SP Angel . Morning View . Monday 07 12 20
Battery material prices rise. US Stimulus talks continue
Ariana Resources (LON:AAU) – Partial divestment of Turkish assets update and MRE update at the Magellan project
AfriTin* (LON:ATM) — Uis tin mine exceeds Stage 1 tin production targets
Ceres Power* (LON:CWR) – Ceres and Bosch scale up for Solid Oxide Fuel Cell production
Bluejay Mining* (LON:JAY) – Titanium Dioxide prices rise in China
Bushveld Minerals* (LON:BMN) – Ferro-vanadium prices jumped 5.7% in the US last week to 10.65-10.85/lbV
Condor Gold* (LON:CNR) – 4,000m diamond core infill drilling launched at La India higher grade start pits
Cornish Lithium (Private) – Battery-grade lithium hydroxide produced at Trelavour hard rock project
Pensana Rare Earths (LON:PRE) – Humberside chosen as proposed site for REE processing facility
Pure Gold Mining (LON:PURE) – Drilling extends high grade mineralisation at the PureGold project
Talga Resources* (LON:TLG) – Scoping Study on graphite resources in Sweden
Prices of industrial minerals seen rising in China and in western markets
Battery related commodities saw interesting prices rises but were joined by other industrial metals
Prices of titanium dioxide are rising in China and the US
Ferro-vanadium prices are rising in the US and Europe
Lithium carbonate prices rose last week in China to Rmb42,000-45,000/t but remained steady in Europe at $7,500-8,500/t (FastmarketsMB)
Graphite flake rose 6.3% to $519/t in China (FastmarketsMB)
IGTV: Copper price rise: https://youtu.be/mdPXTup15VY
VOX – 25/11/20: https://www.voxmarkets.co.uk/media/5fc0b908bc74c922485f4fb0/?context=/listings/LON/EEE/multimedia/
US Election, China growth policies Solgold*, Mkango*, Rainbow Rare Earths*: https://youtu.be/YKk5-kVpVGE
EV revolution, gold and other ideas (Interactive Investor): https://www.youtube.com/watch?v=ja0IdjszfCc
Metals Markets: Are they totally dependent on stimulus? (IG TV): https://youtu.be/TOiSwRpgfKM
*SP Angel act as nomad or broker or nomad and broker to companies mentioned in the above videos.
Dow Jones Industrials +0.83% at 30,218
Nikkei 225 -0.76% at 26,547
HK Hang Seng -1.23% at 26,507
Shanghai Composite -0.81% at 3,417
Economics
China – Auto sales rise 11.1% yoy in November to 2.73m vehicles (caam.org.cn)
CAAM expect sales to rise 37% in auto sales in next year
Russia – started vaccinating thousands against the Coronavirus on Saturday
Currencies
US$1.2103/eur vs 1.2157/eur last week. Yen 104.21/$ vs 103.93/$. SAr 15.249/$ vs 15.182/$. $1.328/gbp vs $1.346/gbp. 0.740/aud vs 0.743/aud. CNY 6.539/$ vs 6.529/$.
Commodity News
Precious metals:
Gold US$1,828/oz vs US$1,842/oz last week
Gold ETFs 106.7moz vs US$106.9moz last week – Mass sell-off in gold ETFs market continues
Gold exchange-traded funds saw their largest ever outflows over the past three weeks, with mass-selling continuing to weigh on the overall price of gold.
Holdings in funds tracked by Bloomberg fell nine consecutive days through Thursday- the longest run of declines since Donald Trump’s presidential victory in 2016.
Investors have offloaded $7.9bn worth of gold since mid-October.
Platinum US$1,030/oz vs US$1,049/oz last week
Palladium US$2,336/oz vs US$2,333/oz last week
Silver US$23.72/oz vs US$24.21/oz last week
Base metals:
Copper US$ 7,679/t vs US$7,755/t last week – BHP executive predicts that copper production will need to double over next 30 years to around 48mtpa
Aluminium US$ 2,018/t vs US$2,042/t last week
Nickel US$ 16,320/t vs US$16,085/t last week
Zinc US$ 2,731/t vs US$2,772/t last week
Lead US$ 2,032/t vs US$2,047/t last week
Tin US$ 19,030/t vs US$18,890/t last week
Energy:
Oil US$48.7/bbl vs US$49.7/bbl last week –
Brent Crude and WTI are both down 0.4% in early trading as more lockdowns are announced in the US and Europe following a strong trading week last week.
Tightened restrictions in California, a tougher lockdown in Bavaria, Germany and increased social distancing rules in South Korea have affected sentiment
Further weighing on sentiment is that it is being reported Iran has instructed its oil ministry to prepare installations for production and sale of crude oil at full capacity within three months
Data points show China experiencing an economic recovery, both Composite and Caixin services PMI have improved MoM, while new order have increased at their fastest pace since 2010 and business confidence is at a 9yr high. Manufacturing PMI improved above expectations
Last week positive vaccine news including the start of the UK roll out of the Pfizer vaccine and signs of a phased easing of OPEC+ production cuts provided a boost to prices
The UK is set to begin the roll out of the Pfizer vaccine this week, while the US is reported to be close to approving the Pfizer vaccine as well.
OPEC+ agreed to ease oil output cuts by 500,000bopd in January
This is seen as a compromise with OPEC+ expected to continue with current cuts of 7.7MMbopd until March but there were some dissenting voices within the group including the UAE suggesting they could not continue much longer at current levels
The move installs confidence in the market that OPEC will exit their production cuts in a coordinated way
Positive news out of the US as momentum gained behind a US$908bn coronavirus aid plan
President elect Biden has shown his support for the plan and Democrats seem to be prepared to make some concessions about the scope of the plan
US Crude inventories fell 679,000bbls last week according to the EIA, US production rose 100,000bopd, the highest level since May according to the same report
Reuters poll of 40 economists/analysts forecast Brent average prices of US$49.35/bbl next year as participants suggest prices will struggle to maintain upward movement next year as winter lockdowns endure and impact the demand outlook.
Natural Gas US$2.416/mmbtu vs US$2.484/mmbtu last week
EIA data showed natural gas inventories down 1Bcf for the week ending 27 November
Expectations had been for a 13Bcf decline for the week
US natural gas consumption is expected to decline as expected this year according to the EIA
The weather is expected to be warmer than normal throughout most of the US for the next two weeks according to NOAA
Uranium US$29.60/lb vs US$29.50/lb last week
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$141.3/t vs US$132.5/t – Iron ore futures extend record highs as Chinese steelmakers appeal for Gov Intervention
Iron ore futures in Singapore are set for another record close, with prices continuing to rise on insatiable demand from Chinese steelmakers.
Purchases from China in November were 98.15mt, a record for that month, while year-to-date imports surpassed 1,000mt- higher than the full-year volume for 2019.
The China Iron & Steel Association have appealed for intervention, saying that prices have become detached from fundamentals and regulators should intervene as soon as possible (Xinhua).
Iron ore futures in Singapore were 1.2% higher at $141.90/t after surging as much as $144.40/t (Bloomberg).
Dalian Commodity Exchange is to scrutinize speculative accounts trading in iron ore. This may prompt some profit taking
Chinese steel rebar 25mm US$610.5/t vs US$611.9/t
Thermal coal (1st year forward cif ARA) US$62.4/t vs US$61.0/t
Coking coal swap Australia FOB US$125.0/t vs US$135.0/t
Other:
Cobalt LME 3m US$32,390/t vs US$32,390/t
NdPr Rare Earth Oxide (China) US$66,910/t vs US$67,006/t – China rare earth exports hit five-month high
The world’s largest rare earth exporter sold 2,611t of REE in November, according to Customs data.
Lithium carbonate 99% (China) US$6,423/t vs US$6,279/t –
Lithium-ion battery cell prices have fallen to US$110/kWh (Benchmark)
Cell prices could fall further to US$60/kWh through economies of scale
Battery cell production may double every 4/5years to meet expectations for demand.
Based on the next generation NCM 811 technology (which already uses much less cobalt, the priciest component, than found in many of today’s EVs) the result is an increase in per kW/h costs of more than 36% – from US$87.2/kwh to US$119.0/kwh. When a 10% cell producer margin is included, moving from a production cost to a price, in a 70KWh battery pack this adds almost US$2,500 to every vehicle. Does this rush to a green society come at a substantial financial cost.
Ferro Vanadium 80% FOB (China) US$27.2/kg vs US$27.0/kg
Ferro-Manganese high carbon 78% Mn US$1,320/t vs US$1,265/t
Tungsten APT European US$220-225/mtu vs US$220-225/mtu
Graphite flake 94% C, -100 mesh, fob China US$510/t vs US$480/t
Graphite spherical 99.95% C, 15 microns, fob China US$2,475/t vs US$2,475/t
Spodumene 6% Li2O min, cif (China) US$380/t vs US$375/t
Battery News
Eni buys stake in Dogger Bank
Italy’s Eni is buying a 20% stake in Dogger Bank Wind Farm project from Norway’s Equinor and Britain’s SSE as it looks to gain expertise in the sector and cut greenhouse gas emissions 80% by 2050.
Eni’s investment was for a combined GBP405m.
SSE and Equinor will each realise GBP200m from the Dogger Bank sale, which is expected to be completed in 2021.
The deal with Eni covers the first two parts of Dogger bank development and will add a combined 2.4GW of capacity with a completion scheduled in 2023 and 2024.
Equinor and SSE retain 50% stakes in phase C which could add a further 1.2GW in 2026. This means that by then, Dogger Bank could produce enough energy for 6 million homes.
UK’s first EV forecourt open in Essex
The UK’s first location dedicated to charging EV vehicles opens today in Braintree, Essex. It is the first of 100 such locations to be built by Gridserve over the next 5yrs, part of a GBP1bn programme.
The site has 36 EV chargers ranging from 7kWh to 22kWh alongside 6 Tesla Superchargers and some 350kWh devices. There is also a services building with an EV educational centre.
Energy is stored on-site in 7mWh batteries and the site is located 44 miles from Clay Hill, a 60-acre solar farm generating 10gWh a year. This is enough to power 5,000 EVs annually.
Bloomberg reports that users are expected to be charged 24p per kWh of charging. Charing a mid-sized EV from 20-80% could cost less than GBP10.
The network of electric forecourts is a significant step forward for the UK EV charging network. The options provided to customers via the app could be a glimpse of the future of charging services and could be a major contributor to breaking down resistance to the EV transition.
ABB has supplied the EV chargers for the site.
EU targets 30 zero emissions vehicles by 2030
A draft document shows the EU is targeting 30m EVs on roads by 2030 according to Reuters. The strategy is due to be published next week.
European target dates to halt the sale of new ICE vehicles vary, Norway has targeted 100% of new car sales to be electric by 2025, the most aggressive target date in Europe. By comparison France is targeting 2040 and Germany, Ireland and the Netherlands 2030.
The report seen by Reuters suggests the bloc’s climate targets will require at least 30m zero-emissions on the road by 2030. The document also states 3 million public charging points and 1000 hydrogen fuel stations will be needed to service the fleet. Europe has 200,000 charging points installed today.
Plug-in EVs registrations reached record highs in September and October, registrations in October hit 146,606, up 195% YoY. 919,000 new plug-in passenger vehicles have registered in Europe YTD. (Inside EVs)
In Q1 2020 9 of the top 10 markets for EV penetration were European (McKinsey).
Just last month EU Commission VP Maros Sefcovic said on Tuesday that he expects the EU to be able to produce enough EV batteries to satisfy domestic demand by 2025.
The report also concluded that high speed rail traffic should double by 2030 and zero-emissions aircraft and ships need to be available by 2035.
Toyota deals blow to UK EV ambitions
Toyota has revealed it will not build BEVs in the UK until the mid-2030’s, hybrid vehicles will be the focus of the next round of investment into their Derbyshire plant.
Production of the Toyota Corolla is scheduled to halt at the plant in 2027 so based on a 7yr production cycle it could be that zero-emissions vehicles are not produced at the site until 2034.
The UK has set a deadline of 2030 for the cessation of sales of new ICE vehicles, part of an aggressive push towards the clean energy transition.
A Brexit deal seems very uncertain at this point but a draft addition of the post-Brexit trade deal seen by the BBC in October suggested electric and hybrid cars will only receive zero tariffs if the maximum content of non-originating (non EU and UK) materials is 45% of the ex-works price of the vehicle.
Those vehicles with greater than 45% of the ex-works price originating from outside the EU and UK would be subject to a 10% tariff.
Company News
Ariana Resources (LON:AAU) 5.4p, Mkt Cap GBP58m – Partial divestment of Turkish assets update and MRE update at the Magellan project
The Company announced the completion of conditional agreements regarding the new JV between Ozaltin and Proccea involving the partial disposal of the interests in Turkish assets in exchange for $35.8m in cash.
Following the completion of the deal, Ariana will hold a 23.5% interest in the JV with Proccea owning 23.5% and Ozaltin holding the remaining 53%.
The JV will hold the Kiziltepe Mine, Tavsan Project and associated exploration and development properties as well as the Salinbas Project.
Ariana will be free carried on further costs (up to a development decision) in respect of the Feasibility Stage development at Salinbbas.
The completion of the agreement remains subject to approval by the Competitoin Authority in Turkey as well as Ariana shareholder approval at a coming GM.
Separately, the Company released an updated mineral resource estimate for the New Sha, the third deposit comprising the Magellan Project area in Cyprus.
New Sha MRE stands at 1.0mt at 0.80% Cu and 0.3% Zn for 8kt Cu and 2.5kt Zn (all Inferred) including a higher grade zone of 0.5mt at 1.13% Cu and 0.3% Zn.
The deposit comprises two zones including New Sha East containing ~90% of the resource within open pittable 50-170m below surface and New Sha West accounting for the balance hosted within ~60m from surface.
The MRE was prepared based on historical drill data acquired from the late 1960s comprising 110 open-hole percussion drill holes for a total of ~12,300m of drilling.
Additionally, a review of historical gold assays allowed the team to put together an Exploration Target for gold domain potential to the tune of 0.5-1.5mt at 0.4-0.85g/t for 6.5-41koz.
Combined with kokkinoyia and Klirou deposits, updated New Sha MRE brings the total for the Magellan project to 9.5mt at 0.65% Cu (all Inferred) with additional potential for gold, silver and zinc-rich zones.
The Magellan project copper/gold/silve/zinc mineralisation is associated with VMS type of deposit.
The Company is currently earning a 50% interest in the project owner, Venus Minerals.
The team expects new drilling in the vicinity of these resource areas to yield further resource growth with drilling planning currently underway.
AfriTin* (LON:ATM) – 2.45p, Mkt cap GBP20m – Uis tin mine exceeds Stage 1 tin production targets
AfriTin report improved plant operation at its Uis tin mine in Namabia through November.
The figures mark the completion of the production ramp-up of Stage 1 of Phase 1 of the operation.
Plant availability rose to its highest monthly level at 83% through November raising utilisation rates to 87% from 85% in October.
The plant processing rate also rose to 74tph on 73tph in October
Ore processed rose to 38,211t in November from 36,796t in October again recording a new monthly record and exceeding stage 1 target capacity by 7%.
Tin contained in concentrate jumped 29% to 41.6t from 32.2t. This is 16% ahead of their stage 1 target indicating better grade also coming through.
Uis has a Measured, Indicated and inferred JORC resource of 71.54mt of ore grading 0.134% with some 95,539t of contained tin.
The mine also has an inferred grade of 85ppm of tantalum for 6,091t of material. Tanatalum 25% Ta2O5 sells for $50-52/lb (~$112/t).
Conclusion: The plant commissioning is achieving better than target results. We now look forward to news of the next expansion and for better reconciliation of the JORC resource grade in time.
*SP Angel act for Bushveld Minerals which holds around 9.5% of AfriTin
Ceres Power* (LON:CWR) 1,032p, Mkt cap GBP1.77bn – Ceres and Bosch scale up for Solid Oxide Fuel Cell production
(Bosch holds 17.6% of Ceres Power)
Ceres Power reports the scale up to mass production of their SOFC ‘Solid Oxide Fuel Cell’ systems based on Ceres’s technology.
This follows successful prototype testing by Bosch
Bosch is to ramp up production to 200MW capacity in 2024 for the stationary power market to decentralise power generation into cities, factories, datacentres and EV charging infrastructure.
The deal is worth GBP23m to Ceres of which GBP6m is conditional on reaching Key Performance Indicators.
Germany recently announced EUR9bn of government support for hydrogen and other clean energy technologies.
Bosch also plans to invest several hundred million euros in SOFCs up to 2024.
Conclusion: Ceres’ fuel cells have come along way in recent years since their early development by Imperial College and then British Gas.
Germany has a strategy to develop 5GW of hydrogen generation facilities equating to around five coal fired power stations.
The challenge is to convert this hydrogen into electrical power in local, distributed power cells in the most efficient form.
Fuel cells should be more efficient than burning hydrogen in combustion engines which also produce NOX emissions.
Ceres SOFC fuel cells are reported to achieve 50% electrical efficiency and achieve around 90% efficiency by utilising the heat generated in the SOFC cell.
*The SP Angel analyst wrote the original pre-IPO research on Ceres Power
Bluejay Mining* (LON:JAY) 12.07p, Mkt cap GBP117m – Titanium Dioxide prices rise in China
Several titanium dioxide factories in China announced recently to increase its titanium dioxide price according to OKChem.com.
Kunming Donghao Titanium Industry Co., Ltd.: is raising titanium dioxide prices by Rmb 1000 / ton with foreign trade prices rising US$ 150 / ton.
CNNC Hua Yuan Titanium Dioxide Co., Ltd: is raising its titanium dioxide price by Rmb 600 / ton with foreign trade prices rising by US$ 100 / ton.
Jinan Yuxing Chemical Co, Ltd: is raising titanium dioxide prices by Rmb 700 / ton with foreign trade prices rising US$ 100 / ton.
Lomon Billions Group Co., Ltd: is raising titanium dioxide prices by Rmb 500 / ton with foreign trade prices rising US$ 100 / ton.
Panzhihua Taidu Chemical Co., Ltd: is raising titanium dioxide prices by Rmb 700 / ton with foreign trade prices rising US$ 100 / ton.
Guangxi Shunfeng Titanium Industry Co.,Ltd: is raising titanium dioxide prices by Rmb 700 / ton
PHZ Tian Lun Chemical Co.,Ltd: is raising titanium dioxide prices by Rmb 700 / ton with foreign trade prices rising US$ 100 / ton.
Venator Materials PLC (NYSE VNTR) also announced price increases for all its titanium dioxide pigments effective from January 1, 2021.
Venator is raising prices by:
EUR120/t or USD $150/t for EMEA (Europe, Middle East and Africa),
$150/t for Asia Pacific,
$0.06/lb or USD $150/t Americas (North America and Latin America)
The FastmarketsMB titanium reference price remains at $230-250/t.
Conclusion: Ilmenite concentrate is the principal feedstock for titanium dioxide with the new Chinese price increases suggesting strengthening demand for titanium dioxide and its feedstock.
*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Hammaslahti, Enonkoski and Outukumpu mines in Finland as well as Bluejay’s Dundas mine site in Greenland.
Bushveld Minerals* (LON:BMN) 12.70p, Mkt cap GBP146m – Ferro-vanadium prices jumped 5.7% in the US last week to 10.65-10.85/lbV
Ferro-vanadium prices rose 1.3% in Europe last week to 24-25.1/kgV (FastmarketsMB)
The price rises hopefully indicate the recovery of vanadium prices as stimulus driven construction and infrastructure projects start to draw vanadium-bearing structural steel through the supply chain.
*SP Angel acts as Nomad and broker to broker to Bushveld Minerals.
Condor Gold* (LON:CNR) 47.0p, Mkt Cap GBP56m – 4,000m diamond core infill drilling launched at La India higher grade start pits
Click here for Initiation note pdf
The Company launched a 4,000m infill diamond core drilling programme at the La India Project, Nicaragua.
The programme will be focused on the near-surface high grade zones (to around 35m depth) where open pit mining will start.
The aim is to improve confidence in the Mineral Resource in the zone narrowing the drill spacing to finalise pit designs and mine schedules ahead of start of production.
Additionally, the plan is to re-drill and replace all RC drilling with diamond core drilling allowing to collect more detailed geological information on gold bearing structures.
Starter pits are estimated to host 445kt at 4.17g/t for 59.7koz of gold at 2.0g/t COG.
Drilling on the higher grade Mestiza open pit is expected to start in January 2021.
Conclusion: The 4,000m drilling programme is focused on improving confidence in the high grade starter pits that are expected to deliver higher grade material early in the life of mine improving La India project economics.
*SP Angel act as sole broker to Condor Gold
Cornish Lithium (Private) – Battery-grade lithium hydroxide produced at Trelavour hard rock project
Cornish Lithium intends to accelerate its Treavor hard rock lithium project near St Austell following the successful production of nominal battery-grade lithium hydroxide.
Production was achieved using ASX-listed Lepidico proprietary L-Max(R) and LOH-Max(R) process technologies on lithium mica samples obtained during the Company’s maiden hard rock lithium drilling programme earlier this year.
Cornish Lithium has now acquired a 15-year technology license from Lepidico which provides an innovative and environmentally responsible metallurgical processing solution, allowing the Company to proceed immediately towards bulk metallurgical testing and the construction of a pilot plant.
This work is expected to accelerate domestic production of battery quality lithium chemicals for the UK automotive and battery industry as well as generating a significant number of skilled jobs in the St Austell area of Cornwall.
The technologies used allow for development of the low-carbon extraction of lithium from zinnwaldite and polylithionite mica ores, and work so far has indicated the potential of this technology to produce battery-grade lithium in Cornwall without the need for further refining.
The license is exclusive to Cornish Lithium and covers the entire St Austell Granite region, an area of approximately 93km2.
Cornish Lithium has also entered into a strategic collaboration agreement with Lepidico to further develop the L-Max(R) and LOH-Max(R) technologies for lithium extraction in the St Austell region
Along with the technology license, Cornish Lithium has received engineering and process plans for the pilot plant constructed by Lepidico in Australia, secured ongoing technical collaboration regarding the development of various metallurgical processes and assistance from Lepidico personnel; and a two-year option to purchase 100 million shares in Lepidico at an exercise price of A$0.016 per share- after paying Lepidico GBP2.3m.
Jeremy Wrathall, Founder and CEO of Cornish Lithium, commented: “We are delighted to have acquired a licence from Lepidico that enables Cornish Lithium to fast track the hard rock Trelavour project towards commercial production of high purity lithium chemicals for the UK battery industry.”
“The next phase of work, which will shortly commence at Trelavour, will run in parallel with studies which continue to advance the Company’s lithium in geothermal waters projects across Cornwall. In particular, the forthcoming construction of the lithium pilot plant at United Downs, will enable the Company to trial Direct Lithium Extraction technology at the United Downs Deep Geothermal Project together with partners Geothermal Engineering Ltd.”
Pensana Rare Earths (LON:PRE) 72p, Mkt Cap GBP140m – Humberside chosen as proposed site for REE processing facility
Pensana has selected the Saltend Chemical Park in the Humber Local Enterprise Partnership as the proposed site to build the UK’s first REE processing facility with a view to create the world’s first fully sustainable magnet metal supply chain.
Pensana will be working with engineering consultants Wood Group, and the processing facility is to become one of only two major producers outside China of rare earth oxides used in the manufacture of powerful permanent magnets.
The site is located on the Humber Estuary, near the UK’s busiest ports complex, and is a 370 acre site which has had GBP500m of investment over recent years.
Gerry Grimstone, UK Minister for Investment said: “We very much welcome the proposal to establish a fully sustainable rare earth oxide magnet metal processing facility in the Humber region. This facility is an important step in the establishment of a permanent magnet supply chain in the UK which could support a range of industries important to building back greener and our Net Zero ambitions.”
Pensana Chairman Paul Atherley commented: “The Saltend Chemicals Park offers an exceptional range of services allowing us to plug into power, water, reagent supplies and services and to recruit a highly skilled local workforce at internationally competitive rates. It is very clear that it is no longer acceptable for British and European companies to import the raw materials critical to the Green economy from unsustainable sources.”
“The Saltend facility has the potential to become a world class producer of rare earth oxides and to help establish a sustainable supply chain for the manufacture of powerful permanent magnets critical for the offshore wind and electric vehicle industries in the UK and Europe.”
Pure Gold Mining (LON:PURE) 153p, Mkt Cap GBP617m – Drilling extends high grade mineralisation at the PureGold project
Underground exploration drilling returned high grade intersections extending gold mineralisation out from planned stopes at the PureGold project in Red Lake, Canada.
Results offer potential to add near term tonnes to the mine plan involving little in the way of additional development costs given close proximity to existing underground infrastructure.
Selected drilling results included:
23.4 g/t gold over 2.9 metres from drill hole PGU-0143; including 50.1 g/t gold over 1.0 metre;
10.3 g/t gold over 6.0 metres from drill hole PGU-0150; including 27.7 g/t gold over 1.0 metre;
13.7 g/t gold over 2.2 metres and 13.9 g/t gold over 1.0 metre from drill hole PGU-0144;
14.3 g/t gold over 1.5 metres from drill hole PGB-0179;
11.6 g/t gold over 1.9 metres from drill hole PGB-0183;
The team is also in the process of drilling from surface on several new discovery targets across the seven kilometre gold corridor.
Talga Resources* (LON:TLG) A$1.80, Mkt cap A$476m – Scoping Study on graphite resources in Sweden
Talga Resources has published results from its Scoping Study in the Niska South, Niska North and Nunasvaara North graphite resources in northern Sweden.
The Study optimises the Niska JORC 2012 resources of 5.1Mt grading 28.7%Cg but excludes resources from the Nunasvaara South deposit
The study works on a mining rate of 400,000tpa pre-tax free cashflow of US$690mpa over a 14 mine life
The project calculates assumed Cash cost of US$2,380/t coated anode (Talnode(R)-C) and graphene (Talphene(R)) products.
The study supports stand-alone production of ~85,000tpa anode product Talnode(R)-C and ~8,500tpa Talphene(R) for silicon anodes from Niska.
Adding the Niska project to the Vittangi Anode Project could raise total production to >100,000tpa of anode production by 2025-26.
This would make Talga the largest Li-ion battery anode producer outside China with the added benefit of access to low cost 100% renewable energy supply.
NPV8 range of US$2.4-4.6bn with base case US$3.5bn
IRR of 47% – Base case
Payback 1.7 years post commissioning
Operating free cash flow US$690mpa
The study was based on a 400,000tpa underground development of in-situ 5.1Mt @ 28.7% graphite with >98% in the Indicated Mineral Resource category.
The Study has been constrained to a 400,000tpa mining and concentrator throughput towards 85,000tpa Talnode(R)-C anode production and 8,500tpa of Talphene(R) production.
Production from Niska would add to the existing 19,000tpa Vittangi Anode Project, to take total Talga Group Talnode(R)-C production to >100,000tpa by 2025-26..
Conclusion: Talga continues to progress towards construction and financing of its graphite projects in Sweden. While Talga has a trial mining permit it will need a full-scale mining permit before financing these full-scale mine plans.
Other mining companies have struggled in recent years to gain permits from the Mines Department in Sweden and it will be interesting to see if Talga is able to jump the queue due to Europe’s growing and pressing need for more locally sourced and possibly better quality graphite anodes.
*SP Angel acted as UK broker to Talga Resources. SP Angel also act for Oxis Energy a leading Lithium metal battery development company.
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.
Sources of commodity prices
Gold, Platinum, Palladium, Silver
BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel
Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt
LME
Oil Brent
ICE
Natural Gas, Uranium, Iron Ore
NYMEX
Thermal Coal
Bloomberg OTC Composite
Coking Coal
SSY
RRE
Steelhome
Lithium Carbonate, Ferro Vanadium, Antimony
Asian Metal
Tungsten
Metal Bulletin
