SP Angel Morning View -Today’s Market View, Wednesday 19th March 2025

Copper extends gains as US premium continues to widen on tariff concerns

MiFID II exempt information – see disclaimer below

80 Mile Plc* (80M LN) – Proposed disposal of Hammaslahti copper-zinc and Outokumpu copper projects to Metals One Plc

Metals One PLc – (MET1 LN)

Great Western Mining* (GWMO LN) – Staking additional claims around Huntoon Copper Project

Ferrexpo (FXPO LN) – FY24 financial results as lower iron ore prices offset higher sales

Kazatomprom (KAP LI) – FY24 earnings climb on stronger uranium prices

Robex Resources (RBX CN) – Signing of US$130m debt facility with Sprott

Rupert Resources (RUP CN) – Placing to support development of Ikkari gold project

Zanaga Iron Ore (ZIOC LN) – Zanaga iron ore project offers potential to add ~US$4bn in overall NPV

Copper ($9,951/t) extends gains as US premium continues to widen on tariff concerns

• Copper is holding its position around five-month highs as Chinese futures flip into backwardation.
• Shanghai futures one-month futures are trading at a $20/t premium to second month futures, suggesting improving physical demand.
• Chinese reports suggest fabricators continue to buy despite the elevated pricing environment, suggesting improving demand.
• A weaker dollar is supporting metals across the board, with the Greenback sliding following Trump’s inauguration.
• The spread between COMEX and LME continues to expand, with US copper prices pushing over 11,100/t, reflecting tariff expectations.
• Beijing continues to reinforce support for consumption, which is expected to feed into stronger new home prices.

Gold ($3,030/oz) consolidates higher as Fed meeting looms and ETF buying continues

• Gold tested $3,045/oz yesterday before consolidating its level around $3,030/oz.
• Haven demand, continued central bank buying, a weaker dollar and sliding US treasury yields are all pushing gold higher.
• The dollar is weakening following more bearish commentary from the Treasury and White House on the state of the US economy, paired with some recent negative data.
• Inflation is cooling in the US, further pushing UST yields lower, with the 10 year at 4.28%, although struggling to push any lower.
• A jump in unemployment may be required to see yields slide below 4%, which may trigger the next leg higher in gold.
• We see a pause in China central bank buying, following their resumption in November (coincided with the 10% rally).
• However, gold continues to enter the mainstream, with fund managers boosting their allocations, seen in the jump in ETF holdings by 5% over the past 12 months.
• We would note that ETF holdings remain well below COVID levels, leaving ample room for further rallies as speculators enter the market.

Zambia – China toxic mine incident  

• Let’s hope China will also make suitable reparations to cover the cost of the Sino-Metals copper tailings collapse which spilled an estimated 50m ltrs of toxic waste into a tributary of the Kafue River.
• Sino-Mining Metals Leach Zambia is majority owned by Chinese-state run China Nonferrous Metals Industry Group.
• The toxic tailings spill forced the authorities to shut down the water supply to the city of Kitwe (700,000 population).
• Local reports indicate the tributary is dead with pictures showing allot of dead fish.
• The incident has served to highlight local anger over Chinese mine practices
• The authorities are also investigating another acid leak incident at a Chinese mine in the Copperbelt region where an alleged police report indicates a worker fell into the acid and died.
• The operators are reported to continue to operate the mine despite an official shutdown order with two Chinese mine managers now arrested.
• We note China is donating >Kwacha 1m to assist Zambian farmers recover from last year’s drought

Economics

US – The Fed likely to leave rates unchanged at 4.25-4.50% with the focus on the commentary over growth and inflation outlook.

• Recession concerns and potential inflationary effects of new administration policies are at the top of investors’ mind.
• Downwards GDP growth and upgrades to inflation forecasts are expected to be released by the Fed later today.
• Updated dot plot is expected to maintain estimates for two rate cuts for this year, in line with latest projections released in December.

China – Banks cutting consumer loan rates to historic lows to boost consumer spending

• Lenders in areas of Shanghai are reported to be offering rates as low as 2.58% compared to up to 10% recorded just two yeas ago (Bloomberg).

Investors await details of stimulus and economic support indicated by CCP Twin Sessions meeting

• Excavator sales rose 52.8% yoy to ~19,279 units in February. Local sales rising +99.4% yoy to ~11,640 and export sales rising by 12.7% to 7,630 ( China Construction Machinery Industry Assn)
• Cumulative January-February sales rose 27.2% yoy to 31,782 units with a 51.4% rise in domestic demand and a 7.37% yoy rise in exports.
• Loader sales rose 34.4% yoy to 8,730 units
• CMI ‘Credit Managers index’ rose 13.53% yoy to 106.68 for February 2025 5.44% mom in February
• CMI rose 10.26% 8.77% mom showing the market improved after the Lunar new year suggesting new recovery in the construction sector.
• We believe the domestic sales are driven by ongoing state infrastructure projects requiring contractors to replace machines to meet contract agreements which specify limited downtime.
• Contractors often acquire new machines for major construction projects but also replace machines every 8-10 years and follow previous peaks in sales.
• We have seen some Chinese miners restarting lepidolite (lithium) and other projects driving sales for larger excavators.

Japan – The BOJ kept rates at 0.50%, in line with the expectations, citing concerns over the potential impact from US tariff policies.

• Markets are not expecting a hike before June-July.

Germany – Lower house of parliament passes the defence and infrastructure bill with the spending plan heading to the upper house for a vote on Friday.

• Bloomberg estimates an increase in spending may see growth doubling to 1.6% in 2026 compared to previous forecasts.
• In the long run new initiatives could add 2pp or more to the level of potential GDP.

Turkey – The lira is sliding to new lows with the currency having been down >10% on the news that main Erdogan political opponent was detained.

• Ekrem Imamoglu, the 54 year old Istanbul mayor and one of Turkey’s most popular politicians, is widely considered as a top contender for the presidency.
• He was taken into custody early Wednesday morning at his home.
• Authorities are reported to have annulled Imamoglu’s university diploma that could bar him from challenging Erdogan in the next presidential election.
• A higher education degree is a mandatory requirement to run for the presidency.
• He was expected to be named the presidential candidate for the Republican People’s Party this Sunday.
• Equity index dropped as much as 7% and 10y bond yields climbed to the highest level this year

Currencies

US$1.0910/eur vs 1.0952/eur previous. Yen 149.51/$ vs 149.81/$. SAr 18.242/$ vs 18.016/$. $1.298/gbp vs $1.300/gbp. 0.634/aud vs 0.639/aud. CNY 7.236/$ vs 7.222/$

Dollar Index 103.578 vs 103.280 previous

Precious metals:         

Gold US$3,033/oz vs US$3,026/oz previous

Gold ETFs 87.0moz vs 86.9moz previous

Platinum US$992/oz vs US$1,011/oz previous

Palladium US$966/oz vs US$982/oz previous

Silver US$33.8/oz vs US$34.1/oz previous

Rhodium US$5,400/oz vs US$5,325/oz previous

Base metals:   

Copper US$9,936/t vs US$9,852/t previous

Aluminium US$2,665/t vs US$2,674/t previous

Nickel US$16,590/t vs US$16,345/t previous

Zinc US$2,962/t vs US$2,937/t previous

Lead US$2,098/t vs US$2,090/t previous

Tin US$35,400/t vs US$35,180/t previous

Energy:           

Oil US$70.4/bbl vs US$71.7/bbl previous

• Crude oil prices fell after the API estimated a larger-than-expected 4.6mb/d w/w build to US crude inventories (+1.2mb/d exp), ahead of today’s US Fed decision that is expected to give a steer on the economic outlook.
• European energy prices edged higher on negative sentiment regarding the outcome of Trump’s ceasefire talks with Putin, as France’s nuclear generation rose 2% w/w to 75% of the country’s 61.4GW maximum capacity.

Natural Gas €42.4/MWh vs €41.1/MWh previous

Uranium Futures $64.3/lb vs $63.6/lb previous

Bulk:   

Iron Ore 62% Fe Spot (China CFR) US$100.4/t vs US$102.2/t

Chinese steel rebar 25mm US$482.8/t vs US$484.2/t

HCC FOB Australia US$175.8/t vs US$176.5/t

Thermal coal swap Australia FOB US$101.4/t vs US$102.5/t

Other:  

Cobalt LME 3m US$36,170/t vs US$36,170/t

NdPr Rare Earth Oxide (China) US$61,498/t vs US$61,686/t

Lithium carbonate 99% (China) US$10,061/t vs US$10,108/t

China Spodumene Li2O 6%min CIF US$810/t vs US$810/t

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

China Tungsten APT 88.5% FOB US$358/mtu vs US$358/mtu

China Graphite Flake -194 FOB US$435/t vs US$430/t

Europe Vanadium Pentoxide 98% US$4.9/lb vs US$4.9/lb

Europe Ferro-Vanadium 80% US$24.0/kg vs US$24.0/kg

China Ilmenite Concentrate TiO2 US$301/t vs US$301/t

Global Rutile Spot Concentrate 95% TiO2 US$1,543/t vs US$1,543/t

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

Brazil Potash CFR Granular Spot US$335.0/t vs US$335.0/t

Germanium China 99.99% US$2,825.0/kg vs US$2,825.0/kg

China Gallium 99.99% US$390.0/kg vs US$390.0/kg

Battery News

General Motors to use Nvidia AI chips to automate vehicles and factories

• GM is to collaborate with Nvidia to develop next-generation vehicles, factories and robots using AI, simulation and accelerated computing.
• The companies will work together to build custom AI systems using existing Nvidia accelerated computer platforms.
• GM says it will apply several of Nvidia’s products to its business, such as the Omniverse 3D graphics platform which will run simulations on virtual assembly lines with an eye on reducing downtime and improving efficiency.
• The automaker also plans to equip its next-gen vehicles with Nvidia’s “AI brain” for advanced driver assistance and autonomous driving.

CATL working on second-gen sodium-ion battery

• Battery leader CATL has disclosed that it is developing its second-generation sodium-ion battery, and that performance metrics are now approaching those of lithium iron phosphate (LFP) batteries.
• CATL introduced its first-generation sodium-ion battery in 2021, which features high energy density, fast charging capability, excellent thermal stability, and strong performance in low temperatures.
• The battery maker believes that “once large-scale adoption is achieved, sodium-ion batteries will have a certain cost advantage over LFP batteries.=”

Tesla gets first of several needed permits to run robotaxis in California

• Tesla has received the first in a series of approvals required for the EV maker to eventually launch a promised robotaxi service in California, according to a state regulator.
• The California Public Utilities Commission (CPUC) said it approved Tesla’s application for a transportation charter-party carrier permit (TCP), a license typically associated with chauffeur-operated services, allowing the company to own and control a fleet of vehicles and transport employees on pre-arranged trips.

Company News

80 Mile Plc* (80M LN) – 0.26p, Mkt cap £11m – Proposed disposal of Hammaslahti copper-zinc and Outokumpu copper projects to Metals One Plc

Metals One pLc – 0.92, Mkt cap £3.3m

• 80 Mile Plc is proposing to sell its Hammaslahti copper-zinc and Outokumpu copper projects to Metals One Plc .
• The move will help to streamline and focus 80 Mile Plc on its new industrial gasses business while reducing the cost of maintaining licenses in Finland.
• 80 Mile Plc will retain an economic interest in the projects through Metals One Plc which is already operating in the region.
• Metals One is looking to replicate the development of Terrafame’s Sotkamo (formerly Talvivaara mine) at its two, similar, Black Shales projects.

• Metals One will pay £250,000 in cash less any working capital adjustment and will issue 10% of its  fully diluted stock to 80 Mile.

Conclusion: This looks like a sensible way for 80 Mile to retain the distraction and cost of holding their Finnish assets while developing their industrial gasses portfolio.

We see the Hammaslahti copper-zinc and Outokumpu copper projects as offering good potential upside though this will require further exploration.

*SP Angel acts as nomad and broker to 80 Mile Plc (formerly Bluejay Mining). The analyst has visited Dundas in Greenland and the Hammaslahti and Enonkoski projects in Finland

Great Western Mining* (GWMO LN) 0.009p, Mkt Cap £0.9m – Staking additional claims around Huntoon Copper Project

• Great Western Mining has staked new claims at the Yellow Peak property.
• The licence package lies on trend with the Huntoon Copper Project and shows key indicators of porphyry-style mineralisation, including outcropping phyllic alteration.
• Fieldwork has identified an evolved granite phase which they believe suggests a large-scale magmatic-hydrothermal system.
• GWMO notes a dominance of quartz-sericite-pyrite assemblages, which are commonly associated with shallow-lying elements of porphyry systems.
• The Company believes there is a correlation at Yellow Peak to the Crowne Point granite at the centre of West Huntoon.

Conclusion: Great Western continue to progress their large-scale copper porphyry target at West Huntoon, Importantly, the addition of additional claims should further boost the asset’s attractiveness for partners looking for scale in Tier One jurisdictions. Detailed mapping, sampling and geophysical surveying is being planned to further the Team’s understanding of Yellow Peak and its relation to the wider West Huntoon area.

*SP Angel act as Broker to Great Western Mining, an SP Angel Analyst has visited Great Western’s Nevada claim blocks

Ferrexpo (FXPO LN) 72p, Mkt cap £555m – FY24 financial results as lower iron ore prices offset higher sales

• Ukrainian high-grade iron ore miner Ferrexpo boosted production to 6,890kt in 2024, up 66%yoy.
• Average iron ore price down 7% to $123/t (65% Fe) generate revenue of $933m.
• C1 costs up 10% to $84/t, weighing on EBITDA, down 30% to $69m on higher electricity and consumable prices.
• Cash balance down 6% to $101m after $102m in CAPEX.
• Premium iron ore prices fell 26% between January and December 2024, closing the year at $114/t.
• Company notes strong demand for DR pellets, with premiums increasing 2% over the year to $58/t.
• C3 freight index rose 19% in 2024 to $24/t, weighing on cash flows.
• Company resumed operations at 3 / 4 pelletiser capacity, supporting a jump in pellet production.
• Exports resumed through black sea ports to Europe, MENA and Asian customers.
• CAPEX reflects new press filtration complex and new concentrate conveyer line to boost concentrate production.

Kazatomprom (KAP LI) US$37, Mkt Cap US$9.6bn – FY24 earnings climb on stronger uranium prices

• Production was 23.3kt including 12.3kt attributable (+10%) in line with guidance.
• Sales at 16.7kt (consolidated, -8%)
• Inventory at 6.3kt (consolidated, -13%)
• Realised sales price came in at $69.5/lb (+26%)
• C1 averaged US$16.6/lb (+25%), within the guide $16.5-18.0/lb range.
• AISC came in at US$27.7/lb (+29%) reflecting an increase in spot prices affecting MET as well as general inflationary pressures on materials, labour and reagents like sulphuric acid.
• Revenue totalled KZT1,813 (+26%) helped by stronger realised uranium prices.
• EBIT amounted to KZT807bn (+19%)
• Adjusted EBITDA was KZT1,097bn (+32%) including KZT789bn att (+23%)
• Net profit (att) at KZT577bn (+38%)
• Capex (100% basis) amounted to KZT318bn (+58%).
• Strong balance sheet maintained with KZT294bn in cash and KZT144bn net cash.
• FY25 guidance
  • 25-26kt production (13-14kt att)
  • 17.5-18.5kt sales
  • $16.5-18.0/lb C1 s
  • $29.0-30.5/lb AISC
  • Capex (100% basis) KZT385-415bn (US$740-800m)

Robex Resources (RBX CN) C$2.73, Mkt Cap C$412m – Signing of US$130m debt facility with Sprott

• The Company signed the previously announced syndicated facility agreement for US$130m with Sprott.
• Terms:
  • 5y facility from the closing date;
  • SOFR plus 6.5%pa interest rate with 50% of interest capitalised during the construction period;
  • Additionally, interest paid based on a gold price participation formula currently estimated to $300/oz applicable to ~4.5koz of gold per quarter for 15 quarters, with the ability to prepay on early repayments of the facility;
  • Senior security over all the assets of the borrower.
• Proceeds to be used to fund the Kiniero Gold Project in Guinea.

Rupert Resources (RUP CN) C$4.9, Mkt Cap C$1.1bn– Placing to support development of Ikkari gold project

• Finnish gold developer Rupert has entered a C$45m bought deal at C$4.5/share.
• The Underwrite will also hold the option to purchase an additional 15% of the offering for over-allotments.
• Furthermore, Rupert is offering a concurrent private placement to rase gross proceeds up to C$33m
• Funds will be used to continue exploration alongside technical and environmental studies.
• The Company recently reported a PFS, with a post-tax NPV5 of US$1.7bn, IRR of 38% using a $2,150/oz gold price, rising to NPV5 of US$2.5bn, IRR of 49% at $2,650/oz Au.
• LOM of 20 years, producing average 227kozpa from the open pit over the first 10 years.
• Initial CAPEX of US$575m, AISC of $918/oz over LOM and $717/oz over first 10 years
• Strip ratio expected at 3.66:1 over the open pit, processing 3.5mtpa, with long hole open stoping to follow, processing 2mtpa.
• Recoveries expected at 96%, with coarse grinding at 100 microns.
• Company expects submission of EIA and DFS initiation in 2H25, 24 month permitting timeline and 2.5 years to construction for first pour in 2030.
• Agnico Eagle hold a 13% stake in Rupert.

Zanaga Iron Ore (ZIOC LN) 8.2p, Mkt Cap £56m – Zanaga iron ore project offers potential to add ~US$4bn in overall NPV

• Zanaga Iron Ore report the potential to increase the value of the Zanaga iron ore project NPV >US$4bn.
• Premium products: the potential for DRI sales could add US$6bn to the Zanaga NPV.
  • DRI sales are achieving significant premiums due to strong demand for greener and cleaner EA furnaces.
  • Management are to run lab-scale test work ahead of likely pilot scale testing on a bulk haematite sample.
• Pellet Plant Feasibility Study:
  • The availability of low-cost local gas on the coast of the Republic of Congo (not the DRC) should support the economic development of a pelletising plant at the coast.
  • The new Pointe-Indienne Special Economic Zone should support the development of a pellet plant using excess power capacity from the nearby Centrale Électrique du Congo power plant where Zanaga has a recent MoU.
  • Management have also “received interest from various groups in Saudi Arabia and the United Arab Emirates (UAE) and is exploring these opportunities.”
  • This could add another US$1bn to the Zanaga project NPV.
• Pipeline Feasibility Study (30mtpa capacity)
  • Management are considering the development of a single buried 30mtpa capacity pipeline.
  • This would have sufficient capacity for both Stage One (12mtpa) and Stage Two (18mtpa)
  • The move would reduce Stage Two capital costs by around US$700m
• Dry Tailings Feasibility Study
  • Moving to use thickened paste or filtered tailings technology to reduce moisture appears to offer long-term benefits and reduce sustaining capex.
  • This has the potential to “deliver up to US$2bn of sustaining capex savings over the life of the mine.”
• Zanaga project key metrics:
• Stage 1 throughput – 12mpta operation.
  • Product 66% Fe
  • CAPEX – $1.9bn,
  • OPEX FOB – US$31.5/dmt LoM
  • OPEX CFR – US$59.4/dmt
  • NPV – $3.68bn
  • IRR – 26%.
• Stage 2 throughput – 30mtpa
  • Product 68.5% Fe
  • CAPEX – $1.87bn
  • OPEX FOB – $25/dmt
  • OPEX CFR – $53.2/dmt
  • NPV – $7.4bn,
  • IRR – 28.2%.
• Costs: Both Stage 1 and Stage 2 sit at the bottom end of the cost curve according to company estimates.
• Management have posted a new and updated corporate presentation: https://www.zanagairon.com
• Offtake: Zanaga recently bought-back Glencore’s 43% stake for US15m, representing an equivalent price of US$0.0516 (~4.16p/s). There is no current offtake agreement in place

Conclusion: Management have outlined potential for US$9bn of potential enhancements to the Zanaga iron ore NPV.

LSE Group Starmine awards for 2024 commodity forecasting:

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

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

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

SP Angel                                                            

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