SP Angel Morning View -Today’s Market View, Tuesday 16th April 2024

Global Li-ion battery demand reaches all-time in Q1 2024

MiFID II exempt information – see disclaimer below

African Pioneer (AFP LN) – Progress on exploration with First Quantum in Zambia

Aura Energy* (AURA LN) – Restructuring of uranium offtake agreement

Bluejay Mining* (JAY LN) – Bluejay reinstates resource at Dundas following review of recent drilling

Cornish Metals* (CUSN LN) – Preliminary Economic Assessment on track for Q2 with nine holes completed into the Wide Formation

Golden Metal Resources (GMET LN) – Coincident geophysical and geochemical anomalies at the Garfield project, Nevada

Group 6 Metals (G6M AU) – Record monthly tungsten production at Dolphin mine

Hummingbird Resources (HUM LN) – Kouroussa update

Kavango Resources* (KAV LN) – Tailings upgrade from Nara Gold Project

Petra Diamonds (PDL LN) – Fifth sales tender shows improving rough diamond prices

Rainbow Rare Earths (RBW LN) – Metallurgical results from Uberaba, Brazil

Lithium equities weaken as carbonate prices stabilise around $15,000/t

• We note a selloff in lithium equities in China and Australia overnight, despite steady prices reported.
• This may reflect a period of restocking post-Lunar New Year that has disappointed so far.
• Additionally, much note was made of environmental checks in Jiangxi, a major lithium carbonate producing region, which weighed on output.
• EV sales in China hit a 13-month low in February, which also likely cooled optimism over a major rebound in prices.
• Buying from South Korea and Japan has remained muted, reported by Platts.
• Sigma auctioned yesterday in Brazil at $1,160/t for their spodumene product, up from lows of $950/t SC6 in the middle of March.
• This differs to Platts’ $1,100/t FOB Australia on April 12^th, down from $1,150/t on March 31^st.
• SMM also reports a leading brine producer in China has been forced into maintenance, expected to limit the surplus for April to 2.5kt lithium carbonate.

Copper prices steady on hungry smelters as hedge funds ramp up bullish bets

• Copper prices are sticking around the $9,500/t mark.
• China inventories have jumped, climbing to highest since April 2020.
• Smelters are reeling from rock bottom TCRC fees, seeking concentrate supply as capacity rises worldwide (namely China, Indonesia, DRC).
• Codelco is looking to boost output, seeking a partners for new projects to boost operational efficiency as it struggles with output.
• Chinese copper traders have ramped up bullish positioning in copper, leaving it vulnerable to a momentum-driven reversal.
• SMM reports that downstream copper buyers are holding off restocking, potentially reflecting expectations of weaker prices to come.

Global Li-ion battery demand reaches all-time in Q1 2024

• Demand for batteries reached an all-time peak of 230GWh across all sectors. (Rho Motion)
• EV batteries accounted for 72% of demand, with 3.1m units sold over the period.
• Battery energy storage saw growth of 40% yoy.
• Battery demand is expected to increase by 25-30% year-on-year, surpassing the 1TWh mark for the first time.

China already has enough manufacturing capacity to meet global demand

• According to Bloomberg NEF, battery demand in 2023 totalled 950GWh, with global manufacturing capacity estimated at around 2.6GWh.
• By 2025, BNEF reports there will be 7.9GWh of declared manufacture capacity globally, almost five times the projected demand of 1.6GWh.

India car sales jump with demand for EVs, SUVs behind rise

• Passenger vehicle sales in India rose 8.4% YTD, reaching 4.22 million units compared to 3.89 million the previous year.
• SUVs and electric cars drove the sales growth, with SUV sales jumping 26% YoY.
• SUVs and larger vehicles accounted for 60% of total passenger vehicle sales in India.
• In contrast, sales of smaller passenger cars, including compact sedans and hatchbacks, declined by 12%.
• The shift towards larger vehicles is attributed to increasing consumer preference for utility vehicles perceived as safer on Indian roads.
• Additionally, the affordability of entry-level cars has decreased for rural consumers due to stagnant income levels.
• EV sales surged by 91% YoY to 90,996 units, albeit from a low base, with Tata Motors and MG Motor dominating the market.
• To boost EV adoption, India reduced import duties for global automakers willing to invest at least $550 million and set up domestic manufacturing within three years.

CATL beats earnings expectations despite seasonal lull

• Chinese battery major CATL has reported Q1 income up 7%.
• Margins reached their highest level since 2Q21, although revenue slid 10% in line with expectations.
• Q1 usually reports lower owing to the impact of Lunar New Year, so CATL’s report came as a welcome surprise to shareholders and analysts.
• The Company is aiming to continue to take market share in the EV cell sector, with no plans to reduce its expansion efforts.
• The Company now holds a 38.4% share of the global battery market.
• Rival LG Energy saw Q1 operating profits slide 40%.

CATL unveils BESS with zero degradation

• CATL has launched its latest grid-scale BESS product, with 6.25MWh per 20-foot container and claims of zero degradation over the first five years.
• The 6.25MWh capacity is significantly above the 5MWh/unit that is standard in BESS products from China (Energy-storage.news)
• The Tener BESS uses a biomimetic solid electrolyte interface (SEI) which CATL claims ‘clears the roadblocks for the movement of the lithium ions.’
• The batteries use lithium iron phosphate (LFP) electrode chemistry and have an energy density of 430Wh/L, higher than the industry range of 140-330Wh/L.
• CATL said the 6.25MWh/unit has reduced the product’s footprint by 30% at the unit level and 20% for the overall project, using the example of a 200MWh project.

Economics

US – Retail sales beat reflects robust consumer demand seeing markets further revising their rate cut expectations with five year inflation breakeven now close the highest level since March 2023.

• Strong numbers lent further support for the US$ index as well as taking government bond yields higher.
• The yen fell 0.7% crossing the 154 level for the first time since 1990.
• Markets are now pricing in between one and two rate cuts for 2024, down from six to seven expected four months ago.
• Retails Sales (%mom): 0.7 v 0.9 (revised from 0.6) February and 0.4 est.
• Retail Sale ex Auto and Gas (%mom): 1.0 v 0.5 (revised from 0.3) February and 0.3 est.

China – Q1 GDP beat estimates posting a strong start to the year, although, March economic showed growth slowed down towards the end of the quarter.

• Both industrial production and consumer spending expanded at a slower pace in March underperforming market estimates.
• Property remained a drag with investment in the sector falling at a higher pace in March.
• Concerns are that strong headline number may see policymakers being reluctant to add further stimulus, Bloomberg reports.
• GDP (%yoy): 5.3 v 5.2 Q4/22 and 4.8 est.
• Industrial Production (YTD %yoy): 6.1 v 7.0 February and 6.6 est.
• Retail Sales (YTD %yoy):4.7 v 5.5 February and 5.4 est.
• FAI (YTD %yoy): 4.5 v 4.2 February and 4.0 est.
• Property Investment (YTD %yoy): -9.5 v -9.0 February and -9.2 est.
• Residential Property Sales (YTD %yoy): -30.7 v -32.7 February.

UK – Wages climbed more than expected in three months to February, although, unemployment increased 0.3pp pointing to potential easing in labour market tightness.

• Odds of two full rate hikes pulled back slightly on a pick up in wages growth rate, although, the consensus remains for 0.50pp of easing in 2024 with the first cut coming in August-September.
• The pound dipped on the data briefly before recovering all losses and trading slightly higher compared to pre announcement levels.
• Wages (3m/%yoy): 5.6 v 5.6 January and 5.5 est.
• Wages ex Bonus (3m/%yoy): 6.0 v 6.1 January and 5.8 est.
• Unemployment Rate (%): 4.2 v 4.0 (revised from 3.9) January and 4.0 est.
• Employment Change (3m/3m): -156k v -89k (revised from -21k) January and 74k est.

Israel/Iran – Israeli war cabinet meets for a third day discussing a potential response to Iran’s weekend attack.

• The US has previously argued that Israel should show restraint and that it will not support any military retaliation.
• The risk is that a potential response may lead to an escalation cycle with the situation rapidly evolving into another major conflict in the region.

Australia – Electric cars and trucks can slash Australia’s $60 billion fossil fuel import bill

• Australia paid over $60 billion to import petroleum products in the previous year, in addition to billions more for storage, distribution, and sales.
• Shifting to electric cars will reduce imports of petrol, which accounts for 41% of Australia’s petroleum consumption.
• Around 29% of total petroleum is used for non-transport activities like mining, where electrification of trucks and generators can reduce diesel fuel usage.
• Road freight, especially light commercial vehicles, is a prime candidate for electrification, contributing significantly to transport emissions.
• Overall, efficient electrification across various sectors can substantially cut Australia’s reliance on imported fossil fuels and associated costs.

Currencies

US$1.0615/eur vs 1.0654/eur previous. Yen 154.42/$ vs 153.92/$. SAr 19.079/$ vs 18.850/$. $1.244/gbp vs $1.247/gbp. 0.642/aud vs 0.648/aud. CNY 7.240/$ vs 7.239/$.

Dollar Index 106.29 vs 105.98 previous.

Precious metals:         

Gold US$2,371/oz vs US$2,356/oz previous

Gold ETFs 81.5moz vs 81.7moz previous

Platinum US$965/oz vs US$975/oz previous

Palladium US$1,022/oz vs US$1,048/oz previous

Silver US$28.42/oz vs US$28/oz previous

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

Base metals:   

Copper US$ 9,517/t vs US$9,476/t previous

Aluminium US$ 2,527/t vs US$2,584/t previous

Nickel US$ 17,765/t vs US$18,245/t previous

Zinc US$ 2,733/t vs US$2,799/t previous

Lead US$ 2,178/t vs US$2,173/t previous

Tin US$ 32,300/t vs US$32,740/t previous

Energy:           

Oil US$90.5/bbl vs US$89.7/bbl previous

Henry Hub Gas US$1.70/mmBtu vs US$1.76/mmBtu yesterday

• Media reports that Waldorf Production is working with its auditors on issues arising from the Company’s FY23 accounts regarding concerns about potential liquidity shortfalls over the going concern period to 30 June 2025. The Company guided average FY24 production of 20-22kboe/d and reported $399m net debt at YE23.
• Equinor will pay $500m cash and transfer its operated position in the Marcellus and Utica shale formations (150mmcfe/d) in Ohio in return for EQT’s non-operated interests (225mmcfe/d) in Pennsylvania, which will lift Equinor’s average interest from 15.7% to 25.7% in certain Chesapeake-operated Northern Marcellus gas units.

Natural Gas €31.9/MWh vs €30.1/MWh previous

Uranium Futures $89.9/lb vs $89.7/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$111.6/t vs US$111.6/t

Chinese steel rebar 25mm US$513.7/t vs US$513.5/t

Thermal coal (1st year forward cif ARA) US$121.0/t vs US$122.0/t

Thermal coal swap Australia FOB US$136.5/t vs US$133.5/t

Other:  

Cobalt LME 3m US$27,830/t vs US$27,830/t

NdPr Rare Earth Oxide (China) US$54,285/t vs US$53,049/t

Lithium carbonate 99% (China) US$15,125/t vs US$15,127/t

China Spodumene Li2O 6%min CIF US$1,240/t vs US$1,240/t

Ferro-Manganese European Mn78% min US$972/t vs US$972/t

China Tungsten APT 88.5% FOB US$320/mtu vs US$320/mtu

China Graphite Flake -194 FOB US$490/t vs US$490/t

Europe Vanadium Pentoxide 98% 5.0/lb vs US$5.0/lb

Europe Ferro-Vanadium 80% 26.25/kg vs US$26.25/kg

China Ilmenite Concentrate TiO2 US$329/t vs US$329/t

China Rutile Concentrate 95% TiO2 US$1,416/t vs US$1,430/t

Spot CO2 Emissions EUA Price US$69.9/t vs US$68.9/t

Brazil Potash CFR Granular Spot US$305.0/t vs US$305.0/t

Battery News

European researchers develop charging protocol that could double EV battery lifespan

• Battery degradation is still a significant problem that manufacturers are trying to tackle for EVs.
• Lithium-ion batteries, the most common battery in EVs on the market, are vulnerable to rapid wear due to traditional loading methods, which accelerate the aging of batteries and therefore reduce their overall capacity and significantly reduce their lifespan.
• A team of researchers have published research in the Advanced Energy Materials journal that proposes using pulsed current over traditional current to prolong battery lifespan.
• Pulsed current involves sending streams of energy intermittently rather than continuously – it allows better absorption by the battery components and reduces the risk of overheating and of rapid degradation.
• Early results from the study shows the new charging method could also improve performance and long-term stability of the battery.

GAC Aion becomes latest Chinese automaker to announce 1000km EV

• GAC Aion announced it will install all-solid-state batteries (ASSBs) in vehicles under its Hyper brand in 2026.
• The automaker claims its batteries will exceed 1000km in range and boast an energy density of 400Wh/kg.
• According to GAC Aion, the volumetric energy density is up by more than 52% over current mass-produced liquid lithium-ion batteries.
• Fellow Chinese EV maker Nio is expected to start deliveries of its ET7 vehicle later this year. The vehicle was driven by CEO William Li during a livestream, reaching 1044km on a single charge.

Toyota Sets New Standard with 1 Million Kilometer EV Battery Warranty

• Toyota is offering an unprecedented 1 million kilometer (621,000 mile) warranty on the batteries of its EVs.
• This battery warranty is significantly longer than the standard 100,000 to 160,000 km warranties offered by most other automakers.
• The extended warranty aims to provide customers with peace of mind and address concerns about battery degradation and replacement costs over time.
• The 1 million km battery warranty could accelerate consumer adoption of EVs by alleviating a major concern about battery life.
• The warranty aligns with increasing consumer demand for longer-lasting and more cost-effective electric vehicles.

EVs are taking over the rest of the world much faster than the US

• Electric vehicles are being adopted at a much faster rate globally compared to the United States.
• According to Bloomberg NEF, 13.7 million EVs were sold worldwide in 2023, representing 18% of total passenger vehicle sales.
• China leads in EV adoption, while North America remains a relatively small market, with only 9% EV penetration in the US in 2023.
• Bloomberg NEF predicts over 16 million EVs will be deployed globally in 2024, surpassing a 20% global penetration rate.
• The growth rate of EV adoption is slowing down, but overall growth remains strong worldwide.
• The US lags behind in EV adoption due to factors like protectionist laws and a lack of certain EV models available in China and Europe.
• Foreign investments are underway to build more EVs in the US, but have yet to result in higher volumes as projects are still in development stages.
• Economic incentives like reducing oil imports drive EV adoption in China and Europe, while the US has ample domestic oil production, providing less direct incentive to switch to EVs.

Harbinger Motors says its EVs will beat diesel trucks in price by end of year

• Harbinger aims to start delivering its final EV product by the end of 2024, promising price competitiveness with diesel trucks.
• This is a bold claim, as medium and heavy-duty EVs typically have a higher upfront cost compared to diesel vehicles.
• The company states that its EV motors will last 450,000 miles, leading to lower long-term fueling and maintenance costs.
• Harbinger recently opened its manufacturing facility in Garden Grove, CA, with the goal of delivering the first upfront cost-competitive medium-duty EVs by the end of 2024.
• The company’s promise of price parity with diesel trucks from the outset is a significant claim in the commercial EV market.
• Harbinger’s approach could provide an electric option for medium-duty commercial trucks to avoid exhaust emissions in urban areas.

Most affordable electric cars for 2024 named – starting at £7,695

• The most affordable EV for 2024 is the Citroen Ami, priced at £7,695, though it is classified as a quadricycle with a 28mph speed limit and limited features.
• The cheapest full-sized EV car is the Dacia Spring supermini, priced at £14,995 with a 137-mile range and quirky customizable interior.
• The BYD Dolphin, a Chinese EV model, is one of the most affordable at £25,490.
• Other budget-friendly EVs include the MG4 EV (from £25,995), Fiat 500e (from £27,460), and Vauxhall Corsa Electric (from £27,055).
• Factors like range, performance, and features vary across these affordable EV options to suit different budgets and needs.
• As more Chinese automakers enter the UK market, affordable EV options are increasing, making electric cars more accessible.

Company News

African Pioneer (AFP LN) 1.95p, Mkt Cap £4.5m – Progress on exploration with First Quantum in Zambia

• African Pioneer reports on the progress of First Quantum Minerals’ exploration of the company’s licences in northwest Zambia where FQM is funding exploration in the Western Foreland area to earn a 51% interest in the project.
• Today’s announcement says that four diamond drill holes (1,297m) have been completed at the Turaco prospect to establish a lithological environment favourable to “Congo-style mineralisation”.
• The company explains that some of the holes at Turaco may have been “stopped prematurely in andesitic basalt and more recent surface geochemical data suggests that conditions suitable for a redox front and copper deposition may occur beneath the base of the basalt cover. FQM will consider further drilling closer to the up-dip extension of the basalt unit to test this possibility”.
• Results are awaited from a “772.3m deep diamond drill hole completed over the Ikatu on an Audio Magneto Telluric (“AMT”) generated target” and from 9 reverse-circulation (RC) drillholes (780m) to test soil geochemical anomalies at the Chipopa target.
• Explaining the background, the announcement says that “Previous exploration by FQM has confirmed the presence of mineralisation with diagnostic regional geological and architectural similarities apparently consistent with Kamoa-Kakula deposit mineralisation located in the DRC”.
• Ivanhoe Mines’ Kamoa Kakula mine in the DRC produced around 300,000t of copper during its initial year of production in 2022 and expects to mine copper grades of around 6% for the first 10 years of its operating life.
• Executive Chairman, Colin Bird, said that the “results generated by this programme confirm proof of concept and the objective now is to continue exploration with the mission to identify the requisite structure and lithology conducive to mineral deposition similar to the Ivanhoe deposits to the north”.

Aura Energy* (AURA LN) 9.25p, Mkt Cap £68m – Restructuring of uranium offtake agreement

• Aura Energy has released a statement to the ASX describing changes to its offtake agreement with Curzon Uranium for the output from its Tiris uranium project in Mauritania.
• The company highlights a 70% increase in the average “fixed price contract price increases 70% to US$74.75/lb U₃O₈ from US$44.09/lb U₃O₈”, subject to a Final Investment Decision by 31^st March 2025.
• The higher price is counterbalanced to an extent by a reduction in contracted volumes “from 2.6Mlbs to 2.1Mlbs over same 7-year term”.
• The company says that the new arrangements deliver “US$41m of additional revenue … to the Tiris Project cash flows at a uranium price of US$80/lb U₃O_8 … [adding US$22m to NPV_8%] _… to US$388M _… [and increasing IRR by 2% ] _… to 36% compared to Front End Engineering Design (“FEED”) study economics2 delivered in March 2024”.
• Tiris will now deliver “150,000lbs U₃O₈ per annum under fixed price terms averaging US$74.75/lb U₃O₈ and 150,000lbs U₃O₈ per annum at spot less 4% discount over 7 years”.
• Aura Energy will pay Curzon Uranium a US$3.5m restructuring fee payable in either cash or shares (priced at A$0.18/share) and Curzon Uranium will also “take a US$3.5M placement of Aura shares at A$0.18 per share”.
• Commenting on the new agreement, CEO, Andrew Grove, welcomed the “cooperation and consideration received from Curzon … [and said that the] … restructured offtake agreement releases significant value in the Project and is another important step in the development of the Tiris Uranium Project”.
• Project life remains at 17 years and the capital cost of the project remains unchanged at US$230m with expected average annual production also unchanged at 2m lbs of U₃O₈.

Conclusion: New offtake terms agreed with Curzon Uranium enhance the economic returns of the Tiris uranium project.

*SP Angel acts as Nomad and Broker to Aura Energ

Bluejay Mining* (JAY LN) 0.33p, Mkt cap £4.95m – Bluejay reinstates resource at Dundas following review of recent drilling

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

• Bluejay has reinstated its 2019 Mineral Resource Estimate following a review of the work done in the 2022 drill program at the Dundas site in Greenland.
• Management has reviewed the 2022 drill program and its results and have “determined that there is sufficient evidence to warrant the reinstatement of the 2019 Mineral Resource Estimate (MRE) at the Dundas Ilmenite Project.”
  • After joining the Company in late December 2023, significant concerns were raised by the new management team regarding the accuracy and representativeness of the 2023 MRE.
  • This decision to reinstate the 2019 MRE reflects the Company’s well-informed position that the downgrade in the 2023 MRE was the result of multiple factors, including the use of unsuitable drilling methods, and questionable decision-making.
• The reasons for the reinstatement are well explained in the RNS statement with supporting photos.
• The 2019 resource was determined using a ‘Sonic’ drill rig as recommended by SRK consultants as the most appropriate rig for drilling into heavy mineral sands.
• Dundas has particularly high-grade and heavy mineral sands, particularly within the Ilulissat Delta area.
• We viewed the ‘sonic’ rig working on the resource at Dundas in July 2017 with minimal core loss.
  • “Sonic drilling is an industry standard for achieving representative samples in unconsolidated sediment.”
• Unfortunately, the management in 2022 commissioned a Geoprobe rig which used a combination of direct push, diamond drilling, and other methods as selected in place of the sonic rig.
  • “Diamond drilling is rarely, if ever, deployed during exploration of mineral sand deposits.”
• Variability in Sample Types: The utilization of multiple drilling approaches (direct push, diamond, auger, etc) led to inconsistencies in sample types, recovery rates, and comparability of results.
• Challenges with Diamond Drilling: Diamond drilling with water lubrication in hard ground conditions resulted in poor core recovery and material washing, particularly affecting particle size distribution (PSD), and recovery of sand.
• Short Drill Runs: Short drill runs yielded a significant number of very short samples, highlighting drilling difficulties alongside repeated hole withdrawals and abandonments.
• Geoprobe Limitations: Geoprobe struggled to penetrate ice-bound sediment, leading to misinterpretation of basement refusal as bedrock, negatively impacting both grade and tonnage estimates.
• Exclusion of Fluvial Zones: Fluvial zones were omitted from resource estimation without sufficient justification, potentially overlooking significant resource areas.
• Rejection of Pre-2022 Exploration Data: During the Mineral Resource Estimate (MRE) process in May 2023, all exploration data predating 2022 was dismissed without a valid rationale.
• Neglect of Oversight: The 2022 Qualified Person refrained from visiting site and failed to engage with pre-2022 consultants to rectify disparities in grade and tonnage estimates.
• Qualified person: Rod McIllree, who is a director of Bluejay Mining is acting as a Qualified Person and is a Fellow of the Australasian Institute of Mining and Metallurgy. McIllree has sufficient experience in the styles of mineralisation and type of deposits under consideration and the activity undertaken to qualify as a Qualified Person as defined by the AIM rules, and for the purposes of The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
• The 2022 drilling at Dundas drilled just 395m out of a planned 1323m campaign due to slow progress, drilling issues and broken equipment.
  • Multiple drilling methods were tried including Hollow Stem Auger, Direct Push, Diamond Coring, Split Spoon, Continuous Sampling, HWT, Downhole Hammering, and ODEX Hammering
  • Primary methods being Hollow Stem Auger, Diamond Coring and Direct Push, within the same borehole.
• Hollow Stem Augering can disturb the surrounding environment, leading to flowing sands, sand lock, and ice rinds (frozen layers) in ice-bound sediment.
  • Hollow stem auger drilling requires specialized equipment with specific torque and weight requirements. If the equipment lacks sufficient power or stability, it cannot effectively penetrate tough formations..
• Augers don’t generally work well in rocky or ice conditions causing further erroneous results.
• Direct Push drill sample collection can result in borehole instability particularly in unstable formations, where the boreholes often collapse. Freezing around the sampling tool is also an issue.
• The inability to remove soil or rock during drilling can lead to shorter holes. First meter recovery averaged only 83% during the 2022 drilling programme, which is typically the highest-grade portion of the orebody.
• Diamond Coring uses diamond-tipped bits with water for cooling and lubrication.
• The use of water to cool and lubricate the rods and bits is known to cause losses in unconsolidated mineral sands with water washing particles smaller than 5 mm out of the core distorting the quality of the sample collection.

Conclusion:  We have questioned the 2022 downgrade of the Dundas resource on many occasions as we could not understand why the 2022 management did not use the ‘Sonic’ drill rig as previously recommended. We also questioned the downgrading of the entire resource based on the testing of a relatively small portion of the resource in 2022.

We are therefore extremely relieved to see Rod McIllree reinstating the 2019 resource based on the results of ‘sonic’ drilling at Dundas. While we believe the resource is larger than the 117Mt JORC resource grading 6.1% ilmenite as published in 2019 we also note there is a less well defined and substantial offshore JORC Exploration Target estimated at 300–530mt grading 0.4-4.8% ilmenite.

We see Dundas as a valuable project with relatively easy access to titanium dioxide producers in North America and potentially China via the Northwest passage.

We look forward to further information and news on the potential to develop the Dundas project in future years.

*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.

Cornish Metals* (CUSN LN) 7.75p, Mkt Cap £39m – Preliminary Economic Assessment on track for Q2 with nine holes completed into the Wide Formation

BUY – 48p/s

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• Cornish Metals reports on progress at the South Crofty tin mine in Cornwall.
• PEA: The team are busy collating information for the South Crofty PEA ‘Preliminary Economic Assessment’ which is due this quarter.
• The PEA should be the first of a series of increasingly detailed feasibility studies leading up to the full financing and restart of the South Crofty tine mine.
• Shaft refurbishment is ongoing with reports indicating the good quality of timbers in the New Cook’s Kitchen shaft.
• Two shaft winders have been installed with man-riding cages also in place and certified for the transport of equipment and workers.
• Dewatering continues with the pumps and Water Treatment Plant operating to specification and holding the water level at 280m below surface. The quality of the discharged water remains better than permitted standards.
• Water is being maintained at this level for three reasons.

• • Slowing the pumping safes sufficient cash to pay for the work currently being done
  • Health and safety. Management do not want anyone working below the current working level for safety reasons.
  • The mine has to install new pumps the lower levels due to the increased ‘head’ pressure. It makes sense to refurbish the shaft and then lower the pumps into place, rather than disassemble the pumps and lower them part of the way.

• New discovery: Drilling on the Wide Formation continues with nine holes completed and ~7,200m drilled to date. Drill holes 10 and 11 are in progress.
• We expect results from the last three drill holes from the assay laboratory shortly.
• These results will be used to extend the known tin resource as they are within easy reach of the mine.
• Tin prices: remain >US$30,000/t at $32,300/t. Prices are volatile due to the developing situation in Myanmar where forces representing the Junta are being pushed back by local militia.
• The Chinese PLA and Thai RTA are present in the boarder areas but are not thought to be involved.
• China normally receives some two thirds of its tin concentrates from mines in Myanmar. Man Maw, the largest of Myanmar’s tin mines is reported to be suspended, though we suspect smaller mines may still be in operation.
• The situation is disruptive for the tin industry with a supply / demand deficit likely to ensue.

Conclusion:  We are keen to see the results from the ‘Wide Formation’ drilling. The results should go towards the development of new resources which should add value to the overall mine plan. The ability to access new resources in a new mining area will give greater flexibility and the ability to mine a connecting resource from existing infrastructure.

*SP Angel acts as Nomad and Broker. An SP Angel analyst formerly worked in the South Crofty tin mine in the 1980s and holds shares in Cornish Metals

Golden Metal Resources (GMET LN) 14.5p, Mkt Cap £13.1m – Coincident geophysical and geochemical anomalies at the Garfield project, Nevada

1. Golden Metal Resources reports that a recent ground magnetic geophysical survey at its Garfield project in the Walker Lane mineral belt of Nevada has identified anomalies coincident with previously identified copper-in-soil geochemical anomalies over its ‘High-Grade’ and ‘Power-Line’ zones.
2. The new geophysical information “directly underlie the strongest parts of the copper (Cu)-in-soil anomalies identified during the recently completed geochemical survey and are also coincident with strong Cu – gold (Au) & silver (Ag)-in-rock results … related to a buried copper porphyry system(s)”.
3. The ‘High-Grade’ zone hosts 2 of the magnetic anomalies measuring 550m x 350m and 500m x 250m respectively, and a 600m x 300m area in the southwestern part of the ‘Power-Line’ zone.
4. Golden Metal Resources explains that “the anomalies indicate they are likely related to large buried magnetic bodies at depth”.
5. Explaining that the geophysical results validate the company’s exploration targeting, Oliver Friesen, CEO, said that “our confidence has grown even stronger … [and support the company’s] … belief that a mineralised copper porphyry system may exist at Garfield”.
6. Further analysis of the magnetic data is underway to provide a 3D model of the three anomalies.
7. Today’s announcement also says that “Following the success of the Garfield magnetic survey, Golden Metal … has commissioned SJ Geophysics to undertake a ground magnetic geophysics survey across some of the main target areas at … [its Nevada tungsten project at] … Pilot Mountain”.
8. The company also confirms that preparations for drilling at Pilot Mountain are “well underway and Golden Metal expects to receive final drilling permits imminently”.

Conclusion: Geophysical and geochemical data both point to a buried porphyry target at Garfield.

Group 6 Metals (G6M AU) A$0.054, Mkt Cap A$50mn – Record monthly tungsten production at Dolphin mine

• Group 6 Metals, which operates the Dolphin Tungsten Mine in Tasmania, provides a production update.
• March mining operations saw 50kt of ore extracted at an average grade of 0.48% WO3.
• Ore processed at 24.5kt, up 49% mom following the refurbishment of two ball mills.
• Plant utilisation at 77%, processing 43tph.
• March production of 5.7kt mtu tungsten concentrate at an average grade c.60%.
• Company reports tungsten prices are stable at $305-320/MTU.

Hummingbird Resources (HUM LN) 7.0p, Mkt Cap £58m – Kouroussa update

• The Company issued a formal Step In Notice to Corica amid ongoing dispute with its mining contractor.
• The notice allows the Company to take contractual control of operations at Kouroussa and issue direct instructions to Corica and tis third party contractors and, if necessary, appoint alternative operators or contractors.
• The team highlights the notice is not a termination of the contract as the Company continues constructive dialogue with Corica.
• In the meantime, the Company engaged ETASI, a West African mining contractor that operates the support fleet at site, to add to existing fleet to increase mining volumes.
• Since suspension of mining by Corica mid March, the processing plant has been treating stockpiles and the ROM provided by small existing ETASI support mining fleet.
• Gold pour averaged ~700oz per week, equivalent to ~36koz in annualised production rate.

Kavango Resources* (KAV LN) 1.07p, Mkt Cap £14m – Tailings upgrade from Nara Gold Project

• Kavango Resources has provided an update on its Nara Gold Project in Zimbabwe.
• The Company’s new MRE for the two Nara tailings dumps now stands at a combined:

• • Measured: 77.7kt at 0.54g/t Au for 1,350koz Au.
  • Indicated: 221kt at 0.65g/t Au for 4,640koz Au.
  • Inferred: 12.2kt at 0.66g/t Au for 258oz Au.
• Management believes there is further upside potential in the tailings dumps with expected tonnage at deeper levels – grade enrichment was noted at depth.
• Kavango is currently assessing the optimal processing route at a local facility.
• The Company is working towards optimising cash flow potential from the tailings dumps, with ongoing metallurgical testwork set to dictate final plant design.

Conclusion: We look forward to updates from Kavango on their metallurgical testwork as they look to optimise value creation from the gold-bearing  tailings dumps.

An SP Angel Analyst holds shares in Kavango

Petra Diamonds (PDL LN) 40.3p, Mkt Cap £84m – Fifth sales tender shows improving rough diamond prices

• Petra Diamonds has announced that its fifth diamond sales tender of FY 2024, realised US$49m from the sale of 362,132 carats bringing FYTD sales to 2,450,613 carats realising US$285 (2022 – 2,237,010 carats realising US$316m).
• Average prices for the tender increased by ~22% compared to the previous tender to US$136/carat bringing the FYTD average to US$116/carat.
• The company explains that “Like-for-like rough diamond prices decreased marginally by 0.8% on Tender 4 FY 2024. Prices for plus 2ct goods remained solid, while prices for smaller goods showed some seasonal weakness contributing to the overall decline. Average like-for-like prices for the first five tenders of FY 2024 were down 8.5% year-to-date compared to the equivalent five tenders of FY 2023”.
• FYTD prices for the Cullinan mine are US$115/carat, US$99/carat for the Finsch mine and US$200/carat for the Williamson mine.
• The company says that it expects the Cullinan mine to realise prices in the range US$105-125/carat, US$95-110/carat for the Finsch mine and US$200-225/carat from the Williamson mine.

Rainbow Rare Earths (RBW LN) 9.75p, Mkt cap £59m – Metallurgical results from Uberaba, Brazil

• Rainbow Rare Earths reports that mineralogical and hydrometallurgical work on phosphogypsum material from Mosaic’s Uberaba site in Brazil has shown grades of 4,520-7,912ppm total rare-earth oxides (TREO) with neodymium/praseodymium (NdPr) comprising 24.7% of the rare-earths.
• The announcement explains that phosphogypsum from Uberaba “has similar characteristics to Phalaborwa” which is also derived from “a hard rock carbonatite phosphate deposit”.
• The company says that the similarity with Pjalaborwa means that “the Uberaba material is amenable to direct acid leaching, which the testwork demonstrated can recover between 31% to 65% of the TREO”.
• CEO, George Bennett, described the initial results as “very positive because they demonstrate that the Uberaba material shows good liberation results that bode well for a potentially economic operation to recover the rare earth elements”.
• He said that Rainbow Rare Earths’ expects “that a significant portion of the process flowsheet and intellectual property developed for Phalaborwa can be applied to rare earth extraction at Uberaba. However, given the scale of the Uberaba project, we could expect a rare earths processing operation there to be significantly larger than that at Phalaborwa”.

Conclusion: Initial tests suggest that Rainbow Rare Earths’ process for treating material at Phalaborwa to recover rare-earths may also be applicable to Mosaic’s, larger, waste stacks from its phosphoric acid plant at Uberaba in Brazil.  We look forward to follow-up results.

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

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

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

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