SP Angel . Morning View . Monday 11 05 20

SP Angel . Morning View . Monday 11 05 20

Miners return to work in South Africa as lockdowns ease


MiFID II exempt information – see disclaimer below


Adriatic Metals* (ADT1 LN) 68p, Mkt Cap £119.5m – Recommended offer to acquire Tethyan Resources for shares

Aura Energy* – (AURA LN) 0.21p, Mkt cap £4.2m – Board appointments

Altus Strategies* (ALS LN) 34p, Mkt Cap £24m – Tabakorole drilling results

BlueRock Diamonds* (BRD LN) 67p, Mkt cap £3.52m – Kareevlei diamond mine restarts today following lockdown

KEFI Minerals* (KEFI LN) 0.77p, Mkt Cap £10m – £3.7m equity raise

Kodal Minerals* (KOD LN)  – 0.035p, Mkt cap £3.8m – Metallurgical test work shows up to 83% recovery vs 73% assumed in feasibility study

Rambler Metals* (RMM LN) 1.75p, Mkt Cap £22.7m – Reduction of losses in 2019

Serabi Gold* (SRB LN) – 93p, Mkt cap £50.4m – Exploration results from Sao Chico

SolGold* (SOLG LN) 27.1p, Mkt cap £493.3m – Franco Nevada agrees up to US$150m financing for Alpala  

Vast Resources* (VAST LN) 0.17p, Mkt Cap £18m – Baita Plai update


LME copper prices hit eight-week high

  • Copper prices continue to climb on expectations of better demand as countries started to ease lockdown measures and restart economic activity, such as Australia, France and Spain (Reuters).
  • Three-month copper on the LME rose as much as 1.8% to $5,370/t- its highest since the 16th of March. The most traded copper contract in Shanghai rose 1.2% to 43,840 yuan ($6,194)/t earlier this morning. 


UK – Coronavirus rules relaxed to ‘Stay alert’ from ‘Stay at home’ to encourage people to go back to work

  • People can also meet with one person from a different household outdoors where the 2 meter rule can be applied.
  • People should go to work where work can not be done from home and social distancing can be observed
  • Many offices will remain closed as public transport cannot support many commuters social distancing.
  • The UK government is likely to advises the wearing of masks in enclosed spaces, trains and busses
  • The government is to publish a 50 page technical report tomorrow offering more detail


Extinction of marginal producers likely to reduce commodity supply over longer term leading to higher metals prices

  • The cost of supporting fixed costs for many marginal metals producers will be the final nail in the coffin of many marginal metals producers.
  • Miners which are struggling to maintain ageing and high-operating cost operations are likely to close without adequate care and maintanence.
  • In many cases plants will be scrapped or sold to cover debts and the cost of closure and administration.
  • The cost of reopening these higher-cost and largely depleted operations is likely to be prohibitive and will lead to a natural rationalisation of the industry.


Reusable masks from Hong Kong government can filter bacteria, fungi and viruses (South China Morning Post)

  • A HK government source claims >7m of the face coverings will be ready for distribution later this month
  • The filtration technology developed by the Hong Kong Research Institute of Textiles and Apparel won a top European prize in 2018.


Chinese base metals output in April (SMM News).

  • Copper cathode output was 752,400 tonnes in April, +1.2% MoM and +6.5% YoY.
  • Aluminia output was 5.65mt in April, +2.6% MoM and -7.1% YoY. 
  • Nickel pig iron output was 38,400 tonnes in April, -4.5% MoM and -19.9% YoY. 
  • Nickel sulphate output was 44,500 tonnes in April, -6.9% MoM and 20.5% YoY. 
  • Zinc output was 479,600 tonnes in April, +2.8% MoM and +4% YoY. 
  • Lead output was 262,000 tonnes in April, +9.34% MoM and 1.5% YoY. 
  • Tin output 10,730 tonnes in April, -10.6% MoM and -22.9% YoY.


Stimulus funding continues to rise as nations start to ease lockdowns

  • $2tn US fiscal package approved by Congress. US may add $0.6t state aid for mortgage markets and travel industries
    • The House passed a $484bn aid package to rescue small small businesses, hospitals ($75bn) and coronavirus testing ($25bn).
    • $2tn US – Trump looking at $2tn infrastructure fund
    • $700bn – US + Fed rate cut to 0-0.25% last night. The $700bn QE to buy Treasuries and mortgage-backed securities.
    • US Fed may soon start buying in up to $750 billion of corporate debt and ETFs
  • $963bn (€750bn) ECB scraps limits on sovereign bond purchases. ECB PEPP buying running at around €250bn
  • EU Finance Ministers have so far failed to agree on a strategy to mitigate the economic impact of the pandemic.
    • The pandemic emergency purchase programme (PEPP) and asset purchase programme (APP) have been reiterated with a cap of €750bn and €120bn, respectively.
    • The bank is reported to have used €100bn of the PEPP so far.
  • $825bn (€756bn) Germany – Bundestag approved €156bn in extra borrowing and ~€600bn in emergency funds
  • $909m $344bn of China stimulus + $565bn in special bonds for infrastructure by local authorities
  • $996bn (108.2tn yen) – Japan +  BoJ pledge for unlimited quantitative easing
  • 400bn (£330bn) UK + $242bn (£200bn) UK QE from BoE & no business rates plus £25,000 cash grants for hospitality sector
  • $387bn (€304bn) France, $200bn (€200bn) Spain, $214bn (A$320bn) Australia Australia – RBA ready to buy bonds again.
  • $78bn (C$107bn) Canada, $32bn Saudi Arabia, US$43.7bn Singapore, $22.6bn India, $19.3bn HK, $13.7bn South Korea, $10bn Switzerland, $8.4bn Italy, $7bn NZ, $3.5bn Ireland, $2bn Taiwan, $0.75bn Indonesia,
  • Argentina to default on $10bn of dollar debt issued til the end of the year. Does not affect the $70bn that Argentina is currently in talks to restructure.
  • $1,000bn – IMF available + $12bn World Bank, 

>12.4tn Total


Dow Jones Industrials





Nikkei 225





HK Hang Seng





Shanghai Composite







US – Employment numbers released last Friday reflect the scale of the COVID-19 pandemic and containment measures on the US labour market.

  • The economy lost a staggering 20.5m jobs in April, the sharpest drop since the Great Depression, with unemployment rate coming in at 14.7%.
  • Additionally, the labour force participation rate measuring the economy’s active workforce dropped to 60.2% in April, down from 62.7% in March and hitting the lowest level since 1973.
  • NFPs: -20,500k v -870k (revised from -701k) in March and 22,000k est.
  • Unemployment Rate (%): 14.7 v 4.4 in March and 16.0 est.
  • US unemployment may still be around 10% in December according to Pictet economist (CNBC)


China – Total financing came in at CNY 3,090bn in April which in turn translates into a 12.0%yoy growth , the strongest in nearly two years.

  • Strong flow of credit to the economy comes in handy amid a challenging economic environment.
  • Separately, the PBOC pledged “more powerful” monetary policy response to the virus impact as per its report released on Sunday without offering much of details on potential measures, Bloomberg reports.
  • Aggregate Financing (CNY bn): 3,090 v 5,149 in March and 2,775 est.
  • New Yuan Loans (CNY bn): 1,700 v 2,850 in March and 1,300 est.
  • M2 money supply grew 11.1% yoy vs 10.1%


India – benchmark sovereign bond prices fall as government increases new bond offerings

  • The Indian government is to borrow INR12tr from INR7.8.


UK – PM Johnson set the scene for a conditional easing of restriction based on the measured basic reproduction number of the COVID-19 and the number of infected.

  • A new Covid Alert System with five levels will govern how quickly lockdown restriction could be eased.
  • The government estimates the nation currently is in Level Three alert, one notch down from levels earlier in the lockdown period.
  • Ro is currently estimated at around 0.5-0.9, “but potentially only just below one”.
  • Authorities are planning to allow phased reopening of shops and allow primary pupils back into schools at the earliest by June 1.
  • Hospitality industry and other public places are expected to remain shut down at least until July.
  • UK may ask power stations to cut supply due to low demand to maintain grid stability


Saudi Arabia – The government is planning a series of austerity measures up to $26.6bn and tripping of the VAT to 15% to cushion public finances from a drop in oil prices.

  • Other measures include delaying or cancelling some operation and capital expenditures at government owned companies and reducing loans planned for a number of state intitiatives, Bloomberg reports.
  • “The COVID-19 challenges have led to a decline in government revenues, and pressure on public finances to levels that aredifficult to deal with later without harming the kingdom’s macroeconomics and public finances in the medium and long term,” Finance Minister Mohammed Al-Jadaan said.


Indonesia – Energy commission discussing 30-year permits for integrated miners 

  • The country’s energy commission is in talks to discuss the awarding of longer-term permits to miners who build processing or refinement facilities in the country. 
  • Authorities also seek to give a 10-year extension to those miners able to fulfil additional requirements in the upcoming revision of mineral and coal mining laws.



US$1.0834/eur vs 1.0808/eur last week (Thursday).  Yen 107.22/$ vs 106.34/$.  SAr 18.241/$ vs 18.614/$.  $1.240/gbp vs $1.241/gbp.  0.654/aud vs 0.646/aud.  CNY 7.082/$ vs 7.087/$.


Commodity News

Precious metals:          

Gold US$1,709/oz vs US$1,690/oz last week (Thursday) – Eighty-nine workers test positive for Covid-19 at Russia’s largest gold mine

  • An outbreak at the Olimpiada mine, operated by Polyus, has resulted in the company testing all workers, and isolating all who have tested positive. 
  • The mine employs over 3,400 people, and a Polyus spokesman told the media that the mine will continue to operate as normal (Bloomberg). 

   Gold ETFs 97.1moz vs US$96.8moz last week

Platinum US$773/oz vs US$764/oz last week

Palladium US$1,929/oz vs US$1,826/oz last week

Silver US$15.56/oz vs US$15.01/oz last week


Base metals:   

Copper US$ 5,319/t vs US$5,249/t last week – Chile – Copper production up 4.5% year-on-year

  • The world’s top producer announced on Friday that it produced 494,700 tonnes in March compared with 473,300 tonnes over the same period in 2019. 
  • Despite Codelco scaling back operations in mid-March to prevent the spread of Covid-19 among its employees, the copper miner kept producing through the whole period- leading to most of the major mines increasing output over the period. 
  • According to Fastmarkets MB, a minor part of the year-on-year growth came as a result of a lower basis of comparison, as heavy rainfall reduced Chilean production in Q1 2019. 

Aluminium US$ 1,493/t vs US$1,482/t last week

Nickel US$ 12,340/t vs US$12,315/t last week – Chinese stainless-steel futures surge 4.4% lifting nickel prices

  • Chinese stainless-steel futures rose 4.4% today to a nine-month high, as domestic demand continues to recover from the country’s shutdowns. 
  • Alongside rising demand, prices also rose on concerns over the supply of raw materials imported from other countries, such as nickel and chrome according to Chinese steelmakers. 
  • Stainless steel futures in shanghai rose as much as 4.4% to 13,730 yuan ($1,940)/t for June delivery (Reuters). 
  • Chinese stainless-steel output rose 9% year-on-year in April, increasing 180,000 tonnes to 2.22mt (SMM News). 

Zinc US$ 2,026/t vs US$1,997/t last week

Lead US$ 1,668/t vs US$1,640/t last week

Tin US$ 15,430/t vs US$15,105/t last week



Oil US$30.5/bbl vs US$29.3/bbl last week

  • Oil prices continue to hold up as further well shut-ins across the US shale patch in addition to a perceived relaxation of lockdowns in the US and Europe
  • However, following the release of API’s inventory estimate prices and a bleak job loss report, there continues to be a resistance with WTI trading at US$24/bbl at the time of writing
  • The EIA confirmed a crude oil inventory build of 4.6MMbbls for the week to 24 April, after a 9MMbbl build the previous week
  • This compared with a build of 8.44MMbbls reported by the API a day earlier and analyst consensus of a build of 8.125MMbbls
  • In gasoline, the EIA reported an inventory draw of 3.2MMbbls for the week to 24 April, after last week it surprised the market with a draw of 3.7MMbbls, sparking hopes that demand could be returning.
  • Gasoline production fell slightly last week, to 6.7MMbbls/d
  • In distillate fuels, the authority reported a hefty inventory rise of 9.5MMbbls for last week, versus an increase of 5.1MMbbls for the prior week
  • Distillate fuel production averaged 5.1MMbbls/d last week, compared with 5MMbbls/d a week earlier

Natural Gas US$1.831/mmbtu vs US$1.931/mmbtu last week

  • US natural gas prices have jumped more than 20% from an early April low and are set to rise through the rest of the year despite high market volatility this week
  • Natural gas demand is expected to start recovering in the coming weeks as states ease lockdowns and as demand for cooling rises in the summer months
  • In addition to expectations of higher demand, the supply of natural gas in the US is dropping as gas producers lower production amid low prices while oil producers scale back oil output and with it – associated natural gas production from oil-directed wells
  • Higher demand than the current lows amid the lockdowns and the ‘shoulder season’ for natural gas consumption for heating or cooling, combined with the decline in production, will lead to higher natural gas prices later this year in our view

Uranium US$33.85/lb vs US$34.05/lb last week



Iron ore 62% Fe spot (cfr Tianjin) US$85.3/t vs US$81.1/t

Chinese steel rebar 25mm US$534.3/t vs US$531.2/t

Thermal coal (1st year forward cif ARA) US$53.4/t vs US$52.8/t

Coking coal futures Dalian Exchange US$117.0/t vs  US$109.0/t



Cobalt LME 3m US$30,000/t vs US$30,000/t

NdPr Rare Earth Oxide (China) US$37,491/t vs US$37,180/t

Lithium carbonate 99% (China) US$5,295/t vs US$5,291/t

Ferro Vanadium 80% FOB (China) US$27.5/kg vs US$27.5/kg

Antimony Trioxide 99.5% EU (China) US$4.9/kg vs US$4.9/kg

Tungsten APT European US$215-225/mtu vs US$215-225/mtu 

Graphite flake 94% C, -100 mesh, fob China US$510/t vs US$520/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,350/t vs US$2,425/t


Battery News

LG Chem moves above Panasonic as the worlds #1 battery maker

  • LG Chem supplied 5.5GWh of EV batteries in Q1 moving it ahead of Panasonic as the world’s primary manufacturer. (EconoTimes)
  • The South Korean manufacturers market share increased to 27.1% on the back of strong performance from LG powered vehicles like the Tesla Model 3, Renault Zoe EV and Audi e-tron.
  • LG Chem’s share is up from 10.7% at the same time last year.
  • South Korean manufacturers LG Chem, Samsung SDI and SK Innovation market share reached 37.5% in Q1 up from 16.4% in April 2019.


Saudi-German JV to manufacture Vanadium Redox flow batteries (VRFB)

  • Nusaned Investment Group (Saudi Arabia) and Schmid Group (Germany) announced completion of their JV transaction. (Chemical Engineering)
  • The agreement which establishes Advanced Energy Storage System Investment Company was signed in May 2019.
  • The JV hopes to become a global leader in utility scale energy storage as part of the Saudi Kingdom’s Vision 2030 objectives. (TradeArabia)
  • The JV will build one of the largest utility scale battery factories to develop VRFBs. Production is expected to begin in 2021. (Asharq Al-Awsat)


Tesla sales fall in China as the Company secures working capital loan for Shanghai facility

  • Tesla sold 3635 Shanghai made Model 3 cars in China in April, down 64% from March according to the China Passenger Car Association. (Reuters)
  • The US EV maker sold 10,160 vehicles in March and produced over 10,000 units in April.
  • The Company has entered into an agreement with the Commercial Bank of China for a US$565.51m. (Reuters)
  • The agreement is an unsecured revolving loan facility for continued expansion of production at the Gigafactory. (Nikkei Asia Review)
  • The Commercial Bank of China has previously loaned Tesla $1.29bn in a term loan in December 2019.  


Company News

Adriatic Metals* (ADT1 LN) 68p, Mkt Cap £119.5m – Recommended offer to acquire Tethyan Resources for shares

  • Adriatic Metals reports it is to acquire Tethyan Resources, which holds brownfield exploration projects at Kizevac and Sastavci in Serbia and a large prospective exploration holding across the Tethyan mineral Belt.
  • The transaction, which is unanimously recommended by Tethyan’s directors, values Tethyan shares at an exchange ratio of 0.166 Adriatic shares for each Tethyan share and ʺrepresents a premium of 40.7% to the 30 day Volume Weighted Average Priceʺ.
  • Adriatic Metals will provide ʺa secured convertible loan of up to €1.3m in three tranches to enable Tethyan to close the transaction for the acquisition of Serbian company EFPP d.o.o., the holder of parts of the Kizevak and Sastavci deposits, and to commence confirmation drilling at Kizevakʺ.
  • Pointing out that Kizevac and Sastavci are past producing mines with extensive historical data Adriatic Metas’ Managing Director, Paul Cronin, explained that ʺTethyan Resource Corp. has been successful in consolidating the Raska district in Serbia, and with the recent addition of the Kizevak and Sastavci licenses, the acquisition presents a unique opportunity for Adriatic to add assets to our portfolio that have the potential, over time, to match the quality of our exceptional Vares Project in Bosnia.ʺ
  • The announcement today confirms that ʺThe Transaction will confirm the enlarged Company as the leading Balkan polymetallic explorer and developer with four key projects (Rupice, Veovaca, Kizevak & Sastavci) covering a total land package in excess of 301km2 across Bosnia and Serbia (Figure 1). The Transaction allows Tethyan shareholders to retain upside to the Kizevak and Sastavci Projects whilst increasing the pace of development as Adriatic brings its strong balance sheet (cash of A$23.8 million and no debt as at 31 March 2020) and its experienced project development team to rapidly progress the projects.ʺ
  • The Kizevac project is described as ʺa past-producing mine reported to host considerable historic Pb, Zn and Ag mineral resources. In 2018 and 2019, Tethyan drilled 14 drill holes, 1km southeast from the historic Kizevak open pit. These Tethyan drill holes intersected high-grade Pb, Zn and Ag mineralisation, including 12 metres at 22.03% Zn, 10.49 % Pb, 167g/t Ag and 0.18g/t Au (Figures 2 & 4). Historic records show that the entire corridor between the old Kizevak open pit and Tethyan’s recent drilling is mineralisedʺ.
  • ʺSastavci was also mined historically by open pit on a smaller scale than at Kizevak and represents a priority drilling target. The Sastavci historic open pit is located 3.5km north-northwest of the Kizevak open pit. Outcropping, steeply dipping, massive sulphide veins up to 5 metres wide are visible in the pit walls. Tethyan collected 65 rock-chip samples across the Sastavci area, which returned Zn values of +30% (limit of assay detection), 7.1% Pb, 94.3g/t Ag and 0.47g/t Au in the old Sastavci open pit.ʺ
  • Historic, non-JORC, resource estimates prepared under local reporting standards show Kizevac containing a resource of 6.2mt at an average grade of 48g/t silver, 5.3% zinc and 3.2% lead with Sastavci containing 1.4mt at an average grade of 30g/t silver, 4% zinc and 1.9% lead.

Conclusion: The acquisition of Tethyan Resources expands Adriatic Metals’ presence in the region and adds additional former mines, representing comparatively low risk brownfield  exploration targets to the portfolio.

*An SP Angel mining analyst has visited Adriatic Metals operations in Bosnia


Aura Energy* – (AURA LN) 0.21p, Mkt cap £4.2m – Board appointments

  • Aura Energy has reported the appointment of two new directors to its board with the announcement that London-based Mr. Paul Heber and Melbourne-based Mr Rob Craigie are to join.
  • Commenting on the appointment of Mr. Heber, the company explains that in view of the company’s AIM listing and that the majority of recent funding has been sources in London, ʺThe appointment of a UK-based Director has long been an ambition of Aura’sʺ. Mr. Heber is French speaking and ʺhas 30 years of experience as an investment manager and stockbroker in global stock markets, following three years in the oil industry … [and] … has had a long term association with Africaʺ.
  • In the light of the current travel restrictions, the appointment of a UK based director is seen as particularly helpful in enhancing Aura Energy’s ability to service the UK market.
  • The appointment of Mr. Craigie, ʺcurrently CFO and Company Secretary for Circa Group Ltd in Melbourne, where he serves on the Board’s Audit & Risk Committeeʺ, strengthens the company’s finance capacity which was depleted following the ʺthe unfortunate departure of Mr Brett Fraser who was an experienced and valued member of the Aura Board.ʺ
  • As well as the Board appointments, Aura Energy also reports that it has issued a further 120m shares at a price of 0.275cents in order to provide additional working capital. The new shares represent approximately 5.7% of the enlarged capital of the company.

Conclusion: The moves to strengthen the Board through the appointment of experienced London and Australian based directors provides Aura Energy with greater exposure to the London investment community and enhances the finance capacity in Australia.

*SP Angel are Nomad and Joint-Broker to Aura Energy


Altus Strategies* (ALS LN) 34p, Mkt Cap £24m – Tabakorole drilling results

  • The Company released drilling results from the shallow 70 hole 2,042m AC programme at the FT Prospect in southern Mali.
  • The programme is managed by the Company and is covered by Glomin Services under the JV agreement.
  • Selected AC drilling intersections include:
    • 12m at 1.05g/t from 9m;
    • 21m at 0.77g/t from surface;
    • 15m at 0.95g/t from surface.
    • Drilling results recorded excellent correlation between magnetic anomalies and drilled mineralisation.
    • This suggests good potential to further extend the strike of the 2.7km long FT Prospect.
    • The Company is preparing for the next phase of work involving an initial diamond drilling programme.

Conclusion: Intersected gold mineralisation and good correlation between geophysics and drilling data bode well for a potential extension of the 2.7km long FT Prospect mineralised area with an initial diamond drilling programme to follow in due course.

*SP Angel acts as Nomad and Broker to Altus Strategies


BlueRock Diamonds* (BRD LN) 67p, Mkt cap £3.52m – Kareevlei diamond mine restarts today following lockdown

  • BlueRock Diamonds report the restart of the Kareevlei Diamond mine in South Africa.
  • The South African government has allowed the restart of open cast mines and plants where social distancing rules may be adhered to.
  • The Kareevlei operations should be back up to full capacity by the end of May but has put its expansion plans on hold for now.
  • While BlueRock sells its diamonds locally, international diamond buyers are unlikely to attend local sales till travel and quarantine restrictions are lifted.
  • While, this may impact local diamond prices we suspect international diamond buyers will find ways of sourcing diamonds from South Africa through local agents.
  • India is already easing its lockdown for economic reasons which may allow diamond cutters to restart operations sometime soon.

*SP Angel act as nomad and broker to Bluerock Diamonds


KEFI Minerals* (KEFI LN) 0.77p, Mkt Cap £10m – £3.7m equity raise

  • The Company has conditionally raised £3.7m through a placing of 569m shares at 0.65p.
  • The raise provides capital to enable closing of the $260m Tulu Kapi project financing including targeted project level equity funding completion in Q2/20 as well as the identified debt funding in Oct/20.
  • The placing will take place in two parts for 114m and 455m shares, respectively, with the second tranche conditional on shareholder approval at a General Meeting to be held on 28 May 2020.
  • RAB Capital subscribed for 236m shares representing 12.6% of the enlarged share capital and has been offered an option to appoint a director to the Board for as long as RAB Capital holds a 10% or more interest in the Company.
  • The Company will be issuing 28.5m warrants with an exercise price of 0.65p expiring in three years in lieu of placing fees.
  • Placing proceeds will be directed towards covering existing liabilities (£1.1m), project related costs including preparation for relocation programme and project funding closure (£1.7m) as well as corporate expenses (£0.7m).
  • Raised funds are estimated to see the Company until Q4/20 by when the team is expecting to have closed and received funds under the full project funding package.

Conclusion: The equity raise is providing KEFI a runway to complete project funding package and see the start of community relocation and pre-construction works at Tulu Kapi, the first modern mine development project in Ethiopia in years, with first full production guided for 2022.

*SP Angel act as Nomad and Broker to KEFI Minerals


Kodal Minerals* (KOD LN)  – 0.035p, Mkt cap £3.8m – Metallurgical test work shows up to 83% recovery vs 73% assumed in feasibility study

  • Kodal Minerals report bulk sample test results of up to 83% on material shipped from the Bougouni Project to China for testing
  • Shandong Shengli Environment Protection Technology Co Ltd ‘Shengli’ tested the material at its 2mtpa Yishu plant in Shandong, China.
  • The Yish plant uses DMS ‘dense media separation’ and flotation to concentrate spodumene mineralisation containing lithium from pegmatite ore. 
  • Shengli’s Yishui plant, ~160km from Qingdao port supplies spodumene concentrate to the Ruifu processing plant which is associated with Koldal’s major shareholder, Suay Chin International.
  • ‘Recoveries of the Bougouni bulk sample from the plant achieved an overall recovery of up to 83% for a 5.5 % to 6.0% Li2O spodumene product.’
  • Bulk sample assayed 1.24-1.47% spodumene ahead of its concentration at the Yishu plant in China.
  • The ‘up to’ 83% recoveries reported are higher than the 71% average recovery used in Kodal’s feasibility study.
  • The quality of the concentrate may vary on larger scale production and may improve with better quality controls.
  • Low impurity levels  in the spodumene concentrate are helpful from a processing perspective with iron at <0.5%. li=””>
  • The results will be used to further optimise the project to hopefully show improved economics
  • Kodal is waiting on news from the Mali Ministry of Mines on its application for a mining licence submitted in January 2020 for the Bougouni project.

*SP Angel act as financial advisor and broker to Kodal Minerals


Rambler Metals* (RMM LN) 1.75p, Mkt Cap £22.7m – Reduction of losses in 2019

Click here for full research note PDF

  • Despite lower copper prices during the year,  Rambler Metals reports a 34% reduction in operating loss of US$11.4m in 2019 (2018 – loss US$17.2m) and a narrowing of EBITDA losses to US$1.3m (2018 – loss US$7.5m).
  • Net cash production costs on the 5,299t of saleable copper production amounted to US$2.77/lb a reduction of 21% on the US$3.52/lb achieved in 2018 as a result of the higher levels of copper production (2018 – 4,187t)
  • The company reports a 31st December 2019 cash balance of US$1.9m.
  • In March 2020 the company announced a 5% increase in reported measured and indicated tonnage compared with the previous, September 2017, estimate which showed improvements in grades for all the metals with copper 4% higher than the earlier estimate with copper and silver 6% and 7% higher respectively and the company points out that ʺThe revision established significantly increased Indicated and Inferred Resources and defined a set of +2% copper mineralized bodies that are the focus of our current mine planning and operations to increase the average grade of mill feed to about 2%ʺ.
  • The company reiterates that discussions with investors to fund an expansion of operational throughput to 1500tpd are ʺare at an advanced stage with anticipated finalization of funding by the end of Q2 2020ʺ.
  • When the funding is completed, the company intends to engage ʺan external contractor to accelerate underground capital development at the Ming Mine. This will set up the mine with enough flexibility to maintain 1,500 tpd at 2% copper grade, by the end of 2020.ʺ
  • At the Nugget Pond Mill, improvements are planned to enable the crushing, grinding and filter capacity to expand to ʺsustainably process 1,500 tpd at 2% copper gradeʺ.
  • President and CEO, Andre Booyzen, summarised the results saying that ʺAll in all, 2019 was a positive year in the operation.  However, given the decline in copper price, the improvements, while narrowing our financial losses, did not lead to a shift to profitability. We must further improve our operations to  deliver 1,500 tonnes ore processed per day at 2% copper grade.”

Conclusion: The improved unit production costs strengthened the financial performance of Rambler Metals though copper prices proved too weak to restore profitability. The expansion of the mineral resource announced in March and the increased mine development work sets the groundwork for an expansion to a 1500tpd production rate at grades of around 2% copper once finance is agreed.

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


Serabi Gold* (SRB LN) – 93p, Mkt cap £50.4m – Exploration results from Sao Chico

  • Serabi Gold has reported results from a further eight surface and ten underground drill holes from its extension drilling programme at Sao Chico.
  • The drilling is testing westerly extensions of the Main vein and is confirming continuity of grade at depth. Among the results highlighted in today’s announcement are:
    • A 5.30m wide intersection of the Main Vein at an average grade of 12.1g/t gold from a depth of 344.70m in surface hole 20-SC-166 including a higher grade section of 2.55m from 346m which averaged 24.37g/t gold; and
    • A 3.40m wide intersection of the Main Vein at an average grade of 3.94g/t gold from a depth of 292.6m in surface hole 20-SC-164; and
    • A 1.37m wide intersection of the Main Vein at an average grade of 28.77g/t gold from a depth of 1.84m in underground hole 20-SCUD-341; and
    • A 2.72m wide intersection of the Main Vein at an average grade of 5.06g/t gold from a depth of 4m in underground hole 20-SCUD-343.
  • CEO, Mike Hodgson explained that in addition ʺFurther west we have new holes 20-SC-167, 169 and 170.  These are the three most westerly holes and all three intersected the Main Vein with the clearly defined vein/alteration being visible.  Whilst the grades returned from the intersections (hole 20-SC-170 graded 1.00m @ 1.09g/t Au) are quite low, this is not unusual and most importantly the intersections demonstrate continuity of a gold bearing structure that is still going strong in our most western hole, now located 375 metres west of the current mine workingsʺ.
  • He also explained that further geophysical and geochemical exploration and additional reverse-circulation drilling of the Cicada anomaly were all yielding encouraging results.
  • Mr. Hodgson also confirmed that ʺOn the operations front we have enjoyed another good month in April with final production expected to be approximately 3,400 ounces and we are starting to be able to change over a small number of staff each week who have been tested for COVID-19 and undertaken a period of quarantine.”

Conclusion: Serabi Gold is continuing to extend the mineralised envelope at Sao Chico with the latest drilling results. We look forward to further news as the exploration continues.

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


SolGold* (SOLG LN) 27.1p, Mkt cap £493.3m – Franco Nevada agrees up to US$150m financing for Alpala  

  • Solgold reports that Franco Nevada has agreed to provide US$100m of NSR funding to the development of the Alpala project. Franco Nevada has an option to increase the funding packahge to US$150m.
  • The initial US$100m attracts a 1% NSR ʺcalculated with reference to Net Smelter Returns from the Cascabel licence areaʺ while the additional US$50m attracts a 1.5% NSR.
  • ʺConcurrently with the entering into of the NSR Financing Agreement, SolGold and Franco-Nevada have also entered into a US$15 million secured Bridge Loan Agreement (“BLA”) of immediately available funds as an initial advance (the “Advance”) prior to closing the NSR Financing Agreement. The full amount of the Advance will be disbursed by Franco-Nevada to SolGold today.ʺ The advance funding is for a period of 4 months at an interest rate of 12%pa and can be extended for a further 4 months period.
  • Nick Mather, CEO of Solgold expressed appreciation for Franco-Nevada’s support in the run-up to the final feasibility and investment decision at Alpala and ʺ for Franco-Nevada’s endorsement of the Alpala Project.  The US$100 million of funding generated, plus the option to upscale the royalty by US$50 million for an additional 0.5% NSR at SolGold’s option, will see the rapid advancement of the Alpala Project”.
  • Solgold’s General Manager of Corporate Finance, Ingo Hofmaier, said that ʺWith BHP, Newcrest and now Franco-Nevada having exposure to the project, there should be no doubt as to the quality of Alpala or Ecuador as a sovereign mining destination for project development capital. Franco-Nevada is the largest royalty and streaming company by market capitalisation, has a history of investing into world-class assets and has invested US$3.1 billion in Latin America since 2015, with SolGold being Franco-Nevada’s first financing in Ecuador”.
  • The proceeds of the financing are to be deployed ʺto fund the costs to complete the Feasibility Study and any surplus will be used for SolGold’s share of the development of Alpala pursuant to agreements with the minority shareholder of ENSA, Cornerstone Capital Resources Inc. (“Cornerstone”).ʺ
  • As a result of the travel restrictions imposed to contain the Covid19 pandemic, Franco Nevada has deferred a site visit until restrictions ease, however, other due-diligence studies have been completed and ʺAs a backup measure, both parties are also investigating alternatives to a conventional site visitʺ.

Conclusion: The support of Franco Nevada further endorses the quality of the Alpala project which has already attracted investment from the major mining companies, BHP and Newcrest Mining

*SP Angel act as Financial Advisor and broker to Solgold 


Vast Resources* (VAST LN) 0.17p, Mkt Cap £18m – Baita Plai update

  • Adrian Badita is joining the Company as General Manager at Baita Plai from the 18th of May.
  • Mr Badita, an Australian and Romanian national, is a mining engineer and a qualified Competent Person under the JORC code.
  • He has over 20 years of experience in the mining sector and has supervised several large-scale operations including a $1.5BN operation producing 100 million t/year.

Conclusion: The Company is bringing Adrian Badita in as Baita Plai General Manager as the team is targeting recommissioning of the polymetallic mine in Romania within six months of securing the funding earlier in January.

*SP Angel acts as Broker to Vast Resources



John Meyer – 0203 470 0490

Simon Beardsmore – 0203 470 0484

Sergey Raevskiy – 0203 470 0474



Richard Parlons – 0203 470 0472

Abigail Wayne – 0203 470 0534

Rob Rees – 0203 470 0535


SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London



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

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


Sources of commodity prices


Gold, Platinum, Palladium, Silver

BGNL (Bloomberg Generic Composite rate, London)

Gold ETFs, Steel


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


Oil Brent


Natural Gas, Uranium, Iron Ore


Thermal Coal

Bloomberg OTC Composite

Coking Coal




Lithium Carbonate, Ferro Vanadium, Antimony

Asian Metal


Metal Bulletin



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.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.

Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.

Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

MiFID II – Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).

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%

Source link

Add a Comment