SP Angel Morning View -Today’s Market View, Thursday 18th April 2024

Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

MiFID II exempt information – see disclaimer below

BHP (BHP LN) – Q3 results maintain FY2024 copper and iron ore production guidance

Celsius Resources (CLA LN) – Additional investment brings total raised this month to over £1m

Centamin (CEY LN) – Annual production and cost guidance reconfirmed as lower grade open-pit operations at Sukari tail off

Empire Metals* (EEE LN) – Drilling completed at Pitfield on time and budget, assay results due in coming weeks

Ferrexpo (FXPO LN) – Full year financial results as war continues to hinder operations

Galan Lithium (GLN AU) SUSPENDED – Suspension extended pending government permitting update

Great Western Mining* (GWMO LN) – Olympic Gold secured through option agreement

Kavango Resources* (KAV LN) – Annual report highlights move towards gold production from Nara gold tailings project in Zimbabwe

Sunstone Metals (STM AU) – Limon project in Ecuador shows early promise of precious metal mineralisation

Thor Explorations (THX LN) – Q1 production results for Segilola confirm 2024 production guidance

Copper extends gains to two-year highs as analysts ramp up bullish calls on concentrate deficit

• Copper prices have rallied again to $9,700/t as TCRCs persist below $0/t.
• Analysts are ramping up their expectations of deficits, with Cobre Panama coming offline and producers in LatAm struggling to ramp up output.
• China production output of refined copper climbed c.8% in march, hitting 37ktpd.
• Aurubis is accusing Chinese smelters of producing at unfeasible economics, calling for a ‘level playing field.
• Industry participants are discussing potential for tariffs to save Western smelters at the ongoing CRU World Copper Conference.

FARDC “Forces armées de la république démocratique du Congo” stop production at COMMUS SAS in the DRC after surrounding their mine

• An unconfirmed report suggests the FARDC is taking action due to:
  • Trucks containing high levels of uranium
  • Production of gold in a fraud with the local vice-governor.
• 15 trucks of cobalt and 27 of cathode copper were stopped in Botswana enroute to South Africa with trucks returned to COMMUS.
• Companies reported to be targetted for the production of ores containing uranium:
  • COMMUS – Zijin Mining (Chinese)
  • ⁠Sicomine – (Chinese majority jv with Gecamines hkolding 32%).
  • ⁠KFM (CMOC) – (Chinese)
• The US is accusing China and the DRC of being complicit in the exploitation of a main product in the manufacture of nuclear weapons.
• COMMUS SAS is described as a successful example of Zijin Mining’s innovative construction practices in Africa, with an annual production capacity of 120,000 tonnes of copper and 3,000 tonnes of cobalt.
• The DRC appears to be turning against China Inc. in this move. We suspect some CIA involvement.

Lithium – Albemarle carbonate auction shows lithium prices picking up though they remain well below long term expectations

• Albemarle auctioned 100t of battery-grade lithium carbonate yesterday at a price of 107k CNY ($14,780/t).
• The industry consensus currently sees long term carbonate prices over $20/kg.
• The Company is due to auction 5,000t of spodumene on April 2024, which will be closely watched by miners following a brief rebound in prices from January lows at $850/t.

Iron ore prices surge in surprise move as China ramps up steel exports

• Benchmark iron ore prices jumped to $116/t, up $17 since March lows.
• Rio Tinto reported yesterday that steel exports have risen 30% yoy from China over Jan/Feb, with the major expecting sustained elevated levels.
• Chinese analysts report mill margins are improving, with restocking expected to accelerate into May holidays.
• Long issued bonds from the PBoC are expected to boost infrastructure investment, although we highlight the property sector remains in the doldrums, showing little signs of life.

Economics

US – Equities climbed and Treasury yields pulled back after global markets steadied following a volatile part of the week, Bloomberg writes.

• Oil prices were little changed following a 3% drop yesterday on weaker Chinese economic data and a pickup in US crude stocks.
• The US$ is trading lower amid a recovery in the risk sentiment helping US$ denominated gold prices.

ECB – Luis de Guindos, ECB Vice President and a voting member on the Governing Council, said that the central bank made it “crystal clear” that interest rates could be cut in June but added that there is consensus on the decision beyond that.

• “I think that we have been crystal clear: if things continue as they have been evolving lately, in June we’ll be ready to reduce the restriction of our monetary policy stance,” de Guindos said today.
• ECBs most recent guidance is for inflation to hover around current levels (2.4% in March) before easing back to the 2% target next year.
• Markets currently see 75 basis points of cuts in the central bank’s 4% deposit rate this year, Reuters reports.

EU – EU and European car sales were down 5.2%yoy and 2.8%yoy in March, respectively.

• European sales amounted to 1.38m units last month.
• European EV sales were down 11% with demand in Germany, Sweden and Norway disappointing.
• Some of the decline is attributed to timing of Easter holidays this year.
• Interestingly, sales of PHEV increased 0.7% outpacing not just BEVs but also ICEs.
• Sales of petrol cars dropped 7% while diesel cars registration were down 18%.
• PHEV are typically equipped with ~3x smaller battery compared to pure EVs.

Zambia – National utility served notices of force majeure to some mines adding to supply pressures in a copper market, Bloomberg writes.

• The Chamber of Mines in Zambia said yesterday that ZESCO, a national power supplier, notified a number of the organization’s members that it can not meet its supply commitments.
• The organisation did not say what projects are to be affected.
• The nation relied on hydropower for 85% of its generating capacities with production hit lately on the back of ongoing drought.

Myanmar – Myanmar homecoming campaign targeting the repatriation of 140,000 Chinese people from Myanmar

• Many of these people are said to have crossed the border into Myanmar illegally often to engage in scams including telephone and online fraud which are said to account for 50-60% of total fraud cases in China.
• China says it is offering leniency, for returning Chinese nationals. We do wonder what their definition of lenience really means – maybe 10 years in correctional camp?
• We also wonder if the offer is a prelude to further military action by the PLA in the region.
• The situation is concerning with regard to Tin and tungsten concentrates which are often smuggled across the border.

Currencies

US$1.0681/eur vs 1.0632/eur previous. Yen 154.27/$ vs 154.58/$. SAr 18.993/$ vs 19.099/$. $1.247/gbp vs $1.245/gbp. 0.645/aud vs 0.642/aud. CNY 7.239/$ vs 7.239/$.

Dollar Index 106.24 vs 106.29 previous.

Precious metals:         

Gold US$2,376/oz vs US$2,380/oz previous

Gold ETFs 81.5moz vs 81.4moz previous

Platinum US$940/oz vs US$950/oz previous

Palladium US$1,034/oz vs US$1,010/oz previous

Silver US$28.41/oz vs US$28/oz previous

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

Base metals:   

Copper US$ 9,687/t vs US$9,513/t previous

Aluminium US$ 2,608/t vs US$2,568/t previous

Nickel US$ 18,450/t vs US$17,880/t previous

Zinc US$ 2,846/t vs US$2,782/t previous

Lead US$ 2,184/t vs US$2,153/t previous

Tin US$ 33,825/t vs US$31,930/t previous

Energy:           

Oil US$87.4/bbl vs US$89.6/bbl previous

Natural Gas €30.7/MWh vs €33.0/MWh previous

Uranium Futures $89.3/lb vs $89.4/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$116.4/t vs US$109.9/t

Chinese steel rebar 25mm US$515.1/t vs US$513.8/t

Thermal coal (1st year forward cif ARA) US$120.3/t vs US$122.0/t

Thermal coal swap Australia FOB US$139.5/t vs US$136.3/t

Hard Coking Coal Australia FOB US$326.0/t vs US$327.0/t

Other:  

Cobalt LME 3m US$27,830/t vs US$27,830/t

NdPr Rare Earth Oxide (China) US$53,044/t vs US$53,189/t

Lithium carbonate 99% (China) US$15,126/t vs US$15,128/t

China Spodumene Li2O 6%min CIF US$1,240/t vs US$1,240/t

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

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

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

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

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

China Ilmenite Concentrate TiO2 US$329/t vs US$329/t

China Rutile Concentrate 95% TiO2 US$1,416/t vs US$1,416/t

Spot CO2 Emissions EUA Price US$68.9/t vs  US$73.1/t

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

Battery News

China’s Li-ion battery output up 15% in Jan-Feb, continues to dominate global market

• China’s lithium-ion battery output grew by 15% yoy in the first two months of 2024, exceeding 117GWh.
• Around 50GWh of the total battery output was for China’s booming EV industry.
• Another 17GWh of battery capacity was produced for power storage applications.
• The output of positive electrode materials reached 277,000t, up 4.5% yoy.
• Negative electrode material production was 230,000t, a 5.6% increase compared to the same period last year.
• China continues to cement its position as the major producer and consumer of lithium-ion batteries for EVs and energy storage.
• In 2023, China’s manufacturing capacity for EV batteries was estimated at 2,600GWh, more than double the global demand of around 950GWh.

The US, Canada, Europe, and India are ramping up their own battery production to compete with China’s dominance, potentially widening the gap between battery supply and demand.

• Analysts predict a massive surplus in battery production capacity, with global factories able to produce 7,900GWh annually by the end of 2025, while demand is projected to reach only 1,600GWh.
• This oversupply has led to dropping battery prices across the board for cars, trucks, and energy storage systems.

Tesla regains position as top EV maker from BYD in Q1

• Tesla sold the highest number of all-electric cars globally at 386,810 units in Q1 2024, despite a 9% yoy decline.
• BYD came in second with 300,114 electric car sales, a 13% yoy increase.
• Volkswagen Group ranked third with 136,136 sales, a 3% yoy decrease.
• For the full year 2023, Tesla sold 1.8m electric cars, BYD sold 1.57, and Volkswagen Group sold 769,029.
• BYD had overtaken Tesla for the first time in Q4 2023
• Overall electric car sales growth was weak or absent in Q1 2024 for the major players, with Tesla and Volkswagen seeing declines.

Home battery start-up takes on Tesla with new spin on lead-acid – made in Australia

• New Zealand-based company, ArcActive plans to manufacture lead-acid home battery energy storage systems in Australia by October 2026.
• The company aims to sell a 20kWh battery packs for $4,900 for parts or $7,000 installed – around half the price of a Tesla Powerwall.
• According to ArcActive, it has reinvented lead-acid battery technology to make it more energy-dense, smaller, and address hydrogen off-gassing issues.
• ArcActive has a $65m capital raising underway to commercialise its technology and build a 600MWh factory in Queensland or Victoria.
• The company expects the $30m factory to take 12 months to set up, followed by 6 months of testing.
• The planned factory aims to produce 30,000 battery units annually, leveraging the lower cost of lead compared to lithium-ion batteries.
• ArcActive’s CEO believes their lead-acid batteries’ low material costs give them a competitive advantage over lithium-ion alternatives.

Tesla likely to invest $2-$3bn in India, with announcement expected this week

• It is expected that Elon Musk will announce significant investment in India when he meets Prime Minister Modi next week.
• Tesla will invest $2-$3bn to build a Gigafactory in the country as it prepares to enter one of the fastest growing EV markets.
• EVs made up just 2% of total car sales in 2023, but the government is targeting 30% of new cars to be EVs starting 2030.
• Musk has been vocally opposed India’s high import taxes for EVs and lobbied for a change.
• India’s government in March unveiled a new EV policy lowering import taxes to 15% from as high as 100% on some models if a carmaker invests at least $500m and sets up a factory.

 Company News

BHP (BHP LN) 2,350p, £120bn – Q3 results maintain FY2024 copper and iron ore production guidance

• BHP reports that, after a positive three months operating performance to 31st March, led by a 10% FYTD increase in copper production, it remains on track to meet its FY 2024 production and cost guidance across its copper and iron ore assets.
• Today’s announcement reports Q3 copper production of 465,900t bringing FYTD output to 1.36mt and maintaining the 1.72-1.91mt full year guidance range.
• Output from the Escondida mine in Chile increased by 13% during the quarter “due to a higher concentrator feed grade of 0.85%, increasing from 0.79%, as mining progressed into areas of high grade ore as planned following the implementation of measures to manage geotechnical events”.
• Production from the South Australian copper operations increased by 53% Y-o-Y to 79,000t reflecting “the addition of volumes this year from Prominent Hill and Carrapateena, and strong underlying operational performance at Olympic Dam including the highest quarter of material mined in over 10 years in Q3 FY24”.
• BHP also says that it is “continuing exploration drilling across the Copper South Australia province to enhance our resource knowledge in support of our growth studies. At Oak Dam, we are progressing the external approval process for an underground access decline to enable faster and lower cost resource definition drilling of the mineral deposit, and we expect to be able to provide an Inferred Mineral Resource for Oak Dam later this calendar year”.
• Western Australian iron-ore operations “delivered another consistent period of production despite heavy rainfall” producing 60.3mt in the quarter bringing FYTD output to 186.8mt and keeping them on track to meet the 282-294mt guidance range.
• The company confirms that the “South Flank remains on track to ramp up to full production capacity of 80 Mtpa (100% basis) by the end of FY24”.
• Guidance for the BMA metallurgical coal operations have been reduced to 43-45mt from the previous range of 46-50mt following quarterly output of 12.1mt bringing FYTD production to 34.7mt, a 16% reduction on the previous year.
• BHP says that Phase 1 of its US$5.7bn Jansen potash project in Canada is now 44% complete with initial production expected by the end of calendar year 2026.

Conclusion: BHP is maintaining its copper and iron ore production guidance after the first 3 quarters of its financial year aided by strong performance at Escondida and the contribution of South Australian copper acquisitions.

Celsius Resources (CLA LN) 0.63p, Mkt Cap £14m – Additional investment brings total raised this month to over £1m

Click Link for SP Angel research report PDF note – MCB project NPV@8% US$463m, IRR of 34.3%

• Celsius Resources reports that following its £922,000 placement earlier this month, it has now received an additional £117,000 following a major shareholder, Silvercorp Metals, exercising its right to participate in future fundraisings which had been agreed in May 2023.
• Proceeds of Silvercorp’s investment bring the funds raised this month to over £1m and the company says that the additional funds will be used for:
  • “Early development works at the MCB Copper-Gold Project” in the Philippines.
  • Permitting expenses for its Sagay project, also in the Philippines; as well as
  • Exploration of a third Filippino project at Botilao.
• In 2023, Silvercorp progressed plans to acquire a 30% interest in Celsius Resources’ MCB project for £30m in cash and shares, however, the plan dis not proceed and Silvercorp withdrew in August 2023 saying that “The two companies have not agreed on the terms of a definitive agreement in line with those contained in the Term Sheet and currently no negotiation is ongoing” and Celsius Resources stating that “the proposed transaction “did not have reasonable prospects of being approved by the requisite majorities of shareholders at the initial proposed price” of A$0.03/share.

Centamin (CEY LN) 125p, Mkt Cap £1.5bn – Annual production and cost guidance reconfirmed as lower grade open-pit operations at Sukari tail off

• Centamin reports production of 104,821oz of gold during the 3 months to 31st March (Q1 2023 – 105,875oz) at a cash cost of US$1,088/oz and at US$1,519/oz on an all-in-sustaining (AISC) basis (Q1 2023 – US$937/oz cash costs and US$1,348 AISC).
• Q1 production resulted from the processing of 3.07mt of ore at an average grade of 1.12g/t gold (Q1 2023 – 3.07mt at 1.20g/t).
• The Sukari open pit mine produced 6.2mt of ore at an average grade of 0.63g/t gold (Q1 2023 – ~3.3mt at 0.87g/t) with underground operations contributing 230kt of ore at an average grade of 3.20g/t (Q1 2023 – 236kt grading 4.02g/t).
• The company says that “scheduled processing of lower-grade ore from the open pit, alongside the planned underground ventilation upgrades and mill maintenance during Q1 contributed to slightly lower production year-on-year” and confirms that it is maintaining its 2024 guidance range of 470-500,000oz of gold production from its Sukari mine in Egypt.
• The company has previously indicated that 2024 production would be weighted to the second half of the year.
• Cost guidance is also maintained in the range US$700-850/oz for cash costs and between US$1,200-1,350/oz AISC with CEO, Martin Horgan, explaining that “Our commitment to cost control meant our AISC on an absolute basis decreased 3% quarter-on-quarter (“QoQ”) and 6% YoY”.
• Outlining the factors underlying the skewed production profile for this year, Mr. Horgan explained that “With improved ventilation and the processing of lower grade open pit ore substantially completed during Q1, we expect production rates to now increase for the balance of the year”.
• He commented on the company’s Doropo project in Cote d’Ivoire he said that work is “progressing well towards completion of the DFS … by mid-year”.
• He also confirmed that the company is “actively following up on the recent exploration successes from our Eastern Desert Exploration (“EDX”) drilling programme” in Egypt.

Empire Metals* (EEE LN) 7.7p, Mkt Cap £46m – Drilling completed at Pitfield on time and budget, assay results due in coming weeks

(Empire holds 70% of Pitfield, Century Minerals, which is run by two geologists holds the other 30%. One of these geologists works for Empire.)

• Empire provide an update on their Pitfield drilling programme, which has now been completed.
• The Company completed 40 RC holes, targeting two zones of high-grade Tio2 mineralisation for potential pit delineation.
• Diamond core drilling was also conducted, to support petrographical understanding and future metallurgical testwork.
• A total of 15,010m drilling has now been completed over 101 RC holes, with 2,025m drilled over 7 diamond holes.
• Management notes that drilling was completed on time and on budget.
• They reiterate plans to deliver a demonstration plant next year, which is intended to highlight the economic nature of the titanite-hosted TIO2 mineralisation, in turn derisking the asset significantly.
• Assay results from the programme are expected in the coming weeks.

*SP Angel acts as nomad and broker to Empire Metals

Ferrexpo (FXPO LN) 46p, Mkt Cap £277m – Full year financial results as war continues to hinder operations

• Ferrexpo reports a loss of $85m for the year to 31^st December 2023 following a $131m provision for their two legal cases.
• The Company produced total pellet production of 3.85mt, down 36% from 2022 at 6mt.
• They sold 4.2mt of pellets, down 32%.
• C1 costs reported at $76.5/t (down 8% on lower energy costs), with a 65% Fe price over the year of $132 and a DR pellet premium of $57/t, down from $87/t in 2022.
• EBITDA reported of $130m, down 83% from 2023.
• Ferrexpo invested $101m in CAPEX, intended to improve pellet quality and lower natural gas consumption through the installation of a press filtration complex. Includes sustaining CAPEX.
• The Company has resumed operations of three of four pelletiser lines on improved logistics access to export markets.

Galan Lithium (GLN AU) SUSPENDED – Suspension extended pending government permitting update

• The Company went into a trading halt on Monday and is now suspended pending the release of government permitting update.

Great Western Mining* (GWMO LN) 0.046p, Mkt Cap £3m – Olympic Gold secured through option agreement

• Today Great Western provides an update on its Olympic Gold Project.
• The Company, pursuant to its 2020 agreement with Nevada Select, has exercised its option to complete its acquisition of the Olympic Gold Project.
• GWM will pay Nevada Select a final payment of $150k, entitling Nevada Select a NSR of 3% over seven claims, alongside 12 additional claims staked in 2021 by GWM.
• The 12 claims staked in 2021 are subject to a 1.75% NSR and the 41 remaining claims are subject to a 1.25% NSR to Sedi-Met.
• Great Western has conducted early-stage exploration, including 4,243m drilling over 28 holes, with highlights of 8.9g/t over 1.52m.
• The Company also believes its West Ridge prospect holds potential for an epithermal zone at depth.
• The Rhyolite Ridge prospect has returned encouraging soil sample results, with a geophysics programme planned to delineate drill targets.

Conclusion: Today’s agreement places the Olympic Project firmly into Great Western’s asset base. Not only does the project hold encouraging exploration potential, it also hosts a prominent proportion of the Company’s planned milling feedstock as it works to process precious metal enriched spoil heaps form historic mining. The mill is ready to begin processing such material and is currently awaiting final environmental permitting. The Nevada state department has advised Great Western that its mill is a high priority project for permitting.

*SP Angel act as Broker to Great Western Mining, an SP Angel Analyst has visited Great Western’s Nevada claim blocks.

Kavango Resources* (KAV LN) 1.02p, Mkt Cap £13m – Annual report highlights move towards gold production from Nara gold tailings project in Zimbabwe

• Kavango reported admin expenses of $2.06m for the year to end December vs $2.22m in 2022.
• Pre-license exploration costs came in at a further $1.15m bringing the pre-tax loss to $3.3m vs $2.2m in 2022.
• A meaningful gain on currency translation added back $0.68m bringing the total loss to $2.62m vs $2.75m in 2022.
• Management have moved to acquire options over three projects in Zimbabwe causing the Intangible assets to rise to $14.6m vs $9.7m a year earlier.
• The team also completed of £6m investment by Purebond Ltd..
• Zimbabwe: Nara Gold tailings:  new MRE for the two Nara tailings dumps now stands at a combined:

• • Measured: 77.7kt at 0.54g/t Au for 1,350koz Au.
  • Indicated: 221kt at 0.65g/t Au for 4,640koz Au.
  • Inferred: 12.2kt at 0.66g/t Au for 258oz Au.
• Kavango is currently assessing the optimal processing route at a local facility. They also see grade enrichment noted at depth within the tailings.
• Management are working towards optimising cash flow potential from the tailings dumps.
• Botswana:  1,886m of drilling in Botswana on the Kalahari Copper Belt and Kalahari Suture Zone did not intersect mineralisation but did provide useful geological information to direct potential future programs
• The program confirmed two out of three technical objectives and made significant progress on the third.
  • “Anticlines and synclines were correctly identified by CSAMT on PL082. Zones of structural disturbance, brecciation and alteration were also clearly interpreted via CSAMT and then confirmed in drill core.
  • Kavango’s geologists observed evidence of fluid flow, with consequent alteration.
  • A final test was to intersect the interpreted Ngwako Pan / D’Kar contact. A massive sandstone unit was intersected.
  • Although the contact was not intercepted, the massive sandstone unit matched the resistive signature on the CSAMT inversion.
  • Drilling on PL082 evidenced that we are higher in the D’Kar sequence than we had originally interpreted. This meant we could make a clear decision to pause work on this licence for now and move to other targets that now appear more prospective.
  • A geological review concluded that our four prospecting licences near the Namibian border offered evidence of shallower stratigraphy. Adjacent property holder ENRG Elements’ (ASX:EEL) licences are understood to host signs of mineralisation and of domal structures. Kavango was able to negotiate terms and acquire a 90% interest in these during 2023.
  • In March 2023 we published the outcome of a report from Dr Hamid Mumin, which identified a possible high potential Banded Iron Formation hosted Lode Gold model at the Ditau Project, and were based on logging of newly acquired third party drill core Kavango considers Target i10 could represent a large-scale, continuous system.
  • This and other models including IOCG continue to offer potential at Ditau, and which the Company will continue to investigate with a particular focus on seeking a JV partner.”
• Significant new expertise has joined the company:
  • Peter Wynter Bee, Chairman of Moxico and ex Reunion Mining and ZincOx Resources joining the board
  • Dave Catterall also brings in geological knowledge of the Kalahari Copper Belt where he has discovered multiple orebodies.
  • Steve Smith is also working towards rapid progress in on the evaluation of gold projects in Matabeleland, Zimbabwe.
  • Leon de Waal brings extensive mineral exploration experience and is  leading the field camps in both Botswana and Zimbabwe.

Conclusion:  Kavango is working towards the production of gold in Zimbabwe while continuing its evaluation of its prospects in Botswana. Gold production should help to secure and expand the company and provide funding for ongoing exploration and future developments in the Kalahari and Matabeleland.

*The SP Angel Analyst holds shares in Kavango

Sunstone Metals (STM AU) A$0.013, Mkt cap A$46m – Limon project in Ecuador shows early promise of precious metal mineralisation

• In an announcement to the ASX, Sunstone Metals reports what it describes as ‘a large mineralised system’ at its Limon project in southern Ecuador.
• The company says that trenching has shown epithermal gold/silver mineralisation in veins over an area of 1.7km x 700m.
• Among the trench results reported are:
  • 14.95m at an average grade of 2.8g/t gold and 2.1g/t silver in trench LM-05c; and
  • 1.5m at an average grade of 2.5g/t gold and 6.3g/t silver in trench LM-05d; and
  • 2.0m at an average grade of 1.1g/t gold and 5.6g/t silver in trench LM-10, described as “within a broad 113.5m wide mineralised interval”; and
  • 2.0m at an average grade of 1.4g/t gold and 7.5g/t silver in trench LM-16
• “Managing Director Patrick Duffy said the next drilling program had the potential to unlock substantial value for shareholders and demonstrate the significance of the Limon discovery”
• “The Limon target area is located 2.7km north-east of the Brama-Alba-Melonal gold-copper porphyry deposits … [within the company’s}… Bramaderos Project … [which] … currently hosts a porphyry gold-copper-silver Mineral Resource estimate of 2.7Moz AuEq at Brama-Alba”.

Conclusion: Relatively early stage trenching results from Sunstone Metals’ Limon project in southern Ecuador shows extensive mineralised epithermal gold/silver veining which is likely to be followed up by drilling.  Limon is located close to the company’s Bramaderos project which should assist exploration logistics.

Thor Explorations (THX LN) 15p, Mkt cap £95m – Q1 production results for Segilola confirm 2024 production guidance

• Thor Explorations reports Q1 gold production of 19,589oz at its Segilola mine in Nigeria from the of 235,900t of ore at a grade of 2.85g/t gold.
• As well as feeding the plant, mine production of ~466kt of ore at a grade of 2.07g/t gold adds to stockpiles reported to contain a total of ~29kt of gold
• The company “Successfully upgraded and commissioned three additional CIL tanks in the process plant with drawdown of excess gold in circuit successfully commenced in March 2024”.
• Drilling of additional near mine targets started in April 2024.
• Production guidance is maintained in the range 95-100,000oz with cost guidance confirmed between US$1,100-1,200/oz on an all-in-sustaining cost basis.
• “In Senegal, the Company’s Douta Project encompasses a mineral resource of 1.78 million ounces (“Moz”) of Au. Work streams in support of a Preliminary Feasibility Study (“PFS”) commenced during the Quarter together with further exploration in the northern parts of the licence”.
• The company expects to deliver an updated mineral resource estimate for the Douta project and a pre-feasibility study during H2 “following completion of … metallurgical testwork programme in China”.  Previous announcements indicated completion of the PFS in Q1 suggesting minor slippage of the timetable.

Conclusion: Segilola remains on track with Douta PFS expected during H2 2024.

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

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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%