SP Angel . Morning View . Tuesday 10 11 20
Gold recovers after a $100/oz correction on vaccine hopes
MiFID II exempt information – see disclaimer below
Beowulf Mining* (AIM:BEM) – Ex Swedish Minister appointed as NEC
Ceres Power (LON:CWR) – Doosan to develop ceres-based marine fuel cell system.
Invinity Energy Systems (AIM:IES)– EMEC use flow batteries and tidal power to produce hydrogen (Energy Global)
IronRidge Resources* (AIM:IRR) – Resignation of finance dire
Ormonde Mining* (AIM:ORM) – AGM arrangements and progress report on potential acquisition
Orosur Mining* (AIM:OMI) – Funds in lieu received for exploration at Anzá
Panthera Resources (LON:PAT) – Additional finance secured by Moydow
SolGold* (AIM:SOLG) – Alpala project committee and Interim CFO appointment
Pfizer – vaccine shows strong T-cell response
This is fantastic news according to Professor Karol Sikora as T-cell immunity lasts much longer than antibodies
Measuring T-cells and their response is significantly more complex than for antibodies which is why the antibody tests are more often used
News yesterday from Pfizer of a possible 90% success rate for its vaccine lifted global financial market
Boris Johnson pronounced the Coronavirus crisis could be over by next Spring and that he was bounced into this latest Lockdown by erroneous statistics.
But, scientists are concerned about potential reinfection from mutated strains of the Coronavirus.
A new strain caught from a Mink in Denmark is of concern but is not yet proven to be dangerous.
Danish MPs voted against culling the nation’s 15m mink. Ten mink farms in Sweden have also been found to host coronavirus outbreaks.
The Pelting season means most mink will be killed for their fur with only breeding stock held back for next year. Anyone for a COVID-coat?
New energy vehicle sales in China remain strong
144,000 NEVs were sold in China in October. EV sales rose 137% to 121,000 units yoy.
Tesla sold 12,143 EVs in October, up 7% mom following a 3.8% price cut for the Model 3 to 249,900 yuan ($37,789) (including local subsidies).
Retail auto sales increased 8% yoy to 2.02m units in October.
NEV sales rose 26% gain in August and 68% in September following two years of slowing sales.
China has just 196 cars per 1000 population vs 838 in the US
Chinese auto sales are expected to be 7% lower this year vs previous an initial estimate of 11%
APEX survey rankings for SP Angel commodity forecasts: 2nd in Gold, 2nd in Copper, 2nd in Nickel, 1st in Tin, 5th in Iron ore.
The survey takes forecast from 21 analysts from commodity traders, banks, economics and specialist commodity forecasters
US – Markets rallied on news of positive results of the Pfizer/BioNTech vaccine led by travel and leisure companies that were particularly hit hard during the pandemic.
The drug is expected to be submitted to authorities for emergency approval in the third week of November, ahead of other vaccine developers, FT reports.
Monday euphoria cooled down slightly today amid questions over the timing of the vaccine’s production and distribution capacities.
William Barr, the US attorney-general, authorised prosecutors to investigate possible instances of electoral fraud in the presidential poll.
Donald Trump refused to concede defeat in presidential elections and continued to make claims of fraud filing lawsuits with the latest case registered in Pennsylvania.
The US surpassed 10m COVID-19 cases yesterday and appeared to hit record hospitalisations later this week.
China – Consumer prices inflation slowed to 0.5%yoy in October raising concerns of a potential deflation and respective negative implications for employment and debt repayment capacity, Bloomberg writes.
Weaker CPI was driven by slowing food prices and weak core inflation.
Food prices increased 2.2%yoy, down strongly from September’s 7.9%yoy.
The core CPI (ex food and energy) continued at 0.5%yoy, same as in September and marking the fourth month in a row that core inflation remained at the same level, suggesting household demand is still weak.
Mozambique – Islamic militants have killed >50 people at football pitch in the district of Mueda in the north of Mozambique.
Bodies were beheaded and chopped into pieces. Local women were captured to be used as slaves.
Mueda is 180km by road to Pemba and just over 200km to Montepuez where Gemfields mine rubies
The area lies on boarder between Mozambique and Tanzania and is not far from the ports of Lindi and Mtwara.
Walkabout Resources’ Lindi graphite project lies to the north as do a number of other graphite projects and producers.
Volt Resources has the Bunyu graphite project, also in the same area
Peru – President Martin Vizcarra was impeached by congress in a 105-19 vote over corruption allegations.
The head of congress, Manuel Merion, will be sworn in as interim president this morning.
General elections to be held April next year with the next president appointment expected in July 2021.
Merino will be the third president in a single five-year term.
Strong impeachment support in congress came as a surprise with most analysts expecting Vizcarra to survive the vote, as he did the previous impeachment attempt in September, Bloomberg reports.
President Vizcarra has long campaigned against corruption at the highest levels says he was leaving office with a ‘clear concience’.
“Opposition lawmakers from nine parties in the unicameral congress banded together to impeach the 57-year-old. They cited accusations of corruption and his handling of the pandemic. In total 105 of Peru’s 130 lawmakers voted to remove him.”
“Peruvians took to the streets and banged pots and pans into the night to voice their anger and opposition to the vote to impeach Vizcarra over corruption allegations.“ The Guardian
Demonstrations are often used to force change in Peru and we believe are often paid for by lobby groups.
Vizcarra’s fight against corruption has made him enemies in congress and opposition lawmakers affected by his anti-corruption reforms.
Germany – Thyssenkrupp seeks €5bn aid package to save steel unit
Thyssenkrupp is in talks with the German government over an aid package for its steel unit which well exceeds the groups market value in order to secure its survival.
Chancellor Merkel’s government has signalled a willingness to provide financial support to the Company’s steel unit, to ensure future domestic production of an environmentally friendly form of steel.
The steelmaker and politicians are exploring about €2bn in liquidity from a government fund and at least €3bn in grants, Bloomberg reports.
UK – Unemployment rate climbed to 4.8% in the three months to September, up from 4.5% in the previous three months to August and in line with expectations.
An increase was driven by a record number of redundancies during the quarter as employers prepared for the expiration of the furlough programme that was later extended.
Redundancies climbed to a record high of 314k, up 195k on the previous year and 181k on the previous quarter.
The BoE forecasts unemployment to peak at 7.75% in Q2 2021
UK to issue first green bond
Chancellor Rishi Sunak announces a proposal to issue the UK’s first sovereign green bond in 2021 and make climate risk disclosure mandatory for major firms from 2025. The first bond will be followed by a series of further issuances designed to meet growing investor demand for green bond instruments.
In the past few years, the global green bonds market has grown, with analyst Moody’s recently projecting total issuance worldwide could increase to between $175bn and $225bn by the end of 2020.
Sunak states that the UK would also look to implement a green taxonomy that should provide a common framework for determining which activities are environmentally sustainable, building on the EU’s ongoing efforts to develop its own green taxonomy.
The UK taxonomy would take the scientific metrics established by the EU taxonomy as its bases, with a new UK Green Technical Advisory Group established to make sure that the approach works in the UK market, according to the Treasury.
The Financial Conduct Authority will also introduce stricter rules on climate risk disclosure for large firms and investors, in line with the guidelines made by the global Taskforce on Climate-related Financial Disclosures.
These rules demand that all large UK companies with a premium listing publicly disclose the risks they face from climate change and the net zero transition, or explain why not, by the end of 2023. Sunak stated that from 2025 the rules would be tightened.
Canada – Churchill town programs radar to warn of influx of polar bears
Sea ice is forming later and breaking up earlier causing hungry polar bears to spend more time hunting for food on land
France – Unemployment rate jumped 1.9pp to 9% in Q3 as more people started to look for a job again after lifting of first lockdown increasing labour force participation rate.
The reclassification of 801k people from inactive to unemployed caused a spike in the joblessness rate.
Younger people were hit the hardest with the unemployment rate among that group increasing 2.6pp to 21.8%.
Separately, industrial production is reported to have shown a 1.4%mom (-6.0%yoy) growth in September, which is likely to slip back into a negative territory in coming months amid a reintroduced lockdown.
French government indicated that more fiscal stimulus may be offered to struggling businesses if need be, according to Finance Minister Bruno Le Maire.
The announcement came just hours before weak unemployment data that showed a jump in the jobless rate.
Azerbaijan/Armenia – A peace deal between Armenia and Azerbaijan brokered by Moscow lead to a ceasefire in the Nagorno Karabakh region.
The truce announced yesterday calls for the deployment of ~2,000 Russian peacekeepers to the disputed territory where Azerbaijan will receive significant territorial concessions from Armenia-backed local government, Guardian reports.
Armenia and Nagorno-Karabakh administration argued they were forced to sue for peace after Azerbaijan took control of the enclave’s strategically positioned town of Shusha and was within striking distance of the region’s largest city, Stepanokert.
The agreement calss for Armenian forces to pass the control over some areas outside the borders of Nagorno Karabakh including the eastern district of Agdam and the Lachin region; the latter hosts the main road leading from Nagorno-Karabakh to Armenia which will remain open and be protected by Russian peacekeepers for five years; Stepanakert will remain under control of the Armenian-backed government.
News of the deal saw different reaction on two sides with celebrations in Azerbaijan and protests in Armenia.
The deal will hopefully end a six-week war that cost thousands in casualties and even more displaced in the worst fighting since the early 1990s.
Estonia – Interior Minister resigns following his questioning of the legitimacy of Joe Biden’s election in the US
Mart Helme was forced to resign following an interview where he described Biden as a corrupt character and won the election thanks to the ‘Deep State’
US$1.1825/eur vs 1.1882/eur yesterday. Yen 105.02/$ vs 103.49/$. SAr 15.491/$ vs 15.597/$. $1.319/gbp vs $1.316/gbp. 0.728/aud vs 0.729/aud. CNY 6.613/$ vs 6.570/$.
Gold US$1,889/oz vs US$1,961/oz yesterday – Gold prices fall 5% on Monday amid Covid-19 vaccine hopes
Gold prices suffered their steepest daily drop in more than seven years on Monday as investors piled into riskier assets amid a vaccine breakthrough said to be more than 90% effective.
Bullion retreated sharply from its two-month peak of over $1,965/oz to below $1,856/oz- whilst many equity indexes surged over 4%.
Near term drivers of the gold price are expected to be further monetary policy from the US and doubts over the potential vaccine’s rollout.
Gold ETFs 111.0moz vs US$111.1moz yesterday
Platinum US$878/oz vs US$905/oz yesterday
Palladium US$2,486/oz vs US$2,474/oz yesterday
Silver US$24.34/oz vs US$25.83/oz yesterday
Copper US$ 6,909/t vs US$6,957/t yesterday – Chile – October copper exports valued at $3.21bn vs $3.05bn in Sept
Total exports rose 13.8% YoY to $6.0bn, meaning copper accounts for 54% of total exports.
Imports fell 14.2% YoY to $4.8bn, resulting in trade surplus $1.27bn.
Aluminium US$ 1,902/t vs US$1,908/t yesterday
Nickel US$ 15,780/t vs US$15,815/t yesterday
Zinc US$ 2,641/t vs US$2,667/t yesterday
Lead US$ 1,832/t vs US$1,843/t yesterday
Tin US$ 18,350/t vs US$18,395/t yesterday
Oil US$42.7/bbl vs US$40.4/bbl yesterday
Natural Gas US$2.899/mmbtu vs US$2.846/mmbtu yesterday
Iron ore 62% Fe spot (cfr Tianjin) US$118.1/t vs US$115.0/t
Chinese steel rebar 25mm US$618.1/t vs US$611.3/t
Thermal coal (1st year forward cif ARA) US$54.0/t vs US$54.6/t
Coking coal swap Australia FOB US$117.3/t vs US$117.3/t
Cobalt LME 3m US$32,835/t vs US$32,835/t
NdPr Rare Earth Oxide (China) US$52,016/t vs US$52,362/t
Lithium carbonate 99% (China) US$5,519/t vs US$5,556/t – Livent to supply lithium from Nemaska assets as it extends contract with Tesla
Lithium producer Livent has extended its supply agreement with Tesla out to 2021. The agreement includes a commitment to provide higher volumes of lithium than in 2020.
Livent has formed a JV to purchase part of Canada’s Nemaska lithium project which is expected to boost the Company’s output in anticipation of increasing demand as EV numbers increase.
Livent is partnering with the Pallinghurst Group to take a 50% stake in Quebec Lithium Partners which formed earlier this year after Nemaska filed for bankruptcy.
The move is not without risk, the project has high operating costs and Livent has little experience operating a spodumene hard rock mine. It only other lithium project is a brine facility in Northern Argentina.
The Company posted lower than expected Q3 results with a 25% YoY revenue decline.
Spodumene 6% Li2O min, cif (China) US$385/t vs US$375/t
Ferro Vanadium 80% FOB (China) US$27.0/kg vs US$27.0/kg
Antimony Trioxide 99.5% EU (China) US$5.4/kg vs US$5.4/kg
Tungsten APT European US$220-225/mtu vs US$220-225/mtu
Graphite flake 94% C, -100 mesh, fob China US$440/t vs US$440/t
Graphite spherical 99.95% C, 15 microns, fob China US$2,300/t vs US$2,275/t
Potassium Ions reduce dendrite formation in lithium ion battery
Columbia Engineering researchers have found that alkali metal additives such as potassium ions can halt the build-up of dendrite microstructures in lithium ion batteries. (Chem Europe)
The team fond the addition of potassium ions to the electrolyte mitigated the deposition of undesirable chemical compounds on the surface of the lithium metal anode which prevent the transport of lithium ion during charging.
The discovery was made using microscopy, nuclear magnetic resonance (NMR) and computational modelling.
The alkali additive is different from traditional methods used to mitigate or prevent the build up of dendrites which have focused on conductive polymers coated on the surface of the electrodes.
The team is now testing alkali metal additives in combination with more traditional additives that encourage growth of conductive layers on lithium metal. They are using NMR to measure the rate of lithium transport through this layer.
Beowulf Mining* (AIM:BEM) 4.88p, Mkt Cap £29.3m – Ex Swedish Minister appointed as NEC
Beowulf have appointed Mr Sven Littorin to the Board as Non-Executive Chairman, effective immediately, whilst Göran Färm today steps down.
Mr Littorin if a former politician and served as Sweden’s Minister for Employment from 2006 to 2010. Since leaving government, Mr Littorin co-founded his own real estate development company and has held a number of advisory positions across Europe, North America, and the Middle East.
Kurt Budge, Chief Executive Officer of Beowulf, commented: “I am very pleased to welcome Sven Otto Littorin as Beowulf’s new Chairman and, on behalf of the Board, I would again like to thank Göran Färm for his valued support over the last three years.
“As Beowulf is almost 68% owned by Swedish shareholders, the foundation of the Company’s asset base remains the Kallak Iron Ore Project, and following the announced Capital Raising, Sven Otto Littorin’s appointment is very timely and serves to maintain our strong market presence and the sustainable development of our mining business.
*SP Angel act as Nomad and Broker to Beowulf Mining
Ceres Power (LON:CWR) 787p, Mkt cap £1.35bn – Doosan to develop ceres-based marine fuel cell system.
Doosan Fuel Cell reports the signing of an MOU with Navig8 for the joint development of a solid oxide fuel cell system that provides cleaner power for ships and allows them to cut carbon emissions and help quality of air.
It will be based on Ceres’ proprietary SteelCell SOFC stack technology.
The future of Doosan’s business could involve a lot more marine applications for the Ceres technology beyond than the established stationary market.
Ceres Power Holdings PLC and Doosan Fuel Cell Co., Ltd have recently introduced a strategic collaboration which involved the building on an initial 50MW manufacturing facility for the manufacture under licence of Ceres’ fuel cell stacks in South Korea.
Doosan states today that it has signed a Memorandum of Understanding for the joint development of a solid oxide fuel cell system for marine propulsion and power generation with Navig8, a large shipping firm based in Singapore which runs 140 chemical and oil tankers worldwide. A SODC power and propulsions system will be installed by Doosan in a 50,000-ton chemical tanker owned by Navig8 as a pilot program for commercialisation.
This shows Doosan’s commitment to developing its new SOFC business into new and innovate market applications outside stationary power markets. The maritime fuel cell is one of the most promising clean energy sources to reduce carbon emissions and improve air quality for ships. The shipping industry makes up 2% of global greenhouse gas emissions.
The International Maritime Organisation has introduced stronger regulations to cut emissions by 50% by 2050, compared to the 2008 level. Doosan’s scheme targets meeting these new standards by reducing GHG emissions in the shipping industry.
Invinity Energy Systems (AIM:IES) 120p, Mkt cap £86m – EMEC use flow batteries and tidal power to produce hydrogen (Energy Global)
The European Marine Energy Centre (EMEC) is set to deploy a 1.8MWh flow battery at their tidal energy test site on the island of Eday, Scotland.
The flow battery system provided by Invinity Energy Systems will consist of eight VS3 vanadium flow battery modules linked by a single system.
The battery will store electricity generated by tidal turbines during high periods and will discharge electricity during low power periods creating continuous on-demand electricity for hydrogen production using EMEC’s 670 kW hydrogen electrolyser.
The battery will enable the site to optimise on-site hydrogen generation and is the first time a flow battery has been used in combination with tidal energy for hydrogen production.
The project is expected to come online in 2021.
Bushveld Minerals has a first right of refusal over the supply of vanadium electrolyte to Invinity VRFB batteries.
IronRidge Resources* (AIM:IRR) 14.8p, Mkt cap £61m – Resignation of finance director
Priy Jayasuriya, Finance Director of SolGold and IronRidge has resigned.
Both companies are looking for a replacement.
We do not see any negative impact from the move.
*SP Angel act as Nomad for IronRidge Resources
Ormonde Mining* (AIM:ORM) 1.2p, Mkt Cap £5.7m – AGM arrangements and progress report on potential acquisition
Ormonde Mining has confirmed that its AGM will take place on 3rd December and that it is to be conducted in accordance with Irish Government’s “compulsory measures restricting public gatherings as a result of COVID-19 … [and that consequently] … the Company will run the AGM this year effectively as a closed meeting”.
The company also confirms that it “remains in an exclusivity agreement in relation to a potential acquisition of a mineral resource project and due diligence remains ongoing. While there can be no certainty that a transaction will complete, Ormonde continues to pursue this opportunity”.
Conclusion: Ormonde Mining is continuing to pursue the previously announced acquisition for a new mineral resource project following its exit from Barruecopardo earlier this year. At this stage, with due-diligence is proceeding and there are no details on the nature of this opportunity but we await further information with interest.
*SP Angel acts as Broker to Ormonde Mining
Orosur Mining* (AIM:OMI) 28.5p, Mkt Cap £40.9m – Funds in lieu received for exploration at Anzá
Orosur has received US$582,170 from Monte Aguilla – a Columbian company that is a 50:50 JV between Newmont and Agnico Eagle, in order to maintain its earn-in rights at the Anza project in Colombia.
The receipt of these funds mean that Monte Aguila has met its obligations under the Exploration Agreement for the 12-month period ending 6th September 2020, allowing it to continue exercising its Phase-1 earn in rights.
As part of the Phase 1 agreement, Newmont and Agnico Eagle must spend $10m over 4 years and make cash payments equalling $2m in the first two years in order to earn a 51% interest in the project.
Monte Águila has already commenced funding year 3 of Phase 1 of the Exploration Agreement which requires a minimum work commitment of US$4m for the 12-month period commencing 7th September 2020.
Following the receipt of exploration funds announced on the 12th of October, Orosur have commenced field activities at Anza, including the awarding of drilling contracts and geophysical work- along with hiring a team of geologists and associated staff who have been mobilised to site.
It is anticipated that one rig should commence operation within a week to 10 days, with a second rig to be mobilised soon after.
The Company announces that it will issue 374,999 common shares of no-par value following the exercise of 374,999 options at an average exercise price of CAD 0.154 by a former non-executive director of the Company, with Orosur receiving a total amount of CAD$57,750.
Application will be made for the shares, which will rank pari passu with the existing Common Shares in issue, to be admitted to trading on AIM and admission is expected to occur on the 13th of November.
Following the admission, the Company will have 163,529,341 Common Shares in issue, and 2,848,315 options outstanding.
Conclusion: Newmont and Agnico Eagle remain committed to funding exploration at the Anza project in Colombia, allowing Orosur’s management to focus on mobilising staff and implementing a major field program. First assay results are expected in the new year, and we look forward to results from an area which has previously produced large epithermal gold deposits.
*SP Angel act as Nomad and Broker to Orosur Mining
Panthera Resources (LON:PAT) 10p, Mkt Cap £8.3m – Additional finance secured by Moydow
Panthera Resources reports that its partner, Moydow Holdings has secured further equity funds of $1m from existing and new investors in addition to the $1.5m raised as part of the Moydow transaction in September.
As a result of the equity raising “Panthera’s interest in Moydow’s ordinary shares will decrease from 54.5% to 46.2%”.
The funds will be used to progress the mineral resource estimation work at Labola, as well as drilling at the Paimasa project in Nigeria where work is expected to start shortly and further induced polarisation geophysical work and possible drilling of the most promising anomalies at Kalaka where “previous drilling has identified a very large-scale gold system … [within a] … 1,000m by 150m zone of intense artisanal mining activity that is currently undrilled”.
Managing Director, Mark Bolton, commented that “The Moydow funding underwrites an intensive work programme in the near term” as exploration work progresses on the company’s west African gold projects.
Conclusion: Panthera Resources’ partner, Moydow Holdings has helped secure an additional $1m to advance the west African gold exploration programme.
Power Metal Resources* (AIM:POW) 1.8p, mkt cap £15.3m – Licence applications for Australian gold JV
Power Metal Resources reports that its 49.9% owned Red Rock Australasia (RRAL_) “has been notified that a further seven of its license applications have been accepted and have been given highest ranking, following the notification in respect of the first three applications received in early July”.
The licenses are located close to the historic mining center of Ballarat in Victoria where gold was first discovered during the 1850s.
In accordance with the local application procedures “RRAL will now advertise the seven applications in newspapers with statewide and local circulation, and after a three-week exposure period, the Department of Jobs, Precincts and Regions of the State of Victoria will begin the application assessment process”.
CEO of Power Resources, Paul Johnson, said that “RRAL is making great progress in the application process and is investing now in building its technical and managerial team, local to Ballarat, in readiness for an investment in field exploration work when licenses are granted allowing ground operations to commence in earnest”.
*SP Angel act as Nomad and Broker to Power Metal Resources
SolGold* (AIM:SOLG) 32.3p, Mkt Cap £653m – Alpala project committee and Interim CFO appointment
Solgold has announced the formation of a project committee consisting of executive and non-executive directors and senior technical staff to guide the development of its Alpala copper/gold project.
The committee will include the recently appointed non-executive directors, Kevin O’Kane and Keith Marshall who have both served in senior technical and mine development roles at BHP and Rio Tinto respectively as well as Solgold’s Chief Executive, Nick Mather and Studies Director, Peter Holmes, the Executive General Manager for Studies, Eduardo Valenzula, Head of Exploration, Jason Ward, Technical Services Manager, Ben Whistler and the Executive General Manager Project and Corporate Finance, Ingo Hofmaier.
The Committee is responsible for oversight of the project “in setting the development strategy, provide advice, support effective decision making and monitor the staged development to achieve agreed outcomes relating to the Alpala Copper-Gold-Silver Project” and to help ensure that project timetables and key milestones are achieved.
Solgold also reports the appointment of Ingo Hofmaier, as interim CFO following the resignation, by mutual agreement, of the incumbent, Mr Priy Jayasuriya.
The company confirms that it has started a search for a full-time CFO to replace Mr. Jayasuriy.
Conclusion: The strengthening of management controls and oversight by technically experienced, non-executive directors working with key members of the technical operations team should benefit the overall project development of Alpala as pre-feasibility study work progresses.
*SP Angel act as financial advisor and broker to SolGold
John Meyer – [email protected] – 0203 470 0490
Simon Beardsmore – [email protected] – 0203 470 0484
Sergey Raevskiy –[email protected] – 0203 470 0474
Joe Rowbottom – [email protected] – 0203 470 0486
Richard Parlons –[email protected] – 0203 470 0472
Abigail Wayne – [email protected] – 0203 470 0534
Rob Rees – [email protected] – 0203 470 0535
Grant Barker – [email protected] – 0203 470 0471
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
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Gold ETFs, Steel
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