SP Angel Morning View -Today’s Market View, Tuesday 21st January 2025

Gold presses higher as US Treasury yields cool on fading inflation expectations

MiFID II exempt information – see disclaimer below

BHP (BHP LN) – 10 year copper production record at Escondida helps deliver 10% increase in H1 copper production

Jubilee Metals Group (JLP LN) –– Power supply for the Roan concentrator

KEFI Gold and Copper* (KEFI LN) – Legal Claims Against KEFI dismissed in UK high court

Liontown Resources (LTR AU) – Ramp up from Kathleen Valley spodumene operations

New Frontier Minerals (formerly Castillo Copper) (NFM LN) – Exploration alliance in Queensland’s Mt Isa Copper Belt

Petra Diamonds (PDL LN) – H1 revenues hit by 10% reduction in like-for-like diamond prices

Premier African Minerals (PREM LN) – Proposed £3.5m fundraising abandoned as retail offer raised insufficient interest

Rome Resources (RMR LN) – Assay results from Mont Agoma drilling, DRC

Teck Resources (TECKb CN) – Production results and 2025 guidance

Xanadu Mines (XAM AU) – Update on Mongolian copper project backed by Zijin

Gold 17 January 2025:             Podcast:  https://audioboom.com/posts/8639775-john-meyer-gold-is-good-solid-asset-to-own

Video:  

Gold ($2,722/oz) presses higher as US Treasury yields cool on fading inflation expectations

• Gold prices have climbed again, now up 6.2% from November lows.
• Traders had sold gold following the election, which had seen sustained buying over fears of a challenged result.
• This coincided with the BRICs summit which raised speculation of a gold-backed alternative reserve currency.
• Gold has since regained its ground from this ‘sell-the-news’ actions.
• Gold is being driven by various factors, including both China retail and central bank buying as a haven alternative.
• China bonds are rallying as investors seek havens from the muted equity and property markets.
• However, Beijing is restricting government bond flows, pushing Chinese capital into gold.
• Elsewhere, Western ETFs have seen a recent inflow following what seems to be a peak in US Treasury yields.
• Historically, higher real rates pushed money out of gold and into Treasuries, although this correlation has broken somewhat since COVID.
• However, with the 10 year yield sliding from 4.8% to 4.57% today, investors are likely rotating into gold.
• Inflation concerns were calmed with key data last week from the US, whilst Trump’s rhetoric yesterday and positive comments on his relationship with Xi Jinping and China supported US Treasury sentiment.

Copper ($9,187/t) holds ground as processing fees fall on Freeport disruption

• Copper prices have held their recent rally, whilst struggling to break through short-term highs of $9,290/t.
• The metal was supported yesterday by a weaker dollar, which fell on expectations of the slower arrival of Trump tariffs.
• However, these fears were then reignited as reports suggested Trump would impose tariffs on Mexico and Canada from the 1^st of February.
• Meanwhile, treatment charges from Fastmarket data have fallen to $8.3/t on Friday, lowest recorded since 2013.
• Freeport is facing copper concentrate export delays from Indonesia after a smelter fire in October, impacting permitting. (Bloomberg)
• Benchmark TCRC fees for 2025 between Antofagasta and Jiangxi were $21.25/t, lowest since 1992.
• Smelter profits face continued contraction following several years of overexpansion.
• Elsewhere, Barrick is reportedly looking to sell its 50% holding in 80ktpa Cu mine Zalivar, with Antofagasta, who hold the other 50%, touted as the logical acquiror.
• BHP has boosted production from Escondida to decade highs whilst production disappointed from Olympic Dam which was hit by an electrical storm.
• Treatment and refining spot cargos priced at a negative -$8.3 on Friday as smelters compete for concentrates ahead of a potential cessation of material from FCX in Indonesia

Trump gets to work reversing Biden-administration EV policies following inauguration

• President Trump has set about reversing policies enacted by the Biden administration, particularly those targeting EVs.
• One of Trump’s many executive orders, titled “Unleashing American Energy,” commits to eliminating Biden’s ‘EV mandate’.
• The order aims to “promote true consumer choice, which is essential for economic growth and innovation, by removing regulatory barriers to motor vehicle access.”
• The Trump administration will also consider ending what he calls “unfair subsidies and other ill-conceived government-imposed market distortions that favour EVs over other technologies.”
• Trump has also targeted EV charging, ordering federal agencies to pause funding for EV chargers under the National Electric Vehicle Infrastructure Formula Program and the Charging and Fuelling Infrastructure Discretionary Grant Program.
• Alongside reversing Biden enacted policies, Trump has said that he is considering imposing 25% tariffs on Canada and Mexico from 1^st February.
• However, Trump did not specifically target China in his inauguration speech, despite being vocal about imposing further tariffs on imports during his campaign and since his election on 5^th November.

Economics

ECB – Holzmann sees uncertainty in January rate cut on higher inflation >2%

• Nagel, the Herman ECB Governing council member sees services inflation as having a high level of uncertainty.
• CPI hit 2.4% in December vs 2.2% in November
• Core CPI held steady 2.7% in December
• Inflation is likely to remain elevated driven by higher gas and energy prices going forward.

China – holds Loan Prime Rate at 3.1% to support Yuan

• The five-year LPR also held at 3.6%. This is important for domestic mortgages.
• We suspect China is ready to let the Yuan weaken depending on what Trump does with Tariffs.

UK – Unemployment rises to 4.4% as payrolled employment falls 47,000

• Monthly pay rise 5.6% yoy which sounds high but is lower than the 6.4% in november.

Exodus of talent

• We heard an LME broker is opening an office in Dubai and we understand 50% of their UK staff have applied to move to move to the new office.
• Will the last one to leave please turn the lights out?

Currencies

US$1.0365/eur vs 1.0311/eur previous. Yen 155.71/$ vs 156.05/$. SAr 18.657/$ vs 18.673/$. $1.226/gbp vs $1.220/gbp. 0.624/aud vs 0.621/aud. CNY 7.280/$ vs 7.313/$

Dollar Index 108.543 vs 109.07 previous

Precious metals:

Gold US$2,726/oz vs US$2,710/oz previous

Gold ETFs 83.6moz vs 83.3m oz previous

Platinum US$938/oz vs US$942/oz previous

Palladium US$934/oz vs US$944/oz previous

Silver US$30.5/oz vs US$30.6/oz previous

Rhodium US$4,675/oz vs US$4,650/oz previous

Base metals:   

Copper US$9,214/t vs US$9,178/t previous

Aluminium US$2,660/t vs US$2,676/t previous

Nickel US$16,060/t vs US$15,876/t previous

Zinc US$2,936/t vs US$2,943/t previous

Lead US$1,951/t vs US$1,977/t previous

Tin US$30,470/t vs US$29,775/t previous

Energy:           

Oil US$79.8/bbl vs US$80.5/bbl previous

• Crude oil prices fell after President Donald Trump declared a national energy emergency and pledged to expand domestic oil and gas production by easing permitting, ended the moratorium on new US licences to export liquefied natural gas and withdrawing the US from the 2015 Paris climate agreement.
• The NOD reported average FY24 Norwegian production rose 3.3% y/y to 4.18mboe/d (52% natural gas).
• France’s transmission network operator reported that nuclear output accounted for 67% of the country’s total generation in 2024, with renewables also contributing a record 148TWh or ~28% of the total.
• Ørsted has fallen 16% in early trading after announcing FY24 guidance for DKK24.8bn of impairments related to interest rate increases, the declining value of seabed leases, and higher costs on the Sunrise Wind project.

Natural Gas €48.2/MWh vs €46.5/MWh previous

Uranium Futures $74.0/lb vs $73.8/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$105.0/t vs US$103.8/t

Chinese steel rebar 25mm US$485.7/t vs US$482.3/t

HCC FOB Australia US$193.0/t vs US$195.5/t

Thermal coal swap Australia FOB US$120.0/t vs US$115.3/t

Other:  

Cobalt LME 3m US$24,300/t vs US$24,300/t

NdPr Rare Earth Oxide (China) US$56,197/t vs US$55,946/t

Lithium carbonate 99% (China) US$10,168/t vs US$10,029/t

China Spodumene Li2O 6%min CIF US$805/t vs US$800/t

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

China Tungsten APT 88.5% FOB US$338/mtu vs US$338/mtu

China Graphite Flake -194 FOB US$430/t vs US$435/t

Europe Vanadium Pentoxide 98% US$4.5/lb vs US$4.6/lb

Europe Ferro-Vanadium 80% US$24.9/kg vs US$25.3/kg

China Ilmenite Concentrate TiO2 US$295/t vs US$293/t

China Rutile Concentrate 95% TiO2 US$1,079/t vs US$1,071/t

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

Brazil Potash CFR Granular Spot US$305.0/t vs US$300.0/t

Germanium China 99.99% US$2,725.0/kg vs US$2,725.0/kg

China Gallium 99.99% US$385.0/kg vs US$385.0/kg 

Battery News

BYD to complete $1bn Indonesia plant by end of 2025

• A top executive at BYD, says the company aims to complete its EV manufacturing facility in Indonesia by the end of this year.
• When built, the plant will have the capacity to produce 150,000 EVs annually.
• Having effectively cornered its domestic market, BYD has been focussing on global expansion.
• 2024 was the first year of sales for BYD in Indonesia, with the automaker selling 15,400 vehicles, 36% of Indonesia’s EV market, according to trade data.

Australia sees surge in utility-scale BESS

• The commencement of two BESS projects in December saw the total of new batteries to have broken ground in 2024 to 4.9GW/13GWh.
• Despite the surge in BESS, energy storage is still struggling to keep up with the amount of new renewable energy production.
• According to Rystad Energy, there is approx. 1.5GW of BESS operational, when the average load is around 23GW.
• Over the next two years, that 1.5GW is expected to reach 8 or 9GW and “that is when you will start to see a shift in the dynamics of the market,” Rystad said.

Saudi Arabia commissions 2GWh BESS

• Saudi Arabia has connected its largest battery energy storage system (BESS) to the grid, the 500MW/2000MWh BESS development in Bisha.
• The Bisha battery storage facility features 122 units, with four LFP battery modules, designed and supplied by China’s BYD.
• This development is part of the kingdom’s Vision 2030, the long-term economic strategy, which aims to derive 50% of its energy from renewable sources by 2030.

Company News

BHP (BHP LN) 2,036p, £106bn – 10 year copper production record at Escondida helps deliver 10% increase in H1 copper production

• In its H1 Operational Review to December 2024, BHP reports that a 22% rise in copper production at Escondida to 644kt spurred a 10% increase in its copper output to 987kt (vs 894kt).
• BHP ascribes Escondida’s increased output to a combination of higher feed grades of 1.03% (6 months to Dec 2023 -0.81%) and “higher recoveries as mining progressed into areas of higher-grade ore as planned … partially offset by planned lower cathode production, as the integration of the Full SaL project continued”.
• The company is maintaining its full year copper guidance range of 1.18-1.30mt for Escondida, where “Concentrator feed grade for FY25 is expected to remain above 0.90%” with total group copper production also maintained in the range 1.845-2.045mt.
• The group’s copper operations at Pampa Norte, where the Cerro Colorado operation “remains in temporary care and maintenance having contributed 11 kt in HY24” declined by 9% to 126kt.
• “At Antamina, copper production decreased 7% to 67 kt reflecting planned lower concentrator throughput and a slight decline in ore grade. Zinc production was 39% lower at 42 kt, as a result of planned lower feed grades and throughput”.
• In South Australia production of 145kt was 6% lower with “Strong underlying performance in Q1 was followed by a two-week weather-related power outage due to a significant storm at the beginning of Q2. The integrity of all major infrastructure was maintained at Olympic Dam during the outage. Ramp up after the outage was achieved safely over the subsequent two weeks, and since then performance has been strong with 30 kt of copper production achieved across Copper SA in December”
• “Carrapateena continues to perform well, with higher productivity from the sub-level cave enabled by Crusher 2”.
• Iron ore production in WA grew by 1% to 130.9mt with the company confirming that it expects full year production within the upper half of the maintained guidance range of 250-260mt.
• BHP comments that the “recent completion of the Port Debottlenecking Project (PDP1) has unlocked greater throughput” in the WA iron operations where “continued strong supply chain performance with record volumes delivered from the Central Pilbara hub (South Flank and Mining Area C) … [followed] … the completion of the ramp up of South Flank in FY2”.
• Iron ore prices declined 22% to US$81.10/wmt compared to the equivalent half year.
• Steel-making coal output declined by 23% to 17.9mt on a 100% basis “underpinned by improved strip ratios and increased prime stripping as a result of an uplift in truck productivity… partially offset by slower production rates at Broadmeadow following the longwall move due to geotechnical characteristics”.
• Steel-making coal guidance is maintained “at between 16.5 and 19 Mt (33 and 38 Mt on a 100% basis), with production now expected to be in the upper half of the range”.
• Energy coal production in NSW “was broadly in line despite a higher proportion of washed coal” at 7.4mt with “guidance for FY25 … unchanged at between 13 and 15 Mt, with production now expected to be in the upper half of the range”.
• The WA Nickel operations remain temporarily suspended with “over 800 employees” redeployed “with the majority moving to roles across the Australian operations”.
• BHP confirms that it “intends to review the decision to temporarily suspend Western Australia Nickel by February 2027”.
• BHP says that Phase 1 of its US$5.7bn Jansen potash project in Canada is now 63% complete with initial production expected by the end of calendar year 2026.

Conclusion: BHP is maintaining its full year production guidance across all its product groups with its iron ore and coal operations expected to deliver within the upper half of the issued guidance range.  Strong performance at Escondida helps maintain copper guidance despite a reduction of the expectations for the South Australian copper operations.

Jubilee Metals Group (JLP LN) – 4.65p, Mkt cap £136m – Power supply for the Roan concentrator

• Jubilee Metals reports that it has received regulatory approval for its new power supply arrangements to restart the Roan copper concentrator plant in Zambia.
• The “new broad based power … [supply agreement] … commenced on 20 January 2025 following approval by the regulator … [and is] … now fully operational and capable of meeting the complete power demands of both the Roan concentrator and the Sable processing plant, if required”.
• Jubilee Metals “is actively preparing for the restart of the Roan concentrator, with copper production rates anticipated to return to target levels as operations ramp up”.
• CEO, Leon Coetzer, said that Jubilee’s team “demonstrated great resilience in overcoming the recent power challenges at its Zambian operations. The commencement of the additional power supply successfully addresses current power supply limitations that affected Roan’s ability to operate historically”.
• He confirmed that Jubilee Metals is now turning its “attention to preparing the plant for re-start and remain focused on delivering reliable production and operational resilience”.

Conclusion: Secure power supply underpins a planned resumption of operations at the Roan concentrator

KEFI Gold and Copper* (KEFI LN) 0.47p, Mk Cap £38m –Legal Claims Against KEFI dismissed in UK high court

• Kefi Gold and Copper Plc report the dismissal of legal claims by the English High Court of Justice, King’s Bench against the company.
• The English High Court of Justice, King’s Bench dismissed all legal claims against KEFI and awards to KEFI all of its counterclaims.

• • “This was the last outstanding attempt in a string of threats of interference against KEFI, all of which have now been successfully dismissed.”
  • The ruling also “extinguishes the need for independent certification of readiness for finance closing in respect of this matter.”

• Tulu Kapi:  KEFI has completed Early Works.
• Project Financing:  Update on certification and formalisation for finance closing.
• Credit approvals are now being updated for finalisation in February 2025 preparing the project for financial close at end Q1

• • All Major Works to be launched as funds are drawn down in the approved sequence.

• Progress in the certification and formalisation process includes:

• • Receipt from the banks the proposed updated detailed terms and conditions for an expanded secured loan package at US$240 million, instead of the previous US$190 million as detailed in the Company’s announcement on 6 November 2024;
  • Already-received approvals have satisfied all substantive conditions precedent set out in 2022 upon restarting preparations to launch the Project (after the lifting of Ethiopia’s State of Emergency as per the Company’s announcements on 14 February 2022 and 30 June 2022). The formalisation process is, for good order, wrapping up documentation for finance closing;
  • Detailed documentation in hand across all of the parties and issues; and
  • Certain Major Works brought forward to further de-risk the Project:

• • • Main Access Road started construction in Q4 2024 to more than halve travel time from the bitumen highway and simplify journey management;
    • We have fully deployed teams for safety, security and community liaison, involving both Government and private sector specialists;
    • Completed compensation for resettlement of a key land package and started the property survey with approximately one third of land holders, to ensure complete alignment before triggering Major Works; and
    • Triggered refreshment of fixed price lump sum components of construction contracts, ahead of financial close at the end of Q1 2025.

Conclusion: We look forward to the closing of the $320m Tulu Kapi funding.  Kefi is also looking at strategic options for its 15% interest in GMCO which holds advanced exploration assets in Saudi Arabia.

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

Liontown Resources (LTR AU) A$0.71, Mkt Cap A$1.7bn – Ramp up from Kathleen Valley spodumene operations

• Liontown reports quarterly results to December 2024.
• The Company is ramping up its Kathleen Valley Lithium Operation in Western Australia.
• Spodumene concentrate increased 215%qoq to 88.7kt, shipping an average grade of 5.2% SC.
• Realised price of US$806/t SC6e, down 5% from previous quarter.
• A$90m generated in revenue, with AISC of US$763/t SC6e.
• Cash position fell 27% to A$193m, with adjusted net cash from operating activities at A$11.5m and A$45m in CAPEX.
• Company remains ‘focused on concluding our processing plant ramp-up, starting underground stoping production and lifting processing plant performance.’
• Open pit operational performance includes 1.2 strip ratio, average Li20 grade mined of 1.3%, 89% plant availability and 55% lithia recovery.
• Lithia recovery expected to hit target of 70% by 3Q26.
• Ore processed at 619kmt, up 120%qoq.
• Liontown continues its underground development, with 1,902 development meres completed over the quarter and 32kt of ore mined.
• Transition for full underground mining in FY26 expected, with underground production stoping due to start 4Q25.
• Company continues to expect steady state production by the end of FY27.

New Frontier Minerals (formerly Castillo Copper) (NFM LN) 0.9p, Mkt Cap £12m – Exploration alliance in Queensland’s Mt Isa Copper Belt

• New Frontier Minerals – formerly Castillo Copper, has agreed with Austral Resources a ‘strategic alliance’ for exploration in the Mt Isa Copper Belt where Austral’s “copper processing plant … [at Mount Kelly] … provides a compelling integrated scalable asset base that delivers significant exploration and mining potential”.
• “NFM’s initial objective is to provide copper ore from the Big One Deposit (MRE: 2.1Mt @ 1.1% Cu), potentially expanding this to other satellite prospects within the NWQ Copper Project”.
• The alliance, currently in the form of an MoU, still requires the negotiation of “a profit-sharing formula, which is mutually beneficially to ensure neither party will incur any losses because of entering into a formal contractual arrangement”.
• CEO, Ged Hall, described the strategic alliance as “an excellent outcome for both groups that has the potential to create significant value”.
• He said that it “provides a potential path to production for copper ore from satellite deposits across the NWQ Copper Project, while Austral Resources secures a new source of feedstock for its Mt Kelly processing facility”.

Petra Diamonds (PDL LN) 25.8p, Mkt Cap £50m – H1 revenues hit by 10% reduction in like-for-like diamond prices

• Petra Diamonds reports H1 production of 1.40m carats of diamonds (H1 FY 2024 – 1.43m carats) and the company is maintaining its full year production guidance range of 2.8-3.1m carats.
• The company processed 6.2mt of ore (H1 FY 2024 – 5.8mt) and generated US$146m revenue from the sale of 1.3m carats of diamonds (US$188m from sales of 1.7m carats).
• The company explains that “Like-for-like prices were down 10% compared to H1 FY 2024 mainly from smaller size categories”.
• Petra Diamonds says that “Consolidated net debt increased to US$225 million as at 31 December 2024 (30 June 2024: US$201 million), mainly due to the continued weak diamond market … [although it says that the] … effect of the lower diamond pricing environment was partly offset by cost control and efficiencies in capital spend profiles”.

Premier African Minerals (PREM LN) 0.027p, Mkt Cap £8.8m – Proposed £3.5m fundraising abandoned as retail offer raised insufficient interest

• Premier African Minerals are looking to restructure its previously announced fundraising for £3.5m following insufficient interest from retail investors.
• The company had commitments of £1.2m from institutional investors subject to the raising of £2.3m from retail investors to meet a £3.5m total target.
• Asking retail investors for £2.3m at short notice on top of a smaller £1.2m fundraising for a lithium mine in Zimbabwe was always going to be a big ask.
• Canmax Technologies confirmed yesterday that it will “work in alignment with Premier to ensure the completion of the commissioning and optimisation of both the primary flotation plant and secondary flotation plant to achieve the targeted grade and recovery at the Zulu Lithium and Tantalum Project” in Zimbabwe.
• Canmax have also confirmed “that the basis of their prepayment under the is unchanged and remains for the delivery of SC6 and not the ownership and/or management of Zulu”.
• The CEO, George Roach, has expressed confidence that the company “will complete the optimisation and final commissioning of the spodumene float circuit at Zulu … [and that] … extensive additional test work completed in the latter part of 2024 and the purchase of additional float cells to be installed at Zulu will support this”.
• We hope management will find a solution to their funding issues.

Rome Resources (RMR LN) 0.31p, Mkt Cap £20.6m – Assay results from Mont Agoma drilling, DRC

• Rome Resources reports assay results from two of its five completed drillholes at the Mont Agoma prospect in North Kivu Province, DRC.
• The company says that the results “confirm significant widths of tin mineralisation across three discrete zones within the tin, copper and zinc zone with combined widths of 38.4m in MADD016A and 32.1m in MADD017 which ended in mineralisation”.
• Highlighted results include:

• • Intersections of 3m at a grade of 0.27% tin from 46.5m depth plus 20.5m grading 0.18% and 14.9m at an average grade of 0.45% tin from 99m depth all in hole MADD-016A which also includes “3.9m at 1.24% Cu from 71.2m; 1.7m at 4.8% Cu from 95.3m; 7.2m at 1.32% Cu from 212.4m … [and] … 31.0m at 4.02% Zn from 92m”; and
  • Intersections of 4m at a grade of 0.44% tin from 72m depth plus 10.5m grading 0.28% from 116.5m and 9.6m at an average grade of 0.37% tin from 130m depth all in hole MADD-017 which also includes a 25.35m intersection at an average grade of 13.97% zinc from 110.1m depth.

• The company speculates on similarities between the mineralisation at Mont Agoma and “the copper to tin mineralisation transition zone at San Rafael in Peru – with decreasing copper and increasing tin at greater depth”.
• Rome Resources confirms that “Mineralisation remains open to the north, south and at depth … [and that] … High grade zinc identified throughout the 500m strike length drilled to date in a similar setting comparable to Mpama South deposit, operated by Alphamin”.
• CEO, Paul Barrett “it is becoming increasingly clear that we are unlocking a complex mineralised system with an increase in widths of tin mineralisation towards the base of the copper zone. Our ongoing deeper drilling campaign will soon reach similar depths where Alphamin’s main resources are located”.
• He said that the results so far “increases our confidence in finding high-grade tin mineralisation as new drilling moves to deeper levels”.

Conclusion: Drilling at Mont Agoma shows 3 zones of tin mineralisation associated with copper and zinc with mineralisation open laterally to the north and south and also at depth. We look forward to news as the exploration progresses.

Teck Resources (TECKb CN) C$64, Mkt Cap C$33bn – Production results and 2025 guidance

• Canadian base metals producer reports production results and guidance following a transformative year.
• The Company sold their steelmaking coal business EVR to Glencore for US$7.3bn in cash.
• 2024 production:

• • Copper: 446kt (vs pre-adjusted guidance of 465-540kt)
  • Zinc in concentrate: 616kt (vs pre-adjusted guidance 565-630kt)
  • Refined zinc: 256kt (vs pre-adjusted guidance of 275-290kt)

• 2025 guidance:

• • Copper: 490-565kt (previously 550-620kt)
  • Zinc in concentrate: 525-575kt (previously 555-615kt)
  • Refined zinc: 190-230kt (previously 270-300kt)

• 2025 cost guidance

• • Copper cash costs: $2.05-2.35/lb
  • Net cash unit costs: $1.65-1.95/lb
  • Zinc cash unit costs: $0.65-0.75/lb
  • Net cash unit costs: $0.45-0.55/lb.

• Company expects to spend US$3.2-3.9bn in the coming years on four copper projects:

• • QB optimisation and debottlenecking to increase throughput by 15-25%.
  • Extending mine life at Highland Valley to mid-2040s.
  • Construction of Zafranal coper-gold project in Peru, set to produce 126ktpa Cu over first five years.
  • San Nicolas construction with Agnico Eagle to produce 63ktpa Cu.
• 2024 CAPEX at C$1,200-1,490m growth and C$685-760m sustaining.
• 2025 CAPEX guided at $750-845m sustaining and $875-980m growth, with stripping costs expected at C$260-300m.

Xanadu Mines (XAM AU) A$0.05, Mkt Cap C$88m – Update on Mongolian copper project backed by Zijin

• Xanadu reports an update on the Kharmagtai project they are developing in Mongolia alongside Zijin.
• The PFS, delivered in September, showing a 29yr LOM copper-gold operation triggered the transition of JV operatorship to Zijin.
• The JV is now planning the next stage through to FID>
• Xanadu will require a ‘viable funding solution’ before approving the budget for the next phase.
• Xanadu is exploring strategic options, with options including:

• • Funding their 50% interest in the project to FID.
  • Selling down their interest at Xanadu or Project level.
  • Sell Xanadu’s 50% interest to Zijin for US$50m
  • Sell half of Xanadu’s share for US$25m.

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.

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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