SP Angel Morning View -Today’s Market View, Tuesday 7th May 2024

Copper strengthens again as China smelters look to ramp up exports

It is with great sadness that we report the passing of David Archer, former CEO of Savannah Resources

• David was a founder of Savage Resources Limited, a mid-tier, multinational miner and refiner.
• He also worked on advancing the Barroso lithium project for Savannah Resources Plc, probably, Europe’s leading, hard rock, lithium project.
• David was MD at Hillgrove Resources, Chairman at Crusader Resources and an independent director at Anglo Pacific.
• David formerly founded and developed PowerTel Limited which deployed one of Australia’s most extensive inter-capital and inner city fibre networks for business customers.

MiFID II exempt information – see disclaimer below

Aterian plc* (ATN LN) – Aterian raises £500,000 at an effective 12% premium to the market

Atlantic Lithium* (ALL LN) – Drilling results from the Dog Leg extension at Ewoyaa highlight resource expansion potential

Barrick Gold (GOLD US) – Saudi Arabia eyeing stake in Reko Diq Project

Bushveld Minerals* (BMN LN) – Proposed disposal of Vanchem for up to $40.6m

ECR Minerals (ECR LN) – Drilling results from Creswick, Victoria

Goldstone Resources* (GRL LN)  – Equity raise update

KEFI Gold and Copper* (KEFI LN) – Tulu Kapi Project update

Phoenix Copper* (PXC LN) – Initial ore reserve estimate for the Empire open-pit project, Idaho

Copper strengthens again as China smelters look to ramp up exports

• Copper prices have climbed over $10,000/t again, as the dollar weakens and analysts point to deficit potential.
• Bloomberg reports that smelters are looking to ramp up exports in a bid to profit from elevated global prices.
• Four smelters are reportedly looking to deliver 40-50kt Cu into the LME, which would mark the highest monthly volume since 2022.
• China traditionally is a net importer of refined copper, however Yangshan premiums at near zero suggest domestic demand is weak.
• Fabricators, a major source of downstream copper demand, are reportedly struggling to make money at current copper prices.
• A Chinese fabricator told Bloomberg that ‘prices have detached from fundamentals and are due a pullback.’
• Shanghai inventories continue to rise as China’s property sector continues to struggle.
• Contango remains persist, further highlighting weak physical demand.
• However, major banks are ramping up their copper price forecasts, with Goldman boosting 2024 price expectations to $12,000/t.
• Renewable demand remains strong alongside EV demand, with AI supporting data centres expected to add additional tonnage demand going forward.
• First Quantum is reportedly in talks with the new Panamanian government over resuming control of Cobre Panama.
• Losing Cobre’s 350ktpa worth of concentrate was one of the triggers of the current copper rally, with smelters struggling to secure alternative concentrate supply.
• The new president-elect Mulino is seen as favourable by the international investment community, showing historical support for mining.
• Copper’s recent rally has been heavily influenced by paper trading speculation, although Shanghai brokers have reportedly cut net-long positions by 6,902 contracts to 18,000 net-long positions.

Iron ore prices hold higher as China trade resumes following holiday

• China iron ore prices strengthened to $120/t for the 62% Fe benchmark as traders returned from their May holiday.
• Beijing has been hinting at additional steps to support the property sector, with additional measures to boost the steel sector.
• Steel prices rallied 2.2% in China this morning, hitting two month highs.
• Officials in China are reportedly looking to ‘research ways to deal with unsold properties in China.

China and DRC ink investment deal linked to copper price

• A restructured deal between China and the DRC will look to fund infrastructure financing whilst copper remains over $8,000/t.
• Financing will stop at $5,200/t copper but will stand at $324m with copper over $8,000/t.
• Funds will be used to support road building.

Report estimates the world will need 80 new copper mines, 70 new lithium mines and 30 new cobalt mines

• A new UN Trade and Development (UNCTAD) report says critical energy transition minerals are not keeping pace with escalating demand.
• The report has identified 110 new mining projects worldwide, valued at $39bn, with $22bn invested in 60 projects in developing countries.
• IEA estimates forecast lithium demand could rise by over 1,500%, with similar increases for nickel, cobalt and copper.
• Investment needed between 2022 and 2030 ranges from $360 – 450bn, potentially leaving a gap of $180 – 270bn.
• Most significant shortfalls are in copper and nickel, accounting for 36% and 16% of the total gap.

Conclusion:  Identifying and recognising and challenge facing global electrification is a first step towards solving the problem.

The development of 110 new mining projects will not come easily along with the sourcing of the $39bn needed.

EV manufacturers expected to use around 950,000t of copper this year

• This is around 530,000 more copper than would be used for traditional ICE vehicles.

IG TV: Gold and Copper. 10/04/2024: https://youtu.be/KuGSbDqWglk?si=-8iikkOHxbbLSnPZ

Sharepickers TV:  Copper will be in Deficit: 03/05/2024 podcast: https://audioboom.com/posts/8500270-john-meyer-copper-will-be-in-deficit

                    Video: https://www.youtube.com/watch?v=i-5J9R9E3_8

*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts. We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate. SP Angel acts as Broker/Nomad or both for Anglo Asian Mining, Kodal Minerals, Power Metals Resources.

Economics

US dollar strengthens again despite dip in nonfarm payrolls

• Friday’s dip in nonfarm payrolls was not enough to hold back the US dollar
• Unemployment rise to 3.9% from 3.8% though labour force participation remained at 62.7%
• US ISM Services falls to 49.4 in April from 51.4 indicating new contraction withing the services economy
• New orders fell 49.1 from 51.4 to.
• Production fell to 51.3 from 54.6.
• Employment rose to 48.6 from 47.4.
• Prices surged to 60.9 from 55.8 a new high since June 2022.
• The market is now looking for fewer rate cuts in the US this year lifting the US dollar

China – Unemployment rises

• Caixin Services grew for the 16th consecutive month of growth
• Caixin China General Services Business Activity Index fell 0.2pts to 52.5 for April
• Official NBS Services PMI fell 2.1pts to 50.3 in April
• Services account for 59% of GDP in China someway behind Western nations due to China’s ongoing focus on manufacturing and its reliance on property/construction growth in recent years.
• Caixin China General Composite PMI rose 0.1pt to 52.8 in April highlighting the importance of gains in manufacturing as services hold growth back. The composite index represents both manufacturing and services
• Exports are seen rising at their fastest pace since November 2020.
• The authorities continue to hold back from substantial intervention despite rising unemployment and appear focussed on filling in holes in local authority off-balance sheet debt.

Eurozone PPI falls 7.8% yoy in March

• Eurozone inflation fell hugely by -7.8% in March despite a modest 0.1pt increase in Industrial Producer Prices for intermediate goods, capital goods and for durable consumer goods.
• Eurozone retail sales rise 0.8% mon in March driven by a 1.2% rise in food, drinks and tobacco and supported by stable volumes in non-food products.
• Eurozone Sentix Investor Confidence also rose to -3.6 from -5.9 in May marking the 7^th monthly increase and highest level since February 2022.
• EU PPI also fell 7.6% yoy with a 3.4% m-o-m fall in Bulgaria followed by a 2.3% fall in Denmark and Greece and a 2.2% fall in Spain.
• The figures are led lower by a substantial pull back in European gas and electricity prices which were elevated last year by Russia’s invasion of Ukraine and the closure of the Nordstream pipeline

Japan – Services PMI rises 0.2pts to 54.3 for March its highest level since August

• Japan’s flash Services PMI manufacturing rose 1.7pts to 49.9 in April from March

UK Construction PMI rose to 53 in April vs 50.2 in March despite the very wet weather

• New activity in civil engineering and commercial projects driven by new found investor confidence despite a fall in house building.
• UK Services PMI rises 0.4% qoq to 55 in April vs 53.1 in March
• The rise indicates ongoing growth in the Services sector.

Currencies

US$1.0763/eur vs 1.0731/eur previous. Yen 154.29/$ vs 153.22/$. SAr 18.482/$ vs 18.569/$. $1.254/gbp vs $1.255/gbp. 0.660/aud vs         0.657/aud. CNY 7.215/$ vs 7.241/$.

Dollar Index 105.20 vs 105.31 previous.

Precious metals:         

Gold US$2,320/oz vs US$2,299/oz previous

Gold ETFs 80.7moz vs 80.9moz previous

Platinum US$959/oz vs US$958/oz previous

Palladium US$974/oz vs US$930/oz previous

Silver US$27.22/oz vs US$27/oz previous

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

Base metals:   

Copper US$ 9,988/t vs US$9,811/t previous

Aluminium US$ 2,567/t vs US$2,537/t previous

Nickel US$ 19,230/t vs US$18,815/t previous

Zinc US$ 2,922/t vs US$2,902/t previous

Lead US$ 2,240/t vs US$2,194/t previous

Tin US$ 32,465/t vs US$31,000/t previous

Energy:           

Oil US$83.4/bbl vs US$83.9/bbl previous

• European energy prices started the week strongly on Middle East escalation concerns as Israel prepares to launch a long-threatened assault on Rafah in southern Gaza.
• US natural gas prices edged higher over the weekend on bullish LNG sentiment as Cheniere Energy reiterated the 10mtpa Corpus Christ LNG facility (CCL3) expansion would commence operations by the end of this year.
• The US Baker Hughes rig count slumped 8 units to 615 rigs last week (-143 or 19% y/y), with oil rigs down 7 to 499 units (-89 y/y) and gas rigs down 3 units to 102 units (-55 y/y) as miscellaneous rigs doubled to 4 units.
• The UK’s North Sea Transition Authority (NSTA) has offered a further 31 licences in the Central North Sea, East Irish Sea, and the Southern North Sea in the final tranche of the 33rd oil and gas licensing round.
• Air Products announced it cannot make a final investment decision on its planned $4bn green hydrogen production plant in Texas until the rules for the implementation of the Inflation Reduction Act are finalised.

Natural Gas €31.6/MWh vs €31.0/MWh previous

Uranium Futures $92.3/lb vs $92.3/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$119.7/t vs US$117.6/t

Chinese steel rebar 25mm US$530.7/t vs US$523.4/t

Thermal coal (1st year forward cif ARA) US$113.5/t vs US$113.5/t

Thermal coal swap Australia FOB US$115.5/t vs US$148.8/t

Hard Coking Coal Australia FOB US$326.0/t vs US$326.0/t

Other:  

Cobalt LME 3m US$27,830/t vs US$27,830/t

NdPr Rare Earth Oxide (China) US$55,925/t vs US$55,724/t

Lithium carbonate 99% (China) US$15,177/t vs US$15,122/t

China Spodumene Li2O 6%min CIF US$1,240/t vs US$1,240/t

Ferro-Manganese European Mn78% min US$972/t vs US$972/t

China Tungsten APT 88.5% FOB US$335/mtu vs US$333/mtu

China Graphite Flake -194 FOB US$480/t vs US$480/t

Europe Vanadium Pentoxide 98% 5.1/lb vs US$5.0/lb

Europe Ferro-Vanadium 80% 26.35/kg vs US$26.25/kg

China Ilmenite Concentrate TiO2 US$326/t vs US$327/t

China Rutile Concentrate 95% TiO2 US$1,421/t vs US$1,416/t

Spot CO2 Emissions EUA Price US$72.1/t vs  US$71.4/t

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

Battery News

UK on track to hit 100,000 public charge points by summer 2025

• The UK is on track to hit 100,000 public EV charge points by summer 2025.
• The rate of installation has accelerated significantly, with the UK reaching 50,000 chargers in October 2023.
• The overall rate of installation in the first four months of 2024 has increased by almost 37% compared with the average across 2023.
• The variety of charging options is improving every month, with more than 135% growth in the number of the highest-powered chargers over the last year.
• The strong pace of charger installations is expected to continue, with encouraging growth right across the charging spectrum.

Nio to partner with rival BYD for batteries for new lower price range EVs

• Chinese EV maker Nio has reportedly struck a deal with rival and battery maker BYD to source batteries for an EV brand priced at a lower range that aims to compete with Tesla. (Reuters)
• BYD, which has been looking to expand its revenue beyond EV sales under its own brand, will see the deal as a huge success.
• Nio, which has been targeting the luxury EV market, confirmed its new brand (“Onvo” in English and “Ledao” in Chinese) and its model L60 which it hopes to compete with the Tesla Model.
• Nio currently buys most of its EV batteries from battery giant, CATL.
• BYD and CATL will jointly supply a smaller battery pack for one version of the new Onvo EV, according to insider sources.
• Another Chinese battery maker, CALB, will supply the brand with a larger battery pack of 85kWh, one of the sources told Reuters.
• When contacted by Reuters, Nio said the information was “inaccurate” and did not elaborate.

Australia – hybrid sales charge ahead as electric cars slow down

• Hybrid vehicle sales in Australia have more than doubled in a year, with 18.3% of all new vehicles sold in April 2024 being hybrids.
• Over 16,000 hybrid vehicles and 1,300 plug-in hybrid cars sold in April 2024, representing a 130% increase compared to 2023.
• SUVs continue to dominate Australia’s automotive market, followed by light commercial vehicles such as utes.
• EV sales, on the other hand, have slowed down, with a decline from 9.5% of the market in March to 6.4% in April 2024.
• The federal government is preparing to debate its new vehicle efficiency standard in parliament, designed to encourage automakers to bring more low-emission cars to the country from next year and cut vehicle pollution.

India – Electric two-wheelers sales cross 1.7m in FY2024

• India’s electric vehicle (EV) sales surpassed 1.7 million units in the fiscal year 2024.
• Electric two-wheelers (E2Ws) dominated the market, accounting for over 55% of the annual EV sales with a total of 1,135,077 units.
• Passenger electric three-wheelers were the second most popular, capturing approximately 32% of the market share.
• The top EV-selling states in India were Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, and Rajasthan, which together accounted for over 50% of the market share.
• Major suppliers of battery packs included iPower, Trontek, Amara Raja, and Inverted.

Electric cars and SUV sales saw a 22% increase in April

• Electric car and SUV sales in India increased by 22% yoy in April 2024, with a total of 6,577 units sold.
• The rise in sales is attributed to growing awareness, increased choice due to new product launches, improving charging infrastructure, and the appeal of eco-friendly and wallet-friendly vehicles.
• Tata Motors maintained its market leader position, selling 4,701 units in April 2024.
• MG Motor India remained in second place, with its ZS EV and Comet EV models contributing to its 12% market share.
• BYD India rose to fourth place, with its Atto 3 SUV, e6 MPV, and Seal sedan contributing to its sales.
• Mercedes-Benz India led the luxury EV space.

Diesel car sales continue to decline

• Diesel car sales are declining globally, with a significant milestone reached in Europe where EV outsold diesel cars for the first time ever in 2023.
• Stricter emissions regulations and dwindling consumer interest in diesel are putting pressure on automakers to adapt, with some abandoning diesel offerings altogether.
• Diesel’s market share plummeted to 13.6% in 2023, while electric vehicles rose to 14.6% according to the European Automobile Manufacturers’ Association (ACEA).
• By March 2024, diesel sales in EU markets dropped further to 12.8%.
• BMW projects the downward trajectory of diesel sales to continue, however the company has no immediate plans to discontinue diesel vehicles.
• The diminishing benefits of diesel compared to other fuels like petrol and alternative power forms are leading to a reduced user base who choose diesel.
• The rise of efficient gasoline engines and advancements in plug-in hybrid and electric drivetrains are further pushing diesel into obscurity.

Company News

Aterian plc* (ATN LN) 0.65p, Mkt Cap £7.1m – Aterian raises £500,000 at an effective 12% premium to the market

• Aterian Plc reports the raising of £500,000
• The funding uses an innovative but previously used mechanism which enables management to issue a prospectus as required by the LSE at a later stage.
• The funds have been raised at an effective 12% premium to the mid-market closing price for the shares on 1 May 2024.
• Use of proceeds:
  • Accelerate the Agdz exploration drill programme in Morocco,
  • Advance operations in Rwanda and Botswana,
  • bolster financial flexibility.
• The mechanism used for the funding requires key investors to effectively pledge stock to new investors while simultaneously subscribing for the same amount of new stock in the company.
  • Simon Rollason, director, has subscribed for £42,666.40 and will also buy the same amount of stock.
  • Altus Exploration Management Limited a subsidiary of Elemental Altus Royalties Corp., and a substantial shareholder in the Company, has subscribed for £457,333.60 and will also buy the same amount of stock in the company.

Conclusion:  The ability for Aterian to raise funds at a premium is impressive in the current challenging market.

Aterian’s joint venture with Rio Tinto on its lithium and tantalum pegmatite prospects in Rwanda makes the company rather more attractive than your average junior explorer in our view.

*SP Angel acts as Broker to Aterian Plc

Atlantic Lithium* (ALL LN) 22.3p, Mkt Cap £138m – Drilling results from the Dog Leg extension at Ewoyaa highlight resource expansion potential

(Ewoyaa Ownership: 40.5% Atlantic, 40.5% Piedmont, 6% MIIF Sovereign Wealth fund, 13% government of Ghana)

• Atlantic Lithium has published results from over 4,100m of resource extension drilling and sterilisation drilling at the proposed plant site at its Eyoyaa lithium project in Ghana.
• Drilling at the ‘Dog Leg’ target has shown “shallow dipping, near surface mineralised pegmatite bodies with true thicknesses up to 35m outside of the MRE, proving potential for significant resource growth”.
• Highlighted intersections, reported at a 0.4% Li₂O cut-off, include:

• • 27m at an average grade of 1.85% Li₂O from a depth of 126m in hole GRC-0177; and
  • 15m at an average grade of 1.08% Li₂O also from a depth of 126m in hole GRC-1059; and
  • 8m at an average grade of 0.93% Li₂O from a depth of 88m in hole GRC-1058

• Almost 3,200m of sterilisation drilling at the plant site did not intersect mineralisation “providing confidence in the proposed plant site location”.
• The company says that it aims to complete a mineral resource revision incorporating all the results from the 2023 programme and additional work this year by “mid-year”.
• Current resources at Ewoyaa include 3.5mt of ‘Measured’ resources at an average grade of 1.37% Li₂O, 24.5mt of ‘Indicated’ resources at 1.25% Li₂O plus 7.4mt of ‘Inferred’ resources at a grade of 1.16% Li₂O.
• Atlantic Lithium also confirms that its regional “exploration programmes … [are] … continuing concurrently in order to advance the Company’s exploration project pipeline”.
• Executive Chairman, Neil Herbert, highlighted the resource expansion potential shown by the recent drilling and said that the “results are from the new Dog-Leg target … [and are] … located on the northern tip of the Ewoyaa Main deposit, outside of the current MRE, where drilling has returned multiple high-grade and broad near surface extensional intersections, including 27m at 1.85% Li₂O from 126m in these most recent results”.

Conclusion: Recent drilling at Ewoyaa provides resource expansion potential when a resource update is completed later this year and also confirms the suitability of the planned plant site.  We look forward to the new resource estimate.

*SP Angel acts as Nomad to Atlantic Lithium. Two mining analysts from SP Angel recently visited the Ewoyaa mine site in Ghana and drove onto Takoradi to check the quality of the road to port. Our analysts also visited the Ministry of Minerals Commission and MIIF, the Ghana Minerals Income Investment Fund

Barrick Gold (GOLD US) US$16.7, Mkt cap US$30bn – Saudi Arabia eyeing stake in Reko Diq Project

• Reuters reports that executives from Manara Minerals, state backed Saudi mining company, are in Pakistan to discuss the acquisition of a stake in Reko Diq.
• Manara Minerals is a JV between the Saudi sovereign wealth fund and state miner Ma’aden.
• The group is reportedly considering a $1bn stake in the asset.
• Barrick’s undeveloped gold and copper project is jointly held with Pakistan.
• Barrick is advancing the project to feasibility stage, on track for completion this year.
• Initial studies have shown Phase 1 throughput potential at 40mtpa with initial capital of $4bn required, with phase 2 increasing to 80mtpa for total CAPEX of $7bn and a LOM of 40+ years, 2022 conceptual designs
• Phase 1 would produce 195kt Cu and 280koz Au from initial studies.
• The project lies on the Tethyan belt and is though to host four primary porphyry deposits.
• Barrick are currently eyeing trucking concentrate to the Port of Gwadar.

Bushveld Minerals* (BMN LN) 0.7p, Mkt Cap £14m – Proposed disposal of Vanchem for up to $40.6m

• The Company entered into a conditional binding term sheet with Southern Point Resources for a sale of its 100% interest in Vanchem for $40.6m.
• As part of the deal, SPR agreed to increase the existing $8.1m working capital facility by additional $9m allowing vanadium operations to continue.
• The first $3m advance from the facility has been received on 3 May with additional funds to come through May-June that are subject to approvals from Orion and shareholder approval of the deal.
• Additionally, SPR agreed to provide further loan of between $5-8m for Vanchem for working capital and maintenance capital expenditure at 15%pa interest.
• Should the disposal of operations fall through, the loan plus accrued interest will become repayable.
• Proposed terms of the disposal replace the transaction announced 20 November 2023 for the sale of a 50% stake in Vanchem for $21.3m.
• New Vanchem disposal consideration ($40.6m in total) and conditions include:
  • $20.6m initial consideration comprised of
    • $8.1m working capital facility provided in September 2023;
    • $9.0m additional working capital facility including $3m (received 3 May 2024), $5m (due 31 May) and $1m (due 30 June);
    • $3.5m payment due on deal completion.
  • $15-20m deferred consideration comprised of:
    • 25% of distributable free cash flow from Vanchem for the three years following completion date subject to a minimum $5m per annum payment over respective three year period for a total of $15m (paid in $1.25m quarterly payments) and a maximum of $20m over the period.
• The deal is conditional on disposal documentation completion, Bushveld shareholders’ approval and regulatory sign off (Tribunal Approval expected the end of July start of August 2024).
• General meeting to consider the proposed Vanchem disposal is expected on or before 31 May 2024.
• The management reports that the team explored all available funding options with the current deal determined to be only viable solution to attract necessary funding to continue as a going concern and avoid business rescue.

Conclusion: The team agreed a conditional deal to sell 100% interest in Vanchem to SPR with the latter, in the meantime, providing required working capital facility to maintain operations running and avoiding start of formal business rescue procedures. The business has been struggling amid falling vanadium prices and delays to receiving funds from earlier equity raise and Vanchem/Mokopane disposal regulatory approvals. The deal, once approved, should reduce the cash burn amid current low vanadium prices and allow the Company to focus on stabilising and potentially expanding production at Vametco, that we estimate accounts for most of value in the Company’s portfolio.

*SP Angel act as nomad and broker to Bushveld

ECR Minerals (ECR LN) 0.26, Mkt Cap £4.8m – Drilling results from Creswick, Victoria

• ECR Minerals reports sampling results from its Creswick gold exploration project in Victoria.
• The samples are derived from reverse-circulation (RC) drillholes KHRC-012, -008, -009 and -015 and the company says that “Only KHRC012 generated any reportable results from the bulk sampling, significant improvement was seen in three of the samples from that hole with single metre long intersections at 27m, 28m and 40m producing gold grades of 3.05g/t, 0.81g/t and 2.53g/t respectively.
• The results show divergence from the original sampling of the same holes which showed 0.76g/t (vs 3.05g/t from the ‘bulk sample’), 0.26g/t (vs 0.81g/t) and 0.37g/t (vs 2.53g/t) over the same intervals.
• Although exploration is still at a relatively early stage, as the project progresses, we hope that the company will be able resolve the underlying causes of the variability in results in order to develop a robust model for any future mineral resource assessment.

Goldstone Resources* (GRL LN) SUSPENDED – Equity raise update

• The Company updates that equity raise completion is expected to be no later than 10 May.
• The delay is attributed to more time needed to allow for completion of transfer of funds from certain subscribers.
• As a result resumption of shares’ trading is expected on or around 13 May.

*SP Angel acts as broker to Goldstone Resources

KEFI Gold and Copper* (KEFI LN) 0.6p, Mkt Cap £34m – Tulu Kapi Project update

• The finance syndicate are on track for final (conditional) approvals during May 2024 for the Tulu Kapi Gold Project in Ethiopia.
• The funding comprises total budget of $320m to be put together at the subsidiary level including $190m in secured debt, $100m in Equity Risk Notes and $20-40m through equity in KEFI subsidiaries.
• KEFI targets an increased 80% interest in TKGM, an owner of the Tulu Kapi license.
• The Company also announces appointments of Jacques Kruger as the new Project Development Manager and Simon Cleghorn, an original Company’s resource geologist, as the Executive Committee member.
• On the ground, dedicated policing has been formed for permanent present at Tulu Kapi and other strategic mining project for monitoring of security in the project area and ensuring compliance with international standards requirements.
• A series of independent experts in areas like environment and social (SLR), safety and security (Constellis) and operations (Behre Dolbear) confirmed Tulu Kapi’s launch plans comply with international standards for environment, community and safety.
• The team reiterated plans to launch development works mid-2024 with first production in mid-2026.
• The Company is also highlighting notable improvement in the regional mining sector sentiment with construction works commencing at another Ethiopian industrial scale gold mine west of Tulu Kapi and operations upgrade programme launched at the only pre-existing large Ethiopian gold mine south of Tulu Kapi.

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

Phoenix Copper* (PXC LN) 16.75p, Mkt Cap £25m – Initial ore reserve estimate for the Empire open-pit project, Idaho

Phoenix holds 80% of the Empire mining property in Idaho)

CLICK FOR PDF

• Phoenix Copper has issued an ore-reserve estimate for its Empire open-pit project in Idaho.
• The estimate, reported in compliance with NI-43-101 standards and using an NSR cut-off of US$22.59/t is the company’s first reserve estimate for the project and builds upon the company’s resource estimation work as “part of the Company’s ongoing pre-feasibility studies”.
• The estimate, which uses the results from 485 drillholes and includes “mining and processing dilution” describes ‘Proven’ reserves of 7.515mt at an average grade of 0.49% copper, 0.38g/t gold and 14.42g/t silver plus a ‘Probable’ reserve of 2.582mt at an average grade of 0.50% copper, 0.16g/t gold and 14.10g/t silver.
• Over 74% of the reserve tonnage lies in the ‘Proven’ reserve reflecting a robust reserve based on the extensive drilling and subsequent analysis, metallurgical testing, engineering and modelling.
• The ‘Proven & Probable’ reserve of ~10.1mt at a copper equivalent grade of 0.66% copper reported today represents approximately 44% of the ‘Measured & Indicated’ resource tonnage at the Empire open-pit mine project of ~22.9mt at an average grade of 0.38% copper, 0.22g/t gold and 10.3g/t silver.
• Explaining that the reserve reported today represents “the economically mineable portion of the mineral resources”, CEO, Ryan McDermott, thanked the “team for their tireless hours of work and their dedication to our Idaho project”.
• The definition of the reserve at the Empire open-pit project follows news earlier this year of the acquisition of key equipment for the project in the form of two ‘pre-owned’ ball mills at a fraction of the cost, and on a significantly shorter delivery timetable than would be expected for equipment supplied from a manufacturer.
• The company’s earlier statement, in March, indicated that the mills were expected to arrive in Idaho during the summer.

Conclusion: The publication of its first mineral reserve estimate for the Idaho open-pit project is an important milestone in the continuing pre-feasibility study.  We look forward to further news as the study progresses and the recently acquired equipment arrives on site.

*SP Angel acts as nomad to Phoenix Copper

No.1 in Base Metals: SP Angel mining team awarded No 1. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q1 2024

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%