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

Gold hits $2,484/oz on Fed rate cut potential, dollar sell off and US Treasury yields holding lower levels

MiFID II exempt information – see disclaimer below

ACG Acquisition Company Ltd (ACG) – ACG to acquire Gediktepe Mine in Turkey

Anglo American (AAL LN) – Strong Q2 production performance keeps most 2024 guidance targets intact

Anglo Asian Mining* (AAZ LN) – Temporary suspension agitation leaching and flotation circuits weighs on 1H24 production

Bluebird Merchant Ventures (BMV LN) – JV gives Bluebird 40% free carry on Kochang gold silver mine in South Korea

Centamin (CEY LN) – Doropo DFS describes 200,000oz pa project in Cote d’Ivoire

Ferro-Alloy Resources (FARF LN) – Quarterly results as plant upgrades look to take advantage of stockpiled material

Great Western Mining* (GWMO LN) – Permit received for processing mill

Haydale Graphene (HAYD LN) – Haydale report potential breakthrough in carbon capture

Premier African Minerals (PREM LN) – Update on the Zulu lithium project.

Gold prices ($2,467/oz) rebound as Treasury yields hold lower and dollar sells off

• Gold rebounded from yesterday’s lows, having $2,484/oz yesterday at 15:00pm
• The move followed a bounce in Treasury yields, which fell below 4.15% for the first time since March.
• The dollar has weakened against a basket of currencies, with the index down 2% from June highs.
• The Nasdaq and SPX sold off yesterday, with the outperforming tech index down 3% yesterday.
• Gold prices may be being supported by CTA funds, which use an algorithmic approach to profit from momentum.
• We also reckon Chinese investors are buying gold as they don’t trust their banking system
• There may be some central bank sales before their currencies appreciate against a weakening US dollar
• Gold producers will also be forward selling into these prices

Investors may wish to look at:

Gold producers:

• Anglo Asian Mining* (AAZ LN)
• Goldstone* (GRL LN)

Gold projects in financing phase:

• Kefi Minerals* (KEFI N)
• Galantas Gold (GAL LN)*
• SolGold (SOLG LN)* –

Gold explorers:

• Orosur Mining* (OMI LN)
• Oriole Resources* (ORR LN)
• Power Metals Resources* (POW LN)
• Wishbone Gold* (WSBN)

Gold project company in project sale process

• Condor Gold* (CNR LN)

Copper ($9,590/t) continues to weaken alongside base metals as demand

• Copper fell again as focus turns to weak demand despite limited supply.
• Zinc fell 1.5% and lead and tin also slid.
• Chinese smelters are cutting production for 2025 on weak margins.
• Concentrate supply remains limited.
• BHP boosted copper production to 15 year ighs and Rio saw output grow 18% yoy.

Economics

US – Waller indicates Fed is getting close to a cut in interest rates,

• Christopher Waller, Fed board governor indicates the Fed is getting closer to the time when a cut in the policy rate is warranted.
• Waller noted moderating inflation and labour market moves indicate progress toward price stability
• Industrial Production (%mom, Jun/May/Est): 0.6/0.9/0.3
• Manufacturing Production (%mom, Jun/May/Est): 0.4/1.0(revised from 0.9)/0.1

Japan – Exports grew for a seventh consecutive month in June, although, the pace was also the slowest in the last seven months.

• Shipments into major markets all slowed down or dropped in June with exports and imports below market estimates.
• Exports rise 5.4% in June

• Export volumes fell 6.2% yoy implying a rise in export values
• Exports into the US rose 11% yoy

• Exports into China rose 7.2% yoy – Exports to China hit the weakest pace in five quarters in the three months to June.
• Exports into Asia rose 7.7% yoy
• Exports into the EU fell 13.4% yoy – indicating the impact of the war in Ukraine

ECB – The central bank is expected to hold rates unchanged this afternoon while continuing to track developments on the inflation front.

• No guidance is expected on the path of future rates with a series of key economy data only due in the coming weeks, Bloomberg reports.
• Main Refinancing Rate (Est/Previous): 4.25/4.25
• Marginal Lending Facility (Est/Previous) 4.50/4.50
• Deposit Facility Rate (Est/Previous): 3.75/3.75

UK – Unemployment rises 16,000 (0.1% mom) in June

• Unemployment held at 4.4% in May
• Monthly pay rose by 3.6% yoy in June but lower than the 6% yoy rise in May due to healthcare sector pay rises
• The number of people Claiming unemployment-type  benefits rose 32,300

Currencies

US$1.0929/eur vs 1.0912/eur previous. Yen 156.13/$ vs 157.13/$. SAr 18.164/$ vs 18.108/$. $1.300/gbp vs $1.300/gbp. 0.674/aud vs 0.674/aud. CNY 7.256/$ vs 7.266/$.

Dollar Index 103.77 vs 104.11 previous.

Precious metals:         

Gold US$2,467/oz vs US$2,469/oz previous

Gold ETFs 82.0moz vs 81.8moz previous

Platinum US$1,010/oz vs US$1,010/oz previous

Palladium US$964/oz vs US$975/oz previous

Silver US$30.49/oz vs US$31/oz previous

Rhodium US$4,625/oz vs US$4,600/oz previous

Base metals:   

Copper US$ 9,628/t vs US$9,678/t previous

Aluminium US$ 2,418/t vs US$2,407/t previous

Nickel US$ 16,475/t vs US$16,600/t previous

Zinc US$ 2,829/t vs US$2,867/t previous

Lead US$ 2,198/t vs US$2,195/t previous

Tin US$ 32,815/t vs US$33,030/t previous           

Energy:           

Oil US$85.7/bbl vs US$83.9/bbl previous

WTI Oil US$81.6/bbl vs $80.8/bbl yesterday

• Crude oil prices moved higher after the EIA reported a 4.9mb w/w draw to crude offset by over 3mb builds to both motor gasoline and distillate stocks in the US, with domestic refinery utilisation falling 1.7% w/w to 93.7%.
• European energy prices were flat as EU natural gas storage levels gained 0.4% w/w to 80.2% full (vs 72.1% 5-Yr average) with all countries in excess of 72% full and aggregate storage now at 910TWh.
• Nigerian-owned Chappal Energies will pay $860m to acquire TotalEnergies’s 10% stake in 15 onshore Nigeria oil mining leases that produced ~14kb/d net in 2023 and the Forcados and Bonny export terminals, which are part of the Shell Petroleum Development Company JV.
• Octopus Renewables Infrastructure Trust announced the sale of the 48MW Ljungbyholm onshore wind farm in Sweden to a German institutional investor for total consideration of c.€74m that realised an IRR of ~11%.

Henry Hub Gas US$2.04/mmBtu vs $2.18/mmBtu yesterday

Natural Gas €31.6/MWh vs €32.8/MWh previous

Uranium Futures $84.8/lb vs $85.4/lb previous           

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$106.0/t vs US$107.2/t

Chinese steel rebar 25mm US$513.3/t vs US$512.7/t

Thermal coal (1st year forward cif ARA) US$113.5/t vs US$114.3/t

Thermal coal swap Australia FOB US$138.0/t vs US$138.0/t

Coking coal Dalian Exchange futures price US$215/t vs US$216.4/t           

Other:  

Cobalt LME 3m US$26,625/t vs US$26,625/t

NdPr Rare Earth Oxide (China) US$49,480/t vs US$49,352/t

Lithium carbonate 99% (China) US$11,371/t vs US$11,495/t

China Spodumene Li2O 6%min CIF US$990/t vs US$990/t

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

China Tungsten APT 88.5% FOB US$330/mtu vs US$330/mtu

China Graphite Flake -194 FOB US$470/t vs US$470/t

Europe Vanadium Pentoxide 98% 5.1/lb vs US$5.1/lb

Europe Ferro-Vanadium 80% 26.75/kg vs US$26.75/kg

China Ilmenite Concentrate TiO2 US$315/t vs US$315/t

China Rutile Concentrate 95% TiO2 US$1,399/t vs US$1,397/t

Spot CO2 Emissions EUA Price US$66.6/t vs US$66.6/t

Brazil Potash CFR Granular Spot US$300.0/t vs US$300.0/t

Battery News

Global battery demand to quadruple by 2030

• Global battery demand is projected to quadruple to 4,100GWh by 2030, driven by rising EV sales, according to prediction from Bain & Company.
• Lithium-ion batteries will remain dominant, while emerging technologies like solid-state and high-density sodium-ion are expected to hold single-digit market shares until 2030.
• LFP and NMC account for over 90% of lithium-ion battery sales for EVs. LFP is set to dominate in China due to high demand and established supply chains.
• In the US and EU, LFP will gain share but remain less dominant than in China due to immature supply chains and higher import costs.
• Solid-state batteries promise higher energy density, improved safety, and faster charging, with commercialisation anticipated in three to four years following recent proofs of concept.
• Sodium-ion cells offer lower costs and improved safety, with advancements in energy density comparable to LFP – production scaling is planned by 2025, with commercial availability expected in the first half of 2025.

Connected EV charging points surge to 7.4m units in 2023

• The number of connected EV charging points in Europe and North America reached an estimated 7.4m units in 2023.
• Europe leads with approximately 5.5m connected charging points, reflecting a connectivity penetration rate of 70%.
• North America accounts for about 1.9m connected charging points, with a connectivity penetration rate of 56%.
• The connected EV charging points market is projected to grow at a CAGR of 37%, reaching 35.7m connected points by 2028, according to Berg Insight.
• The market includes diverse players such as software companies, hardware providers, and charge point operators (CPOs), some of whom offer in-house developed back-office platforms as white-label solutions.
• Notable players in NA include, Blink Charging, Flo, EV Connect, Shell Recharge Solutions, and Tesla, with ChargePoint and Enel X Way dominating the connected private charger market.
• Notable players in Europe include software vendors Last Mile Solutions, Virta, GreenFlux, Driivz, and AMPECO, and hardware companies like Easee, Zaptec, and Pod Point.

Volvo blames EU tariffs as it cuts 2024 sales forecast

• The automaker has cut its full-year sales forecast, blaming the introduction of the new EU tariffs on Chinese-made EVs.
• The company has revised its sales growth to 12-15%, down from 15% on the back of uncertainty.
• Volvo who has large manufacturing bases in China, will be affected until it can move its production of its EX30 EV model to Belgium, according to CEO Jim Rowan.

SK Group to merge energy units to support struggling battery business

• SK Group will combine two of its energy-related units as it undergoes a major restructuring in a bid to shore up finances in its loss-making battery business.
• SK Innovation, the parent of battery unit SK On, will acquire SK E&S in an all-stock deal, according to an exchange filing on Wednesday.
• The combined company will have total assets of about 100 trillion won ($73bn), SK Innovation said.
• The overhaul comes after shares in SK Innovation plunged more than 25% in the past year – unlisted SK On, which is still majority-held by SK Innovation, has posted operating losses every quarter since 2021.

India sees drop off in EV uptake in June

• The EV car market in India saw a 13.5% decline yoy in June 2024, facing challenges such as high costs, dropping used EV prices, uncertain government policies, and insufficient fast-charging stations.
• Tata Motors led the mass-market segment with 4,346 units sold, holding a 63% market share despite a 20.77% yoy and 14.50% mom decline.
• MG Motor recorded 1,405 units sold, showing a 21.12% yoy growth but a 2.50% mom decrease.
• Mahindra saw a 7.99% yoy growth with 446 units sold, despite a 20.92% mom drop, however, the upcoming XUV700 EV expected to boost sales.
• BYD India experienced a 23.78% YoY and 40.99% MoM increase, selling 229 units.
• Hyundai faced a significant 61.88% yoy and 36.46% mom decline, selling only 61 units.
• Kia’s sales dropped by 61.54% yoy and 28.57% mom, with only 15 units sold.

Sunwoda to invest 2bn yuan for lithium battery factory in Vietnam

• The Chinese battery maker is looking to build its first battery plant in Vietnam, and third overseas as it seeks to expand global presence.
• CLS noted that the company’s investment plans in Hungary and Morocco are to build power battery factories, while Vietnam is planned to build consumer batteries.
• Sunwoda has said that as an emerging market economy, Vietnam has undertaken more consumer electronics capacity transfer in recent years, and the relevant industrial chain supporting facilities are also constantly improving.

Company News

ACG Acquisition Company Ltd – ACG to acquire Gediktepe Mine in Turkey

• ACG, a London listed special purpose acquisition Company led by Artem Volynets, announced a deal to acquire Gediktepe Mine in Turkey
• The Gediktepe Polymetallic Mine produced 34koz gold and 361koz silver from existing oxide operation.
• The plan is to develop a sulphide circuit for production of copper and zinc.
• Permitted development plans are for target annual CuEq production rate of 20-25ktpa over initial 11y LOM.
• The US$290m transaction includes:
  • $100m cash payment
  • 30% AGC equity (valued at ~$37m) issued to Lidya, a subsidiary of Turkey based conglomerate Calik Holding (seller)
  • $145 funding for the sulphide expansion project
  • $8m in transaction costs and working capital
• Funding includes:
  • 30% AGC equity
  • $67.5m in equity investments
  • $40m in gold prepayments
  • $110m in senior debt
  • $22.5m in mezzanine debt
  • $13m in cash flows from the existing oxide operation.
• Deal funding was agreed in principle and is subject to final documentation.
• Among investors a leading global mining private equity fund for $135m in senior debt and equity, Traxys Europe SA for $25m in mezzanine debt and equity and a group of investors led by ACG’s co-sponsors and a leading European family office for $60m in equity.
• The transaction is expected to be completed by a long stop date of 31 August 2024.
• The deal is planned to be the first of many as ASG team is aiming to establish a portfolio of copper producing assets and is actively engaged in discussions with other several targets.

Anglo American (AAL LN) 2,306.5p, Mkt Cap £30.4bn – Strong Q2 production performance keeps most 2024 guidance targets intact

• Reporting its Q2 production results for the three months to 30^th June 2024, Anglo American highlights record Q2 performance at its Minas Rio iron ore operations in Brazil as well as a strong quarter for the copper operations in Peru and Chile.
• Copper output of 195,700t “is tracking well to our full year plan and is 2% higher than the first half of 2023, with the 6% decrease in the second quarter driven by lower throughput at Los Bronces and El Soldado, and planned lower grades at Quellaveco, partially offset by higher throughput at Collahuasi driven by the fifth ball mill”.
• The Chilean mines produced 120,400t of copper “reflecting lower throughput at Los Bronces and El Soldado, partially offset by higher throughput at Collahuasi”.
• Anglo American’s Peruvian mine at Quellaveco produced 75,300t of copper (Q1 2024 – 72,000t and Q2 2023 – 78,300t) “due to planned lower grades (0.74% vs. 0.96%), partially offset by record throughput during the quarter. Operational performance is tracking well against the revised mine plan”.
• 2024 copper production guidance remains intact at 730-790,000t with cost guidance maintained at ~US1.57/lb although Anglo American clarifies that “Production in Chile is weighted to the first half of the year owing to the planned closure of the Los Bronces plant, which is now scheduled for the end of July; production is also subject to water availability. Production in Peru is weighted to the second half of the year as a higher grade area of the mine is accessed”.
• Iron ore production in Q2 “was broadly flat at 15.6 million tonnes … [Q2 2023 15.6mt] …. Minas-Rio achieved a record second quarter performance, with production up 1%, … [to 6.4mt] … offset by a planned decrease at Kumba  … [to 9.2mt] … due to the previously announced business reconfiguration to align with third-party logistics constraints”.
• Anglo American is maintaining its 2024 guidance for iron ore production at 58-62mt with Kumba contributing 35-37mt and Minas Rio’s share in the range 23-25mt.  Cost guidance is also unchanged “c.$37/tonne (Kumba c.$38/tonne; Minas-Rio c.$35/tonne)”.
• Lower production from the Kroondal mine contributed to a 2% decline in platinum group metals (PGM) production to 921,000oz in concentrates (Q2 2023 – 943,000oz) with declines at “Mototolo, Mogalakwena and Unki … partially offset by higher production from Amandelbult”.
• The company reminds readers that the production from the Kroondal mine “is reported as third-party purchase of concentrate from November 2023” following its disposal of the mine in Q4 2023.
• Although cautioning that its 2024 PGM production guidance “remains subject to the impact of Eskom load-curtailment” guidance is unchanged in the range 3.3-3.7moz of metal in concentrate with cost guidance also intact at ~US$920/PGM oz.
• Diamond output from De Beers “decreased by 15% … [to 6.4m carats – Q2 2024 7.6m carats] … driven by a proactive approach to manage inventory and preserve cash”.
• Diamond production remains dominated by Botswana (4.7m carats), with 0.56m carats from Namibia, 0.51m carats from S Africa and 0.67m carats from Canada.
• Botswana’s diamond output declined by 19% compared to the 5.83m carats of Q2 2023 as the production from the Jwaneng mine tipped towards processing of stockpiles; “Production at Orapa was broadly flat”.
• Diamond production from South Africa increased by 8% however “reflecting the benefit of processing increased volumes of higher grade underground ore as the Venetia mine transitions underground”.
• Anglo American comments that “Demand for rough diamonds recovered slightly at the start of 2024 following the cessation of the voluntary moratorium on rough diamond imports into India in late 2023, and improved demand for diamond jewellery in the United States year-end retail selling season. However, with midstream polished inventories remaining higher than normal and continued cautious restocking from retailers, demand for rough diamonds deteriorated in the second quarter of the year. Market conditions are expected to reflect a protracted recovery in demand”.
• The company is maintaining its 2024 diamond production guidance in the range 26-29m carats with cost guidance intact at ~US$90/carat.
• “Steelmaking coal production increased by 26% to 4.2 million tonnes … [Q2 2023 ~3.4mt] … primarily driven by higher production at the Grosvenor underground longwall operation”.
• Following the suspension of operations at Grosvenor after an underground fire at the end of June, “Production guidance for 2024 has been updated to exclude Grosvenor in the second half of the year given the current uncertainties, resulting in guidance of 14-15.5 million tonnes (previously 15-17 million tonnes) … Unit cost guidance for 2024 is consequently updated to $130-140/tonne⁽¹⁾ (previously c.$115/tonne)”.
• “Nickel production was broadly flat at 10,000 tonnes, reflecting operational stability … [and] … Production guidance for 2024 is unchanged at 36,000-38,000 tonnes … [but] … Unit cost guidance for 2024 is revised lower to c.550 c/lb (previously c.600 c/lb), reflecting the benefit of lower input costs”.
• “Exploration expenditure decreased by 9% to $32 million … [and] … Evaluation expenditure decreased by 9% to $50 million, primarily due to a decrease in spend at PGMs and diamonds, partially offset by higher spend in copper and iron ore”.

Conclusion: Anglo American is maintaining its production and cost guidance across most of its major commodity groups although the suspension of operations at the Grosvenor mine following a fire has prompted a reduction in steelmaking coal production guidance and lower input costs have reduced cost expectations for nickel production.

Anglo Asian Mining* (AAZ LN) 90p, Mkt Cap £103m – Temporary suspension agitation leaching and flotation circuits weighs on 1H24 production

BUY

• Q2 production amounted to 2.7koz GEO (1Q24: 2.5koz; 2Q23: 12.4koz) with agitation leaching and flotation operations remaining temporarily suspended.
• Permissions for the start of the tailings dam wall raise construction are due imminently that should see a restart of agitation leaching and flotation.
• 1H24 production amounted to 5.3koz GEO (1H23: 23.4koz) including:
  • 4.7koz gold (1H23: 14.6koz)
  • 13koz silver (1H23: 45koz)
  • 0.1kt copper (1H23: 1.9kt)
• Tailings deposition was paused August last year as the Company is working on obtaining a sign off from authorities for the start of tailings dam wall raise at Gedabek.
• Production is driven by heap leaching and SART operations in the meantime.
• 1H24 gold sales were 6.0koz at an average realised gold price of $2,174/oz (1H23: 10.5koz at $1,939/oz).
• Inventories stood at $3.6m most of which is in the form of gold dore (1Q24: $4.2m including 1.6koz gold and $0.7m worth of copper concentrate).
• With most of production capacity temporarily suspended, the Company remained FCF negative during the period with net debt climbing to $12.1m (1Q24: $10.9m) including $7.8m in cash (1Q24: $9.8m) and $19.9m in debt (1Q24: $20.7m).
• The Company drew on $3m of $5m prepayment facility with Trafigura in June.
• The team has been managing cash carefully during the period with heap leaching operations reporting little stacking in 2Q24 with gold being leached largely from existing heaps reflecting lower mined ore volumes as well as reduced capital spend through 1H24 in general.

Conclusion: Weak production through 1H24 reflects a temporary suspension of agitation leaching and flotation operations with the team expecting final sign off from authorities allowing the start of tailings dam wall raise construction imminently. Operations are expected to restart once construction starts given available spare capacity in the tailings dam, by which time, the management will provide updated FY24 production guidance.

*SP Angel acts as Nomad and Broker to Anglo Asian Mining

Bluebird Merchant Ventures (BMV LN) 1.36p, Mkt Cap £10m – JV gives Bluebird 40% free carry on Kochang gold silver mine in South Korea

• Bluebird Merchant ventures reports the signing of a US$2m investment into the Kochang gold silver mine.
• The new operators have committed to invest US$2m into the historic Kochang mine leaving Bluebird with a 40% free carry.
• Bluebird has a previous target of 12-15,000ozpa of gold production from the redevelopment and reopening of the mine.
• Production could start in the next 6-9 months according to the statement following relevant permitting.
• The same jv partner has also committed US$5m to develop the Gubong mine.
• Bluebird’s new strategy to accelerate mine development now has US$9m committed to the development of two mines in South Korea and a mine in the Philippines.
• Gubong 40% (South Korea) S Korean consortium investing US$5m to acquire 60%.
  • KORES, the Korea Resources Corporation estimated 2.34mt grading ~7.3g/t gold with potential for 1moz gold in-situ + ~300,000oz from satellite ore bodies.
• Kochang 40%  (South Korea) same S Korean consortium investing US$2m to acquire 60%.
  • Kochang reported to have produced  ~110,000oz gold and 5.9moz silver between 1961-1975.  Potential for further 550-700,000t @ 5.2-6.6 g/t gold, and 27.3-34.8 g/t silver.
• Batangas 40% (Phillipines): local partner is investing US$2m to secure 60% ownership
  • JORC resource of 440,000oz inc. an ore reserve of 128,000oz inc. silver credits. Some $20m has been invested with 14km of identified mineralised structures
• Management have personally invested around US$2m into advancing the three key projects within Bluebird
• Bluebird see potential for 100,000ozpa of gold production along with >1.5moz of mineable gold at the two historic Korean mines.

Conclusion:  Will be interesting to see how well the new joint ventures work and if the sums committed are sufficient to bring the three mines into production by their local jv partners.

Centamin (CEY LN) 133.4p, Mkt Cap £1.5bn – Doropo DFS describes 200,000oz pa project in Cote d’Ivoire

• Centamin’s Definitive Feasibility Study (DFS) on its 1.9moz Doropo gold project in northeast Cote d’Ivoire describes an investment of US$373m delivering a mine delivering an average of 167,000oz pa of gold (and 207,000oz pa over the first 5 years) over a 10 year mine life and generating an after tax NPV_8% of US$426m and IRR of 34%.
• The economic base case uses a gold price of US$1,900/oz.
• Sensitivity analysis published in today’s announcement shows that at a higher US$2,000/oz gold price the after-tax NPV_8% increases by ~14% to US$487m
• The project develops a probable reserve of 38.22mt at an average grade of 1.53g/t gold within a ‘Measured & Indicated’ mineral resource of 76.85mt at an average grade of 1.26g/t to deliver gold at an average life of mine cash cost of US$892/oz and all-in-sustaining cost of US$1,097/oz and cash cost of US$817/oz (AISC US$971/oz) over the first five years.
• A total of 8 “relatively shallow deposits will be mined using a conventional drill, blast, load and haul open pit operation” to deliver up to 4.9mtpa of ore and remove a total of 188mt of waste over the mine’s life.
• Processing of up to 5.4mtpa of oxide/ transition ore and 4.0mtpa of fresh ore uses “a conventional closed SAG/ball mill/crushing … and CIL flowsheet” with an average 89% recovery rate over the life-of-mine.
• Centamin has identified opportunities to enhance the development of Doropo in areas including the identification of opportunities to expand the resource base and via the upgrading of the current ‘Inferred’ resource of ~7.4mt at an average grade of 1.23g/t gold (0.3moz) and incorporate them in the mine plan as well as seeking additional savings in both capital and operating costs.
• The company confirms that it will submit an application for a mining permit during H2 2024 and expects to produce the first gold from Doropo within 36 months.
• In a separate announcement today, Centamin confirms that a 120mt waste removal programme at its Sukari mine in Egypt ahead of schedule and that the operating capacity of its contractor, Capital Ltd, “will support the construction of a new dump leach pad, as well as facilitating the early completion of limited waste stripping scheduled for 2025 ahead of the delivery of the new 785C dump trucks. The net result is expected to be a small increase in total open pit material mined above the planned annual volume for 2024”.

Conclusion: The Doropo DFS will trigger a mining licence application to develop a mine capable of delivering an initial >200,000oz pa within around 3 years.

Ferro-Alloy Resources (FARF LN) 5.8p Mkt Cap £28m – Quarterly results as plant upgrades look to take advantage of stockpiled material

• Ferro-Alloy report their Q2 production results from their polymetallic operation in Kazakhstan.
• The Company processed 778t of concentrate, up 16% qoq.
  • 87.6t V2O5 (+7.4%qoq)
  • 7t Mo in FeMo form (-2.8%qoq)
  • 39t Ni in nickel concentrate (+16.2%qoq)
• H1 output came in at:
  • 169t V2O5 (-2.0%yoy)
  • 14t Mo in FeMo form (-32%yoy)
  • 72t Ni in nickel concentrate (+19.3%yoy)
• Production of vanadium pentoxide was higher during the quarter reflecting higher tonnage of concentrate treated.
• Lower molybdenum grades of processed concentrate meant molybdenum production was down on annual basis.
• Operations continue to face strong headwinds from lower nickel and vanadium prices.
• Management has been investing in plant improvements to boost processing, expanding the solution ponds to support higher grade vanadium pentoxide production.
• FerroAlloy produces on a trading and tolling basis.
• However, the Company intends to upgrade their own nickel concentrate stockpiles (4kt) to recover vanadium and molybdenum.
• Commercial production expected 3Q24.

Great Western Mining* (GWMO LN) 0.04p, Mkt Cap £3.4m – Permit received for processing mill

1. Great Western Mining has received their processing permit for gravity separation at their JV precious metal mill in Nevada.
2. The Nevada Division of Environmental Protection has issued a Water Pollution Control Permit, authorising operation of the plant.
3. Western Milling is now able to process up to 18ktpa of ore. Great Western holds a 50% stake in the mill.
4. The Permit will be effective from 31^st July.

Conclusion: This is a key development for Great Western. The delays to permitting have been frustrating for the Company and the receipt of the permit is a major derisking event. We look forward to further updates as commissioning gets underway and gravity concentrate is produced in this high gold and silver price environment.

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

Haydale Graphene (HAYD LN) 0.31p, Mkt cap 5.56m – Haydale report potential breakthrough in carbon capture

• Haydale Graphene report a potential breakthrough in the use of graphene for carbon capture.
• The process uses “Haydale’s proprietary HDPlas® plasma functionalisation process to optimise the surface chemistry of the nanomaterial”
• This nanomaterial may be capable of adsorbing carbon dioxide.
• Haydale has worked with Carbon Capture LLC in Florida on a feasibility study to build and deliver an initial prototype device.
• The technology if proven at larger scale could offer a new area for growth in plasma functionalised graphene nanomaterials.

Premier African Minerals (PREM LN) 0.08p, Mkt Cap £24m – Update on the Zulu lithium project.

• Premier African Minerals reports that commissioning of the new scrubber unit is progressing.
• Preliminary results suggest lower loss of spodumene tailings and better grades.

No.1 in Base Metals: SP Angel mining team awarded No 1. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q1 2024

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

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

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

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

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

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London

W1S 2PP

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

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

DISCLAIMER

This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

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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.

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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