SP Angel Morning View -Today’s Market View, Wednesday 5th March 2025

Metals rally as China looks to stockpile strategic commodities and dollar weakens

MiFID II exempt information – see disclaimer below

Apollo Minerals (AON AU) – Update on exploration programme following Capital Drilling placement

Great Southern Copper (GSCU LN) – £1.57m exploration funding for Cerro Negro

Guardian Metal Resources (GMET LN) – Research study highlights the scale of tungsten demand for nuclear fusion

Mkango Resources* (MKA LN) – Low carbon footprint confirmed for HyProMag USA recycled permanent magnets

Metals Exploration (MTL LN) – Acquisition of processing plant for La India

Oriole Resources* (ORR LN) – Positive Mbe drilling results from Cameroonian exploration programme

Snowline Gold (SGD CN) – Drilling results to support updated MRE and imitation of PEA

Sovereign Metals* (SVML LN) – Rehabilitation of Kasiya rutile and graphite mine test pit in Malawi

SQM (SQM US) – FY24 results

Metals rally as China looks to stockpile strategic commodities and dollar weakens

• Copper jumped 2% on the LME to $9,550/t and c.5% on CME to $4.78/lb.
• Zinc, aluminium and nickel all rallied too.
• The move followed reports China’s state planner will ‘move faster to fulfil the yearly task of stockpiling strategic goods as we work to expand the scale of reserves.’
• Analysts had previously estimated that China’s strategic reserves hold c.1.5-2mt of copper, 800k-900kt of aluminium and 250-400kt of zinc.

Tariff day – Trump threatens to double tariffs for any country which imposes retaliatory tariffs

• The cost of selling anything into the US from Canada (25%), Mexico (25%) and China (20%) goes up allot today.
• There must be many business owners and workers stressing about where else they will sell their products.
• We feel particularly sorry for many small businesses in Canada and Mexico which may be forced to close or take drastic action to find new markets.

Gold arbitrage trade cools as concerns over Trump bullion tariffs fade

• The cross-Atlantic gold price dislocation has faded as concerns over tight physical markets ease.
• The gap between COMEX and LBMA futures hit c.$60/oz in January amid rising concerns Trump would tariff gold.
• These fears have now faded, with the spread narrowing to c.$10/oz vs the normal difference of c.$2.
• COMEX gold stockpiles have hit their highest level in four years, cooling concerns over a short squeeze.

Iron ore weakens amid steel production cuts from China to curb oversupply

• Iron ore futures fell below $100/t in Singapore, whilst holding at $107/t in China.
• Focus is currently on the National People’s Congress, where pressure has been placed on steel mills to reduce production to ease pollution.
• The NPC set no specific targets on lower steel output, but a state-owned steelmaker’s Chair suggested that 150mt should be cut by 2030.
• Bloomberg Intelligence estimates that this equates to a cut of 240mt of iron ore (14% of the seaborne market.
• Meanwhile, tariff tensions between the China and the US continue, pushing policymakers in Beijing to pursue measures to support consumption.
• Mysteel expects improving steel demand from end users, whilst additional steelmakers have been ordered to cut output in China’s steel hub Tangshan.
• Steel inventories across Chinese traders rose 0.8%wow to hit 21.7mt, a nine-month high.

Tin ($31,579/t) prices hold firm following sell-off on reports of return of Man Maw operation

• News from Myanmar suggests the authorities in the WA province are looking for proposals to restart mining at the Man Maw tin mine.
• Tin prices are holding above $30,000/t having sold off on reports of the major Myanmar tin mine Man Maw returning to production.
• The ITA confirmed reports that Wa State authorities have begun accepting applications for mining and processing licences at Man Maw.
• Man Maw’s suspension has seen Myanmar’s tin exports to China fall to 21,500t in 2H24 from 54,900t over the first half of the year and 94,600t same period last year. (Reuters)
• The mine produces around 33,000-34,000tpa of tin in concentrates representing around of 10% global production (370,100t in 2023)
• China raw material imports fell 36%yoy in 2024 as they struggled to replenish ore from the DRC, Australia and Bolivia.
• Supply from the operation isn’t expected to start flowing until 2H25, following dewatering and a remobilisation of workers.
• We note the Myanmar region remains volatile as does the Eastern DRC where the M23 and other rebel groups continue to gain ground in North Kivu province which hosts Alphamin’s Bisie tin mine.

China – Trump’s doubling of tariffs to 20% gives China the perfect excuse to withhold a range of critical minerals

• China is smart: they are moving to expand SRB reserves across a range of commodities.
• This will likely restrict the availability of critical metals to Western traders without need to explicit bans on their export.
• We suspect it won’t take long for US industry to start squealing and lobbying Trump to reverse the tariffs.
• China controls so much refined global supply that any restrictions on their availability should force the US back to the negotiating table.
• Grid expansion: China is also looking to fortify and expand its power grid which will require the use of more copper, steel, aluminium, vanadium + a few other critical metals
• EV’s: China is the world’s largest car producer and is also consuming more than 50% of all EV’s produced.
• Global EV sales were 17.4m in 2024 with China buying 11m vs North America at 1.9m and Europe at 3.2m
  • China is also ramping up the incorporation of electric busses to promote a cleaner environment along with better energy efficiency
• Inflation: The US cannot compete with China on cost for anything other than high-tech items.
  • The tariffs will therefore be highly inflationary with the cost of the tariff passed onto US consumers.
  • We suspect the cost of many Chinese goods will still undercut much that is made in America.
• China’s main exports to the US in 2024 (China customs data):
  • Electrical, electronic equipment $127bn inc.
    • Smartphones at representing 6.7% if imports from China at US$35bn of value
    • Portable computers $25bn
    • Li-ion batteries $15bn
  • Machinery, nuclear reactors, boilers $85bn
  • Toys, games, sports requisites $32bn
  • Plastics $22bn
  • Total Chinese exports to the US$ 157bn
• China’s NDRC ‘National Development and Reform Commission’ is looking to support China through lower potential sales into the US through:
  • Increasing domestic demand
  • Integrate technology and innovation into industry.
  • Etc…

Economics

US – Trump administration that imposed 25% tariffs on Mexico and Canada yesterday may announce a roadmap for tariff relief for goods covered by NAFTA as soon as today, Commerce Secretary Howard Lutnick said. (Bloomberg)

• Lutnick said that the tariffs may land “somewhere in the middle” with Trump “moving with the Canadians and Mexicans, but not all the way.”

China – The government increased its fiscal deficit target to CNY 5.7tn ($780bn) or ~4%, up from 3% in 2024 and marking the highest level since a major tax overhaul in 1994. (Bloomberg)

• That marks a revision to fiscal policy discipline with the government previously aiming for deficit to come in at no more than 3% and suggests authorities are willing to support ailing growth outlook.
• Authorities also released new GDP growth target of around 5%, in line with the previous year, despite challenges presented by escalating trade war with the US.
• Both targets came in line with markets expectations.
• The government will issue CNY 1.3tn of ultra long special sovereign bonds, more than CNY 1tn sold last year.
• Some CNY 300bn will fund a trade in programme that subsidises purchases of cars, appliances and home goods, double last year’s levels.

Germany – The nation will increase spending on defence and infrastructure stepping away from previously ultra conservative budget policy. (Bloomberg)

• Main parties agreed to launch a €500bn infrastructure fund to invest in priorities including transportation, energy grids and housing, chancellor in waiting Friedrich Merz said.
• Additionally, new parliament is expected to amend the constitution to exempt defence and security outlays from limits on fiscal spending.

Ukraine – President Zelensky said he is ready to negotiate a peace deal and ready to sign a minerals deal. (BBC)

• Some suggested that the deal may be announced during his address to Congress yesterday, although, it looks like the agreement is not to be finalised in due course.
• The decision came after the US paused all its military aid to Ukraine.

Currencies

US$1.0683/eur vs 1.0496/eur previous. Yen 149.53/$ vs 149.05/$. SAr 18.429/$ vs 18.618/$. $1.284/gbp vs $1.270/gbp. 0.627/aud vs 0.621/aud. CNY 7.258/$ vs 7.283/$

Dollar Index 106.501 vs 107.354 previous.

Precious metals:

Gold US$2,919/oz vs US$2,908/oz previous

Gold ETFs 85.8moz vs 85.8moz previous

Platinum US$972/oz vs US$955/oz previous

Palladium US$961/oz vs US$935/oz previous

Silver US$32.3/oz vs US$31.8/oz previous

Rhodium US$4,875/oz vs US$4,775/oz previous

Base metals:

Copper US$9,502/t vs US$9,364/t previous

Aluminium US$2,636/t vs US$2,604/t previous

Nickel US$16,100/t vs US$15,780/t previous

Zinc US$2,852/t vs US$2,816/t previous

Lead US$2,032/t vs US$1,989/t previous

Tin US$31,865/t vs US$31,675/t previous

Energy:

Oil US$70.9/bbl vs US$70.7/bbl previous

Henry Hub Gas US$4.23/mmBtu vs US$4.10/mmBtu yesterday

• Brent crude oil prices briefly dipped below $70/bbl yesterday on negative sentiment caused by US tariffs and higher OPEC+ output, as the API estimated a 1.5mb/d w/w draw to US crude inventories (0.3mb draw exp).
• European natural gas prices edged lower on warmer weather forecasts with France’s nuclear generation flat /w at 77% of the country’s 61.4GW maximum capacity.
• Saudi Aramco announced a revised target of 2.5mtpa of blue ammonia by 2030 (from 2027) due to the difficulty in securing offtake agreements with appropriate return, with the prior 2030 target of 11mtpa now dropped. The Company estimates the cost of blue hydrogen at $200/boe and green hydrogen at $400/boe.
• Vaalco Energy announced a refinancing with a new revolving credit facility with an initial commitment of $190m and the ability to grow to $300m through a $110m accordion at an initial rate of SOFR+6.5%.

Natural Gas €43.6/MWh vs €43.8/MWh previous

Uranium Futures $64.2/lb vs $65.0/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$106.9/t vs US$106.9/t

Chinese steel rebar 25mm US$486.2/t vs US$485.0/t

HCC FOB Australia US$185.5/t vs US$184.0/t

Thermal coal swap Australia FOB US$103.5/t vs US$103.5/t

Other:  

Cobalt LME 3m US$24,420/t vs US$24,215/t

NdPr Rare Earth Oxide (China) US$61,239/t vs US$61,042/t

Lithium carbonate 99% (China) US$9,919/t vs US$9,888/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$4.8/lb vs US$4.8/lb

Europe Ferro-Vanadium 80% US$23.6/kg vs US$23.8/kg

China Ilmenite Concentrate TiO2 US$300/t vs US$299/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$322.5/t vs US$322.5/t

Germanium China 99.99% US$2,825.0/kg vs US$2,775.0/kg

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

Battery News

UK reaches 75,000 EV charge point milestone

• As of the end of February, there are 75,675 public charge points in the UK.
• The total number of charge points installed is a 32% yoy increase compared to February 2024, when 57,290 devices were installed.
• 2024 saw a record rate of charge point installation with particularly strong growth in the ultra-rapid segment (150kW+), which has seen an increase of 74% in installations since the end of February 2024.

Automakers warn that new Trump tariffs will cause 25% rise in vehicle prices

• The Alliance for Automotive Innovation which represents all major automakers in the US, except Tesla, has warned that new tariffs on Mexico and Canada could see price of vehicles rise by up to 25%.
• North America has a well-integrated supply chain across the US, Canada and Mexico, that has been in place for 25 years.
• Some car parts can cross the borders up to six times before final assembly.
• Stellantis has warned that the new tariffs will add further “cost burden” to consumers as extra costs are passed on.

Company News

Apollo Minerals (AON AU) A$0.017, Mkt Cap A$13m – Update on exploration programme following Capital Drilling placement

• Apollo Minerals, who are exploring for gold in Gabon, provide an update on their ongoing exploration programme at Salanie.
• The Company is following up on Phase 1 drilling last year which identified gold mineralisation including 5.8m at 8.2g/t Au from 15.5m.
• Salanie lies within a 12km prospective greenstone belt.
• Phase 2 is currently ‘progressing well,’ with new shareholder Capital Drilling undertaking the programme and five holes now completed over 520m.
• Two holes have now been submitted for analysis.
• Drilling is currently targeting a high-grade historical pit, where mineralised grade quartz-vein structures have been identified.
• Drilling is expected to be completed in early April.

Great Southern Copper (GSCU LN) 4p, Mkt Cap £18.75m – £1.57m exploration funding for Cerro Negro

• Great Southern Copper reports that it has raised £1.57m (gross) to progress its Chilean exploration around the historic Mostaza mine at its Cerro Negro copper/gold/silver target within its Especularita project.
• The new funds comprise:
  • £1.044m via the issue of 36m shares at a price of 2.9p/share; and
  • £0.522m from a “convertible loan note from the existing majority shareholder Foreign Dimensions PTY Limited, convertible at 2.90p per ordinary share”
• The additional financial resources will “mainly be used to accelerate the drilling and exploration programme at Mostaza Mine, Cerro Negro, including the next phase of diamond drilling, commencement of metallurgical test work and payment of option and land holding costs”.
• Recent drilling around Mostaza, consisting of 9 diamond drill holes totalling 1,002.6m successfully intersected high sulphidation copper / silver mineralisation in all of the holes and initial assay results from the first of the holes showed an intersection of 20m at an average grade of 3.31% copper and ~270g/t silver from a depth of 27m and included 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.
• Assay results from the remaining eight holes of the Phase 1 drilling are “pending”.
• CEO, Sam Garrett, welcomed the additional financial support, including that of “our major shareholder” and said that it will allow Great Southern Copper to “advance what we believe has the potential to be a high grade high-value Cu-Au deposit”.
• Mr. Garrett confirmed that the early results from Cerro Negro “have garnered significant interest from a number of institutions, which is pleasing given the ongoing difficulties in the capital markets”.

Conclusion: Additional funds should facilitate continuing exploration at Cerro Negro including drilling and metallurgical test work.  We await the results from the remaining holes of the Phase 1 drilling and plans for the follow-up campaign with interest.

Guardian Metal Resources (GMET LN) 32p, Mkt cap £40m – Research study highlights the scale of tungsten demand for nuclear fusion

(Power Metals Resources* holds a 19.4% stake in Guardian Metals)

• Guardian Metal Resources, which is drilling the Desert Scheelite project at what is reported to be the United States’ largest tungsten deposit at Pilot Mountain, Nevada has drawn attention to the publication of “a study titled ‘Supply and Demand of Tungsten in a Fleet of Fusion Power Plants’ in the Fusion Engineering and Design journal”.
• The company says that this study, which it “co-funded … is the first scientific paper to directly quantify the amount of tungsten that is expected to be required in nuclear fusion technology in the context of a tungsten supply chain”.
• Today’s announcement reports that “if global tungsten production stays stagnant for the roll out of 500MWth and 2000MWth scale fusion reactors, the fusion industry will require 100% of global production by 2056”.
• The study highlights that “the widespread adoption of nuclear fusion power plants… [requires] … a reliable tungsten supply chain”. Currently, the world’s tungsten supply is dominated by China with>80%.
• Welcoming the study, CEO, Oliver Friesen, summarised by saying that “Simply put, current global tungsten output is vastly insufficient to meet growing future demand from fusion technology and as a result, significant investment will be required across the entire tungsten supply chain”.

*SP Angel acts as Nomad and Broker to Power Metal Resources

Mkango Resources* (MKA LN) 10p, Mkt Cap £31m – Low carbon footprint confirmed for HyProMag USA recycled permanent magnets

BUY

• HyProMag USA, a 50/50 CoTec/Maginito JV, announced exceptionally low CO2 footprint for recycled sintered permanent magnets using patented HPMS technology.
• Minviro Ltd that was commissioned to carry the study reported Product Carbon Footprint (PCF) of 2.35kg CO2 per kg of NdFeB cut sintered block product and 0.38kg per kg of NdFeB alloy powder product.
• Maginito is owned 79.4/20.6 by Mkango/CoTec.

Conclusion: The Company continues to advance its HyProMag JV with CoTec in the US establishing a sustainable source of permanent magnets production from spent equipment using patented HPMS technology. We would expect much support for the project from government agencies at the time when administration is aiming to diversify away from nation’s reliance on China dominated supply.

*SP Angel acts as nomad and broker to Mkango Resources

Metals Exploration (MTL LN) 5.65p, Mkt Cap £139m – Acquisition of processing plant for La India

• Metals Exploration reports that it has agreed the acquisition of a gold plant, currently in Alaska, for the La India gold project in Nicaragua.
• The US$9.7m plant includes crushers, mills, a gravity recovery circuit and a CIL plant and associated conveyors, elution and smelting circuit.
• The purchase price is payable in stages with US$2m “due within 14 days of the execution of the Agreement” with a further US$3m “upon verification of transport scheduling” which is expected at the end of March.
• A further US$2m is payable “following the final inspection of the Plant (expected to take place on or around 30 April 2025” with a final US$2.7m “when the Plant is prepared for shipment … on or around 31 August 2025”.
• Although exact timing is, to a degree weather dependent, Metals Exploration plans to start dismantling the plant “in early May 2025, with the target to have the Plant in transit before the end of August 2025… to match our construction schedule” at La India.
• CEO, Darren Bowden, explained that the acquisition and relocation of the plant “provides the Company with the ability to fast track the La India project, saving considerable development time in not having to order long-lead items. This purchase has re-affirmed our ability to achieve our aim to have commenced production at La India in Q4 2026”.
• In January, Metals Exploration released highlights of an an internal study on La India which envisages a combination of open pit and underground mining compared to the previous open pit-only study of the former owner, Condor Gold*.
• The update increased the operating life from 8.4 years to 12.4 years increasing annual production to 145koz compared to the ~70kozpa rate in the plan of the previous owners based on an initial phase of open-pit mining alone.
• Ore processed increased to 1.4mtpa compared to the 0.9mtpa previously indicated, with feed grades of 3.53g/t Au compared to 2.56g/t Au.
• The January study showed marginally higher initial CAPEX of US$122m (previously US$116m) and slightly higher operating costs on an all-in-sustaining basis (AISC) of US$1,176/oz (previously US$1,058/oz).
• At a gold price of $2,500/oz, the internal estimate increases NPV_6% to US$882m (previously US$338m), whilst IRR decreases from 71% to 54%.

Conclusion: Metals Exploration has moved quickly to secure a process plant for La India which should help the company meet its Q4 2026 target date for initial gold production from the Nicaraguan project.

*SP Angel acted as Broker to Condor Gold

Oriole Resources* (ORR LN) 0.215p, Mkt cap £8.4m – Positive Mbe drilling results from Cameroonian exploration programme

(BCM International is earning a 50% interest in Mbe and Bibemi by spending US$4m on exploration respectively)

• Oriole Resources reports the second set of holes from their maiden drilling programme at Mbe.
• The Company has now drilled 2,200m over the first seven holes.
• Oriole is using scissor holes to better understand the orientation of mineralisation.
• Today the company reports the second set of holes from the programme.
• MBDD003 :
  • Intersected 60m of recurrent gold mineralisation at 0.2g/t COG, with highlights including:
  • 1.70m at 6.11g/t Au from 50m
  • 8.00m at 1.03g/t Au from 55.6m,
  • 14.30m at 0.86g/t Au from 68m
  • 4.30m at 1.05g/t Au from 134m
  • 4.24m at 7.70g/t Au from 146m (includes 1.72m at 18g/t Au)
  • 2.32m at 1.02g/t Au from 184m
• MBDD004 intersected mineralisation, albeit less pervasive than in the MBDD003, likely owing to the system being less dilational towards that fenceline, suggesting less faulting/fractures for gold to flow through on that side.
• The exploration team believes that the core suggests the NNW trending structures intersected here are steeply dipping to the east, vs shallower dips in the initial two scissor holes drilled to the south..
• MBDD003 shows wider zones of lower grade mineralisation similar to that intersected in the first two holes, 200m to the south.
• The Company is currently drilling hole MBDD007, due to be completed imminently, and results for the next batch of drill holes are due 2Q25.

Conclusion: Oriole has now delivered the second set of assay results from their ongoing Mbe drilling programme, with hole MBDD003 providing encouraging evidence of high-grade potential. However, we are particularly encouraged by the pervasive mineralisation now encountered across both scissor holes. The results highlight higher-grade zones interspersed between wider envelopes of lower-grade gold mineralisation at relatively shallow depths, opening the potential for a bulk tonnage, open pit operation, should further mineralisation be identified.

*SP Angel acts as Broker to Oriole Resources

Snowline Gold (SGD CN) C$6.64, Mkt cap C$1.05bn – Drilling results to support updated MRE and initiation of PEA

• Canadian gold explorer Snowline reports infill drilling results from Valley project, Yukon.
• Infill highlights include:
  • V-24-119: 618m at 1.68g/t from surface, including 202m at 3.24g/t Au.
  • V-24-120: 201m at 1.88g/t Au from 8m, including 105m at 2.9g/t Au
  • V-24-121: 243m at 1.06g/t Au from 41m
  • V-24-122: 352m at 1.05g/t Au from 6.5m
• The Company aims to report an updated Valley MRE in 1H25, after a 90% increase in drilling over 2024.
• The current MRE stands at:
  • 76mt at 1.66g/t Au for 4.05moz Indicated.
  • 71mt at 1.25g/t Au for 3.26moz Inferred.
• The MRE is pit-constrained by a 0.72 revenue factor and 0.4g/t Au cut-off.
• The Company believed the pit has ample room for expansion, with mineralisation reported beyond the limits of the current pit shell.
• Additionally, Snowline has initiated a PEA for Valley, using SRK Consulting to conduct the study.

Sovereign Metals* (SVML LN) 44.5p, Mkt Cap £267m – Rehabilitation of Kasiya rutile and graphite mine test pit in Malawi

(Sovereign currently holds 100% of the Kasiya project. Malawi has 10% free carry right. Rio Tinto holds 19.9% of Sovereign Metals)

STRONG BUY – Valuation 55p

• Sovereign Metals report the successful backfilling of 170,000m3 and rehabilitation of land used for test mining at the Kasiya mine site in Malawi.
• The Sovereign team, advised by Rio Tinto refilled the test pits and replaced the top soil enabling landowners to have immediate and safe access to the land without missing a planting season.
• Support, training and conservation farming methods are enabling local farmers to tripling crop yields with a variety of rehabilitation crops, including maize, giant bamboo, sunhemp, groundnuts and mung beans.
• The Conservation Farming program has been increased to 350 from 90 for this growing season with early indications suggesting > 300% yield growth may be possible.
• Five-step rehabilitation:

1. Lime addition – using locally sourced dolomitic lime (calcium and calcium-magnesium-carbonate) to improve naturally low PH levels.
2. Organic carbon and basic nutrient introduction. Tests include the application of biochar and a blend of nitrogen, potash (MOP), phosphate (MAP) and sulphur (NPK).
3. Grading, ripping and discing to incorporate the lime, biochar, and fertilisers using graders and locally sourced farming equipment.
4. Planting of rehabilitation crops – currently in progress to benefit from the coming summer rainfall. Giant bamboo is planted to act as a primary crop to enhance carbon and bio-activity with Maize and other cover crops intercropped.
5. Monitoring and evaluation with local farmers to improve results through conservation farming, composting and testing new seed varieties.
   • The team are also looking to establishing an indigenous, fruit and farming nursery.
   • The site is serving as a live demonstration of rehabilitation and rapid return of land to local farmers for agriculture.

• Global Rutile concentrate prices appear to be holding steady at US$1,543/t for 95% TiO2.
• Rutile prices in China appear to be rising to US$1,116-1,157/t from $1,089/t at the start of the year

Conclusion:  The strong focus on land remediation and improving crop yields should serve Sovereign well with the local community. Local farmers can see and should feel confident that their land will be returned to them in a good state for the next planting season, enabling the mine to progress with relatively little disruption to nearby communities. The removal of rutile and graphite via relatively simple mechanical processes is also helpful.

*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.

SQM (SQM US) $38, Mkt Cap $10.6bn – FY24 results

• FY24 revenues totalled $4,529m (FY23: $7,468m) marking a 39%yoy led by lower prices.
• Adjusted EBITDA of $1,484m implying 33% margins (FY23: $3,180m and 43%).
• PBT of $974m (FY23: $2,807m)
• NPAT at -$404m (FY23: $2,013m).
• Volumes climbed strongly with the Company highlighting double digit growth in almost all of business lines.
• In particular, sales volumes in lithium and iodin businesses hit the highest level in the company’s history.
• Lithium sales amounted to 205kt LCE (+21%yoy) generating $2,241m in revenues (-57%).
• Realised lithium prices averaged $10,936/t, down more than 64%yoy (FY23: $30,467/t).
• Lithium accounted for ~50% of Group revenues, down from ~70% in FY23.
• Mt Holland Lithium Mine ramp up is ongoing with nameplate capacity targeted for year end.
• Kwinana refinery is on track to start production mid-2025.
• The team is progressing with lithium expansion projects in Chile.
• FY25 lithium division is guided to post 15% growth in sales volumes including 10kt LCE from Mt Holland (FY24: 4kt)
• The division is to account for $750m of total $1.1bn in capex including $550m to spent on projects in Chile and $200m for international lithium projects.
• Average realised prices are expected to be lower in 2025.

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 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