Today’s Market View – Gem Diamonds, Greatland Gold, Power Metal Resources and more…

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SP Angel . Morning View . Thursday 28 10 21


China allows more magnesium refining but continues to limit power to smelters




Gem Diamonds (LON:GEMD) – Operational disruption prompts adjustments to production and cost guidance at Letseng


Greatland Gold (LON:GGP) – Further drilling results from Havieron show potential to expand the South East Crescent zone


Power Metal Resources* (LON:POW) – Field exploration continues at South Ghanzi


Kavango Resources (LON:KAV)


Rainbow Rare Earths* (LON:RBW) – BUY – Valuation 43p – Results


Eurasia Mining* (LON:EUA) – Asset sale update


Vast Resources (LON:VAST) – GBP1.35m placing


Vulcan Energy (ASX:VUL) – Shares suspended as Vulcan responds to short selling report




Reality of Chinese developers’ crisis sinks in, S&P predicts 10% property sale slump in 2022 in China and an additional 5-10% 2023


Evergrande is faces a missed coupon payment due on Friday with a further three more payments due on 11 November.


The property developer has resumed construction on 40 projects according to a company report.


Evergrande has $37bn in total borrowings set to mature by June end 2022.


Around 9% of all China’s foreign debt is owed by property developers with >50% of Chinese developers bonds holding junk-bond status (S&P).


Fantasia Holdings, Modern Land and Sinic have all defaulted-on debt over the past month.


Analysts expect the tighter credit environment to hit property developers with poorer quality land banks, higher leverage, and ‘weaker sales execution capability’.


China’s NDRC vowed to ease access to foreign exchange capital following a meeting with key developers at which Evergrande was absent.


Branches of the State Administration of Foreign Exchanges have agreed to accelerate approvals of cross-border currency remittances.


Commercial bills, issued to contractors as ‘I owe yous’, increased 30% to c. US$20bn last year.


A scenario where developers fail to pay commercial bills raises the potential for contractors to suspend construction, hitting developers’ cash flows and damaging their credit metrics.


20% of regional and local government revenue comes from land sales to developers (Moody’s).


A leaked letter in 2018 from China’s central bank stated over-leveraged developers may pose a systemic risk to China. A 2020 document showed Evergrande’s liabilities involved 128 banks and 121 non-banking institutions at the time.




Gold prices continue to rise despite 7% fall in demand in Q3 on ETF outflows despite strong demand from central banks and jewellery


Q3 2021 vs Q3 2020 saw a 7% decline in gold demand at 831t. (World Gold Council)


2020 Q3 demand was 894.4t with outflows from gold-backed ETFs pointed to as the primary factor.


Gold ETF sales of 27t sees gold demand slip into a y-o-y decline despite increasing jewellery demand.


The WGC saw ETF outflows dominated by US sales, with ‘risk on attitude’ and a ‘stronger USD’ pointed to as primary factors.


Bar and coins bought by retail investors saw 18% sales growth in Q3, a 5th consecutive quarter of gains. 262t were purchased in Q3 2021 vs 221 in same period 2020.


Gold jewellery demand grew 33% y-o-y to 443t vs 333t same period 2020.


Gold for tech grew 9% to 83.8t vs 77.2t Q3 2020.


Central banks purchased 69t for reserves vs 10t in same period 2020.


Total gold supply fell 3% y-o-y to 1,239t vs 1,279.4t.


Mine production hit its highest quarter on record, with the decline in supply caused by a fall in recycling as prices tumbled.




Dow Jones Industrials -0.74% at 35,491


Nikkei 225 -0.96% at 28,820


HK Hang Seng -0.35% at 25,538


Shanghai Composite -1.23% at 3,518




Economics


ECB is holding its monetary policy meeting today with regional inflation numbers pointing to accelerating inflationary pressures.


Expectations are for the President Christine Lagarde to highlight the transitory nature of inflation arguing it is too early to tighten monetary policy.


Eurozone inflation hit a 13-year high in September, mainly pushed up by higher energy prices, rising car prices and higher costs of accommodation.


Despite recent downward revisions to growth on the back of supply chain bottlenecks and high energy prices, markets are currently pricing in a first high at the end of 2022.




Germany – Employment came in stronger than forecast in October as firms added additional workers to meet strong demand.


Inflation report is due later today with separate regional data released already this morning pointing to more gains in the headline measure.


Estimates are for consumer prices inflation to increase to 4.5%, up from 4.1% in September.


Unemployment Change (‘000): -39 v -31 (revised from -30) in September and -20 est.




Spain – Inflation overshoots expectations strongly in October hitting the highest in three decades.


CPI (EU Harmonised, %yoy): 5.5 v 4.0 in September and 4.6 est.




Peruvian government demands Congress hikes mining taxes


The current Peruvian administration has requested Congress enable the raising of taxes on the mining sector to boost funding of social programs.


The government wants a revision of royalties, income tax and a ‘special tax’ enacted when metal prices soar.


The campaign to increase mining revenue is a key part of Socialist President Castillo’s manifesto.


MMG, Aluminium Corp and Anglo American would all be exempt from much of the new taxes owing to previous tax stability agreements signed.


$50bn worth of future mining investments are currently in the country’s pipeline.




China expects limited magnesium production through to March 2022, automakers start to feel impact


China controls 87% of global magnesium production, which has been hit by rolling electricity blackouts across the country.


European inventories are expected to run out by November 2021 (Reuters).


Yulin’s Fugu County, containing 50 smelters contributing 60% of total output, has halved production from mid-September. (SCMP)


15 of those 50 smelters are expected to halt production until March 2022.


Analysts expect auto and aluminium sectors to be hit the hardest, compounding limitations caused by the semiconductor shortage.


New European car registrations fell 23% and China’s automotive output crashed 17.9% in September. Toyota has cut total output by 40%. (S&P Global).


Magnesium emits 5x the carbon pollutants vs steelmaking and is thus expected to be further limited by Beijing as it looks to curb emissions.


Manufacturers and traders have quoted prices up to $8,240 this month, up from $3,259 earlier this year.


The US is benefited by US Magnesium which offers a domestic supply however shortages are still present.


Analysts expect consumers to utilise magnesium alternatives.


Aluminium prices fall 5.1% on Wednesday amid China coal price cap


Aluminium prices fell to the lowest level in two months on expectations that surging costs will ease following China’s plans to cap coal prices to resolve an energy crunch.


News from China is that the National Development and Reform Commission is considering capping the price that miners sell thermal coal at 528 yuan/t ($83).


The Commission responded to the news saying that it is currently studying what is a reasonable range for coal prices, without giving specific details.


The most-active thermal coal contract on the Zhengzhou Commodity Exchange fell for a seventh straight day on Thursday, dropping as much as 9.7% to 1,034 yuan/t.


Aluminium fell 5.1% to settle at $2,686/t on Thursday on the LME – one of the biggest daily declines in the past -10 years.


Aluminium prices fell as much as 2.6% this morning to $2,617/t on the LME – the lowest since 26th of August, while in Shanghai sinking to 4.6% to a three-month low.




Currencies


US$1.602/eur vs 1.1612/eur yesterday. Yen 113.71/$ vs 113.99/$. SAr 15.099/$ vs 14.860/$. $1.375/gbp vs $1.377/gbp. 0.752/aud vs 0.753/aud. CNY 6.397/$ vs 6.3383/$.




Commodity News


Precious metals:


Gold US$1,803/oz vs US$1,788/oz yesterday


Gold ETFs 98.3moz vs US$98.2moz yesterday


Platinum US$1,022/oz vs US$1,026/oz yesterday


Palladium US$1,989/oz vs US$2,014/oz yesterday


Silver US$24.13/oz vs US$24.05/oz yesterday


Rhodium US$14,100/oz vs US$14,100/oz yesterday




Base metals:


Copper US$ 9,668/t vs US$9,674/t yesterday


Aluminium US$ 2,676/t vs US$2,757/t yesterday


Nickel US$ 19,720/t vs US$19,960/t yesterday


Zinc US$ 3,367/t vs US$3,373/t yesterday


Lead US$ 2,403/t vs US$2,407/t yesterday


Tin US$ 35,535/t vs US$37,000/t yesterday




Energy:


Oil US$83.7/bbl vs US$85.7/bbl yesterday


Oil prices have retreated in early trading today after the Energy Information Administration reported an inventory build of 4.3MMbbls for the week to 22 October


This compared with a modest draw of 400kbbls for the previous week and analyst expectations for a build of 1.65MMbbls


Gasoline stocks were down by 2MMbbls, with production slightly up on the previous week


This compared with an inventory draw of 5.4MMbbls for the previous week, with production averaging 10.1MMbopd


In middle distillates, the agency estimated an inventory decline of 400kbbls for the week to 22 October


Production of middle distillates averaged 4.6MMbopd


This compared with a middle distillate inventory decline of 3.9MMbbls a week earlier, and production of 4.4MMbopd


Refinery inputs averaged 15MMbopd last week, an increase of 58,000bopd on a week earlier


Imports of crude averaged 6.3MMbopd, compared with 5.8MMbopd a week earlier


Oil prices hit a seven-year high on Tuesday, driven up by continued robust demand in the US and the tight global supply situation, which OPEC+ has signalled it will not alleviate for now with additional supply


The energy crunch is still nowhere close to subsiding, so we expect prevailing strength in oil prices in November and December as supply lags demand and as OPEC+ stays quiet




Natural Gas US$6.096/mmbtu vs US5.850/mmbtu yesterday


Natural gas futures continue to rise as forecasts for cold November weather in the US East Coast heightened concerns that supplies will struggle to meet demand this winter


Prices are bouncing back from recent declines, though they’re still shy of the seven-year high reached earlier this month.


While mild October weather allowed producers to inject more gas into storage than usual, forecasts for a cooler early November in the Midwest and East are a reminder that supplies of the heating and power-generation fuel are still below normal


Meanwhile, the US is expected to export every molecule it can to help ease shortages of gas in Europe and Asia


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$48.9/lb vs $48.5/lb yesterday




Bulk:


Iron ore 62% Fe spot (cfr Tianjin) US$117.4/t vs US$120.8/t


Chinese steel rebar 25mm US$832.7/t vs US$856.6/t


Thermal coal (1st year forward cif ARA) US$113.0/t vs US$124.0/t – China looks to Russia for coal imports as Australian snub continues


China thermal coal imports from Russia rose 28% month-on-month in September, importing 3.7mt.


This marks a 230% rise from Sept. 2020.


3mt of thermal coal came from Indonesia Sept, 19% from August, soaring 89% from same period 2020.


Customs data reported 0 imports of Australian thermal coal.


Chinese coal imports soared 76% to 32.9mt in September vs last year.


Australian coal accounted 38% of China’s imports in 2019.




Thermal coal swap Australia FOB US$182.5/t vs US$197.0/t


Coking coal swap Australia FOB US$3644.0/t vs US$355.0/t




Other:


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


NdPr Rare Earth Oxide (China) US$114,932/t vs US$104,963/t


Lithium carbonate 99% (China) US$27,443/t vs US$27,494/t


China Spodumene Li2O 5%min CIF US$1,390/t vs US$1,360/t


Ferro-Manganese European Mn78% min US$2,247/t vs US$2,247/t


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


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


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


Europe Ferro-Vanadium 80% 32.75/kg vs US$32.75/kg


China Ilmenite Concentrate TiO2 US$387/t vs US$388/t


Spot CO2 Emissions EUA Price US$68.8/t vs US$69.4/t




Renewable News


Minimum wind turbine capacity for Hollandse Kust West Wind Farm Zone set at 14MW


The minimum output of wind turbines to be used at the Hollandse Kust West Wind Farm Zone has been set to 14MW each, according to sources at the Dutch Ministry of Economic Affairs.


The tender for building offshore wind farms at the zone is expected to be opened this December and the Dutch government anticipates to receive final bids by April 2022.


Updates to the tender’s site descriptions now limit the number of units to be installed on each site to 60 and set a minimum capacity per turbine to 14MW, instead of the previously planned 10MW.


Currently GE Renewable are the only manufacturer with a 14MW turbine in operation – a prototype operating at the port in Rotterdam.


Siemens Gamesa expect to have a 14MW turbine prototype operational before the end of the year.


Denmark’s Vestas V236-15.0 MW model, which is due to be built next year and enter serial production in 2024, and the 16-MW MySE 16.0-242 from China’s MingYang Smart Energy also due to begin commercial production in 2024, are the next generation of ‘mega-turbines’.




Ioneer Ltd. and Sibanye plan joint lithium production at US plant


Ioneer and Sibanye Stillwater will produce lithium together at a US lithium plant.


Sibanye invested $70mn in the venture and agreed to buy half of Ioneer’s lithium mine last month.




UK announces GBP1.7bn investment in nuclear power station


The UK gov. has allocated GBP1.7bn of the new budget to progress plans for the Sizewell C nuclear station.


This investment will prepare the project for a final investment decision within the next three years. (FT)


Ministers have announced intentions to enable households to cover costs for new nuclear plants.


Boris has made a clear commitment to UK domestic nuclear production.


Hinkley Point, built by EDF, is the UK’s only plant currently in construction.


The FT reports Sizewell C stated that UK companies will build ‘70% of the construction value’ with the ‘majority owned by British investors.’




SK Innovation to develop high-performance solid-state batteries


SK Innovation has joined with Solid Power to develop high-performance and commercially viable solid-state batteries.


The South Korean company will invest $30 million to acquire a stake in the solid-state battery developer.


SK Innovation and Solid Power will use nickel, cobalt, manganese (NCM) cathode materials and high-content silicon anode materials to produce all-solid-state batteries with high energy density.


A spokesperson for SK Innovation stated that they are targeting an energy density of 930W per litre.


Solid Power have previously been backed by Ford and BMW.




Company News


Gem Diamonds (LON:GEMD) 55p, Mkt Cap GBP88m – Operational disruption prompts adjustments to production and cost guidance at Letseng


Production of 23,435 carats during the 3 months to 30th September brings Gem Diamonds’ year-to-date output to 82,266 carats – 14% above the 72,403 carats produced during the 9 months to 30th September 2020.


During the quarter, the Letseng mine treated approximately 1.5mt of ore at an average grade of 1.56 carats per hundred tonnes (cpht) and sold 29,782 carats for an average price of US$1,589/carat generating revenue of US$47.3m.


Gem Diamonds refers to operational disruption in its process plant and extreme weather conditions causing power supply interruptions during the quarter which led to “unplanned downtime”.


The company says that “these issues have now been addressed” but as a result, the company is revising its 2021 production guidance to the range 110-114,000 carats from the previous range of 123-127,000carats and adjusting its sales guidance to 103-107,000carats (previously 119-123,000carats).


Operating cost guidance is increased to the range US$280-290/t from the previous range of US$275-285/t and expectations for capital spending have been adjusted to US$6-8m from the previously indicated US$14-15m.


The company says that the “highest price per carat achieved in the Period was US$88,889 per carat for a 4.41 carat light blue diamond” with the highest price achieved from the sale of a white Type IIa diamond was “US$47, 574 per carat for a 65 carat diamond”.


Six individual diamonds sold for in excess of US$1m each.


Gem Diamonds also says that since 30th September it has recovered “two large high-quality Type IIa white diamonds (a 245 carat and 102 carat)” and that these will be sold during Q4.


The company says that prices achieved in the September diamond tender “reflected a continued recovery of the diamond market which was supported by strong consumer demand” and that the “first trial viewing held in Dubai in September was well attended and the increased competition and confidence in the product contributed to the stronger prices achieved”.


CEO, Clifford Elphick, explained that “During the quarter, diamonds recovered were of a relatively lower quality for Letseng’s normal Run of Mine production. Notwithstanding that, prices achieved for these goods were strong reflecting the continued good demand and market prices paid for Letseng category diamonds”.




Greatland Gold (LON:GGP) 17.5p, Mkt Cap GBP693m – Further drilling results from Havieron show potential to expand the South East Crescent zone


Greatland Gold draws attention to the Quarterly Exploration Report released by its partner, Newcrest Mining, to the ASX disclosing results from recent drilling at the Havieron gold/copper project in the Paterson region of W Australia.


The report releases the results of an additional 22 holes in the infill and growth drilling programme and Greatland Gold says that “Significant mineralisation was reported in 18 of the new holes”. Assay results from a further 24 completed holes are still awaited.


A total of 210,629m of drilling in 254 holes has now been completed at Havieron.


The limits of the South East Crescent zone are being expanded by the recent drilling “where increasing grade and thickness of mineralisation has been observed from recent drilling” offering the “potential for resource additions outside of the existing Inferred Mineral Resource limits”.


Results of the latest drilling “support the continuity of the high grade Crescent Zone, and in some places appear to upgrade the zone” and the company highlights a 120.4m long intersection at an average grade of 10g/t gold and 0.66% copper from a depth of 764.6m in hole HAD-117W6 which it describes as “the best gram metre intercept drilled to date at Havieron”.


Among the other results from the South East Crescent zone highlighted in today’s announcement are intersections of:


78.1m averaging 2.1g/t gold and 0.2% copper from a depth of 762m in hole HAD-117W4 which included higher grade sections of 13.8m averaging 3.7g/t gold and 0.18% copper from 793.9m depth and 10.8m averaging 3.6g/t gold and 1.0% copper from 829.4m; and


44.7m averaging 7.1g/t gold and 0.17% copper from 1,412m in hole HAD-086W3 including 20.2m averaging 15g/t gold and 0.29% copper from 1,421m; as well as


Multiple intersections in hole HAD-113W3 of 29.1m averaging 3.2g/t gold and 0.09% copper from 1,261.9m depth and 44.4m averaging 5.7g/t gold and 0.11% copper from 1,306.6m and 52.0m averging 3.2g/t gold and 0.42% copper from 1,362m depth


Drilling aimed at increasing the resource envelope of the North West Crescent and Northern Breccia zone intersected:


22.5m of Northern Breccia mineralisation averaging 2.6g/t gold and 0.15% copper from a depth of 1,281m in hole HAD-069W4; and


52.3m, also of Northern Breccia mineralisation, at an average grade of 2.1g/t gold and 0.29% copper from 1,150.7m in hole HAD-081W3; and


72.3m of Northern Breccia mineralisation at an average grade of 1.4g/t gold and 0.07% copper from 1,279.5m in hole HAD-147W2


Eastern Breccia zone drill intercepts highlighted in today’s announcement included:


An intersection of 212.3m at an average grade of 1.20g/t gold and 0.06% copper in hole HAD-084W2 and including


49.8m at an average grade of 1.50g/t gold and 0.02% copper from 1,473m; and


59.6m at an average grade of 0.89g/t gold and 0.12% copper from 1,553.2m; and


43.3m at an average grade of 2.70g/t gold and 0.06% copper from 1,642m depth


CEO, Shaun Day, said that the continuing “success from each set of drill results confirm Havieron as a world class gold-copper project and its potential to expand further in scale. The Pre-feasibility study highlighted the low capex, low risk approach to developing Havieron, which puts this asset in a class of its own as we progress it forward and add further upside to its future economic outcomes”.


Today’s announcement also confirms that the feasibility study work is continuing and remains on track for delivery in the December quarter, 2022 and comments that “Significant upside opportunities are being evaluated to increase the scale and life of Havieron, as well as presenting the opportunity to adopt alternative, lower cost, mining methods”.


Conclusion: With over 200,000m of drilling now completed at Havieron the resource envelope continues to expand. Feasibility study work continues on course for delivery during the December quarter of 2022. Much of the potential lies at depth with some of the intersections reported today significantly deeper than 1km.




Power Metal Resources* (LON:POW) 1.7p, Mkt cap GBP21.3m – Field exploration continues at South Ghanzi


Kavango Resources (LON:KAV) 5.15p Mkt cap GBP21m


(South Ghanzi is held under a 50/50 Joint Venture) with Kavango Resources, with Kavango being the operator of the project)


The JV reports that it has commenced a ground magnetic survey of the southern limb of the Acacia target in the South Ghanzi Project, providing more insight into geological conditions and allowing further interpretation of the electromagnetic data it acquired from the airborne surveys flown in the spring.


The Ground Survey will be conducted over a 14km by 4.5km block and will cover 676.5 line kilometers, including 634.5km of traverse lines and 42km of tie lines.


Line spacing will be 100m and readings will be taken continuously.


Kavango has also commenced geochemical sampling at Acacia, outlining targets for possible drilling.


The Company expects to commence “fence” lines of shallow drill holes which will act as a geological orientation exercise and allow the Company to assess structural trends and any associated geochemical and/or EM anomalies.


Kavango has also started work on re-logging regional historic drill hole data.


In addition to the exploration work undertaken, The JV reports that the Environmental Management Plan has been approved covering prospecting licenses for a period of two years.


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




Rainbow Rare Earths* (LON:RBW) 15.48p, Mkt Cap GBP79m – Results


BUY – Valuation 43p


Click link for full research note: CLICK FOR PDF


(Rainbow hold 70% of Phalaborwa with 30% to be held by Bosveld Phosphates)


(Neodymium Nd, Praesidium Pr, Terbium Tb, Dysprosium Dy. Rainbow holds 100% of the Gakara mine and associated licenses in Burundi)


Rainbow report results for the year to end June 2021.


Sales rose to $639,000 from $422,000 as the Gakara trial mine in Burundi raised production through increasing mechanisation of the trial mining project.


The mine broke even on an operational basis with costs running at $639,000 vs $905,000 a year earlier.


This demonstrates the route to economic viability.


Rare earth element (REE) prices for Gakara rose 64% through FY 2021 helping the economics of the project alongside the operational improvements.


Administration expenses rose to $2.7m from $2.4m a year earlier as the team focussed on the process flow sheet for the Phalaborwa project in South Africa.


Rainbow report a total loss for the year of $2.7m vs $2.2m due to the development work which is ongoing on the Phalaborwa and Gakara projects.


Phalaborwa presents a significant opportunity to extract NdPr, Tb and Dy rare earth oxides directly using K-Tech processing technology.


Gakara should also report operating profits at current rare earth concentrate prices on further mechanisation and expansion of the mine.


The Gakara mine and expansion project remain suspended pending approval from the Burundi government and Minister of Mines to allow the project to restart and to export rare earth concentrates out of Burundi.


*SP Angel act as broker and financial advisor to Rainbow Rare Earths




Eurasia Mining* (LON:EUA) 21p, Mkt Cap GBP606m – Asset sale update


The Company has been notified that the interested party successfully completed its due diligence.


Additionally, the Board is reporting that the Company received further interest from other parties regarding a potential acquisition since the receipt of the Proposal in May.


The Company continues to work closely with its advisors (UBS, DLA Piper and others) on the best option to monetise its assets.


Conclusion: The Company remains committed to maximise value for its shareholders keeping a number of strategic options open with a series of parties reported to have expressed additional interest in a potential acquisition of its assets.


*SP Angel act as Nomad and Broker to Eurasia Mining




Vast Resources (LON:VAST) 2.9p, Mkt Cap GBP6.9m – GBP1.35m placing


The Company announced a GBP1.35m raise at 2.5p this morning.


Funds will be used to cover the shortfall in working capital as the Company is aiming to establish production at sustainable run rates.


The Company is planning to make its next sale of concentrate to its offtake partner early next month.


Separately, both Andrew Prelea (CEO) and Roy Tucker (Executive Director) agreed to extend the lock up period for its 15m and 2.3m shares by a year until 30 November 2022.


Shares were acquired following a sale of a minority stake in Baita Plai in late 2020 allowing the Company to consolidate a 100% interest in the project.


28.5m shares were issued at the time as a consideration to AP Mining owned by Andrew Prelea (53%), Roy Tucker (8%), Michael Kellow (19%), Samuel Tucker (8%, son of Roy Tucker) and Alexander Prelea (12%, son of Andrew Prelea).




Vulcan Energy (ASX:VUL) – Mkt cap A$1.86bn – Shares suspended as Vulcan responds to short selling report


Vulcan Energy shares have been suspended on the ASX as the company publishes its initial response to a short selling report by J Capital Research Limited.


The response states the J Capital Research contains many claims that are wrong and misleading.


Vulcan states “The Report in many material respects does not appear to be based on reliable information2 and therefore the recommendations and opinions do not appear to be formed on a reasonable basis.”


Vulcan’s lengthy and detailed response describes the work done by Vulcan on the process to be used to extract lithium from geothermal brines in the Upper Rhine in Germany.


The company plans to use an aluminate-based sorbent to extract lithium from its brines, as described in its presentation of 14 September 2021.


Vulcan has around 80 personnel who are focussed on geothermal energy project development and direct lithium extraction.


Conclusion: There is significant debate over the economic extraction of lithium from geothermal brines in the lithium industry. The challenge is to extract lithium using this technology on a scale which makes the capital and operating costs economic.




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]ngel.co.uk – 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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