SP Angel Morning View -Today’s Market View, Tuesday 27th May 2025

Chinese copper smelters offering hefty discounts to LME prices for refined copper at smelter gates

MiFID II exempt information – see disclaimer below

Alba Mineral Resources (ALBA LN)  – Latest progress report on the Welsh and Swedish projects

Cobra Resources (COBR LN) – Land expansion at the Boland rare-earths project in South Australia

Guardian Metal Resources (GMET LN) – Geotechnical drilling intersects tungsten mineralisation outside the planned pit shell at Desert Scheelite, Nevada

Ionic Rare Earths (IXR AU) – First recycled magnet REOs delivered to magnet manufacturer

Ivanhoe Mines (IVN CN) – Kakula operations suspended on ongoing seismic activity

MAC Copper (MTAL N) – Agreed offer from Harmony Gold for $1.03bn in cash

Premium Resources (PREM CN) – Drilling extends Selebi North underground

Rio Tinto (RIO LN) – Rio Tinto accused of political bribery in Australian press

Sibanye-Stillwater (SSW SJ) – Miners successfully returned to surface at Kloof gold mine, South Africa

Zijin Mines (2899 HK) – Growing streaming business amid wider gold push, FT

Vulcan Energy (VUL AU) – Commencement of drilling at the Lionheart Lithium Project

Copper (US$9,600/t ) – Chinese copper smelters offering hefty discounts to LME prices for refined copper at smelter gates

• We believe Chinese smelters are offering historically low Tc/Rcs of ~$50/t & 5c/lb to take copper concentrates for smelting and refining.
• Antofagasta is said to have offered copper concentrates negative Tc/Rcs numbers according to concentrate traders though at lesser levels than the minus -$50/5c/lb see in the spot market.
• But once the metal is refined the smelters are thought to offer a sizeable discount to LME prices making up for the low Tc/Rc charges.
• US premiums over the LME copper prices have widened again serving to draw additional copper into the US and away from other markets
• China copper consumption has risen a massive 9% this year outstripping the addition of new copper mine production.
• LME copper stocks fall a further 2,575t to 164,725t.
• SHFE copper stocks fell a further 9,471t last week to 98,671t. SHFE stocks were 116,753t a month earlier. Highlighting an acceleration in Chinese copper consumption and alack of deliverable grade copper metal with some smelters on slower working and shut down due to maintenance and a potential shortage of copper concentrates.
• The arb has widened again for deliverable-grade copper into US warehouses as US traders await news on the Trump Administration Section 232 notice and as demand accelerates
• Even the IEA, a conservative organisation at the best of times says copper supply will fall 30% short of the amount required by 2035 if nothing is done, highlighting that China now controls >70% of copper processing.

Gold ($3,300/oz) slides as US-EU trade tensions ease following Trump’s outburst

• Gold prices are sliding further having spiked on Friday following Trump’s call for a 50% tariff on the EU.
• Brussels has stated it will accelerate negotiations with Trump’s administration to avoid a trade war.
• The metal rallied to $3,370/oz, but has since retraced ground, sitting unchanged since Thursday.
• Gold prices have struggled to mount another attempt at passing the $3,500/oz level reached during the trade war escalation.
• Gold ETFs have seen outflows for the past five weeks, having peaked in mid-April. (Bloomberg)
• China ramped up gold purchases during April, as it continues to diversify its central bank foreign reserves.
• Analysts note that 0.5% of global GDP is being spent on gold currently, highest proportion in five decades. (Mining.com)
• US Treasury yields are also sliding, having shot higher over the past month, with the 10 year hitting 4.6%.
• A weaker dollar is supporting gold, with the dollar index holding below the 100 level as it consolidates 2022 lows.

Currencies

US$1.135/eur vs US$1.134/eur previous, Yen 143.53/$ vs 143.28/$, SAr 17.917/$ vs 17.859/$, US$1.354/gbp vs US$1.348/gbp, US$0.645/aud vs US$0.652/aud, CNY 7.189/$ vs 7.195/$

Dollar Index 99.31 vs 99.46.

Economics

US – President Trump announced Sunday to postpone planned 50% tariffs on the EU to 9 July to allow more time for negotiations.

• Previously, Trump threatened to impose higher tariffs from 1 June highlighting slow progress in discussions.
• Last Friday, Trump criticised the EU’s non-tariff barriers, including VAT, “ridiculous corporate penalties”, non-monetary trade restrictions, and “unjustified lawsuits against American companies”.
• The decision follows a phone conversation with President of European Commission Von der Leyen.
• European equities extended Monday gains earlier this morning recovering some of its losses from last week.

China – Industrial profits climbed at a faster pace in April despite higher US tariffs.

• The increase is reported to have been driven by government trade in programme stimulating equipment upgrades and demand for consumer goods.
• Industrial Profits (%yoy, Apr/Mar/Est): 3.0/2.6/NA

Japan – Bond yields fell dragging the yen lower on expectation for a reduction in the issuance of long dated bonds.

• 40y notes saw its yield pulling back about 25bp.
• The Finance Ministry is reported to have sent out a questionnaire to market participants on Monday evening asking for their views on issuance and the current market situation.
• Earlier, a Japanese government advisory urged authorities to reduce budget deficit amid ongoing monetary tightening lifting debt servicing costs for the world’s most indebted developed nation.

France – Inflation slowed to 0.6%yoy in May marking the lowest reading in more than four years.

• “Another very encouraging sign of disinflation in action,” Bank of France head Francois Villeroy said.
• “.. the normalization of monetary policy is doubtless not complete and we could — in the conditional— see this at our Governing Council meeting next week.”
• Markets expect a rate cut next week followed by at least one more before year end.
• EU Harmonised CPI (%mom, May/Apr/Est): -0.2/-0.7/0.1
• EU Harmonised CPI (%yoy, May/Apr/Est): 0.6/0.9/0.9

European car sales drop in April, EV sales strong despite poor Tesla performance

• Overall car sales in the region fell 0.3% in April, with the strongest sales growth coming from electric and plug-in hybrid cars.
• Battery electric sales were up 27.8% despite Tesla seeing sales decline 49.0% yoy

Precious Metals

Gold US$3,308/oz vs US$3,332/oz previous

Gold ETFs 88.7moz vs 88.7moz previous

Platinum US$1,079/oz vs US$1,100/oz previous

Palladium US$988/oz vs US$1,023/oz previous

Silver US$33.7/oz vs US$33.4/oz previous

Rhodium US$5,500/oz vs US$5,425/oz previous

Base metals:

Copper US$9,600/t vs US$9,567/t previous

Aluminium US$2,456/t vs US$2,471/t previous

Nickel US$15,488/t vs US$15,562/t previous

Zinc US$2,702/t vs US$2,711/t previous

Lead US$1,986/t vs US$1,986/t previous

Tin US$32,709/t vs US$32,278/t previous

Energy:

OilUS$63.9/bbl vs US$63.4/bbl previous

Natural Gas €36.5/MWh vs €36.4/MWh previous

Uranium Futures $71.6/lb vs $71.6/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$100.1/t vs US$100.8/t

Chinese steel rebar 25mm US$469.5/t vs US$469.5/t

HCC FOB Australia US$189.5/t vs US$190.0/t

Thermal coal swap Australia FOB US$103.0/t vs US$102.5/t

Other:  

Cobalt LME 3m US$33,251/t vs US$33,700/t

NdPr Rare Earth Oxide (China) US$60,086/t vs US$60,207/t

Lithium carbonate 99% (China) US$8,601/t vs US$8,768/t

China Spodumene Li2O 6%min CIF US$655/t vs US$685/t

Ferro-Manganese European Mn78% min US$995/t vs US$1,113/t

China Tungsten APT 88.5% FOB US$397/mtu vs US$388/mtu

China Graphite Flake -194 FOB US$425/t vs US$430/t

Europe Vanadium Pentoxide 98% US$5.2/lb vs US$5.2/lb

Europe Ferro-Vanadium 80% US$24.4/kg vs US$24.4/kg

China Ilmenite Concentrate TiO2 US$287/t vs US$287/t

Global Rutile Spot Concentrate 95% TiO2 US$1,465/t vs US$1,513/t

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

Brazil Potash CFR Granular Spot US$365/t vs US$357.5/t

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

China Gallium 99.99% US$395.0/kg vs US$395.0/kg

Battery News

China’s first large-scale lithium-sodium energy storage station goes into operation

• China’s first large-scale lithium-sodium hybrid energy storage station has been put into operation and will be capable of powering hundreds of thousands of homes.
• The station can store up to 800,000kWh of electricity per day, which can be used by 270,000 households, according to a Xinhua news agency report.
• The energy storage station uses the latest high-capacity sodium-ion batteries with the top response speed six times faster than other existing sodium-ion batteries in conjunction with technologically mature lithium batteries.
• The Baochi energy storage station will be operated by China Southern Power Grid in Yunnan province in southwestern China.

BYD slash prices on EV models in China, seeing lithium prices plummet and sparking new price war

• BYD announced a fresh round of subsidies and incentives for more than 20 models, reducing the price up to 34%.
• On the back of the announcement, shares in Chinese automakers such as BYD, Nio and Geely fell by up to 9.5%.
• Last week, China’s state planner warned against excessive competition in some industries, saying that some firms were even selling below cost, disrupting fair competition and warned that it may take corrective action.

Company News

Alba Mineral Resources (ALBA LN) 0.02p, Mkt cap £2.2m – Latest progress report on the Welsh and Swedish projects

• Alba Mineral Resources has issued a progress report on its projects in Wales and Sweden following an update earlier this month.
• At its Clogau St David’s mine in North Wales, the company confirms that its plans for underground blasting remain consistent with the arrangements described in March “namely to reposition the first raise so as to be able to commence it much sooner in the planned blasting programme than previously planned”.
• The company says that this plan involves “commencing Raise 1 within 5 metres from the current face position of the No.5 Level Drive West, enabling an earlier transect across the projected payshoot”.
• While the overall plan remains intact, plans have “been modified with a view to achieving greater frequency and faster progression through the blasting sequences” which seems aimed at bringing forward the availability of mined ore for processing which is currently reliant on treating material from the waste tip.
• At its Finnsbo exploration project in Sweden, the company reports that its contractor has completed a ground magnetic geophysical survey investigating “POP 2″ style of high-grade gold, copper and rare earth element (“REE”) mineralisation … of magmatic origin and related to the intrusive tonalite” along a 1.13km strike length located west of “the historic Bredasen shafts”.
• Bredasen is described as the largest of “several artisanal magnetite workings …  [in the area with] … a series of three flooded vertical shafts of roughly 30-40m depth“.
• Alba Mineral Resources explains that a “magnetic susceptibility survey in mineral exploration uses the magnetic properties of rocks and minerals to locate and characterise potential mineral deposits … [and comments that it expects] … that drill targets will be generated from this survey”.
• Executive Chairman, George Frangeskides, commented that the initial interpretation of the geophysical data “confirms that the focus of future work should be the drilling of a few short exploratory holes at the contact zone starting at the POP 2 location and stepping out towards the southeast, seeking continuity of the high-grade gold, copper and rare earth mineralisation we have encountered at POP 2”.

Cobra Resources (COBR LN) 1.43p, Mkt cap £13m – Land expansion at the Boland rare-earths project in South Australia

• Cobra Resources reports that it has expanded its landholding at the Boland rare-earths project by an additional 1,200km² to 3,365km².
• The additional land hosts what the company describes as “prospective geology across the Yaninee and Narlaby palaeochannel systems which host the unique and highly favourable geology that makes the Boland Project amenable to in situ recovery (“ISR”), a low-cost, low impact mining process”.
• Confirming that it is preparing “to incorporate targets within the New Tenements with the next stage of the REE resource drilling programme … [the company explains that] … Drill samples are available through the South Australian core library for assay providing a low-cost pathway to drill targeting”.
• The company is acquiring the additional land from the Tri-Star Group in a transaction involving an initial cash payment of A$50,000, followed by a future payment of A$200,000 after 5 years “reduced by up to A$50,000 should Cobra not gain heritage approval to drill within defined areas of the Narlaby Palaeochannel”.
• Definition of a “JORC compliant Mineral Resource Estimate of at least 100Mt at more than 1,000 ppm Total Rare Earth Oxide” triggers an additional payment of A$500,000 with a similar payment on the definition of “a JORC compliant Mineral Reserve of at least 50Mt at more than 1,000 ppm TREO”.
• The additional tenements also attract a 1.5% NSR on rare-earth production, capped at a total A$5m.
• Managing Director, Rupert Verco, said that the transaction “consolidates our dominant regional land position to ensure Cobra can become the leader in the in situ recovery of rare earths”.
• He described Cobra Resources’ ambition “to grow a multi-generational resource that can provide critical metals including dysprosium and terbium at a bottom quartile cost with the highest possible environmental stewardship”.

Guardian Metal Resources (GMET LN) 40p, Mkt Cap £55m – Geotechnical drilling intersects tungsten mineralisation outside the planned pit shell at Desert Scheelite, Nevada

Power Metals Resources* (POW LN) 13p, Mkt cap £15m – (Power Metals* holds a 19.5% stake in Guardian Metal Resources)

• Guardian Metal Resources reports that it has completed a seven-hole programme of geotechnical drilling totaling 1,156m at its Pilot Mountain tungsten project in Nevada.
• The data will contribute to the design “of the planned open pit shell … [as] … a key input into the ongoing Pre-Feasibility Study for the Project”.
• As well as providing the geotechnical information, the company explains that the drilling “intersected porphyry and/or skarn-type alteration and mineralisation, suggesting that the Desert Scheelite mineralised system extends beyond the current known limits of the Desert Scheelite Zone”.
• Although assay data does not seem to be available yet, intersections in the Desert Scheelite zone include “Multiple strongly skarn altered intervals … with local visible scheelite mineralisation” in hole GCH-01 as well as “Multiple porphyry-mineralised intervals … [with] … molybdenite and/or chalcopyrite veins” in hole GCH-04 and GCH-05 and skarn and porphyry style mineralisation in hole GCH-07.
• As well as the drilling on Desert Scheelite, the “first drill hole at the Project’s ‘Garnet Zone’, PGMR25-001, is now complete to a final depth of 100m, and the Company is pleased to report that it intersected multiple very strongly visually skarn-mineralised scheelite dominated intervals”.
• The company explains that this is the first hole it has drilled on the Garnet Zone since acquiring the property in 2021.

Conclusion: Geotechnical drilling at Pilot Mountain’s Desert Scheelite Zone provides indications that mineralisation may be more extensive than previously thought.  The intersection of visible scheelite mineralisation in drilling at the Garnet Zone is providing encouragement that there may be additional previously unrecognised potential.

*SP Angel acts as Nomad and Broker for Power Metals

Ionic Rare Earths (IXR AU) A$0.01, Mkt Cap A$37m – First recycled magnet REOs delivered to magnet manufacturer

• Viridion JV delivered first recycled magnet REOs to its magnet manufacturing partners, CIT Senai, in Brazil.
• Viridion uses long loop hydrometallurgical process to separate out REOs contained in end of life magnets at Ionic Technologies’ facility in Belfast.
• Magnets were sourced from decommissioned MRI machines and wind turbine generators.
• CIT Senai will use recovered REOs for lab scale tests and product qualification.
• Viridion is a 50/50 JV between Viridis Mining and Minerals and Ionic Rare Earths focused on commercialisation of the Company’s IP developed by IonicRE’s 100% owned UK subsidiary, Ionic Techlogies.

Ivanhoe Mines (IVN CN) C$10.8, Mkt Cap C$14bn – Kakula operations suspended on ongoing seismic activity

• Ivanhoe reported yesterday that underground activities at Kakula were suspended on Saturday 25^th May.
• The decision followed recent seismic activity, which had continued over the days following the temporary suspension on May 20^th.
• Company notes that the activity ‘could potentially continue for weeks, which would inhibit access to the mine and prolong the temporary suspension.’
• Ivanhoe notes an increase in water inflow levels into Kakula after underground pumping and electrical infrastructure were impacted.
• Ivanhoe is preparing dewatering plans and is acquiring additional pumping equipment to boost capacity, supported by Zijin.
• The Kamoa mine continues uninterrupted.
• Current dewatering rates in the shallower western sections are c.1,000L/s, with the team aiming to boost this back to 3,000/s.
• Surface infrastructure unaffected, and Phase 1 and 2 concentrators processing ore from surface stockpiles.
• Ivanhoe suspends production and cost guidance, alongside the timeline for the direct-to-blister smelter ramp up.

MAC Copper (MTAL N) – agreed offer from Harmony Gold for $1.03bn in cash

Harmony Gold to acquire MAC Copper (MTAL N) for $1.03bn in cash

• Harmony Gold is acquiring the assets of MAC Copper including the CSA copper mine in Cobar, New South Wales, Australia
• The recommended cash offer represents a 20.7% premium to the unaffected closing price of $10.25/s price on the NYSE.
• Production: 41,000t in 2024 and a run rate of 45,000tpa in Q4 2024 and 50,000tpa by 2026 including additional copper production from the Merrin Mine
• Guidance: 43-48,000t of copper in 2025.
• Costs: Q1 ’25 C1 cash costs were US$1.91/lb (US$4,210/t) Total cash costs were US$2.47/lb ($5,445/t).
• SP Angel: long-term copper price forecast is for $10,500/t.
• Tc/Rc benchmark charges cut by ~16c/lb
• Cash: US$75m at end December. Mac had US$153 of liquid assets at end-March and reported US$150m in net debt in 1Q25 (exc. streams)
• Harmony are funding the deal with a $1.25bn bridge loan and existing cash reserves.
• The CSA Mine is one of Australia’s longest running mines having started as a lead, zinc mine in 1871.
• It is also 1.9km deep having transitioned into an underground in 1965 following the discovery of a significant resource in 1961.
• Glencore acquired the mine in 1998, restarting the mine a year later. MAC copper acquired the mine from Glencore in 2023.

Premium Resources (PREM CN) C$0.5, Mkt Cap C$204m – Drilling extends Selebi North underground

• Nickel developer/explorer Premium, who hold the Selebi project in Botswana, provide an exploration update.
• Hole SNUG-25-186 intersected ‘South Limb mineralisation’ over 16.2m, 132m down-plunge of the previous hole SNUG-25-184.
• Company notes that borehole electromagnetic results suggest a ‘thicker interval of mineralisaiton lies immediately to the northwest of drill hole SNUG-25-186.’
• Management states that holes SNUG-25-186 and SNUG-25-184 have etended South limb mineralisation 315m down-plunge from the lower extent of the 2024 resource model.
• The current 2024 resource has a down-plunge extent of 965m.
• Assay results expected in July.

Rio Tinto (RIO LN) 4,527p, Mkt cap £57bn – Rio Tinto accused of political bribery in Australian press

• Rio Tinto have been accused of political bribery in a secret lawsuit between with the Mongolian government in relation to the Oyu Tolgoi copper mine according to the Australian Financial Review.
• Re: Oyu Tolgoi Jakob Stausholm is reported to have spent ~$8.5bn buying out minority shareholders forgiving debt to the Mongolian government to keep the peace with Mongolia threatening to revoke Rio Tinto’s plan for Oyu Tolgo in 2019.
• Mongolia now claims in a new UK High Court arbitration that Rios owe a substantial sum in disputed taxes.
• The Mongolian authorities are also reported to be accusing Rio Tinto of bribery and corruption according to the AFR report.
• The revelations comes at a time when Bold Baatar, who currently works at Business Council of Mongolia as a director for Rio Tinto has been tipped to succeed CEO, Jakob Stausholm whose surprise exit was announced last week.
• Mining.com also suggest the board should look for a new CEO who knows mining better.
• Observers also privately accuse the Rio Tinto board of insufficient practical working knowledge of the mining industry driven by the Cadbury Commission guidelines on board governance where directors are selected on a range of criteria other than their knowledge of the workings of the mining industry.

Sibanye-Stillwater (SSW SJ) R2,617, Mkt Cap R74bn – Miners successfully returned to surface at Kloof gold mine, South Africa

• Sibanye Stillwater reports that it has successfully concluded the safe return to surface of 260 employees temporarily retained underground for safety reasons at its Kloof No.7 sub-shaft in South Africa.
• The announcement, issued on 23rd May, confirms that there were no injuries as a result of the incident the previous day when “the skip door of the Kloof 7 sub-shaft rock winder opened at the loading point on Level 39, impacting Levels 40, 41 and below”.
• “Comprehensive safety inspections and a shaft integrity assessment, along with the necessary repairs, were carried out before employees could be safely brought to surface … and measures were taken to ensure employees were safe and had access to food and water”.

Zijin Mines (2899 HK) HK$18, Mkt Cap HK$515bn – Growing streaming business amid wider gold push, FT

• Chinese major Zijin, is expanding its exposure to streaming and royalties, reflecting a bullish attitude towards long-term gold prices, FT reports.
• The Company is looking to spin out its overseas gold mines into a separate listing on the Hong Kong stock exchange, in a push for ‘internationsalisation’ and to build a ‘world-class, leading listed international gold company.’
• The subsidiary will continue to be a subsidiary of Zjijn, with the listing intended to create greater value for shareholders amid the gold price rally.
• Zijin’s asset management unit reportedly manages over US$5bn, with an MD at their subsidiary stating they are ‘trying to find quality resources that are undervalued.’
• The Zijin fund manager stated that the ‘under-investment has been a huge problem’ in the gold sector, noting ‘it’s really hard to find quality projects.’
• Zijin committed $125m of financing, including a $75m stream, to Montage Gold* for the development of their Kone gold project in the Côte d’Ivoire last year, alongside Wheaton.
• Last month, Zijin provided a $25m gold stream to TongGuan Gold for their Gansu province gold mine.
• Zijin have also taken a stake in Predictive Discovery*, alongside the Lundin Family, who are progressing the Bankan gold project in Guinea.
• Zijin has reportedly spent $7bn on acquisitions since 2015. (Dealogic)
• In gold, this has included Continental’s Buritica, Nevsun Resources with the Timok and Bisha projects, and Guyana Goldfields with the Aurora project.
• Zijin accounts for 24% of China’s total gold production.
• Zijin has a three-pronged approach to metals, focusing on copper, gold and lithium.

*An SP Angel analyst holds shares in Montage and Predictive

Vulcan Energy (VUL AU) A$4.1, Mkt Cap A$886m – Commencement of drilling at the Lionheart Lithium Project

• The Company commenced drilling of the first new well for the Phase One Lionheart Project at the Schleidberg well site near Landau, Germany.
• The Field Development Plan for Phase One involves 24 production and re-injection wells.
• The Company currently has four historic production and re-injection wells operating at site.
• Full project execution including mobilisation of EPC/EPCM contractors will start on completion of financing.
• The Company estimates total funding requirement for Phase 1 (24ktpa LHM) amounting to €2.2bn including €1.4bn in project capex and the balance in funding costs, debt service reserve account, contingencies and owners’ costs.
• Debt component is expected to account for €1.5-1.6bn with the balance of €625-725m coming in the form of equity including potential asset level investments.

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

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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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