SP Angel Morning View -Today’s Market View, Thursday 30th January 2025

Copper rises as traders assess impact of Trump tariffs whilst dollar slides

MiFID II exempt information – see disclaimer below

The SP Angel Mining Team will be in Cape Town next week for the 121 Mining Investment Conference and the Indaba

• Simon, Sergey, Arthur and I will be boldly seeking out new opportunities and presenting commodity and company ideas to a full schedule of investors.
• Ewan, Charlie, Grant and Richard will be available at the 121 and on the Wednesday and Thursday after.
• Please drop us a line on john.meyer@spangel.co.uk if you would like to catch up with the team
• 121 Conference details:  https://www.weare121.com/121mininginvestment-cape-town/

Atlantic Lithium* (ALL LN) – Feldspar resource update to help restart the once vibrant Saltpond ceramics industry in Ghana

Bezant Resources (BZT LN) – Progress report on the Hope and Gorob projects in Namibia

Glencore (GLEN LN) – 2024 production guidance achieved across all commodity groups

Kore Potash* (KP2 LN) – Quarterly update as financing package looms for potash project

Orosur Mining* (OMI LN) – Results following transformative drilling programme

Power Metals Resources* (POW LN) – Copper identified at new base metals prospect in Oman

Predictive Discovery (PDI AU) – Quarterly update

Resolute Mining* (RSG LN) – Q4 report confirms 2024 production narrowly missed guidance and indicates increased output in 2025

Rome Resources (RMR LN) – Latest drilling results from Kalayi, DRC

Sovereign Metals* (SVML LN) – Quarterly report highlights Rio Tinto oversight of optimised prefeasibility study

Gold ($2,775/oz) higher post-Fed meeting amid reports of bullion shortage in London

• Gold prices are hovering just below record highs of $2,790/oz in the spot market.
• The metal has been lifted following the FOMC meeting, where the Fed held rates steady.
• Powell expressed caution over further rate cuts but stated that ‘interest rates are meaningfully above neutral.’
• He also stated that they ‘want to see further progress on inflation’ but they ‘need real progress on inflation or a weak job market to cut.’
• 10 year yields are hovering around the 4.5% mark, now 30bp lower than recent highs.
• The US dollar rally has cooled, providing a tailwind to gold alongside lower yields.
• The FT reports that rising demand for bullion on COMEX has led to a shortage of supply in London, with the wait to withdraw form the BoE vault rising to four to eight weeks from a few days.
• Traders in New York are reportedly stockpiling supply, with inventory levels up 75%, their highest since August 2022.
• This may reflect mounting concerns over Trump’s tariff impositions, although he has specified steel, copper and aluminium will be the primary tariff targets.
• ETF holdings for gold have been cut, marking three straight days of declines, longest since December 17^th.
• We see ETF buying as the potential next catalyst higher for gold prices, should US Treasury yields continue to slide from recent highs over reduced inflation concerns.

Copper ($9,115/t) rises as traders assess impact of Trump tariffs whilst dollar slides

• Coppe prices have bounced, having touched $8995/t yesterday.
• Metals that had enjoyed some speculative positioning from the AI trade saw a sell-off on Monday after the DeepSeek panic.
• This seems to have calmed now, as the long-term supply/demand picture remains promising.
• However, traders are currently assessing the potential impact of Trump’s tariffs.
• Trump stated on Tuesday that they ‘have to bring production back to our country’ when referencing steel, copper and aluminium.
• US copper smelters are on the decline whilst refined capacity is growing in China, Indonesia and the DRC.
• The US is a net copper importer, however there is discussions of an accelerated development of Rio’s Resolution alongside other projects, including Hudbay’s Copper World and the Arctic project in Alaska.

Gold market comment (17/01/2025):     Podcast:  https://audioboom.com/posts/8639775-john-meyer-gold-is-good-solid-asset-to-own

Video:  

Economics

US – The Fed left rates unchanged at 4.25-4.5%, in line with expectations, in a unanimous vote amid increasing uncertainty over inflation outlook.

• “The committee is very much in the mode of waiting to see what policies are enacted,” Powell said.
• “We need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be,” Powell commented on inflationary nature of potential Trump policies.
• The Fed will want to see further slowdown in inflation before opting for more rate cuts.
• FOMC meeting statement read that inflation remained “somewhat elevated” but a reference to inflation having made progress toward their 2% goal was removed.
• Powell clarified the change was not meant to send a policy signal.
• Latest Fed projections are for two more rate cuts this year as per December dots plot with updated estimates due at the next meeting in March.
• 2y yields climbed on the announcement but ended up little changed overall hovering around 4.2%.

Eurozone – The central bank is expected to cut rates by 25bp later today despite little progress on disinflation front and as waning growth concerns escalate.

• Markets are expecting nearly four cuts this year with the second one coming as early as the next meeting in March.

EVs: Chinese EV registrations fell 3.5% yoy in Europe

Germany – The economy registered a faster than expected drop in the final quarter of the year taking annual contraction to 0.2%.

• The nation is holding snap elections at the end February that are expected to see Olaf Scholz losing its seat to Friedrich Merz leading the conservative CDU/CSU bloc that promises lower taxes and fewer regulations.
• The government cut its 2025 growth forecast yesterday to just 0.3% from 1.1% highlighting headwinds in industrial production and overseas demand.
• While inflation slowed down and households have more money to spend, the economy struggles with “fundamental structural problems” including shortage of skilled workers, excessive bureaucracy and lack of investment, Economy Minister Robert Habeck said commenting on projections.
• 4Q24 GDP (%qoq, 4Q/3Q/Est): -0.2/0.1/-0.1
• 2024 GDP (%yoy, 2024/2023/Est): -0.2/-0.3/0.0

France – GDP contracted 0.1%qoq in 4Q24 as a boost from Paris Olympic Games faded and activity suffered from slower consumer sending and stagnation in business investment.|

• The nation is battling with a budget crisis with the current government using a stopgap legislation to avoid a shutdown.
• 2025 budget talks are expected to finish next week with latest PM budget proposals to face a parliamentary vote that could see Francois Bayrou resign.
• Slowing economic growth further complicates the task to bring budget deficits that amounted to 6.1% in 2024, a revision on 4.4% initially forecast and more than double the EU target level of 3%.
• 4Q24 GDP (%qoq, 4Q/3Q/Est): -0.1/0.4/0.0
• 2024 GDP (%yoy, 2024/2023/Est): 0.7/0.9/0.8

US – SoftBank looking at potential $25bn investment in OpenAI. This is in addition to the $15bn that SoftBank has pledged to Stargate which has a jv with OpenAI.

• The level of SoftBank investment will give some indication of their view of the new Chinese rival DeepSeek.
• Trump withdrew an order freezing an array of federal grants and loans.

South Africa – Reserve Bank expected to cut rates to 7.5%.

• The current prime rate is 11.25%.

UK – Automotive manufacturing fell 14% yoy to just under 780,000

Europe braces for trade war with Trump administration

• The European Union sees a trade clash as inevitable and officials are trying to rally support from member states as they brace for Trump to play on their divisions to force through his “America First” agenda.
• The bloc has prepared a list of US goods to hit with duties in retaliations, and some members compared the situation to the Brexit negotiations, people familiar said.
• Any clash couldn’t come at a worse time for the EU, which is fighting from a position of weakness with deepening economic malaise and political fragmentation in France and Germany’s governments.
• The EU needs to “use this time to prepare, either for a discussion or for retaliation,” Arancha González Laya, dean of the Paris School of International Affairs at Sciences Po, said. “We should remain united, because given integration of the European economy, tariffs on one member states is tariffs on the EU as a whole.”
• Officials are skeptical of the idea that they can talk Trump out of triggering a trade clash that could embroil everything from steel and cars to European tech regulations and tax policy.

Currencies

US$1.0420/eur vs 1.0426/eur previous. Yen 154.55/$ vs 155.25/$. SAr 18.479/$ vs 18.685/$. $1.245/gbp vs $1.245/gbp. 0.623/aud vs 0.624/aud. CNY 7.245/$ vs 7.245/$.

Dollar Index 107.878 vs 107.879 previous.

Precious metals:         

Gold US$2,775/oz vs US$2,764/oz previous

Gold ETFs 83.2moz vs 83.0moz previous

Platinum US$956/oz vs US$948/oz previous

Palladium US$980/oz vs US$957/oz previous

Silver US$31.0/oz vs US$30.5/oz previous

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

Base metals:   

Copper US$9,105/t vs US$8,970/t previous

Aluminium US$2,631/t vs US$2,571/t previous

Nickel US$15,390/t vs US$15,400/t previous

Zinc US$2,794/t vs US$2,756/t previous

Lead US$1,971/t vs US$1,941/t previous

Tin US$30,220/t vs US$29,825/t previous

Energy:           

Oil US$76.2/bbl vs US$77.5/bbl previous

• Crude oil prices edged lower after the EIA estimated US inventory w/w builds of 3.5mb to crude and 3.0mb to gasoline stocks, partially offset by a 5.0mb draw to diesel, with refinery utilisation down 2.4% w/w to 83.5%.
• European energy prices hit a 15M high on global gas supply outages as EU natural gas storage levels fell by 3.3% w/w to 55.1% full (vs 62% 5-Yr average) with aggregate storage now at 632TWh.
• Ørsted and PGE have taken FID on the 1.5GW Baltica 2 offshore Poland wind farm, which has locked in the majority of the project’s capex for the 107 14MW turbines and is expected to be fully commissioned in 2027. The Baltica 2 CfD runs for 25 years at a nominal 2021 starting price of €71.82/MWh plus accumulated inflation.

Natural Gas €50.7/MWh vs €49.1/MWh previous

Uranium Futures $70.6/lb vs $69.3/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$105.8/t vs US$105.1/t

Chinese steel rebar 25mm US$487.6/t vs US$487.6/t

HCC FOB Australia US$187.0/t vs US$187.0/t

Thermal coal swap Australia FOB US$114.0/t vs US$114.6/t

Other:  

Cobalt LME 3m US$21,550/t vs US$21,550/t

NdPr Rare Earth Oxide (China) US$57,284/t vs US$57,284/t

Lithium carbonate 99% (China) US$10,145/t vs US$10,145/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$338/mtu vs US$338/mtu

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

Europe Vanadium Pentoxide 98% US$4.5/lb vs US$4.5/lb

Europe Ferro-Vanadium 80% US$24.6/kg vs US$24.6/kg

China Ilmenite Concentrate TiO2 US$296/t vs US$296/t

Global Rutile Spot Concentrate 95% TiO2 US$1,588/t vs US$1,588/t

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

Brazil Potash CFR Granular Spot US$305.0/t vs US$305.0/t

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

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

Battery News

Tesla commits to cheaper car in H1 2025

• Tesla has said it is on track to roll out new, cheaper EV models in the first half of 2025, despite its quarterly profit and revenue falling short of expectations.
• Tesla’s valuation has soared with the election of Donald Trump, but it posted a dip in sales over 2024.
• Rivals such as China’s BYD, and European manufacturers BMW and Volkswagen have all launched new cheaper models to capture market share.
• Tesla has not revealed details regarding pricing, features and how its new models would be different from current offerings.

Honda to boost investment in Ohio auto plants by $300m

• Honda has announced it will boost its investments in three Ohio auto plants by $300m to have flexibility to build EVs, hybrids and gas-powered vehicles on the same assembly line.
• In 2022, the Japanese automaker in announced plans to invest $700m in three plants but is now upping that to $1bn.
• Honda is also building a joint venture Ohio battery plant with LG Energy Solution in which the overall investment is expected to be $4.4 billion.

Company News

Atlantic Lithium* (ALL LN) 11.86p, Mkt Cap £82m – Feldspar resource update to help restart the once vibrant Saltpond ceramics industry in Ghana

1. Atlantic Lithium report the development of a significant resource of feldspar clay at the Ewoyaa lithium mine site in Ghana.
2. We believe this material is suitable feedstock for local pottery.
3. The feldspar material will be mined alongside the
4. Measured and Indicated feldspar runs at 29.8Mt representing 81% of the total

1. • Measured: 3.7mt at 40.2% feldspar,
   • Indicated: , 26.1mt at 42.1%,
   • Measured & Indicated 29.8mt
   • Inferred: 7.0mt at 42.4%,
   • Total resource: 36.8mt @ 41.9% feldspar from the same mine plan as the spodumene:
   • Spodumene ore MRE:  36.8mt @ 1.24% Li2O
   • The feldspar resource has increased by: 15.43mt grading 41.9%

1. Quartz and muscovite co-products may also be separated for sale alongside the spodumene and feldspar.
2. Saltpond ceramics:
3. Ghana’s Head of State, Colonel Acheampong, opened a new ceramics factory at Saltponds using local clay material in November 1973.
4. Unfortunately, the ceramics factory was divested to a Chinese company in the 1990s and subsequently collapsed in 2019 due to the rising cost of production.
   • https://www.britishpathe.com/asset/130627/

Conclusion: The supply of low-cost feldspar clay for local pottery manufacturing will hopefully reinvigorate this once thriving industry providing good quality jobs for local villages.

*SP Angel acts as Nomad and Broker to Atlantic Lithium

Bezant Resources (BZT LN) 0.02p, Mkt cap £3.7m – Progress report on the Hope and Gorob projects in Namibia

• Bezant Resources reports that, pending receipt of environmental approvals, it is continuing to refine technical and contractual aspects of its plans to develop the Hope & Gorob Copper & Gold Project in Namibia.
• In addition to starting optimisation study work on ore-sorting using “a one tonne ore sample obtained from its recently completed drilling programme at Hope”, the company has “negotiated access to a Namibian-based ore sorter unit with the specifications corresponding in size, throughput and sensor types to the equipment selected for the Hope & Gorob ore sorting”.
• The company says that results from the optimisation “will inform the financial model as to the anticipated cash flow relative to run of mine ore upgrade and ore sorter recovery associated with multiple variable sensor testing”.
• Bezant Resources has also discussed pricing “with contractors responsible for drilling and blasting, in-pit mining and haulage and outbound logistics for the transport and delivery of pre-concentrate to the copper concentrator for the open pit mining at Hope” and is continuing “negotiations regarding heavy plant and equipment to be used for mining and ore – waste haulage”.
• Hope & Gorob’s mineral resources comprise:
  • Indicated: 10mt @ 1.89% Cu & 0.31g/t Au
  • Targeting >3mt @ >1.8% Cueq – in open pit resource subject to independent mineral resource estimation
• Executive Chairman, Colin Bird, described the “Development of a metallurgically simple copper – gold resource amenable to ore sorting and modest capex with a 5 – year open pit starter ore body … [as] … an ideal asset for the Company”.
• He said that he was looking “forward to … the receipt of the ECC … [Environmental Clearance Certificate] … and the next stage of development of the mine”.

Glencore* (GLEN LN) 347.9p, Mkt Cap £42bn – 2024 production guidance achieved across all commodity groups

• Reflecting improved H2 performance across its suite of commodities, Glencore reports that it met its 2024 production guidance.
• Chief Executive, Gary Nagle, highlighted a 26,000t (6%) H2 improvement in copper output, bringing full year output to 951,600t (2023 – 1,010,100t) and a 17% (17,000t) H2 increase in zinc output compared to H1 bringing full year production to 905,000t (2023 – 918,500t).
• Mr. Nagle also drew attention to an H2 increase of 5.2mt in energy coal output to 99.6mt for the year (2023 – 106.1mt) and a 13.1mt “near-fivefold increase vs H1” in steelmaking coal production to a full year total of 19.9mt (2023 – 7.5mt).
• Excluding production from the Cobar mine, which was sold in June 2023, the 4% year-on-year decline in copper production is attributed to “lower planned production at Antapaccay and Collahuasi, further impacted by geotechnical-related delays at Antapaccay and lower grades and unplanned mill downtime at KCC”.
• The increased H2 copper output to 489,000t reflects “improved KCC production due to higher-grade ores, higher than planned run-rates at Mutanda and increased Mount Isa copper production, following a regional flooding event earlier in the year”.
• “Overall own sourced zinc production of 905,000 tonnes was broadly in line with 2023, reflecting lower zinc tonnes from Antamina (64,500 tonnes), given its expected copper/zinc mine sequence during the year, largely offset by the ramp up of Zhairem (Kazzinc, up 53,600 tonnes)”.
• Glencore explains the increased steelmaking coal output as a reflection of the July 2024 acquisition of Elk Valley Resources in Canada which delivered 12.5mt in H2 and comments that “Australian steelmaking coal production was consistent year over year” at 7.4mt (2023 – 7.5mt).
• In Australia, 2024 thermal coal output “of 63.9 million tonnes was 2.4 million tonnes (4%) lower than 2023, due to longwall moves at Ulan and the base period inclusion of 1.4 million tonnes from Liddell mine, prior to its closure in July 2023”.
• Colombian thermal coal output from Cerrejon “of 19.1 million tonnes was 2.9 million tonnes (13%) lower than 2023, due to community blockades and permitting delays which impacted planned mine sequencing, in combination with unusually heavy rains in Q4 2024”.
• The Group’s “own sourced nickel production of 77,300 tonnes was 6,900 tonnes (10%) higher than 2023. Overall own sourced nickel production of 82,300 tonnes was 15,300 tonnes (16%) lower than 2023, reflecting KNS’s transition to care and maintenance (22,200 tonnes) in Q1 2024, partially offset by recovery from the INO supply chain constraints seen in the base period (3,700 tonnes) and higher production from Murrin Murrin (3,200 tonnes)”.
• Glencore confirms that it will update production guidance for 2025-2028 “alongside the release of our 2024 Preliminary results on 19 February”.

*An SP Angel analyst holds shares in Glencore

Kore Potash* (KP2 LN) 2.1p, Mkt Cap £92m – Quarterly update as financing package looms for potash project

• Potash developer Kore Potash provides an update for the quarter to 31^st December.
• The Company signed the Engineering, Procurement and Construction contract for the Kola Project with PowerChina on the 19^th November 2024.
• Project cost is estimated at $1,929m and PowerChina will oversee the design and construction.
• The EPC is a fixed price contract, subject to delivery timelines (penalties/bonuses for delays/early completion) and final completion tests including produced potash product complying with Brazilian market specifications (MOP KCl ≥95% among others).
• Indicative timeline of next major milestones to first production include:
  • Late February 2025 – securing non-binding financing term sheet from Summit;
  • Late April 2025 – Early Works completion;
  • 2H25 – binding Financial close, FNTP issued, construction commenced;
  • 1H29 – maiden production at the Kola Project.
• Summit Consortium is expected to deliver a financing proposal by the end of February 2025.
• Kore reiterates its confidence in Summit Consortium to arrange financing for the construction of the Kola Project, but ‘provides no assurance to shareholders that the Summit Consortium will provide the financing required on terms which are acceptable to the Company.’
• If Summit does not provide a suitable financing package, Kore will ‘explore other debt, equity and structured finance alternatives.’
• Relations with the RoC Government remains strong, and there was a strong presence from the RoC Ministry of Mines and Geology at the EPC signing.
• The Company held US$1.34m in cash as of 31^st December 2024, with no debt
• US$0.6m spent on exploration over the quarter, with the majority of this spent on the Kola Study.

*SP Angel acts as Nomad and Broker to Kore Potash

Orosur Mining* (OMI LN) 6.2p, Mkt Cap £16m – Results following transformative drilling programme

• Orosur reports results following an active 2Q25, having reassumed control of the Anza project.
• The Company has made strong progress drilling the Pepas prospect from late November, reporting assay results including:
  • PEP016 – 43.7m at 3.13 g/t Au from 62m
  • PEP017 – 40.2m at 2.06 g/t Au from 56m
  • PEP018 – 54.1m at 6.01 g/t Au from surface
• In Argentina, the Company has submitted permitting applications to drill in the Santa Cruz Province, with approval now received.
• They are refining targets with an additional geo-physical programme, with drilling set to take place this year, subject to funding.
• The Company holds a $2.2m cash balance following a £1.25m equity raise in December.

*SP Angel acts as Nomad and Broker to Orosur Mining

Power Metals Resources* (POW LN) 13.5p, Mkt cap £15.4m – Copper identified at new base metals prospect in Oman

• Power Metals provides an update from their initial exploration efforts at Block 8 concession in Oman, where they are proposing to earn a 12.5% stake.
• The Company has completed stream sediment sampling, outcrop mapping, rock sampling, ionic leach sampling, trenching and is planning gravimetric geophysics.
• Rock and float samples have returned two anomalous copper readings.
• In-situ outcrop sample at Al Maidar returned:
  • 4.46% Cu
• Malachite float sample from stream sediment programme
  • 1.75% Cu
• The malachite sample was recorded 2km from Al Maidar.
• POW is focused on advancing five initial target areas, using previous geophysical data and recent fieldwork results.
• Target 1:
  • Prospective for Cyprus-type VMS Cu-Au mineralisation, with three trenches completed over December.
• Target 2:
  • Also prospective for Cyprus-type VMS Cu-Au mineralisation, with ionic leach soil sampling completed in January
• Target 3:
  • Mantle sequence rocks considered prospective for Cr-PGE and Cu-Au, with stream sediment sampling and mapping completed to date.
• Targets 4&5:
  • Cr-PGE prospective, assay results pending from rock and stream sampling completed in December.
• Company reports that stream sediment sampling has shown ‘several new occurrences of secondary copper oxide float and an initial in-situ copper occurrence’ near Al Maider village.
• Ionic leach soil sampling is being conducted to gauge it’s effectiveness, with 24 samples collected and assays due soon.
• A gravimetric ground geophysics survey is being planned in conjunction with the ionic leach sampling programme.
• A geophysics contractor has been sourced and work is due for February.
• Trenching has been conducted at Al Mansur to support drill target delineation, with three trenches completed over 150m total length, with results pending.

*SP Angel acts as Nomad and Broker to Power Metals

Predictive Discovery (PDI AU) A$0.25, Mkt Cap A$588m – Quarterly update

• The Company released Q4CY24 update.
• Resource definition drilling continued with results from more than 10,000m announced including drilling Fouwagbe, Sounsoun and 800W as well as exploration drilling t the SB target.
• The Company secured an approval of the ESIA from the Ministry of Environment and Sustainable Development (MEDD) allowing the team to apply for the Exploitation License.
• Bankan DFS work progressed well with all workstreams on target for completion in 2H25.
• Geotechnical and hydrogeological drilling were completed with metallurgical testing largely finished.
• The Company spent A$2.2m and A$11.7m in expensed and capitalised costs during the quarter.
• Closing cash balance stood at A$28.8m with no outstanding debt.

*An SP Angel holds shares in Predictive Discovery

Resolute Mining* (RSG LN) 19.8p, Mkt Cap £443m – Q4 report confirms 2024 production narrowly missed guidance and lowers 2025 guidance

• Reporting on its Q4 2024 operating performance, Resolute Mining reports the production of 87,687oz of gold bringing full year output to 339,869oz (2023 – 330,994oz).
• Production was slightly lower than the 345-365,000oz guidance “due to lower-than-expected production at Mako” which produced a full year total of 123,935oz (2023 – 119,847oz) with the Syama mine in Mali producing 163,379oz (151,256oz).
• Syama saw “a strong year at both the oxide and sulphide operations … [with] … both sulphide and oxide plants … [maintaining] … high utilisation and … [milling] … near nameplate capacity of 3.93Mt versus 3.84Mt in 2023”.
• The announcement explains that, at Syama, “As expected, the combined ore tonnes mined decreased to 3.21Mt (vs 4.24Mt in 2023) due to approximately 1Mt less oxide ore being mined in 2024. The sub-level cave underground operation had another productive year in 2024 achieving approximately 2.4Mt of ore mining as it continues to benefit from productivity improvements from truck fill and loader operations that were implemented in 2023”.
• Production at Mako was “higher than the prior year albeit below guidance predominantly due to lower-than-expected grades and disruption to mining operations as the pit flooded during the abnormally heavy rainy season”.
• On an all-in-sustaining cost (AISC) basis, annual production costs of US$1,476/oz were in line with the US$1,470/oz achieved in 2023 with costs at Syama of US$1,497/oz (2023 – US$1,473/oz) with Mako producing at US$1,244/oz (2023 – US$1,373/oz).
• Guidance for 2025 is for gold output in the range 275-300,000oz with AISC guidance in the range US$1,650-1,750/oz.
• Syama is expected to produce between 195-210,000oz at between US$1,700-1,800/oz with Mako in the range 80-90,000oz at US$1,300-1,400/oz.
• Today’s announcement also confirms the previously reported updated mineral resource estimate for the Tamboronkoto deposit in Senegal of “343 koz grading 2.1g/t Au at 1g/t cut off or 571 koz grading1.1 g/t at 0.5 g/t cut-off” and explains that drilling extends to “150m below surface” and that mineralisation is open down dip with drilling during the final quarter of 2024 and continuing into 2025 targeting “the resource between 150m and 200m below surface. Preliminary results suggest that the mineralisation is continuous down dip”.
• Acting CEO, Chris Eger, said that from “an operational and cash generation perspective 2024 was one of the strongest years Resolute has had in recent times” and commented that “operations at Syama continue to perform extremely well due to the improvements that have been put in place over the last several years. The Mako operation continued to generate substantial cash flows despite a rain-impacted H2 and lower than expected grades. Moving into 2025 we expect both operations to continue generating strong cash flow albeit at lower production levels due to the end of mining at Mako in Q2 and the commencement of stockpile processing”.
• Expressing appreciation for the “tremendous resilience and commitment to the business” of employees, three of whom, “including the Company’s CEO at the time … were unexpectedly detained” by Malian authorities in Bamako in November following discussions “with the mining and tax authorities regarding general activities related to Resolute’s in- country business practices, and to progress open claims made against the Company”.
• “The three employees were released on 21 November 2024” and Resolute Mining has now “executed a memorandum of understanding expressed as a protocol … along similar lines to those agreed with other mining companies in Mali … [which establishes a framework] … regarding the long-term future of the operations in Mali”.
• “Discussions with the Government of Mali are ongoing to clarify points of the Protocol and Resolute is continuing to assess its full implication to the Company’s activities in Mali. Throughout the discussions, and since the settlement of the Protocol, normal operations have been maintained at Syama”.

*SP Angel analysts hold shares in Resolute Mining

Rome Resources (RMR LN) 0.28p, Mkt Cap £17m – Latest drilling results from Kalayi, DRC

• Rome Resources reports more results from 10 holes of a seventeen-hole diamond drilling programme at its Kilayi prospect in North Kivu Province, DRC.
• The company says that the results “confirm continuous tin mineralisation across multiple sub-parallel ore shoots, supporting the Company’s geological model and highlights the growing scale of the deposit”.
• Among the results highlighted in today’s announcement are:

• • A 5.5m wide intersection averaging 0.89% tin from a depth of 102.5m in hole KBDD-009 which includes 2.4m at an average grade of 1.39% tin from 105.6m depth; and
  • A 0.9m wide intersection averaging 1.28% tin from a depth of 137.5m in hole KBDD-010; and
  • A 2.85m wide intersection averaging 0.45% tin from a depth of 24.6m in hole KBDD-014 and a further 3.9m wide intersection at 0.38% tin from 32.09m”

• Today’s announcement confirms that hole KBDD-016 “has delivered the best visual tin intersection to date, where a 10m wide cassiterite bearing zone was identified at one of the deepest levels drilled to date. This reinforces the Company’s zonation model that tin mineralisation strengthens towards the granite source … [and says that deeper] …. drilling is now targeting these higher-grade extensions, with results expected from KBDD016 in Q1 2025”.
• CEO, Paul Barrett, explained that the recent results reinforce “our confidence in Kalayi’s growing scale, with mineralisation now confirmed across multiple zones and improving as we drill deeper towards the granite source”.
• He expressed the view that “It is becoming increasingly clear that we are unlocking a simple, open pittable, high-grade tin resource which, due to the pinch and swell geometry, indicates that there is potential for even greater widths of high-grade mineralisation both at depth and along strike”.
• In the light of this observation we hope that the geometry of the mineralisation swells more than it pinches.
• Mr. Barrett also explained that the company is continuing its drilling campaign at the Mont Agoma prospect, also in North Kivu, with 1,358m now completed and three holes currently in progress and “six planned drill holes … [remaining] … during the current programme”.
• The company also confirms its 27^th January release “that its operations and on-site activities continue to remain unaffected by the unrest in the city of Goma”.

Conclusion: Recent drilling results from Kalayi lend support to the company’s geological model and drilling continues. The company confirms that its exploration is not affected by the current unrest in Goma

Sovereign Metals* (SVML LN) 38p, Mkt Cap £234m – Quarterly report highlights Rio Tinto oversight of optimised prefeasibility study

(Sovereign currently holds 100% of the Kasiya project. Malawi has 10% free carry right. Rio Tinto acquired an initial strategic interest of 15% for A$40m mid 2023 and has recently invested a further A$19.2 to move up to 19.9%)

STRONG BUY – Valuation 55p

• The recently published optimised PFS shows the Kasiya project to be the worlds largest and lowest-cost producer of natural rutile and natural flake graphite.
• The large-scale, yet relatively simple project appears to meet the criteria for major company involvement.
• Recently completed trials highlight that rutile and graphite can be simply mined from surface using conventional machinery for dry mining or hydraulically mined using high-pressure hoses.
• The main test pit has been refilled to its original ground level and on-site soil remediation and land rehabilitation is now underway.
• We expect trials to show improved crop yields after rehabilitation with the rutile and graphite removed.
• Rutile: Iluka recently reported firm prices for rutile at $1,662/t for Q4 for 95% gradeproduct.
• Graphite: test work confirmed the Kasiya graphite is suitable for sale a refractory material. Further work will likely confirm the graphite is also suitable for Li-ion battery anodes.

Optimised PFS results:

• • Capex: US$665m
  • Total life of mine development capital: US$1,127m vs US$1,250m in September 2023
  • Sustaining capital: US$397m
  • NPV8% US$2,322m
  • IRR of 27%
  • Operating costs: US$428/t vs US$404/t , on an FOB, Nacala basis
  • Throughput: 12mtpa for Stage 1 rising to 24mtpa in Stage 2
  • Production  – Rutile:  222,000tpa

– Graphite 233,000tpa

• • Sales US$640mpa
  • EBITDA US$409mpa
  • Mine life 25 years initially

Assumptions:

• • Rutile: US$1,490/t  (Iluka report rutile at $1,662/t today for Q4 for 95% grade rutile)
  • Graphite: US$1,290/t
• Quarterly financials, Expenditure:
  • Sovereign spent A$7.2m on drilling, assays, metallurgical test work, ESG and other Malawi operations through the past quarter.
  • Staff costs came to a relatively modest A$369,000 for the quarter implying total staff costs of around A$1.5m for the year.
  • Admin and corporate costs were A$326,000 for the quarter and A$970,000 for the six months
• Interest received was A$650,000 in the quarter covering almost all the staff, admin and corporate costs
• Cash and cash equivalents stand at A$33.5m.

Conclusion:  It is refreshing to see a company where the interest received virtually covers all the staff, admin and corporate costs, with the vast majority of expenditure on the development of the value of the asset in the ground.

Sovereign will upgrade the optimised PFS to a DFS in Q2 at which point we expect the company to enter into discussions over the mine financing and potential partners for the mine development.

We suspect Rio Tinto may prefer to become the sole operator of the mine leading to the takeover of Sovereign Metals.

*SP Angel act as Nomad and broker to Sovereign Metals. The analyst has visited the Kasiya mine site. We highly recommend the Malawi coffee beans sold in Lilongwe airport.

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 are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

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

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