SP Angel Morning View -Today’s Market View, Wednesday 2nd August 2023

Uranium prices jump higher as Niger coup leader threatens French uranium supply

MiFID II exempt information – see disclaimer below

American West Metals (AW1 AU) – Drilling of deeper geophysical targets at the Storm project provides validation of the geological and exploration model pending assay results

BeMetals* (BMET CN) – C$5.3m of continuing support from B2Gold for exploration in Japan and Zambia

Bushveld Minerals* (BMN LN) – BUY, Under Review – Operational challenges weigh on production with FY23 guidance revised lower

Celsius Resources* (CLA LN) – Progress of the offer from Silvercorp Metals in Canada

Empire Metals* (EEE LN) – Pitfield gravity survey supports drill programme progression

Endeavour Mining (EDV LN) – Q2 production results show full year guidance intact and exploration ramp up in Cote D’Ivoire

Ferrexpo – (FXPO LN) – Interim results show improving costs and sales volumes

GreenRoc Mining* (GROC LN) – Placing to raise £470,000 at 3.8p

VOX Markets:  

31/07/2023: https://audioboom.com/posts/8341813-john-meyer-on-lab-grown-diamonds-bushveld-minerals-power-metals-res-wh-ireland

24/07/2023: https://audioboom.com/posts/8338437-john-meyer-on-improved-liquidity-plus-cornish-metals-beowulf-rainbow-rare-earths-solgold-sove

*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts. We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.

Lithium – Rio Tinto CEO says ‘wouldn’t mind’ having a Canadian lithium project

• Rio Tinto is on the hunt for more lithium following their deal with Aterian plc yesterday
• Under the Aterian deal Rio Tinto has the option to invest $7.5m to earn up to 75% on a series of 19 identified pegmatite zones in Rwanda
• Rio Tinto bought Rincon Lithium in March 2022 for $825m
• Rio recently raised Rincon’s capex est. to $335m from $140m for the Rincon ‘starter plant’ from which they hope to learn and make design improvements before committing to a full-scale project.

Uranium prices continue upwards momentum as Niger coup supports supply concerns

Press reports indicate the coup leader in Niger has threatened to cut exports of uranium and gold to France

• Niger is the EU’s second largest supplier of natural uranium representing some 4% of global U3O8 product and 25% of EU exports.
• Russia is said to control 40% of the world market for nuclear fuel
• Cutting France and potentially the West off from further uranium supplies will send U3O8 prices higher.
• We expect uranium prices to rise as nuclear power stations look to boost inventory levels
• Uranium prices have been ticking higher on concerns the military coup in Niger could limit supply availability.
• Prices sit at around $56/lb, these sat at a low of $48/lb in December 2022.
• Uranium mine operator Orano has continued production, with most production sold over long-term contracts.
• EU nuclear agency does not see an immediate risk to European nuclear production in Europe if Niger cut deliveries.

Copper prices fall as stimulus enthusiasm wanes and China downstream demand weakens

• Copper prices on LME have slid back to $8,565/t following a major move higher on Monday over $8,800/t.
• There has been much optimism over Chinese stimulus measures lifting the property sector, however traders seem to be losing patience.
• Chinese demand indicators are failing to pick up, with a combination of spot TC-RC charges, physical premiums, forward spreads, inventories, scrap discounts, processing rates and import arbitrage premiums highlighting weak domestic demand.
• Smelter operating rates are sliding alongside rod operating rates, cable and wire production rates and copper tube rates.
• Smelter maintenance periods are seemingly on the rise too, suggesting refined demand is limited and operators are taking the opportunity to execute repair work.
• China futures sit in contango, an additional sign domestic demand remains weak.
• China copper cathode exports have fallen 12% ytd,
• Inventory levels are low, suggesting a tight markets, however, analysts suggest off-exchange inventories are buoyant in China’s State Reserve Bureau.
• US factory activity contracted for the 9^th month, whilst China’s home sales have fallen 33% yoy, with neither screaming imminent bull run for copper.
• The market will remain choppy until some concrete China policy guidelines are announced.

Iron ore extends losses as China property market continues to unravel

• Iron ore prices have fallen to $106/t, down from $115/t last week.
• Data today showed value of new home sales from top 100 developers sliding 33% in July yoy, the highest decline in 12 months.
• State council calling on local governments to ramp up support.
• Property accounts for 30% of steel demand in China.
• Flooding in Hebei in steel mills are also adding to concerns of steel mill demand.

Economics

US – Fitch downgraded the US sovereign debt rating to AA+ from AAA citing weakening fiscal position over the next three years and continuing down0-the-wire debt ceiling negotiations, Reuters reports.

• The agency first flagged chances of a downgrade in May and maintained its stance in June after the debt ceiling negotiations resulted in a deal.
• 10-year yields ticked higher following the announcement yesterday.
• JOLTS job openings fell to 9.58m in June vs 9.82m in May.
• JOLTS job quits 3.772m vs4.015m

China – Country Garden surprised markets with a share repurchase plan announcement after cancelling a $300m share placement the day earlier.

• The Company said it will buyback 10% of its shares in an effort to restore confidence following an earlier sell off in stock.

Japan – Unemployment fell to 2.5% in June vs 2.6% in May

Indonesia – Inflation rose 0.2% in July vs 0.1% in June and 3.1% yoy in July vs 3.5 in June

EU – Unemployment steady at 6.4% in June .

Germany – Unemployment 7.4% in July vs 7.5% in June

UK – BoE set to raise rates by 0.25% to 5.25% tomorrow

• We are concerned the BoE may try to maintain the value of Sterling against the US dollar in preference to looking after local mortgage holders.
• While holding the value Sterling helps to limit the impact of imported inflation it effectively locks the BoE into following Fed rates higher.
• UK inflation is pulling back with supermarkets and many other retailers pulling prices back in reaction to consumer concerns and the cost of living crisis.
• Petrol and diesel prices are also falling at the pumps with the Auto Trader showing sharp falls this year in the value of used car stock across the market.
• The Manheim auto index shows US used car prices falling.
• UK electricity prices are also pulling back with Octopus now offering 28.4-30.3p/kWh to consumers on its fixed and flexible rates, which is allot better than the punitive 47.3p charged by Scottish Power in my last bill.

South Korean – Exports fall 16.5% yoy in July vs -6% in June led by a 34% collapse in semiconductor exports

• Imports also fell 25.4% yoy vs 11.7%

Russia/Ukraine – Russian drones attacked port facilities and a grain silo in southern Odesa region as Russia aims to undermine Ukraine’s capacity to export its grain.

• Wheat futures jumped 4% early Wednesday on news of further drone strikes on port facilities in Ukraine.
• In Kyiv, more than 10 drones have been shot down, FT cites military information sources.

Australia – RBA leaves interest rates unchanged at 4.1%

Currencies

US$1.0988/eur vs 1.0977/eur yesterday. Yen 142.71/$ vs 142.63/$. SAr 18.403/$ vs 17.929/$. $1.277/gbp vs $1.283/gbp. 0.657/aud vs 0.665/aud. CNY 7.184/$ vs 7.165/$

Dollar Index 102.17 vs 102.10 yesterday.

Commodity News

Precious metals:

Gold US$1,949/oz vs US$1,957/oz yesterday

Gold ETFs 91.3moz vs US$91.4moz yesterday

Platinum US$930/oz vs US$948/oz yesterday

Palladium US$1,239/oz vs US$1,276/oz yesterday

Silver US$24.30/oz vs US$24.56/oz yesterday

Rhodium US$4,100/oz vs US$4,100/oz yesterday

Base metals:

Copper US$ 8,609/t vs US$8,800/t yesterday

Aluminium US$ 2,237/t vs US$2,273/t yesterday

Nickel US$ 22,200/t vs US$22,420/t yesterday

Zinc US$ 2,526/t vs US$2,569/t yesterday

Lead US$ 2,138/t vs US$2,157/t yesterday

Tin US$ 27,555/t vs US$27,805/t yesterday

Energy:           

Oil US$85.7/bbl vs US$85.2/bbl yesterday

• Crude oil prices remain above $85/bbl after the API reported a massive 15.4mb draw in US crude oil and fuel stocks, which was significantly above expectations and has focussed attention on today’s EIA numbers.
• Valaris announced plans to reactivate the Company’s DS-7 drillship after it secured a $364m 12-well contract offshore West Africa for drillship that is expected to start in 2Q24 and has an estimated duration of 850 days.

Natural Gas US$2.565/mmbtu vs US$2.660/mmbtu yesterday

Uranium UXC US$56.15/lb vs US$56.15/lb last week

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$106.0/t vs US$107.9/t

Chinese steel rebar 25mm US$535.2/t vs US$536.3/t

Thermal coal (1st year forward cif ARA) US$120.0/t vs US$119.5/t

Thermal coal swap Australia FOB US$137.5/t vs US$140.5/t

Coking coal swap Australia FOB US$236.0/t vs US$236.0/t

Other:  

Cobalt LME 3m US$33,420/t vs US$33,420/t

NdPr Rare Earth Oxide (China) US$65,435/t vs US$65,595/t

Lithium carbonate 99% (China) US$35,850/t vs US$35,938/t

China Spodumene Li2O 6%min CIF US$3,710/t vs US$3,710/t

Ferro-Manganese European Mn78% min US$1,060/t vs US$1,070/t

China Tungsten APT 88.5% FOB US$310/mtu vs US$310/mtu

China Graphite Flake -194 FOB US$675/t vs US$675/t

Europe Vanadium Pentoxide 98% 7.6/lb vs US$7.6/lb

Europe Ferro-Vanadium 80% 31.85/kg vs US$31.85/kg

China Ilmenite Concentrate TiO2 US$313/t vs US$311/t

Spot CO2 Emissions EUA Price US$93.5/t vs US$93.4/t

Brazil Potash CFR Granular Spot US$345.0/t vs US$345.0/t

Battery News

£750m 1GW Li-ion Battery Storage System to be built in Greater Manchester

• Carlton Power, a UK independent energy infrastructure development company, has secured planning permission for a 1GW (2080MWh) battery energy storage system (BESS) project located at the Trafford Low Carbon Energy Park in Greater Manchester.
• Construction of the battery storage scheme is expected to begin in Q1 ‘24 with it entering commercial operation in the final quarter of 2025.
• Trafford Energy Park is being developed as a multi-stage energy development to support Manchester and the Northeast. Projects include:
  • Trafford BESS – 1GW Li-ion Battery Energy Storage Project
  • Green Hydrogen Project – Carlton’s 200MW Trafford Green Hydrogen scheme; the scheme’s first phase (15-20MW) is also set to enter commercial operation in Q4 ‘25.
  • a Cryobattery, Liquid Air Energy Storage (LAES) project – Highview Power Storage Inc. is planning to build and operate the world’s first commercial liquid air storage system – a £250m, 250MWh long duration, cryogenic energy storage system.

European battery maker ACC exploring North American battery plant

• French-based Automotive Cells Co (ACC) is in early talks with officials in Canada and the United States on setting up a battery manufacturing plant in North America. (Reuters)
• ACC is a joint venture between Stellantis, Total Energies and Mercedes-Benz Group.
• ACC, which was launched in 2020, has announced EV battery plants in Germany, France and Italy with €7b of investment.
• Last month, Stellantis resolved a dispute with the Canadian government over subsidies to build an EV plant with its South Korean LG Energy Solution , under which the project could receive incentives up to C$15b.
• Global automaker and EV battery manufacturers are eying the North American market for new manufacturing plants, as Canadian and the US governments roll out incentives to manufacturers, to lower their reliance on China for critical minerals.

Company News

American West Metals (AW1 AU) A$0.245, Mkt Cap A$81m – Drilling of deeper geophysical targets at the Storm project provides validation of the geological and exploration model pending assay results

• In a release to the ASX, American West Metals has published drilling results from the first two deep holes investigating geophysical gravity anomalies beneath the 4100N  copper zone at the Storm copper project on Somerset Island in northern Canada.
• Diamond drill holes ST23-01 and ST23-02, located 680m apart within a 5km x 1km gravity anomaly, both intersected what the announcement describes as “thick intervals of visual copper sulphides … [including the minerals chalcocite and chalcopyrite, which the company says] … suggests that drilling has potentially identified a very large copper deposit”.
• The “Diamond drilling continues on high-priority copper targets with first assays expected in the next 4 weeks [but while cautioning that] … Visual estimates of mineral abundance should never be considered a proxy or substitute for laboratory analyses” today’s announcement reports:
  • An overall total of 45.5m of visual sulphide copper mineralisation in hole ST23-01 with “30.5m of breccia-style visual copper sulphide (dominantly chalcocite) within three zones associated with the shallow copper mineralisation of the 4100N Zone between 45m and 86m downhole, and … [a deeper zone comprising] … 15m of visual breccia and vein-style copper sulphide (dominantly chalcopyrite) between 332m and 347m downhole – the first discovery intersection”; and
  • A 37m wide intersection of “visual breccia-style copper sulphide (dominantly chalcocite) between 333m and 370m downhole” in hole ST23-02.
• Hole ST23-01 “was designed to test the northern extent of the high-grade 4100N Zone, and to test the large gravity anomaly at depth, below the near-surface copper mineralisation”.
• Mineralisation in Hole ST23-02 “is hosted within bioturbated mudstones within a broader interval of fossiliferous carbonates. The geology and mineralisation are very similar to drill holes ST23-01 and ST22-10, and located at a similar depth … The presence of chalcocite suggests that drill hole ST23-02 is potentially vectoring to the higher-grade portions of the copper system”.
• Photographs of drill core published in the announcement www.americanwestmetals.com/site/pdf/e8eecfc4-02f0-4fa5-8d45-59ceec4c9344/Major-Copper-Discovery-Confirmed-at-Storm.pdf show “Chalcopyrite (brassy) in vugs and veinlets in drill hole ST23-01 from approximately 342m downhole … [and] … chalcocite (dark grey) breccia fill and veining in drill hole ST23-02 from approximately 358.2m downhole”.
• Commenting on the results of the first two drillholes investigating the deeper level geophysical anomaly, Managing Director, Dave O’Neill, explained that they “have discovered a new copper deposit below the near-surface mineralisation with both holes intersecting thick intervals of copper sulphide at the same stratigraphic horizon”.
• He also confirmed that reverse-circulation (RC) “drilling on the high-grade near surface deposits is also advancing rapidly, and we plan to give an update on the 2750N and 2200N Zone results shortly”.
• Outlining the geological potential, the announcement says that “The Storm area shows clear similarities to many of the world’s major sediment-hosted copper systems, including the deposits of the Kalahari Copper Belt (Botswana) and Central African Copper Belt (DRC, Zambia) … [and describes the stratigraphy of the mineralised system as] … laterally very extensive. The geometry of the host package is interpreted to be relatively flat-lying and predictable, with thick sequences of altered sediments comprised of dolomudstone and carbonate rocks”.
• A third diamond drill hole is “underway … approximately 1.7km south of ST23-02, and 1km west of the high-grade 2750N Zone. The hole is testing a large gravity anomaly and EM conductor in an area with limited previous drilling”.
• Continuing RC drilling on the 2750N and 2200N zones is expected to deliver results “shortly” while drilling to expand the 4100N Zone is expected to deliver initial assay results “in the next 2-3 weeks”.
• Further metallurgical and environmental baseline work is underway.

Conclusion: Initial results from the first two holes testing deeper geophysical anomalies at the Storm Project appear to confirm the exploration concept and geological model. We look forward to the assay results from the initial deeper drilling to provide insight into the grade characteristics of the mineralisation encountered.

*SP Angel has previously raised funds for Aston Bay Minerals

BeMetals* (BMET CN) – C$0.19, Mkt cap C$33.7m – C$5.3m of continuing support from B2Gold for exploration in Japan and Zambia

• In an announcement to the Canadian market yesterday, BeMetals reported that its principal shareholder, B2Gold, has invested up to C$5.3m via a C$3.3m convertible debenture and a commitment to invest an additional C$2m.
• The debenture, which will pay 7%, matures in five years is convertible into shares at a price of C$0.25/share at the option of B2Gold “at any time on or before the maturity date”.
• “The acquisition of the Debenture by B2Gold, which currently owns 18.8% of the common shares of BeMetals, will result in B2Gold owning greater than 20% of the Company on a partially diluted basis. Therefore prior to closing of the Offering, approval by BeMetals’ shareholders will be sought for B2Gold to become a control person of the Company. The Company’s annual and special meeting of shareholders has been set for September 6, 2023”.
• The additional funds “will be used for continued exploration of the Company’s portfolio of gold projects in Japan and its copper project in Zambia”.
• Welcoming the continuing support of the principal shareholder, President and CEO, John Wilton, explained that “Later this month we plan to commence our first drilling operations at the Todoroki Gold-Silver Project in Japan. In addition, aircore drilling at the Pangeni Copper Project is well underway and follow-up core drilling is planned in the second half of 2023”.
• The announcement explains that “Due to the timing for completing a shareholder meeting prior to closing of the Offering, B2Gold has agreed to advance an initial C$1.75 million by way of an unsecured bridge loan to the Company which will bear interest at a rate of 7% per annum (the “Bridge Loan”). The Bridge Loan will have a term of six months and is repayable by BeMetals at any time in cash”.

Conclusion: BeMetals continues to have the backing of B2Gold as advances its exploration programmes in Japan and in Zambia. We await results from the programmes with interest.

*SP Angel has acted as broker to BE Metals

Bushveld Minerals* (BMN LN) 2.5p, Mkt Cap £32m – Operational challenges weigh on production with FY23 guidance revised lower

BUY – Under Review

• Q2/23 production came in at 840mtV (-11%qoq and +26%yoy) taking production for the first six months to 1,784mtV (+9%yoy)
• Q2/23 sales amounted to 1,068mtV with H1/23 sales at 2,096mtV helping the Group to destock in a sign of previous logistical challenges abating.
• Quarterly C1 cash costs climbed to $27.5/kgV (ZAR511), up 6%qoq and 11%qoq in USD and ZAR terms, reflecting lower production as well as higher raw materials and maintenance costs.
• Depreciation in the SA rand during the period to 18.7 from 17.8 helped contain inflationary pressures in US$ terms.
• At Vametco, Q2/23, production was 485mtV (-29%qoq and +2%yoy) with C1 cash costs at $27.5/kgV (ZAR514).
• H1/23 production was 1,167mtV (-5%yoy) with C1 cash costs at $24.7/kgV (ZAR450).
• Production pulled back due to unplanned maintenance at the Sulphate Recovery Plant, dust collectors and the refinery as well as power supply issues following a transformer failure at the local municipality in June.
• Additionally, heavy rainfall during the period required a plant stoppage due to barren dam level constraints.
• At Vanchem, Q2/23 production was 355mtV (+36%qoq and +86%yoy) with C1 cash costs at $27.2/kgV (ZAR507)
• H1/23 production was 617mtV (+49%yoy) with C1 cash costs at $30.1/kgV (ZAR548).
• Production growth was driven better performance at the commissioned last year Kiln-3, although, output came in behind inhouse estimates.
• Weaker than anticipated production was driven by unplanned plant breakdowns and unscheduled power disruptions as well as a delay in the use of better quality third party ore with first batch processed in July as opposed to previous plans for April.
• BELCO electrolyte manufacturing plant construction was completed with hot commissioning in progress in H2/23 and first production to commence once suitable off-takers for the product are secured.
• On Orion refinancing discussions, the Company will provide details of a general meeting for shareholders regarding the approval of the Orion transaction following the completion of the legal documentation and once the SA Reserve Bank approval is secured.
• FY23 guidance downgraded to 3.7-3.9ktV at $26.6-26.9/kg (ZAR481-487) C1 cash cost compared to 4.2-4.5ktV at $26.1-27.0/kgV (ZAR447-438) targeted previously.
• FY23 Vametco guidance revised to 2.3-2.4ktV at $25.6-25.9/lkgV (ZAR463-469) compared to 2.7ktV at $23.6-24./kgV (ZAR396-402), previously.
• FY23 Vanchem guidance changed to 1.4-1.5ktV at $28.1-28.5/kgV (ZAR509-516) compared to 1.5-1.8ktV at 29.7-30.8/kgV (ZAR498-517), previously.
• The downgrade is largely driven by challenges encountered at Vametco including capacity constraints at the barren dam and the Sulphate Recovery Plant as well as a delay in processing of better quality third party ore at Vanchem.
• The team highlighted a number of initiatives to implement at Vanchem to ramp up production to sustainable ~180mtV per month run rates during the next six months.
• Vanadium prices pulled back with the team prioritising sales into the higher value markets (aerospace application, specialty alloy and chemicals).
• Ryan’s Note (US) quarterly vanadium price of $40.2/kgV (Q1/23: $42.5).
• London Metal Bulletin (EU) quarterly vanadium price of $33.5/kgV (Q1/23: $39.4).
• Asian Metals (China) quarterly vanadium price of $29.3//kgV (Q1/23: $37.8).

Conclusion: Production pulled back largely driven by unplanned maintenance, supply disruptions and heavy rainfall leading to dam capacity issues at Vametco. Output at Vanchem climbed on better performance at the commissioned Kiln 3, although, the run rate came in lower than expected due to unplanned plant breakdowns, power supply challenges as well as a delay in processing of low silica third party ore. Lower group production along with costs inflation translated into higher unit costs, although, depreciation in the national currency during the quarter helped to negate some of those negative effects. To reflect operation challenges, the Company downgraded annual production and cash costs guidance.

On a positive front, the Company continued to destock during the quarter in a sign of previous logistical challenges abating. The team also identified a number of initiatives at Vanchem to ramp up production.

to sustainable ~180mtV (ie 2.2ktV pa) run rates over the next six months.

*SP Angel act as nomad and broker to Bushveld

Celsius Resources* (CLA LN) 1.35p, Mkt Cap £33.7m – Progress of the offer from Silvercorp Metals in Canada

(Celsius has agreed to sell a 30% economic ownership of MCB copper mine for US$43m implying a valuation of >$143m on consummation of the deal)

Click Link for SP Angel research report PDF note – MCB project NPV@8% US$463m, IRR of 34.3%

• Celsius Resources has provided a progress report on its proposed acquisition by Silvercorp Metals which was announced in May.
• Celsius Resources is progressing development of its MCB Copper Gold Project in the Philippines where a December 2021 Scoping Study envisaged the US$253m development of a 314mt JORC compliant resource averaging 0.48% copper and 0.15g/t gold at the MCB project generating an after-tax NPV of US$464m over a 25-year mine life processing 2.28mtpa of ore from underground mining.
• In today’s announcement, the company confirms that, although the “period of exclusivity under the term sheet has now expired … [it] … remains committed to advancing the discussions with Silvercorp with a view to executing binding agreements which are in the best interests of Celsius shareholders as a whole”.
• Today’s announcement confirms that “negotiations with regards to the legally binding agreements … [have been] … substantially completed”.
• Celsius Resources says that “following initial feedback received … from its shareholders, the Company has sought to advance discussions with Silvercorp regarding a number of key commercial aspects of the transaction”.
• The original term sheet “contemplated an inter-conditional spin-out of the combined Sagay (Philippines) and Opuwo Cobalt (Namibia) projects” and it may be possible to speculate that the shareholder representations relate, in part, to the fate of the Sagay and Opuwo projects.
• We also observe that since Silvercorp’s offer in May, Celsius Resources has secured the approval of the Philippines authorities for its Environmental Protection and Enhancement Program at the MCB Project as well as additional exploration licences in the area; progress which may colour shareholders’ value expectations.

Conclusion: Legal agreements for Silvercorp’s proposed acquisition of Celsius Resources are now substantially complete and with management affirming its commitment to advancing discussions with Silvercorp. We await further news with interest.

*SP Angel acts as broker to Celsius Resources.

Empire Metals* (EEE LN) 4.65p, Mkt Cap £23m – Pitfield gravity survey supports drill programme progression

(Empire holds a 70% interest in the Pitfield prospect 313km north of Perth, WA)

• Empire Metals report the completion of an Airborne Gravity Survey at the Pitfield Project in Western Australia.
• Management plan to use the data to build a detailed geological model of the Yandanooka Basin which hosts the Pitfield titanium-haematite discovery.
• Pitfield has already been shown to host a 40km magnetic anomaly which appears to coincide with extensively altered and mineralised sedimentary beds.
• The basin appears to host discrete high-density bodies which may comprise iron-titanium mineralisation and/or hematitic iron oxides which may be associated with copper mineralisation.
• Petrographic studies show ilmenite TiO2 in recovered mineralisation.
• Gravity data combined with magnetic and other survey results will be used for placing drill targets to test the quality and extent of the titanium anomaly.
• The team will use diamond core and RC ‘reverse circulation’ with RC used to test for scale and diamond core used to check mineralogy, grade and geological controls on the thicker, higher-grade mineralisation.
• The plan is to drill 21 RC holes for 3,206m with the first 18 holes focused near the old Mt Scratch workings to the north and the final three holes spread evenly across a 30km distance to the south.
• Detailed airborne magnetics and airborne electromagnetics surveys done last September confirmed a massive alteration footprint within host sedimentary rocks coincident with a gravity anomaly.
• The new, detailed magnetic and electromagnetic anomalies give more detail of the 8km x 40km geophysical anomaly and will help with drill targeting.
• The gravity survey should help identify high-density zones of thick iron-titanium oxide-rich mineralised beds or large zones of hematitic iron oxides which may be associated with copper mineralisation.
• The Pitfield titanium mineral discovery to be hosted within a large-scale stratabound sedimentary deposit on the Western edge of the Yandanooka Basin and may host titanium with hematite along with smaller quantities of rutile, leucoxxne and other titanium oxide minerals. Hemo-ilmenite is currently processed by Rio Tinto RTIT Quebec.
• Pitfield may be part of a new class of titanium in stratabound sedimentary rock.
• Sheffield Resources (SFX AU) has defined a titanium mineral sands resource on its Eneabba project incorporating mineral sands from its Yandanooka project just a few kilometres west of Empire’s Pitfield tenements.

Conclusion:  Empire continue to rapidly progress their discovery of a sizeable ilmenite deposit at the Pitfield. The primary goal of the gravity survey programme, which was flown in the middle of July over the entire anomaly, is to gain a more complete understanding of the subsurface rock density at a higher resolution. The programme should support drill target selection, with the next programme set to include both diamond core and RC drilling over ‘the entire length of the magnetics anomaly.’ Management state this is fully funded.  

*SP Angel acts as nomad and broker to Empire Metals

Endeavour Mining (EDV LN) 1,691p Mkt Cap £4.55bn – Q2 production results show full year guidance intact and exploration ramp up in Cote D’Ivoire

• Endeavour reports Q2 production results.
• Gold production rose from 243koz in Q1 to 268koz. Down from 292koz same period 2022.
• AISC stood at $1,000/oz for the period vs $955/oz Q1 and $866/oz same period last year.
• Adj EBITDA rose from $240m in Q1 to $253m in Q2 but down from $295m same period last year.
• $51m spent on exploration in the period.
• Endeavour sold the Boungou and Wahgnion mines during the period ($300m total consideration) and is focusing on enhancing brownfield expansion at Sabodala-Massawa and Ladfigue (greenfield).
• On track to meet full year guidance with ramp up in production in H2 – total guidance of 1,060-1,135koz.
• AISC guidance ont rack of $978/oz
• Increasing drill programme to 180km at Yanda-Iguela in Cote d’Ivoire.

Ferrexpo – (FXPO LN) 90, Mkt cap £544m – Interim results show improving costs and sales volumes

• Ukrainian high-grade iron ore producer Ferrexpo report interim results for the year.
• Pellet production for the period rose 57% vs 2H22 to 1,967kt but fell 59% vs the same period last year.
• Sales volume increased 15% to 2,085kt vs 2H22 but remain 52% lower than the same period last year.
• Revenue rose 17% vs 2H22 on the back of higher realised iron ore fines prices and the increase in production, climbing to $334m but down 64% vs same period last year.
• The Company is focusing on ramping up higher-grade iron ore production, to feed the European market.
• Cash cost of production fell to $71/t on a combination of hryvnia currency devaluation, lower input material costs and cost saving initiatives.
• Freight rates fell 26% yoy.
• Cash balance rose 19% to $135m.
• The Company remains constrained with only one-to-two pelletiser lines of four despite a full workforce.
• Management states plans to hold off on long-term CAPEX investment in case of an extension of the conflict.
• Ferrexpo’s principal loading port, the Port of Pivdennyi, remains disrupted as the conflict affects trade routes in the Black Sea, with alternative sources weighing on costs.

GreenRoc Mining* (GROC LN) 3.84p, Mkt Cap £5.7m – Placing to raise £470,000 at 3.8p

• GreenRoc Mining report the raising of £470,000 at 3.8p/s.
• Alba Mineral supported the placing buying 3m new shares worth 115,000. Alba now hold 63m shares or 42.97% of GreenRoc following the placing.
• Proceeds will be used towards:
  • PEA for Amitsoq project
  • Laboratory preparation of different graphite product samples
  • EIA and SIA studies
  • Process test work in new REFLUXTM float cells developed by FLSmidth consortium
  • Offtake and finance negotiations
  • General working capital requirements.
• GreenRoc have also supplied a 200kg sample of Amitsoq graphite ore for test runs using FLSmidth’s new REFLUXTM cells which are shown to vastly improve recovery rates.
• The REFLUXTM cells are also said to reducing residence time, power and water usage alongside capital and running costs and space needs for several different ore types.
• Positive results from this test will be very helpful in delineating the right processing technique at Amitsoq.
• GreenRoc Mining report significant progress at their Amitsoq graphite mine in the south of Greenland in Europe.
• ProGraphite is concentrating a 700kg bulk sample of Amitsoq graphite material for testing along with the preparation of spheronised graphite samples at UVF-FIA in Germany.
• PEA parameters:
  • 400,000t of ore output for
  • ~80,000t of graphite concentrate
• Amitsoq: JORC Inferred Mineral Resource to be 23.05mt grading 20.41% Gc ‘Graphitic Carbon’ with a total graphite content of 4.71mt including:
  • 1.26mt of Measured Resource,
  • 6.12mt Indicated Resource from 2.04mt – a 200% increase over the 2022 MRE,
  • 15.67mt Inferred Resource from 6.24mt to – a c.150% increase over the 2022 MRE,
  • Total: 23.05mt grading 20.41% GC at a cut-off grade of 0% Gc.
• The LGL ‘Lower Graphite Layer’ contains some 16.88mt, @ 21.51% for 3.634mt of contained graphite representing >77% of the total resource with the rest in the UGL ‘Upper Graphite Layer’.

Conclusion:  GreenRoc continue to make progress towards the financing and reopening of the Amitsoq graphite mine in the south of Greenland. We look forward to further news on results from the REFLUXTM test work, on offtake discussions and on the PEA.

*SP Angel acts as broker to GreenRoc Mining

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