SP Angel Morning View -Today’s Market View, Tuesday 2nd April 2024

Gold prices soar past record highs following Fed inflation gauge as Central Bank buying accelerates

MiFID II exempt information – see disclaimer below

BHP (BHP LN) – Sale of Queensland metallurgical coal operations

Golden Metal Resources (GMET LN) – Drilling plans for Pilot Mountain

Goldstone Resources* (GRL LN) SUSPENDED – Board changes and corporate update

Talison Lithium (Private JV) – Greenbushes spodumene mine records solid profits on production jump despite price slump

Horizonte Minerals (HZM LN) – Further short-term relief on interest repayments as the company tries to secure a long term financial solution

Kavango Resources* (KAV LN) – Heliborne geophysics in Kalahari Copper Belt

Kodal Minerals* (KOD LN) – Termination of Suay Chin’s first right of refusal on spodumene offtake

Rainbow Rare Earths (RBW LN) – 35kg bulk sample sent to Florida for K-Tech testing

Shanta Gold (SHG LN) – Acquisition update

Sunrise Resources (SRES LN) – Sale of mineral claims in Nevada

Versarien* (VRS LN) – Accounts highlight turnaround prospects for graphene group

IGTV: Copper:  https://www.ig.com/uk/news-and-trade-ideas/beat-the-street–megacaps-and-chips-higher-ahead-of-us-data–tes-240326

https://www.ig.com/uk/news-and-trade-ideas/_copper-likely-to-stay-above–9-000–meyer-240315

Sharepickers – on Gold, Copper, Arc Minerals, Atlantic Lithium, Cornish Metals, Empire Metals & Sovereign Metals

Podcast: https://audioboom.com/posts/8477440-john-meyer-on-gold-copper-arc-atlantic-cornish-empire-sovereign.

Youtube: https://www.youtube.com/watch?v=PcmKx065aWw.

Gold prices soar past record highs following Fed inflation gauge as Central Bank buying accelerates

• Gold prices jumped to $2,270/oz, falling to $2,232/oz before bouncing back to $2,262/oz today.
• The metal had weakened on the back of strong US Factory data, having been spurred by softer PCE data last week.
• Confusingly, Treasury yields have not supported gold’s recent rally, with the 10-year still sitting at 4.3%, vs 3.8% in December which triggered gold’s previous rally.
• Asian market trading has been strong, with China’s central bank also reportedly been boosting reserves.
• ETF holdings remain low, providing additional catalyst potential should the current rally persist.
• Analysts are boosting gold price predictions, with bulge bracket banks boosting forecasts to up to $2,500/oz.
• Given the disparity between Treasury yields, the dollar and gold, expect a weak nonfarm payroll posting to add further fuel to the gold rally.

Copper climbs despite record contango suggesting weak short term demand

• Copper prices have climbed to around the $9,000/t mark, up from recent lows around the $8,800/t mark.
• Contango levels have hit records on the LME, with futures currently trading at a $100/t discount to spot prices.
• Improving factory data in the US has provided some cause for demand optimism, with China production cuts amid rockbottom TCRC fees also supporting the rally.
• The Renmimbi will be an interesting player in metal prices given its current level at four month lows, driving speculation of price intervention.
• A weaker Yuan makes it more expensive for Chinese copper buyers on the international market.

Iron ore prices fall below $100/t again as China home sale drought persists

• Iron ore prices are hovering around the $101/t mark for the 62% index, having fallen below the key resistance level.
• Property sales in China continue to slump, with new-home sales across 100 real estate companies down 46% yoy to c.$50bn.
• Country Gardens reported it would miss its annual results reporting deadline, adding further concern over the sector.
• Iron ore stockpiles reportedly rose 1.1% wow to 142mt.

Chinese lithium companies optimistic that bottom is in as expansion plans mount

• Ganfeng and Tianqi both reported annual results, with slumping prices impacting revenues.
• However, both firms have committed to continuing to expand market share as their smaller rivals struggle.
• Tianqi confirmed plans to accelerate production plans at the Yajiang spodumene mine in Sichuan.
• The mine holds 19.7mt at 1.3% Li20.
• Ganfeng reports it intends to ‘gradually collect and develop’ low cost brine assets.
• CMOC and Zijin have also noted intentions to boost lithium capacity through M&A opportunities. (Bloomberg)

Economics

US – Manufacturing PMI climbs to growth for first time in 18 months

• Manufacturing PMI at 51.9 vs 52.2 previous
• Construction spending down 0.3% vs -0.2% previous
• ISM Manufacturing Employment at 47.4 vs 45.9 previous
• ISM Manufacturing PMI at 50.3 vs 47.8 previous
• ISM Prices at 55.8 vs 52.5 previous

Germany – The gauge of inflation expectations among businesses fell to the lowest level since March 2021 boding well for a rate cut in the near term.

• Ifo Institute’s price expectations index fell from 15.0 in February to 14.3 in March.
• “Inflation is still on the decline and should fall below 2% this summer… from a German perspective, there’s no reason why the ECB shouldn’t cut interest rates soon,” Ifo head of forecasts commented on the data.

UK – House prices unexpectedly fell 0.2%mom in March versus an 0.3% increase forecast and following a 0.7%mom gain registered the previous month, Nationwide data showed.

• Prices were still 1.6% higher than March last year with average property now at ~£261k.
• “Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards,” Nationwide commented on numbers.

Israel/Iran – Air strike on the consular part of Iran’s embassy in Damascus, Syria, kills three senior members of Iran’s Revolutionary Guards.

• The strike that Iran blamed on Israel marks another escalation in the regional conflict and is the fourth suspected Israeli attach on Tehran’s forces in Syria this year.
• Israel that usually neither confirms or denies strikes linked to Iran did not comment on the strike.
• Zahedi is reported to have been responsible for Revolutionary Guards’ overseas operations having previously commanded forces in Lebanon and Syria from 2008 to 2016.

Ukraine – Military carried out it longest range drone strike in Russia targeting an industrial facility and a refinery ~1,300km from the Ukrainian border.

• The drone attacked the Alabuga special economic zone that hosts a facility producing Iranian designed Shahed drones.
• Russian officials said that another drone targeting a refinery in nearby Nizhnekamsk was downed without any damage to the facility or casualties.

Russia – Russian authorities abandon rescue at Pioneer mine collapse in Amur region

• Russian authorities have decided to terminate the rescue operation at the Pioneer mine in Zeya District.
• The official statement was made by JSC Pokrovsky Mine. Drilling results showed that the workings, where the miners could be, are filled with rock mass and water.
• The lives of rescuers and employees involved in the operation are in danger due to the high probability of repeated collapse of the rock mass and flooding in the underground workings, as well as partial collapse of the pit wall – this is the conclusion given by experts.
• Rescuers and employees of the mine are threatened by the collapse of the pit wall in the volume of more than 200,000m3, and there is also a threat of a breakthrough of waterlogged rock mass, which accumulates in the pit. It is impossible to pump it out at the moment due to the danger to the lives of specialists.
• The results of exploratory drilling of five boreholes into all underground horizons where people could be present show that the underground workings are filled with rock, clay, ice and water throughout the entire depth.
• The underground workings and main access ramp had held firm for eight years indicating that poor working practices and a lack of attention and investment by current management was largely responsible for the collapse of the mine workings and loss of life in the mine.
• We expect other Russian mines may suffer similar events in an environment where profit is prioritised over safety.

Currencies

US$1.0732/eur vs 1.0791/eur previous. Yen 151.69/$ vs 151.37/$. SAr 18.890/$ vs 19.016/$. $1.256/gbp vs $1.261/gbp. 0.650/aud vs 0.649/aud. CNY 7.235/$ vs 7.228/$.

Dollar Index 105.04 vs 104.59 previous.

Precious metals:

Gold US$2,255/oz vs US$2,196/oz previous

Gold ETFs 82,162,357.7moz vs 82,133,128.3moz previous

Platinum US$911/oz vs US$896/oz previous

Palladium US$1,012/oz vs US$998/oz previous

Silver US$25.45/oz vs US$24/oz previous

Rhodium US$4,725/oz vs US$4,675/oz previous

Base metals:

Copper US$ 8,981/t vs US$8,845/t previous

Aluminium US$ 2,362/t vs US$2,304/t previous

Nickel US$ 16,930/t vs US$16,715/t previous

Zinc US$ 2,488/t vs US$2,443/t previous

Lead US$ 2,034/t vs US$2,008/t previous

Tin US$ 27,890/t vs US$27,420/t previous

Energy:

Oil US$88.4/bbl vs US$86.6/bbl previous

• Crude oil prices rose over the weekend after an Israeli attack on Iranian military personnel in Syria threatened to escalate tensions in the Middle East.
• US natural gas prices moved higher after the EIA reported a 36bcf w/w draw (-29bcf exp) to 2,296bcf and dry gas production fell below 100bcf/d on April 1^st.
• The US Baker Hughes rig count was down 3 units to 621 rigs last week (-134 or 18% y/y), with oil rigs down 3 to 506 units (-86 y/y) and gas rigs unchanged at 112 units (-48 y/y) as Louisiana lost 3 rigs to 41 units (-16 y/y).

Natural Gas €27.2/MWh vs €27.8/MWh previous

Uranium Futures $87.2/lb vs $88.6/lb previous

Bulk:

Iron Ore 62% Fe Spot (cfr Tianjin) US$101.2/t vs US$101.6/t

Chinese steel rebar 25mm US$523.6/t vs US$531.5/t

Thermal coal (1st year forward cif ARA) US$118.5/t vs US$118.5/t

Thermal coal swap Australia FOB US$135.0/t vs US$130.3/t

Other:

Cobalt LME 3m US$28,550/t vs US$28,550/t

NdPr Rare Earth Oxide (China) US$48,926/t vs US$48,700/t

Lithium carbonate 99% (China) US$14,581/t vs US$14,458/t

China Spodumene Li2O 6%min CIF US$1,210/t vs US$1,210/t

Ferro-Manganese European Mn78% min US$975/t vs US$975/t

China Tungsten APT 88.5% FOB US$310/mtu vs US$310/mtu

China Graphite Flake -194 FOB US$490/t vs US$490/t

Europe Vanadium Pentoxide 98% 5.1/lb vs US$5.2/lb

Europe Ferro-Vanadium 80% 26.45/kg vs US$26.45/kg

China Ilmenite Concentrate TiO2 US$330/t vs US$330/t

China Rutile Concentrate 95% TiO2 US$1,430/t vs US$1,446/t

Spot CO2 Emissions EUA Price US$60.9/t vs US$60.9/t

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

Battery News

EV sales slow in US, following 13 straight quarters of increases

• EV sales rose 15% from the first quarter of 2023 to the first quarter of 2024, a slower pace of growth than the previous year.
• However, if Tesla is excluded, EV sales actually rose 33% year-over-year. The slowdown appears to be primarily a “Tesla slowdown”.
• The price gap between EVs and gas-powered vehicles has narrowed significantly, from about $15,000 in March 2023 to around $5,300 by the end of Q1 2024. This is due to excess inventory leading to more discounts and incentives.

Xiaomi EV launch sees $7.6bn added to market value

• Shares in the company surged 16% following the launch of its first EV.

• The electronics maker makes the majority of its revenue from its smartphone business but gained an EV production license from the Chinese government in August 2023.
• The Xiaomi Speed Ultra 7 (SU7) will start at prices under $30,000 – cheaper the Tesla Model 3 in China.
• On Friday the company announced that it had received 88,898 pre-orders for the car in the first 24 hours of sales.

Electric 3-wheeler sales in India see surge of 57% in FY2024, hit record levels of 630,000 units

• The transition to e-mobility is fastest in the 3-wheeler industry, with every second unit sold now being a zero-emission model.
• Electric 3-wheelers now account for 54% of total 3-wheeler sales in India, with CNG models at 30% and diesel at 11%.
• Mahindra Last Mile Mobility topped the sales for the year with 60,013 units, a 103% increase over the previous year.
• YC Electric Vehicles and Saera Electric Auto were the second and third largest players with 42,658 and 30,088 units respectively.
• Other top-selling OEMs included Dilli Electric Auto, Piaggio Vehicles, Mini Metro EV, Champion Poly Plast, and Unique International.
• Bajaj Auto, a recent entrant in the electric 3-wheeler market, sold 10,733 units and ranked 13th among the top 40 OEMs.

Biden’s $7.5bn investment in EV chargers has only seen seven stations built

• The Biden administration announced a $7.5bn investment to establish a nationwide EV charging network, with a goal of 500,000 charging points.
• As of March 2024, only seven EV charging stations had been built using these federal funds – the stations in Hawaii, New York, Ohio, and Pennsylvania offer charging points for 38 vehicles.
• The slow rollout is due to the lengthy process required for states to submit plans to the administration and then solicit bids for the construction of the chargers.
• Analysts estimate the $7.5bn in funding is enough to build up to 5,000 stations or around 20,000 charging points, a fraction of the Biden administration target.
• The strict requirements for publicly-funded chargers, such as needing to work 97% of the time and provide 150 kW of power, have also contributed to the delays.
• However, experts expect the rollout to ramp up significantly in 2024 as more states get their plans approved and start construction on new charging stations.

Tesla raises price of Model Y in US by $1,000

• Tesla has raised the prices of all versions of its Model Y in the US by $1,000.
• The price increase comes a day before Tesla is due to release its Q1 2024 delivery numbers, which are expected to be lower compared to previous quarters.
• This is due to a slowdown in Tesla’s sales amid rising global competition in the electric vehicle market, with Chinese rival BYD overtaking Tesla in deliveries in Q4 2023.
• During Tesla’s Q4 2023 earnings call, executives said they expected deliveries to be “noticeably lower” this year.
• Tesla’s stock price declined 29% during Q1 2024, making it the worst performer in the S&P 500 index. Tesla’s current share price is $175.79 US.

Company News

BHP (BHP LN) 2,331p, £115bn – Sale of Queensland metallurgical coal operations

• BHP reports the completion of its previously announced disposal of Queensland metallurgical coal interests at Daunia and Blackwater to Whitehaven Coal.
• Whitehaven Coal has paid US$2bn to the BHP/Mitsubishi coal alliance (BMA) as well as “a preliminary completion adjustment of US$44.1 million for working capital and other agreed adjustments”.
• The announcement confirms that “Whitehaven Coal paid a US$100 million deposit on signing of the Asset Sale Agreement on 18 October 2023” and also that “US$1.1 billion cash remains payable by Whitehaven Coal to BMA over 3 years after completion and a potential additional amount of up to US$900 million in a price-linked earnout may also be payable by Whitehaven Coal to BMA over 3 years”.
• The “price-linked earnout is subject to a cap of US$350 million each year and depends on average realised pricing exceeding agreed thresholds for each of the 3 years following completion on 2 April 2024 … [leading to a total] … cash consideration for the transaction … [of] … up to US$4.1 billion”.

Golden Metal Resources (GMET LN) 14.5p, Mkt Cap £12.3m – Drilling plans for Pilot Mountain

(Power Metal Resources (POW LN) 0.76p, Mkt cap £15m holds 62% of Golden Metal Resources)

1. Golden Metal Resources reports that it has agreed a 2,000m drilling programme for its wholly-owned Pilot Mountain tungsten project in Nevada with a local diamond drilling contractor.
2. The start of the programme is awaiting the award of the required permits from the Bureau of Land Management, and these are expected to be in place “shortly”.
3. The 14.8km² Pilot Mountain project area, located ~200km SE of Reno, already hosts 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 within the deposits at Desert Scheelite and Garnet.
4. In November 2023, the company announced that high-resolution induced polarisation geophysical surveys at Pilot Mountain had identified “five high-priority un-drilled exploration targets” and when the company announced the injection of £750,000 by a new investor, in March this year, it indicated that some of the funds would be used to progress the exploration of Pilot Mountain.
5. Commenting in today’s announcement, CEO, Oliver Friesen, said that “We have spent the better part of a year preparing exploration and resource expansion targets and we feel very confident with the targets that are now being finalised”.
6. World tungsten supply is dominated by China and the metal is not currently mined in the US, which identifies it as a strategic commodity.

Conclusion: Pilot Mountain is understood to be the USA’s largest known tungsten deposit and moving towards further drilling, which may expand the current resource, is likely to attract interest from the authorities and others seeking to secure a locally-sourced supply.  We await the outcome of the planned drilling with interest.

Goldstone Resources* (GRL LN) SUSPENDED – Board changes and corporate update

• Bill Trew, a Company’s Non-Executive Chairman and a ~25% shareholder, steps down from the Board effective April 1.
• The Company remains in discussions with potential investors regarding a refinancing of outstanding liabilities and an equity raise.
• Any potential equity raise will be conditional on shareholder approval at a general meeting.
• Financial position remained materially unchanged from the announced on March 1.
• At the beginning of the month, the Company had ~$0.5m in cash and $11.2m in outstanding liabilities including $4.8m in relation to the Gold Loan, $3.0m due under the convertible loan note with Blue Gold International (was due for repayment on 30 Nov/23) and a series of smaller creditors with ~$3.4m outstanding and most now overdue for repayment.
• The team is expecting to provide an update regarding a potential refinancing over the next two weeks.
• Shares remain suspended.

*SP Angel acts as broker to Goldstone Resources

Talison Lithium (Private JV) – Greenbushes spodumene mine records solid profits on production jump despite price slump

• Greenbushes in Western Australia, which Fastmarkets reports as the largest and highest grade producer globally, released its financial results yesterday.
• The mine, owned JV Albemarle, Tianqi and IGO Ltd, produced 16% of the world’s spodumene in 2023.
• The holding company Talison recorded a profit of c.$6.3bn over the 12 months to December 31^st, up from $3.26bn in 2022. (AFR)
• Revenues reportedly stood at $9.8bn, despite spodumene prices slumping from $8,000/t to $850/t over the period.
• Albemarle reported a spodumene auction last week for US$1,246/t.
• IGO reported Greenbushes would cut production to 1.3-1.4mtpa in a bid to trim down stockpiles.
• Tianqi reports that Greenbushes is expected to hold a full capacity of 2.14mtpa.
• Greenbushes resource currently stands at 447mt at average Li20 grade of 1.5%, reserves reported at 179mt at average Li20 grade of 1.9%.

Horizonte Minerals (HZM LN) 2.13p, Mkt Cap £4.05m – Further short term relief on interest repayments as the company tries to secure a long term financial solution

• Horizonte Minerals reports that temporary waivers on interest payments granted by its lenders which had been extended until 29^th March in order to facilitate refinancing and restructuring for the development of the Araguaia ferronickel project in Brazil have again been extended until 30^th April.
• While cautioning that there is no assurance of a successful outcome to discussions with the lenders, the announcement warns that “If no extension is agreed, deferred interest originally payable at the end of December 2023 and at the end of Q1 2024 will become immediately due and payable on 1^st May 2024”.
• The company confirms that, as already disclosed, “the Company’s Brazilian subsidiary, has been granted an injunction (Brazilian Precautionary Measure) giving it a 60-day stay period against the enforcement of debt and certain security held by senior lenders and creditors, in order to negotiate and work on a restructuring plan to be approved by its creditors”.
• Horizonte Minerals explains that, as a guarantor of the debts of its Brazilian subsidiary, “if claims are made in relation to the guarantee given by the Company, the Company may also need to consider applying for protective measures that may be available to it, or alternatively appoint administrators for the Company in the UK”.
• In an announcement in early March, Horizonte Minerals said that its cash balance was “expected to provide sufficient working capital until mid-April 2024”.

Conclusion: Horizonte Minerals has again secured the agreement of lenders to waive interest payments which are now suspended until 1^st May to aid in securing a long term financial solution to the shortfalls revealed by the cost overruns at Araguaia. Today’s announcement confirms that failure to agree a solution for the Brazilian project has the potential to jeopardise the future of Horizonte Minerals itself.

Kavango Resources* (KAV LN) 0.95p, Mkt Cap £12.4m – Heliborne geophysics in Kalahari Copper Belt

• Kavango Resources reports results from a recent geophysical survey at their Kalahari Copper Belt targets.
• Helicopter borne gravity surveys conducted by the team has yielded encouraging gravity highs.
• Two linear features have been noted, the Kara and Tsootsha gravity highs, potentially linked to the Okwa complex.
• The Company is looking for basin margins, where base metals potentially lie on the edge of deeper basins.
• These have traditionally been prospective for Cu-Ag mineralisation.
• Kavango considers preliminary studies of the data encouraging, with clearly defined fold hinge targets noted.
• Sandfire’s Motheo Mine holds similar fold hinges associated with copper mineralisation.

Conclusion: Kavango’s exploration team are encouraged by the results from initial interpretation of the heliborne survey, with the presence of basin and sub-basin structures supporting their expectation of sedimentary copper mineralisation. The Company is now looking to define target areas for ground-based geophysics, before looking to start drilling towards the end of this quarter.

*An SP Angel Analyst holds shares in Kavango

Kodal Minerals* (KOD LN) 0.4p, Mkt Cap £80m – Termination of Suay Chin’s first right of refusal on spodumene offtake

BUY – Target 0.97p

(Hainan Mining holds a 51% stake in KMUK which holds the Bougouni Lithium Project in Mali with Kodal holding 49%. The Mali government has the right to a free carry on 10% of the project and an option to acquire a 10% stake)

• Kodal Minerals have terminated Suay Chin International’s first right of refusal on 80% of the spodumene offtake to come from the Bougouni Lithium Project in Mali.
• The move simplifies the process for Hainan Mining to control the offtake from the mine.
• Kodal’s KMUK subsidiary is making a two-stage termination payment of US$14m to settle the offtake contract.
  • US$7m to be paid within 10 business days of the signing of an offtake agreement between KMUK and Hainan,
  • US$7m to be paid within 10 days of the first shipment of spodumene concentrate from the Bougouni Lithium Project, or on 31 October 2024, whichever date is earlier.
• This allows KMUK to enter into negotiations with the Hainan Group and to finalise an offtake agreement with Hainan for 100% of the spodumene product from the Bougouni mine.
• Offtake discussions will initially relate to spodumene production from the Stage 1 DMS ‘Dense Media Separation’ process plant.
• Valuing the jv company on its estimated cash flow shows :
  • Sales of >$1bn of revenues over 4 years .
  • NPV $420m at a 7% discount rate on a post-tax basis.

Assumptions:

• • Price: $2,080/t for 5.5% spodumene concentrate.
  • Production of 120,000tpa
  • Trucking: 10 trucks carrying 350t per day at a cost of under $100/t.
• Valuation: Kodal’s 49% of $420m is estimated to be worth some $206m (£165m) at a spodumene concentrate price of $2,080/t.
• Adding in the $17.75m of cash in Kodal along with the added dilution realises a valuation 0.70p/s.
• If we apply a 25% discount to the NPV valuation we get 0.97p.
• Cash: Kodal reported amounts due from subsidiary undertakings of US$14.2m plus 0.5m investments in subsidiary undertakings along with US$0.44m in cash and cash eq plus other receivables. This equates to $15.25m of total assets at the company level and $15.7m at the group level.

Conclusion: Kodal are working towards the development of the Bougouni Lithium mine in Mali with long lead items being ordered and infrastructure and early earthworks in progress. It will be interesting to see if Hainan Mining will want the full mine offtake and how much they will pay.

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

Rainbow Rare Earths (RBW LN) 9.62p, Mkt cap £60m – 35kg bulk sample sent to Florida for K-Tech testing

• Rainbow Rare Earths have sent 35kg of processed REE carbonate material to K-Tech in Florida for further processing.
• The sample is 35kg, which is the same weight as the baggage allowance in Economy Flex Plus on Emirates, is to be used in the separation of specific rare earth oxides.
• While this is somewhat heavier than your average chocolate bar it is still a tad short of the sort of scale we would like to see before investing the $295.5m as estimated in the October 2022 PEA.
• We look forward to the results and to justification for the application of the CIX ‘continuous ion exchange’ and CIC ‘ continuous ion chromatography’ processes to be used.

Shanta Gold (SHG LN) 14.2p, Mkt Cap £150m – Acquisition update

• The Company reports on the progress of the latest 14.85p cash offer from Saturn Resources.
• The team has now received unconditional approval from the Competition Authority of Kenya.
• The Company reports the acquisition remains conditional on other regulatory approvals in Kenya and Tanzania as well as shareholder approval.
• General meeting is scheduled for 2 April.
• The acquisition is expected to become effective in H1/24 with a long stop date for the deal set at 9 October.

Sunrise Resources (SRES LN) 0.05p Mkt Cap £2.0m – Sale of mineral claims in Nevada

• Sunrise Resources reports that it agreed the sale of 29 mining claims in Nevada held for the industrial mineral, diatomite.
• The claims, which are located in the Crow Springs area around 85km by road from a diatomite processing plant owned by the purchaser, Dicalite Management Group, are being sold for “US$150,000 of which US$75,000 is payable on transfer of the Claims” with the balance “payable when Dicalite submits a mine plan of operations to the Bureau of Land Management”.
• In addition, “Sunrise will retain a royalty of US$6/dry ton of diatomite mined and removed from the Claims and Dicalite will have an option to purchase the royalty for US$500,000 after the 10^th anniversary of the first royalty payment”.
• Commenting of the agreement, to sell of the “these non-core claims”, Executive Chairman, Patrick Cheetham, said that the “sale is consistent with our policy to generate 100% owned attractive exploration projects at very low cost to be sold or joint ventured to other companies, and to mitigate risk from over exposure to any one project or resource”.
• Mr. Cheetham confirmed that Sunrise Resources’ “out-of-pocket expenses to date in securing and maintaining the Crow Springs diatomite claims are less than US$25,000”.

Versarien* (VRS LN) 0.12p, Mkt Cap £1.8m – Accounts highlight turnaround prospects for graphene group

• Versarien is rapidly turning its loss making operations around through the sale of loss making assets and focus on key graphene sales.
• Versarien accounts to 30 September 2023 report a loss of £14.18m for 2023 vs £8.41m in 2022 including the impairment of £8.58m treated as an exceptional cost.
• Group revenues from continuing operations came in at £5.45m vs £11.11 in 2022.
• Sales of graphene fell to £0.24m from £2.15m in 2022.
• Adjusted LBITDA for continuing operations of rose to £3.01m from £2.40m in 2022 with the H2 LBITDA loss halving £1.00m from £2.01m in H1.
• Versarien graphene focus:
• Construction
  • Key demonstration for the use of CementeneTM in precast concretes following trials with Banagher Precast Concrete Limited (Ireland)
  • Delivered the first 3D concrete printed headwall to Costain and National Highways as part of the A30 Chiverton to Carland Cross upgrade in Cornwall
  • Continued to be active as part of advisory board of National Highways’ Roads Research Alliance (RRA) alongside more than 20 construction companies through involvement in the Digital Roads of the Future Partnership
• Leisure
  • Umbro have launched Spring/Summer and Autumn/Winter 2023 Pro Training Elite collections integrated with Graphene-WearTM
  • Signed a sales agreement with GoToGym covering Colombia, Brazil and United States of America. GoToGym Brazil have launched active-wear incorporating Versarien’s Graphene-WearTM technology
  • Continuing to supply graphene enhanced elastomers to US-based Flux Footwear LLC, an adaptive footwear company, with royalties in place for the use of Versarien’s Graphene-WearTM trademark
• Technology Licencing
  • Versarien continues to licence 14 patents to GrapheneLab (Korea) for the manufacture of chemical vapour deposition (CVD) graphene
• Commercial R&D and Grant Funding Highlights
  • Commercial R&D contracts were signed with CBMM (Brazil), IRPC Public Company (Thailand) and a UK aviation company
  • Successful on-time delivery of Graphene Flagship Spearhead project led by Airbus Helicopters (GICE project)
  • Gnanomat was awarded a grant from ICEX Trade and Investment for €415,000 to enable the company to commercialise and launch a new line of conductive inks
  • Commenced a 4-year long iCARE (Integrated Assessment and Advanced Characterisation of Neuro-Nanotoxicity) project (Horizon Europe), studying graphene in different use cases including graphene enhanced concretes and elastomers
• Operational/Manufacturing Highlights
• As part of cost cutting exercises, the R&D team has been slimmed down significantly during 2023, to concentrate on its strategic objectives
• The Company has now ceased USA and China sales operations in order to focus on its European operations whilst maintaining its partnerships in South Korea
• Versarien recently sold its South Korean plant and equipment to MCK Tech (Korea) for £604,000

Conclusion:  The accounts are somewhat behind recent events which are now changing the shape of the company with new focus on Graphene Activewear and Cementene™ the concrete modifier.

*SP Angel acts as Nomad and Broker to Versarien

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

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

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

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

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 of less than 15%