SP Angel Morning View -Today’s Market View, Tuesday 8th October 2024

Chinese lithium equities extend rally despite steady prices as traders look to restocking

Copper and iron ore slide alongside base metals as China policy meeting disappoints

MiFID II exempt information – see disclaimer below

Aterian plc* (ATN LN) – Jebilet Est copper project produces compelling copper results in Morocco

Atlantic Lithium* (ALL LN) – Mine Operating Permit issued for Ewoyaa lithium mine in Ghana

ECR Minerals (ECR LN) – Gravity recovery test results from the Blue Mountain project, Queensland

GreenX Metals Ltd (GRX) – £252m claim upheld by International Court of Arbitration

Ivanhoe Mines (IVN CN) – Production report as guidance revised lower on power disruptions

Tungsten West (TUN LN) – New CEO appointed to the board

Xtract Resources (XTR LN) – Bushranger ore-pre-concentration study

Copper and iron ore slide alongside base metals as China policy meeting disappoints

• A Beijing policy meeting on this morning has disappointed metals markets, with reduced confidence that the NDRC will use ‘bazooka style’ stimulus to shore up the economy.
• Iron ore prices fell 4% in Singapore, sliding to $105/t for the 62% Fe index.
• Copper has also sold off, down 2% to $9,750/t.
• Aluminium and zinc have also weakened, both down over 2%.
• Traders had been buying in anticipation that Beijing would provide further stimulus measures to prop up the faltering property sector.
• The sharp decline in base metals likely reflects speculative money leaving the market rather than a dramatic shift in supply/demand fundamentals.
• Copper inventories have been sliding and premiums have been strengthening in the second half of this year, suggesting Chinese buyers are more open to purchases.

Lithium – Chinese lithium equities extend rally despite steady prices as traders look to restocking

• Chinese lithium producers and refiners saw a sharp rally overnight, despite a significant sell-off in the wider Shanghai market.
• Ganfeng climbed, Gotion and Tianqi all rallied limit up at 10%.
• Conversely, Australian producers weakened, with Pilbara down 3% and Liontown and IGO both off 5%.
• Shanghai SC6 prices are sitting at $775/t, up marginally.
• Carbonate prices are up marginally, with battery grade prices climbing slightly.
• Mysteel expect monthly product to fall 8% in China for October, as refiners continue maintenance periods.
• LFP production is expected to rise 4% in October in China.
• Mysteel expect supply to tighten over the next month or so, but see the market oversupplied over the medium term.
• Pre-holiday inventories showed a sharp decline for Chinese downstream lithium players, down 6% wow to September 30^th.
• Smelter carbonate inventory fell 18%, whilst trader inventory fell 3% and downstream inventories rose 13%.
• The sector has been boosted by Rio’s offer for Arcadium, with the Major sharing our confidence that an eventual uptick in lithium prices is inevitable.

Gold ($2,638/oz) prices slide further on higher US Treasury yields and stronger dollar

• Gold has faced a wave of selling since touching $2,670/oz at the end of September.
• Momentum-driven funds have likely taken profits after the metal failed to break through $2,670/oz twice.
• This was then likely compounded by the stronger-than-expected NFP data last Friday, which pushed US Treasury yields back over 4% for the 10 year.
• Gold and treasury yields typically have an inverse relationship, although this has been disrupted in recent years by substantial central bank buying.
• Tensions in the Middle East continue, providing some haven demand for gold.
• Chinese retail buyers have been a supportive tailwind, and there is a chance that the recent domestic equity rally saw investors rotate from bullion into stocks.
• The dollar has strengthened from two-year lows hit at the beginning of September, also weighing on gold prices.

Nickel – Elliott Associates loses appeal against the LME over annulled nickel trades

• The LME suspended the nickel market on 8th March 2022 annulling $12bn in nickel trades.
• The High Court in London ruled the extreme price move was a once in a generation event and the LME acted lawfully in cancelling the trades.
• The judges ruled, “There was no question of seeking to favour one cohort of traders over another. Rather the decision was taken in the interest of the market as a whole,”

 This is Why Gold is Rising and It Will Probably Continue:

• Podcast: https://audioboom.com/posts/8547593-john-meyer-this-has-one-of-the-lowest-risk-profiles-i-ve-seen-for-a-long-time

 Economics

China – Briefing by National Development and Reform Commission underwhelmed markets offering little in the way of new stimulus measures

• Copper is down 1.9% this morning, iron ore is off 4.9% while brent is trading 1.8% lower.
• Hang Seng recorded a 9.5% drop posting its worst single day performance in more than a decade, although, the index remains up ~22% YTD.
• Separately, China is planning to impose anti dumping measures on French cognac imports in a sign of escalating trade tensions with the EU.
• EU members voted on Friday in support of steep increases in tariffs on Chinese EVs.

Japan – Basic wage climbed strongly in August, although, incomes in real terms dropped in the same months.

• Salaries were up 2.9%yoy but down 0.6% in nominal and real terms, respectively.

Germany – Industrial production piked up in August, although, that is unlikely to take the sector out of a contraction in Q3.

• Average for the first two months of Q3 is still more than 1% below Q2 average.
• Industrial Production (%mom, Aug/Jul/Est): 2.9/-2.9(revised from -2.4)/0.8
• Industrial Production (%yoy, Aug/Jul/Est): -2.7/-5.6(revised from -5.3)/-3.8

Serbia – Parliament started debating on opposition proposal to ban lithium and borate mining and exploration.

• The government earlier argued that allowing $2.4bn Jadar Lithium Project would attract investment and jobs while insisted that the Company would be held to high international environmental and industrial standards.
• A deputy from the opposition Ecological Uprising movement that proposed the ban as an amendment to the existing mining law argued that lithium mining would be devastating for the environment.
• “Nothing will stop without lithium; there will be no apocalypse and no austerity,” Danijela Nestorovic said.

Israel – The Israel Defence Forces are preparing to step up ground operations at Lebanon issuing evacuation orders to more than two dozen villages in the south west of the country.

• Military provided “urgent warnings” in Arabic to beachgoers and boars along the Lebanese coast up to the Awali river signalling planned maritime operations against Hizbollah, according to FT.

Currencies

US$1.0979/eur vs 1.0960/eur previous. Yen 147.67/$ vs 148.41/$. SAr 17.476/$ vs 17.421/$. $1.307/gbp vs $1.311/gbp. 0.672/aud vs         0.679/aud. CNY 7.057/$ vs 7.018/$.

Dollar Index 102.43 vs 101.86 previous

Precious metals:         

Gold US$2,638/oz vs US$2,649/oz previous

Gold ETFs 83.5moz vs 00.0moz previous

Platinum US$965/oz vs US$989/oz previous

Palladium US$998/oz vs US$1,016/oz previous

Silver US$31.2/oz vs US$32.3/oz previous

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

Base metals:   

Copper US$9,727/t vs US$9,964/t previous

Aluminium US$2,582/t vs US$2,668/t previous

Nickel US$17,560/t vs US$17,970/t previous

Zinc US$3,103/t vs US$3,177/t previous

Lead US$2,109/t vs US$2,162/t previous

Tin US$33,245/t vs US$33,805/t previous

Energy:           

Oil US$79.5/bbl vs US$78.6/bbl previous

Natural Gas €39.8/MWh vs €40.6/MWh previous

Uranium Futures $83.1/lb vs $82.2/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$105.6/t vs US$108.8/t

Chinese steel rebar 25mm US$501.9/t vs US$494.9/t

Thermal coal (1st year forward cif ARA) US$126.8/t vs US$123.5/t

Thermal coal swap Australia FOB US$150.3/t vs US$142.3/t

Other:  

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

NdPr Rare Earth Oxide (China) US$60,655/t vs US$60,980/t

Lithium carbonate 99% (China) US$10,416/t vs US$10,330/t

China Spodumene Li2O 6%min CIF US$740/t vs US$740/t

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

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

China Graphite Flake -194 FOB US$445/t vs US$445/t

Europe Vanadium Pentoxide 98% 4.6/lb vs US$4.6/lb

Europe Ferro-Vanadium 80% 24.55/kg vs US$24.55/kg

China Ilmenite Concentrate TiO2 US$320/t vs US$321/t

China Rutile Concentrate 95% TiO2 US$1,325/t vs US$1,346/t

Spot CO2 Emissions EUA Price US$62.9/t vs  US$62.9/t

Brazil Potash CFR Granular Spot US$277.5/t vs US$282.5/t

Germanium China 99.99% US$2,775.0/kg vs US$2,775.0/kg

China Gallium 99.99% US$455.0/kg vs US$455.0/kg

Battery News

Northvolt subsidiary files for bankruptcy.

• Northvolt Ett Expansion was planning to increase production capacity at the flagship plant in Skelleftea, Sweden, before it was suspended in late September.
• Northvolt, Europe’s most developed battery producer, has been struggling financially following order delays and losing contracts/
• Earlier the Company dropped plans to produce cathode active material (CAM) and focus on its core business of making battery cells, Reuters writes.
• That marks a change in strategy from original plans to be a one stop shop focused on producing everything from active materials to batteries including end of life recycling.

Company News

Aterian plc* (ATN LN) 53p, Mkt Cap £5.1m – Jebilet Est copper project produces compelling copper results in Morocco

(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 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 Morocco)

• Jebilet Est (100%) Copper Project: new copper zones identified, 35 km northeast of Marrakech within an established current and historic mining district in Morocco.
• Recent work has identified several new mineralised zones, including a 9.25 % copper sample from a previously untested area reconfirming earlier work by the team.
• The license is easy to access via asphalt roads and a network of smaller tracks and is 15km from a rail line to Casablanca and 15km east of the Bir N’Hass copper mine.
• Highlights:
  • Quartz-carbonate vein targets identified
    • 9.25 % Cu returned from isolated vein outcrops.
    • 2.09 % Cu and 0.88 % Cu from new vein outcrops traced discontinuously over a 450m strike length.
  • Vein zone on the western licence has strike length of 3.25 km.
    • 0.56 % Cu from recent sampling and up to 4.43 % Cu from previous sampling.
    • Multiple veins over an apparent surface width of up to 120m outcropping.
• Target areas for follow-up work:
  • Target 1 – Up to 2.09 % Cu, 0.88 % Cu, and 0.81 % Cu from a series of quartz-carbonate veins, individually up to 4 m apparent width and 50 m strike length, discontinuously traced over a 450 m strike length.
  • Target 2 – 9.25 % Cu from an isolated outcrop within the surrounding soil cover.
  • Target 3 – 0.68 % Cu from quartz veining coincident with a historically mapped 1.70 km long lineament.
• Previous Aterian fieldwork:
  • Western Licence:
    • Up to 4.43 % Cu, 3.11 % Cu and 1.79 % Cu from brecciated quartz-carbonate veins within a previously mapped, east-northeast striking vein system, now extending to 3.25 km in strike length.
    • Individual veins are up to 10 m in apparent width and 110 m in strike length.
    • Outcrops are commonly observed in areas with thin, surrounding soil cover.
  • Eastern Licence:
    • Up to 3.11 % Cu, 1.80 % Cu, 1.75 % Cu and 1.71 % Cu from previously mapped quartz-carbonate veins over an extensive east-northeast trending target area of approximately 1.4 km by 0.8 km.
    • Individual veins are up to 5 m in apparent width and up to 145 m in strike length.
• Work to be done using in-house team:
  • Ground magnetics and IP profiles to be completed over Jebilet Est.
  • Selective channel/trench sampling will support this work in confirming potential future drill targets.

Conclusion:  Jebilet Est is producing encouraging copper results in an accessible region. Indications suggest a potential 120m wide package of quartz-carbonate veins and alteration zones within target area.  The mineralisation is seen at surface indicating potential for a shallow deposit. The team have also extended the strike extent of the surface mineralisation suggesting potential for a greater  area of mineralisation.

*SP Angel acts as Broker to Aterian Plc

Atlantic Lithium* (ALL LN) 15.96p, Mkt Cap £103m – Mine Operating Permit issued for Ewoyaa lithium mine in Ghana

(Ewoyaa Ownership:  Atlantic 62.9% falling to 40.5% if Piedmont fund their share of Ewoyaa, Piedmont 18.2% rising to 40.5% on project funding, MIIF Sovereign Wealth fund 6%, Ghana 13%)

(Piedmont are contracted to pay $70m + 50% of the total Capex to raise their stake to 40.5%. Total cost would be $135m to Piedmont on a $200m capex.)

• The Minerals Commission of Ghana has issued the Mine Operating Permit for the Ewoyaa Lithium Project in Ghana.
• The permit was the last regulatory approval required before starting construction of the Ewoyaa Lithium Mine and Process Plant
• Management need to complete the financing package with one or more new offtake partners and potentially other lenders before making a FID ‘ Final Investment Decision’.
• The team are also waiting on the final ratification of the Ewoyaa Mining Lease by the Ghanian government which should resume sitting on 15 October.
• Lithium market: Rio Tinto’s interest and potential offer for Arcadium Lithium, the world’s third largest lithium producer lends confidence to future expansion in the lithium market.
• We recently spoke to a Chinese buyer of lithium who reckoned the market had bottomed out and was looking for a +20% increase in demand for lithium hydroxide.
• Benchmark Minerals Intelligence forecast lithium demand to rise to 4mtpa in 2035 vs 0.68mt in 2022. This equates to another 73 mines at an average production rate of 45,000tpa
• Benchmark’s forecasts look similar to lithium for other raw materials including, cobalt, nickel and natural graphite in terms of the number of new mines required to meet estimated li-ion battery demand.

Conclusion:  Atlantic is looking to complete the financing and permitting required to start construction of the Ewoyaa lithium mine this year.

We are aware of a number of buyers looking to add to their offtake and look forward to further news on the mine financing with respect to the offtake portion of the total capex.

*SP Angel acts as Nomad to Atlantic Lithium. Two mining analysts from SP Angel have visited the Ewoyaa mine site in Ghana. Our analysts also visited the Ministry of Minerals Commission and MIIF, the Ghana Minerals Income Investment Fund which has invested in Atlantic Lithium and the Ewoyaa project.

ECR Minerals (ECR LN) 0.25, Mkt Cap £4.6m – Gravity recovery test results from the Blue Mountain project, Queensland

• ECR Minerals reports that results from single-stage gravity recovery testing of samples from its Blue Mountain project have shown recovery rates of 91.7% of the gold into just 0.4% of the sample mass.
• The testing was undertaken by Gekko Systems on samples of alluvial gold “found at or near the surface, meaning that the mining techniques used to extract any minerals are not associated with high capital expenditure”.
• Today’s announcement explains that 80% of the gold within the 75µm sized sample was contained in the coarser >106µm sized fraction representing ~6% of the overall mass indicating that “the gold in the ore is amenable to gravity concentration by a batch centrifugal concentrator”.
• Additional leaching tests show that tailings from the concentrate “a gold recovery of 87.6% after 24 hours and a leach tail grade of 1.63 g/t Au” indicating that “a gravity recovery circuit and conventional cyanidation is a viable treatment option as a way of recovering the gold from Blue Mountain ore after further testwork and economic evaluation”.
• Acknowledging that “further analysis is still required … [Managing Director, Mike Whitlow, said] … the results so far have provided evidence that potential commercial opportunities still exist in some of the historical goldfields through the application of modern technology”.
• He said that “the concentrations of gold being found at or around surface level fully validates examining the viability of installing a production plant at the site”.

Conclusion: Initial test results support the potential for gravity recovery of alluvial gold at Blue Mountain.  We await further news on the company’s follow-up work.

GreenX Metals Ltd (GRX) 48p, Mkt cap £98m – £252m claim upheld by International Court of Arbitration

• GreenX Metals has been awarded ~£252m (A$490m) in compensation by the International Court of Arbitration against the Republic of Poland.
• Interest is added to the claim at the overnight interest rate, SONIA +1% compounded pa.
• The award is for £183m (A$355m) in compensation byt eh Tribunal under the Energy Charter Treaty awarded from 31 December 2019.
• GreenX costs have been covered by a lending facility from Litigation Capital Management.
• The Tribunal has unanimously held that the Republic of Poland had breached its obligations under the Treaties in relation to the Jan Karski project, entitling GreenX to compensation. In respect of the Dębieńsko project, the Tribunal did not uphold the Claim under the Treaties.
  • “The Claim was brought under the United Nations Commission on International Trade Law Rules (UNCITRAL) and the Awards are final and binding on the parties. The UNCITRAL Rules do not provide for an appeal procedure i.e., grant no explicit authority to a panel to reconsider its award. 
  • Under the UNCITRAL Rules, either party may, within 30 days of receiving an award, ask the Tribunal to correct any computational, clerical or typographical errors in the award, issue an interpretation of the award or render an additional award on any claims omitted from the final award. These procedures do not allow either party to request that the Tribunal reconsider the merits of its decision.
  • If a party believes that an award ought to be “set-aside” or “annulled”, then that party must apply for relief from a court where the arbitration was seated, which would be the national courts of England and Wales for the BIT claim and Singapore for the ECT claim. Poland has 28 days from the date of the BIT Award and three months from receiving the ECT Award to apply for set aside of the respective Awards, which can only be set aside under limited circumstances. It is important to note that a “set-aside” motion is different from a general “appeal” since a set-aside motion can in general only relate to a lack of jurisdiction on the part of the Tribunal or procedural unfairness, unlike an appeal, where the actual merits of a case might be revisited by a court. In summary, Poland cannot initiate any post award proceedings to re-examine the Tribunal’s decision on the merits of the case. The threshold to succeed on a “set-aside” motion in either the Singapore or English domestic courts is high, with courts in both jurisdictions rejecting set-aside applications in the vast majority of cases.”
• GreenX recently acquired a large scale copper project in Germany including the historic Richelsdorf copper and silver mines.

Conclusion:  This is a substantial award for GreenX and it is difficult from the statement to see how the Republic of Poland can overturn the ruling.

Ivanhoe Mines (IVN CN) C$20, Mkt Cap C$27bn – Production report as guidance revised lower on power disruptions

• Ivanhoe, copper and zinc producer in the DRC, reports production from Q3.
• Kamoa Kakula produced 116kt copper in concentrate, whilst the Kipushi zinc mine produced 17.8kt zinc in concentrate.
• Kamoa ytd has produced 303kt copper in con, with average daily production rate rising in September to hit 1,460t.
• Phase 1 and 2 concentrates milled 2.2mt of ore in Q3 at 4.9% Cu feed grade, with average recoveries of 87%.
• Phase 3 concentrate produced first concentrate in June and milled 1.1mt of ore over Q3 at an average feed grade of 2.6% Cu.
• The lower feed grade in Q3 reflects the feed of historical surface stockpiles.
• Commercial production at Phase 3 concentrator was hit in Q3, producing 22.1kt copper in concentrate at an average recovery of 80%.
• Improvements at Phase 3 noted, with the concentrator milling 117kt in the last week of September, with recoveries increasing to 84%.
• Company downgrades guidance from 440-490kt copper in concentrate to 425-450kt for 2024.
• Lower guidance follows production hit from grid power disruption, alongside slower ramp up from Phase 3 concentrator.
• Construction of the smelter remains on schedule for the end of the year.

Tungsten West (TUN LN) – 2.75p, Mkt cap £5.2m – New CEO appointed to the board

• Following its announcement in August of the appointment of Jeffery Court as CEO Tungsten West confirms today that he has now taken up his role and has been appointed as a director.
• He is described as “an experienced international mining executive” with former roles at Rio Tinto, and “More recently, as the Chief Executive Officer – Mining & Chief Development Officer – Mining of Capital’s drilling and mining services business”.
• Welcoming Mr. Court, Chairman, David Cather, said that his “experience in mine feasibility and project development will be invaluable during this crucial time at Tungsten West, as we look to secure further financing and recommence mining and processing operations at Hemerdon in 2026”.
• The new CEO commented that “The historic Hemerdon mine has the potential to play a significant role in the development of a secure UK and European supply chain for tungsten and tin … [and said that] … the Project’s advancement towards production will further reinvigorate the UK mining industry”.
• When Tungsten West announced its annual results earlier this month, it confirmed that a third iteration of the project feasibility study is underway, in parallel with funding efforts, with the study expected to be “completed by the end of 2024”.  We imagine that Mr. Court’s background will equip him to have an important role in guiding the feasibility work.

Conclusion: The appointment of the new CEO is timely in the context of the latest feasibility study for the reopening of Hemerdon and financing plans for the reopening of the mine to resume production in 2026.

Xtract Resources (XTR LN) 0.75p, Mkt Cap £6.0m – Bushranger ore-pre-concentration study

• Following a review in June of the options for pre-concentration of ore at its Bushranger project in New South Wales by Altrius Consulting which concluded that the “mineralisation is not considered amenable to upgrade by Tomra ore sorting” Xtract Resources has assessed pre-screening, gravity separation and coarse particle flotation as alternative pre-concentration techniques.
• Using a 94kg sample from drill core, further testing has shown that pre-concentration using coarse particle flotation delivered “78% of the copper mineralisation recovered into only 5% of the mass, with the head grade of the composite sample of 0.19% Cu being upgraded into a pre-concentrate product of 2.8% Cu … [recovering] … 30% more copper than conventional flotation”.
• The latest round of testing also showed that “upgrading of the Racecourse mineralisation by pre-screening and simple dense media separation did not achieve positive results, probably due to the disseminated nature of the chalcopyrite within the host rock”.
• Executive Chairman, Colin Bird, commented that “The pre-concentrate test work on copper-gold mineralisation from the Racecourse deposit on the Bushranger Project has shown encouraging results with coarse particle flotation … technology demonstrating the potential to increase the grade of copper concentrates and recover up to 30% more copper”.
• Mr. Bird also pointed out that “As the average grade of the world’s overall copper resources continues to fall, ore pre-concentration will become an increasingly important part of the process to allow copper mineral resources to be economically mined and it is pleasing to see that the copper-gold mineralisation from the Racecourse deposit responds well to ore pre-concentration”.
• He confirmed that Xtract Resources will “carry out more detailed test work on the most appropriate methodologies with a low-cost budget and if appropriate introduce the revised technical parameters into the financial model. At current and forecasted copper prices, the project is demonstrating the potential to be one of the next global contributors to the copper deficit”.
• The Bushranger project hosts a “Mineral Resource of 512Mt @ 0.22% CuEq, at a cut-off of 0.1% CuEq*, and classified as Inferred and Indicated in accordance with JORC (2012) (refer to … for the Racecourse Prospect”.
• Today’s announcement also comments that “Mining studies by Optimal Mining on the Bushranger Gold-Copper Project, completed in 2022 and 2023, concluded that a minimum production rate of 20 Mtpa, and copper price in excess of US$10,000/tonne, are required to generate a positive Net Present Value (“NPV”) from open pit mining of the Racecourse Mineral Resource”.

Conclusion: Test work is pointing to the potential use of coarse particle flotation as a pre-concentration technique at the Bushranger deposit in NSW.  We await further news with interest.

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