SP Angel Morning View -Today’s Market View, Thursday 24th October 2024

US asks G7 members to consider sanctions on Russian palladium and titanium supplies in a fresh round of sanctions

MiFID II exempt information – see disclaimer below

Amaroq Minerals (AMRQ LN) – Exploration update

Anglo American (AAL LN) – Quarterly production reports highlights operational stability

Aura Energy* (AURA LN) – Quarterly report highlights progress on Tiris uranium project in Mauritania and at Häggån in Sweden

Ariana Resources (AAU LN) – Identification of resource expansion potential at Dokwe, Zimbabwe

ECR Minerals (ECR LN) – Exploration results from the Lolworth project, Queensland

Empire Metals* (EEE LN) – Diamond drilling shows thicker extensions of Pitfield’s weathered cap

Ferro Alloy Resources (FAR LN) – 3Q24 production

Goldstone Resources* (GRL LN) – $175k equity raise and $300k debt conversion

Montage Gold* (MAU CN) – US$825m financing package from Wheaton and Zijin to develop Cote D’Ivoire project

Oriole Resources* (ORR LN) – Initial exploration results from Gamboukou

Palladium – The US asked G7 members to consider sanctions on Russian palladium and titanium supplies in a fresh round of sanctions.

• The initiative was offered by Biden administration during a meeting of G7 deputy finance ministers on Tuesday in Washington.
• Russia accounts for >40% of global palladium production, according to USGS.
• Russia accounted for ~15% of global titanium sponge production in 2020 most of which is produced by VSMPO-AVISMA, where Russian government holds a 25% blocking stake through state owned defence conglomerate Rostek.
• Titanium is exported to a number of OEMs and aerospace companies in particular.
• Palladium is up 7% trading around $1,140/oz this morning.

Lithium ion battery prices slide as lithium prices remain depressed

• Benchmark reports that lithium-ion battery prices have fallen to $66.5/kWh, down 20% ytd.
• LFP prices have fallen below $60/kWh, from $96.2/kWh same time last year.
• Spodumene prices remain depressed at $750/t in China for 6% concentrate, whilst carbonate prices are being quoted below $10,000/t.
• SMM reports Albemarle’s recent carbonate auction fetched CNY72.7k/t. ($10,219/t)

Gold prices ($2,738/oz) rally again despite dollar rally as eyes turn to BRICs comments

• Gold rebounded from a 1.2% sell-off yesterday, falling to $2,710/oz before rebounding to $2,740/oz.
• The dollar climbed to August highs before retreating this morning.
• Meanwhile, treasury sell-off seems to have paused with the 10 year rising to 4.25% before retreating below 4.2%.
• Higher dollar and treasury yields traditionally weigh on gold, however a new global dynamic of central bank buying from BRIC countries has propelled prices higher.
• Putin is due to host a press-conference this afternoon in Kazan, with de-dollarisation talks a key focus for gold bulls as the group looks to diversify away from US influence.

Copper ($9,625/t) bounces as iron ore steadies lower on high inventories and limited Chinese stimulus

• Copper prices have climbed from yesterday morning lows, as they continue to bounce between $9,500-10,000/t on LME.
• Base metals are showing signs of life, however, with zinc rallying as LME futures spreads flip to backwardation on major buying.
• Bloomberg reports a single buy has taken 40% of November open interest, with other buyers scooping up LME warehouse inventories.
• Iron ore is steady just above $100/t, having pared gains made following China’s surprise stimulus announcements in September.
• A major CCP congress meeting remains unscheduled, sparking speculation that limited further stimulus measures will be announced this yea.

Rare Earths – KIA take control of REE mining areas

• The KIA, the rebel ‘Kachin Independence Army’ has taken control of Myanmar’s region for precious stones and rare earth mining (Mining.com).
• Kachin state borders with Yunnan province, China with much gems and mineral concentrates smuggled across the border into China.
• The KIA has taken the region from the NDA-K militia which is aligned with the military government while cooperating with Chinese mining companies.
• We feel sure not much of the gems or concentrates go through official channels and that the KIA will resume shipments to fund their military activities.
• Myanmar responsible for a critical 57% of global dysprosium and terbium concentrates according to Adamas Intelligence.

We recommend investors look at:  Lynas rare Earths, Mkango Resources*, Ionic Rare Earths, Rainbow Rare Earths. *SP Angel acts as Nomad and broker

Kimchi cabbage stockpile drawdown to make up for global shortage

• Reuters reports the South Korean government is to release 24,000 tonnes of napa cabbage from their strategic stockpile to support the peak kimchi-fomenting season (Reuters).
• Unusually warm weather appears to be damaging the cabbage crop with napa cabbage prices spiking higher causing the government to step in to release an additional 10% of contractually grown cabbages into the market.
• Napa cabbage thrives in the cooler climate of the Korean mountains. Lets hope North Korea doesn’t develop a taste for it.
• We wonder if our current Prime Minister, Kier Starmer, will last as long as a S Korean nappa cabbage?

 Economics

Japan

• Preliminary Manufacturing PMI (Oct/Sep/Est): 49.0/49.7/NA
• Preliminary Services PMI (Oct/Sep/Est): 49.3/53.1/NA
• Preliminary Composite PMI (Oct/Sep/Est): 49.4/52.0/NA

Eurozone – Private sector remained in contraction for a second month in October with both Germany and France reported sub 50 PMI readings this morning.

• Demand is struggling with new orders down for the fifth consecutive month.
• Recruitment is responding with employment down for the third consecutive month and at the fastest pace since the end of 2020.
• Final goods inflation increased at a modest pace which the slowest since February 2021 as deflation in the manufacturing sector was outweighed by inflation in services.
• Stubborn services inflation may see the ECB to opt for a 25bp cut rather than a larger move during the December meeting.
• Preliminary Manufacturing PMI (Oct/Sep/Est): 45.9/45.0/45.1
• Preliminary Services PMI (Oct/Sep/Est): 51.2/51.4/51.5
• Preliminary Composite PMI (Oct/Sep/Est): 49.7/49.6/49.7

Germany

• Preliminary Manufacturing PMI (Oct/Sep/Est): 42.6/40.6/40.8
• Preliminary Services PMI (Oct/Sep/Est): 51.4/50.6/50.6
• Preliminary Composite PMI (Oct/Sep/Est): 48.4/47.5/47.6

France

• Preliminary Manufacturing PMI (Oct/Sep/Est): 44.5/44.6/45.0
• Preliminary Services PMI (Oct/Sep/Est): 48.3/49.6/49.9
• Preliminary Composite PMI (Oct/Sep/Est): 47.3/48.6/48.9

UK – Private sector growth hit a 11 month low with activity slowing in both manufacturing and services sectors.

• Respondents to the S&P Global PMI survey cited business uncertainty ahead of the Autumn Budget due 30 October.
• A wait-and-see approach saw business pause major spending decision acting as a constraint on new business orders.
• Overall growth of business orders eased to its slowest since June.
• Private sector employment decreased for the first time since December 2023, albeit only marginally.
• Prices for final goods and services climbed at the quickest pace since July.
• Preliminary Manufacturing PMI (Oct/Sep/Est): 50.3/51.5/51.5
• Preliminary Services PMI (Oct/Sep/Est): 51.8/52.4/52.4
• Preliminary Composite PMI (Oct/Sep/Est): 51.7/52.6/52.5

Currencies

US$1.0794/eur vs 1.0782/eur previous. Yen 152.14/$ vs 152.50/$. SAr 17.719/$ vs 17.553/$. $1.297/gbp vs $1.297/gbp. 0.666/aud vs 0.667/aud. CNY 7.114/$ vs 7.130/$.

Dollar Index 104.24 vs 104.33 previous

Precious metals:         

Gold US$2,735/oz vs US$2,754/oz previous

Gold ETFs 84.1moz vs 84.0moz previous

Platinum US$1,035/oz vs US$1,037/oz previous

Palladium US$1,119/oz vs US$1,078/oz previous

Silver US$34.3/oz vs US$34.7/oz previous

Rhodium US$4,750/oz vs US$4,750/oz previous

Base metals:   

Copper US$9,636/t vs US$9,521/t previous

Aluminium US$2,711/t vs US$2,637/t previous

Nickel US$16,340/t vs US$16,195/t previous

Zinc US$3,270/t vs US$3,116/t previous

Lead US$2,074/t vs US$2,060/t previous

Tin US$31,395/t vs US$30,985/t previous

Energy:           

Oil US$75.9/bbl vs US$75.6/bbl previous

• Crude oil prices edged higher even as the EIA reported US inventory builds of 5.4mb to crude and 0.9mb to gasoline, offset by a 1.2mb draw to diesel stocks, with refinery utilisation recovering 1.8% to 89.5%.
• European energy prices rose to their highest YTD24 level on unplanned Norwegian outages even as EU natural gas storage levels rose 0.3% w/w to 95.3% full (vs 92.2% 5-Yr average), with aggregate storage at 1,094TWh.
• Media reports that Harbour Energy plans to sell down the Company’s stakes in several North Sea fields and has renewed plans to acquire a US-listed company that will allow it to list and move its headquarters to the US.
• RWE’s strategy director told conference attendees that ‘interest rates are the oil price of the energy transition’, with the availability of capital and interest rates determining the speed of low-carbon energy system adoption.
• Dominion Energy has closed the sale of a 50% interest in the 2.6GW US Coastal Virginia Offshore Wind project to Stonepeak for $2.6bn, which represents a reimbursement of ~50% of project-to-date capital investment and is due to be completed in late 2026. The transaction is in line with Dominion’s debt reduction initiatives.

Natural Gas €42.1/MWh vs €40.8/MWh previous

Uranium Futures $82.6/lb vs $82.6/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$103.4/t vs US$103.1/t

Chinese steel rebar 25mm US$537.3/t vs US$534.6/t

HCC FOB Australia US$203.0/t vs US$203.3/t

Thermal coal swap Australia FOB US$145.0/t vs US$144.0/t

Other:  

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

NdPr Rare Earth Oxide (China) US$59,468/t vs US$59,331/t

Lithium carbonate 99% (China) US$9,771/t vs US$9,748/t

China Spodumene Li2O 6%min CIF US$750/t vs US$750/t

Ferro-Manganese European Mn78% min US$985/t vs US$985/t

China Tungsten APT 88.5% FOB US$340/mtu vs US$340/mtu

China Graphite Flake -194 FOB US$440/t vs US$445/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$314/t vs US$315/t

China Rutile Concentrate 95% TiO2 US$1,272/t vs US$1,269/t

Spot CO2 Emissions EUA Price US$63.9/t vs US$63.9/t

Brazil Potash CFR Granular Spot US$277.5/t vs US$277.5/t

Germanium China 99.99% US$2,875.0/kg vs   US$2,875.0/kg

China Gallium 99.99% US$455.0/kg vs US$455.0/kg

Battery News

Tesla forecasts sales growth of 20-30% next year

• Tesla CEO Elon Musk said he expects the companies vehicle sales to grow 20% to 30% next year.
• Musk also said the electric vehicle maker will roll out driverless ride-hailing services to the public in California and Texas next year
• His statement doubles down on his pledge made when the robotaxi  ‘Cybercab’ was unveiled two weeks ago, but the project will likely face significant regulatory and technical challenges.
• Waymo, which offers paid rides in autonomous vehicles in parts of California, as well as in Phoenix, Arizona, spent years logging millions of miles of testing before it received its first permit from the California Public Utilities Commission (CPUC).
• Tesla does not have, and has not applied for, a testing permit without a driver, the agency said.

Tesla to sell Powerwall battery storage systems in Japan

• Tesla will start selling its Powerwall home battery system in Japan through electronics store chain Yamada Denki. (Nikkei)
• Nikkei reported that Tesla aims to speed up distribution of its home battery system in Japan by partnering with Yamada Holdings, the operator of the chain, which has about 1,000 stores nationwide.

Amazon India forecasts 250% yoy growth in two wheelers, driven by electric vehicle sales

• Amazon India is expecting a 250% yoy growth in sales over the festive season, driven by electric vehicles.
• The Indian division of the e-commerce giant began selling electric two-wheelers last year and now has more than 10 brands being sold on the platform.
• 75% of two-wheelers being sold on the platform are electric.

Company News

Amaroq Minerals (AMRQ LN) 79p, Mkt Cap £258m – Exploration update

• The Company completed 2024 exploration programme including 8,600m of core drilling across five key targets focused on gold, copper and nickel across its licese areas in Greenland.
• The programme included first pass drilling at Nanoq gold and Josva copper projects.
• ~2,900 of resource drilling in 11 holes completed at the Nalunaq Target Block Extension Zone (results due 1Q25).
• The Company is developing Nalunaq Gold Project with commissioning of Phase 1 involving gravity circuit due to start in 4Q24 while additional drilling is expected to contribute towards MRE update in 1H25.
• Conducted first surface sampling at Eagle’s Nest, 30km north of Nalunaq (results due 4Q24).
• Completed first scout drilling of 130m across two holes at the high-grade Nanoq gold project (results due 4Q24).
• Completed a significant 4,773m of remote exploration drilling at the Stendalen Cu/Ni project (1Q25).
• Conducted new scout drilling for 501m in two holes at the epithermal copper/gold mineralization at Target North (1Q25).
• Completed initial drilling  for 212m across two holes at the high-grade copper mineralization at the historic Josva mine (1Q25).

Anglo American (AAL LN) 2,420.5p, Mkt Cap £31.1bn – Quarterly production reports highlights operational stability

• Reporting its Q3 production results for the three months to 30^th September 2024, Anglo American highlights a second consecutive record quarterly performance at its Minas Rio iron ore operations in Brazil as well as emphasising the operational stability of its production base.
• Underlining its confidence in operational stability, Anglo American has lifted its 2024 guidance range for the PGM operations to the range 3.7-3.9m oz from the previous 3.3-3.7m oz and also increased nickel production guidance to 38-39,000t from the previously announced range of 36-38,000t.  Nickel cost guidance has also been reduced to ~US$5.30/lb from the previous level of ~US$5.50/lb.
• Nickel output rose by 6% to 9,900t (Q3 2023 – 9,300t) bringing YTD output to 29,400t (2023 – 28,400t) “due to operational improvements and higher stability at the Barro Alto plant as well as longer planned maintenance in the comparative period. This performance was partially offset by lower production from Codemin, which was impacted by an unplanned stoppage at the refinery during the quarter”.
• Quarterly copper output of 181,300t (Q3 2023 – 209,100t) brings the year-to-date total to 575.100t (2023 – 596.300t) leaves Anglo American “on track to meet full year guidance” of 730-790kt.  Unit cost guidance is also intact at ~US$1.57/lb including ~US$1.90/lb from the Chilean operations and ~US$1.10/lb in Peru.
• Copper output declined by “13% in the quarter as expected versus the comparative period, due to the planned closure of the smaller and more costly Los Bronces plant, partially offset by higher grades at El Soldado … [and the company says that production] … at Quellaveco in Peru is expected to increase in the fourth quarter as grades and recoveries improve”.
• The company explains that improved recovery rates at Quellaveco are expected “as improvements continue to optimise the coarse particle recovery plant”.
• “Iron Ore, production was 2% higher … [at 15.7mt] … as Minas-Rio achieved a record third quarter performance, reflecting enhanced operational stability, partially offset by a planned decrease at Kumba … [which still delivered its highest production in the last 12 months] … to align with third-party logistics constraints”.
• The company says that iron ore sales “were broadly flat … [at] … 8.8 million tonnes, as inclement weather conditions impacted the port in July; however, the third-party rail and port performance has continued to constrain sales. The Transnet annual shutdown for rail and port maintenance that began in early October has been completed”.
• Iron ore production guidance for 2024 remains intact at 58-62mt with Kumba expected to produce 35-37mt and Minas Rio a further 23-25mt.  Cost guidance is also unchanged in the region of US$37/t.
• Platinum Group Metals (PGM) output “decreased 10% versus the comparative period … [to 922,000oz ] … primarily reflecting the expected lower metal in concentrate production in line with 2024 guidance” currently at 3.3-3.7moz for 2024.
• PGM production from Anglo American’s own mines “decreased by 17% to 552,000 ounces, mainly due to the disposal of Kroondal in Q4 2023” while output from Mogalakwena “was impacted in July by downtime and repairs caused by an electrical failure in the North Concentrator’s primary mill (c.45,000 ounces). The mill has returned to normal operating levels as at the end of July”.
• Production guidance for the full year is maintained in the range 3.3-3.7moz of PGMs with cost guidance also intact at ~US$920/oz.
• “Rough diamond production decreased by 25% … [to 5.6m carats for the quarter bring in YTD output to 18.9m carats] … reflecting a production response to the prolonged period of lower demand, higher than normal levels of inventory in the midstream and a continued focus on managing working capital”.
• Diamond output from Botswana declined by 32% to ~4m carats in the quarter while that from Namibia fell by 14% to ~0.46m carats with Canadian output 11% lower at 0.6m carats althoygh South African output rose by 41% to 0.5m carats.
• Anglo American confirms that diamond trading “conditions during the quarter continued to be challenging in light of higher than normal midstream inventory levels and the prolonged period of depressed consumer demand in China … [and that] … year to date consolidated average realised price increased by 4% to $160/ct, reflecting a larger proportion of higher value rough diamonds being sold, partially offset by an 18% decrease in the average rough price index”.
• Diamond production guidance for 2024 is unchanged in the range 23-26m carats, “however, as the midstream continues to hold higher than normal levels of inventory and the expectation for a recovery remains protracted, De Beers is actively assessing options with our partners to reduce production going forward”.
• Production of steelmaking coal declined by 6% to 4.1mt (Q3 2023 – 4.4mt) bring YTD output to 12.1mt (2023 – 11.2mt) “primarily driven by the cessation of mining at Grosvenor following the underground fire in June 2024. Excluding the impacts of Grosvenor, steelmaking coal production increased by 3%, reflecting higher production from the Dawson open cut operation and Moranbah longwall operation”.
• Anglo American reports that “Significant progress has been made at Grosvenor, focusing on impact assessment and re-entry planning. Initial camera footage indicates the impact of the underground fire may have been relatively concentrated”.
• Production guidance for 2024 steelmaking coal production is “unchanged at 14-15.5 million tonnes” with cost guidance maintained in the range US$1.30-1.40/t.
• The company confirms that “Exploration expenditure decreased by 24% to $29 million primarily due to a decrease in spend in iron ore and diamonds. Evaluation expenditure decreased by 19% to $42 million, mainly due to a decrease in spend in PGMs, steelmaking coal and diamonds”.

Conclusion: Anglo American emphasises the operational stability of its production base while lifting its 2024 production guidance for PGMs and nickel.  Impact assessments of the fire at the Grosvenor coal mine suggests that its impact may have been more limited than had been feared initially.

Aura Energy* (AURA LN) 9.48p, Mkt Cap £81m – Quarterly report highlights progress on Tiris uranium project in Mauritania and at Häggån in Sweden

(Aura Energy hold 100% of Tiris Uranium and 100% of the Häggån Project in Sweden, Häggån hosts 2.5bnt of vanadium, SOP ‘sulphate of potash’ and uranium resource)

• Aura Energy report and highlight good progress made on both the Tiris uranium and Häggån projects in Mauritania and Sweden.
• Key financials:

• • Net cash used in investing A$1.48m
  • Net cash used in investing A$2,9m
  • G&A  inc. corporate costs: A$1.1m
  • Staff costs: A$0.4m,
  • Expenditure on exploration and evaluation: A$2.9m
  • Repayment of borrowings: A$1.2m
  • Proceeds from Curzon placement: A$5.4 million
  • Cash: A$15.8m

• Management increased the estimated resource for the Tiris project by 55% to 91.3mlbs of contained uranium
• Häggån: Management’s application for a new exploration license was knocked back “as the Häggån no 1 concession remains valid and has not yet expired until the determination of the Exploitation Permit Application, at which point new exploration application and exemption will be resubmitted”.
• Sweden’s climate minister announced plans to lift the nation’s ban on uranium mining last year. The nation is planning another 10 new nuclear reactors.
• Including the extraction and sale of uranium into the Häggån mine plan in Sweden will materially boost the economics of this substantial project.
• Tiris: Aura appointed Orimco and Macquarie Capital (Austalia) to arrange debt funding for the Tiris project and to engage with potential strategic investors.
• RPMGlobal were also appointed as Independent Technical Experts to undertake the technical and ESG due diligence on behalf of the funders with site visits scheduled for October.
• Legal due diligence should also start soon.
• Drilling for water shows strong flows of up to 55cubic meters an hour with >60% success in water drilling. The project is estimated to need around 160 cubic meters an hour.

*SP Angel acts as Nomad and Broker to Aura Energy

Ariana Resources (AAU LN) 2.4p, Mkt Cap £43m – Identification of resource expansion potential at Dokwe, Zimbabwe

• Ariana Resources reports that its review of data from the recently acquired Dokwe gold project in Zimbabwe indicates that there may be potential to increase the current 1.8moz gold resource as both the Dokwe North and Dokwe Central mineralisation remain open both laterally and at depth.
• The data review shows that “Several moderately angled southwest plunging higher-grade shoots at the Dokwe North deposit remain untested at depth and demonstrate that the deposit remains open to the south” while at Dokwe Central, the “deposit remains open to the west and historical intercepts … to the east indicate that the prospectivity of the Dokwe Central fault zone extends for at least 1km”.
• Further step-out and infill drilling is now planned which Managing Director, Dr. Kerim Sener, explained could generate a “potential enhancement of the resource to at least 2Moz of gold”.
• Dr. Sener explained that improved geological understanding of Dokwe North has identified “several high-grade zones … which display good strike continuity through the deposit, trending northeast-southwest and plunging at a moderate angle to the southwest. This opens up the southern end of the deposit for further exploration … [while deeper drill holes ] … suggest the potential for repeated prospective stratigraphy, … indicating that there is an opportunity to encounter good mineralisation on the northern flanks of the deposit”.
• Commenting on Dokwe Central, he said that “we have now demonstrated an opportunity to define further mineralisation along strike over a distance of approximately 1km along a faulted contact between volcanic and sedimentary units … [suggesting] … a well-defined mineralised zone developed in the immediate vicinity of the fault zone … [which]… trends broadly east-west”.
• He confirmed that “we are designing new drilling programmes” to better understand potential to expand the resource base at Dokwe North and Dokwe Central.

Conclusion: Improved geological insights offer the potential for resource expansion at Dokwe.

ECR Minerals (ECR LN) 0.3, Mkt Cap £6m – Exploration results from the Lolworth project, Queensland

• ECR Minerals reports early-stage rock-chip sampling and trenching results from its Lolworth gold exploration project covering 946km² in three exploration permits in Queensland.
• Results from 378 rock-chip samples yielded assays of up to 14.7g/t gold with “trenching at the Gorge Creek West Prospect … [identifying] … broader zones of gold mineralisation, including best grades of 11.05, 3.72 and 4.82 g/t Au within a quartz shear zone”.
• Twenty-three of the rock-chip samples “returned silver grades greater than 10 g/t Ag with six samples exceeding 50 g/t Ag”.
• At Gorge Creek West, stream sediment sampling results have “delineated the ridgeline as a potential gold source, and trenching has revealed a North-South trending quartz sulphide shear zone traced along a 40m strike. A secondary shear was located 12.5 metres west of the main zone”.
• At the Uncle Terry prospect, “Reconnaissance rock chip sampling has previously revealed the highest-grade gold assay to date (75.6 g/t Au) from a quartz-sulphide subcrop”.
• The company also discloses that at its Tambo prospect in Victoria, the “first diamond drill hole has reached 85 metres and encountered quartz and sulphide mineralisation at a 38 metre depth. A second hole is currently underway, with two or three more holes planned for a total planned aggregate depth of 450-550 metres”.

Conclusion: Early-stage rock-chip and trenching exploration results from the Lolworth project in Queensland. We await further news as the exploration progresses.

Empire Metals* (EEE LN) 7p, Mkt Cap £46m – Diamond drilling shows thicker extensions of Pitfield’s weathered cap

• Empire reports the completion of their diamond drilling programme at the Pitfield titanium project in WA.
• The Company drilled five holes to over a total of 679m at the Thomas and Cosgrave targets.
• Drilling encountered the targeted weathered zones over from near surface to c.60m depths.
• The drilling suggests deeper extensions of the more friable weathered zone, which hosts the higher-grade, high-purity anatase section.
• Company reports strong core recovery, which will support metallurgical testwork crucial for progressing the project.
• Upcoming metallurgical testwork will examine grindability of the ore, testing the energy input needed for liberating titanium from gangue minerals.
• The programme reiterates Empire’s belief that the anatase-rich weathered cap will support easier mining conditions, reducing energy consumption needed for comminution.
• Empire has now drilled c.15km of RC drilling and 2.7km of diamond drilling over 17 holes.

Conclusion: Empire continues to progress and derisk the Pitfield titanium project. Diamond core crucial for further metallurgical test work needed to examine the earlier stages of the Pitfield flowsheet. The drilling shows deeper extensions of the higher-grade, high-purity anatase cap, which is encouraging, alongside the reported friable and soft nature, which will likely support cheaper mining and initial processing, should an economic route to production be established.

 *SP Angel acts as nomad and broker to Empire Metals

Ferro Alloy Resources (FAR LN) 2.7p, Mkt Cap £13m – 3Q24 production

• 3Q24 production amounted to:

• • 52t vanadium pentoxide and YTD at 222t (3Q23 and YTD23: 47t and 220t);
  • 7t molybdenum (in ferro molybdenum) and YTD at 21t (3Q23 and YTD23: 6t and 27t);
  • 64t nickel (in Ni con) and YTD at 136t (3Q23 and YTD23: 16t and 76t).
• Production is sourced from processing nickel rich residues held at the plant during the quarter.
• Residues contained lower levels of vanadium leading to a ~40%qoq drop in vanadium production.
• Metallurgical recoveries of both vanadium and molybdenum from nickel residues at the commercial scale testing did not replicate laboratory results.
• As such the team decided to revert to processing bought in catalysts on a tolling basis.
• The Company has sufficient catalysts for processing during 4Q24 either already at the plant site or on order.
• Research and development are ongoing for a potential upgrading of produced Ni concentrate into FeNi.

Goldstone Resources* (GRL LN) 1.0p, Mkt Cap £7m – $175k equity raise and $300k debt conversion

• The Company raised conditionally £176k in new equity and is converting £234k (US$300k) of outstanding debt into new shares.
• New shares are issued at 1.05p, same as the last equity raise price.
• The Company will be issuing 39m shares that represents ~5% of enlarged share capital.
• Proceeds will be used to continue ramping up operations at Homase targeting 1koz pm production rate as well as general working capital purposes.
• The Company owes £2.4m (~$3m) under the Blue Gold convertible note (unsecured, 8% interest, 3.25p conversion price) 30 November this year.

*SP Angel acts as broker to Goldstone Resources

Montage Gold* (MAU CN) C$2.22, Mkt cap C$765m – US$825m financing package from Wheaton and Zijin to develop Cote D’Ivoire project

• Montage Gold, developer of the Koné project in Cote D’Ivoire, reports it has secured a financing package from Wheaton Precious Metals and Zijin Mining.
• Wheaton will provide US$625m via a gold stream and $75m in a loan facility.
• Wheaton will pay the $625m over four equal instalments during construction.
• Wheaton will purchase 19.5% of the payable gold from Montage’s ‘Core Area of Interest’ until 400,000 ounces has been delivered.
• Wheaton will pay a minimum transfer price of 20% at a gold price above $2,100/oz,
• Following this, Wheaton will purchase 10.8% of the payable gold until a further 130,000 ounces of gold has been delivered, before reducing to 5.4% for the remainder of the LOM.
• Payable gold calculated using a fixed payable factor of 99.9%.
• The Core Area of Interest comprises the Kone and Gbongogo deposits, within a 500-meter boundary.
• Montage holds a further 50 exploration targets across the property.
• The US$75m redeemable subordinated gold stream from Zijin also regards the same Area of Interest as the Wheaton stream.
• Zijin will receive 3.1% of payable gold from Kone until 54koz have been delivered, before switching to a 1.3% stream for LOM.
• The Zijin is fully redeemable under buyback options outlined in the press release.
• Wheaton will also provide a $75m loan facility, which can be drawn following the fourth instalment of the stream payment for three-years from closing.
• The rate will be SOFR + 7.75%pa, and a commitment fee of 1.5%pa standby fee from receipt of first instalment of the stream payment.
• Zijin was also provide a loan facility, of US$50m at SOFT floored at 2.5% plus 4%pa.
• Zijin hold 9.9% of the Company, with Barrick holding 4.6% and the Lundin Group holding 19.9%.
• Kone is expected to produce 301koz over the first eight years of production, with LOM estimated at $998/oz.
• Strip ratio of 1.18:1, average mill throughput 11mtpa, average LOM head grade 0.72g/t Au.
• Total LOM gold production of 3.6moz.
• The project holds 4moz in reserves at 0.72g/t Au.
• CAPEX is US$712m, with SUSEX of US$165m.
• NPV5 of $1,089m at $1,850/oz Au.

*A member of the SP Angel mining team holds shares in Montage Gold

Oriole Resources* (ORR LN) 0.35p, Mkt cap £14m – Initial exploration results from Gamboukou

• Oriole have released an exploration update from their 90% owned Gamboukou licence in Cameroon, part of the wider CLP licence package.
• Micon consultants recommended regional stream sediments, with collection of 407 samples now completed.
• Nine samples returned gold grading 10ppb Au, up to 39ppb.
• Gold samples were ranked, highlighting similarities to regional stream sampling from the Eastern CLP licences.
• pXRF samples were also used for lithium pathfinder elements, like rubidium and caesium, although further work is required.

*SP Angel acts as Broker to Oriole Resources

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.

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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