Today’s Market View – AfriTin, Cornish Lithium, Altus Strategies and more…

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SP Angel . Morning View . Thursday 22 07 21


Sentiment continues to improve supported by positive corporate results




Graphene producer funding – EIS scheme approval applied for


The company wishes to fund a ramp up in graphene production to get ahead of demand and to develop markets for a number of new, graphene products


The business is also able to upgrade graphite to a higher grade/specifications using its process – rolling out this process also requires funding


Please email if you wish to invest in the company


*SP Angel’s role is limited to making introductions and interested parties should be aware that investment in a private company can present certain risks not present in listed companies (e.g. limited or no liquidity and no rules compelling disclosure of information to investors). This offer is open to professional investors only and is not offered to retail investors.




AfriTin* (LON:ATM) -Uis mine in Namibia aiming towards doubling monthly concentrate output


Alba Mineral Resources (LON:ALBA) – Identification of new gold target close to Gwynfynydd


Altus Strategies* (LON:ALS) – New silver/copper licenses secured in Morocco


Cornish Lithium (PRIVATE) – DLE technology provider selected for the Pilot Plant


Greatland Gold (LON:GGP) – Additional drilling results from Havieron


Piedmont Lithium (NASDAQ:PLL) – A presentation delivered to Gaston County officials


Serabi Gold* (LON:SRB) – Exploration potential of the Atacadao trend at Sao Domingos




Dow Jones Industrials +0.83% at 34,798


Nikkei 225 closed


HK Hang Seng +1.64% at 27,672


Shanghai Composite +0.34% at 3,575




The next Morning View will be released on Monday following a short break on Friday as the team is attending Oxford Mining Club summer event.




Australian government invests in rare earths, offers $10.9m grant to Lynas


Lynas Rare Earths Ltd. have received a grant from Australia to advance a new refining process for high-purity rare earths.


The move provides further evidence of governments looking to capitalise on international concerns over China’s dominance in the rare earths market.


Lynas, one of the world’s largest rare earth producers outside of China, are in the process of constructing a large processing facility in WA.




Economics


Risk sentiment continues to rebound with global equities set for the biggest three-day rally since April.


The drive is led by corporate earnings optimism with around 86% of the S&P 500 companies that reported results so far having beaten estimates.




IMF is not expecting the pandemic to be over earlier than the end of 2022 unless the global vaccination drive accelerates.


“It is so clear that we are, on the pace we’re on today, not going to end the pandemic… by the end of next year,” Kristalina Georgieva said on Wednesday.




US – President Biden dismissed concerns over persistent inflationary pressures as the economy recovers from the pandemic induced shock, Bloomberg writes.


“There will be near-term inflation… (but) it’s highly unlikely that it’s going to be long-term inflation that’s going to get out of hand,” President said Wednesday night at a CNN town hall in Cincinnati.




China rejected the next stage of a WHO-led investigation into origins of the Covid-19 pandemic as long as the probe considers it possible that the virus leaked from the Chinese lab, FT writes.


Zeng Yixin, the vice minister of the National Health Commission, said he was “shocked” to see the so-called “lab leak” hypothesis taking a central part fo the proposed WHO plan for a second phase study.


Earlier, WHO director-general said it was “premature” to rule out the option that the virus might have accidentally leaked from a government lab in Wuhan.




Floods continue to wreak havoc on German metal producers


Berzelius Ecobat’s lead plant in Stolberg, Germany has declared force majeure on its metal shipments from its west German smelter following flooding.


The smelter has a capacity of 155,000 tonnes.


They anticipate ‘at least several weeks’ before reopening.


Europe’s largest copper producer, Arubis, announced late last week that floods had limited facilities in its Stolberg plant.


The flooding is expected to further tighten a supply-limited lead market.




UK/EU – Brussels is planning to renegotiate the EU’s Brexit deal with the UK after its counterpart tried to amend the so-called Norther Ireland protocol that came into effect this year, FT reports.


Under the protocol, all goods shipped from great Britain to Northern Ireland should be checked in the Irish Sea for compliance with EU’s rules for customs and agri-food products, thus, avoiding a hard border on the island of Ireland.


Checks at Irish Sea ports increased tensions among the pro-UK unionist community in Northern Ireland and led to disruption of some trade between Great Britain and the region.


The alternative proposed by the UK is to replace check at ports with a new system largely based on the honesty of traders, with spot checks behind the border.


Additionally, the UK aimed at stripping the European Court of justice of its role in policing it.




Australia – Sydney reported 124 new daily cases marking the highest number of infections since an outbreak of the Delta variant in mid-June.


Infections climbed over the past 24 hours in the states of Victoria and South Australia despite lockdowns and stay at home orders covering more than half of Australia’s 25m population.


Stay-at-home orders are now in place in South Australia, Victoria and New South Wales.


Less than 14% of people are reported to have been vaccinated, the worst rating among OECD countries.




Currencies


US$1.802/eur vs 1.1763/eur yesterday. Yen 110.20/$ vs 109.94/$. SAr 14.532/$ vs 14.695/$. $1.375/gbp vs $1.361/gbp. 0.738/aud vs 0.730/aud. CNY 6.465/$ vs 6.475/$.




Commodity News


Precious metals:


Gold US$1,802/oz vs US$1,811/oz yesterday


Asian Gold ETFs see $1.6bn inflows


Asian funds saw strong inflows in contrast to US and European gold ETFs, who endured $8.5bn and $3.6bn in the first half of the year.


Huaan Gold ETF Fund received GBP304m in additional capital. The majority of these inflows came from China.


Asian-listed Gold ETFs saw inflows of $3.4bn in 2020.


Continued capital allocation to Gold ETFs has been explained by central bankers’ loose monetary policy, relative dollar weakness, decline in real yields and surging Delta variant cases globally.


Gold ETFs 100.2moz vs US$100.2moz yesterday


Platinum (AIM:ZERO) US$1,085/oz vs US$1,076/oz yesterday


Palladium US$2,675/oz vs US$2,667/oz yesterday


Silver US$25.24/oz vs US$25.13/oz yesterday




Base metals:


Copper US$ 9,451/t vs US$9,289/t yesterday


Antofagasta fear impact of droughts on copper production.


London-listed copper miner, Antofagasta, has warned of the impact a lack of water supply could have on its Los Pelambres copper mine in Chile.


The mine is one of the largest copper producers in the world. Precipitation in the region has been significantly lower than 2019, which marked the driest year of the 12-year drought.


Antofagasta believes it is still on track to produce between 730-760k mt of copper this year – 2020 saw 733.9k mt. However, production in the first half of this year fell 2.8%. Lower quality ore has been suggested as the primary factor.


The company plans to construct a desalination plant in response to reduced rain levels.


Copper giant Codelco eyes SE Asian and Indian markets to reduce Chinese reliance


The world’s largest copper producer, Chilean state mining company Codelco, is seeking to quadruple its sales in Southeast Asia by 2023. It is also planning increased penetration into the Indian market.


The firm is set to open a new office in Singapore next month.


Codelco believes these markets are set to be well positioned for growth over the next 20 years.


A vice president for the firm estimates that Southeast Asia and India’s copper consumption will exceed 20% globally by 2040, up from today’s 8%.


China’s increasing smelting capacity is of primary concern to Codelco, with their dependence on pre-refined copper set to reduce.


Aluminium US$ 2,460/t vs US$2,438/t yesterday


Nickel US$ 18,715/t vs US$18,365/t yesterday


Zinc US$ 2,952/t vs US$2,939/t yesterday


Lead US$ 2,343/t vs US$2,313/t yesterday


Tin US$ 33,405/t vs US$33,395/t yesterday




Energy:


Oil US$72.1/bbl vs US$69.1/bbl yesterday


Natural Gas US$3.928/mmbtu vs US$3.924/mmbtu yesterday




Bulk:


Iron ore 62% Fe spot (cfr Tianjin) US$205.2/t vs US$213.2/t


China’s insatiable iron ore demand continues to boost Australia’s trade surplus


The Australian Bureau of Statistics has released preliminary figures for June, showing a trade surplus of GBP13.3b.


Chinese demand for Australian iron ore was a primary factor behind this, hitting another record in June and accounting for almost half the value of goods exports last month.


Despite political tensions, iron ore shipments from Australia to China rose 7% in June, hitting $14.8bn in value. 85% of Australia’s iron ore exports are to China.


It is estimated that the weak AUD has boosted exporter demand.


Trade tensions between China and Australia have been amplified since 2018. Recently the U.S. Trade Representative announced it is committed to standing with its allies such as Australia to address China’s potentially harmful policies.


Chinese steel rebar 25mm US$819.1/t vs US$819.3/t


Thermal coal (1st year forward cif ARA) US$94.3/t vs US$92.3/t


Coking coal swap Australia FOB US$207.0/t vs US$207.0/t


China Illmenite Concentrate TiO2 US$367.39/kg vs US$366.3/t




Other:


Cobalt LME 3m US$52,500/t vs US$52,500/t


NdPr Rare Earth Oxide (China) US$92,040/t vs US$91,895/t


Lithium carbonate 99% (China) US$12,375/t vs US$12,356/t


China Spodumene Li2O 5%min CIF US$710/t vs US$700/t


Ferro-Manganese European Mn78% min US$1,871/t vs US$1,900/t


China Tungsten APT 88.5% FOB US$293/t vs US$292/t


China Graphite Flake -194 FOB US$515/t vs US$515/t


Europe Vanadium Pentoxide 98% 9.3/lb vs US$9.3/lb


Europe Ferro-Vanadium 80% 39.75/kg vs US$39.75/kg


Spot CO2 Emissions EUA Price US$57.4/t vs US$57.2/kg




Battery News


Molten sodium batteries for grid-scale energy storage


Researchers at Sandia National Laboratories have designed a new class of molten sodium batteries that can be used for grid-scale energy storage.


Molten sodium batteries have been used for many years to store energy from renewable sources, but typically operated between 270?C and 350?C – Sandia’s new molten sodium battery can operate at 110?C.


Among the major innovations that allowed this lower operating temperature was the development of a “catholyte” – a liquid mixture of two salts, in this case, sodium iodide and gallium chloride.


The sodium-iodide battery has been tested at lab-scale with 400 charge/discharge cycles over eight months.




Tesla agrees deal with BHP to secure greener supply of nickel


Tesla has signed a nickel deal with BHP to reduce dependence on Chinese supply lines,


The deal with the world’s largest miner is the third nickel agreement struck by Tesla in the last 8 months. The previous two were with Vale and Trafigura.


Elon Musk has emphasised the need for a ‘sustainable’ supply of nickel with mines who provide the metal ‘efficiently and in an environmentally sensitive way’.


BHP have estimated that demand by 2030 will increase by 500%, owing to the rapidly growing market for EV batteries. The metal is also needed for stainless steel production.


The deal involves sourcing nickel from BHP’s WA plant. The Nickel West plant is advertised as one of the lowest carbon-producing nickel operations globally. This provides Tesla with an attractive alternative to China-dominated, coal-fired nickel facilities in Indonesia.


Whilst details regarding the deal are lacking, it is estimated that BHP will supply up to 18k tonnes annually to the EV manufacturer.


BHP’s Nickel West plant is positioned to provide enough nickel for 2m EV batteries pa, translating to c.80k tonnes. Increased investment in the plant reflects BHP’s focus on decarbonisation.




Company News


AfriTin* (LON:ATM) 5.4p, Mkt cap GBP60.1m -Uis mine in Namibia aiming towards doubling monthly concentrate output


AfriTin reports that during the 12 months to 28th February 2021, during which its Uis tin mine in Namibia ramped-up production to in excess of the Phase 1 nameplate capacity, it recorded a loss of GBP5.8m (2020 – loss of GBP1.8m).


Revenues GBP5.0m were broadly matched by cost of sales during the ramp-up phase to deliver a gross loss of just GBP2,589 with the bulk of the annual loss attributable to a GBP3.1m impairment charge against exploration licences and higher administrative charges of GBP2.5m during the ramp-up phase.


The company reports a year-end cash balance of GBP1.4m and current borrowings of GBP3.9m at 28th February 2021.


The financial results reflect the production of 473t of tin concentrate, containing 311.7t of metal during the year with the Chief Executive, Anthony Viljoen, explaining that “We are now planning to grow the Company’s revenue streams by expanding the throughput of the pilot plant and introducing tantalum and lithium by-product revenue streams. The metallurgical test work to develop the process design has been a key priority to unlocking the significant potential of AfriTin”.


AfriTin also highlights the agreement, in December 2020, with its offtake partner Thaisarco to renew and extend the tin concentrate offtake agreement for a further three years.


Acknowledging the contribution of the AfriTin team in bringing Uis to production during the Covid19 pandemic, Chairman, Glen Parsons, said “To ramp up production and surpass nameplate production capacity is a testament to the hard work carried out on site, and to the team’s resolve and determination to deliver”.


He also said that “Since November 2020, Uis continues to grow total monthly production which has exceeded the planned production of 60 tonnes of tin concentrate per month.”.


Future efforts are directed towards doubling monthly concentrate output to 120tpm, exploration to expand the mineral resource/reserve inventory and accelerating the test work establish the viability of developing by-product production of lithium and tantalum.


*SP Angel act for Bushveld Minerals which holds around 9.5% of AfriTin




Alba Mineral Resources (LON:ALBA) 0.27p, Mkt cap GBP15.9m – Identification of new gold target close to Gwynfynydd


Alba Minerals reports that exploration within its North Wales licences close to the historic Gwynfyndd gold mine has identified a new target with the discovery of grab samples assaying at up to 24g/t gold.


The grab sampling results come from follow-up field exploration arising from a review of historical data in the area which contains “some 300 historical workings in the Dolgellau Gold Field, not to mention no fewer than 11 past producing gold mines”.


Sampling of a quartz boulder found close to one of the historic mine workings showed “a multi-stage banded vein reminiscent of epithermal mineralisation” which when broken open contained a “pod of massive sulphide mineralisation … which returned elevated grades of 6.5 g/t and 24.1 g/t Au”.


The company says that another loose boulder sample, known as ‘float’ comprised “breccia mineralisation which returned a grade of 3.8 g/t Au”.


The company concludes that “there is potential for both vein- and breccia-hosted mineralisation along and between the 5-6 target structures” and that it will be following up with a programme of field mapping and bedrock sampling during August.


Alba Minerals has also “collected stream sediment samples within the Company’s Gwynfynydd exploration licence area … [to] … form the basis of a study currently being completed by an MSc (Exploration Geology) student at Camborne School of Mines. The study will identify the best sampling and analysis methodology for stream sediment sampling in the Dolgellau Gold Belt as well as including a comprehensive review of existing regional stream geochemistry and drainage basin analysis.”


Conclusion: The early-stage identification of gold bearing float samples close to the historic Gwynfynydd gold mine is encouraging Alba Minerals to conduct more detailed mapping and sampling during August in an effort to identify the source of the mineralised boulders.




Altus Strategies* (LON:ALS) 60p, Mkt Cap GBP48m – New silver/copper licenses secured in Morocco


BUY – 118p


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The Company was granted four new exploration projects as well as an extension to the existing Agdz license for a total of ~149km2.


New licenses are considered to be prospective in silver and copper and increase total Moroccan portfolio to 14 projects covering ~824km2.


Agoudim Silver Project (29km2) is located 30km east and is potentially found in the same fault zone as the Imiter silver mine operate by Managem;


Tazoult Silver Project (14km2) ius located 13km east of the Zgounder silver mine operated by TSX-V listed Aya Gold and Silver;


Assif Silver & Gold Project (26km2) located 11km southwest of the historical Tiouit gol mine;


Anezal Base Metal Project (64km2) located 40km northwest of the bou Azzer cobalt mine operated by Managem;


Agdz II Copper-Silver Project (16km2) located 12km northwest of the Agdz project and 32km west of the Bouskour copper mine operated by Managem.


The team is carrying an inhouse remote sensing of properties using satellite imagery and extensive historical exploration data to identify priority exploration targets.


*SP Angel acts as Nomad and Broker to Altus Strategies




Cornish Lithium (PRIVATE) – DLE technology provider selected for the Pilot Plant


GeoCubed, the JV between Cornish Lithium and Geothermal Engineering, announced the selection of GeoLith SAS as a provider of their Li-Capt(R) Direct Lithium Extraction technology for GeoCubed’s Pilot Plant.


GeoLith has been selected following a comprehensive tender process involving other ten DLE technology providers evaluating effectiveness on Cornish geothermal waters.


GeoLith’s technology was selected due to the quality of their tender, the effectiveness of their technology, and their ability to design and deliver a Pilot Plant.


The plant is expected to be commissioned at United Downs by the end of Mar/22.


The GBP4m plant will be partly funded using a GBP2.9m contribution from the UK Government’s Getting Building Fund.


Plant nominal capacity is planned at 10ktpa LCE with results to be used for engineering and design of a commercial lithium facility in Cornwall.




Greatland Gold (LON:GGP) 18.7p, Mkt Cap GBP750m – Additional drilling results from Havieron


Greatland Gold draws attention to the report released by its partner, Newcrest Mining, to the ASX disclosing results from recent drilling at the Havieron gold/copper project in the Paterson region of W Australia.


The company says that “Growth Drilling continues to confirm extensions to the high grade South East Crescent and the Northern Breccia mineralisation below and around the initial Inferred Mineral Resource estimate”.


Reporting previously undisclosed results the company says the best of these were:


An 84.5m wide intersection of the Northern Breccia zone from a depth of 683m in hole HAD138 which averaged 2.00g/t gold and 0.05% copper; and


A 36.2m wide intersection, also of the Northern Breccia, averaging 2.7g/t gold and 0.09% copper from a depth of 988.8m in Hole HAD136W1 which also contained a lower mineralised intersection of 201m averaging 0.45g/t gold and 0.09% copper from 1050m depth.


The company says that it is awaiting assay results for a further 15 drillholes targeting the Northwest Crescent and Northern Breccia zones as well as the South East Crescent and Breccia zones.


Progress is also reported on the initial underground construction with completion of the box-cut and portal during May, and 69m of underground decline advance completed and the contractor now moving to 24-hour operations.


Conclusion: The drilling programme at Havieron continues to expand the resource potential around the existing inferred mineral resource of 18mt at an average grade of 3.8g/t gold and 0.61% copper within the South East Crescent Zone, which remains open both laterally and at depth as well as a further 34mt at an average grade of 1.1g/t gold and 0.15% copper within the Breccia Zone.




Piedmont Lithium (NASDAQ:PLL) US$57.6, Mkt Cap US$907m – A presentation delivered to Gaston County officials


Piedmont suffered a trading halt and a 20% fall in share price after claims the company had repeatedly failed to apply for necessary permits for its North Carolina Lithium facility.


In response to this, the company presented to the Gaston County Board of Commissioners.


The company emphasised the role Gaston County could play in the U.S. EV supply chain.


Keith Phillips, CEO, stated that a mining permit would be submitted in August 2021. He highlighted the company’s commitment to being ‘sustainable, and environmentally responsible’.


It has also been revealed that Scott + Scott Attorneys, who represent shareholders, are currently investigating whether Piedmont’s officers and directors violated federal securities laws.




Serabi Gold* (LON:SRB) 65.5p, Mkt Cap GBP49m – Exploration potential of the Atacadao trend at Sao Domingos


Serabi Gold reports results of surface sampling and initial drilling within the Atacadao trend of its Sao Domingos project area.


The Atacadao area is located around 2km south of the Toucano trend which the company has previously highlighted as an area of interest and has outlined an area mineralised alteration of up to 50m wide along some 600m of strike and where initial drilling has returned gold bearing intersections.


Both areas lie to the west of Serabi Gold’s Sao Chico deposit.


The company says that 36% of the 69 rock chip samples it recovered over a 1.5×1,5km area at Atacadao “returned over 3g/t Au with an average of grade of 22.5g/t Au” and that one sample assayed at 204.77g/t gold.”


Geological mapping in the area has “outlined a broad east-west corridor of parallel gold bearing structures transected by a NE-SW mineralised structure. Historic artisanal hard-rock shafts, located at the intersection of these structural orientations, have returned grades of up to 40.59g/t Au”.


Results from the first 3 drillholes at Atacadao reported in today’s announcement show multiple, narrow, mineralised intersections of up to 2.35m with grades ranging from around 0.6g/t gold to a high of 6.19g/t and down-hole depths of up to 300m.


CEO, Mike Hodgson, described the results from Atacadao as “very encouraging” and said that the “distribution and grade of the rock chip samples demonstrates the strength and scale of the mineralised system. The objective of the drilling is to provide us with a better understanding on the geological controls on gold deposition and, while this is still at an early stage and on the periphery of the trend, the initial results are very promising”.


Including Toucano, Atacadao is the second of “multiple prospects in the Sao Domingos project acquired by Serabi in 2020” and Mr. Hodgson says that Serabi Gold is “proving up additional prospects at Sao Domingos for future drill-testing”.


Serabi Gold has accelerated its exploration activity this year and is currently also drilling at the Sao Chico mine and has two rigs deployed to test southern extensions to the orebody at its Palito mine.


Conclusion: Initial exploration of the second of several targets at Sao Domingos known as the Atacadao trend has shown high-grade gold in surface sampling over a 1.5kmx1.5km area west of the Sao Chico mine and multiple narrow zones of gold mineralisation are reported from the first three drillholes. We look forward to further news as exploration of the Sao Domingos area progresses.


*An SP Angel analyst has visited the Serabi’s gold mining operations in Brazil




Recent Interviews:


IGTV: Stock picks in the small-cap mining space:


Evolution of Chinese construction and implications for commodity demand: https://youtu.be/jB2nURL8uPw


VOX Markets: 10/06/21: https://audioboom.com/posts/7884446-john-meyer-talks-about-cornish-metals-empire-metals-anglo-american-ncondezi-energy-mkango-r


BBC: Catalytic converters https://www.bbc.co.uk/sounds/play/p09jl6c9


*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, 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.




No.1 in Copper: “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”


No1. In Gold: “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”


The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020




Analysts


John Meyer – [email protected] – 0203 470 0490


Simon Beardsmore – [email protected] – 0203 470 0484


Sergey Raevskiy [email protected] – 0203 470 0474


Joe Rowbottom – [email protected] – 0203 470 0486




Sales


Richard Parlons [email protected] – 0203 470 0472


Abigail Wayne – [email protected] – 0203 470 0534


Rob Rees – [email protected] – 0203 470 0535


Grant Barker – [email protected] – 0203 470 0471






SP Angel


Prince Frederick House


35-39 Maddox Street London


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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.




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, Tungsten, Spodumene, Ferro-Manganese, Graphite


Asian Metal



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