SP Angel Morning View -Today’s Market View, Thursday 10th August 2023

Copper climbs as US dollar weakens on soft inflation expectations

MiFID II exempt information – see disclaimer below

Atalaya Mining (ATYM LN) – Production guidance remains intact following solid H1 performance

Atlantic Lithium* (ALL LN) – Former CEO buys shares

Bushveld Minerals*(BMN LN) – BUY– Mustang Energy convertible notes update

Caledonia Mining* (CMCL LN) – Production & cost guidance maintained following improvements at the Blanket mine after production challenges of H1

EQ Resources (EQR AU) – Acquisition of Barruecopardo to create a major western world tungsten concentrate producer

Galantas Gold* (GAL LN) – QME mine plan completion and Omagh infill drilling update

Galileo Resources (GLR LN) – Lithium results declared in Zimbabwe but what’s the mineralisation and how was it assayed?

Lucara Diamonds (LUC CN) – Q2 results confirm 2023 guidance

Power Metal Resources* (POW LN)– Launch of exploration at North Wind Lithium Project

Tertiary Minerals* (TYM LN) – BUY– Exploration update as soil sampling begins in Zambia

Iron ore prices hover around $100/t as China looks to limit rallies

• China is looking to crack down on iron ore purchases in a more monopolistic fashion.
• State buyer China Mineral Resources is looking to consolidate purchases and expand into spot markets to exert further control on prices.
• The key steelmaking ingredient has been moving in the right way for Chinese officials recently, sliding below $100/t as Brazil ramps up supply and China mills remain muted.
• However, mill operations are reportedly picking up in August, although steel production controls are looming.

Gold prices slide to one-month low as traders position themselves for US inflation data

• Gold prices hit an early-July low of $1,915/oz in the spot market yesterday afternoon, before strengthening slightly to $1,920/oz.
• US CPI data will be today’s primary focus, due at 12:30GMT.
• Expectations are for a slight acceleration in July on base case/seasonal/oil price effects.
• The market now prices in an 86.5% chance of no rate hike in September, although this dovish shift has failed to have a marked impact on US Treasury yields.
• Gold-backed ETFs have been consistently selling holdings since May and sit at a five month low.
• Rates held this high give investors little incentive to opt for non-interest yielding gold.
• It seems a reversion of the current selling trend by ETFs could be a major tailwind to gold prices, however this likely requires a sustained period of rate cuts in line with a US recession.

Tin – China refined tin output slides 13% on smelter maintenance and ore limitations following Myanmar ban

• State research house Antaike reports that China refined tin output fell 13% mom in July.
• The reduction was primarily driven by maintenance at Yunnan Tin, expected to be lifted soon.
• China Tin also slowed refining rates.
• Analysts are already noting a slowdown in ore on market following Myanmar’s mining ban.
• Smelter activity is expected to decline in the second half of this year, the ITA suggests.

Economics

China – Consumer price Deflation prompts investors to trade on boost to stimulus

• Year on year inflation data comparisons are bound to fall due to last year’s high inflation rate.
• More meaningful comparisons might be extracted from month-on-month data and comparing indices with inflation two or three years ago.
• Severe flooding in Northern China will occupy government minds .

US – Inflation drives pay and benefits of average full-time UPS delivery driver to US$170,000pa (£135,000)

• UPS drivers make $95,000pa in pay and another $50,000 in benefits (BBC).
• Competition is tough between delivery companies with UPS losing around 1m packages a day to rival companies on the threat of strike action.
• While UPS drivers are particularly well paid this latest increase has the potential to spark a new round of inflation in the US.

Niger – Coup leader is ex-UN peacekeeper

• In a tale of gamekeeper turned poacher, General Tchiana, the leader of the recent coup in Niger has been revealed to be an ex-UN peacekeeper .

Currencies

US$1.1016/eur vs 1.0974/eur yesterday. Yen 143.82/$ vs 143.14/$. SAr 18.850/$ vs 18.922/$. $1.275/gbp vs $1.277/gbp. 0.656/aud vs 0.656/aud. CNY 7.210/$ vs 7.208/$.

Dollar Index 102.25 vs 102.34 yesterday.

Commodity News

Precious metals:

Gold US$1,920/oz vs US$1,930/oz yesterday

Gold ETFs 90.7moz vs US$90.8moz yesterday

Platinum US$904/oz vs US$907/oz yesterday

Palladium US$1,253/oz vs US$1,224/oz yesterday

Silver US$22.85/oz vs  US$22.85/oz yesterday

Rhodium US$4,100/oz vs US$4,100/oz yesterday

Base metals:

Copper US$ 8,439/t vs US$8,443/t yesterday

Aluminium US$ 2,212/t vs US$2,214/t yesterday

Nickel US$ 20,580/t vs US$20,965/t yesterday

Zinc US$ 2,484/t vs US$2,480/t yesterday

Lead US$ 2,130/t vs US$2,132/t yesterday

Tin US$ 26,900/t vs US$27,285/t yesterday

Energy:           

Oil US$87.9/bbl vs US$86.1/bbl yesterday

• Crude oil prices fell after the EIA reported a 5.8mb w/w US crude build, offset by 2.7mb gasoline and 1.8mb distillate stock draws, with domestic production estimated at 12.6mb/d and refinery utilisation rising to 93.8%.
• European energy prices surged by 40% yesterday after Australian workers voted to approve industrial action at the North West Shelf, Wheatstone and Gorgon LNG operations, threatening c.10% of global exports.
• European energy prices have retreated overnight with natural gas storage levels rose 2.3% w/w to 88% full (vs 73.8% 5-Yr average), with the three largest storage nations above 89% full and overall EU storage of 997TWh.
• Ørsted reported 123power 1H23 power generation up 3% y/y to 15.3TWh as ramp-up on new assets (Hornsea 2, Changhua) was partly offset by lower wind speeds as well as lower availability, with revenues and operating cash flows impacted by lower power prices. The Company maintains FY23 EBITDA guidance of DKK20-23bn.

Natural Gas US$2.973/mmbtu vs US$2.795/mmbtu yesterday

Uranium UXC US$56.75/lb vs US$56.25/lb yesterday

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$100.1/t vs US$99.7/t

Chinese steel rebar 25mm US$518.5/t vs US$519.3/t

Thermal coal (1st year forward cif ARA) US$123.0/t vs US$123.0/t

Thermal coal swap Australia FOB US$148.5/t vs US$145.0/t

Coking coal swap Australia FOB US$236.0/t vs US$236.0/t

Other:  

Cobalt LME 3m US$33,420/t vs US$33,420/t

NdPr Rare Earth Oxide (China) US$66,152/t vs US$65,971/t

Lithium carbonate 99% (China) US$34,324/t vs US$34,338/t

China Spodumene Li2O 6%min CIF US$3,560/t vs US$3,560/t

Ferro-Manganese European Mn78% min US$1,052/t vs US$1,048/t

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

China Graphite Flake -194 FOB US$675/t vs US$675/t

Europe Vanadium Pentoxide 98% 7.6/lb vs US$7.6/lb

Europe Ferro-Vanadium 80% 31.85/kg vs US$31.85/kg

China Ilmenite Concentrate TiO2 US$311/t vs US$311/t

Spot CO2 Emissions EUA Price US$91.5/t vs US$91.2/t

Brazil Potash CFR Granular Spot US$352.5/t vs US$352.5/t

Battery News

House of Lords to launch inquiry into UK’s EV transition

• The upper house of parliament announced it was launching an inquiry into EVs that will examine the government’s approach to phasing out fossil-fuel models, charging infrastructure and end-of-life disposal of EVs.
• The UK government has a ban on the sale of new fossil-fuel-only model cars by 2030, and on hybrid vehicles that have both a large battery and combustion engine by 2035.
• The House of Lords’ environment and climate change committee said the aim of the inquiry was to “understand how the Government will achieve its target of decarbonising cars and vans in the UK”,and is looking to speak to industry and local authorities about what is need to encourage greater uptake.
• EVs are generally more expensive than their combustion engine counterparts and bringing prices down has been seen as key to mass adoption by consumers.
• Insufficient access to charging infrastructure, especially on-street chargers for those who park on the street and cannot charge at home, has also been cited as a barrier to broader public adoption.

China’s control of the CleanTech market (FT)

• In response to the US imposed restrictions on selling computer chips to China, Beijing announced restrictions on the exports of gallium and germanium – critical materials in the production of EVs, microchips and other strategically important products.
• This one incident has further highlighted that China is by far the lowest-cost and biggest supplier of many of the key building blocks for clean technologies.
• China is responsible for the production of about 90% of the world’s rare earth elements, ~80% of all the stages of making solar panels and 60%of wind turbines and EV battery manufacture.
• Increasingly, it is becoming more apparent that the west will struggle to create secure clean tech supply chains to exclude China.
• China is the leading producer of at least one stage of the supply chain for 35 of the 54 mineral commodities that are considered critical to the US, according to the US Department of the Interior and the US Geological Survey.
  • In EV batteries, China’s share of the raw materials they require is lower than 20% but it holds a 90% share of the market for processed versions of the same materials, according to Goldman Sachs.
  • China’s market share of graphite reserves is just over 20%, its market share for graphite processing is nearly 70% (Goldman)
• China’s oversea metals and mining investments reached $10b in the first 6 months of 2023 and will likely surpass their previous annual record of $17b in 2018.

Company News

Atalaya Mining (ATYM LN) 328p, Mkt Cap £457m – Production guidance remains intact following solid H1 performance

• In its interim financial results, Atalaya Mining confirms that it remains on track to produce 53-55,000t of copper at an all-in-sustaining cost (AISC) in the range US$3.00-3.20/lb.
• Production during H1 of 26,351t of copper (H1 2022 – 24,847t) resulted from the treatment of 7.8mt of ore at an average grade of 0.39% copper at an average AISC of US$3.00/lb (H1 2022 – 7.5mt at 0.38% and AISC of US$3.45/lb).
• Revenues of €170m (H1 2022 -€180m) and lower operating costs of €130m (H1 2022 -€138m) resulted in EBITDA of €40m (H1 2022 – €41m).
• Lower electricity prices and “modestly lower expensed mining costs, partly offset by higher administrative and expensed exploration costs” are described as contributing to the cost reductions.
• A €10m foreign exchange gain in H1 2022 was not repeated and profit of €20m is lower than the €30m achieved during H1 2022.
• Commenting on the results, CEO, Alberto Lavandeira, said that “Copper fundamentals continue to improve, with many large miners having recently downgraded their production guidance for 2023 as a result of operational challenges and project delays. Over the medium term, few large new projects are expected to be sanctioned due to uncertainties related to permitting and cost inflation”.
• He also pointed out that “more governments around the world are now classifying copper as a strategic metal. Recently, the U.S. Department of Energy released its 2023 Critical Materials Assessment, which included copper on its list of materials with high risk of supply disruption that are integral to clean energy technologies” and he described Atalaya as well placed to benefit from the global supply/demand position.

Atlantic Lithium* (ALL LN) 19.8p, Mkt Cap £120m – Len Kolff buys shares

(Piedmont can earn into up to 50% of the Ewoyaa lithium project through the expenditure of around 70% of the project capex)

• Atlantic Lithium has been notified that Len Kolff, the former CEO at Atlantic has bought shares in the company.
• Len stepped aside in favour of Keith Muller who moved from COO to CEO in May this year.
• Keith is a mining engineer and specialist in dense media separation, the process to be used to concentrate the spodumene from Ewoyaa.
• Len is a top-quality geologist from the University of Tasmania and the Royal School of Mines, Imperial College, London.
• Kolff working closely with Iwan Williams on the direction of drilling and exploration in and around Ewoyaa and in managing community relations in the field with country manager Abdul Razak.

*SP Angel acts as Nomad to Atlantic Lithium. Two mining analysts from SP Angel recently visited the Ewoyaa mine site in Ghana and drove onto Takoradi to check the quality of the road to port and see the infrastructure for the potential new Livista refinery site. Our intrepid analysts also visited the Ministry of Minerals Commission and MIIF, the Ghana Minerals Income Investment Fund.

Bushveld Minerals*(BMN LN) 2.5p, Mkt Cap £129 – Mustang Energy convertible notes update

BUY – 12.8p (from 15.8p)

CLICK FOR PDF

• Mustang Energy convertible loan notes holders informed Mustang that they have elected to act on the backstop agreement.
• The backstop agreement envisages the issuance of new shares in Bushveld Minerals in lieu of outstanding Mustang convertible loan notes after the deadline for Mustang readmission to trading on the LSE passed on 31 July 2023.
• In return, Mustang will transfer 22.1% interest in VRFB-H that holds a 40% interest in Enerox, a VRFB OEM based in Austria and operating under CellCube brand name, as well as novate rights under the US$2m loan made to Enerox.
• As a result, Bushveld Minerals will be issuing a total of ~270.4m new shares to redeem ~£7.2m in outstanding 2021 and 2023 Mustang convertible loan notes (implying a 2.6p issue price and representing 17.4% of enlarged share capital).
• Bushveld Minerals will hold a 64.5% interest in VRFB-H including a direct interest of 22.1% and an indirect interest of 42.4% through its 84% shareholding in Bushveld Energy (50.5% interest in VRFB-H).

Conclusion: Exercise of the backstop option by Mustang Energy convertible note holders increases the Company’s stake in VRFB-H and ultimately in Enerox, a VRFB OEM based in Austria, although at a hefty price with ~270m new shares to be issued representing ~17% of enlarged share capital. Conversion of notes, essentially, means Bushveld is taking an additional 22.1% interest in VRFB-H at a ~$32m valuation which is in line with the original deal agreed in April 2021 when Mustang Energy invested $7.5m for a 22.1% interest funding its with 2021 CLNs ($8m). This compares to ~$13m implied from the latest Garnet investment of ~$3.3m for additional 10% in Enerox taking its stake in the VRFB producer to 60% with the remaining 40% held by VRFB-H.

We revised our valuation to account for the latest updated FY23 guidance (3.7-3.9ktV at $26.1-27.0/kgV C1) as well as increased number of shares and lower VRFB-H implied valuation. Production is expected to come in marginally stronger in H2/23 predominantly driven by better feed at Vanchem, although, earnings are to remain under pressure as vanadium prices remain subdued. Share price performance is expected to be held back by ongoing Orion convertible facility refinancing (~$45m) discussions as well as a need for additional liquidity over the next 12 months highlighted in the interims. Ultimately, Group rerating will be driven by vanadium prices that we would expect to perform well on the back of potential stimulus measures in China as well as ramping up growth in VRFB demand.

*SP Angel act as nomad and broker to Bushveld Minerals

Caledonia Mining* (CMCL LN) 827.5p, Mkt Cap £170m – Production & cost guidance maintained following improvements at the Blanket mine after production challenges of H1

• Reporting its results for the quarter and half year to 30^th June, Caledonia Mining reiterates its full year gold production guidance range of 75-80,000oz as its Blanket mine in Zimbabwe moves on from the operating challenges of H1.
• On-mine production cost guidance remains in the range US$770-850/oz.
• The company confirms that it is placing its Bilboes project in Zimbabwe on care and maintenance pending the “results of the feasibility study on the project … [which] … will be published before year end after which we will be able to establish the best development approach”.
• Explaining the decision to put further mining of oxide ore at Bilboes on care and maintenance, CEO, Mark Learmonth, said that it “has no bearing on the viability of the much larger sulphide project which was the reason for acquiring Bilboes … [and that] … In due course, the remaining oxide material will be mined and processed alongside the sulphide ore”.
• On-mine costs for the 17,436oz of gold production at the Blanket Mine during the quarter were US$915/oz, however with the inclusion of the costs of the 1,076oz of gold produced at Bilboes, overall quarterly on mine costs ran at US$1,084/oz.
• The company reports stable quarterly revenues of US$37.0m (Q2 2022 – US$37.1m) and lower gross profit of US$10.9m (Q2 2022 – US$17.9m) as a result of “the costs of waste-stripping at the Bilboes oxide operation, notwithstanding a small revenue contribution of $2.2 million in the Quarter”.
• Caledonia Mining explains that waste removal costs at Bilboes “will facilitate access to the sulphide mineralization when the sulphide project is in operation”.
• Looking ahead, the company reports improved operating performance at Blanket during July with the production of “7,829 ounces of gold and strong operating cash flows … [which it says] … demonstrate that production challenges in the First Half have been addressed”.
• Deep drilling at the Blanket mine, which amounted to around 5,600m during the first five months of 2023, is continuing “with the objective of further upgrading inferred mineral resources, thereby potentially extending the life of mine”.
• Caledonia Mining says that “Initial results … [from the deep drilling campaign] … indicate that the grades and widths of the existing Eroica ore body are generally better than expected”.

Conclusion: Recent improvements in the operating performance at the Blanket mine in July allow Caledonia Mining to maintain full year production and cost guidance while the suspension of oxide mine operations at Bilboes pending completion of the feasibility study for oxide mining should improve the stability at an operating level.  We look forward to the results of Bilboes feasibility work later this year.

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

EQ Resources (EQR AU) A$0.079, Mkt Cap A$110m – Acquisition of Barruecopardo to create a major western world tungsten concentrate producer

• EQ Resources which operates the Mt Carbine tungsten mine in Queensland, has announced a binding agreement with the investment company, Oaktree Capital, to acquire the Spanish tungsten producer, Saloro, which operates the Barruecopardo tungsten mine in Salamanca Province.
• EQ Resources will acquire Saloro for “a nominal consideration of EUR1 and the benefit of all of the intercompany loans owed by Saloro to the Oaktree group (which is approximately EUR80,000,000) for EUR1”.
• In addition, EQ Resources will issue 278 million shares to Oaktree at an issue price of A$0.09 per share (approximately A$25m) and grant 78 million Options at A$0.10 per share, exercisable within a period of 2 years.
• As a result, Oaktree will own 15.86% of EQ Resources.
• The A$25m will be deployed to repay A$8.34m of Saloro’s debt, for A$8.34m of additional capital investment at Barruecopardo and for additional working capital.
• EQR says that key operational improvements which will be part of its initial focus include:
  • the installation of X-Ray sorting; and
  • improving metallurgical recovery through optimisation of feed to the jigs, spirals and tables; and
  • “Installation of a new fines recovery circuit”; and
  • “Pit mapping of alteration and fluid flow vectors to understand potential mineralisation extensions” and “gaining a better understanding of the potential strike extent and repetition of jog structures”
• The company says that the transaction will make it “the largest tungsten concentrate producer in the Western World, with a robust growth pipeline across two top-tier mining jurisdictions”.
• The historic Barruecopardo mine was reopened in 2019 “after nearly 40 years of shutdown” and is currently producing “approximately 140 tons/month of high-grade (>65% WO3) tungsten concentrate, with various minor plant expansion projects ongoing for higher recovery and throughput”.
• With world supply dominated by China, tungsten features as a critical mineral commodity in a number of jurisdictions including the US, EU, Australia and Japan.  The emergence of a sizeable western world producer is likely to be a welcome development for intermediate processors and end-users in these areas.

Conclusion: The acquisition of an established, Spanish, tungsten producer in addition to its Australian operation establishes EQ Resources as a significant force in the supply of western-world tungsten.

Galantas Gold* (GAL LN) 17p, Mkt Cap £19m – QME mine plan completion and Omagh infill drilling update

• The Company announced a completion of the contract mining plan by QME Mining Services for the Omagh Gold Project in Northern Ireland.
• The plan is for a nine months development period before a ramp up to ~5ktpm mining rates within 12 months of start up of development works.
• Estimates are for gold production to run at 1.2-1.4koz per month once development completed and high grade dilation zones are accessed.
• Underground development works capital cost is estimated at ~$12m.
• The team also studying an expansion to the existing mill to accommodate higher mined tonnages from multiple levels at both Joshua and Kearny potentially growing mill throughput to 500tpd from 180tpd and doubling production rates to ~30-35kozpa.
• Separately, the Company announced preliminary drilling results at the Omagh Gold Project including an intersection of a massive sulphide mineralisation at a projected dilation zone at the Joshua Vein (FR-DD-23-196).
• This was the first exploration hold completed from surface over 19 months and modelled to infill high grade dilation areas.
• Assay results are pending.

Conclusion: The Company along with QME, its mining contractors, completed a contract mining plan envisaging a $12m underground mine development to reach 1.2-1.4kozpm production rates in 12 months from the start of development works at the Omagh Gold Project. The team is also studying a potential mill expansion to take production run rates to 2.5-2.9kozpa as infill and step out drilling is expected to deliver growth in the resource.

*SP Angel acts as Broker to Galantas Gold

Galileo Resources (GLR LN) 1.24p, Mkt Cap £14.5m – Lithium results declared in Zimbabwe but what’s the mineralisation and how was it assayed?

AVOID

• Galileo Resources have declared peak values of lithium from drilling including 4m grading 1% Li2O including an intercept of 1m at 2.04% Li2O at Kamativi in Zimbabwe.
• Li2O grades of >1.5% are not normal and we have learned to be wary of ‘peak values’ when not backed up by more conclusive data.
• The results is said to be from drilling into an 18m pegmatite but there is no mention of the ‘true width’ or of the metallurgy.
• Eg. is the Lepidolite or Spodumene?
• There is a big difference from a processing perspective in the metallurgy and while Chinese refiners appear desperate to source any lithium bearing mineral today, we suspect non-spodumene minerals will be left behind in future due to issues related to their processing.
• Zimbabwe is also land locked with minerals often trucked to Durban for export reducing the value of bulk concentrates.
• This will probably make the journey only viable for better quality spodumene concentrates in future years if the government ever allows its export.
• The press release also refers to pXRF analysis indicating the presence of anomalous quantities of tin in some pegmatites.
• The use of a pXRF, which is quite normal in the field these days, but is not generally seen as suitable for discovery announcements and makes us wonder how grades have been determined as there is no reference to any accredited Laboratory in the announcement.
• Zimbabwe: The government has ‘officially’ declared that the nation will not allow the export of lithium concentrates and there are no lithium smelters in country.

Conclusion:  We are left wondering if the company understand the metallurgy of what they are drilling and how they are assaying the stated li2O grades. We would avoid the stock until these basic questions are answered and the company puts out something that might be relied on.

Lucara Diamonds (LUC CN) C$0.40, Mkt Cap C$182m – Q2 results confirm 2023 guidance

• Lucara Diamonds confirms that Q2 production of 90,497 carats of diamonds at an operating cost of US$27.97/t of the 0.7mt of ore processed keeps it on track to achieve its full year guidance in the range of 395-425,000 carats at costs between US$32.50/t and US$35.50/t.
• The company, which reported yesterday on the recovery of a 1,080-carat diamond from its wholly owned Karowe mine in Botswana, says that during the quarter it recovered 13 diamonds larger than 100 carats including 4 stones of over 200 carats.
• “Revenues of $41.1 million (Q2 2022: $52.3 million) reflected a continuation of weaker diamond prices and a planned change in product mix beginning in early 2023 … [while] … Operating margins of 59% were achieved (Q2 2022: 67%) … despite price softness in the rough diamond market”.
• Lower “Adjusted EBITDA was $15.7 million (Q2 2022: $24.4 million), with the change directly attributed to a decrease in revenues”.
• Commenting on the global diamond market, Lucara Diamonds says that “Following on the record high diamond prices achieved in early 2022, a softer diamond market emerged in the latter half of 2022 which has persisted into the second quarter of 2023, the result of global economic concerns combined with geopolitical uncertainty, including the ongoing conflict in Ukraine”.
• While identifying signs of returning market stability as “China continues to open-up post-Covid” the company notes that “Sales of lab-grown diamonds increased during the period. Intense competition combined with improvements in technology continue to drive prices of lab grown diamonds down”.
• The rise of lab-grown diamond sources “further differentiates this market segment from the natural diamond market and highlights the unique nature and inherent rarity of natural diamonds”, however the “longer-term market fundamentals remain unchanged and positive, pointing to strong price growth over the next few years as demand is expected to outstrip future supply, which is now declining globally”.
• The company confirms its previously announced revision to the timetable of the underground development at Karowe, which “is expected to extend mine life to at least 2040 … in response to slower than planned ramp up to expected sinking rates, and, to account for time incurred to date, as well as for anticipated future grouting programs”.
• “The updated schedule incorporates a 28% increase in the duration of construction, extending the anticipated commencement of production from the underground from H2 2026 to H1 2028. The revised forecast of costs at completion is $683 million (including contingency), a 25% increase to the May 2022 estimated capital cost of $547 million”.
• Commenting on the revised schedule, CEO, Eira Thomas said that despite the extended timetable and increased cost “sufficient surface stockpiles ensure that the mill will operate to capacity during this period and the project remains economically robust.”

Power Metal Resources* (POW LN) 0.75p, Mkt cap £15m– Launch of exploration at North Wind Lithium Project

• Power Metal announces the start of exploration at the 57.89 km² North Wind Lithium Project in Ontario, Canada.
• North Wind is 100% owned by Ion Battery Resources, itself a wholly-owned subsidiary of POW’s.
• POW completed the earn-in on Ion Battery’s Authier North Lithium Project last month.
• The Company believes North Wind is prospective for pegmatite-hosted lithium.
• Sediment samples at North Wind show anomalous concentrations of lithium, caesium and tantalum, supporting future exploration efforts.
• The Company is currently undertaking geochem sampling, prospecting and rock sampling at the project to guide more targeted exploration.
• The project lies on the Onaman-Tashota Greenstone Belt, which hosts the Jackpot Lithium Project to the south with 2mt @ 1.09% li20 and the Seymour Project with 9.9mt @ 1.04% li20 65km to the northwest.

*SP Angel acts as Nomad and Broker for Power Metal Resources

Tertiary Minerals* (TYM LN) 0.092p, Mkt cap £1.8m – BUY– Exploration update as soil sampling begins in Zambia

CLICK FOR PDF

• Tertiary provides an update on exploration in Zambia following the approval of forest permits last month.
• At Konkola West, Tertiary will target shallower and gentler-dipping prospective Lower Roan copper mineralisation to the northwest of the licence, guided by KoBold-provided data.
• The Company is currently executing soil sampling programmes with 260 samples due to be analysed using pXRF.
• This should enable more precise infill sampling.
• At Mukai, 310 samples will be collected, targeting stratigraphy along strike of FQM’s Tirosa Project.
• At Mushima North, the team is targeting IOCG copper mineralisation, with 1,150 samples set to be taken over 200 x 200m grids over three targets.
• At Lubuila, analysis of copper results point to lateritic enrichment as opposed to in-situ copper mineralisation.

Conclusion: It is reassuring to see the pace accelerating for Tertiary in Zambia as the various maiden exploration programmes get underway across their copper-prospective licence packages. Management is keen to highlight Tertiary’s ‘significant discount’ to listed juniors exploring in Zambia – a similar conclusion our recent Initiation Note, attached above, reached. We look forward to results from a potential drill porgramme at Jacks alongside the future target areas expected to be revealed by the ongoing soil sampling campaigns.

*SP Angel acts as Nomad and Broker to Tertiary Minerals

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 of less than 15%