SP Angel Morning View -Today’s Market View, Tuesday 18th March 2025

Gold pushes higher as US gold stockpiles fall and banks hike price targets

MiFID II exempt information – see disclaimer below

Ariana Resources (AAU LN) – 2025 production guidance envisages a 25% increase in gold output

Atalaya Mining (ATYM LN) – Good start to 2025 as copper output expected to improve and costs fall

Founders Metals (FDR CN) – Positive assay results from Van Gogh Gold project, Suriname

Greatland Gold (GGP LN) – 2024 MRE includes Greatland’s inaugural estimate for Telfer

Katoro Gold (KAT LN) – Completion of the 31 Explore acquisition to focus on Canada as Haneti project in Tanzania is dropped

KEFI Gold and Copper* (KEFI LN) – Tulu Kapi project funding and community engagement update

Lithium Argentina (LAR CN) – Full year results as Cauchari-Olaroz ramp up continues

McEwen Mining (MUX CN) – Full year operational results as Los Azules development progresses

Pensana (PRE LN) – Financing update on Longonjo REE project in Angola

Power Metals Resources* (POW LN) – Continuation of portfolio rationalisation strategy

Snowline Gold (SGD CN) – C$20m equity raise

Gold ($3,021/oz) pushes higher as US gold stockpiles fall and banks hike price targets

• Gold prices have firmed up over $3,000/oz, with price touching $3,030/oz this morning.
• The move follows sustained strength, despite cooling fears of bullion shortages, with US warehouses recording their biggest decline in stockpiles since December.
• Traders had been rushing to bring gold across the Atlantic over tariff concerns, although these seem to have been allayed.
• Despite easing tightness in the physical market, gold prices are extending gains.
• This comes as China continues to buy, and analysts hike price targets again.
• Gold sentiment seems to be improving in the financial community, with ETF holdings now pushing higher, nearing 87moz but well below levels hit during COVID, suggesting more room to run.
• The dollar continues to fall, despite steady US treasury yields, reflecting rallying currencies in Europe and Japan.
• Investors are also drawn to gold as a result of its limited counterparty risk, as opposed to bank deposits, derivatives and government loans etc.
• This factor may be drawing flows amid increasing market and geopolitical uncertainty, with US equity markets weakening amid growth slowdown concerns.
• European investors may also be looking to gold amid the recent fiscal impulse, with Germany planning to ramp up defence spending amid slowing economic growth.

Conclusion: The fragmentation of the past 20 years of globalisation is likely a key theme in this gold bull run. This was triggered by sanctions imposed upon Russia, prompting diversification away from dollar-denominated foreign reserve holdings. This has been reflected in a doubling of gold buying from Central Banks, led primarily by Western adversaries, notably China. This theme has continued under Trump, with a potential end to ‘Pax Americana,’ and rising animosity between the US and its long-held western allegiances, pushing countries to diversify their reserve base.

Copper ($9,834/t) rally amid demand green shoots in China

• Copper prices have strengthened above $9,834/t, with the key $10,000/t level in sight.
• Meanwhile Indonesia has granted approval to Freeport to export copper concentrate, through to September.
• Regarding demand, copper’s new five-month high may follow Beijing’s vow to revive consumption.
• The spending plan aims to boost people’s incomes, amid sustained deflation and continued property market contraction.
• China retail sales increased 4% in Jan-Febyoy, exceeding forecasts, whilst new-home prices fell at a quicker pace in February than expected.
• Home sales fell from 4Q24 levels over Jan/Feb, but the decline was smaller than the fall last year before the 4Q24 stimulus. (Bloomberg)
• Supply remains ample, with new home starts contracting and property investment still weak.
• Bloomberg estimate February home sales rates will take 5.3 years to absorb unsold floor space, vs 5.6 years in 3Q24.
• However, March is showing rebounding transactions after a weak holiday period, with analysts anticipating a stabilisation in sales following a weak winter period.

Economics

China – CCP Two Sessions meetings

• New Stimulus to come after Two Sessions meetings forecast a record high budget deficit.
• Target for the deficit-to-GDP ratio raised to a new high of 4% from last year’s target of 3% with Li Qiang calling for a more “proactive fiscal policy”.
• Chinese analysts see China as needing to drive domestic growth to make up for a loss of demand from the US.
• Coupons will likely be used alongside other fiscal stimulus to encourage greater house buying which generally prompts demand.
• China is to lift pension benefits for rural and non-working urban residents by CNY20/month while increasing basic pension benefits helping 320m people.
• GDP growth target – no change.
• Trump has levied a 20% tariff and has threatened up to 60% tariffs on Chinese imports
• Deficit forecast to rise to CNY5.66tn ($784bn) from CNY4.06tn ($570.1bn) with central government holding 86% or CNY4.86tn of the total deficit with greater support for local authorities to fill in local debt.

US – Retail sales came in weaker than expected in February with previous month’s gauge revised lower pointing to weakening sentiment among US consumers. (Bloomberg)

• While control group sales gauge performed better, some commentators attributed better reading to seasonal adjustment issues.
• Separately, NY manufacturing activity measure dropped in March to the lowest since early 2024.
• Measures of prices picked up consistent with an outlook for slower growth and faster inflation as tariffs kick in.
• Retail Sales (%mom, Feb/Jan/Est): 0..2/-1.2(revised from -0.9)/0.6
• Retail Sales Control Group (%mom, Feb/Jan/Est): 1.0/-1.0(revised from -0.8)/0.4
• Empire Manufacturing (Mar/Feb/Est): -20.0/5.7/-1.9

Japan – The central bank started its two-day meeting with expectations for rates to be held steady.

• The currency weakened 0.5% to 14.90 after hitting a high of ~147 earlier this month, the highest since last October.

Germany – Lawmakers are expected to approve a debt funded spending bill on defence and infrastructure. (Bloomberg)

• The legislation will exempt defence spending above 1% of GDP in borrowing restrictions and setup a special infrastructure fund that can borrow up to €500bn over 12 years.

Russia – President Putin and Donald Trump are set to have a phone call later today to discuss the US proposed 30-day ceasefire.

• US administration is expected to report on results of the conversation right after the phone call.

Israel – Hamas targets were hit in Gaza after a two-month ceasefire collapsed. (FT)

• 326 people are reported killed and 440 injured in the air strikes on Tuesday.
• Strikes were launched in response to “repeated refusal to release our hostages” and rejection of mediators’ proposals in talks to extend the ceasefire, Benjamin Netanyahu said.
• The operation would “continue for as long as necessary, and will expand beyond air strikes”, suggesting a new ground campaign may follow.

Currencies

US$1.0952/eur vs 1.0879/eur previous. Yen 149.81/$ vs 148.64/$. SAr 18.016/$ vs 18.197/$. $1.300/gbp vs $1.294/gbp. 0.639/aud vs 0.632/aud. CNY 7.222/$ vs 7.237/$

Dollar Index 103.280 vs 103.78 previous

Precious metals:         

Gold US$3,026/oz vs US$2,984/oz previous

Gold ETFs 86.9moz vs 86.7moz previous

Platinum US$1,011/oz vs US$997/oz previous

Palladium US$982/oz vs US$967/oz previous

Silver US$34.1/oz vs US$33.8/oz previous

Rhodium US$5,325/oz vs US$5,250/oz previous

Base metals:   

Copper US$9,852/t vs US$9,781/t previous

Aluminium US$2,674/t vs US$2,682/t previous

Nickel US$16,345/t vs US$16,470/t previous

Zinc US$2,937/t vs US$2,973/t previous

Lead US$2,090/t vs US$2,069/t previous

Tin US$35,180/t vs US$35,282/t previous

Energy:           

Oil US$71.7/bbl vs US$70.6/bbl previous

• European energy prices fell on warmer weather forecasts and despite Germany’s energy minister denying that Russian gas flows to Europe would potentially resume following a ceasefire in Ukraine.
• Media reports that private equity firm Ardian is finalising the terms of a ~€1bn acquisition of Akuo, which has a 1.9GW renewable power portfolio in operation and under construction and a project pipeline of over 12GW.

Natural Gas €41.1/MWh vs €42.2/MWh previous

Uranium Futures $63.6/lb vs $63.6/lb previous

Bulk:   

Iron Ore 62% Fe Spot (China CFR) US$102.2/t vs US$102.3/t

Chinese steel rebar 25mm US$484.2/t vs US$484.0/t

HCC FOB Australia US$176.5/t vs US$176.5/t

Thermal coal swap Australia FOB US$102.5/t vs US$106.5/t

Other:  

Cobalt LME 3m US$36,170/t vs US$36,170/t

NdPr Rare Earth Oxide (China) US$61,686/t vs US$61,486/t

Lithium carbonate 99% (China) US$10,108/t vs US$10,017/t

China Spodumene Li2O 6%min CIF US$810/t vs US$810/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$1,005/t

China Tungsten APT 88.5% FOB US$358/mtu vs US$358/mtu

China Graphite Flake -194 FOB US$430/t vs US$430/t

Europe Vanadium Pentoxide 98% US$4.9/lb vs US$4.9/lb

Europe Ferro-Vanadium 80% US$24.0/kg vs US$24.0/kg

China Ilmenite Concentrate TiO2 US$301/t vs US$301/t

Global Rutile Spot Concentrate 95% TiO2 US$1,543/t vs US$1,543/t

Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t

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

Germanium China 99.99% US$2,825.0/kg vs US$2,825.0/kg

China Gallium 99.99% US$390.0/kg vs US$390.0/kg

Battery News

BYD unveils new platform that supports 10C charging and up to 1000kW charging power

• BYD has unveiled a new electrification platform, the “Super e-Platform,” consisting of new blade batteries that support ultra-fast charging, high performance electric motors and new silicon carbide chips.
• The new blade batteries has a 10C charging multiplier which means it could theoretically charge to full in one-tenth of an hour – six minutes.
• The batteries support charging power of up to 1,000kW or 1MW, which the company’s new supercharger supports.
• A 1000kW supercharger can add 2km of range per second or 400km in five minutes according to the company.
• The supercharger’s charging power is twice that of the peak power of Tesla’s latest V4 supercharger.
• BYD plans to build more than 4,000 of these new supercharger facilities.

Nio partners with CATL for largest battery swap network

• Nio continues to push ahead with its expansion of its battery swap network, announcing a partnership with battery maker CATL.
• The companies will work together to build the world’s largest and most advanced battery swap service network for passenger cars, enhance battery swap network sharing and accelerate the adoption and advancement of battery swap services on the basis of unified battery standards.
• CATL will support Nio in developing the battery swap network, while its Choco-Swap technology standard and network will be introduced into subsequent newly developed models under Nio’s new brand Firefly, according to a statement.
• The two networks will operate in parallel to provide EV users with a more seamless and efficient battery swap experience.

Company News

Ariana Resources (AAU LN) 1.95p, Mkt Cap £35m – 2025 production guidance envisages a 25% increase in gold output

• Ariana Resources’ production guidance for 2025 indicates a 25% rise in gold production to around 25,000oz (2024 – ~20,000oz).
• The guidance covers the expected output of the mines at Kiziltepe and Tavsan, approximately 130km by road from Kiziltepe, in Turkiye with open pit ming at Kiziltepe largely within the Arzu South pit where grades of around 1.9g/t are anticipated, and also on “high-grade (c.2.5 g/t gold) areas at the Tavsan Main pit”.
• The announcement confirms that “Ore stockpiled at Tavsan and awaiting stacking onto the heap-leach pads is c.600,000 tonnes as they remain in construction”.
• Managing Director, Dr. Kerim Sener, said that 2025 production was expected to be delivered “at an estimated combined cash cost of c.US$1,500 per ounce”.
• He said that construction at “the Tavsan mine is now largely drawing to a close, with the completion of the heap-leach pads the only major outstanding task” and that “High-grade ore from Tavsan will be processed through the CIL plant, while the heap-leach operation is commissioned in the coming months”.

Conclusion: Production guidance from Ariana Resources indicates a 25% increase in 2025 gold production to ~25,000oz at a cost around US$1,500/oz.

Atalaya Mining (ATYM LN) 365.5p, Mkt Cap £527m – Good start to 2025 as copper output expected to improve and costs fall

• Atalaya Mining reports 2024 EBITDA of €66.4m (2023 – €73.1m) and profit of €32.6m (2023 – €36.7m) with a closing net cash balance of €35.1m plus unsold copper concentrates valued at €19.7m.
• The company is proposing a final dividend of “$0.03/sh proposed, bringing the full year total to $0.07/sh”.
• The financial results reflect the production of 46,227t of copper in concentrate (2023 – 51,667t) at a cash cost of US$2.92/lb (2023 – US$2.79/lb) and all-in-sustaining cost of US$3.26/lb (2023 – US$3.09/lb).
• The company comments that 2025 has started well with production in 2025 expected within the range 48-52,000t at a cash cost of US$2.70-2.90/lb and costs on an all-in-sustaining basis of US$3.20-3.40/lb.
• Atalaya Mining also explains that it expects to reduce cash costs “along with further investments in higher grade deposits such as San Dionisio and Masa Valverde” which are expected to deliver higher grades to the 15mtpa Riotinto plant partially replacing lower grades from Cerro Colorado.
• Today’s announcement indicates non-sustaining capital investment of €58-82m in 2025 including €32-46m for waste stripping, dewatering and relocation of roads at San Dionisio along with €8-12m for an access ramp at Masa Valverde and €10-12m for “Expansion of … [the] … existing Riotinto tailings facility”.
• CEO, Alberto Lavandeira, commented that Atalaya Mining is “proud of several key accomplishments that were achieved in 2024 despite the challenges we faced with lower production. In terms of our operations, we achieved a new annual record for ore processed, exhibited good control of absolute costs, improved our safety performance and achieved reductions in our water and electricity consumption rates.”
• He expressed optimism for 2025 saying that the year had stared positively and that “We expect to make further progress at our projects in the Riotinto District including San Dionisio and Masa Valverde, which are key components of our strategy to deliver higher grade material to the plant at Riotinto”.
• Mr Lavandeira also explained that at Proyecto Touro in northern Spain, “permitting continues to advance after being awarded the status of strategic industrial project by the Xunta de Galicia”
• He said that “We believe this project will be benchmark in sustainable mining in Europe and a milestone for Galician industry. We remain confident on the outlook for copper and believe that the timing for Touro is ideal given significant copper market deficits are on the horizon”.

Conclusion: Atalaya Mining has made a positive start to 2025 and is guiding for a modestly higher, 48-52,000t of copper production at a lower cash cost of US$2.70-2.90/lb.

Founders Metals (FDR CN) C$5.75, Mkt cap C$524n – Positive assay results from Van Gogh Gold project, Suriname

• Founders Metals reports assay results from the Van Gogh project, Suriname.
• Hole VG004 returned:
  • 72m at 2.3g/t Au from 177m and 9m at 1.5g/t Au from 262m
• The Company considers Van Gogh ‘another key discovery, with characteristics most like Upper Antino.’
• The intercept is located 2km from Lawa and 3.8km from Da Vinci, running sub-parallel to the main Antino Shear Zone.
• Gold mineralisation is hosted within a subvertical mylonite zone, estimated true widths of 25-50m.
• The mineralised zone hosts broad intervals of intensely sheard, silificied country rock.
• Initial holes at Van Gogh are believed to have gone over the top of the mineralised structures, with mineralisation steeply dipping, occurring in fresh rock.
• The Company will now focus on targeting the broad, fresh rock, gold-bearing interval VG004.

Greatland Gold (GGP LN) 10.6p, Mkt Cap £1,250m – 2024 MRE includes Greatland’s inaugural estimate for Telfer

• Greatland Gold’s mineral resource estimate for 31^st December 2024 includes the Telfer mine, acquired from Newmont Mining in late 2024 for the first time bringing the group’s mineral inventory, including Havieron, to a total of 285mt at an average grade of 1.11g/t gold and 0.14% copper hosting 10.2moz of gold and 387kt of copper.
• At Telfer, the West Dome open-pit, “currently the primary source of ore mined at Telfer” contains an ‘Indicated & Inferred’ resource of 115.6mt at an average grade of 0.55g/t gold and 0.05% copper containing 2.1moz of gold and 61kt of copper with ~25% (0.5moz) of the contained gold designated ‘Indicated’ the balance as ‘Inferred’.
• The company explains that “Drilling of … additional Resources outside of … previously identified … [extensions to the West Dome mineralisation] … began in February 2025 and will continue to be a focus throughout 2025 with a second reverse circulation (RC) drill rig recently arriving on site”.
• Underground resources at Telfer’s Main Dome total 7.9mt at an average grade of 2.62g/t gold and 0.51% copper totalling 0.7moz of contained gold and 40kt of contained copper.  Approximately 0.5moz (~70%) of the total is ‘Indicated’ with the balance, ‘Inferred’.
• Today’s announcement explains that at Telfer’s Main Dome “Two underground diamond rigs are currently onsite, focused on upgrading high priority areas of the MRE, along with testing several new near-mine targets such as the Eastern Stockwork Corridor (‘ESC’) located in the Upper Mine to the east of the M Reefs”.
• In addition, there are 30.6mt of stockpiles at Telfer grading 0.45g/t gold and 0.05% copper containing an additional 0.4moz of gold (and 16kt of copper) with 10.3mt at an average grade of 0.68g/t gold and 0.07% copper classed as ‘Measured’ with the balance (20.3mt at 0.3g/t gold and 0.04%copper) ‘Indicated’.
• The ‘Indicated & Inferred’ resource at Havieron remains unchanged since the 2023 estimate of 131mt at an average grade of 1.67g/t gold and 0.21% copper hosting 7moz of gold and 270kt of contained copper.
• Commenting on the estimate, Managing Director, Shaun Day, said that the estimate for Telfer “confirms the very significant extension opportunities we see at Telfer and gives us confidence in the opportunity to extend Telfer’s mine life. This result is an important step towards a long life integrated Havieron and Telfer mining operation”.
• He commented that the “upcoming June 2025 quarter is a very exciting one for Greatland, in which we will report our first full quarter operating results for the March 2025 quarter, give production and costs guidance for FY2025, deliver our inaugural Telfer Ore Reserve estimate, and list on the ASX”.

Conclusion: The latest MRE, following the acquisition of Telfer shows an overall total of over 10moz of gold, including the resources at Havieron, and Greatland Gold is optimistic of further extending the resources and life of Telfer where it is drilling at both the West Dome and Main Dome.

Katoro Gold (KAT LN) 0.04p, Mkt Cap £0.8m – Completion of the 31 Explore acquisition to focus on Canada as Haneti project in Tanzania is dropped

• Katoro Gold confirms the acquisition of 31 Explore Limited which holds mineral claims in Ontario prospective for lithium-bearing pegmatites and rare-earth elements.
• 31 Explore’s property portfolio “is underpinned by the systematic evaluation of an extensive range of Ontario Geological Survey data and mapping and other sources … [as well as historic exploration which] …. provides other encouraging information, however… [today’s announcement explains] … that these areas are historically underexplored for the critical mineral deposits”.
• The acquisition is via 375m ‘Acquisition Warrants’ priced at 0.1p and a further 375m warrants priced at 0.15p.
• “The Acquisition Warrants are valid for a period of four years and are subject to a lock in restriction period of 12 months”.
• Katoro Gold comments that 31 Explore’s “projects have been selected based on the technical merits that underlie their critical minerals potential … [and includes] … mapped, but previously untested or un-assayed pegmatites in close proximity to intrusions that are known to have generated known lithium-caesium-tantalum (LCT) mineralisation”.
• Today’s announcement also confirms that after “an extensive technical review of further opportunities at Haneti … [and in view of] … the levels of capital required … the Board have concluded that funds going forward will be focused in Canada and have decided to cease further investment at Haneti” in Tanzania.

Conclusion: Completion of the 31Explore acquisition emphasises the commitment to the Ontario exploration programme.

KEFI Gold and Copper* (KEFI LN) 0.55p, Mkt Cap £44m – Tulu Kapi project funding and community engagement update

• The Company announces that both co-lending banks have now received approvals from respective committees and Boards to proceed with the $240m facility for the $320m Tulu Kapi Gold Project in Ethiopia.
• Funding is subject to formal updates of prior approvals and to all documentation reflecting the expanded facility as well as all standard conditions previously reported typical of a transaction.
• Separately, the team reports that the community is supporting and agreeing to the resettlement plan and compensation surveys.
• All other preparatory programmes are on track.
• Previously, the Company is expecting to assemble all definitive documentation by 31 March to trigger development of the Project as soon as possible thereafter.

Conclusion: The Company moves ahead with securing the $240m bank funding for the $320m Tulu Kapi Gold Project which is key to closing the rest of the funding and move the project into the development stage at a time when gold prices hover around all time highs. The team also highlights good progress on the community engagement side.

*SP Angel act as Nomad and Broker to KEFI Gold and Copper

Lithium Argentina (LAR CN) C$3.3, Mkt cap C$532m – Full year results as Cauchari-Olaroz ramp up continues

• Lithium brine developer Lithium Argentina, who are in JV with Ganfeng in Argentina, report full year results.
• The Company produced 25,400t of LCE on a 100% basis in 2024, with 4Q24 production of 8,500t LCE, at 85% of design capacity.
• They guide for 30-35kt LCE production in 2025, weighted towards 2H25.
• OPEX over 2024 at $7,130/t LCE, down to $6,630/t in 4Q24.
• OPEX guidance for 2025 similar to 2024, with SUSEX guided at $600-700/t.
• Company received an average realised price of $7,800/t LCE in 2024, with benchmark prices at $10,400/t battery-grade LCE, Cauchari is expected to yield $8,300/t.
• The discount to spot reflects additional processing costs alongside taxes and logistics.
• Company provided an updated technical report for the 40ktpa LCE plant, with long-term OPEX estimates at $6,543/t.
• Company is integrating a 5,000tpa solvent extraction demonstration plant to integrate into stage 1, using Ganfeng’s proprietary solvent extraction DLE process.
• Solvent extraction is intended to leverage solar evaporation to improve recoveries and reduce processing requirements.
• Company also exploring additional production of 40,000tpa from stage 2, expected to utilise the existing infrastructure and new processing technology.
• Company has a regional growth plan for production capacity of up to 150ktpa LCE from Pozuelos-Pastos Grandes, Sal de la Puna and Cauchari Olaroz.
• LAR held $86m in cash and a $75m undrawn facility as of December 31^st, with the subsidiary Exar holding $210m debt, securing an additional $150m facility to be finalised in 2Q25.

McEwen Mining (MUX CN) C$10.8, Mkt cap C$580m – Full year operational results as Los Azules development progresses

• McEwen produced 136k GEOs in 2024 vs 155k GEO in 2023.
• The Company is aiming to produce GEO production to 225-255k by 2030, on the back of increased output from the Fox Complex.
• Company reports adj. EBITDA of $29m over 2024, and a net loss of $44m owing to McEwen Copper expenses.
• McEwen held cash and cash equivalents of $62.2m over the period, and $130m in debt, vs $40m prior year.
• Company is progressing McEwen Copper’s Los Azules project, with construction guided for late 2026.

Pensana (PRE LN) 37.7p, Mkt Cap £109m – Financing update on Longonjo REE project in Angola

• Pensana Plc report the company has received approvals for the full financing of ~US$ 268m for the Longonjo rare earth project.
• Management report the Board of the AFC ‘Africa Finance Corporation‘ have approved the AFC’s participation for US$81.2m in an ~US$160m syndicated loan facility alongside Absa Bank subject to the conclusion of definitive loan documentation and the fulfilment of conditions precedent.
• This covers ~60% of the Phase 1 project funding for Longonjo.
• FSDEA the ‘Angolan Sovereign Wealth Fund’ are also putting in US$15m in equity, with FSDEA having approved an investment of US$38m in equity and a convertible loan, and the AFC approving US$54.9m by way of a convertible loan.
• The equity investments are at subsidiary level and are also subject to finalising the documentation and the fulfilment of conditions precedent.
• Expenditure: Pensana says it has spent >US$70m over the past six years on exploration, technical and environmental studies on the Longonjo rare earth project in the Huambo district of Angola approximately 350 kilometres Southeast of the capital Luanda.
• JORC resource: 30.1mt grading 2.55% TREO ‘total rare-earths oxides’ and 0.55%NdPrO ‘Neodymium and Praseodymium oxide’ using a 0.3% NdPrO cut-off containing 166,000t of NdPrO.
  • Proven – 13.3mt at 0.67% NdPrO, 3.19% TREO for 89,300t NdPrO and 424,000t TREO.
  • Probable – 16.8mt at 0.55% NdPr, 2.05% TREO for 77,000t NdPrO and 323,000t TREO.
  • NdPrO tonnes and grade is inclusive of the TREO, making up ~22% of the total basket.
• Mine life is >20 years.
• Offtake with Hanwa (non binding MOU), a Japanese trader, for 20ktpa of ultra-clean MREC from Longonjo for 5 years “at prices to be discussed”.
• Hanwa was reported to consider financial support though we do not see the Hanwa name in today’s press release.
• In March Pensana referred to production of 20ktpa MREC ‘Mixed Rare Earth Carbonate’ from 2026 before expanding operations (~$100m capex) to 40ktpa MREC (~5ktpa NdPr) from 2029.
• Market pricing is difficult to know due to confidentiality on sales agreements but we could assume the company might be paid 63% of the contained value of their basked or saleable rare earths.

• Saltend:  Pensana do not provide an update on the Saltend refinery which was estimated to cost $195m in 2022.
• Economic Feasibility: There is a Technical Due Dilligence report from January 2024 which gives details on the proposed capital cost of the Longonjo mine and plant in Angola of US$216.5m.
• Unfortunately, the operating cost is missing in the January 2024 RNS:
  • “Operating Cost Estimates have been updated based on the revised Project scope and also brought to a consistent cost base date of Q4 2023. “
  • “TMC has reviewed all of the operating cost centre data and concurs that the operating cost estimates as provided meet the accuracy levels associated with a BFS, however it is noted that the retender for the mining contract scheduled for late 2024 will impact on overall Project economics and in all likelihood trigger the requirement for a revision of the mining optimisation plan.”

Conclusion:  We are concerned at the lack of publicly available details on the Longonjo REE project and look forward to the publication of a BFS or something similar in terms of project economics.

We fail to see how a financing of this scale can be properly completed without a Feasibility Study and we look forward to Pensana updating the market with further details on the project economics.

Power Metals Resources* (POW LN) 13p, Mkt cap £15m – Continuation of portfolio rationalisation strategy

• Power Metals notes that Katoro has ceased further investment into the Haneti Project, in which POW owns 35%.
• Management ‘concurs with Katoro that the extensive technical review undertaken by Katoro does not indicate sufficient prospectivity at Haneti.’

Conclusion: Power Metals continues to streamline their portfolio, and we are encouraged to see the prioritisation of high-value assets. A large-scale exploration programme for uranium is getting underway in Canada, whilst the Company continues to secure prospective copper assets in the Middle East.

*SP Angel acts as Nomad and Broker for Power Metals

Snowline Gold (SGD CN) C$8.4, C$1.3bn – C$20m equity raise

• The Company announced a C$20m underwritten equity raise in flow through shares to fund exploration in the Yukon Territory.
• The raise involves an issue of 1.9m shares at C$10.68 per share.
• The fundraise would allow to redirect some of existing cash on the balance sheet towards engineering and environmental work at the flagship Valley deposit.
• The project hosts 7.3moz in total resource including 76mt at 1.66g/t for 4.1moz in the Indicated category and 81mt at 1.25g/t for 3.3moz in the Inferred resource.

LSE Group Starmine awards for 2024 commodity forecasting:

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

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

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

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