SP Angel . Morning View . Thursday 16 09 21
China state planner plans to release more metal to alleviate supply shortages
Evergrande debt crisis has potential to affect broader economy
Pre-IPO financing opportunity for new gold mine development in Ghana
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Management are experienced and are looking to IPO within 18 months.
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IGTV: 02/09/21: Chinese slowdown is ‘unlikely to be for long’: https://youtu.be/SB32PEX0EWY
Bluejay Mining* (LON:JAY) – Greenland agrees new economic aid with the US
Ariana Resources (LON:AAU) – Further drilling results from Kepez North
CATL (LON:CATL) – CATL may be joining the bidding war for Millennial Lithium Corp. as Chinese firms battle for EV material supply
Condor Gold* (LON:CNR) – Senior mining engineer appointed to advance La India feasibility study
Cora Gold* (LON:CORA) – Interims
Galileo Resources (LON:GLR) – Sale of Kalahari Copper Belt licences expected to complete next week
Greatland Gold (LON:GGP) – Expanding its exploration footprint in the Paterson province, Western Australia
Red Rock Resources (LON:RRR) – IP survey identifies four anomalous areas at the Mikei gold project
Sibanye-Stillwater (JSE:SSW) – $490m invested for 50% stake in Nevada lithium project
Power Metal Resources* (LON:POW) – Four uranium properties acquired in Saskatchewan
Vulcan Energy (ASX:VUL) – Vulcan raises A$200m in share placement for Zero Carbon lithium project
China announces plans to release more metal reserves over concerns of supply shortage
The Chinese state planner is aiming to ‘overcome mismatches between supply and demand’ through the release of copper, zinc, and aluminium from its state reserves.
Li Hui from the NDRC believes metals prices ‘are still high’ and hopes the Commission will be able to guide them lower.
Public auctions this year have seen the release of 420,000t of metals at ‘slightly lower’ prices than the market.
The Chinese government has cracked down on metal production, forcing Aluminium producer Shaanxi Nonferrous Yulin New Material to reduce output by 50% – the company can produce 600,000t pa.
China – Evergrande debt crisis has potential to set back broader economy
Evergrande Group has said that it cannot sell properties and other assets fast enough to service its massive $300bn debt pile, and that its cashflow was under “tremendous pressure” (The Guardian)
Angry investors who believe they may be facing a 75% write down besieged Evergrande’s Shenzhen headquarters earlier this week prompting the founder’s wife to make a $3m investment into the company.
Two Evergrande subsidiaries have failed to discharge guarantee obligations for CNY934m ($145m) worth of wealth management products issued by third parties which could lead to some form of cross-default.
Evergrande is one of the world’s most indebted companies and its failure is likely to be a severe shock to the Chinese financial system reminding us of the US Subprime crisis in 2008..
The property market is estimated to represent around 40% of Chinese GDP impacting construction sector and commodity demand (reuters)
Chinese property investment rose 0.3% in August vs Aug. 2020 – the slowest growth in the sector for 18 months.
Chinese property new starts fell by 17% yoy in August while floor space sales fell 16% yoy.
Evergrande on Monday proposed that investors choose to accept 10% of the principal and interest of the matured product now and the rest via 10% instalments quarterly, payment by property assets, or by using the outstanding product value to offset home purchase payments according to Caixin..
Evergrande had 1.4m properties due for completion by end-June. Most if not all of these properties will have been pre-sold and paid for up front. If Evergrande is not able to pay contractors to complete the properties the group will be liable for losses incurred involving banks which have provided mortgages on the properties.
Fitch ratings have emphasised the potential ripple effect of an Evergrande default.
Fitch point to the potential for ‘credit polarisation among homebuilders’, with a possible knock-on effect to the smaller banks.
We suspect the Chinese authorities will not let Evergrande fail in Lehman Bros style but we also expect the government will require a full restructuring as part of its pint of soy sauce/pound of flesh.
Dow Jones Industrials -+0.68% at 34,814
Nikkei 225 -0.62% at 30,323
HK Hang Seng -2.06% at 24,517
Shanghai Composite -1.16% at 3,614
US – Industrial production growth slows down on bad weather, supply components shortages and virus disruptions.
Hurricane Ida, the sixth-costliest tropical cyclone on record, that hit the US Gulf Coast and Northeast in August is estimated to have cost 0.3pp in industrial production amid plant closures for petrochemicals, plastic resins, and petroleum refining.
Industrial Production (%mom): 0.4 v 0.8 (revised from 0.9) in July and 0.5 est.
Capacity Utilisation (%): 76.4 v 76.2 (revised from 76.1) in July and 76.4 est.
China – Weak August online sales suggest weak consumer spending last month was not only driven by Covid-19 outbreak restrictions.
Online consumption climbed 10.6% in August on a two-year basis (to limit the effect of a drop in 2020), down by 7.1pp from the previous month, Bloomberg reports.
Retail sales data released yesterday showed a sharp deceleration in the growth pace in August with consumption up 2.5%yoy vs 7.0%yoy expected.
Japan – Overseas shipments undershoot expectations on the back of logistics challenges and delta variant affected global demand.
With coronavirus restrictions in place and trade growth lagging expectations, economic conditions are seen deteriorating.
Auto exports to the US and Europe dropped yoy reflecting a global shortage of ships and the lack of other key parts as manufacturing facilities in SE Asia were locked down amid the pandemic.
A jump in imports is attributed to higher commodity prices as well as inbound vaccines shipments.
Exports (%yoy): 26.2 v 37.0 in July and 34.1 est.
Imports (%yoy): 44.7 v 28.5 in July and 40.0 est.
Australia – The A$ pulled back on the back of weak employment numbers in August reflecting lockdown measures implemented in the nation’s two largest cities.
Unemployment rate fell, although, it was a reflection of weaker participation rate as more people exited labour force.
Sydney and Melbourne along with large parts of the east coast are under a lockdown that is affecting around half the nation’s population, Bloomberg writes.
Employment Change: -146.3k vs 3.1k (revised from 2.2k) in July and -80.0 est.
Unemployment Rate (%): 4.5 v 4.6 in July and 5.0 est.
Participation Rate (%): 65.2 v 66.0 in July and 65.7 est.
Biden increases efforts to push through $3.5tn spending bill
Biden has met with moderate Democratic senators Manchin and Sinema to gain their approval for his $3.5tn bill.
Manchin and Sinema’s support is critical for the bill to pass owing to the Democrat’s slim majority in the Senate.
The bill focuses on education, childcare, and climate-related projects.
A vote on the bill is anticipated for the end of September.
Rising dollar weighs on gold price as traders await next Fed meeting
Spot gold fell 0.1% to $1,790.42 whilst holdings in the SPDR Gold Trust decreased 0.2% Wed.
A ticking up of both the dollar and US Treasury yields have provided downward pressure to bullion prices.
A potential taper announcement next week could send bullion prices below key resistance of $1,770.
The FOMC meets next week on 21-22nd Sept.
It is expected that the market will also begin to price in a raising of interest rates over the next 6m.
US factory production and business conditions data were strong in August and September.
Chile lowers 2021 copper price estimate on weaking demand and Fed taper potential
The Cochilco, Chile’s copper commission, forecasts its average copper price for 2021 at $4.20/lb as opposed to previous estimates of $4.30/lb.
The report also forecasts 2022 average prices at $3.95 in anticipation of a market surplus.
The agency expects a supply deficit of 153,000t for 2021 but this is expected to revolve into a surplus of 190,000t in 2022.
Weakening Chinese command for the red metal alongside the US Fed’s paring back of stimulus are both bearish for the copper price.
Russia – Finance Ministry submits proposal to raise taxes for metals and mining on Thursday
The Russian Finance Ministry has submitted a proposal to Prime Minister Mikhail Mishustin on Thursday, proposing to increase the coefficient applied to base mineral extraction to 5 from current 3.5.
The Ministry is seeking to raise an additional 300-350bn roubles through increased mining taxes.
US$1.1794/eur vs 1.1809/eur yesterday. Yen 109.35/$ vs 109.55/$. SAr 14.510/$ vs 14.330/$. $1.382/gbp vs $1.383/gbp. 0.731/aud vs 0.732/aud. CNY 6.440/$ vs 6.438/$.
Gold US$1,786/oz vs US$1,800/oz yesterday
Gold ETFs 99.8moz vs US$99.9moz yesterday
Platinum US$945/oz vs US$934/oz yesterday
Palladium US$2,026/oz vs US$1,974/oz yesterday
Silver US$23.63/oz vs US$23.72/oz yesterday
Copper US$ 9,471/t vs US$9,480/t yesterday
Aluminium US$ 2,876/t vs US$2,870/t yesterday
Nickel US$ 19,460/t vs US$19,660/t yesterday
Zinc US$ 3,053/t vs US$3,043/t yesterday
Lead US$ 2,220/t vs US$2,233/t yesterday
Tin US$ 33,850/t vs US$33,800/t yesterday
Oil US$75.4/bbl vs US$74.2/bbl yesterday
Brent and WTI continue to tick higher following the latest report from the American Petroleum Institute (API) on confirming a draw in crude oil inventories of 5.437MMbbls for the week ending 10 September
This comes despite the price of Russia’s flagship Urals grade falling this week as Russian supply and exports are set to grow and as Iraq cuts the price of its crude for Europe
On Tuesday, the Urals grade from the Baltic Sea was offered at a discount of US$2.35/bbl to Dated Brent
While the discount to Brent is typical for the Urals grade, this week’s discount is much deeper than the US$1.05/bbl discount at which the Russian flagship crude was offered last week
One of the key reasons for weaker prices of Urals is the expectation of rising supply out of Russia, which is producing more under its higher OPEC+ quota and which is preparing to export more barrels next month
So far in September, Russia’s crude oil and condensate production has been higher by 2.4% compared to August
The other reason for the weakening price differentials of Russia’s Urals is somewhat unexpected competition from Iraq, which has cut prices for the US and Europe (except the Mediterranean), in a rare divergence from the pricing of Saudi Arabia
Iraq’s lower crude prices in Europe for October are competing with Russian Urals supply, among others
Last week, tighter supply of US medium sour crudes in the aftermath of Hurricane Ida pushed the price of Russia’s Urals up to a discount of just US$1.05/bbl to Dated Brent
In the days following Hurricane Ida, there was increased interest from refiners for Russian crude, especially the medium sour Urals, which is similar to the US Mars blend whose production was still offline
Natural Gas US$5.400/mmbtu vs US$5.294/mmbtu yesterday
Europe’s energy crisis deepened yesterday, with natural gas futures in Europe and the UK soaring by double digits, while a fire at a electricity converter station that connected France to England
October Title Transfer Facility (TTF) natural gas futures in the Netherlands, the European benchmark, increased to EUR72.195/MWh, a new record and a nearly 10% gain on the day
UK natural gas futures increased 10% to 181.42p/therm, also a new high
European benchmark natural gas prices have increased 287% year to date, driven by a shortage of supplies from Russia, which is using more of its own natural gas; a lack of US supply due to hurricanes disrupting refineries; a heat wave in the UK and elsewhere that has disrupted wind power
Natural gas producers in the North Sea are in a rush to increase production as a supply squeeze lifted gas prices in the UK and Europe to record highs
The production slump was the result of delayed maintenance at the Forties pipeline network, which temporarily shut in all 67 offshore fields connected to it for three weeks in June
Some fields remained shut in for longer according to Wood Mackenzie as some parts of the pipeline system needed additional work
As a result, UK gas production in the first eight months of the year totalled just 17Bcm
This was down from 24Bcm the previous year
It is, however, recovering in August, North Sea field operators pumped 72% more gas than they did in July
This will boost this year’s total production, they added, but it will still likely remain below the 2020 total, at 27Bcm
Europe is struggling to deal with elevated natural gas and electricity prices, just as it had been bouncing back from a prolonged slump
The gas replenishment rate in Europe’s gas storage sites has continued to slow down, standing only 69% full (a 10-year low for this time of the year), pushing TTF forwards above Brent prices.
Amidst disappointing wind generation figures, some countries are increasing their coal purchases, which in turn maintains the upward pressure on carbon prices as they have breached another threshold this week, trading above EUR62 per metric ton of CO2 equivalent
Germany, France, and the United Kingdom all saw their year-ahead contracts for 2022 reach an all-time high on Monday, with all of them trending well above EUR90 per MWh (almost $110 per MWh)
Iron ore 62% Fe spot (cfr Tianjin) US$113.6/t vs US$120.0/t
Chinese steel rebar 25mm US$858.0/t vs US$852.9/t – Weak Chinese steel output continues to weigh on iron ore prices
Chinese steel production has fallen for the 3rd consecutive month to 83.24Mt in August.
The NBS figures show average daily output has fallen to its lowest level since March 2020.
62% Fe fines imported into China have reportedly been trading for $116.64/t – a 4.1% decline from Tuesday’s price.
Iron Ore futures on the Dalian Commodity Exchange fell 4.3% to $106.02/t.
Stainless steel futures have jumped 4.5%.
A similar occurrence took place before the Beijing Olympics in 2008 which marked a major contraction in iron ore prices.
Thermal coal (1st year forward cif ARA) US$128.5/t vs US$129.5/t
Coking coal swap Australia FOB US$366.0/t vs US$365.0/t
China Ilmenite Concentrate TiO2 US$376.54/t vs US$376.6/t
Cobalt LME 3m US$51,500/t vs US$51,500/t
NdPr Rare Earth Oxide (China) US$93,165/t vs US$93,191/t
Lithium carbonate 99% (China) US$22,515/t vs US$22,055/t
China Spodumene Li2O 5%min CIF US$990/t vs US$990/t
Ferro-Manganese European Mn78% min US$1,822/t vs US$1,825/t
China Tungsten APT 88.5% FOB US$303/t vs US$303/t
China Graphite Flake -194 FOB US$535/t vs US$535/t
Europe Vanadium Pentoxide 98% 8.9/lb vs US$8.9/lb
Europe Ferro-Vanadium 80% 34.75/kg vs US$35.25/kg
Spot CO2 Emissions EUA Price US$70.6/t vs US$72.0/kg
Battery Start-up EnerVue raises $100M for clean energy nickel-hydrogen batteries
EnerVue is hoping to utilise a more cost-efficient, scalable nickel-hydrogen battery for stationary energy storage.
The technology is superior to lithium-ion in extreme temperatures, easy to maintain and lasts longer.
The start-up believe they have succeeded in bringing the cost of the battery storage technology down from $20,000Kwh to $100Kwh.
In contrast to the batteries used in space and EnerVue’s alternative is the use of a platinum electrode, which supposedly accounts for 70% of the cost.
EnerVue replace platinum electrodes and ceramic separators for low-cost, ‘Earth-abundant materials’ – they have declined to report which specific materials.
The company state it is currently in ‘late-stage’ discussions for a site and partner for US production of 1Gwh batteries pa.
The start-up has partnered with oil giant Schlumberger for manufacturing and sales.
UK has largest pipeline for floating offshore wind globally
Figures published in a report by RenewableUK have showed that the UK has more floating wind project planned or operational that anywhere else in the world.
The trade body identified 8.8GW of floating wind projects in various stages of development around the UK, 16% of the global pipeline of 54GW – 30.9GW of the global total is in Europe
The report comes just after the UK government announced a GBP24m budget for floating wind in its next Contracts for Difference (CfD) auction which is expected to open in December.
Alongside the CfD funding, Crown Estate Scotland’s ongoing ScotWind leasing process is also aiming to support the development of 10GW of floating and fixed offshore wind projects.
The UK government has pledged to build at least 1GW of floating wind capacity by 2030.
Other leaders in the floating wind market include Ireland which has a pipeline of 7.7GW, and Australia, which has 7.4GW of capacity in the pipeline.
Ocean Winds and Aker Offshore Wind submit bids for floating offshore wind
Ocean Winds and Aker Offshore have submitted joint bids in the ScotWind Leasing process to install 6GW of floating offshore wind capacity.
In July, the companies formed a new partnership to participate in the Scottish seabed leasing round.
It has been revealed that they have submitted a proposal for several sites in the Outer Moray Firth to deliver a project that ‘would revolutionise energy production in Scotland.’
According to the partnership, the project would create thousands of high-skilled jobs as part of the country’s ‘just transition’.
Around 80% of the world’s wind resources are in waters deeper than 60m and are unsuitable for fixed foundation turbines – floating turbines can make massive contributions to the energy grid because the infrastructure is based away from the coastline in deep water, according to the joint venture partners.
Crown Estate Scotland will announce the successful applicants in early 2022.
Fire at UK-France subsea cable station sends electricity prices to record highs
A large fire at Britain’s main electricity subsea cable will reduce imports from France until the end of March, further exacerbating a power shortage which has sent prices to record highs.
A total of 3,000MW come in via the cables from France – two-thirds of which will stay offline until March 2022.
UK day-ahead power auction prices have soared 223% since last Friday to currently sit at GBP414/Mwh.
Prior to the fire, prices were already at records highs in the UK as calm weather reduced wind generation at the same time as nuclear outages were extended.
Market participants comment that electricity is now so scarce in Britain that any more grid mishaps or unexpected plant outages could leave millions without power.
Even before the fire, the National Grid’s buffer of spare capacity was set to be the smallest for five years.
While residential consumers in Britain are protected by a cap on prices until April, heavy industry could be hugely affected if high prices remain.
Bluejay Mining* (LON:JAY) 11.54p, Mkt cap GBP112m – Greenland agrees new economic aid with the US
The US continues to strengthen its alliance with Greenland with a nominal $10m aid package announced last night.
While $10m is relatively small the package it confirms US interest in the region without upsetting Denmark which had supported Greenland financially for many years.
Greenland gained full independence from Denmark’s long standing colonial control in 2009.
Denmark continues to support Greenland financially and logistically .
The US has previously claimed it is looking to aid sustainable growth in Greenland and is trying to counteract Russia’s “aggressive behaviour and increased militarisation in the Arctic” and China’s “predatory economic interests” (iasparliament.com)
This round of funding is primarily aimed at development of the mining sector, tourism and education, all worthy causes in our view.
We definitely recommend visiting Ilulissat for views over the y Ilulissat Icefjord is a UNESCO World Heritage Site and Qaanaaq for its proximity to Bluejay’s Dundas ilmenite mining project.
Qaanaaq is also relatively close to the US strategic airbase at Thule.
Bluejay received a Letter of interest from the US EXIM Bank earlier this year for a provisional $208m in debt funding.
The company has also received three further Letters of interest from other export credit agencies..
Conclusion: The US are being uncharacteristically sensitive with their nominal $10m aid to Greenland. Denmark gives around $10,000pa per person to Greenland worth around $600mpa in total to keep the economy going but this is increasingly seen as a costly drain on the Danish economy where GDP was $371bn last year.
*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.
Ariana Resources (LON:AAU) 4.7p, Mkt Cap GBP50m – Further drilling results from Kepez North
Ariana Resources reports results from its 18 hole drilling programme at the Kepez North area of its 23.5% owned Kiziltepe mine in Turkey.
The additional holes, inclined at an angle of 600, which are said to have “confirmed and further de-risked the mineral resource estimate”included:
An intersection of 3.2m averaging 11.53g/t gold and 168.7g/t silver from surface in hole KPZ-D17-21 which also contained a second intersection of 8.8m averaging 6.23g/t gold and 26.0g/t silver from a depth of 19.2m; and
An intersection of 6.4m also averaging 6.23g/t gold with 57.8g/t silver from a depth of 22.8m in hole KPZ-D18-21; and
An intersection of 8.0m averaging 4.62g/t gold and 96.8g/t silver from surface in hole KPZ-D11-21; and
Managing Director, Dr. Kerim Sener, explained that the “additional drilling results from the Kepez North area have further reinforced our understanding of this unusually high-grade zone of gold and silver mineralisation”
He also said that “With a current total JORC Measured and Indicated Resource of 36,400 ounces of gold at a grade of 7.15 g/t Au, Kepez North will provide Kiziltepe with a source of high-grade ore for blending with our current processing plant feedstock. Further exploration will continue in the vicinity, to determine the potential for this vein system to host other spatially restricted but high-grade zones of mineralisation which could add to the mine production schedule in the future”.
Kepez North is located approximately 14km by haul road from the Kiziltepe processing plant which should provide straightforward access to implement the blending strategy.
CATL (LON:CATL) $5.42, Mkt cap $5.4bn – CATL may be joining the bidding war for Millennial Lithium Corp. as Chinese firms battle for EV material supply
Bloomberg have reported that CATL, the world’s largest EV battery maker, has made a $298m offer for Canadian-based lithium miner Millennial.
Millennial reported last week that a bid of C$3.85 per share was submitted but failed to name the bidder.
Ganfeng Lithium announced in July its plans to buy Millennial for C$3.60 per share.
Both CATL and Millennial representatives declined to comment on the matter.
Millennial have given Ganfeng until the 27th September to update its proposal.
Millennial have 4.12Mt of LCE in Argentinian projects.
Condor Gold* (LON:CNR) 40.5p, Mkt Cap GBP55m – Senior mining engineer appointed to advance La India feasibility study
Condor Gold has announced the appointment of an experienced mining engineer, Jair Diaz Navarro, to progress “all aspects of mining engineering studies for a forthcoming Feasibility Study” for the development of La India.
Mr. Diaz Navarro is a Colorado School of Mines trained mining engineer with a background in mining operations and in mine planning who was recently a long-term planner at OceanaGold’s Haile mine in S Carolina where he was “responsible for the annual mine plan; as well as reporting annual reserves, LOM equipment requirements, pit optimizations and various trade-off studies to improve shareholder value” and formerly at Barrick Gold’s Cortez mine.
His role at Condor Gold will draw on these skills and focus “on optimising mine schedules to maximise the Project’s economics”.
Last week, the company announced a positive Preliminary Economic Assessment for the mine outlining two possible routes to production either via a solely open-pit based operation producing around 120,000ozpa of gold for the first six years of a 9 year mine life or a mixture of open-pit and underground mining to produce an average of 150,000ozpa for the initial 9 years of a 12 year life.
We imagine that Mr. Diaz Navarro will become intimately involved in the details of the two alternatives as he works to develop the optimum outcome for the feasibility study.
Conclusion: We see Condor Gold’s appointment of an experienced senior mining engineer to optimise the planning and economics of the feasibility study as part of the accelerating development of La India.
*SP Angel act as a broker to Condor Gold
Cora Gold* (LON:CORA) 15.5p, Mkt Cap GBP38m – Interims
The Company continued exploration programme at the Sanankoro Gold Project during the period focused on both infill as well as resource expansion drilling.
Year to date, the Company conducted its largest ever drilling campaign at the site with a number of high grade intersections returned across the deposit.
The Company recorded a $0.7m loss in H1/21 (H1/20: $0.6m) all attributed to well controlled admin costs.
Exploration spending amounted to $3.3m during the period, up on $1.2m in H1/20, reflecting accelerated pace of exploration drilling.
Cash balance stood at $5.7m as of Jun/21 with the Company having completed a GBP3.1m equity raise on 09 June.
The Company carries no debt on its balance sheet.
The Company reiterated its targets to deliver an updated MRE in H2/21 and a DFS in H1/22.
Galileo Resources (LON:GLR) 1.45 pence, Mkt Cap GBP11.6 m – Sale of Kalahari Copper Belt licences expected to complete next week
Galileo Resources has announced that it expects to complete the sale of its nine licences in the Kalahari Copper Belt to ASX listed Sandfire Resources “on or around 22 September 2021”.
Sandfire is developing the Mothae copper/silver project in the Kalahari Copper Belt of Botswana following its acquisition of MOD Resources in October 2019 and also operates the DeGrussa copper mine in Western Australia.
Sandfire will pay US$1.5m in cash and issue approximately 370,000 of its shares, worth approximately US$1.79m at 14th September pricing “for a right of first refusal in relation to the 13 Kalahari Copper Belt licences retained by the Company”.
In addition, “Sandfire is to reimburse Galileo up to US$500K of exploration expenditure incurred … [and] … spend US$4M on the Included Licences (the “Exploration Commitment”) within two years of Completion (the “Exploration Period”) and if the US$4M is not spent, any shortfall will be paid to the Company. The Exploration Commitment is to be reduced by the amount of the Reimbursed Exploration Expenditure”.
Sandfire is also committed to pay a “one-off success payment is to be paid to the Company for the first ore reserve … which exceeds 200,000 tonnes of contained copper … in the range of US$10 million to US$80 million depending on the amount of contained copper … US$2 million of the Success Payment will be held in escrow for up to three years pending any claim by Sandfire under the Licence Sale Agreement”.
Welcoming the transaction, which he described as “a major step forward for Galileo in its Kalahari Copper Belt endeavours” Chairman and CEO, Colin Bird, explained that “Sandfire have a significant position in the Kalahari Copper Belt and hence we feel that this arrangement will benefit both parties to further enhance their positions.”
He also said that “The transaction allows Sandfire to explore the Included Licences, which are in close proximity to their major mine build, and also allows Galileo to carry out exploration on the Excluded Licences in the Kalarahi Copper Belt which is part of the Northwest Botswana Rift which the USGS in 2015 reported as the world’s most prospective area for yet-to-be discovered sediment hosted copper deposits”.
Greatland Gold (LON:GGP) 17.95p, Mkt Cap GBP720m – Expanding its exploration footprint in the Paterson province, Western Australia
Greatland Gold reports that it has acquired additional exploration tenements in the Paterson Province, WA.
The company has agreed to acquire the 75km2 Pascalle tenement and the 100km2 Taunton tenement as well as 2 licnece applications covering 840km2 located 120-170km southeast of its Havieron project, from Province Resources.
The company is paying Province Resources A$50,000 in cash for the Pascalle tenement and A$150,000 in cash plus a further A$200,000 in cash or shares for the Taunton tenement.
In addition, Greatland Gold has applied for the Canning licence “which is adjacent to one of the Paterson South licence applications and consolidates the area of interest”.
CEO, Shaun Day, expalianed that “This is our first licence acquisition since Havieron and adds over 1,000km2 of exploration ground in the Paterson region expanding Greatland’s strategic footprint in one of the most prospective exploration areas for gold-copper deposits in Australia”.
He said that the Pascalle area is situated between Havieron and Greatland Gold’s partner at Havieron, Newcrest Mining’s Telfer mine and that “the tenements in the Paterson South region give us exposure to some exciting geophysical targets under around 400 meters of cover with one adjacent to our existing Canning licence application. This provides an opportunity to use the knowledge we have gained in the northern Paterson and apply this to the same host rock formations and structures we are seeing in the south”.
“As with Havieron, these new exploration licences contain multiple magnetic and geophysical anomalies. The new ground sits under cover and remains untested, which will allow us to apply our proven record of discovery and exploration success to identify prospective Telfer, Winu and Havieron style mineralisation”
Conclusion: The expansion of its exploration area within the Paterson Province gives Greatland Gold the opportunity to apply the exploration insights gained at Havieron to additional prospects. We await news of exploration progress with interest.
Red Rock Resources (LON:RRR) 0.68p, Mkt cap GBP8m – IP survey identifies four anomalous areas at the Mikei gold project
Red Rock Resources reports that an induced polarisation (IP) geophysical survey on the Masurura area at the Eastern Licence of the Mikei Gold Project in Kenya has identified four anomalies for follow up exploration including further geophysics, structural mapping and possible drilling.
The Francis 2, Francis 3, Lake Bush and Lake Bush BIF anomalies occur within the Migori Greenstone Belt on the northern margin of the Tanzanian Craton and the IP results are reported to coincide “well with previously delineated soil geochemical contours … historic drilled assay intercepts at shallow depths and the presence of artisanal miners”.
The company says that exploration of the area dates back to the 1930s and that “During 2011 and 2012, Red Rock undertook an infill drilling programme at all five of the lode gold prospects; MK, Kakula-Kalange-Munyu (KKM), Kakula-Kalange-Munyu West (KW), Nyanza (NZ), and Gori Maria (GM)” resulting in a JORC (2012) compliant indicated and inferred resources estimate of 15.13mt at an average grade of 1.49g/t gold (723,000oz of contained gold.
Chairman, Andrew Bell, explained that “Our priority is through drilling to enhance the extent, tonnage, and grade of the key deposit areas that have already been identified, while identifying fresh drill targets along the trend”.
He also explained that “In opening up this new area further east along the belt from our existing defined Resources, the IP programme has shown once more the considerable exploration upside that exists within our licenses.”
Conclusion: Early stage geophysical exploration at Mikei has shown promising anomalies within the Migori Gold Belt which may ultimately expand the current resource inventory
Sibanye-Stillwater (JSE:SSW) ZAR4,867, Mkt cap ZAR140bn – $490m invested for 50% stake in Nevada lithium project
Sibanye-Stillwater has reached an agreement with Ioneer Ltd to establish a joint venture to develop the Rhyolite Ridge lithium-boron open pit mining project located in Nevada, US.
Under the terms of the agreement, Sibanye-Stillwater will contribute $490 million for a 50% interest in the Joint Venture, with ioneer to maintain a 50% interest and retain operatorship.
The Rhyolite Ridge Lithium-Boron Project covers two separate lithium-boron deposits (North Basin and South Basin) located 4km apart. Small-scale historical mining for boron took place in the South Basin.
Ioneer has also agreed to provide Sibanye-Stillwater with an option to participate in 50% of the North Basin, upon the election of Sibanye-Stillwater to contribute up to an additional $50m. In addition, Ioneer has entered into a subscription agreement with Sibanye-Stillwater for a strategic placement of $70m of Ioneer ordinary shares.
The companies will establish a Technical Committee which will meet regularly to oversee the operations of the project and an ESG Committee.
Operations at Rhyolite Ridge are expected to start in 2023, with operations consisting of a conventional drill-and-blast, load-and-haul operation. Development of the quary will occur in tow stages, the first of which will see an initial starter pit developed in the southwestern part of the ore body to supply ore for the first 4.5 years of the Project. In this area, lithium grades are 15% higher than the average grade for the deposit and the ore is more exposed at surface.
In stage 2, pit design will facilitate a larger mining area to be maintained, aiding the efficiency of the operation for another 21 years.
Ioneer’s processing in volves a vat leaching process uses a series of 7 vats where crushed ore is sequentially leached for 3 days with diluted sulphuric acid. The spent ore undergoes a displacement wash to remove valuable interstitial lithium and boron in solution.
The spent ore is free draining, allowing the vat to be emptied of solution and produces a residue material that is suitable for dry stacking. Through this process, high lithium and boron recoveries in leaching are consistently achieved at low to moderate temperatures (60?C) and moderate free-acidity levels.
A boric acid circuit, followed by a evaporation and crystallization circuit and finally a lithium carbonate circuit separates valuable metals to be sold.
Ioneer comment on the possibility of installing a lithium hydroxide circuit in year 3.
The Rhyolite Ridge process is expected to produce quality products at an overall recovery of 85% for lithium carbonate, 95% for the lithium hydroxide circuit, and 79% for boric acid.
Establishment of the JV and SS’s funding commitment is subject to certain terms, including receipt of final permits, commitments for remaining debt financing, and other customary approvals. Ioneer anticipates these conditions precedent to be satisfied during the during second half of calendar year 2022.
Power Metal Resources* (LON:POW) 2.08p, Mkt cap GBP27m – Four uranium properties acquired in Saskatchewan
Power Metals reports the acquisition by claim staking of four 100% owned uranium exploration properties comprising 7 licences surrounding the Athabasca Basin, located in northern Province of Saskatchewan, Canada.
The four 100% owned properties cover a combined 109km2, including the Clearwater Uranium Property, Tait Hill Uranium Property, Thibaut Lake Uranium Property and the Soaring Bay Uranium Property.
All four Properties are surrounding the prolific Athabasca Basin, in northern Saskatchewan, Canada which is home to some of the world’s largest and highest-grade uranium mines including Cameco Corporation’s Cigar Lake and McArthur River Uranium Mines.
The Properties were staked after detailed analysis of several provincial geological databases including airborne magnetics, government bedrock mapping as well as publicly available assessment report files and the mineral deposits index.
The claims have been registered with the Mineral Administration Registry Saskatchewan and the total cost of claim staking was C$6,521, and valid for 2 years with no minimum spend commitment required.
Paul Johnson, Chief Executive Officer of Power Metal Resources plc commented: “The Properties have been selected after careful review and are strategically located where there is material evidence of uranium prospectivity as demonstrated by historic exploration reports as well as through various uranium focused government databases.”
*SP Angel acts as Nomad and Broker to Power Metal Resources
Vulcan Energy (ASX:VUL) A$14.62, Mkt cap A$1.6bn -Vulcan raises A$200m in share placement for Zero Carbon lithium project
Vulcan has announced commitments for all of its underwritten share placement.
The placement was priced at A$13.50 per share and gained support from both existing and new shareholders. Hancock Prospecting have provided a considerable amount of the funds.
The company had announced earlier this week its plans for a A$220m capital raise.
The plan also consisted of a A$20m share purchase plan. This is set to open on Sep. 24th.
Vulcan aims to utilise the proceeds of the raise for expanding their ‘integrated renewable energy and lithium development strategy’ according to their MD and CEO Dr. Francis Wedin.
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
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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.
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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
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Rob Rees – [email protected] – 0203 470 0535
Grant Barker – [email protected] – 0203 470 0471
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+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
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