Today’s Market View – SolGold


SP Angel . Morning View . Friday 10 09 21

Gold trades higher despite ECB cautiously tapering stimulus

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VOX Markets: 09/09/21:

IGTV: 02/09/21: Chinese slowdown is ‘unlikely to be for long’:

SolGold* (LON:SOLG) 28.4p, Mkt Cap GBP647m – Tandayama-America drilling results flagged as ‘best to date’

Uranium prices soar as investors bet on strong demand for the material amid the electrification drive.

Uranium prices rose to >$40.4/lb yesterday marking a new high since 2015 with uranium futures rising 15% last week.

Strong demand helped to push uranium prices higher from $30/lbs at the start of the year.

Demand is expected to increase to 162mlbs in 2021 and then to 206mlbs in 2030 and potentially to 292mlbs in 2040, according to World Nuclear Association data.

The Sprott Physical Uranium Trust is reported to have acquired 6mlbs of physical uranium since launching in mid-July exceeding $1bn worth of assets.

This brings its total holding to Sprott has bought 24mlbs of uranium, with 2020 total volume at 92.2mlbs according to Yellow Cake PLC (AIM:YCA).

Yellow Cake, a London listed uranium investment fund, holds around 16mlbs.

Global mine supply is expected to be around 125mlbs in 2021, FT reports.

Stronger prices were also driven by logistics challenges and positive announcements from Japan over plans to ramp up nuclear power plants’ restart.

Fumio Kishida, a leading contender to become Japan’s next prime minister, stressed that restarting nuclear power plants was necessary to reach the nation’s net zero goals.

The top global uranium miner, NAC Kazatomprom JSC, made a statement this year that output would remain reduced through 2023.

Palladium falls to 12-month low on automaker demand concerns

Spot palladium continued to decline over lower demand from automakers and prospects for substitution.

This week, the World Platinum (AIM:ZERO) Investment Council said it expects that the higher costs of palladium used in autocatalysts will spur a gradual switch by automakers to use more platinum in gasoline-powered vehicles.

Both platinum and palladium have been hurt by expectations that auto output will remain constrained by a shortage of semiconductors.

Vale sets 2026 as date for completion of Indonesian HPAL nickel plant

. PT Vale Indonesia have announced plans to begin construction at the Pomalaa project in 2022.

. The project requires an amendment to its environmental impact study which its deputy chief executive believes it will acquire this year.

. Predictions have estimated that the high pressure acid leach processing will enable the plant to produce 40,000t of mixed sulphite precipitate – a key component of EV batteries.

Comnputercenter forecasts semiconductor chip shortages to last into next year

Dow Jones Industrials –0.43% at 34,879

Nikkei 225 +1.25% at 30,382

HK Hang Seng +1.56% at 26,116

Shanghai Composite +0.27% at 3,703


US and China leaders are reported to have had a conversation for the first time since February as lower-level efforts failed.

Optimism over restarted dialogue pushed the renminbi nearly to a three-month high.

Fed officials still see potential for 2021 taper

James Bullard of the St. Louis Fed believes ‘the big picture is that the taper will get going this year and will end sometime by the first half of next year’.

Bullard thinks the US labour market is in a ‘very strong’ position going into next year.

Dallas Fed President, Kaplan, still sees a taper in October but has revised his economic growth forecasts from 6.5% to 6% for the rest of this year, predicting a 2.6% rise in inflation.

An official Fed report on Wednesday stated the US economy ‘downshifted slightly’ in August.

Doves point to strong job openings as a sign that ‘the jobs are there’ but ‘that the workers may not want to take those jobs right now’.

The 21-22 September meeting will provide a key indicator as to taper timings going forward.

Nobel-prize winning Democrat economist thinks Jay Powell should leave Fed sparking the potential for a major overhaul of the Federal Reserve.

Joseph Stiglitz has criticised Powell’s loose attitude towards financial regulation and lack of commitment to climate-related issues.

Powell is being called on to take into consideration the potential for extreme weather conditions to affect ‘financial stability’ and the ‘mispricing of assets.’

Stiglitz has advised Biden to ‘check his “gut”‘ over Powell’s commitment to full employment in the case of a less ‘transitory’ inflation period.

Stiglitz wants to see a Powell replacement to tolerate higher inflation in return for higher employment.

Stiglitz sees Powell as a hindrance if the Biden administration is to ‘fulfil what is at the heart of its agenda.’

China – Credit growth picks up in August with monetary authorities prepared to ease the flow of credit amid waning economic growth momentum.

China Aggregate Financing CNY2960.0bn vs CNY1056.6bn

China New Yuan loans CNY1220.0bn in August are lower than CNY1400bn estimates but higher than previous CNY1083.2bn loans in July

China August passenger vehicle sales falls 11.7% YoY

Total vehicle sales fell to 1.79m units in August, down 7% on the month prior.

EV sales rose 182% YoY in August to 321,000.

China – sliding into ‘deep aging’ crisis as 149 cities have 14% of residents >65

Analysis of the population demographics of Chinese cities shows China sliding into a a ‘deep aging’ crisis.

The fastest-aging cities are mostly clustered around the Yangtze River, the southwestern cities of Chongqing and Chengdu, and the urban industrial northeast according to China Business News (CBN).

Official census stats are regarded by some as highly dubious with experts suggesting the aging crisis in China as much more serious than current announcements suggest.

The impact of excessive pollution on the population’s health in advanced age groups is also likely to cause China to slow with a Japan-style economic slowdown predicted as the population ages further.

The news may provide yet more reason for China to transform and orientate its economy towards higher-value sectors while running down more labour intensive and polluting sectors.

ECB – The central bank announced a slowdown to monthly bond purchases under the Pandemic Emergency Purchase programme (PEPP) from the current EUR80bn per month rate.

The ECB did not disclose what the new pace is going to be and added that the stimulus may be revised if the eurozone outlook weakens.

The PEPP that accounts for up to 80% of current ECB purchases is set to expire next March.

Market reaction was fairly muted with EUR and European equity indices trading higher and 10y German bond yields up at -0.348% vs -0.362% on Thursday.

UK – Growth slowed in July as consumers dialled back spending, construction sector contracted amid a shortage of raw materials and legal services were hit by the end of the stamp duty holiday, FT reports.

Growth hit the weakest pace since January with the economy still down 2.1% on pre pandemic levels in Feb/20.

GDP (%mom): 0.1 v 1.0 in June and 0.5 est.

GDP (%qoq): 3.6 v 4.8 in June and 3.8 est.

UK exports dropped 1.0%mom in July as weaker shipments to the EU outpaced an increase in export value to non-EU markets (+5%mom).

The decline in exports to the EU was driven predominantly by a decline in medical and pharmaceutical goods following a rise in June, that could not be replaced by increasing exports to non-EU countries.

The UK government is considering a “mix and match” Covid vaccine booster programme ahead of an autumn campaign, FT writes.

Separate studies show that protection against symptomatic infection provided by the BioNTech/Pfizer (NYSE:PFE) and the Oxford/AstraZeneca vaccines waned four to six months after the second dose.

Government is looking at options to offer people a different vaccine to their first two jabs for the third booster shot on the basis that it would provide better protection against Covid-19.

A final decision by the government will be made once the Joint Committee on Vaccination and Immunisation has prepared a recommendation.

Earlier, the UK’s Medicines and Healthcare products Regulatory Agency has approved the BoNTech/Pfizer and Oxford/AstraZeneca vaccines for use as booster shots.

“We know that a person’s immunity may decline over time after their first vaccine course… I am pleased to confirm that the Covid-19 vaccines made by Pfizer and AstraZeneca can be used as safe and effective booster doses,” MHRA chief executive said.

Container spot rates capped by CMA CGM shipping

‘CMA CGM SA’ the container shipping and logistics company has elected to freeze spot container rates till 1 February 2022 to support customers struggling to afford shipping.

CMA CGM recorded some $10.7bn of revenue in the first quarter (vs $31.5bn for 2020) with 75% of sales coming from container shipping.

Container rates have risen eight fold since March 2020 according to Drewry Data (Bloomberg).

Container shipping rates causing some shippers to ditch bulk commodities and convert to carrying containers

The move may cause some minor disruption in the availability of vessels for bulk shipping raising rates and delaying raw materials shipments.


US$1.1840/eur vs 1.1814/eur yesterday. Yen 109.97/$ vs 110.08/$. SAr 14.118/$ vs 14.243/$. $1.387/gbp vs $1.377/gbp. 0.740/aud vs 0.736/aud. CNY 6.441/$ vs 6.460/$.

Commodity News

Precious metals:

Gold US$1,801/oz vs US$1,789/oz yesterday

Gold ETFs 99.8moz vs US$99.8moz yesterday

Platinum US$986/oz vs US$997/oz yesterday

Palladium US$2,201/oz vs US$2,262/oz yesterday

Silver US$24.23/oz vs US$23.87/oz yesterday

Base metals:

Copper US$ 9,513/t vs US$9,368/t yesterday

Aluminium US$ 2,881/t vs US$2,837/t yesterday

Nickel US$ 20,400/t vs US$20,065/t yesterday

Zinc US$ 3,085/t vs US$3,072/t yesterday

Lead US$ 2,319/t vs US$2,272/t yesterday

Tin US$ 33,725/t vs US$32,750/t yesterday


Oil US$72.2/bbl vs US$72.9/bbl yesterday

Loading disruptions and supply issues due to Hurricane Ida have have clearly impacted supply, with a few terminals, including Louisiana’s Offshore Oil Port, shut following the storm

Yesterday, 77% of US Gulf of Mexico crude oil production remained offline, according to the US Bureau of Safety and Environmental Enforcement

Despite the uptick in prices, uncertainties loomed as the market came under renewed pressure

China’s announcement yesterday that it will release a part of its state oil reserves through public auction to offer domestic refiners’ relief from high feedstock costs

Releasing from state reserves is not great for sentiment, given that it will weigh on crude oil import demand

Throughputs at China’s independent refineries in eastern Shandong province have continued to fall in August due to maintenance works and cuts earlier in the month amid weak margins

The combined throughput comprising crude, bitumen blend and fuel oil fell to a 17-month low of 9.45 million mt in August

In inventory news, the total US commercial crude stocks declined 1.53MMbbls in the week ended 3 September to 423.87MMbbls, according to the Energy Information Administration on Sept. 9, leaving its around 6% behind normal for this time of the year

Total motor gasoline inventories decreased 7.2MMbbls last week and are about 4% below the five-year average for this time of the year

The EIA in its September Short-Term Energy Outlook have also said that growing concerns about the spread of the delta variant have fostered continued declines in oil prices

The EIA confirmed that it expected US crude oil production to fall by 200,000bopd to 11.08MMbopd in 2021, a bigger decline than its previous forecast for a drop of 160,000bopd

Prices were also supported as protesters in Libya blocked oil exports at Es Sider and Ras Lanuf

Meanwhile, the UN atomic watchdog criticised Iran for stonewalling an investigation into past activities and jeopardising important monitoring work, possibly complicating efforts to resume talks on reviving a nuclear deal

The negotiations between world powers and Iran have been paused for almost three months since the election of a new radical president in Iran, reducing prospects of Tehran being able to resume oil exports

Natural Gas US$5.015/mmbtu vs US$4.924/mmbtu yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$129.9/t vs US$130.7/t

Chinese steel rebar 25mm US$835.1/t vs US$832.6/t

Thermal coal (1st year forward cif ARA) US$124.5/t vs US$123.5/t

Coking coal swap Australia FOB US$317.0/t vs US$290.0/t

China Ilmenite Concentrate TiO2 US$376.5/t vs US$375.4/t


Cobalt LME 3m US$51,500/t vs US$50,840/t

NdPr Rare Earth Oxide (China) US$92,607/t vs US$92,360/t

Lithium carbonate 99% (China) US$20,278/t vs US$20,278t

China Spodumene Li2O 5%min CIF US$970/t vs US$970/t

Ferro-Manganese European Mn78% min US$1,825/t vs US$1,825/t

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

China Graphite Flake -194 FOB US$535/t vs US$535/t

Europe Vanadium Pentoxide 98% 9.0/lb vs US$9.0/lb

Europe Ferro-Vanadium 80% 36.75/kg vs US$37.25/kg

Spot CO2 Emissions EUA Price US$73.9/t vs US$73.3/kg

Battery News

Solar startup seeking to replace silver in solar panels with copper

Australian startup SunDrive is looking to replace silver in solar panels with copper, reducing the cost of the technology significantly.

Solar panel manufacturers consume as much as 20% of the world’s industrial silver annually and when silver prices are high, the metal can account for 15% of a solar cell’s price.

The new technology uses copper as a replacement for the silver in current solar panels and recently set a record with 25.54% efficiency.

We are apprehensive of the application of this technology on a large scale – particularly due to issues with oxidisation of copper that limits efficiency over time.

Company News

SolGold* (LON:SOLG) 28.4p, Mkt Cap GBP647m – Tandayama-America drilling results flagged as ‘best to date’

Solgold has reported drilling results and provided a progress report on its exploration of the Tandayama-America deposit which is located within its Cascabel project area in Ecuador and approximately 3km north of the company’s flagship Alpala project where the company is working on a pre-feasibility study for the development of a 2.6bn tonnes copper/gold resource.

The Tandayama-America (TAM) target “forms a northwest trending corridor, occupying an area approximately 1,200m long, up to 750m wide, and extending from surface to a depth of over 1,200m” and remains open laterally towards the south and east and at depth.

Solgold has completed over 18,500m of drilling so far at TAM with a further 9,200m planned during the balance of 2021.

Today’s announcement highlights results from hole 13, described as “the best drilling intersections achieved at the TAM deposit to date”including

An intersection of 1,010m from a depth 194m averaging 0.30% copper and 0.34g/t gold headlined as 0.55% copper equivalent (CuEq)

The intersection includes higher grade sections of:

824m from 194m at an average grade of 0.33% copper and 0.4g/t gold (0.63% CuEq);

736m from 246m depth at an average grade of 0.36% copper and 0.44g/t gold (0.69% CuEq);

392m also from 246m depth at an average grade of 0.42% copper and 0.68g/t gold (0.93% CuEq); and

132m from a depth of 498m at an average grade of 0.48% copper and 0.81g/t gold (1.09% CuEq)

The company confirms that it is currently awaiting assay results from holes 14-23 and that drilling of holes 24-27 is currently underway with hole 24, located “approximately 160m northwest and 160m deeper than Hole 13 … [encountering] … intense mineralisation within an early quartz-diorite intrusion from 507m depth”.

Solgold says that it interprets this zone in hole 24 “as an extension of the strong mineralisation encountered in Hole 13 … with approximately 2% visible chalcopyrite and trace visible gold mineralisation”.

The company confirms that it is working on an initial mineral resources estimate for the TAM area and plans to release the estimate “later in 2021”.

Jason Ward, Head of Exploration said that as TAM is close to Alpala “additional copper and gold mineralisation at TAM will add to the already impressive metal inventory at Cascabel”.

He explained that parts of the mineralisation at TAM “appears amenable to both bulk surface mining methods as well as bulk underground mining methods. The potential upside of higher-grade depth extensions beneath TAM is also adding exciting possibilities to the still growing Cascabel project”.

He also confirmed that geotechnical, hydrogeological and metallurgical “data is already being prepared to facilitate the conversion of future resources to reserves, and this seems likely to have a major beneficial impact on the development of the Cascabel property as a whole as studies progress in 2022”.

Although it is relatively early to speculate before there is even a formal resource estimate for TAM, we wonder whether its proximity to Alpala may offer long-term scope for TAM to feed a single processing plant serving both deposits?

Conclusion: Solgold is reporting long mineralised drill intersections, similar to those encountered at its flagship Alpala project located just 3km to the south, at the TAM deposit and confirms that it expects to release an initial mineral resources estimate by the end of 2021. We look forward to the publication of the estimate which will provide insight into the scale of the mineralisation at TAM which is reported to remain open both laterally in two directions and at depth.

*SP Angel act as Financial Advisor to SolGold.

Recent Interviews:

IGTV: Chinese slowdown is ‘unlikely to be for long’:

Mining sector: where now as Gates & Bezos move in?:

VOX Markets: 09/09/21:


BBC: Catalytic converters

*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


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


Richard Parlons [email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

Grant Barker – [email protected] – 0203 470 0471

SP Angel

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*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


Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt


Oil Brent


Natural Gas, Uranium, Iron Ore


Thermal Coal

Bloomberg OTC Composite

Coking Coal




Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite

Asian Metal


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