SP Angel Morning View -Today’s Market View, Wednesday 7th May 2025

Copper holds higher ground as US copper tariff probe expected soon

MiFID II exempt information – see disclaimer below

Asiamet Resources (ARS LN) – BKM optimized feasibility study sets stage for financing discussions

Dundee Precious Metals (DPM CN) – Stronger commodity prices lift sales

Kinross Gold (KGC US) – Increasing cash flows as margins strengthen

Lake Resources (LKE AU) – Kachi strategic review

Larvotto Resources (LRV AU) – DFS results for Hillgrove Antimony-Gold Project

Montage Gold* (MAU CN) – Strategic partnership with Aurum Resources

RHI Magnesita (RHIM LN) – Q1 2025 Trading update

Strategic Minerals* (SML LN) – Re-analysis of 73 Redmoor drill samples upgrades tungsten grade by an average 9.2%

Vast Resources (VAST LN) – Historic parcel update

Copper ($9,464/t) holds higher ground as US copper tariff probe expected soon

• Copper prices have hold higher, having rallied sharply yesterday over $9,500/t.
• Bloomberg reports copper tariffs are expected soon, following Trump’s Section 232 probe into the market.
• Trump initially threatened 25% tariffs on all copper imports.
• China rate cut expectations likely contributed to the rally yesterday, although it turned into a ‘sell the news’ event.
• Iron ore prices have weakened slightly, on limited signs of ‘bazooka’ stimulus needed to prop up the construction market.

Gold ($3,382/oz) volatile amid increased optimism de-escalation between China and the US

• Gold prices rallied strongly yesterday, climbing to $3,430/oz, before slipping 1.5% this morning.
• The move followed a return to trading from the Chinese, who were off for May Day holiday.
• Noticeably reduced strength over the Chinese further reinforced their role in the ongoing gold price rally.
• We note that China’s Central Bank added gold reserves for the six straight month, supporting the c.9% rally through April.
• Gold seems to be shrugging off escalating tensions between India and Pakistan, instead focusing on continued thawing tensions between the Trump administration and Beijing.
• Momentum traders are also highlighting the warning signs from current gold levels, noting the 200 day moving average is c.18% below current levels.

Economics

US – Washington and Beijing are set to have first trade talks since announcement of new tariffs by the current administration this weekend.

• Treasury secretary Scott Bessent and US trade representative Jamieson Greer will be meeting their counterparts in Geneva.

China – The central bank cuts rates in an effort to stimulate growth amid weak consumer sentiment and trade war with the US.

• 7-day reverse repo was cut by 0.1pp to 1.4% from 1.5%
• RRR ‘Reserve Requirement Ratio’ was also cut by 0.5pp freeing up ~7tn yuan (US$139bn) in additional liquidity.
• This is the first cut in the policy rate and the reserve requirement ratio since September last year.
• Additionally, the central bank announced a series of other more directed measures improving availability of credit in a number of sectors.
• More stimulus is expected

India/Pakistan – Pakistan vowed to retaliate after India carried air strikes with 26 people reported to have been killed.

• India said that it carried out “precision strikes” on nine “terrorist camps in Pakistan and the disputed region of Kashmir.
• India reported that it targeted the planners of the Pahalgam attack that claimed 25 lives in later April as a result of a terrorist attack.
• We would not be surprised if the attacks were pre-cleared with the Pakistan government.
• Eg it might be difficult for the Pakistan government to attack and contain certain terrorist groups within its own territory.

Yemen – Main airport and port closed in response to missile attack on Israel and threat to close the Red sea to shipping

South Africa – US to introduce bill to create law to sanction South Africa

• The bill proposes the sanction of senior ANC and South African government officials involved in corruption and or human rights abuses (Businesstech).
• The bill states that the South African government’s foreign policy actions have long ceased to reflect its stated stances of nonalignment, with it favouring Hamas, the Russian Federation and China.
• It identifies eight key problem areas with the ANC and South Africa:
  • The ANC’s policies are inconsistent with South Africa’s stated policy of non-alignment in international affairs.
  • The South African Government has a history of siding with malign actors, including Hamas, a United States-designated Foreign Terrorist Organization and a proxy of the Iranian regime, and continues to pursue closer ties with the People’s Republic of China (PRC) and the Russian Federation.
  • The South African Government’s continued support of Hamas.
  • Members of the South African government delivering “antisemitic and antiIsrael” statements and actions following the October 7 attacks by Hamas.
  • The South African Government and the ANC maintain close relations with the Russian Federation, which has been accused of perpetrating war crimes in Ukraine and indiscriminately undermining human rights.
  • The South African Government’s interactions with the PRC Government and ANC interactions with the Chinese Communist Party (CCP), who are committing gross violations of human rights in the Xinjiang province and implementing economically coercive tactics around the globe.
  • The ANC-led South African Government’s history of substantially mismanaging a range of state resources and often being “proven incapable of effectively delivering public services, threatening the South African people and the South African economy”.
  • The most recent comments by former ambassador to the US, Ebrahim Rasool, describing President Trump as ‘‘extreme,’’ and characterising him as a white supremacist.
• This feels like a first step in sanctioning South Africa for its political alignment with Russia, China, Iran and Middle Eastern terrorist groups.

Conclusion:  While it is extremely difficult to contain and prevent commodity trade flows, the mining sector might start to be affected If the US goes further in its sanctions.

Currencies

US$1.1362/eur vs 1.1326/eur previous. Yen 143.17/$ vs 143.67/$. SAr 18.249/$ vs 18.263/$. $1.335/gbp vs $1.331/gbp. 0.648/aud vs 0.646/aud. CNY 7.232/$ vs 7.212/$

Dollar Index 99.401 vs 99.712 previous

Precious metals:         

Gold US$3,391/oz vs US$3,366/oz previous

Gold ETFs 88.7moz vs 88.8moz previous

Platinum US$987/oz vs US$978/oz previous

Palladium US$973/oz vs US$950/oz previous

Silver US$33.0/oz vs US$33.1/oz previous

Rhodium US$5,375/oz vs US$5,375/oz previous

Base metals:   

Copper US$9,480/t vs US$9,441/t previous

Aluminium US$2,395/t vs US$2,438/t previous

Nickel US$15,685/t vs US$15,630/t previous

Zinc US$2,623/t vs US$2,644/t previous

Lead US$1,933/t vs US$1,937/t previous

Tin US$31,775/t vs US$31,750/t previous

Energy:           

Oil US$62.9/bbl vs US$61.5/bbl previous

• Crude oil prices edged higher on talk of US oil supply peaking and as the API estimated a 4.5mb/d w/w draw (-2.5mb/d exp) to US crude inventories, a draw of 2mb to gasoline and a 2.2mb build to distillate stocks.
• The EIA expects oil inventories to grow by 0.4mb/d in 2025 and double to 0.8mb/d in 2026 as forecast demand growth of 1mb/d and 0.9mb/d, respectively, fail to keep pace with supply growth mainly from the Americas.
• Diamondback Energy cut its 2025 capex budget by 10%, or $400m, and plans to drop three of its 15 rigs due to higher costs and lower prices. The CEO expects the rig count to decline by 10% by end-June and for US oil production to peak and then fall in 2H25, with WTI prices of ~$70/bbl needed to spur higher activity levels.
• Ørsted will take a ~$600m loss after shelving the 2.4GW Hornsea 4 wind farm project, which received a contract for difference (CfD) award last September. The Company cited a continued increase of supply chain costs, higher interest rates, and an increase in the risk to construct and operate the offshore UK pre-FID project.
• Disruption to port activity in Iran and shipping issues in the Red Sea may also be serving to raise oil prices.

Natural Gas €34.6/MWh vs €33.3/MWh previous

Uranium Futures $69.8/lb vs $69.8/lb previous

Bulk:   

Iron Ore 62% Fe Spot (China CFR) US$99.8/t vs US$99.8/t

Chinese steel rebar 25mm US$469.8/t vs US$468.2/t

HCC FOB Australia US$188.5/t vs US$187.0/t

Thermal coal swap Australia FOB US$104.8/t vs US$102.0/t

Other:  

Cobalt LME 3m US$33,700/t vs US$33,700/t

NdPr Rare Earth Oxide (China) US$56,966/t vs US$56,992/t

Lithium carbonate 99% (China) US$8,877/t vs US$9,013/t

China Spodumene Li2O 6%min CIF US$755/t vs US$775/t

Ferro-Manganese European Mn78% min US$995/t vs US$995/t

China Tungsten APT 88.5% FOB US$363/mtu vs US$363/mtu

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

Europe Vanadium Pentoxide 98% US$5.2/lb vs US$5.2/lb

Europe Ferro-Vanadium 80% US$24.3/kg vs US$24.3/kg

China Ilmenite Concentrate TiO2 US$287/t vs US$288/t

Global Rutile Spot Concentrate 95% TiO2 US$1,513/t vs US$1,513/t

Spot CO2 Emissions EUA Price US$65.1/t vs  US$65.1/t

Brazil Potash CFR Granular Spot US$357.5/t vs US$357.5/t

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

China Gallium 99.99% US$395.0/kg vs US$395.0/kg

Battery News

China’s recycling of EV batteries and solar cells strengthening new-energy industry

• Recycling critical materials such as lithium, cobalt and nickel are helping to drive profits and shore up China’s resource security during the ongoing trade war with the US.
• Batteries and solar panels reaching the end of their life cycle in China are increasingly seeing the materials reused and reintroduced into new products, reducing waste and conserving resources.
• The weight of end of life car batteries in China is expected to exceed 4mt a year by 2028, and the annual output value of the waste-battery-recycling industry will be more $38.5bn, according to the state-run Economic Daily.
• Guangdong Brunp Recycling Technology, a subsidiary of CATL, said it was capable of recovering 99.3% of the nickel, cobalt and manganese in a retired battery, and 91% of the phosphorus and lithium.

Nio experienced 134,770 battery swaps in a single day over Labor Day holiday

• Over the five day holiday, Nio recorded 634,177 battery swap services across its 3,300 battery swap stations.
• The record day saw 134,770 battery swaps carried out.
• The number of battery swaps represent 64% increase in the average daily number of services provided by battery swap stations along highways.
• Nio is continuing to expand its battery swap network and has announced several joint ventures this year, including one with battery leader CATL.

Company News

Asiamet Resources (ARS LN) – 1p, mkt cap £29m – BKM optimized feasibility study sets stage for financing discussions

• Asiamet reports results from the BKM Stage 1 Optimised Feasibility Study, Kalimantan, Indonesia.
• Asiamet has aimed to deliver a simplified, lower-CAPEX, staged-build heap leach operation that targets higher-grade ore.
• Study highlights:
  • Average annual production of 10kt copper cathode over a 13 year LOM.
  • Development CAPEX of $178m, strip ratio of 0.77:1. LOM AISC of $2.37/lb.
  • Post-tax NPV8 of $122m at LT copper price of US$4.3/lb, IRR of 18%.
  • NPV8 increases to $202m at $5/lb, with IRR at 23%.
• Management notes the project is ‘execution-ready’ with strategic engagement underway with financing and offtake parties.
• With the Study completed, Asiamet states it will ‘initiate formal engagements with its prospective lenders.’
• Additionally, Asiamet sees BKM Stage 1 as a ‘platform for growth,’ expecting 80kt Cu to remain of un-leached copper in spent heap leach ore, alongside 245kt in-situ sulphide copper resource.

Conclusion: Asiamet has worked to deliver a more manageable study for a staged approach to the construction and development of the BKM Project. This new approach involves an initial 13 year LOM heap leach operation producing 10ktpa copper cathodes. Focus now shifts to construction financing discussions, and Management notes ‘a growing list of interested parties.’

Dundee Precious Metals (DPM CN) C$19, Mkt Cap C$3.3bn – Stronger commodity prices lift sales

• Production amounted to 49.9koz (-21%yoy) and 5.9mlbs (-12%).
• Payable metal sales amounted to 44.8koz (-19%) and 5.2mlbs (-5%).
• AISC averaged $1,244 (+41%).
• Averaged realised prices of $3,004/oz (+41%) and $4.35/lb (+12%).
• Revenues climbed to $144.1m (+16%) as stronger realised prices more than offset lower sales volumes.
• Adjusted EBITDA $75.2 (+38%).
• FCF (ex working capital) totalled $79.1m (+32%).
• PAT $33.5m (-15%).
• EPS $0.19 (-14%).
• Cash position increased to $763m, no debt and an undrawn $150m revolving credit facility in place.
• $0.04 quarterly dividend announced with a record date 30 June.
• Guidance reiterated for 225-265koz gold and 28-33mlbs copper at $780-900/oz AISC.
• Čoka Rakita FS advancing well and on-track for completion at year-end 2025.
• Loma Larga FS update expected to be completed in 2Q25.

Kinross Gold (KGC US) $15.2, Mkt cap $19bn – Increasing cash flows as margins strengthen

• Kinross reports 512koz AuEq over the quarter, at AISC of $1,355/oz.
• Operating cash flow of $597m, attributable cash flow of $370m.
• Kinross retains guidance of 2moz AuEq over the year at an AISC of $1,500/oz.
• The Company repayed $200m in debt,, reducing net debt to $540m with cash and cash equivalents increasing to $695m from $612m at year end.
• Company aims to repurchase minimum $500m of shares during 2025, acquiring $60m worth since beginning of April.
• Tasiast restarted milling following the April 14^th fire, with no impact expected to annual guidance.
• Great Bear construction progresses, with drilling focus shifting from the LP zone to regional exploration.

Lake Resources (LKE AU) A$0.03, Mkt Cap A$60m – Kachi strategic review

• The Company is launching a strategic review of the Kachi Lithium Brine Project in Argentina.
• Potential options to be considered including a potential sale of the Project (full or partial) or a potential sale or merger of the Company as well as restructuring initiatives, partnerships/JVs.
• Kachi FS was completed in December 2023 based on the use of a DLE process.
• Lilac Solutions, a DLE extraction technology Company, holds a 20% interest in the project.
• Exploitation Environmental Impact Assessment is expected to be secured mid-2025.
• The project hosts ~11mt LCE at ~220mg/L in resources.
• FS envisaged $1.4B project delivering 25ktpa LCE at ~$6,050/t over 25y LOM.

Larvotto Resources (LRV AU) A$0.81, Mkt cap A$356m – DFS results for Hillgrove Antimony-Gold Project

• Larvotto, who are developing the Hillgrove Antimony-Gold Mine in Australia, report DFS results.
• Larvotto’s DFS highlights include:
  • Eight year LOM producing 85kozpa AuEq, peaking at 102koz AuEq.
  • Open pit operation, mining 350kt, before long hole stoping producing 320-535ktpa.
  • 485ktpa throughput, with average LOM gold production of 41koz, average LOM antimony production of 4.9kt.
  • Pre-production CAPEX at A$139m, with SUSEX of A$371m.
  • Base case post-tax NPV8 of A$280m, IRR of 48% ($2,400/oz Au, $25,000/t Antimony).
  • Spot NPV8 of A$1.1bn, with 153% IRR.
• Company is targeting ramp-up to commence production in 2026.
• Company holds a seven-year offtake agreement with Wogen and received a A$6m prepayment.
• Management believes there are ‘significant resources yet to be converted into Reserves.’

Montage Gold* (MAU CN) C$3.97, Mkt cap C$1.41bn – Strategic partnership with Aurum Resources

• Montage Gold, developer of the Koné project in Cote D’Ivoire, has agreed a deal with Aurum, Zhaojin and the Lundin Family.
• Montage will obtain a 9.9% ownership stake in Aurum by issuing 2.89m shares of Montage worth c.C$10.4m (0.8% of Montage)
• Additionally, Zhaojin Mining and the Lundin Family will both increase their interest in Aurum to 9.9% respectively.
• China’s Zhaojin acquired Tietto’s Abujar Gold Mine in the Cote D’Ivoire for US$474m in 2024, after it had ramped up to 37koz/quarter.
• Aurum will receive gross proceeds of A$35.6m, which will be used to accelerate resource definition drilling at Boundiali and exploration drilling at Napie.
• Aurum holds the Boundiali and Napie gold projects in Côte d’Ivoire, with Boundiali lying directly north of Montage’s Kone project.
• Montage is guiding for first pour in 2Q27, expected to produce 301koz over the first eight years of production at $998/oz.
• Boundiali hosts 50mt at 1g/t Au for 1.59moz.
• Aurum is currently completing a 100,000m drill programme, targeting the higher grade Nyangboue gold deposit, with a PFS and updated resource due by year-end.
• Aurum expects a Boundiali PFS, ESIA study and approval, exploitation licence and approval and DFS by 2H26.
• Napie holds 0.87moz in JORC resource, with an MRE update also due CY2025 following 30,000m of drilling.

Conclusion: This marks the fourth investment by Montage into West African gold exploration/development assets, with the Company now holding stakes in Sanu Gold, African Gold, Predictive Discovery* and Aurum. We would expect the Boundiali ore to be fed into the 11mtpa Kone mill at some point, given the higher grade and proximity to the plant, currently being constructed. We are particularly interested by the collaboration with Zhaojin, marking a second major Chinese miner teaming up with the Lundins through Montage (Zijin holds 9.6% in Montage and joined in the PDI investment). Montage’s management has stated their intentions to build a ‘leading African gold producer,’ likely seeing Guinea as the next area of focus.

*An SP Angel analyst holds shares in Montage Gold and Predictive Discovery

RHI Magnesita (RHIM LN) – 3,125, Mkt cap £1.48bn – Q1 2025 Trading update

• RHI Magnesita which makes refractory products reports increasing downside risk to the 2025 trading outlook which could negatively affect the Group’s end markets.
• Q1 trading conditions saw lower sales volumes and a worsening of business in the glass and non-ferrous metals sectors worldwide.
• There is also lower pricing for cement and steel markets in India and the Middle East.
• EBITA margins also fell in Q1 due to lower volumes in high-margin project business, weaker finished goods pricing and higher raw material costs.
• Lower utilisation rates
• The Network Optimisation Programme to result in the closure of the Wetro plant in Germany.
• Cost saving measures include cuts to the cost of goods sold, selling and G&A.
• Price increases are also being pushed through to restore margins.
• Strong competition is seen in India and West Asia from low-cost imports of Chinese refractories and Indian overcapacity.
• Net debt rose to €1.6bn and end-March primarily due to the completion of the Resco acquisition and the payment of the remaining €346m of cash proceeds.
• The group also took a new €200m syndicated term loan for the Resco acquisition.
• Ratio of net debt to Pro Forma Adjusted EBITDA – is expected to be c.2.9x at the half year with gearing expected to return to c.2.5x by year end.

Strategic Minerals* (SML LN) 0.32p, Mkt Cap £6.5m – Re-analysis of 73 Redmoor drill samples upgrades tungsten grade by an average 9.2%

• Strategic Minerals have re-analysed drill samples at Redmoor to give a meaningful upgrade on the tungsten results.
• The team re-analysed 73 samples from previous drilling identifying an overall increase in grades which should help to bolster the next resource estimate.
  • “As part of the ongoing re-logging campaign at Redmoor, a review process was undertaken on recent assay results. “
  • The analytical cutoff grade used to select XRF samples was reduced to 0.3% WO₃ from 0.5% WO₃ for higher levels of accuracy.
• A number of >0.5% WO₃ samples have also been submitted and re-analysed for the more appropriate XRF analysis by ALS Laboratories, Loughrea.
• “The average increase in grade from the 73 analysed samples is 9.2%.”
• The entirety of the 2018 drill core, comprising 12 holes for 7,375m has now been relogged. A total of 340 samples, representing 485.57m of new sample length, were collected from the 2018 core, adding additional data and identifying further mineralised intersections (see RNS dated 11 February 2025).
• Work continues to progress in re-logging and sampling the 2017 drill core with a further two drillholes representing 709m so far relogged, and additional new samples selected from both drillholes for future analysis. A further 6,313m of drillcore is remaining from 18 holes for re-logging and sampling..
• Redmoor JORC compliant resource:

• Equivalent metal calculations: Sn(Eq)% = Sn% x 1 + WO3% x 1.43 + Cu% x 0.40. WO3(EQ)% = Sn% x 0.7 + WO3 + Cu% x 0.28. 
• Commodity price assumptions: WO3 US$ 33,000/t, Sn US$ 22,000/t, Cu US$ 7,000/t. 
• Recovery assumptions: total WO3 recovery 72%, total Sn recovery 68% & total Cu recovery 85% and payability assumptions of 81%, 90% and 90% respectively.

• Comparisons:
• It is unfair to compare the tungsten grade with Tungsten West as Hemerden is an open cast mine which hosts a MRE of 347.7Mt at 0.12% WO₃and 0.03% Sn.
• The SnEq grade compares better with Cornish metal’s South Crofty mine which runs at 0.91% SnEw in their JORC 2012 Mineral Resource Estimate.
• South Crofty benefits from substantial existing infrastructure of shafts, tunnels and a fully permitted site.
• Leigh Creek (LCCM) copper, South Australia:  non-binding HoA agreement for potential disposal with Axis Mining & Minerals.
• Terms: a non-refundable A$100,000 cash payment and a further A$1.9m cash payment for 100% of the asset + 19.9% the of the listed vehicle up to a maximum value limit of A$3 million.
• In addition, Axis will pay an earn-out to Strategic Minerals equivalent to A$4m and could deliver total consideration of up to A$9m.

Conclusion: Potentially raising the overall grade of the Redmoor by 9.2% would make a meaningful difference to the economics of the resource. Further re-assaying of the 2017 drill samples should again increase the potential upgrade of the resource. Further drilling at Redmoor should also expand the scale of the resource increasing its strategic and potential economic value.

*SP Angel acts as Nomad and broker to Strategic Minerals

Vast Resources (VAST LN) 0.48p, Mkt Cap £13m – Historic parcel update

• The Company reported that additional ~6,000cts of gem quality stones were identified in the historic parcels recovered from the central bank of Zimbabwe that were previous unknown.
• The parcel now is estimated to contain ~135,000cts with ~36,500cts having been already identified to be gem quality.
• First stones have been selected for cleaning and estimates with initial results expected in the coming weeks.
• The Company expects selling process to be conducted in phases to maximise potential value of the parcel.

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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