SP Angel . Morning View . Thursday 17 12 20
US Fed pledges monetary policy support boosting risk sentiment
Anglo American (LON:AAL) – De Beers reports continuing signs of recovering demand at its final sales cycle for 2020
Caledonia Mining* (LON:CMCL) – Exploration option at Connemara North
IronRidge Resources* (LON:IRR) – Highly prospective gold licenses acquired in Ivory Coast
Kavango Resources (LON:KAV) – Exploration progress on the Kalahari Copper Belt
Kodal Minerals* (LON:KOD) – Acquisition of 350,000oz gold resource in Southern Mali
Panther Metals (LON:PALM) – Merolia Gold Project acquisition completed
Rio Tinto (LON:RIO) – New Chief Executive
SolGold* (LON:SOLG) – Visible copper mineralisation in initial drilling at Tandayama-America
Sunrise Resources (LON:SRES) – Bulk sample from CS Pozzolan-Perlite project
China – economic growth to continue despite expected slowdown in credit growth next year
We expect China to continue to maintain economic growth through 2021 despite a pullback in credit growth
China is likely to touch the breaks a little to prevent overheating as vaccines and other measures serve to reduce the threat of Coronavirus resurgence
The nation will likely remain the world’s largest importer of most metals particularly with ongoing Stimulus programs drawing in additional commodities for construction and development.
China’s Dual Circulation strategy and high apartment sales should also continue to stimulate local demand for domestic appliances and other consumer goods
The new habit / addiction of buying consumer products for ordinary Chinese people is likely to last long and have dramatic effect so long as credit is available to fuel the new consumer boom in China.
While China continues to power ahead the rest of the world is struggling to catch up, in terms of stimulus spending and new stimulus project development.
Democracies consideration for environmental and social objections is slowing down the good intentions of policy makers who want to push projects to life the economy
The US which is normally the first Western nation to react and also badly needs to repair and rebuild much infrastructure is struggling with its politics and while the EU loves to give the impression of unity it has been arguing behind closed doors over conditions imposed on stimulus programs.
In conclusion, we feel that while China will continue to grow Western infrastructure stimulus may not gather momentum for another few months.
We therefore expect metals prices to pause at relatively high levels before rising again next year.
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 -0.15% at 30,155
Nikkei 225 +0.18% at 26,807
HK Hang Seng +0.82% at 26,678
Shanghai Composite +1.13% at 3,405
Economics
US – The central bank upgraded its economic growth and employment estimates, but suggested it will maintain close to zero interest rates until at least the end of 2023.
Meanwhile, the Fed will keep buying at least $120bn of debt per month until “substantial further progress has been made toward the committee’s maximum employment and price stability goals”.
This marks a subtle difference on the previous statement that read that purchases will continue over the “coming months”.
10y Treasuries initially slipped on the announcement with investors expecting an upwards revision to bond purchases, while S&P 500 closed 0.2% up on the day.
GDP estimates were revised upwards with a contraction in 2020 expected to come in at -2.4% (-3.7% estimated previously) before the economy growing 4.2% (4.0%) in 2021 and 3.2% (3.0%) in 2022.
Core inflation is not expected to hit the 2% target before 2023.
Weak US retail sales in November raise concerns over the health of consumer spending (-1.1%mom v -0.1%mom in October and -0.3 est).
Separately, December Markit PMIs showed growth in manufacturing and services slowed down, although, the pace remained strong.
“The survey data add to the likelihood of the economy having continued to expand in the fourth quarter, building on the recovery seen in the third quarter,” Markit wrote.
“However, while November had seen business buoyed by increased activity around Thanksgiving as well as a surge in business confidence following the Presidential election and encouraging vaccine news, December has seen companies rein in their expectations, given the higher virus case numbers and tougher lockdown stances adopted in some states.”
New orders continued to grow boding well for the outlook with domestic demand continuing to grow among manufacturing and service sector firm while new export sales recorded a decline.
US lawmakers are rushing to finalise a relief package potentially before the end of the week with the final virus related proposal likely to be <$900bn.
UK – The central bank is expected to leave the pace of assets purchases and rates unchanged at 0.1% in an announcement later today.
The path of the latest pandemic as well as the final outcome of Brexit deal negotiations may see the BOE adjusting its policy.
The BOE announced GBP150bn of asset purchases in November as the nation was heading into a lockdown with the MPC voting unanimously to keep benchmark rates at 0.1%.
The pound is stronger against the EUR this morning with Brexit talks continue and the UK government suggested that Parliament maybe called in as early as next week to vote on the deal.
EC President Ursula von der Leyen was largely upbeat, saying there was now a “narrow path” to a deal.
Emmanuel Macron tests positive for Covid-19
It is possible that Brexit might get done in his absence, though Brexit talks which were reported to be close to agreement stalled after Michael Barnier returned from his self-isolation.
Currencies
US$1.2238/eur vs 1.2204/eur yesterday. Yen 103.21/$ vs 103.33/$. SAr 14.750/$ vs 14.856/$. $1.358/gbp vs $1.352/gbp. 0.762/aud vs 0.758/aud. CNY 6.531/$ vs 6.534/$.
Commodity News
Precious metals:
Gold US$1,883/oz vs US$1,860/oz yesterday – Gold continues to rise as US Fed pledges to maintain asset-purchase programme
Gold prices are on course for a third weekly gain, after the Fed promised to continue supporting the US economy through its asset-purchasing programme at its final policy meeting of 2020.
Bullion has maintained its appeal throughout the pandemic, with the US reporting another daily record of deaths on Wednesday, while Germany saw its biggest rise in fatalities since the pandemic began.
Gold ETFs 106.6moz vs US$106.6moz yesterday
Platinum US$1,055/oz vs US$1,050/oz yesterday
Palladium US$2,353/oz vs US$2,333/oz yesterday
Silver US$25.77/oz vs US$24.99/oz yesterday
Base metals:
Copper US$ 7,917/t vs US$7,837/t yesterday – Copper eyes $8,000/t on demand optimism as inventories collapse
Copper continued to rally on Thursday, as US lawmakers edged closer to a stimulus deal, with Senate Majority Leader Mitch McConnell said Congressional leaders are discussing another pandemic package and said “we’re gonna get there”.
Stimulus developments are driving copper prices as the US and China attempt to build their way out of economic turmoil.
The ‘Green Tinted’ rebuilding is beneficial for copper, as it is vital in everything from electric vehicles to wind turbines to battery storage facilities.
Copper stockpiles have dwindled to their lowest level in six years, highlighting the tightness in the global market as prices rally.
Antofagasta secures labor deal at its Centinela Cu mine which produced around 276,000t last year
Aluminium US$ 2,046/t vs US$2,044/t yesterday
Nickel US$ 17,560/t vs US$17,530/t yesterday
Zinc US$ 2,870/t vs US$2,850/t yesterday
Lead US$ 2,053/t vs US$2,061/t yesterday
Tin US$ 19,985/t vs US$19,665/t yesterday – Tin prices rise over 1% on Wednesday to new year-to-date high
Tin was the biggest riser on the LME’s complex of base metals yesterday, rising 1.1% to just below $20,000/t (Fastmarkets MB).
Tin, along with most other base metals, is piggy-backing on hopes of further US congressional stimulus which is viewed as positive for industrial metals.
Energy:
Oil US$51.8/bbl vs US$50.8/bbl yesterday
Brent Crude futures were up 0.9% to US$51.53/bbl this morning, with WTI futures rising 1% to US$48.28/bbl
The EIA reported US crude inventories fell by 3.1MMbbls in the week to 11 Dec
Expectations had been for a 1.9MMbbl draw
A US stimulus package edges closer as congressional leaders suggests substantial progress has been made on a US$900bn coronavirus relief bill and a funding bill to prevent a government shutdown
The Fed announced yesterday that it will continue buying US$120bn of debt/month until further progress had been made towards recovery.
Crude inventories in the week to 11 Dec were up 2MMbbls to 495MMbbls according to API data
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
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
Global energy consumption is expected to be 96.9MMbbls in 2021 (2020: 91.2MMbopd)
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$2.695/mmbtu vs US$2.639/mmbtu yesterday
Natural gas prices were nearly unchanged for the third consecutive trading session yesterday, ahead of today’s inventory report from the Department of Energy
Expectations are for a 107Bcf draw in stockpiles according to survey provider Estimize
Monthly LNG exports hit a fresh record in November, according to the EIA According to NOAA, the weather is expected to be warmer than normal throughout most of the US
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$30.10/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$154.8/t vs US$153.4/t
Chinese steel rebar 25mm US$631.4/t vs US$626.6/t
Thermal coal (1st year forward cif ARA) US$67.4/t vs US$68.3/t
Coking coal swap Australia FOB US$123.3/t vs US$124.0/t
Other:
Cobalt LME 3m US$32,000/t vs US$32,000/t
NdPr Rare Earth Oxide (China) US$61,013/t vs US$61,145/t
Lithium carbonate 99% (China) US$6,737/t vs US$6,734/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
US automakers ask for EV backing
Alliance of Automotive Innovation is urging strong support on EVs from US policymakers.
The trade association which represents automakers including GM, VW, Toyota and Ford has urged new incentives for R&D and consumer purchases.
It is expected that tougher emission restrictions will be instituted by the Biden administration and the incoming President has committed to building out EV charging infrastructure, targeting 550,000 new charge points.
There is no-coherent policy in the US on EVs today, the Trump Administration’s challenge against California’s stricter emissions standards split the auto industry with supporters on both sides.
GM has since revised its position, withdrawing its support for the challenge and reiterating its commitment to climate change issues.
California will introduce a ban on the sale of new ICE vehicles from 2035.
LFP cathode material reduction
Lithium Australia subsidiary VSPC has completed successful trials for the production of a high purity lithium ion cathode powder produced from low-cost iron ore iron and waste resources.
The Company suggests in-house iron oxalate production could reduce the net cost of production by up to 10%.
The trial delivered excellent electrochemical performance using VSPC’s battery grade iron oxalate and was highly effective at removing impurities.
VSPC has also trialled adding manganese to LFP cathode powder to overcome energy density limitations.
Lithium Australia plans to launch pilot-scale manufacture of LFP using phosphate as an alternative to lithium carbonate.
EVs account for 6.7% of sales in Romania
EV and hybrid sales accounted for 6.7% of total auto sales in Romania from Jan-Nov this year.
This represent a 22% increase in sales YoY to 7,345 units. The Romanian car market contracted 26% over the same period.
BEV sales increased 60%, during the period while PHEV sales increased 129%. Hybrid car sales increased 1.6%.
Romania offers purchase subsidies of EUR4,450 per BEV and a grant of EUR1,100 per PHEV. Romania also offers registration and ownership tax benefits.
Company News
Anglo American (LON:AAL) 2,498.5p, Mkt Cap GBP33.4bn – De Beers reports continuing signs of recovering demand at its final sales cycle for 2020
Anglo American has announced that the tenth and final De Beers sales cycle of 2020 realised US$440m (2019 – US$426m) and that the previously reported sales for the ninth sales cycle have now been confirmed at US$462m.
Providing an optimistic commentary to the results De Beers Chief Executive, Bruce Cleaver, said that “Positive consumer demand for diamond jewellery as we enter the holiday season is supporting the continuation of retail orders for polished diamonds from the diamond industry’s midstream sector. This in turn supported steady demand for De Beers rough diamonds at our final sales cycle of 2020. While the diamond industry ends the year on a positive note, we must recognise the risks that the ongoing Covid-19 pandemic presents to sector recovery both for the rest of this year and as we head into 2021”.
Caledonia Mining* (LON:CMCL) 1185p, Mkt Cap GBP142m – Exploration option at Connemara North
Caledonia Mining reports that it has reached an agreement to explore the Connemara North area in the Gweru District of Zimbabwe. Connemara North is adjacent to the former First Quantum Minerals Connemara Mine which is currently closed but “produced approximately 20,000 ounces of gold per annum from an open pit heap leach operation.”
Caledonia Mining says that First Quantum had publicly indicated “plans to expand the existing open pit operations at Connemara mine, when gold prices were approximately $300/oz … [but] …At this stage it is not possible for Caledonia to verify any of the work performed by previous owners or to ascertain what proportion of any purported resource lay within the boundaries of the Connemara North property over which Caledonia has secured the option.”
The option provides Caledonia Mining a period of 18 months to conduct exploration “and subsequently, if exploration is successful and at its sole discretion, to acquire the mining claims over the area. The total consideration is an initial payment of $300,000, followed by a further payment of $5 million (payable in cash or shares at the discretion of the vendor) which would be payable should Caledonia decide to exercise its right to acquire the mining claims. Caledonia has also agreed to the payment of a one per cent net smelter royalty to the vendor on gold it produces from Connemara North”.
The option agreement comes shortly after the announcement, last week, of a similar option covering the Glen Hume property located approximately 30km from Connemara North.
Commenting on the options at Glen Hume and Connemara North, Chief Executive, Steve Curtis, said that “We are excited at the prospectivity of these two properties and if evaluation work proves successful and our exploration programs deliver favorable results, Caledonia will have a great opportunity to establish a footprint in the highly prospective Zimbabwe Midlands which could deliver operating synergies between the two sites”.
Mr. Curtis added that “This has been a busy year for Caledonia and with the completion of Central Shaft in sight I am pleased that we are now able to start delivering on the other components of our corporate strategy”.
We observe that re-evaluating opportunities close to former mines in established gold districts is likely to be a lower risk and possibly more rapid process than establishing grass-roots exploration programmes in untested terrain. It seems likely that Caledonia Mining will be able to verify whether its interest in Connemara North is worth pursuing well within the 18 months duration of the initial option agreement.
Conclusion: In recent times, Caledonia Mining has been focussed on the delivery of the Central Shaft project and securing the long term future expansion of its Blanket gold mine, however with that project now nearing a successful conclusion and Blanket set to increase to around 80,000ozpa of gold production it is encouraging to see the company looking at further opportunities. Caledonia Mining’s long-term commitment and operating experience in Zimbabwe provides it with valuable insights into the geological, commercial and governmental environment. We look forward to news from the exploration of Connemara North and Glen Hume as the work proceeds.
*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe
IronRidge Resources* (LON:IRR) 12.2p, Mkt cap GBP50.3m – Highly prospective gold licenses acquired in Ivory Coast
IronRidge has acquired 100% of the Bodite and Bianouan Gold Licenses from Major Star SA in return for the issue of 1,550,388 no-par value ordinary shares in IronRidge at a price of 18 pence per share.
The two highly prospective gold licenses complement IronRidge’s flagship Zaranou gold license, with previous drilling indicating high-grade gold along with broad low-level anomalism.
Previously reported high-grade AC drill results from the Bianouan license at a 0.15g/t gold cut-off with maximum 2m of internal dilution include:
12m at 5.87g/t gold from 10m, including 2m at 33.8g/t gold
8m at 1.29g/t gold from 8m, including 2m at 3.17g/t gold
1m at 3.13g/t Au from 32m at end of hole
At the Bodite license, previous AC drill results at a 0.15g/t gold cut-off with maximum 2m of internal dilution include:
2m at 9.01g/t gold from 32m
2m at 2.74g/t gold from 14m
10m at 0.3g/t (including 2m at 0.59g/t gold) from 12m
22m at 0.21g/t gold from surface
IronRidge was able to acquire the licenses after it announced in March 2017 that it had entered a Joint-Venture Agrement with Major Star, under which IronRidge had rights to acquire 100% of the Licenses with Major Star maintaining a residual NSR of 2.5% of which 40% can be acquired for between US$2.5m at any time. The staged earn in agreement has now been terminated on the issue of the 1,550,388 ordinary shares, which equate to a 0.374% interest in the enlarged share capital of IronRidge.
Vincent Mascolo, CEO of IronRidge commented: “We are delighted to have completed this acquisition allowing us to consolidate the Zaranou portfolio at a significant premium to IronRidge’s current share price. The Bodite and Bianouan gold licenses complement our flagship Zaranou gold license and represent a highly prospective ground holding with high-priority air core drilling intersections and significant soil anomalies”
“The acquisition of the Licenses is in line with our strategic growth plan; of creating and developing valuable synergies within the Company’s existing portfolio in the region, with the ultimate ambition of driving and sustaining shareholder value through the discovery of world-class assets.”
*SP Angel act as Nomad for IronRidge Resources
Kavango Resources (LON:KAV) 2.8p, Mkt cap GBP7.4m – Exploration progress on the Kalahari Copper Belt
Kavango reports that it has completed soil sampling at its LVR project on the Kalahari Copperbelt, allowing the company to identify regional metallic anomalies for future airborne electromagnetic surveying.
First soil sampling sae six lines run on targeted areas, guided by the interpretation of geological structures and regional magnetics. 365 samples were taken over 36.5km, at 100m spacing and 50m spacing over 2,500m.
XRF analysis of soil samples identified encouraging zinc anomalies, with the metal a recognised pathfinder element for the less mobile copper ions in the soil.
Elevated levels of Zn indicated shallow mineralisation, and selected samples will be sent to lab testing, with results expected early 2021- when ground magnetic surveys and further soil sampling are also scheduled.
The LVR project is a Joint Venture with ASX-listed Sandfire Resources, where Kavango has the right to earn up to 90% in prospecting licences PL082/2018 & PL083/2018 by way of a staged earn-in.
Michael Foster, CEO of Kavango Resources, commented: “The LVR Joint Venture is rapidly turning into a significant copper/silver exploration project for Kavango. We were extremely fortunate to secure this earn-in arrangement when we did at the start of this year. The proximity of one of the licences to the major metal discoveries at T3 & A4 (Sandfire), and the known regional geological structures, make these licences highly prospective. Now that we have started exploration work and have already identified zinc anomalies in the local soils, we are increasingly encouraged by the potential here. We look forward to undertaking airborne geophysical surveys early in the new year.”
Conclusion: We look forward to Kavango’s sample results expected in 2021, along with both ground and airborne magnetic surveys over an area which has previously produced world-class copper deposits.
Kodal Minerals* (LON:KOD) – 0.083p, Mkt cap GBP9.7m – Acquisition of 350,000oz gold resource in Southern Mali
Kodal Minerals report the acquisition of the Fatou Gold Project in southern Mali.
Fatou has a 350,000oz NI 43-101 resource with potential for further resource expansion on further drilling.
Bernard Aylward is an expert geologist with extensive knowledge of Southern Mali and is planning a nine-month drilling programme to increase the Fatou resource.
The deal enables Kodal to earn up to 90% of the 100sqkm Fininko Concession and the 200sqkm of Foutiere
Kodal is also expanding exploration at Dabakala along with reconnaissance aircore drilling, RC drilling and targeted diamond drilling on its other gold assets.
Acquisition Terms:
Fininko: US$2,050,000 in cash over two years:
US$0.275m upon execution of the agreement and lodging it with the Ministry of Mines, Energy and Water;
US$0.275m six months after the execution of the agreement for 50%
US$0.5m 15 months after the execution of the agreement for 90%
US$1m 24 months after the execution of the agreement to coincide with the mineral resource update and Feasibility study.
+ a 2% NSR to Sacko
Kodal retains the right to terminate the agreement with Sacko at any time in written notice.
If the agreement is terminated after the fifteen-month payment and IGS-Mali has completed exploration exceeding US$1,500,00, then IGS-Mali will retain its 90 per cent. interest in the concession.
Foutiere: Payment of up to US$200,000 in cash over three years:
US$25,000 upon execution of the agreement and lodging it with the Ministry of Mines, Energy and Water;
US$35,000 12 months after the execution of the agreement for 60%
US$60,000 24 months after the execution of the agreement for 80%
US$80,000 36 months after the execution of the agreement to coincide with the mineral resource update and Feasibility study.
+ a 1.5 per cent. NSR Royalty to Falcon. Kodal can buy back half the NSR for US$1,000,000 and has first refusal on any sale or proposed transfer of the NSR or retained interest in the concession.
Riverfort proposal: Kodal has also received a funding proposal from Riverfort Global Opportunities PLC for up to US$2.5m to fund drilling and other exploration at Fatou along with part of the deal. The funding is on a no-interest and no-fee basis.
“At completion of the spend of the US$2,500,000, or by 31 October 2021, or upon monetisation of some or all Gold Assets, the Investors can either:
i. convert the funding to a 40 per cent. holding in a gold joint venture to be formed with Kodal holding 60 per cent. (subject to certain percentage adjustments as detailed below);
ii. convert the funding into new Kodal shares at a price to be determined; or
iii. seek repayment of the funding over a 15-month period.
Funding is initially non-dilutionary to existing shareholders and will be used to acquire the Fatou Project, as well as to explore and develop this project and the other assets in Kodal’s gold portfolio”
Kodal remains focussed on progress and future development of the Bougouni Lithium Project which is subject to an MoU with Sinohydro (part of Power China).
Sinohydro is working with Suay Chin and Shandong Ruifu Lithium Industry Co Ltd, which produces lithium carbonate and lithium hydroxide in China and are expected to take the Bougouni spodumene concentrate.
Bougouni is expected to produce 220,000tpa of 6% spodumene concentrate over an initial 8.5 years for >USD$1.4bn of total revenue at $680/t starting H2 2021 and rising 2%pa
Project capital expenditure is estimated at US$117m plus contingencies with a 1.7 year payback
The project is estimated to have a 58% pre-tax IRR, 51% post tax IRR, US$300m NPV7% pre-tax, US$200m NPV7% post-tax
*SP Angel acts as Financial Advisor and Broker to Kodal Minerals
Panther Metals (LON:PALM) 12.6p , Mkt Cap GBP7.2m – Merolia Gold Project acquisition completed
The Company completed the acquisition of the Merolia Gold Project in the Eastern Goldfields of Western Australia from White Cliff Minerals (ASX-listed WCN AU, A$0.03, Mkt Cap A$15.0m).
The early stage exploration project covers 145km2 of the Merolia Greenstone belt and incorporates the Ironstone, Comet Well and Burtville East Gold prospects along a 14km long corridor collectively known as the Comet Well Mineralised Trend (CWMT).
The consideration included a A$112.5k cash payment and 734,470 shares issued at a price of 12.65p (50% to be subject to a six months lock-up with the remaining 50% to involve a 12 months lockup).
Additionally, the Company will pay A$1.25/oz for any potential future reported compliant mineral resource
“Our entry into the highly prolific Laverton greenstone belt in the Eastern Goldfields Province, in a known gold mineralised zone, which is still largely untested, caps a remarkable year for the business and our shareholders… The property contains some significant drilling intercepts which we look forward to using as a base to grow a resource,” the Company commented on the announcement.
Rio Tinto (LON:RIO) – 5,641p, Mkt cap GBP69bn – New Chief Executive
Rio Tinto reports that Jakob Stausholm, currently one the company’s executive directors and its Chief Financial Officer is to be its new Chief Executive following the resignation of Jean-Sebastian Jacques in the aftermath of the destruction of the Juukan Gorge rock-shelters in Western Australia.
Mr. Stausholm joined Rio Tinto in 2018 following senior roles in major international companies including “two decades with Royal Dutch Shell in numerous financial positions globally and as Chief Internal Auditor for the group” as well as non-executive experience with Statoil and Woodside Petroleum.
Chairman, Simon Thompson welcomed the appointments saying that Mr. Stausholm’s “His blend of strategic and commercial expertise, strong values and a collaborative leadership style are the ideal qualities for our next chief executive”.
Mr. Stausholm’s role as chief financial officer will be assumed, in an interim capacity by Peter Cunningham, “previously Group Controller for Rio Tinto … [who] … has held a number of senior finance and leadership roles across Rio Tinto in a career spanning 27 years with the company”.
SolGold* (LON:SOLG) 35.8p, Mkt Cap GBP750m – Visible copper mineralisation in initial drilling at Tandayama-America
SolGold reports that its first drill-hole, TAD-20-001 at the Tandayama-America prospect area within its Cascabel licence area is currently at a depth of 595m having entered a zone of visible chalcopyrite (copper sulphide) mineralisation at a depth of 55m.
The company says that “drilling passed into a zone of strong visible chalcopyrite copper sulphide mineralisation within a quartz-diorite intrusion” at a depth of 524.5m.
Solgold says that the mineralisation encountered so far is “very similar” to that seen in the high-grade core of its flagship Alpala deposit located approximately 3km south of Tandayama-America.
The most recent mineral resources estimates for this high-grade zone at Alpala show 442mt at an average grade of 0.87% copper, 0.86g/t gold and 2.34g/t silver (1.4% copper equivalent) at a cut-off grade of 0.8% copper equivalent which has a published overall measured and indicated resource of 2.6bn tonnes at an average grade of 0.37% copper, 0.25g/t gold and 1.08g/t silver.
A second drill-hole, TAD-20-002, is currently at a depth of 391m and has “intersected visible chalcopyrite mineralisation from 44m depth … [and the company suggests] … that the hole is vectoring toward potential increase in mineralisation as the hole enters the area of combined Cu-Mo-Au soil anomalism”. The target area at Tandayama-America is characterised by coincident Cu-Mo-Au soil geochemical highs centred upon outcropping mineralisation in the Tandayama and America creeks.
There are no assay results from the drilling so far at Tandayama-America, however, photographs of drill-core from hole TAD-20-001 accompanying today’s announcement show visible chalcopyrite mineralisation and the company’s announcement “estimates chalcopyrite percentages of up to 4% by volume”.
Commenting on the results from Tandayama-America, CEO, Nick Mather, explained that they “will impact significantly on the upside for the Alpala development. We will have to carefully assess the impact on currently planned site infrastructure however, it is a high-quality problem. More copper and gold discoveries will add to Alpala’s already impressive credentials in a robust copper and gold market and a supportive nation. The quartz diorite host with close similarities to the richly endowed QD10 intrusion at Alpala is indeed an encouraging element”.
Tandayama-America and Alpala are two of a number of target areas within the Cascabel licence area which also includes the Alpala Western Limb, Alpala South, Northwest, and Central targets as well as targets at Aguinaga, Chinambacito, Parambas and Moran/Upper Moran.
Conclusion: Initial drilling results from Tandayama-America will have to be confirmed by assay but at this stage extensive intersection of visible copper sulphide mineralisation appears positive. Additional targets are known elsewhere within the wider Cascabel licence area, which includes the flagship Alpala project, currently in the latter stages of a pre-feasibility study. Elsewhere in Ecuador, Solgold’s initial drilling at Porvenir has produced encouraging results and the company is progressing exploration of a number of other promising targets.
SP Angel act as Financial Advisor to SolGold
Sunrise Resources (LON:SRES) 0.26p Mkt Cap GBP9.4m – Bulk sample from CS Pozzolan-Perlite project
Sunrise Resources reports that it has started the extraction of a 500 tons bulk-sample from its CS Pozzolan-Perlite project in Nevada.
The sample is being taken in collaboration with a large cement and ready-mix concrete producer which will grind and mill the material so that it can be used in “a number of separate commercial concrete pours where the natural pozzolan will be substituted for a proportion of ordinary Portland cement in the concrete mixes”.
The work is part of a continuing collaboration amid discussions of a potential offtake and joint development of the project.
The company comments that “The costs of mining and transport of the pozzolan bulk sample to the mill will be shared equally … and all other cost” will be met by the concrete producer.
The sampling will also include the extraction of a 200 ton sample of perlite “for processing into additional horticultural grade raw perlite for ongoing market trials by potential offtakers”.
Executive Chairman, Patrick Cheetham, welcomed the additional sampling and the continuing collaboration saying that it will advance the testing of the pozzolan from bench-scale work “into some real-life commercial construction projects”.
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
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35-39 Maddox Street London
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*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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