SP Angel Morning View -Today’s Market View, Wednesday 26th February 2025

US copper futures rally as Trump calls for import tariffs and Chile sees power outage 

MiFID II exempt information – see disclaimer below

Anglo Asian Mining* (AAZ LN) – FY25 guidance delivering on a recovery in production

Ariana Resources (AAU LN) – Asgard Investments portfolio

Great Southern Copper (GSCU LN) – Initial assay results from the Phase 1 drilling at Cerro Negro

KEFI Gold and Copper* (KEFI LN) – Jibal Qutman MRE update +23% in total resource and +50% in the Indicated category

Lynas Rare Earths (LYC AU) – Results show impact of low NdPr prices

Sovereign Metals* (SVML LN) – Graphite from Kasiya mine in Malawi confirmed as suitable for use in expandable and expanded graphite markets

US copper futures rally as Trump calls for import tariffs and Chile sees power outage

• Copper futures on COMEX have rallied 4% overnight to $4.7/lb ($10,378/t) whilst LME prices are sitting at $9,550/t.
• The cross-Atlantic divergence reflects continued concerns over US tariffs under the Trump administration.
• These concerns were escalated last night after Trump ordered a probe into US copper trade, under national security grounds.
• The President stated that ‘Great American Copper Industry has been decimated by global actors attacking our domestic production.’
• US officials are arguing that there is overcapacity and dumping in world markets that is impacting domestic US copper production.
• The US produced c.850kt of copper last year and consumed 1.6mt of refined supply.
• The US sources 90% of refined copper imports from Chile, Canada, and Peru. (USGS). The US produced 1.1mt of copper in 2023 vs 1.27mt of copper in 2017.
• Opposition to new mines has made the development of new mines impossible in many key states, particularly Minnesota.
• Rio Tinto is still working to appease local opposition to its Resolution copper mine in Arizona.
• Other, polymetallic mines are on indefinite hold in Minnesota including, Antofagasta’s Twin Metals project, Glencore’s (Polymet’s) Nothmet, Talon’s Tamarack nickel copper mine
• China dominates US in terms of smelting capacity, with the US hosting two primary copper smelters.
• Elsewhere, Chile has suffered a power blackout, with major miners including Codelco and BHP affected. Chile supplies c.30% of global copper.
• Codelco has stated it is resuming operations after power supply returned.
• The blackout was triggered by a fault in transmission lines from state-owned ISA InterChile.
• Chile copper production around 5.3m forecast to rise to 6.07mt in 2026. Global demand of 26mt in 2024 rising to 27mt this year
• BHP is set to begin its $10.8bn capex programme in Chile, upgrading concentrators at Escondida and exploring leaching technology etc.
• The investment is expected to see BHP sustain an average annual run rate of 1.4mt from Chile in the 2030s vs sliding to 900kt without.
• Additionally, Panama’s dollar bonds have climbed to their highest levels since mid-December on renewed expectations of Cobre Panama reopening.
• Analysts expect FQM’s mine, which produced 1.5% of global copper supply before coming offline, to take six months to restart.

Chinese steelmakers rally on reports of production cuts and government support

• Chinese steelmaker shares rallied overnight, whilst iron ore held steady over $107/t.
• The move higher, with some listed steelmakers rallying limit up, reflects reports of production cuts amid overcapacity.
• WeChat messages suggested the government could order production cuts of up to 50mt of steel.
• Whilst the reports are unverified, both HRC and rebar prices rallied in country.
• Previous analysis has suggested the current steel glut in China requires a 15% capacity cut for a return to profitability in 2025.
• China produced over 1bnt of steel in 2024, whilst exports climbed to a nine year high in 2024.
• The wider trend in global steelmaking is transitioning blast furnace capacity to EAF production, which currently accounts for <10% of China’s output vs their 2025 target of 15%.

Conclusion: We expect a return to profitability for Chinese steelmakers to provide support to high-quality iron ore premiums, which have faced headwinds over the past 24 months on weak margins in China. A return to profitability should provide a positive tailwind to high-grade iron ore concentrate producers and developers such as Vale*, Champion Iron Ore, Nordic Iron Ore, and Beowulf Mining*. See our note on Beowulf’s high-grade concentrate for further insight into the market: LINK

*SP Angel acts as Nomad and Broker to Beowulf Mining, *An SP Angel analyst holds shares in Vale

Gold ($2,915/oz) slides from record highs amid wider market sell-off and profit taking

• Gold prices were hit yesterday amid a wider sell-off in equities and a rally in US Treasuries.
• Sliding US Treasury yields failed to support gold prices, which have since bounced from yesterday’s lows of $2,895/oz.
• We note continued strong buying from ETFs, with physical holdings rising 642koz yesterday, biggest one-day increase since October 2023.
• ETFs have now added for the sixth straight day in a row but remain well below 2020 levels.
• We continue to see ETFs as the next supportive buyer for gold in this uptrend, with Central Banks having done much of the heavy lifting last year.
• ETF buying should, theoretically, be accelerated by lower US Treasury yields as haven investors rotate out of government bonds.
• The dollar has weakened since Trump’s inauguration, with a rally in the Yen supporting the trend.
• Sentiment over the US economy has weakened significantly over the past week, after disappointing PMI data and weak shaky consumer confidence yesterday.
• This was accentuated by Treasury Secretary Bessent’s comments yesterday that the US economy ‘may have exhibited some reasonable metrics but ultimately was brittle underneath.’
• In a dig at Biden’s administration, Bessent highlighted that 95% of job growth in the past 12 months was from public and government-adjacent sectors, arguing that the ‘private sector has been in a recession.’

Rare Earths – in Ukraine ???

• We have been scratching our heads wondering where all these rare earths are in Ukraine.
• Is there something that Donald Trump knows about the geology of the Ukraine that we don’t.
• Ukraine was so very corrupt that few miners ventured into the region and even fewer were able to succeed where so many feared to tread.
• We did have a couple of contacts looking at gold, copper and ilmenite in Ukraine in recent years but there was little prospect of raising funds for minerals in the region.
• Even if someone had a REE deposit in Ukraine it would either have to have sufficiently low mining cost to overcome the punitive prices offered for REE concentrates by Chinese processors or it would need access to some new REE processing technology that is still in development.
• Even if sizeable REE deposits exist in Ukraine the idea of mining these elements seems far off due to their processing which would likely need to be highly subsidised in the West for the production of the REE metal oxides required for permanent magnets in wind turbines, EVs, robots and many other products.
• Javier Blas at Bloomberg has put together an amusing summary of the situation which is worth a view.
• https://www.linkedin.com/posts/javier-blas-363b9512_ukraine-ugcPost-7300420247419781120-YLC6/?utm_medium=ios_app&rcm=ACoAAAjpT0oBkkSgCSMiEhSKuxkshEqmzmqPrkk&utm_source=social_share_send&utm_campaign=mail.

Economics

US – Consumer confidence unexpectedly plunged to the lowest since mid-2024 with respondents expressing worries over new administration policies.

• Weaker sentiment with a drop in PMIs released last week saw markets starting to price in two 25bp cuts in rates this year.
• 10y yield pulled back 11bp overnight hitting the lowest level since mid-December.
• Conference Board Consumer Confidence (Feb/Jan/Est): 98.3/104.1/102.5

G-20 finance ministers, and central bankers are in Cape Town today

• We feel sure Trump’s tariffs, inflation, trade barriers and Fed interest rates will be high on their agendas.
• We suspect the message will be ‘Keep Calm and Carry On’.
• Trump’s quick deal on Ukraine feels like it sets the stage for more US public negotiation.
• Eg. there will be lots of noise out of the White House but not so much might change.
• The US likes to be paid for its support with the UK only recently paying off war bonds from WWII

Germany – Consumer sentiment remains weak amid political uncertainty as well as headwinds from challenging economic outlook.

• GfK Consumer Confidence (Mar/Feb/Est): -24.7/-22.6(revised from -22.4)/-21.6

Ukraine – Kyiv agreed terms on a deal with Washington that would cover mineral resourcing including oil and gas. (FT)

• Under the agreement, a join US/Ukraine fund to be created to manage future revenues from nation’s natural resources.
• The fund would receive 50% of proceeds from the ‘future monetisation’ of state owned mineral resource including il and gas, and associated logistics.
• Accumulated funds would be allowed to invest in projects in Ukraine.
• The agreement excludes mineral resources that are already developed, meaning it would not cover the existing activities of Naftogaz or Ukrnafta, largest gas and oil producers.
• The latest deal does not include explicit US security guarantees.
• President Zelenskiy is expected to travel to the US this Friday to sign the deal with President Trump.

Currencies

US$1.0510/eur vs 1.0468/eur previous. Yen 149.42/$ vs 149.48/$. SAr 18.389/$ vs 18.404/$. $1.266/gbp vs $1.262/gbp. 0.633/aud vs         0.634/aud. CNY 7.255/$ vs 7.264/$.

Dollar Index 106.426 vs 106.575 previous.

Precious metals:         

Gold US$2,912/oz vs US$2,933/oz previous

Gold ETFs 85.3moz vs 85.1moz previous

Platinum US$975/oz vs US$967/oz previous

Palladium US$941/oz vs US$939/oz previous

Silver US$31.8/oz vs US$32.1/oz previous

Rhodium US$4,675/oz vs US$4,675/oz previous

Base metals:   

Copper US$9,530/t vs US$9,443/t previous

Aluminium US$2,658/t vs US$2,637/t previous

Nickel US$15,450/t vs US$15,330/t previous

Zinc US$2,837/t vs US$2,824/t previous

Lead US$2,018/t vs US$1,982/t previous

Tin US$33,130/t vs US$33,020/t previous

Energy:           

Oil US$73.2/bbl vs US$75.0/bbl previous

• Crude oil prices fell after the US consumer confidence index plummeted in February which outweighed the API estimating a 0.6mb/d w/w draw to US crude inventories, contrary to consensus expectations for a 2.3mb build.
• European natural gas prices fell on warmer weather forecasts as France’s nuclear generation fell 3% w/w to 77% of the country’s 61.4GW maximum capacity.
• BP announced a widely anticipated strategic reset, which will slash capex in transition activities to boost upstream oil & gas investment to ~$10bn per annum to grow production to 2.3-2.5mboe/d in 2030.

Natural Gas €43.6/MWh vs €46.9/MWh previous

Uranium Futures $65.2/lb vs $64.7/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$107.1/t vs US$107.2/t

Chinese steel rebar 25mm US$487.1/t vs US$486.9/t

HCC FOB Australia US$187.8/t vs US$187.7/t

Thermal coal swap Australia FOB US$102.3/t vs US$102.8/t

Other:  

Cobalt LME 3m US$22,280/t vs US$21,550/t

NdPr Rare Earth Oxide (China) US$62,029/t vs US$61,603/t

Lithium carbonate 99% (China) US$9,925/t vs US$9,911/t

China Spodumene Li2O 6%min CIF US$815/t vs US$815/t

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

China Tungsten APT 88.5% FOB US$343/mtu vs US$343/mtu

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

Europe Vanadium Pentoxide 98% US$4.6/lb vs US$4.5/lb

Europe Ferro-Vanadium 80% US$23.8/kg vs US$23.8/kg

China Ilmenite Concentrate TiO2 US$297/t vs US$297/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$320.0/t vs US$320.0/t

Germanium China 99.99% US$2,725.0/kg vs US$2,725.0/kg

China Gallium 99.99% US$385.0/kg vs US$385.0/kg

Battery News

Tesla acquires assets from insolvent German supplier Manz

• Tesla Automation, a subsidiary of the US automaker has signed an agreement to acquire key assets, including 300 employees, of German automation company Manz AG.
• Manz is an automation systems supplier that is invested heavily in battery technology.
• It filed for insolvency in December 2024 following deterioration of Europe’s battery industry.
• Tesla has faced a sharp sales decline in Europe, selling only 9,900 vehicles in January, down 45% from the same month in 2024.
• The automakers share of new car registrations has also dropped to 1% from 1.8% over the same period.

European car sales drop in January as falling combustion engines outweigh EV gains

• Overall sales of cars in Europe were down 2.1% in January, despite fully electric vehicles being up 37.3%.
• EVs, including BEV, HEV and PHEVs, sold in the bloc accounted for 57.2% of passenger car registrations in January, up from 47.4% in the previous year.
• EU carmakers are struggling to compete with Chinese rivals and bracing for US tariffs which could cause sales to tumble further.

Company News

Anglo Asian Mining* (AAZ LN) 118p, Mkt Cap £142m – FY25 guidance delivering on a recovery in production

BUY – TP under review

• The Company released production and earnings guidance for FY25.
• FY25 production forecast at
  • 28.0-33.0koz gold (FY24: 15.1koz);
  • 6.5-6.8kt copper (FY24: 0.4kt).
  • Revenues (net of 12.75% under PSA) forecast at $110-125m using $2,800/oz gold and $9,000/t copper price assumptions.
  • EBITDA forecast at $45-55m.
• At Gilar, the team is expecting to process first ore in 1Q25 with the underground operation delivering ~400kt at 1.47g/t and 1.8% in FY25.
• Gilar ore is to be first treated at the agitation leaching plant recovering gold in dore with tailings processed in the flotation circuit to recover copper in concentrate.
• The material will be complemented by mined tonnages from Gedabek open pit and Gadir underground operations to fill in capacities.
• Heap leaching operations are expected to process 425-475kt at 0.55g/t with all material to be crushed to recover more gold taking advantage of higher gold prices.
• Demirli production is expected to be restarted before year end, although, FY25 guidance does not include any output or potential revenues from Demirli copper concentrate reflecting uncertainty on timing and volumes.

Conclusion: FY25 production is guided to recover strongly from a temporary suspension affected period in 2023/24 with both agitation leaching and flotation circuits up and running. High grade material from Gilar is expected to contribute ~400kt in FY25 taking copper production to the highest on record of 6.5-6.8kt. Coupled with strong commodity prices, the Group is guiding for the highest Group revenue on record. FY25 guidance comes below our forecasts for gold production but slightly over on copper (41koz and 6.2kt) reflecting variation in Gilar grades as well as lower contribution from HL operations. Despite the discrepancy, we are encouraged to hear that first Gilar ore is expected in 1Q25 while development works at Demirli looking to restart operations are ongoing. The latter is expected to deliver next step in Group production growth and, in our opinion, remains overlooked by the market. We reiterate BUY recommendation and will release earnings update shortly.

*SP Angel acts as nomad and broker to Anglo Asian Mining

Ariana Resources (AAU LN) 1.95p, Mkt Cap £35.4m – Asgard Investments portfolio

• Ariana Resources has provided a review of the main holdings of its 100% owned Asgard Investments which holds interests in exploration companies operating in Africa, Australia, central and southeast Asia.
• Today’s announcement headlines the recently agreement with Ivanhoe Mines to fund an initial US$18.7m “and up to US$115 million during a subsequent phase, including up to 217,000m of drilling” at Pallas Resources’ projects in Kazakhstan.
• Exploration, by an 80% owned joint venture (Ivanhoe 20%) is targeting “major copper systems in the Chu-Sarysu Basin, Central Kazakhstan, one of the world’s largest and most well-endowed sediment-hosted copper basins … [which hosts the] … Dzhezkazgan deposit (2.0Bt at 1.1%Cu for 22MtCu)”.
• “On completion of the Initial Phase, Ivanhoe will spend up to US$115 million during the subsequent Phase 1, which includes up to 217,000m of drilling”
• The announcement also describes the progress of Panther Resources in Australia (Asgard holding 4.9%) where a scoping study on the Coglia project near Laverton, WA has demonstrated “a revised Mineral Resource of 102.9 Mt @ 0.60% Ni + 370 ppm Co” and where pre-production capital investment of ~A$377m is expected to generate an NPV8% of A$409m and IRR of 31.8% over a 10 year project life with a 3.2 year payback.
• Copper / nickel exploration by Altai Resources (Asgard holding 8.3%) in central Asia is focussing on electro-magnetic and magnetic geophysical surveys to identify “supergiant copper-nickel sulphide systems”.
• Other holdings include a 5.9% interest in Annamite Resources which is exploring for “precious and base metals in Laos, SE Asia” and where the Sokdee and Vangma targets cover licences of 185km² within “a significant nine-kilometre-long porphyry trend”.
• We notice that Asgard previously held an interest in privately held Rockover Resources, owner of the Dokwe gold project near Bulawayo, Zimbabwe which was ultimately acquired by Ariana Resources in a merger completed in July 2024.  Work by Ariana increased the initial 1.3moz resource at Dokwe to~1.8moz and feasibility study work is continuing on plans to develop a 75-100,000oz pa mine.
• Welcoming the progress made by investee companies, Managing Director, Dr. Kerim Sener, said that the joint-venture between Pallas Resources and Ivanhoe Mines “initially covers the newly acquired Aktogay West (377km²) Copper Project” and that the agreement exemplifies “our Asgard strategy”.

Conclusion: Through its Asgard subsidiary, Ariana Resources gains exposure to a wide range of relatively early stage exploration projects and more advanced development opportunities and we look forward to further updates as the projects advance.

Great Southern Copper (GSCU LN) 1.85p, Mkt Cap £8.75m – Initial assay results from the Phase 1 drilling at Cerro Negro

• Great Southern Copper reports the first assay results from its recently completed Phase 1 drilling campaign at its Cerro Negro copper/gold/silver target within its Especularita project located 170km from the port city of Coquimbo, and 130km from Antofagasta Minerals’ copper concentrate port at Los Villos in Chile.
• The campaign comprised 9 diamond drill holes totalling 1,002.6m, each of which intersected high sulphidation copper / silver mineralisation.
• Results from hole CNG25-DD001, drilled at the historic Mostaza mine site, include:
  • An intersection of 20m at an average grade of 3.31% copper and ~270g/t silver from a depth of 27m and include higher grade sections of 7m averaging 5.72% copper and ~490g/t silver from 31m depth and 3m averaging 6.62% copper and ~563g/t silver from 35m.
• “Mineralisation in hole CNG25 DD001 is confined to a 20m wide, north-south trending structurally-controlled lode, or “lens”, that dips moderately steeply to the west”.
• The company says that “Strike and depth continuity of visible mineralisation” is confirmed by the drilling and the mineralisation remains “open in all directions”.
• Today’s announcement confirms that “Planning for follow-up resource and exploration drilling … [in a Phase 2 programme is] … underway” and that results from the other Phase 1 holes are pending.
• CEO, Sam Garrett, described the result from the first hole at Mostaza as “tremendously significant … [and that it demonstrates] … that the former Mostaza mine has the potential to be a high-grade high-value Cu-Ag deposit”.
• He also explained that the assay “grades for CNG25 DD001 are significantly higher than the historically reported EDH25 results and if this is confirmed in other GSC drillholes, it could have a positive impact on the potential economics of the Mostaza resource”.

Conclusion: The first assay results from the Phase 1 drilling at Cerro Negro have shown copper/silver assays higher than seen in historical drilling.  We await assay results from the remaining holes and plans for the follow-up campaign with interest.

KEFI Gold and Copper* (KEFI LN) 0.5p, Mkt Cap £43m – Jibal Qutman MRE update +23% in total resource and +50% in the Indicated category

• The Company released an updated MRE for the Jibal Qutman Gold Project in Saudi Arabia.
• Updated mineral resource is for 37.0mt at 0.76g/t for 902koz including:
  • 30.5mt at 0.76g/t for 748koz in the Indicated category and;
  • 6.5mt at 0.74g/t for 154koz in the Inferred resource.
• Oxide mineralisation accounts for 13.3mt at 0.75g/t for 318koz (~35%) with the balance hosted in the sulphide domain (23.7mt at 0.77g/t for 585koz).
• The resource is based on ~95,100m of RC and DD drilling.
• Updated MRE compares to the previous estimate of 28.4mt at 0.80g/t for 733koz (2015).
• The update includes a 50% increase in the Indicated category as well as a 23% in total contained gold.
• Higher confidence estimate reflects additional infill drilling while step out drilling at Red Hill, better modelling of key high grade areas and higher gold price assumption allowed to expand the pit shell both at depth and along strike.
• GMCO (15% KEFI) is studying Stage 1 development options involving an open pit operation focused on the oxide mineralisation using CIL plant.
• Plans will be announced once finalised and reviewed with government authorities.
• Regional exploration continues focusing on 35km long license area using both geochemical surface sampling and airborne geophysics to identify new drill targets and extensions to the current resource.

Conclusion: GMCO drilling expands high confidence M&I category by 50% (Indicated accounts for 83% of the total v 68%, previously) while growing total mineral inventory to just over 900koz (+23%) at Jibal Qutman. The update follows a new MRE for Hawiah and Al Godeyer released last week that delivered a >25% increase in total resource with a >160% growth in the Indicated category to be used for future reserves and economic studies. The Company remains focused on closing funding and start of development works at the Tulu Kapi Gold Project in Ethiopia with a strategic review of the 15% stake in GMCO JV ongoing.

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

Lynas Rare Earths (LYC AU) A$5.9, Mkt cap A$5.6bn – Results show impact of low NdPr prices

• Lynas reported 1H25 results for the half year ending 31^st December 2024.
• The Company report revenues of A$254m, EBITDA of A$38.1m and NPAT of A$5.9m.
• The Company’s cash balance fell from A$686m to A$308m yoy.
• Lynas reported a 22% increase in NdPr production volume to 2,969t, whilst the Chinese NdPr price exc. VAT fell to US$49/kg from US$56/kg over the period.
• Cost of sales rose 29% on higher volumes, whilst unit costs rose with additional facilities coming online.
• CAPEX of A$267m over the period, commissioning Stage 1 of Mt Weld expansion and ramping up Kalgoorlie processing facility.
• Lynas Malaysia ramp up and commissioning expected CY25.
• Company notes ‘rare earths market continues to be subject to complex influences,’ but states that there is ’sustained support for supply chain development from key governments.’

Sovereign Metals* (SVML LN) 44p, Mkt Cap £251m – Graphite from Kasiya mine in Malawi confirmed as suitable for use in expandable and expanded graphite markets

(Sovereign currently holds 100% of the Kasiya project. Malawi has 10% free carry right. Rio Tinto acquired an initial strategic interest of 15% for A$40m mid 2023 and has recently invested a further A$19.2 to move up to 19.9%)

STRONG BUY – Valuation 55p

• Sovereign Metals reports the result of test work done by ProGraphite and Dorfner Anzapian in Germany on graphite from the Kasiya rutile and graphite project in Malawi.
• Test work shows that flake graphite from the Kasiya project “has the key characteristics required for use in expandable (fire retardant) and expanded (gaskets, seals, and brake lining) applications.“
  • The tests confirm that Kasiya medium to coarse flake (>150 microns to >300 microns) achieved very high expansion ratios using standard reagents at room temperature and short durations providing a competitive advantage over other current and potential sources of graphite supply.
• Price: US$1,140/t (FOB) for 94-95% graphite concentrate material suitable for expandable and expanded markets. (December 2024)
• Kasiya natural flake graphite concentrate has been shown to be suitable for:
  • anode materials (graphite fines)
  • large refractory materials (coarse flake)
  • expandable and expanded graphite markets (medium to coarse flake)
• Coarser flake material can also be spheronised for anode materials
• We note, anode precursor materials producers prefer certain shapes of spheronisation.
• The sheer scale of the Kasiya mine being planned combined with the low cost of co-product graphite production suggests Kasiya could become the world’s dominant natural flake graphite mine.
• Flame retardant: We see the market for graphite-based flame retardants and graphite-infused intumescent paints.
• The global market was valued at around $1.1bn in 2024 growing to a projected $2.4bn last year and potentially $1.73bn by 2030.
• Other halogen-based flame retardants, which include brominated and chlorinated flame retardants are being phased out due to their impact on health.
• In 2019 the Anchorage Alaska Assembly banned flame retardant chemicals in consumer products, principally due to the health impact of household fires involving these retardants.
• Barrier technologies such as flake graphite are seen as preferable to the use of polybrominated diphenyl ethers, ammonium polyphosphate, antimony trioxide, brominated flame retardants, tetrabromobisphenol A, and zinc borate.
  • “ProGraphite achieved expansion volumes of 320cm3/g and 355cm3/g for >180 microns concentrate and >300 microns concentrate respectively using standard reagents and conditions, above the typical minimum requirements of 250cm3/g and 350cm3/g respectively for these size fractions.
  • Optimisation testing of >150 microns concentrate at DorfnerA achieved a very high expansion volume of 650cm3/g, using standard reagents and short duration testing at room temperature – Figure 2. The results indicate the potential to tailor expansion volumes to application requirements and the ability to achieve high expansion volumes when required.”

Conclusion: The Kasiya rutile and graphite mine looks set to become the world’s largest and lowest-cost producer of rutile (titanium) and graphite. The substantial and careful work being done by the Sovereign and Rio Tinto teams on ensuring the best environmental, social and governance should hopefully ensure a smooth start to the operation after the Optimised DFS is completed in 4Q25.

*SP Angel act as Nomad and broker to Sovereign Metals. The analyst has visited the Kasiya mine site. We highly recommend the Malawi coffee beans sold in Lilongwe airport.

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.

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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