SP Angel Morning View -Today’s Market View, Thursday 25th May 2023

Risk sentiment pulls back on US debt ceiling concerns and sticky inflation

MiFID II exempt information – see disclaimer below

Beowulf Mining* (BEM LN) – Resource clarification

European Metals Holdings (EMH LN) – Successful lithium recoveries from testwork of zinnwaldite at Cinovec Project

Phoenix Copper* (PXC LN) – Bond issue for Empire oxide pit close to completion as technical work progresses

Premier African Minerals (PREM LN) – Pilot plant optimisation required for the Zulu Lithium project, Zimbabwe

Gold – $1,959/oz – Prices trend lower as dollar marches higher and US Treasury yields rally

  • Gold prices failed to break above $1,985/oz yesterday, with trading volatile amid ongoing negotiations over the US debt ceiling.
  • The metal subsequently fell, now hovering around the $1,960/oz mark.
  • Gold has been hit by a combination of rising US Treasury yields and a strengthening dollar.
  • The sell-off in US government bonds parallels ongoing negotiations between the Biden’s administration and House Republicans.
  • The dollar is currently hitting mid-March highs, further reducing gold’s appeal.
  • Yields and the dollar are also being supported by hawkish Fed commentary, with several Fed members raising the prospect of additional hikes going forward.

 Copper weakness persists as China state researcher rings alarm bells

  • Copper prices are holding below $8,000/t, hovering around the $7,950/t mark after touching $7,850/t last night.
  • Chinese copper demand remains weak with easing manufacturing growth, property market paralysis and consistent concentrate supply from Peru following disruptions earlier this year.
  • The dollar continues to weigh on base metals, whilst a weaker yuan limits Chinese buyers’ ability to purchase international supply.
  • Antaike, China’s state-backed research house, warns copper prices could slide to between $4,340/t and $6,500/t between 2024-2025. We see these as somewhat pessimistic given the supply side dynamics and structural underinvestment in the sector.
  • Robert Friedland, on the other hand, believes current market weakness is ‘momentary’ and remains ‘very very bullish on demand.’
  • BHP believes China property ‘sales and completions of homes will turn around first, and then new starts,’ noting that this ‘trajectory is holding.’
  • ICSG estimates a Q1 refined surplus of 332,000t representing about 1.2% of global annual output which accounts for why more copper is showing up on the LME though copper is flowing out of SHFE warehouses now.
  • The ICSG now forecast a deficit of 114,000t for this year versus their previous prediction of a 155,000t surplus in 2023.
  • The ICSG estimated a 431,000t copper deficit last year.

 Tin prices jump as Myanmar doubles down on mine suspension plans

  • Tin prices rallied 2% to $24,400/t this morning following an announcement from the Wa government relayed by the International Tin Association.
  • The organisation stated the plan ‘sends a strong message to the mining sector about the Wa government’s unwavering commitment to promote sustainable mining practices, protect the environment and safeguard the welfare of mine workers.’
  • Tin markets are extremely tight, and the Wa state supplied 36kt/48kt of China’s imports from Myanmar last year.

 Iron ore prices slide again as traders look to summer lull in Chinese construction

  • Iron ore prices have fallen to three-week lows as China emerges from its disappointing ‘peak’ construction season.
  • Dalian prices fell to $99/t whilst Singapore futures fell to $94.8/t.
  • Iron ore prices have fallen close to 15% this year.
  • Steel demand has disappointed since its re-emergence from Covid lockdowns at the turn of this year.
  • Summer is traditionally a muted season for steelmaking demand and construction activity in China.
  • Supply has remained stable from major producers Brazil and Australia.
Dow Jones Industrials -0.77% at 32,800
Nikkei 225 +0.39% at 30,801
HK Hang Seng -2.03% at 18,729
Shanghai Composite -0.12% at 3,201


US – Risk sentiment pulled back with no resolution on debt ceiling negotiations so far helping the US$ higher against major peers.

  • Fitch, a credit rating agency, put the US on watch for a possible downgrade yesterday.
  • “Fitch still expects a resolution to the debt limit before the X-date (1 June),” the credit agency said in a report.
  • Both Fitch and Moody’s currently rate the US debt at top AAA and Aaa, respectively, while S&P ranks it at AA+ after a downgrade in 2011 amid debt ceiling negotiations at the time.
  • US dollar index continues to strengthen to 104 partly due to Euro weakness which represents around half the index following news of German recession in Q1
  • US weekly 30-year mortgage rate rose to 6.69% vs 6.57% previously
  • Mortgage applications fell -4.6% vs -5.7% previously.

Japan – Reuters Tankan index rose to 6 in May vs -3 in April

South Korea – The central bank cut its economic growth projections to 1.4% from 1.6% for this year on the back of lower exports amid cooling global demand.

  • The Bank of Korea also decided to leave rates unchanged at 3.5% for a third consecutive meeting amid slowing economic growth.
  • Business confidence 73 May vs 70 in April

Turkey – Business confidence largely unchanged at 108.3 in May vs 108 in April

  • Capacity utilisation 76% (75.4%),

EU has been effective in reducing demand as well as diversifying sources for its natural gas imports following the Russian invasion of Ukraine.

  • EU gas demand is expected to fall by more than its total imports from Russia this year, according to the European Commission report.
  • Estimates suggest the EU consumptions will be reduced by a further 60bn cubic metres in 2023 “which is more than the gas volumes we still foresee to import from Russia in 2023 both pipeline and LNG”.

 Germany – Final GDP numbers revised Q1 estimate into a contraction territory on the back of lower personal and government spending.

  • Q1 GDP was brought down to -0.3%qoq from previous estimate of no growth (0.0%qoq).
  • This also suggests the economy was entered a recession in Q1/23 extending a contraction to two quarters (Q4/22 -0.5%qoq.
  • Ifo Institute business climate fell to 91.7 vs 93.6

UK – Gas and power bills are set to pull back as the UK energy regulator to cut the price cap by £1,206 to £2,074 from July.

  • The move follows a drop in wholesale gas and electricity prices.
  • Gas prices hit a high of >€300/MWh in August last year and have pulled back down to ~€27/MWh on the back of better weather, demand rationalisation and a weaker economic outlook.
  • The price cap is reset every three months to reflect changing wholesale costs. It started increasing in April 2022 following an increase in wholesale gas and electricity prices.
  • It hit £3.549 in October and then £4,279 in January compared to below £1,280 in previous years, FT reports.

Inflation – Inflation hits 9.5% in Austria

  • Austrian inflation now outpaces Italian and UK inflation at 8.7%.
  • Sweden is not far behind at 7.7%, Germany at 7.6%. France and Portugal are at 6.9%
  • Are central banks targets of 2% inflation are simply unrealistic ?
  • Key inflation drivers in the UK as reported by the ONS are:
    • Clothing and footwear
    • Food and non-alcoholic drinks (mainly millennials and Gen-Z)
    • Housing and household services:
    • Restaurants and hotels
    • Transport
  • More globally:
    • Supply chain issues driven by ongoing Covid disruption – yes, Covid still exists out there
    • Ukraine war disruption
    • Energy prices – strangely high in the UK despite big falls in oil and gas prices. Competition Authority report being prepared on food and fuel.
  • Oil and gas prices have fallen heavily and should now reduce inflation
  • Chinese manufacturers are struggling to sell much domestically which will likely prompt discounted exports

Conclusion: Inflation should naturally pull back, though 2% seems a long way off. Higher mortgage rates for an increasing number of home owners will naturally soak up allot of spare income and create new economic and social distress.

Ukraine – Kyiv reported that all of 36 Iranian Shahed drones launched at the capital overnight were downed by Ukrainian air defence forces.

Russia / Ukraine – Did Russian militia sympathetic to Ukraine launched attacks into Russia this week?

  • There is evidence that Putin organised for the FSB to bomb apartment blocks within Russia to gain support for his ‘strong-man’ approach from Russian citizens and we suspect Putin may be at it again.
  • Putin has previously used ‘fake’ attacks to gain public support and appears to be moving large numbers of its citizens away from certain areas.
  • Does this mean that Putin is planning some form of heinous attack, or is Putin playing another game of bluff?
  • See John Sweeney – Killer in the Kremlin – https://www.penguin.co.uk/books/453960/killer-in-the-kremlin-by-sweeney-john/9781804991206
  • Better still, sign up to John Sweeney’s new film: ‘The Eastern Front’ https://byline.tv/putindocumentary/


US$1.0717/eur vs 1.0779/eur yesterday. Yen 139.47/$ vs 138.64/$. SAr 19.318/$ vs 19.240/$. $1.234/gbp vs $1.243/gbp. 0.653/aud vs 0.657/aud. CNY 7.075/$ vs 7.057/$.

Dollar Index 104.11 vs 103.50 yesterday.

Commodity News

Precious metals:

Gold US$1,959/oz vs US$1,973/oz yesterday

Gold ETFs 94.0moz vs US$94.1moz yesterday

Platinum US$1,025/oz vs US$1,049/oz yesterday

Palladium US$1,411/oz vs US$1,454/oz yesterday

Silver US$23.09/oz vs US$23.33/oz yesterday

Rhodium US$6,900/oz vs US$7,000/oz yesterday

 Base metals:   

Copper US$ 7,945/t vs US$7,972/t yesterday

Aluminium US$ 2,216/t vs US$2,200/t yesterday

Nickel US$ 21,230/t vs US$20,910/t yesterday

Zinc US$ 2,283/t vs US$2,317/t yesterday

Lead US$ 2,042/t vs US$2,060/t yesterday

Tin US$ 24,270/t vs US$23,950/t yesterday


Oil US$78.0/bbl vs US$77.5/bbl yesterday

  • Crude oil prices edged lower despite the EIA reporting a 12.4mb US crude inventory draw last week, as well as 2mb gasoline and 0.5mb distillate stock draws, with refinery utilisation decreasing slightly by 0.3% to 91.7%.
  • European energy prices are below $300 per thousand cubic meters for the first time in two years as EU natural gas storage levels rose 2.2% w/w to 66.5% full (vs 48.1% 5-year average), with strong builds in France, Germany, Italy and the Netherlands contributing to aggregate storage of 751TWh.

Natural Gas US$2.386/mmbtu vs US$2.335/mmbtu yesterday

Uranium UXC US$53.60/lb vs US$53.40/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$95.5/t vs US$100.1/t

Chinese steel rebar 25mm US$514.4/t vs US$521.9/t

Thermal coal (1st year forward cif ARA) US$110.0/t vs US$110.0/t

Thermal coal swap Australia FOB US$150.0/t vs US$160.0/t

Coking coal swap Australia FOB US$228.0/t vs US$228.0/t


Cobalt LME 3m US$30,195/t vs US$34,930/t

NdPr Rare Earth Oxide (China) US$67,996/t vs US$68,019/t

Lithium carbonate 99% (China) US$39,653/t vs US$40,032/t

China Spodumene Li2O 6%min CIF US$4,010/t vs US$4,010/t

Ferro-Manganese European Mn78% min US$1,302/t vs US$1,310/t

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

China Graphite Flake -194 FOB US$760/t vs US$765/t

Europe Vanadium Pentoxide 98% 7.4/lb vs US$7.5/lb

Europe Ferro-Vanadium 80% 32.25/kg vs US$32.25/kg

China Ilmenite Concentrate TiO2 US$319/t vs US$322/t

Spot CO2 Emissions EUA Price US$88.3/t vs US$91.8/t

Brazil Potash CFR Granular Spot US$370.0/t vs US$370.0/t

Battery News

Jaguar Land Rover to pick UK over Spain for new gigafactory

  • According to reports, Jaguar Land Rover (JLR) owner, Tata Group, will select the UK over Spain for a new gigafactory.
  • It is believed that the UK Government is expected to sign a deal with the automaker soon, to build a battery gigafactory in Somerset that could create up to 9000 jobs.
  • The deal would mark an important milestone for Britain in terms of innovation and investment in the automotive sector, the most significant car deal in the UK since the 1980s.
  • The decision by the Indian bluechip company would give a boost to the British car industry coming days after major automakers including Vauxhall owner Stellantis and Ford warned that looming post-Brexit trade rules risked making it unviable.
  • The deal would signal success for Brexiteers, with the UK still able to attract business over its European counterparts – however it is believed that the UK government has offered up to around £500m is subsidies and incentives to JLR and a further £300m to Tata Steel to remain in the UK.

Company News

Beowulf Mining* (BEM LN) 1.8p, Mkt Cap £21m – Resource clarification

  • Beowulf Mining have clarified the market on the scale of the Kallak iron ore project at its subsidiary Jokkmokk Iron Mines AB in Sweden.
  • The PERC standard total Measured and Indicated resource is 132mt grading 28.3% Fe with an Inferred Mineral Resource of 39mt grading 27.1% Fe, as prepared by BGS ‘Baker Geological Services’.
  • It appears the company aggregated a number of areas of mineralisation and potential mineralisation within the Kallak project area which should be reported separately under the PERC standards.
  • The company made reference to an estimated “389 million tonnes of iron mineralisation”, in an RNS Reach press release on 22 February 2023.
  • The company also included the estimate in a presentation at a conference in March this year where it clearly highlights that the 389mt is from the Kallak areas including Kallak North, Kallak South and the exploration targets across the Company’s Parkijaure nr 2,6 and 7 licenses.
  • Today’s press release does not change our view of the resource.

*SP Angel acts as Nomad and Broker to Beowulf Mining

European Metals Holdings  (EMH LN) 34p, Mkt cap £65m – Successful lithium recoveries from testwork of zinnwaldite at Cinovec Project

  • EMH confirms the separation efficiency of flotation of its lithium-bearing zinnwaldite from the Cinovec Lithium/Tin Project in Czech Republic.
  • The Company reports >95% lithium recovery to flotation concentrates at Li-grades and mass yield from fine ore.
  • The testwork is intended to optimise the project DFS, and the Company believes the results ‘further demonstrated the potential for high overall lithium recoveries.’
  • Final results for the current testing programme are expected by the end of June.
  • The DFS is expected to be completed in Q4 2023, with results today believed to ‘confirm both capex and opex reductions.’
  • The Cinovec Measured MRE stands at 53.3mt @ 0.48% Li2O and 0.08% Sn, Indicated MRE of 360.2mt @ 0.44% Li2O and an Inferred MRE of 294.7Mt @ 0.39% Li2O for a total resource of 7.39mt LCE  and 335kt tin.
  • EMH is reassured to note neutral pH of the flotation, supporting their ESG ambitions.
  • Cadence Minerals holds a 7.2% interest in the project.

 Phoenix Copper* (PXC LN) 22.75p, Mkt Cap £28m – Bond issue for Empire oxide pit close to completion as technical work progresses

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


  • In its results for the year to 31st December 2022, released today, Phoenix Copper reports a loss of US$1.59m (2021 – loss of US$0.97m) and a year-end cash balance of US$4.66m.
  • Investment, largely relating to the purchase of property, plant, and equipment, during the year amounted to US$6.84m (2021 – US$10.24m) and the company raised an additional US$1.42m “by way of the exercise of warrants.
  • As it moves to develop the 22.9mt of measured and indicated copper oxide resources at its Empire open pit in Idaho, the company reports that plans to finance the project through “an $80 million corporate copper bond issue, which will pay a floating rate linked to the higher of a copper price coupon or an interest rate coupon, but subject to a minimum coupon of 8.5% per annum are nearing completion.
  • CEO, Ryan McDermott, confirmed that the “process design engineering necessary for completing a feasibility study, and ultimately completing the Plan of Operations for approval by the regulatory authority, is in progress with an emphasis on the metallurgical testing of the performance of the environmentally benign reagent, ammonium thiosulphate, to help develop a “final process design for the recovery of copper, gold, silver, and possibly zinc”.
  • Mr. McDermott also confirmed “the acquisition of the Empire Mine patented and unpatented claims formerly owned by Honolulu Copper Company and the associated 2.5% production royalty, as well as acquiring an additional 1.0% production royalty from Mackay LLC and explained that the Honolulu claims “form the northern half of the Empire Mine holdings, including North Pit/Red Star and the deep sulphides, while the Mackay LLC royalty applies to production from the southern portion of the proposed Empire open pit and sulphides underlying the oxide resource”.
  • He also outlined the potential of the Navarre Creek, located some 5km to the NW of the Empire mine site, where plans for drilling during 2023 comprised … up to 60 RC drill holes on 30 drill pads that will target geochemical anomalies identified from previous surface sampling programs, and geophysical anomalies identified in a total field magnetics survey and hyperspectral mineral survey conducted in 2021.
  • The Navarre Creek drilling is expected to start in June.
  • Drilling of 268m at the Red Star project close to the Empire mine during the latter part of the year “targeted magnetic anomalies identified during the 2021 ground magnetics survey … [and Mr. McDermott explains that assay] … values for copper, silver, lead, and zinc were consistent with previous drilling programs in the area and added significantly to our understanding of the mineralogy and structural regime of the area.
  • In his comments to shareholders, Executive Chairman, Marcus Edwards-Jones, highlighted the technical efforts to reduce “dependence on reagents, which represent over 60% of costs in many mines, and diesel and he also discusses the long term fundamental strength of the copper price outlook which “remains the driving force and creator of initial cash flow for Phoenix”.
  • He pointed out that industry-wide copper grades “have been declining steadily over the last 30 years and the new discoveries being put into production are needed to replace existing reserves rather than creating surpluses.
  • Pointing to the challenges of many operating jurisdictions Mr. Edwards-Jones summarised the outlook for Phoenix Copper saying that “we are happy to be based in the comparatively safe and stable USA, which is a net importer of copper despite its substantial production, and our strategy of predominantly using our own cashflow from the Empire open pit to prove up a world class copper sulphide deposit underneath remains the same.

Conclusion: The 2022 results report confirms the progress on developing the Empire oxide copper project in Idaho where a US$80m corporate copper bond issue to fund development of the existing copper oxide resource is nearing completion.

*SP Angel acts as nomad to Phoenix Copper

 Premier African Minerals (PREM LN) 0.57p, Mkt Cap £123m – Pilot plant optimisation required for the Zulu Lithium project, Zimbabwe

  • Premier African Minerals reports that although the pilot plant at its Zulu lithium project is now “fully commissioned” it has received advice from the supplier that “the plant requires certain limited modifications to allow for full optimisation to design capacity throughput”.
  • The company says that the required modifications include “the upgrade of screening, relocation of the mill and addition of cyclones to remove correctly sized material to the floatation plant”.
  • Describing the delays to becoming fully operational as frustrating, the company says that it “understands that the costs associated with this remedial action will be met by the plant supplier, and we will work with them to ensure that the plant achieves nameplate throughput expeditiously”.
  • A potential concern is that Premier African Minerals confirms that its “requirements to supply spodumene to Canmax Technologies Co., Ltd. (“Canmax”) are to ship first product by 30 May 2023 (which will not now be met), failing which CanMax may elect to cancel the Marketing and Pre-Payment Agreement and require that the prepayment plus interest is settled within 90 days following notice”.
  • The company says that “Canmax has always been supportive of Premier, and we continue to engage with them and look forward to first shipment in June 2023.
  • Premier African Minerals “has previously advised that the delays had caused our cash to be constrained. Recent exercise of options and issue of remaining shares free from pre-emptive rights by way of direct placement, has provided interim relief to this position. Alternative further funding may need to be sought if there are any further significant shipment delays”.
  • CEO, George Roach, said, however that he is “encouraged by our growing confidence in our resource and mining operations, near completion of our dam and tailings facility, performance of the crushing, sorting, and floatation elements of the plant”.

Conclusion: Plant modification are needed which will delay previously agreed deliveries of lithium concentrate product and could potentially trigger cancelation of the Marketing and Pre-Payment Agreement.  Although the cost of the plant modifications may be met by the supplier, Premier African could require additional funds if it experiences further delays.

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


John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474


Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

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

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London


*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.

Sources of commodity prices  
Gold, Platinum, Palladium, Silver BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt LME
Oil Brent ICE
Natural Gas, Uranium, Iron Ore NYMEX
Thermal Coal Bloomberg OTC Composite
Coking Coal SSY
RRE Steelhome

Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite Asian Metal


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