SP Angel Morning View -Today’s Market View, Wednesday 29th March 2023

Metal prices little changed ahead of the US PCE data later in the week

MiFID II exempt information – see disclaimer below

Aura Energy* (AURA LN) – Enhanced DFS increases annual production rate at the Tiris uranium project to 2m lbs and boosts economic returns

Central Asia Metals (CAML LN) – 2022 dividend maintained at 20p/sh

Horizonte Minerals (HZM LN) – 2022 reports highlights progress towards early 2024 production at the Araguaia ferronickel project

Shanta Gold (SHG LN) – 2022 sales climb on a recovery in NLGM production with further growth expected following the Singida commissioning

Dow Jones Industrials -0.12% at 32,394
Nikkei 225 +1.33% at 27,884
HK Hang Seng +1.90% at 20,161
Shanghai Composite -0.16% at 3,240



US$1.0834/eur vs 1.0830/eur yesterday. Yen 131.89/$ vs 131.21/$. SAr 18.161/$ vs 18.242/$. $1.233/gbp vs $1.233/gbp. 0.668/aud vs 0.669/aud. CNY 6.889/$ vs 6.886/$.

Dollar Index 102.65 vs 102.55 yesterday.

Commodity News

Risk sentiment picked up this morning on the news of a planned split into six business divisions that is seen by many as easing of tensions with Chinese regulators.

  • Shares closed 12% up on the HK exchange while am measure of HK listed tech firms were up 2.5%.
  • The US$ index edged higher after hitting the lowest level in eight weeks on Tuesday.
  • PCE inflation data is out later this week that the Fed considers the preferred measure of changes in consumer prices.
  • Markets are currently pricing a less than 50% chance that the central bank will hike by 25bp at the next meeting (03 May).

US – Consumer confidence surprised on the upside in March despite recent financial market turmoil leading to fears of a contagion in the regional banking system.

  • The survey showed consumers remained cautious cutting on selected discretionary items like entertainment and dining out, however, were more inclined to purchase large tickets items like autos and white goods.
  • The survey would have included effects from the baking covering the period up to March 20, a week over the news about the failure of SVB and Signature Bank.
  • Strong labour market seems to be more than compensating for strong inflation challenges and higher borrowing costs.
  • House prices continued to drop further in January cutting the annual growth rate to the weakest in over two years on the back of higher mortgage rates.
  • Conference Board Consumer Confidence: 104.2 v 102.9 February and 101.0 est.
  • S&P CoreLogic CS 20-City (%mom): -0.43 v -0.51 December and -0.50 est.
  • S&P CoreLogic CS 20-City (%yoy): 2.55 v  4.65 December and 2.60 est.

Germany – Consumer sentiment improved marginally in April, although, continued to struggle with the survey concluding that “private consumption is unlikely to make a positive contribution to economic growth this year”, GfK said.

  • “The expected loss of purchasing power is preventing a sustained recovery in domestic demand,” GfK wrote.
  • GfK Consumer Confidence: -29.5 v -30.5 March and -30.0 est.

UK – Mortgage approvals ticked up in February, albeit from a low base currently running at the lowest since 2010 (excluding pandemic lows).

  • British clothing retailer Next is guiding for challenging year in 2023 driven by “the combination of inflation in… cost base and top line sales, which are likely to edge backwards”.
  • Mortgage Approvals: 43.5k v39.6k January and 41.3 est.

Precious metals:

Gold US$1,964/oz vs US$1,954/oz yesterday

   Gold ETFs 93.1moz vs US$92.9moz yesterday

Platinum US$965/oz vs US$970/oz yesterday

Palladium US$1,419/oz vs US$1,420/oz yesterday

Silver US$23.18/oz vs US$22.92/oz yesterday

Rhodium US$8,350/oz vs US$8,350/oz yesterday

           Base metals:   

Copper US$ 8,940/t vs US$8,994/t yesterday

Aluminium US$ 2,387/t vs US$2,381/t yesterday

Nickel US$ 23,800/t vs US$23,900/t yesterday

Zinc US$ 2,926/t vs US$2,910/t yesterday

Lead US$ 2,137/t vs US$2,148/t yesterday

Tin US$ 25,770/t vs US$25,665/t yesterday


Oil US$79.2/bbl vs US$78.4/bbl yesterday

  • Crude oil prices edged higher on news that Kurdistan’s oil fields were starting to shut-in production as revenue-sharing talks continue and after the API reported a 6mb draw in US crude oil stocks (vs 0.2mb build expected).
  • European gas prices moved higher as lower wind power generation and colder temperatures forced European countries to start taking gas out of storage again after five days of inventory growth.
  • US HH natural gas prices fell to the lowest levels since September 2020 following forecasts for more moderate temperatures in much of the Lower-48.

Natural Gas US$2.008/mmbtu vs US$2.095/mmbtu yesterday

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


Iron ore 62% Fe spot (cfr Tianjin) US$123.3/t vs US$120.4/t

Chinese steel rebar 25mm US$612.0/t vs US$611.9/t

Thermal coal (1st year forward cif ARA) US$134.5/t vs US$134.5/t

Thermal coal swap Australia FOB US$192.4/t vs US$195.0/t

Coking coal swap Australia FOB US$340.0/t vs US$340.0/t


Cobalt LME 3m US$34,430/t vs US$34,180/t

NdPr Rare Earth Oxide (China) US$78,753/t vs US$80,240/t

Lithium carbonate 99% (China) US$30,558/t vs US$31,442/t

China Spodumene Li2O 5%min CIF US$4,660/t vs US$4,710/t

Ferro-Manganese European Mn78% min US$1,338/t vs US$1,338/t

China Tungsten APT 88.5% FOB US$325/mtu vs US$325/mtu

China Graphite Flake -194 FOB US$790/t vs US$790/t

Europe Vanadium Pentoxide 98% 9.4/lb vs US$9.5/lb

Europe Ferro-Vanadium 80% 38.75/kg vs US$38.85/kg

China Ilmenite Concentrate TiO2 US$345/t vs US$343/t

Spot CO2 Emissions EUA Price US$94.3/t vs US$93.0/t

Brazil Potash CFR Granular Spot US$450.0/t vs US$450.0/t

Battery News

Company News

Aura Energy* (AURA LN) 15.5p, Mkt Cap £79m – Enhanced DFS increases annual production rate at the Tiris uranium project to 2m lbs and boosts economic returns

(Aura holds 85% of the Tiris Uranium Project, Mauritania)

  • Aura Energy’s ‘Enhanced Definitive Feasibility Study’ (EFS) for its Tiris uranium project shows increased average annual production of 2mlbs of U3O8 over a slightly longer mine life compared to the 800,000lbs pa envisaged in the 2021 DFS.
  • The company explains that the higher production rate is underpinned by “the recently announced 52% increase in Measured and Indicated Resources to 29.6 Mlbs U3O8, (62.1Mt at 216 ppm U3O8, at a 100ppm grade cut-off)”.
  • Increased  mineral resources are now expected to deliver total production of 25.5mlbs of U3O8 at an average all-in-sustaining cost of US$28.77/lb over a 16 year mine life in the company’s base case.
  • The study envisages a total capital investment of US$178.2m delivering an after tax NPV8% of US$226m and IRR of 28% compared to the 2021 study which was based on the expenditure of US$74.8m to produce 800,000lbs annually and generated an after-tax NPV8% of US$79.7m and IRR of 22%.
  • Aura Energy uses a base case price of US$64/lb of U3O8 in its analysis and also describes an upside case using a price of US$79/lb in which the same capital expenditure delivers an NPV8% of US$347m and IRR of 35% over a 17 year mine life.
  • Aura Energy confirms that “Further project optimisation will be investigated as part of the FEED study which has commenced using the outcomes of the EFS”.
  • The company explains that its 2022 infill drilling campaign increased the project’s ore reserve to 40.3mt at an average grade of 254ppm U3O8 with around 48% of the reserve tonnage (19.3mt at a grade of 257ppm) classed as ‘Proved’ with the balance defined as ‘Probable’ under the JORC (2012) classifications.
  • The new reserve tonnage is 270% larger than the previous reserve estimate of 10.9mt (albeit at a lower grade compared to the 336ppm reported in the 2019 estimate) with total contained U3O8 179% larger at 22.6m lbs.
  • Managing Director, Dave Woodall, explained that the project benefits from “its low capital intensity, low operating costs, competitive all-in-sustaining cost and … [that] … key regulatory approvals in place … [and he also said that] … What differentiates Tiris is the ore quality that allows free-dig shallow open pit mining. Aura does not require expensive drill and blast operations or capital-hungry infrastructure for crushing and screening … [and a process route which relies on] … simple scrubbing and screening” prior to leaching.
  • Mr. Woodall confirmed that the focus at the Tiris project “is now on the consideration of a Final Investment Decision as early as Q4 2023, which would see commissioning in late 2024 for commercial production in early 2025”.

Conclusion: Infill drilling last year has increased the mineral resources and reserves at Tiris and underpinned an expanded production rate which enhances economic returns compared to the previous, 2021, assessment. We look forward to the Final Investment Decision on Tiris later this year.

*SP Angel acts as Nomad and Broker to Aura Energy

Central Asia Metals (CAML LN) 238p, Mkt Cap £457m – 2022 dividend maintained at 20p/sh

  • Central Asia Metals reports a 2022 profit of US$33.8m (2021 – US$84.2m) and EBITDA of US$131.6m (2021 – US$141.5m)
  • The company is declaring a final dividend of 10p/share bring the distribution for the full year to 20p/share (2021 – 20p/share) representing “47% of 2022 free cash flow  (2021: 45%) in line with stated dividend policy”.
  • Gross revenues for the year were US$232.2m (2021 – US$235.2m) reflecting the production of 14,254t of copper from Kounrad at a cash cost of US$0.65/lb and 21,743t of zinc in concentrate at a cost of US$0.78/lb from Sasa.
  • The company says that Kounrad where the operation “continued to perform well … [and] … we enjoyed celebrating 10 years of copper production” output exceeded the company’s upwardly revised guidance range of 13,500-14,500t.
  • The company comments that the costs at Sasa reflect “elevated electricity costs incurred during H2 2022” while costs at Kounrad “remained very low by global standards at $0.65 per pound, despite inflationary pressures”.
  • Central Asia Metals also confirms that “In August, we made our final repayment of the $187 million debt which we secured to acquire Sasa less than five years before. CAML ended 2022 with cash in the bank of $60.6 million”.
  • Looking at expectations for 2023, the company’s guidance is for Kourad to produce between 13-14,000t of copper and for Sasa to produce 27-29,000t of zinc in concentrate.
  • Capital expenditure during 2023 is expected to be “between $28 million and $30 million, of which between $11 million and $13 million is expected to be committed to sustaining capex. Total expected 2023 capex also includes approximately $5 million related to the Kounrad solar power plant. CAML expects Cut and Fill Project capital expenditure in the order of $12 million in 2023”.

Horizonte Minerals (HZM LN) 138.5p, Mkt Cap £374m – 2022 reports highlights progress towards early 2024 production at the Araguaia ferronickel project

  • In its 2022 results Horizonte Minerals reports on the progress of its Araguaia ferronickel project in Brazil where, following the successful conclusion of US$633m of debt and equity financing, construction formally started in May 2022.
  • In its accounts, the company reports a pre and post-tax loss of US$5.3m in 2022 (2021 – loss of US$13.4m) and a year end cash balance of US$154m.
  • The company confirms that it has placed all of the “key material contracts at Araguaia, with first production on track for Q1 2024”.
  • Commenting on the year, CEO, Jeremy Martin also highlighted the importance of the various contracts and said that “the most critical of these contracts, is the low-cost power contract. Electrical energy makes up approximately a third of our operating costs at Araguaia, so having a power contract with renewable sourcing, at the extremely competitive pricing that we were able to lock in, means that Araguaia will be operating in the lowest quartile of the cost curve for at least the ten-year duration of the initial contract life”.
  • He confirmed that 2023’s “primary focus will be on delivering Araguaia on-time, on-budget and safely. We are targeting cold commissioning towards the end of 2023 with hot commissioning and subsequent first nickel in 1Q 2024”.
  • Mr. Martin also commented on the company’s project at Vermelho, also in Brazil, which he described as “an excellent opportunity to develop a low-cost supply of nickel and cobalt to meet the fast-growing demand due to global efforts to transition to net zero emissions” and where a contract to deliver a feasibility study was awarded in October 2022 and which he described as “a major milestone in advancing the project through to a funding decision”.

Conclusion: Investors will no doubt welcome confirmation that the Araguaia project remains on course for cold commissioning later this year ahead of initial nickel production early in 2024.  We expect that there will be regular news as development progresses at Araguaia and the Vermelho feasibility study advances.

Shanta Gold (SHG LN) 12.4p, Mkt cap £130m – 2022 sales climb on a recovery in NLGM production with further growth expected following the Singida commissioning

  • Revenue totalled $114m (2021: $104m), up 10% driven by higher gold sales of 63.7koz (2021: 57.5koz).
  • Realised gold price averaged $1,791/oz (2021: $1,801/oz).
  • Production was up 18%yoy at 65.2koz (2021: 55.3koz), slightly below the lower end of the guided 68-76koz range.
  • Stronger production was driven by higher plant throughput and grades at the NLGM operation.
  • Mining operations are reported to have been held back in H2/22 by equipment availability issues that were now rectified as the second contractor was engaged for surface NLGM operations as well as an extra Sandvik underground production drill rig was commissioned in Dec/22.
  • AISC came down to $1,271/oz (2021: $1,439/oz) reflecting stronger production during the period.
  • EBITDA and EBIT amounted to $23m and $6m, respectively (2021: $21m and $5m).
  • FCF totalled -$26m (2021: -$14m) on the back of Singida Gold Project development spend and ongoing exploration at West Kenya.
  • Closing cash balance stood at $3.8m with net debt at $23.6m 2021: $13.2m and $6.9m net cash).
  • Final dividend is proposed at 0.1p, in line with 2021, equivalent to ~$1.3m payment or ~1.6% yield when 0.1p interim dividend is taken into account.
  • 2023 NLGM guidance is for 66-72koz at $1,200-1,300/oz with Singida expected to contribute extra ounces on top of that.
  • Singida development is almost complete with the team expecting commissioning announcement this month (Mar/23).
  • Singida production guidance will be released following the start of commercial production (previously, the LOM plan guided for ~32kozpa).

Conclusion: Results reflect stronger gold production in 2022 with cash flow constrained reflecting capital intensive period with Singida nearing commissioning. 2023 is expected to improve with contribution from new output from Singida.

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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