SP Angel Morning View -Today’s Market View, Monday 9th September 2024

Gold slides as Treasuries pare gains after NFP-fuelled rally

MiFID II exempt information – see disclaimer below

Andrada Mining (ATM LN) – Lithium Ridge project attracts support from major lithium company

Anglesey Mining (AYM LN) – Resignation of NED

Armadale Capital (ACP LN) – Progressing Canyon Silver Project

Aura Energy* (AURA LN) – Permit applications in Sweden

Eurasia Mining* (EUA LN) – Reinstatement of trading following the release of FY23 and agreed loan facility

Greatland Gold (GGP LN) SUSPENDED – Trading halt on speculation of Telfer acquisition

Katoro Gold (KAT LN) – Canadian uranium exploration project

Pensana (PRE LN) – Non binding MOU signed for 20ktpa with Hanwa

Rockfire Resources (ROCK LN) – Interim results highlight mineral resource increase at the Molaoi zinc project in Greece

Serabi Gold (SRB LN) – Progress at Coringa and Palito

Syrah Resources (SYR AU) – Continued pressures of weak graphite market

80 Mile Plc* (80M LN) formerly Bluejay Mining* –  – Helium identified as surface at Outokumpu

Gold ($2,493/oz) slides as Treasuries pare gains after NFP-fuelled rally

• Gold prices have fallen in Monday trading, sliding from Friday highs of $2,527/oz to fall below $2,500/oz again.
• The move followed a reversal in a recent US Treasury rally, which saw yields slide to 3.67% before paring gains to 3.76% today.
• NFP data showed a continuation of a slowdown in hiring in the US, with previous reports revised lower and the August reading coming in below expectations.
• The dollar has strengthened but remains near nine month lows against a basket of currencies.
• CPI data due Wednesday will be closely watched for further guidance on the Fed’s decision next week.
• The market is leaning towards a 25bp cut, having priced a 50/50 chance of a 50bp cut in the wake of the jobs data last week.
• Waller noted the potential to front-load cuts, emphasising the Fed’s commitment to its employment mandate.

Iron ore continues to hover around $90/t as steel mill profitability weighs on outlook

• Iron ore has steadied around the $90/t mark, with some prices falling below that level in Asian trading.
• Trade data due tomorrow will highlight iron ore import appetite into the world’s largest consumer.
• Steel mills are under pressure from weak margins amid low steel pricing environment.
• However, lower coking coal prices and sliding iron ore prices may trigger a resumption in buying.
• Iron ore is now down 33% ytd.
• China PMI data showed the steel industry falling further into contraction, hitting 40.4 in August vs 42.5 in July.
• There remains over 380m sqm worth of unsold homes, with new home starts down 20% this year.

Visible mineralisation reports in drill core

• We feel partly responsible for increasing reports of visible mineralisation in drill core.
  • Partly because we encouraged SolGold and others to publish pictures and geological text describing the core as it came off the drill rig
  • Partly because we have been financing exploration companies which are drilling in places where they are finding mineralisation
• So when it came to the identification of >1km intersections of copper and gold at SolGold’s Cascabel project we felt the market was made aware of the importance of the results as fast as was practically possible and so the drillers couldn’t get ahead of the market (not that they would do such a thing?).
• While SolGold’s drillers can now afford to retire to islands in the Caribbean it’s not because they bought the stock ahead of everyone else.
• It’s because they negotiated a sweet deal at 1p/s as part payment to help SolGold pay for the drilling.
• We are currently, quietly excited about a number of exploration companies operating in Zambia where the dry season has kicked off several new drilling campaigns.
• Anglo American (Arc Minerals), First Quantum Minerals, KoBold Metals, Moxico*, Tertiary Minerals*, Moonstone, BE Metals* and Zamare* are all drilling in the West of for copper which is seen as highly prospective for new discoveries.
• Recently published results from BE Metals* and Zamare report visible copper mineralisation. We believe this is in seams where hydrothermal fluids (water) or possibly by hydrocarbons have passed through carrying copper, gold, cobalt and some other minerals.
• Copper tends to accumulate in greater tonnages and grades in junctions where there has been a change in PH, temperature or pressure prompting geologists to look for structural features where these formations occur.
• How long it will take and how much it will cost to find and delineate the next economic copper mine is anyone guess but we feel sure more discoveries will come.
• Remember: While visible mineralisation is exciting it is difficult to guess at the grade and the first observed cores may not say much about the length of the intersection or if there are multiple intersections.

*The analyst holds shares in BE Metals, Zamare and Moxico, SP Angel acts as Nomad and Broker for Tertiary Minerals

Economics

US – Soft labour numbers fuelled recession fears and saw a self off in riskier assets with S&P 500 and Nasdaq closing 1.7% and 2.6% down on Friday.

• WTI oil prices dropped $2/bbl at one point while copper fell 1.5%.
• NFPs came in lower than forecast along with downward revisions to previous months.
• Fed Governor Christopher Waller suggested he is open for more aggressive rate cuts if the data warranted it.
• “If the data suggests the need for larger cuts, then I will support that.”
• NFPs (Aug/Jul/Est): 142k/89k(revised from 114k)/165k
• Unemployment Rate (Aug/Jul/Est): 4.2%/4.3%/4.2%
• Av Hourly Earnings (%mom, Aug/Jul/Est): 0.4/0.2/0.3
• Av Hourly Earnings (%yoy, Aug/Jul/Est):3.8/3.6/3.7

China – Weak inflation numbers released this morning highlight potential deflation risks and sluggish consumer sentiment.

• CPI (%yoy, Aug/Jul/Est): 0.6/0.5/0.7
• PPI (%yoy, Aug/Jul/Est): -1.8/-0.8/-1.5

Japan – Revised GDP numbers showed a slower than expected growth in 2Q24 with downward revisions in private consumption and business investment.

• The yen is trading weaker this morning, although, not too far off levels hit in early August after the BOJ hiked rates.
• GDP (%qoq, 2Q/2Qprelim/Est): 0.7/0.8/08
• GDP (%yoy, 2Q/2Qprelim /Est): 2.9/3.1/3.2

Currencies

US$1.1060/eur vs 1.1119/eur previous. Yen 143.26/$ vs 142.23/$. SAr 17.940/$ vs 17.695/$. $1.310/gbp vs $1.319/gbp. 0.667/aud vs 0.673/aud. CNY 7.115/$ vs 7.085/$

Dollar Index 101.48 vs 100.86

Precious metals:         

Gold US$2,494/oz vs US$2,520/oz previous

Gold ETFs 83.0moz vs 83.0moz previous

Platinum US$934/oz vs US$933/oz previous

Palladium US$926/oz vs US$944/oz previous

Silver US$28.1/oz vs US$28.9/oz previous

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

Base metals:   

Copper US$ 9,101/t vs US$9,131/t previous

Aluminium US$ 2,342/t vs US$2,384/t previous

Nickel US$ 15,930/t vs US$15,940/t previous

Zinc US$ 2,733/t vs US$2,750/t previous

Lead US$ 1,960/t vs US$1,990/t previous

Tin US$ 31,000/t vs US$31,045/t previous

Energy:           

Oil US$72.1/bbl vs US$72.9/bbl previous

• Crude oil prices were impacted by negative market sentiment from Friday’s non-farm payrolls that reinforced fears of a US slowdown, partially offset by increasing geopolitical risk in Venezuela.
• After a ~10% weekly drop in oil prices on demand-supply balance concerns, we await this week’s monthly market outlooks from OPEC, the Energy Information Administration and the International Energy Agency.
• The Baker Hughes US rig count fell by 1 unit w/w to 582 rigs last week (-50 or 8% y/y), with oil rigs flat at 483 units (-30 y/y) and gas rigs down 1 to 94 units (-19 y/y), as Pennsylvania lost 2 more rigs to 16 units (-5 y/y).
• Norway announced it has received applications from 21 companies in the 2024 Awards in predefined areas (APA) licensing round, which is down from 25 companies last year and a high of 50 companies in 2013.
• Woodside announced on Friday it had raised $2bn in the US bond market in two tranches consisting of $1.25bn via 10-year bonds with a coupon of 5.1% and $0.75bn through 30-year bonds with a coupon of 5.7%.

Natural Gas €76.7/MWh vs €37.0/MWh previous

Uranium Futures $79.7/lb vs $79.7/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$91.3/t vs US$90.8/t

Chinese steel rebar 25mm US$470.6/t vs US$473.8/t

Thermal coal (1st year forward cif ARA) US$120.5/t vs US$118.5/t

Thermal coal swap Australia FOB US$139.5/t vs US$139.0/t

Coking coal Dalian Exchange futures price US$175/t vs US$174.3/t

Other:  

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

NdPr Rare Earth Oxide (China) US$61,280/t vs US$60,338/t

Lithium carbonate 99% (China) US$9,768/t vs US$9,809/t

China Spodumene Li2O 6%min CIF US$740/t vs US$740/t

Ferro-Manganese European Mn78% min US$995/t vs US$995/t

China Tungsten APT 88.5% FOB US$333/mtu vs US$333/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$320/t vs US$321/t

China Rutile Concentrate 95% TiO2 US$1,370/t vs US$1,376/t

Spot CO2 Emissions EUA Price US$72.4/t vs US$72.4/t

Brazil Potash CFR Granular Spot US$290.0/t vs US$290.0/t

Germanium China 99.99% US$2,575.0/kg vs US$2,575.0/kg

China Gallium 99.99% US$445.0/kg vs US$445.0/kg

Battery News

South Korea to require disclosure of EV battery details

• The Korean government announced, on Friday, measures that will be introduced to improve EV safety following recent high profile EV fires.
• On 1^st August, an imported EV exploded in an apartment underground parking lot, 33km west of Seoul, damaging about 140 cars – days later, a fire broke out in a parked EV in Geumsan, 166km south of Seoul.
• Under the government plans, a EV battery certification system, that was scheduled to go into effect next February, will launch early on a trial basis in October.
• The government will carry out prior safety checks on batteries of both domestic and foreign-made EVs before they are manufactured.
• EV manufacturers will also be required to disclose key information on the batteries, including their brand and main ingredients, in addition to the currently required battery capacity, rated voltage and maximum output.

Chinese vehicles sales fall for fifth straight month

• Passenger vehicle sales in China fell in August for the fifth straight month, industry data from the China Passenger Car Association showed.
• Sales of all-electric and plug-in hybrid models rose, with NEV sales topping the 1m mark for the first time.

UK EV sales surge as August vehicle sales see slight decline

• Battery electric car sales in the UK grew by 10.8% in August, driven by discounts and new model releases, raising EV market share to 22.6% (Society of Motor Manufacturers and Traders, SMMT)
• The UK new car market was down 1.3%, but August is traditionally one of the quietest months of the year for vehicle sales.
• Petrol and diesel car sales declined by 10.1% and 7.3%, though they still represent 56.8% of new car registrations.
• Plug-in hybrid sales dropped by 12.3%, while hybrid electric car sales increased by 36.1%, capturing 13.8% of the market.
• Year to date, BEV market share has edged up to 17.2% and is expected to rise further to 18.5% by the end of the year thanks to increasing model choice – with approx. 364,000 BEVs registrations forecast for the year.

Are ambitious emissions targets making things difficult for automakers?

• Over 1.1 million EVs are on UK roads, but brands like Volkswagen and Volvo are revising their EV targets as they struggle to sell affordable models
• Volkswagen is under pressure, facing potential plant closures and union strikes, despite plans to invest €125bn in electrification.
• Volvo scaled back its goal of selling only electric cars by 2030, aiming now for 90% EV production by the end of the decade.
• Stellantis criticised the UK’s Zero Emission Vehicle (ZEV) mandate for forcing an unrealistic EV sales mix, warning it could stop UK production.
• Tariffs on Chinese-made EVs are adding financial strain for brands like Seat and Cupra, which rely on imports.
• Despite concerns, EV demand saw a 10.8% increase in August, with a market share reaching 22.6%, its highest since December 2022.

Company News

Andrada Mining (ATM LN) 3.65p, Mkt cap £53m – Lithium Ridge project attracts support from major lithium company

• Andrada Mining reports that the Chilean lithium producer, SQM, is earning an initial 40% interest in its Lithium Ridge project in Namibia.
• SQM will spend an initial US$0.5m ‘participation fee’ followed by an additional US$1.5m with an “option to invest US$20 million over three and a half years, in different stages to earn a 40%” interest.
• Expenditure of the initial US$7m over 18 months earns a 30% interest with an additional 10% interest secured by “additional funding of US$13 million for exploration over a further 24-month period”.
• “Subsequent funding of the DFS will enable SQM to attain up to 50% ownership”.
• Andrada Mining will “manage and operate the project during the earn-in period” and secure “a one-off success fee will be payable by SQM should Andrada complete a JORC (2012) compliant Mineral Resources Estimation exceeding 40 million tonnes during the third earn-in period”.
• The success fee “will be calculated based on the percentage of lithium oxide content in the resource”.
• CEO, Anthony Viljoen, welcomed the participation of SQM which bolsters Andrada Mining’s “belief in the Lithium Ridge asset as a potential world-class resource, and further establishes Andrada as a multi-asset, polymetallic explorer and miner”.
• He explained that the agreement to advance the Lithium Ridge project is “the first African partnership that SQM has entered” and commented that “SQM provides the ideal partner to unlock the full potential of Lithium Ridge”.

Conclusion: As well as the provision of funding to progress the Lithium Ridge project we expect SQM’s participation to bring a wealth of technical and commodity expertise in lithium to assist in progressing the project.

Anglesey Mining (AYM LN) 1.25p, Mkt Cap £5.8m – Resignation of NED

• Anglesey Mining reports the resignation of non-executive director, Namrata Verma “in order to pursue other interests”.
• Thanking her for her contribution to Anglesey Mining, Interim Chairman, Andrew King, confirmed the Board’s intention “to recruit a new non-executive director”.

Armadale Capital (ACP LN) 0.33p, Mkt Cap £2m – Progressing Canyon Silver Project

• Armadale continues to work on the Canyon Silver project in Idaho.
• The Company is aiming to open historic workings for sampling.
• Ground conditions are reportedly ‘difficult than expected’ delaying progress.
• The tunnels were driven by hand in 1892, and Armandale is aiming to widen it using timbering and rock-bolting
• The Company reports that the first 100 feet are now widened, able to support a diamond drilling pad.
• Regarding the Company’s Mahenge graphite project, they continue to monitor progress of other graphite companies operating in Tanzania.
• They cite difficult funding conditions for Tanzanian project development.

Aura Energy* (AURA LN) 6p, Mkt Cap £53m – Permit applications in Sweden

(Aura Energy hold 100% of Tiris Uranium and 100% of the Häggån Project in Sweden, Häggån hosts 2.5bnt of vanadium, SOP ‘sulphate of potash’ and uranium resource)

• Aura Energy reports that it has submitted applications for an Exploitation Permit for its Häggån K no 1 project area and for an exploration permit for its Häggån no 2 area which covers the areas of the original Häggån no 1 concession in central Sweden.
• The “Häggån Project is located … in central Sweden and contains a globally significant polymetallic Mineral Resource of approximately 2 billion tonnes containing vanadium, potassium, nickel, zinc, molybdenum, and uranium” which the company says is “critical to Sweden and Europe’s energy transition and energy and global food security”.
• While there is a lower level of confidence associated with inferred mineral resources we fee further drilling should increase confidence in the resource and its future potential.
• The company confirms that, if it is granted, the Exploitation Permit would provide “tenure over the Häggån Project and be valid for 25 years, pending approval from the Swedish government” and that “While the Swedish Mining Inspectorate considers the Häggån K no 1 Exploitation Permit application the Häggån no 1 exploration license will remain valid”.
• The company says that it believes that application for the new exploration permit, which would secure “the areas of the original Häggån no 1 exploration license … will be considered favourably due to the considerable amount of work undertaken over the Project to date”.
• Andrew Grove, md, explained that approval of the applications would strengthen Sweden’s position as “the EU’s leading mining and mineral nation … [and] … help Aura to create jobs and support economic growth in Sweden as we progress the project development”.
• We believe the Swedish government is working towards the lifting of the ban on uranium mining to help Sweden achieve its clean energy ambitions.
• This is a game changer for the Häggån project which contains > 800 million pounds U₃O₈  (JORC 2024) which was excluded from the scoping study.
• The scale of the project looks material for Sweden as well as generating potential significant critical metal supply for Sweden and the EU.

• Scoping study estimates (2023) – Vanadium and SoP ‘Sulphate of Potash’ a key fertiliser.
• Study done on 65mt resource represents under 3% of Haggan’s 2.0bnt estimated MRE Mineral Resource Estimate (JORC 2004)
  • Throughput:  3.5mtpa – Base Case scenario proposes mining the high-grade zone at ~5.9mtpa
  • Vanadium production:  10,400tpa V2O5 high-quality vanadium flake
  • SoP fertilizer production:  217,000tpa sulphate of potash (SOP) by-product for sale as fertiliser
  • Mixed sulphide product: 3,000tpa
  • Capex: US$592m
  • NPV₈ of between US$456m to US$1,307m.
    • Assumes:  V2O5 price of between US$7.0/lb and $13/lb, SOP price of US$650/t K2O, a Nickel price of US$20,000/t, Mo price of US$51,000/t and Zn price of US$2,500/t, with 70% payability for base metal units

• Including uranium:
• NPV₈ rises by 37% at a uranium price of US$65/lb U₃O₈.

• • NPV base-case:  $756 – $1,606m including uranium production
    • Assumes:  V2O5 price of between US$7.0/lb and $13/lb, SOP price of US$650/t K2O, U3O8 price of US$65/lb, a Nickel price of US$20,000/t, Mo price of US$51,000/t and Zn price of US$2,500/t, with 70% payability for base metal units. Subject to anticipated Swedish legislative change
  • IRR:  26-47%
  • Operating cash flow of between US$140 – 270mpa
  • Payback:  1.5 to 2.0

• Resource (Indicated & Inferred) estimated to contain 2.35bt @ 155ppm U₃O₈ plus ~0.3% vanadium pentoxide, ~210ppm molybdenum, ~340 ppm nickel, ~465 ppm zinc and around 4% K2O.
• Over 90% of the resource tonnage is currently classed as ‘Inferred’ although the company has previously described a higher grade core to the deposit.
• Sweden currently uses 2.4Mlbs pa of U₃O₈ in their three nuclear reactors and is committed to building two additional nuclear reactors by 2035 making Häggån strategically important to the nation’s ongoing energy security.

Conclusion: We await further news on applications in Sweden.

*SP Angel acts as Nomad and Broker to Aura Energy

Eurasia Mining* (EUA LN) 2.7p, Mkt Cap £76m – Reinstatement of trading following the release of FY23 and agreed loan facility

• The Company signed a working capital funding facility and released FY23 accounts on Friday with trading in shares reinstated this morning.
• The team signed a trade finance loan agreement with Sanderson Capital Partners for up to £2.5m.
• The one year loan (repayable 29 August 2025) is convertible in the Company’s shares at Sanderson’s discretion at a fixed price of 2.7p.
• The loan is secured by 94.6m shares held by Christian Schaffalitzky (Chairman) that will be put in escrow account until the loan is repaid.
• The loan can be drawn down in five tranches including:
  • £250k immediately;
  • £750k on or around 24 September;
  • £500k following the Company listing shares on an additional exchange;
  • The balance (£1.0m) to be made available on signing a term sheet for disposal of its Russian asset.
• Sanderson will be paid 12.5% of the total amount of the facility to be settled in new shares at 2.3p with an additional 5% of the amount drawn under the facility to be also settled in new shares at 2.3p.
• Sanderson is issued 54.3m warrants with an exercise price of 4.0p and exercisable over a two year period.
• The facility is coupon free.
• Directors will be deferring payment of any accrued fees from the previous 12 months and any future compensation until the loan is outstanding.
• The Company estimates the first £1m of the facility together with existing cash balances to cover working capital needs over the next 12 months.
• In addition, the Company is due VAT refunds of £0.3m from HMRC and its subsidiary in Russia is reported to have secured a long term loan facility of $1.3m.
• FY23 loss amounted to £6.7m (FY22: -£7.2m) mostly reflecting FX losses.
• Some concentrate has been sold during the period booking £2.1m in revenues.
• CFO came in at £1.8m (FY22: -£6.8m) reflecting positive contributions from working capital.
• Capitalised development and exploration costs amounted to £4.4m (FY22: £8.4m) as spend was reduced amid an ongoing stockpile and assets sale process.
• The Gorup had £1.3m in cash and £0.2m in debt and outstanding leases as of period end.

*SP Angel act as Nomad and Broker to Eurasia Mining

Greatland Gold (GGP LN) SUSPENDED – Trading halt on speculation of Telfer acquisition

• Greatland has seen trading suspended after speculation of an upcoming deal to acquire Newmont’s Telfer assets.
• The AFR reported overnight that Greatland is looking to raise A$500m to acquire Newmont’s Telfer mine, which has been up for sale as part of their non-core holdings.
• Andrew Forrest is reportedly set to put over A$100m in as a cornerstone investor.
• Greatland responded to speculation this morning, stating they are in ‘advanced negotiations with Newmont in respect of the Potential Acquisition.’
• Newmont currently has a majority stake in Greatland’s Havieron discovery.
• The asset has a defined reserve of 2.9moz AuEq at 3.7g/t AuEq, with an MRE of 8.4moz AuEq at 2g/t AuEq.
• Greatland reports that the proposed terms are confidential, but their proposed consideration includes a mixture of cash, deferred payments and equity.

Katoro Gold (KAT LN) 0.12p, Mkt Cap £1.6m – Canadian uranium exploration project

• Katoro Gold reports that it has acquired a Canadian uranium exploration project, the White Pine project, through staking 8,036 hectares in northwest Ontario close to the Trans Canada Highway.
• A radiometric survey shows “an intense radiometric signature over the Project, extending at least 14km” in an area known to host anomalous levels of uranium in lake sediments.
• The company says that the “White Pine project area has prospective geology supportive of intrusive-type uranium targets with two granitic rock bodies, which have radioactive occurrences”.
• Interim CEO, Patrick Cullen, explained that “White Pine represents a notable first step into uranium exploration for Katoro at what the Board believes is an opportune time and in a world class jurisdiction”.

Conclusion: Katoro Gold is making an initial foray into uranium exploration in Canada. We await results from the company’s initial exploration.

Pensana (PRE LN) 15p, Mkt Cap £39m – Non binding MOU signed for 20ktpa with Hanwa

• The Company signed a non-binding MOU for an offtake with Hanwa, a major Japanese commodities trader.
• The offtake covers up to 20ktpa of ultra-clean MREC from the Longonjo REE Project in Angola.
• The agreement is for five years at prices to be discussed.
• In addition, Hanwa is reported to consider financial support as well as options to attract governmental and financial institutions’ support for other Pensana projects including Coola and Sulima west expansion, the separation and metallization projects.

Rockfire Resources (ROCK LN) 0.2p, Mkt Cap £5.5m – Interim results highlight mineral resource increase at the Molaoi zinc project in Greece

• Following last week’s announcement of a five-fold increase in the ‘Inferred’ resources of its wholly owned Molaoi zinc project in Greece, Rockfire Resources has announced a loss of £0.89m for the six months to 30^th June 2024 (H1 2023 – £0.41m loss) and a closing cash balance of £0.51m.
• The company highlights the resource increase to 15m @’Inferred’ tonnes at an average grade of 9.96% on a zinc equivalent base which it says “places Molaoi within the top 20 undeveloped zinc resources globally in terms of tonnage, grade and zinc equivalent metal content”.
• Rockfire Resources also confirms its “strategy to increase the resource at Molaoi to at least 400,000 tonnes of zinc equivalent metal remained on track, with a quality hit 400m north of the main resource outline … [which] … opens the resource up towards the north and may allow for a rapid expansion of tonnes of contained zinc in the resource”.
• The company also confirms that its ‘farm-in’ partner for the Lighthouse and Kookaburra precious metals project in Australia, Sunshine Metals, failed to meet the minimum required to meet its earn-in spending commitments under its obligations for earning a 75% interest in the project.
• The shortfall of A$235,239 is being added to the commitments under Stage 2 of the agreement which now requires A$835,329 of expenditure by 20^th March 2025.

Serabi Gold (SRB LN) 72.5p, Mkt Cap £55m – Progress at Coringa and Palito

1. Serabi Gold has issued a progress report on its Coringa mine development in Brazil and on exploration around its existing Palito mine.
2. The company also maintains its 2024 gold production guidance of 38-40,000oz
3. At Coringa, the company confirms that the project remains on schedule and on budget with the crushing plant “expected to be operational by the end of September … [and] … the ore sorter scheduled for commissioning in October”.
4. An updated independent Preliminary Economic Assessment (PEA) for Coringa “is progressing well and the company anticipates the release of the results later this month” describing the company’s plan “to pre-concentrate mined ore at the Coringa project using the classification plant currently under construction and trucking the preconcentrated product to the Palito Complex, 200km to the north on a paved federal highway”.
5. Serabi Gold also confirms that it is generating encouraging initial results from a 3,500m drilling programme investigating mineral extension potential towards the south and at depth and “a previously untested part of the G3 orebody … [lying] … 100m to the south of the -50m level … [with] … a strike length of 400m … being tested… [making it] … a significant sized target to test, but also close to mine infrastructure for access”.

Conclusion: Serabi Gold reports confirms that the Coringa mine development remains on schedule and budget and that exploration at Palito is delivering encouragement for extending the mineralised envelope. We look forward to the revised PEA for Coringa.

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

Syrah Resources (SYR AU) A$0.2, Mkt Cap A$212m – Continued pressures of weak graphite market

• Syrah recorded a post-tax loss of A$67m.
• Cost of sales reported at A$44m, with mining and production costs at A$36.4m, logistics at $A8.7m, D&A at $7.8m.
• Finance costs for the period stood at A$9.6m, with A$10m in interest incurred on borrowings.
• Net cash outflow from operating activities at A$40.4m.
• Cash at 30^th June 2024 stood at A$82m, A$40m of which is restricted to Vidalia expansion.
• Total liabilities reported at A$266m, A$207m of which relates to the Convertible Notes and DoE loan.
• As regards production, Balama sold 29.8kt of graphite over 1H24, down from 56.3kt the same period last year.
• Syrah has slowed production at Balama to campaign levels amid weak downstream demand.
• No natural graphite was sold to Chinese buyers following the export restrictions introduced last year.
• Syrah notes ‘intense competition and oversupply issues in the Chinese domestic synthetic graphite AAM market, reducing natural graphite fines demand and maintaining pressure on soft fines prices.’
• Syrah has seen increased demand from alternative markets, selling 10kt to Indonesia.
• Vidalia continues to ramp up, with management noting increased capacity utilisation.
• The company is progressing qualification processes and have dispatched production samples to be tested by customers.
• Company notes that commercial AAM sales have been delayed due to a two-year transition period granted to EV OEMs for sourcing non-Foreign Entity of Concern graphite.

80 Mile Plc* (80M LN) formerly Bluejay Mining* – 0.33p, Mkt cap £6.9m – Helium identified as surface at Outokumpu

(Bluejay Mining holds 100% of the Hammaslahti and Enonkoski projects and all its Greenland prospects)

• 80 Mile Plc formerly Bluejay Mining reports the detection of high concentrations of helium “at surface in selected drill holes” on its Outokumpu licenses in Finland.
• The test work shows “stabilized values of up to 10.7% Helium in the Perttilahti Area” with surface sampling using a portable helium detector giving results at surface, directly from the historical drill holes.
  • “Gas samples from a 2480-meter-deep drill hole, analysed by the GTK, has additionally revealed up to 46% geological hydrogen, highlighting the belt’s potential for industrial gas reserves.“
  • Over “2000 historical drill holes provide robust foundation for fast-tracking gas assessment across the 40-kilometer licence holding”
• Management now plan to focus on areas with the highest helium concentrations with additional surface sampling, re-entering select drill holes for deeper testing.
• The team will integrate the findings with historical seismic data to pinpoint the most prospective zones.
• 80 Mile Plc will start  a ‘proof of concept’ study to look at the potential for future commercial recovery of helium and hydrogen using the existing deep drill holes.
• Eric Sondergaard, md, says “For helium or hydrogen to be detected at surface levels, there must be a sustained and significant source of these gases continuously feeding upward, suggesting the existence of large, potentially commercially viable subsurface accumulations.”
• Potential production of helium or hydrogen discoveries in Finland would likely be prioritised with logistics and permitting likely to be easier than in the East of Greenland.
• 80 Mile Plc (Bluejay) recently placed £1.75m of stock at 0.3p/s with investors.
• The company recently acquired of 51% of White Flame Energy for £1.4m worth of Bluejay shares for its industrial gas potential in Greenland
• White Flame Energy Limited holds 100% of three potentially large scale industrial gas, natural gas and liquid hydrocarbon rich exploration and exploitation licences, onshore, East Greenland.

*SP Angel acts as nomad and broker to 80 Mile Plc (formerly Bluejay Mining). The analyst has visited Dundas in Greenland and the Hammaslahti and Enonkoski projects in Finland.

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

If anyone reads this article found it useful, helpful? Then please subscribe www.share-talk.com or follow SHARE TALK on our Twitter page for future updates. Terms of Website Use All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned

---