Today’s Market View – Central Asia Metals, IronRidge Resources, Keras Resources and more…

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SP Angel . Morning View . Monday 11 01 21

Markets await Biden stimulus proposal

 

Anglesey Mining (LON:AYM) – Mineral resources and PEA for Parys Mountain

Castillo Copper (LON:CCZ) – Further assay results from drilling at the Big One project in Queensland

Central Asia Metals (LON:CAML) – Stable production reported in 2020 with final dividend to be announced in March

IronRidge Resources* (LON:IRR) – Sale of non-core gold project

Keras Resources* (LON:KRS) – Keras increase stake in the Daiamond Creek organic phosphate mine to 51%

Power Metal Resources* (LON:POW) – Molopo Farms drilling highlights nickel and PGM potential

Tertiary Minerals* (LON:TYM) – Progress of Nevada exploration

 

COVID lockdowns affecting imports into China as cities lockdown and icy blast also disrupts ports

Logistics companies might rightly feel aggrieved for suffering so much trouble over the past year.

First Covid disruption, then problems with too many containers in the west and some also stuck in in Europe as belligerent customs officials demanded post Brexit paperwork before the Brexit deadline.

Now we hear two Chinese cities have been locked down with shippers advised to book alternative ports for frozen reefer cargos into Dalian.

Now we hear freezing weather has also caught a number of Asian ports off guard.

 

China reports +100 cases for the first time since last summer with the outbreak in northern Hebei province continuing to expand

Covid-19 cases are mostly in Hebei province leading to the lockdown of Shijiazhuang (10m people) close to Beijing.

If lockdowns spread to other major cities near Shanghai then the Chinese market may sell down in risk-off trade

Steel rebar futures fall on rising Covid-19 cases in China

If lockdowns spread to Tianjin or Tangshan then iron ore production may be hit by the crisis

Steel rebar futures fell from the highest close since 2011 on Monday, as a spike in infections was reported in the steelmaking province of Hebei.

China reported 82 confirmed infections in Hubei, 2 in Liaoning and 1 in Beijing, with the city of Shijiazhuang in Hebei now in lockdown.

A resurgence in Covid-19 due to novel strains of the virus is a cause for concern in China, with the country shutting down areas and workplaces as soon as outbreaks are reported- which is expected to weigh on steel demand.

Steel rebar inventories rose 5% last week, according to Mysteel.

Steel rebar futures closed 3.1% lower at 4,348 yuan/t after five straight weeks of gains, while hot-rolled coil prices also declined (Bloomberg).

 

Appian raises US$775m for second private equity mining fund

The fund has found new interest from university endowments, large US and European pension plans, family offices and sovereign wealth funds which do not have significant exposure to mining.

While mining requires substantial capital for mine developments there are a limited number of development ready projects for investment at any one time.

The fund plans to target additional investments in countries including Brazil, Australia, Mexico, Peru, Chile and Canada, and where Appian has existing operations. The second fund will run for 10 years.

 

Recent Interviews:

IGTV:   Is 2021 the start of the new COVID-Supercycle or will Lockdowns delay the recovery? https://youtu.be/7LO0tDc-pNc

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

08/01/20 :https://www.voxmarkets.co.uk/media/5ff8216bafab1e2b28278e94/?context=/listings/LON/ALS/multimedia/

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

iiTV:     The mining stock to own in 2021: https://www.youtube.com/watch?v=4x7SuSLQwCI&t=11s

Small Cap Mining Share tips for 2021 – https://www.youtube.com/watch?v=G_6RKAp91k4

Miners for a green industrial revolution – https://www.youtube.com/watch?v=rXlNS6JIDvg&t=3s

A Mining megatrend and three solid dividend stocks – https://www.youtube.com/watch?v=sH5r-QbTRwg

*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts.

We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, one and all, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.

 

Dow Jones Industrials +0.18% at 31,098

Nikkei 225 Closed at 28,139

HK Hang Seng +0.11% at 27,908

Shanghai Composite -1.08% at 3,531

 

Economics

IMF – Forecasts China GDP growth of 7.9% in 2021 on 1.9% GDP growth in 2020

 

China – Consumer prices post a recovery in December driven by higher food costs, according to Bloomberg.

Although, core inflation that strips out volatile food and energy prices remained muted at 0.4%, down on 0.5% recorded in previous months.

The recent coronavirus outbreak in Shijiazhuang, a city next to Beijing, and sporadic cases around the country may weigh on the growth and inflation outlook should authorities tighten restrictions.

CPI (%yoy): 0.2 v -0.5 in November and 0.0 est.

PPI (%yoy): -0.4 v -1.5 in November and -0.7 est.

 

US Dollar gains as 10year bond yields rise over 1.1% on hints the Fed may taper bond buying

US President-elect joe Biden is planning to announce a multi-trillion dollar economic stimulus proposal this Thursday

Economic and political advisors to Biden spent the last several days working on size and components, Bloomberg reports.

Many elements are expected to come from House Democrats’ $3.4tn Heroes Act that was blocked by the GOP-controlled Senate.

The package will include a range of support for state and local authorities, an increase in direct payments to $2,000 and expanded unemployment benefits, along with funding for vaccine distribution, school re-opening, tax credits, rental relief and aid to small businesses.

nonfarm payrolls fell 140k on Friday to vs Nov 245k

unemployment held steady at 6.7%

private employment fell 95k vs 334k in November

manufacturing employment rose by 38k (27k),

government employment declined 45k (-99k),

participant rate unchanged at 61.5%,

average weekly hours slipped 34.7 (34.8) and

average hourly earnings rose 5.1%yoy (4.4%).

 

Japan – leading economic index rose to 96.6 in November from 94.3),

 

South Africa – manufacturing PMI pulled back to 50.3 in December vs 52.6 in November

 

France – industrial production fell to 0.9% in November vs 1.9% in October

 

Sweden – industrial production rose 1.5% in November vs 2% in October

 

Brazil – industrial production rose 1.2% in November vs 1.1% in October and 2.8% yoy in November vs 0.3% yoy in October

 

The UK is planning to expand vaccination “mega-centres” at locations such as sports stadiums and conference halls sevenfold aiming to increase weekly delivered vaccine rate.

Health Secretary Matt Hancock is “on course” to meet its coronavirus target with more than 200k people being vaccinated every day and the total now around 2m.

Earlier PM Johnson set a target to deliver around 15m shots by mid-February that would allow authorities to start lifting restrictions.

 

Currencies

US$1.2198/eur vs 1.2226eur last week.  Yen 104.07/$ vs 103.96/$.  SAr 15.450/$ vs 15.366/$.  $1.350/gbp vs $1.357/gbp.  0.772/aud vs 0.777/aud.  CNY 6.474/$ vs 6.472/$.

 

Commodity News

Precious metals:  

Gold US$1,854/oz vs US$1,892/oz last week

Gold ETFs 107.4moz vs US$107.3moz last week

Platinum US$1,052/oz vs US$1,109/oz last week

Palladium US$2,368/oz vs US$2,405/oz last week

Silver US$25.16/oz vs US$26.51/oz last week

Base metals:  

Copper US$ 8,008/t vs US$8,171/t last week –

Aluminium US$ 2,008/t vs US$2,022/t last week

Nickel US$ 17,370/t vs US$17,930/t last week

Zinc US$ 2,797/t vs US$2,854/t last week – Zinc prices tumble 2.6% on Friday amid large inventory inflows in Shanghai

Zinc prices closed 2.6% lower on the LME on Friday, at $2,814/t.

Inventories totalled 35,008 tonnes, up by 6,427 tonnes, or 22.5%, from a week earlier (Fastmarkets MB).

Lead US$ 1,991/t vs US$2,026/t last week

Tin US$ 20,750/t vs US$21,095/t last week

Energy:           

Oil US$55.5/bbl vs US$54.8/bbl last week

Last week oil posted its biggest weekly gain since late September 2020 as Saudi Arabia’s plan to materially reduce output spurred a surge in physical crude buying

Futures in New York advanced US$3.72/bbl last week and Brent oil topped US$55/bbl for the first time since February

Saudi Arabia’s pledge last week to cut production by 1MMbopd in February and March has made for a tighter supply outlook sooner than anticipated

Meanwhile, prospects for additional stimulus under a Biden administration spurred broader market gains.

Saudi Arabia’s surprise cut appears to have caught some Asian buyers by surprise and demand for US crude for export to Asia has gained this week

Unipec, the trading arm of China’s largest refiner, bought its eighth cargo of North Sea crude in a pricing window run by S&P Global Platts last week and was seeking more in what may be the heaviest buying of its kind on record

Elsewhere, we are now in the second day of the annual five-day rebalancing of portfolios which could attract as much as US$9bn buying into crude oil contracts, putting upward pressure on oil prices

The rebalancing of indices to adjust the weighting of assets in portfolios is being done every year so that target allocations or risk levels are restored

However, the rebalancing this year could attract more than usual buyers into crude oil contracts because of the 20-percent decline of oil prices during 2020

The next five days could see a buying spree in oil futures that could be as high as US$9bn to adjust the weighting of the major commodity-linked indices

The market will likely see long positions into another 80 to 100MMbbls oil futures contracts, which could drive oil prices by US$2-US$3/bbl

It’s not a given that the market will see US$9bn of new buying into oil futures because some investors and traders may have already done it ahead of the rebalancing period

Even if the buying spree is not so high, the rebalancing will likely to continue to support oil prices

Natural Gas US$2.611/mmbtu vs US$2.662/mmbtu last week

Gas demand for the week 6-12 January is expected to be low, according to NatGasWeather, with demand seen rising over the weekend, but lighter again around the middle of next week as much of the US warms back above normal

The US benchmark prices, however, are much lower than the price of LNG in Asia, which has recently jumped to a six-year high

The high LNG prices are expected to incentivise increased US LNG exports in the coming weeks and months

Natural gas prices moved lower at the back end of last week, reversing a four-day rally

This came despite a larger than expected draw in natural gas inventories released yesterday by the Department of Energy

Natural gas in storage was 3,330Bcf as of 1 January according to EIA estimates

This represents a net decrease of 130Bcf from the previous week

Expectations were for a 110Bcf draw

Stocks were 138Bcf higher than last year at this time and 201Bcf above the five-year average of 3,129Bcf

At 3,330Bcf, total working gas is within the five-year historical range

The weather is expected to be cooler than normal in the south of the US and warmer than normal in the north

 

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$167.5/t vs US$164.6/t – shipments through Port Hedland rose 16% in December to 40mt

Chinese steel rebar 25mm US$674.2/t vs US$675.1/t

Thermal coal (1st year forward cif ARA) US$71.0/t vs US$69.6/t

Coking coal swap Australia FOB US$132.0/t vs US$136.0/t

           

Other: 

Cobalt LME 3m US$36,500/t vs US$35,500/t

NdPr Rare Earth Oxide (China) US$64,720/t vs US$63,882/t

Lithium carbonate 99% (China) US$8,341/t vs US$7,976/t – Chile threatens Albemarle with legal action over Atacama data sharing pact

Chilean regulators have threatened Albemarle with legal action, demanding that the miner present a plan for turning over data on its lithium reserves by week’s end.

Chile gave Albemarle approval to hike production from the Atacama salt flat on condition that the miner prove that its reserve could sustain increased output.

Officials say that Albemarle has failed to provide adequate reserves data more than a year after the regulator asked for it.

Albemarle sought to keep parts of that data confidential, however the regulator has rejected the company’s argument and insisted that it provides the data.

The company has since released a statement saying that there is no conflict with Chilean officials, and that it plans to issue a prompt reply (Reuters).

Ferro Vanadium 80% FOB (China) US$30.0/kg vs US$30.0/kg

Ferro-Manganese high carbon 78% Mn US$1,380/t vs US$1,370/t

Tungsten APT European US$235-240/mtu vs US$230-235/mtu

Graphite flake 94% C, -100 mesh, fob China US$520/t vs US$520/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$395/t vs US$380/t

 

Battery News

Offshore wind energy to produce hydrogen 

ITM Power, Orsted, Siemens Gamesa Renewable Energy, and Element Energy have been awarded EUR 5 million in funding from The Fuel Cells and Hydrogen Joint Undertaking under the European Commission to investigate the feasibility of combining an offshore wind turbine with an electrolyser and transporting renewable hydrogen to shore.  

They aim for a compact electrolysis system that can withstand harsh offshore environments and have minimal maintenance requirements. 

The electrolyser system will be compact, to allow it to be integrated with a single offshore wind turbine. It will integrate desalination and water treatment processes, making it possible to use seawater as a feedstock for the electrolysis system. 

The project is planned to start in 2021 and run to the end of 2024.  

 

Nio  – new ET7 EV to costs $69,500 and is planned as a rival to the Tesla Model Y which is cheaper due to Tesla’s initial discounting

 

Apple and Hyundai set to sign partnership deal  

Apple Ince and Hyundai Motor plan to sign a partnership deal on autonomous electric cars by March and start production around 2024 in the US.  

This follows a statement last week from Hyundai Motor that it was in early talks with Apple.  

Shares in Hyundai Motor rose 14.6% this morning, while affiliate auto parts maker Hyundai Mobis shares rose 12.7% and Kia shares rose 9.1% versus a 2% gain in the wider market.  
 

2020 warmest year on record 

Europe had its hottest year ever recorded in 2020, while globally 2020 tied with 2016 as the warmest on record.  

The global average temperature in 2020 was about 1.25C warmer than the preindustrial period of 1850-1900. This is primarily due to higher levels of CO2 in the atmosphere.  

Compared to the 1981-2010 period, the global average temperature in 2020 was 0.6C warmer, while Europe was 1.6C warmer.  

Last year, 34bn tonnes of CO2 were emitted from burning fossil fuels which was lower than 2019. However, those emissions still pushed CO2 concentrations to historic highs as the gas lingers in the atmosphere for decades. 

 

Company News

Anglesey Mining (LON:AYM) 10 pence, Mkt Cap £18.8m – Mineral resources and PEA for Parys Mountain

Angelsey Mining has announced a new mineral resources estimate and the results of a Preliminary Economic Assessment (PEA) on the historic Parys Mountain property in Wales.

The new resource estimate, prepared by the consultants, Micon, using a cut-off of US$48/t amounts to 5.2mt classified as indicated at an average grade of 0.36% copper, 1.36% lead, 2.55%zinc, 29.7g/t silver and 0.3g/t gold as well as a further 11.7mt classed as inferred at an average grade of  1.22% copper, 0.54% lead, 1.04%zinc, 10.8g/t silver and 0.2g/t gold.

The PEA examined 3 potential development options “ranging from 5.5 million tonnes at 1,500 tonnes per day in Case A to 11.4 million tonnes at 3,000 tonnes per day in Case C” with a range of mine lives between 11-12 years and pre-production capital expenditures ranging between US$57.5m in case B to US$99.0m for Case C.

Using assumed metal prices of US$1.20/lb for zinc, 2.81/lb for copper, US$0.95/lb for lead, US$16.67/oz for silver and US$1,459/0z for gold, the various development plans generated after tax NPV10% between US$26m (case A) and US$99m (Case C) and IRRs of between 17.5% (Case A) and 23.6% (Case C).

At the pre-tax level Case C generates an NPV10% of US$120m and an IRR of 26.0%.

The company comments that “Using the higher current January 2021 metal prices and exchange rate would double this Case C NPV10 to $238 million (£176 million) and applying a more conservative 12% discount rate to this would result in an NPV12 of $195 million (£144 million)”.

Chief Executive, Bill Hooley, said that “We are very encouraged with these financial results, particularly for the expanded scenario.  The PEA clearly demonstrates that Parys Mountain has the potential to be developed as a serious mining project producing an average 7,300 tonnes of copper, 8,000 tonnes of zinc, 7,600 tonnes of lead, 6,000 kg of silver and 160 kg of gold, in concentrates, per year in Case C and become a major contributor to the UK economy”.

The company explains that “Several areas for further improvement have been identified as we continue to evaluate and optimise the alternative cases and initiate the necessary work to move towards completing a Preliminary or a Definitive Feasibility Study”.

 

Castillo Copper (LON:CCZ) 4p, Mkt Cap £26.9m – Further assay results from drilling at the Big One project in Queensland

Castillo Copper reports further drilling results from its drilling at the Big One prospect which is located in its Mt Oxide project area in Queensland.

The company says that the recent results  “significantly extend known mineralisation” and provide “Compelling evidence that Big One Deposit is a shallow, high-grade copper-cobalt system with the potential to scale further”.

At this stage, a “maiden JORC compliant resource” is being prepared which may allow third-party observers to form a view of the scale and quality of the mineralisation. Castillo Copper is also preparing a geophysical exploration plan

Among the results reported today are:

A 40m wide intersection from surface in hole 303RC at an average grade of 1.64% copper which includes 11m averaging 4.4% from 24m depth, 5m averaging 7.34% from 28m and a single 1m averaging 16.65% from 29m. We note that partial results, excluding assay data were reported from this hole and others during December; and

A 44m wide intersection averaging 1.19% copper from surface in hole 301RC, including 14m averaging 3.55% from 27m, 3m averaging 10.88% from 37m and a single metre averaging 12.6% from 37m depth; and

A 12m wide section averaging 0.79% copper from 52m in 213RC, including 8m averaging 1.06% from 57m depth, 3m averaging 2.03% from 58m and single metres averaging 4.37% and 1.46% from 59m and 62m respectively; and

8m averaging 0.47% copper from 84m in hole 207RC, 8m averaging 0.41% from 16m in hole 306RC, 8m averaging 0.42% from 54m in hole 206RC, 5m averaging 0.66m from 35m in hole 302RC and 5m averaging 0.53% from 34m in hole 305RC

The company explains that “The latest assay results have extended original lengths of visually logged mineralised intersections … while laboratory analyses confirmed the presence of high-grade, shallow copper mineralisation in eight drill-holes at Big One Deposit”.

The company also says that “ore grade cobalt readings were noted in 301RC – 12m @ 912ppm Co fm 29m incl: 1m @ 1,435ppm Co. While further work is required to determine the extent of mineralisation, there is potential for significant cobalt credits” while assays have also shown anomalous levels of silver, arsenic and bismuth as well as “very minor gold readings”.

Castillo Copper says that the onset of the wet season has caused a pause in drilling, “a geophysics campaign is being formulated to identify new bedrock conductors (and potential test-drill targets)”.

Managing Director, Simon Paull, said that the recent results “could be transformative for Big One Deposit … [and that they demonstrate] … the potential for significant further upside with mineralisation observed away from the main copper lode. There is now compelling evidence that Big One Deposit is a scalable, shallow, high-grade copper-cobalt system.”

Conclusion: We look forward to the compilation of the drilling results from the Big One prospect into an initial mineral resource estimate which quantifies the extent and scale of mineralisation.

 

Central Asia Metals (LON:CAML) 264p, Mkt Cap £466m – Stable production reported in 2020 with final dividend to be announced in March

Annual copper production at Kounrad came in at 13.9kt, within increased guidance (2019: 13.8kt).

Annual zinc and lead production at Sasa totalled 23.8kt (2019: 23.4kt) and 29.7kt (2019: 29.2kt), both largely within 23-25kt Zn and 30-32kt Pb respective guided ranges.

The Company repaid $38.4m in corporate debt during the year with closing cash balance of $47.9m and outstanding gross debt of $80.4m as of YE20.

Remediation works following the TSF4 incident in September last year progressed well in Q4/20 with more than 95% of the tailings deposited during the leakage having been removed from the river.

The team put in place a hedging programme for 30% of copper production using a zero cost collar contract locking in the price range of $6,900-8,380/t as well as for 30% of zinc and lead production using swaps using $2,804/t and $2,022/t respective prices.

The hedging programme has been arranged in the light of increased capital spending in 2021 ($15-17m) as the team implements the Cut and Fill Project at Sasa with the new underground access decline construction expected to commence in Q2/21.

FY20 financial results will be released on 30 March 2020 with the final dividend for 2020 to be announced at the time.

FY21 production guidance is for 12.5-13.5kt Cu, 23.0-25.0kt Zn and 30.0-32.0kt Pb.

Conclusion: Company reports flat production in 2020 and guides for stable output in 2021 as copper prices trade at multi-year highs. Final dividend to be announced on 30 March 2020.

 

IronRidge Resources* (LON:IRR) 14.6p, Mkt cap £58.3m – Sale of non-core gold project

IronRidge report that it has completed the sale of its May Queen gold project in South East Queensland to Australasian Gold Limited (AGL), allowing the company to maintain focus across its core African portfolio.

Historic drilling completed during the 1980s at May Queen intersected multiple high-grade gold intervals, including 2m @ 73.4 g/t Au (including 1m at 145g/t), 4m @ 38.8g/t Au (at end of hole) and 3m @ 18.9g/t Au, over an approximate 100m strike hosting numerous parallel vein systems, open to the north-west and south-east.

AGL is an Australian focused gold explorer with a prospective gold project within the proven Ashburton region of Western Australia, and is currently working towards an IPO.

IronRidge are set to receive 4.5m shares representing 28.1% of the enlarged share capital of AGL, while investing A$100,000 at 10 cents per share to provide AGL with working capital- with IronRidge holding an initial 5.5m AGL shares representing 32.3% of the enlarged share capital.

IronRidge have the right to a future board position whilst a shareholding of greater than 10% is maintained, and also maintains top-up rights.

Vincent Mascolo, Chief Executive Officer of IronRidge, said: We are pleased to be partnering with AGL on the divestment of our non-core May Queen gold project in South East Queensland, Australia. The divestment provides IronRidge with significant project upside through exploration success, to be led by AGL, whilst allowing the Company to intensify capital focus and managerial momentum on our core suite of gold and lithium assets in Africa.

*SP Angel act as Nomad for IronRidge Resources

 

Keras Resources* (LON:KRS) 0.145p, Mkt cap £7.6m – Keras increase stake in the Daiamond Creek organic phosphate mine to 51%

(Keras also hold an 85% interest in Societé General des Mines which holds the Nayéga manganese project license in Togo. Keras now holds 40% of Falcon which holds 100% of the Diamond Creek phosphate mine which is operating in Utah, USA)

Keras report it has taken control of Falcon Isle Holdings, the organic phosphate business in Utah, USA.

The company loaned US$2.5m into Falcon Isle Holdings to get production running and earn a 51% stake.

The Keras team hit the ground running last year with directors making personal loans into the Falcon Isle to get commercial production started before the winter.

This has accelerated cash flows and partially de-risked the business while proving production, sales and distribution processes.

The business has bagged 50lb -10 and -100 mesh high grade, organic phosphate which is now ready for dispatch using a toll treatment arrangement.

A new and larger processing plant is now en route and expected to arrive in Utah in January with commissioning due in this quarter.

This plant will produce organic phosphate products in 50lb and 1t tote bags.

Keras / Falcon Isle Holdings, mined 7620t in its first few months to October last year when the mine closed for the winter.

The Diamond Creek mine sold 1,012t at US$260/t in August and September demonstrating significant demand for the product at that time.

The mine is targeting 48,000t of commercial production within the next four years implying potential sales over US$12.5mpa.

Manganese: Keras continue to await a license to mine the Nayéga Manganese Project in Togo.

The company are encouraged by their recent visit to Togo and for the potential further expansion of the project through ongoing exploration of the lease area.

Recent intercepts from the lease area show 1.76m @ 18.6% Mn from 0m, 2.05m @ 15.8% Mn from 0m and 2.00m @ 16.2% Mn from surface.

The plant at Nayéga is ready to go at 6,500tpm as demonstrated with its bulk sample shipment and is ready to increase to 25,000tpm (300,000tpa).

This implies potential EBITDA of US$5.7m on sales of around $35mpa off a 25,000tpa plant

Manganese ore prices jumped a further 10.5% this week in South Africa to $3.8/dmtu (FastmarketsMB).

Prices in China for 44% Mn rose 14.3% to $4.89/dmtu while prices for 37% Mn also rose 10.0%

Manganese is a major component in the two most common types of Li-ion batteries used for EVs which have around 61% of manganese content in the cathode.

90% of manganese is used in steel production where the manganese helps to convert the iron into steel

Conclusion: Keras continue to press ahead with developing cash flow and production in Utah and in Togo. We are hopeful the new administration in Togo will come through with the mining license for Nayéga and production will start soon after.

*SP Angel act as Nomad and Broker to Keras Resources

 

Power Metal Resources* (LON:POW) 2.95p, Mkt cap £28.5m – Molopo Farms drilling highlights nickel and PGM potential

Power Metal is currently undergoing an extensive technical review of the first two diamond drill holes at its Molopo Farms Complex Project in Botswana, with initial analysis identifying 4.4m of  ultramafic rocks with finely disseminated sulphides in angled hole KKME 1-6 at approximately 270m vertical depth.

The project in question relates to the Kalahari Key Mineral Exploration Ltd (KKME) of which Power Metal has an 18.26% shareholding and elected to earn in to a 40% interest in the project by funding US$500,000 of exploration by April 2021. To date Power Metal have paid US$192,641 leaving a balance remaining of US$307,359 (approximately £230,523) which is fully covered by Power Metal cash resources.

The setting of this sulphide intersection is consistent with KKME’s geological model and suggests prospectivity for platinum group metals as well as base metals. The core will now be split to allow a more detailed examination of the mineralogy prior to assay testing at an accredited lab in South Africa.

Power Metal are now set to deepen drill hole KKME 1-6 from 547m to circa 600-650m, while downhole geophysics field work and interpretation for the two holes drilled to date is expected to be completed by the end of January.

The Company is also reviewing airborne and survey data completed by Aster Funds Ltd and Bell Geospace Ltd which should accelerate and refine the exploration targeting process for future drill testing.

Paul Johnson, CEO of Power Metal Resources commented: “The identification of visible sulphides during the geological core-logging process for hole KKME 1-6 is a potentially significant development, subject of course to assay testing of samples, opening up the potential for PGM mineralisation besides the base metals originally targeted. We are now in the midst of an extensive technical review of the entire licence areas with a particular focus around the first two drill holes. This will further refine our present targets and generate new targets for the remainder of the drill programme.

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

                                                     

Tertiary Minerals* (LON:TYM) – 0.27p, Mkt cap £2.2m – Progress of Nevada exploration

Tertiary Minerals reports that soil sampling work at its Pyramid precious metal exploration project in Nevada has confirmed historic gold in soil anomalies extending over 1km of strike length and also identified two further anomalies one of which extends over 500m and remains open-ended and the second of which extends 800m.

The company plans an immediate follow up programme of trenching and further sampling.

Tertiary Minerals also confirms that it has now received permission to drill at its Lucky Copper prospect in Nevada and that it is currently working on the interpretation of sampling and geophysical data from the Mt Tobin and Paymaster projects in Nevada.

The company also confirms that it has now terminated its Lassedalen Fluorspar project in Norway.

Executive Chairman, Patrick Cheetham, confirmed that the company expects to test the new target anomalies at the Pyramid project as soon as possible “initially with trenching and sampling with follow up drilling as justified”.

Conclusion: Tertiary Minerals confirms the cessation of its fluorspar project in Norway and is now focussed on its portfolio of precious and polymetallic exploration projects in Nevada.

*SP Angel act as Nomad and Broker to Tertiary Minerals

 

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

 

DISCLAIMER

This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.

Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.

Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

MiFID II – Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins ([email protected]).

SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

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