SP Angel Morning View -Today’s Market View, Thursday 15th August 2024

Gold cools off new highs whilst copper strengthens as Escondida strike looms

MiFID II exempt information – see disclaimer below

Adriatic Metals (ADT1 LN) – Contractor fatality

American West Metals (AW1 AU) – Potential extension of high-grade copper at Storm copper in Canada

Aston Bay Holdings (BAY CN)

Aura Energy* (AURA LN) – Restructuring of Curzon offtake agreement and placement now done

Artemis Resources (ARV LN) – Reconnaissance rock-chip results from the Titan prospect, WA

Bushveld Minerals* (BMN LN) – Central bank approves Orion $10m matched funding

Cornish Metals* (CUSN LN) – Interim results focus on progress at South Crofty

Guardian Metal Resources (GMET LN) – £2.15m financing to accelerate exploration in Nevada

Power Metals Resources* (POW LN) – (Power Metals* holds a 51% stake in Golden Metal Resources)

Pilbara Minerals (PLS AU) –Acquisition of Latin Resources in all share deal

Tungsten West (TUN LN) – CEO appointment

Copper ($9,080/t) strengthens as Escondida strike looms

• Copper prices have been bouncing around the $9,000/t level, strengthening from recent lows.
• The market is watching a strike at the world’s largest copper mine, Escondida, with BHP failing to reach an agreement with the key unions.
• Escondida accounts for 5% of global copper supply.
• Lundin is operating Caserones despite labour strike concerns, although it notes that there are restrictions on output.
• Some supply angst was removed yesterday after Zambia and the DRC resumed border flows.
• Stockpiles continue to build in exchange warehouses as China struggles to absorb inventories.
• China is exporting substantial copper into LME warehouses, with 72% of July’s increased inventories China-based.

Gold ($2,455/oz) weakens as focus shifts to retail sales to gauge US consumer strength

• Gold prices gave back some gains yesterday, falling from near record highs to $2,444/oz.
• The move followed CPI data, which showed inflation cooling in line with expectations.
• Yields fell following the data, but much of the move had been made following Tuesday’s PPI release.
• Retail sales are due today, with economists expecting a slight uptick MoM.
• Focus will also be on jobless claims, due this afternoon, after NFP data a fortnight ago triggered concerns of a recession.

Economics

US – Inflation numbers came in largely in line with expectations on Wednesday with both headline and core measures slightly ticking down yoy.

• The data is likely to add a further argument for the Fed to start cutting rates at the coming September meeting.
• Markets are pricing in a 25bp move at the coming meeting with a total of four 25bp cuts before YE.
• CPI (%mom, Jul/Jun/Est): 0.2/-0.1/0.2
• CPI (%yoy, Jul/Jun/Est): 2.9/3.0/3.0
• Core CPI (%mom, Jul/Jun/Est): 0.2/0.1/0.2
• Core CPI (%yoy, Jul/Jun/Est): 3.2/3.3/3.2

China – Property investment falls 10.2% yoy from January to July vs a 10.1% fall from January to June

• Property sales by floor area in January-July fell 18.6% from a year earlier, compared with a 19.0% slump in January-June, National Bureau of Statistics (NBS) data showed on Thursday.
• New construction starts fell 23.2% yoy by floor area following a 23.7% fall in H1
• Funds raised by Chinese property developers fell 21.3% yoy following a 22.6% fall in January to June.
• Industrial Production (%yoy, Jul/Jun/Est): 5.1/5.3/5.2
• Retail Sales (%yoy, Jul/Jun/Est): 2.7/2.0/2.6
• Fixed Asset Investments (%YTD, Jul/Jun/Est): 3.6/3.9/3.9
• Property Investments (%YTD, Jul/Jun/Est): -10.2/-10.1/-9.9
• Residential Property Sales (%YTD, Jul/Jun/Est): -25.9/-26.9/NA

Chinese steel production dropped 9%yoy to ~83mt in July marking the lowest output reported this year.

• YTD production was down 2.2%yoy on the back of ongoing declines in property sector investments and prices as well as shrinking factory activity.
• China Baowu Steel Group that produces ~7% of the global steel said that the current crisis is more serious than the downturn of 2008 and 2015.
• The crisis will likely be “longer, colder and more difficult to endure than we expected, Chairman Hu Wanngming said.

Japan – The economy grew faster than expected in 2Q24 with inflation measure slowing down, albeit, not as quick as forecast.

• Growth has been driven by consumer spending helped by the biggest wage increases in more than three decades agreed with large companies and the government led tax rebates.
• Business investment also climbed beating estimates while net exports and some destocking trimmed the headline GDP number down slightly.
• GDP (%qoq SA anualised, 2Q/1Q/Est): 3.1/-2.3(revised from -1.8)/2.3
• GDP Deflator (%yoy, 2Q/1Q/Est): 3.0/3.4/2.6

UK – The economy registered 0.6%qoq growth in 2Q24, in line with expectations, predominantly driven by government spending with both private spending and business investment lagging estimates.

• High borrowing costs and political uncertainty may be attributed to factors behind muted consumer and business spending.
• Expectations for a rate cut are little changed with a nearly 60% chance that the BOE will rates unchanged at the next meeting in September.
• Beyond that investors are expecting two cuts from the current 5% before year end.
• GDP (%qoq, 2Q/1Q/Est): 0.6/0.7/0.6
• Private Consumption (%qoq, 2Q/1Q/Est): 0.2/0.4/0.5
• Government Spending (%qoq, 2Q/1Q/Est): 1.4/0.0/0.3
• Business Investment (%qoq, 2Q/1Q/Est): -0.1/0.5/0.4
• Exports (%qoq, 2Q/1Q/Est): 0.8/-1.0/-1.2
• Imports (%qoq, 2Q/1Q/Est): 7.7/-2.7/1.5

Ukraine – The largest drone attack was launched on Russian airfields yesterday involving 117 drones as well as missiles targeting airfields in bordering regions.

• Ukrainian official said the airfields of Voroniezh, Kursk, Savasleyka and Borisoglebsk were aimed at in order to prevent Russian air attacks on Ukraine, FT reports.

Currencies

US$1.1014/eur vs 1.1003/eur previous. Yen 147.24/$ vs 147.20/$. SAr 18.031/$ vs 18.108/$. $1.286/gbp vs $1.284/gbp. 0.662/aud vs 0.664/aud. CNY 7.157/$ vs 7.148/$.

Dollar Index 102.56 vs 102.63 previous

Precious metals:         

Gold US$2,456/oz vs US$2,469/oz previous

Gold ETFs 82.3moz vs 82.3moz previous

Platinum US$939/oz vs US$936/oz previous

Palladium US$944/oz vs US$952/oz previous

Silver US$27.99/oz vs US$27.90/oz previous

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

Base metals:   

Copper US$ 9,043/t vs US$8,986/t previous

Aluminium US$ 2,343/t vs US$2,348/t previous

Nickel US$ 16,370/t vs US$16,280/t previous

Zinc US$ 2,727/t vs US$2,712/t previous

Lead US$ 2,035/t vs US$1,990/t previous

Tin US$ 31,590/t vs US$31,550/t previous

Energy:           

Oil US$80.1/bbl vs US$81.1/bbl previous

• Crude oil prices moved lower after the EIA reported a 1.4mb build to crude inventories in the US, offset by draws of 2.9mb to gasoline and 1.7mb to distillate stocks, and refinery utilisation rising 1% w/w to 91.5%.
• European energy prices remain elevated due to geopolitical risk as EU natural gas storage levels rose 2% w/w to 88.2% full (vs 80.1% 5-Yr average), with Germany over 92% full and aggregate storage now at 1,004TWh.
• Media reports that Offshore Energies UK co-hosted a fiscal forum at its Aberdeen offices between senior members of the UK oil and gas sector and the Exchequer Secretary to the Treasury, which represented an opportunity to hear from senior leaders following the changes to the Energy Profits Levy announced last month.

Natural Gas €38.9/MWh vs €39.7/MWh previous

Uranium Futures $81.4/lb vs $81.5/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$95.2/t vs US$99.0/t

Chinese steel rebar 25mm US$488.7/t vs US$489.3/t

Thermal coal (1st year forward cif ARA) US$129.8/t vs US$128.8/t

Thermal coal swap Australia FOB US$151.0/t vs US$152.5/t

Coking coal Dalian Exchange futures price US$191/t vs US$183.6/t

Other:  

Cobalt LME 3m US$26,500/t vs US$26,500/t

NdPr Rare Earth Oxide (China) US$53,513/t vs US$53,024/t

Lithium carbonate 99% (China) US$9,850/t vs US$10,143/t

China Spodumene Li2O 6%min CIF US$850/t vs US$860/t

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

China Tungsten APT 88.5% FOB US$327/mtu vs US$327/mtu

China Graphite Flake -194 FOB US$462/t vs US$462/t

Europe Vanadium Pentoxide 98% 4.7/lb vs US$4.7/lb

Europe Ferro-Vanadium 80% 25.2/kg vs US$25.2/kg

China Ilmenite Concentrate TiO2 US$321/t vs US$321/t

China Rutile Concentrate 95% TiO2 US$1,404/t vs US$1,406/t

Spot CO2 Emissions EUA Price US$69.9/t vs US$69.9/t

Brazil Potash CFR Granular Spot US$295.0/t vs US$295.0/t

Germanium China 99.99% US$2,145/kg vs US$2,145/kg

China Gallium 99.99% US$440/kg vs US$440/kg

Battery News

China’s automakers see Southeast Asia as key market for further growth

• As we saw at the end of last week, in July 2024, sales of NEVs in China surpassed traditional car sales for the first time, with 853,000 NEVs sold out of 1.595m passenger cars.
• From January to July 2024, China’s NEV production and sales increased by nearly 30% yoy, with BYD leading the market.
• China exported 708,000 NEVs in the first seven months of 2024, up 11.4% from the previous year, with Europe and Southeast Asia as key destinations.
• Chinese EV makers are increasing their presence in Southeast Asia by boosting production in countries like Indonesia, Malaysia, and Vietnam.
• BYD considers Vietnam, with its population of over 100m, as a crucial market for future EV growth.
• Southeast Asian countries are introducing incentives such as tax exemptions, subsidies, and partnerships with Chinese automakers to boost EV production and attract global investments

Zeekr unveils battery with 10-minute charge time

• The Geely owned brand has unveiled an upgraded lithium iron phosphate (LFP) battery that will charge for 10% to 80% in around 10 minutes.
• Even in cold conditions as low as minus 10C, the cells will be able to charge to 80% in around 30 minutes,
• Range anxiety has been one of the main barriers to EV adoption.
• The new batteries will be available in the Zeekr 007 sedan, with deliveries to begin next week.

Tesla China sees strong Q3 registrations, continues to gain momentum

• In the week of August 5-11, Tesla China registered 15,500 new vehicles, marking a 24% increase from the previous week.
• The 15,500 registrations represent Tesla China’s highest vehicle registrations for the sixth week in any quarter to date.
• Tesla’s domestic sales in China are not officially reported weekly, but vehicle registrations tracked by industry insiders provide insight into the company’s market performance.
• Tesla China sold 74,117 vehicles wholesale in July, a 15.3% yoy increase, with 46,227 units sold domestically and 27,890 exported.
• Giga Shanghai, Tesla’s primary export hub, plays a crucial role in the company’s global sales, which could help Tesla exceed its 2023 record of 1.8m vehicles sold worldwide.

Decline in EV sales in Ireland raises concerns over climate targets

• Ireland saw a 25% drop in EV sales from January to July 2024 compared to the same period last year, with 12,765 EVs licensed (RTE).
• This decline is troubling for meeting Ireland’s Climate Action Plan goal of 845,000 EVs by 2030, with current numbers far behind.
• Misconceptions about EVs and concerns over charging infrastructure contribute to slow adoption, according to Matthew Sealy of the Irish Electric Vehicle Association.
• Dealers like Nadia Adan note a preference for hybrid vehicles due to concerns about EV range and charging infrastructure.
• The decline in EV sales may indicate persistent issues, risking further delays in meeting Ireland’s climate targets.

Polestar begins US production to avoid high tariffs

• The Swedish automaker has made the step towards avoiding high tariffs imposed on Chinese-made EVs by announcing it has begun production of the Polestar 3 SUV in the US.
• Polestar, majority owned by China’s Geely, has been manufacturing its vehicles in China and exporting to overseas markets.
• The Polestar 3 will be made in Volvo’s US plant in South Carolina and will be sold to customers in the US and Europe.

South Korean scientists develop battery material for extreme cold

• South Korean researchers have developed a new battery material, SKIER-5, that functions effectively in temperatures as low as -20°C, overcoming limitations of traditional graphite anodes.
• SKIER-5 anodes showed five times higher discharge capacity than graphite at -20°C and a 1.5 times increase in capacity after 1,600 charge-discharge cycles.
• This innovation could significantly enhance the performance of EVs, energy storage systems, and drones in extreme cold and fluctuating temperatures.

BlackRock increases stake in Lucid Motors by 4.4m shares in Q2

• In its quarterly portfolio update, asset manager BlackRock disclosed it had added 4.4m shares of Lucid Motors in Q2 2024, bringing its total to over 45m shares, a 10.76% increase from Q1 .
• The increased stake is valued at nearly $139m based on the recent closing price.
• Since initiating its position in Lucid after the 2021 merger, BlackRock has grown its holdings from 31.4m to 45.2m shares.
• Institutional ownership of Lucid’s stock is near record levels, with 703 institutional shareholders collectively owning 1.65bn shares.
• Lucid’s largest shareholder, Saudi Arabia’s Public Investment Fund, recently committed an additional $1.5bn in cash to the company.
• Citi Group reduced its Lucid holdings by nearly 48% in Q2, while increasing its stake in Tesla by over 22%.
• Geode Capital also increased its Lucid stake by 9.62%, now holding over 16m shares.

Company News

Adriatic Metals (ADT1 LN) 140p, Mkt cap £446m – Contractor fatality

• Adriatic reports a fatal accident at its Rupice Mine that took place yesterday.
• The incident involved an employee of a local Bosnian subcontractor and an overturned vehicle.
• Adriatic management expresses their condolences, and the Company is working with the local authorities to determine the cause of the incident.

American West Metals (AW1 AU) A$0.14, Mkt cap A$70m – Potential extension of high-grade copper at Storm copper in Canada

Aston Bay Holdings (BAY CN) C$0.12, Mkt cap C$30m  

(Aston Bay hold 20% of the Storm copper and Seal Zinc projects. American West Metals Limited hold 80%)

• American West Metals report confirmation of a near-surface extension to high-grade copper at the Storm project on Somerset Island in the north of Canada.
• The results show decent copper grades in the near-surface environment.
• Cyclone Deposit: •
  • Drill hole SR24-11 has intersected:
    • 19.8m @ 1.2% Cu, 3.0g/t Ag from 12.2m downhole, including,
      • 4.6m @ 3.0% Cu, 7.0 g/t Ag from 21.3m downhole
    • o 3m @ 3.2% Cu, 8.5g/t Ag from 59.4m downhole •
  • Drill hole SR24-21 has intersected:
    • 13.7m @ 2.1% Cu, 7.9g/t Ag from 67.1m downhole, including,
      • 7.6m @ 3.2% Cu, 12.2g/t Ag from 70.1m downhole •
  • Drill hole SR24-09 is located outside of the current resource and has intersected:
    • 15.2m @ 1.4% Cu, 2.4g/t Ag from 103.6m downhole, including,
      • 6.1m @ 2.7% Cu, 2.7g/t Ag from 108.2m downhole
• Chinook Deposit:  
  • Drill hole SR24-10 has intersected:
    • 3.1m @ 1.3% Cu, 6.0g/t Ag from 38.1m downhole, including,
      • 1.5m @ 2.3% Cu, 10.0g/t Ag from 38.1m downhole
    • 1.5m @ 2.4% Cu, 3.0g/t Ag from 89.9m downhole.

Conclusion: These look like positive results supporting the copper discovery at Storm. Management was forced to retract a recent statement by the ASX referring to reference to a 1.5mt production scenario and related capex. We are told this information had not been released in accordance with ASX Listing Rules 5.16 and 5.17. We still see the Storm Copper project as a significant copper discovery albeit in a remote part of Canada bordering on the North West Passage.

Aura Energy* (AURA LN) 6.75p, Mkt Cap £57m – Restructuring of Curzon offtake agreement and placement now done

(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 report the completion of the Curzon Uranium Ltd.offtake agreement on the Tiris uranium mine in Mauritania.
• The new offtake improves the price for the uranium yellowcake to be produced adding value to the Tiris uranium project.
• The new NPV improves to:
  • US$388m NPV@8% a US$22m increase
  • IRR rises to 36% a 2% increase vs the FEED economic study done in February
• Curzon receive a US$3.5m restructuring fee paid in 30m Aura shares at A$0.18/s which will be escrowed till the start of first production.
• Aura is also placing a further 30m Aura shares with Curzon on the same terms to be issued next week with half of these shares to be escrowed till 30 June 2025 or the Final Investment Decision which is due by end Q1 2025.
• Options: Aura is also issuing 6m options at a strike price of A$0.20/s to Curzon.
• New investor: Curzon will hold ~7.2% of the shares in issue
• The funds will enable Aura to take the roject through to its Final Investment Decision by Q1 2025.
• Total number of shares: Curzon will have 848,462,427 shares in issue including the new stock to Curzon
• Tiris Uranium (Mauritania)
  • Production: 2mlbs pa of a high-grade leach feed of ~1,743ppm U₃O₈ over 17 years with significant potential to expand beyond the current resource of 91.3mmlbs U₃O_8.
  • Leach feed grade 1,997ppm U₃O₈ over the first five years with just 0.5mtpa throughput through the leach process plant which is similar to Paladin’s Langer Heinrich in Namibia.
  • 3.5mlbs pa capacity of U₃O₈ as a yellowcake precipitate.
• Offtake negotiations are said to be near complete with leading US nuclear utilities.
• Project funding discussions on the $230m capex have started with debt, other strategic investors and equity.
• Desert-to-Power initiative: US$900m was made available for a 225kV multinational power line between Mauritania and Mali connecting 620,000 people as part of the African Development Bank’s Desert-to-Power initiative.
• The project will be an important link in the proposed ‘trans-Sahel spine’ to connect link Mauritania to Chad via  Burkina Faso, Niger and Mali connecting new renewable energy parks to the sub-region’s power grid.
• African Development Bank Group’s Deputy Director General for North Africa and Country Manager for Mauritania, Malinne Blomberg, said: “The aim of our involvement in this large-scale project is to turn our policy of supporting the development of green infrastructure in Africa into a reality — to promote green, inclusive, sustainable growth, which will significantly improve the living conditions of people in Africa.”
• Production could start within 18-months of financing in 2026 / 2027.
• Location: the Tiris East uranium project is located in the north east of Mauritania. It is > 100km from the boarders with Algeria and Mali.
• Häggån:  Aura is also looking to make progress on the Häggån polymetallic project in Sweden which has potential for 10,000tpa of V₂O₅ vanadium pentoxide and 1mlbs pa of U₃O₈ uranium
• Häggån shows a potential post-tax IRR of 28-49% assuming capex of $456m.
• We are hopeful that Sweden will overturn its ban on uranium mining following approval of Uranium production at Terrafame’s Sotkamo mine in Finland. Sweden has six nuclear reactors.

Conclusion:  Aura’s Tiris uranium project is edging towards the completion of its Final Investment Decision and capital funding.

*SP Angel acts as Nomad and Broker to Aura Energy

Artemis Resources (ARV LN) 0.88p, Mkt Cap £9.1m – Reconnaissance rock-chip results from the Titan prospect, WA

• Artemis Resources has reported high grade vein gold in rock chip sampling from the Titan prospect at its Karratha gold project in WA.
• Highlighted samples taken during reconnaissance exploration from veins showing visible gold have yielded assays including one of >10,000g/t (above the limit of the assay method) as well 6,520g/t and 10.2g/t.
• Different samples also yielded copper assays of 23.88% and 14.55% copper.
• Director, George Ventouras, said that the company’s “re-focus of exploration efforts and strategy on a tenement wide scale is continuing to deliver evidence of multiple new zones for gold mineralisation, which we believe could contain the potential for large scale deposits”.
• The Titan prospect is described as a “greenfield discovery … [located] … within the Company’s Carlow tenement and approximately 2km from the Carlow project where there is a current JORC 2012 compliant Mineral Resource of 374,000oz Au (Au Eq total mineral resource of 704,000 oz AuEq)”.
• The company describes a 700m long “mineralised trend … including a highly mineralised sub vertical quartz-iron vein zone with abundant visible gold” at Titan and says that the mineralisation “appears to remain open under shallow cover … on a much larger and strike extensive structural zone”.

Conclusion: Early-stage reconnaissance rock-chip sampling has yielded encouraging results from veins containing visible gold in the Titan prospect at the Karratha exploration project and we look forward to the results of follow-up exploration work.

Bushveld Minerals* (BMN LN) 0.7p, Mkt Cap £16m – Central bank approves Orion $10m matched funding

• The South African Reserve Bank approved the applicable exchange control authorisation relating an up to $10m in matched funding from Orion.
• Funds are to be released in due course assisting the Company with working capital needs during the Vametco turnaround strategy.

*SP Angel act as nomad and broker to Bushveld Minerals

Cornish Metals* (CUSN LN) 6.5p, Mkt Cap £34m – Interim results focus on progress at South Crofty

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• In its interim report for the six months to 30th June, Cornish Metals reports a loss of C$4.1m (2023 – C$0.9m loss) and a closing cash balance of C$6.0m (~£4.5m).
• As the company advances the South Crofty mine reopening project towards a formal construction decision, project financing in 2025 and a resumption of tin production in 2027, the company reports increased consumption of cash in both operations (C$2.3m vs C$1.3m in 2023) and investment (C$17.8m vs C$15.6m in H1 2023).
• Cornish Metals highlights the recently announced appointment of Don Turvey as CEO as well as the release, in April, of the Preliminary Economic Assessment (PEA) describing the plans for reopening South Crofty.
• Today’s announcement describes the continuing progress on refurbishing the New Cook’s Kitchen Shaft and on the de-watering programme confirming that treated water discharged into the Red River “continues to exceed the standards permitted by the Environment Agency”.
• Cornish Metals explains that “Rephasing shaft refurbishment, concurrent with mine dewatering, will improve the functionality of NCK shaft, enable larger equipment to access the mine at an earlier stage in its re-development and ensure that high health and safety standards are applied as the underground mine workings are accessed”.
• The announcement also confirms the previously announced disposals of the ‘non-core’ royalty assets at Cantung and Mactung in Canada for US$4.5m in cash and of the Nickel King exploration project, also in Canada, for “a total consideration of up to C$8.0 million”.
• Interim CEO, Ken Armstrong, said that the disposals provide “near-term liquidity and demonstrates our priority and focus on advancing South Crofty towards commencement of production in 2027”.
• He described how “Momentum and activity levels have remained high since the start of the year as the Cornish Metals team continues to progress work plans and accomplish key milestones, particularly the completion of the Preliminary Economic Assessment of the South Crofty tin project that confirms the Project’s potential to be a low-cost and long-life tin mining operation”.
• The announcement also summarises progress with the exploration south of the mine in the South Carn Brea area where 9,000m of exploration drilling was completed to assess the “geometry and the continuity of tin mineralization discovered by the Company at the Wide Formation target” which is described as “similar in character to that associated with No. 8 Lode, one of the most prolific tin producing lodes in the latter years of operation of the South Crofty mine”.
• Initial results of the drilling show that “the Wide Formation structure … [extends] … over a 1.6km strike length, a downdip extent of at least 525 meters and thicknesses ranging from 1.8 meters – 4.8 meters. The structure remains open” and includes an intersection of “1.21 meters grading 0.87% Sn in CB23_004”.
• The drilling also “identified a new mineralized structure lying directly beneath the Great Flat Lode (named the “Great Flat Lode Splay”), and several high-grade, steeply dipping tin zones between the Great Flat Lode and the Wide Formation. Notable tin intercepts from the newly identified Great Flat Lode Splay include 3.38 meters grading 1.01% Sn in CB23_002”.
• In our opinion, the exploration success in identifying previously undetected mineralisation in the South Carn Brea area may ultimately expand the mineral resource and extend the mine life and is a testament to the further exploration potential of an area which has already been mined for at least 400 years.

Conclusion: Cornish Metals is continuing to progress towards a formal construction decision, financing in 2025 and resumption of tin production at the South Crofty mine in 2027.

*SP Angel acts as Nomad and Broker. An SP Angel analyst formerly worked in the South Crofty tin mine in the 1980s and holds shares in Cornish Metals

Guardian Metal Resources (GMET LN) 30.5p, Mkt Cap £35m – £2.15m financing to accelerate exploration in Nevada

Power Metals Resources* (POW LN) 17.5p, Mkt cap £19m – (Power Metals* holds a 51% stake in Golden Metal Resources)

• Guardian Metal Resources (formerly Golden Metal Resources) reports that it has completed a £2.15m financing through the issue of ~8m additional shares, representing around 6.7% of the enlarged company, at a price of 27p/share.
• Subscribers will also receive a warrant to subscribe for additional shares at a price of 40p/share within the next two years on the basis of one warrant for every two shares issued.
• The funds “will be applied to the acceleration of exploration and project development activities at the Company’s Pilot Mountain and Garfield projects. In particular on drilling of new and validated porphyry targets across both projects, and the continuing resource expansion drilling at Pilot Mountain”.
• Describing the exploration completed this year as “very productive”, CEO, Oliver Friesen, said that the additional funds “will directly support multiple drillholes in the various porphyry targets at Pilot Mountain, of which further news is expected shortly, and further resource drilling as well as various ongoing development workstreams associated with Pilot Mountain. Drilling at the Garfield project is also planned, subject to urgent completion of preparatory work, including the acquisition of relevant permits and final interpretations of all geophysical data”.
• He said that the success of its Nevada exploration “has drawn interest from North American resource investors and, following my recent North American business trip, we have been able to finalise this important strategic financing”.

Conclusion: Additional funds should help to accelerate the Nevada exploration campaign and fund more drilling.  We look forward to the results.

*SP Angel acts as Nomad and Broker for Power Metals

Pilbara Minerals (PLS AU) A$2.7, Mkt Cap A$8bn –Acquisition of Latin Resources in all share deal

• Pilbara Minerals, major spodumene producer in Western Australia, announces it has agreed to acquire 100% of Latin Resources.
• Latin Resources shareholders will receive 0.07 Pilbara Minerals shares for each Latin Resources share.
• At Pilbara’s closing price of A$2.85/shr, the deal implies A$0.2/shr for Latin Resources, a 32% premium to the Company’s 30 day VWAP, valuing the equity at A$560m.
• Pilbara recently announced plans to ramp up Pilgangoora to 2mtpa spodumene concentrate production capacity.
• Pilbara intends to upgrade the Salinas PEA using its experience from Pilgangoora.
• Salinas, located in Minas Gerais, Brazil, holds a mineral resource of 77.7mt at 1.24% Li20.
• The PEA suggests stage 1 CAPEX of US$253m, total development CAPEX of US$308m 11 year LOM and potential to produce 499ktpa 5.2% SCeq over LOM.
• The PEA envisages cash costs inc. royalties at US$567/t SC5.2eq., with global recoveries of 78.3%.
• Pilbara’s optimisation plans include options to upgrade undersized spodumene material to boost recoveries.
• The Company notes that expected production data for Salinas will be ‘subject to market conditions.’
• Concerns had been raised over the stacked and thin nature of Salinas’ pegmatite dykes, risking dilution and poor recoveries. However, Pilbara management sees their experience with ore sorting from Pilgangoora as an opportunity to upgrade the asset

Tungsten West (TUN LN) – 2.5p, Mkt cap £4.7m – CEO appointment

• Tungsten West has appointed Jeffery Court as its new CEO following the departure of his predecessor in June.
• Subject to the approval of a UK work visa, Mr. Court is expected to assume the role “no later than 1 November 2024”.
• He is described as “an experienced international mining executive” with former roles at Rio Tinto, and “More recently, as the Chief Executive Officer – Mining & Chief Development Officer – Mining of Capital’s drilling and mining services business”.
• He will also join the company’s Board.
• Chairman, David Cather, welcomed the appointment and said that he was looking “forward to working with him on progressing the strategically important Hemerdon mine towards production … [and] … securing further financing for the Project and recommencing mining and processing operations at Hemerdon in 2026”.

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.

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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