Today’s Market View – Botswana Diamonds, Castillo Copper, Sibanye-Stillwater and more…

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SP Angel . Morning View . Monday 25 10 21


Gold recovered to $1,800/oz as China flags new covid outbreak




Botswana Diamonds (LON:BOD) – GBP550,000 fund-raising


Castillo Copper (LON:CCZ) – IP Survey identifies potential drill targets at Luanshya


KEFI Gold and Copper* (LON:KEFI) – Security incident resolved


Kore Potash (LON:KP2) – Quarterly operations update


Petropavlovsk (LON:POG) – Q3 update highlights recovering production at own mines with increasing POX Hub utilisation


Sibanye-Stillwater (JSE:SSW) – In talks to buy Brazilian projects for $1bn


Strategic Minerals* (LON:SML) – GBP400,000 fund-raising




Recent interviews


VOX Markets: 20/10/21: https://www.voxmarkets.co.uk/articles/john-meyer-altus-cora-rambler-953f402


IGTV: 08/10/21: How high energy prices are pushing up metals: https://youtu.be/em4zwo2i4Cs




Strong steel demand on forecast-beating profits but Sweden’s SSAB warns of weakening European demand as the semiconductor shortage hits auto industry


SSAB shares up 54% this year on rising steel demand as economies rebounded from the pandemic.


Q3 earnings (580bn crowns) beat expectations (4.41bn), with demand expected to stay strong in Q4.


SSAB see a ‘certain lag in the realization of steel prices, compared to the spot market’.


However, the company has warned of weakening European demand as the semiconductor shortage takes hold of the auto industry.


EU and China look to increase magnesium supply as the metal threatens the manufacture of aluminium alloys for automotive use


The European Commission is set to hold talks with China to ease magnesium shortages.


Industry groups, auto manufacturers, have warned of the potential for shortages to cause plant shutdowns.


China supplies 95% of the EU’s magnesium key to steel and aluminium making.


The Commission stated that the bloc is set to run out of magnesium inventories by end-November.


Magnesium prices have doubled to 2008 highs, hitting new highs as power curbs cut production in China.


Remaining stocks in Europe are selling for $10,000-$14,000/t with Eurometaux calliing for domestic magnesium production in the long-term.




Gold firms to $1,800/oz as Jerome Powell warns of worsening supply-side constraints and the increasing risk of inflation


Powell stated on Friday that ‘supply-side constraints have gotten worse’ and ‘the risks are clearly now to longer and more-persistent bottlenecks, and thus to higher inflation’.


Powell called for the Fed to remain flexible over the next few months, making sure that its ‘policy is positioned for a range of possible outcomes.’


The Fed has approved $2.8tn in federal spending since December 2020.


The central bank is expected to reduce monthly $120bn asset purchases by $15bn a month from November, ending in June 2022.


Powell stated it ‘is time to taper’ but doesn’t ‘think it is time to raise rates.’


Gold has hovered around the $1,800/oz mark, with US futures touching $1,799.10.


The dollar index has neared its month low of 93.455, touching 93.667.




US – US court suggests support for Rio Tinto’s Resolution copper mine


A US appeals court has questioned its ability to override a Congressional ruling that gave Rio access to the region containing the Resolution copper mine.


The Apache Stronghold Native American conservationist group are looking to overrule the resolution.


Rio has spent $1bn on its Resolution copper mine but it is yet to reach production.


The Apache Tribe considers the site to be home to deities.


Barrack Obama gave Rio the rights to mine the 40bn pound copper deposit in 2014.


Congress is currently debating the 2014 legislation.




Copper prices rebound on falling stockpiles


Shanghai warehouse stockpiles have hit their lowest levels since 2009.


3-month LME copper futures rose 1.9% to $9,888/t.


Shanghai stockpiles fell to 39,839t.


LME inventories fell 161,550t, their lowest since June 22.


Fund managers’ bullish bets are at their highest level since May 11, with net long positions on COMEX copper at 54,030 contracts.


Power rationing in China has supported the tight copper market, although power cuts are easing in some provinces.


Shandong Fangyuan Nonferrous Metals Group, China’s largest private copper smelter restarted a 300,000tpa line after a long shutdown.


The company transforms around 3% of global copper at 700,000tpa




Day 3 – Borehole drilling


Our drillers are getting into their stride with the near completion of a whole hole in a day complete with PVC pipe down to 125m.


The PVC pipe will carry the glycol (antifreeze) which runs through the heat collector pipes.


In this case the glycol will run through just over 500m of bore piping before it reaches the heat pump.


This is calculated to be sufficient for 18kW of heat output which is the estimated heat required for my hovel.


Drilling is entirely into the formation knows as Oxford Clay, a Jurassic marine sedimentary mudstone which underlys much of southeast England.


The Middle and Upper Oxford Clays differ slightly, as they are separated by an argillaceous limestone in the South Midlands.


The Oxford Clay is well known for its rich fossil record of fish and invertebrates though you would be hard pressed to find anything in the clay we are bring up.


Coarse gravel and a heavy media are used to encase the PVC pipe and hold it in place in the hole.


Duck/Duct tape still seems to be critical part holding the drill casing alongside other multiple jobs


Question is – do we call it Duck tape or Duct tape – its not as clear cut as you might think


Duct tape was originally called “duck” tape and is definitely not recommended for fixing ducts.


Duct tape was first invented in World War II. It was originally called ‘duck’ tape because it was made out of a cotton duck fabric and it repelled water like a duck’s back.


The tape was invented to seal ammunition cases but was found to be useful for many other things




Dow Jones Industrials +0.21% at 35,677


Nikkei 225 -0.71% at 28,600


HK Hang Seng -0.04% at 26,118


Shanghai Composite +0.76% at 3,610




Economics


US – Private sector output growth accelerated in October led by the services sector with the respective subindex climbing to a three month high, according to the Markit PMI data.


Manufacturing PMI underperformed estimates and hit a seven month low.


At the same time, backlogs of work climbed to record high on the back of supply chain bottlenecks and labour shortages driving the steepest increase in prices yet recorded by the survey.


Business outlook dipped to the joint-lowest in eight months (on a par with July) with many companies highlighting concerns over supply issues, labour shortages and price pressures.


Markit Manufacturing PMI: 59.2 v 60.7 in September and 60.5 est.


Markit Services PMI: 58.2 v 54.9 in September and 55.2 est.


Markit Composite PMI: 57.3 v 55.0 in September.




China – New coronavirus inflections will increase in coming days and the areas affected by the epidemic may continue to expand, an official at the National Health Commission said.


He urged areas that have been affected by the pandemic to adopt “emergency mode”.


China speeds up $225bn local bond issuance in bid to boost faltering economy


China aims to complete its CNY3.65tn annual bond issuance quota by November end – an expected $112bn monthly average of special bonds.


This acceleration would mark a sharp increase from the first 9-months of this year.


Local governments have issued 61% of the quota already at 2.2tn yuan.


The bonds are predominantly focused on infrastructure projects.


The finance ministry hopes to ‘promote the positive role of special bonds in local economic and social development’.


The power crisis combined with sliding real estate and land sales have seen government revenues shrink as the economic recovery from the pandemic slows.


The move comes as China’s fiscal revenue fell 2.1% in September y-o-y.


Fiscal spending has risen 2.3% this year to 17.9tn yuan.




Volvo cuts back size of planned IPO to $2.3bn


Volvo has reduced its IPO by a fifth, as equity markets continue to weigh soaring energy costs and persistent supply chain delays.


Volvo, owned by Zhejiang Geely Holding Group, is now selling shares to raise about 20bn kronor ($2.3bn).


The company has set a price of 52 kronor a share – at the low end of its initial range.


Volvo seeks to sell only fully electric vehicles by 2030, and also is looking to build a battery plant in Europe.


IPO funds will be used to add car making capacity to almost double annual sales to 1.2m vehicles by 2025.




Germany – business confidence falls to 6-month low on supply chain issues


Germany’s Ifo Business confidence index fell to 97.7, with businesses particularly exposed to supply disruptions given the nation’s reliance on industry.


Recent company surveys suggest the weakness is also spilling into services as consumer turn wary of quickly rising prices, Bloomberg reports.


Ifo president Clemens Fuest commented: “capacity utilization in manufacturing is falling. Sand in the wheels of the German economy is hampering recovery”




Australia – Manufacturing PMI rose to 57.3 in October vs 56.8 in September


Services recovered to 52.0 vs 45.5


Composite PMI gained to 52.2 vs 46.0




Japan – Manufacturing PMI rose to 53.0 in October vs 51.5 in September


Services recovered to 50.7 vs 47.8


Composite PMI gained to 50.7 vs 47.9


CPI rose 0.4% in September vs -0.2% and rose 0.2% yoy vs -0.4% in August




Germany – Manufacturing PMI rose to 58.2 in October vs 58.4 in September




Services recovered to 52.4 vs 56.2


Composite PMI gained to 52.0 vs 55.5




France – Manufacturing PMI fell to 53.5 in October vs 55.0 in September


Services recovered to 56.6 vs 56.2


Composite PMI gained to 54.7 vs 55.3




EU – Manufacturing PMI pulled back to 58.5 in October vs 58.6 in September


Services slipped to 54.7 vs 56.4


Composite PMI gained to 54.3 vs 56.2




UK – Manufacturing PMI rose to 57.7 in October vs 57.1 in September


Services recovered to 58.0 vs 55.4


Composite PMI gained to 56.8 vs (54.9




US – Markit – Manufacturing PMI pulled back to 59.2 in October vs 60.7 in September


Services recovered to 58.2 vs 54.9


Composite PMI gained to 57.3 vs 55.0




UK – GfK consumer confidence slid to -17 in October vs -13 in September ),


Spt retail sales -0.2% in September vs -0.6% in August and -1.3% yoy in September vs -0.2% in August




EU – Flash consumer confidence -4.8 in October vs -4.0 in September




Baltic index tumbles as capsize demand softens


The Baltic dry bulk sea freight index fell to January lows, down 5.2% to 4,410.


The index is down on the week 9.1%.


The Capesize index recorded a weekly loss of 20.1%.


Average daily earnings for a 150,000t capsize cargo, used to transport iron ore and coal, fell $5,911 to $51,463.


The panamex index has hit 11-year highs, rising 6.4% this week.


Panamexes ship 60-70,000t coal and grain cargoes.


The supramax index ended a 13-day rally, falling 40 pts to 3,584.




Currencies


US$1.1653/eur vs 1.1636/eur last week. Yen 113.67/$ vs 114.05/$. SAr 14.837/$ vs 14.657/$. $1.379/gbp vs $1.379/gbp. 0.749/aud vs 0.749/aud. CNY 6.381/$ vs 6.393/$.




Commodity News




Precious metals:


Gold US$1,8/oz vs US$1,792/oz last week


Gold ETFs 98.3moz vs US$98.3moz last week


Platinum US$1,045/oz vs US$1,057/oz last week


Palladium US$2,039/oz vs US$2,034/oz last week


Silver US$24.42/oz vs US$24.29/oz last week


Rhodium US$14,000/oz vs US$14,000/oz last week




Base metals:


Copper US$ 9,850/t vs US$9,907/t last week


Aluminium US$ 2,920/t vs US$2,885/t last week


Nickel US$ 19,960/t vs US$19,980/t last week


Zinc US$ 3,448/t vs US$3,418/t last week


Lead US$ 2,426/t vs US$2,401/t last week


Tin US$ 37,050/t vs US$37,000/t last week




Energy:


Oil US$86.3/bbl vs US$84.0/bbl last week


Oil prices rose further in early trading today, extending pre-weekend gains to hit multi-year highs as global supply remained tight amid solid fuel demand in the US and elsewhere in the world as economies pick up from coronavirus pandemic-induced slumps


After more than a year of depressed fuel demand, gasoline and distillate consumption is back in line with five-year averages in the US, the world’s largest fuel consumer


Meanwhile, US energy firms last week cut oil and natural gas rigs for the first time in seven weeks even as oil prices rose, according to Baker Hughes


Investors also appear to have raised their net long US crude futures and options positions in the week to 19 October, the US Commodity Futures Trading Commission (CFTC) said on Friday, underlining strong market sentiment


Oil prices have also been bolstered by worries about coal and gas shortages in China, India and Europe, which spurred fuel-switching to diesel and fuel oil for power


However, we do note some caution in the market with WTI futures currently in steep backwardation, meaning later-dated contracts trade are at a lower price than the current contract


Normally later months trade at a higher price, reflecting the costs of storing oil




Natural Gas US$5.515/mmbtu vs US$5.183/mmbtu last week


Surging natural gas prices in Europe and Asia have boosted global demand for oil products, benefiting oil refiners globally


Yet, it is these record natural gas prices that have started to weigh on the refining industry, which has just rebounded from several consecutive weak quarters due to the pandemic-driven slump in fuel consumption.


Apart from slowing down steel, chemicals, and fertilizer production in Europe, the record natural gas prices are significantly raising operating expenditures for refiners because natural gas is being used for hydrogen production at the hydrocracker and hydrotreater units that remove sulfur from higher-sulfur crude


European natural gas prices fell on expectations that mild and windy weather will provide some relief to the region’s strained energy system


Warm temperatures at the start of the heating season are set to temper demand, pushing prices lower despite signals from Russia that the country will not transport more gas without quick approval of its controversial Nord Stream 2 pipeline


In its October Short-Term Energy Outlook, the US Energy Information Administration forecasts that natural gas spot prices at the US benchmark Henry Hub will average US$5.67/mmbtu between October 2021 and March 2022, the highest winter price since 2007-2008


The increase in Henry Hub prices in recent months and in the forecast reflect below-average storage levels heading into the winter heating season and strong demand for US LNG, even after relatively slow growth in US natural gas production


The EIA expects Henry Hub prices will decrease after the first quarter of 2022, as production growth outpaces growth in LNG exports, and will average US$4.01/mmbtu for the year


US exports of LNG are establishing a record high this year, a new record high anticipated for next year


The EIA expects LNG exports to average 9.7Bcf/d this year (3.2Bcf/d more than the 2020 record high of 6.5Bcf/d) and to exceed annual pipeline exports of natural gas for the first time


The year-on-year increase in LNG exports coincides with slight growth in US natural gas production


US dry natural gas production is expected to average 92.6Bcf/d this year, which is 1.1Bcf/d more than in 2020 but 0.3Bcf/d less than in 2019




Uranium UXC US$49.0/lb vs $48.9/lb last week




Bulk:


Iron ore 62% Fe spot (cfr Tianjin) US$119.4/t vs US$116.3/t


Chinese steel rebar 25mm US$863.8/t vs US$896.1/t – China steel group vows to control prices and ensure supply in volatile environment


The China Iron and Steel Association called for the industry to act to control prices in a ‘complex, volatile, unstable and uncertain market situation.’


The group’s chairman stated that ‘market forces, the rule of law and internationalisation are still the basic principles we must abide by’.


The group do not see government specifications as ‘a long-term solution.’


Crude steel output in China fell to a 3-year low in September on the back of power restrictions.




Thermal coal (1st year forward cif ARA) US$116.0/t vs US$118.5/t


Thermal coal swap Australia FOB US$201.0/t vs US$190.0/t


Coking coal swap Australia FOB US$355.0/t vs US$362.0/t




Other:


Cobalt LME 3m US$56,545/t vs US$56,545/t


NdPr Rare Earth Oxide (China) US$102,018/t vs US$99,335/t


Lithium carbonate 99% (China) US$27,503/t vs US$26,985/t – Albemarle to restart lithium mine in Australia on surging prices


Albemarle and its partner Mineral Resource Ltd has reported plans to restart the mothballed Wodgina mine in Australia due to surging prices for the metal.


Spodumene production is expected to resume in Q3 2022, with the JV initial restarting one of three 250,000tpa processing trains, with others to be added depending on market demand.


Albemarle paid $1.3bn for a 60% stake in Wodgina in late 2019 and shortly after the mine was placed on care & maintenance due to a supply glut leading to a slump in prices.


Lithium prices have surged this year, with lithium carbonate prices in China surging to record highs while 6% spodumene prices in Australia have risen 271% year-to date to $1,445/t.


Australia is currently the world’s largest supplier of lithium, although Chile has the most reserves worldwide.




China Spodumene Li2O 5%min CIF US$1,300/t vs US$1,270/t


Ferro-Manganese European Mn78% min US$2,208/t vs US$2,159/t


China Tungsten APT 88.5% FOB US$314/t vs US$314/t


China Graphite Flake -194 FOB US$585/t vs US$575/t


Europe Vanadium Pentoxide 98% 8.0/lb vs US$7.9/lb


Europe Ferro-Vanadium 80% 31.95/kg vs US$31.25/kg


China Ilmenite Concentrate TiO2 US$386/t vs US$386/t


Spot CO2 Emissions EUA Price US$67.6/t vs US$67.5/t




Battery News


Panasonic unveil new battery prototype for Tesla


Panasonic have revealed a prototype battery that has five times the storage capacity of current ones.


During the reveal of the battery, Panasonic also announced they had no plans to make Lithium Iron Phosphate (LFP) EV batteries.


This is despite Tesla announcing last week that they will be transitioning to LFP batteries in all standard-range cars.


Panasonic this year established a test line in Japan to make the 4680 format (46mm wide x 80mm tall) battery cell that Tesla says will store more energy, halve battery costs and drive a 100-fold increase in battery production by 2030.




BYD rumoured to have agreed battery supply deal with Tesla


A new rumour about a battery supply agreement between BYD and Tesla has emerged in China, just a few months after the first one, in August, was later denied by BYD.


According to cls.cn, BYD has secured a contract for 10GWh per year of LFP batteries.


If the rumoured 10GWh per year is true, it should be enough for over 160,000 EVs with 60kWh battery packs.




Evergrande to focus on new EV venture instead of real estate operations


An announcement by chairman, Hui Ka Yan, reported by state media on Friday, that it would make its new electric vehicle venture its primary business, instead of property, within 10 years.


The company’s first electric car, the “Hengchi”, will be delivered from its Tianjin factory at the start of next year, according to a recent statement on Evergrande’s website.




Company News


Botswana Diamonds (LON:BOD) 1.1p, Mkt Cap GBP9.3m – GBP550,000 fund-raising


Botswana Diamonds has announced that it has raised GBP550,000 by placing an additional 55m shares at a price of 1p/share.


The new shares represent approximately 6.5% of the enlarged capital of the company and the proceeds will be used to continue exploration in both South Africa and Botswana.


Botswana Diamonds announced last month that drilling on its Thorny River property in South Africa had indicated that two prospective kimberlite zones located approximately 100m apart could be linked as a single structure and that it had exercised its pre-emption rights to gain control of the project.




Castillo Copper (LON:CCZ) 2.2p, Mkt Cap GBP27.9m – IP Survey identifies potential drill targets at Luanshya


Castillo Copper reports that its induced polarisation (IP) geophysical survey at Luanshya in Zambia has identified up to 14 potential drilling targets within a 6km long zone “of copper surface anomalism” identified in previous geochemical soil sampling.


Geophysical interpretation of the IP results has shown “several zones of high chargeability with associated copper anomalism, which are potential bodies of disseminated copper sulphide mineralisation” as well as noting that “the high-chargeability zones are coincident with a previously identified NW-SE trendline2,3 that is ~5-10km wide and hosts historic / current operating mines and deposits”.


The company explains that the coincident geochemical and geophysical signatures at Luanshya suggests that “underlying mineralisation could be structurally controlled, with the potential for mafic sources of copper mineralisation in the region”.


Geophysical IP work in Zambia has now moved on to examine soil anomalies previously identified at the Mkushi target.


Conclusion: Early stage geochemical and geophysical exploration at Luanshya has identified potential drilling targets.




KEFI Gold and Copper* (LON:KEFI) 1.2p, Mkt Cap GBP26m – Security incident resolved


Security issues first reported in the previous month at the Tulu Kapi gold project in the state of Oromia, Ethiopia, have now been resolved.


The Company advises that the security incident involved the abduction of four TKGM employees and contractors during inspections of traffic routes of the Tulu Kapi project.


Details of the incident could only be made be reported following their safe release on 23 October with all four returning to their families unharmed.


Following the release TKGM immediately informed the security services, local authorities including the President of Oromia and the Minister of Mines s well as other partners to the project.


TKGM arranged for the independent community liaison and field-safety advisers to attend the site next month to update on project development plans with all government agencies involved.


The Company reiterated its readiness to proceed with the Tulu Kapi project as soon as possible.


Having disclosed all details of the incidence to government agencies the Company looks forward to working together with the Ministry of Mines to ensure authorities are satisfied to the development timeline.


The team reiterated plans to launch development works this year and reiterated planned project commissioning in 2023.


Conclusion: The announcement highlights positive outcome to the security incident at the Tulu Kapi gold project involving the abduction and the following release of four employees/contractors who now returned home safe. The Company updated all government agencies on the nature and the result of the incident and remains committed to closing the funding and launching development works this year albeit with updated risk management procedures.


*SP Angel act as Nomad and Broker to KEFI Gold and Copper




Kore Potash (LON:KP2) 1.2p, Mkt Cap GBP39m – Quarterly operations update


Kore has released an operational quarterly update for the period ending 30 September 2021.


The optimisation study for the Kola Project remains on track for completion in Q1 2022, with management expecting to receive an interim report on the Study within weeks.


The company remains on track to present an Engineering, Procurement and Construction proposal for the construction of Kola to the Company in Q2 of 2022.


Kore maintains that subject to completion of a successful Study, they remain on track to provide the royalty and debt financing proposal for the full construction cost of Kola to the Company in Q2 of 2022.


Kore Potash management also continued to brief potential offtake partners with the capability to procure all of the Kola production and who have expressed interest in partnering with the Company.


Ms Amanda Farris was appointed as interim Chief Financial Officer on 15 July 2021. Ms Farris is an Australian Chartered Accountant with over 20 years’ experience in the mining industry.




Petropavlovsk (LON:POG) 24p, Mkt Cap GBP960m – Q3 update highlights recovering production at own mines with increasing POX Hub utilisation


Q3 production came in at 111.6koz (Q3/20: 114.1koz) including 101.6koz from own operated mines (Q3/20: 86.5koz) and 10.1koz from 3rd concentrate processing (Q3/20: 27.6koz).


Lower 3rd part concentrate output is attributed to planned maintenance at the Pokrovka POX facility in September and planned higher share of own concentrate processing sourced from the new Pioneer flotation plant.


The Company is ramping up processing of higher margin own concentrate POX with the POX Hub having treated 88% of own material in Q3/21 compared to an average of 69% in the first two quarters.


Pioneer flotation plant (3.6mtpa) commissioned in May/21 ramped up to full capacity in Q3/21 (830kt or ~3.3mt annualised processed in Q3/21).


Malomir flotation plant expansion (extra 1.8mtp to existing 3.6mtpa) continued on schedule through the quarter with guided completion in Q3/22.


POX treated ~78kt of refractory concentrate in Q3/21 comprised of 43kt at 29g/t from Malomir, 26kt at 27g/t from Pioneer and 10kt at 38g/t from 3rd parties.


POX capacity utilisation is also improving with Q3/21 averaging 78% of planned 400ktpa facility versus 61% in H1/21.


POX plant is expected to operate at full capacity in Q4/21.


Gold sales amounted to 120.1koz at an average realised price of $1,780/oz (Q3/20: 121.1koz at $1,919/oz).


YTD production totalled 306.6koz (9M20: 436.6koz) reflecting weaker first half of the year including 259.8koz from own mines and 46.8koz from 3rd party concentrate (9M20: 300.1koz and 134.5koz, respectively).


2021 guidance reiterated at 430-470koz including 370-390koz from own mines and 60-80koz from 3rd party refractory concentrate processing.


TCC are guided to average $870-970/oz (2020: $1,034/oz).




Sibanye-Stillwater (JSE:SSW) ZAR5,347, Mkt cap ZAR150bn – In talks to buy Brazilian projects for $1bn


Dow jones reports that Sibanye is in talks to buy two Brazilian miners for about $1bn including debt.


The miner is reportedly looking to acquire Atlantic Nickel, which operates the Santa Rita mine, and Mineracao Vale Verde, which is developing a coper and gold mine.


Santa Rita is one of the world’s biggest open-pit nickel sulphide mines, and has an estimated annual processing capacity of 6.5mt of ore per annum.


Construction at Vale Verde is now complete and the project has secured the major permits needed to produce copper, and will have an estimated production of 20,000tpa copper over an initial 14 years.


According to DJ, the deals are expected to be announced in the coming days.




Strategic Minerals* (LON:SML) 0.43p, Mkt Cap GBP8.1m – GBP400,000 fund-raising


Strategic Minerals has announced that it has raised GBP400,000 by placing an additional 106.7m shares at a price of 0.375p/share.


The new shares represent approximately 5% of the enlarged capital of Strategic Minerals and the company explains that the proceeds “will be used primarily to complete work required to satisfy conditions placed on the current PEPR … [Programme for Environmental Protection and Rehabilitation] … associated with the Paltridge North deposit at the LCCM … [Leigh Creek copper mine project in South Australia] … In addition, the funds raised will be used to assist in the working capital requirements associated with funding Cornwall Resources Limited’s (“CRL”) portion of the DDC project, where the funding rebate process is taking longer than expected”.


Managing Director, John Peters and Executive Director, Peter Wale are each subscribing for 4m of the new shares taking their respective interests in Strategic Minerals to 3.43% and 4.01%.


Commenting that the fund-raising ensure ” the capacity of the Company to prudently fund critical work to complete PEPR requirements and to continue progress in Cornwall”, Mr. Peters confirmed that “it will have submitted the necessary additional PEPR information prior to the end of the year and expects to be in production in the first quarter of 2022, resulting in revenue flows around mid-2022, subject to funding”.


He also confirmed that Strategic Minerals “has been progressing asset level funding discussions which are now at an advanced stage and the Directors consider these negotiations will be completed before the PEPR becomes unconditional”. The company has previously explained that it is in discussions with a “respected global bank” for the provision of a loan facility of at least US$10m to progress Leigh Creek to production.


Mr. Peters also explained that work at the Redmoor tin and tungsten project of Cornwall Resources continues to make progress and “shows excellent potential for this asset to achieve meaningful value recognition” in 2022.


Conclusion: Strategic Minerals has raised GBP400,000 to ensure that work can continue on finalising the required PEPR for the Paltridge North deposit at Leigh Creek where the company expects to be in production during Q1 2022.


*SP Angel acts as Nomad and Broker to Strategic Minerals




Recent Interviews:


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


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


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


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


*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts.


We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.




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


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


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




Analysts


John Meyer – [email protected] – 0203 470 0490


Simon Beardsmore – [email protected] – 0203 470 0484


Sergey Raevskiy [email protected] – 0203 470 0474


Joe Rowbottom – [email protected] – 0203 470 0486




Sales


Richard Parlons [email protected] – 0203 470 0472


Abigail Wayne – [email protected] – 0203 470 0534


Rob Rees – [email protected] – 0203 470 0535


Grant Barker – [email protected] – 0203 470 0471






SP Angel


Prince Frederick House


35-39 Maddox Street London


W1S 2PP




*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)


+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.




Sources of commodity prices


Gold, Platinum, Palladium, Silver


BGNL (Bloomberg Generic Composite rate, London)


Gold ETFs, Steel


Bloomberg


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


LME


Oil Brent


ICE


Natural Gas, Uranium, Iron Ore


NYMEX


Thermal Coal


Bloomberg OTC Composite


Coking Coal


SSY


RRE


Steelhome


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


Asian Metal

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