SP Angel Morning View -Today’s Market View, Monday 8th April 2024

Gold prices at $2,337/oz as central bank buying continues

MiFID II exempt information – see disclaimer below

Aterian plc* (ATN LN) – Expanding its exploration interests in the Kalahari Copper Belt

Caledonia Mining (CMCL LN) – Appointment of new COO

Cora Gold (CORA LN) – ~2,000m RC drilling programme at the Madina Foulbe in Senegal

Oriole Resources* (ORR LN) – Renewal of Senala Gold Project in Senegal

Petra Diamonds (PDL LN) – Tightening the squeeze on costs

Serabi Gold (SRB LN) – Exploration progress in Brazil

Syrah Resources (SYR AU) – Delivery of graphite fines to Indonesia as China exports slump

Tietto Minerals (TIE AU) – Quarterly gold production of 37koz from Abujar

Gold prices at $2,337/oz as central bank buying continues

• Gold prices have now soared more than $200/oz over the past month, climbing to $2,337/oz.
• The move has dumfounded analysts, given the break from its tight correlation with US Treasuries, which have sold off over the past month.
• The dollar has also been relatively strong, with gold rallying against most global currencies.
• Central bank buying has been a sustained source of support for gold, with Bloomberg reporting China’s PBOC has added gold for the 17^th month in a row.
• China’s reserves have now risen to c.73moz, with strong trading noticeable in Asian trading hours.
• This has fuelled speculation over a potential devaluation of the yuan, alongside geopolitical concerns over heightened aggression with Taiwan.
• Retail investor targeted physical ETFs have seen outflows for the past ten months, with outflows in 2024 standing at $5.7bn.
• Traders are also likely buying in advance of a global rate cutting cycle, with the Fed reiterating their intention to cut rates this year, despite hot economic data and inflation trending above the 2% target.
• However, this would suggest a divergence between bond traders and gold traders, with the Treasury market yet to reflect an imminent cutting cycle as yields continue to climb, sitting at ytd highs.
• Futures data suggests CTA, or momentum-based algorithmic funds, have been ramping up purchases, with overall futures trading jumping.

Stellantis ceo, Carlos Tavares, says EV battery weight needs to halve over the next 10 years

• We agree that EV battery capacity should and almost certainly will double over the next decade.
• News flow indicates significant improvement in technology on all fronts.
• Motor efficiency, regenerative breaking and other system efficiencies will also improve to enable EVs to go further on a single charge.
• EV manufacturers and their Gigafactories are cautious in rolling out new tech so it may 10 years to test and gear up production to double power density.
• If we combine this with a mere 10% improvement in motor and regenerative breaking efficiency then we reckon EVs should displace ICE ‘Internal Combustion Engine’ vehicles for all but the most committed of long-haul drivers in time.
• These improvements combined with increasing regulation and cost for driving ICEs into cities will surely end production of most ICE vans and passenger cars.
• Mr Tavares also refers to the scarcity of lithium. There is plenty of lithium in the world so he may be referring to a scarcity of lithium refining in the western world.
• Most western lithium is refined in Chile where high-grade brines are converted directly into lithium hydroxide which is preferred by LFP battery manufacturers.
• Western consumers demand greater range requiring NCM batteries with Chinese gigafactories preferring lithium carbonate which is more readily made from hard-rock spodumene, but given the average EV only uses around 8kg of lithium this is not such a major cost.
• The near-total displacement of ICE with EVs is not a matter of ‘if’ but ‘when’ in our view.

Kia plans to invest a massive US$28bn into EVs

• Kia recently update the market on its plan to invest $28bn into EVs and air taxis.
• Management have raised their sales target by 34.4% to 4.3m pa from 32.m pa
• EV sales are forecast to make up 58% at 2.48mpa in 2030.

Diamond prices continue to rise for 0.5-1ct stones as market recovers from carnage caused by LGD

• The RapNet Diamond Index continues to show modes gains on 0.5-1ct diamonds with 0.5%ct up 0.1% this week and 1ct rising 0.03%
• Carnage in the diamond market caused by collapsing LGD ‘Lab Grown Diamonds’ appears to have disconnected from natural mined stones.
• Consumers appear to be increasingly seeing LDG as costume jewellery and appear to be reverting to the value of natural diamonds for more precious jewellry.

Economics

Inflation – Food inflation falls across 38 industrialised nations to 5.3% yoy in February (FT)

• Food inflation continues to fall from its Ukraine War high across the industrialised world to 5.3% yoy in February from 6.2% yoy in January (OECD).
• A resumption of shipments through the Black Sea corridor has helped
• The UN Food and Agriculture Organization also shows prices for food inc. cereal, sugar, and meat have fallen from their 2022 highs.
• In the US, annual food price inflation dropped to 2.2 per cent in February, down from a peak of 11.4 per cent in August 2022 and the lowest since May 2021.

US – Treasury yields are on a rise with benchmark 10y trading at 4.45% following a strong market beat on US$ labour numbers on Friday.

• NFPs: 303k v 270k (revised from 275k) February and 214k est.
• Unemployment Rate: 3.8% v 3.9% February and 3.8% est.
• Av Hourly Earnings (%mom): 0.3 v 0.2 (revised from 0.1) February and 0.3 est.
• Av Hourly Earnings (%yoy): 4.1 v 4.3 February and 4.1 est.
• US gives TSMC $11.6bn in grants to build three semiconductor foundries in Arizona

US Houses require rewiring to meet demand for heat pumps, induction stoves and EV Chargers.

• US homes are facing costly rewiring to meet new power demands from domestic appliances as well as EV chargers.
• 3.6m heat pumps were sold in the US last year, though this was down 16.6% on 2022.
• US building regulation is managed at a Federal level with no national building code meaning that even new homes often lack sufficient capacity to meet demand

China – Cina Construction Bank filed a liquidation petition against Shimao Group, a Chinese developer, for failing to repay ~$200m worth of debt, according to Reuters.

• The news highlights a rare case of a Chinese state owned firm going after a local developer.
• The case differs from China Evergrande and Country Garden where motions were launched by overseas based creditors.

Germany – Industrial production climbed more than forecast in February marking a second month of strong growth.

• Despite a pick in production through the start of the year, industrial output remains down 4.9%yoy and nearly 8% lower than pre-pandemic peak.
• Industrial Production (%mom): 2.1 v 1.3 (revised from 1.0) January and 0.5 est.
• Industrial Production (%yoy): -4.9 v -5.3 (revised from -5.5) January and -6.8 est.

Israel – Ministry of Defence said it pulled its troops from Khan Younis in southern Gaza to prepare for an offensive on Rafah, Hama’s considered last stronghold, FT writes.

• The operation is planned to destroy Hama’s Rafah Brigade, “an achievement which will finalise the dismantling of Hamas as a military authority in Gaza”, according to the Ministry.
• The US previously warned that a big ground offensive on the town would be a mistake.

Romania poised to pass law to allow nation to deploy troops to defend its citizens abroad

• The new law could allow the Romanian military to protect its citizens in Moldova and other Eastern European states against Russian aggression.
• A new Romanian National Military Command Centre ‘CNMC’ is proposed to coordinate and manage all defence forces, including NATO troops stationed in Romania.
• CNMC could integrate and coordinate Romanian armed forces with NATO and the EU. (Euractiv)

Sierra Leone – President invokes state of emergency over Kush opoid epidemic

• President Julius Maada has set up a national task force to combat an epidemic of Kush opoid use.
• The ‘zombie’ drug causes users to stagger into streets where they are often hit by passing vehicles..
• Rising cases are also seen in Guinea and Liberia

Myanmar – Regime evacuates forces from Myawaddy on the Thai border

• Over 600 military personnel along with 14o family members have surrendered to the KNU ‘Karen National Union’ and PDF ‘Peoples Defense Forces’.

Currencies

US$1.0834/eur vs 1.0836/eur previous. Yen 151.83/$ vs 151.29/$. SAr 18.649/$ vs 18.674/$. $1.263/gbp vs $1.262/gbp. 0.659/aud vs 0.658/aud. CNY 7.234/$ vs 7.233/$.

Dollar Index 104.33 vs 104.27 previous.

Precious metals:

Gold US$2,337/oz vs US$2,286/oz previous

Gold ETFs 82,213,400.2moz vs 82,160,671.1moz previous

Platinum US$934/oz vs US$927/oz previous

Palladium US$1,011/oz vs US$1,012/oz previous

Silver US$27.79/oz vs US$27/oz previous

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

Base metals:   

Copper US$ 9,329/t vs US$9,302/t previous

Aluminium US$ 2,461/t vs US$2,443/t previous

Nickel US$ 17,730/t vs US$17,765/t previous

Zinc US$ 2,627/t vs US$2,640/t previous

Lead US$ 2,130/t vs US$2,147/t previous

Tin US$ 29,050/t vs US$28,765/t previous

Energy:           

Oil US$89.8/bbl vs US$91.1/bbl previous

• Crude oil prices edged lower on reports that Israel had withdrawn troops from Gaza, which boosted hopes for progress at ceasefire at talks in Egypt.
• The US Baker Hughes rig count was down 1 unit to 620 rigs last week (-131 or 17% y/y), with oil rigs up 2 to 508 units (-82 y/y) and gas rigs down 2 to 110 units (-48 y/y) as Texas gained 7 rigs to 297 units (-80 y/y).
• Media reports Saudi Aramco has suspended 23 units from a total contracted offshore fleet of 92 jack-up rigs, which is expected to result in a cooling in day rates and reduction from the current 87% global utilisation rate.

Natural Gas €26.3/MWh vs €26.5/MWh previous

Uranium Futures $88.9/lb vs $89.0/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$98.8/t vs US$98.6/t

Chinese steel rebar 25mm US$515.7/t vs US$521.8/t

Thermal coal (1st year forward cif ARA) US$116.5/t vs US$115.0/t

Thermal coal swap Australia FOB US$130.3/t vs US$128.9/t

Other:  

Cobalt LME 3m US$28,550/t vs US$28,550/t

NdPr Rare Earth Oxide (China) US$50,182/t vs US$50,185/t

Lithium carbonate 99% (China) US$15,137/t vs US$14,724/t

China Spodumene Li2O 6%min CIF US$1,220/t vs US$1,210/t

Ferro-Manganese European Mn78% min US$972/t vs US$975/t

China Tungsten APT 88.5% FOB US$315/mtu vs US$310/mtu

China Graphite Flake -194 FOB US$490/t vs US$490/t

Europe Vanadium Pentoxide 98% 5.0/lb vs US$5.0/lb

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

China Ilmenite Concentrate TiO2 US$330/t vs US$330/t

China Rutile Concentrate 95% TiO2 US$1,431/t vs US$1,431/t

Spot CO2 Emissions EUA Price US$57.9/t vs US$57.4/t

Brazil Potash CFR Granular Spot US$305.0/t vs US$305.0/t

Battery News

India’s EV sales expected to surge 66% in 2024

• EV sales in India are projected to surge by 66% in 2024, following a near doubling of sales in 2023.
• India’s EV sales growth contrasts with slowing sales in major markets like the US and China.
• By 2030, EVs are expected to capture nearly a third of India’s personal vehicle market.
• Tata Motors remains the dominant player in India’s EV market, though it faced competition from Mahindra & Mahindra and China’s BYD in 2023.
• The Indian government aims to increase EV sales to 30% of total car sales by 2030, up from just 2% in 2023.
• Mahindra’s EV sales grew by 2,500% in 2023 driven by its XUV400 electric SUV, while BYD saw over 1,500% growth from models like the e6 MPV.

Brazil imports of Chinese electric vehicles surge ahead of new tariff

• Imports of EVs from China to Brazil surged in the first quarter of 2024 ahead of a new 35% import tax on EVs taking effect on 1^st April.
• Brazil imported 10,700 EVs from China in Q1 2024, up from just 1,200 units in the same period last year.
• The new tariff aims to protect Brazil’s fledgling EV production by making imported EVs more expensive.
• Brazil’s EV market is still small but growing rapidly, with sales doubling in 2023 to around 60,000 units.
• The government expects the new tariff to spur more local EV production and assembly investments by global automakers.
• However, critics argue the tariff will raise EV prices for consumers in the short-term before local production ramps up.
• Brazil currently has no large-scale EV production but wants 50% of new vehicles to be electrified by 2030.

Australia sees record new vehicle sales for March

• New vehicle sales in Australia broke records in March 2024 with 109,647 units sold, surpassing the previous March record set in 2018.
• Q1 2024 saw 304,452 sales, representing the best ever first quarter for new vehicle sales, up 13.2% from Q1 2023.
• Battery EVs made up 9.5% of sales, up from 6.8% in March 2023. Hybrid and plug-in hybrid sales increased to 14% from 6% yoy.
• In total, plug-in vehicles held a 23.5% market share, demonstrating increasing consumer preference amid decarbonisation efforts.
• Toyota led sales with 18,961 units, followed by Ford, Mazda, Mitsubishi, and Kia. The Ford Ranger was the top-selling vehicle model.
• Most states and territories saw sales increases compared to March 2023, except for a 0.6% decrease in Tasmania.

EV sales down 25% in South Korea, hybrid car sales jump

• EV sales in South Korea dropped by 25.1% yoy in March 2024 to 13,493 units.
• In contrast, hybrid vehicles saw a 48.5% jump in sales to 10,293 units during the same period.
• The decline in EV sales is attributed to the end of government subsidies and tax benefits for EVs at the end of 2023.
• Hyundai Motor’s EV sales plunged 35.5% to 5,901 units, while Kia’s EV sales fell 18.3% to 4,305 units in March.
• However, Hyundai’s hybrid sales surged 73.3% and Kia’s hybrid sales jumped 41.5% year-over-year.
• The shift towards hybrid vehicles is seen as a temporary phenomenon until new EV models are launched later in 2024.
• Analysts expect EV sales to rebound in the second half of 2024 as automakers roll out new electric models.
• The South Korean government plans to reintroduce EV subsidies in the second half of 2024 to support the transition to electric mobility.

German electric car sales ‘very weak’ in March

• New car sales in Germany fell by 6.2% yoy in March 2024 to 263,844 units.
• Analysts attribute the drop mainly to a slump in demand for BEVs after the German government withdrew EV incentives at the end of 2023.
• BEV sales plunged by nearly 29% in March 2024 compared to a year ago.
• The removal of EV incentives has led to “considerable uncertainty” in the German auto market according to analysts.
• Despite high discounts offered by automakers, demand for electric cars in Germany is currently “very weak.”
• Germany still aims to have 15 million fully electric cars on its roads by 2030, according to the transport minister.
• But analysts say the withdrawal of incentives has significantly impacted the adoption of EVs in the short-term.

Bangkok International Motor Show sees 28% rise in orders

• Traditional vehicles still dominated order numbers, but EVs gained a larger share according to the event.
• 53,438 cars and 5,173 motorcycles were ordered across the two week show, with EVs accounting for 32.8% of car orders, up from 21.5% at last years show.
• Toyota led the manufacturers for number of orders, with Chinese EV maker BYD second.
• Chinese EVs were in the spotlight as they challenge the Japanese automakers that have dominated Thailand’s auto market.
• Chinese automakers have committed more than $1.44bn into production facilities in Thailand, which is Southeast Asia’s largest auto manufacturing hub.
• Thailand is looking to convert 30% of its annual vehicle production to EVs by 2030.

Tesla sales fall amid lower global demand for electric cars

• Tesla reported a 24% drop in global vehicle deliveries in the Q1 2024 compared to the same period last year.
• The company delivered 310,048 vehicles in Q1 2024, down from 405,278 vehicles in Q1 2023, marking Tesla’s biggest quarterly decline in deliveries since early 2020.
• The drop in sales reflects lower demand for electric vehicles globally amid rising interest rates and economic uncertainty.
• Tesla had to offer discounts and incentives in many markets to boost sales, impacting its profit margins.
• The company’s sales were particularly weak in China, its second-largest market after the U.S.
• Analysts expect Tesla’s sales to rebound in the coming quarters as new models like the Cybertruck gain traction.
• However, intensifying competition from legacy automakers and EV startups poses a growing challenge for Tesla.

Toyota hybrid electric sales double

• Toyota reported a 74.1% increase in sales of its hybrid and electrified vehicles in Q1 2024 in the US market.
• Hybrid and electrified models accounted for 36.6% of Toyota’s total US sales volume in Q1 2024.
• The Toyota RAV4 hybrid set a new sales record in Q1 2024, with 93.3% of total RAV4 sales being the hybrid variant.
• Toyota aims to capitalise on the resurgence in hybrid demand seen in Australia, Europe, and US markets.
• However, Toyota’s global chairman stated that EVs would not be prioritised over other solutions like hybrids and hydrogen.

Company News

Aterian plc* (ATN LN) 0.63p, Mkt Cap £6.8m – Expanding its exploration interests in the Kalahari Copper Belt

• Aterian plc reports that Botswana’s Ministry of Minerals and Energy has approved its acquisition of a 90% interest in Atlantis Metals which hold prospecting licences for copper/ silver including one located “50 km east of MMG’s Zone 5 deposit … [at Khoemacau] … (92.9 million tonnes grading 2.00 % Cu and 21 g/t Ag)” in the Kalahari Copper Belt.
• This Atlantis licence is also “within 30 km” of Aterian’s “Zone 9 Cu-Ag prospect” and “Another licence is located 7 km west of the KCM Banana zone, which hosts 157 million tonnes grading 0.86% Cu and 11 g/t Ag”.
• The company also announced that it has been granted six new licences covering ~970km2 covering the “highly prospective D’Kar Formation, known to host regionally significant Cu-Ag deposits” in the Kalahari Copper Belt where the interface between the D’Kar Formation and the underlying Ngwako Pan Formation has proved a fruitful geological setting for copper/silver mineralisation.
• As well as the Kalahari Copper Belt licences Aterian also discusses over 2,500km² of licences “located along the eastern and southern shores of Sua Pan, within the Central District” of Botswana which it says are potentially interesting for lithium brine in and area known as the Makgadikgadi Pans.
• The Makgadikgadi Pans have been designated a “’Lithium Zone’ by the Ministry of Mines and Energy since 2022 due to a history of known lithium brine occurrence and the emergence of new Direct Lithium Extraction (DLE) technologies capable of rendering once-thought uneconomic deposits, economic”.
• Samples taken from “the northern area of Sua Pan … returned values of 103, 117 and 223 mg/l Li … [although Aterian explains that] … the source and precise sample location are unknown at this time”.

Conclusion: Aterian’s acquisition of Atlantis Metals and securing additional licences expand its exploration profile in the Kalahari Copper Belt.  We await news of the continuing exploration with interest.

*SP Angel acts as Broker to Aterian Plc 

Caledonia Mining (CMCL LN) 845p, Mkt Cap £162m – Appointment of new COO

• Caledonia Mining has announced the appointment of mining engineer, James Mufara, as its new Chief Operating Officer.

• Mr. Mufara, who has over 25years of mining experience in southern African mining operations joins from Harmony Gold where “as Regional General Manager, he headed a complex portfolio of operations consisting of five mines and 15,000 staff, mining 450koz of gold per annum”.
• “His experience includes deep-level underground mining and open-pit operations, which is relevant to the existing underground operation at Blanket mine and Caledonia’s development projects at Bilboes and Motapa which will be open-pit”.
• Welcoming him to Caledonia Mining, CEO, Mark Learmonth, said that he “will be joining us at a pivotal moment in Caledonia’s development and I know the team will benefit from his wealth of experience”.
• James Mufara said that he is looking forward to “working with the talented team … [at Caledonia Mining] … to drive operational performance across the group’s high-quality portfolio”.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe

Cora Gold (CORA LN) 2.1p, Mkt Cap £10m – ~2,000m RC drilling programme at the Madina Foulbe in Senegal

• The Company is launching a 2,000m RC reconnaissance drilling programme at the Madina Foulbe permit in Senegal.
• The license area is located ~27km west of the Sadiola Gold Mine and next to several other Tier 1 deposits (Loulo, Gounkoto, Fekola) in the Kedougou-Kenieba Inlier regional gold belt.
• The programme is designed to test previously defined targets located under the best gold in soil anomalies and termite mound anomalies.
• The team previously carried a short drilling programme at the property before the focus switched to the Sanankoro Gold Project in Mali.
• The programme is expected to start 15 April and finish in May.
• The Company had ~$2.9m in cash as of mid March and is debt free after repaying/converting outstanding convertible loan notes earlier this year.

Conclusion: The Company is looking to test priority gold targets at the Madina Foulbe permit in Senegal as progress at the Sanankoro Project stalls amid the moratorium on new mining permits in Mali.

Oriole Resources* (ORR LN) 0.36p, Mkt cap £15m – Renewal of Senala Gold Project in Senegal

• Oriole reports it has secured a renewal of the exploration licence over the Senala gold project in Senegal.
• Oriole holds an 85% interest in the licence, which is currently under JV with Managem.
• Managem recently completed a six-year investment to acquire a 59% interest in Senala.
• The Senala licence package now stands at 354.5km².
• The new licence is now valid for three years.
• Oriole is continuing their assessment of Managem’s percentage ownership before beginning discussions over its progression.
• Oriole will then decide whether to contribute to the future work plan or dilute its ownership percentage.

*SP Angel acts as Broker to Oriole Resources

Petra Diamonds (PDL LN) 42p, Mkt Cap £82m – Tightening the squeeze on costs

• Petra Diamonds reports increasingly stringent cost-savings targets saying that it is aiming to save more than US$30mpa on a sustainable basis from 2025.
• The company confirms that it is “on track to deliver the US$75 million of cash savings in FY 2024 as a result of capital deferrals and cost savings of circa US$10 million”.
• The targeted savings include a reduction in tonnages from 2.8mtpa to 2.2mtpa at the Finsch mine and targets at the Cullinan mine “set assuming currently planned throughput tonnages going forward”.
• Cost containment and debt management have been a consistent theme for Petra Diamonds and today’s announcement says that the further reduction in its target “will align our group support structures with our more streamlined operational requirements and transition Petra to a more smoothed capital profile to enable sustainable net free cash flow generation, notwithstanding the continued slower recovery of the diamond market as a result of ongoing economic uncertainty and weakness in China”.
• The company also reports a definitive agreement on the sale, for a “nominal cash consideration”  of its Koffiefontein mine in South Africa to Stargems but explains that when the sale and transfer is completed, Petra Diamonds “will no longer be responsible for KDM’s environmental rehabilitation liabilities and care and maintenance costs”.
• Petra Diamonds says that its interim 2024 results show “provisions totalling US$23.1 million … for liabilities, costs and commitments associated with KDM … [and that after completion of the sale] … Petra will remain liable for funding certain ongoing social commitments relating to KDM that were made during Petra’s ownership”.
• The sale remains subject to the approval of South Africa’s Department of Mineral Resources and Energy.

Conclusion: Further cost containment and the sale of the Koffiefontein mine should help Petra Diamonds respond to current rough diamond market pressures and a slower than expected recovery in China.

Serabi Gold (SRB LN) 64p, Mkt Cap £53m – Exploration progress in Brazil

1. Serabi Gold has provided a progress report on its exploration around its Palito mine in the Tapajos region of Brazil where an induced polarisation (IP) geophysical programme over the Sao Domingo area defined a 1km long x 0.25km wide anomaly in an area of artisanal mining activity.
2. Follow-up, wide-spaced (~100m), auger drilling of initial results, including an intersection of 7.2m at ana average grade of 258g/t, has shown shallow gold mineralisation including:
   • A 1m wide intersection at an average grade of 18.46g/t gold from a depth of 1m in hole 24-TRSAD-004; and
   • A 2m wide intersection at an average grade of 0.18g/t gold from a depth of 3m in hole 24-TRSAD-006; and
   • Another 2m wide intersection at an average grade of 0.54g/t gold from a depth of 6m in hole 24-TRSAD-016; and
   • A 0.5m wide intersection at an average grade of 0.10g/t gold from a depth of 4m in hole 24-TRSAD-024.
3. CEO, Mike Hodgson, said that interpretation of the auger drilling and the geophysics “has helped us understand better the past successful drilling results of 2021… [and also helped revise] … our initial geological interpretation and … [taken Serabi Gold] … a significant step closer to identifying the source that has supported extensive artisanal workings in the area”.
4. Elsewhere, “Recent diamond drilling at Matilda … [where Serabi Gold has been working with the Brazilian mining company, Vale] … demonstrates mineralisation extends to over 150m depth with results for the final hole 21 intersecting the depth continuation of mineralisation” including:
   • An intersection of 144m at an average grade of 0.26% copper and 0.06g/t gold from a depth of 228m in hole 23-MT-021; and
   • An intersection of 32m at an average grade of 0.40% copper and 0.10g/t gold from a depth of 410m also in hole 23-MT-021.
5. Mr. Hodgson said that “Whilst Vale have, during this week, informed us that they wish to withdraw from the exploration alliance, we do have a number of other groups keen to partner with us on the exploration for copper mineralisation”.
6. “First phase drilling completed in January on the Ganso Target, indicates a large zone with geologic features and mineralogy characteristic of an upper alteration zone typical of a copper porphyry system. This new target for epithermal gold and porphyry copper-gold mineralisation is located just 13km northeast of the Matilda copper target”.
7. Mr. Hodgson said that the work at Ganso “is important, not only for Serabi but also for the entire Tapajos region, as it confirms that despite the old age of the rocks, the region has a huge untested potential as a source of porphyry style copper or copper-gold and epithermal gold mineralisation”.

Conclusion: Serabi Gold’s Brazilian exploration programme is helping unlock the geological understanding of mineralisation within its Palito licence as well as at the Ganso and Matilda porphyry targets.  We await further insights as the exploration proceeds.

*An SP Angel analyst has visited the Serabi’s gold mining operations in Brazil

Syrah Resources (SYR AU) A$0.53, Mkt Cap A$460m – Delivery of graphite fines to Indonesia as China exports slump

• Syrah reports it has sold 10kt of natural grahite fines from Balama to PT Indonesia.
• The buyer is developing a $478m AAM facility in Indonesia, targeting 80ktpa AAM production capacity.
• Production is expected to commence in 2024.
• The sale reflects Syrah’s ambitions of diversifying its supply chain away from China.
• The Company also provides a graphite market outlook.
• China graphite exports remain limited for fines and coarse flake exports, however China has delayed released data for March.
• Purified spherical graphite exports were sitting at 25-40% of the 2023 monthly exports.
• However, active anode material exports returned to 2023 levels.

Conclusion: Syrah’s move to increase sales to alternative buyers is understandable following China’s export controls late last year. We note Management expects export licence approvals to improve going forward as anode supply chain restocking begins, supporting natural graphite demand. However, prices remain depressed at c.$500/t for natural flake products, requiring a sustained rebound in anode restocking to support a recovery.

Tietto Minerals (TIE AU) A$0.64, Mkt Cap A$723m – Quarterly gold production of 37koz from Abujar

• Tietto, which is currently operating the Abujar project in Côte d’Ivoire, provides its quarterly report.
• Milling for the quarter increased 410kt to 1.23mt at 0.99g/t, recovering 95% for 37,111oz.
• The Company expects to be debt free by the June quarter and will be unhedged.
• Costs will be reported this month, with the previous quarter showing $1,311/oz vs $982/oz targeted in the technical study once ramp up is complete.
• Tietto had A$80m in cash at the end of December and is targeting 170koz pa over the mine’s 9 year mine life.
• Tietto is currently under offer from Zhaojin for 100% of the equity, at A$0.58/share, however Management has recommended shareholders reject the offer.

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 202

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 of less than 15%

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