SP Angel Morning View -Today’s Market View, Thursday 3rd October 2024

Chinese shut additional high-cost lithium mines in Zimbabwe

China have invested over $100bn into overseas cleantech since 2020

MiFID II exempt information – see disclaimer below

Anglo Asian Mining* (AAZ LN) – BUY, New Target – 308p – Gedabek is ready to restart with Demirli to upgrade growth profile

Castillo Copper (CCZ LN) – Focus on Queensland copper projects with divestment of NSW project

Galileo Resources (GLR LN) – Initial results of reverse-circulation drilling at the Shinganda copper project, Zambia

Jubilee Metals Group (JLP LN) – FY 2024 results show improving results for chrome and copper offset by weaker PGEs

Metals One plc (MET1 LN) – High-grade intersections identified in re-assayed cores from historic drilling on black schist project in Finland

Mkango Resource* (MKA LN) – Government grant funding for rare earths magnets recycling business

Power Nickel (PNPN CN) – Assay results from Lion Zone Discovery

Premier African Minerals (PREM LN) – £550,000 fund raising

Technology Minerals (TM1 LN) – Fire at Recyclus LiBatt plant in Wolverhampton

Tungsten West (TUN LN) – Annual results highlight receipt of plant operating permits and the strategic nature of tungsten production in the western world

Chinese shut additional high-cost lithium mines in Zimbabwe

• Bikita Minerals, a Chinese lithium miner in Zimbabwe, announced that their DMS plant will be shut down from October 2024.
• The Company cited ‘lithium market factors.’
• Sinomine, who own Bikita, reported that the recent price slump is ‘making it difficult for lithium companies to stay afloat, with most mining entities downscaling production.’
• This follows reports that CATL has shuttered their large-scale Jiangxi lepidolite operations.
• The West Australian reports that Liontown Resources has laid off a third of its head office staff.
• The Company sold its first cargo of spodumene concentrate this month.
• Focus remains on other Australian spodumene producers, with Bald Hill and Mount Marion both likely operating at losses.
• Ganfeng reportedly sold A$270m worth of Pilbara Minerals stock last night in a block trade.

Copper ($10,014/t) pares gains as traders wait for China to return to market after holiday

• Copper prices enjoyed a further leg higher yesterday, climbing to $10,122/t, before easing this morning.
• Sentiment has improved following the Fed’s 50bp rate cut and China’s renewed stimulus rollout.
• Meanwhile, the ICSG has reiterated their surplus expectations for 2025 at 194kt.
• Copper mine production is expected to grow 3.5% next year, with ramp ups from Kamoa Kakula and Oyu Tolgoi.
• Russia’s Malmyzhskoye mine is also due to come online, expected to add c.250ktpa.
• Barrick announced they have launched a process to expand the Lumwana copper mine with a $2bn expansion, feasibility study due by year end.
• The expansion is expected to double throughput and bring production from 120kt to 240ktpa.
• Lumwana mining volumes expected to rise from 150mt in 2025 to 240mt in 2028 and 290mt in 2030.
• Refined demand is expected to grow 2.7% next year, with Chinese demand seen up 1.8%.
• Low TCRCs likely reflect a roll-out in smelter capacity as Chinese refined output rose 6% yoy in 2024.
• However, global inventories have fallen 100kt over the past month but sit 284kt higher than at the beginning of the year. (Reuters)
• Futures remain in contango, suggesting ample physical supply.

Gold prices ($2,644/oz) ease as jobs data sooths recession concerns and traders wait for NFPs tomorrow

• Spot gold prices have fallen to $2,644/oz following yesterday’s ADP employment data.
• ADP employment showed an increase of 143k jobs vs 124k expected and 103k previous, also revised higher.
• This has fuelled a sell-off in US Treasuries, with the 10 year yield rising to 3.8%.
• The dollar has rallied, also weighing on gold, as traders add to the greenback against a basket of currencies.
• Nonfarm Payrolls are due tomorrow, with the gold market expected to react to any major divergence from expectations.
• Given bullish positioning, it wouldn’t be surprising to see a pullback in gold on even a marginally stronger-than-expected jobs number.
• However, if the reading comes in below expectations, gold may be a beneficiary of a return to recession trades.
• Any further escalation in the Middle East is also expected to support gold, however the metal is finding it hard to break through recent record highs of $2,670/oz.
• We note Tanzania is looking to diversify its foreign reserves with gold, stating plans to buy gold from domestic miners at market price, with reduced fees and faster payments.
• The Tanzanian shilling has fallen 8% against the dollar this year.
• They follow Madagascar, Ghana and Uganda who all buy gold from in country miners.

China have invested over $100bn into overseas cleantech since 2020

• Chinese overseas investments in clean energy technology projects have exceeded $100bn since the start of 2023 according to Australian research group Climate Energy Finance (CEF).
• China is responsible for 32.5% of global EV exports, 24.1% of lithium battery exports and 78.1% of solar panels.
• Investment has ramped up recently as Chinese private companies look to circumvent trade barriers that are being established in key markets.
• The US and Canada have introduced 100% tariffs on Chinese EV imports and the EU is set to officially introduce tariffs of up to 38% on EVs by November.
• BYD is building a $1bn plant in Turkey to avoid a proposed EU tariff of nearly 40%, and battery maker CATL is planning factories in Germany, Hungary and elsewhere.
• A separate study from the Grantham Institute estimates that two thirds of China’s cleantech production capacity will be surplus to domestic requirements and will need to be exported.

Panasonic begins production of 4680 battery that increases energy density by 500%

• Panasonic has begun production on its 4680 cylindrical lithium-ion batteries offer substantial improvements over the conventional 2170 cells.
• The company claims the new cells increase energy density by 500%, which extends the driving range of EVs, but also reduces the number of cells required for the same battery pack capacity.
• This results in a more efficient battery pack assembly process and ultimately lowers the cost of EVs, making them more affordable to a wider market.

Nickel – Ambatovy nickel, cobalt mine shuts pipeline due to damage

• Sumitomo which holds 54.2% of the Ambatovy mine has had to shut its ore pipeline in Madagascar.
• The closure of the pipeline is to avoid ore loss into the local forest.
• The stoppage may start to tighten the market for cobalt where surpluses out of the DRC have depressed prices.
• Ambatovy produced around 35,000t plus ~3,390t of cobalt last year.

Tin prices ($33,870/t) continue to rise as Shanghai inventories slide and Myanmar typhoon raises supply concerns

• Tin prices are nearing $34,000 on the LME, climbing over the past month on reduced supply from Myanmar and Indonesia.
• Shanghai exchange warrants have been sliding, falling over 7kt in 40 days.
• Indonesia has been slowing tin production approvals as it cracks down on corruption in the industry.
• Chinese buyers have reported tightening ore supply, with Yunnan and Jiangxi smelters struggling to ramp up operations on limited feedstock.
• The maintenance period is expected to come to an end after the Autumn holiday, raising concerns over pressures on upstream supply.
• Shanghai Metals Market reports that ‘some beneficiation plants will face a situation of having no ore to process,’ if production remains constrained from Myanmar.
• Myanmar is facing impacts from a recent typhoon; with tin production already limited for most of 2024.

LME Week speculation: – Boliden may look to acquire Neves Corvo and Zinkgruvan mines for around 1.7bn

• Its not an entirely new rumour but it makes sense for a European smelting group to consolidate European mines in a world where EU regulators are looking to protect the critical raw materials supply chain.

This is Why Gold is Rising and It Will Probably Continue:

• Podcast: https://audioboom.com/posts/8547593-john-meyer-this-has-one-of-the-lowest-risk-profiles-i-ve-seen-for-a-long-time

Economics

Peace dividend – why is no one looking for a peace dividend?

• We are struggling to find any investors who are prepared to look beyond current conflicts towards the potential for a peace dividend.
• Are we alone in looking forward, towards a more peaceful world, where the Ayatollahs are not able to start proxy wars, where Russia is not able to invade any FSU sovereign nations, Where China and India are not supporting Russia where, North Korea is not able to threaten its neighbours and where China backs off from threatening Taiwan.
• Slowly, but surely, we see Western technology eroding the power of aggressors, with Return-to-Sender subroutines redirecting drones back to their owners, exploding pagers etc…
• The Lebanese people will rejoice at the eradication of Hezbollah which hijacked and abused their political system with the support of Tehran.
• Beirut will hopefully return to the thriving city it once was.
• Iran may see further replacement of hard-line zealots with more moderate leaders as conflict comes closer to home.
• While China was busy building new cities, industries and infrastructure, Russia channelled funds into corrupt arms contracts and Swiss bank accounts to the benefit of their elite leaving the masses in grinding poverty.
• In the midst of these conflicts, we see a brighter future ahead.

US – Richmond President and voting FOMC member, Tom Barkin warned that inflation may prove to be sticky next year suggesting the rate may not go as low as investors expect in 2025.

• “I’m more concerned about inflation than I am about the labor market,” Barkin said commenting on the short to medium term outlook.
• Barkin supported a 50bp cut last month and agreed that the rate could further 50bp by the end of the year.
• NFPs are due this Friday with expectations for the economy to have added 150k jobs in September, up on 1422k in August.

UK – The pound hits a 2-week low after central bank governor Andrew Bailey hinted at a rate cut.

• The central bank could be “a bit more aggressive” with its rate cutting strategy if inflation proves to be lower, Bailey told The Guardian.
• Markets are fully pricing a rate cut at the coming meeting in November and a potential second one in December.
• Inflation has been coming down but the progress sort of stalled in the last couple of months with headline and core measures at 2.2% (unchanged) and 3.6% (un on 3.3% July) in August.
• Separately, property sales climbed at the fastest pace since spring 2021 when the market rebounded after the first Covid-19 lockdown.
• The number of agreed sales climbed 25%yoy helped by lower mortgage rates.

Israel – Military hit central Beirut for the second time since the conflict started in Lebanon with heavy bombardments reported overnight across southern parts of the country.

Currencies

US$1.1034/eur vs 1.1070/eur previous. Yen 146.40/$ vs 144.11/$. SAr 17.308/$ vs 17.354/$. $1.316/gbp vs $1.329/gbp. 0.687/aud vs 0.690/aud. CNY 7.019/$ vs 7.019/$

Dollar Index 101.82 vs 101.26 previous

Precious metals:         

Gold US$2,649/oz vs US$2,655/oz previous

Gold ETFs 83.4moz vs 83.2moz previous

Platinum US$995/oz vs US$999/oz previous

Palladium US$996/oz vs US$1,014/oz previous

Silver US$31.5/oz vs US$31.5/oz previous

Rhodium US$4,725/oz vs US$4,725/oz previous

Base metals:   

Copper US$10,027/t vs US$10,018/t previous

Aluminium US$2,681/t vs US$2,658/t previous

Nickel US$18,280/t vs US$17,940/t previous

Zinc US$3,168/t vs US$3,163/t previous

Lead US$2,141/t vs US$2,125/t previous

Tin US$33,865/t vs US$33,800/t previous

Energy:           

Oil US$74.9/bbl vs US$75.2/bbl previous

Natural Gas €38.4/MWh vs €39.4/MWh previous

Uranium Futures $82.2/lb vs $82.0/lb previous      

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$109.1/t vs US$108.5/t

Chinese steel rebar 25mm US$494.9/t vs US$494.9/t

Thermal coal (1st year forward cif ARA) US$121.5/t vs US$124.8/t

Thermal coal swap Australia FOB US$141.4/t vs US$142.8/t     

Other:  

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

NdPr Rare Earth Oxide (China) US$60,980/t vs US$60,980/t

Lithium carbonate 99% (China) US$10,330/t vs US$10,330/t

China Spodumene Li2O 6%min CIF US$740/t vs US$740/t

Ferro-Manganese European Mn78% min US$995/t vs US$995/t

China Tungsten APT 88.5% FOB US$335/mtu vs US$335/mtu

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

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

Europe Ferro-Vanadium 80% 24.55/kg vs US$24.55/kg

China Ilmenite Concentrate TiO2 US$321/t vs US$321/t

China Rutile Concentrate 95% TiO2 US$1,346/t vs US$1,346/t

Spot CO2 Emissions EUA Price US$62.9/t vs US$62.9/t

Brazil Potash CFR Granular Spot US$282.5/t vs US$282.5/t

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

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

Battery News

RWE surpasses 900MW of battery storage under construction in US

• Energy company, RWE, broke ground on three battery energy storage systems (BESS) in Texas, taking its capacity of projects under construction in the US to 931MW.
• The latest three projects have a combined power capacity of 450MW with a storage capacity of 900MWh.
• RWE is targeting 6GW of battery storage globally by 2030.

BYD exec. expects solid-state batteries to be widespread by 2030

• Widespread use of solid-state batteries may be unlikely within the next three years, but could be feasible in the next five years according to BYD’s chief scientist.
• Initially, solid-state batteries will likely be used only in high-end models and then gradually in mid-to-low end and budget models.
• Currently, solid-state battery production faces challenges including high costs, complex manufacturing processes and difficult integration with vehicles.
• Several battery makers have made significant progress with semi solid-state batteries, which gives promise to the fast development of fully solid-state batteries.
• Beijing WeLion New Energy Technology have developed a semi solid-state battery for EV maker NIO, with a 360Wh/kg energy density.

Company News

Anglo Asian Mining* (AAZ LN) 95p, Mkt Cap £109m – Gedabek is ready to restart with Demirli to upgrade growth profile

BUY – 308p

CLICK FOR PDF

• We prepared updated production and earnings estimates as the team is restarting AGL/FLO circuits at the Gedabek Gold/Copper Mine, Azerbaijan.
• FY24 Group guidance is for 15.0-19.5koz GEO (FY23: 31.8koz GEO) including 14.0-16.0koz gold and 250-850t copper reflecting a temporary suspension of AGL/FLO circuits since Aug/23 amid permitting of the tailings dam wall raise.
• FY24 guidance implies 2H24 production to be 2-3x that 5.3koz GEOs reported in 1H24 with AGL now up and running while FLO is due to restart in November.
• FY25 production is estimated to reach 70koz GEO (SPAe) including 39koz gold and 7kt copper (FY24e: 15koz and 0.8kt) with Gilar (commissioning 4Q24) to be key contributor to production that year.
• Outside Gedabek, the Demirli Cu/Mo asset is set to significantly upgrade the medium term Group growth pipeline (>35ktpa CuEq target ex Demirli) as the team prioritises resumption of production at the brownfield operation, recognising highly value accretive development opportunity. Given all necessary infrastructure in place, the project features low capital cost profile with fast route to production.
• Demirli is expected to contribute ~20ktpa Cu to production vs 12kt CuEq recorded in pre-suspension FY22, contributing ~$170m or 111p to estimated NAV and accounting for >30% of the Group’’s valuation, nearly on par with established Gedabek operations (~40%).
• In addition to organic growth potential, Demirli is set to help with internal FCF generation supporting funding of greenfield projects (Xarxar, Garadag) and significantly reduce risks typically associated with a single asset producer, highlighted by the temporary suspension at Gedabek.

Valuation: We update our valuation to ~$460m or 308p, with Gedabek and Demirli accounting for most of that, and reiterate our BUY recommendation. We highlight a strong potential production growth profile and increasing share of copper in output mix (our NAV sensitivity to copper price is 6x that to gold) allowing the Company to capitalise on a limited number of copper producers in the London

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

Castillo Copper (CCZ LN) 0.25p, Mkt Cap £2.9m – Focus on Queensland copper projects with divestment of NSW project

• Castillo Copper reports a conditional agreement to divest its Cangai copper project in northern New South Wales in a share-based transaction with ASX listed Infinity Mining.
• The company explains that the proposed transaction facilitates a focus on progressing its Queensland copper assets “commencing with the Big One Deposit”.
• Conditions for the transactions include:
  • Infinity Mining securing at least A$1m of funding; and
  • Castillo Copper securing agreement from royalty holders to accept 30m Infinity Mining shares and 15m options for their interests; and
  • Relevant statutory and shareholder approvals.
• Castillo Copper will receive 40m Infinity Mining Shares and 20m options retaining participation “in any value created arising from advancing the Cangai Copper Mine tenements”.
• Chairman, Ged Hall, explained that Castillo Copper “is highly confident Infinity Mining’s team has the capability to fully develop the Cangai Copper Mine tenements”.

Conclusion: Plans to divest the Cangai project emphasises Castillo Copper’s commitment to advance its Queensland exploration.

Galileo Resources (GLR LN) 1.13p, Mkt Cap £13.1m – Initial results of reverse-circulation drilling at the Shinganda copper project, Zambia

• Galileo Resources reports that it has completed 30 reverse-circulation (RC) holes (2,213m) of its previously announced drilling campaign at its Shinganda copper project in western Zambia.
• Today’s announcement says that “visual inspection … [of] … intercepts of the supergene enrichment zone representing the most likely setting for the highest copper and gold grades were seen at the base of several drillholes”.
• Encouraged by these results Galileo Resources is pressing ahead with “a short Phase 4 diamond drill programme to ensure maximum recovery of core in this zone and therefore a more accurate assessment of grade than that offered by RC drill chips”.
• The company confirms that a “total of three diamond drill holes and 310 metres of drilling has been completed to date to specifically target the supergene zone, intersecting both iron-rich oxides and copper sulphide mineralisation”.
• Commenting on the drilling at Shinganda, Chairman & CEO, Colin Bird, said it shows that “mineralisation appears to extend over 6km cumulatively on the two mineralised structures at varying widths from 6m to 47.5m”.
• Mr. Bird confirmed that “Whilst the core and RC chips appear to be well mineralised we have sent samples for assay … [and] … we eagerly await the assay results in order to proceed with the next phase of extension and infill with the objective of establishing a JORC (2012) Mineral Resource”.
• A photograph of a section of drill core from hole SHDD-024 included in the announcement shows “massive copper and iron sulphides”.

Conclusion: RC drilling has shown sufficient encouragement for Galileo Resources to press ahead with core drilling in advance of receiving assay results. We await results from the new drilling at the Shinganda prospect as the exploration progresses.

Jubilee Metals Group (JLP LN) – 4.85p, Mkt cap £147m – FY 2024 results show improving results for chrome and copper offset by weaker PGEs

• Jubilee Metals reports a profit of US$6.4m for the year to 30^th June (2023 – US$15.6m) and a closing cash balance of US$19.3m.
• EBITDA was ~7% lower than the US$29.8m achieved in FY 2023 at US$27.7m ”supported by increased chrome production … [up 20% and exceeding guidance at ~1.5mt] … partially … [offsetting] … the impact of the sharp decline in PGM EBITDA”.
• EBITDA of the chrome operations rose by over 150% to US$17.8m (2023 – US$7.0m) while the contribution from PGMs declined to US$6.7m (2023 – US$23.9m).
• Reflecting the expansion of output at the Roan Concentrator in Zambia, the EBITDA contribution of Jubilee Metals’ copper operations “increased  by 71.4% to US$3.6 million (FY2023:US$2.1 million)”.
• The company says that its “focus in Zambia now shifts to bringing into operation its copper resources to utilise its expanding copper processing capacity such as:

• • the acquisition of the Munkoyo open-pit mining project on 28 June 2024, which was brought into operation during July 2024, ahead of schedule, with mined run-of-mine (ROM) grades exceeding 3.5% copper which is delivered to Sable for refining.
  • Roan commencing with the processing of historically mined low grade surface stockpiles
  • The large Waste Rock Project, with approximately 260 million tonnes of surface rock, which is set to begin an industrial trial of 15 000 tonnes through Roan’s front-end module in November 2024 as part of the final due diligence review.
  • The completion of the technical review of Project G, as Jubilee’s potential second targeted copper open-pit mining opportunity”.

• The company’s FY 2025 production guidance envisages a 6.6% increase in chrome production to 1.65mt with a similar level of PGE output at 36,000oz and copper output in the range 5,850-7,500t representing increases of between 71-119% on the 2024 output.

Metals One plc (MET1 LN)– 0.5p, Mkt cap £1.8m – High-grade intersections identified in re-assayed cores from historic drilling on black schist project in Finland

• Metals One report the identification of high-grade nickel, copper, cobalt and zinc in re-assayed cores from historic drilling on black schist project in Finland
• The team are looking to extend the current 57.1mt Ni-Cu-Co-Zn of resources defined over the R1 and P5 areas
• Metals One has re-assayed two historical drillholes at P1 drilled by the GTK ‘Geological Survey of Finland’
  • “Nickel mineralisation within a black schist sequence at P1 indicates that there is potential for a larger, shallow mineral resource, whilst historical drilling intersected a 15m-25m thick zone of nickel mineralisation which is potentially extensive to the west, north and south. P1 sits 8km north of P5.”
• Intersections:
  • 29m-38m: 9m at 0.20% Ni, 0.08% Cu, 0.01% Co, 0.007% Zn, including 5m at 0.24% Ni, 0.12% Cu, 0.01% Co, 0.02% Zn (0.10 Ni cut off)
  • 121.5m-141.5m: 19.5m at 0.22% Ni, 0.10% Cu, 0.017% Co, 0.36% Zn, including 12m at 0.27% Ni, 12% Cu, 0.02% Co, 0.39% Zn (0.10 Ni cut off)
• Management are focused on delivering a PEA ‘Preliminary Economic Assessment’ on the Black Schist projects and to eventually deliver a mining project in the region.
• Sotkamo, formerly Talvivaara uses a bio-heap leaching process to recover and process CuS, ZnS and (Ni-Co)S precipitates using bacterial leaching.
• The Sotkamo mine capacity is ~30,000tpa of nickel in nickel sulphate, 55,000tpa zinc and 200tpa of uranium from 2026.

Conclusion:  Historic drill holed are normally just as good as fresh drilling when it comes to stratigraphic information and mineral assays. If Europe wants more nickel, copper and cobalt produced within the EU then it knows where to look.

Mkango Resource* (MKA LN) 5.8p, Mkt Cap £20m – Government grant funding for rare earths magnets recycling business

• HyProMag and Mkango UK have been awarded ~£220k in grants as part of a $15m investment programme managed by Innovate UK.
• The funding will be used to advance medium-loop (via remelting) and long-loop (via chemical processing) rare earth magnet recycling routes.
• REEmelt is a ~£600k project to be carried in collaboration with Less Common Metals, ADEY and University of Birmingham.
• Medium loop route involves liberating end of life rare earth magnets via HPMS, followed by remelting, strip casting at LCM’s facilities in Ellesmere Port (UK) and remanufacture into a new sintered rare earth magnet for demonstration in an ADEY magnetic filter.
• The Sustainable Alternative to Hydrometallurgical Processes (SAHP) project focused on long loop recycling route has a ~£250k budget that will see Mkango UK working together with Imeprial College spin-out, Nanomax, to validate its novel Oxidative Ionothermal Synthesis (OIS) process at pilot scale.
• Nanomox has developed a novel and highly innovative synthetic manufacturing process which can process polymetallic materials to selectively extract and recover target metals allowing for more efficient recycling and processing of industrial waste streams.
• HyProMag and Mkango UK are 100% subsidiaries of Maginito that is owned by Mkango and CoTec 80%/20%.
• Both routes are complementary to the short loop rare earth magnet recycling technology advanced by HyProMag in the UK, Germany and the US.

Conclusion: UK government is continuing to support development of commercial rare earth magnet recycling technologies as highlighted by grants provided to Mkango and Ionic earlier this week aiming to reduce dependence on imported materials and establishing more sustainable supply chains in critical materials.

*SP Angel acts as nomad and broker to Mkango Resources

Power Nickel (PNPN CN) C$0.8, Mkt Cap C$150m – Assay results from Lion Zone Discovery

• Power Nickel, who are progressing the Polymetallic Lion Zone discovery, report assay results.
• Highlights include:
  • 068 – 1.7m at 0.2g/t Au, 11g/t Ag, 2.74% Cu, 3.5g/t Pd, 1.54g/t Pt from 475m
  • 069 – 17m at 0.28g/t Au, 9.5g/t Ag, 0.93% Cu, 7g/t Pd, 1.7g/t Pt from 100m
  • 070 -32m at 0.45g/t Au, 21g/t Ag, 3.62% Cu, 8g/t Pd, 2.5g/t Pt from 118m
• Follows results earlier this week of:
  • PN 24-063 – 5m at 4.41% Cu, 0.48g/t Au, 0.47% Ni and 25g/t Ag from 428
  • PN 24-064 – 2.15m at 0.49% Cu, 0.21g/t Au, 0.1% Ni and 3g/t Ag from 452m
  • PN 24-065 – No significant Value
  • PN 24–066 – 12m at 0.65% Cu, 6.4g/t Pd, 0.06% Ni, 4.53g/t Ag
  • PN 24-067 – 12m at 1.75% Cu, 1.99g/t Pd, 8.54g/t Ag, 0.14% Ni.
• Company notes that it expects mineralisation is ‘being transposed into a fault zone to a nearby offset location, likely deeper to the east.’
• They are conducting EM, Gravity and Geo Chemical downhole data, alongside using Ambient Noise Tomography passive seismic data to support drill targeting.
• They have a 30,000m, fully funded winter programme due to start October 15^th.

Premier African Minerals (PREM LN) 0.03p, Mkt Cap £13m – £550,000 fund raising

• Premier African Minerals reports that it has raised £550,000 through the issue of ~1,746m additional shares at a price of 0.0315p/share.
• We estimate that the new shares represent ~5% of the enlarged share capital.
• The additional financial resources will support “essential operational requirements at both Premier and Zulu Lithium and Tantalum Project” in Zimbabwe.
• Commenting on “how best to move the Zulu … [project]…forward … [today’s announcement says that the options include ] … a possible sale of Zulu, either in its entirety, partially or as a joint venture, or the potential installation of an additional spodumene float plant”.
• Development of the Zulu project has experienced protracted difficulties, including in achieving design capacity in the spodumene flotation plant and the company says that “one of several solutions under review would require an increase in throughput above the original design capacity to match the surplus capacity of the cleaner cells”.
• CEO, George Roach, confirmed that Premier African Minerals is “making progress, and I do expect a resolution to this final problem after which we do expect to produce at grade and at design recovery. The alternatives set out above are under active negotiation and a satisfactory outcome should result”.

Conclusion: Additional financing to aid in the completion of the Zulu lithium plant.  The company discloses that a possible full or partial sale of the project is under consideration alongside assessment of a further expansion through adding an additional spodumene flotation plant.

Technology Minerals (TM1 LN) 0.11p, Mkt Cap £1.9m – Fire at Recyclus LiBatt plant in Wolverhampton

(Global Battery Metals currently holds 55% in Leinster with 45% held by Technology Minerals Plc. Global Battery Metals can earn into 90% on exercise of a third option with $1m of expenditure and payment of €200,000 in cash or shares)

• Technology Minerals reports a fire at their Recyclus lithium battery recycling facility in Wolverhampton.
• The fire was in one of seven bays used to store batteries before processing. This is separate from the recycling plant.
• There was no damage to the other six bays and no other buildings or plant were affected.
• The burned material will still be recycled so no materials will be wasted or sent to landfill.

Conclusion:  Fires are a hazard at all Li-battery recycling facilities and will likely become a regular occurrence. Damaged and mishandled Li-batteries are quite likely to catch fire in the recycling supply chain on a regular basis and it is good to see the Recyclus plant has been set up with suitable precautions.  Even the new solid-state NCM and LFP battery chemistries will catch fire when mistreated

Tungsten West (TUN LN) – 2.5p, Mkt cap £4.7m – Annual results highlight receipt of plant operating permits and the strategic nature of tungsten production in the western world

• Yesterday afternoon Tungsten West reported a loss of £9.7m for the year to 31^st March (2023 – £10.3m loss) and a closing cash balance of £1.6m offsetting long term borrowings of £1.8m and short-term debt of £11.7m.
• Tungsten West is working to resume production of tungsten and tin concentrates from the treatments of ~700ktpa of ore at the Hemerdon mine in Devon.
• Commenting on the year Chairman, David Cather, said that the “most significant achievement in the period was the granting of a draft permit for the Mineral Processing Facility (MPF) “by the Environment Agency (EA) in January 2024” followed by the award of the full permit in June.
• We interpret the award of the permit as a recognition by the EA that the low-frequency noise issues in the processing plant, which emerged under the stewardship of the previous owners, have now been resolved and the removal of an obstacle to the funding required “to reconfigure the MPF and recommence mining and processing”.
• Expressing confidence that once funding has been secured, “we will see the restart of mining at Hemerdon” Mr. Cather acknowledged that Tungsten West has “lost some very good people with significant deep knowledge of the project. I am delighted that some of those who left have subsequently rejoined. I am hopeful that we may yet entice a few more back along with global mining talent”.
• A third iteration of the project feasibility study is underway in parallel with funding efforts with the study expected to be “completed by the end of 2024”.
• Mr. Cather also highlighted the strategic significance of tungsten as a critical metal in a market dominated by China pointing out Hemerdon’s potential as, “a significant resource of tungsten available to the UK, EU, US and their allies and partners”.

• Tungsten is recognised as a ‘Critical Mineral’ in jurisdictions including the EU, UK, US, Australia, and Japan and we believe that resumption of production at one of the western world’s larger deposits should be welcomed by western-world consumers.

Conclusion: We await the latest feasibility study for the reopening of Hemerdon to gain insight into the expected operating profile and project economics.

No.1 in Base Metals: SP Angel mining team awarded No 1. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q1 2024

No.1 in Copper:  “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”

No1. In Gold:  “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”

The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

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

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London

W1S 2PP

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

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

DISCLAIMER

This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.

Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.

Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

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

If anyone reads this article found it useful, helpful? Then please subscribe www.share-talk.com or follow SHARE TALK on our Twitter page for future updates. Terms of Website Use All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned

---