SP Angel Morning View -Today’s Market View, Tuesday 18th July 2023

Gold rises on the weaker dollar as inflationary pressures ease

MiFID II exempt information – see disclaimer below

Andrada Mining (ATM LN) –Commissioning of tantalum bulk sampling plant and convertible loan notes issued

Celsius Resources* (CLA LN) – Approval for MCB Project’s Environmental Protection and Enhancement Program

Galantas Gold* (GAL LN) – Omagh MRE update

Kore Potash* (KP2 LN) – Quarterly update

IGO Ltd (IGO AU) A$14.8, Mkt cap A$11.2bn – Impairment of nickel assets by 75% as higher capital and operating costs bite

Leo Lithium (LLL AU) – Suspension of shares until Thursday’s announcement

Libero Copper & Gold (LBC CN) – C$2.0m equity raise

Anglo Asian Mining holds 21.3m shares (~20%) and 12.1m warrants in the Company

Panthera Resources Plc (PAT LN) – Panthera extends date for completion of litigation financing on Bhukia project dispute in India

Petra Diamonds (PDL LN) – Operating update and refreshed production guidance

Rainbow Rare Earths (RBW LN) – Can Rainbow & K-Tech prove to be a part of the West’s answer to China’s weaponisation of Critical metals?

Savannah Resources* (SAV LN) – Equity placing completed raising £6.5m

VOX Markets:  14/07/2023: https://audioboom.com/posts/8334912-john-meyer-on-china-s-deflation-plus-bushveld-minerals-empire-metals-strategic-minerals

*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.

Pre-IPO financing for High-Purity Alumina project

Li-ion batteries use a separator membrane made out of High-Purity Alumina

1. High-Purity Alumina (HPA) is an inert chemical with high thermal stability. It gives good heat resistance and insulation making it ideal as a coating for separator membranes.

1. The project alumina has been shown to be suitable for Li-ion batteries, LED lighting and synthetic sapphire for smartphones and tablets,
2. The resource contains a JORC inferred resource sufficient for 10,000 – 20,000tpa of HPA >30 years
3. The process uses an innovative process flowsheet combining commercial proven technologies with recent metallurgical tests producing 99.995% alumina.
4. CRU estimate demand for HPA powder could reach 187,000t in 2028 from 19,000t in 2018.
5. CRU predict substantial demand growth led by Li-ion battery and LED production,
6. Price: High-purity alumina sells for ~$30,000/t today up from $24,000/t in 2018,
7. The company looking to fund HPA studies, metallurgical work, working capital and listing costs

*SP Angel’s role is limited to making introductions and interested parties should be aware that investment in a private company can present certain risks not present in listed companies (e.g. limited or no liquidity and no rules compelling disclosure of information to investors). This offer is open to professional investors only and is not offered to retail investors. 

Copper prices weaken as Chinese stimulus pledges continue to disappoint traders

• LME copper is weakening below $8,500/t as longer-term demand prospects look gloomy on Chinese slowdown.
• Chinese officials have been emphasising their desire to roll out policy to support consumption, a move away from their traditional debt-fuelled splurging on metals-supportive infrastructure projects.
• However, traders suggest that this may be priced in, with weak volumes suggesting speculators are holding off on bets in either direction.
• A weak US dollar is providing some marginal support to copper prices.
• The Chilean Peso, which generally appreciates on buoyant copper prices, fell to its lowest close since April 10.
• Copper cash spreads fell $11.25 to -$23, sliding further into contango in a sign supply remains accessible and demand is weak.

Gold – $1,963/oz – Prices rise as dollar weakness persists and US bond buying weighs on yields

• Gold prices have climbed in line with a combination of sliding treasury yields and a sliding US dollar.
• The dollar is sitting at a one-year low, supporting gold buying.
• Treasury yields on the 10-year have fallen to 3.71%, weighing on real yields which traditionally pressure non-yielding gold.
• Focus turns to US retail sales due this afternoon which should provide an update on the state of the US consumer.

Rio Tinto’s financing of Sovereign Metals* indicates a keen desire to invest in new projects

• Rio Tinto is back in the junior market again looking for critical metals and EV materials.
• Its deal with Sovereign Metals* yesterday demonstrates a willingness to help accelerate new projects even in regions where it has little experience.
• We are hearing more anecdotal reports of major and mid-tier miners looking to invest in early-stage exploration and project evaluation.
• Much of this is under-the-radar with private companies though we expect to see more deals announced with listed companies this summer.

*SP Angel act as Nomad and broker to Sovereign Metals.  

Economics

US – NY Fed Empire State manufacturing index reduced to a poultry 1.1 vs 6.6

China – China records highest ever temperature with 52.2C recorded in Sanbao, Xinjiang

• John Kerry travelled to Beijing yesterday where temperatures are forecast to hit 39C tomorrow.

• The authorities must be concerned about global warming, particularly with another heatwave in the north and flooding in the south.
• Evergrande results, now overdue, are forecast to show huge losses for 2022 and 2021 where sales fell to $4.4bn and $61.8bn vs $101bn in 2020
• Evergrande are carrying around $300bn in total liabilities and is working on an offshore debt restructuring plan. The company was suspended on the HKSE last March.
• Economists expect China GDP growth to come in at around 3% for the full year.
• GDP is being helped lower by falling retail sales at 3.1% yoy in July vs 12.7%.
• Youth unemployment hit a new new high of 21.3% from 20.8% in May.
• China is expected to announce new consumption-led stimulus following its next Politburo meeting at the end of this month.
• New initiatives may also include further easing of restrictions on lending on property purchases and further modest cuts in interest rates.
• Few expect President Xi to announce substantial construction stimulus as seen in past crises.

UK – Grocery inflation eased for a fourth consecutive month in July, FT cites data published by Kantar.

• Inflation slowed down to 14.9% in the four weeks to July 9, down from 16.5% in the previous month.

Russia/Ukraine – Russia pulled out of the grain deal as the agreement came officially to an end at midnight Tuesday.

• Ukraine suggested exports of its grains can be maintained under supervision of an international armed patrol force to ensure their safety while being shipped from Black Sea ports.
• President Erdogan representing Turkey in the agreement told reporters that President Putin “wants to continue the agreement” and that he will discuss the renewal of the deal when they meet in person next month.
• Ukraine is one of the world’s largest exporters of sunflower, maize, wheat and barley.

Currencies

US$1.127/eur vs 1.121/eur yesterday. Yen 138.28/$ vs 138.62/$. SAr 17.969/$ vs 18.018/$. $1.310/gbp vs $1.308/gbp. 0.683/aud vs 0.661/aud. CNY 7.174/$ vs 7.175/$.

Dollar Index 99.63 vs 99.94 yesterday

Commodity News

Precious metals:

Gold US$1,963/oz vs US$1,956/oz yesterday

Gold ETFs 92.1moz vs US$92.1moz yesterday

Platinum US$988/oz vs US$975/oz yesterday

Palladium US$1,303/oz vs US$1,258/oz yesterday

Silver US$24.94/oz vs US$24.74/oz yesterday

Rhodium US$4,350/oz vs US$4,350/oz yesterday

Base metals:   

Copper US$ 8,496/t vs US$8,549/t yesterday

Aluminium US$ 2,257/t vs US$2,254/t yesterday

Nickel US$ 21,160/t vs US$21,284/t yesterday

Zinc US$ 2,404/t vs US$2,391/t yesterday

Lead US$ 2,094/t vs US$2,109/t yesterday

Tin US$ 28,480/t vs US$28,575/t yesterday

Energy:           

Oil US$78.4/bbl vs US$79.0/bbl yesterday

• Northeast Asia spot LNG prices are trading below $10/mmBtu despite a heatwave impacting parts of the region, with TotalEnergies 2Q23 guidance also highlighting the ongoing impact of a less favourable LNG commodity price environment y/y, illustrated by an average LNG sales price near $10/mmBtu.
• Shell will supply Morocco with an annual 0.5bcm of LNG under a 12-year deal, the North African country’s energy ministry said on Friday, via a gas pipeline linking to Spanish ports to enable ONEE to operate two power stations in northern and eastern Morocco that previously operated on Algerian gas using the same pipeline.

Natural Gas US$2.534/mmbtu vs US$2.544/mmbtu yesterday

Uranium UXC US$55.40/lb vs US$55.40/lb yesterday 

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$112.7/t vs US$112.0/t

Chinese steel rebar 25mm US$525.5/t vs US$528.6/t

Thermal coal (1st year forward cif ARA) US$101.0/t vs US$101.0/t

Thermal coal swap Australia FOB US$134.5/t vs US$128.0/t

Coking coal swap Australia FOB US$225.0/t vs US$225.0/t

Other:  

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

NdPr Rare Earth Oxide (China) US$63,006/t vs US$61,892/t

Lithium carbonate 99% (China) US$40,773/t vs US$41,658/t

China Spodumene Li2O 6%min CIF US$4,080/t vs US$4,080/t

Ferro-Manganese European Mn78% min US$1,133/t vs US$1,127/t

China Tungsten APT 88.5% FOB US$315/mtu vs US$315/mtu

China Graphite Flake -194 FOB US$675/t vs US$685/t

Europe Vanadium Pentoxide 98% 7.5/lb vs US$7.5/lb

Europe Ferro-Vanadium 80% 32.25/kg vs US$32.25/kg

China Ilmenite Concentrate TiO2 US$310/t vs US$309/t

Spot CO2 Emissions EUA Price US$95.1/t vs US$94.6/t

Brazil Potash CFR Granular Spot US$345.0/t vs US$335.0/t

Battery News

BYD submit $1bn investment proposal to build EVs and batteries in India

• The Chinese automaker has submitted the $1bn proposal to build EVs and batteries in partnership with a local company, insiders with direct knowledge told Reuters last week.
• The longer-term plan is to build a full line-up of BYD-brand electric cars in India from hatchbacks to luxury models, one of the people said.
• BYD’s push into India is part of its rapid global expansion to challenge Tesla, which still leads in sales of EVs alone.
• If the India investment is approved, BYD would have a presence in all major global car markets except for the United States.

Tesla build first Cybertruck at Giga Texas after two years of delays

• After being announced in 2019, Tesla has pushed back production times and Musk had last year cited shortages in sourcing components as the reason for pushing the launch of Cybertruck into 2023.
• Musk has said that Tesla would like to produce a quarter-million Cybertrucks a year, depending on demand, with an aim of mass production by the end of 2023.

Company News

Andrada Mining (ATM LN) 6.94p, Mkt cap £105m –Commissioning of tantalum bulk sampling plant and convertible loan notes issued

• Andrada reports it has raised £7.7m through the issue of 77 unsecured, convertible loan notes of £100k each.
• Loan buyers will also receive two warrants in Andrada for every £1 of Loan Note held, with each warrant allowing the holder to subscribe for one ordinary share.
• The loan notes are convertible at a price of 9.45p/35% premium to the 7p 30-day VWAP.
• If Andrada wants to redeem the loan notes early, it is required to pay an early redemption premium of 20% on the value of the loan notes being redeemd + outstanding interest.
• The Loan Note lenders would also have the option to convert their notes into shares at the conversion price if Andrada redeems the notes early.
• Andrada announces today that the construction of the lithium bulk sampling plant and tantalum circuit is complete.
• Funding will be used for the commissioning of the bulk sampling plant and tantalum circuit, as well as the commencement of the Company’s lithium feasibility study, on-going exploration and met testwork programmes.
• Andrada expects today’s Loan Note issue of £7.7m combined with the Development Bank of Namibia/Orion senior secured debt facility of £4.4m currently under negotiation should be sufficient for the next 15-18 months.

Celsius Resources* (CLA LN) 1.25p, Mkt Cap £27.6m – Approval for MCB Project’s Environmental Protection and Enhancement Program

(Celsius has agreed to sell a 30% economic ownership of MCB copper mine for US$43m implying a valuation of >$143m on consummation of the deal)

Click Link for SP Angel research report PDF note – MCB project NPV@8% US$463m, IRR of 34.3%

1. The Philippines Mines and Geosciences Bureau has granted EPEP ‘Environmental Protection and Enhancement Program’ approval for the MCB copper project.
2. Makilala Mining, Celsius’s local subsidiary which holds the MCB project has also been given approval is also given for the FMRDP ‘Final Mine Rehabilitation and/or Decommissioning Plan’.
3. “The issuance of the Certificate of Approval indicates the Company has instituted these environmental measures prior to the commencement of construction and mining operations, and that the Company has committed to environmental protection for the life of the mine. “
4. Management have committed to a “Contingent Liability and Rehabilitation Fund, to ensure satisfactory compliance with the commitments and performance of the activities stipulated in the EPEP-FMRDP.”
5. The mining permit requires the approval and support of the EPEP-FMRDP which contains “contingency and emergency preparedness as well as environmental monitoring and implementation costs”
6. The FMRDP deals with mine closure scenarios and remediation processes including cost estimates.

Conclusion: Management le by Julito R. Sarmiento, Chairman and Peter Hume, Managing Director have worked to achieve approvals which should lead to the issue of a mining permit in August.

*SP Angel acts as broker to Celsius Resources

Galantas Gold* (GAL LN) 17p, Mkt Cap £18m – Omagh MRE update

• The Company released an updated MRE for Kearny and Joshua veins on the flagship Omagh Gold Project in Northern Ireland.
• Updated mineral resource stands at 1.4mt at 6.29g/t for 293koz including:
• 0.8mt at 6.82g/t for 167koz in the Measured and Indicated category;
• 0.7mt at 5.69g/t for 126koz in the Inferred category.
• Kearney accounts for ~60% of the resource between two veins.
• All other veins on the property were not updated with the latest mineral resource remaining unchanged.
• Total MRE now stands at 1.7mt at 6.40g/t for 352koz with Kearney and Joshua accounting for over 80%.
• The update compares to 2.2mt at 7.39g/t for 521koz estimated previously and 1.2mt at 5.78g/t for 224koz when more conservative factors are applied.
• The update is based on 42 additional drill holes focused on Kearny and Joshua veins from the last update in 2014 as well as a complete review of the previous vein wireframe interpretations.
• Upside potential to the current MRE remains with mineralisation open along strike and to depth.
• Drilling is ongoing on site with the plan test down plunge extension of the Joshua Vein to the north.

Conclusion: The mineral resource update following a comprehensive programme to infill Kearny and Joshua veins accounting for >80% of the resource at the high grade Omagh Gold Project. The update reflects a better understanding of the deposit with nearly 60% of the total at Kearny and Joshua in the Measured and Indicated category with a further upside to the total remaining as mineralisation is open along strike and at depth.

*SP Angel act as Broker to Galantas Gold

IGO Ltd (IGO AU) A$14.8, Mkt cap A$11.2bn – Impairment of nickel assets by 75% as higher capital and operating costs bite

• IGO reports it expects to record an impairment expense of between A$880-980m on the Forrestania and Cosmos assets acquired from Western Areas in June 2022.
• IGO has reassed the accounting value of Cosmos and Forrestania to factor in increasing CAPEX and operatig costs, delays in mine production schedules and Cosmos development delays.
• IGO has withdrawn guidance previously provided for Cosmos.
• Management notes the ‘disappointing… capital and operating costs escalation and unforeseen operational challenges’ which have affected the value of the assets.
• Analysts have moved to write off IGO’s previously announced downstream nickel strategy as a result.

Conclusion: We suggest that the rising nickel powerhouse Indonesia is continuing reshape the global nickel market, a theme we expect to continue as the country moves to prioritise downstream/refined exports.

Kore Potash* (KP2 LN) 0.56p, Mkt Cap £19m – Quarterly update

• Discussions regarding final terms of the EPC contract for the Kola Potash Project
• SEPCO and PowerChina, a SEPCO parent Company, commenced work to support the provision of guarantees in the EPC contract including performance and retention bonds for the completion of construction and the operating performance of Kola.
• Summit Consortium reiterated its commitment to provide financing proposal for the full capital cost of Kola including royalty and debt funding within six weeks of finalisation of EPC contract terms.
• Strategic options regarding the DX Project are being considered.
• Closing cash balance stood at US$2.6m (Q1/CY23: $3.8m) with no debt as of Q2/CY23 after accounting for $1.1m invested in Kola ($1.0m) and $0.1m (DX) during the period.

Conclusion: Discussions regarding the final EPC contract and contractor guarantees with SEPCO and PowerChina are ongoing with Summit Consortium reiterating its support for the project and readiness to provide a financing solution once EPC terms are finalised.

*SP Angel acts as Nomad and Broker to Kore Potash

Leo Lithium (LLL AU) – SUSPENDED – Suspension of shares until Thursday’s announcement

• Leo Lithium has suspended trading in advance of an announcement due Thursday 20^th July.
• The Company has not offered much in the way of information regarding the pending announcement.
• Speculators suggest the suspension may be regarding the planned changes to the Malian mining code reported by Reuters over the weekend.
• The Mali government is reportedly considering increasing its option to acquire stakes in mining projects to 30% vs 20%, alongside an additional 5% for local stakeholders.
• Last week Leo awarded a mining contract worth $348m to Corica Mali for a five-year term production schedule.
• The contractor began early works construction last week and are currently pre-stripping and DSO mining.
• Leo expects first spodumene concentrate production in H1 2024.
• We expect Leo Lithium’s Thursday update will provide an important read-across to Kodal Minerals,* which is developing the Bougouni Lithium Project in Mali.

*SP Angel acts as financial advisor and broker to Kodal Minerals.

Libero Copper & Gold (LBC CN) C$0.06, Mkt Cap C$6m – C$2.0m equity raise

Anglo Asian Mining holds 21.3m shares (~20%) and 12.1m warrants in the Company

• The Company is raising C$2.0m issuing 40m units at C$0.05/share.
• Each unit is comprised of one share and a warrant (36m exercise period and C$0.075 exercise price).
• Net proceeds from the raise will be used for exploration at the Esperanza Project in San Juan, Argentina, and the Mocoa deposit in Putumayo, Colombia.

Panthera Resources Plc (PAT LN) 6.69p, Mkt cap £10.4m – Panthera extends date for completion of litigation financing on Bhukia project dispute in India

• Panthera Resources reported yesterday on its arbitration financing over its gold projects in India held within Indo Gold Pty.
• Management are negotiating for US$10.5m in litigation financing with LCM Funding SG Pty Ltd as previously announced in February.
• LCM continues to work on its detailed due diligence in relation to its litigation financing and may require further changes to the terms and conditions Arbitration Financing Agreement to reflect any settlement in-kind from the Bhukia Project dispute such as the grant of a licence.
• Panthers has therefore agreed to a further extension to the LCM due diligence to 28 July.
• “In addition to pursuing a potential claim against the Republic of India for breaches of its obligations under the Australia-India Bilateral Investment Treaty, the Company continues to pursue an amicable resolution of the dispute and the grant of the Bhukia Prospecting Licence.“

Conclusion:  There is a reason why foreign mining companies avoid India for mining. The situation at Panthera perfectly highlights why no sensible mining company dares to go there.

Petra Diamonds (PDL LN) 74p, Mkt Cap £140m – Operating update and refreshed production guidance

• Petra Diamonds reports an operating update for Q4 and FY 2023 and provides guidance for FY 2024 to FY 2026.
• Petra reports diamond production fell 5% to 620kcts qoq owing to sliding grades at Cullinan and Finsch.
• The Company has reduced its full year production guidance for 2023 to 2.67mcts vs previous guidance of 2.75-2.85mcts and down from FY 2022 production of 3.35mcts.
• Q4 saw total rough diamond sales at $49.9m vs Q3 at $67.8m, taking 2023 sales to $328.4m vs $584.1m in 2022.
• Petra explains the reduction in diamond revenue as a 34% reduction in rough diamond sold following a 20% reduction in diamonds recovered.
• Petra also notes a reduction in exceptional stone sales to $12.6m for the year vs $89.1m in 2022.
• The company has also suffered from deferred sales of 75.9kcts from FY 2023 to FY 2024.
• Positively, Petra’s Williamson project received regulatory approval for the commissioning of a new Tailings Storage Facility, which commenced commissioning in July and production resuming ahead of schedule.
• Furthermore, Petra has reduced gross debt to $247.3m at period end vs $366m in June 2022 following the repurchase of a tranche of 2026 Loan Notes.
• However consolidated net debt has increased to $176.7m vs $40m same period last year following the aforementioned diamond sale deferral to 2024 and increased capex for mine extension projects.
• Going forward, Petra expects a ‘substantial production increase over the next three years’ as it extends capacity at Cullinan and Finsch.
• Petra reports grades have stabilised at Cullinan and Finsch and expects recoveries to improve going forward.
• The Company is anticipating new wage discussions with organised labour to begin in the coming months.

Conclusion: Management expects an increase of up to one million carats in production by FY 2025, providing some good news to Petra shareholders, despite the substantial drop in diamond sales revenue yoy and sales deferral to next year. The Company sees operations at Cullinan and Finsch to have stabilised and grade and recoveries to be sustained going forward. Management’s primary focus for the next 12 months will be reducing waste dilution and maintaining grade control. The team remains optimistic that an improvement in the natural diamond market is inbound owing to a ‘structural supply deficit.’ We remain wary of the longer-term supply dynamics of the rough, mined diamond market given the increasing market share of synthetic, lab-grown diamonds.

Rainbow Rare Earths (RBW LN) 13.71p, Mkt cap £82m – Can Rainbow & K-Tech prove to be a part of the West’s answer to China’s weaponisation of Critical metals?

• Rainbow Rare Earths reported yesterday on a non-binding agreement with Mosaic over a phosphogypsum stockpile at Uberaba in Brazil.
• The two companies jointly agreed to collaborate on the development of a process flowsheet and work on a PEA for the extraction of REEs from the Uberaba tailings.
• Rainbow’s K-Tech technology proposes to use a CIX circuit for loading RE Elements onto cation resin before a CIC ‘continuous ion chromatography’ process for the separation of specific REE metal oxides.
• Rainbow’s front end process flow sheet for the production of a mixed RE sulphate is subject to a joint patent been developed with K-Tech.
• Rainbow also has exclusive rights to apply K-Tech’s back end RE separation technology in Brazil.
• ReeTec, is also using ‘CIC’ separation technology in Norway, see: https://www.reetec.no/.
• ReeTec claims to have “proven the technology from the laboratory, via a successful operation of a pilot unit and an industrial scale demo-plant which has been up and running since 2019. A full-scale industrial plant is being planned.”
• The Rainbow process uses existing CIC technology which is used in the food, mining and other industries to chemically separate metal ions through a chromatographic process.
• Bench / laboratory scale test work shows early success with pilot plants being built at Mintek (front-end) and Florida (back-end separation) to test how well the process scales up for REE separation.
• The front-end pilot plant is currently running at Mintek at a meaningful scale for a pilot plant, see pics on website: https://www.rainbowrareearths.com/projects/gallery/
• Cost:  Early examination of the process flowsheet suggests a relatively simple process with relatively low cost, though much will depend on recovery rates, yields, acid, reagent and energy consumption.
• Rainbow’s PEA / scoping study indicates an average cost of US$33.86/kg of separated REE oxide making this the lowest cost REE project in the West and giving rise to a substantial ~75% margin depending on the cost of financing and near-term price forecasts of: Nd US$110/kg; Pr US$112.50/kg; Dy US$340/kg; Tb US$1,875/kg.
• Uberaba produces a phosphate slurry from a similar hard rock carbonatite to that at Phalaborwa in South Africa with.
• Uberaba’s phosphogypsum residues result from phosphoric acid production using sulphuric acid and heat, in an identical process to that used at Phalaborwa indicating that capital and operating costs should be similar.
• Production potential: In theory, Rainbow’s front-end and K-Tech’s separation process could extract ~4.000 tpa of the four key magnet RE oxides being NdPr, Dy & Tb from Uberaba in Brazil. This could run in parallel with the Phalaborwa plant at some 1,750tpa–2,000 tpa to give ~6,000tpa representing around 7% of total primary and secondary NdPr production in 2022.

Conclusion:  If the process works well at a larger scale on phosphogypsum residues then China could lose its ability to weaponise REEs. If Rainbow’s and the K-Tech process works really well at with low cost REE production, then Rainbow could even provide a solution to the horrific pollution suffered by workers in Chinese REE plants. Rainbow’s front-end pilot plant to produce a mixed RE sulphate has been commissioned with the 1^st sulphate production to be exported to the US for final separation on schedule for the 3^rd quarter 2023 and the final separated RE oxides from the K-Tech back-end also scheduled for the end of the 3^rd quarter 2023.

Savannah Resources* (SAV LN) 4.6p, Mkt Cap £78m – Equity placing completed raising £6.5m

BUY – 21.1p (from 22.6p)

• PrimaryBid offer was completed raising a further £0.4m taking the total equity placing to £6.5m.
• Following the placing, the Company now has £11.4m in the bank (no debt) to progress DFS and environmental permitting related work on the flagship Barroso Lithium Project.

Conclusion: The retail offer via PrimaryBid adds £0.4m to the equity raise taking the total to £6.5m, all completed without a placing discount reflecting strong demand from existing and new shareholders.

As previously suggested, we updated our target valuation to account for dilution of 139.2m new shares, while highlighting remaining strong investment case as the team continues to de-risk the largest hard rock spodumene deposit in Europe.

*SP Angel acts as Nomad and Broker to Savannah Resources

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

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

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

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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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%

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