SP Angel Morning View -Today’s Market View, Thursday 5th October 2023

Industrial metals prices follow oil lower on global demand concerns

MiFID II exempt information – see disclaimer below

Anglo American (AAL LN) – Reduced rough-diamond sales at De Beers eighth sales cycle as the mid-stream diamond industry addresses stock build-up

Artemis Resources (ARV LN) – Early-stage exploration of lithium pegmatite targets in WA

Critical Metals (CMRS LN) – Assay results from Anzar project, Morocco

Ferrexpo – (FXPO LN) – Q3 production results as production increases before winter

Future Metals (FME LN) – Expanding its exploration holdings in the East Kimberley Region, WA

Power Metal Resources* (POW LN) – Update on Tati Gold Project, Botswana

Tertiary Minerals* (TYM LN) – BUY– Soil sampling results from Mushima North, Zambia

IGTV: New lower lows in base metals keep coming – why? https://youtu.be/1KWgI2HTUGw?si=VlVfQtpW-mrI7slD

          Copper will still move up despite a gear shift down in carbon-zero targets  https://youtu.be/jbywf2hmEU8?si=yxJcwGiE1_V121Ok

VOX: 29/09/23:  https://audioboom.com/posts/8375969-john-meyer-on-china-s-property-implosion-plus-atlantic-lithium-bushveld-sovereign-metals

          22/09/23:  https://audioboom.com/posts/8372001-john-meyer-discusses-heat-pumps-the-energy-transition-plus-bluejay-jay-kodal-kod-savannah-sav

*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.

Zambia – Barrick Gold to invest US$2bn into Lumwana copper mine expansion

• Barrick is investing heavily in Zambia with a US$2bn expansion of the Lumwana copper mine which it bought from Equinox in 2011 for US$7.4bn
• The mine will expand to a throughput of 50mtpa to produce some 240,000tpa of copper from 2031. The mine has a 36-year mine life.
• The team are due to complete a full feasibility study at Lumwana by end 2024.
• Barrick calculate the Lumwana mine has contributed around $3bn to the Zambian economy in taxes, royalties, salaries and procurement of goods and services with 99.3% of the workforce made up of Zambian nationals.
• We note, in Zambia, many miners wear their High-Viz mine jackets to restaurants and clubs, not for health and safety but to show they have well paid jobs on the mines.

Copper slumps amid Codelco downgrade by Moody’s and 2024 surplus expectations

• Copper prices fell further to below $7,900/t to near yearly lows.
• The move follows concerns over a surplus of 467kt next year, forecasted by the International Copper Study Group.
• The market is expected to see a 27kt deficit this year, after mine growth expectations were revised down from 3% to 1.9%.
• New output is coming online from the DRC, Peru and Chile, with mine growth expected to grow by 3.7% next year.
• Kamoa Kakula and Tenke, QB2 and Torromocho and Quellaveco are all expected to support more buoyant supply in 2024, alongside additional supply from Malmyzhskoye and Udokan in Russia.
• Refined output is expected by the Organisation to increase by 4.6% next year as China ramps up smelter capacity, with scrap supply also increasing.
• A 467kt surplus is expected for 2024 vs a 461kt deficit experienced in 2022.
• The dollar is also weighing on copper prices, although its sharp rally higher seen over the course of the past two months fizzled slightly yesterday following weaker ADP numbers.
• Low liquidity is also supporting the sell-off as Chinese traders go on holiday for a week.
• Inventories are elevated and persistently high rates are weighing on longer term demand expectations.
• Codelco was downgraded by Moody’s yesterday on lower production volumes, higher costs and higher capital spending requirements.

Gold stops sliding as yield sell-off pauses on weak US jobs data, eyes turn to tomorrow’s payrolls

• Gold prices have held around the key $1,820/oz mark as US Treasury bonds stopped sliding after an historic rout.
• The US 10-year has fallen to 4.75%, providing some respite to gold prices which move inversely to the alternative safe haven assets.
• Focus turns to tomorrow’s non-farm payroll data, which should provide a major catalyst to gold prices either way after a turbulent few weeks of headwinds.

EV sales forecast to rise to >86% of global vehicle sales by 2030

• EVs are expected to comprise between 62% and 86% of global vehicle sales by 2030, with China projected to reach a 90% EV market share, according to an RMI report.
• Falling battery costs, and the prospect of EV prices falling to that of internal combustion engine (ICE) vehicles by 2030 are expected to drive EV demand higer.
• EV battery costs are assumed to fall below $100/kWh by 2026, making EVs more affordable and cheaper to operate without fuel or maintenance costs, further promoting adoption.
• Norway experienced rapid EV adoption, with around 80% of new cars sold in 2022 being fully electric.
• Early adoption and huge financial commitment to creating an excellent charging infrastructure have encouraged adoption.
• It is likely that it is the infrastructure for EVs in most countries that will effect levels of adoption.
• In China, EV and ICE vehicles achieved price parity, with best-selling EVs like the SAIC Wuling Mini EV costing about $5,000, resulting in significant sales and market dominance.
• Major automakers are redirecting 50%-70% of their budgets to EV development and digital technologies, transitioning away from ICE platforms.
• Global automakers are investing in battery plants and EV factories, positioning for EV dominance, making ICE vehicles niche products by 2030.

2030 EV battery pipeline tops 8.9TWh (Benchmark Mineral Intelligence)

• Global capacity to reach 8.9TWh by 2030
  • China is predicted to further extend its EV battery domination.
  • Europe and US to become key regions of development.
• US: 38 gigafactories with a capacity of 1.3TWh
• Europe: 36 gigafactories with a capacity of 1.2TWh
• China: 291 gigafactories with a capacity of 6.1TWh
• Rest of World: 37 gigafactories with a capacity of

Mineral processing technology

• It is interesting to note the Western World is waking up to the need to develop new, cleaner and more efficient forms of mineral processing.
• The US and Europe are not able to tolerate the construction of traditional smelters and furnaces and are focussing on new hydrometallurgical processes.
• New technology to improve front-end processing efficiency, improving recovery rates and rejecting impurities should also aid efficiency gains.
• Automated process plant systems and increasing robotics are serving to improve safety and efficiency.
• Funds are increasingly available via government grants and specialist investor interest in this area.
• New plants are often able to clean up pollution from historic processes and overcome concerns from increasingly stringent regulators.
• In an industry which often appears slow to change, substantial gains are to be made through the simple application of these innovations.

Economics

US – A drop in ADP payrolls registered in September saw the US$ and bond yields pull back yesterday with markets eagerly awaiting NFPs this Friday.

• ADP Employment Change (‘000): 89 v 180 August (revised from 177) and 150 est.

Germany – Poor trade data released this morning reflect deteriorating global growth outlook hitting export oriented sectors of the economy.

• Rising bond yields are not helping the sentiment either with 10y bund yields approaching 3% level, the highest sine early 2010s.
• Exports (%mom): -1.2 v -1.9 July (revised from -0.9) and -0.6 est.
• Imports (%mom): -0.4 v -1.3 July (revised from 1.4) and 0.5 est.

France

• Industrial Production (%mom): -0.3 v 0.5 July (revised from 0.8) and -0.4 est.
• Industrial Production (%yoy): -0.5 v 2.5 July (revised from 2.7) and -0.5 est.

UK – The pound is off this morning following the release of worse than expected property PMI data.

• The sector is reported to have registered the fastest drop in new orders for over three years with business expectations at their weakest so far this year.
• Weak demand and rising borrowing costs were reported as drivers behind poor numbers.
• S&P Global Construction PMI: 45.0 v 50.8 August and 50.0 est.

Russia – The government is ramping up military spending as the nation’s strategy is increasingly leaning towards the war of attrition.

• The cabinet aims to spend R10.8tn ($108bn) on defence in 2024, three times the amount allocated in pre war 2021 and 70% more than was planned for 2023.
• Military budget is set to exceed social welfare spending for the first time

Ukraine – The US sent 1m rounds of ammunition seized from Iran to Ukraine, FT reports.

• 7.6mm calibre rounds were captured from Iran’s Islamic Revolutionary Guard Corps by US naval forces from a stateless ship in Dec/22.
• The US took formal ownership of the munitions in July.
• We are dismayed at the swinging of US politics to remove the House speaker.

• We hope the US will continue to fund Ukraine till it is able to expel the Russian army from is territory.
• The cost of Russian forces taking over Ukraine will ultimately be far greater than the cost of pushing them back.
• We Remember the horror of Bucha where >650 were shot dead by Russian soldiers and a further 1,316 bodies were uncovered in the Kyiv Oblast following Russia’s withdrawl.

Currencies

US$1.0503/eur vs 1.0469/eur previous. Yen 148.97/$ vs 148.99/$. SAr 19.408/$ vs 19.371/$. $1.214/gbp vs $1.207/gbp. 0.634/aud vs 0.631/aud. CNY 7.298/$ vs 7.298/$.

Dollar Index 106.75 vs 107.21 previous.

Commodity News

Precious metals:

Gold US$1,821/oz vs US$1,820/oz previous

Gold ETFs 87.5moz vs 87.5moz previous

Platinum US$866/oz vs US$866/oz previous

Palladium US$1,172/oz vs US$1,165/oz previous

Silver US$21.09/oz vs US$21/oz previous

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

Base metals:

Copper US$ 7,903/t vs US$7,955/t previous

Aluminium US$ 2,230/t vs US$2,275/t previous

Nickel US$ 18,610/t vs US$18,765/t previous

Zinc US$ 2,480/t vs US$2,497/t previous

Lead US$ 2,111/t vs US$2,110/t previous

Tin US$ 24,035/t vs US$24,095/t previous

Energy:

Oil US$86.2/bbl vs US$90.5/bbl previous

• Crude oil prices plummeted c.$5/bbl yesterday as the market focused on the uncertain macroeconomic outlook, with a sharp 8mb w/w decline in finished motor gasoline supply in the US, which acts as a proxy for demand.
• The EIA reported a 2.2mb w/w US crude draw that was more than offset by a significant 6.5mb to gasoline stocks, with refinery utilisation also falling by 2.2% to 87.3%.
• European energy prices were stable as EU natural gas storage levels rose 1.1% w/w to 96.3% full (vs 87.9% 5-Yr average), with both Germany and France adding over 3TWh to lift overall storage to 1,095TWh.
• Civitas Resources will pay Vitol $2.1bn to acquire Vencer Energy’s Midland Basin assets, which is expected to boost Group production by 55kboe/d to 325-345kboe/d in 2024. Civitas said the acquisition is priced at 2.8x FY24 EBITDA, based on $80/bbl WTI crude and $3.50/mmBtu Henry Hub gas prices.

Natural Gas €38.500/MWh vs €38.190/MWh previous

Uranium UXC US$72.75/lb vs US$70/lb previous

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$115.4/t vs US$115.8/t

Chinese steel rebar 25mm US$540.3/t vs US$540.3/t

Thermal coal (1st year forward cif ARA) US$118.0/t vs US$120.3/t

Thermal coal swap Australia FOB US$144.5/t vs US$150.0/t

Coking coal swap Australia FOB US$321.0/t vs US$321.0/t

Other:  

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

NdPr Rare Earth Oxide (China) US$71,252/t vs US$71,252/t

Lithium carbonate 99% (China) US$21,033/t vs US$21,033/t

China Spodumene Li2O 6%min CIF US$2,290/t vs US$2,290/t

Ferro-Manganese European Mn78% min US$1,019/t vs US$1,016/t

China Tungsten APT 88.5% FOB US$305/mtu vs US$305/mtu

China Graphite Flake -194 FOB US$645/t vs US$645/t

Europe Vanadium Pentoxide 98% 6.6/lb vs US$6.6/lb

Europe Ferro-Vanadium 80% 29.25/kg vs US$29.25/kg

China Ilmenite Concentrate TiO2 US$316/t vs US$316/t

Spot CO2 Emissions EUA Price US$83.9/t vs US$83.6/t

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

Battery News

EU officially launches probe into Chinese EV subsidies

• The decision to investigate Chinese subsidies on EVs has been expected for a few weeks.
• The European Union said Wednesday that it had “sufficient evidence” of illegal Chinese EV subsidies as it officially launched an inquiry that has enraged Beijing.
• The action could lead to a trade war after Beijing warned the probe would harm trade relations between the two sides.
• If the EU concludes there are unfair practices, it could impose tariffs on Chinese car manufacturers above the standard 10% EU rate.

As EV sales surge and cars get heavier, parking garages will need to adapt

• The increasing prevalence of EVs and larger cars is impacting parking garages, leading to concerns about structural integrity and fire safety.
• The London-based Institution of Structural Engineers released updated design guidance for car parks, addressing concerns related to the increasing weight of vehicles, particularly due to electric and hybrid batteries.
• The average vehicle weight has risen from 1.5 metric tons in 1974 to nearly 2 metric tons in 2023, prompting considerations for both new and existing parking structures.
• Heavier vehicles, particularly SUVs, pose challenges for parking garages, potentially leading to structural issues.
• Possible solutions include structural assessments, strengthening weak points, screening vehicles before entry, or keeping heavy vehicles on the ground floor.
• Fire safety concerns arise with EVs, as extinguishing EV fires, especially battery-related fires, is challenging. Sprinkler systems could mitigate fire risks in underground parking facilities.
• The European Commission launched a task force focused on the fire-safe deployment of EV charging points in covered parking garages, aiming to create guidelines while balancing fire safety and operational needs.
• More than 10m EVs were sold in 2022, and nearly one in five new cars sold in the current year is expected to be electric.
• Efforts are underway to adapt parking infrastructure to accommodate EVs and larger vehicles while ensuring safety and operational efficiency.

LGES to supply Toyota with EV batteries

• Toyota and LG Energy Solution have signed a supply agreement for lithium-ion batteries for use in the Japanese automaker’s US-built EVs starting in 2025.
• The announcement caps a wave of investments in new EV battery plants in North America, spurred by the Inflation Reduction Act (IRA).
• The IRA and other US legislation provide incentives aimed at boosting domestic production of EVs, batteries and raw materials.
• LGES will now supply batteries to five top automakers; Toyota, GM, Stellantis, Hyundai and Honda, from its eight North American plants.
• There are at least 37 battery plants operating or planned in the U.S. and Canada, representing 1.3TWh of annual production capacity – enough for 10m EVs annually. (Benchmark Mineral Intelligence)

Company News

Anglo American (AAL LN) 2,128p, Mkt Cap £29bn – Reduced rough-diamond sales at De Beers eighth sales cycle as the mid-stream diamond industry addresses stock build-up

• Anglo American reports that, provisionally, the eighth De Beers sales cycle of 2023 realised US$200m and that the previously reported provisional sales of US$370m for the seventh sales cycle have now been confirmed.
• The outcome of the eighth sales cycle brings the year-to-date sales to approximately US$3.4bn, which we estimate is around US$1.5bn (31% lower than the US$4.9bn of sales achieved during the first eight sales cycles of 2022 and, we believe, the lowest level at this stage of the year since 2019 (US$3.2bn).
• The US$200m provisional sales during the eighth cycle represents a decline of around 60% compared to the US$508m achieved in 2022.
• Al Cook, CEO of the De Beers Group, commented that “De Beers reduced its rough diamond availability and made sales of $200 million as the industry’s midstream rebalances certain areas of stock accumulation”.
• He confirmed that “De Beers will continue to support its Sightholders to help re-establish equilibrium between wholesale supply and demand by providing full flexibility for rough diamond allocations in Sights 9 and 10 of 2023”.
• In what we interpret as a response to the increasing consumer acceptance of laboratory grown diamonds, Mr. Cook said that De Beers will spend “an additional $20 million in natural diamond marketing to help drive consumer demand during the holiday season”.

Artemis Resources (ARV LN) 1.3p, Mkt Cap £22m – Early-stage exploration of lithium pegmatite targets in WA

• Artemis Resources reports that geological mapping and rock-chip sampling has identified pegmatites along the margins of the Andover mafic complex within its West-Pilbara tenements.
• Based on the rock geochemistry, the company says that six sets of these pegmatites exhibit “elevated levels of lithium-caesium-tantalum (LCT) and rubidium mineralisation … [and that four of these are] … considered potentially prospective for economic mineralisation”.
• Technical Director and acting CEO, Dr. Simon Dominy, said that “From a technical perspective, our understanding of the pegmatites and their chemical zonation is increasing. As data from rock chip sample analysis builds, the Artemis technical team are interpreting metal zonation and fractionation patterns within the pegmatite clusters which the Company will be using for infill sampling and focussed reconnaissance”.
• “The exploration field team will be modifying its exploration approach in the coming weeks as it begins to revisit priority pegmatites that require further assessment as well as maintaining the current reconnaissance work to identify new pegmatites”.

Conclusion:  Mapping and rock-chip sampling has identified pegmatites some of which are potentially lithium-bearing and early-stage follow up exploration is expected. Investors should also note, there is no mention of the identification of ‘spodumene’ as a source material, there has been no drilling and the company is a long way off the identification and delineation of anything potentially mineable.

Critical Metals (CMRS LN) 4.6p, Mkt Cap £2.3m – Assay results from Anzar project, Morocco

• Critical Metals has reported results from 10 channel samples and a single hand sample taken “taken from random locations at three different historical mining sites” on its Anzar exploration project in central Morocco.
• Among the channel samples, which tested a mineralised sandstone, the company reports “channel Sample 04, which returned 160 g/t silver with 10.65% copper and over a width of 1.2m in channel Sample 10, which assayed 160g/t silver with 15.7% copper”.
• Other channel sample results range between 0.13% (sample 03) and 11.21% (sample 06) copper with silver assays ranging between 8g/t in 4 samples up to 160g/t in sample 06.
• The company also reports an assay of 272g/t silver in the hand sample “selected for its clearly visible high-grade copper mineralisation, so not representative of the deposit’s average grade”.  The sample recorded an assay of 40.12% copper suggesting that it is probably a secondary copper mineral rather than a primary sulphide.
• CEO, Charlie Long, commented that “We believe that Anzar has the potential for fast-track development, in part due to its high-grade characteristics. Leveraging our team’s mine construction and operational expertise in Morocco, along with the successful track record of small-scale copper flotation plants in the region, we will prioritise this option to generate early cash flow”.

Conclusion: The early-stage assay results from Anzar show high grades of both copper and silver, however, we caution that channel and hand sampling is a very early stage and selective exploration tool and we expect that considerable additional work will be required to establish the geometry, geological setting, scale and grade characteristics of the mineralisation before any development decision can be made.

Ferrexpo – (FXPO LN) 73p, Mkt cap £430m – Q3 production results as production increases before winter

• Ferrexpo produced 1,251kt premium 65% pellets over Q3, a 17% increase from Q2.
• 98kt of commercial concentrate production was produced at 67%, an 8% decline from the previous quarter.
• The Company continues to produce and sell pellet products and is benefitting from a higher price environment, despite the ongoing war in Ukraine.
• Ferrexpo has successfully brought another pelletiser line online, and is producing at a ‘variable, yet stable’ rate, depending on customer demand and logistic routes.
• Regarding legal challenges against management, the Company reports that Ferrexpo Poltava Mining’s Chair was ‘detained with bail set at a very high amount’ – the group believes accusations over waste product sales are without merit.

Future Metals (FME LN) 1.9p, Mkt Cap £7.9m – Expanding its exploration holdings in the East Kimberley Region, WA

• Future Metals reports that, through an option to acquire Osprey Minerals, it is expanding its exploration tenements in the East Kimberley region by ~100km².
• Osprey Minerals’ holdings lie “within a 20km radius of the Company’s 100% owned Panton Project” and, if the option is exercised, will be acquired for A$625,000 in Future Metals’ shares.
• The tenements include the “drill ready Eileen Bore Cu-Ni-PGM prospect” which is described as “an advanced exploration target with drilling confirming wide zones of consistent Cu-Ni-PGM mineralisation from surface along a known strike of ~400m”.
• The company reports that historical drilling information for Eileen Bore which demonstrates “a disseminated Cu-Ni-PGM magmatic sulphide body” including intersections of:
  • 120m at an average grade of 0.73% copper, 0.29% nickel and 0.86g/t PGM3 from surface in hole EBRC-010; and
  • 96m at an average grade of 0.70% copper, 0.29% nickel and 0.78g/t PGM3 from 24m depth in hole EBRC-003; and
  • 84m at an average grade of 0.54% copper, 0.24% nickel and 0.75g/t PGM3 from 36m depth in hole EBRC-011.
• Many of the 60 historic drill holes (5,761m) are said to have “ended in mineralisation”.
• Welcoming the opportunity provided in the Osprey Minerals land package, Managing Director, Jardee Kininmonth, explained that “Eileen Bore has expansive strike potential and drilling to date shows it is open at depth and potentially down plunge. Proving up another deposit of scale will be highly complementary to our existing resource at the Panton Project”.
• The company highlights that “Eileen Bore’s high Cu:Ni ratio and tubular, plunging geometry are highly analogous to the Sakatti deposit in Finland. The Sakatti deposit similarly shows high Cu:Ni ratios near surface with increasing Ni and overall grade as it plunges at depth … [and the] … deposit hosts 44.4Mt @ 1.9% Cu, 2.5% Ni & 1.5g/t PGM_3E“.
• In May this year, the company started a reverse-circulation (RC) drilling programme at the Panton Project, located approximately 60km north of Halls Creek, to test coincident nickel/copper/platinum group metals geochemical anomalies and geophysical targets.
• The company’s website shows a total ‘Indicated & Inferred’ resource of 129mt at an average grade of 0.59g/t palladium, 0.52g/t platinum and 0.11g/t gold at its Panton prospect.

Conclusion: The additional land close to its Panton project adds a second relatively advanced project to Future Metals’ East Kimberley portfolio. We await news of further exploration.

Power Metal Resources* (POW LN) 0.7p, Mkt cap £14.5m – Update on Tati Gold Project, Botswana

• Power Metal provides an update on its Tati Gold project in Botswana.
• A 2023 geochemical soil sample campaign identified two gold-in-soil Geochem anomalies.
• This encouraged the Company to generate six additional targets, with c.450 samples due for lab assay testing.
• One of these targets suggests an extension from the historic Cherished Hope mine workings.
• In-fill and step-out soil sampling will now be executed.

*SP Angel acts as Nomad and Broker for Power Metal Resources

Tertiary Minerals* (TYM LN) 0.14p, Mkt cap £2.8m – BUY– Soil sampling results from Mushima North, Zambia

CLICK FOR PDF

• Tertiary has generated pXRF results from soil samples at the C1 target area at Mushima North.
• Mushima North holds historic drilling results of 33m @ 0.24% Cu from the RKN800 hole.
• The Company is targeting ‘IOCG-style copper mineralisation at the project alongside more traditional Copperbelt sediment-hosted mineralisation.
• From 572 soil samples over a 200m x 200m grid, a >60ppm copper anomaly over 4km x 1.25km target has been noted.
• Peak values of 211ppm were recorded near the historic drill hole.
• Elevated arsenic levels were recorded in the vicinity of higher anomalous readings.
• Samples will now be submitted for lab-based analysis.

Conclusion: The C1 results mark the first pXRF results from Tertiary’s campaign at Mushima, with readings from the priority target A1 and neighbouring A2 expected imminently. The results support hopes of wider-lying mineralisation where previous drilling has proven wide copper intercepts. Whilst additional results from Mushima await, Tertiary continues to develop their relationship with a ‘well-resourced mineral exploration and mining company’ at the Mukai licence to drill deep targets.

*SP Angel acts as Nomad and Broker to Tertiary Minerals

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 of less than 15%