SP Angel Morning View -Today’s Market View, Thursday 4th May 2023

Gold rises on Powell signals rate pause. BYD and other EV sales take off

MiFID II exempt information – see disclaimer below

STAR WARS DAY:  May the fourth be with you

  • Alternatively ‘Go long and prosper’ Dr Spock

Beowulf Mining* (BEM LN) – Changes to Senior Management

Orosur Mining* (OMI LN)– Anzá Operational Update and Progress in Brazil and Argentina

Caledonia Mining (CMCL LN) – Marketing arrangements for production from the Blanket Mine

Generation Mining (GENM CN) – US$400m senior debt facility for the Marathon project

Unicorn Mineral Resources (UMR LN) – Drilling to start next week at Kilmallock, Ireland.

Gold – $2,038/oz – Gold climbs back to yearly highs as Powell signals rate hike pause and banking turmoil continues

  • Gold prices jumped yesterday, with futures touching $2,080/oz.
  • The move followed Powell’s signal that the Fed would look to pause interest rates following the 25bp hike yesterday.
  • Gold soared as yields fell on Powell’s following press conference, as inflation continues to stay firm.
  • Safe haven demand is currently being bolstered by the ongoing US Banking crisis, with PacWest Bancorp sliding 36% in after hours trading on rumours of a potential sale.
  • The debt ceiling issue is also on gold traders’ minds, pushing additional inflows into gold.

BYD EV sales rise 94% with production even higher as BYD builds inventory to feed exceptional demand growth

  • BYD sold some 550,000 vehicles in Q1 accounting for including exports of 38,000 vehicles and now represents over a third of all EV sales in China.
  • CATL and BYD continue to dominate the market with CATL installing 46.6GWh, a 35% market share, and BYD installing 21.5GWh, a 16.2% market share.
  • CATL is expected to maintain its domination for the time being due to demand for passenger vehicles, including the Tesla Model and Model Y, and the Chinese commercial vehicle market.
  • However, BYD is gaining popularity in the Chinese domestic market with its price competitiveness and vertically integrated supply chain, including self-supply of batteries and vehicle manufacturing.
  • Some expect BYD EV sales to see 3.5-4m with around half the cars full electric, potentially overtaking Tesla. New BYD Seagull costs just $11,000 but with shorter range.

Global EV battery demand grew 42% mom in March.

  • EV sales rose to nearly 1.1m vehicles in March though this is still short of the record 1.3m EV sales seen in December
  • The growth is ahead of passenger EVs & light duty EV sales which rose 36% mom and heavy duty and commercial EV sales which rose by 73% (Rhomotion)
  • Battery pack sizes rose to 51kWh from 49kWh highlighting demand for longer range and capacity.
  • Battery manufacturers continue to plan to increase capacity by 30-50% putting further strain on supply chains.
  • Q1 global EV battery consumption totalled 133.0GWh, up 38.6% from 95.9GWh in the same period last year, according to a report released yesterday by South Korean firm SNE Research.

Battery chemistry is led by LFP ‘Lithium Fe Phosphate’ at 37% of all battery capacity ahead of NCM811 (higher density) at 21%

  • Li-NCM ‘Nickel Cobalt Manganese’ chemistries still account for 55% of all battery production with NCA making up a further 7%
  • Battery anode chemistry is still led by Synthetic graphite at 57% of the market versus 40% for natural graphite.
  • We see natural graphite continuing to gain market share due to its lower cost and greater availability, particularly as new graphite producers get better at material purity and anode coating.
  • We are working with a company which can, not only, purify graphite but also add some graphene into the mix at low cost and with minimal environmental impact.
  • Graphite producers should see substantial interest in their offtake by processers who are able to upgrade and qualify their material for anode production.

We recommend: GreenRoc*, Talga, Renascor, Beowulf* for exposure to graphite. We recommend: Atlantic Lithium, Kodal Minerals and Savannah Resources for lithium.

We have worked with Talga and Renascor, both are good companies and both have >A$500m market capitalisations.

GreenRoc has good management and a quality graphite deposit in a sensible location at a bargain £5m market capitalisation.

Iron ore hovers around five-month lows on weak Chinese steel demand

  • Singapore iron ore futures fell 4.4% overnight to $100/t.
  • Bloomberg reports steel mills are slashing prices further as buyers remain elusive and the construction sector continues to wallow.
  • Mine output traditionally rises during the coming months, adding supply-side pressure to iron ore prices, with Australia boosting exports to China at 14.7mt in one week in April.
Dow Jones Industrials -0.80% at 33,414
Nikkei 225 +0.12% at 29,158
HK Hang Seng +0.96% at 19,889
Shanghai Composite +0.82% at 3,350


US – In line with expectations, the Fed raised interest rates by 25bp to a new range of 5.00-5.25%, the highest since mid-2007.

  • The FOMC played down the possibility of a rate cut in the near term highlighting sticky nature of inflation.
  • “We on the committee have a view that inflation is going to come down not so quickly… if that forecast is broadly right, it would not be appropriate to cut rates,” Fed Chairman Jay Powell said.
  • Regarding further rate increases the FOMC said it will be incoming data driven but removed previous guidance stating additional monetary tightening “may be appropriate”.
  • Confidence in the banking sector is being tested with PacWest Bancorp, a California based lender, seeing a 60% sell off in its share price in after trading hours on Wednesday.
  • The bank is reported to be considering strategic options including a sale having been approached by several potential ivestors.
  • The bank recorded a ~17% drop in deposits during Q1/23 but is much smaller in size terms with $~$44bn in assets compared to failed Silicon Valley Bank and First Republic Bank that held $209bn and $230bn, respectively.

China – A private PMI measure released this morning matched official data released last week showing that manufacturing sector contracted in April.

  • That was the first sub 50.0 mark reading in three months.
  • Subindexes showed domestic demand was the main drag on the sector taking total new orders into a contraction.
  • Employment contracted at stronger pace during the month, a second one in a row.
  • Prices for inputs and final goods dropped well below 50 recording new lows since Jan/16 and Dec/15, respectively.
  • Lower inflation was led by weaker energy and raw materials costs as well as sluggish demand.
  • The data highlights concern over the strength of the Chinese economy following market beating GDP data in Q1/23 led by post Covid pent up demand.
  • Caixin Manufacturing PMI: 49.5 v 50.0 March and 50.0 est.

Eurozone – The ECB decision is due today with general expectations for a 25bp hike to 3.25%, down on a 50bp increase at the previous meeting.

  • Currently markets are pricing in three 25bp hikes including the one this week with rates to peak over 3.6% before a potential rate cut at the end of the year.
  • While headline inflation has been coming down and the core measure stabilised both remain at elevated levels and far above the 2% official target.

Germany – Weak trade data shows struggling demand in March both externally in the EU and globally as well as domestically.

  • Exports (%mom): -5.2 v 4.0 February and -2.2 est.
  • Imports (%mom):  -6.4 v 4.4 February and -2.1 est.

LSE CEO says executives in the UK should be paid more to attract and retain talent

  • Average FTSE 100 CEO pay increased from £3.2m in 2020-21 to £3.9m in 2021-22, mainly thanks to an increase in annual bonuses, according to analysis from PwC in November. (The Times)
  • The comments might not go down well with those concerned about the pay gap between management and workers.
  • The FCA and London Stock Exchange are initiating a series of reforms designed to attract new companies to the London market, such as removal of the requirement to have three years of audited financial accounts and to merge the Premium and Standard lists together. Maybe the AIM market for smaller companies will also see significant reform.
  • In an ideal world rule changes would also allow UK pension fund managers to hold a greater proportion of UK listed smaller companies.
  • The LSE has seen just six IPOs this year raising £90m versus 46 last year raising £1bn. In 2006, 297 IPOs raised £30bn highlighting the potential for the market in better market conditions.
  • Financial and professional services account contributed around £76bn in taxes in 2020 making up around 10% of total UK tax receipts according to the City of London Corporation.

 Russia cancels at least six Victory (May) day parades due to security concerns

  • We also suspect there is not much, working, equipment or soldiers left to parade.
  • Ukraine has stressed that it was not behind the drone that exploded over the Kremlin yesterday and purely defending its territory.
  • Russia is also considering cancelling the aerial flypast due to a lack of trained pilots alongside security concerns.
  • Ukraine is preparing for a new Spring / Summer offensive to retake land occupied by Russian forces.


US$1.1067/eur vs 1.1041/eur yesterday. Yen 134.77/$ vs 135.90/$. SAr 18.262/$ vs 18.431/$. $1.257/gbp vs $1.252/gbp. 0.667/aud vs 0.667/aud. CNY 6.914/$ vs 6.913/$.

Dollar Index 101.25 vs 101.61 yesterday.


Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,015/oz yesterday

Gold ETFs 93.6moz vs US$93.6moz yesterday

Platinum US$1,053/oz vs US$1,069/oz yesterday

Palladium US$1,444/oz vs US$1,436/oz yesterday

Silver US$25.46/oz vs US$25.31/oz yesterday

Rhodium US$7,950/oz vs US$8,200/oz yesterday

Base metals:   

Copper US$ 8,520/t vs US$8,648/t yesterday

Aluminium US$ 2,350/t vs US$2,358/t yesterday

Nickel US$ 25,185/t vs US$24,025/t yesterday

Zinc US$ 2,614/t vs US$2,626/t yesterday

Lead US$ 2,151/t vs US$2,147/t yesterday

Tin US$ 26,500/t vs US$26,075/t yesterday



Oil US$73.2/bbl vs US$75.2/bbl yesterday

Natural Gas US$2.166/mmbtu vs US$2.233/mmbtu yesterday

Uranium UXC US$53.70/lb vs US$52.00/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$101.4/t vs US$102.2/t

Chinese steel rebar 25mm US$554.4/t vs US$553.5/t

Thermal coal (1st year forward cif ARA) US$134.0/t vs US$134.0/t

Thermal coal swap Australia FOB US$181.0/t vs US$190.0/t

Coking coal swap Australia FOB US$245.0/t vs US$245.0/t


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

NdPr Rare Earth Oxide (China) US$62,920/t vs US$62,876/t

Lithium carbonate 99% (China) US$23,360/t vs US$23,344/t

China Spodumene Li2O 5%min CIF US$4,090/t vs US$4,090/t

Ferro-Manganese European Mn78% min US$1,366/t vs US$1,364/t

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

China Graphite Flake -194 FOB US$775/t vs US$775/t

Europe Vanadium Pentoxide 98% 8.2/lb vs US$8.3/lb

Europe Ferro-Vanadium 80% 32.75/kg vs US$33.25/kg

China Ilmenite Concentrate TiO2 US$341/t vs US$340/t

Spot CO2 Emissions EUA Price US$95.9/t vs US$95.6/t

Brazil Potash CFR Granular Spot US$390.0/t vs US$390.0/t

Company News

Beowulf Mining* (BEM LN) 2.2p, Mkt Cap £25m – Changes to Senior Management

  • Beowulf announces that CEO Kurt Budge is stepping down as CEO and Director of the Company with immediate effect.
  • Kurt is looking to pursue other business interests, having spent nine years at Beowulf.
  • He played a crucial role in the development of the Kallak Iron Ore Project, with the award of the Company’s Exploitation Concession a significant milestone.
  • Johan Rostin will take over as interim CEO and Executive Chairman whilst the Board seeks a permanent successor.
  • Johan has extensive experience in permitting processes, senior management, infrastructure, logistics and capital investments, leaving Beowulf in good hands through the interim period.
  • Kurt states that ‘due to the nature of the project and its location, now is the time for me to step down and the project and the Company progresses to the next phase.’
  • Kurt’s role in the progress made by Beowulf over the past nine years has been pivotal and we wish him the best in his future endeavours.

*SP Angel acts as Nomad and Broker to Beowulf Mining

Orosur Mining* (OMI LN) 5p, Mkt Cap £9m – Anzá Operational Update and Progress in Brazil and Argentina

  • Orosur reports that it Exploration Agreement partner, Minera Monte Aguila (MMA), a 50/50 JV between Agnico Eagle and Newmont, has placed the Anzá project in care and maintenance.
  • MMA invested $10m in Phase 1 of exploration in 2022, before agreeing with Orosur to progress to Phase 2 of the Exploration Agreement, including paying $2m for the formation of MMA.
  • Whilst MMA has reduced exploration expenditures and effectively placed the Anzá project in care and maintenance, a final decision regarding further progression of the project is yet to be made.
  • If the option was made available, Orosur emphasises it ‘would welcome the opportunity to get back into the driver’s seat if that option is viable.’
  • Whilst Anzá is Orosur’s most advanced project, the Company also holds prospective assets in Brazil and Argentina.
  • In Argentina, the El Pantano gold project is currently under a JV and Exploration agreement with an Argentinian private Company.
  • The group is completing early-stage reconnaissance exploration work, including geological mapping, soil and rock chip sampling and ground magnetic surveys through this month before pausing for the winter recess.
  • Orosur’s geologists recently visited Newmont’s Cerro Negro gold project in Argentina, with geological similarities noted.
  • As a result of the visit, focus has shifted at El Pantano to higher-level pathfinder elements, including Mercury and Arsenic alongside textural variations.
  • Orosur and partners will begin the environmental permit process for drilling this month, with the aim of completing a drill programme within the year.
  • At Brazil, the Ariquemes Tin Project, where Orosur has the right to earn a 75% stake in the project, the team has identified areas of metal anomalism through wide-spaced stream sediment sampling.
  • Orosur will now look to start detailed mapping, soil and rock chip sampling and auger drilling.

Conclusion: Whilst MMA’s decision is disappointing, it points to a potential shift in focus given the ongoing merger deal between Newmont and Newcrest. Anzá remains a highly prospective project and Orosur would be well positioned to resume exploration activities if MMA were to hand over the reigns. In the meantime, the Company will continue to progress the earlier stage El Pantano and Ariquemes projects and we look forward to further updates from current field programmes.

*SP Angel acts as Nomad and Broker to Orosur Mining

 Caledonia Mining (CMCL LN) 1,210p, Mkt Cap £225m – Marketing arrangements for production from the Blanket Mine.

  • Caledonia Mining reports that it has started the direct sale of gold production from its Blanket gold mine in Zimbabwe to “a refiner outside Zimbabwe”.
  • Under the new arrangements, unrefined gold from the mine is initially processed at the Zimbabwean Reserve Bank’s Fidelity Gold Refinery and then exported to an overseas refinery for final processing and sale on behalf of Caledonia Mining.
  • The company explains that this mechanism allows “the Zimbabwean authorities full visibility over the gold produced and exported by Caledonia … [while allowing the company to receive] … the proceeds of the gold sales directly into its bank account in Zimbabwe within a few days of delivery to the final refinery”.
  • “This arrangement in respect of production from Blanket Mine complies with the current requirements to pay a 5 per cent royalty and that Blanket continues to receive 75 per cent of its revenues in US dollars and the balance in local currency”.
  • CEO, Mark Learmonth, described the new sales arrangement for Blanket’s mine production as “a big milestone for Caledonia … [and said that they demonstrate] …  the pragmatic approach of the Zimbabwe authorities to resolve commercial issues facing gold producers.
  • He confirmed that “In the 10 years or so during which Blanket Mine has sold its gold in-country … we have experienced very few difficulties in receiving payment within the prescribed period; when difficulties have arisen, they have been resolved rapidly“.
  • Explaining the new arrangement in the wider context of Caledonia Mining’s expansion plans in Zimbabwe at the Bilboes project and “thereafter at Motapa and Maligreen”, he explained that the “new marketing arrangement should make it easier for Caledonia to arrange debt facilities with funders outside Zimbabwe which may be used to support the construction of the new mines”.

Conclusion: Although existing arrangements have served Caledonia Mining well in the past, the ability to market its gold production from the Blanket mine directly overseas provides an additional flexibility which may facilitate Caledonia’s plans to expand its Zimbabwean production base.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe

Generation Mining (GENM CN) C$0.54, Mkt Cap C$98m – US$400m senior debt facility for the Marathon project.

  • Generation Mining reports that it has secured a US$400m senior project finance facility to help finance the development of its wholly-owned Marathon palladium/copper project north of Lake Superior, Ontario.
  • The facility, agreed with a group of banks, is subject to the successful completion of due-diligence and formal documentation.
  • Jamie Levy, President and CEO, welcomed the agreement and said that the “US$400 million senior debt facility (CDN $540 million) combined with the undrawn Wheaton Precious Metals Stream of CDN $200 million, or a total of CDN $740 million represents a significant portion of the initial capital required to develop the Marathon Project. The Company will now focus on finalizing the definitive documentation, together with arranging equipment leases and sourcing the balance of the capital required to fully finance construction”.
  • Results of the updated feasibility study for the Marathon project, released at the end of March, showed that the development is expected to “produce an average of 166,000 ounces of payable palladium and 41 million pounds of payable copper per year over a 13-year mine life generating an NPV6% of C$1.6bn and IRR of 25.8% with a 2.3 year payback on a capital investment of $1.3bn.

Unicorn Mineral Resources (UMR LN) 6.25p, Mkt Cap £1.7m – Drilling to start next week at Kilmallock, Ireland.

  • Unicorn Mineral Resources, which made its London market debut in October last year, reports that it plans to start drilling at its Kilmallock property, located around 20km south of Glencore’s Pallas Green zinc/lead property in Ireland, next week.
  • The drilling programme is expected to consist of a 6-hole, 1,250m, campaign over 12 weeks with 5 holes planned to investigate “areas of high-grade zinc, lead and copper mineralisation at the Ballycullane and Bulgaden Zones, with an additional hole targeting a separate significant geochemical and geophysical anomaly delineated by recent surveying”.
  • The drilling campaign is based on a review of historical exploration data including “historic geochemical surveying, carried out by Syngenore and Billiton … [which] … defined a large and extremely high-grade Zn/Pb anomaly at Ballycullane” as well a number of historic drilling results which include “one 3.8m intercept with 14.66% zinc, 4.8% lead and 133.79 g/t silver at a depth of 325m, leading Unicorn to believe that a major, undiscovered, mineralising system is located in this area”.
  • Glencore’s 2022 Annual Report shows an inferred resource of 45mt at an average grade of 7.21% zinc and 1.22% lead at Pallas Green.
  • Kilmallock is also relatively close to the Stonepark exploration project owned by the Canadian exploration company, Group Eleven Resources (76.56%) and Arkle Resources* (23.44%) where an NI43-101 compliant inferred resource estimate of 5.1mt at an average grade of 8.7% zinc and 2.6% lead was published in April 2018.

*SP Angel are Nomad and broker to Arkle Resources

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

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

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


John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474


Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

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

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London


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

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

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

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


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