SP Angel Morning View -Today’s Market View, Thursday 19th September 2024

Gold whipsaws in wake of FOMC as miners reiterate discipline on M&A amid rising cashflows

Copper strengthens as inventories fall and growth trades pick up following larger Fed rate cut

MiFID II exempt information – see disclaimer below

Calidus Resources (CAI AU) – Suspended – Rumours of Mark Creasy bailout

CleanTech Lithium (CLT LN) – DLE to be trialled in pilot plant

Jubilee Metals Group (JLP LN) – Management and executive changes

Phoenix Copper* (PXC LN) – Empire open-pit project PFS

Rockfire Resources (ROCK LN) – Confirmation of £0.53m funding

Rome Resources (RMR LN) – Portable XRF results from Kayali drilling

Titan Minerals  (TTM Au) – Gina Rinehart JV for copper exploration in Ecuador

Gold ($2,590/oz) whipsaws in wake of FOMC as miners reiterate discipline on M&A amid rising cashflows

• Gold rose sharply following the Fed’s 50bp cut yesterday, hitting record highs of $2,601/oz before falling sharply, below $2,550/oz.
• Prices subsequently rallied again overnight, likely supported by Asian buyers, hitting $2,585/oz this morning.
• The market currently expects two additional 25bp cuts this year, and the long end of the US Treasury curve has sold off whilst shorter duration bills have rallied.
• The 10 year currently sits at 3.7% after sliding to 3.6% yesterday before the FOMC meeting.
• The dollar is flat as Sterling and the Euro rally.
• Gold miners have reiterated their discipline over M&A concerns on the current conference circuit, with B2 Gold’s CEO emphasising plans for capital returns.
• Beatty criticised companies buying ‘dumb stuff’ whilst Bristow stated that Gold Fields’ deal for Osisko showed ‘markers of exuberance in the market.’

Copper ($9,577/t) strengthens as inventories fall and growth trades pick up following larger Fed rate cut

• Copper prices are rallying towards $9,600/t after the Fed rate cut fuelled bullish commodity trades.
• Higher rates weigh on growth expectations traditionally, and the rally likely reflects growing confidence in a soft landing.
• Inventories have also been ticking lower in China, whilst focus will be on demand indicators from the downbeat Chinese property sector

Iron ore bounces off key level whilst China steel industry sees rising bankruptcy risk

• 62% Fe China iron ore prices are hovering around $92/t, having fallen below $90/t briefly last night.
• Steel mill stockpiles climbed 3% to 15mt in September mom, whilst volumes 5.3% lower than same period last year.
• Iron ore prices have fallen 33% ytd.
• BHP estimate that 150mt of current tonnes have a cost base above $90/t, whilst 170mt have a cost base of $80-100/t.
• Expectations of PBoC stimulus continues, with the bank announcing growth measures last October to support growth targets, with an ensuing rally in iron ore prices.
• Bloomberg highlight Xianjiang and Gansu steel as facing high risk of bankruptcy,

Tin prices ($31,600/t) hold strong with mounting supply concerns as Man Maw remains suspended

• Tin prices have continued to hold at historically elevated levels following a series of supply disruptions over the past two years.
• The Myanmar Wa State has allowed some exports of above-ground stocks, and small scale artisanal mining is ongoing, but the giant Man Maw remains suspended.
• Reuters reports concentrate volumes flowing over the Myanmar border with China have ‘fallen sharply in recent months.’
• ITA estimated that Man Maw accounted for 70% of Myanmar’s 40kt 2022 production.
• The Wa State is currently executing an audit over the country’s tom sector, although this has lasted longer than anticipated.
• The audit started last August and China has imported 100kt of tin concentrate from Myanmar since, vs 173kt same period the year prior.
• Reuters reports China tin raw material imports down 26% yoy first half of this year, with alternative sources including Australia, Bolivia and Nigeria.
• Major Chinese smelters have extended maintenance periods on ore feed limitations. (SMM)
• Yunnan Tin’s Gejiu smelter going on maintenance is expected to bring 5-6,000t offline through September.
• On the demand side, semi-conductor sales are reportedly picking up following a two year slump.

REEs – SRC ‘Saskatchewan Research Council’ produces REEs

• The SRC claims to have been the first to commercially produce refined rare earths in North America.
• So far the SRC has produced NdPr from monazite which often occurs with titanium mineral sands.
• The SRC appear to be using existing processes but are using technology to improve the way the system operates.
• The SRC team are looking to raise their production capacity fro NdPr to 400tpa from 120t currently. Enough for 500,000 EVs.
• The SRC has bought a stockpile of rare earth material from a a mine near Yellowknife.
• The team are also looking to process samarium which his used in defence weapons and F-35s.

Economics

US – The Fed launched the easing cycle with a 50bp cut, the first one in more than four years, taking benchmark rate to 4.75-5.00%.

• The central bank said that upside inflation risks have diminished while labour downside risks increased.
• The updated dot plot guides for two more rate cuts this year with the rate at 4.25-4.75% by YE24.
• Policymakers expected four 25bp rate cuts in 2025 and two more in 2026.
• Fed comments on the decision during the press conference suggested the central bank may succeed in avoiding in a hard landing.
• S&P500 hit an intraday all time high following the decision but pulled back after to close slightly down on the day.
• Gold briefly hit $2,600/oz for the first time as the US$ index fell to the lowest in over a year.
• The Fed also issued GDP, inflation and unemployment rate projections revising June estimates.
• GDP estimates were largely little changed with a downwards revisions to inflation and an upgrade to jobless numbers after accounting for latest economic data.
• GDP projections (2024/25/26): 2.0/2.0/2.0 from 2.1/2.0/2.0
• Inflation estimates (2024/25/26): 2.3/2.1/2.0 from 2.6/2.3/2.0
• Unemployment Rate forecasts (2024/25/26): 4.4/4.4/4.3 from 4.0/4.2/4.1

UK – The central bank is expected to avoid cutting rates for a second consecutive time later this afternoon opting for a potential 25bp in November instead.

• Unemployment has been on a rise lately while inflation stabilised in the 2.0-2.2% over the last several months.
• Recent wage settlements with the train drivers unions and junior doctors look likely to keep inflation rates higher than target causing the BoE to take a more cautious approach to cutting rates.
• Deflation in manufactured goods from China such as Electric Vehicles and many other products should help to limit the inflationary impact of rising wages in the current environment.

Brazil – The central bank in a unanimous move decided to lift rates by 25bp to 10.75% yesterday with inflation running above the 3% target.

• Higher public spending and a tight labour market is said to be behind both consumption and price pressures.

Israel – The government announced a “new phase” in the war with regional Islamist groups diverting troops to the Lebanese border.

• The start of the operation has been supported by a wave of micro explosions planted in electronics devices in Lebanon aimed at shutting communication devices used by Hezbollah.
• A series of telecommunications’ devices explosions in Lebanon is reported to have killed 26 people over two days and wounded more than 3,000.
• “The center of gravity is moving north, meaning that we are allocating forces, resources and energy for the northern arena,” Yoav Gallant, Israeli Defence Minister, said.

New round of walkie-talkie explosions on Hezbollah terrorists

• A second series of explosions occurred yesterday as a series of hand-held radios used by Hezbollah exploded
• Hezbollah has very little support across the Middle East and we hope the effect of this retaliation will be to end this organisation.
• Hezbollah as fired some 8,000 missiles into northern Israel since the start of the conflict in Gaza.

Australia – Employment numbers surprise on the upside in August beating expectations for a 5^th consecutive month.

• Employment Change (‘000, Aug/Jul/Est): 47.5/48.9(revised from 58.2)/26.0
• Unemployment Rate (pp, Aug/Jul/Est): 4.2/4.2/4.2

PNG – Barrick Gold to suspended operations at its Porgera gold mine in PNG after tribal violence lead to the killing of two employees

• The police have been allowed to use lethal force to control violence between illegal settlers and local landowners.
• More then 35 people are thought to have been killed in this latest round of tribal violence which now involves the use of high-power weapons.
• A UN advisor estimates as many as 50 people have been killed in Enga with up to 300 soldiers and police moving into the area to restore peace.
• Unfortunately, the main road to Porgera remains blocked ~25 miles from town by a massive landslide on 24 May in which 670->2,000 villagers were buried and hundreds more displaced.

UK – Historic tin mine discovered in Cornwall during roadworks

• Road construction at St Austell in Cornwall has encountered old tin mining activity in the form of a 10m long adit which may lead to an old shaft.
• A spokesperson for the County Council said that “Given Cornwall’s rich mining history, it’s not uncommon to discover unmapped mining features during construction” according to Cornwall Live.
• Cornwall’s tin mining history dates from the Bronze Age with a long intermittent mining history petering out during the latter part of the 20^th century.
• Today, Cornwall’s tin industry is currently attracting renewed support with several companies including Cornish Metals*, which is working to reopen the South Crofty mine near Camborne, and Strategic Minerals*, working at the Redmoor site near Callington in east Cornwall, working to rejuvenate the industry.
• Drivers should be careful of potholes in Cornwall, you never quite know where they might lead!

*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

*SP Angel acts as Nomad and Broker to Strategic Minerals

Russia – 1.8 Kilo tonne blast in Russia as Tropets arsenal goes up

• Ukraine hit a major Russian arsenal 300 miles inside Russia and 250 miles northwest of Moscow last night.
• The blast was recorded on seizmometers with the heat detected by NASA from space.
• The attack demonstrates Ukraine’s ability to launch major offensives against Moscow if it chooses.
• It doesn’t really matter whose missile the Ukrainian’s used, there won’t be any evidence left to identify it with.
• Recent media news on the West’s ban on using western missiles to attack Russia looks like a way of warning Russia of what is about to hit them if they persist in this war.
• Given the atrocities committed by Russia against Ukraine we feel the Ukrainians have been wholly reserves in their actions.

Currencies

US$1.1143/eur vs 1.1125/eur previous. Yen 142.23/$ vs 141.75/$. SAr 17.470/$ vs 17.559/$. $1.325/gbp vs $1.319/gbp. 0.682/aud vs 0.677/aud. CNY 7.068/$ vs 7.096/$

Dollar Index 100.71 vs 100.83 previous

Precious metals:         

Gold US$2,579/oz vs US$2,570/oz previous

Gold ETFs 83.4moz vs 83.3moz previous

Platinum US$987/oz vs US$984/oz previous

Palladium US$1,076/oz vs US$1,120/oz previous

Silver US$31.1/oz vs US$30.6/oz previous

Rhodium US$4,700/oz vs US$4,725/oz previous

Base metals:   

Copper US$9,577/t vs US$9,371/t previous

Aluminium US$2,549/t vs US$2,526/t previous

Nickel US$16,390/t vs US$16,245/t previous

Zinc US$2,915/t vs US$2,911/t previous

Lead US$2,058/t vs US$2,010/t previous

Tin US$31,865/t vs US$31,535/t previous

Energy:           

Oil US$74.2/bbl vs US$73.2/bbl previous

• Crude oil prices rose following the US Fed’s decision to decrease US interest rates by 0.5% as the EIA reported a 1.6mb draw to crude and no change to gasoline and or stocks, with refinery utilisation falling 0.7% to 92.1%.
• European energy prices were stable as EU natural gas storage levels rose 0.2% w/w to 93.4% full (vs 87.9% 5-Yr average), with Germany and Italy over 95% full and aggregate storage now at 1,070TWh.

• The US Energy Department announced yesterday that it was seeking to buy up to 6mb of oil to help replenish the Strategic Petroleum Reserve (SPR).

Natural Gas €35.7/MWh vs €35.4/MWh previous

Uranium Futures $79.5/lb vs $79.5/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$92.6/t vs US$90.6/t

Chinese steel rebar 25mm US$478.6/t vs US$476.0/t

Thermal coal (1st year forward cif ARA) US$115.9/t vs US$115.8/t

Thermal coal swap Australia FOB US$135.3/t vs US$135.3/t

Coking coal Dalian Exchange futures price US$173/t vs US$172.0/t

Other:  

Cobalt LME 3m US$24,300/t vs US$24,300/t

NdPr Rare Earth Oxide (China) US$58,647/t vs US$58,135/t

Lithium carbonate 99% (China) US$9,975/t vs US$9,936/t

China Spodumene Li2O 6%min CIF US$740/t vs US$740/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$440/t vs US$440/t

Europe Vanadium Pentoxide 98% 4.6/lb vs US$4.6/lb

Europe Ferro-Vanadium 80% 24.55/kg vs US$24.55/kg

China Ilmenite Concentrate TiO2 US$322/t vs US$321/t

China Rutile Concentrate 95% TiO2 US$1,380/t vs US$1,374/t

Spot CO2 Emissions EUA Price US$63.4/t vs US$63.4/t

Brazil Potash CFR Granular Spot US$290.0/t vs US$290.0/t

Germanium China 99.99% US$2,625.0/kg vs US$2,625.0/kg

China Gallium 99.99% US$445.0/kg vs US$445.0/kg

Battery News

EU car sales at 3-year low in August

• New car sales in the European Union fell 18.3% in August to their lowest in three years. (European Automobile Manufacturers Association)
• Major markets Germany, France and Italy all saw significant losses.
• Sales of fully electric cars slumped 43.9% in August, falling for the fourth consecutive month, and plug-in hybrids fell 22.3%.
• German EV sales dropped 68.8% in the month and France saw a 33.1% decline.
• Hybrid electric vehicles saw a 6.6% growth to a market share of 31.3%.

New hybrid vehicle sales to be allowed until 2035 in UK

• The new Labour government plan to reinstate the 2030 ban on the sale on new cars that run solely on petrol or diesel.
• The government has said that the sale of some hybrid vehicles will be allowed until 2035 in order to aid the transition.
• Carmakers have been lobbying to extend petrol sales as growth in demand for electric cars has slowed after a surge in recent years.
• In August, 22.6% of UK car sales were electric and analysts expect electric sales to increase as carmakers race to hit separate rules known as the zero emissions vehicle (ZEV) mandate.
• In its manifesto, Labour pledged to give “certainty to manufacturers by restoring the phase-out date of 2030 for new cars with internal combustion engines”.
• A spokesperson for the Department of Transport said, “The original phase-out date included the provision for some hybrid vehicle sales between 2030 and 35. We know it is important to provide certainty and stability for drivers and will set out further details in due course.”

BYD will still have cheapest EV in US even with 100% tariffs

• Even with the new 100% tariff on EVs imported from China, BYD would still have the cheapest EV in the US, according to a new report.
• BYD has no plans to enter the US passenger vehicle market the company’s North American CEO Stella Li said, but if it did, it could hold an advantage over US automakers.
• AutoForecast Solutions believes that BYD’s lowest price EV, even with the 100% tariff would be priced around $25,000.

Company News

Calidus Resources (CAI AU) – Suspended – Rumours of Mark Creasy bailout

• Calidus Resources is currently in administration following its collapse in June after Warrawoona failed to ramp up.
• Reports suggest that Warrawoona’s orebody had been modelled incorrectly, whilst cost inflation is also blamed as a factor.
• The West Australian reports that a Mark Creasy company West Coast Gold has lodged a deed of company deal to secure Calidus’ assets.
• West Coast holds over A$1.3bn in assets as of June 2023.
• The Paper reports that there were two competing bids, including a A$170m proposal backed by Petra Capital and a A$135m bid from unnamed oversees interests.
• The offer is reported to return creditors units ranging between $0.03 to $1 to the dollar.
• Creasy bought A$149m worth of Calidus’ debt owed to Macquarie in July.

CleanTech Lithium (CLT LN) 15.17p, Mkt Cap £22m – DLE to be trialled in pilot plant

• CleanTech Lithium report the completion of their due diligence on the use of iFO ‘industrial forward osmosis’ as an alternative to using a thermal evaporator to concentrate their eluate.
• The iFO system is to be used in the pilot plant to see how well it performs ahead of production of lithium carbonate.
• The iFO process is reported to have achieved higher water recovery and 60% lower energy consumption.
• The iFO system works better when ‘solar thermal’ is used for its power supply.
• The pilot plant in Chile produced a 88m3 of concentrated eluate (11.2x factor) over 384 hours (14 cycles) equal to ~1 tonne of lithium carbonate which has been shipped to Conductive Energy in Chicago.
• The iFO unit is expected to take two weeks to commission in Chicago.
• Further detail on the Laguna Verde project and iFO process is contained in the press release
• Laguna Verde PFS is due by the year end.
• CleanTech’s DLE pilot plant located 275mk away from the Laguna Verde deposit in Copiapo, Chile was commissioned in 1Q24 with a capacity of 1t LCE per month.
• Laguna Verde hosts ~1.8mt LCE at 200mg/l Li (~0.04% Li20) in total resource with Measured and Indicated accounting for 1.1mt at 196mg/l.
• Fund raising and ASX admission process: CleanTech is looking to raise up to A$20m as part of its ASX listing, has filed its application for admission to the ASX and is awaiting a formal response.
• The process can normally take four-six weeks from filing till admission and trading.
• Receipt of Conditional Approval should trigger the completion of the offer process and the process for the listing with the Offer Period now extended to 23 September.

Conclusion: We are impressed by the level of detail contained in today’s statement and the idea of using ‘solar thermal’ for the generation of renewable energy and the use of the iFO system.

We will be interested to see the operating and capital cost parameters which come out of the pilot plant test work.

Jubilee Metals Group (JLP LN) – 5p, Mkt cap £150m – Management and executive changes

• Jubilee Metals reports the appointment of Dr. Rueul Khoza as a director and is expected to assume the role during October.
• He is described as “an eminent business leader having held the position as chairman of several blue-chip firms including Nedbank Group Ltd, one of Africa’s largest banking corporations, Public Investment Corporation Ltd, the largest asset management firm in Africa, Eskom Holdings Ltd, the largest power generator in South Africa, and is also a director of the Johannesburg Stock Exchange”.
• The company also announced that Neal Reynolds is resigning as Chief Financial Officer “to pursue a new opportunity”.
• “Riaan Smit, currently Chief Financial Officer of the chrome & PGM division in South Africa, has been appointed interim Group CFO while a replacement is found”.
• CEO, Leon Coetzer, welcomed Dr. Khoza saying that he “brings a wealth of experience and knowledge that will strongly compliment the Jubilee Board” and Mr. Coetzer also extended his “gratitude to Neal and … [thanked] … him for his contribution during Jubilee’s restructuring into a decentralised leadership model”.

Phoenix Copper* (PXC LN) 16.75p, Mkt Cap £36m – Empire open-pit project PFS

Phoenix holds 80% of the Empire mining property in Idaho)

CLICK FOR PDF

• Phoenix Copper’s pre-feasibility study (PFS) for the Empire open pit mine in Idaho describes open-pit mining of an 11.1mt ore ‘Proven & Probable’ ore-reserve at a grade of 0.49% copper and ~0.3g/t gold and ~14g/t silver at the site near Mackay.
• An initial capital investment of US$62.6m and life of mine capital of US$83.9m is expected to generate an after tax NPV7.5% of US$73.8m and an IRR of 40.2% (Pre-tax NPV7.5% of US$87.9m and IRR of 46.4%) at a copper price of US$4.45/lb (~US$ 9,800/t), gold price of US$2,325/oz and a silver price of US$27.25/oz.
• Sensitivity analysis presented in the study show that a 10% increase in copper price to US$4.90/lb (US$10,900/t) generates a 29% higher after tax NPV7.5% of US$94.9m.
• Current metal prices are ~US$9,370/t for copper, US$2,570/oz for gold and US$30.60/oz for silver and SP Angel’s long term price projections are US$11,000/t for copper, US$2,450/oz for gold and US$30.63/oz for silver.
• Over the 8 years mine life, a total of 18.8mt of waste will be removed at an average stripping ratio of 1.69:1.
• Mined ore feeds a 4,000tpd flotation plant supported by a cementation plant to leach and recover a total of ~41,000t (90mlbs) of copper, 40,000oz of gold and 1.76moz of silver at a life-of mine cash cost of US$2.44/lb of copper equivalent and all-in-sustaining cost of US$3.15/lb.
• The report is available on the company’s website at https://Phoenix Copper Limited
• CEO, Ryan McDermott, explained that “Following the publication of the Empire Mine mineral reserves statement on 7 May 2024 … the Empire team engineered a crush-grind-flotation-tank leach process design for the proposed open pit.  The flotation circuit will also be suitable for processing future polymetallic sulphide vein material from below the open pit”.
• He explained that plans including “driving an adit toward known sulphide mineralization and developing underground drilling stations along the length of the adit” are being finalised to “to advance the exploration of the deeper sulphide vein system with an eye on augmenting the open pit ore with feed from the higher-grade sulphide vein system below the pit”.
• Mr. McDermott also confirmed that “the pre-owned ball mills purchased by the Company in March 2024 have been delivered to our facility in Idaho.  Additional rolling stock and some fixed assets have been purchased, all pre-owned, and are also at the Idaho facility.  As we have previously reported, it is the Company’s intention to outfit the Empire Mine and milling operation with used and pre-owned equipment to decrease the overall capex”.
• The CEO also clarified that “The PFS was prepared using the NI 43-101 format, but is not considered NI 43-101 compliant because used and pre-owned equipment pricing was used to calculate capital expenditures. The Company is well-positioned to purchase additional used equipment for the Empire Open-Pit operation and has selected to incorporate used equipment pricing in its cashflow model, as opposed to NI 43-101’s required new equipment pricing”.
• In our view, under the supervision of experienced engineering management, the use of such equipment offers a practical way to manage the capital costs relative to the use of new equipment, although it is possible that in these circumstances the safety net of OEM warranties will either be unavailable or restricted.

Conclusion: The PFS demonstrates a robust project using the company’s metal price assumptions which are more conservative than SP Angel’s.  The use of some used equipment reduces the overall capital requirement and, in our opinion, represents a pragmatic development approach even though it impinges on the formal requirements of Canada’s NI-43-101 Reporting Code for a Pre-Feasibility Study

*SP Angel acts as Nomad to Phoenix Copper

Rockfire Resources (ROCK LN) 0.11p, Mkt Cap £2.7m – Confirmation of £0.53m funding

• Rockfire Resources reports that its recently announced Placing and Subscription have raised a total of ~£0.53m for the continuing work at the Molaoi zinc project in Greece.
• The company has issued an additional ~531.75m shares representing approximately 17% of the enlarged company.
• Rockfire Resources confirms that following the Placing & Subscription Rostra Holdings owns 15.55% of its shares with TPM Middle East Dubai holding 10.1% and The Wonderful Group holding a further 9.98% interest.

Rome Resources (RMR LN) 0.27p, Mkt Cap £12.9m – Portable XRF results from Kayali drilling

• Rome Resources reports that handheld XRF analyses from its drilling at the Kalayi tin prospect within the Bisie North project in North Kivu Province, DRC has shown tin mineralisation in drillholes KBDD-005 and KBDD-006.
• The results, which will need to be confirmed by formal assay show a 1.5m wide zone of tin mineralisation in hole KBDD-005 and a wider, 10m, intersection in KBDD-006 as well as a “narrow zone of near surface tin mineralisation” in hole KBDD-007.
• The company confirms that hole KBDD-009 is currently at a depth of 62.5m “targeting the significant mineralisation intersected at depth in KBDD006” while hole KBDD-016 is currently at a depth of 46m “intersecting a gossanous zone with quartz veining and anomalous tin in the bottom 3m”.
• A further hole, KBDD-010 will test a “high-grade tin in soil anomaly to the south of the current drilling”.
• Rome Resources confirms that a fourth drilling rig is expected to arrive on site within two weeks to drill at Mont Agoma “which has to date seen minimal drilling during the current campaign”.
• Acknowledging that the XRF work will require verification, CEO, Paul Barrett, said that it provides “further confirmation that our licence area contains significant, high-grade tin mineralisation”.
• He said that “Our team has a wealth of experience developing tin projects within the DRC, and we are looking forward to drawing on their expertise as drilling and testing continues at the Company’s Bisie North Project”.

Conclusion: Encouraging preliminary information from the handheld XRF analysis requires validation through analysis and we look forward to these results as the company steps up its drilling campaign with the arrival of a fourth machine.

Titan Minerals (TTM Au) – A$0.44, Mkt Cap, A$80m – Gina Rinehart JV for copper exploration in Ecuador

• Titan has signed binding JV with Hancock to earn 80% into the Linderos Copper Project.
• Hanrine, a subsidiary of Hancock, will earn an initial 5% of the Linderos project through a $2m spend.
• Rinehart’s subsidiary has a right to earn an 80% interest through a US$120m investment.
• The Group is planning to drill 10,000m.
• The early stage project is believed to hold potential for a porphyry copper-gold discovery.
• By funding a 10,000m drilling programme, Hancock will earn a 30% interest in the project.
• An additional 15,000m drilling will earn Hancock a 51% interest.
• The 80% interest will be triggered by either a US$120m spend or a decision to mine, whichever comes first.

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, 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

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