SP Angel . Morning View . Monday 10 08 20

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

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MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

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  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

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MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

CLICK FOR PDF

  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

CLICK FOR PDF

 

MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

CLICK FOR PDF

  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

CLICK FOR PDF

 

MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

CLICK FOR PDF

  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

CLICK FOR PDF

 

MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

CLICK FOR PDF

  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

CLICK FOR PDF

 

MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

CLICK FOR PDF

  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

CLICK FOR PDF

 

MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

CLICK FOR PDF

  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

SP Angel . Morning View . Monday 10 08 20

Gold holds USD2,035/oz as Trump orders more stimulus

CLICK FOR PDF

 

MiFID II exempt information – see disclaimer below 

 

Arkle Resources* (ARK LN) – Fieldwork resumes at Wicklow and Donegal

Aura Energy* – (AURA LN) – Submission of documents to the Supreme Court of Victoria

Bluejay Mining* (JAY LN) – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

Cora Gold* (CORA LN) BUY – Target 17.2p CLICK FOR PDF – ESIA update

Erris Resources (ERIS LN) – Loch Tay exploration results

Eurasia Mining* (EUA LN) – Tipil license granted

European Metal Holdings (EMH LN) – Drilling underway to upgrade resources

Pensana Rare Earths (PRE LN) – Appointment of NED 

 

China nickel sulphate jump 11.3% since start of July indicating strong demand from battery and other manufacturers

  • The price of nickel sulphate rose for the third straight week last week, driven by the strength of the nickel futures market on the LME. 
  • The LME three-month nickel price closed at $14,379/t on Friday, up 4.2% from $13,806/t on the 31st of July (Fastmarkets MB). 
  • Demand for NCM lithium-ion batteries has been recovering at a faster pace recently, as sales of NEVs in China rose 26.8% in June compared to a month prior. 
  • Supply worries have also supported the price of nickel, as the Philippine government have imposed one of Asia’s strictest lockdowns, and have recently extended it to the 18tdh of August (SMM News). 

 

Base metals – Lower demand offset by COVID-19 related supply shock

  • Despite the deep economic contraction seen in the first half of this year, base metals prices have recovered well. 
  • Iron ore prices are at new high levels while copper has regained much of the loss suffered when the Coronavirus first hit logistics and manufacturing in China. 
  • Disruption to mine supply, particularly in Latin America appears to have more than offset the fall in global demand for metals.
  • Manufacturer restocking is drawing inventory levels down as ongoing and sporadic mine and logistic issues further disrupt metal supply.
  • New infrastructure spending and stimulus projects in China and throughout the world are being used to restart economic growth but require metal and other commodity inputs for their construction.
  • Significant, new EV charging infrastructure combined with new Wind farm projects will generate substantial new demand for copper, steel, vanadium and other metals as politicians focus on developing greener power generation and use.  
  • China is accelerating wind-farm and EV charging projects while EU stimulus may support the transformation of European auto manufacturing to EV output.
  • Lockdowns and limited working due to COVID-19 restrictions continues to limit gold and PGM mining in South Africa copper in Peru Chile and Zambia, and Iron ore in Brazil to name just a few areas. 

Conclusion: We expect ongoing momentum in the base metals to continue to help prices higher as supply disruption combines with new demand. Expectations for a weaker US dollar may further support prices as the US votes on new stimulus packages to restore economic growth.

 

Dow Jones Industrials

 

+0.17%

at

27,433

Nikkei 225

 

closed

 

22,330

HK Hang Seng

 

-0.71%

at

24,358

Shanghai Composite

 

+0.75%

at

3,379

 

Economics

US – President Trump signed an executive order to provide an extra $400 per week in unemployment payments partly replacing jobless assistance that expired at the end of last month.

  • Additionally, Trump ordered to extend eviction moratoriums, defer payroll taxes and postpone student-loan payments.
  • The decision is likely to be challenged by the court since the Congress controls federal spending.
  • Democrats and Republicans have not agreed a new stimulus package yet as the House of Representatives has cancelled its August recess and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess.
  • Nonfarm payrolls surprised on the upside last Friday with the economy adding 1.76m jobs and helping to pull the unemployment rate back by almost a percentage point.
  • Sanctions on Hon g Kong Chief Executive Carrie Lam and 10 other top HK and Chinese officials that were imposed by the US on July 14 came into force last Friday.
  • US health secretary landed in Taiwan on Sunday that many interpreted as a step up in the standoff between the US and China as Alex Azat is the most senior US cabinet official to visit the island since Washington stopped diplomatic relations with Taipei in 1979, FT reports.
  • NFPs: 1,763k v 4,791k in June and 1,480k est.
  • Unemployment Rate: 10.2% and 11.1% in June and 10.6% est.
  • Av Hourly Earnings (%mom/yoy): 0.2/4.8 v -1.3/+4.9 in June and -0.5/+4.2 est.
  • Private employment rose 1.462m in July vs 4.767m in June
  • Manufacturing employment grew 26k in July vs 365k in June
  • Participation rate stable at 61.5% in July
  • Weekly hours worked steady at 34.5.

 

Canada – Employment change rose 418k in July vs 952k in June

  • Unemployment 10.9% in July vs 12.3% in June
  • Participation rate 64.3% in July vs 63.8% in June

 

China – Consumer inflation picked up while deflation in producer prices eased in July amid a recovery from the coronavirus pandemic and disruptions from regional flooding.

  • CPI climbed to 2.7%yoy following a 2.5% increase in June and PPI registered a 2.4% drop v a 3.0% decline the previous month.
  • Food prices climbed last month on the back of damage and transportation disruptions caused by floods in central and southern China, Bloomberg reports.
  • Excluding food and energy prices, core CPI was up 0.5%yoy  v 0.9%yoy in June marking the weakest reading since 2010.
  • Slowdown in PPI deflation was driven by higher commodity and industrial product prices.

 

China’s foreign ministry is planning to place sanctions against US officials including Senators Ted Cruz and Marco Rubio starting today, in response to a Washington’s decision to sanction 11 HK and Chinese officials on Friday.

 

UK – One in three UK businesses plans to cut staff in Q3 with almost 40% of private firms expecting to make layoffs this quarter, according to a survey of 2,000 employers carried by human resources body the CIPD and Adecco Group.

  • “Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” senior labour market adviser at the CIPD said.

UK – Coronavirus cases rise on greater testing buy hospitalisations fall as demographics change and early treatments improve

  • The ONS estimates 3,700 people are getting infected every day in England down 12% on the 4,200 estimate last week
  • Covid-19 cases have fallen to 950 vs 1,006 on 26 June 26
  • The ONS estimated 28,300 people in England had the coronavirus between July 27 and August 2 equating to 1:1,900 people vs 1:1,500 previously causing the government to instate a number of local lockdowns.
  • Reports on falling hospitalisations and ICU cases indicate that either early treatment is working much better than previously or the statistics are recording higher numbers of cases in less vulnerable people who are being tested.
  • We suspect the figures reflect both hypothesis with the major spike in hospitalisations due to the early spread the Coronavirus through hospital wards and nursing homes.
  • The likelihood of someone dying after being admitted to intensive care with COVID-19 has approximately halved since the early days of the pandemic.

 

Eurozone – Sentix Investor Confidence -13.4 in August

  • France – Germany walks out of talks to reform the WHO as US tries to take over the negotiations
  • Germany – industrial production rose 8.9% in June vs 7.4% in May

 

Australia – The government is planning to dial back its JobKeeper wage subsidy at the end of next month, although, that may be reviewed depending on future developments, Finance Minister Cormann said.

  • The programme meant to help the employer cover staff costs and avert a jump in unemployment is set to drop from A$1,500 to A$1,200 a fortnight at the end of September.

 

Currencies

US$1.1766/eur vs 1.1849/eur last week.  Yen 105.98/$ vs 105.56/$. SAr 17.743/$ vs 17.542/$.  $1.306/gbp vs $1.312/gbp.  0.715/aud vs 0.722/aud.  CNY 6.968/$ vs 6.962/$.

 

Commodity News

Precious metals:

Gold US$2,032/oz vs US$2,059/oz last week – Gold eases on Monday amid stronger US dollar though uncertainty remains

  • The price of gold fell on Monday as the US dollar held onto Friday’s gains- strengthening after better than expected US payrolls data. 
  • The US dollar index jumped above the 93.00 level and consolidated above the level of resistance on better than expected US economic data (FX Street). 
  • Spot gold fell 0.3% to $2,029/oz earlier this morning after hitting a record high of $2,072/oz on Friday before retreating nearly 2% on positive US data (Reuters). 
  • Another flare up in tensions between the US and China limited gold’s losses- as President Trump took steps to ban two popular Chinese apps. 

   Gold ETFs 108.8moz vs US$108.9moz last week

Platinum US$978/oz vs US$977/oz last week

Palladium US$2,192/oz vs US$2,205/oz last week

Silver US$28.42/oz vs US$28.26/oz last week

            

Base metals:    

Copper US$ 6,304/t vs US$6,448/t last week

Aluminium US$ 1,766/t vs US$1,780/t last week – China unwrought aluminium exports down 23% YoY

  • China exported 373,000t of unwrought aluminium in July, up 5.5% from June but down 23.3% from a year ago. 
  • Exports totalled 2.74mt in the first seven months of 2020, down 21% compared to the same period last year according to customs data (SMM News). 

Nickel US$ 14,285/t vs US$14,375/t last week

Zinc US$ 2,381/t vs US$2,402/t last week

Lead US$ 1,900/t vs US$1,948/t last week

Tin US$ 17,705/t vs US$17,820/t last week

            

Energy:            

Oil US$44.8/bbl vs US$45.0/bbl last week

Natural Gas US$2.274/mmbtu vs US$2.149/mmbtu last week

Uranium US$32.25/lb vs US$32.25/lb last week

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$111.7/t vs US$114.1/t

Chinese steel rebar 25mm US$543.3/t vs US$545.3/t

Thermal coal (1st year forward cif ARA) US$59.5/t vs US$59.5/t – Chinese coal imports up 3.2% in June

  • China’s overall coal imports recovered to 26.1mt in July vs 25.29mt in June.
  • Last month’s imports fell 20.6% from 32.89mt compared to the same period last year, as shipments have fallen due to tightening import curbs. 
  • Imports in the first seven months of this year totalled 200.1mt- up 6.8% year-on-year. 
  • Coal import quotas at Chinese ports have meant that cargoes have been booked a few months earlier through Chinese ports, however these cleared in July and therefore included in July import data. 
  • Lower import coal prices could have also encouraged Chinese buyers to take the risk and book July-delivery cargoes, contributing to the month-on-month rise (Argus Media). 

Coking coal futures Dalian Exchange US$119.0/t vs US$119.0/t

            

Other:   

Cobalt LME 3m US$33,200/t vs US$33,200/t

NdPr Rare Earth Oxide (China) US$45,707/t vs US$44,883/t

Lithium carbonate 99% (China) US$4,980/t vs US$4,984/t

Ferro Vanadium 80% FOB (China) US$30./kg vs US$30./kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$205-210/mtu vs US$205-210/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t

Cat litter – ‘Clumping mineral or non-clumping wood/paper cat litter, that is the question? Imerys

  • Imerys report ‘Bentonite-based clumping cat litter is the preferred product because of its unique property to absorb moisture and liquid (urine).
  • Bentonite increases its volume several times after coming into contact with liquid, causing cat litter to form clumps that can be easily scooped up. Voila! An instantly clean toilet for your pet.’
  • Having recently acquired two kittens in the Lockdown – thoroughly recommended from a health perspective for one’s partner we note while bentonite clays do clump when the little critters do their stuff they also make a massive mess when they get kicked around and stick to cat fur.
  • Our recent ‘in-house’ study showed ‘Toffee’ and ‘Smokey’ were more than happy with wood and paper pellets which seem to break down on use
  • Their owners definitely preferred the paper pellets partly due to the significantly lighter weight of a 30 litre bag and we didn’t really care about the clumping so long as the stuff got covered up and the sh1t hidden away. The paper pellets are also much easier to vacuum up.
  • So when it comes to paper pellets, two out of two kittens were quite happy with the paper and two out of two owners preferred it.

 

Battery News

Octillion to introduce new leasing plan

  • Provider of advanced lithium-ion storage systems, Octillion Power Systems has announced a new demonstrator program.
  • The battery leasing program will see participating fleet operators source batteries through a lease-to-own program with no upfront payment.
  • The program hopes to collect data on battery degradation, evaluate fleet-operation use models and assess second life viability of used batteries.
  • Battery leasing is seen as a way of reducing the upfront costs of the vehicle and providing a kind of warranty for when new improved batteries are available given the speed of technological progress.
  • The disadvantage is the lower running costs of an EV are offset by paying a monthly fee for the battery.
  • The program may be more successful for commercial fleets where payments spread over the lifetime of the vehicle and protection against technology creep may encourage corporate enterprises to adopt the technology.

 

Hyundai launches IONIQ as a brand

  • Hyundai has turned the Ionic model into a new EV brand. Hyundai hopes to release 3 EV’s under the IONIQ brand by 2025.
  • The first model to be release will be the IONIQ 5 in early 2021 which Hyundai has said will be based on the concept EV the ‘45’.
  • The IONIQ 6 and 7 are scheduled to follow win 2022 and 2024, respectively.
  • All the models will sit on an Electric Global Modular Platform (E-GMP). Hyundai has not yet released information on the battery sizes or technologies.
  • The current IONIQ model will not come under the new brand so is expected to be dropped from the line-up. The IONIQ is currently available in hybrid, plug in hybrid and EV versions.
  • Hyundai shares rose 10% on the announcement.
  • The Korean automaker currently produces 4 hybrid models and 3 electric vehicles.

 

Tesla begins installing V3 supercharger in Beijing

  • Tesla has begun installing V3 superchargers in Beijing as it ramps up its charging network across China.
  • The Company expects to have an additional 4,000 charging stations installed by the end of the year. As of June 2,500 superchargers were installed in the country.
  • The V3 supercharger was first introduced by Tesla in 2019, it has a 1MW power cabinet which is capable of peak rates of 20kW per car. At peak efficiency, the V3 could charge a car in 15 minutes.
  • The V3 is already installed in locations in across the US and Europe.

 

Company News

Arkle Resources* (ARK LN) 0.93p, mkt cap £2.0m – Fieldwork resumes at Wicklow and Donegal

  • The Company are pleased to report that fieldwork has restarted at its Mined River and Inishowen gold projects in the Republic of Ireland. 
  • Arkle holds a strategic block of licenses covering a 15km gold bearing trend at Mine River, and at Donegal earlier drilling discovered high-grade gold in the Meeneragh Glentogher area. 
  • The team intends to extend a programme of soil sampling east along the gold trend at Mine River, with over 3,000 samples planned in a tight grid of 20m by 100m spacing.
  • A similar soil sampling programme will be undertaken at Inishowen in Donegal, with over 500 samples at 20m by 100m spacing over the known gold veins at Meeneragh to include areas where gold bearing rock has been previously discovered.
  • The soil sampling programmes at both Wicklow and Donegal are due to be completed in the coming month, after which the company will prioritise targets for follow up trenching or drilling. 

*SP Angel are Nomad and broker to Arkle Resources

 

Aura Energy* – (AURA LN) 0.35p, Mkt Cap £8.6m – Submission of documents to the Supreme Court of Victoria

  • Aura Energy reports that it has filed documents with the Supreme Court of Victoria alleging breaches of corporate law by the Cayman Islands company, ASEAN Deep Value Fund and others including two of Asean’s directors, Mr. DP O’Neil and Mr. DE Roes, as well as Mr.JL Bennett, a director of Aura Energy and Mr Florian Hoertlehner (a resident of Panama) and Blue Star Private Foundation (an entity controlled by Mr Hoertlehner); and, Mr Axel Sartingen (a resident of Germany) and Milaco GmbH (an entity controlled by Mr Sartingen”.
  • The case presented to the Court alleges the breaching of “sections of the Corporations Act 2001 … relating to disclosure of substantial holdings and the prohibition on the acquisition by shareholders and their associates of voting power in a public company in excess of 20%”.
  • Among the measures Aura Energy is seeking from the Court is the deferral of the EGM requisitioned by ASEAN for 14th August where a resolutions concerning the composition of the company’s Board are to be considered by shareholders.

Conclusion: Aspects of the long-running dispute between Aura Energy and ASEAN and its allies, including the possible breach of corporate law are to be considered by Victoria’s Supreme Court. We await the Court’s adjudication and news on whether the EGM scheduled for 14th August is to be deferred. In the meantime, Aura Energy announced last month that it had agreed a term sheet with TSX listed Chilean Metals for a C$4.5m funding of exploration over the company’s gold, base and battery-metals licences close to the Kinross Tasiast gold mine in Mauritania, where Aura Energy also is advancing the Tiris uranium project.

*SP Angel are Nomad and broker to Aura Energy

 

Bluejay Mining* (JAY LN) 7.67p, Mkt cap £72m – Thunderstone exploration program targets historic showings of gold, pgms and base metals.

  • Bluejay Mining is determined to capitalise on its position in Greenland while it waits on final approval to start mining at the Dundas ilmenite project.
  • The team have been busy working on the Dundas project while also finalising the field program for exploration of the Thunderstone licenses in the South of the Greenland land mass.
  • Exploration at Thunderstone will start with remote sensing and will focus on several high-priority gold, PGM and base metal geochemical anomalies seen in the Bluejay’s re-analysis of historical data.
  • Examination of these near-coastal targets will be boat-based with helicopter support where required.
  • Dr Philippa Mason has been commissioned to carry out a project-wide remote sensing study on Thunderstone using Aster, Sentinel-2, Landsat-8 and Arctic DEM satellite data.
  • Dr Mason is based at Imperial College and is part of the EnVision mission to understand why Venus is so different to Earth www.envisionvenus.net.
  • We suspect the remote sensing work for Bluejay in Greenland will be useful for the EnVision project on Venus.
  • Bluejay has already applied for extension of the Thunderstone licences as a result of the geochemical anomalies identified including a cluster of gold anomalies close to historical reports of gold-bearing quartz veins. Some of these are also coincident anomalous PGMs, copper, nickel, cobalt and chrome.
  • Exploration and drilling at Kangerluarsuk and Disko-Nuussuaq has been delayed due to the impact of the Coronavirus on the international logistics required resulting in significant cost saving.
  • Thunderstone: the field team will be based on a boat moving around the Greenland coast for rock, stream and heavy mineral concentrate sampling.
  • This reduces contact with local communities from a Coronavirus perspective and also ensures the team is able to easily access its targets through a network of deep-water fjords which cross-cuts the license.
  • Joshua Hughes, Bluejay’s Greenland Exploration Manager will work with Dr Denis Schlatter, Bluejay’s consultant geologist. Both are highly experienced at working in Greenland and cognisant of similar looking geology and gold belts in Scandinavia.
  • The highly gold anomalous Tasersuaq area is located only 15-30 km southeast of the former Nalunaq gold mine which produced over 350,000oz grading ~15 g/t.

Conclusion: Thunderstone is highly prospective with rock chips and stream sediments showing gold, PGM and base metal mineralisation. Remote sensing will better guide the field team to the source of the stream sediments while the bare bedrock will be easily examined when the team access the target sites. Despite the exposed bedrock around the coast of Greenland there is much that is unexplored due access issues and the scattered population.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

Cora Gold* (CORA LN) 13.3p, Mkt Cap £25m – ESIA update

BUY – 17.2p

CLICK FOR PDF

  • Environmental and Social Impact Assessment (ESIA) carried by Digby Wells continues on time and on budget.
  • The study was launched on 4 May 2020 and is expected to be completed in mid-2021.

*SP Angel acts as Nomad and Broker to Cora Gold

 

Erris Resources (ERIS LN) 7.88p, Mkt Cap £2.6m – Loch Tay exploration results

  • Erris Resources has announced results from its early stage exploration of the Loch Tay area where results of 53 rock-chip samples include samples of well-developed quartz stockworks in the Lead Trial area covering an area of around 200mx170m uphill from the historic workings.
  • Among the assay results reported from this area are a sample of quartz breccia averaging 3.05g/t gold with 1.14% lead and 0.46% zinc as well as 2.27g/t Au in a boulder of quartz with small felsite clasts … and ·    1.71g/t Au in a quartz-stockwork breccia boulder.”
  • The company also reports that “Two other samples had 1.06g/t Au and 0.96g/t Au respectively while many have anomalous gold. This area is over 2km from the Lead Trial-Dunan area to the southeast but multiple float boulders and exposure of outcrops has allowed geologists to develop a better understanding of the mineralising system. Mineralisation appears to be focussed at the brecciated contacts of the felsite sill although a mineralised extensional joint set with northeast trend has also been observed and may also be important as a secondary control on the mineralisation”
  • CEO, David Hall, said that “These observations and results point to a vigorous hydrothermal system in the area while the highest-grade samples are located 2km to the southeast at Lead Trial-Dunan, the area in between having poor exposure. A work programme including systematic soil sampling has commenced that will aim to link the two areas into a coherent major target area extending over 3 km”
  • The company confirms that mapping and sampling is to continue and the work plan amended as required in order to expand or close off anomalies and mineralised boulder trains and rapidly identify drill targets. The Company plans to trial a ground magnetic survey across the Lead Trial prospect to determine if the contacts of the felsite sills and structures can be mapped. If the results are positive, then the survey can be expanded to cover the entire +3km trend. The combination of geophysics, detailed mapping and soil and rock geochemistry will be used to identify future drill targets at Lead Trial.”

 

Eurasia Mining* (EUA LN) 22.25p, Mkt Cap £599m – Tipil license granted

  • The Company secured the 24.5kmTipil exploration license covering around 17km of river course and sedimentary units which host PGM mineralisation adjacent to the West Kytlim alluvial mine.

*SP Angel act as Nomad and Broker to Eurasia Mining

 

European Metal Holdings (EMH LN) 15.6p, Mkt Cap £24.3m – Drilling underway to upgrade resources

  • European Metals Holdings reports that it has commenced drilling to upgrade a portion of the indicated mineral resource at Cinovec to the measured level and provide the basis of a reserve estimate to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing.”
  • Cinovec reported a probable reserve o3 34.5mt at an average grade of 0.65% Li2O in July 2017 and this new phase of work aims to provide a higher level of confidence ‘Proven’ reserve for the initial mining phase.
  • Commenting on this reserve development strategy, Executive Chairman, Keith Coughlan explained that “The aim of the campaign is to convert the initial years mining into Proven Reserves category. Following consultations with potential lenders, we expect that this will assist greatly in the securing of more attractive debt finance for the Project once we enter that stage of operations.”
  • The programme is planned to include 5,550m of drilling in 19 holes and the company confirms that the first hole, CIS-18, is on schedule for completion at 275 metres”.
  • As well as the resource drilling, “A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines”.
  • Mr. Coughlan confirmed that There are no Covid 19 related movement restrictions or limitations and the drilling is progressing well”.

 

Pensana Rare Earths (PRE LN) 40p, Mkt Cap £66.8m – Appointment of NED 

  • Pensana has reported the appointment of an experienced international lawyer, Ms. Sandra Bates, as an independent non-executive director.
  • Ms. Bates, who is a partner at the London firm, Keystone Law, is described as an international lawyer with over 20 years’ experience advising listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement”.
  • Welcoming the appointment and affirming the company’s commitment to the Equator Principles and IFC Performance Standards in the development of the Longonjo rare-earths project in Angola, Chairman, Paul Atherley, explained that “The EU taxonomy on Sustainable Investment is the writing on the wall for all listed Companies seeking access to the burgeoning ESG Funds and with Sandra’s asssitance we are aiming to became a company that fully integrates Sustainable Development Goals into its operations from the outset and from the ground up”.
  • Sandra Bates said that she was excited by the opportunity to join “Paul and the team at this very exciting stage of the Company’s development. The team is particularly passionate about developing young Angolan professionals, especially women in STEM, engaging responsibly with the environment, putting back into the local community and looking to build one of the world’s lowest carbon footprint mines”.

Conclusion: The strengthening of the board-level team at Pensana comes ahead of an expected minerals resources estimate due in September and a bankable feasibility study for Longonjo expected in October.

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

 

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk – 0203 470 0535

 

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, Antimony

Asian Metal

Tungsten

Metal Bulletin

 

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This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

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SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%



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