SP Angel Morning View -Today’s Market View, Thursday 13th April 2023

Gold and base metals rally as the dollar weakens on lower US inflation

MiFID II exempt information – see disclaimer below

Bradda Head (BHL LN) – Additional claims acquired in San Domingo pegmatite district

Castillo Copper (CCZ LN) – Metallurgical testing of the rare earth elements potential of the BHA project.

Kodal Minerals* (KOD LN) – BUY, Target 0.7p – Chinese state committees approve funding package for Hainan Mining investment into Kodal and Bougouni lithium project

Oz Minerals (OZL AU) – Oz shareholders approve BHP acquisition as mining M&A accelerates

IGTV:   23/03/23: Mining in a banking crisis – how does it work?  https://www.youtube.com/watch?v=DiL9Ea88o-w

VOX Markets Podcast:  24/03/2023: https://audioboom.com/posts/8269467-john-meyer-why-gold-is-rallying-plus-atlantic-lithium-celsius-resources

ii Interactive Investor:  Battery Metals – Four Stocks – https://www.youtube.com/watch?v=8fwy6PXUe6s&t=5s

*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts. We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.

US looks to slash vehicle emissions 56% by 2023 with toughest ever emissions standards for cars and delivery vehicles

  • A new EPA proposal looks to automakers to increase EV production from 5.8% in 2022 to 60% in 2030 and 67% in 2032.
  • California now requires all new vehicles sold by 2035 to be either EVs or plug-in electric hybrids.
  • The EPA proposal also suggests vocational vehicles, including buses and rubbish trucks, will see a 50% EV split by 2032, with tractors also eyed for a major rise in EV market share.
  • The EPA is looking to implement concentrations of particulate matter smaller than 2.5um to a range of 9-10ug/m3 from 12ug/m3.
  • Regulators are looking to stimulate fleet buying of EV cars and 4x4s and delivery vehicles with new emissions regulations (FT)
  • The new regulations could force carmakers to make 67% per cent of their American models electric by 2032.
  • This is a massive step-up in the proportion of electric vehicles expected by this date and will require a huge effort in the instillation of charging stations to ensure Americans can continue to drive to work.
  • The new regulations are effective from 2027 and ramp up to 2032.
  • US regulators are targeting their Paris Agreement commitment on air pollution by lowering emissions by 50-52% below 2005 levels by 2030.
  • A number of major US car manufacturers were aiming for 40-50% EV production 2030.

Gold prices rally again as US headline inflation cools faster than expected

  • Gold prices climbed to $2,026 after US headline inflation came in at 5%, lower than the expected 5.1%.
  • This triggered further US Treasury buying on expectations of limited Fed rate hikes going forward, causing 10-year yields to slide and the dollar to weaken.
  • The data release saw a sixth straight day of gold buying from ETFs, further supporting the rally.
  • Focus will now shift to US labour data to guide on core inflation, which remains hot and a primary concern for Powell and the Federal Reserve.

Ghanaian inflation falls more than expected with falling gasoline prices supporting miners

  • Ghana’s inflation rate slowed to 45% vs expectations of 49.8%.
  • Petrol and diesel items are leading the slide in price surges, providing much-needed respite to miners struggling with soaring costs.
  • The Cedi, Ghana’s national currency, has rallied 12% vs the Dollar since February, and the Bank of Ghana expects inflation to slide to 29% by eoy.
  • Bloomberg reports an IMF bailout of $3bn is ‘imminent’ as China offers concessions.

Iron ore prices see sustained weakness as China introduces cap on steel output

  • Iron ore prices fell 2.6% in China to $112/t as supply remains ample and domestic steelmaker demand wallows.
  • Beijing is looking to keep output at 2022 levels of steelmaking as construction demand remains weak, weighing on prices for the key ingredient.
  • Steel mills are suffering from weak margins following 2.5 years of property market contraction.
  • The move also points to Beijing’s green ambitions and efforts to reduce carbon emissions.

Zinc – Tc/Rc jump to $274/t from $230/t in 2022, $159/5 in 2021, $299.75/t in 2020 as market sees >300,000t deficit

  • Refined zinc production fell 4.1% yoy last year leading to a threatening shortage of available physical zinc metal (ILZSG).
  • Zinc usage also fell 3.3% yoy last year due to Chinese lockdowns and slower global activity in road building and new construction starts.
  • More recent stimulation of new Chinese rail and other construction appears to be driving imports higher again with a 30% rise in zinc imports in January and February.
  • Production of refined zinc also rose 6.6% in the first three months according to Shanghai Metal Markets.
Dow Jones Industrials -0.11% at 33,647
Nikkei 225 +0.26% at 28,157
HK Hang Seng -0.05% at 20,299
Shanghai Composite -0.27% at 3,318


US – Inflation slowed in March in a welcome piece of news for monetary authorities, albeit, on annual basis continued to run at historically elevated levels suggesting another rate hike in May (2-3) is likely to be voted through.

  • Energy costs dropped 3.5%yoy reflecting declines in gasoline, natural gas and power, although, it may prove to be short lived given OPEC+ decision to cut production supporting crude prices.
  • CPI (%mom): 0.1 v 0.4 February and 0.2 est.
  • CPI (%yoy): 5.0 v 6.0 February and 5.1 est.
  • Core CPI (%mom): 0.4 v 0.5 February and 0.4 est.
  • Core CPI (%yoy): 5.6 v 5.5 February and 5.6 est.
  • Weekly 30- year mortgage rate was 6.3% vs 6.4%
  • Applications rose -5.3% after -4.1%..

China – Trade rebounds strongly in March defying expectations with overseas shipments jumping 14.8% led by improved demand in southeast Asia as well as Europe.

  • Domestic demand remained muted weighed down by the nation’s housing market slump and Covid Zero restrictions.
  • Exports (%yoy): 14.8 v -1.3 February and -7.1 est.
  • Imports (%yoy):-1.4 v 4.2 February and -6.4 est.

Japan – New BOJ Governor Kazuo Ueda highlighted risks of inflation falling below the 2% target suggesting the central bank may delay normalization of the monetary policy.

  • Comparing risks of inflation overshooting and falling below 2%, “its appropriate to conduct monetary policy by focusing on the latter risk”, Bloomberg cited Ueda.

UK – GDP growth came in flat in February versus a marginal expansion forecast on the back of a series of public services strikes.

  • The data suggests the nation is likely to avoid a recession in H1/23 but leaves the UK on track for an extended period of stagnation, Bloomberg writes
  • The economy is 0.3% larger compared to pre-Covid Feb/20 levels, although, the recovery remains weaker than in any other G7 economy, FT reports.
  • GDP (%mom): 0.0 v 0.4 (revised from 0.3) January and 0.1 est.
  • GDP (3m/3m): 0.1 v 0.2 (revised from 0.0)) 3m to January and 0.0 est.

IMF – World Economic Outlook baseline forecast growth falls to 2.8% this year from 3.4% in 2022 and then 3.0% in 2024.

  • The IMF also expect advanced economies to slowdown to 1.3% from 2.7% last year
  • The IMF also see potential for global growth to slow further to 2.5% this year if advanced economy growth drops below 1%.
  • The group also see global headline inflation falling to 7.0% from 8.7% last year largely driven by lower oil and gas prices

India – CPI rose 0.23% in March vs 0.2% in February and 5.55% yoy in March vs 6.44% in February


US$1.0998/eur vs 1.0930/eur yesterday. Yen 133.07/$ vs 133.67/$. SAr 18.319/$ vs 18.406/$. $1.250/gbp vs $1.243/gbp. 0.672/aud vs 0.666/aud. CNY 6.873/$ vs 6.886/$.

Dollar Index 101.44 vs 102.02 yesterday.


Commodity News

Precious metals:

Gold US$2,024/oz vs US$2,016/oz yesterday

Gold ETFs 93.4moz vs US$93.3moz yesterday

Platinum US$1,023/oz vs US$1,006/oz yesterday

Palladium US$1,461/oz vs US$1,461/oz yesterday

Silver US$25.52/oz vs US$25.31/oz yesterday

Rhodium US$7,500/oz vs US$8,000/oz yesterday


Base metals:   

Copper US$ 8,970/t vs US$8,848/t yesterday

Aluminium US$ 2,336/t vs US$2,306/t yesterday

Nickel US$ 23,600/t vs US$23,350/t yesterday

Zinc US$ 2,809/t vs US$2,747/t yesterday

Lead US$ 2,143/t vs US$2,098/t yesterday

Tin US$ 24,265/t vs US$23,560/t yesterday



Oil US$87.1/bbl vs US$85.8/bbl yesterday

  • Crude oil prices edged higher with the EIA reporting a 0.5mb US crude inventory build last week, together with 0.4mb gasoline and 0.7mb distillate stock build, with refinery utilisation falling by 0.3% to 89.3%.
  • The EIA’s Short-Term Energy Outlook outlined how mild winter temperatures and reduced natural gas consumption in the residential and commercial sectors drove down US gas demand in January and February.

Natural Gas US$2.078/mmbtu vs US$2.190/mmbtu yesterday

Uranium UXC US$50.35/lb vs US$50.35/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$118.1/t vs US$118.3/t

Chinese steel rebar 25mm US$590.1/t vs US$590.9/t

Thermal coal (1st year forward cif ARA) US$132.0/t vs US$142.0/t

Thermal coal swap Australia FOB US$202.0/t vs US$207.0/t

Coking coal swap Australia FOB US$286.0/t vs US$286.0/t



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

NdPr Rare Earth Oxide (China) US$72,600/t vs US$73,331/t

Lithium carbonate 99% (China) US$26,116/t vs US$26,501/t

China Spodumene Li2O 5%min CIF US$4,590/t vs US$4,590/t

Ferro-Manganese European Mn78% min US$1,358/t vs US$1,350/t

China Tungsten APT 88.5% FOB US$323/mtu vs US$323/mtu

China Graphite Flake -194 FOB US$780/t vs US$780/t

Europe Vanadium Pentoxide 98% 9.0/lb vs US$9.1/lb

Europe Ferro-Vanadium 80% 36.75/kg vs US$36.85/kg

China Ilmenite Concentrate TiO2 US$346/t vs US$345/t

Spot CO2 Emissions EUA Price US$106.0/t vs US$103.4/t

Brazil Potash CFR Granular Spot US$420.0/t vs US$420.0/t


Battery News

Major Chinese battery maker looks to Europe for five new factories

  • SVolt Energy Technology, which supplies Stellantis with batteries, is planning to build five new European factories.
  • The company is a spin-out from Great Wall Motor Co. and currently has two German facilities to supply Stellantis from 2025.
  • It plans to have the production capacity to feed 1m EVs pa.
  • Bloomberg reports it is in discussions with several European car manufacturers.

Company News

Bradda Head (BHL LN) 4.7p, Mkt Cap £18m – Additional claims acquired in San Domingo pegmatite district

  • Bradda Head has acquired three inlier claims over 60 acres of prospective pegmatite ground in San Domingo, Arizona.
  • The acquisition enables Bradda to target a potential 9km mineralised trend ‘without encumbrance.’
  • The Company had completed an initial drill programme on its surrounding claim blocks in March.
  • The previous holders of the lode claims had allowed Bradda Head to drill over their claims, with the Company reporting the final hole shows ‘abundant visible spodumene.’
  • The Company awaits assay results for the drill programme.
  • BHL is targeting the Lower Jumbo mine, which holds a 1.5m long spodumene cast in an historic mine that historical data suggests produced c.155t at a grade of 5.3% Li2O.
  • Five historic lithium mines are reported to be located in the surrounding area of BHL’s claim block.
  • Assay results from the Jumbo Target include:
    • 9.54m @ 1.85% Li2O
    • 4m at 1.27% Li2O
  • The Company notes both significant pegmatite intersections and visible spodumene and lepidolite at its Northern Claim block.

Conclusion: Bradda Head’s acquisition of pegmatite-focused exploration claims is an interesting development for the company, and we look forward to assay results from the San Domingo drilling programme. The Company holds a promising resource at its lithium-in-clay Basin project, however hard-rock processing methods remain the preferred source for lithium with Chinese and new Western processors.

 Castillo Copper (CCZ LN) 0.75p, Mkt Cap £9.4m – Metallurgical testing of the rare earth elements potential of the BHA project.

  • Castillo Copper reports that it has commissioned the Australian Nuclear Science & Technology Organisation (ANSTO) to investigate the potential to leach rare-earth elements from samples taken from its BHA East Zone project in New South Wales.
  • The tests will focus on six samples which comprise fresh pegmatite to highly weathered clay taken from the Fence Gossan, Reefs and Tors Tanks prospects which drilling has shown to contain magnetic rare earth oxides (MREO).
  • ANSTO’s scope of work covers:
    • “The potential to extract REE mineralisation from shallow clay zones;
    • Characterising the REE leachability from the six samples which comprise fresh pegmatite to highly weathered clay; and
    • Separating out high-value MREO (Nd+Pr+Dy+Tb) as the grades in the samples range from 362-603ppm MREO”
  • The work is expected to take 8-10 weeks.
  • Chairman, Ged Hall, explained that “Understanding the potential to extract REE mineralisation, especially MREOs, will greatly assist in our efforts to align with a future development partner. Pleasingly, the work done to date clearly confirms there is an extensive shallow REE system across the central part of the BHA Project’s East Zone”.

Conclusion: Metallurgical tests will help clarify the rare-earth mineral potential of the BHA East Project. Results are expected in about 2-3 months.

 Kodal Minerals* (KOD LN) 0.64p, Mkt Cap £108m – Chinese state committees approve funding package for Hainan Mining investment into Kodal and Bougouni lithium project

BUY – Target 0.7p

  • Kodal Minerals reports confirmation on all necessary approvals required by Hainan Mining for its agreed investment into Kodal Minerals and into Kodal’s underlying Bougouni Lithium project.
  • We note, the deal include all Kodal’s lithium licenses and project in Mali with funding available for further exploration within the joint venture.
  • Kodal is free to pursue other lithium options outside Mali which leaves the way open for Kodal to develop further lithium and gold projects outside the current Hainan Mining agreement.
  • Approvals from Chinese authorities include:
    • ‘Overseas Project Investment Filing Certificates’ from Hainan Province NDRC ‘National Development and Reform Commission’
    • ‘Company Overseas Investment Certificate’ from the Department of Commerce of Hainan Province.
  •  Kodal management are working to complete the conditions precedent for closing the deal in relation to the Hainan Funding Agreement which include the reorganisation of Kodal’s subsidiary companies so that all Kodal’s Malian lithium assets are held within Kodal Mining UK, including the Bougouni project.
  • “The Kodal technical team is currently in Hainan Province visiting the executives and technical specialists of Hainan Mining.”
  • Kodal will also take the Hainan team to Mali to introduce them formally to Mali Government officials and to conduct site visits.
  • Assay results from recent drilling show high-grade lithium in spodumene with particularly good intersections showing:
    • 18m at 1.31% Li2O from 42m and 8m at 1.55% Li2O from 77m at Ngoualana in a groundwater testhole to the NW of the proposed pit. Additional drilling now planned to test this area.
    • 8m at 1.50% Li2O from 29m at Kola prospect;
    • 9m at 1.47% Li2O from 29m at Kola prospect.
  • The deal: Hainan Mining have already deposited the first $7m of their agreed financing into an escrow account which forms a non-refundable deposit.
  • Hainan are effectively buying 51% of the jv for $94.34m in cash + a $5.66m loan to the jv which is being partially used to compensate Kodal for its expenses to date on the project.
  • Hainan has also agreed to buy $17.75m of stock at 0.5p/s to take its stake in Kodal to 14.8%.
  • The deal effectively values the jv company at $188.68m with Kodal holding a 49% stake worth $92.45m on the Hainan valuation.
  • JV company valuation:
    • Sales of >$1bn of revenues over 4 years.
    • NPV $420m at a 7% discount rate on a post-tax basis.


    • $2,080/t for 5.5% spodumene concentrate (prices are currently 4,590/t for 5% Li in spodumene concentrate).
    • Production of 120,000tpa
    • Trucking: 10 trucks carrying 350t per day at a cost of under $100/t and representing less than one truck per hour during daylight hours.
  • Valuation: Kodal’s 49% of $420m is estimated to be worth some $206m (£166m) at a spodumene concentrate price of $2,080/t spodumene concentrate.
  • When the $100m + $17.75m lands in Kodal’s jv and corporate bank accounts the funding will be secured we should then reduce our 50% discount to NPV to around a 25% discount to account for potential construction, commissioning and trucking issues.
  • Adding the $17.75m cash subscription into the Kodal valuation then raises our valuation to around 0.70p/s. This does not include upside from higher spodumene concentrate prices.

Conclusion:  Kodal Minerals is another step close to the final consummation of its deal with Hainan. Chinese battery manufacturers and lithium processors remain hungry for more hard rock spodumene material, while some are resorting to processing Lepidolite for its lithium content. Lepidolite is lithium-bearing mica which reduces yields and raises processing costs and is seen as a lesser quality alternative to spodumene.

*SP Angel acts as financial advisor and broker to Kodal Minerals.

Oz Minerals (OZL AU) A$28, Mkt Cap A$9.45bn – Oz shareholders approve BHP acquisition as mining M&A accelerates

  • Shareholders of Oz Minerals approved a revised offer from BHP yesterday of A$9.6bn.
  • BHP had increased its bid from A$25/share to A$28.25/share in December after its initial offer was rejected in December.
  • Oz Minerals shareholders will receive a special dividend of A$1.75/share in addition to A$26.50 in cash.
  • Shareholders voted 98.33% in favour of the takeover.
  • BHP will gain exposure to Oz’s Carapateena copper mine, in the vicinity of its Olympic Dam IOCG copper operation alongside the West Musgrave nickel project, near BHP’s Nickel West operations.

Conclusion: BHP’s takeover of Oz parallels Glencore’s move to acquire Teck and Newmont’s $19.5bn bid for Newcrest. This is an exciting time for the mining sector, and we see the major’s appetite for M&A reflecting their belief that many projects remain undervalued by the market following a decade of underinvestment and metal price volatility. We anticipate top level investment to trickle down to more junior explorers and developers as cash-rich acquirees eye opportunities.

No.1 in Copper:  “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”

No1. In Gold:  “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”

The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020


John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474


Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

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

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*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

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

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


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