SP Angel Morning View -Today’s Market View, Thursday 27th February 2025

Gold price slips on profit taking as Indonesia opens new bullion banks

MiFID II exempt information – see disclaimer below

Amaroq Minerals (AMRQ LN) – Review of 2024 exploration at Nalunaq, Greenland

Anglo Asian Mining* (AAZ LN) – BUY, 296p – Earnings update

Ecora Resources (ECOR LN) – Moxico, Mimbula copper stream increases base metal exposure

Moxico Resources* (Private)

Kore Potash* (KP2 LN) – Kola optimised DFS

Loncor Resources (LN CN) –Drilling at Adumbi, DRC, shows high grade at depth

Versarien* (VRS LN) – Versarien defers Innovate loan repayment start date to August 2026

Tertiary Minerals* (TYM LN) – Brunton Pass drill results suggest potential for deep porphyry

Tolu Minerals (TOK AU) – Hot commissioning of plant at Tolukuma gold mine

WIA Gold* (WIA AU) – Drilling at Kokoseb, Namibia extends mineralisation at depth

Xtract Resources (XTR LN) – Acquisition of Moroccan exploration and development interests

Gold ($2,890/oz) price slips on profit taking as Indonesia opens new bullion banks

• Gold prices have extended losses, sliding $75/oz from recent record highs.
• ETFs have been trimming holdings following the recent spike higher, with 4,639oz sold yesterday, with ETF holdings up 2.9%ytd.
• We note Indonesia has launched gold banking services at the state-run banking group PT Bank Rakyat.
• Indonesian Minister of State-Owned Enterprised noted that Indonesians privately hold 1,800t of gold and they ‘want to invite the public to trust the formal financial system.’
• Bullion banks are expected to offer services in gold deposits, pawnbroking, financing and direct trading.
• This follows reports of Chinese insurance companies being encouraged to add gold to their balance sheets, furthering the metal’s entry into mainstream finance.

Japanese conglomerate Indemitsu approves construction of lithium sulfide facility

• Materials company Indemitsu is set to build a production facility for lithium sulfide to feed solid-state lithium-ion rechargable batteries.
• Indemitsu is set to expand its lithium sulfide production capacity to 3GWh/year, aiming to commercialise sikud0state batteries in 2027 and 2028.
• Solid state batteries have a solid electrolyte and are believed to boost power output and reduce charging time, also lengthening service life.
• Solid state lithium-ion batteries are expected to be up to 35% more lithium intensive that traditional lithium-ion batteries.
• Lithium sulfide will be produced from lithium hydroxide, which is typically derived from mined spodumene concentrate.
• The sulfur used in the production is produced using by-products from the petroleum product industry.

China steel mill stockpiles climb to May 2024 highs

• Amid escalating calls for production cuts, China steel mill inventory levels have risen to 16.7mt, highest since May.
• Production volumes at highest levels in seven months.
• Equity analysts are boosting Chinese steel names amid expectations of authorities ordering supply cuts, boosting margins and HRC prices.

Economics

US – President Trump threatens to impose 25% tariffs on the EU “very soon” during his first cabinet meeting of the second term.

• Tariffs will affect autos and “all other things”.
• Nvidia reported a 78%yoy increase in quarterly revenues of $39.3bn, beating market estimates for $38.3bn.
• Net income was up 80% in three months to January with the Company forecasting $43bn in sales this quarter.
• Jensen Huang shrugged off market concerns over demand for its chips following DeepSeek news earlier this year that claimed the Company trained its models on less advanced equipment.
• Nvidia CEO said the Company is seeing “amazing” demand for its latest generation Blackwell chips.
• Shares were little changed in after hours trading after posting almost 4% gain on Wednesday heading into quarterly results.

China – The government is planning to re-capitalise three of its largest banks in coming months for at least CNY 400bn ($55bn). (Bloomberg)

• Bloomberg reports that China is working to recapitalise their major banks over the coming months for the first time in two decades.
• New liquidity is expected to be provided as soon as June with final amounts being finalised.
• The announcement follows banking regulator plans to refinance capital at the top six top state lenders first flagged September last year.
• China could inject as much as CNY  1tn of new capital into its largest bank, Bloomberg News reported last year.
• The Government is considering using special sovereign bonds to fund liquidity injections.
• Banks had been directed to lend to under pressure borrowers, including defaulting property developers.
• Lending to Chinese buildings fell for a fourth consecutive year, down 6.1%yoy.
• Meanwhile, China’s property crisis continues, four years after Evergrande defaulted on Xi Jinping’s three red lines imposition.
• Home sales continue to slide despite sustained stimulus, and banks have been pulling out of lending to development projects smaller cities.
• China home prices have fallen 30% from 2021 peaks, with the housing sector’s contribution to the economy shrinking from 24% to 19%.
• Home sales fell 3.2% in January yoy, with property sold by area sitting at a 14 year low.
• China property equities have fallen c.9% ytd, and developer dollar bonds are holding at distressed levels.

Inflation – more inflation to come as China moves to cut unsustainable levels of competition in key industries

• Someone in China has had a lightbulb moment and realised they are reducing profits at the expense of China Inc.
• Regulators are looking at ways to reduce cut-throat competition in key sectors to enable better margins.
• In many cases China is so dominant in these sectors there is very little overseas competition left so they might as well make bigger profits for China Inc. to tax.
• Executives from:
  • Trina Solar,
  • JA Solar Technology
  • Longi Green Energy Technology
• Tech firms include:
  • Alibaba
  • JD.com
• Automakers:
  • BAIC Group
  • Mercedes-Benz.
• Lower profits and losses from excessive competition is stalling capital expenditure and innovation risking a loss of momentum in these key sectors.
• There is no mention of the damage done by the ‘detention’ of tech entrepreneurs under the Xi presidency.
• Solar modules saw significant price gains this week with Longi Green Energy raising prices by RMB 0.05/W and Trina Solar and JinkoSolar by RMB 0.03/W according to the Cailian Press.

Conclusion: China can use this as an opportunity to raise inflation safely at home while improving company profits. This will export further inflation into the US and other importers of Chinese goods.

It’s a win-win in industries where China is dominant. Next stop may well be refined metals.

We suggest buyers stock up on solar panels and other Chinese imports while they are still cheap.

Russia – It was interesting to see Putin offering to supply the US with rare earths

• Given Russia’s reliance on China accepting this offer might be like a frog giving a scorpion across a river

Currencies

US$1.0477/eur vs 1.0510/eur previous. Yen 149.50/$ vs 149.42/$. SAr 18.469/$ vs 18.389/$. $1.267/gbp vs $1.266/gbp. 0.630/aud vs         0.633/aud. CNY 7.270/$ vs 7.255/$.

Dollar Index 106.580 vs 106.426 previous.

Precious metals:

Gold US$2,885/oz vs US$2,912/oz previous

Gold ETFs 85.4moz vs 85.3moz previous

Platinum US$970/oz vs US$975/oz previous

Palladium US$932/oz vs US$941/oz previous

Silver US$31.7/oz vs US$31.8/oz previous

Rhodium US$4,700/oz vs US$4,675/oz previous

Base metals:   

Copper US$9,432/t vs US$9,530/t previous

Aluminium US$2,639/t vs US$2,658/t previous

Nickel US$15,760/t vs US$15,450/t previous

Zinc US$2,832/t vs US$2,837/t previous

Lead US$1,999/t vs US$2,018/t previous

Tin US$32,030/t vs US$33,130/t previous

Energy:           

Oil US$72.8/bbl vs US$73.2/bbl previous

• Crude oil prices were stable as the EIA estimated a US inventory w/w draw of 2.3mb to crude, offset by builds of 0.4mb to gasoline and 3.9mb to diesel stocks, with refinery utilisation up 1.6% w/w to 86.5%.
• European natural gas prices edged higher as EU natural gas storage levels fell by 2.7% w/w to 39.9% full (vs 51.2% 5-Yr average) with aggregate inventory now at 458TWh and Germany falling to 36.1% full.
• Media reports the EU plans to adopt a more flexible approach to meeting interim storage threshold targets this Summer, towards replenishing reserves above the 90% threshold by November 1.

Natural Gas €43.7/MWh vs €43.6/MWh previous

Uranium Futures $65.0/lb vs $65.2/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$107.0/t vs US$107.1/t

Chinese steel rebar 25mm US$486.2/t vs US$487.1/t

HCC FOB Australia US$187.7/t vs US$187.8/t

Thermal coal swap Australia FOB US$101.5/t vs US$102.3/t

Other:  

Cobalt LME 3m US$22,880/t vs US$22,280/t

NdPr Rare Earth Oxide (China) US$61,896/t vs US$62,029/t

Lithium carbonate 99% (China) US$9,903/t vs US$9,925/t

China Spodumene Li2O 6%min CIF US$815/t vs US$815/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$1,005/t

China Tungsten APT 88.5% FOB US$343/mtu vs US$343/mtu

China Graphite Flake -194 FOB US$430/t vs US$430/t

Europe Vanadium Pentoxide 98% US$4.7/lb vs US$4.6/lb

Europe Ferro-Vanadium 80% US$23.8/kg vs US$23.8/kg

China Ilmenite Concentrate TiO2 US$299/t vs US$297/t

Global Rutile Spot Concentrate 95% TiO2 US$1,543/t vs US$1,543/t

Spot CO2 Emissions EUA Price US$65.1/t vs  US$65.1/t

Brazil Potash CFR Granular Spot US$320.0/t vs US$320.0/t

Germanium China 99.99% US$2,775.0/kg vs US$2,725.0/kg

China Gallium 99.99% US$385.0/kg vs US$385.0/kg

Battery News

Mercedes to cut jobs in China as local competition fiercens

• Mercedes-Benz Group are planning to cut up to 15% of its workforce in China as sales faltered and competition in the market increased.
• Most of the layoffs are expected to be in sales and finance departments rather than across its manufacturing teams.
• Foreign carmakers have struggled in China, with the rise of domestic manufacturers and their high-tech, affordable EVs winning over customers.
• Mercedes reported a 7% decline in sales in China last year.
• Other foreign automaker have also been looking to streamline their workforce, with local media reporting layoffs at Porsche and BMW last year.

Aston Martin to cut global workforce by 5% after delaying EV for second time

• Aston Martin are set to axe 170 jobs as it saw its losses widen by 20% last year.
• The automaker has also delayed its first all-electric model for a second time, pushing back a previous pledge to launch in 2027.
• Sales fell around 10% in 2024, with the number of cars falling from 6,620 in 2023 to 6,030.
• Aston Martin did say that sales had increased 10% in H2 compared to a year earlier.
• Aston said it would pursue a “blended approach” through to 2030, focused on plug-in hybrids such as the Valhalla, before developing a bigger line up of electric sports cars and SUVs.

Company News

Amaroq Minerals (AMRQ LN) 101p, Mkt Cap £392m – Review of 2024 exploration at Nalunaq, Greenland

• Amaroq Minerals has provided a summary of exploration results for it 2024 campaign at Nalunaq, southern Gereenland.

• The work included 2,985m of surface core drilling in 11 holes and ~230m of underground core drilling in 7 holes from the company’s first underground drilling programme as well as surface and underground mapping and sampling.
• The “results continue to validate the geological model at Nalunaq … [and]… suggest that previous surface drilling may have under-reported gold grades, as evidenced by both underground drilling results and our high-grade variability study”.
• The underground high-grade continuity study used close-space sampling to investigate “variability within the Main Vein, offering insight into why small-diameter surface drilling may sometimes underrepresent gold grades … [and the company explains that the] … findings will directly inform the next Mineral Resource Estimate (MRE4) … [which is] … expected at the end of this quarter”.
• “Surface drilling identified gold-bearing structures, including an intersection of 22.7g/t Au over 0.5m, supporting further evaluation of the Target Block extension” while channel samples from the “.Main Vein (18.85g/t Au) and 75 Vein (6.63g/t Au) suggest mineralization may extend further west, though additional work is required to confirm continuity”.
• The company’s website Nalunaq – Amaroq Minerals Ltd. details a September 2022 inferred resource at Nalunaq of 355kt at an average grade of 28g/t gold hosting 320koz of gold.
• Work planned for 2025 includes:
  • “Targeted underground drilling to enhance confidence in high-grade zones”; and
  • “Expanded surface exploration to unlock additional resource growth potential”.
• As well as further geological modelling to help “refine mining strategies” and “optimise resource extraction”.

Conclusion: Exploration results from 2024 are contributing to improved understanding of the high-grade nature of the Main Vein at Nalunaq and will inform the forthcoming update to mineral resource estimates, expected later this quarter.  We await the new estimate with interest.

Anglo Asian Mining* (AAZ LN) 118p, Mkt Cap £134m – Earnings update

BUY – 296p (from 308p)

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• We release an updated set of earnings estimates following the release of FY25 production/earnings guidance by the Company yesterday; we also include yesterday’s comment on the announcement below.
• The Company released production and earnings guidance for FY25.
• FY25 production forecast at:
  • 28.0-33.0koz gold (FY24: 15.1koz);
  • 6.5-6.8kt copper (FY24: 0.4kt).
• Revenues (net of 12.75% under PSA) forecast at $110-125m using $2,800/oz gold and $9,000/t copper price assumptions.
• EBITDA forecast at $45-55m.
• At Gilar, the team is expecting to process first ore in 1Q25 with the underground operation delivering ~400kt at 1.47g/t and 1.8% in FY25.
• Gilar ore is to be first treated at the agitation leaching plant recovering gold in dore with tailings processed in the flotation circuit to recover copper in concentrate.
• The material will be complemented by mined tonnes from Gedabek open pit and Gadir underground operations to fill in capacities.
• Heap leaching operations are expected to process 425-475kt at 0.55g/t with all material to be crushed to recover more gold taking advantage of higher gold prices.
• Demirli production is expected to be restarted before year end, although, FY25 guidance does not include any output or potential revenues from Demirli copper concentrate reflecting uncertainty on timing and volumes.

Conclusion: FY25 guidance points to a strong recovery in production post a temporary suspension in 2023/24 at both agitation leaching and flotation circuits. High processed copper grades see FY25 expected copper production climb to the highest on record with red metal expected to account for ~40% of FY25 production compared to ~20% in pre disruption FY22. FY25 output remains predominantly gold delivering 100% unhedged exposure into record spot prices. In general, strong gold and copper prices combine with robust production forecast to deliver record Group turnover in FY25.

We are encouraged to hear that first Gilar ore is expected in 1Q25 with underground operations to deliver ~400kt at 1.47g/t and 1.8% in FY25. Gilar is key to stronger production in FY25 (~60% of gold and copper production) with higher grades helping margins (for reference, AGL and FLO treated 1.46g/t and 0.6%material in FY22).

Demirli development works are ongoing with the Company expecting to resume operations before YE. We expect first production in FY26 with first full year production in FY27 at ~18kt Cu. Demirli is the next step in Group production growth plan and, in our opinion, remains overlooked by the market. Demirli accounts for $165m (~110p) or 33% of our Group NPV estimate.

We adjusted our FY25 production for released guidance including 31koz and 6.7kt, compared to 41koz and 6.2kt estimated previously. The change is driven by the difference in Gilar processed grades and lower heap leach contribution. Including slight adjustment to operating costs we arrive at $122m/$55m in FY25 Revenue/EBITDA applying Company used $2,800/$9,000 gold/copper prices. Additionally, we revised our price assumptions to better reflect latest changes in commodity prices with gold/copper averaging 2,875/$9,438 in FY25 ($2,450/$10,513) and $2,700/$10,625 in FY26 ($2,450/$11,000). On our price assumptions, the Company is estimated to generate $60m in EBITDA in FY25 and potentially double that in FY26 as Demirli comes online. We reiterate our BUY recommendation with an updated 296p (from 308p) target price.

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

Ecora Resources (ECOR LN) 61.7p, Mkt Cap £149m – Moxico’s Mimbula copper stream increases base metal exposure

Moxico Resources* (Private)

• Ecora Resources reports that it has agreed a US$50m copper-streaming transaction with Moxico Resources* in relation to the Mimbula copper mine in Zambia.
• “The Stream will cover Mimbula’s existing reserve-based Life Of Mine … of 11 years with potential for additional extension”..
• The mine is currently expanding its capacity from a current run rate of around 20,000tpa of copper cathode to (14,000t in 2024) to 56,000tp by mid-2026 and today’s announcement explains that the structure of the streaming agreement “reduces ramp-up risk and has an expected payback period of approximately 6-7 years”.
• Chief Executive, Marc Bishop Lafleche described Mimbula as offering “everything we look for in an investment; it is a high-quality ore body, with low operating costs, and with an exceptional management team who have developed the project from concept to a high-margin operation currently undergoing a brownfield expansion to increase production capacity”.
• He explained that “The transaction has been structured with the objective of frontloading streamed copper entitlements to the initial 7-8 years of the stream”..
• The transaction, which increases “Ecora’s copper and base metal exposure as a percentage of NAV … [to] … approximately 45% and 75% respectively”, is expected to complete “within the coming days”.
• Moxico Resources* is a private company which is currently expanding its copper mining and development portfolio in Zambia.
  • Mimbula: the Mimbula mine currently holds around $1bn worth of contained copper in stockpiles awaiting processing by low cost heap-leach and agitation leach processes.
    • C1 Cash costs are running at around $2,500/t with lower costs expected as external reliability issues stabilise producing >US$6m a month in EBITDA.
    • Processing is expanding heap to 46,000tpa through elevated temperature leaching feeding into an on-site SX/EX circuit with completion due mid-2026.
    • The mine should hit a run rate of 30,000tpa by the yead of H1 2025
  • Kalengwe: The President of Zambia inaugurated Moxico’s Kalengwe mine in November with a mobile flotation process plant now being installed to process existing stockpiles.
    • A new road to connect Kalengwa with the Mufumbwe and other deposits is to be completed by April.
  • Exploration: Further exploration work in Zambia is said to be showing promising results.
  • Saudi Arabia: Moxico is working with the Ajlan & Bros Mining Company on the Khniguiyah zinc project in Saudi Arabia.
    • A recent BFS indicates a $350m capex for 100-140,000tpa of zinc in concentrates including 8-10,000tpa of copper.
  • Esperanza project, Argentina: Moxico is also earning into a 100% interest in Latin Metals’ Esperanza and Huachi projects in San Juan Province.
    • Esperanza is a copper-gold porphyry where drilling has been partially defined by 8,500m of drilling with a pyrite halo also exposed at surface
    • The best drill hole returning 387m @ 0.57% copper and 0.27g.t gold from surface, including 166m @ 0.84% copper and 0.37 g/t gold from surface.

Conclusion: Ecora has done well to lock in a streaming agreement with a new and up and coming copper producer in Zambia and we suspect the relationship with Moxico will work to the benefit of both parties.

*An SP Angel mining analyst recently visited Moxico’s Mimbula copper mine in Zambia. The analyst holds shares in Moxico Resources.

Kore Potash* (KP2 LN) 2.9p, Mkt Cap £126m – Kola optimised DFS

• The Company released the Optimised DFS on its flagship Kola Potash Project located in the Republic of Congo.
• The study updates for the recently agreed EPC contract with PowerChina International along with adjustments to other assumptions including life of mine, operating costs and pricing among others.
• The operation is designed as a conventional mechanised underground mine with a shaft access; ROM ore is conveyed 25.5km to the processing plant with produced MOP conveyed further 8.5km to the maring export facility for export.
• The mine benefits from shallow mining depths (<300m) and short transportation route to main export markets in Brazil.
• Optimised DFS highlights include:
  • 2.2mtpa MOP production rate over a 23 year life of mine (LOM).
  • LOM is based on Kola reserves and only 6% of Inferred Resource offering a potential to further extend life of project on conversion of 340mt in Inferred resources into higher confidence category.
  • Capex used $2.1bn based on a signed fixed price EPC basis.
  • Construction assumed to start 1 January 2026 with first production to follow in 43 months.
  • AISC costs of $128/MOP CFR Brazil including $19/MOP in shipping costs, $13/MOP in SUSEX and $12/MOP in royalties.
  • MOP CFR Brazil price averaging over LOM of $449/MOP.
  • Average LOM EBITDA of $733m implying 74% EBITDA margins.
  • NPV10 and IRR (both post tax and ex 10% government free carry) of $1.7bn and 18%.

Conclusion: The Company delivered an updated DFS for the Kola Potash Project applying up to date capital and operating cost assumptions. The project features low operating costs reflecting shallow depths, seam thickness and continuity and favourable logistics located only ~30km away from coast compared to ~2,000km for Jansen operation, for instance. Estimates that Kola potash delivery route to one of top global markets in Brazil is almost a third compared to MOP delivered by Canpotex. Having signed a fixed cost binding EPC with PowerChina and updated DFS team focuses on project funding discussions.

*SP Angel acts as Nomad and Broker to Kore Potash

Loncor Resources (LN CN) C$0.6, Mkt Cap C$89m –Drilling at Adumbi, DRC, shows high grade at depth

• Loncor, who holds 85% of the 3.66moz Adumbi deposit in the DRC, report drill results from their deep drilling programme.
• The Company is currently completing an 11,000m deep drilling programme below the Adumbi open pit, which holds an indicated resource of 1.88moz Au at 2.08g/t Au.
• Loncor is targeting fifteen holes below the pit shell to outline an inferred underground MRE.
• Additionally, scout drilling is being conducted over four targets 8-13kom to the southeast from Adumbi, across 12 holes and 2,400m.
• Today the Company reports results from hole LADD027:
  • 2.6m at 4.06g/t from 533m
  • 16m at 5.8g/t Au from 564m
  • 11.9m at 7g/t Au from 568m
  • 22.6m at 4.77m from 603m
  • 14m at 7g/t Au from 611m
  • 2m at 4.3g/t Au from 654m
• The hole intercepted mineralisation at a vertical depth of 478m below surface, 75m below the current pit shell.
• The Company argues that the high-grades over decent widths ‘offer significant potential for an underground operation to complement the open pit at Adumbi.’
• Loncor is aiming to delineate 8.9-9.6mt at 4.7-4.9g/t Au to a depth of 900m.

Versarien* (VRS LN) 0.035p, Mkt Cap £1.4m – Versarien defers Innovate loan repayment start date to August 2026

• Versarien report agreement to defer the start of repayments on the £5m Innovate loan to August 2026.
• The Innovate loan has funded the G-SCALE project development including the use of graphene in concrete, leisure wear and elastomers.
• The £5m loan is due for repayment in 10 equal quarterly instalments. Interest of 7.4% on the loan is to be deferred till August 2026.
• 50% of the interest payments on the Loan had been deferred until February 2025
• Versarien have been making solid progress in the development of graphene in concrete for 3-D printing with their Cementene^TM admixtures and novel 3D construction printed mortars.
• The team are working with Balfour Beatty to develop graphene enhanced 3D construction printed materials and products and is involved with a 3D construction printing contract with Building For Humanity CIC, for their Charter Street project starting this year.
• Biosensors: The team have also launched a new biosensor chip which utilises new graphene barristor sensor platform technology.
  • The current modulation is amplified more than 10,000 times compared to graphene field-effect transistors (GFET) enabling the barristor transistors to overcome many GFET limitations.
• Graphene inks: Versarien continue to advance their graphene and 2D materials business lines with graphene inks for printed electronics applications.
• Technology Licencing: The team are also working with partners that are licencing their technology and know-how
  • Montana Quimica LTDA in Brazil signed a know-how and manufacturing licence agreement last year for the production of advanced materials in across a number of industries.
  • Versarien continues to licence 14 patents to GrapheneLab (Korea) and 5 patents to MCK Tech (Korea) for the manufacture of chemical vapour deposition (CVD) graphene

• Pipeline: Versarien has a £4.7m pipeline of opportunities with £1.6m of commercial work and £3.1m of grant funding.
• Asset sale: management previously agreed the sale of AAC Cyroma, it’s plastics manufacturing business to Harper Bennett for £550,000 in cash, with payments split into 16 equal quarterly instalments of £34,375.

Conclusion: Versarien continue to make steady progress on the development of graphene across three key market areas. The turnaround strategy has jettisoned its loss making businesses bringing is cash for ongoing work programs.

*SP Angel acts as Nomad and Broker to Versarien

Tertiary Minerals* (TYM LN) 0.05p, Mkt Cap £1.8m – Brunton Pass drill results suggest potential for deep porphyry

• Tertiary has announced the assay results from four holes drilled at their Brunton Pass Copper-Gold target in Nevada.
• The Company drilled 890m in RC holes.
• Although none of the holes intercepted significant mineralisation, the Company notes that thick intervals of anomalous copper, mercury and arsenic were intersected.
• Hole 24TBPRC002 returned 210m at 170ppm Cu, with 0.19% Cu over 1.53m.
• Tertiary notes that ‘all four holes intersected thick intervals containing anomalous copper values associated with fresh and oxidised pyrite and trace chalcopyrite.’
• Management notes that ‘only the peripheral parts of the IP anomaly have been intersected at depth so far and the stronger pats of the anomaly remain untested.’

Conclusion: Tertiary is targeting a large copper porphyry deposit at Brunton Pass, Nevada. The recently completed drilling has led the exploration team to believe that they have intercepted the halo of a buried porphyry, with deeper drilling now justified.

*SP Angel acts as Nomad and Broker to Tertiary Minerals

Tolu Minerals (TOK AU) A$0.82, Mkt Cap A$93m – Hot commissioning of plant at Tolukuma gold mine

• Papa New Guinea gold company Tolu report that the modular gravity recovery plant has been installed, with final commissioning and testing underway.
• The Company expects ‘formal production and revenue generation will commence once final commissioning is completed.’
• Company expects a production rate of 2,000oz/pm in a gold/silver dore by the end of 2025.
• Tolu is also aiming enhanced silver recovery with their modular expansion.
• Geotube technology is being used to temporarily store tailings and enable decanting of water.
• The plant is currently being fed from stockpiled ore.
• Tailings from the gravity plant is being stockpiled for retreatment once the leaching plant is recommissioned.
• Initial capacity of 6tph, 25% of the existing plant.

WIA Gold* (WIA AU) A$0.17, Mkt Cap A$203m –Drilling at Kokoseb, Namibia extends mineralisation at depth

• WIA Gold, Australian explorer in Namibia, reports drilling results from their programme at Kokoseb.
• WIA reports MRE expansion drilling has ‘discovered a significant new high-grade area, corresponding to a split from the main mineralised zone.’
• Hole KRC331 intercepted 27m at 6.8g/t Au from 207m.
• The hole was an infill hole to the northern side of the Central Zone, extended beyond its main target and intersected the new high-grade area 80m downhole under the main targeted mineralisation.
• Additionally, the Company notes that the high-grade shoot has now been confirmed across a 500m continuous strike via infill drilling, with mineralisation open at both sides and is currently being tested.
• Management sees the recent drill results as highlighting ‘the potential upside to the existing resource base at Kokoseb.’
• There are currently 3 RC rigs and 3 diamond drill rigs onsite.

*An SP Angel Analyst holds shares in WIA Gold

Xtract Resources (XTR LN) 0.55p, Mkt Cap £4.5m – Acquisition of Moroccan exploration and development interests

• Yesterday, Xtract Resources reported the US$500,000 acquisition of an initial 50% interest in a Moroccan based exploration and development company, Wildstone.
• Wildstone holds “15 exploration licences for copper, silver and antimony … [and] … plans to commence exploration and subject to results, commercial production”.
• Xtract Resources can acquire a further 30% of Wildstone, taking its interest to 80%, for a further staged payment of US$900,000; as follows
  • Payment of US$150,000 on “basic exploration” during the first year earns a further 10% with
  • A second 10% tranche “by spending a further US$250,000 on exploration, which is anticipated to be a continuation of progress made in Year 1, but with more drilling and consequent assay work” and
  • “in the third year earn a further 10% fully diluted interest in the Vendor by spending US$500,000 on drilling and resource evaluation and definition, with the anticipation of producing one or more JORC resources”.
• The announcement confirms that Xtract and Wildstone “anticipate that within 6 months of signing the Agreement, small scale mining shall commence, utilising Wildstone’s own contractors (the “Small Scale Development”). The capital funding for the Small-Scale Development of US$200,000 will be provided by Xtract who will be allowed to recover the initial capital by being paid 75% of free cashflow”.
• Executive Chairman, Colin Bird, explained that Xtract Resources believes that “the entry into Morocco will establish a firm base for shareholder value enhancement”.
• He also commented that the acquisition furthers “Xtract’s mission to explore and where appropriate develop small mines in strategic and critical minerals.  The business will be progressed along traditional lines i.e. exploration into feasibility study and development where appropriate”.

Conclusion: Xtract Resources is acquiring an initial 50% interest in a Moroccan exploration/development company with the opportunity to increase its interest to 80% through exploration leading to a JORC compliant mineral resource.  The acquisition is also expected to lead to initial small-scale production within a year, subject to permitting.

LSE Group Starmine awards for 2024 commodity forecasting:

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

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

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

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

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

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

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