SP Angel Morning View -Today’s Market View, Monday 28th October 2024

Gold cools as Middle East tensions de-escalate following Israeli strikes on Tehran

MiFID II exempt information – see disclaimer below

Adriatic Metals (ADT1 LN) – Quarterly report as ramp up continues

BHP (BHP LN) – US$31.7bn settlement over Samarco Fundão dam failure in Brazil in 2015

Bushveld Minerals* (BMN LN) – Vametco operations to slowdown amid liquidity pressures

Castillo Copper (CCZ LN) – Completion of exploration project acquisition in NT, Australia

Develop Global (DEV AU) – Woodlawn Copper-Zinc project production looms following Trafi offtake

Metals Exploration (MTL LN) – Preparations to drill at the Abra prospect, Philippines

PYX Resources (PYX LN) – First export of rutile

Q2 Metals (QTWO CN) – Drilling results show large lithium pegmatite in Quebec

SolGold* (SOLG LN) – Appointment of project management company for the Cascabel Feasibility Study

Tertiary Minerals* (TYM LN) – pXRF results show copper-zinc mineralisation in Zambian drilling

Gold ($2,730/oz) cools as Middle East tensions de-escalate following Israeli strikes on Tehran

• Gold prices cooled as tensions eased in the Middle East, with Iran suggesting it would retaliate following Israel’s air strikes in country.
• Spot prices are sitting around $2,730/oz, but remain below the $2,750/oz all time high.
• Oil prices slumped 6% as a result.
• US Treasuries have continued their sell off, with the 10 year rising to 4.26%.
• This has pushed the dollar index up, which is currently sitting at 104.2, its highest level since July.

Copper ($9,525/t) steady as China set to hit peak copper levels this decade

• Copper prices are holding around the lower band of their recent trading range.
• The wider base metals complex is weak this morning, with zinc down 1.45%, lead down 1% and aluminium also sliding.
• Antaike expects China to reach peak copper demand at the end of this decade, as renewable energy intensity falls with replacements and improving efficiency.
• Iron ore strengthened slightly, whilst the CISA calls for supply restraint after inventories rose again.
• Baosteel set to report tomorrow, with industry steel margins closely watched to gauge steel appetite.
• Freeport Indonesia smelter repairs may take six months delaying metal production. Indonesia may or may not allow Freeport to export concentrates which were destined for the smelter.

Zinc (US$3,082/t) – Teck Resource’s guided zinc output to 240-250,000t from 275-290,000t due to a fire in electrolytic zinc plant at Trail.

• Sibanye-Stillwater Century tailings retreatment also guided lower to 66,000t from 76,000t due to suspension over local bushfires and resulting damage to infrastructure

Economics

US – Demand for new homes expected to rise in lower US interest and mortgage rate environment

• US growth, while lower than China’s will have a disproportionate impact on metals demand as US activity is more metals consumptive.

China – Likely CNY10-15 trillion of stimulus to start

• Estimates are that local government debt may be ~ 2x official figures
• How long will it take for China to restore its property market to normal functionality?
• In 2017, an estimated 65 million units – a fifth of all homes in China – lay vacant (SCMP)
• In 2023 there were 20 million unconstructed and delayed pre-sold homes worth ~$440bn according to Nomura
• In 17 October 2024 China pledged US$562bn in loans to complete unfinished homes and renovate 1m units in villages within cities. The figure disappointed (Bloomberg).
• How will this impact the rest of the economy?
• Can the Chinese people afford to acquire the hundreds of thousands of unfinished apartments?
• What will persuade Chinese savers to buy property again?
• Can Chinese banks lend sufficient multiples to new buyers?
• Can the government create sufficient confidence to persuade buyers to commit to new mortgages.
• Lower hydropower capacity may impact aluminium and other power hungry metals production such as wafer production for solar cells

France – Macron alleged to have involvement in billion-dollar contract to rebuild Beirut port after 2020 anfo blast.

• It is alleged that Macron met leaders of Hezbollah and the businessman secured the contract tax-free.

UK – Budget on Wednesday – Chancellor to restrain spending plans, encourage investment and loosen fiscal rules to avert cuts in government budgets

• First budget by a Labour chancellor in 15 years so likely changes are in fiscal rules to open the way for increase in public investment.
• Expect statements on unlocking way for capital investment to help business, goals to restore stability and drive some sustainable growth.
• Commitment to 5.5% public sector pay blew the budget before the Chancellor squared the books risking another ‘Liz Truss’ unfunded currency collapse.
• Labour committed to two rules in their manifesto;
  • -Balance day to day expenditure with tax receipts
  • -Get debt falling as % of economy over parliament
• Business taxation
  • NI, employer contributions to National Insurance will go higher for employers
  • Pensions contributions will probably go higher as well
  • Freeze corporation tax at 25%
  • Retain full expensing capital allowances
  • Oil & Gas: reduction in 91% capital allowance could add to the £25bn the industry is expected to pay from 2024-2027
  • Bank surcharge increased for a fixed period. UK Banks contributed £10.8bn in Corporation Tax last year including a surcharge equating to 12.2% of total corporation tax.
  • UK Finance calculate the banking sector’s total tax rate in London will be 45.8%  this year.
  • Ban on water company dividends until sewage spills under control.
  • Increase in rate of residential property developer tax, currently at 4% (to fund greater share cladding replacements) driving Corporation Tax for developers to >29%
• Personal taxation
  • IHT tax increases – might bring in a further £6bn on top of existing £8bnpa
  • IHT loopholes: expect some closure of exemptions and loopholes is not unpopular except for the few who are been specifically hit.
  • Non-dom loopholes changes – too easy for non-doms to move to realise too much
  • Capital gains tax increases – unlikely to equalise with income taxes (last done by Nigel Lawson in Tory govt in 1988)
    • Kier Starmer ruled out 39% Capital Gains Tax – But he didn’t say 38% wouldn’t be the number.
  • Wealth tax – difficult to action
  • Pensions: tax relief clawback appears to be on hold, for now, as it might backfire by hitting public sector workers.
  • reinstating life-time allowance
  • reduce tax free lump sum for pension pot -currently 25%
  • VAT on private schools: Cancellation of charitable status could raise £1.6bn but schools expected to reclaim tax on capital projects.
  • Winter fuel: means testing of Winter Fuel payments could save £1.5bn.
• NHS: government looking to bring in ID cards to somehow restrict use of the NHS to UK tax-payers and potentially charge ineligible health visitors for its services.
• Cars: We are inevitably moving towards a ‘Pay-per-Mile’ vehicle tax system, question is not if but when and under any government but maybe not in this budget.
• Investment:  Maybe some statues of the Labour leaders in Trafalgar Square.
• Private Equity: firms looking to leave UK if the tax on their profit share / carry is raised
• Bribery and corruption: acceptance of lavish corporate gifts seems to be ok in No 10.
• Union Subscriptions: potential to cut 20% refund on union subscriptions.
• Property: landlords sold ~300,000 more properties than they bought since 2016. The raising of council tax on short term lets (AirBnB) was introduced by the previous government.
• Government budgets: Chancellor likely to halt planned cuts to Government department budgets
• Deserving causes: Government pledged to spend £4.8m on deserving causes – whatever they are
• Drink: The OBR, Office for Budget Responsibility already assumes a 6.2p/ltr rise in alcohol duties
• Bond borrowing: substantial additional borrowing risks a ‘Liz Truss’ style economic wobble. Tweaking the fiscal rules is a time-honoured way of enabling additional borrowing.
  • Problem is, the Gilt market where the government borrows its funding is raising the cost of this borrowing in the knowledge the Chancellor has few alternative sources for extra income.
  • Interest rates: cut in rates likely to stop at 3.5% in government raises another £15-20bn in the markets.
• UK trains – We overheard a comment on a train last week where the guard who had apologised for the late running of the train said quietly there would be no more apologies for late running as the whole network will be government owned and the government is unlikely to want to apologise for anything.

Mali tensions escalate with Barrick over Loulo mine concession

• Bloomberg reports that the Mali junta is threatening to take Barrick’s Loulo mine concession in 2026, when the permit expires.
• The Finance Minister has reportedly sent a letter to Barrick, suggesting that Barrick come for talk’s on the mine’s ‘transition phase.’
• Mali jailed four Barrick local executives last month, accusing them of financial crimes.
• Bristow has reportedly proposed a US$371m settlement over the Loulo operational permit, according to Bloomberg.

Mining companies can offer multiple returns: Video:

Podcast: https://audioboom.com/posts/8591948-john-meyer-mining-companies-can-offer-multiple-returns

 This is Why Gold is Rising and It Will Probably Continue:

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

Currencies

US$1.0811/eur vs 1.0820/eur previous. Yen 153.33/$ vs 151.94/$. SAr 17.668/$ vs 17.686/$. $1.297/gbp vs $1.297/gbp. 0.660/aud vs 0.663/aud. CNY 7.128/$ vs 7.125/$.

Dollar Index 104.31 vs 104.12previous

Precious metals:         

Gold US$2,735/oz vs US$2,730/oz previous

Gold ETFs 84.1moz vs 84.1moz previous

Platinum US$1,023/oz vs US$1,012/oz previous

Palladium US$1,196/oz vs US$1,137/oz previous

Silver US$33.5/oz vs US$33.5/oz previous

Rhodium US$4,700/oz vs US$4,750/oz previous

Base metals:   

Copper US$9,553/t vs US$9,523/t previous

Aluminium US$2,652/t vs US$2,610/t previous

Nickel US$16,155/t vs US$16,255/t previous

Zinc US$3,082/t vs US$3,093/t previous

Lead US$2,023/t vs US$2,057/t previous

Tin US$31,360/t vs US$31,150/t previous

Energy:           

Oil US$72.6/bbl vs US$74.8/bbl previous

Natural Gas €42.0/MWh vs €42.4/MWh previous

Henry Hub Gas US$2.46/mmBtu vs US$2.52/mmBtu last Friday

• Crude oil prices fell 5% on reduced geopolitical risk after limited military strikes by Israel on Saturday, which targeted Iranian air defence systems protecting energy infrastructure sites rather than the facilities themselves.
• The US Baker Hughes rig count was unchanged at 585 units last week (-40 or 6% y/y), with oil rigs down 2 to 480 units (-24 y/y) and gas rigs up 2 to 101 units (-16 y/y), with Louisiana losing 2 units to 36 rigs (-6 y/y).
• Mol’s COO called out the EU hypocrisy in calling for it to halt crude oil imports from Russia via the Druzhba pipeline whilst allowing European customers to buy refined oil products made in Turkey or India from Russian crude. Mol’s land-locked refineries run on Urals blend crude that would take significant resources to upgrade.
• Media reports that Gabon’s state-owned power business is looking to renegotiate a 5-year PPA contract signed just 6M ago to provide 250MW of electricity (25% of Gabon’s supply) via two Karpowership vessels.
• Altera Infrastructure announce that the STARFISH project has been awarded up to €225m in grant funding by the EU Innovation Fund. Phase 1 of the project is expected to enable the storage of 42.75mt of CO2-equivalent over the first 10 years in the Havstjerne reservoir as part of a shared storage solution offshore Norway.

Uranium Futures $80.7/lb vs $81.9/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$104.1/t vs US$103.7/t

Chinese steel rebar 25mm US$540.5/t vs US$537.5/t

HCC FOB Australia US$203.5/t vs US$202.0/t

Thermal coal swap Australia FOB US$146.0/t vs US$145.5/t

Other:  

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

NdPr Rare Earth Oxide (China) US$59,343/t vs US$59,508/t

Lithium carbonate 99% (China) US$9,891/t vs US$9,754/t

China Spodumene Li2O 6%min CIF US$750/t vs US$750/t

Ferro-Manganese European Mn78% min US$985/t vs US$985/t

China Tungsten APT 88.5% FOB US$340/mtu vs US$340/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$314/t vs US$314/t

China Rutile Concentrate 95% TiO2 US$1,228/t vs US$1,256/t

Spot CO2 Emissions EUA Price US$63.9/t vs  US$63.9/t

Brazil Potash CFR Granular Spot US$280.0/t vs US$277.5/t

Germanium China 99.99% US$2,875.0/kg vs US$2,875.0/kg

China Gallium 99.99% US$455.0/kg vs US$455.0/kg

Battery News

Mercedes-Benz EV sales down 30% amid competition from China

• The German automaker revealed that electric car sales fell by 31% in Q3 2024 and that electric van sales also fell by a similar margin.
• To end of September sales were down 22% and 16% respectively.
• The company blamed the steep decline on “ongoing intensive competition characterising the market environment for all-electric vehicles”.
• As well as greater competition, Mercedes is suffering from a slowdown in its home market, with volumes of battery-powered cars down by nearly 70% in August. (European Automobile Manufacturers’ Association)

LG Chem develops breakthrough materials to prevent EV battery fires

• LG Chem has unveiled a groundbreaking temperature-responsive Safety Reinforced Layer (SRL) that aims to prevent thermal runaway.
• The thermal runaway suppression material is a composite layer, just 1 micrometre thick placed inside the battery cell between the cathode and the current collector.
• In rigorous testing, the new material demonstrated its effectiveness in preventing fires.
• During a penetration test on mobile LCO (Lithium Cobalt Oxide) batteries, none of the batteries equipped with the thermal runaway suppression layer caught fire, only 16% of batteries without the SRL remained safe.

Company News

Adriatic Metals (ADT1 LN) 210p, Mkt cap £710m – Quarterly report as ramp up continues

• Adriatic mined 63.1kt at 289g/t Ag, 2.9g/t Au, 7.5% Zn, 5.1% Pb over the September quarter.
• Tonnes milled increased 123%qoq, whilst underground development rose 13%qoq.
• Quarterly production of 95.5koz Ag, 831oz Au, 958t Zn, 554t Pb and 87t Cu.
• Recoveries below design rates as ramp up continues, averageing 69% Zn, 68% Pb,80% for Ag and 60% Au.
• Recoveries expected to improve with stoping ore increase, reducing grade variability.
• Processing plant expected to operate at 24/7 rates from November.
• Commercial production target remains on track for 4Q24.
• Production guidance retained at 180t milled, whilst 2025 sees an increase to 750-800kt.
• Storm damage affected the rail line connecting Sarajevo to Ploce Port, with trucking required until repaired.
• Adriatic received permits for Phase 1 of TSF at Veovaca, ready in December 2024.
• Exploration ongoing at Rupice, with 3,809m drilled over 37 holes, which the company state ‘reconcile well with the reserve model.’
• EoY MRE due to incorporate 13.3km Rupice infill drilling and step-out programme over 49 holes, with Rupice extended north by 80m and south by 90m.
• Cash at 30^th September of US$23.8m, with US$25m debt facility from Orion remaining undrawn.
• Cash down US$36.4m over the period.
• US$120m drawn from Orion to date, with first repayment due 31^st December 2024.

 BHP (BHP LN) – 2,186p, Mkt cap £110bn – US$31.7bn settlement over Samarco Fundão dam failure in Brazil in 2015

• BHP report the settlement of US$31.7bn with respect to the communities affected by the Samarco Fundão dam failure in Brazil in 2015
• The tailings dam was operated by Samarco Mineracao SA, a 50-50 joint venture of BHP and Vale SA with BHP and Vale previously saying they would each contribute 50% to cover the Fundao dam failure liabilities.
  • US$7.9bn has already been spent to 30 September 2024 on remediation and compensation.
  • US$18.0bn to be paid in instalments over 20 years to the Public Authorities, the relevant municipalities and Indigenous peoples and traditional communities.
  • ~US$5.8bn for work to be carried out by Samarco in additional performance obligations.
• BHP Brasil expects to pay US$6.5bn in FY ’24 – this has already been provided for.
• The agreement allocates compensation to programs for the benefit of people, communities and the environment in the affected regions, including
• (I US$ = 5.71 Brazilian Real)
  • R$11bn1 for universal water sanitation,
  • R$12bn1 for health programs,
  • R$6.5bn1 for economic recovery programs,
  • R$4.3bn1 for improvements to road and infrastructure,
  • R$2.0bn flood response fund,
  • R$2.4bn to foster fishing and biodiversity,
  • R$1bn for a program to support women,
  • R$5.7bn1 for a social participation fund for investment in education, culture, sports and food security, and
  • R$3.75bn1 for an income assistance program to support the most vulnerable people in the affected regions;
  • R$8 billion1 (US$1.4bn2) to eligible Indigenous People and Traditional communities with the allocation of funds to be determined by Indigenous and Traditional communities following a consultation process to be conducted by the Federal Government;
  • R$95,0001 compensation per person to eligible fishermen and farmers in the affected regions and
  • R$13,0181 per person to individuals with water damage claims; and
• BHP ‘Obligation to Pay’ schedule of payments (R$ Billion, 100%)

Conclusion: The sheer magnitude of the tailings collapse and numbers of people affected makes this an extraordinary settlement. While compensation payments are rarely sufficient to fully make up for losses suffered the funds will have some stimulus impact on the affected regions of Brazil.

Many lessons have and are being learned about how to manage mine tailings and how to ensure the mistakes leading towards the Fundão tailings dam collapse do not happen again.

Bushveld Minerals* (BMN LN) 0.3p, Mkt Cap £8m – Vametco operations to slowdown amid liquidity pressures

• The Company will be slowing down production at Vametco amid ongoing low vanadium prices and liquidity constraints.
• The length of a temporary slowdown will be determined by availability of sufficient funds including proceeds from the Vanchem disposal.
• As a result of the decision to slowdown operations, FY24 guidance for 3.8-4.0ktV at $26.7-27.1/kgV (Vametco and Vanchem combined) was withdrawn.
• 3Q24 production update will be released in the first week of November.

Conclusion: Vametco operations are being slowed down amid working capital constraints amid ongoing pending approvals for the Vanchem disposal deal and weak vanadium prices. Transaction with SPR is expected to complete shortly with the deal involving $20.6m in initial consideration that we would expect to get offset against outstanding working capital facilities with SPR as well as $15-20m in deferred payments with $1.25mpq paid over a three year period. Additionally, the Company should be receiving $3.7m in sale proceeds from Mokopane conditional on Vanchem disposal completion.

*SP Angel act as nomad and broker to Bushveld

Castillo Copper (CCZ LN) 0.38p, Mkt Cap £4.6m – Completion of exploration project acquisition in NT, Australia

• Castillo Copper reports the completion of the acquisition, announced last week of an 85% interest in Harts Range niobium/uranium and heavy rare-earth elements project in Australia’s Northern Territory.
• Today’s announcement confirms that in addition to the 100km² Hart’s Range project located around 120km northeast of Alice Springs Castillo Copper has “increased its footprint by ~25% with a proximal exploration license application – ‘Harts Range East Project’ – that has comparable underlying geology to the granted tenure (15km west)”.
• Chairman, Ged Hall, explained that the “Board is now working closely with the geology team to expedite ramping up the development campaign” and today’s announcement confirms that the “initial focus will comprise undertaking a desktop review to generate key insights for the inaugural post-grant exploratory field trip”.

Conclusion: Castillo Copper has moved quickly to secure and expand the Harts Range niobium/uranium and heavy rare-earth elements project and we await their plans to progress the project following completion of a desk-top assessment.

Develop Global (DEV AU) A$2.5, Mkt Cap A$668m – Woodlawn Copper-Zinc project production looms following Trafi offtake

• Develop Global, Bill Beaumont’s mining and mining service company in Australia, provides an update on the Woodlawn Copper Zinc project.
• The Company received an offtake agreement from Trafigura in the form of pre-payment and loan facility of US$65m.
• Trafigura will buy all of Woodlawn’s production over a five-year period. The documentation of the agreement is reportedly ‘almost finished.’
• Company estimates the pre-tax Woodlawn NPV7 of A$728m.
• Company expects first metal production from Woodlawn in CY25.
• Develop’s mining services revenue reported at A$53m.
• Cash reported at A$30.5m, no debt.
• Company paid the FID milestone payment to the Woodlawn seller over the quarter via shares and cash.

Metals Exploration (MTL LN) 6.55p, Mkt Cap £110m – Preparations to drill at the Abra prospect, Philippines

• Metals Exploration reports that it expects to start exploration drilling at the Abra prospect in Luzon, Philippines in around three weeks
• The programme at Abra, located approximately 200km north of the company’s Runruno operation, is expected to consist of four drillholes in the Manikbel area and is scheduled to be completed before the end of 2024.
• The Manikbel prospect is described as “a 4×2 km interpreted intrusive complex, is located within a prominent 5×3 km circular caldera feature surrounded by smaller circular anomalies and aligned with a major Northeast-Southwest trending corridor … [the company says that its] … research indicates that two previous minor drill campaigns were completed in the Manikbel prospect area some 40 plus years ago”.
• Recent geological mapping, supported by aeromagnetic geophysical data and soil geochemistry “highlights the substantial potential of a major porphyry copper system in this region”.
• Metals Exploration says that the “objective of the drill programme, beyond the identification of mineralisation, is to compile an initial resource estimate by Q3 2025”.
• We expect subsequent work programmes to be guided by the results of the initial drilling, however substantial additional drilling is likely to be required to deliver the company’s aspiration of an initial resource in the second half of next year.
• The company also announces the appointment of a new VP-Exploration, Max Tuesley.  He is described as having “extensive exploration experience both in the Philippines and abroad and provides the management capability required to develop our exploration potential”.
• Mr, Tuesley joins from a former role as Managing Director of Culpeo Minerals Ltd, an ASX listed company with exploration assets in Chile and a prior career “focussed on the Philippines where he worked for more than 10 years”.

Conclusion: We look forward to results from the initial drilling at the Abra project area and subsequent exploration plans with interest.

PYX Resources (PYX LN) 3.6p, Mkt Cap £20m – First export of rutile

• PYX Resources reports the shipment of its first shipment of rutile from its mineral sands operations in Kalimantan to a customer in Tianjin, China.
• The 350t consignment, shipped under the recently granted export licence awarded by Indonesia’s Ministry of Trade last month, contains a minimum grade of 90% titanium dioxide.
• Chairman and Chief Executive, Oliver Hasler, describes the initial export shipment as “a significant milestone for PYX Resources … [which] … positions us to effectively respond to the rising demand for our products”.
• Prior to the award of the export licence, PYX Resources had accumulated rutile stockpiles of around 6,000t of “Titanium Dioxide material … [and now anticipates] … consistent and ongoing shipments in the future”.

Q2 Metals  (QTWO CN) C$1.3, Mkt Cap C$172m – Drilling results show large lithium pegmatite in Quebec

• Q2 Metals reports drilling results from its summer programme at the Cisco Project in Quebec.
• The Company reported highlights of:
  • CS-24-019: 57m at 1.06% Li20
  • CS-24-017: 72m at 1.01% Li20
  • CS-24-021: 347m at 1.35% Li20
• Management encouraged by hole 21, which highlight the scale and consistency of the Cisco lithium pegmatite.
• Higher grade zones reported within, including 30m at 1.75% Li20.

SolGold* (SOLG LN) 9.1p, Mkt Cap £278m – Appointment of project management company for the Cascabel Feasibility Study

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• SolGold reports that it has appointed G Mining Services as project manager to aid in the delivery of the feasibility study for the development of its Cascabel copper/gold project in Ecuador.
• The appointment follows a competitive tender in which G Mining’s Ecuador experience in assisting Lundin Mining on its Fruta del Norte project and “their extensive global experience positions them as a critical partner to continue de-risking and advancing the Cascabel Project”.
• Their responsibilities will include the oversight of “timelines, milestones, and deliverables, as well as implementing and managing cost control systems. G Mining will develop and maintain detailed project schedules, assist SolGold with specialised consultant selection and contract management, and provide senior estimation services for project costing”.
• Welcoming the appointment, CEO, Scott Caldwell, said that their “Ecuadorian experience, cost-competitive approach, and strong team make them the ideal partners as we advance the project, de-risk key elements, and move forward”.
• Mr. Caldwell noted that the project still has “numerous areas … [where] … we feel meaningful improvements can be made to the existing PFS, particularly in the areas of the inclusion of the Tandayama-Ameríca open cut resources, gold and copper recovery, improved mine plan, site layout and infrastructure efficiency, power supply, waste rock and tailings management” and said that Solgold looks forward to working with G Mining to improve these aspects of the project.
• The existing prefeasibility study, released in March, describes an underground block-caving operation with an initial 28-year mine life generating an after-tax NPV8% 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.
• Mr. Caldwell also described how, in parallel with progressing the Feasibility Study, Solgold was “working on the processes to secure the various permits to facilitate access to development and the balance of the financing that will be required for a development decision”.
• In July, Solgold secured US$750m of the pre-production US$1.55bn capital investment described in the 2024 revised PFS via a gold streaming finance agreement with a consortium of Franco Nevada (70%) and by Osisko (30%).

Conclusion: The appointment of an experienced project manager with local Ecuadorean experience for the Cascabel project feasibility study highlights the project’s growing momentum following the release of the PFS in March and the US$750m gold streaming agreement announced in July which should provide almost half of the US$1.55bn pre-production capital required.

*SP Angel acts as broker to Solgold

Tertiary Minerals* (TYM LN) 0.08p, Mkt Cap £2.9m – pXRF results show copper-zinc mineralisation in Zambian drilling

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• Tertiary provides an update from their recently completed drilling programme at Mushima North.
• The Company has drilled 25 holes to maximum depths of 112m at its Zambian copper target.
• A1 Target was a copper-in-soil anomaly covering 3km north south by 1.5km east-west.
• 17 holes were drilled over three traverses using aircorde and RC drilling.
• Company reports pXRF highlights of:
  • 24TMN024: 33m at 0.21% Cu from 22m
  • 24TMN003: 8m at 0.10% Cu from 14m
  • 24TMN005: 43m at 0.14% Cu from 31m
  • 24MN008P: 11m at 0.14% Cu and 62m at 0.41% Zn from 19m
• Tertiary will now complete ground magnetic surveys as it continues to develop its understanding of the A1 target in a structural and stratigraphic sense.
• The Company will send selected samples for lab check analysis, alongside precious metal assaying.
• Company notes the final whole of the programme 24TMN024, a vertical hole to the south, returned grades up to 1% Cu, however there was insufficient time to drill further holes in the programme.
• Tertiary notes that the association of zinc and copper mineralisation is interesting , whilst arsenic presence may suggest the possibility for precious metal mineralisation
• C1 Area, where Tertiary is targeting IOCG-style mineralsiation, saw 100m holes drilled vertically, however the gravity anomalies identified by BHP were too deep for the Tertiary rig.
• As a result, the C1 Target remains untested.

Conclusion: Tertiary’s maiden drilling programme at Mushima North has yet to intercept economic copper grades. However, the Company’s programme has further boosted their understanding of both Target A1 and C1, with the identification of arsenic and zinc opening further questions as to the wider geology of the prospect. The primary IOCG-style target, C1, remains untested and will require deeper drilling.

*SP Angel acts as Nomad and Broker to Tertiary Minerals

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

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