Today’s Market View – AfriTin, AVZ Minerals, Bushveld Minerals and more…


SP Angel . Morning View . Monday 27 09 21

Power shortages in China add to growth outlook concerns

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AfriTin* (LON:ATM) – Strong six months fuelled by rising production levels at Uis and strong tin prices

AVZ Minerals (ASX:AVZ) – secures $240m of Chinese investment to develop DRC lithium project

Bluejay Mining* (LON:JAY) – Further drilling at Enonkoski

Bushveld Minerals* (LON:BMN) – Interims highlight doubling of vanadium production to 5,000-5,4000mtVpa by end-2022

Eurasia Mining* (LON:EUA) – Completion of $15m placing

GoldStone Resources (AIM:GRL)* (LON:GRL) – Warrant exercise provides GBP180k of funding to company

Power Metal* (LON:POW) – Further assay from the Botswana Molopo Farms Complex drilling

Rambler Metals and Mining* (LON:RMM) – Introduction of measures to combat rising Covid19 levels on the Baie Verte Peninsula

Scotgold Resources* (LON:SGZ) – BUY – GBP2m director loan conversion

Serabi Gold* (LON:SRB) – 2020 results show 83% rise in post-tax profit

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

Chinese industrial equities fall as country heads into power supply shock

Shares of Chinese electricity-intensive industries including metals, chemicals and shipping slumped on Monday as Beijing curbed power supplies in order to cut emissions.

Rising demand for electricity is causing coal and gas prices to soar, with ramp ups in mining and energy production made even harder due to strict targets implemented by the Chinese government to cut emissions.

Almost half of China’s regions missed energy consumption targets set by Beijing and are now under pressure to curb power use.

Its looking increasingly likely that China will have to ration coal and gas this winter, with the crisis affecting homes as well as businesses as Guandong province limits domestic air conditioner use.

China’s thermal coal futures have soared in recent months, repeatedly setting records as pollution concerns constrain domestic output and shipments from top supplier Australia remain banned.

Aluminium Corporation of China fell as much as 11% in Hong Kong this morning, Basoshan Iron -4%, China Molybdenum -10%.

Chemical companies: China National Chemical Engineering -7.4%, Zhejiang Longsheng -6.4%.

Coal-powered plant operators: Huadian Power International -9.1%, Huaneng Power -9.4%.

Shipping: COSCO Shipping Holdings -10%China Shipbuilding Industry -7%, China Merchants Energy Shipping -6.9%.

Shanghai copper inventories hit 12-year low

Chinese warehouse stockpiles fell to a 12 year low as scrap shortages see increased demand for refined copper.

Scrap shortages have been caused by supply disruptions and tighter restrictions.

3-month LME futures rose 0.5% to $9,380.50/t and Shanghai futures rose 0.9% to $10,768/t.

Shanghai inventories have been falling for 7 straight weeks.

The potential crisis of the power crunch on copper supply is ambiguous as semi-fabricating and downstream customers will look to decrease output.

Dow Jones Industrials -+0.10% at 34,798

Nikkei 225 -0.03% at 30,240

HK Hang Seng +0.06% at 24,206

Shanghai Composite -0.83% at 3,583


China’s economic woes intensified by energy crisis

China’s economic growth and heavy industries have begun to contract as energy prices soar.

Beijing has been increasingly policing emissions to cut China’s energy intensity by 3% in 2021.

Only 10 of 30 regions achieved their emissions goals in 1H 2021.

Power shortages have been triggered as coal supplies are limited and prices of thermal coal skyrocket.

Regions have demanded residents to limit their consumption of high-energy electronics during peak times.

7% of aluminium and 29% of national cement production capacity has been affected.

Analysts have slashed their growth expectations for China’s 4Q 2021.

Ripple effects are expected in global markets as Chinese industry limitations further exacerbate supply chain disruptions.

Tesla and Apple have both been limited in their Chinese production capabilities

Japan – The ruling Liberal Democratic Party to hold leadership elections on Wednesday ahead of general elections in November.

Two former foreign ministers Fumio Kishida and Taro Kono, are neck and neck in the four-way race, Nikkei Asia reports.

Fumio Kishida, 64, views nuclear power as Japan’s important energy option to support stable and affordable power supply on course for the carbon neutrality target by 2050.

Taro Kono who is in charge of the government rollout of the vaccination programme is a critique of nuclear power generation calling for increasing renewable energy share while weaning Japan from nuclear energy as reactors reach the end of the their lifetime.

Preliminary PMI manufacturing 51.2 for September vs 52.7 in August

PMI services 47.4 for September vs 42.9 in August

PMI composite 47.7 for September vs 45.5 in August

Germany – Preliminary general election results show the left of centre Social Democrats winning a narrow victory with support for the centre-right CD/CSU of outgoing chancellor Angela Merkel dropping to a history low, FT writes.

The SPD got 25.7% of the vote, up on the 20.5% recorded four years ago.

Merkel’s CDU/CSU won 24.1% of the vote, down from ~33%.

The Greens secured 14.8%, up on 8.9% in previous elections, making it the third largest party in the parliament.

The FDP won 11.5%.

Much now depends on who smaller parties partner with to form the coalition government.

The news was well received by markets with the German DAX trading ~0.9% up this morning as concerns of the Left Party making it into the coalition reduced considerably.

PMI manufacturing 58.5 for September vs 62.6 in August

PMI services 56.0 for September vs 60.8 in August

PMI composite 55.3 for September vs 60.0 in August

UK – Supply chains are under pressure following the reopening of the economy post Covid-19 related restrictions and Brexit with UK ministers planning to issue temporary visas to address lorry drivers and food industry workers’ shortages.

10,500 new temporary visas are to be issued to help supply goods in the run up to Christmas.

Business leaders said the measure is insufficient.

Earlier PM Johnson suggested that military personnel may be engaged to tackle the UK’s fuel crisis amid a shortage of tanker drivers.

At least half of petrol stations outside the motorway network that is prioritised by oil companies is reported to have run out of fuel.

Anti-Brexit haulage body accused of stirring fuel-tanker crisis in the press

Shortage of lorry drivers in the UK and in Europe down to pay and working conditions.

We spoke to a lorry driver who had given up driving lorries due to the low pay and treatment of drivers.

It is now painfully clear that the training and education of many professions in the UK have been undermined by an influx of skilled migrant workers.

The pandemic, where many migrants returned home has exposed the failings of a system where the UK does not feel the need to train sufficient numbers of young people ranging from doctors and nurses to lorry drivers and builders.

PMI manufacturing 56.3 for September vs 60.3 in August

PMI services 54.6 for September vs 55.0 in August

PMI services 54.1 for September vs 54.8 in August

France – PMI manufacturing 55.2 for September vs 57.5 in August

PMI services 56.0 for September vs 56.3 in August

PMI composite 55.1 for September vs 55.9 in August

EU – PMI manfacturing 58.7 for September vs 61.4 in August

PMI services 56.3 for September vs 59.0 in August

PMI composite 56.1 for September vs 59.0 in August

US Markit – PMI manufacturing 60.5 for September vs 61.1 in August

PMI services 54.4 for September vs 55.1 in August

PMI composite 54.5 for September vs 55.4 in August

India – Daily Covid cases pull back further to the weakest in more than six months amid ongoing vaccination and more widespread exposure to virus, FT writes.

Daily cases fell to 29,000 over the past seven days compared to the average of 30,000 detected in the previous week.

The nation vaccinated nearly 17% of the population and 47% of people received at least one dose.

India administers 7m jabs a day.

A nationwide study completed in June and July found that two-thirds of the population had antibodies to the virus that officials hope will soften a potential third wave of infections.


US$1.1707/eur vs 1.1707/eur last week. Yen 110.69/$ vs 110.50/$. SAr 14.937/$ vs 14.897/$. $1.368/gbp vs $1.371/gbp. 0.727/aud vs 0.728/aud. CNY 6.460/$ vs 6.465/$.

Commodity News

Precious metals:

Gold US$1,758/oz vs US$1,753/oz last week

Gold ETFs 99.5moz vs US$99.5moz last week

Platinum US$993/oz vs US$982/oz last week

Palladium US$1,983/oz vs US$2,005/oz last week

Silver US$22.63/oz vs US$22.66/oz last week

Base metals:

Copper US$ 9,935/t vs US$9,278/t last week

Aluminium US$ 2,895/t vs US$2,916/t last week

Nickel US$ 18,900/t vs US$19,175/t last week

Zinc US$ 3,109/t vs US$3,088/t last week

Lead US$ 2,152/t vs US$2,135/t last week

Tin US$ 35,540/t vs US$36,375/t last week


Oil US$79.1/bbl vs US$77.5/bbl last week

Oil prices have extended last weeks’ gains in early trading today amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions

Supply tightness continues to draw on inventories across all regions, particularly prominent in the US and Asia

Rising gas prices as also helping drive oil higher as the liquid becomes relatively cheaper for power generation

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Caught short by the demand rebound OPEC+ has had difficulty raising output as under-investment or maintenance delays persist from the pandemic

China’s first public sale of state oil reserves has barely acted to cap gains as PetroChina and Hengli Petrochemical bought four cargoes totalling about 4.43MMbbls

India’s oil imports hit a three-month peak in August, rebounding from nearly one-year lows reached in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand

Natural Gas US$5.294/mmbtu vs US$5.075/mmbtu last week

Global record high natural gas prices are pushing some energy-intensive companies to curtail production in a trend that is adding to disruptions to global supply chains in some sectors such as food and could result in higher costs being passed on to their customers

Some companies, including steel producers, fertiliser manufacturers and glass makers, have had to suspend or reduce production in Europe and Asia as a result of spiking energy prices

That includes two of the world’s largest fertiliser makers, which said they would cut production in Europe

The UK has agreed to provide state support to one of the companies to restart production of by-product carbon dioxide, which is used in food production, to avert a supply crunch

The steep rise in European gas prices has been driven by a combination of a strong recovery in demand and tighter-than-expected supply, as well as several weather-related factors.

These include a particularly cold and long heating season in Europe last winter, and lower than usual availability of wind energy in recent weeks

European prices also reflect broader global gas market dynamics

There were strong cold spells in East Asia and North America in the first quarter of 2021

They were followed by heatwaves in Asia and drought in various regions, including Brazil

All of these developments added to the upward trend in gas demand

In Asia, gas demand has remained strong throughout the year, primarily driven by China, but also by Japan and Korea

On the supply side, LNG production worldwide has been lower than expected due to a series of unplanned outages and delays across the globe and delayed maintenance from 2020


Iron ore 62% Fe spot (cfr Tianjin) US$115.0/t vs US$108.7/t

Chinese steel rebar 25mm US$885.4/t vs US$881.5/t – Labour plans $3bn UK green steel industry

Ed Miliband has called for a ‘Biden-style green investment’, with a carbon-free domestic steel industry ‘the first instalment of that’.

The Shadow Business Secretary announced that a Labour government would initiate a 10-year transition to a carbon-free steelmaking industry.

Thermal coal (1st year forward cif ARA) US$137.9/t vs US$132.3/t

Coking coal swap Australia FOB US$374.0/t vs US$384.0/t

China Ilmenite Concentrate TiO2 US$378.5/t vs US$375.1/t

Uranium – China looks to Gobi Desert for use of alternative to uranium for nuclear reactors

China is planning to develop nuclear reactors using thorium instead of uranium in Wuwei in the Gobi Desert.

The reactors do not need water traditionally used for cooling the nuclear fuel rods.

Thorium is a by-product from rare earth mining and is less radioactive and more plentiful than uranium.

The current reactor in development can supply 1,000 households however plans to roll out a 373mw reactor by 2030 have been announced.


Cobalt LME 3m US$53,380/t vs US$53,380/t

NdPr Rare Earth Oxide (China) US$92,267/t vs US$92,184/t

Lithium carbonate 99% (China) US$25,699/t vs US$24,747/t

China Spodumene Li2O 5%min CIF US$1,060/t vs US$1,030/t

Ferro-Manganese European Mn78% min US$1,809/t vs US$1,811/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% 8.2/lb vs US$8.4/lb

Europe Ferro-Vanadium 80% 33.25/kg vs US$33.25/kg

Spot CO2 Emissions EUA Price US$70.9/t vs US$71.1/kg

Battery News

EV maker Polestar to go public via $20bn SPAC

Swedish EV maker Polestar is preparing to go public through a merger with blank-check company Gores Guggenheim at a valuation of $20bn including debt.

The company raised $550m in external funding in April and in June announced plans to build Polestar 3 – an SUV at Volvo’s US plant in South Carolina starting H2 2022.

Ganfeng Lithium to explore nickel chemical EV batteries

Ganfeng, the world’s largest lithium company, is set to invest $30mn in its recently acquired, Indonesia-based Silkroad Nickel.

The Company is ‘studying making downstream chemicals’ for EV batteries in its Indonesian nickel plant.

Ganfeng’s consolidation of another battery metal to its arsenal sparks concern over China’s dominance in the EV supply chain.

A spokesperson for the Company said Ganfeng is watching ‘the Indonesian national policy for nickel exports’ after the country banned nickel ore exports in 2020.

Company News

AfriTin* (LON:ATM) – 5.35p, Mkt cap GBP60m – Strong six months fuelled by rising production levels at Uis and strong tin prices

AfriTin reports a gross profit of GBP1.11m for the six-months ending 31st August 2021 (2020 – GBP0.01m) and a pre and post-tax loss of GBP0.50m (2020 – GBP1.04m loss).

The company also reports a 31st August cash balance of GBP6.29m and borrowings of GBP0.51m.

The results reflect a 468% increase in the volume of tin concentrate production to 368t of concentrate with a tin content of 199t from the company’s Uis mine in Namibia as well as improved tin prices of US$33,794/t which contributed to a 22% gross profit margin.

Afritin highlights the previously announced GBP4.5m senior loan facility with Standard Bank to facilitate the planned 67% expansion of the Phase 1 processing plant at the Uis mine which is expected to be commissioned by during Q2 2022.

Also, as previously announced, Afritin is progressing test work on the recovery of lithium and tantalum by-products.

Afritin confirms that it has initiated an “8,000 metre lithium and tantalum exploration drilling programme over the V1/V2 ore body to run over the next 12 months” and says that it is launching what it describes as a “new technology metal regional expansion programme in the second half of the financial year is a step toward unlocking the potential of a new metallogenic province that is the Erongo region of Namibia”.

While looking forward to what he described as an exciting second half for Afritin, CEO, Anthony Viljoen explained that, despite the additional challenges of the Covid19 pandemic, “the AfriTin team has once again managed to produce an impressive half-yearly performance”.

Mr. Viljoen also described Namibia as “an incredibly gracious host country within which to operate … [and confirmed that] … We remain conscious of the environment and its people, and this will continue to be built into our corporate DNA as we strive to become a significant African multi-commodity tech-metals producer”.

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

AVZ Minerals (ASX:AVZ) A$0.35c, Mkt cap A$1.13bn – secures $240m of Chinese investment to develop DRC lithium project

ASX-listed AVZ Minerals announced this morning that it has secured funding from a private investment firm, jointly owned by Chinese battery maker CATL and Pei Zhenhua, operating under the name CATH.

Under the agreement, CATH would get a 24% stake in the JV, while AVZ’s interest would drop to 51% and DRC-owned firm Cominiere would retain its 25% stake.

The project covers 188km2 in southern DRC and hosts lithium pegmatites with a strike length of 13km+ centred on a historical tin mining operation.

Drilling highlights include 235m @ 1.66% Li2O, 202.8m @ 1.57% Li2O and 250.9m @ 1.48% Li2O.

AVZ has progressed the project to DFS stage, which gives a pre-tax NPV10 of US$2.35bn, based on a 4.5mtpa operation.

Following today’s announcement, AVZ agreed to progress a study to increase yearly production, expanding dense media separation capacity from 4.5mtpa throughput, producing 0.7mt of SC6 as contemplated in the 2020 DFS to a 10mtpa DMS throughput, producing 1.6mt of SC6.

An existing offtake-agreement with Yibin Tianyi is to be assigned to CATH and would be expanded in scope.

This morning’s announcement from AVZ is the latest in a spate of investment into lithium pegmatite projects in Africa by major producers and end-users.

IronRidge Resources* has seen its Ewoyaa Lithium Project in Ghana fully-funded to the tune of $102m by Piedmont, with the company also entering into a binding offtake agreement to take 50% of IronRidge’s Cape Coast Lithium Portfolio’s life of mine spodumene concentrate.

Firefinch reported earlier this year the details of a $130m deal with Ganfeng, China’s largest lithium processor to develop the Goulamina lithium project in Mali. Goulamina Lithium Project envisages a 2.3mtpa milling/flotation plant supplying 436ktpa fine 6% Li2O spodumene concentrate over 23y LOM, according to the Oct/20 DFS.

Kodal Minerals* has it’s Bougouni lithium project next door to Goulamina, where it envisages producing 220ktpa 6% Li2O spodumene concentrate over an initial 8.5 years, with Kodal and Firefinch also having a cooperative in place agreement to work together on the projects to share elements of infrastructure.

*SP Angel act as nomad and broker or broker to companies mentioned in this comment

Bluejay Mining* (LON:JAY) 11.34p, Mkt cap GBP109m – Further drilling at Enonkoski

Bluejay Mining has announced that Rio Tinto, its joint-venture partner on the exploration of the Enonkoski nickel-copper-cobalt project in eastern Finland, has agreed to extend its exploration funding and to continue drilling.

The company says that “Planning for the upcoming diamond drill programme is ongoing and preliminary plans include 3,000-4,000 metres of drilling to be conducted in October-December 2021 at several target areas on the belt”.

The decision follows a programme of mapping and sampling, relogging of historic drill-core and the completion, in early September, of a detailed airborne magnetic survey covering approximately 2,000 line km.

Bluejay Mining’s COO, Thomas Levin, confirmed that “The field team have been continuing with the geological field work at several target areas on the belt. The aim with the ongoing top of bedrock sampling and recently completed, very detailed, 20-40 metre line spacing drone 3 component magnetic survey, is to assist in the target generation for the upcoming diamond drilling programme”.

Rio Tinto and Bluejay’s existing joint venture for exploration of the Enonkoski nickel-copper project in the Outokumpu Belt was signed in November 2020 with Rio Tinto funding US$20m of exploration to earn a 75% interest in the project.

The Outokumpu Belt is one of the most prolific metallogenic belts globally, hosting multiple high-grade mines including the world famous Outokumpu mine

Conclusion: The decision to continue drilling suggests that results to date from Enonkoski have been encouraging and we await further news.

*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.

Bushveld Minerals* (LON:BMN) 10.7p, Mkt Cap GBP126m – Interims highlight doubling of vanadium production to 5,000-5,4000mtVpa by end-2022

Bushveld Minerals report a 9% rise in H1 sales to $47m from $43m yoy.

Group production fell 5% to 1,574mtV vs 1,1661/mtV .

Vametco production guidance is for: 2,300-2,400mtV at a cost of $23.70-24.20/kgV.

Vanchem production guidance is for: 1,100- 1,200mtV at a cash cost of $30.3-31.1/kgV.

Vanadium sales fell 9% to 1,608mtV vs 1,765/mtV.

The average realised Vanadium prices rose to $29.24/kgV vs $24.2/kgV. We note the lag in received prices against the H1 LBM ferrovanadium price of $33.4/mtV in H1.

High iron ore prices encouraged traders to blend magnetite ores bearing vanadium with hematite ores. Bushveld expects this practice to stop at iron ore prices of <$100/t.

Vanadium prices are around $29/mtV in China today having slipped around 13% in the past 30 days..

An EBITDA loss of $10.8m vs a loss of $1.0m was recorded despite the increase in sales due to scheduled maintenance and unscheduled stoppages in Q1.

Unit costs rose to $39.7/kgV vs $25.0/kgV.

Vametco cut costs by 2.6% in Q2 and expects costs to fall to previous guidance of US$23.7-24.2/kgV for C1 unit costs.

South African rand strength led to a rise in local costs with the currency rising 13% to 14.54/USD through the period. The rand has since weakened to 15.04 today.

Operating losses rose to $19.7m vs a loss of $9.9m yoy with the rand strength adding ~$7.3m to the EBITDA loss.

Pre-tax losses rose to $22.7m vs $10.7m yoy.

Group unit costs rose by 59% to $39.7/kgV from $25.0/kgV.

Production outlook: Critically, management expect to double vanadium production through the restart of Kiln 3 at Vanchem with $18m of capex now allocated.

Vanchem’s Kiln 3 is of a similar size and capacity as the main kiln at Vametco and should raise Vanchem production to ~2,600mtV, with Vametco running at ~2,600mtV.

Production is targeted to rise to a run rate 5,000-5,400mtV by end 2022 and onto 6,400-6,800mtV int eh medium term.

The group remains on schedule to produce 3,400-3,600mtV by the year end..

Bushveld maintain their aim to raise production to 8,400mtV pa in the longer term.

Cost savings: Bushveld aim to cut costs by $2.5-4m pa from 2022.

Operating and administrative costs came in at US$14.4 m vs $14.0m in H1 2020.

Sustaining capital $6.1m vs $0.1m in H1 2020

Bushveld Energy: Construction has started on the new vanadium electrolyte plant in South Africa beung built in conjunction with the IDC agency who are partners in the business.

This will be the largest publicly announced plant outside China at 200MWh pa of vanadium electrolyte production. The plant should hopefully scale up to 800MWh pa as demand for VRFB batteries rises for longer term power storage.

Bushveld recently sold 9,000kg of vanadium pentoxide to Invinity Energy Systems for $200,000 presumably for conversion into electrolyte.

Covid-19: Bushveld saw five active Covid cases with a 96% recovery rate and two Covid-related fatalities though the period.

The group are running a vaccination program for Vametco and Vanchem employees.

Cash at end June: $31.6m vs $50.5m and end December.

Net debt: $54.4m vs $33.7m at end December due to the H1 loss on lower production, higher unit costs and the stronger rand.

*SP Angel acts as Nomad and broker to Bushveld Minerals.

Eurasia Mining* (LON:EUA) 25.3p, Mkt Cap GBP721m – Completion of $15m placing

The Company closed the earlier announced $15m placing last Friday.

The Directors have reduced the financing size to approximately $15m from the higher amount offered to Eurasia.

The Company issued 41.6m shares at 26p, the closing mid-market price on Friday, along with 41.6m of warrants.

The raise brings total cash position of the Company to $35m.

The proceeds will be used to progress Rosgeo JV related work over PGM and battery related assets in the Kola Peninsula with a respective JORC resource estimate by Wardell Armstrong is planned to be announced shortly.

*SP Angel act as Nomad and Broker to Eurasia Mining

GoldStone Resources* (LON:GRL) 11.1p, Mkt Cap GBP49.3m – Warrant exercise provides GBP180k of funding to company

GoldStone reports an exercise of 6,000,000 warrants to subscribe for new ordinary shares of 1 penny each in the capital of the Company at a price of 3 pence per Ordinary Share.

The Warrant Exercise provides GBP180,000 of additional funding to the Company.

*SP Angel acts as Broker to GoldStone Resources

Power Metal* (LON:POW) 2.1p, Mkt Cap GBP26m – Further assay from the Botswana Molopo Farms Complex drilling

The Company released additional assays from the second hole (KKME 1-6) drilled at the Molopo Farms Complex Project in southwest Botswana.

Additional tests were carried on the 7m wide downhole interval between 445-452m in line with the recommendation of the University of Witwatersrand that examined the KKME 1-6 core.

The Company received assay results for the 8 samples in the interval submitted with selected results including:

0.6m at1.7% Ni, 0.55g/t Pt and 0.15g/t Pd from 446.7m;

0.7m at 0.7% Ni from 447.3m.

Nickel and PGM bearing sulphide mineralisation was encountered throughout the entire 7m interval.

Results represent the single highest nickel and platinum results from the 2020 drilling programme to date.

The Company is planning to sample additional intervals with a potential to detect further fine grained sulphide mineralisation in the KKME 1-6 core.

The identification of additional mineralised pyroxenite horizons within KKMEE 1-6 is encouraging and will help in planning the next phase of drilling.

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

Rambler Metals and Mining* (LON:RMM) 22.25p, Mkt cap GBP29.5m – Introduction of measures to combat rising Covid19 levels on the Baie Verte Peninsula

(Rambler owns 100% of the Ming Copper-Gold Mine)


Rambler Metals and Mining has introduced a programme of rapid Covid19 testing for its employees in response to a total of “109 active cases in the Province with 70 confirmed cases in the Baie Verte region, and 18 presumptive cases pending official results. From Wednesday’s update there are 39 new cases reported in the Baie Verte region” which hosts Rambler’s operations.

The company confirms that “approximately 250 tests have been administered by the Company with less than 1% being referred to Public Health for follow-up” and that currently “approximately 7% of the workforce … [ of 280] … are required to isolate”.

Rambler Metals explains that “vaccination rates in the local region at 67% are lower than the provincial and national averages” and it encourages “all of its employees and contractors to follow all public health guidelines including receiving the recommended vaccines to combat this pandemic”.

The company confirms that “To date, the impact to the operation has been confined to minor production and development delays due to the non-availability of workers on certain shifts. Further impacts are expected for the next few weeks during the mandatory isolation period but are not expected to be long term”.

Conclusion: Rambler Metals is stepping up Covid19 testing among its workforce to combat rising infection levels in the area. Although the local situation is evolving, at this stage, the company confirms only minimal disruption to its operations.

*SP Angel act as Nomad and broker to Rambler Metals & Mining

Scotgold Resources* (LON:SGZ) 83p, Mkt Cap GBP46m – GBP2m director loan conversion


The Company agreed a conversion of the GBP2m short term loan facility into its shares.

The loan will be converted into 3.3m shares at a price of 60.6p, a ~15% discount to the 30d VWAP.

Lenders include Nat le Roux (Chairman, ~63% of new shares), William Styslinger (NED, 17%), Peter Hetherington (NED, 11%) and Ian Proctor (NED, 3%).

The short term loan that is due Nov/21 was drawn in May this year as the Company was addressing a number of operational challenges during the ramp up stage at the high grade Cononish Gold-Silver Mine.

The ramp up is progressing well with the team highlighting operations are on track to achieve monthly operating targets with 50-75t of concentrate expected in September.

Conclusion: The conversion of the loan reflects Directors’ confidence in the team and the project to deliver on projected ramp up schedule as well as alleviates the requirement to repay the loan in Nov/21.

*SP Angel act as Nomad and broker to Scotgold Resources. A number of SP Angel analysts have visited the Cononish gold mine

Serabi Gold* (LON:SRB) 65p, Mkt Cap GBP49m – 2020 results show 83% rise in post-tax profit

Serabi Gold reports an 83% increase in after-tax profit in 2020 to US$7.03m (2019 US$3.83m).

The results reflect the production of 31,212oz of gold at a cost of US$1,075/oz on a cash basis and US$1,374 all-in sustaining cost (2019 – 40,101oz at US$832/oz cash cost and US$1,081/0z AISC).

Despite the challenges of the Covid19 pandemic which we expect was a contributor to the lower output levels, Serabi Gold generated US$11.6m of operational cash flow (2019 (US$14.0m) and reports a 31st December 2020 cash balance of US$6.6m

The company says that the lower operational cash flow “broadly reflects the reduction in revenue of approximately US$4.1 million resulting from the lower level of gold sales in the year”.

The company also highlights the previously reported start of the Coringa mine development “which, when in full production, is expected to increase current group annual production by approximately 100 per cent. to approximately 80 kozpa. Initial development of the Coringa Mine portal commenced in July 2021” as well as the regional exploration programme which is aimed at developing “a mineral resource above 2 million ounces of contained gold in aggregate across all of the Company’s projects”.

Serabi Gold also takes the opportunity to report progress on the investigations into previously reported “unexplained cash withdrawals” which delayed the completion of the annual audit.

Investigation “identified that one of its senior managers authorised the withdrawal of cash over a period from January 2015 to March 2021 totalling approximately US$349,000 … [and] … that the Company’s wholly owned Brazilian subsidiary Serabi Mineracao SA (“SMSA”) did not receive the services documented to have been provided in respect of these cash withdrawals. The enquiries undertaken on behalf of the Company did not identify direct evidence of improper payments occurring within the scope of licencing and/or payments to obtain benefits in connection with public agencies.”

“Deloitte and FFA have also noted instances of irregularities relating to expenses reimbursements of approximately US$904,000 and travel advances of approximately US$510,000 paid to certain Brazilian based staff.”

“Management is satisfied that all of the payments identified by the review process have been accounted for as expenses of the Group in the year in which they were incurred. Accordingly, and recognising the materiality of the value of the transactions recorded in each period, no adjustment to the previously reported results of the Group has been considered necessary.”

Serabi Gold “has made a provision of approximately US$400,000 in respect of additional profits tax that may be due if it is determined that the identified expenditures were not deductible for tax purposes.”

“The Group has already made certain changes in personnel, implemented changes in internal controls and is currently establishing an internal audit function based in Brazil appointed by and reportingly directly to the Audit Committee.”

Expressing appreciation for the efforts of Serabi Gold’s staff during the Covid19 pandemic, Chairman, Nicholas Banados said that “Serabi is now well positioned and financed to deliver on its growth plans … The initial development of the Coringa project is now underway in anticipation of first gold being produced during 2023, whilst simultaneously, the Company also now has the funding available to continue its exploration programmes and develop some of the very exciting resource growth opportunities that exist within its Palito Complex land tenement”.

Conclusion: Serabi Gold’s 2020 results reflect the impact of the Covid19 pandemic but show the company well positioned to deliver its growth strategy with the start of the Coringa development a key element in the company’s strategy to grow its gold output from the current level of around 40,000oz pa to 100,000oz pa. Internal audit measures have been implemented following the unauthorised cash withdrawals by certain staff which was uncovered during the audit process.

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

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

Prince Frederick House

35-39 Maddox Street London


*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.

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