Today’s Market View – Alba Mineral Resources, Ariana Resources, Atalaya Mining and more…

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SP Angel . Morning View . Wednesday 11 08 21


Battery metals prices continue to lead metals complex




Alba Mineral Resources (LON:ALBA) – Encouraging drill results at Amitsoq graphite project


Ariana Resources (LON:AAU) – Arzu Central drilling results


Atalaya Mining (AIM:ATYM, TSX:AYM) (LON:ATYM) – H1 results confirm 2021 production and cost guidance


Bluejay Mining* (LON:JAY) – Strong demand for titanium concentrates expected according to major buyers


Condor Gold* (LON:CNR) – H1 report confirms the development of La India remains on track


Largo Resources (CVE:LGO) – Q2/21 earnings climb on strengthening vanadium market demand


Lucara Diamonds (CVE:LUC) – Covid stretches timetable on underground development at Karowe


Phoenix Copper* (LON:PXC) – Additional land at Navarre Creek


SolGold* (LON:SOLG) – Sharug drilling underway




Copper – prices rise – but why?


Copper prices are rising because a new strike at Escondida, which produces ~4.5% of the world’s copper is going on strike


The mine produces some 22,778t a week of copper in concentrates sending smelters and their customers scrambling around the market for new supply.


BHP announced discussions with the union representing its Escondida copper mine have been productive, though a deal has not been officially approved by the mine workers.


Demand is also good for copper creating upside pressure on prices that had been depressed by China’s hollow threats of SRB sales. Yes, they did sell just a bit of copper!


Demand is strong because Wind farms, their turbines and cabling use lots of it.


Demand is also strong because automotive factories are ramping up new EV production, requiring more copper than they had thought


Further demand is also due from the US construction boom to come from Joe Biden’s newly passed trillion-dollar Stimulus.


China would have to collapse or the SRB would need to offload allot more metal to crush this latest rally in copper and if the SRB did sell they might not have the metal for when they really need it.


Air conditioning unit sales likely to rise as global warming raises temperatures


Demand for air conditioning units is expected to triple by 2050 as incomes rise and the world heats up.


Unfortunately, air conditioning uses huge amounts of power requiring the generation of more electricity.


A typical office uses around 31-41 kWh/m2 a year according to Mitsubishi Electric. Other household units use 1.15-2.5kw/hr.


Fortunately new technology / materials are transforming the power consumption of air conditioners.


Transaera is using metal organic frameworks developed by an MIT professor to cut power consumption to around a fifth of current useage.




Gold ETFs see $1bn inflows in July from European investors, contrasting U.S. net selling


European-based investors placed nearly $1bn into gold-focused ETFs in July.


These inflows offset the outflows from U.S. funds whose attraction to gold has been dampened following Fed officials’ sentiment to raise rates sooner rather than later.


The divergence marks a clear cross-Atlantic division over inflation concerns.


The European ETFs gained net inflows of $999bn, equalling 17.1 tonnes of gold. U.S. ETFs, on the other hand, saw outflows of net $402m, figures from the World Gold Council have shown.


These inflows mark a 0.3% rise in assets under management in gold ETFs, with European buying bolstered by Asian inflows.


Gold ETF assets under management remain down $6bn since January.


The price of gold has moved against traditional correlations, as with real yields, confusing analysts.


If inflation proves to be less transitory than the Fed have suggested, U.S. investors may return their attention to the precious metal.




Dow Jones Industrials -+0.46% at 35,265


Nikkei 225 +0.65% at 28,071


HK Hang Seng +0.17% at 26,651


Shanghai Composite +0.08% at 3,533




Economics


US – S&P 500 closed at another record high yesterday as the US Senate passed a $1tn bipartisan infrastructure package with the legislation to be heading to the house of Representatives for approval.


Inflation data is out later today and will be watched closely for signs of the strength of the recent inflationary momentum.


Estimates are for growth in CPI to pull back in July.


CPI (%mom): 0.5 est v 0.9 in June.


CPI (%yoy): 5.3 est v 5.4 in June.


Core CPI (%mom): 0.4 est v 0.9 in June.


Core CPI (%yoy): 4.3 est v 4.5 in June.


US Senate pass $1tn infrastructure bill and approve additional $3.5tn spending blueprint


The bipartisan $1tn bill passed the Senate 69-30 and marks America’s most considerable investment into public infrastructure for decades.


The bill still needs to pass the House of Representatives, where the Democrats have a thin majority thanks to Kamala Harris’ vote.


The Democrats plan to push the package through legislation using the ‘budget reconciliation’ process which only needs a simple majority vote. The budget resolution passed a vote in the Senate this morning 50 to 49.


Senior Republicans have described the additional $3.5tn spending plan as ‘radical’.


Republicans have rallied against Democrat plans to raise the debt ceiling in order to allow deficit spending.


If the Republicans do not raise the debt ceiling, which currently stands at $28.5tn, either a federal government shutdown or a debt default could be initiated.


Janet Yellen, the Biden’s Treasury Secretary, has called on Congress to raise the ceiling.




Ports are facing the biggest logistics challenge since start of container shipping, FT reports.


There are currently 363 container ships stuck outside ports around the world, mote than double the number from earlier in the year.


For instance, in ports of LA and Long Beach in the US, there 2 ships waiting for a berth that is estimated to take up to 12 days before ships can drop anchor and unload.




China – Credit growth slowed more than expected in July despite a resurgence in new cases and rising concerns over waning economic growth momentum.


Aggregate Financing (CNY bn): 1,060 v 3,669 in June and 1,700 est.


China auto sales fell 11.9% yoy in July to 1.864m vehicles. July passenger vehicle sales -7% YoY to 1.6m units (China Association of Automobile Manufacturers)


The 7% drop on the year prior for passenger vehicles was a slight rebound from -11% YoY in June.


Sales from Jan-July are still 21.2% higher YoY at 11.6m units.


Electric vehicle sales jumped another 164.4% yoy in July to ~271,000 units.


July saw the continuation of strong new energy sales in China.


This increase in demand comes as the combustion engine vehicle sales in China struggled for a 3rd straight month hit by flooding, Covid-19 and a shortage of semiconductors.


The increase in green vehicles parallels Chinese officials’ push for a cut in pollution, which subsequently encouraged EV makers Nio, Xpeng and BYD to all ramp up capacity.




Currencies


US$1.1726/eur vs 1.1736/eur yesterday. Yen 110.47/$ vs 110.41/$. SAr 14.833/$ vs 14.753/$ $1.386/gbp vs $1.384/gbp. 0.734/aud vs 0.733/aud. CNY 6.481/$ vs 6.480/$.




Commodity News


Precious metals:


Gold US$1,731/oz vs US$1,736/oz yesterday


Gold ETFs 100.3moz vs US$100.4moz yesterday


Platinum (AIM:ZERO) US$1,005/oz vs US$995/oz yesterday


Palladium US$2,646/oz vs US$2,628/oz yesterday


Silver US$23.34/oz vs US$23.62/oz yesterday




Base metals:


Copper US$ 9,491/t vs US$9,443/t yesterday


Aluminium US$ 2,592/t vs US$2,564/t yesterday


Nickel US$ 18,840/t vs US$18,825/t yesterday


Zinc US$ 3,018/t vs US$2,975/t yesterday


Lead US$ 2,292/t vs US$2,281/t yesterday


Tin US$ 35,210/t vs US$34,815/t yesterday




Energy:


Oil US$71.1/bbl vs US$70.0/bbl yesterday


Oil prices continue to tick up on news that Libya’s crude oil production fell on this week by 60,000-70,000bopd due to a leak in a pipeline


A leak on a 30-inch pipeline linking the Gallo oilfield with the Al-Waha oilfield forced NOC to reduce production until it assesses the damage and makes the necessary repairs


The NOC has not provided a timeline on when production will be restored but said that it had reached out to the ministries of oil and finance, asking them to extend the funds needed for repairs and funds needed to avoid the frequent disruptions to oil production due to poor infrastructure


Libya surprised many oil market observers, and probably the OPEC+ group itself, after managing in just a few months to restore its oil production back to 1.25MMbopd from less than 100,000bopd in September 2020


The 1.25MMbopd level was the volume Libya was pumping before the oil port blockade began in January 2020


Even after the lifting of the blockade in mid-September and the ceasefire from October, Libya’s oil production has not been entirely stable so far in 2021 due to strikes from the Petroleum Facilities Guard over unpaid salaries and the lack funds for restoration and maintenance of oil infrastructure


Libya could boost its oil production to 1.6MMbopd by the middle of 2022 if the industry has the necessary funding, according to Libya’s Oil Minister Mohamed Oun


Currently, the North African producer exempted from the OPEC+ cuts, produces 1.2MMbopd


According to secondary sources in OPEC’s latest Monthly Oil Market Report, Libya’s crude oil production averaged 1.163MMbopd in June, up from 1.157MMbopd in May




Natural Gas US$4.121/mmbtu vs US$4.044/mmbtu yesterday




Bulk:


Iron ore 62% Fe spot (cfr Tianjin) US$161.9/t vs US$158.5/t


Chinese steel rebar 25mm US$819.0/t vs US$813.4/t


Thermal coal (1st year forward cif ARA) US$100.3/t vs US$100.1/t


Coking coal swap Australia FOB US$198.0/t vs US$198.0/t


China Illmenite Concentrate TiO2 US$358.4/t v US$358.8/t




Other:


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


NdPr Rare Earth Oxide (China) US$96,418/t vs US$96,540/t – US rare earth producers get windfall from House of Representatives bill


A Democrat has introduced legislation which extends tax credits to U.S. producers of rare earth magnets.


The move comes as western economies look to protect their domestic supply of rare earth materials over concerns of Chinese dominance in the sector.


The legislation is part of a bill aimed at creating a national U.S. strategy for increasing the domestic production of lithium, rare earths and other ‘strategic’ minerals used for the EV, arms and electronics sectors.


The Rare Earth Magnet Manufacturing Production Tax Credit Act enjoyed bipartisan support.


It sets a $20/kg credit for neodymium iron boron magnets made in America.


This credit increases to $30/kg for magnets made using rare earths sourced domestically.


Proponents of the legislation have highlighted the need for the U.S. to secure ‘all of the necessary components of the supply chain’ as the Biden administration looks to commit to vehicle electrification.


The U.S. currently has no domestic facilities to produce rare earth magnets, with MP Materials relying on Chinese processors.




Lithium carbonate 99% (China) US$14,181/t vs US$13,045/t – UK export agency looks to invest in Argentina lithium project


Australia’s Lake Resources today announced interest from the UK’s export credit agency to fund 70% of a lithium project in Kachi, Argentina.


UK Export Finance stated its focus on the project reflects Britain’s need for a reliable lithium sourcing strategy.


Export agencies have been exploring EV-related lending opportunities as big banks have expressed concern over financing the sector.


The trade agency highlighted Lake Resources’ dedication to limiting environmental impacts from their extraction processes, such as brine evaporation.


The funding is not binding and requires a feasibility study in the Argentinian province of Catamarca.


The agency has expressed desire to begin construction of the project in mid-2022.




China Spodumene Li2O 5%min CIF US$850/t vs US$850/t


Ferro-Manganese European Mn78% min US$1,739/t vs US$1,743/t


China Tungsten APT 88.5% FOB US$305/t vs US$305/t


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


Europe Vanadium Pentoxide 98% 9.8/lb vs US$9.8/lb


Europe Ferro-Vanadium 80% 40.75/kg vs US$40.75/kg


Spot CO2 Emissions EUA Price US$66.0/t vs US$66.1/t




Battery News


Top wind turbine manufacturer cuts 2021 outlook amid surging commodity costs


Danish turbine manufacturer Vestas expects its full year revenue to be about 3% lower this year, citing surging commodity costs and supply-chain disruptions.


Commodity prices have rallied this year, meaning renewable energy developers face rising costs as large amounts of metals such as copper and steel are vital for the wind industry.


Higher costs have already forced Spanish turbine rival Siemens Gamesa Renewable to report a loss earlier this year.


Steel prices in the US have surged more than 80% this year, with the metal being the single biggest input for turbine manufacturers – accounting for ~84% of a turbine’s weight.


Copper is used within a wind turbine’s generator, power transformer, gearbox and tower cabling – with the price on the LME up 22% so far year-to-date.




Company News


Alba Mineral Resources (LON:ALBA) 0.28p, Mkt cap GBP16.7m – Encouraging drill results at Amitsoq graphite project


Alba reports the completion of drilling operations at the Amitsoq Graphite Project in southern Greenland.


Alba drilled 8 holes at Amiotsoq for a total of 935m, all of which intersected graphite mineralisation.


Drilling confirmed the existence of two significant and laterally continuous graphite horizons, referred to by the company as the Upper Graphite Layer (UGL) or Lower Graphite Layer (LGL).


Several graphite intersections are considerably thicker than expected from the modelling, up to 8.19m in the UGL and up to 15.54m in the LGL.


Alba prepared five drill pads, although only four were utilized as Pad D wasn’t reached due to technical issues. The programme was down on the planned 15 holes for up to 1,700 metres, principally due to ground conditions at Pads C and D.


Drilling at Pad C did not manage to attain the required depths to intersect the expected graphite horizons due to ground conditions, although Abe expect this to be revisited in the next drilling programme, using different techniques to counteract the ground conditions.


A follow-up mapping and ground geophysical survey of the Kalaaq graphite deposit has also been completed on the mainland section of the Amitsoq licence area. During the programme, the team excavated two trenches showing multiple horizons of graphite mineralisation with average grades from sampling of 25.6% TGC, among the highest of any project in the world.


In addition to the drilling, the team have chip sampled the graphite outcrops in line with the drill fences in order to supplement the graphite mineralisation information to be used in the forthcoming resource estimation work.


The abandoned graphite mine seems to be in a fairly good condition, and the workings will be channel sampled in the next exploration campaign.


Conclusion: Alba will take great encouragement from graphite intersections well in excess of what the company projected in its structural model. Progress announced today will help Alba establish a maiden mineral resource at the project.




Ariana Resources (LON:AAU) 4.7p, Mkt Cap GBP50m – Arzu Central drilling resutls


The Company reported drilling results from the Arzu Central area at the Kiziltepe Mine.


Ariana holds 23.5% in the mine trough a Zenit Madencilik San. ve Tic. A.S. Joint Venture with Proccea Construction Co. and Ozaltin Holding A.S.


Selected intersections include:


10.8m @ 2.00g/t Au + 32.8g/t Ag


8.5m @ 2.16g/t Au + 57.2g/t Ag


2.0m @ 8.37g/t Au + 50.0g/t Ag


“The latest drilling results from Kiziltepe demonstrate unequivocally that the Arzu and Derya vein systems are interlinked without interruption through the Arzu Central area, which is largely obscured beneath cover rocks,” the Company commented on the results.


“The Derya structure clearly represents a splay off the main NW trend of the Arzu structure, which interestingly appears to carry typically higher grades than Arzu North.”


The team is working to incorporate new drilling data into an updated MRE and Exploration Target at the Kiziltepe Mine.




Atalaya Mining (LON:ATYM) 314p, Mkt Cap GBP427m – H1 results confirm 2021 production and cost guidance


Atalaya Mining reports EBITDA for the six months to 30th June 2021 of EUR99.4m (2020- EUR22.1m) and a profit of EUR66.0m (2020 – EUR6.0m)


The financial performance reflects the production of 28,332t of copper in concentrate (2020 – 26,864t) at a cash cost of US$2.15.lb (2020 – US$1.93/lb) and an all-in-sustaining cost (AISC) of US$2.49/lb (2020 – US$2.16/lb) and the impact of “strong copper prices”.


The increased unit cost on both a cash and AISC basis reflect “a weaker US Dollar/Euro rate” as well as “a one-off adjustment in June… to expense a proportion of year-to-date capitalised stripping costs to reflect a higher life-of-mine waste-to-ore ratio following the updated reserves and resources announced that month”.


The company reports a 30th June 2021 net cash balance of EUR37.8m.


Atalaya Mining is maintaining its 2021 production guidance of 52-54,000t of copper and also its full year cost guidance of US$2.25-2.35/lb on a cash basis and US$2.50-2.65/lb on an AISC basis.


The company reiterates its previous comments on the long-life of the Cerro Colorado open-pit following the reserves upgrade in June and on the potential to mine the “sizeable resource … at San Dionisio deposit” as well as the potential to develop underground mining opportunities for the polymetallic Planes-San Antonio and San Dionisio deposits.


Atalaya Mining confirms that exploration is continuing at the Masa Valverde project “with ground geophysics and two rigs currently drilling around the new Majadales and the historic Masa Valverde deposits” with the intention of “publishing NI 43-101 compliant resource estimates on the properties”.


At Proyecto Touro in Galicia a newly designed project to address “the concerns previously raised by stakeholders” is being finalised for submission to the provincial authorities.


The company received an investigation permit for the Los Herreros at Riotinto Este during May and expects a for Penas Blancas “in the coming months”. Atalaya Mining has invited quotes for airborne geophysical surveys covering the three Riotinto Este licences, Los Herreros, Penas Blancas and the Cerro Negro.


Conclusion: Atalaya Mining has delivered a robust H1 performance and is maintaining its full year production guidance. The potential to develop in and around Proyecto Riotinto is underlined by the recent mineral reserves update as well as the underground opportunities at Planes San Antonio and San Dionisio and the longer term exploration opportunities at Masa Valverde and Riotinto Este. The company is confident that its new plans for the Touro project in northern Spain will address previously expressed concerns




Bluejay Mining* (LON:JAY) 14.07p, Mkt cap GBP136m – Strong demand for titanium concentrates expected according to major buyers


Click link for Kobold deal pdf


BUY – Valuation 37.7p


Bluejay Mining are looking fortuitous in their timing for optimising and financing the Dundas ilmenite, titanium mineral sands project, in Greenland.


After many years of depressed prices for titanium concentrate ‘Tio2’ feedstock strong demand has depleted stocks as global production is struggling to keep pace.


The major TiO2 producers have just completed their second quarter results this week with all expecting strong demand through the third quarter.


Domestic Chinese demand remains strong but rising freight, energy and ilmenite costs are making exports of pigments to Europe less attractive indicating that prices will rise further.


Kronos Worldwide reported a 38% rise in net income to $25.7m yoy.due to the impact of higher TiO2 sales prices and volumes though partially offset by higher manufacturing and other production costs.


Tronox saw a 67% yoy increase in adjusted EBITDA in Q2 to $237m on a 60% rise in sales to $927m. TiO2 volumes rose by 45% yoy in Q2 driven by double digit growth in all regions.


Tronox average selling prices for TiO2 rose by 9% yoy or 6% on a local currency basis.


Venator EBITDA rose by 16% yoy to $43m in Q2 driven by a 24% increase in sales to $567m. Average selling prices rose by 4% qoq while maintenance programs cut sales volumes of TiO2 by 3%.


Venator expect ‘further price improvement to recover increased costs of raw material and energy.’


Chemours saw a massive 120% rise in Adj EBITDA driven by a 51% increase in sales to $1,655m. Chemours saw higher Ti-Pure pricing across all selling channels, higher Ti-Pure pigment volumes and APM volume growth across nearly all products and regions driving a $298m improvement in EBITDA.


Conclusion: The stage is set for a further rise in ilmenite prices driven by strong expectations for demand and restocking through the third quarter. Strong demand for paint ahead of further lockdowns in China and elsewhere looks likely to keep the major TiO2 pigment producers busy for some time.


*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Enonkoski mine site in Finland. The analyst holds shares in Bluejay Mining.




Condor Gold* (LON:CNR) 38p, Mkt Cap GBP51m – H1 report confirms the development of La India remains on track


In its report for the three and six months to 30th June 2021, Condor Gold reports an H1 loss of GBP1.01m (2020 – loss of GBP0.36,m).


The company also reports a 30th June 2021 cash balance of GBP3.00m.


Chairman/Chief Executive, Mark Child, confirms that Condor Gold “is on track with its strategic objective of constructing and operating a processing plant producing circa 100,000 oz gold per annum, then materially expanding the production capacity and demonstrating a 5M oz Gold District.”.


Outlining specific achievements during the last six months, the company highlights the acquisition, in March, of an unused semi-autogenous (SAG) mill from the mining company First Majestic Silver thereby securing a key item for the La India plant. We also expect that buying a mill which is superfluous to First Majestic’s requirements shortens the delivery time required to fabricate the mill from a plant manufacturer.


The company has also undertaken infill drilling within the area of the La India starter pits providing detailed information on the initial plant feed and mitigating the potential risks of unexpected ore characteristics during the early part of the plant operations. Results released so far have “confirmed the geological model”.


In July, the company announced drilling results from the area between the Northern and Southern Starter Pits including an intersection of 60.60m (54.50m true width) t an average grade of 1.98g/t gold from a depth of 5.75m in hole LIDC452 which “has the potential to reduce the strip ratio in this area due to the increase in gold mineralized tonnage verse waste rock, thus improving Project economics. These results will be incorporated into a revised FS-level mine plan and are expected to have a positive impact on project economics”.


Additional infill drilling is also underway as part of an 8,500m programme within the permitted Mestiza open pit and “is anticipated to take a further 4 months to complete”.


As part of the plans to demonstrate the wider potential of the area, Condor Gold initiated a 5,000m programme of exploration drilling at Cacao in February. Cacao is located within 4km of the La India plant site and “already hosts an Inferred Mineral Resource of 662 Kt at 2.8 g/t gold for 60,000 oz gold as defined by Condor from 2,890m drilling in 2019”.


Cacao is described as “a highly prospective target” and the “Cacao vein is one of the widest in the district” with initial drilling results including an intersection of 25.93m (14.9m true width) at an average grade of 3.94g/t gold from a depth of 263.82m in hole CCDC033.


Condor Gold describes this intersection as “the best drilling intercept returned to-date from the Cacao Prospect (“Cacao”). This assay result supports the geological model that Cacao is a fully preserved, deep-seated epithermal gold mineralisation system, with the potential to host a significant gold deposit”.


Corporate developments included a GBP4m fundraising in February with the placement of approximately 9.5m additional shares at a price of 42p/share.


Conclusion: Condor Gold is reporting progress on a number of aspects of the La India mine development with the securing of a SAG mill for the plant and important infill drilling at the starter and Mestiza pits providing greater assurance on the characteristics of the mill feed for the early part of the mine’s life and offering the potential to expand the resources. Exploration work at the nearby Cacao target is supporting geological evidence that Cacao may represent a fully preserved epithermal gold system which may host another deposit.


*SP Angel act as a broker to Condor Gold




Largo Resources (CVE:LGO) C$21, Mkt Cap C$1,354m – Q2/21 earnings climb on strengthening vanadium market demand


Largo Resources released Q2/21 earnings results yesterday highlighting strong vanadium market demand and prices and reiterating 2021 guidance.


Vanadium pentoxide ‘V2O5’ production amounted to 3.1kt in Q2/21, up 55% qoq and 20% yoy.


Sales volumes climbed to 3.0kt, up 9%qoq and 197%yoy.


The average European V2O5 price rose to US$8.19/lb, up 16% qoq and 33% yoy.


Cash operating costs excluding royalties averaged US$3.39/lb vs US$2.87/lb in Q1/21 and US$1.89/lb in Q2/20.


Revenues climbed to US$54.3m in Q2/21 and US$94.1m in H1/21 (H1/20: US$51.9m).


Net Income came in at US$8.4m in Q2/21 and US$12.6m in H1/21 (H1/20: -US$2.7m).


Estimated EBITDA increased to US$28.8m in H1/21 (H1/20: US$18.7m).


Net Operating Cash Flow was US$$20.8m in H1/21 (H1/20: -US$64.6m).


FCF totalled US$6.5m in H1/21 (H1/20: -US$73.2m).


Q2/21 closing cash balance stood at US$80.7m with US$15.0m and US$2.7m in outstanding debt and leases, respectively.


2021 guidance reiterated at 12-12.5kt V2O5 production and 12.25-12.75kt sales at US$3.10-3.30/lb cash operating costs excluding royalties and US$3.50-3.70/lb total cash costs.




Lucara Diamonds (CVE:LUC) C$0.73, Mkt Cap C$331m – Covid stretches timetable on underground development at Karowe


Lucara Diamonds has provided an update on its plans to develop underground mining at its Karowe diamond mine in Botswana.


Covid-related delays have increased the timetable to achieve 75% of the targeted 2.7mtpa production rate by 1.3 years


Total capital development costs have increased by 4% compared to the 2019 Feasibility Study to C$534m as a result of an increased shaft diameter (from 8.0m to 8.5m) and additional development.


CEO, Eira Thomas, explained the progress at Karowe and said that the “project is fully financed, allowing us to move into high gear during the second half of the year. Using conservative diamond price assumptions, the project delivers strong economics projected to pay back capital in under three years and add approximately $4 billion in revenues from an extended mine life out to at least 2040. The project also comes at a time when the outlook for the diamond market is stronger than it has been for many years representing an exciting growth opportunity for our shareholders and stakeholders in Botswana”.


She explained that although Covid19 “has impacted the UGP project schedule, however, no material variances between the 2019 FS … and the current execution plan have resulted. Rather, during this period in 2020 and 2021, all critical path items were addressed and a concerted effort was placed on detailed design, engineering and procurement which have helped to significantly de-risk the project”.




Phoenix Copper* (LON:PXC) 74.5p, Mkt Cap GBP80m – Additional land at Navarre Creek


(Phoenix holds 80% of the Empire mining property in Idaho)


CLICK FOR PDF


Phoenix Copper has increased its land holding at Navarre Creek, located some 5km to the NW of the Empire mine site, by a further 1,157 acres (47%) to 3,577 acres (1,477 hectares) following encouraging preliminary results from electro-magnetic (EM) surveying.


The additional unpatented claims are contiguous with Phoenix Copper’s pre-existing holding at Navarre Creek, which now covers “over six kilometres of prospective gold strike length” and extends the land holdings further towards the northeast.


The company’s Navarre Creek area, which the company has described as displaying geological similarities to those seen on the gold deposits of the well-known Carlin trend in the adjacent state of Nevada, now includes “an area of secondary alteration thought to be epithermal in nature, with over 2.5-kilometres of highly brecciated, west-trending jasperoid intersecting argillically and silicically altered Eocene Challis volcanics. The altered volcanic rocks are similar in nature to the mineralised volcanic rocks found in the Carlin Trend”.


Planned drilling during 2021 includes 2,300m of reverse-circulation (RC) drilling at Navarre Creek and the new exploration effort will add to the 2020 exploration at Navarre Creek which included mapping and sampling where 53 of the 90samples recovered showed grades “above the detection limit for gold with a high of 0.569 grammes per tonne” as well as “a strong correlation between elevated gold values and elevated antimony values, typical in Carlin-type epithermal gold systems”.


All but one of the samples with gold grades in excess of 0.1g/t “occur within the same alteration type, that being predominantly a jasperoid-hosted quartz stockwork and micro-veining system”.


Conclusion: The company’s decision to extend its land holding at Navarre Creek indicates their confidence in its exploration potential based upon geological similarities with the Nevada deposits of the Carlin trend and last year’s sampling and mapping results. The 2,300m of RC drilling planned for this year will provide an opportunity to verify the extent of these similarities and establish an initial basis for further exploration efforts.


*SP Angel act as Nomad for Phoenix Copper




SolGold* (LON:SOLG) 25.65p, Mkt Cap GBP585m – Sharug drilling underway


Solgold has started drilling at its wholly-owned Sharug prospect in southern Ecuador where it has a 6-holes programme underway at the Santa Martha copper/gold porphyry target.


Santa Martha is “part of a 600m wide by 1,200m long northeast trending corridor containing mineralisation styles, size and geometry consistent with surface exposure of a vertically extensive, well-preserved copper-gold porphyry system”.


The target exhibits the geochemical, geophysical and alteration characteristics that “SolGold has recognised through Ecuador and define the blueprint we developed at the tier 1 Alpala project”.


Executive Director, Jason Ward, described the start of the drilling at Sharug as “a further step to becoming a large and integrated explorer, developer and producer in Ecuador”.


Conclusion: The start of drilling at Sharug, where Solgold has used its experience at the 2.6bn tonne Alpala project to help define a similar target, is part of the company’s exploration of its extensive portfolio of wholly-owned exploration projects where the company has identified 13 priority targets. We look forward to the initial drilling results as the programme proceeds.


*SP Angel act as Financial Advisor to SolGold.




Recent Interviews:


IGTV: China fearing failure in metals pricing tactic: https://youtu.be/RK4HQPrs60s


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


VOX Markets: 04/08/21: https://audioboom.com/posts/7918741-john-meyer-talks-about-china-cora-gold-kodal-minerals-power-metals-rambler-metals


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


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, Tungsten, Spodumene, Ferro-Manganese, Graphite


Asian Metal



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