SP Angel Morning View -Today’s Market View, Tuesday 28th January 2025

Copper pares recent gains on data centre growth concerns and stronger dollar 

MiFID II exempt information – see disclaimer below

Ariana Resources (AAU LN) – Newmont Mining continues its exploration support

Aterian plc* (ATN LN) – Rio Tinto resume drilling in Rwanda, pegmatites intersected

Cobra Resources (COBR LN) – Bench-scale metallurgical work shows capacity to produce rare-earth carbonate product from Boland project

Cornish Metals* (CUSN LN) – NWF and Vision Blue participate in £56m funding for South Crofty

Fortescue Ltd (FMG AU) – Purchase of Red Hawk Mining

Goldstone Resources* (GRL LN) – Settlement of the £2.8m convertible note

Great Western Mining* (GWMO LN) – Update on precious metals mill in Nevada as first production looms

Guardian Metal Resources (GMET LN) – Exploration results from Pilot Mountain, Nevada

Power Metals Resources* (POW LN) – (Power Metals* holds a 45% stake in Guardian Metal Resources)

Kavango Resources* (KAV LN) – Conversion of 538m shares into equity as prospectus is published

Newmont Corporation (NEM US) – Sale of Porcupine for up to US$425m

Sylvania Platinum* (SLP LN) – 2Q25 results amid continued growth investment programme

Tertiary Minerals* (TYM LN) – Annual results following busy year of drilling

The SP Angel Mining Team will be in Cape Town next week for the 121 Mining Investment Conference and the Indaba

• We will all be at the 121 Conference with Simon, Sergey and Arthur boldly seeking out opportunities.
• We have a full schedule of investor meetings and will presenting ideas on commodities and mining companies.
• Ewan, Charlie, Grant and Richard will be available at the 121 and on the Wednesday and Thursday after.
• Please drop us a line on john.meyer@spangel.co.uk if you want to catch up with the team
• 121 Conference details:  https://www.weare121.com/121mininginvestment-cape-town/

Copper ($9,025/t) pares recent gains on datacentre growth concerns and stronger dollar

• The copper price has given back its recent rally, sliding from c.$9,365/t to today’s $9,030/t level.
• The move lower has been accentuated by the weekend’s revelation of potentially lower AI datacentre and chip demand following a Chinese breakthrough in the space.
• Analysts had been expecting significant demand growth from AI datacentres for copper, given their energy intensive nature.
• Reports from the Trump administration of tariffs on copper and steel had supported the dollar, weighing on copper demand from Chinese buyers.

EV sales could surpass 20m in 2025

• Global sales of fully electric and plug-in hybrid vehicles will rise by at least 17% this year to over 20m cars. (Rho Motion)
• The growth will be helped by the extension of China’s auto trade-in subsidies, and the return of EV growth in Europe.
• Growth in Europe is expected to occur as stricter CO2 emission targets come into effect and the availability of cheaper models.
• The Rho Motion report forecasts European sales growth of 15% from the 3m EVs sold in 2024.
• With the extension of auto trade-in subsidies in China, growth is expected to be greater than the previously forecast 17%.
• In 2024, China’s EV sales jumped 40% to 11m.
• Rho Motion also forecast the US to see 16% growth in 2025 with limited impact from President Donald Trump’s policy changes.
• The report does continue to say that long-term consequences are more likely, with a worst case scenario 47% drop in EV battery demand by 2040.

DeepSeek (Private, part of Chinese Quant fund) – Nvidia’s share price has fallen over 20% to $118 on the news that a Chinese developer is disrupting the market.

• DeepSeek’s open source reasoning model R-1 ‘allegedly’ matches OpenAI’s new o1 at <10% of the cost, but does it?
• The newsflow that began to precipitate the Nvidia fall was the announcement that R-1 was the most downloaded model on ‘Hugging Face’s’ library, amongst others, as developers sought to understand what it means for AI development.
• Some users claim that R-1’s search feature is superior to that of OpenAI and Perplexity. Others claim that the quality of response still lags OpenAI’s o1 Pro model.
• If true, the reduced costs of development of AI tools and open access means enterprises have alternative options to costly proprietary models.
• DeepSeek reportedly trained its model using only 50k Nvidia GPUs vs other AI labs which can use 500k+ for each model.
• An earlier version of R-1 called V3 was reportedly developed on a budget of $5.6m over two months though the total development cost of R-1 is likely to have been materially higher.
• The basis for the AI model is that it departs from the supervised fine-tuning process widely used in most Large Language Models (LLMs) by using reinforcement learning.
• The latter process skips the requirement, and therefore cost, of training models on curated datasets.
• Unfortunately, the US embargo of Nvidia chips to China may have assisted a competitive response to expensive LLM development.
• Open-source models by definition have a huge cost advantage and this we believe explains why Meta, with its open source Llama 3 model, closed up last night (+2% to $660).
• Open source does come with limitations such as support and compatibility issues however and may not be suitable for all enterprise applications.
• If closed-source competitor OpenAI has been dealt a blow then it may be surprising that Microsoft, with its major investment in OpenAI, was only down 2% at $434 last night.
• There is always a market for lower cost solutions so If development practices become leaner as a function of reduced training costs, then this has the potential to significantly open up the AI inference market.
• In itself this is not a bad thing, but it could reduce the demand for high end GPUs used in training data sets, hence the move down in Nvidia’s share price.
• The shortage of global GPU supply and Nvidia’s premium gross margins (c75%) always looked susceptible to competition.
• The potential use of lower grade hardware (such as Nvidia’s cut-down H800 chip) in development which can lower cost without impacting latency clearly has significant advantages over Nvidia’s premium H100 chip and its Grace Blackwell architecture.
• These moves may have an effect on demand at the margin but In our view, the opening up of a lower cost market may be generate complementary demand for LLMs though it feels unlikely that it will materially diminish the demand for enterprise high performance computing.
• Coincidentally, the news arrived at a time of slowing growth for the so-called Magnificent 7 with the market susceptible to negative news flow.
• Nvidia, at an indicative opening price of c$120+ today, and a FY26E p/e of 34x for a business growing 50%, does not feel overly exposed to a further material de-rating.
• But the forward earnings growth differential between the Magnificent 7 and the S&P 493 is closing suggesting further rerating may be due.
• We question the prospective ROE and capex plans of the Magnificent 7 and while capital markets have been happy to support these plans there may be some rethinking due.
• The move in the Nvidia share price feels like a healthy correction – for now.

Gold market comment (17/01/2025):     Podcast:  https://audioboom.com/posts/8639775-john-meyer-gold-is-good-solid-asset-to-own

Video:  

Economics

US – Treasury Secretary Scott Bessent is looking to start off with 2.5% universal tariff on US imports gradually ramping up to as high as 20%.

• The 2.5% levy would move higher by the same amount each month allowing the administration to negotiate potential trade deals with its counterparties.
• President escalated tariff rhetoric on Monday in a speech in Florida threatening more duties on semiconductors, metals and pharmaceuticals, FT reports.
• US futures are trading higher this morning following a sell off at the start of the week on the news of the DeepSeek AI algorithm release that was comparable to OpenAI and Google models but came at a fraction of the cost.
• DeepSeek engineers are reported to have been also able to write code without using Nvidia’s Cuda software platform that is viewed to the Company’s dominance of AI development, according to FT.
• The news raised concerns over competitiveness of existing AI tech companies and aggressive projections for semiconductors’ demand.
• S&P 500 and Nasdaq futures are up 0.4% and 0.6% this morning after losing 1.5% and 3.1% on Monday.

China – Central bank injected a record amount of liquidity via its new tool in January.

• The PBOC lent CNY 1.7tn (~$234bn) in outright reverse repurchase agreements using three and six month contracts to support liquidity in the markets.
• The amount matched the amount of liquidity released under reverse repos and government bond purchases recorded the previous month.
• Investors doubt the latest government initiative to boost personal consumption by offering subsidies will be enough to improve sentiment, Blomberg writes.
• Authorities are offering subsidies stimulating shoppers to spend more over the eight day Lunar New Year holiday that starts today.
• Shanghai, for instance, in September unveiled CNY 500m worth of vouchers for spending on hotels, dining and movies.
• The municipality announced another round of vouchers last week as latest economic data showed a drop in retail sales in 2024, the first time in more than four decades (excl pandemic related slump).
• Some economists are questioning the efficacy of the programme arguing that subsidies are just front loading demand with job prospects and income growth remain subdued.
• China is celebrating Lunar New Year with local equity markets to reopen next Wednesday.

Germany – Industrial lobby group expects the economy to post a third annual GDP drop this year.

• BDI estimates the economy to shrink 0.1% this year following a 0.2% drop in 2024 and 0.3% decline in 2023.
• Markets are more upbeat on the outlook with the median Bloomberg prediction for a 0.4% expansion.
• Bundesbank expects growth of just 0.2% but warns of a potential contraction amid uncertainty over new US administration proposals to implement new tariffs.

Currencies

US$1.0426/eur vs 1.0486/eur previous. Yen 155.68/$ vs 155.13/$. SAr 18.834/$ vs 18.573/$. $1.243/gbp vs $1.246/gbp. 0.624/aud vs         0.629/aud. CNY 7.245/$ vs 7.261/$.

Dollar Index 107.928 vs 107.518 previous.

Precious metals:

Gold US$2,735/oz vs US$2,758/oz previous

Gold ETFs 83.1moz vs 83.1moz previous

Platinum US$940/oz vs US$941/oz previous

Palladium US$960/oz vs US$973/oz previous

Silver US$29.9/oz vs US$30.3/oz previous

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

Base metals:   

Copper US$9,027/t vs US$9,189/t previous

Aluminium US$2,585/t vs US$2,624/t previous

Nickel US$15,540/t vs US$15,715/t previous

Zinc US$2,799/t vs US$2,829/t previous

Lead US$1,938/t vs US$1,949/t previous

Tin US$29,525/t vs US$30,050/t previous

Energy:           

Oil US$77.6/bbl vs US$78.5/bbl previous

• US energy market forecasts were downgraded as new AI technology from Chinese start-up DeepSeek cast doubt on a projected surge in future electricity demand.
• The 1.1GW Inch Cape offshore wind project in Scotland to reach first power in late 2026 from the deployment of 72 15MW turbines has secured £3.5bn of project financing from a lending group of 22 commercial banks.

Natural Gas €48.5/MWh vs €48.6/MWh previous

Uranium Futures $68.7/lb vs $71.2/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$104.0/t vs US$104.8/t

Chinese steel rebar 25mm US$487.6/t vs US$486.5/t

HCC FOB Australia US$189.0/t vs US$190.0/t

Thermal coal swap Australia FOB US$115.5/t vs US$117.0/t

Other:  

Cobalt LME 3m US$23,750/t vs US$24,300/t

NdPr Rare Earth Oxide (China) US$57,284/t vs US$57,155/t

Lithium carbonate 99% (China) US$10,145/t vs US$10,123/t

China Spodumene Li2O 6%min CIF US$815/t vs US$815/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$430/t

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

Europe Ferro-Vanadium 80% US$24.6/kg vs US$24.6/kg

China Ilmenite Concentrate TiO2 US$296/t vs US$295/t

Global Rutile Spot Concentrate 95% TiO2 US$1,588/t vs US$1,588/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$305.0/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

BMW and Tesla join Chinese firms in EU tariff challenge

• Tesla and BMW have joined Chinese EV manufacturers in challenging the EU’s tariffs on Chinese-made EVs, filing cases with the Court of Justice of the European Union (CJEU).
• BYD, Geely and SAIC had all submitted lawsuits last week.
• Specific details of Tesla’s claim are yet to be disclosed.

Nio records over 100,000 battery swaps in a day

• Nio has revealed in completed 103,919 battery swap services on 23^rd January ahead of the Chinese New Year holiday.
• The announcement on Chinese social media platform, Weibo, said that more than 80% of the power added to Nio vehicles on the highway came via battery swap services.
• Nio has 3,064 battery swap stations in China, with 955 located along highways.
• The company also has 2,639 supercharging stations offering 12,222 charging piles and 1,684 destination charging stations offering 13,118 charging piles.

Company News

Ariana Resources (AAU LN) 1.63p, Mkt Cap £30m – Newmont Mining continues its exploration support

• Ariana Resources reports that Newmont Mining is to invest an additional US$871,000 in its 5-year Exploration Alliance which was launched in March 2022 with an initial US$2.5m funding to advance exploration for gold and copper in southeast Europe.
• The investment, via Ariana Resources 76% owned Western Tethyan Resources (WTR), is via 28.88m Ariana shares priced at 2.375p/share with Newmont also continuing its technical support.
• Managing Director, Dr. Kerim Sener, explained that the Alliance’s “exploration programmes to date have encompassed project generative work across Kosovo and North Macedonia, with several other projects across the Alliance region having been reviewed and assessed”.
• He said that “On the back of the results of these programmes, we are now positioned to undertake further work across some of the priority targets generated and we look forward to providing further updates on these programmes as they advance”.
• Success in exploration would result in a project being transferred to a “dedicated “Mining Company”, which will initially be held 100% by WTR with Newmont having the right to “invest a further US$1 million in the Mining Company over a further period of two years, enabling it to earn-in to 60% in such Mining Company”.
• “Expenditure of a further US$15 million on a pre-feasibility study, which establishes a JORC or NI43-101 resource of over two million ounces of gold, will enable Newmont to earn-in to 75%”.
• In 2023, Newmont reported exploration expenditure of close to US$200m.

Conclusion: Additional investment from Newmont suggests that the Exploration Alliance is generating sufficiently encouraging results and that there may be more to come.

Aterian plc* (ATN LN) 51p, Mkt Cap £6m – Rio Tinto resume drilling in Rwanda, pegmatites intersected

(Rio Tinto jv has the option to invest US$7.5m in two stages to earn up to 75% in the HCK lithium and tantalum hard rock prospect in Rwanda)

(Rwanda: Aterian holds an effective 100% stake in the Musasa Mining Licenses plus a 70% interest in Kinunga Mining Limited which holds the HCK licence alongside HCK Mining Company Limited which has a 30% interest.)

(Botswana: Aterian also holds a 90% in Atlantis Metals which holds its licenses in Botswana). (Morocco: Aterian holds 100% on all licenses held in Moroc

co)

• Aterian reports on drilling at HCK in Rwanda in cooperation with Rio Tinto which is supervising and managing the drilling.
• Aterian and Rio Tinto are JV at HCK, which holds lithium spodumene prospectivity.
• Rio has now drilled two holes since the New Year, to depths of 252m, whilst a third hole is in progress.
• Reports suggest ‘multiple pegmatite dykes were intersected in the initial two holes.’
• Core has been shipped to Kigali where Rio is conducting geological and mineralogical logging.
• Samples will then be shipped to an external lab, with assays due 1Q25.

Conclusion: Rio have moved quickly to start drilling this field season in Rwanda, and assay results are due this quarter. It is encouraging to see reports of multiple pegmatite dyke intersections in the recent core. Rio recently highlighted their dedication to lithium’s future with the purchase of Arcadium for c.US$6.7bn, with hard rock operations expected to be a fundamental part of their long-term growth strategy in the space. We look forward to more updates and results as and when they become available.

*SP Angel acts as Broker to Aterian Plc

Cobra Resources (COBR LN) 1.13p, Mkt cap £8.8m – Bench-scale metallurgical work shows capacity to produce rare-earth carbonate product from Boland project

• Cobra Resources reports that further bench-scale metallurgical testing of in-situ recovery (ISR) methods on material from its Boland rare-earths project in South Australia has produced “a potentially saleable mixed rare earth carbonate”.
• The mixed rare earth carbonate (MREC) product has a grade of 65.2% which is described as “Exceptionally high grade” with low levels of impurities and a “High critical Heavy Rare Earth (“HREO”) content: industry standout HREO quantity of 14.5% of MREC”.
• The company says that “based on treated sample grade of 4,447ppm TREO, ~4.2kg of MREC could be produced from one tonne of Boland ore at this grade”.
• Managing Director, Rupert Verco, said that “this is an exceptional milestone for the Company as it validates Boland’s potential bottom quartile cost operating metrics, owing to the mineralisation’s amenability to ISR, and confirms that a quality product can be achieved through a simple, low-cost flowsheet”.
• Today’s announcement also confirms that “Results from 54 resource-focused drillholes … [are] … expected during February 2025”.
• The company also explains that it expects to deliver an initial mineral resource estimate for the project in June/July this year and undertake “Infield permeability testing” also around June/July.

Conclusion: Bench scale demonstration of the ability to produce a potentially saleable rare-earth carbonate product from Boland is likely to be followed by an initial MRE and infield permability testing later this year.

Cornish Metals* (CUSN LN) 8.2p, Mkt Cap £44m – NWF and Vision Blue participate in £56m funding for South Crofty

• Cornish Metals announces a proposed funding of a minimum £56m at a price of 8p/share.
• The UK’s National Wealth Fund (NWF) “a company wholly-owned by HM Treasury … has conditionally … [agreed to contribute] … up to £28.75 million by way of a strategic investment … for up to 359,375,000 new common shares … at 8 pence per share (the “Issue Price”)”.
• The NWF investment is subject to “a minimum of £25 million”.
• In addition, “Vision Blue Resources Limited … which currently holds approximately 25.95 per cent. of the issued share capital of the Company, has also conditionally agreed to subscribe at the Issue Price … for such number of new Common Shares which are required in order to maintain its c. 25.95 per cent. ownership interest in the Company”.
• Vision Blue Resources will also subscribe for “such further number of Common Shares as shall be required in order for the VBR Subscription to raise, in aggregate, up to a maximum of £18,280,550”.
• Further funds are to be raised via a “conditional placing to both new and existing institutional and other investors …  at the Issue Price. The Company has also granted the Placing Agents a broker option pursuant to which an additional up to c.£5.9 million may be raised at the Issue Price subject to demand”.
• The additional funds “will be principally used to ensure that the Company can continue with its path to development through competing the shaft refurbishment and de-watering process, the start of early project works, ordering long lead items and completion of the project finance process and up to the point of the formal final investment decision at its South Crofty Tin Mine”.
• This includes “funding approximately £20m of the South Crofty Project’s initial capital expenditure requirements” as well as continuing to progress detailed project engineering.
• In detail, approximately 24% (£13.3m) will be used for mining and related activities, including dewatering with a further ~31% (£17.2m) for long lead time items and ‘early works’ plus ~23% (12.6m) for site costs and necessary land purchases.
• A further £7.8m (14%) will repay “the credit facility plus accrued interest provided by Vision Blue to the Company” with the remaining £5.1m used for project engineering work.
• “The Fundraising is expected to provide financial runway through to the end of Q1 2026 with project debt finance to be arranged before then and a final investment decision expected at that time”.
• Welcoming the investment from NWF and the continuing support of Vision Blue Resources, CEO, Don Turvey, explained that “Tin is a critical mineral that is essential for the energy transition and anything electronic. South Crofty is a strategic asset with the ability to responsibly provide a secure, high grade long-term supply of tin, reviving Cornwall’s rich mining history and contributing to the local economy and the UK’s transition to net zero”.
• Reflecting on the progress achieved in the last two years, he added that the “financing will enable the Company to maintain this strong momentum and further unlock the project’s potential by delivering crucial milestones expected in the coming year including the completion of mine dewatering and shaft refurbishment, the start of early project works, placing orders for long-lead items, and concluding the project finance process”.
• Cornish Metals is working on a DFS for South Crofty however, based on an assumed long-term tin price of US$31,000/t its May 2024 PFS showed capex of US$177m generating an after-tax NPV8% of US$201m and IRR of 29.8%.
• The PEA envisages from the production of up to 5,000 tonnes per year and total production of 49,310t of tin, in concentrate, from the processing of almost 3mt of pre-concentrated ore averaging 1.83% tin over a 14-years mine life.
• the introduction of pre-concentration of the ore using X-ray and dense media (DMS) sorting sees processing rates of 250ktpa through upgrading of mined ore production of 500ktpa.
• The major components of the pre-production capital costs, which includes a US$25.7m contingency, are US$40.5m on capitalised mining costs and US$59.7m for the process plant with pre-production payback within 3 years.
• An additional US$54m of post-production capital is required to sustain production and deliver life-of-mine cash costs of US$12,705/t and all-in-sustaining costs of US$16,661/t of tin production, net, we assume, of the by-product copper and zinc production of 3,444t and 3,255t respectively.
• Operating costs of ~US$103/t include mining costs of ~US$65/t and processing costs of ~US$25/t.
• Subsequent exploration drilling work south of the mine has identified relatively extensive mineral potential in the ‘Great Flat Lode’ and ‘Wide Formation’ and we have previously commented that this may ultimately expand the mineral resource and extend the mine life and is a testament to the further exploration potential of an area which has already been mined for at least 400 years.

• In August last year the company announced that initial results of the drilling in the Carn Brea area had shown that “the Wide Formation structure … [extends] … over a 1.6km strike length, a downdip extent of at least 525 meters and thicknesses ranging from 1.8 meters – 4.8 meters. The structure remains open” and includes an intersection of “1.21 meters grading 0.87% Sn in CB23_004”.
• The drilling also “identified a new mineralized structure lying directly beneath the Great Flat Lode (named the “Great Flat Lode Splay”), and several high-grade, steeply dipping tin zones between the Great Flat Lode and the Wide Formation. Notable tin intercepts from the newly identified Great Flat Lode Splay include 3.38 meters grading 1.01% Sn in CB23_002”.

Conclusion: Additional funding including the participation of the UK’s National Wealth Fund, and the continuing support of Vision Blue Resources maintains progress toward the resumption of tin production from South Crofty where a final investment decision is expected in Q1-2026.

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

Fortescue Ltd (FMG AU) A$19, Mkt Cap A$458bn – Purchase of Red Hawk Mining

• Fortescue announced overnights plans to buy Red Hawk Mining for A$1.05/share in cash, for a fully diluted equity value of A$254m.
• Red Hawk holds the Blacksmith Iron Ore Project, 30km west of Fortescue’s Solomon operations.
• Blacksmith holds an MRE of 243mt at 59.3% Fe.

Goldstone Resources* (GRL LN) 1.3p, Mkt Cap £10m – Settlement of the £2.8m convertible note

• The Company is issuing ~148m shares to Devonport Capital in consideration for the £2.8m convertible loan settlement.
• Earlier in December, the Company announced an agreement to issue 85.9m shares to settle the outstanding principal and accrued interest of the loan (implying a 3.25p conversion price) as well as 61.8m new shares as a consideration for the conversion agreement.
• New 148m shares represent ~16% of the enlarged issued share capital.

Conclusion: Settlement lifts immediate liquidity pressures as the Company is working on raising production rates targeting 1kozpm in 1Q25.

*SP Angel acts as broker to Goldstone Resources

Great Western Mining* (GWMO LN) 0.018p, Mkt Cap £1.9m – Update on precious metals mill in Nevada as first production looms

1. Great Western’s Western Milling JV was recently inspected by the State of Nevada Inspector of Mines to ensure all regulations had been complied with before production start.
2. The inspection reported ‘no significant issues’ but highlighted a few ‘minor issues, primarily health and safety items.’
3. These will be addressed before first production.
4. The Nevada Division of Environmental Protection also visited, with no issues noted.
5. No issues also arose from a site visit to the OMCO tailings site.
6. Trial production will begin once the minor health and safety adjustments have been made.

Conclusion: Great Western’s precious metal processing JV has faced numerous delays, predominantly owing to Nevada State bureaucracy. These now seem to be behind the company and first production looms imminently following the recent inspection. The mill will be ramping up at a time of record high gold and silver prices and Great Western should be able to capitalise on this whilst also progressing the mill to its next stage, which will include vat-contained leaching and higher recoveries.

*SP Angel act as Broker to Great Western Mining, an SP Angel Analyst has visited Great Western’s Nevada claim blocks.

Guardian Metal Resources (GMET LN) 32.8p, Mkt Cap £41m – Exploration results from Pilot Mountain, Nevada

Power Metals Resources* (POW LN) 14p, Mkt cap £15m – (Power Metals* holds a 45% stake in Guardian Metal Resources)

• Guardian Metal Resources reports that rock sample assays from Pilot Mountain show evidence of porphyry copper and molybdenum mineralisation.
• Pilot Mountain is “the Company’s flagship tungsten asset where drilling on the deposit continues with a plan to continue to pre-feasibility engineering study in 2025” but the new assays indicate that it may also host a “mineralised hydrothermal breccia nested within the Company’s Porphyry South target”.
• Samples “from various breccia outcrops include: 1.93% Cu, 204 ppm Mo and 0.94% Cu, 287 ppm Mo” at the 1.25×1.5km Porphyry South target which is described as “one of 3 porphyry targets identified to date at Pilot Mountain”.
• CEO, Oliver Friesen, said that the “results validate our belief in the significant potential of Pilot Mountain as a large-scale multi-metal project. The discovery of a hydrothermal breccia zone with outcropping Cu-Mo mineralisation is a game-changer for this underexplored target area and underscores the potential scale and quality of this asset”.

• Conclusion: Early-stage exploration rock chip sample results from the Porphyry South target show the potential for copper/molybdenum mineralisation at Pilot Mountain where the company is looking at expanding its existing tungsten resource where the Desert Scheelite and Garnet deposits host an ‘Indicated’ mineral resource of 9.01mt at an average grade of 0.26% tungsten trioxide (WO₃) plus an ‘Inferred’ resource of a further 3.53mt at an average grade of 0.31% WO₃.

*SP Angel acts as Nomad and Broker for Power Metals

Kavango Resources* (KAV LN) 0.82p, Mkt Cap £25m – Conversion of 538m shares into equity as prospectus is published

• Kavango report the conversion of loan notes into 547,995,076 new shares upon publication of their latest prospectus yesterday.
• The strategic financing of Kavango was announced on 19 December which reported the raising of £6,566,200.
• Zimbabwe gold: Kavango is exploring and developing gold production from Prospects 3 and 4 at its Hillside Gold Project in Zimbabwe near Bulawayo.
• The team have hired a mining engineer, who has experience in lode gold systems and modern mining practices.
• Metallurgical work is ongoing to compliment the manufacture of a gold process plant in South Africa.
• Zimbabwe hosts 22 Archean greenstone belts which are considered to be similar to that seen in Australia.
• The company hold 100% of 440Ha at Hillside and run
• Prospect 1: reopened two shafts with small scale mining. The team are preparing to install a small CIP VAT leach process plant at the site.
• Prospect3: potential for an open pit operation with throughput at 30,000tpm grading around 1.2g/t and potential for ~70% recovery rates
  • Capex is ~$3m. Gold in granitic material is thought to run at 1.98g/t with metallurgical testing giving 92% recoveries.
  • Resource: the short-term resource target is modest but the prospect shows significant upside potential
  • A number of parallel reefs have been identified with drilling being done to extend the known resource
• Prospect 4: Drilling is being done to test underground potential with five x 500m holes. Artisanal mining at the site across 200x600m area.
  • Potential for a 200tpd CIL process plant with potential for expansion.
  • Drilling to be done from underground with a decline to be driven to 90m depth.
• Botswana exploration: Kavango plans to complete the next phase of geophysics shortly to guide us on the next phase of drilling, which we are planning for Q1 2025.
  • Rio Tinto and BHP are both working on ground close to Kavango licenses in Botswana.
• Number of shares: Kavango now have 3,048,706,821 shares following conversion of the convertible loan notes.

Conclusion: Kavango is preparing to forge ahead with growing gold production in Zimbabwe while continuing to work on its exploration portfolio in Botswana.

*An SP Angel Analyst holds shares in Kavango

Newmont Corporation (NEM US) $42, Mkt Cap $47bn – Sale of Porcupine for up to US$425m

• Newmont has now completed its planned divestments by selling the Porcupine operation in Ontario to Discovery Silver.
• Discovery will pay up to US$425m, including:
  • Cash consideration of US$200m due on closing
  • Equity consideration of $75m in Discovery shares, issued to Newmont at same prie as bought public deal offering
  • Deferred cash consideration of US$150m, paid in annual cash payments from December 2027.
• Porcupine proven and probable reserves in 2023 stood at 32.7mt at 2.1g.t Au for 2.2moz.
• Porcupine holds the Hollinger open pit and Hoyle Pond underground operations.
• The asset produced 260koz in 2023, at US$1,577/oz AISC.

Sylvania Platinum* (SLP LN) 47p, Mkt Cap £119m – 2Q25 results amid continued growth investment programme

• South African PGM producer Sylvania reports production results for the FY2Q25 period.
• Plant feed of 640kt, up 2%qoq with feed head grade at 2.19g/t, up 8%.
• Total 4E production up 6% to 20.2k.
• Average 4E basket price achieved of US$1,387/oz, up 2%qoq, with revenue of US$19.9m, up 7%.
• AISC of US$971/oz 4E vs cash costs at US$946/oz 4E, down 2% and 3%qoq respectively.
• EBITDA reported up 104% to US$6.7m and net profit up 110% to US$6.3m.
• Meanwhile CAPEX spend over the quarter up 28% to US$9.9m and Cash balance down 18% to US$77.5m
• Company continues to invest in the Thaba JV,  with first production expected 2HFY25.
• Construction of high voltage yard delayed by high rainfall, not expected to impact commissioning.
• Thaba JV expected to be delivered on time.
• Company maintains guidance of 73-76koz 4E for the year.

*An SP Angel analyst holds shares in Sylvania Platinum

Tertiary Minerals* (TYM LN) 0.08p, Mkt Cap £2.9m – Annual results following busy year of drilling

• Tertiary has published their annual results to the 30^th September.
• The Company has completed several JVs in Zambia, with KoBold and First Quantum.
• At Mushima North, the Company is drilling their own programme, returning copper, zinc and silver mineralisation, with further drilling planned.
• At Mukai, where Tertiary has a JV with First Quantum, an initial scout drilling programme has been conducted and results are due soon.
• At Konkola West, KoBold is completing a deep dipping hole to assess the potential for down-dip extensions to the Konkola and Lubambe mines.
• Company has drilled four holes in Nevada at their Brunton Pass copper/gold target and expects results before end of February.
• Cash position at year end of £775k

*SP Angel acts as Nomad and Broker to Tertiary Minerals

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

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