Today’s Market View – Greatland Gold, Castillo Copper, Botswana Diamonds and more…

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SP Angel . Morning View . Monday 30 11 20

 

Beowulf Mining* (LON:BEM) – Swedish Constitutional Committee urge swift resolution at Kallak

Botswana Diamonds (LON:BOD) – Sekaka acquisition completed

Bushveld Minerals* (LON:BMN) – Conditions satisfied for US$65m financing with Orion Mine Finance

Bluebird Merchant Ventures (LON:BMV) –Independent expert determined Southern Gold interest worth $11.05m

Caledonia Mining* (LON:CMCL) – Central Shaft completed on time and under budget

Castillo Copper (LON:CCZ) – First copper assays from latest drilling at the Big One project in Queensland

Greatland Gold (LON:GGP) – New agreements with Newcrest at Havieron and at Black Hills and Paterson Range East

IronRidge Resources* (LON:IRR) – Board Change

Mkango Resources* (LON:MKA) – Grant-funding for rare-earth magnet recycling research

Orosur Mining* (LON:OMI) – Orosur raises £4m

Petropavlovsk (LON:POG) – Ex-Highland gold chief appointed as CEO

 

Copper prices hit eight-year high on solid China data and vaccine hopes

Copper prices continued to rise on Monday, with prices in Shanghai hitting their highest in more than eight years, while prices in London are set for their best month in four years.

There is also speculation over the potential for a Chinese copper producer which may have sold copper forwards at lower levels to be forced to buy the metal back in.

Risk appetite improved over the weekend as two of America’s top health officials said a vaccine will be deployed across the US before the end of the year.

China’s relentless economic recovery continued, with the latest manufacturing data indicating that the sector rose to a three-year in November – offering support to base metals across the board.

Economies are rebuilding from the coronavirus pandemic with an emphasis on eco-friendly practices which is going to require a greater supply of copper nickel in order to implement effectively.

The most-traded January copper contract on the Shanghai Futures Exchange ended up 3.7% at 57,680 yuan ($8,757)/t – the highest close since September 20212 (Reuters).

On the LME, prices rose 2% earlier this morning to $7,648/t, up 13.8% on a monthly basis.

 

China – Stimulus projects may now include a proposal for the Yarlung Zangbo River hydropower project in Tibet

The project is nearly twice as large as the Three Gorges Dam

The dam would have a 2,000m drop and could develop 60mkWh

 

Dow Jones Industrials +0.13% at 29,910

Nikkei 225 -0.79% at 26,434

HK Hang Seng -2.03% at 26,348

Shanghai Composite -0.49% at 3,392

 

Economics

 China – November manufacturing PMI at 52.1 vs 51.4 last and 51.5 expected

Non-manufacturing PMI at 56.4 vs 56.2 last and 56.0 expected.

The official manufacturing PMI reading was the highest since September 2017, while the mon-manufacturing PMI was the highest reading since 56.7 in June 2012.

According to Capital Economics, the recovery of household spending has supported the rebound in manufacturing and services, with households continuing to run down excess savings accumulated this year.

 

India – July-Sept GDP declines -7.5%

Trade and services sector -15.6%

Financial and real estate sector -8.1%

Construction sector -8.6%

Agriculture sector +3.4%

 

Turkey – Q3 GDP expands 6.7% YoY

Turkey’s economy grew better-than-expected from July-Sept, rebounding from the contraction in spring as a result of the coronavirus pandemic.

Ankara expects growth of 0.3% this year, although a contraction of -1.5% is possible under a worst-case scenario, whilst projecting a rebound of 5.8% in 2021.

 

US – More Chinese companies added to Trump’s investment blacklist

Chipmaker SMIC and offshore oil and has explorer CNOOC have been added to a list of firms blocked from American investment due to military ties, Reuters reports.

The latest addition of four firms brings the total number of firms on the list to 35.

The addition of CNOOC is likely to exacerbate tension in the South China Sea, a location where the state-backed oil major operates extensively.

 

Japan – Copper products output falls 6% YoY

Production of copper and copper alloy fabricated products fell 6% to 59,289 tonnes in October.

Last month’s decline was narrower than the slides of 31% and 18% recorded in August and September respectively.

 

Italy – €8bn business support package approved

The Italian government has approved further support measures allowing small companies, the self-employed and others who have suffered a sharp drop in income to delay paying their taxes.

One-of payments of €1k will also go to workers in the hospitality and arts sectors which have been among the worst hit during the most recent lockdowns.

 

England – Coronavirus infections fall 1/3 since lockdown began

Figures released this morning show that cases in the north-west and north-east have fallen more than 50%.

The infection rate between November 13 and 24 amounted to 96 per 10,000, down from 132 per 10,000 from October 26 to November 2 – with a sample size of 105,000 people.

 

Currencies

US$1.1971/eur vs 1.1924/eur last week.  Yen 104.12/$ vs 104.02/$.  SAr 15.303/$ vs 15.185/$.  $1.334/gbp vs $1.336/gbp.  0.738/aud vs 0.738/aud.  CNY 6.586/$ vs 6.583/$.

 

Commodity News

Precious metals:         

Gold US$1,780/oz vs US$1,809/oz last week

Gold ETFs 108.1moz vs US$108.3moz last week

Platinum US$960/oz vs US$962/oz last week

Palladium US$2,402/oz vs US$2,403/oz last week

Silver US$22.25/oz vs US$23.26/oz last week

           

Base metals:  

Copper US$ 7,631/t vs US$7,486/t last week

Aluminium US$ 2,014/t vs US$1,990/t last week

Nickel US$ 16,285/t vs US$16,475/t last week

Zinc US$ 2,822/t vs US$2,774/t last week

Lead US$ 2,104/t vs US$2,050/t last week

Tin US$ 18,930/t vs US$18,935/t last week

           

Energy:           

Oil US$47.4/bbl vs US$47.5/bbl last week

Oil price saw strong gains last week, Brent Crude finishing at US$48.37/bbl and WTI $45.18/bbl on the back of an improved economic outlook and COVID-19 vaccine news

Expectations are Pfizer/BioNTech will receive FDA approval for their vaccine on December 11/12th

An oil demand recovery still faces some obstacles to due strong restrictions on movement and business across Europe

Winter infection rates are also expected to hamper demand, the return of Asian heating and restocking could offset this to some extent

A change in work culture may have an overhang on gasoline demand according to the Federal Rserve Bank of Kansas City President Esther George

Dollar weakness supported crude prices as gasoline demand fell by 128,000bopd to 8.13MMbpd, the lowest since June

The US rig count has risen by 10 to 241, while the Canadian rig count rose by 1.

Prices fell in early trading today on nerves surrounding the OPEC+ meeting at which a decision on whether or not to extend output cuts in January will be taken

Consensus expectations are for a 3-month delay to output increases

No extensions could represent a US$5/bbl hit to the downside from current spot levels (Reuters)

Natural Gas US$2.916/mmbtu vs US$2.926/mmbtu last week

Natural gas prices rose on inventory draws in line with expectations last week, inventory levels were 3,940Bcf on November 20th according to the EIA, a net decrease of 18Bcf from the previous week

Stocks had been 322Bcf greater than this time last year and 250Bcf above the five-year historical average

There has been an improvement in the 10-15 day weather forecast with colder weather expected for the first week of December in the US

NoRWEgian gas exports could be hit by a security worker strike at the Nyhamna processing facility

Exports from the facility which has a capacity of 84m mcm of gas per day will be cut by 500Mcm (Reuters)

   

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$127.6/t vs US$125.2/t

Chinese steel rebar 25mm US$617.4/t vs US$618.6/t – China stainless steel imports rose 16.9% in October

Stainless steel imports amounted to 207,000t in October, up 16.9% compared to the month prior due to an increase of steel coil and plate, mostly from Indonesia (SMM News).

Thermal coal (1st year forward cif ARA) US$60.7/t vs US$60.2/t

Coking coal swap Australia FOB US$108.5/t vs US$108.5/t

           

Other: 

Cobalt LME 3m US$32,390/t vs US$32,390/t

NdPr Rare Earth Oxide (China) US$66,048/t vs US$67,602/t

Lithium carbonate 99% (China) US$5,922/t vs US$5,925/t

Ferro Vanadium 80% FOB (China) US$27.0/kg vs US$27.0/kg

Antimony Trioxide 99.5% EU (China) US$5.5/kg vs US$5.5/kg

Tungsten APT European US$220-225/mtu vs US$220-225/mtu

Graphite flake 94% C, -100 mesh, fob China US$480/t vs US$445/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,475/t vs US$2,275/t

Spodumene 6% Li2O min, cif (China) US$380/t vs US$375/t

 

Battery News

Regional disparities in EV charging points  

London and the south-east have benefited disproportionately from the installation of new electric car charge points in the last year having received 45% of new charger capacity, well in excess of their 27% share of the population.  

The total number of publicly accessible chargers last month passed 20,000 but there are still 46 local authorities with less than 10 public charging points per 100,000 residents. 

Analysis commissioned by the Society of Motor Manufacturers and Traders suggested the UK would need to build more than 1.9m public charging points by 2030 – well over 500 per day. This would cost about £16.7bn. 

The confirmation of the 2030 ban on internal combustion engine cars will cause an acceleration in investment in chargers says Nick Ballamy, managing director of EVC, which plans to spend £150m to install 100,000 charge points over the next 5 years.

 

‘Collared monopiles’ for RWE’s Kaskasi Offshore Wind Farm 

RWE is to deploy collared monopiles at its 342MW Kaskasi offshore wind farm. 

They have signed a contract with DEME Offshore for the transport and installation of the new foundation technology with offshore construction works expected to start in Q3 at the wind farm located in the German North Sea. 

Special collars will be installed around three monopile foundations at seabed level, based on RWE patented technology, to provide support for lateral loading, increase the bearing capacity and improve the structural integrity of the foundation. 

38 monopiles will be installed, which will feature up to 9MW turbines, with a “vibro pile driving” installation method used instead of hammering monopiles into the seabed.

The project is due online in summer 2022.

 

CATL returns to the top

CATL took top spot for batteries in use with 19.2GWh used in batteries from January to September. This equates to a 23.1% market share.

LG Chem follows close behind with 18.9GWh (22.9% market share), Panasonic in 3rd place with 17.6GWh (21.2% market share). The top 3 are some way ahead of the rest, Panasonic and SKI the closest chasers with 6.2% and 5.5% market share respectively.

Good news for CATL and evidence demand remains for their batteries. The Company reportedly signed a deal with Tesla to supply LFP batteries for the Model Y Standard Range Plus in China last week.

CATL supplies batteries to WM Motors which has experienced recent fires in its vehicles but the CATL’s batteries have not yet been cited as the reason for these problems.  

LG Chem has reportedly also signed a contract with Tesla to supply the batteries for the Model Y. The Company has received negative press of late on the back of Hyundai KONA battery fires and subsequent vehicles recall and GM vehicles recalls. LG Chem’s supplies the batteries for the vehicles involved.

 

Tesla gets the go ahead to sell the Model Y SUV in China

The Californian EV maker, who will join the S&P 500 on December 21st has received approval from the Ministry of Industry and Information Technology to start selling the Model Y vehicle in China.   

Tesla already has permission to sell its Model 3 vehicles in China where it now manufacturers them as well. The Company began shipping vehicles made at its Shanghai facility to Europe in October.

Tesla continues to build out its brand in China, adding the Model Y to the range and last week announcing it will start manufacturing EV chargers in the country in 2021.

The Company has signed recent battery supply deals with LG Chem and CATL for the Model Y vehicles calming fears that’s it internal battery production intentions would reduce its demand for supply partners batteries.

Tesla sales in China were up 103% YoY to US$1.4bn in Q2, 23% of the Company’s global sales. (Just Auto)

NEV sales in China remain robust, 144,000 NEVs were sold in October, EV sales up 137% compared to the same time in 2019.

 

Company News

Beowulf Mining* (LON:BEM) 5p, Mkt cap £26.5m – Swedish Constitutional Committee urge swift resolution at Kallak

(Beowulf holds 46.1% of Vadar. Beowulf also holds 100% Kallak iron ore in Sweden, 100% of Aitolampi graphite in Finland and 40% of the Mitrovica and Viti projects in Kosovo)

Sweden’s Minister of Trade and Industry has been publically criticised by Sweden’s Constitution Committee, KU, in its annual review of the government.

The Constitutional Committee (KU) has reviewed the Swedish Government’s handling for an Exploitation Concession at Kallak North, having met on the 26th of November. The highlights of the statement made by the KU are as follows:

“KU has examined the application for a processing concession for Kallak. In the Government case, no visible administrative measures were implemented for almost three years. This means a delay that is not acceptable, according to KU.”

“It also appears that the applicant has on several occasions asked the Ministry of Trade and Industry for a meeting. The Ministry has then stated that this is not possible because the issue concerns a forthcoming Government decision and is a matter under consideration.”

“KU notes that the Ministry management’s statement does not seem to be in line with what the Prime Minister has stated. The Government Offices thus seem to lack a common approach to the possibility for parties in administrative matters to have a meeting with the responsible ministry.”

Beowulf is also waiting to hear from UNESCO regarding the project, and the Company is writing to the Ministry of Enterprise and Innovation over the organisation’s review of the project.

Beowulf’s subsidiary Jokkmokk Iron Mines has invested, explored and developed at Kallak for 14 years, and the company has voluntary prepared a Heritage Impact Assessment, submitted to the Mining Inspectorate in April 2017.

In March 2017, Naturvårdsverket, The Swedish Environmental Protection Agency; and Riksantivarieämbetet, The National Heritage Board confirmed that Kallak would have no direct impact on Laponia, an area which at its closest point is 33.8km from Kallak.

Sven Otto Littorin, Chairman of Beowulf, commented: “The Ministry’s recent move to consult UNESCO, as a means to satisfying all partners in Government that the Company’s application is good and meets the requirements, seems to have anticipated the KU’s findings.

“While the issue of Kallak is somewhat politically charged, I like to work with these challenges and I would, most of all, like to work with the community in Jokkmokk, to make the town a national centre for sustainable and skills-developing mining in collaboration with partners, such as Luleå University of Technology. It would mean a lot to the municipality and create hundreds of long-term jobs for decades to come.”

The Constitutional Committee directs harsh criticism at Minister Ibrahim Baylan the Ministry of Trade and Industry.

Beowulf Mining has been waiting for an answer about the iron ore project in Kallak since 2013 when the company first submitted an application for a processing concession.

According to Dagens Industri interview: “On the Ministry of Trade and Industry’s table is also the mining and smelting company Boliden’s application for a processing concession for the copper supply in Laver – after more than six years, there is no decision there either. The issue of permits is also highly topical for state-owned LKAB, which has identified protracted and legally uncertain processes as the single greatest risk in the company’s conversion to fossil-free production.”

“Based on the permit processes we have today and historically, these changes will be difficult – if not impossible – to implement,” LKAB’s CEO Jan Moström told Di earlier this week.”

Conclusion: The published conclusion of the Constitutional Committee is a big kick up the backside for the government minister and a rallying call for companies trying to get their projects approved. We are increasingly hopeful the minister may now follow due process and issue the permits as required under Swedish legislation.

*SP Angel act as Nomad and Broker to Beowulf Mining

 

Botswana Diamonds (LON:BOD) 0.75p, Mkt Cap £5.4m – Sekaka acquisition completed

Botswana Diamonds reports the completion of its previously announced acquisition of Sekaka Diamonds.

An initial deferred payment of US$150,000 is due on 27th November 2021, the first anniversary of the transaction.

Sekaka, the former exploration vehicle of Petra Diamonds in Botswana, includes the 3.5hectare XX36 kimberlite pipe which has an “historic SAMREC compliant Indicated Resource of 17.9 million tonnes at 35 cpht, and an Inferred Resource of 6.7 million tonnes at 36 cpht [carats per hundred tonnes], estimated for the pipe by Z-Star in 2016” located around 70km from Gem Diamonds Ghaghoo project and 260km north-west of the capital, Gabarone.

Sekaka also owns a bulk sampling plant on the site at XX36 as well as an “extensive diamond exploration database contains the results of work undertaken since 2005.  The data include data in respect of airborne (including the Falcon survey) and ground magnetics (including gravity and Electromagnetics), in addition to heavy mineral sampling.  BOD believes that the information contained in the database will provide substantial support to its future kimberlite exploration activities in Botswana”.

Chairman, John Teeling, said that the acquisition “paves the way to explore commercial development options for KX36 and begin to evaluate the extensive database in conjunction with ours to discover more kimberlites in prime diamond real estate”.

Conclusion: Completing the Sekaka Diamonds acquisition increases Botswana Diamonds exposure with the addition of a relatively advanced diamond project, a bulk sampling plant and an extensive database of historical exploration information.

 

Bushveld Minerals* (LON:BMN) 12.60p, Mkt cap £145m – Conditions satisfied for US$65m financing with Orion Mine Finance

BUY – Valuation 37.7p

(Bushveld Energy has negotiated to holds 50% Enerox Holdings Limited (50% other investor) which holds 90% of Enerox GmbH along with 8.71% in Invinity) If no other investors participating then the €3.7m loan will be split between the Bushveld and the other investor.

Bushveld Minerals have satisfied conditions required for the completion of the US$65m funding with Orion Mine Finance.

The company is now able to drawdown of US$30m under the Production Financing Agreement and US$35m of convertible notes with Orion.

Royalty: Bushveld will pay a gross revenue rate of 1.175% in 2020 and 2021 and 1.45% from 2022.

Bushveld will also pay US$0.443/kgV on the tonnage of vanadium sold each quarter.

The rate drops by 75% once Vametco’s vanadium sales have hit 132,020mtV eg in 30 years

Bushveld can repay up to 50% of the loan each year on the first three loan anniversaries.

The convertible notes have a 10% coupon and a 17p/s strike price. Orion may convert up to one third in the first six months, and another two thirds in the second six months

Funds will be used to expand vanadium production at Vametco to >4,200mtV pa and for debt repayment.

Vanchem: funds will also be used for the first phase of Vanchem’s critical refurbishment programme, and debt repayment purposes.

Conclusion: We support management’s determination to continue to invest in and grow vanadium production and the business as a whole. We expect demand for vanadium to continue to rise in China and to also recover in the US and Europe as new stimulus-driven construction projects come through.

VRFB battery production looks set to take off with three new orders announced by Invinity Energy Systems in the last two months and others expected to follow. Invinity‘s latest 8MW project should use around 40-44t of vanadium in electrolyte representing around 1% of Bushveld vanadium production. The development of further VRFB projects should create significant additional demand over the next few years.

*SP Angel acts as Nomad and broker to broker to Bushveld Minerals

 

Bluebird Merchant Ventures (LON:BMV) – 5.35p, Mkt cap £21m – Independent expert determined Southern Gold interest worth $11.05m

Click for our 2018 note

Bluebird Merchant ventures reports the result of the independent expert valuation on Southern Gold’s 50% interest in the South Korean projects.

The valuation is set at US$11.05m of which Bluebird has agreed to pay 90% or US$9.945m (~£7.5m).

The settlement will be made by 26 January next year and may include an equity and royalty components to meet the full amount.

Capital costs are estimated at $28m to reopen the mines at Kochang and Gubong.

Gold production is planned to start at Kochang next year at 7,000oz due to its lower initial capital cost requirements.

Gold production is then expected to rise to 40,000oz in 2024 and then onto 100,000ozpa from 20205

Management are targeting production of 100,000ozpa within five years of first production.

Conclusion: This is good news for Bluebird. The value of the two mines will have risen along with the gold price and the stated intention to produce 7,000oz from the old Kochang gold mine brings the company much closer to cash flow.

 

Caledonia Mining* (LON:CMCL) 1140p, Mkt Cap £138m – Central Shaft completed on time and under budget

Caledonia Mining reports that it has completed equipping the new Central Shaft at the Blanket mine and that it expects to complete the commissioning of the shaft during Q1 2021.

The project began in 2015 and despite a decision to increase the scope of the project in order to extend the mine’s life until 2034, the “Capital cost to date is approximately $60 million, compared to initial sinking contractor quotes received of about $100 million”.

The company was able to self-fund the project and we conjecture that much of the cost saving results from using Caledonia Mining’s own mining crews under “supervision from Sinking Engineering Mining Construction” as compared with the costs of using a contractor to deliver a turnkey project.

As well as extending the overall life of the Blanket mine, the Central Shaft “is expected to increase production by  around 45 per cent from approximately 55,000 ounces of gold in 2019 to the target rate of 80,000 ounces from 2022 … [as well as deliver efficiency savings and economies of scale which] … are expected to reduce the all-in sustaining cost per ounce of gold from $855[1] in 2019 to between $700 and $800 per ounce”.

Chief Executive, Steve Curtis, hailed the “completion of the equipping phase is a huge milestone for the Company, and no-one should underestimate this achievement. The last five years have been a tremendous team effort and we commend our employees for their hard work and their commitment to safety. Shaft sinking is widely regarded as one of the most dangerous activities in mining and I am proud to report that over more than five years the crew achieved 1,850 fatality free shifts to date with only  two LTI and achieving more than one million LTI free man hours worked since the last LTI”.

Mr. Curtis applauded the achievement of the operating team delivering Central Shafts saying that he “would like to take this opportunity to recognise Dana Roets (Chief Operating Officer), Caxton Mangezi (Blanket Mine General Manager), Wimpy Nel (Design Engineer), Carel Greeff (Projects Manager), the late Rodney Voight (Civils Design Engineer), the entire team at Blanket, our technical team in Johannesburg especially Deon Niemand and the contractors for their outstanding performance as we take the business into its next chapter”.

Conclusion: The successful completion of the new Central Shaft is fundamental to the long-term sustainability of production at the Blanket mine delivering increased production and lower costs as it accesses deeper level ore. The substantial capital cost benefits of owner operation of the shaft-sinking project required the building and harnessing of a highly capable mining team and its unstinting commitment which should deliver further operational benefits as Central Shaft moves from development into production operations.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe

 

Castillo Copper (LON:CCZ) 2.3p, Mkt Cap £27.3m – First copper assays from latest drilling at the Big One project in Queensland

Castillo Copper reports shallow copper mineralisation in assay results from its latest drilling programme at the Big One copper project in Queensland where it had earlier announced the visual identification of the copper minerals chalcocite and malachite.

Results highlighted in today’s announcement include:

An intersection of 7m at an average grade of 1.37% copper from a depth of 57m in hole RC_213, including 3m at an average 2.18% copper from 58m; and

An intersection of 1m at an average grade of 4.14% copper from a depth of 65m in hole RC_211; and

An intersection of 7m at an average grade of 0.54% copper from a depth of 55m in hole RC_206; and

An intersection of 4m at an average grade of 0.43% copper from a depth of 85m in hole RC_207.

The results are interpreted by Castillo Copper’s geologists as coming from “the transitional zone between the oxide and sulphide domains … [and are] … consistent with earlier observations that confirmed visible malachite (oxide) and chalcocite (sulphide) in RC chips, but further data points are required “.

Hailing the results announced today as “a solid start to the current drilling campaign”, Castillo Copper points out that it still has 28 drill holes to complete in the planned programme and that “Assay results for the full seven drill-holes completed are being finalised and are expected to be returned shortly”.

The company also points out that the results announced today are consistent with previous drilling, presumably by other operators which include:

3m averaging 12.25% copper from a depth of 42m in hole B07; and

8m averaging 2.33% copper from 44m in hole B05; and

4m averaging 2.20% copper also from 44m depth in hole B06; and

6m averaging 1.55% copper from 666m in hole B25’; and

4m averaging 1.45% copper from 36m in hole B02; and

3m averaging 1.36% copper from 83m depth in hole B26.

Drilling is continuing with some modifications to the plan based on these initial results.

 

Greatland Gold (LON:GGP) 26.38p, Mkt Cap £959m – New agreements with Newcrest at Havieron and at Black Hills and Paterson Range East

Greatland Gold has announced an updated agreement with Newcrest Mining for its Havieron Project in the Paterson Region of WA where previous announcements indicate that an initial inferred mineral resource estimate covering the South East Crescent Zone is likely during the current quarter.

The new agreement maintains Newcrest’s commitment “to incur expenditure of US$65m and deliver a Pre-Feasibility Study to earn 70%” of the project but recognises that “In order to support the planned acceleration of the construction of a box-cut and decline and a faster rate and scope of planned spending on exploration activities, the parties have agreed to fund these activities in proportion to their post-Farm-in period interests”.

Greatland Goldand Newcrest have agreed that “In order to incorporate ongoing growth drilling activities, the parties have agreed a structure that allows Newcrest to deliver the Pre-Feasibility Study in Stage 4” which is currently underway with Newcrest’s ownership increased to an overall 60%.

Newcrest has provided a US$50m loan facility to Greatland Gold which “is expected (based on current forecasts) to fund Greatland’s share of joint venture costs, including Early Works and Growth Drilling, up to the completion of the Feasibility Study”. The loan bears interest at LIBOR + 8%.

In a further transaction which deepens the relationship between Greatland Gold and Newcrest, two further joint-ventures have been agreed covering Greatland Gold’s Black Hills, which is located northwest of Havieron in a similar geological setting its and its Paterson East licences.

Under the agreement which is similar to the original terms with the Havieron joint-venture, Newcrest “immediately receives a 25% interest in both licences and has the right to earn up to a 75% interest in the licences by spending up to A$20m as part of a two-stage Farm-in over five years, including an A$3m minimum commitment for Stage 1”.

Welcoming the agreements as a landmark moment for Greatland Gold, Chief Executive, Gervaise Heddle, said that “The Havieron Joint Venture Agreement formalises our relationship with Newcrest beyond the existing farm-in, and with this agreement in place, we expect to progress rapidly towards the potential establishment of mining operations over the next two to three years. Importantly, the new Havieron Loan Agreement with Newcrest secures for us our share of the necessary monies to accelerate activities at the Havieron project”.

Mr. Heddle said that “By early 2021, we expect to be moving forward with multiple exploration campaigns in the Paterson as we advance exploration at the Havieron Joint Venture, the Juri Joint Venture and across Greatland’s 100%-owned licences”.

Conclusion: The agreements show a deepening relationship with Newcrest Mining as the Havieron project accelerates towards the completion of an initial mineral resources estimate for the South East Crescent Zone during December.

 

IronRidge Resources* (LON:IRR) 14p, Mkt cap £56.2m – Board Change

IronRidge announce the retirement and replacement of Mr Alistair McAdam with the appointment of Ms Christelle Van Der Merwe Non-Executive Director to the Board.

Christelle joins the Board as part of the Company’s strategic alliance with mining company Assore Limited, which as a 25% interest in IronRidge. Ms Van Der Merwe brings extensive resources industry experience in strategic exploration, mining development and environmental management.

Christelle’s key roles included leading the mining-related geology and resources of the Assore subsidiary companies, comprising the pyrophyllite and chromite mines, along with the company’s iron and manganese mines. She has been Assore’s group geologist since 2013.

*SP Angel acts as Nomad for IronRidge Resources

 

Mkango Resources* (LON:MKA) 13.63p, Mkt cap £16m – Grant-funding for rare-earth magnet recycling research

(Mkango’s 75.5% subsidiary, Maginto Ltd holds a 25% stake in HyProMag which is a partner in the ‘Rare–Earth Recycling for E-Machines’ RaRE project)

Mkango Resources has announced that its HyProMag subsidiary, in conjunction with European Metal Recycling (EMR) and the University of Birmingham is to receive UK Research & Innovation (UKRI) support for research into the recycling of rare-earth magnets from “speakers used in automotive and consumer electronics applications, which account for approximately 20% of the current market for rare earth magnets”.

The research support for the Rare Earth Extraction from Audio Products (REAP)comes after the announcement earlier this year of the Rare Earth Recycling for E-Machines (RaRE) project and “further cements HyProMag’s and University of Birmingham’s positions as leaders in the field” Managing Director, William Dawes said in today’s announcement.

EMR, the third of the partners, is described as “a global leader in metal recycling, operating at 150 locations around the world.”

“EMR will pre-process automotive and flat screen TV loudspeaker scrap to provide a feed of scrap components containing NdFeB magnets to HyProMag. HyProMag will use the HPMS process in conjunction with the University of Birmingham to extract the magnets as a demagnetised alloy powder, which can be used in the remanufacture of magnets”.

Nick Mann, General Manager, Operations, at HyProMag pointed out that current estimates suggest that recycling of rare earth magnets is currently under 5% and that with “demand for rare earth magnets accelerating, it is imperative that we find viable economic solutions to reclaim end of life magnets that are currently lost”.

The REAP Project has a budget of just over £250,000 of which around £175,000 (around 68%) “will be funded by UKRI through the Driving the Electric Revolution challenge, part of the Industrial Strategy Challenge Fund, with the balance funded by the Project partners. HyProMag’s contribution will be fully funded from the £300,000 investment made by Maginito in January 2020”.

Mr. Dawes explained that “Mkango is uniquely positioned in the rare earths supply chain, developing sustainable solutions for the supply of rare earth carbonate, NdPr oxide, NdFeB alloys and magnets, underpinned by the strategic partnership with HyProMag and sustainable development of the Songwe Hill rare earths project in Malawi, for which a feasibility study is underway.”

Conclusion: Mkango Resources is extending its downstream research in the rare-earths business with the grant funded work to develop recycling of rare-earths magnets in a continuing association with the University of Birmingham and with EMR while also continuing its work on the feasibility study for the Songwe Hill rare-earths project in Malawi where it  expects to complete the studies in the second half of 2021.

*SP Angel act as Nomad and Broker to Mkango Resources

 

Orosur Mining* (LON:OMI) 21.1p, Mkt Cap £39.5m – Orosur raises £4m

Orosur Mining have raised £4m representing 12.6% of the company’s enlarged share capital at a 30% discount to the closing price on Friday.

The issuance of 23.5m new shares at 17p/s takes the company’s enlarged share capital to 187m shares in total.

Warrants: The company is also issuing one warrant for every two placing shares representing another 11.8m new shares if exercised.

The warrants are priced at 25.5p/s and are exercisable up to 7 December 2022.

The funds are to be used for ‘general working capital of the Company, to strengthen the Company’s position in relation to the Anzá project and to allow the Company to evaluate and potentially pursue other attractive exploration projects.’

Anzá: Drilling has started at the Anzá gold project in Colombia under the joint venture between Orosur and the new Monte Aguila joint venture between Newmont and Agnico Eagle.

The Monte Aguila joint venture 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 Anzá project.

A second drill rig has arrived at site and is preparing to start drilling this week.

*SP Angel act as Nomad and Broker to Orosur Mining

 

Petropavlovsk (LON:POG) 26.9p, Mkt Cap £1,076m – Ex-Highland gold chief appointed as CEO

Petropavlovsk have appointed Denis Alexandrov as CEO from the 1st of December, with interim CEO Maxim Meshcheryakov remaining with the company in a senior position.

Alexandrov was previously CEO at Highland Gold Mining, a top 10 Russian gold producer, from January 2016 to November 2020.

 

Analysts

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

 

Sales

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

 

 

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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