted an additional 6 months to 17 January 2024 to incur US$500,000 of exploration expenditure over the other two licences that are the subject of the Option Agreement”.
2. The company says that “First Quantum has identified the key structural architecture determining the boundary between the Western Foreland and the Central Fold and Thrust Terrain in the area of AFP’s licenses. Deep drilling on AFP’s licenses has successfully identified diagnostic features indicative of similar stratigraphy and mineralization processes to those involved in the formation of the Kamoa-Kakula deposit”.
3. Ivanhoe Mines’ Kamoa Kakula mine in the DRC produced around 300,000t of copper during its initial year of production in 2022 and expects to mine copper grades of around 6% for the first 10 years of its operating life.
4. Under the agreement, First Quantum is obliged to “prepare a Technical Report demonstrating an Indicated mineral resource of at least 300,000 tonnes of contained copper for First Quantum to earn a 51% shareholding” in the licences.
5. First Quantum is reported to have spent US$1.6m on exploration of the licences so far, with work including “mapping, soil sampling, ground geophysics, air core drilling and diamond drilling … [and has now started drilling on a shallow priority target at] … Turaco … in the fold- and thrust domain”.
6. “First Quantum has confirmed its intention to drill-test each of the main near-surface targets including Chipopa, Turaco and Chibwika during the current programme whilst planning for deeper drilling to test the Western foreland domain for Kamoa-style mineralisation”.
7. Welcoming the agreement with First Quantum, Executive Chairman, Colin Bird, said that African Pioneer is “particularly eager and excited to see the outcome of the current Turaco drilling given the broad mineralised intercepts reported at shallow levels during the 2022 programme … [and is looking] … forward to our future involvement with First Quantum, with the knowledge that they will approach the exploration with enthusiasm and their typical technical wisdom”.

 Anglo Asian Mining* (AAZ LN) 45p, Mkt Cap £51m – Gilar drilling results and development update

BUY

• The Company released results from the recent step out drilling at Gilar along with underground operation development update.
• Among selected drilling results are:

• • 23GLDD144 – 20m at 1.31g/t Au and 0.51% Cu from 357m including 3m at 4.59g/t Au and 2.03% Cu.
  • 23GLDD146 – 12m at 0.77g/t Au and 0.46% Cu from 317m including 3m at 2.00g/t Au and 1.12% Cu.

• Both holes are located ~100m out of known mineralisation boundaries confirming extension potential that is planned to be tested from underground.
• On development side, main decline and ventilation tunnel works is ongoing.
• The portal pushback area has been supported with geotechnical wire mesh and shotcrete.
• Haul road between the mine portal and the Gedabek processing facility has ben designed.
• Construction of a temporary heavy equipment workshop is due to start shortly.
• The Company hosted a Mining Plus site visit in September as part of the process to prepare a JORC MRE for the Gilar deposit with the report planned to be released in November.
• Maiden production is now expected to commence in H1/24 as Gedabek processing facilities restart following tailings’ environmental audit work.

Conclusion: Gilar drilling results from step out holes (~100m from known boundaries) confirm extension of gold/copper mineralisation that is planned to be tested from underground helping to save on drilling costs. Meanwhile, underground development works continue with maiden JORC MRE due in November and first production in H1/24. Higher grade Gilar ore coupled with expansion of the flotation plant are key drivers behind near term production growth.

*SP Angel acts as Nomad and Broker to Anglo Asian Mining

Europa Metals Limited (EUZ LN) 2.05p, Mkt Cap £1.7m – Submission of Toral mining licence application

• Europa metals reports that it has submitted its application for permission to mine its Toral zinc / lead /silver project to the authorities in the Spanish region of Castilla y Leon.
• The application envisages underground mining of the ~7mt indicated mineral resource which grades 5.0% zinc, 3.7% lead and 29g/t silver (around 8% on a zinc equivalent basis), at a rate of around 700ktpa.
• Toral also contains additional ‘inferred resources’ of 13mt at a grade of 4.1% zinc, 2.3% lead and 19g/t silver (6.0% ZnEq) and the 15 years production life the company envisages presumably includes mining part of the inferred resources.
• Mining is expected to use mechanised cut and fill methods in the upper, narrower parts of the deposit and sublevel methods at the deeper levels of the mine with a portion of the mine waste used as backfill reducing the pressure for surface waste storage.
• The company describes the processing using an initial ore sorting circuit followed by “conventional flotation of lead and zinc, producing the corresponding concentrates that carry other elements with economic value such as silver in the lead concentrate”.
• Welcoming the submission, Executive Chairman, Myles Campion, applauded the dedicated teamwork of Europa Metals’ team in overcoming “a few hurdles … [including] … Covid” to complete the submission documents.
• He also confirmed plans to recommence “drilling … [and to start] … a preliminary economic assessment” during 2024.

Horizonte Minerals (HZM LN) 18.5p, Mkt Cap £48m – Progress on site at Araguaia, Brazil with review of capital costs and schedule now expected in mid Q4

• Horizonte Minerals, which earlier this month reported that it expected a capital cost overrun of at least 35% on its current US$537m budget and a delay of around six months to initial production at its Araguaia ferronickel project in Brazil has confirmed continuing progress on-site.
• The company confirms that the “42m long Rotary Dryer has been lifted onto its support piers for final alignment and completion ahead of internal and external welding” and that it expects to start commissioning “by year end”.
• In addition, installation of the Rotary Kiln, which “will produce calcine that is transferred to the Electric Arc Furnace at a rate of around 115 dry tonnes per hour at an exit temperature of around 800^oC” is progressing with installation of the refractory lining expected to start in December.
• Installation of the Electric Arc Furnace and calcine storage bins has also made progress with “Refractory installation … expected to commence in Q1-2024, starting around the feed pipes before focusing on the internal lining of the circular 18m by 7.25m furnace”.
• Ore stockpiles from the initial mining now contain around 138,000t and “By year end, the Company anticipates having stockpiled around 250,000 tonnes, at an average grade of 1.90% Ni, in line with the target for the year”.
• “Commissioning of the 230kV power transmission line from the Xinguara Bay substation to the Araguaia project has begun and is due to be concluded by February 2024”.
• Horizonte Minerals confirms that up to 30^th September total expenditure on the project had reached US$429m and that “Reta Engenharia is expected to complete its capital cost and schedule analysis report, following which an independent technical advisor, nominated by Senior Lenders will review the updated costs with targeted completion by mid Q4-2023”.
• Welcoming the on-site progress of the construction, CEO, Jeremy Martin, said that “Notwithstanding the expected increase in capital, the Araguaia project remains a Tier 1 nickel project with lower quartile C1 cash costs, and a long mine life of 28 years producing a high grade, low impurity FeNi product. Discussions with the Company’s major shareholders and lenders to fund the project to completion are progressing”.

Conclusion: Following news of a likely capital cost overrun of at least 35% for the Araguaia Project, announced earlier this month, progress on site continues with ore stockpiles expected to reach 0.25mt of material grading 1.9% nickel by the end of the year and key parts of the process plant, including the dryer, kiln, furnace and the power transmission line moving closer to completion.

Savannah Resources* (SAV LN) 3.5p, Mkt Cap £63m – DFS drilling commenced at Barroso

BUY – 21.1p

• The Company started the drilling programme at the Barroso Lithium Project in Portugal.
• The two phase programme that includes ~14,000m of drilling in ~230 holes will cover resource, reserve, hydrogeological and geotechnical drilling to be used for the Project DFS.
• Phase 1 will be completed in two months with 60 holes to be completed for ~3,200m.
• Phase 2 will be adjusted based on results of the first part and is expected to take around six months and include further ~10,200m in 166holes.
• Results will be used to update the existing resource (28mt at 1.05% Li2O) as well as prepare maiden reserve estimates as part of the DFS that is targeted for completion in H2/24.
• Drilling is to be carried by EDASU (RC drilling) and SPI (DD) that have previously worked with the Company and are familiar with the Project.

Conclusion: Drilling commenced at Barroso as part of maiden mineral reserve and DFS work with the team remaining on target to release the study in H2/24.

*SP Angel acts as Nomad and Broker to Savannah Resources

Shanta Gold (SHG LN) 11p, Mkt Cap £112m – FY23 production guidance is comfortably in sight on strong Q3 output

• Q3/23 production came in at 27.9kokz (Q2/23: 29.4koz) with stable production at the NLGM plant and better than expected output at Singida.
• Quarterly AISC averaged $1,023/oz.
• Adjusted EBITDA amounted to $19.0m (Q2/23: $23.2M) mostly accounting for lower sales volumes.
• The Company received a cash VAT refund of $6.7m in respect of the Nov/22-Mar/23 period with outstanding VAT receivable reduced to $27m in Q3/23 (Q2/23: $31.0m).
• Around US$23.0 m of the total VAT receivable relates to the legacy period from 2017-2020 which is currently undergoing formal proceedings with the Tanzania Revenue Appeals Board.
• Good earnings allowed the Company to continue to deleverage with net debt reduced to $4.9m (Q2/23: $8.7m).
• At NLGM, production was 18.3koz taking YTD to 52.9koz in line with internal estimates.
• AISC averaged $1,279/oz (Q2/23: $1,181/oz) during the quarter reflecting less ounces produced and more investment in sustaining capex including the planned power station genset refurbishment after 18,000 hours of usage.
• At Singida, production was 9.7koz taking YTD to 19.7koz as the plant continued to perform well running at design rates after reaching commercial production on 1 June 2023.
• Quarterly production was 15% better than inhouse estimates accounting for positive reconciliation of processed and reserve grades.
• AISC averaged $899/oz (Q2/23: $736/oz).
• FY23 production and cost guidance reiterated at 90-98koz and $1,200-1,300/oz.

Conclusion: Stable performance at NLGM and better than expected production at Singida set the Company on target to hit its FY23 guidance with strong gold price environment helping the Company accelerate deleveraging of the balance sheet.

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

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*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

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SPA 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%