SP Angel Morning View -Today’s Market View, Tuesday 13th August 2024

Gold climbs to near record high as traders position before key inflation data

MiFID II exempt information – see disclaimer below

Barrick Gold (GOLD US) – Quarterly results as Bristow eyes acquisitions in Canada

Bluejay Mining* (JAY LN) – Analysis of historic drilling in Finland shows interesting grades and intersections of helium and hydrogen

Bushveld Minerals* (BMN LN) – SPR working capital facility drawdown

CleanTech Lithium (CLT LN) – ASX dual listing and a proposed equity raise

Gem Diamonds (GEMD LN) – H1 production and sales in line with 2024 guidance

Gold Fields Limited (GFI SJ) – US$1.57bn cash acquisition of Osisko Mining

Jubilee Metals Group (JLP LN) – Roan plant expansion produces its first copper concentrate

Kavango Resources* (KAV LN) – Initial drilling success at Nara, Zimbabwe

Neo Energy Metals (NEO LN) – Acquisition of South African uranium project

Oriole Resources* (ORR LN) – Mbe soil sampling identifies new anomalous gold zones

Sunrise Resources (SRES LN) – Completion of latest drilling at Pioche, Nevada

Gold ($2,461/oz) nears record highs as traders position before key inflation data

• Gold prices climbed over $2,470/oz, near their recent record spot highs of $2,483/oz.
•  US Treasury yields and the dollar were little changed yesterday, with the gold price moving without its traditional major catalysts.
• Geopolitical tensions are escalating again, with Ukraine making incursions into Russia and the Middle East still destabilised.
• US producer price inflation is due today, with CPI data due on Wednesday.
• Traders will be watching closely for an uptick in inflation, which could further reduce odds of a 50bp rate cut in September, which has fallen to 49% having been priced in a fortnight ago.
• CTA funds, which trade using momentum, are likely driving some of the recent move, leaving it vulnerable to a sharp reversal.

Copper ($8,915/t) eases from recent rally whilst South American miners go on strike

• Copper prices have pared some gains, having briefly rebounded over $9,000/t after recent weakness.
• The metal has been unwinding from a strong rally in May, where a short squeeze on COMEX and concerns over a concentrate shortage pressured prices.
• Lundin Mining’s Caserones mine is suffering a strike in Chile, whilst BHP is negotiating with workers at Escondida to avert a major strike.
• Jiangxi Copper has halted production at Shandong smelter after three fatalities.
• Supply disruptions may also stem from the DRC, whose main concentrate export route into Tanzania is being blocked by Zambia.

Economics

OPEC cuts oil demand forecasts over concerns for Chinese economic activity

US – JP Morgan global composite manufacturing data 49.7 in July vs 50.9 in June

• Federal Reserve Jackson Hole meeting on Thursday 22nd August

China – Foreign investors pull record US$14.8bn out of China in Q2 vs US$10bn of net inflows into China in Q1.

• The last outflow was in Q3 ’23 when investors pulled $12bn out of China
• Chinese companies also invested a record US$71bn outside China in Q2 vs US$39bn Q2 ‘23
• The net financial outflow comes to $86bn in direct investment.
• China’s current account trade surplus continues to grow rising to US$87bn in Q2 vs US$54.9bn in Q1 totalling US$142bn in H1 ‘24.
• Reshoring of component and parts manufacturing to the West and nearshoring of manufacturing into Vietnam, Thailand, Malaysia and Mexico has been drawing investment away from China for some years.
• Started by Trump’s ‘Make America Great Again’ campaign the onset of Covid highlighted Western manufacturing’s overreliance on components and parts which are made in China.
• China’s initial Covid lockdowns caused widespread disruption for many manufacturers, partly due to logistical delays caused by the lockdown lorries in and out of Wuhan province.
• Wuhan is a major logistical hub with certain critical components either made in or transported through the province
• Later Covid restrictions also slowed the loading and unloading of containers for shipping.
• The situation nailed home the need to diversify component manufacturing out of China and across a more diverse range of locations.
• The prospect of higher tariffs on Chinese made EVs in the EU and threats of Chinese retaliation against the EU has also caused some major automotive manufacturers to scale back investment into China
• Tariffs: interestingly, President Washington brought in the Tariff Act of 1789 adding 5% to all imports. The tariff was principally aimed at Whisky imports.
• Chinese total social financing fell to CNY7.7bn in July vs CNY3.3bn in June

Eurozone – ZEW Economic Sentiment index collapsed to 17.9 from 43.7 below the 35.4 expected

• Current Situation Index rose 3.7pts to -32.4 but remains negative

Germany – ZEW Economic Sentiment index collapsed to 19.2 from 41.8 and far below the 30.6 expected

• The Current Situation Index also fell hard to -77.3 from -68.9.
• The outlook for German exports is poor with tariff wars and rising expectations for a hard landing in China and the US along with conflicts in Ukraine and the Middel East.
• Wholesale prices rose 0.3% in July vs -0.3% in June and -0.1% yoy in July vs -0.6% yoy in June.

UK – The pound climbed following better-than-expected unemployment data with markets dialling back forecasts for two hikes this year.

• Labour earnings slowed down as expected while jobless rate also fell contrary to a slight pick-up forecast.
• A 25bp cut is now fully priced in for November with a potential second cut to come in December.
• The pound is up 0.4% and 0.3% against the US$ and € trading at 1.28 and 1.17, respectively.
• Av Weekly Earnings (3m %yoy, Jun/May/Est): 4.5/5.7/4.6
• Av Weekly Earnings ex Bonus (3m %yoy, Jun/May/Est): 5.4/5.8(revised from 5.7)/5.4
• Unemployment Rate (3m/3m, Jun/May/Est): 4.2/4.4/4.5
• Employment Change (3m/3m, Jun/May/Est): 97k/19k/3k

India – Inflation rose 1.4% in July vs 1.3% in June and 3.54% yoy in July vs 5.1% yoy in June

Iran – UK, France and Germany issued a joint statement calling on Iran and its proxies to refrain from attacking Israel.

• The US asked Turkey and other allies with ties to Iran to convince Tehran to de-escalate tensions in the Middle East.
• Iran condemned European leaders for urging Tehran not to attack Israel said it will “not seek anyone’s permission to exercise its legitimate rights”.
• Israel said that ceasefire talks may not restart this week should Iran or Hezbollah launch an attach.

Turkey – Unemployment rose to 9.2% in June vs 8.5% in May

Currencies

US$1.0928/eur vs 1.0923/eur previous. Yen 147.80/$ vs 147.26/$. SAr 18.226/$ vs 18.249/$. $1.280/gbp vs $1.277/gbp. 0.660/aud vs 0.659/aud. CNY 7.174/$ vs 7.181/$.

Dollar Index 103.17 vs 103.18 previous

Precious metals:         

Gold US$2,464/oz vs US$2,437/oz previous

Gold ETFs 82.2moz vs 82.3moz previous

Platinum US$941/oz vs US$934/oz previous

Palladium US$920/oz vs US$918/oz previous

Silver US$27.79/oz vs US$27.79/oz previous

Rhodium US$4,725/oz vs US$4,700/oz previous

Base metals:   

Copper US$ 8,967/t vs US$8,916/t previous

Aluminium US$ 2,300/t vs US$2,314/t previous

Nickel US$ 16,200/t vs US$16,180/t previous

Zinc US$ 2,727/t vs US$2,769/t previous

Lead US$ 2,022/t vs US$2,062/t previous

Tin US$ 31,125/t vs US$31,580/t previous

Energy:           

Oil US$81.9/bbl vs US$80.1/bbl previous

• Crude oil prices continue to climb higher as tensions ratchet up in the Middle East ahead of an expected retaliatory military strike by Iran against Israel.
• OPEC’s Monthly Oil Market Report has reduced its FY24 global demand growth forecast from 2.25mb/d to 2.11mb/d and FY25 forecast from 1.85mb/d to 1.78mb/d due to lower expectations for China. The EIA currently forecasts 1.1mb/d and 1.6mb/d, respectively, with the IEA forecasting just below 1mb/d growth for each year.

Natural Gas €39.2/MWh vs €39.8/MWh previous

Uranium Futures $81.4/lb vs $81.4/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$99.2/t vs US$100.1/t

Chinese steel rebar 25mm US$491.1/t vs US$493.6/t

Thermal coal (1st year forward cif ARA) US$128.8/t vs US$128.3/t

Thermal coal swap Australia FOB US$152.5/t vs US$150.5/t

Coking coal Dalian Exchange futures price US$186/t vs US$188.8/t

Other:  

Cobalt LME 3m US$26,500/t vs US$26,500/t

NdPr Rare Earth Oxide (China) US$52,133/t vs US$52,080/t

Lithium carbonate 99% (China) US$10,106/t vs US$10,096/t

China Spodumene Li2O 6%min CIF US$870/t vs US$890/t

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

China Tungsten APT 88.5% FOB US$327/mtu vs US$327/mtu

China Graphite Flake -194 FOB US$462/t vs US$465/t

Europe Vanadium Pentoxide 98% 4.7/lb vs US$4.7/lb

Europe Ferro-Vanadium 80% 25.2/kg vs US$25.2/kg

China Ilmenite Concentrate TiO2 US$320/t vs US$320/t

China Rutile Concentrate 95% TiO2 US$1,401/t vs US$1,399/t

Spot CO2 Emissions EUA Price US$69.9/t vs US$69.9/t

Brazil Potash CFR Granular Spot US$295.0/t vs US$295.0/t

Germanium China 99.99% US$2,145/kg vs US$2,145/kg

China Gallium 99.99% US$440/kg vs US$440/kg

Battery News

EV battery costs are down 90% over the last 15 years

• The average cost of lithium-ion battery packs for EVs has dropped by 90% from 2008 to 2023, according to the US Department of Energy.
• In 2023, battery prices averaged $13/kWh, a significant decline from $1,415/kWh average in 2008.
• While battery prices have fluctuated due to external factors like the COVID-19 pandemic, the overall trend remains downward.
• Tesla’s efforts to further reduce costs with its 4680 cells have not yet achieved the desired savings, but future projections remain optimistic.
• Goldman Sachs predicts that battery costs could drop another 40% by 2025, potentially bringing EVs to cost parity with gasoline vehicles and accelerating global adoption.

Global EV sales up 21% in July underpinned by biggest jump in Chinese sales in 2024

• Global sales of fully electric and plug-in hybrid vehicles rose by a yearly 21% in July, thanks to China’s strongest growth this year and despite dropping demand in Europe. (Rho Motion)
• Global EV and hybrid sales were at 1.35m in July, of which 880,000 were in China, where they were up 31% yoy, the data showed.
• China achieved a major milestone in the automotive industry, with EVs and plug-in hybrids comprising 51% of all new car sales in July 2024 – three years ago, EVs made up only 7% of the Chinese automotive market.
• In Europe, sales were down 7.8% in July, to YTD figures in line with 2023 – in the seven months of 2024, EV sales have dropped by 12% in Germany, the EU’s biggest EV market.
• In the United States and Canada, EV sales were up 7.1% in July.

Porsche repurposes used EV batteries for 5MW Battery Energy Storage System

• Porsche has developed a 5-megawatt energy storage system at its Leipzig plant using 4,400 recycled battery modules from Taycan EVs.
• The system, designed for over ten years of use, helps reduce peak energy loads and stabilise the grid.
• Porsche plans to replicate this sustainable energy solution at other locations, integrating it into the balancing energy market by year-end.

Amazon India Partners with Gentari to deploy 10,000 EVs for deliveries by 2025

• Amazon India has entered a strategic partnership with Gentari, an electric mobility firm, to deploy 10,000 EVs for last-mile deliveries by 2025.
• Under this collaboration, Gentari will procure and deploy the EVs over the next three years while also providing comprehensive fleet management services.
• By the end of 2023, Amazon India had already deployed more than 7,200 EVs across 400 cities, demonstrating significant progress towards its goal.
• This partnership with Gentari is expected to accelerate the deployment, contributing to India’s net-zero targets and promoting a cleaner, more sustainable transportation future.
• Gentari’s services also include a wide network of EV charging points and EV subscriptions, enhancing the support provided to Amazon’s delivery partners.

Nissan trialling new cooling paint to improve efficiency

• Nissan is trialling an innovative paint that can help to reduce cabin temperatures, meaning less energy is needed for air conditioning.
• The automaker is working with Radi-Cool Japan, Japan Airport Terminal Co and All Nippon Airways on a trial to see if a new generation of exterior paint can help keep a car cooler.
• The companies are running a yearlong feasibility study with Nissan NV100 service vehicles.
• Results so far have been significant – parked next to an identical vehicle, with standard paint, the special coated Nissan sees a 12-degree reduction in exterior surface temps and a 5-degree reduction inside the vehicle.
• This means that not only is the vehicle more pleasant to sit in but requires less air conditioning to lower and maintain a more acceptable temp. This reduces the energy consumption of the EV and allows for a more energy efficient vehicle.

Company News

Barrick Gold (GOLD US) US$19, Mkt cap US$33bn – Quarterly results as Bristow eyes acquisitions in Canada

• Barrick reported gold production of 948koz over 2Q24, vs 1,009koz in the same period last year.
• AISC reported at $1,498/oz vs $1,355/oz same period last year and $1,474/oz in 1Q24.
• Copper production at 43kt over the period vs 48kt same period last year.
• Debt steady qoq at $4,724m, whilst cash stood at $4,036m, up from $3,942m 1Q24.
• EBITDA reported at $1,289m whilst free cash flow reported at $340m.
• Company expects higher production and lower costs in 2H24, expecting a ramp up from Pueblo Viejo and Lumwana.
• Reko Diq feasibility study expected to be completed by year end.
• EBITDA up 42% qoq and debt net of cash reduced by 12% qoq after the Company benefited from higher gold prices, at $2,338/oz for the quarter.

Conclusion: Higher gold prices are starting to feed into producer margins, boosting earnings and cash flow. M&A in the sector is starting to heat up, with Goldfields buying Osisko’s remaining half in the Windfall project yesterday for c.$1.6bn. This encouraged speculation over Barrick’s future growth plans. Bristow responded to Bloomberg, stating that Barrick is looking for investment opportunities in Canada. Goldfield’s acquisition of Osisko valued Windfall at c.$500/oz in reserves, and just over $200/oz for gold in resources.

Bluejay Mining* (JAY LN) 0.39p, Mkt cap £5.8m – Analysis of historic drilling in Finland shows interesting grades and intersections of helium and hydrogen

(Bluejay Mining holds 100% of the Hammaslahti and Enonkoski projects and all its Greenland prospects)

• Bluejay Mining report interesting news in their work to discover and evaluate the potential of helium and hydrogen showings in Finland.
• The team are working through historic drill logs from drilling on their licenses to better evaluate the potential for economic discovery.
• Helium:
  • intersection shows 100 meters at 5.6% helium within a broader 1,500-meter intercept at 1.5% helium
• The drill hole shows potential for some form of discovery though further work will need to be done to determine the scale and connectivity within the reservoir and if there are any significant impurities.
• The team will also need to work out the economics of liquefying and transporting from the wellhead as well as the scale of the reservoir and its potential flow rates.
• Geological hydrogen (industrial gas):
  • Deep Drilling Success: Gas samples from a historic 2480-meter-deep drill hole, analysed by the GTK, has revealed up to 46% geological hydrogen,
• The Bluejay team are integrating all historical data including seismic for further analysis.
• Lithium brine: Newly identified Results also include:
  • 80m @ 5.03% lithium (50,300mg/l) in deep brines within a larger section of 580m@ 1.16% lithium (11,623mg/l).
• These are remarkably good grades for lithium brines and warrant some further examination. We do not know how deep the brines are or anything about their potential flow rates.
• Further work:
  • Surface Sampling:
    • Historical drill hole and surface sampling will be undertaken using a portable hydrogen and helium detector to measure concentrations of these gasses.
    • This program will also aid in assessing the location and condition of historical drillholes for further sampling.
  • Water Sampling:
    • Water samples will be collected from a selection of deep boreholes and analysed for hydrogen, helium, and other gases, establishing a baseline for gas presence and concentration.
  • Flowmeter Testing:
    • Groundwater flow rates will be measured to identify water-conductive fractures, aiding in locating potential gas-rich zones.
  • Pumping Tests:
    • Pumping tests will be conducted to understand the hydrogeological structures and flow characteristics, crucial for estimating recoverable gas volumes and production rates.
  • Packer Testing:
    • Specific borehole sections will be isolated to measure water flow and rock integrity, identifying permeable zones that could contain hydrogen and helium.
  • BMR ‘Borehole Magnetic Resonance’:
    • BMR logging will measure formation porosity and water volume, providing detailed geophysical data to enhance hydrogeological models and improve gas potential understanding.
• Kobold jv:  We expect to see an update on the Kobold JV and the Disko Copper Nickel Project sometime soon following analysis of the substantial data set collected in previous field seasons.

Conclusion: Bluejay are making progress through the analysis of historic data to show potential for new helium, hydrogen and industrial gas discoveries. Much work will need to be done to confirm potential economic value and the work program should take this work forward towards the realisation of new value for the business.

*SP Angel acts as nomad and broker to Bluejay Mining. The analyst has visited Dundas in Greenland and the Hammaslahti and Enonkoski projects in Finland. This comment has been prepared with input from SP Angel’s specialist Oil & Gas analyst.

Bushveld Minerals* (BMN LN) 0.65p, Mkt Cap £15m – SPR working capital facility drawdown

• The Company received a final $2m tranche of the $12m working capital facility from Southern Point Resources.
• Additionally, Orion reiterated its commitment to provide additional funds matching SPR tranches for up to $10m.

Conclusion: Working capital facility provides necessary financial flexibility as the team is focused on closing Vanchem disposal process and concentrate on optimising operations at Vametco all while vanadium prices remain at depressed levels.

*SP Angel act as nomad and broker to Bushveld Minerals

CleanTech Lithium (CLT LN) 15.5p, Mkt Cap £25m – ASX dual listing and a proposed equity raise

• The Company is planning a dual listing on the ASX and is aiming to raise a minimum of A$10m and up to $20m.
• The plan is to complete the listing on or around 24 September.
• New equity is to be raised at A$0.30 (~£0.16), 7% discount to the previous closing price, with one option attached to each share with an exercise price of A$0.375 for 18 months from the issue date.
• Proceeds of the fundraise are to be used for ongoing Laguna Verde PFS including drilling and hydrogeology and further metallurgical and DLE pilot plant testing among other things.
• The Laguna Verde PFS is expected to be completed by the end of 2024 subject to successful fundraising completion.
• The DLE pilot plant located 275mk away from the Laguna Verde deposit in Copiapo, Chile, was commissioned in 1Q24 with a capacity of 1t LCE per monh.
• The plant is designed to produce concentrated eluate (11.2x factor) that is then shipped to the facilities of Conductive Energy in Chicago, US, for conversion into battery grade lithium carbonate.
• The plant recently produced an initial 88m3 of concentrated eluate, an equivalent of 1t LCE, following an operating period of 384h over 14 cycles.
• Laguna Verde hosts ~1.8mt LCE at 200mg/l Li (~0.04% Li20) in total resource with Measured and Indicated accounting for 1.1mt at 196mg/l.

Gem Diamonds (GEMD LN) 13.33p, Mkt Cap £18.6m – H1 production and sales in line with 2024 guidance

• Gem Diamonds reports the recovery of 55,873 carats of diamonds during the six months to 30^th June (H1 2023 – 50,601 carats).
• Production came from the processing of ~2.54mt of ore (H1 2023 – ~2.47mt) at an average grade of 2.20 carats per hundred tonnes (2023 – 2.05cpht).
• The ‘satellite’ pits generated around 44% of the ore treated (1.11mt) (H1 2023 – 1.27mt) and the volume of waste removed to access ore declined by 35% to 3.16mt (H12023 – 4.85mt).
• Sales of 56,944 carats at an average price of US$1,366/carat generated revenues of US£77.9m (H1 2023 – US$71.6m from the sale of 52.163 carats at an average price of US$1,373/ carat).
• The company sold 11 individual diamonds at prices in excess of US£1m while a single 62.78 carat white diamond sold at a price of US$41.007/carat achieved the highest price for any individual diamond during the period.
• The company confirms that “All operational and financial metrics are trending within the original guidance issued in March for 2024” which indicate production in the range 88-92,000 carats from the processing of between 4.9-5.1mt of ore.
• Conclusion: H1 production of ~56,000 carats maintains expectations for 88-92,000 carats in 2024.

Gold Fields Limited (GFI SJ) ZAR27315, Mkt Cap ZAR244bn – US$1.57bn cash acquisition of Osisko Mining

• Gold Fields has agreed to acquire Osisko Mining for C$4.90/share in a cash transaction worth US$1.57bn.
• “Once completed, the transaction will consolidate Gold Fields’ 50% partnership stake into full ownership and control of the Windfall Project … [in Quebec] … and its entire exploration district and will eliminate our existing obligations of a C$300m deferred cash payment and C$75m exploration obligation, which were part of the May 2023 Windfall JV transaction with Osisko Mining”.
• The transaction, which has been recommended by Osisko’s Board is subject to its shareholders’ approval and regulatory permissions.
• Gold Fields’ CEO, Mike Fraser, said that the Osisko deal is “consistent with our strategy to improve the quality of our portfolio through investment in high-quality, long-life assets, like Windfall. It provides an opportunity to consolidate our presence in Québec, a Tier-1 mining jurisdiction, and apply our experience in greenfields exploration, project development and underground mining”.

Jubilee Metals Group (JLP LN) – 6p, Mkt cap £180m – Roan plant expansion produces its first copper concentrate

• Following its announcement last week of the completion of the plant expansion at its Roan copper plant in Zambia, Jubilee Metals confirms that the plant has produced its first copper concentrate.
• “The copper concentrate produced from Roan’s Front-End Module, targeting previously mined material, will be refined to produce copper cathode at the Company’s Sable refinery”.
• The company emphasise that this concentrate “is in addition to the sulphide copper concentrate already being produced from Roan’s mill-and-float circuit”.
• CEO, Leon Coetzer, described the production of the “concentrate produced from our processing modules … [as[ … a significant milestone for the business allowing Jubilee to commence filling the available copper production capacity at our Zambian operations”.
• Production at the newly completed facility “will be ramped up during Q3 CY2024”.

Kavango Resources* (KAV LN) 1.5p, Mkt Cap £24m – Initial drilling success at Nara, Zimbabwe

• Kavango Resources reports that assays from its recently completed initial diamond drilling campaign at Nara in southern, Zimbabwe have confirmed gold mineralisation.
• Six holes were drilled for a total of 1364.4m with five of the holes successfully “intersecting the quartz vein shear structures worked by artisanal miners”.
• The company says that the “assay results provide confirmation of a gold mineralised system at Nara and support the potential for a large system of gold-bearing shears at the project … [and that] … Higher-grade assays at depth offer compelling evidence for continuation of structures, along with shallow structures under thick cover not yet found or worked by artisanal miners”.
• Among the results tabulated in today’s announcement are:
  • Multiple intersections in hole NAKL-DD001 with 2.1m averaging 1.54g/t gold from 54.9m depth, and single metre long intersection averaging 1.88g/t from235.5m and 3.78g/t from 241m; and
  • Intersections of 1.18m at an average grade of 3.12g/t gold from 163.37m depth in hole NAFE-DD001which included a 0.41m wide zone averaging 6.27g/t gold from 136.37m; and
  • Multiple intersection of 1m at an average grade of 2.21g/t gold from 36m as well as 0.8m averaging 3.01g/t from 38m and 0.7m averaging 2.10g/t from 70.7m in hole NABZ-DD001
• Kavango Resources says that the “assay values may under-represent the quartz vein shear structures as compared with grades reported by artisanal miners from their production at depth on the same and similar structures, and past production at the historic mines”.
• Follow up work will include the integration of its geophysical induced polarisation data with the drilling “to identify further drill targets associated both with expanding the footprint of existing deposits at the project and testing new structures”.
• Chief Executive, Ben Turney, explained that “Our first phase of exploration at the Nara Project confirms the potential for a large-scale gold-bearing system here. We believe this is shaping up to become an underground opportunity for Kavango Mining to pursue. We are encouraged both by the grades we have encountered and widespread gold mineralisation”.

Conclusion: Initial drilling results from Nara confirm gold mineralisation observed in historical and artisanal workings with the company working to identify additional drill targets and to mobilise a second drill rig later in the year.

*An SP Angel Analyst holds shares in Kavango

Neo Energy Metals (NEO LN) 1.03p, Mkt Cap £6.1m – Acquisition of South African uranium project

• Neo Energy Metals reports has agreed to acquire the Beisa uranium project in the Witwatersrand Basin of South Africa from Sunshine Mineral Reserve Pty for an initial cash exclusivity fee of R2.5m (~£107,500) plus 20m share at an issue price of 75p/share.
• “On settlement of the acquisition of the 100% interest in the Beisa Projects, the Company will pay a cash fee of ZAR175,00,0000 (approx. £7,500,000) and issue new ordinary shares to the value of ZAR200,000,000 (approx. £8,500,000) at an issue price of 1.25 pence per share”.
• The Beisa project is described as “one of the largest undeveloped uranium resources in South Africa” with ‘Inferred’ resources under South Africa’s SAMREC Code of 90.24mlbs of U3O8 (plus an additional 4.17moz of gold hosted within the Beisa uranium Reef and the adjacent Beatrix Reef).
• The “Beisa North Uranium Project, the Beisa Reef is present from a depth of 350 metres (‘m’) to the north of the Beisa Uranium Mine … [and the company says that the] … shallow depths and steep configuration of the Beisa Reef favour the typical narrow underground mining methods of the Witwatersrand Basin, which are considered the most appropriate for reducing dilution of the uranium-gold ore”.
• CEO, Sean Heathcote, described the acquisition as “a major milestone for Neo Energy Metals, and significantly expands our footprint in one of the richest and long-standing uranium producing regions in the world … [which] … strengthens the Company’s ability to achieve its strategic goal of becoming a major player in global uranium market and as South Africa’s leading uranium company”.
• He confirmed that “In the coming weeks, we will look to finalise the formal documentation and regulatory approvals for the acquisition with the team at Sunshine Mineral Reserves and in parallel with that finalise the debt funding arrangements”.

Conclusion: The Witwatersrand Basin has a long history of uranium production, however with the resource still currently at @Inferred’ level there will be additional work required to firm up the resource, establish a reserve and design a mine layout.  We await further news with interest.

Oriole Resources* (ORR LN) 0.27p, Mkt cap £10m – Mbe soil sampling identifies new anomalous gold zones

• Oriole Resources has completed a second infill soil sampling programme at Mbe in Cameroon.
• Mbe covers 2,266km² and Oriole’s previous soil sampling at MB01 yielded gold anomalies up to 8.2g/t Au.
• Additional soil sampling results have identified three zones of gold anomalism to the east of previously identified MB01.
• This programme has yielded results up to 0.28g/t Au.
• Oriole notes the lower grade of the new anomalous zones but emphasises that for soils they remain highly anomalous and offer strong satellite potential alongside the primary MB01 target.
• Additionally, Oriole has completed two trenching programmes over 7,055m.
• This included nine trenches spaced 200m apart over 5,338m and seven infill trenches over 100m spacing for 1,717m.
• The Company expects to report initial results for the trenching programme in 3Q24.
• Oriole will use the trenching results to delineate drill targets, with a maiden drilling programme expected in the 2024/25 field season.

Conclusion: Oriole continues to progress early-stage exploration at its greenfield gold project Mbe in Cameroon. Additional anomalous gold zones have been identified to the east of the high-grade MB01 zone. Trenching results are expected soon which will be used to guide a maiden drilling programme at the project.

*SP Angel acts as Broker to Oriole Resources

Sunrise Resources (SRES LN) 0.05p Mkt Cap £2.3m – Completion of latest drilling at Pioche, Nevada

• Sunrise Resources reports that it has completed a programme of sonic drilling and pitting at its Pioche sepiolite project in Nevada.
• The campaign comprised 12 vertical holes totaling 460m focused within an 160 hectare area in the central and eastern part of the project area whereas drilling in 2022 concentrated in the western and central areas.
• In addition, “6 pits were dug using an excavator to sample well defined sepiolite beds at surface over a strike length 2.7km”.
• The programme was “managed and funded by Tolsa USA Inc (“Tolsa”), a subsidiary of Spanish sepiolite producer, Tolsa S.A., the world’s largest sepiolite producer … [which] … holds an option to purchase the Pioche project for US$1.4 million exercisable by 28 December 2024 with future payments to Sunrise of a 3% revenue-based royalty on production”.
• Samples have been sent to Tolsa’s laboratory in Spain.

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

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