SP Angel Morning View -Today’s Market View, Monday 2nd May 2023

Lithium carbonate rises to $23,344/t on sustained EV demand

MiFID II exempt information – see disclaimer below

Aston Bay Holdings (BAY CN) – Copper mineralisation intersected in Nanavut drill holes

Aura Energy* (AURA LN) – Trading Halt on ASX

Galantas Gold* (GAL LN) – Q4/22 and FY22 results highlight increased FCF outflow amid Omagh Project development works

Mkango Resources* (MKA LN) – Q4/22 and FY22 results highlight progress on REE the Mine, Refine, Recycle strategy

Thor Explorations (THX LN) – Segilola produces 98koz of gold in first year of operations.

Copper rallies from 6-week lows on signs of demand optimism

  • Copper prices have climbed to $8,650/t following a sustained move lower in April, sliding c.5% as recessionary concerns continued to mount.
  • China’s peak construction season has disappointed so far, weighing on demand for copper-heavy household products and wiring.
  • Trading volumes remain low, however, as Chinese markets are closed for holidays.
  • China manufacturing activity surprised with contraction in April, raising the potential for further Beijing-backed stimulus measures to accelerate investment and boost base metal demand.
  • Copper miners in Peru and Chile are reporting inventory build which may add further pressure to prices struggling with weak demand.

Gold – $1,982/oz – Prices flatline as traders hold bets before Fed meeting

  • Gold prices have weakened slightly from $1,990/oz last week to $1,982/oz this morning.
  • The metal has weakened as US economic data shows sustained inflationary pressures, despite a small contraction in manufacturing activity for April.
  • The FOMC meets today and tomorrow and is expected to hike rates by 25bp.
  • However, gold traders alongside bond market participants will focus on Powell’s language as regards a pause or a potential additional 25bp hike in July.
  • US Treasuries have weakened over the past 48 hours, climbing to 3.55% and weighing on gold following a flood of bond sales by JP Morgan following the acquisition of FRC.
  • Alongside the Fed, gold traders will focus on the debt ceiling issue in the states, with Janet Yellen warning the US government may run out of cash by June 1st.

Lithium prices tick higher following extended weakness on expectations of price bottom

  • Lithium carbonate prices in China climbed 11%, marking their first weekly increase since November 2022.
  • The battery metal has suffered a five month sell-off following a 10x rally on a rapid uptake in EV demand and limited supply.
  • EV sales are expected to climb 35% this year and the lithium market is expected to remain tight as new projects come online slowly.

EVs – one in five cars sold in the world in 2023 expected to be an EV of some sort – IEA

  • EV sales exceeded 10m last year with further strong gains expected this year.
  • The IEA predicts sales to rise to >14m. 67m cars were sold in total in 2022.
  • The IEA expects EV sales to exceed 50% in the US in 2030 from 12% this year. 55% in Europe in 2030 vs 25% this year and 60% in China in 2030 vs 35% this year.
  • We expect the rapid rise in EV sales combined with the greater mileage typically driven in newer cars to cause diesel and gasoline sales to fall faster than expected in China and the West.
  • Oil prices are expected to come under increasing pressure as oil producers compete for new markets for their sales.
Dow Jones Industrials -0.14% at 34,052
Nikkei 225 +0.12% at 29,158
HK Hang Seng +0.53% at 20,000
Shanghai Composite +1.14% at 3,323


US – PCE inflation to 4.2% yoy, Core PCE down to 4.6% yoy

China – Manufacturing PMI at 49.2 vs 51.9 in March as exports and new orders slide – chemical fibre, ferrous metal mining and metal processing all seeing slower production

  • PMI services fall to 56.4 vs 58.2 in March (57 expected)
  • Total property sales for top 100 Chinese property developers fell 17.4% mom but rose 30% yoy – China Index Academy
  • Chinese steel demand sub-index for new orders slid 10.3pts to 39.9 in April

Japan – PMI manufacturing at 49.5 vs 49.2 in March

EU – PMI manufacturing slides to 35-month low at 45.8, manufacturing output at 48.5, a four-month low

UK – PMI manufacturing at 47.8 vs 47.9 in March

  • Long-term sickness is costing the UK £43 billion a year and it’s dragging down the economy.

Good news – Traffic wardens are to strike in Westminster during the King’s coronation

  • The GMB union, which supports traffic wardens, is predicting chaos in London.
  • We wish to thank the GMB union for supporting the wardens in their strike on 2nd, 4th and 6th May.
  • Somehow, we feel the action will not disrupt the Kings’ Coronation on Saturday 6th May.

Australia – Surprise 25bp rate hike on ‘still very high and broadly based’ services price inflation

Argentina – Official interest rates rise to 91% from 81%

  • Inflation rises to 104% with expectations for 110% by the end of this quarter
  • Argentina is reported to have agreed to start to pay for Chinese imports in Yuan rather than US dollars
  • The move now means the CNY is now more often used than the US dollar for Chinese cross-border transactions
  • The CNY was used in 48% of all Chinese cross-border transactions versus the US dollar at 47%

JP Morgan acquire assets of First Republic Bank

  • The FDIC closed First Republic Bank yesterday and sold the lump of its deposits and assets to JP Morgan.
  • Customers had withdrawn $100bn in deposits causing the shares to fall 76% over the past month and 97% over the past year.
  • JP Morgan is paying the FDIC $10.6bn to assume $92bn in deposits in the bank alongside some $173bn of loans.
  • First Republic suffered huge unrealised losses on its loan portfolio due to the rise in interest rates.
  • Losses on leveraged commercial property funds and lending are the next issue to hit the sector in our view.


US$1.0997/eur vs 1.1007/eur last week. Yen 137.60/$ vs 135.81/$. SAr 18.374/$ vs 18.388/$. $1.250/gbp vs $1.248/gbp. 0.671/aud vs 0.659/aud. CNY 6.913/$ vs 6.919/$.

Dollar Index 101.94 vs 101.77 last week

Commodity News

Precious metals:

Gold US$1,982/oz vs US$1,991/oz last week

Gold ETFs 93.5moz vs US$93.6moz last week

Platinum US$1,054/oz vs US$1,082/oz last week

Palladium US$1,462/oz vs US$1,491/oz last week

Silver US$24.80/oz vs  US$25.15/oz last week

Rhodium US$8,500/oz vs US$8,500/oz last week

Base metals:   

Copper US$ 8,648/t vs US$8,557/t last week

Aluminium US$ 2,358/t vs US$2,321/t last week

Nickel US$ 24,025/t vs US$23,889/t last week

Zinc US$ 2,626/t vs US$2,638/t last week

Lead US$ 2,147/t vs US$2,115/t last week

Tin US$ 26,075/t vs US$25,754/t last week


Oil US$79.6/bbl vs US$78.5/bbl last week

Natural Gas US$2.319/mmbtu vs US$2.346/mmbtu last week

Uranium UXC US$52.10/lb vs US$52.00/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$102.2/t vs US$104.1/t

Chinese steel rebar 25mm US$553.5/t vs US$554.2/t

Thermal coal (1st year forward cif ARA) US$134.0/t vs US$134.0/t

Thermal coal swap Australia FOB US$184.5/t vs US$190.0/t

Coking coal swap Australia FOB US$245.0/t vs US$247.0/t



Cobalt LME 3m US$34,930/t vs US$34,930/t

NdPr Rare Earth Oxide (China) US$62,876/t vs US$64,746/t

Lithium carbonate 99% (China) US$23,344/t vs US$22,762/t

China Spodumene Li2O 5%min CIF US$4,090/t vs US$4,090/t

Ferro-Manganese European Mn78% min US$1,359/t vs US$1,364/t

China Tungsten APT 88.5% FOB US$325/mtu vs US$325/mtu

China Graphite Flake -194 FOB US$775/t vs US$775/t

Europe Vanadium Pentoxide 98% 8.3/lb vs US$8.4/lb

Europe Ferro-Vanadium 80% 33.25/kg vs US$33.75/kg

China Ilmenite Concentrate TiO2 US$340/t vs US$340/t

Spot CO2 Emissions EUA Price US$93.9/t vs  US$94.3/t

Brazil Potash CFR Granular Spot US$390.0/t vs US$405.0/t

Battery News

Tesla reaches 5,000 Supercharger site milestone

  • Tesla has announced that it is now operating 5,000 Supercharger sites globally.
  • The company’s Japanese Twitter account announced on the same day that it now has 300 Supercharger sites operating in Japan.

Company News

Aston Bay Holdings (BAY CN) $0.04, Mkt cap C$6.2m – Copper mineralisation intersected in Nanavut drill holes

  • Aston Bay’s project operator and partner, American West Metals, has successfully started an RC drilling programme and Moving Loop Electromagnetic Survey at the Storm Copper Project’s 4100N Zone.
  • The partnership is looking to define maiden copper resources at the 4100N, 2750N and 2200N Zones.
  • Four RC drill holes have now been completed at 4100N Zone, with each hole intersecting copper sulfides, dominated by chalcocite, bornite and chalcopyrite.
  • The team also notes minor native copper and copper oxides present.
  • The mineralisation is hosted withim dolomite and is believed to be mostly vein and fracture-style mineralisation.
  • 3,000m of historical drilling at 4100N had identified widespread copper sulfide mineralisation, which the team’s current programme confirms.
  • Historical intercepts include:
    • 110m @ 4.18% Cu from surface and 56m @ 3.07% Cu from 12.2m
    • 41m at 4.18% Cu from 38m
    • 48m @ 2.92% Cu from 8m
    • The above widths indicated are core length.
  • Each hole recorded between 24 to 30m of strong visual copper sulfides at depths ranging from 49m to 56m.
  • Drill samples have now been sent to the laboratory for analysis.
  • Aston Bay is hoping that the shallow nature of the mineralisation will open the door to the possibility low-cost, open-pit mining.
  • Currently, Aston Bay and American West are completing a further 12 RC holes at 4100N Zone, whilst the MLEM survey at the same target has identified two strong conductors previously undiscovered.
  • The Storm Copper project is a hydrocarbon replacement style sedimentary style deposit, bearing similarities to mineralisation in the DRC.

Aura Energy* (AURA LN) 11.4p, Mkt Cap £63m – Trading Halt on ASX

(Aura holds 85% of the Tiris Uranium Project, Mauritania)

  • Aura Energy shares have been placed into a trading halt at the request of the directors of Aura Energy pending the release of an announcement.
  • Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday, 3 May 2023 or when the announcement is released to the market.
  • Aura are working towards a final investment decision on the Tiris uranium project in Mauritania.
  • Tiris uranium project update:
    • Simple free dig, open cast mining,
    • Strong financial metrics delivered from the EFS, headlined by a 180% increase in the Base Case post-tax NPV of US$ 226M and IRR of 28%,
    • Aura forecasts 57% cash margins,
    • AISC of US$ 28.77 / lb U3O8,
    • 18-month construction time line
    • Capex US$87.9m + additional capex of US$90.3m,
    • Production 2.0 Mlbs pa U3O8,
    • Process enables quick increase to >2,000ppm U3O8
    • 76% of forecast production from Proved and Probable Reserves, and 24% from Inferred Mineral Resources
    • 30-year mine life
  • Enhanced feasibility study based on a 52% increase in Measured and Indicated Resources at the Tiris Uranium Project
    • Measured and Indicated Resources at Tiris Uranium Project to 29.6 Mlbs U3O8, 62.1mt grading 216 ppm U3O8 at a 100ppm grade cut-off.
  • This Resource upgrade enabled the enhancement of the DFS to raise production to 2.0 mlbs pa U3O8
  • FEED ‘front-end-engineering design’ work working towards a final investment decision in Q4.
  • Häggån Project Update
  • Swedish government reiterated support to lift the national ban on uranium mining with Aura working with government on progress work required for an exploitation permit in 2024.
  • Cash: A$4.4m at end march with A$1.2m of expenditure due on Tiris Project development costs and A$837k of corporate costs.
  • Net operating cashflow and the investment in exploration and evaluation for the quarter of A$2.2m forecast
  • At the current expenditure the Aura has sufficient cash for 1.97 quarters.
  • The exercise of 90m listed options is expected to raise A$4.7m at an the exercise price of A$0.052/s. 30m of options are held by large shareholders.
  • The directors anticipate that the existing funds and those received from the exercise of options will be sufficient to cover the operating activities and exploration and evaluation activities of the business.

*SP Angel acts as Nomad and Broker to Aura Energy

Galantas Gold* (GAL LN) 24p, Mkt Cap £28m – Q4/22 and FY22 results highlight increased FCF outflow amid Omagh Project development works

  • Net loss amounted to C$16.6m (FY21: -C$5.3m) including a C$10.1m impairment loss on the Omagh Project.
  • Concentrate sales grossed US$0.6m (FY21: US$1.1m) with proceeds offset against development costs as the mine is not in a commercial production stage.
  • Concentrate inventories as of YE22 stood at C$83k (YE21: C$109k).
  • FCF amounted to -C$11.4m (FY21: -C$6.9m) reflecting increased spend on mine development.
  • Closing cash balance stood at C$1.0m (Q3/23 and FY21: C$3.6m and C$1.1m) with outstanding debt of C$9.9m (FY21: C$7.2m).
  • The Company closed a placing in late March 2023 raising ~C$3.0m in new equity and agreed a shares-for-debt transaction with several creditors settling ~C$0.7m of outstanding loans through an issue of new shares.

Conclusion: Increased FY22 FCF outflow reflects accelerated development works at the Omagh Gold Project with the earnings weighed down by an ~C$10m impairment charge.

*SP Angel acts as Broker to Galantas Gold

Mkango Resources* (MKA LN) 9.7p, Mkt Cap £26m – Q4/22 and FY22 results highlight progress on the REE Mine, Refine, Recycle strategy

  • The Company continued to progress its portfolio of assets focused on the rare earths’ Mine, Refine, Recycle strategy during the period.
  • The Malawi Government appointed an independent, international law firm to review and finalise the Mining Development Agreement.
  • Post Q4/22, authorities approved the Songwe Hill ESHIA marking another milestone in the MDA approval process on course to a mining license.
  • The team continues discussions with lenders and strategic investors for funding of a feasibility study for the Pulawy Separation Plant.
  • Further downstream, HyProMag GmbH, developing a recycling plant in Baden-Wurttemberg state, Germany, with a minimum capacity of 100tpa NdFeB, was awarded €3.7m in grants, representing 60% of capex, from the European Regional Development Fund (€2.5m) and the regional Ministry of Economic Affairs, Labour and Tourism (€1.2m).
  • The facility is expected to start first production in 2024.
  • Same size facility is being developed in partnership with the University of Birmingham at Tyseley Energy Park in the UK that is targeting initial production in Q4/23.
  • Financially, FY22 net loss amounted to US$6.0m (FY21: -$9.3m) split between corporate expenses ($3.5m) and project related expenditure ($2.4m).
  • Although, the pace of expenditures came down significantly in Q4/22 (-$0.7m) following the release of the Songwe hill DFS in Q3/22.
  • FCF amounted to -$5.3m (FY21 -$7.7m)
  • Closing cash balance stood at $494k (Q3/22: $418k) with $1.8m outstanding in secured CoTec convertible bonds (27p conversion price, 5%interest and Jun/24 expiry date).
  • CoTec invested a further $0.5m in Mkango in Feb/23 taking total convertible facility notional to £2.0m.
  • Additionally, CoTec subscribed for shares in Maginito representing to a post-issuance 10% equity stake in exchange for a £1.5m ($1.8m) investment in Mar/23.
  • The Company also raised $4.2m through an equity placing in Feb/23 with proceeds funding a €2.5m convertible loan note provided to HyProMag Germany that would unlock grants for the German Recycling Project as well as cover costs associated with permitting of the Songwe Hill Project in Malawi.

Conclusion: The Company continues to advance its portfolio of REE assets with Songwe Hill going through a permitting process following a completion of the DFS in Q3/22 while the team is actively de-risking the recycling part of the business securing funding for small scale facilities in the UK and Germany that are planned to come online in 2023 and 2024, respectively.

*SP Angel acts as nomad and broker to Mkango Resources

Thor Explorations (THX LN) 18.95p, Mkt Cap £119m – Segilola produces 98koz of gold in first year of operations.

  • Reporting results for 2022, Thor Explorations reports production of 98,006oz of gold in its first operating year for its Segilola Gold mine in Nigeria.
  • Production met the company’s guidance range of 90-100,000oz with the plant “consistently operated above nameplate capacity”.
  • Production costs were US$821/oz on a cash basis and US$1,091/oz on an all-in-sustaining basis and the company explains that these were “higher than budget AISC was a result of materially increased prices of ammonium nitrate and diesel  during 2022.
  • Operations generated a net profit of US$25.4m (2021 – loss of US$2.1m) from the sale of 92,489oz of gold at an average price of US$1,767/oz.
  • Thor Explorations explains that it reduced its net debt to US$31m (2021 – US$65.6m) during the year.
  • Company production guidance for 2023 is in the range 85-95,000oz of gold at an AISC of between US$1,150-1,350/oz.
  • The company explains that it is switching from diesel to compressed natural gas to power its generators and says that “Once fully operational they will reduce greenhouse gas emissions at the Segiola Mine Project by 53%”.
  • As announced in its recently released Q1 results, Thor Explorations reiterates the identification of a “new high grade quartz vein system within 15km of Segilola, with multiple high grade drillhole intercepts including 1m at 310 g/t gold which equates to 10 oz of gold per tonne”.
  • Elsewhere, the completion of an additional 26,000m of reverse-circulation drilling at its Douta project in Senegal, helped deliver a 144% increase in the estimated mineral resource to 1.78moz which now include the “Makosa, Makosa Tail and the recently discovered Sambara prospects, all of which remain open along strike and down dip”.
  • Thor Explorations confirms plans for an additional 40,000m drilling programme at Douta during 2023 including both diamond drilling and more reverse-circulation holes, with a preliminary feasibility study expected during Q4 2023.
  • Summarising 2022’s performance, President and CEO, Segun Lawson, said that “Despite the global supply chain issues that Thor faced, which contributed to a higher than budgeted AISC, the Company still managed to achieve an annual operating profit of US$40 million and a net profit of US$25.4 million”.
  • He also confirmed the company’s confidence in the Douta project and said that “we believe that it has the potential to provide significant value to shareholders”.

Conclusion: Segilola has delivered at the upper end of the company’s guidance range in 2022. We look forward to the PFS for the Douta project in Senegal later in the year which may describe the potential for a second operating mine.

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


John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474


Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London


*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.

Sources of commodity prices  
Gold, Platinum, Palladium, Silver BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt LME
Oil Brent ICE
Natural Gas, Uranium, Iron Ore NYMEX
Thermal Coal Bloomberg OTC Composite
Coking Coal SSY
RRE Steelhome

Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite Asian Metal


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