SP Angel Morning View -Today’s Market View, Wednesday 12th April 2023

Gold breaks critical level ahead of US inflation data today and IMF warnings

MiFID II exempt information – see disclaimer below

Anglo American (AAL LN) – De Beers – Third sales cycle of the year sees continuing appetite for rough diamonds as China picks up.

Bushveld Minerals* (BMN LN) – Conditional deal to streamline CellCube ownership structure

Central Asia Metals (CAML LN) – Q1 Operations update

Eurasia Mining* (EUA LN) – Operations update

Invinity Energy Systems (IES LN) – Invinity Awarded £11m for 30 MWh Flow Battery

Kenmare Resources (KMR LN) – Q1 results report recovery in Chinese ilmenite demand with prices recovering

Phoenix Copper* (PXC LN) – Drilling results from the Red Star project, Idaho

Teck Resources (TECK US) – Glencore sweetens offer following rejection by Teck board

IGTV:   23/03/23: Mining in a banking crisis – how does it work?  https://www.youtube.com/watch?v=DiL9Ea88o-w

VOX Markets Podcast:  24/03/2023: https://audioboom.com/posts/8269467-john-meyer-why-gold-is-rallying-plus-atlantic-lithium-celsius-resources

ii Interactive Investor:  Battery Metals – Four Stocks – https://www.youtube.com/watch?v=8fwy6PXUe6s&t=5s

*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.

Gold pushes higher as traders ramp up bets on cooling inflation

  • Following a correction over the weekend, spot gold prices have rallied again to $2,020/oz this morning.
  • The move comes despite a rally in US Treasury yields and the Dollar, which both traditionally have an inverse correlation to gold prices.
  • Bloomberg-polled economists expect a headline CPI figure of 5.1% for March vs 6% in February.
  • A figure substantially higher than 5.1% will add significant downward pressure on gold prices, however expect a figure in line or lower than expected to further support gold’s rally.

China threatens ban on REE exports along with other critical and minor metals in retaliation to US restrictions on advanced semiconductors into China

  • EV sales now represent around 13% of global car sales.
  • Sounds like China is starting to exercise its ability to restrict critical material sales for political gain.

Copper steadies China ramps up smelter output as demand outlook improves

  • Copper prices have steading around $8,850/t as traders await US CPI data.
  • However, demand fundamentals in China seem to be improving, with refined smelter Cu output climbing 4.8% in March mom. (Shanghai Metals Market)
  • Analysts suggest these may climb again in April to 953.9kt, before easing on seasonal factors in May.
  • Inventories continue to slide, with global stocks now down 30% since February-end.
  • On the supply side, Chile’s government agreed to reduce royalty levels if taxes exceed 50% of operating profit.
  • Tax rates for Chilean miners operating are set to remain lofty, with the government refusing to meet demands for a cut.

Iron ore remains weak as Chinese steel mills slash prices to boost sales

  • Iron ore prices have fallen 1.8% this week as Chinese steel mill demand remains muted.
  • Mysteel reported yesterday that 11 steel mills have slashed prices, with iron ore inventories buoyant.
  • Traders sitting on large inventories are forced to lower iron ore prices despite being in the historical ‘peak’ construction season.
  • Scrap steel prices are also on the slide, further adding pressure to iron ore prices.
  • Analysts expect an improved steel pricing picture in H2, however Beijing continues to commit to cracking down on iron ore speculation by funds and traders.

Refined lead exports ramped up from China

  • China flipped from net importer status to net exporter of refined lead over the Dec.22-Feb.23 period.
  • China had been a new importer of lead from 2018-2020.
  • China is now exporting over 10kt of refined lead products ever month, the highest level since Sept. 21.
  • Analysts point to supply shortages in demand hubs including the US, Vietnam and Turkey.
Dow Jones Industrials +0.29% at 33,685
Nikkei 225 +0.57% at 28,083
HK Hang Seng -0.99% at 20,283
Shanghai Composite +0.41% at 3,327


China – Investment in new rail infrastructure rises 6.6% to US$16.5bn for first three months of the year (SCMP)

  • This compares with London’s new Crossrail at $24bn in total and The total budget for HS2 estimated at around $124bn
  • China has the enormous benefit of near-unlimited funding, rapid planning, cheap labour and rapid land acquisition for its new rail, much of which is unopposed.
  • Chin now has some 37,900km o high-speed rail lines with 4,153 high-speed trains making it the world’s largest high-speed railway though the state is said to have lost some $837bn by end-2021.
  • Renewed focus on connecting border areas including Xinjiang and Tibet along with the new Western land-sea corridor
  • China is using rail to better connect rail between western China and other Southeast Asian Nations
  • China is also testing a new high-speed MAGLEV train
  • Chinese rail freight rose 10% to 1.6m TEU containers last year along the Xi Jinping’s Belt and Road routes to Russia and Europe.
  • Freight rose 18.5% to 756,000 TEU containers along the new Western land-sea corridor last year.
  • Total social financing rose to CNY5,380bn in March vs CNY3,160bn in February

Japan – Consumer confidence rose to 33.9 in March from 31.1 in February

  • The Japan Eco Watchers outlook also rose to 54.1 from 50.8

Peru  – Peru looks to raise copper exports by 15% to 2.8mt this year


US$1.0930/eur vs 1.0906/eur yesterday. Yen 133.67/$ vs 131.42/$. SAr 18.406/$ vs 18.220/$.  $1.243/gbp vs $1.246/gbp. 0.666/aud vs 0.669/aud. CNY 6.886/$ vs 6.877/$.

Dollar Index 102.02 vs 101.95 yesterday.

Commodity News

Precious metals:

Gold US$2,016/oz vs US$2,001/oz yesterday

Gold ETFs 93.3moz vs US$93.3moz yesterday

Platinum US$1,006/oz vs US$1,006/oz yesterday

Palladium US$1,461/oz vs US$1,439/oz yesterday

Silver US$25.31/oz vs US$24.98/oz yesterday

Rhodium US$8,000/oz vs US$8,000/oz yesterday


Base metals:   

Copper US$ 8,848/t vs US$8,849/t yesterday

Aluminium US$ 2,306/t vs US$2,325/t yesterday

Nickel US$ 23,350/t vs US$23,120/t yesterday

Zinc US$ 2,747/t vs US$2,774/t yesterday

Lead US$ 2,098/t vs US$2,095/t yesterday

Tin US$ 23,560/t vs US$23,755/t yesterday



Oil US$85.8/bbl vs US$84.9/bbl yesterday

  • Crude oil prices were broadly unchanged with the API reporting a weekly 0.4mb build in US crude oil stocks for last week (vs 1.3mb draw expected).
  • European gas prices edged higher as French nuclear reactors operating levels were reported as falling w/w from to 68% to 59% of capacity from 35 available reactors, down from 39 last week.
  • CNOOC announced that it has successfully built its first floating wind turbine that will be used via submarine cables to power a nearby offshore oil and gas cluster located in the South China Sea.

Natural Gas US$2.190/mmbtu vs US$2.160/mmbtu yesterday

Uranium UXC US$50.35/lb vs US$50.35/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$118.3/t vs US$116.9/t

Chinese steel rebar 25mm US$590.9/t vs US$591.5/t

Thermal coal (1st year forward cif ARA) US$142.0/t vs US$142.0/t

Thermal coal swap Australia FOB US$207.0/t vs US$205.0/t

Coking coal swap Australia FOB US$286.0/t vs US$286.0/t



Cobalt LME 3m US$34,930/t vs US$34,930/t

NdPr Rare Earth Oxide (China) US$73,331/t vs US$74,805/t

Lithium carbonate 99% (China) US$26,501/t vs US$26,508/t

China Spodumene Li2O 5%min CIF US$4,590/t vs US$4,590/t

Ferro-Manganese European Mn78% min US$1,350/t vs US$1,345/t

China Tungsten APT 88.5% FOB US$323/mtu vs US$323/mtu

China Graphite Flake -194 FOB US$780/t vs US$785/t

Europe Vanadium Pentoxide 98% 9.1/lb vs US$9.2/lb

Vanadium prices continue to fall in China as Vanadium Nitride price pulls back to CNY187-190,000/t (27.6/kg) from a high of 205-208,000/t ($30/kg) in March

  • Vanadium pentoxide which is used for chemical and vanadium electrolyte for VRFB batteries prices also fell to $7.6-7.7/lb from $8.6-8.7/lb a month ago.
  • We suspect the pull back in prices is due to a lower number of new construction projects with lesser structural rebar and other steels required
  • Focus remains on the completion of thousands of apartment blocks following regulatory support from the Chinese authorities for Evergrande and other indebted property developers.

Europe Ferro-Vanadium 80% 36.85/kg vs US$37.05/kg

China Ilmenite Concentrate TiO2 US$345/t vs US$345/t – Ilmenite concentrate prices continue to rise in China

  • Prices have risen to CNY2,350-2,400/t ($345/t) from CNY2,200-2,270/t ($325/t) in November last year .

Spot CO2 Emissions EUA Price US$103.4/t vs US$102.0/t

Brazil Potash CFR Granular Spot US$420.0/t vs US$420.0/t

 Company News

Anglo American (AAL LN) 2,690p, Mkt Cap £36bn –De Beers – Third sales cycle of the year sees continuing appetite for rough diamonds as China picks up.

  • Anglo American reports that, provisionally, the third De Beers sales cycle of 2023 realised US$540m and that the previously reported provisional sales of US$495m for the second sales cycle have now been confirmed as US$497m.
  • The initial year-to-date provisional sales for 2023 of US$1.49bn are around 21% lower than the US$1.88bn achieved during the first three sales cycles of 2022.
  • Al Cook, CEO, De Beers Group, confirmed that it continues to “see good demand for our rough diamonds … [which] … were in line with expectations and we continue to see some encouraging positive trends in consumer demand for diamond jewellery, not least in China.

 Bushveld Minerals* (BMN LN) 4.4p, Mkt Cap £58m – Conditional deal to streamline CellCube ownership structure

  • The Company signed a conditional agreement with Garnet Commerce and Mustang Energy under the terms of which VRFB Holdings (VRFB-H) will acquire 50% interest in Enerox Holdings held by Garnet.
  • Enerox Holdings holds a 100% interest in Enerox GmbH, an Austrian-based VRFB manufacturer with more than 20 years of research and development in the energy storage space, branded under the name CellCube.
  • Should all conditions be met, VRFB-H will hold a 100% interest in Enerox Holdings and Enerox GmbH as a result.
  • Bushveld Energy, a 84% subsidiary of Bushveld Minerals, currently holds a 50.5% interest in VRFB-H.
  • Bushveld Minerals interest in VRFB-H will be converted into Mustang Energy shares (~21-23% interest) once Mustang Readmission to the LSE market is completed.
  • On readmission, Mustang Energy will hold a 100% interest in VRFB-H and Enerox GmbH offering a streamlined corporate structure allowing investors greater transparency in value of underlying energy storage assets.
  • The transaction is part of a broader strategy to carve out Bushveld Energy into an independent entity focused on the downstream VRFB opportunities with the carve out expected to be completed in H2/23.
  • 50% interest in Enerox Holdings will cost $33.2m and will be paid by Mustang Energy including:
  • $7.5m in cash funded by proceeds from the planned Mustang placing and up to $2.5m in convertible loan notes’ proceeds.
  • $25.7m in Mustang shares (~104.8m shares at 20p).
  • The acquisition is conditional on Mustang securing necessary approvals for readmission and issuance of new shares/loan notes, Mustang raising a minimum of $15m on readmission as well as Austrian Government approvals regarding the proposed change of control of Enerox.
  • Mustang has until 31 July to completed the readmission.
  • Mustang will also raise up to $2m through new convertible loan notes with 31 July maturity to provide funding until the readmission.

Conclusion: Mustang Energy in anticipation of the readmission to the LSE market (exp 31 July 2023) agreed to conditionally consolidate the interest in the Enerox GmbH, a VRFB OEM based in Austria and operating under CellCube brand name. Under the conditional agreement, the 50% interest in the Enerox will be acquired for $33.2m in cash and new equity. Once the transaction and readmission are completed 25.25% interest in Enerox held by Bushveld Energy, a 84% subsidiary of Bushveld Minerals, with an implied value of ~$17m will be converted into Mustang Energy shares. The transaction allows to streamline corporate structure ahead of the Bushveld Energy carve out targeted for H2/23.

*SP Angel act as nomad and broker to Bushveld

 Central Asia Metals (CAML LN) 232p, Mkt Cap £422m – Q1 Operations update

  • Central Asia Metals reports it is on track to meet 2023 production guidance at both Kounrad and Sasa.
  • It expects full year Cu production between 13-14kt, Zinc in concentrate of 19-21kt and lead in concentrate of 27-29kt.
  • For the first quarter of 2023, Copper production climbed from 3,024t in 1Q22 to 3,336t in 1Q23.
  • Zinc production for the quarter fell from 5,240t in 1Q22 to 4,917t in 1Q23.
  • Lead production for the period fell from 6,736t in 1Q22 to 6,618t in 1Q23.
  • Year on year, ore mined in the quarter at Sasa fell from 197,501t to 196,503t.
  • Zinc grades at Sasa fell from 3.14% to 2.95% over the period, however Zinc recovery rates rose from 84.3% to 85.2%.
  • Lead grades at Sasa fell from 3.65% to 3.59% but recovery rates improved from 93.3% to 94.2%.
  • The Company reports no lost time injuries at either site over the period.
  •  As regards the transition of Sasa to paste fill mining by H2 2023, the team notes that this development timeline remains on track.
  • The Company expects to start dry commissioning the Paste Backfill Plant this month and has finished over 1.8km of the new Central Decline.
  • Central Asia also notes that the construction of the 4.77MW solar plant at Kounrad remains on track.

Eurasia Mining* (EUA LN) 3.6p, Mkt Cap 101m – Operations update

  • At alluvial PGM operations in West Kytlim, electric dragline that was assembled in Q4/22 completed testing and commissioning.
  • Together with access to grid power secured last year, operating costs of mining operations are expected to reduce significantly in 2023.
  • Waste stripping is ongoing with operations awaiting warmer weather to start washing of gravels.
  • Produced concentrate from 2022 (~£5.6m worth) remains safely stored with the team deciding on the optimal timing and strategy to sent it to refiners.
  • At development Kola projects, the Monchetundra Project DFS submitted with Rosnedra in Dec/22 is going through the review process by authorities with a final opinion on the project expected in coming weeks.
  • At NKT the team is studying the potential for an open pit operation to run in parallel with underground mining.
  • The Company continues to consider options to sell its portfolio of mining assets in Russia including the West Kyltim operating mine, the Monchetundra Project mining license, the NKT brownfield project, and the entitlement to the Nyud brownfield project.
  • Cash position was at £3.0m as of March held in USD and GBP in accounts outside of Russia, down from £4.0m in mid-December.
  • Additionally, the Company held £5.6m worth of PGM concentrate in unsold inventories as well as outstanding VAT receivables from 2022 VAT payments.

Conclusion: Operational improvements at West Kytlim including commissioning ofelectric dragline and grid access to hydropower are expected to significantly cut operating costs at alluvial operations during the 2023 season (typically May-November) with the team awaiting warmer weather to start washing of gravels. We are looking to the news on the sale of stockpiled PGM concentrate (~£5.6m) from last year that should add to available £3.0m cash balance as operations are looking to start new mining season. Options to sell a portfolio of Russian PGM assets continue to be considered.

*SP Angel act as Nomad and Broker to Eurasia Mining

Invinity Energy Systems (IES LN) 38.5p, Mkt cap £74m – Invinity Awarded £11m for 30 MWh Flow Battery

  • Invinity Energy Systems has been awarded a grant of £11m as part of a matched funding arrangement for the development of a new 30MWh VFB flow battery.
  • The funding is from the Department for Energy Security and Net Zero under Phase 2 of the LODES ‘Longer Duration Energy Storage Demonstration’ competition.
  • The un-named project partner who has signed heads of terms is expected to at least match the £11m funding.
  • The new 30MWh VFB battery is due for delivery in 2024 for connction at a key National Grid node.
  • The battery should be capable of >7MW of power on demand with fast-response, high-throughput characteristics enabling a broad range of services to the grid.
  • The battery, in theory, could supply power to >3,500 homes and is >6x larger than than Infinity’s battery at the Oxford Superhub battery test site.
  • It will be interesting to see where Invinity source their vanadium electrolyte from.
  • We believe the Vanadium in electrolyte represents some 30-40% of total VFB battery costs depending on the scale of the battery instillation.
  • We understand that current prices for vanadium pentoxide are currently above the break-even price for VFB electrolyte manufacture which is estimated at around US$6.5/lb V2O5 indicating that some sort of financing arrangement will be required to justify broad commercialisation of this technology.
  • Vanadium pentoxide prices are currently trading around $7.6-7.7/lb in China.

 Kenmare Resources (KMR LN) 479.5p, Mkt Cap £460m – Q1 results report recovery in Chinese ilmenite demand with prices recovering.

  • Kenmare Resources reports on what it describes as a ‘challenging period’ over the three months to 31st March following the disruption from a lightning strike in February.
  • Kenmare Resources is, however, maintaining its 2023 production guidance “for all products, with ilmenite and rutile expected to be towards the bottom end of the guidance range”. We understand that 2023 production guidance is for between 1.05-1.15mt of ilmenite production.
  • During the quarter, Kenmare’s Moma operation produced 315,000t of heavy mineral concentrate from 9.26mt of ore at a grade of 4.13%(Q1 2022 -9.39mt at 4.49%)
  • Ilmenite production decreased 20% in Q1 2023 to 204,300 tonnes (Q1 2022: 256,800) and primary zircon production decreased 12% to 11,400 tonnes (Q1 2022: 12,900 tonnes) due primarily to lower HMC availability” while rutile output was 15% lower at 1,700t “in line with lower HMC consumption”.
  • Shipments of 271,700t of finished product rose by 17% compared to Q1 2021 to 271,700t “benefitting from increased transshipment capacity and availability of ocean-going vessels”.
  • Commenting on the state of the market for ilmenite, Kenmare Resources says that it “stabilised in Q1 2023, at lower levels than Q4 2022, with evidence of spot price increases in recent weeks”.
  • The company says that although the “global pigment market remained weak as destocking of inventories only halted in early 2023 and underlying demand was impacted by higher interest rates …  chloride pigment production in China rebounded strongly in Q1 2023 and demand from the titanium metal sector continued to increase”.
  • Kenmare says that “spot ilmenite prices in China have increased in recent weeks, benefitting from stronger pigment production”.
  • Demand weakness for zircon seen during the second half of 2022 continued into Q1 2023 and Kenmare says that “while the Chinese market has remained subdued, India has continued to show strong demand growth”.
  • Zircon prices remained stable in Q1 2023 benefitting from lower supply, due to production issues in Australia and South Africa”.
  • Manging Director, Michael Carvill commented that the “market for ilmenite stabilised in Q1 2023, with evidence of spot price increases in recent weeks supported by recovering Chinese pigment demand. While received prices are lower than the peaks achieved in 2022, they nevertheless remain near all-time highs”.

 Phoenix Copper* (PXC LN) 22.75p, Mkt Cap £28m – Drilling results from the Red Star project, Idaho.

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


  • Phoenix Copper has released results from a 4-hole, 268m programme of reverse-circulation drilling at its Red Star project close to the historic Empire mine in Idaho.
  • The programme, which was completed in late 2022, provides samples and technical information for geological modeling and an updated resource” and follows up initial drilling in 2018 and a ground-magnetic geophysical survey undertaken in 2021.
  • Among the results highlighted in today’s announcement are:
    • A 1.52m wide intersection at an average grade of 1.44% lead, 19.9g/t silver and 565ppm molybdenum from a depth of 30.48m in hole RS22-01; and
    • A 7.62m wide intersection averaging 0.36% copper, 142.7g/t silver, 2.94% lead, and 1.54% zinc from a depth of 32.00m in hole RS22-02.
    • The intersection in RS22-02 included a 1.52m wide section averaging 1.01g/t gold, 332g/t silver, 1.35%copper, 2.18% lead, 1.32%zinc and 156ppm molybdenum from 33.53m depth within a wider zone of 6.10m from 33.53m which averaged 175.3g/t silver, 3.68%lead and 1.89% zinc.
    • A 3.05m wide intersection at an average grade of 0.53g/t gold and 0.21% copper from a depth of 3.05m and including a 1.52m wide section averaging 0.87g/t gold and 0.28% copper from 4.57m depth in hole RS22-03; and
    • A 9.15m wide intersection at an average grade of 1.56g/gold and 0.32% copper from a depth of 1.52m in Hole RS22-04.  The intersection includes a 1.52m wide zone at an average grade of 0.62g/t gold, 42.7g/t silver and 0.64% copper from a depth of 3.05m and a second zone, also of 1.52m width which averaged 7.59g/t gold and 0.58% copper from a depth of 9.14m.
  • The drilling tested the extent of mineralised zones identified by the geophysical work which appear to plunge steeply to the east along … structures … similar to the well understood magnetite zones encountered in the open pit area on the southern end of the project”.
  • Despite slow drilling resulting from the steep topography typical of the area” and variations in the hardness of the formations drilled, CEO, Ryan McDermott, confirmed that the results “have added significantly to our understanding of the mineralization and boundaries of the anomalies and will aid in future drilling, modeling and updating of the resource”.
  • He stressed that “the drilling results seen thus far in the Red Star area are indicative of higher-grade, narrow vein mineralization which typically lends itself to underground mining methods. Conversely, the longer and lower grade drilling intercepts in the Empire open pit area lend themselves to bulk tonnage, open pit mining methods”.

Conclusion: The most recent results from Red Star have helped to clarify geological understanding of the mineralisation and will contribute to further mineral resource estimation in due course. We look forward to further news on the project and on the updated mineral resource estimate as the exploration advances.

*SP Angel acts as nomad to Phoenix Copper

Teck Resources (TECK US) US$43.3, Mkt Cap US$22.4bn – Glencore sweetens offer following rejection by Teck board

  • Glencore has submitted an improved offer for Teck Resources, following its $23bn attempt at a hostile takeover.
  • Glencore had offered $23bn in shares for the combined company last week, but has since offered $8.2bn in cash to sweeten the deal for shareholders.
  • The total value of the offer was not increased.
  • Teck investors are concerned about gaining exposure to Glencore’s coal business.
  • If the new proposed offer goes through, Teck investors will own close to 24% of the combined business.
  • Teck’s larges shareholder, Normal Keevil, has stated he will not sell for any price.
  • Teck investors are set to vote on the spin out of the coal business to a new entity, Elk Valley Resources, on April 26th.

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


John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474


Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

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

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London


*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 Asian Metal


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