Today’s Market View – Rio Tinto, Condor Gold, Botswana Diamonds and more…

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SP Angel . Morning View . Wednesday 16 12 20


Eurozone PMIs beat expectations on positive vaccine outlook




Arc Minerals* (LON:ARCM) – Copper production at Cheyeza and Kalaba likely to start next year with cash flow to support further drilling


Botswana Diamonds (LON:BOD) – Modelling of newly identified kimberlite at Thorny River


Condor Gold* (LON:CNR) – Initial site-preparation work underway at La India


Rio Tinto (LON:RIO) – Oyu Tolgoi underground development update


Tertiary Minerals* (LON:TYM) – Appointment of non-executive director


Power Metal Resources* (LON:POW) – Geophysics commenced at Kisinka Copper-Cobalt Project


Shanta Gold (LON:SHG) – Positive NLGM drilling results


Vast Resources* (LON:VAST) – Asset backed debt facility update




Gold prices rise as dollar weakens ahead of Fed meeting


Gold prices rose over 1% on Tuesday, driven by prospects of further US stimulus when the Federal Reserve’s policy committee meet later today.


Markets are expecting fresh guidance on the Fed’s asset-purchase programme, with any major developments on this front expected to lift inflation expectations and support bullion prices.


While positive vaccine news has dampened gold’s appeal amid renewed risk-on sentiment, it is becoming more widely accepted that the vaccine will stop the next wave, but do very little to curtail rising cases and lockdowns currently occurring.


The US dollar index has fallen 0.92% so far this week, making dollar-denominated gold cheaper to holders of other currencies.




Copper prices rise Chinese data and positive vaccine news


Copper prices continued to hit fresh multi-year highs on Wednesday, as China’s factory output grew at the fastest pace in 20 months in November on rising demand for manufactured goods.


Three-month copper on the LME rose 0.2% to $7,798/t this morning, building on Tuesday’s gains, while the most traded January copper contract on the Shanghai Futures climbed 0.6% to 57,910 yuan/t (Reuters).


Positive developments regarding Covid-19 vaccines from various manufacturers has supported wider markets including base metals prices in recent weeks.


Yesterday saw Moderna’s vaccine set for regulatory authorisation in the US, while other vaccines continued to be rolled out in Europe.




IGTV: As traders continue to bid up Tesla, is the EV sector approaching a bubble? https://youtu.be/LaDWBpTZ7SQ


Copper price rise: https://youtu.be/mdPXTup15VY


VOX – 10/12/20: https://www.voxmarkets.co.uk/media/5fd228d9bc74c922485f501e/?context=/listings/LON/ARCM/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 +1.13% at 30,199


Nikkei 225 +0.26% at 26,757


HK Hang Seng +0.97% at 26,460


Shanghai Composite -0.01% at 3,367




Economics


US – Lawmakers continued to hold talks regarding the latest proposed $748bn fiscal aid programme.


The negotiations on Tuesday included Nancy Pelosi and Mitch McConnell as well as Chuck Schumer and Kevin McCarthy.


Following the latest session on Tuesday might, McConnell was optimistic over the prospects of reaching an agreement.


“Everybody wants to finish. Everybody wants to get a final agreement as soon as possible. We all believe the country needs it. And I think we’re getting closer and closer,” he said.


Markets will be awaiting results of the Fed meeting to see if the central bank alters its bond purchase programme or keeps the status quo.




BioNTech will supply 100m vaccine doses to its Chinese partners at Fosun Pharma for use in mainland China next year, FT reports.


This marks the nation’s first publicly announced order of a foreign jab against the virus.


Fosun Pharma, the Hong Kong and Shanghai-listed healthcare unit of Fosun International conglomerate, became the Chinese partner of BioNTech in March, pledging $135m towards development of a COVID-19 vaccine in return for distribution rights and a share of profits in China.


Fosun will pay EUR125m for the first batch of 50m doses by December 30, followed by an additional EUR125m following the approval from Chinese regulators.




Eurozone – Vaccine optimism sees the economy performing better than expected in December with manufacturing sector growth accelerating and contraction in the services providers sector slowing down, according the flash Markit PMI data.


New orders climbed marginally helped by growth in the manufacturing sector as well as a substantial slowing in the rate of loss of new business in the service sector.


Brighter prospects have also led to the slower rate of job losses.


In Germany, composite PMI climbed to 52.5 from 51.7 reporting a sixth consecutive monthly expansion with manufacturing sector running close to its highest in the survey’s history.


In France, the index was up at 49.6 v 40.6 in November indicating a sharp easing in the rate of contraction with manufacturing returning to modest growth and services coming close to steadying.


“The fourth quarter downturn consequently looks far less steep than the hit from the pandemic seen earlier in the year, though the picture is very mixed by sector… Companies have also become increasingly optimistic about the year ahead, with vaccine rollouts expected to help restore businesses to more normal trading conditions as 2021 progresses,” Markit commented on the data.


Eurozone Manufacturing PMI: 55.5 v 53.8 in November and 53.0 est.


Eurozone Services PMI: 47.3 v 41.7 in November and 42.0 est.


Eurozone Composite PMI: 49.8 v 45.3 in November and 45.7 est.




UK – Inflation continued to pull back amid lacklustre consumer demand with prices for clothing, food and recreation pulling the headline number down.


Consumer prices increased 0.3%yoy in November, compared with 0.7%yoy in the previous month.


Outlook remains weak as the government announced new restrictions shortly after ending November’s lockdown.




UK – Government to revamp shipping tax and regulation regime after Brexit transition period


The UK is planning to turn London into a hub for shipping companies to register vessels after the Brexit transition period, the FT reports.


According to calculations provided by the government, revamping the UK’s shipping tax and regulation regime could be worth GBP3.7bn over three years and create 2,500 high-quality jobs directly.




Currencies


US$1.2204/eur vs 1.2140/eur yesterday. Yen 103.33/$ vs 104.08/$. SAr 14.856/$ vs 15.019/$. $1.352/gbp vs $1.332/gbp. 0.758/aud vs 0.752/aud. CNY 6.534/$ vs 6.546/$.




Commodity News


Precious metals:


Gold US$1,860/oz vs US$1,843/oz yesterday


Gold ETFs 106.6moz vs US$106.6moz yesterday


Platinum US$1,050/oz vs US$1,015/oz yesterday


Palladium US$2,333/oz vs US$2,322/oz yesterday


Silver US$24.99/oz vs US$24.21/oz yesterday




Base metals:


Copper US$ 7,837/t vs US$7,773/t yesterday


Aluminium US$ 2,044/t vs US$2,040/t yesterday


Nickel US$ 17,530/t vs US$17,745/t yesterday – Riots at nickel plants in Indonesia and New Caledonia add to supply worries


Violent protests by 800 workers at Indonesia’s nickel smelter operated by PT Virtue Dragon Nickel Industry.


Company activities were paralysed as critical equipment was torched in the riot.


SHFE nickel prices fell 1.4%, from a 14-month high of 134,180JPY/t to 129,370JPY/t at close amid suspected profit taking.


This follows violent protests earlier this month in Noumea, New Caledonia over the sale of Brazilian company Vale’s Goro nickel mine. Goro mine is the fourth largest global nickel ore producer.


Sale of the mine has become proxy for the territory’s independence debate, with pro-independence protesters supporting a bid for the mine by local company Sofinor.


Vale and the French overseas ministry rejected Sofinor’s proposal and favour consortium led by Prony Resources, with the consortium including a 25% stake held by Trafigura.


If the sale fails, Vale will shut plant in a few weeks, potentially triggering thousands of job losses.




BASF and Eramet develop nickel-cobalt refining complex to supply growing electric vehicle market


Research and subsequent development would include a High-Pressure Acid Leaching (HPAL) plant, located in Weda Bay Indonesia, and a Base Metal Refinery (BMR), location to be determined. Targeted project start up in mid-2020s.


The HPAL plant will process local mining ore from Weda Bay deposit to produce nickel and cobalt intermediate.


BMR will supply nickel and cobalt to produce cathode materials for lithium-ion batteries in EVs.


Development will provide BASF with an additional 42,000t of nickel and 5,000t of cobalt annually, providing critical raw materials to support strong growth in global EV value chain.


Zinc US$ 2,850/t vs US$2,845/t yesterday


Lead US$ 2,061/t vs US$2,015/t yesterday


Tin US$ 19,665/t vs US$19,700/t yesterday




Energy:


Oil US$50.8/bbl vs US$50.0/bbl yesterday


Oil futures price rose on Tuesday before softening overnight as API data showed a second consecutive inventory build


Brent Crude futures were down 0.3% to US$50.61/bbl in the early hours of the morning and WTI fell 0.3% to US$47.49/bbl


Crude inventories in the week to Dec 11 were up 2MMbbls to 495MMbbls according to API data


Expectations had been for a 1.9MMbbl barrel draw.


The International Energy Agency expects oil demand to remain weaker both this year and into 2021, the Agency revised down its estimates by 50,000bopd for 2020 and 170,000bopd in 2021


Global energy consumption is expected to be 96.9MMbbls in 2021 (2020: 91.2MMbopd)


The IEA expects governments to keep borders closers and travel restrictions in place until a vaccine is widely available which will impact fuel demand as fewer people travel by air


COVID-19 infection rates in the US and a tightening of restrictions across Europe continue to concern the market, US cases past 16m with 2,918 deaths yesterday


The US has begun roll out of the Pfizer vaccine stating yesterday and the Moderna vaccine is expected to be approved by the FDA later this week


OPEC has postponed it Joint Technical Committee and Ministerial Monitoring Committee meetings until Jan 3 and 4


The group has also revealed its expectations of a slower demand recovery than originally expected, lowering its forecasts by 350,000bopd for 2021


Natural Gas US$2.639/mmbtu vs US$2.658/mmbtu yesterday


Natural gas prices moved slightly lower yesterday ahead of Thursday’s inventory report from the Department of Energy


Expectations are for a 107Bcf draw in stockpiles according to survey provider Estimize


The weather is expected to be milder than normal over the next two weeks, but a storm scheduled to hit the northeast will generate additional heating demand


Supply rose slightly in the latest week


Prices in Asia continue to move higher, congestion in the Panama Canal, supply outages and colder weather forecast for China, Japan and South Korea has seen the JKM move above US$8.075/mmbtu


Demand in Asia is helping to support prices in Europe as supply gets redirected. European storage drew by 146Bcf last week, above average for this time of year (108Bcf)


Uranium US$30.10/lb vs US$30.00/lb yesterday




Bulk:


Iron ore 62% Fe spot (cfr Tianjin) US$153.4/t vs US$151.1/t


Chinese steel rebar 25mm US$626.6/t vs US$622.8/t


Thermal coal (1st year forward cif ARA) US$68.3/t vs US$67.0/t – Scott Morrison indicates China coal ban is breach of WTO rules


The Australian Prime Minister has accused China of breaching international trade rules and its trade obligations under the China-Australia free trade agreement regarding a boycott of Australian coal.


The Prime Minister was responding to a report in Chinese state media which confirmed that China was restricting imports of coal only from Australia and prioritising imports from Mongolia, Indonesia and Russia.


Mr Morrison said that Australia was ready to talk to Chinese officials over trade disputes, but stands by the issues it has with China, including the country’s push for an investigation into the origins of Covid-19.


Trade Minister Simon Birmingham acknowledged that China was a significant importer of Australian coal, which amounted to $14bn in 2019, however other markets were still significant including Japan, Koera, India and Vietnam (The Guardian).


Coking coal swap Australia FOB US$124.0/t vs US$124.3/t




Other:


Cobalt LME 3m US$32,000/t vs US$32,000/t


NdPr Rare Earth Oxide (China) US$61,145/t vs US$61,795/t


Lithium carbonate 99% (China) US$6,734/t vs US$6,722/t


Ferro Vanadium 80% FOB (China) US$27.5/kg vs US$27.5/kg


Ferro-Manganese high carbon 78% Mn US$1,325/t vs US$1,320/t


Tungsten APT European US$220-230/mtu vs US$220-225/mtu


Graphite flake 94% C, -100 mesh, fob China US$510/t vs US$510/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


Toyota targets 2021 prototype EV powered with solid-state with production to start shortly after


Toyota are promising 500km range and a full charge from 0-100% in just 10 minutes.


Similar to QuantumScape it is not yet clear whether either has moved beyond breakthroughs at cell level to commercially viability, the coming months may provide a clearer picture.


The Company have already filed >1,000 patents relating to solid state batteries.


Solid State batteries take their name from the solid state of their electrolyte. Li-ion batteries in EVs today use liquid electrolyte, though this liquid is normally in gel form sandwiched between layers in the battery.




VW vehicles could have solid state batteries by 2024


VW’s $300m investment in QuantumScape could provide it access to solid-state technology that could close the range gap with Tesla.


QuantumScape has guided to a prototype factory in 2024, and a 20gWh production plant by 2026.


VW invested $100m into QuantumScape in 2018, followed by a further $200m investment this year, increasing its stake to 20%.


Quantum scape estimates its cells to have a energy density 50% greater than conventional EV batteries which could enable a range of 450-500 miles.


The VW ID3 uses lithium ion batteries today with a range of ~342 miles.




Lithium batteries survive -80oC


Lithium thionyl chloride non-aqueous electrolyte enables the batteries to survive temperatures of -80oC.


The batteries manufactured by Tadiran are being used to maintain continuous wireless tracking data in packages delivering COVID-19 vaccines.


Other uses included GPS tracking, environmental monitoring and other applications which require long life, high capacity and high energy density.


Tadiran specialises in lithium ion batteries for industrial use, its production facilities are located in Buedingen, Frankfurt.




Company News


Arc Minerals* (LON:ARCM) – 3.95p, Mkt cap GBP39m – Study highlights copper production at Cheyeza and Kalaba with cash flow to support further drilling


(Arc holds 72.5% of Zaco and 66% of Zamsort in Zambia. Zamsort has a portfolio of copper-cobalt prospects close to FQM’s new Trident mine on the Copperbelt in Zambia. The Cheyeza project is 66% owned by Arc Minerals through its holding in Zamsort.)


CLICK FOR PDF – Strong Buy


Arc Minerals reports the results from its Proof of Concept Study on the Cheyeza East and Kalaba projects in the West of Zambia.


An independent consultant has been used to generate the grade-tonnage models, metallurgical testwork and processing flowsheet/assumptions and run the Whittle optimisation


The internal study draws on conceptual mining, extraction and processing methods for both prospects and “concludes that both Cheyeza East and Kalaba Deposits are technically feasible and economically viable”


The work supports the decision to advance the formal technical studies to target completion of a Scoping Study during the first half of 2021.


The study confirms technical and economic feasibility for the Cheyeza East Oxide and Kalaba Sulphide ores


Both open pits should have strip ratios of under 1:1 due to the shallow nature of the mineralisation


The study models a 3,000 t/d processing plant for both projects at a $6,500/t copper price


Production could start in Q1 2022. We estimate copper production of >10,000tpa assuming our estimate of an average grade of ~1% copper.


Finance: the cost of developing the pits should be minimal with the cost of the plant likely to be secured through an offtake or asset-backed loan with a relatively quick payback


Cash Flow: the company estimates free cash generation of ~$15-20mpa at conservative copper prices which will be used for further drilling and exploration of Arc’s licenses


“Further drilling and testwork along with the respective technical studies will be required before the Company is able to formally confirm that the projects are economically viable.”


We expect management to report maiden JORC resources for the Cheyeza East and Kabala Deposits sometime soon indicating that a decent amount of work has been done to support the conceptual mine plan.


Recommendation: We continue to recommend Arc Minerals on the potential for significant discovery in the West of Zambia. There is very considerable interest from the mining majors in the region with Rio Tinto and First Quantum Minerals farming into a number of new projects. Drilling, soil sampling and other exploration confirm the presence of sizeable geological structures which may host significant copper mineralisation with cobalt also seen in some areas.


Conclusion: The technical team at Arc are confident the resources at Cheyeza East and Kabala will support a small mine plan processing 3,000t/d. This should produce >10,000t of copper in concentrate worth around $86mpa at current copper prices. Both projects should have relatively low cash operating costs with mineralisation at and near surface. We look forward to further detail on the capital and operating costs with the publication of the scoping study.


Anglo American have finalised their technical due diligence and have moved onto the submission of due diligence questions in relation to the company. We expect Anglo to submit a proposal to Arc for an ongoing exploration joint venture or earn-in agreement within months.


*SP Angel acts as Nomad and broker. Our intrepid mining analyst and co-driver drove to Arc’s license and pilot process plant at Kalaba from Lusaka and back again.




Botswana Diamonds (LON:BOD) 0.78p, Mkt Cap GBP5.6m – Modelling of newly identified kimberlite at Thorny River


Botswana Diamonds reports that it has used the recent drilling and data from a ground gravity geophysical survey at its Thorny River project in South Africa to produce an initial 3D model of the recently identified small kimberlite body.


The modelling showed “showed an East – West trending body gently dipping to the east with a surface expression of 80 x 40m”.


The modelling will help to plan the next phase of drilling which is expected to include “drilling core holes to further confine the geological boundaries and microdiamond sampling to determine a first pass diamond grade estimate of the body”.


Botswana Diamonds says that the 3D modelling has “also discovered an additional anomaly to the east, which could be an extension of the kimberlite pipe and will be drilled in the New Year”.


Chairman, John Teeling, confirmed that Botswana Diamonds plans to drill this potential eastward extension in the New Year.


Conclusion: Modelling of the recently discovered kimberlite and a possible eastward extension should help target the next phase of drilling which should provide initial information on possible grades and more detail on the geology. We look forward to the results when they become available.




Condor Gold* (LON:CNR) 48p, Mkt Cap GBP56.2m – Initial site-preparation work underway at La India


Condor Gold reports that it has started the initial site preparation work, including clearing trees and scrub vegetation on the 11.26 hectares site and providing access roads to the planned 2,800tpd processing plant, at its La India project site in Nicaragua.


The company is stockpiling any removed topsoil for use in future site reclamation and plans to plant around 7,000 trees to replace those removed on a 10:1 basis while the “useable wood will either be repurposed or distributed as cooking fuel for local families”.


Condor Gold explains that this initial work “will use local Nicaraguan firms and local labour thereby creating jobs in the local communities” which will no doubt provide a welcome stimulus to the economy of the local area.


Following the initial clearance and access work, “A second, more comprehensive stage of site preparation will follow, which will include geotechnical drilling on the location of the SAG or Ball Mill and key infrastructure. It will include deep foundation excavation for the location of the processing plant, offices, accommodation, warehouses etc and will be extended to the tailings storage facility, water retention dam, explosive magazine, offices, accommodation, internal roads and preparation of a berm”.


Additional work during the second stage will involve local surface water diversions as well as emplacement of structural concrete in preparation for the project development.


CEO, Mark Child, identified the start of site preparation, where the initial work is expected to take around 3-4 months, as an important landmark in Condor Gold’s evolution from exploration and development into a producing gold company


Conclusion: The start of site preparation work at La India is an important step in the development of the existing 1.1moz resource and advances Condor Gold’s goal of an average 120,000oz pa of gold production over the first seven years of operations.


*SP Angel act as sole broker to Condor Gold




Rio Tinto (LON:RIO) – 5,684p, Mkt cap GBP70bn – Oyu Tolgoi underground development update


Rio Tinto has confirmed a capital development of US$6.75bn to bring the Panel 0 underground development at Oyu Tolgoi in Mongolia to sustainable production by October 2022.


The Mongolian Government holds a 34% interest in Oyu Tolgoi with Turquoise Hill Resources, where Rio Tinto holds a 50.8% controlling interest, holding the remaining 66%.


We note that, in September, Turquoise Resources disclosed an estimate of the capital required to develop the underground reserves at Oyu Tolgoi in the range US$6.6-7.1bn and that the estimate released today by Rio Tinto falls at the lower end of this range.


The development, in conjunction with existing open pit operations, is expected to give Oyu Tolgoi annual copper production of 480,000tpa and 340,000oz pa of gold between 2028-2036, making it the world’s fourth largest copper producer and place the mine in the lowest quartile of global copper cash costs.


The company has confirmed an overall underground probable mineral reserve estimate of 450mt at an average grade of 1.52% copper made up of 412mt at an average grade of 1.52% copper (with 0.29g/t gold and 3.13g/t silver) at the Hugo Dummet North orebody with an additional 38mt at a grade of 1.56% copper, 0.54g/t gold and 3.68g/t silver at the Hugo Dummett North Extension.


This 450mt estimate supersedes the previous estimate of 450mt at an average grade of 1.51% copper, 0.31g/t gold and 3.16g/t silver published in July 2020 and reflects “finalisation of the design”.


Currently Rio Tinto owns a 33.5% interest in the Hugo Dummett North deposit and 29.5% of the Hugo Dummett North Extension deposit.


The company says that “Rio Tinto and its partners, the Government of Mongolia and Turquoise Hill Resources (TRQ), need to continue to work together to finalise three other milestones – the outstanding government approvals, funding and a power solution – in order to ensure that the project can commence caving operations in 2021”.


Conclusion: Rio Tinto has confirmed a capital cost estimate of US$6.75bn for the development of the underground mine at Oyu Tolgoi. While the project still needs to achieve additional government approvals, funding and the provision of adequate power supplies, today’s announcement provides a timetable for initial sustainable copper production from the underground mine by October 2022 and a development path which sees the mine as the world’s 4th largest copper producer, and one of its lowest cost producers, by the late 2020s.




Tertiary Minerals* (LON:TYM) – 0.24p, Mkt cap GBP2.0m -Appointment of non-executive director


Tertiary Minerals reports the appointment of a well-known mining consultant, Dr. Mike Armitage of SRK, as a non-executive director.


Dr. Armitage, who has over 35 years mining industry experience, “is currently Chair of the Applied Earth Science Division of the Institute of Materials, Minerals & Mining, Chair of the Geological Society Business Forum and Honorary Chair of the Critical Minerals Association” and will chair Tertiary Minerals’ Remuneration, Audit and Nomination Committees.


Welcoming the appointment, Executive Chairman, Patrick Cheetham, said that “We have been looking for a high-calibre candidate for some time now and I am delighted that Mike has agreed to join us. His extensive experience and global contacts in the mining industry will be a valuable resource for the Company as we seek to advance our expanding portfolio of mineral projects”.


Conclusion: Tertiary Mining has appointed a well-respected and highly experienced technical consultant to its Board.


*SP Angel act as Nomad and Broker to Tertiary Minerals




Power Metal Resources* (LON:POW) 2.05p, Mkt cap GBP18.5m – Geophysics commenced at Kisinka Copper-Cobalt Project


Power Metal has begun a programme of geophysics at Kisinka, located 30km East of the regional capital of Lubumbashi in the southern part of the Katangan Copperbelt in the Democratic Republic of the Congo, with the programme under the supervision of Minerals Exploration Associates SARL.


The programme will consist of a 277 Line Kilometres (KmL) ground magnetics survey on a north-south spacing of 100m and an east-west spacing of 1,000m to be carried out by Progress SARL; along with a 12 KmL induced polarization survey on six lines of 2 KmL each to be carried out by Progress SARL.


The geophysics will focus on the central and southern anomalies and the open area south-east of the southern anomaly, and intends to detect low magnetics lithologies while obtaining a more accurate picture of structural geology and conductive targets in order to optimise drill targeting.


Power Metal has previously completed two programmes of geochemical work at Kisinka which confirmed promising copper and cobalt anomalous zones, open along strike to the south-east and north-west.


Paul Johnson, CEO of Power Metal Resources commented: “This work is an important follow up to the geochemical work conducted over the last two years and will help us tie the laboratory results and the identified anomalies to the underlying lithologies and structure of the area. This in turn will enable us to assess additional potential directions in areas where the anomalies are open, and to prioritise targets for drilling.”


Separately, Power Metal has received notices to exercise warrants over 43,000,000 new ordinary shares of 0.1 pence each in the Company at an exercise price of 0.7 pence per ordinary share. Subscription monies of GBP301,000 have been received by Power Metal in respect of the warrant exercises.


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




Shanta Gold (LON:SHG) 14.3p, Mkt Cap GBP149m – Positive NLGM drilling results


Drilling at Luika, one of the Company’s three actively mined underground deposits, carried over a strike length of 200m and returning high grade intersections.


Nine diamond holes for a total of 4,042m are outside the existing mineral reserves and will be incorporated within the next mine plan update.


Selected drilling intersections from the Luika deposit include:


u Hole CSD201 intersected 3.58 m grading 14.71 g/t Au, incl. 2.54 m at 18.62 g/t Au from 420 m;


u Hole CSD184 intersected 3.13 m grading 4.09 g/t Au from 393 m;


u Hole CSD192 intersected 0.66 m grading 40.44 g/t Au from 410 m; and,


u Hole CSD202 intersected 2.23 m grading 3.32 g/t Au, incl. 0.57 m at 12.18 g/t Au from 417 m.


Porcupine South is a new near surface target that was subject to 28 RC holes for a total of 2,466m over a strike length of 500m.


The target takes the total number of known deposits at NLGM to 12.


The area is ~22km east of the NLGM processing plant making it feasible to potentially truck the mined material to the treatment facility.


Selected drilling intersections from the South Porcupine include:


u Hole PSRC012 intersected 7 m grading 7.26 g/t Au, incl. 2 m at 22.60 g/t Au from 20 m;


u Hole PSRC017 intersected 12 m grading 3.63 g/t Au, incl. 5 m at 7.19 g/t Au from 41 m;


u Hole PSRC018 intersected 5 m grading 3.30 g/t Au, incl. 3 m at 4.75 g/t Au from 41 m;


u Hole PSRC025 intersected 6 m grading 4.13 g/t Au, incl. 1 m at 13.10 g/t Au and 1 m at 6.45 g/t Au from 28 m;


u Hole PSRC026 intersected 5 m grading 3.02 g/t Au, incl. 2 m at 4.55 g/t Au from 84 m;


u Hole PSRC033 intersected 5 m grading 2.98 g/t Au, incl. 2 m at 4.19 g/t Au from 43 m; and,


u Hole PSRC041 intersected 7 m grading 2.25 g/t Au, incl. 3 m at 3.69 g/t Au from 120 m.


Drilling at Luika and South Porcupine will continue into Q1/21 testing down-plunge extensions with a target to negate new resources.


The Company expects to announce a net increase in JORC reserves in early 2021.


Conclusion: Ongoing drilling at existing mining operations as well as new targets returns good grades that is expected to add low cost ounces to the mine plan extending the life of mine at NLGM.




Vast Resources* (LON:VAST) 0.13p, Mkt Cap GBP24m – Asset backed debt facility update


The Company reports that the bank credit committee had a meeting yesterday discussing the Baita Plai asset backed loan with the final decision currently pending.


*SP Angel acts as Broker to Vast Resources






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

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