Chinese major buys Brazilian tin mine as supply concerns mount
MiFID II exempt information – see disclaimer below
Anglo American (AAL LN) – Placing of Amplats shares raises US$527m
Asiamet Resources (ARS LN) – Financing specialist joins as BKM project progresses
Aura Energy* (AURA LN) – Chairman highlights Tiris project in his AGM address to shareholders
Botswana Diamonds (BOD LN) – Drilling approval in Botswana
Galantas Gold* (GAL LN) – 3Q24 financial results
Sunrise Resources (SRES LN) – Sale of mineral claims in Nevada completed
Wishbone Gold* (WSBN LN) – Appointment of Finance Director
Chinese major buys Brazilian tin mine as supply concerns mount
- China Nonferrous Metals Mining Group has reportedly bought a stake in Brazilian tin mine Pitinga.
- Pitinga has processing capacity of 7mtpa, alongside an alloy smelting plant with capacity of 4,000tpa and a tin foundry in Pirapora with 7,000tpa capacity.
- The Pitinga mine produces a tin concentrate before being trucked to the Pirapora smelter near Sao Paulo.
- Pitinga also produces niobium and tantalum by-products.
- CNMC is reportedly paying US$340m for the mine.
- Historical Minsur reports suggest the Pitinga resource stands grades c.0.14% Sn for c.500kt Sn contained.
- Pitinga reported cash costs of $16,000/t in 2022, producing 6kt of the year at an average feed grade of 0.17%.
- The news follows reports that an Abu Dhabi sovereign wealth fund is eyeing an investment into the Bisie project in DRC.
Metals strengthen as dollar weakens following sharp rally into Trump election victory
- Copper climbed back over $9,000/t this morning, whilst other metals were also green, with zinc and lead both ticking higher.
- Zinc saw LME outflows at the highest level since 2015.
- Meanwhile, tin fell below $29,000/t and nickel bounced off the $16,000/t mark.
- Vedanta is set to build a $2bn copper smelter in Saudi Arabia as the global smelter capacity expansion continues.
- Meanwhile, iron ore has been defying negative sentiment, with the 62% index holding above the $102/t mark.
- Steel production is reportedly above average on a seasonal basis, up 9.5% over the last three months vs the three year average.
- Bloomberg reports cumulative losses in China’s steel industry were 23bn CNY, vs 34bn in 2023.
Gold strengthens as US Treasury yields extend slide after US housing sales disappoint
- Gold prices bounced after another sharp sell off, touching $2,609/oz after falling 3%.
- The metal regained ground overnight, likely from Asian buying.
- However, lower US treasury yields are also expected to be supporting the metal, which has climbed to $2,650/oz.
- The 10 year has fallen to 4.26%, now down nearly 25bp from recent highs.
- ETF buyers traditionally rotate from money market funds into gold when yields slide.
- A weaker dollar, which has fallen against a basket of currencies, is also likely supporting gold.
- The traditional correlations are weakening, however, with focus on central bank buying as foreign reserve diversification continues.
- Meanwhile, using housing sales hit a two year low at 610k units in October, lower than expectations.
- The slide is partly a reflection of rising US yields over the period.
- However, it may also reflect a weakening US consumer, with the housing market a major component the economy.
Four senior Barrick employees were arrested by the government pending trial in Mali.
- Reuters reports that it could be same employees that were briefly detained in September.
- The news follows a similar case with Resolute Gold with a number of employees detained including CEO amid negotiations over new fiscal terms of mining operations in the country.
Namibia goes to elections with high unemployment in focus
- Namibian elections are taking place today, with the South West Africa People’s Organisation aiming to defend their position.
- Independent Patirots for Change are challenging, having previously secured 29% of the vote in 2019.
- Namibia currently faces a 43% youth unemployment rate, droughts and a housing crisis.
- The incumbent party has enjoyed a 34 year rule, with Netumbo Nandi-Ndaitwah seeking to become the first female president.
Lithium – Bolivia signed an agreement with CBC, a Chinese consortium that includes battery manufacturer CATL, to build two DLE plants for at least US$1bn.
- The government will hold a 51% stake in the project.
- Processing facilities will treat Uyni brines located in southwest Bolivia.
- Two facilities are estimated to produce 35ktpa LCE combined.
Zambian miners rescued as droughts continue to impact mining operations
- Reuters reports miners trapped in IRH’s Mopani copper mine and a Chinese mine have been rescued.
- The incidents were triggered by a nationwide blackout after power was disrupted by limited hydropower generation following a severe drought.
- The Kariba North Bank Power Station, which has capacity of 1,080MW is currently producing 120MW.
| Dow Jones Industrials | 0.28% | at | 44,860 | |
| Nikkei 225 | -0.80% | at | 38,135 | |
| HK Hang Seng | 2.32% | at | 19,603 | |
| Shanghai Composite | 1.53% | at | 3,310 | |
| US 10 Year Yield (bp change) | -3.7 | at | 4.269 |
Economics
US – Jamieson Greer was selected as US trade representative supporting expectations for tighter trade policies.
- Greer, a lawyer at King & Spalding in Washington, is a protégé of Robert Lighthizer who led the use of tariffs with China and Europe during Trump first term.
- Jay Bhattacharya, a professor at Stanford and vocal opponent of Covid 19 lockdowns, was picked as director of the National Institutes of Health.
- The NIH is the world’s largest state backed biomedical research agency with a $47bn annual budget.
- November Fed meeting minutes showed policymakers support moving “gradually” to lower interest rates amid stronger than expected economic growth.
- Odds of just short of 70% that the Fed will cut by 25bp in December.
China
- Industrial Profits (%yoy, Oct/Sep/Est): -10.0/-27.1/NA
Germany
- GfK Consumer Confidence (Dec/Nov/Est): -23.3/-18.4 (revised from -18.3)/-18.8
France – 10y bond yield premiums to German Bunds hit the highest level since the Eurozone debt crisis in 2012.
- The premium increased 3bp to hit 89bp today.
- Selling picked up on fears that Michel Barnier will struggle to pass a budget for next year enacting needed cuts to reduce the nation’s deficit.
- Marine Le Pen, the head of the National Party, who criticised the budget threatened to join no confidence motion if no proposed changes implemented.
- Barnier warned the nation faces a “storm” in financial markets if his budget proposals are rejected and the government is voted out of power.
Israel/Lebanon – A US brokered ceasefire has taken effect between Lebanon and Israel from 4am Wednesday.
- Under the agreement, the Israel Defense Forces will withdraw its forces from Lebanon over a period of 60 days who are to be replaced by the Lebanese army.
- Hizbollah will move north of Litani river (30km away from the Israeli border) and will not be allowed to rebuild its infrastructure in southern parts of Lebanon.
Currencies
US$1.0519/eur vs 1.0483/eur previous. Yen 153.15/$ vs 153.89/$. SAr 18.089/$ vs 18.150/$. $1.260/gbp vs $1.255/gbp. 0.650/aud vs 0.648/aud. CNY 7.248/$ vs 7.258/$.
Dollar Index 106.66 vs 107.10 previous
Precious metals:
Gold US$2,652/oz vs US$2,614/oz previous
Gold ETFs 83.2moz vs 83.2moz previous
Platinum US$933/oz vs US$930/oz previous
Palladium US$991/oz vs US$976/oz previous
Silver US$30.6/oz vs US$30.2/oz previous
Rhodium US$4,600/oz vs US$4,600/oz previous
Base metals:
Copper US$9,037/t vs US$8,987/t previous
Aluminium US$2,628/t vs US$2,617/t previous
Nickel US$15,960/t vs US$16,060/t previous
Zinc US$3,129/t vs US$3,028/t previous
Lead US$2,038/t vs US$2,010/t previous
Tin US$28,300/t vs US$28,860/t previous
Energy:
Oil US$73.1/bbl vs US$73.3/bbl previous
- Crude oil prices edged lower following the Israel-Hezbollah cease-fire overnight and despite the API estimating an unexpected 5.9mb w/w draw (+0.2mb exp) to US crude inventories.
- European gas prices edged down as French nuclear reactor operating levels fell 2% w/w to 78% of 61.4MW capacity, with Gazprom reporting a stable gas supply of 42.4mcm/d (~1.5bcf/d) via the Sudzha metering station.
Natural Gas €46.4/MWh vs €47.4/MWh previous
Uranium Futures $77.2/lb vs $77.2/lb previous
Bulk:
Iron Ore 62% Fe Spot (cfr Tianjin) US$103.8/t vs US$102.7/t
Chinese steel rebar 25mm US$497.6/t vs US$498.7/t
HCC FOB Australia US$203.5/t vs US$204.5/t
Thermal coal swap Australia FOB US$138.5/t vs US$143.0/t
Other:
Cobalt LME 3m US$24,300/t vs US$24,300/t
NdPr Rare Earth Oxide (China) US$57,093/t vs US$57,246/t
Lithium carbonate 99% (China) US$10,343/t vs US$10,540/t
China Spodumene Li2O 6%min CIF US$790/t vs US$790/t
Ferro-Manganese European Mn78% min US$985/t vs US$985/t
China Tungsten APT 88.5% FOB US$338/mtu vs US$338/mtu
China Graphite Flake -194 FOB US$440/t vs US$440/t
Europe Vanadium Pentoxide 98% US$4.9/lb vs US$4.8/lb
Europe Ferro-Vanadium 80% US$26.3/kg vs US$25.6/kg
China Ilmenite Concentrate TiO2 US$307/t vs US$307/t
China Rutile Concentrate 95% TiO2 US$1,124/t vs US$1,123/t
Spot CO2 Emissions EUA Price US$64.9/t vs US$64.9/t
Brazil Potash CFR Granular Spot US$282.5/t vs US$282.5/t
Germanium China 99.99% US$2,825.0/kg vs US$2,825.0/kg
China Gallium 99.99% US$430.0/kg vs US$430.0/kg
Battery News
Trump threats of 25% tariff on Mexico and Canada would deal big blow to the auto industry
- The US auto industry relies heavily on imports of vehicles and parts made in Mexico and Canada.
- Stellantis, Chrysler, GM and Ford all manufacture certain models in the two neighbouring countries and manufacturing plants in the US depend heavily on supply chains too.
- Trump has promised to preserve auto jobs across the US, but the effect of higher priced autos could have a significant effect on inflation and lead to lower sales and lay offs at US auto factories.
- Automakers are already struggling with current economic climates globally, with Nissan announcing it will lay off 9,000 employees globally and VW considering closing factories in Germany for the first time.
UK government to consult EV targets amongst growing backlash from automakers
- The government has said it will consult on EV targets, amongst dissatisfaction from automakers, but plans to stick to the 2030 deadline for phasing out new petrol and diesel car sales.
- The Society of Motor Manufacturers & Traders (SMMT) called for urgent government intervention to safeguard the sector, warning weak demand for electric cars and the requirement to fulfil sales quotas had ” the potential for devastating impacts on business viability and jobs”.
- Stellantis, the owner of Vauxhall, have also said it would close its plant at Ellesmere Port, putting 1,100 jobs at risk.
- Ford has also announced that it will cut 800 jobs in the UK over the next three years.
- Business Secretary Jonathan Reynolds confirmed it would consult on the so-called zero emissions vehicle mandate.
- Manufacturers are arguing that demand for EVs has not been as high as was expected when the rules were drawn up.
China expecting over 100,000 eVTOLs by 2030, industry body says
- By 2030, China could have 100,000 eVTOLs in households or as air taxis, the China Low Altitude Economic Alliance said in a report released today.
- Within two to three years, air traffic networks and ground flight service facilities in China’s major cities will be largely completed and eVTOLs will be commercialised in large quantities, the report also stated.
- The price of eVTOLs is also expected to decrease by up to 80% making them more affordable for commercial or private use.
Company News
| Overnight Change | Weekly Change | Overnight Change | Weekly Change | ||
| BHP | -0.2% | -0.7% | Freeport-McMoRan | -2.0% | -1.5% |
| Rio Tinto | 0.1% | 1.1% | Vale | -1.7% | -1.2% |
| Glencore | 0.9% | 0.4% | Newmont Mining | -0.5% | -2.2% |
| Anglo American | 2.4% | 3.8% | Fortescue | 1.9% | 5.1% |
| Antofagasta | 0.4% | -0.2% | Teck Resources | -1.1% | -1.0% |
Anglo American (AAL LN) 2,430p, Mkt Cap £30bn – Placing of Amplats shares raises US$527m
- Anglo American completed an accelerated bookbuild of Anglo American Platinum shares this morning.
- The Company’s subsidiary sold 17.5m shares in Amplats, 6.6% of the company at ZAR548/share.
- The placing will raise US$527m gross.
- Anglo American continues to raise cash, having sold the remainder of their coal division this week, in their bed to streamline the company after BHP’s takeover attempt.
Asiamet Resources (ARS LN) – 0.58p, mkt cap £17m – Financing specialist joins as BKM project progresses
- In an announcement yesterday, Asiamet Resources reported the appointment of a new Head of Corporate Finance, Mr. Mudit Goenka.
- He is described as having “a wealth of experience in debt financing, mergers and acquisitions, capital markets and strategic transactions … [most recently] … as a Director of Southeast Asia Investment Banking at Bank of America Merrill Lynch (“BAML”) in Singapore advising clients on complex debt financings and M&A transactions”.
- His “immediate focus will be driving a successful project financing initiative for the Company’s BKM copper development project and managing all corporate finance and M&A-related activities for the Company”.
- Welcoming him to Asiamet, CEO Darryn McClelland, said that “we are very pleased to have secured the services of such a well credentialed corporate finance executive as Mudit to drive the project financing for BKM. Mudit brings a wealth of experience and relationships in debt financing and capital markets to the Company and his recent South East Asian capital markets exposure will assist in rapidly advancing the financing options available for the BKM project”.
- The announcement also reports the departure of James Deo, current Chief Development Officer and formerly Chief Financial Officer, who joined the company in 2018, “to pursue new opportunities”.
- Mr. McClelland thanked him “for his dedication and significant contribution to the Company over almost seven years in the roles of CFO and CDO … [saying that he] … worked tirelessly to get the Company to this inflection point and we wish him all the best for his future endeavours”.
Aura Energy* (AURA LN) 7.5p, Mkt Cap £62m – Chairman highlights Tiris project in his AGM address to shareholders
(Aura Energy hold 100% of Tiris Uranium and 100% of the Häggån Project in Sweden, Häggån hosts 2.5bnt of vanadium, SOP ‘sulphate of potash’ and uranium resource)
- In his address to shareholders at Aura Energy’s AGM in Perth, Chairman, Phil Mitchell, highlighted progress of the Tiris uranium project in Mauritania under the leadership of CEO, Andrew Grove and CFO Mark Somlyay and the project team.
- He explained that “Further appointments are underway to ensure the team has the capacity to successfully bring Tiris into production in late 2026”.
- Mr. Mitchell highlighted the “fully permitted and construction ready” status of the Tiris project where the updated production target, released in September shows an NPV8% of US$499m and IRR of 39%
- He explained that, following the 55% increase in the MRE from 58.9m lbs of U3O8 to 91.3m lbs, Aura Energy is “investigating options to expand the annual production base from 2Mlbspa U3O8 to 3Mlbspa U3O8 or greater after year three of operations”.
- Mr. Mitchell commented on the revised offtake agreement with Curzon Uranium where the “average fixed contract price … has increased 70% to US$74.75/lb U3O8 up from US$44.09 per pound – subject to FID … [Final Investment Decision] … by early 2025, which we’re confident of achieving”.
- There has, however been a reduction in the contracted volume “from 2.6Mlbs to 2.1Mlbs over the same seven-year term, delivering US$41 million of additional potential revenue to Tiris at a uranium price of US$80 per pound”.
- Mr. Mitchell confirmed progress on financing the Tiris project and said that Aura Energy has “received confidential, non-binding proposals from a number of investors and debt providers and other parties continue to contact us expressing willingness to co-invest”.
- Although declining to provide details given the stage of the discussions, he confirmed that “Independent engineers have commenced due diligence on all aspects of the project on behalf of the lenders and investors”.
- Elsewhere, discussions are continuing with the Swedish authorities and local communities to build and nurture “relationships with key stakeholders as we move through the required approval processes to continue the development of the Häggån Project”.
Conclusion: Aura Energy should see a busy 2025 as it moves towards a formal FID on the Tiris uranium project and production by late 2026 and also seeks to progress the Häggån Project in Sweden.
*SP Angel acts as Nomad and Broker to Aura Energy
Botswana Diamonds (BOD LN) 0.23p, Mkt Cap £2.7m – Drilling approval in Botswana
- Botswana Diamonds reports receipt of the necessary environmental approvals for drilling close to its wholly-owned KX36 diamond project in Botswana.
- The “proposed drilling programme will focus on two gravity anomalies of twelve and six hectares close to the Company’s KX36 discovery, which are of particular interest to the Company”.
- Today’s announcement describes the 3.5 Ha KX36 kimberlite pipe hosting resources of “17.9Mt at 35 carats per hundred tonnes (“cpht”) (indicated) and 6.7Mt at 36 cpht (inferred) at $65/ct … at an estimated diamond value of up to $107/ct”.
- “Subject to securing the necessary funding, the Company would target commencement of its drilling programme during the Kalahari dry season (April to October) next year”.
- Describing the approval for drilling as “significant”, Chairman, John Teeling, said that “we believe that the Kalahari will be the next diamond province in Botswana … [adding that Botswana Diamonds believes] … further diamond discoveries will be made in Botswana”.
Conclusion: We look forward to the results from the drilling expected to take place in mid 2025.
Galantas Gold* (GAL LN) 4.9p, Mkt Cap £6M – 3Q24 financial results
- The Company reported a net loss of C$0.7m (3Q23: -C$1.3m).
- No revenues were reported during the quarter amid no commercial production with ~US$200k (3Q23: US$333k) worth of proceeds from concentrate sales offset against capital costs.
- G&A amounted to C$1.2m (3Q23: C$0.9m) including C$0.4m in net interest expense (3Q23: C$0.3m).
- FCF was -C$2.2m over 9M24 (9M23: -C$3.8m) including -C$0.1m in net CFO and $2.1m in capitalised costs.
- Net debt stood at C$18.3m (Dec23: C$11.9m) including C$0.4m in cash and C$18.7m in loans and convertibles C$12.4m of which is due within the next 12m.
*SP Angel acts as Broker to Galantas Gold
Sunrise Resources (SRES LN) 0.04p Mkt Cap £1.9m – Sale of mineral claims in Nevada completed
- Sunrise Resources reports that its previously announced sale of 29 mining claims in Nevada held for the industrial mineral, diatomite has now been completed.
- The company confirms that it has now received the US$75,000 balance of the agreed US$150,000 purchase price for the claims, which are located in the Crow Springs area around 85km by road from a diatomite processing plant owned by the purchaser, Dicalite Management Group.
- The sale, which was first announced in April, includes the retention by Sunrise Resources of “a royalty of US$6/dry ton of diatomite mined and removed from the Claims”.
- Welcoming the pace of Dicalite’s “plans to start mining on the Crow Springs Diatomite Claims” Executive Chairman, Patrick Cheetham, explained that “ we hope to be able to say more about future royalty payments once Dicalite’s mining plans become public”.
Wishbone Gold* (WSBN LN) – 0.29p, Mkt Cap £1.2m – Appointment of Finance Director
- Wishbone Gold has announced that its CFO since October 2021, Mr. Kaiyi (Jack) Sun, is to join the Board as Finance Director.
- Described as having “more than 20 years international business and finance experience”, Mr. Sun has been a “fellow of the Association of Chartered Certified Accountants” since 2009.
- Welcoming him to the Board, Deputy Chairman, Richard Poulden, said that he brings “detailed knowledge of the Company and its business”.
*SP Angel acts as a Broker for Wishbone Gold
LSE Group Starmine awards for Q3 commodity forecasting:
No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Previous Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q3 2024
No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q3 2024
No.1 in Copper: “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”
No1. In Gold: “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”
The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020
Analysts
John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490
Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484
Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474
Sales
Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472
Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534
Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535
Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
SP Angel
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*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 |
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