SP Angel Morning View -Today’s Market View, Thursday 1st August 2024

Gold pushes higher ($2,435/oz) again as Fed leans dovish and Treasuries rally on rate cut hopes

MiFID II exempt information – see disclaimer below

Albemarle (ALB US) – Q2 results show continued pressure on lithium producers

Arc Minerals (ARC LN) – Drill core from Virgo prospect in Botswana being sent to ALS laboratory in South Africa

Critical Metals (CMRS LN) – Fieldwork underway at the Igli exploration project, Morocco

Goldstone Resources* (GRL LN) – Options to directors and senior management

Keras Resources* (KRS LN) – Keras starts commercial production of PhoSul® organic phosphate fertilizer granules in Utah, USA

Orosur Mining* (OMI LN) – Update on re-acquisition of Anzá

Premier African Minerals (PREM LN) – Latest update on the Zulu lithium project

Rockfire Resources (ROCK LN) – Latest drilling results from Molaoi project, Greece

Taseko Mines (TKO LN) – Update on operations and Florence construction

Gold pushes higher ($2,435/oz) again as Fed leans dovish and Treasuries rally on rate cut hopes

• Gold prices rallied to recent highs of $2,458/oz last night, before paring some gains this morning on profit taking.
• The move paralleled a sharp rally in US Treasuries, with yields sliding across the curve.
• The 10 year fell to 4.05%, now down 70bp from April highs.
• Powell hinted that the Fed is gaining more confidence in a potential rate cut in September, with the market pricing in 100% chance of a 25bp cut.
• Middle East tensions continue to mount, with Hamas leader Haniyeh killed yesterday in Iran.

Base metals ease from post-Fed rally as China data offsets lower dollar

• Copper prices eased from yesterday’s rally, back to $9,115/t having touched $9,330/t yesterday.
• Nickel is down 1% and aluminium and zinc are both off 50bp.
• The post-Fed base metals rally was triggered by a weaker dollar amid increased expectations of rate cuts in September.
• Chile copper production fell 1.2% yoy in June, whilst improving Chinese Yangshan premiums suggest import demand is improving amid lower prices.
• Shanghai copper inventories have now hit two-month lows.
• Weaker Chines PMIs are weighing on metals demand hopes, whilst a dollar rally this morning is fuelling further concerns over the health of the global economy.

Uranium markets tighten as Russian uranium import ban comes into effect

• Major Canadian uranium producer Cameco reported earnings yesterday, with the call providing some insight into current market conditions.
• Management report quieter spot markets and lower long-term contracting as caution rises before the Russian import ban comes into this month.
• They note their long term order book grows as utilities boost production.
• Note ongoing sulphuric acid issues that producers are suffering from, alongside the introduction of the Kazakh mineral extraction tax change.
• Management expects the ‘days of cheap pounds coming out of Central Asia are effectively over.’

China to build world’s first thorium molten salt nuclear power plant

• China has announced the construction of an innovative nuclear power plant (NPP) that will be fuelled by liquid fuel based on molten thorium salt.
• The Shanghai Institute of Applied Physics (SINAP) has been researching this technology since 2011 focusing on liquid fluoride-thorium reactors (LFTRs).
• Construction of a prototype of a thorium molten salt reactor (TMSR) with a capacity of 2MW began in September 2018 and was reportedly completed in 2021.
• China now plans to build the world’s first NPP based on molten salt in the Gobi desert – construction will begin in 2025 with the aim of developing safer and more environmentally friendly nuclear energy.
• The reactor does not need water for cooling, since it uses liquid salt and carbon dioxide to transfer heat and generate electricity.
• The reactor will use fuel enriched in less than 20% U-235, with a thorium reserve of about 50kg and a conversion factor of about 0.1 FLiBe – a eutectic mixture of lithium fluoride and beryllium fluoride containing 99.95% lithium-7 will be used, and the fuel will consist of uranium tetrafluoride (UF4).

Economics

US – The Fed unanimously voted to leave rates unchanged at the 5.25-5.50% range, in line with expectations, but suggested the rate cut come as early as September.

• Jay Powell said there was “a real discussion” at the FOMC this week over cutting rates adding that “a reduction in our policy rate could be on the table as soon as the next meeting in September”.
• “If we were to see inflation moving down … more or less in line with expectations, growth remains reasonably strong, and the labor market remains consistent with current conditions, then I think a rate cut could be on the table at the September meeting,” he said.
• Both two year and 10y sovereign bond yields continued to fall following the announcement hitting the lowest level since February.
• Markets are currently leaning towards up to three rate cuts this year.
• Meta reported better than expected sales and earnings yesterday with the stock trading more than 6% higher in pre market.
• Chipmakers also gained a strong boost on speculation that Biden administration export ban on chipmaking equipment to China may exclude its allies including Japan, the Netherlands and South Korea, according to Reuters.
• Under the proposed ban called the Foreign Direct Product rule half a dozen of Chinese semiconductor fabrication factories from receiving exports from a series of countries.
• Countries that are expected to be included in the list are Israel, Taiwan, Singapore and Malaysia.

China – Manufacturing sector fell inro a contraction for the first time in nine months in July, private sector PMI data showed.

• The PMI measure came in lower than expected with new business orders falling for the first time in a year.
• “The most prominent issues are still insufficient effective domestic demand and weak market optimism,” Caixin commented on data.
• Caixin Manufacturing (Jul/Jun/Est): 49.8/51.8/51.5

UK – The central bank is due to announce its policy rate decision later today.

• Markets are assigning a more than 60% chance of a rate cut today with a total of two before year end.
• On a separate note, property markets climbed more than expected in July, Nationwide data shs.
• Prices were up 2.1%yoy and 0.3%mom marking the highest growth rate since December 2022.
• The average price of £271k remains 2.8% below its peak hit earlier in 2022.

Iran/Israel – Ayatollah Ali Khamenei orders a direct strike on Israel in retaliation to reported Israel’s assassination of the political leader of Hamas Ismail Haniyeh in Tehran earlier, the New York Times reports.

• Haniyeh was in Tehran attending Iranian President Masoud Pezeshkian’s swearing-in ceremony and was killed as a result of an airstrike.
• Separately, Israel confirmed this morning that Mohammed Deif, Hamas’ second in command and head of its military wing, was killed in a strike in Gaza ion July 13.

Currencies

US$1.0809/eur vs 1.0821/eur previous. Yen 149.92/$ vs 152.15/$. SAr 18.215/$ vs 18.217/$. $1.279/gbp vs $1.284/gbp. 0.653/aud vs 0.651/aud. CNY 7.237/$ vs 7.226/$.

Dollar Index 104.19 vs 104.41 previous

Precious metals:         

Gold US$2,443/oz vs US$2,417/oz previous

Gold ETFs 82.5moz vs 82.5moz previous

Platinum US$974/oz vs US$970/oz previous

Palladium US$929/oz vs US$918/oz previous

Silver US$28.91/oz vs US$29/oz previous

Rhodium US$4,650/oz vs US$4,650/oz previous

Base metals:   

Copper US$ 9,181/t vs US$9,162/t previous

Aluminium US$ 2,290/t vs US$2,260/t previous

Nickel US$ 16,540/t vs US$16,465/t previous

Zinc US$ 2,672/t vs US$2,682/t previous

Lead US$ 2,065/t vs US$2,056/t previous

Tin US$ 30,000/t vs US$30,015/t previous

Energy:           

Oil US$81.5/bbl vs US$80.0/bbl previous

• Crude oil prices edged higher on fiery Middle Eastern rhetoric, with the EIA also reporting w/w draws of 3.5mb to crude and 3.6mb to gasoline stocks in the US and refinery utilisation falling 1.5% w/w to 90.1%.
• European energy prices remain elevated due to geopolitical risk as EU natural gas storage levels rose 1.5% to 84.9% full w/w (vs 75.8% 5-Yr average), with Germany almost 89% full and aggregate storage now at 966TWh.
• Shell’s CEO told media the LNG Canada export project is 90% through the construction phase with commissioning anticipated to commence around YE24 ahead of producing first cargoes in the middle of 2025.
• Media reports Chevron’s $53bn Hess deal will be delayed ahead of a pivotal arbitration hearing scheduled to take place in May 2025 regarding its acquisition of Hess’ interest in the ExxonMobil-operated Guyana portfolio.

Natural Gas €36.0/MWh vs €35.1/MWh previous

Uranium Futures $84.2/lb vs $82.4/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$99.8/t vs US$98.0/t

Chinese steel rebar 25mm US$500.4/t vs US$502.8/t

Thermal coal (1st year forward cif ARA) US$119.3/t vs US$118.0/t

Thermal coal swap Australia FOB US$139.3/t vs US$138.8/t

Coking coal Dalian Exchange futures price US$200/t vs US$202.2/t

Other:  

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

NdPr Rare Earth Oxide (China) US$50,708/t vs US$50,441/t

Lithium carbonate 99% (China) US$10,639/t vs US$11,002/t

China Spodumene Li2O 6%min CIF US$940/t vs US$940/t

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

China Tungsten APT 88.5% FOB US$325/mtu vs US$325/mtu

China Graphite Flake -194 FOB US$465/t vs US$465/t

Europe Vanadium Pentoxide 98% 4.9/lb vs US$4.9/lb

Europe Ferro-Vanadium 80% 25.95/kg vs US$25.95/kg

China Ilmenite Concentrate TiO2 US$316/t vs US$316/t

China Rutile Concentrate 95% TiO2 US$1,389/t vs US$1,391/t

Spot CO2 Emissions EUA Price US$66.4/t vs US$66.4/t

Brazil Potash CFR Granular Spot US$297.5/t vs US$297.5/t

Germanium China 99.99% US$2,125.0/kg vs US$2,125.0/kg

China Gallium 99.99% US$440.0/kg vs US$435.0/kg

Battery News

Uber and BYD partnership to bring EVs to ride-hailing platform

• Uber and Chinese automaker BYD have announced a multi-year partnership on Wednesday aimed at bringing 100,000 new electric vehicles to the ride-hailing platform globally.
• The partnership will initially target Europe and Latin America and will offer drivers accessible pricing and financing for BYD EVs.
• Uber and BYD will offer drivers discounts on vehicle maintenance, charging, financing and leasing, depending on the market, to support the transition to EVs.
• The partnership will eventually be expanded to the Middle East, Canada, Australia and New Zealand.
• “When an Uber driver makes the switch to an EV, they can deliver up to four times the emissions benefits compared to a regular motorist, simply because they are on the road more,” Uber CEO Dara Khosrowshahi said.

New Labour government angling to bring back 2030 ICE ban

• The move was one of the Labour party’s key manifesto points in the run up to the election of 4^th July.
• The Conservative government had previously delayed the end of sales of combustion vehicles 2030 to 2035.
• At the time the, the move was met with mixed reaction, with some automakers saying it undermined efforts they had made into retooling and the SMMT saying it would cause more confusion for buyers.
• Other automakers were more in favour of the move.
• Having won the election, the Labour party are likely to make this manifesto promise a reality, but it yet to be seen if there will be any caveats.

BMW plans five new EV battery factories

• BMW Group is set to establish five battery factories close to its current auto manufacturing sites to support the upcoming Neue Klasse EVs.
• Construction is underway for assembly plants producing sixth-generation, high-voltage batteries in the US, Germany, Hungary, China, and Mexico.
• The strategic location of these battery factories near auto plants will bolster production resilience, aligning with BMW’s “local for local” manufacturing approach, the automaker stated.
• The Neue Klasse series will utilise new cylindrical cells, which promise significant improvements in energy density, charging times, and range.

China’s BYD prepare to break into Canadian market

• BYD is preparing to enter the Canadian market, as indicated by recent government filings.
• This move follows the imposition of hefty, 100% tariffs on Chinese EVs by the US, which limits BYD’s ability to sell directly in that market.
• BYD currently sells electric buses and trucks in the US and passenger vehicles in Mexico, but it has no immediate plans to enter the US passenger vehicle market.
• BYD’s potential expansion into Canada could lead to indirect entry into the US market.
• However, Canada has been in a 30-day consultation period to discuss potential measures to restrict Chinese EV imports, including the introduction of higher tariffs to align with the US and European Union.

Tesla struggling to attract new EV shoppers

• Tesla is facing challenges in attracting new EV buyers, as revealed by a JD Power study.
• The survey indicates that owners of EVs from traditional automakers are more satisfied with their vehicles than Tesla owners.
• Tesla’s strategy of lowering prices to stay competitive is also losing effectiveness, impacting its financial performance, which now relies more on non-automotive revenue streams.
• Tesla’s market share in the US EV market dropped below 50% for the first time in the second quarter, a significant decline from its 80% share in 2020.
• This decline presents an opportunity for traditional automakers like Chevrolet and Ford, which are introducing new electric models and gaining market share.
• These traditional brands are seeing higher levels of emotional attachment and excitement from new EV owners compared to Tesla according to the study.

Company News

Albemarle (ALB US) $94, Mkt Cap $11bn – Q2 results show continued pressure on lithium producers

• Albemarle reports a net loss of $188m, adjusted EBITDA of $386m from $1.4bn in net sales.
• The Company announced a ‘Cost Actions and Initiation of Review to Optimise cost and Operating Structure’ amid a lower lithium price environment.
• The Company has stopped construction of Kemerton Train 3, placed Kemerton Train 2 on care and maintenance.
• As a result, they will write down $0.9-1.1bn in 3Q24.
• Kemerton slowdown expected to reduce CAPEX by $300-400m in 2024 and Kemerton 3 halt expected to save $200-300m over next 18 months.
• The Company reports average lithium market prices of $12-15kg vs $25/kg in 2H23.
• CAPEX for 2024 expected at the high end of the $1.7-1.8bn range.
• $363m reported in cash from operations on Talison JV dividends as Greenbushes continues to push output.
• $1.8bn in cash and total debt of $3.5bn reported as of June 30^th.
• Albemarle believes it will be able to deliver 2024 EBITDA of $900-1,200m in a $15/kg LCE scenario.
• CEO Kent Masters reportedly stated that ‘the market is not improving… it’s actually probably getting a little worse,’ looking instead to a ‘lower for longer’ pricing environment. (AFR)
• The Company still forecasts global lithium demand at 3.3mt LCE in 2030 vs 1.3mt LCE today.
• Albemarle suggests Chinese conversion facilities and non-integrated producers are likely unprofitable and integrated producers under pressure.
• Incentive prices for new western Greenfield projects well above current spot levels.
• EV affordability reportedly improving, with battery costs nearing $100/kWh pack average.
• EV registrations up 22% yoy ytd.

Arc Minerals (ARC LN) 1.84p, Mkt cap £27m – Drill core from Virgo prospect in Botswana being sent to ALS laboratory in South Africa

(Anglo American holds 70% of the jv with Unico Minerals Limited with Arc Minerals holding the other 30% through Unico Minerals.  Unico Minerals is a 67% jv with 33% held by Kopara Investments. Arc also holds 75% in Alvis-Crest (Proprietary) Limited which holds two licenses in the Kalahari Copper Belt, known as Virgo covering >210km2, around 10km south east the recently commissioned Khoemacau Copper in Botswana.)

• Arc Minerals reports on drilling at its Virgo Project within the Kalahari Copper Belt in Botswana.
• Arc have drilled a total of 1,824m on its Virgo prospect in the Kalahari.
• Core samples have being split and prepared to be shipped for assay with management reporting visible copper mineralisation in the drill holes.
  • “Mineralisation has been observed in the form of chalcocite and bornite blebs within carbonate veins and disseminations within the Lower Marl and laminated siltstone. 
  • Several cross cutting and bedding parallel veins with micro fault filled veins characterize the siltstone mineralised unit, while in the Lower Marl mineralisation is in the form of disseminations and blebs predominantly chalcocite.”
• Zambia: Management also report they are in dialogue with the Ministry of Mines over certain mining license applications which are in the process of being resolved.
  • A letter in confirmation of good standing with respect to our application over 33404-HQ-LML (Handa) has been received and we’re awaiting similar confirmation with respect to 33403-HQ-LML (Zaco).
• Board remuneration:
  • We would remind investors of the salaries and bonuses which the Arc board awarded themselves last year with substantial sums still owing to the directors and likely to be payable this year either in cash or cash and shares.
  • The annual report declares total remuneration of £1.5m for the year, but this does not appear to include the 50% of bonuses declared on a deferred basis and payable in 2024 in cash or in shares at the discretion of Management (see note iV in the key management remuneration.
  • Nick von Schirnding (Chairman) £759,000 from £309,000 salary and bonus of £450,000 (£225,000 “represents 50% of bonuses declared during the year. The remaining 50% was declared on a deferred basis and will be payable in 2024 in cash or in shares at the discretion of Management”)
  • Rémy Welschinger (NED): £536,000 from £194,000 salary and £342,000 bonus (£171,000 represented 50% of the bonuses declared during the year). This was for 10 months as an executive director.
  • Ian Lynch’s (CFO) £222,000 total from £22,000 salary and £202,000 bonus (£101,000 represented 50% of the bonuses declared during the year) for 2 months as CFO ,
  • Brian McMaster £96,000 from £48,000 salary and £48,000 bonus (£24,000 represented 50% of the bonuses declared during the year)
  • Valentine Chitalu £96,000 from £48,000 salary and £48,000 bonus (£24,000 represented 50% of the bonuses declared during the year)
• Board and key personnel awards appear to be over £7.5m from 2021 to end 2023.
• We refer investors to Page 55 in: https://www.arcminerals.com/investors/document-library/default.aspx

Conclusion:  We caution investors over today’s statement. Arc, like other explorers in the Kalahari are drilling through substantial sand cover and have not reported details on the depth of the ‘visible copper mineralisation’ or the widths of the mineralised samples. Given the performance of Arc Minerals shares we also caution investors over the exorbitant remuneration awarded as indicated in the annual report.

Critical Metals (CMRS LN) 1.3p, Mkt Cap £1.0m – Fieldwork underway at the Igli exploration project, Morocco

• Critical Metals reports that its exploration team is now on site and has started systematic exploration at the Igli project in Morocco.
• Reconnaissance work in January “returned very high grade silver and good copper assays” from the site, which is located relatively close to “two important mines” at Tiouit and Imiter and in a favourable geological setting with “widespread NE-SW faulting, which act as one of the controls for mineralisation in the region”.
• The company says that its Phase 1 exploration is expected to include detailed geological and structural mapping and sampling as well as the identification of “silver, copper and other economic mineral showings across the property” and satellite imaging analysis.

Conclusion: Initial field exploration at Igli should provide a basis for any future work and aid target identification for any subsequent work which is merited.  We look forward to news from the project as work proceeds.

Goldstone Resources* (GRL LN) 1.7p, Mkt Cap £16m – Options to directors and senior management

• The Company approves issuance of share options to directors and senior managers.
• 56m new options to be issued representing ~8.5% of current existing issued share capital.
• Options will vest in three tranches involving different exercise prices:
• Tranche 1 for 50% of options will vest immediately and have an exercise price of 2p;
• Tranche 2 for 25% of options will vest once production exceeds 650oz per month for three consecutive months and have an exercise price of 2.5p;
• Tranche 3 for 25% of options will vest once AISCs will go down sub $1,500/oz for three consecutive months and have an exercise price of 3p.
• No details on expiration dates for options are provided.
• This is first the issuance of share options by the Company since September 2011.

*SP Angel acts as broker to Goldstone Resources

Keras Resources* (KRS LN) – 4.6p, Mkt cap £3.7m – Keras starts commercial production of PhoSul® organic phosphate fertilizer granules in Utah, USA

(Keras holds 100% of the Diamond Creek phosphate mine in Utah, USA)

• Keras Resources reports the start of commercial production of PhoSul® granules at its Integrated Delta processing facility in Utah.
• The plant has moved to commercial production after some optimisation and certain upgrades to achieve consistent production with support from contractor contractor Burningham Enterprises Group and jv partner PhoSul LLC.
• PhoSul® solves Phosphorous run-off and water resource contamination and has been developed to improve P2O5 availability to crops with field tests showing significant yield and quality improvements over other rock phosphate products.
• The joint venture plans to produce between 8,000-10,000t this summer with Keras’ mine selling rock phosphate to the jv building up to steady-state sales of approximately 10,500tpa in addition to internal sales of approximately 6,500tpa.

• Phosul® consists of 80% of 50 mesh ore from Keras’ Falcon Isle Diamond Creek mine.
• Plant capacity: 5tph with a 520t/month running a single shift operation.

• • Double shift capacity ~ 920tpm of saleable bulk Phosul® granules expected in Q4.

• The Phosul jv should consume ~10,500tpa of 50 mesh phosphate when running at steady state.
• Keras’ Diamond Creek can produce ~25,000tpa of rock phosphate.

• Pricing: Phosul® granules are currently quoted at $40 for a 25lb bag on Walmart or $70 / 50lb bag on ebay in the US (equates to US$3,086/t at $70/50lb bag)
• Revenue: The jv could sell $24.7m – $30.7m of product this season.
• The https://www.phosul.com/ website highlights a 2020 crop study:
  • “The control plot (no fertilizer added) yielded 6.47 t/ac (fresh weight) and 3.78 t/ac dry weight, while Phosul yielded (on average) 18.64 t/ac (fresh weight) and 11.80 t/ac dry weight.
  • An increase of 12.17 t/ac (wet) and 8.02 t/ac (dry) was realized in this field.
  • At $125/ton, a return of $821/ac (gain – product cost @500 lbs/ac) makes Phosul a great investment!
  • The producer plans to re-apply Phosul after his first cutting.”
• Stockpile: ~4,250tons of 50 mesh product which will cover the operation through 2024 with all mining and crushing costs already expensed.
• The jv will build a stockpile of PhoSul® at the Delta Facility.
  • “Organic granulation requires a very specific formula and the blending of the PhoSul® ingredients in the design ratio, supplemented with moisture, an organic binder and a dust control agent in the overall product blend has been a challenging process which we will continue to optimise with strong support from our PhoSul LLC JV colleagues.
  • An important part of our transition to sales will include moisture and hardness testing as well as 240 size guide number (“SGN”) analysis on an ongoing basis.
  • Our intention is to produce 240SGN product in bulk in the short-to medium-term, with the option to produce 1 ton bags should demand dictate.”
• Power: Connection to 3-phase power will replace 600kW of diesel generation as soon as is practicably possible reducing power costs and CO2 emissions.

• Manganese:  we await news on the restart of the Nayéga manganese mine by the government of Togo where Keras holds a 1.5% royalty advisory fee plus 6.0% of gross revenue from the mine over the lesser of 3.5 years or 900,000t of beneficiated manganese ore sold..
• The deal with the Togo government should give nearly $0.9m a year at a price of $3.5/dmt for manganese and production of 7,480tpa equating to some $2.6m over three years.
• Manganese ore prices for 38%min FOB South Africa jumped in July to $4.07-4.22/dmtu from 3.47-3.62/dmtu at end June. Note Manganese concentrates are subject to a 25% import tariff into China from this year.
• The recent jump in manganese prices should be good for Keras assuming the government of Togo starts production from the Nayéga manganese mine.

*SP Angel acts as nomad and broker to Keras

Orosur Mining* (OMI LN) 4.2p, Mkt Cap £8.3m – Update on re-acquisition of Anzá

(Anzá 100% indirect ownership proposed)

• Orosur Mining provides an update on its transaction to re-acquire 100% ownership of the Anzá project, which was in JV with Newmont and Agnico Eagle.
• All parties continue to work ‘in good faith on finalisation of the share purchase agreement and the negotiation of ancillary agreements,’ alongside securing regulatory approval from TSXV.
• No material changes to the terms of the transaction have been made.
• Management suggests that minor details in the transaction have resulted in ‘substantial delays to completion.’

*SP Angel acts as Nomad and Broker to Orosur Mining

Premier African Minerals (PREM LN) 0.06p, Mkt Cap £19m – Latest update on the Zulu lithium project

• Premier African Minerals has announced that the suppliers of the flotation plant at its Zulu lithium project in Zimbabwe have confirmed their confidence in the flotation circuit “to effectively produce … [an] … SC6” lithium product.
• The company confirms its previous announcement that “the plant has already produced a spodumene concentrate at 6.2% Li2O, effectively better than SC6”.
• The plant suppliers, ENPROTEC, have stated their commitment to “determine what input changes can and need to be implemented to the plant operation to produce the required grade at the required recovery at target output and will apply these changes first on a laboratory scale to fully understand the effects of each and how to then implement these changes in the plant within the shortest time frame possible”.
• Expressing frustration that “real optimisation of the float circuit could only properly start after Q1 2024 after commissioning of the new mill and subsequent installation of the scrubber” CEO, George Roach, asserted that the “progress made this year on the most complex part of this plant is actually very good and we should not lose sight of the fact that this initial plant at Zulu is likely only the beginning of a long and exciting development for this project”.
• Premier African Minerals also says that its “internal estimate (including Zulu) of the all- in-projected cost, which has not been independently verified, on a delivered China port basis, inclusive of all administrative and overhead costs is less than US$750 ton SC6 when plant output reaches 4,000 tons per month”.

Conclusion: It appears that further work, including laboratory scale tests, are still required to deliver the planned performance from the flotation plant at the troubled Zulu Lithium project.

Rockfire Resources (ROCK LN) 0.19p, Mkt Cap £4.7m – Latest drilling results from Molaoi project, Greece

• Rockfire Resources reports that its latest drillhole, HMO-005, at its wholly-owned Molaoi zinc project in Greece has extended known zinc mineralisation further to the north and at depth.
• The company, which is reporting drilling assays on a zinc-equivalent (ZnEq) basis, says that the hole, which is angled at 65⁰ towards the west, intersected “multiple lodes” and highlights:

• • An intersection of 1.7m at an average grade of 11.5% ZnEq from 218.70m depth; and
  • An intersection of 5.05m at an average grade of 3.4% ZnEq from 248.78m depth; and
  • An intersection of 2.74m at an average grade of 4.5% ZnEq from 259.09m depth; and
  • An intersection of 1.91m at an average grade of 7.1% ZnEq from 281.43m depth; and
  • An intersection of 3.07m at an average grade of 2.91% ZnEq from 328.00m depth.

• An update to the existing ‘Inferred’ resource of 2.3mt at an average zinc equivalent grade of 11% “remains on track and … is anticipated in 2024”.
• CEO, David Price explained that “each hole has been successful in expanding the resource outline. This is anticipated to result in a significant upgrade to the current resource”.
• The company has previously indicated that its objective with the current drilling is to deliver “a zinc equivalent resource of at least 400,000 tonnes”, implying a 60% increase in resource tonnage (to ~3.7mt) at grades consistent with the existing 11% ZnEq estimate.
• Mr. Price also said that “Rockfire’s resource consultant has identified a minimum of 12 lodes so far and recent drilling has confirmed the continuation of these lodes to the north and at depth”.

Conclusion: Rockfire Resources’ drilling at Molaoi continues to expand the footprint of mineralisation with the identification of 12 individual mineralised lode structures so far.  Although some of these may not ultimately prove economic in terms of either grade, width or perhaps continuity, we look forward to a revised resource estimate incorporating the results of the present drilling campaign.

Taseko Mines (TKO LN) 170p, Mkt Cap £500m – Update on operations and Florence construction

• Taseko reports copper production of 22.7kt over the first six months of 2024, mining 41mt and processing 13.4mt.
• Copper production down 3% yoy over the period, whilst mined tons down 6.3%.
• C$285m reported in sales over the period, with C$94m reported in cash flows from operations.
• Adjusted EBITDA of C$121m.
• Taseko’s Gibraltar mine produced 9kt Cu over Q2, processing an average grade of 0.23% Cu.
• Recoveries at Gibraltar at 78%, lower on concentrator interruptions.
• C1 operating costs at US$2.99/lb.
• Company continues to work towards production at Florence, with SX/EW plant and tank farm concrete foundations now poured.
• 18 production wells have been completed in line with the development programme.
• Taseko expects Florence first production in 4Q25.

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.

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