SP Angel Morning View -Today’s Market View, Monday 3rd March 2025

Gold edges higher after worst week in three months on dollar rebound

MiFID II exempt information – see disclaimer below

Beowulf Mining* (BEM LN) – Full year results

Blencowe Resources (BRES LN) – AFC shows interest in the Orom Cross graphite project, Uganda

ECR Minerals (ECR LN) – Potential acquisition of exploration projects in Canada

Guardian Metal Resources (GMET LN) – Desert Scheelite drilling results

Kavango Resources* (KAV LN) – Appointment of Alex Gorman, Peel Hunt, Mining Analyst as COO of Kavango in June

Landore Resources (LND LN) – Historic drill core sampling results

Oriole Resources* (ORR LN) – Next Mbe results received from maiden drilling programme

Sovereign Metals* (SVML LN) – New presentation on graphite strategy for Sovereign’s world-class Kasiya rutile and graphite mine in Malawi

Zanaga Iron Ore (ZIOC LN) – Strategic investment syndicate buys out Glencore to progress DRC iron ore project

Gold ($2,869/oz) edges higher after worst week in three months on dollar rebound

• Gold prices are bouncing having touched recent lows of $2,833/oz on Friday.
• The move was followed by a wave of profit taking, likely from algorithmic funds, triggered by a reversal in the dollar.
• The dollar has been trending lower since Trump’s inauguration after traders bet on tariffs triggering a resurgence in inflation, lifting yields higher.
• The 10 Year treasury has now slid from 4.8% to 4.2% amid renewed concerns over slowing US economic growth.
• This has pushed the dollar down, alongside impacts from a recent rally in the Japanese Yen amid rising expectations of rate hikes.
• Meanwhile Asian countries continue to seek greater gold exposure, with reports suggesting Singapore boosting holdings, Indonesia opening new bullion banks and Hong Kong gold trade booming.
• Chinese retail and central bank buying was a major trigger for the recent rally towards $3,000/oz, with Western ETFs starting to add sizeable physical holdings this year.
• Speculative fervour likely become overstretched amid concerns of bullion shortages in London, with the recent pullback considered necessary for a more sustained rally going forward.

Copper ($9,368/t) edges lower as traders focus on Trump’s next tariff move

• LME and CME copper prices continue to diverge, as traders have moved metal to the US in anticipation of Trump’s probe into the metal.
• The Spread between CME and LME copper prices rose to over $1,000/t last week, implying the market expects c.10% on copper from Trump.
• The LME price continues to slide steadily having risen to over $9,550/t last week.
• Traders are rushing to move copper from LME warehouses to CME, with c.100kt LME-stored copper cancelled over the last week (Reuters).
• The Trump administration is accusing other countries of ‘attacking our domestic production,’ stating that ‘it’s time for copper to come home.’

Coal slides despite supply concerns on underinvestment and rising Indian demand

• Australian thermal coal prices have eased to $100/t as markets remain well supplied and mild winter weather reduces demand.
• Analysts note growing inventories in China after a period of stockpiling following the shortages in 2021 and 2022.
• China inventories have risen to 665mt by the end of December, up 21%yoy.
• Thermal coal prices peaked at $450/t in 2022 in the wake of the Russia Ukraine war and spiking energy prices.
• WoodMac expect that 10% of export mines have become unprofitable under $110/t.
• Metallurgical coal prices have also been sliding on weak steel demand from China as their property market continues to unwind.
• Bloomberg reports that only 10/70 nations have plans to boost output by over 10mt worth of thermal coal.
• India’s coal ministry expects the country’s thermal coal demand to rise to 1.5bnt by March 2030, growing c.3%pa.
• The IEA has now revised coal demand outlook higher over its last four annual reports, with global demand expected to rise 1% through 2027.

Economics

US and Ukraine fail to sign the minerals deal following a heated argument in front of the media in the Oval Office.

• President Trump is negotiating a ceasefire between Russia and Ukraine arguing President Zelenskyy need to make compromises and avoiding explicitly providing security guarantees.
• President Trump said that Zelenskyy “can come back when he is ready for Peace”.
• The minerals deal is seen as a stepping stone toward further security ties between the US and Ukraine.
• President Zelenskyy said on Sunday that he is still “ready to sign” a US-Ukraine minerals deal.
• A meeting between the UK, France and other countries last weekend resulted in a four points plan in support of Ukraine including:
  • to keep military aid flowing into Ukraine, and to keep increasing the economic pressure on Russia;
  • that any lasting peace must ensure Ukraine’s sovereignty and security and Ukraine must be present at any peace talks;
  • in the event of a peace deal, to boost Ukraine’s defensive capabilities to deter any future invasion;
  • to develop a “coalition of the willing” to defend a deal in Ukraine and to guarantee peace afterwards. (BBC)
• Euro is up 0.4% this morning against the US$ with German and French equity indices also trading higher.

Trump vs Zelenskyy– It’s not just about the money: We believe Trump wants to use US mining companies to give the US good reason to defend US mineral assets in Ukraine

The acquisition of mines and mineral licenses as a reason for the US to defend its assets is not a completely new idea

• There is an alternative take on the excruciating, televised meeting between Trump, Zelenskyy and JD Vance in the Whitehouse.
• The view goes: Zelenskyy was appealing in public to the American people so he can push Trump into allowing Ukraine to join NATO or at least bring NATO into support Ukraine.
• Unfortunately, if NATO joins the war against Russia this brings the US directly into the conflict. China has a ‘no limits’ special relationship with Russia and would, almost step in to support Russia. Iran may also join as well.
• China and Iran are already supporting the Russian war in Ukraine through trade and through the supply of drones and critical components for its military.
• Russia will not sign a peace treaty if it joins NATO.
• But, if Zelenskyy signs the proposed US minerals deal and if Putin attacks US mineral assets, eg. US miners in Ukraine then the US will have good reason to respond.
• We suspect Trumps discussions with Putin are purely aimed at ending the war and not part of some greater plan to allow Russia to recreate its empire.
• We note, some see, Russia alone as relatively unimportant in the world but Russia with Ukraine is an empire again.
• For Zelenskyy, joining NATO would provide his greatest protection but unfortunately would risk dragging the US into a wider conflict involving China and Iran and potential escalation to WWIII.
• So while we were horrified to view the Trump / Zelenskyy shouting match we understand the stakes are high and while Trump is offering to put American mining companies into Ukraine he is going to forcefully resist escalating the conflict.
• From a minerals perspective, most western miners have avoided Ukraine due to its long-standing endemic corruption.
• We see Ukraine Rare Earths as a red herring though Ukraine is rich in iron ore, ilmenite (titanium), graphite, spodumene (lithium) and uranium. These minerals are all easily available elsewhere.

China – Investors are looking forward to results of the annual National People’s Congress and potential pro stimulus measures to be announced.

• The Congress will be hearing PM Li Qiang address and debate the government’s budget and legislative proposals over the coming week.
• 2025 GDP target is to be announced with many expecting something around 5%, the same as last year.
• Additionally, PM will revel government budget deficit target that may be increased from 3% to 4% of GDP.

Bitcoin jumped ~10% with other cryptocurrencies posting more dramatic increases after President Trump backed Crypto Strategic Reserve.

• Posting on Truth Social platform, Trump said he signed an order which “directed the President Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL and ADA”.
• He later added that “obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve”.
• ETH, SOL, ADA and XRP are all up over the last 24h registering +6%, +11%, +43% and 14%, respectively.

Currencies

US$1.0405/eur vs 1.0404/eur previous. Yen 150.09/$ vs 150.60/$. SAr 18.674/$ vs 18.510/$. $1.259/gbp vs $1.260/gbp. 0.622/aud vs 0.622/aud. CNY 7.292/$ vs 7.282/$.

Dollar Index 107.354 vs 107.371 previous.

Precious metals:         

Gold US$2,868/oz vs US$2,855/oz previous

Gold ETFs 85.5moz vs 85.5moz previous

Platinum US$952/oz vs US$949/oz previous

Palladium US$935/oz vs US$919/oz previous

Silver US$31.3/oz vs US$31.1/oz previous

Rhodium US$4,725/oz vs US$4,700/oz previous

Base metals:   

Copper US$9,335/t vs US$9,353/t previous

Aluminium US$2,609/t vs US$2,622/t previous

Nickel US$15,630/t vs US$15,765/t previous

Zinc US$2,822/t vs US$2,780/t previous

Lead US$1,990/t vs US$2,000/t previous

Tin US$31,310/t vs US$31,365/t previous

Energy:           

Oil US$72.6/bbl vs US$73.4/bbl previous

• European energy prices moved higher following a fractious White House meeting on Friday cast doubt on the likelihood of a potential Russia-Ukraine peace deal in the near-term.
• “The US Baker Hughes rig count was up 1 to 593 units last week (-36 or 6% y/y), with oil rigs down 2 to 486 units (-20 y/y) and gas rigs up 1 to 101 units (-17 y/y), as the Haynesville Form. added 1 to 31 units (-10 y/y).
• US Commerce Secretary Howard Lutnick confirmed over the weekend that tariffs on Canada and Mexico would go into effect on Tuesday, but that the level of the threatened 25% tariff was still under negotiation.
• Media reports that Zenobe has commenced operations at the 200MW first phase of the Blackhillock battery storage project in Northeast Scotland, which is due to be expanded to 300MW by next year.
• ACCIONA Energía announced completion of the ~€1bn sale to Endesa of 34 Spanish hydroelectric plants with 626MW capacity with total annual production of around 1.3TWh.

Natural Gas €46.6/MWh vs €46.2/MWh previous

Uranium Futures $65.0/lb vs $65.0/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$106.9/t vs US$106.9/t

Chinese steel rebar 25mm US$485.4/t vs US$485.3/t

HCC FOB Australia US$185.5/t vs US$187.5/t

Thermal coal swap Australia FOB US$99.0/t vs US$100.3/t

Other:  

Cobalt LME 3m US$23,985/t vs US$23,030/t

NdPr Rare Earth Oxide (China) US$60,999/t vs US$61,661/t

Lithium carbonate 99% (China) US$9,892/t vs US$9,888/t

China Spodumene Li2O 6%min CIF US$815/t vs US$815/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$1,005/t

China Tungsten APT 88.5% FOB US$343/mtu vs US$343/mtu

China Graphite Flake -194 FOB US$430/t vs US$430/t

Europe Vanadium Pentoxide 98% US$4.8/lb vs US$4.8/lb

Europe Ferro-Vanadium 80% US$23.8/kg vs US$23.8/kg

China Ilmenite Concentrate TiO2 US$299/t vs US$299/t

Global Rutile Spot Concentrate 95% TiO2 US$1,543/t vs US$1,543/t

Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t

Brazil Potash CFR Granular Spot US$322.5/t vs US$320.0/t

Germanium China 99.99% US$2,775.0/kg vs US$2,775.0/kg

China Gallium 99.99% US$385.0/kg vs US$385.0/kg

Battery News

European Commission to propose measures to boost EV demand

• The European Commission is set to present measures this week which it hopes will boost demand for EVs in the EU.
• The Commission will publish its automotive action plan on 5^th March to help ensure EU car producers can electrify their fleets and compete with more advanced Chinese and US rivals.
• A draft, seen by Reuters, makes proposals to the 27 EU member countries on actions that can be taken to accelerate the uptake of EVs.
• It will also work with EU countries to assess how best to incentivise EV purchases and funding options for them, and is proposing that zero-emission heavy vehicles should be exempt from road charges.
• New EV sales fell 5.9% in 2024, according to EU automakers’ association ACEA, which says limited charging infrastructure was partly to blame, as well as a shortage of cheap EVs and Germany’s sudden ending of subsidies.
• Battery production was also covered in the draft, with increasing European content requirements on battery cells and components sold in EVs in the European Union, expected to be put forward.

Company News

Beowulf Mining* (BEM LN) 23.5p, Mkt cap £9m – Full year results

• Beowulf Mining report their financial results for the year to 31^st December 2024.
• Beowulf notes progress at their Kallak Iron Ore project, where they are working towards a PFS and Environmental Permit application.
• The Company received a positive verdict from the Supreme Administrative Court upholding the original award of the Kallak Exploitation Concession.
• Additionally, testing showed the ability to produce a high-grade iron ore concentrate product with <2% Silica and <0.23% alumina, grading up to 70% Fe.
• Beowulf initiated the Consultation Process for Kallak in September as part of the Environmental Permitting process.
• In Finland, the Company is working towards the completion of the optimised GAMP PFS, which remains scheduled for 1Q25.
• Company held £881k in cash as of 31^st December 2024, with the Company ‘currently working… to procure additional near term financing… which would include management participation.’

*SP Angel acts as Nomad and Broker to Beowulf Mining

Blencowe Resources (BRES LN) 4.15p, Mkt Cap £11.4m – AFC shows interest in the Orom Cross graphite project, Uganda

• Blencowe Resources reports that the African Finance Corporation (AFC) has expressed a possible interest in debt or project level investment in the Orom Cross graphite project.
• Today’s announcement describes “extensive engagement between Blencowe and AFC over the past few years … [and confirms that] … AFC has conducted due diligence on the Orom-Cross Graphite Project and recognises its high-purity product, low-cost structure, and strategic positioning as a key supplier of non-China graphite into the global battery and industrial markets”.
• “AFC’s Expression of Interest includes potential funding participation in the initial start-up phase of Orom-Cross development, targeted for 2026. As part of this initial investment, AFC has also indicated an interest in securing future funding rights for subsequent project expansions”.
• Describing the AFC’s activity, the announcement confirms that “Since 2008 AFC has disbursed more than US$13.2 billion across key infrastructure and resource projects, with an investment footprint across 36 African countries and 43 member states, including the Republic of Uganda”.
• Executive Chairman, Cameron Pearce, welcomed the interest of the AFC as “a material milestone for Blencowe” in the context of increasing institutional investor interest in “graphite’s critical role of in the global battery supply chain”.
• He also confirmed that the continuing “drill programme is expected to materially increase our graphite resource, further enhancing Orom-Cross’ economics and the attraction of the project”.

Conclusion: AFC’s potential interest in the Orom Cross project could enhance the project’s profile among investors. We await results from the continuing resource drilling with interest.

ECR Minerals (ECR LN) 0.23, Mkt Cap £5.2m – Potential acquisition of exploration projects in Canada

• ECR Minerals reports that it has entered an exclusive agreement to acquire Maximus Minerals which owns “three properties in Ontario, Canada” prospective for copper and zinc with “gold showings”.
• The option envisages a maximum £500,000 for Ontario projects at the Cavern Lake zinc project located 10km NE of Dorion, the Silver Lake zinc/gold project 55km east of Savant Lake and the Chapman Copper project 200km east of Thunder Bay.
• The Maximus Minerals portfolio also includes a further project at Cat Key approximately 280km west of Thunder Bay, Ontario, currently under option “for an additional C$600,000 (c. £329,000)”.
• “The Proposed Acquisition will be satisfied by the issue of up to 151,515,151 new Ordinary Shares to Maximus’ shareholders. The new Ordinary Shares in ECR will be issued at the higher of 0.33 pence per share … [representing] … up to 10.4% of the Company’s as enlarged ordinary share capital”.
• Chairman, Nick Tulloch, explained that ECR Resources aims to expand and said that Maximus, with its three existing base metal projects and the option over the advanced high-grade gold Cat Key Project “will provide ECR with both a geographical and project expansion, taking our assets beyond Australia and beyond gold, whilst still utilising the skills of the team”.

Conclusion: Possible acquisition of exploration projects in Ontario diversifies ECR beyond its existing Australian projects and broadens its commodity exposure. We await further news as the exploration progresses.

Guardian Metal Resources (GMET LN) 34p, Mkt cap £42m – Scheelite drilling results

(Power Metals Resources* holds a 19.4% stake in Guardian Metals)

• Guardian Metal Resources has released further results from its continuing drilling campaign at the Desert Scheelite tungsten project at Pilot Mountain, Nevada.
• The company confirms that 51 holes have been completed and that the “final planned drillholes into Desert Scheelite will be completed in the following weeks following which attention will be turned to geotechnical drilling to support the planned pre-feasibility study”
• Among the results highlighted in today’s announcement are:
  • A 27.1m wide intersection at an average grade of 0.46% tungsten trioxide, 32g/t silver, 0.71% zinc and 3278ppm (0.33%) copper from 20.7m depth in hole PM24-034; and
  • 18.5m at an average grade of 0.28% tungsten trioxide, 55g/t silver, 0.26% zinc and 353ppm (0.03%) copper from 27m depth in hole PM24-038 which also intersected a second zone of 18.2m at an average grade of 0.25% tungsten trioxide, 253g/t silver, 1.09% zinc and 205ppm (0.03%) copper from 58m depth; and
  • 7.5m at an average grade of 0.21% tungsten trioxide, 2.9g/t silver, 0.12% zinc and 125ppm (0.01%) copper from 26.5m depth in hole PM24-039 which also intersected 12.1m at an average grade of 0.35% tungsten trioxide, 57g/t silver, 0.98% zinc and 5103ppm (0.51%) copper from 41.8m depth.
• Today’s announcement also confirms that Guardian Metal Resources “is also finalising the first ever geological model for the Gunmetal zone with drillholes to planned thereafter”.
• “Guardian has also received a … permit which allows for the excavation of 20 drill pads at the Project’s ‘Garnet’ tungsten-copper-silver-zinc zone” at Pilot Mountain.
• CEO, Oliver Friesen, explained that the “Garnet and Gunmetal zones … host polymetallic tungsten-silver-copper-zinc mineralisation very similar to what is found at Desert Scheelite”.
• Mr. Friesen also said, “Finally, preliminary drill planning is underway to target the newly discovered mineralised copper breccia zone within the Porphyry South target area located immediately south of Desert Scheelite”.
• The Pilot Mountain tungsten project is reported to be the United States’ largest resource of a strategic metal not currently produced in the US.
• The drilling campaign aims to expand the current ‘Indicated’ mineral resource of 9.01mt at an average grade of 0.26% tungsten trioxide (WO3) plus an ‘Inferred’ resource of a further 3.53mt at an average grade of 0.31% WO3 within the deposits at Desert Scheelite and Garnet.

Conclusion: Drilling is continuing at Pilot Mountain with encouraging results. We look forward to the results being reflected in an updates mineral resource estimate.

*SP Angel acts as Nomad and Broker for Power Metals

Kavango Resources* (KAV LN) 0.78p, Mkt Cap £12m – Appointment of Alex Gorman, Peel Hunt, Mining Analyst as COO of Kavango in June

• Kavango Resources reports that non-executive director, Alex Gorman will assume the role of Chief Operating Officer in early June.
• Alex, who will “move to Bulawayo, Zimbabwe where she will be better able to manage the group’s operations” is a geologist by profession with insight into the geology of the Kalahari Copper Belt via Master’s degree studies.
• Alex Gorman is currently a Mining Analyst at Peel Hunt, covering small and mid-cap mining companies listed in London.
• Formerly, Alex worked in BMO’s commodities team, and in various analytical, business improvement and consulting roles at Wood Mackenzie”.
• Chairman, David Smith, welcomed the appointment and expressed confidence that “her combination of a technical geological background, familiarity with our projects in Botswana and Zimbabwe, and her knowledge of the mining industry generally, will be a real benefit to the Company”.

Conclusion: We had the opportunity to visit the Hillside mines and licenses with Alex in February and feel she will make a positive and meaningful addition to the Kavango team. Alex has formerly worked with Dave Catterall who is consultant geologist to Kavango. We see Alex and Dave’s work as critical to optimising the move to larger-scale mining on the Hillside mining licenses.

*Two SP Angel Analysts recently visited Kavango’s Hillside mines and licenses in Zimbabwe. An SP Angel analyst holds shares in Kavango

Landore Resources (LND LN) 3.4p, Mkt Cap £10m – Historic drill core sampling results

• The Company announces results from the 2024 infill drill core sampling programme on selected historic drill holes at the flagship BAM Gold Deposit and Lamaune Gold Exploration Target at the Junior Lake property, Ontario.
• Infill sampling programme was carried late last year on 27 existing drill holes from BAM and two drill holes from Lamaune Gold, located ~8.5km along strike west north-west from BAM Gold.
• Results indicate significant gold potential within the gabbroic lithological unit, which comprises the southern flank of BAM Gold.
• Sampling of Lamaune Gold historic core identified anomalous gold values in previously unsampled core, indicating potential for additional mineralisation.
• The 3,500m drilling programme is expected to commence at BAM March 2025 focused on the overall confidence in the grade, size and continuity of the resource as well as testing down dip potential.
• Drilling will be followed by a MRE update later this year as well as reviewing the 2020 PEA to a PFS reflecting higher gold price environment.
• Separately, the Company reports this morning that it received ~£220k from 9.2m exercised warrants.

Oriole Resources* (ORR LN) 0.2p, Mkt cap £7.8m – Next Mbe results received from maiden drilling programme

(BCM International is earning a 50% interest in Mbe and Bibemi by spending US$4m on exploration respectively)

• Oriole Resources reports they have now received the next set of results from the maiden drilling programme at their Mbe gold project in Cameroon.
• The programme is currently being funded by BCM International, who are earning up to US$4m for an additional 40% stake in the asset.
• The receipt of assay results has been delayed due to custom hold ups, which has subsequently pushed back the requisite QAQC checks.
• Company expects to announce the results ‘very soon.’

*SP Angel acts as Broker to Oriole Resources

Sovereign Metals* (SVML LN) 45.4p, Mkt Cap £267m – New presentation on graphite strategy for Sovereign’s world-class Kasiya rutile and graphite mine in Malawi

(Sovereign currently holds 100% of the Kasiya project. Malawi has 10% free carry right. Rio Tinto holds 19.9% of Sovereign Metals)

STRONG BUY – Valuation 55p

• The Kasiya deposit benefits from unusually low levels of sulphur which is a negative for battery materials manufacturers.
• The deposit is made up of particularly soft and friable material enabling unusually low cost, low impact mining.
• Simple dry mining with no blasting enables the separation of the large-flake graphite at Kasiya with very little physical impact on the graphite flake as it passes through the separation circuit.
• This leads to a relatively high 57% of large Jumbo (+80um) material with just 12% medium flake (+100um) and 32% small flake (-100um).
• Larger flake graphite continues to attract significantly higher prices at US$1,140-1,193/t vs medium flake at $860/t and small flake at $564/t.
• A growing and probable deficit in small -100um flake graphite is seen as pushing battery anode producers into buying larger flake sizes as the market develops.
• Growth in the refractory and foundry industry continues to drive prices for larger flake graphite with the large flake graphite market expected to grow to US$15.7bn by 2032 from $7.37bn in 2024 according to Wise Guy Reports.
• Because the graphite at Kasiya was formed from the accumulation of algae in a shallow lake environment over millions of years it is sees as unusually consistent with uniform composition.
• This compares with many hard-rock mines where hard rock require blasting, transitional zones lead to less consistency and higher sulphur levels negatively impact the quality of the material.
• Optimisation of the current PFS shows an incremental cost of producing and transporting graphite concentrate to port at US$241/t after deducting the portion of the costs allocated to Rutile.
• This renders Kasiya the World’s lowest-cost graphite producer by some margin, with an estimated graphite C1 cost of $241/t, nearly half that of the next lowest cost producer, NGX at ~$390/t and Syrah’s Balama mine at $430-480/t.
• Most importantly, it is lower than China’s weighted average C1 cost of $257/t making Sovereign the only graphite play capable of competing with China today.
• Management expect the Kasiya DFS to be completed in Q4 .

Conclusion: The news, economic and environmental benefits of Sovereign’s Kasiya mine continue to improve making this a compelling and significant investment from a battery materials and titanium industry perspective. We expect Rio Tinto to move to take greater ownership of the Kasiya project after the DFS has been produced.

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

Zanaga Iron Ore (ZIOC LN) 10.5p, Mkt Cap £73m – Strategic investment syndicate buys out Glencore to progress DRC iron ore project

• Iron ore developer Zanaga reports it has raised US$21.5m at c.4.1p from a group of mining industry veterans for the execution of the DRC iron ore project.
• The fundraise includes backing from mining industry veterans including Mark Cutifani, Tony Trahar, Tony O’Neil, Phil Mitchell and Mick Davis.
• The fundraise enables the repurchase of Glencore’s stake in ZIOC and the cancellation of the current Glencore offtake/development agreement.
• Glencore currently holds a 43% equity stake in ZIOC.
• The remaining funds following the repurchase will be used for 12 months worth of working capital expenditure.
• The team is looking to further optimise the Zanaga project and product before beginning a formal bid process.
• The Transaction sees 20% of the iron ore product marketing rights allocated to Gulf Iron and Steel.
• Zanaga recently completed an update feasibility study with a Chinese iron ore technical engineering team for the magnetite project in the Republic of Congo.
• The staged project includes an initial 12mpta operation.
• This yielded results of a $1.9bn CAPEX, OPEX of US$31.5/dmt over LOM for a NPV of $3.68bn and an IRR of 26%.
• This compares to a CAPEX budget of $2.2bn in the 2014 FS, with OPEX at $32.1/dmt for 12mtpa.
• The updated feasibility included a second stage bringing production to 30mtpa.
• This suggests a $1.87bn CAPEX bill, OPEX at $25/dmt, NPV of $7.4bn, IRR of 28.2%.
• The 2014 FS for 30mtpa yielded a CAPEX budget of $2.5bn, OPEX of $25.7/t.

LSE Group Starmine awards for 2024 commodity forecasting:

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

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

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

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

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                                                            

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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, 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