Copper rises as Teck merges with Anglo American and Freeport halts Grasberg underground operations
MiFID II exempt information – see disclaimer below
Anglo American (AAL LN) – Meger with Teck creates world’s 1.3mtpa copper producer and fends off interlopers
Teck Resources (TECK US)
Griffin Mining (GFM LN) – Resumption of operations supports financials
Metals Exploration (MTL LN) – Progress at La India as plant erection begins
Orosur Mining* (OMI LN) – Strong progress at Pepas and encouraging update from El Cedro porphyry target
Power Metal Resources* (POW LN) – Drilling gets underway in Oman
Serabi Gold (SRB LN) – Impressive results from Palito and Coringa in Brazil
Sylvania Platinum (SLP LN) – Strong results as Thaba JV chromite production looms
Copper ($9,940/t) rises as Freeport’s Grasberg mine suspends operations on incident
- Copper prices have risen to recent highs after Freeport reported it has halted mining at Grasberg.
- Prices have edged over $9,900/t on worries over supply disruptions from one of the world’s largest mines.
- Freeport suggested seven workers have been trapped underground following a large flow of wet material blocked evacuation routes.
- Rescue crews are working to clear the area for evacuation.
- A lower dollar has also been lifting copper prices, with increased rate cut expectations weighing on the greenback.
Gold hits new high of $3,649 on probability of Fed rates cuts following weak US labour data
- Gold prices are heading higher on traders expectations for further rate cuts
- Confidence in the US Central Bank is being eroded by Trump’s attack of Fed independence
- A meeting between the major BRIC nations China, India and Russia is also of concern to already anxious investors.
- Concerns over the valuation and payability of AI in the US as the new technology looks to create value
- Central Banks: China and India are seen adding to their gold holdings while shunning US Treasuries.
- ETF inflows continue as other investors also flock into gold
- Non-Farm Payroll data disappointed increasing the likelihood of Fed rate cuts
- The market fully priced in a 25bp cut in September and increased odds of a 50bp cut to c.12%.
- US Treasury yields fell with the 10 year hovering just above 4.04% vs 4.75% in January.
- The consistent rise in gold prices does start to cause some concern, and we wonder whether there is some geopolitical hedging going on…
IGTV – The Future of Mining: Gold, Copper, Rare Earths & M&A: https://youtu.be/-G59iOq6x2c?si=z4fVkyHNP9isbOTB
The News Forum – The Buck Stops Here: https://www.thenewsforum.ca/series/thebuckstopshere
| Dow Jones Industrials | +0.25% | at | 45,515 | |
| Nikkei 225 | -0.42% | at | 43,459 | |
| HK Hang Seng | +1.14% | at | 25,925 | |
| Shanghai Composite | -0.51% | at | 3,807 | |
| US 10 Year Yield (bp change) | +2.7 | at | 4.07 |
Economics
Currencies
US$1.1751/eur vs 1.1727/eur previous. Yen 147.26/$ vs 147.65/$. SAr 17.495/$ vs 17.526/$. $1.356/gbp vs $1.352/gbp. 0.660/aud vs 0.658/aud. CNY 7.127/$ vs 7.133/$.
Dollar Index 97.37 vs97.68 previous.
Precious metals:
Gold US$3,645/oz vs US$3,610/oz previous
Gold ETFs 94.4moz vs 93.8moz previous
Platinum US$1,397/oz vs US$1,401/oz previous
Palladium US$1,146/oz vs US$1,133/oz previous
Silver US$41.3/oz vs US$41.1/oz previous
Rhodium US$7,150/oz vs US$7,150/oz previous
Base metals:
Copper US$9,918/t vs US$9,904/t previous
Aluminium US$2,615/t vs US$2,619/t previous
Nickel US$15,175/t vs US$15,370/t previous
Zinc US$2,849/t vs US$2,868/t previous
Lead US$1,986/t vs US$1,995/t previous
Tin US$34,305/t vs US$34,495/t previous
Energy:
Oil US$66.7/bbl vs US$66.6/bbl previous
- Gulf Keystone Petroleum announced that it is pursuing a potential dual listing of its shares the Oslo Stock Exchange, which it plans via a possible secondary offering in connection with the listing to facilitate initial trading liquidity.
- Adura, the proposed merged Shell-Equinor UK E&P, has appointed Neil McCulloch as its new Chief Executive Officer, who brings over 30 years of experience at EnQuest, OMV and BG, and is the current CEO at Spirit Energy.
- Strathcona Resources increased its bid for MEG Energy to 0.8 of its own shares, which is ~10% higher than its original takeover bid and the ~C$7bn offer (75% cash) that Cenovus tabled last month for the 100kb/d oilsands producer.
Natural Gas €33.3/MWh vs €32.4/MWh previous
Uranium Futures $76.8/lb vs $76.2/lb previous
Bulk:
Iron Ore 62% Fe Spot (cfr Dalian) US$118.9/t vs US$117.1/t
Chinese steel rebar 25mm US$455.2/t vs US$455.8/t
HCC FOB Australia US$186.3/t vs US$185.5/t
Thermal coal swap Australia FOB US$107.0/t vs US$111.0/t
Other:
Cobalt LME 3m US$33,335/t vs US$33,335/t
NdPr Rare Earth Oxide (China) US$81,384/t vs US$81,314/t
Lithium carbonate 99% (China) US$10,313/t vs US$10,305/t
China Spodumene Li2O 6%min CIF US$860/t vs US$860/t
Ferro-Manganese European Mn78% min US$1,015/t vs US$1,015/t
China Tungsten APT 88.5% FOB US$528/mtu vs US$528/mtu
China Graphite Flake -194 FOB US$405/t vs US$410/t
Europe Vanadium Pentoxide 98% US$5.4/lb vs US$5.4/lb
Europe Ferro-Vanadium 80% US$23.7/kg vs US$23.7/kg
China Ilmenite Concentrate TiO2 US$270/t vs US$270/t
China Rutile Concentrate 95% TiO2 US$1,101/t vs US$1,101/t
Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t
Brazil Potash CFR Granular Spot US$352.5/t vs US$352.5/t
Germanium China 99.99% US$3,075.0/kg vs US$3,075.0/kg
China Gallium 99.99% US$395.0/kg vs US$395.0/kg
EV & battery news
MG unveils first mass-produced EV with semi-solid-state battery
- Chinese automaker SAIC has revealed that it will introduce the world’s first mass produced EVs to launch globally with semi-solid state batteries in the upcoming MG4
- The EV will use a manganese-based lithium-ion battery, by QingTao Energy, which has a gel-like electrolyte with just 5% liquid content for better safety, thermal stability, and longevity.
- It has an energy density rated at 180Wh/kg; with a range is around 333 miles which is similar to LFP versions.
- In China, the price for the semi-solid-state MG4 will start at around $14,000.
- Rollout is set for China first, with global availability likely by early 2026.
| Overnight Change | Weekly Change | Overnight Change | Weekly Change | ||
| BHP | -1.0% | -4.4% | Freeport-McMoRan | 0.7% | 5.1% |
| Rio Tinto | -1.1% | 2.2% | Vale | 0.5% | 1.7% |
| Glencore | 3.7% | 4.5% | Newmont Mining | -0.6% | 1.8% |
| Anglo American | 7.3% | 9.6% | Fortescue | 1.5% | 3.8% |
| Antofagasta | 3.4% | 4.4% | Teck Resources | 2.0% | 3.4% |
Company news
Anglo American (AAL LN) 2,501p, Mkt Cap £29bn – Meger with Teck creates world’s 1.3mtpa copper producer and fends off interlopers
Teck Resources (TECK US) $35, Mkt Cap $17bn ($39/shr pre-market)
- Anglo American and Teck Resources announced this morning an ‘at market merger of equals.’
- Anglo American will issue 1.3301 shares to Teck shareholders for each outstanding Teck class A common share and class B subordinate voting share, consistent with a merger of equals at market.
- Anglo American shareholders will own c.62.4% and Teck shareholders will own 37.6% of the pro forma entity.
- Anglo American shareholders will receive a special dividend of US$4.5bn ahead of completion.
- Anglo Teck will be headquartered in Canada but retain its primary listing on LSE.
- The Group expects the merger to take 12-18 months.
- Pre-tax recurring annual synergies from the merger estimated at US$800m (year 4)
- The Group sees an additional US$1.4bn of annual average underlying EBITDA via synergies from combining Collahuasi and Quebrada Blanca, expected to boost copper production by 175ktpa (from 2030).
- Group notes strength of diversified cash flow base containing premium iron ore and zinc, alongside copper.
- Duncan Wanblad (Anglo) will take the CEO role, Jonathan Price (Teck) as deputy CFO.
- The combined Anglo Teck is expected to generate 70% of EBITDA from copper at consensus prices.
- Copper production expected to grow to 1.35mtpa by 2027 driven by:
- Collahuasi, 245.8kt attributable production, 44% ownership, Chile,
- Quebrada Blanca, 207.8kt production, 60% ownership. Chile
- Quellaveco, Peru, 306.3kt production, 60% ownership Peru
- Los Bronces, Chile, 172.4kt production, 50.1% ownership Chile
- Highland Valley Copper, 102.4kt production, 100% ownership Canada
- Antamina, 96.1kt attributable production, 22.5% ownership Peru
- High-grade iron ore production of c.61mtpa and zinc production from Red Dog will also form key parts of the portfolio.
- Development portfolio includes:
- JV with Codelco for joint mine plan at Los Bronces and Andina
- Galore Creek and Schaft Creek projects in British Columbia
- Zafranal in Peru, San Nicolas in Mexico, NuevaUnion in Chile, NewRange in US and Sakatti in Finland.
- Potential for syndication at Woodsmith
Conclusion: 17 months on from BHP’s approach, Anglo American has joined forces with Teck to create the second largest listed copper miner globally after BHP. Anglo has been through a period of simplification following BHP’s approach, trimming down its asset base through sales and divestments. Disappointing operational performance at QB has led to Teck’s underperformance over the past year (down 21% vs global copper miners ETF up 31%). The two Companies see US$800m worth of synergies from the combination, alongside an additional US$1.4bnpa in EBITDA from combining Collahuasi and Quebrada Blanca. There is an element of sticking together to survive here, with Teck previously pursued by Glencore and supposedly both Vale and Rio, whilst the possibility of BHP coming back for another crack at Anglo had also been rumoured. We would expect the combined Anglo Teck to further divest its non-core asset base as the market continues to crave copper. De Beers separation plans are ongoing, alongside the sale of AAL’s steelmaking coal and nickel divisions. We are encouraged to see the pro-forma entity keep London as their primary listing.
Griffin Mining (GFM LN) 195p, Mkt Cap £355m – Resumption of operations supports financials
- Gold and zinc producer in China, Griffin, reports quarterly results.
- Revenue for the quarter rose to $43m, up from $20.4m qoq.
- Cost of sales rose to $22.1m from $16.6m.
- Gross profit increased to $21.2m from $3.9m.
- PBT at $15.5m from ($1.2m)
- Ore mined increased to 359kt over the quarter from 224kt.
- Zinc produced at 10.5kt, gold at 6.3koz and silver at 119koz (6.6kt, 2.4kt and 43.6kt respectively in prior quarter).
Conclusion: The results reflect the resumption of operations in 2Q25, following the barraging of all underground access. Management reports the return to ‘business as usual.’ Zone II infrastructure development nearing completion and Company is aiming for ore extraction in 4Q25.
Metals Exploration (MTL LN) 14.3p, Mkt Cap £423m – Progress at La India as plant erection begins
- Metals Exploration provides an update from their La India project.
- The Company has now unloaded the Rock Creek gold processing plant and is delivering equipment to site.
- Plant erection activities due for October 2025 start.
- Mine development earthworks now 95% complete with ROM pad being finalised.
- Metals Exploration provides a video tracing update, click LINK
Conclusion: Metals Exploration are led by proven mine builders and have wasted no time in progressing La India towards construction following their acquisition of Condor Gold. Gold production is aimed for 4Q26 aimed at 68kozpa, 126kozpa in 2027 and 132kozpa in 2028.
Orosur Mining* (OMI LN) 26p, Mkt Cap £72m – Strong progress at Pepas and encouraging update from El Cedro porphyry target
- Orosur reports additional drill results from their flagship Pepas Project, alongside an update from El Cedro.
- Six additional holes have been completed from Pepas for the MRE infill programme, highlights include:
- PEP054 – 20.6m at 2.01g/t Au from 20m
- PEP055 – 47.25m at 15.25g/t Au from 22m (inc. 14m at 46g/t Au and 1.9m at 303g/t au)
- PEP056 – 22.5m at 1.64g/t Au
- PEP057 – 7.45m at 3.05g/t Au and 17.1m @ 5.47g/t Au —
- PEP058 – 34.85m at 3.24g/t Au from 33m
- PEP059: 14.2m at 0.75g/t Au from 13.4m
- Management notes that hole PEP055 was influenced by coarse gold samples, with two samples returning 466g/t Au and 123g/t Au.
- Company suggests the MRE could be completed by late October, with the rig then moved back to exploration either around Pepas or APTA>
- Metallurgical testing is ongoing.
- At El Cedro, Orosur reports good progress with spur soil sampling over the presumed porphyry system.
- The programme is now 65% complete, and initial assay results have returned large areas over 0.3g/t to 1g/t Au.
- There have also been base metal associations in what is presumed to be a porphyry system.
Conclusion: Results in line from Pepas as Orosur continues to infill the small but high-grade open pit target for an MRE, due for completion in October. Visible gold identified in PEP055, likely to be top-cut for the MRE but highlights high-grade vein material yet unidentified from drilling to date. Elsewhere, we are encouraged by today’s update from El Cedro, where a mapping and soil sampling programme continues to define a porphyry system with both gold and base metal anomalies. Whilst Pepas remains the flagship, we see it as a small scale but highly profitable starter operation that will leverage Orosur’s capacity to expand its drilling programmes across Colombia and Argentina.
*SP Angel acts as Nomad and Broker to Orosur Mining
Power Metal Resources* (POW LN) 16p, Mkt cap £18.5m – Drilling gets underway in Oman
- Power Metal Resources, project generator, has provided an update from its Block 8 exploration tenure in Oman.
- POW is earning up to 12.5% in the property which has shown prospectivity for base metals, particularly copper.
- Encouragingly, following a period of geophysics and geochemical sampling, POW has scheduled a maiden drill programme for 15th September.
- This follows the completion of an in-fill and extension gravimetry survey at Al Mansur.
- This defined a massive sulphide mineralisation target at AM1 trending north south, and a massive sulphide mineralisation target at AM2 as either a separate target or an extension of AM1.
- The combination of AM1 and AM2 suggests 700m of anomalous target strike length at Al Mansur.
- Drilling will test for mineralisation and provide an initial indication of potential width, grade and strike related to the identified anomalies.
- Targets are believed to dip to the west, with holes to be drilled form west to east.
- 9 holes over 750m will be drilled (DD) on three NW-SE fence lines over AM1 (6) and AM2 (3).
Conclusion: An exiting step for Power Metal’s venture into the Middle East, with its maiden drilling programme set to get underway at Block 8 in Oman. They have identified a significant strike from two gravity anomalies and have delineated a selection of high-priority drilling targets at the prospect. We look forward to further updates.
*SP Angel acts as Nomad and Broker for Power Metal Resources
Serabi Gold (SRB LN) 232p, Mkt Cap £173m – Impressive results from Palito and Coringa in Brazil
- Serabi Gold report some particularly impressive drill results from the recent campaign at Palito and Coringa in the Amazon rainforest in Brazil.
- Management are 13,800m through a 30,000m drill programme split with 14,000m planned at Palito and 16,000m at Coringa.
- Best results:
- 0.53m @ 151.00 g/t Au from 60.68m
- 1.36m @ 17.99 g/t Au from 195.50m including 0.33 m 58.40 g/t
- 0.41m @ 13.95 g/t Au from 40.72m
- 3.40m @ 6.64 g/t Au from 274.00m including 0.60 m 26.80 g/t
- 0.79m @ 25.66 g/t Au from 117.70m
- 0.25m @ 58.80 g/t Au from 233.62m
- 0.52m @ 18.45 g/t Au from 380.94m
- 1.00m @ 8.90 g/t Au from 373.00m
- Coringa: Discovery of new orebody just ~500m south of the Serra mine
- Including extension to the strike length of the Meio zone trend at Coringa
- Coringa: Focus on Serra and Meio with follow up work at Galena and Jatoba.
- 25 drill holes report gold >3.0 g/t out of 64 holes completed
- Management are looking to identify and connect the underground resources in the 500m between the Serra mine and Serra South zone.
- Palito: extension to the Senna orebody to the north and south of the Palito mine Complex
- Drilling is looking for 2-3m thick hydrothermal alteration extensions of the Senna and Piaui orebodies.
- The strongest intercept here shows 0.65m grading 8.18 g/t Au which might connect Onça with the Piaui target to be drill tested in Q4.
- “The Mutum and Jiboia targets have demonstrated broad zones of hydrothermal alteration with gold mineralization, suggesting potential for the development of lower-grade, higher-volume oxidized deposits. “
- Cash: the company had US$30.4m at end June.
- Gold sales were 20,215oz in Q1
- Guidance confirmed for 44-47,000oz this year in July.
- Target: to increase resources by 1-1.5moz at Palito and Coringa Q1 next year.
Conclusion: Management should be proud of today’s drill results which appear to support the potential for longer-term production growth for the Pailto Complex and Coringa mines in Brazil.
*An SP Angel analyst has visited the Serabi’s gold mining operations in Brazil
Sylvania Platinum (SLP LN) 78p, Mkt cap £196m – Strong results as Thaba JV chromite production looms
- PGM and chrome producer Sylvania report annual results to June 2025.
- The Company reported net revenue of $104m, up from $82m 2024.
- EBITDA of $29m vs $13.5m 2024.
- Net profit of $20m vs $7m 2024.
- Production exceeded original guidance at 81koz 4E (73koz 2024)
- Basket price of $1,507/oz for the period vs $1,339/oz 2024.
- AISC of $938/oz down from $967/oz.
- $1m buyback completed at 42p/share.
- Cash fell to $61m from $98m on Thaba JV CAPEX ($32.3m).
- Thaba JV commissioning ongoing with ramp up due FY26.
- FY26 Guidance:
- 83-86koz 4E
- 100-130kt chromite concentrate
LSE Group Starmine awards for 2025 / 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 for Q1 2025
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
George Krokos – george.krokos@spangel.co.uk – 0203 470 0486
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.
| Sources of commodity prices | |
| Gold, Platinum, Palladium, Silver | BGNL (Bloomberg Generic Composite rate, London) |
| Gold ETFs, Steel | Bloomberg |
| Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt | LME |
| Oil Brent | ICE |
| Natural Gas, Uranium, Iron Ore | NYMEX |
| Thermal Coal | Bloomberg OTC Composite |
| Coking Coal | SSY |
| RRE | Steelhome |
| Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite, Rutile | Asian Metal |
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
SP Angel Corporate Finance LLP is authorised and regulated by the Financial Conduct Authority and is a Member of the London Stock Exchange.
