SP Angel Morning View -Today’s Market View, Thursday 3rd August 2023

Albemarle raises guidance on strong lithium market dynamics

China continues to struggle as property sector continues to weigh on economy

MiFID II exempt information – see disclaimer below

Albemarle Corporation  (ALB US) – Quarterly results show raised outlook to reflect sustained lithium demand strength

Anglo Asian Mining* (AAZ LN) – Environmental inspection update

Anglesey Mining (AYM LN) – Deploying innovative exploration technique at Parys Mountain

Botswana Diamonds (BOD LN) – Initial production from Thorny River expected during H2

Horizonte Minerals (HZM LN) – Progress of Araguaia project construction

Kodal Minerals* (KOD LN) – Kodal receives US$3.5m prepayment from Hainan Mining

Mkango Resources* (MKA LN) – HyProMag acquisition deal completion

Syrah Resources (SYR AU) – Offtake agreements signed with US downstream players to diversify marketing strategy

VOX Markets:  

31/07/2023: https://audioboom.com/posts/8341813-john-meyer-on-lab-grown-diamonds-bushveld-minerals-power-metals-res-wh-ireland

24/07/2023: https://audioboom.com/posts/8338437-john-meyer-on-improved-liquidity-plus-cornish-metals-beowulf-rainbow-rare-earths-solgold-sove

*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts. We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.

Potash – Nutrien halts potash investment on sliding profits from fertilizer business

• Largest global fertilizer producer Nutrien has paused potash project expansion on ‘unprecedented volatility’ in fertilizer prices.
• The Company had aimed to boost potash production to 18mt, but now states it is ‘indefinitely pausing’ these plans.
• Potash prices fell to a 29 month low in June, have since rallied slightly but remain 50% lower than last year’s levels.
• The earnings call noted an improving North American market, but did not reflect the bullishness in potash outlook of rival Mosaic.

China moves to crack down on iron ore/steel traders again in hope of price stability

• China’s iron ore and steel governing body is considering banning night-time future trading to cool market volatility. (Bloomberg)
• Beijing has been taking measures to crack down on speculation in key industrial metals markets for several years now.

Tin prices edge higher as ITA confirms Myanmar has started crackdown on key mining jurisdiction

• Tin prices are hovering around the $28k/t mark as supply concerns mount over Myanmar’s crackdown.
• The International Tin Association reports Myanmar has begun cracking down on exploration and extraction in areas of the Shan state.
• The area, controlled by the Wa State Army, supplies China with 30% of its tin ore.
• The group expects the tin market to tighten substantially going forward.
• However, Chinese stocks remain buoyant, and the fact that LME futures sit at a cash discount for physical supply highlights ample stocks.

Iron ore prices accelerate decline on oversupply as Beijing property stimulus remains elusive

• Iron ore prices fell to $103/t in Tianjin, with the steelmaking ingredient suffering consistent losses since last week.
• Record monthly flows in Port Hedland have been rising, with rising bulker rates also pointing to increasing supply.

Superconductor – Potential holy grail of super conductors developed in Korea?

• Researchers in South Korea claim they have discovered a super conductor that operates at room temperature.
• LK-99 would be the holy grail of the energy world as it would provide a super-efficient way of transmitting power without resistance and losses.
• Superconductors typically require material to be cooled to near absolute zero – a difficult and expensive process which is not normally practical for power transmission.
• There are mixed views on whether the researchers have truly succeeded as others have reportedly tried to follow the same methodology and not succeeded in creating the material.
• We will continue to watch for further confirmation on LK-99 from South Korea.

CAT – Global 22% Q2 yoy growth in sales

• North America saw a 32% Q2 yoy growth
• Asia Pacific saw 10% Q2 yoy growth
• China saw lower sales volumes driven lower sales of equipment to China

Economics

US – Strong preliminary employment numbers along with a sovereign debt rating downgrade sent US$ index and yields higher on Wednesday.

• 10y bond yields are trading at >4.15% this morning marking the highest level so far this year.
• The move was further exacerbated by the news the the Treasury will issue $103bn of securities next week, slightly more than forecast, Bloomberg writes.
• ADP Payrolls: 324k v 455k (revised from 497k) June and 190k est.

China – Unlike manufacturing, growth in services industry surprisingly picked at the start of Q3/23 supported by an increase in new business orders mostly driven by the local market.

• Caixin Manufacturing PMI: 49.2 v 50.5 June and 50.1 est.
• Caixin Services PMI: 54.1 v 53.9 June and 52.4 est.
• Caixin Composite PMI: 51.9 v 52.5 June
• Home sales fell -33.5% mom and -33.1% yoy according to the leading 100 property developers to CNY350.4bn (US$49bn) (CREI)
• Land sales also fell -27% yoy for the largest 300 cities (CREI)
• Planned construction -33% yoy for the year-to-date by proposed area of construction
• Residential apartment sales fell -4.43% yoy in July to 332,800sqm
• Shenzhen new apartment sales fell  -11.14% yoy in July to 413,500sqm across 3628 units
• The PBOC has much work to do to stabilise and restore growth in the property sector
• Some cities looking at stimulating new consumption particularly for EVs with scrappage schemes and tax rebates.
• Passenger car sales fell -5% yoy and -8% mom in July to 1.734m vehicles
• Year-to-date vehicle sales are still up +1% at 11.26m units
• Third typhoon for year passes through Beijing causing widespread flooding and unprecedented rainfall in Beijing

Japan – The central bank intervened for the second time this week in an effort to slow down increases in sovereign bond yields.

• Monetary authorities announced an unscheduled operation to buy 400bn yen ($2.8bn) of securities across various maturities after the yield on 10y debt touched a new nine year high of 0.65%.
• The Bank of Japan slightly eased its yield curve control programme last week reiterating the 10-year yield target at around 0% while saying that it would be a buyer of debt at 1%, double the previous 0.5% level.

UK – The central bank to announce its rate decision later today (12pm) with market expectations for a 25bp move, although, a 50bp hike is not completely ruled out.

• Markets are currently pricing in benchmark rates to peak around 5.75% by the end of the year implying three more 25bp hikes from current 5.0%.

Niger – ECOWAS deadline for Wednesday week looms over Niger

• Nigeria is restricting power to Niger following the Coup with rolling backouts reported.
• Niger leader in discussions with Wagner group leader.
• France is evacuating citizens.
• Burkina Faso and Mali say military intervention to restore President Mohamed Bazoum in Niger would be declaration of war
• The region is looking increasingly unstable

Currencies

US$1.0917/eur vs 1.0988/eur yesterday. Yen 143.30/$ vs 142.71/$. SAr 18.548/$ vs 18.403/$. $1.270/gbp vs $1.277/gbp. 0.653/aud vs 0.657/aud. CNY 7.194/$ vs 7.184/$.

Dollar Index 102.80 vs 102.17 yesterday.

Commodity News

Precious metals:

Gold US$1,934/oz vs US$1,949/oz yesterday

Gold ETFs 91.1moz vs US$91.3moz yesterday

Platinum US$921/oz vs US$930/oz yesterday

Palladium US$1,230/oz vs US$1,239/oz yesterday

Silver US$23.57/oz vs US$24.30/oz yesterday

Rhodium US$4,100/oz vs US$4,100/oz yesterday

Base metals:

Copper US$ 8,469/t vs US$8,609/t yesterday

Aluminium US$ 2,212/t vs US$2,237/t yesterday

Nickel US$ 21,435/t vs US$22,200/t yesterday

Zinc US$ 2,461/t vs US$2,526/t yesterday

Lead US$ 2,136/t vs US$2,138/t yesterday

Tin US$ 27,700/t vs US$27,555/t yesterday

Energy:           

Oil US$82.9/bbl vs US$85.7/bbl yesterday

• The recent crude oil price rally ended as the market ignored the record 17mb EIA reported inventory build, offset by a higher adjustment factor, and focused on US gasoline demand falling for a fourth straight week.
• The EIA reported a huge 17mb w/w US crude draw, as well as a 0.8mb draw on distillate and 1.5mb build in gasoline stocks, and refinery utilisation falling by 0.7% to 92.7%.
• Chesapeake Energy reported average 1H23 production of 3.9bcf/d and expects 2H23 levels to fall further as the Company plans to spend about a third less on development work in the latter half of the year running four rigs in the Marcellus, five in the Haynesville, and none in the Eagle Ford.
• Media reports that ExxonMobil has put its assets in Argentina’s onshore Vaca Muerta shale basin that currently produce ~15kb/d up for sale, though the Company plans to retain its three offshore exploration licence interests.
• BayWa Group announced plans to sell wind and solar projects with a total output of 500MW before the end of the year, which follows the sale of projects with a total output of 120MW during 1H23.

Natural Gas US$2.487/mmbtu vs US$2.565/mmbtu yesterday

Uranium UXC US$56.25/lb vs US$56.15/lb yesterday

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$103.2/t vs US$106.0/t

Chinese steel rebar 25mm US$534.4/t vs US$535.2/t

Thermal coal (1st year forward cif ARA) US$115.0/t vs US$120.0/t

Thermal coal swap Australia FOB US$137.8/t vs US$137.5/t

Coking coal swap Australia FOB US$236.0/t vs US$236.0/t

Other:  

Cobalt LME 3m US$33,420/t vs US$33,420/t

NdPr Rare Earth Oxide (China) US$65,479/t vs US$65,435/t

Lithium carbonate 99% (China) US$35,798/t vs US$35,850/t

China Spodumene Li2O 6%min CIF US$3,710/t vs US$3,710/t

Ferro-Manganese European Mn78% min US$1,054/t vs US$1,060/t

China Tungsten APT 88.5% FOB US$310/mtu vs US$310/mtu

China Graphite Flake -194 FOB US$675/t vs US$675/t

Europe Vanadium Pentoxide 98% 7.6/lb vs US$7.6/lb

Europe Ferro-Vanadium 80% 31.85/kg vs US$31.85/kg

China Ilmenite Concentrate TiO2 US$312/t vs US$313/t

Spot CO2 Emissions EUA Price US$91.1/t vs US$93.5/t

Brazil Potash CFR Granular Spot US$345.0/t vs US$345.0/t

Battery News

India rebuffs Chinese automakers but rolls out red carpet for Tesla

• Tesla has had a red-carpet welcome from India for discussions of a proposal to invest in the country, while its largest rival in EVs, China’s BYD has taken a back seat following scrutiny from New Delhi.
• Since a meeting between Musk and Indian Prime Minister Narendra Modi in June in New York, Tesla has fast-tracked closed-door discussions with Indian officials on a potential plant investment and plans to build a new low-cost $24,000 EV.
• Talks have continued over the past week with Tesla discussing minute details of its plans to gain access to India’s fast-growing EV market, and Modi personally tracking developments.
• BYD had been seeking approval for a $1b investment in India but is no longer interested in pursuing the approval. (Reuters)
• The Chinese automaker is facing an investigation over allegations that it underpaid import tax in India and Indian officials are worried about the national security implications of Chinese-made vehicles and the data they could collect.

Japan looks to build EV supply chains in Africa

• Japan’s government plans to work with three African nations to develop supply chains for cobalt and other minerals critical in making EV batteries (Nikkei)
• Japan is looking to diversify its sources of critical minerals, including lithium, to enhance economic security and counter China’s growing investment in African countries.
• The Japan Organization for Metals and Energy Security (JOGMEC), the state-owned resource explorer, intends to sign a memorandum of understanding with Zambia soon, and will finalise plans with Congo and Namibia based on preliminary agreements reached with the two countries.

EU need to fast track EV charging points

• The European Union has adopted a new law requiring member countries to install EV chargers on all motorways, at intervals of minimum 60km.
• Industry experts say this will mean installing 6,000 new charging points a week between now and 2030.

Company News

Albemarle Corporation  (ALB US) $203, Mkt Cap $23 – Quarterly results show raised outlook to reflect sustained lithium demand strength

• Albemarle reports quarterly results, raising EPS guidance by 17% above previous expectations.
• The Company saw new sales increase to $2.4bn, a 60% jump in the quarter yoy.
• Net income rose in line with this at $640m for the quarter.
• The Company signed a deal with Ford to supply >100kt of Lithium hydroxide between 2026 and 2030.
• Albemarle increased its full year 2023 guidance to $10.4-$11.5bn vs $9.8-11.5bn as of last quarter.
• Net sales expected to rise 40-55% yoy, with a 10-15% increase in Adj. EBITDA.
• CAPEX expectations raised from $1.7-1.9bn to $1.9-2.1bn for the full year, with the amended deal with MinRes the primary reason.
• In terms of lithium pricing, Albemarle expects realised pricing to be in the higher end of their 20-30% increase yoy, supposing prices continue at these levels.
• Higher prices are noted in battery/tech-grade carbonate and hydroxide.
• Its Salar Yield Improvement Project has moved into commissioning phase,
• The Company’s Meishan processing facility is expected to be complete ahead of schedule in early 2024.

Conclusion: Albemarle’s strong sales results and upgraded forward guidance for their ‘energy storage’ segment, primarily levered to lithium, reflects a market stabilisation for the fundamental battery metal. The sharp May correction in LCE markets saw prices rally 45% to current levels, with Albemarle’s forward guidance suggesting majors expect these levels to hold as EV demand continues to rise and supply remains tight. They continue to invest in growth projects, with LCE production anticipated to reach 300ktpa by 2027, double last year’s levels. The Company also continues to move downstream, increasing ownership stakes in their joint venture with MinRes to 100% of the Kemerton hydroxide processing facility and the Qinzhou and Meishan plants in China.

Anglo Asian Mining* (AAZ LN) 69p, Mkt Cap £79m – Environmental inspection update

BUY – Under Review

• A full environmental inspection of the Gedabek facilities was carried by Micon International on behalf of the government in late July.
• Micon was accompanied by Iqlim, a local Azeri company, that collected samples including soil, surface, underground water and air at Gedabek.
• Micon is expected to provide a full report with its findings to the government and the Company by 8 September 2023.
• Additionally, Micon and government representatives along with Company’s consultants including Mine Environmental Management and Knight Piesold inspected existing tailings dam and the proposed site for the new facility.
• Preliminary sampling showed levels of cyanide at the existing site were within regulated limits.
• A presentation on the construction of the new tailings dam was also provided to all participants.
• As Micon prepares the report, the Company suspended its flotation and agitation leaching operations from 31 July in line with government directions.
• Operations will remain suspended until the report is completed and necessary remedial activities, if any identified as part of the audit, are implemented.
• Suspended production is estimated to cost the Company 400t copper and 300oz of gold in missed output in August.
• The team will use the time to carry out essential maintenance works during the period.
• Heap leaching operations will continue as normal with expected production of 1koz in August.
• Production guidance is conditional on the duration of operations’ suspension with the team to monitor the situation closely and provide further updates as appropriate.

Conclusion: The Company released an environmental audit update yesterday reporting that Micon International engaged by the government carried out a site inspection and is expected to release a full report by 8 September. Flotation and agitations leaching operations that were suspended on 31 July will remain on hold until then at least suggesting that may cost the Company just over a month of lost production (excluding heap leaching). The Company will use the time to carry necessary maintenance at its operations in the meantime, while our understanding is that exploration and development works at new sites are expected to continue as planned. We are looking forward to updates over Micon audit and remain confident that operations can restart as soon as possible given the Company’s good track record of operations in the region.

*SP Angel acts as nomad and broker to Anglo Asian Mining

Anglesey Mining (AYM LN) 1.55p, Mkt Cap £6.4m – Deploying innovative exploration technique at Parys Mountain

• Anglesey Mining reports that it has engaged a ground engineering technical services company based in Wakefield, UK to undertake a ‘Proof of Concept study’ of Muon Tomography at the historic Parys Mountain mine.
• The specialist expert, Central Alliance, will deploy sensors “in stages down the 300-metre-deep Morris Shaft at the Parys Mountain mine … to create an image of the subsurface … [and] … expedite both the discovery of additional mineralised zones and the development of the current known resources”.
• Chief Executive, Jo Battershill, explained that “conventional geophysical methods … [are becoming] … increasingly difficult to employ on the Isle of Anglesey due to impediments such as power cables, windfarms and roads … [so]… the need to develop new technology is becoming more important”.
• He commented that “the entire Parys Mountain stratigraphy remains highly prospective, and that existing mineralisation should extend both along strike and at depth, as seen at many other VMS deposits around the world. Bringing modern exploration methods to this project could facilitate and expedite both the discovery of additional mineralised zones and the development of the current known resources”.
• The company also confirms that a six-month long programme to drill six diamond drill holes (~3,725m) to investigate the Northern Copper Zone and “increase the resource confidence category for the upper levels of the NCZ, extend the high-grade Garth Daniel resource estimate and test the Central Zone, which is not currently in the Parys Mountain resource estimate” is expected to start in September.
• Copper mining at Parys Mountain has a long history and is said to have started during the Bronze Age and, according to the company’s website, Parys Mountain eventually “became probably the world’s largest copper mine in the 1780s. Until 1800 most mining was by open cast but from 1810 Cornishmen opened up significant underground workings. By 1910 all significant mining activity had ceased”.

Conclusion: We await the results of the new Muon Tomography survey and the latest phase of drilling with interest.

Botswana Diamonds (BOD LN) 0.93p, Mkt Cap £9.7m – Initial production from Thorny River expected during H2

• Botswana Diamonds reports that it expects to commence production at its Thorny River diamond project in South Africa during the second half of 2023.
• The company explains that preparatory work including the recovery of 1,481 carats of diamonds from dump material associated with previous mining at the adjacent Marsfontein mine, has experienced delays resulting from “equipment and weather issues … [but the project is now] … delivering better than expected grades and diamond values”.
• Chairman, John Teeling, explained that “Mining on Marsfontein is a proof of concept … [which] … augurs well for our adjacent Thorny River development”.

Horizonte Minerals (HZM LN) 157.5p, Mkt Cap £424m –Progress of Araguaia project construction

• Horizonte Minerals has provided a progress report on the construction of its wholly-owned Araguaia ferronickel project in Brazil where the first metal production is expected in Q1 2024.
• The company says that around 65% of the construction has been completed by 30^th June and that “physical site construction … [is] … 53% complete”.
• “US$329 million has been spent on the Araguaia construction out of the budgeted capital requirement of US$537 million”.
• “As of 30 June 2023, the Company had total liquidity sources of US$344 million comprised of US$206 million undrawn on the Senior Debt Facility, a cash position of US$108 million, and US$30 million on the Cost Overrun Facility”.
• Horizonte Minerals confirms that “After quarter-end, the Company successfully passed its cost-to-complete test, in accordance with its lending terms, which assessed the Company’s funding headroom to carry-out the Araguaia Phase 1 project build to nameplate production, enabling the draw down of an additional US$75m”.
• Among the highlights the company confirms the “delivery of the Rotary Kiln and commencement of ore mining” and the start of ore stockpiling “following the issuance of the mining permit during the quarter”.
• “Off-site, construction of the 126km, 230kV transmission line is well advanced with over 90% of the pylons erected and 42 km of conductor cable installed. Construction of the water storage reservoir has commenced”.
• CEO, Jeremy Martin, explained that “Whilst the key focus is the construction activities at Araguaia, we are making good progress on the Line 2 Feasibility Study which is scheduled to be published later this year. The proposed expansion has the potential to double the annual nickel production to 29,000 tonnes per year”.
• The company explains that “The Araguaia processing site has also been designed and optimised to allow for the build out of Line 2 with key fixed infrastructure sized to support both lines, helping to reduce the overall cost of developing Line 2”.
• Mr. Martin also said that feasibility work is continuing on the Vermelho nickel project with a study expected to be published during 2024.
• The geology of Vermelho is amenable to processing with either “High-Pressure Acid Leach (“HPAL”) or Rotary Kiln Electric furnace (“RKEF”) technologies” and we expect that the feasibility work will clarify the relative merits of the two treatment routes.

Conclusion: Araguaia remains on track to produce its first metal in Q1 2024 with over half of the site construction work now completed. Work on the feasibility of a second process line to double production at Araguaia is expected to be completed later this year and Horizonte Minerals expects to publish a feasibility study on a second Brazilian project, at Vermelho next year.

Kodal Minerals* (KOD LN) 0.50p, Mkt Cap £85m – Kodal receives US$3.5m prepayment from Hainan Mining

(Kodal / Hainan jv deal long-stop date to 31 August 2023)

• Kodal Minerals reports the receipt of a $3.5m prepayment of the subscription agreement from Hainan Mining as part of the fuller funding package.
• Management have sole discretion over the use of the funds for general working capital.
  • “The Prepayment is repayable or convertible into new ordinary shares of the Company should the Funding Package not proceed.”
• Kodal is currently restructuring its subsidiary companies in Mali in preparation for receipt of the full funding for the Kodal-Hainan Mining joint venture.
• The team are busy registering ‘Les Mines de Lithium de Bougouni SA’ to hold the Bougouni mining licence on behalf of the new joint venture.
• This is a condition for the receipt of the full US$100m investment and $17.75m subscription funding package.
• The $3.5m is an advance payment from the $17.75m subscription and should not add any further dilution on top of the new 3,550m shares due to be issued.
• Leo Lithium:  Kodal also expects to receive £1.6m from the completion of the sale of Bougouni West to its near neighbour, Leo Lithium.
• Recent delays to Kodal’s restructuring in Mali are thought to be due to the departure of the Minister of Mines in Mali due to power shortages in the country.
• The new minister of mines, Amadou Keita, formerly minister of higher education was appointed a month ago.
• Leo Lithium shares remain suspended on the ASX due to “ongoing incomplete discussions with the government of Mali on correspondence it has received”.
• Leo Lithium, which is working with jv partner Ganfeng, recently announced the production and stockpiling of ore for preparation in Stage 1 production.
• Leo Lithium reports: “The Government of Mali has the right to a 10% free carry interest in the Goulamina Lithium Project through a prescribed process. Initial discussions have commenced, and this process remains at an early stage with no defined timetable. The Government continues to work towards the general elections scheduled to occur throughout 2023 and conclude with Presidential elections in February 2024.“

*SP Angel acts as financial advisor and broker to Kodal Minerals

Mkango Resources* (MKA LN) 9.8p, Mkt Cap £24m – HyProMag acquisition deal completion

• The Company announces a completion of the transaction to consolidate interest in HyProMag to 100% by Maginito (Mkango/CoTec 90%/10%).
• The deal was announced earlier in May with Maginito taking its stake in HyProMag from 42% to 100% in return for a £1m cash consideration, £1m in Mkango shares (9.7m at 10.3p/sh) and further £3m payable in four contingent milestone tranches (cash or shares at Mkango discretion).
• Following the consolidation of the interest, Maginito will hold a 100% interest in HyProMag and 90% interest in HyProMag GmbH, assuming a conversion of previously announced convertible loan.
• HyProMag was founded in 2018 out of University of Birmingham by a group of experts in the field of rare earth magnetic materials, alloys and hydrogen technology.
• HyProMag is currently developing a £4.3m short loop recycling facility with an initial capacity of 100tpa NdFeB at Tyseley Energy Park in Birmingham with first production planned for 2023.
• Additionally, HyProMag is developing a similar sized facility in Germany through its 90% owned (assuming HyProMag GmbH convertible loan conversion) subsidiary HyProMag GmbH with first production planned in 2024.

*SP Angel acts as nomad and broker to Mkango Resources

 Syrah Resources (SYR AU) A$0.71, Mkt cap A$488m – Offtake agreements signed with US downstream players to diversify marketing strategy

• Syrah Resources announces it has signed an offtake agreement with two US spherical graphite and anode processers in the US.
• Binding offtake agreements have been signed with Graphex Technologies and Westwater Resources.
• Graphex processes anode materials for li-ion batteries and has produced 10ktpa of spherical graphite in China since 2018.
• Graphex is looking to ramp up spherical graphite production to 55ktpa over the next three years and is currently building the Warren AAM processing facility in Michigan for US OEMs.
• Westwater is building the AAM processing facility in Kellyton, Alabama – expected to be producing by 2024.
• Syrah is targeting 100ktpa sales of Balama fines to third-party, ex-China battery supply chains from 2026.

Conclusion:  Whilst Syrah is developing its own AAM processing facility, Vidalia, the offtake agreements with effective downstream competitors mark Syrah’s desire to diversify Balama’s market access. Management notes that the deals will ‘not impact Vidalia’s value position.’ The Company is currently negotiating further commercial arrangements with other anode processing/OEM customers. Syrah paused production at Balama in Q2 as a result of a glut of anodes in China and fine supply globally. Such offtake agreements will give Syrah more consistent markets to sell into, whilst potentially limiting their leverage to an improving graphite price were market dynamics to tighten going forward.

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                                                            

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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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MiFID II – Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).

SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%