SP Angel Morning View -Today’s Market View, Tuesday 7th January 2025

Gold edges higher as China boosts gold reserves for second consecutive month

MiFID II exempt information – see disclaimer below

SP angel received great news yesterday from the LSEG StarMine commodities forecast polling team

• SP Angel – 1^st in LSEG StarMine Precious Metals poll for 2024
• SP Angel – 2^nd in LSEG StarMine Base Metals poll for 2024

Anglesey Mining (AYM LN) – Approval of scoping level Environmental Impact Assessment for Parys Mountain

Barrick Gold (GOLD US) – Mali update

Condor Gold* (CNR LN) – Shareholder and Court approval of offer from Metals Exploration

Critical Mineral Resources (CMR LN) – Advancement of commodity trading business

GreenX Metals (GRX LN) – GreenX to receive US$500,000 from BHP as it enters last stage of BHP Xplor accelerator program

Kefi Gold and Copper* (KEFI LN) – Operational update

Syrah Resources (SYR AU) – Agreement with US DoE for DFC loan waiver

Zijin Mining (2899 HK) –Manono spodumene project to start in 2026 following legal disputes

Gold ($2,642/oz) edges higher as China boosts gold reserves for second consecutive month

• Gold was volatile yesterday, jumping to $2,650/oz before falling sharply below $6,620/oz after Trump dismissed an article about more lenient tariffs.
• The dollar sold off suddenly on the news report, before recovering amid Trump’s interview.
• However, multiple currencies are strengthening against the dollar again this morning, raising the possibility that the recent rally is fading.
• US Treasury yields remain stubbornly strong, however, with the 10 year holding around 4.63%.
• Gold traders are likely in for a volatile week, with labour data due today, tomorrow and Friday.
• A softer series of labour prints may support a gold breakout from the recent tight trading range around $2,630/oz.
• However, other factors are at play, with Bloomberg reporting China’s central bank has boosted gold reserves for the second month in December.
• The PBoC bullion reserve rose to 73.3moz in December from 73moz in November.
• The PBoC paused purchases for six months to November.
• China’s central bank and retail demand is currently the key driver of the gold price, and the return to buying from the PBoC is an encouraging sign.
• Additionally, Indonesia joined the BRICs group this morning, adding further economic capacity to the underlying theme of dollar reserve diversification.

Copper ($9,029/t)climbs as dollar rally fades and China supports currency

• Copper climbed sharply yesterday amid the dollar sell-off, then holding gains after the currency’s weakness faded.
• The move comes amid a ramp up in support measures from the PBoC for the yuan, which has been under substantial pressure recently.
• A weak yuan weighs on Chinese buyers’ capacity in the international market.
• Meanwhile, Codelco’s copper output rose slightly in 2024, with the Chair stating production rose just 3-4kt from 2023.
• The Company has been struggling to reach progress towards its 2030 target of 1.7mtpa.
• Codelco output is struggling with grade decline.

Panama government opens public consultation on the Cobre Panama copper mine due 7^th February. The government is looking to assess environmental issues and put in place environmental protection.

• The closure of the mine took around 360,000t of copper concentrates out of the market last year pushing Tc/Rcs treatment and refining charges lower and helping to support copper prices as Chinese construction slowed.

Base metals rise as Trump denies tariffs will target critical goods

• While Trump’s policies are difficult to predict and prone to many turns we suspect much of the bluster is part of his style of negotiation

Tencent, a tech group, and CATL, a batteries manufacturer, are down more than 7% and 3% today as the US included both companies on the list with alleged military links.

• Chip manufacturer ChangXin Memory Technologies, drone maker Autel Robotics and IT equipment maker Quectel Wireless Solutions have also been add to the list.
• CATL accounts for a third of batteries used in modern EVs with Tesla and Stellantis being two top users of those batteries for CATL.
• CATL market share amounted to 37% in 2024, followed by 17% at BYD with LG Energy coming in third with a ~10% share.

BMW private equity arm invested into a rare earth processing Massachusetts based start up Phoenix Tailings planning to recover REEs from mined waste.

• No size of the investment is disclosed.
• BMW iVentures is joining Yamaha Motor Ventures and led by Envisioning Partners, as part of Phoenix Tailings’ latest fundraising round.
• The startup is building a $13m plant in Exeter, New Hampshire, and is planned to start production in June 2025.
• The Company is aiming to produce rare earth metals including neodymium-praseodymium (NdPr), dysprosium (Dy), dysprosium iron (DyFe), and terbium (Tb).
• The technology is a hydrometallurgical recovery process using selective halogenation to produce oxides and a mixed halide salt reduction to produce metals.
• The process is said to be adaptive to a wide array of feedstocks.

Economics

US – Services PMI rose to 56.8 in December from 56.1 a month earlier

• Composite PMI also rose to 55.4 from 54.9 driven by better manufacturing (strong orderbooks) and services performance.
• GDP growth is expected to remain string following a positive 3.1% in Q3 2024.
• The market appears to be predicting just two Fed rate cuts they year which is holding the US dollar at higher levels
• The stronger dollar is helping to offset inflation in services and accommodation.

Eurozone – Inflation expectations over the next 1y and 3y periods picked up in November raising risks of a stagflation in the region.

• 1y and 3y CPI expectations increased to 2.6% (+0.1pp) and 2.4% (0.3pp), respectively.

Eurozone – Services PMI rose to 51.6 in December from 49.5 following a period of contraction

• Composite PMI lifted to 49.6 from 48.3 dragged lower by disastrous manufacturing with companies looking to make goods in lower cost countries.
• Spain led the Services PMI numbers with 56.8
• Germany Services PMI at 48.0 remains in contraction
• France Services PMI was 47.5
• We expect a series of modes ECB rate cuts to weaken the Euro.
• While German manufacturers have been hit hard by higher energy costs and union issues we should not doubt their ability to bounce back.
• Sentix Investor Confidence fell further to -17.7 in January from -17.5 in December
• The German Current Situation Index remains at -50.8 highlighting the distress of the German economy.
• While Li-ion battery technology is not quite up to powering larger and heavier German cars we suspect the capacity for Li-ion batteries will soon improve to the standards required.
• China has started to impose restrictions on the export of its Li-ion battery and EV technology highlighting their determination to maximise their lead in this field.
• It would make some sense for the Eurozone and UK to relax the drive to EV adoption to allow European manufacturers to catch up with China.

UK – Property prices fell 0.2%mom to £297k in December on Halifax numbers.

• Annual increase reduced to 3.3%, down from 4.7% recorded in November.
• Data comes in contrast to figures from Nationwide showing housing prices rising at the fastest annual rate since October 2022 last month.

UK Services PMI rose 51.1 in December from 50.8

• Composite PMI fell slightly to 50.4, from 50.5 on lower business confidence and the higher cost of employment in the UK due to the rise in NI paid by employers

• The BoE elected not to cut rates in December with businesses looking to raise prices to cover higher taxes
• A stronger sterling should help offset some of this inflation.
• Higher UK interest rates are making life tough for mortgage holders looking to remortgage and risk reducing transactions and damaging property prices.

Switzerland – Year-on-year Headline CPI slowed to 0.6% yoy from 0.7% yoy

• CPI falls 0.1% mom

• • Domestic products prices rose 0.1% mom.
  • Imported products prices fell -0.5% mom.
• Core CPI slowed to 0.7% yoy from 0.9% yoy.
  • Domestic products prices slowed to 1.5% yoy from 1.7% yoy.
  • Imported products prices ticked up to -2.2% yoy from -2.3% yoy.
• The data highlights a pullback in tourism from European countries and a slowdown in luxury sales.
• Slow inflation is helpful to the Swiss national bank if they want to cut interest rates.

Tibet – Earthquake kills 95

• The death toll from the Tibet earthquake will likely rise from 95 dead and 130 injured.

Currencies

US$1.0423/eur vs 1.0354/eur previous. Yen 157.43/$ vs 157.61/$. SAr 18.559/$ vs 18.662/$. $1.256/gbp vs $1.248/gbp. 0.628/aud vs 0.625/aud. CNY 7.331/$ vs 7.350/$.

Dollar Index 107.99 vs 108.95 previous.

Precious Metals

Gold US$2,641/oz vs US$2,633/oz previous

Gold ETFs 82.8moz vs 82.8moz previous

Platinum US$958/oz vs US$954/oz previous

Palladium US$928/oz vs US$920/oz previous

Silver US$30.8/oz vs US$30.3/oz previous

Rhodium US$4,575/oz vs US$4,575/oz previous

Base metals:

Copper US$9,025/t vs US$8,900/t previous

Aluminium US$2,508/t vs US$2,496/t previous

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

Zinc US$2,884/t vs US$2,894/t previous

Lead US$1,938/t vs US$1,922/t previous

Tin US$29,289/t vs US$29,108/t previous

Energy:

Oil US$75.9/bbl vs US$76.2/bbl previous – Brent crude looks steady after yesterday’s pullback

Natural Gas €46.8/MWh vs €48.9/MWh previous

Uranium Futures $72.8/lb vs $72.8/lb previous

Bulk:

Iron Ore 62% Fe Spot (cfr Tianjin) US$97.8/t vs US$99.6/t

Chinese steel rebar 25mm US$487.9/t vs US$487.6/t

HCC FOB Australia US$204.0/t vs US$203.0/t

Thermal coal swap Australia FOB US$126.5/t vs US$127.0/t

Other:  

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

NdPr Rare Earth Oxide (China) US$54,407/t vs US$53,776/t

Lithium carbonate 99% (China) US$9,842/t vs US$9,933/t

China Spodumene Li2O 6%min CIF US$790/t vs US$790/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$985/t

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

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

Europe Vanadium Pentoxide 98% US$4.8/lb vs US$5.0/lb

Europe Ferro-Vanadium 80% US$25.6/kg vs US$26.3/kg

China Ilmenite Concentrate TiO2 US$290/t vs US$294/t

China Rutile Concentrate 95% TiO2 US$1,087/t vs US$1,089/t

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

Brazil Potash CFR Granular Spot US$295.0/t vs US$295.0/t

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

China Gallium 99.99% US$395.0/kg vs US$415.0/kg

Battery News

Cyberturck sales slow despite incentives

• Negative news appears to have slowed Tesla Cybertruck sales according to Autoweek.com.
• Cybertruck sales are lumped in with other Tesla model sales to 23,640 for the last quarter
• If you assume one-third of this relates to the Cybertruck that gives  7,880 for Q4 2004.
• However, Cybertruck sales could rise if Tesla are able to produce their targeted affordable Cybertruck for $39,900.
• Incidentally, the recent Las Vegas Cybertruck explosion destroyed the plastic interior but barely damaged the outer stainless steel panels

Company News

Anglesey Mining (AYM LN) 0.75p, Mkt Cap £3.5m – Approval of scoping level Environmental Impact Assessment for Parys Mountain

• Anglesey Mining confirms that its Environmental Impact Assessment (“EIA”) Scoping Report for the Parys Mountain mine project has been approved by the local authority, Anglesey County Council.
• The company highlights that “the Planning Service have stated their broad agreement with the environmental scope as presented by the Company” and also that there is “wide acceptance of the scope of the overall methodology, how the company has characterised potential impacts, and with the avoidance and mitigation of potential impacts in areas such as Ecology and Biodiversity, Visual Impact, Air Quality, Noice and Vibration, Labour and Working Conditions and Human Health”.
• Anglesey Mining comments that further work “has been recommended … [in three areas] … namely: Ground and Surface Water, Cultural Heritage and Traffic and Transportation”.
• Addressing these recommendations Anglesey Mining says that, based on comments from specialist consultants it “expects that the re-commencement of mining and processing operations will have a net positive impact” on the concerns over ground and surface water.
• The company says that its plans will “not directly impact any statutorily designated … [cultural heritage] … sites. However, as described in the company’s submission, the site lies almost entirely within the Amlwch and Parys Mountain Registered Landscape of Outstanding Historic Interest”.
• Anglesey Mining says that it “will make provision within its plans to conduct a full transport assessment in line with the recommendations made”.
• Welcoming the decision CEO, Rob Marsden, said that the contribution of the North Wales Minerals and Waste Planning Service “will make this project better for all stakeholders” and that “Anglesey Mining is happy to comply with … requests … [for additional information in the three specific areas highlighted] …so that a more informed planning decision can be made”.
• Mr. Marsden explained that the “permitting objective of Anglesey Mining remains unchanged, that is to make a planning application, that when enacted, will be seen to provide economic returns to investors, job opportunities, mitigation of the impacts to the environment and enhanced respect for, and appreciation of, the mining heritage of Parys Mountain, thus earning us a social licence to operate.

Conclusion: Local Authority approval of the scoping level EIA for Parys Mountain is an important milestone for the project. The identification of discrete areas requiring additional work at this stage is helpful to both the company and the regulatory authorities and implies a mutually beneficial relationship between them.

Barrick Gold (GOLD US) US$15.5, Mkt Cap US$27bn – Mali update

• The Company remains restricted from shipping gold from its Loulo-Gounkoto mining operation in Mali.
• Additionally, authorities issued a separate order preventing the Company from exporting the existing gold stock.
• The Company criticised the decision and said unless the issue is not resolved within this week it will have to temporarily suspend operations at Lou-Gounkoto.
• A number of Barrick employees remain in detention in Mali as authorities are seen putting pressure on the Company to agree to a change in fiscal terms of its local operations.

Condor Gold* (CNR LN) 31.75p, Mkt Cap £63m – Shareholder and Court approval of offer from Metals Exploration

(Condor Resources holds 100% of the La India gold mining project)

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• Yesterday afternoon Condor Gold announced that it had received Court approval for the acquisition of the company by Metals Exploration plc under a Scheme of Arrangement.
• The announcement also confirmed that over 99% of shareholders voting had approved the transaction.
• Subject to “the satisfaction or, if applicable, waiver of the remaining Conditions … the Scheme is expected to become Effective on 15 January 2025”..

Conclusion: The acquisition of Condor Gold by Metals Exploration is expected to be completed on 15th January.

*SP Angel acts as a broker to Condor Gold

Critical Mineral Resources (CMR LN) 1.4p, Mkt Cap £1.2m – Advancement of commodity trading business

• Critical Mineral Resources, who hold exploration ground in Morocco prospective for copper, provide an update on their commodity trading venture.
• The Company reports they have now undertaken various trades since early December in multiple metals.
• They will look to expand the business over the coming year alongside their local JV partners.
• CMR have begun discussions for potential providers of working capital.
• The business secures ore or semi-processed raw materials from small-scale mines, artisanal miners and aggregators.

GreenX Metals (GRX LN) 36.55p, Mkt cap £97m – GreenX to receive US$500,000 from BHP as it enters last stage of BHP Xplor accelerator program

• GreenX Metals reports it is now one of just eight early-stage exploration companies selected by BHP to participate in the 2025 BHP Xplor program.
• BHP Xplor will provide GreenX with approximately US$500,000 in non-dilutive funding to support and accelerate its exploration plans at the Tannenburg Copper Project.
• Selection for BHP Xplor also gives GreenX access to BHP expertise, networks and partnerships and is expected to accelerate exploration at Tannenberg in an area historic copper mines.
• There are no obligations or commitments on GreenX beyond the conclusion of the BHP Xplor program attached to the grant, other than certain exclusivity, pre-emption and data sharing rights as disclosed below.
• GreenX intends to use the grant to conduct geophysics programs over the Tannenberg licence area.
• GreenX is targeting a prolific subtype of sediment-hosted copper deposit knows as Kupferschiefer style copper mineralisation which make up the second most prevalent source of copper production and reserves in the world.

Kefi Gold and Copper* (KEFI LN) 0.48p, Mk Cap £29m – Operational update

• The Company provided an update on development progress at the Tulu Kapi Gold Project in Ethiopia ahead of the Future Minerals Forum in Saudi Arabia.
• Construction of the new main access road from the highway to the Tulu Kapi funded by government equity has now started.
• Funding wise, debt legal documents are being updated for execution of the expanded US$240m (up from $180m) facility.
• Regarding project equity, up to $30m in the form of gold linked preference shares in a wholly owned local subsidiary, KEFI Minerals (Ethiopia), are expected to be issued once Ethiopian Stock Exchange is launched (exp end of January).
• A further $30m tranche is being finalised with Middle Eastern and other sectoral investors.
• A 15% interest in Saudi Arabia JV remains under strategic review with the team planning to hold further discussions with interested parties during the Forum next week.
• Earlier the Company agreed with its JV GMCO partner, ARTAR, to offset outstanding $10m due for its share of exploration costs in return for a 10% interest in GMCO taking its stake to 15%, down from 25%.

Conclusion: All focus on closing Tulu Kapi $320m funding package taking the project into a development stage while, in parallel, the Company continues to review strategic options for its 15% interest in GMCO owning early stage and advanced exploration assets in Saudi Arabia.

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

Syrah Resources (SYR AU) A$0.22, Mkt Cap A$222m – Agreement with US DoE for DFC loan waiver

• Syrah and the US DoE have agreed to waiver the events of default announced on 12 of December.
• The default followed an interruption to operations amid wider civil unrest in Mozambique following the recent elections.
• The lender provided Syrah with a US$53m disbursement from the DFC loan in November 2024 to fund working capital.
• The remaining balance is still committed to Syrah.
• However, further DFC disbursements are not available to Syrah whilst Balama operations are blocked by protests.

Zijin Mining (2899 HK) HK$14.74, Mkt Cap HK$390bn –Manono spodumene project to start in 2026 following legal disputes

• Bloomberg reports that major Chinese miner Zijin will start producing lithium from the DRC at the end of 2026.
• Zijin is progressing the large-scale Manono project in southeast Congo and holds average grades of 1.5% Li2O.
• However, Australian firm AVZ has begun arbitration proceedings against Zijin and the DRC government.
• Zijin is also progressing lithium assets in China and Argentina, both brine and hard rock.
• Zijin is already active in the DRC, holding 45% of Kamoa Kakula.

 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                                                            

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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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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