SP Angel . Morning View . Growing number of coronavirus cases in China weigh on risk sentiment

SP Angel . Morning View . Tuesday 21 01 20

Growing number of coronavirus cases in China weigh on risk sentiment


MiFID II exempt information – see disclaimer below   

Adriatic Metals* (ADT AU) – Rupice metallurgical results

BHP (BHP LN) – Half-Year Production report

BlueRock Diamonds* (BRD LN) – Achieves profitable operations during H2 2019

Base Resources (BSE LN) – Assays indicate likely high-grade extension to Toliara project in Madagascar

Caledonia Mining (CMCL LN) – Increased holding in the Blanket gold mine

Highland Gold (HGM LN) – 300.7koz produced in FY19 v 290-300koz guided

Jangada Mines (JAN LN) – drilling starts at vanadium property

Premier African Minerals* (PREM LN) – Power supply connected at RHA

Sunstone Metals Limited (STM AU) – Bramaderos Main assays extend strike length of mineralisation to 650m


Funds buy into copper as trade war uncertainty lifts (Reuters)

  • Funds have been holding a net long position on the CME copper contract since the beginning of this year, the first time they have been collectively bullish since April 2019.
  • Market sentiment began improving in December, as the prospect of a US-China trade deal loomed.
  • Funds turned net long of copper around the middle of January, amounting to 6,906 contracts.
  • Copper has other fundamentals aiding its bull run, such as supply falling 0.4% in the first nine months of 2019, and LME and ShFE stocks being at their lowest since 2014 (ICSG).


Gold US$1,561/oz – prices hold steady as China instates measures to contain new coronavirus.

  • Gold prices continue to hold relatively high levels on heightened geopolitical risk relating to Iran, Syrah and Libya.
  • The head of the IMF warned on risks to the global economy at Davos yesterday cutting global growth forecasts to 3.3% from 3.4%.
  • The IMF also revised its China growth forecast higher by 0.2% to 6%, diplomatically holding a forecast that looks politically acceptable to China despite real Chinese growth figures generally accepted to be be substantially less than the official figures.
  • The IMF also tweaked US growth 10.% lower to 2.0% .


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New IMF growth outlook released yesterday showed the global economy is expected to show a modest rebound in 2020 after growth slowed to the weakest pace since the financial crisis.

  • Global growth may be bottoming out helped by positive signs of a turnaround in the manufacturing activity and global trade supported by “a broad-based shift toward accommodative monetary policy, intermittent favourable news on US-China trade negotiations, and diminished fears fo a no-deal; Brexit, leading to some retreat from the risk-off environment that had set in at the time of the October WEO”.
  • Among downside risks the fund highlighted “rising geopolitical tensions, notably between the United States and Iran, intensifying social unrest, further worsening of relations between the United States and its trading partners, and deepening economic frictions between other countries”.
  • Global GDP will expand 3.3% in 2020 and 3.4% in 2021 versus 2.9% last year.
  • This marks a downward revision of -0.1pp and -0.2pp estimated previously in Oct/19, respectively, which largely reflects “a more subdued growth forecast” for India.
  • US growth is expected to come down from 2.3% in 2019 to 2.0% (-0.1pp) in 2020 and 1.7% (-) in 2021 as the effect of lower taxes to wane and expected weaker support from further loosening of financial conditions.
  • China is expected to post 6.0% (+0.2) and 5.8% (-0.1) growth rates v 6.1% in 2019 as the nation agreed “phase one” trade deal with the US.
  • “However, unresolved disputes on broader US-China economic relations as well as needed domestic financial regulatory strengthening are expected to continue weighing on activity,” the fund said in the report.
  • Euro zone projected to show 1.3% (-0.1) and 1.4% (-) growth rates v 1.2% in 2019 supported by improvements in external demand.
  • India is expected to grow 5.8% (-1.2) and 6.5% (-0.9) v 4.8% this year on the back of stronger than expected slowdown in domestic demand amid stresses in the financial sector and a drop in credit growth.


China – China virus worries weigh on risk sentiment this morning with global equity indices trading lower this morning.

  • Authorities have said the latest disease was caused by coronavirus, the same kind of pathogen involved in SARS outbreak 17 years ago that claimed 800 lives.
  • The source and transmission routes of the 2019-nCoV virus remain unknown with some of the first group of patients in Wuhan, central China, worked or shopped at a seafood market.
  • Health officials in Wuhan confirmed a fourth death today with almost 200 confirmed cases of the virus, Bloomberg reports.
  • 15 medical workers are reported to have been infected, with one in critical condition, according to a report from state news agency Xinhua.
  • The news over medical workers contracting the virus indicates that the disease is more easily transmitted than previously thought, bringing it to a higher risk level.


UK – The pound is up 0.3% against the US$ today on better than expected employment data in November.

  • The economy added more jobs and earnings climbed stronger than markets estimated.
  • Av Weekly Earnings (3M %yoy): 3.2 v 3.2 in October and 3.1 forecast.
  • Employment Change (3M/3M): 208k v 24k in October and 110k forecast.
  • Unemployment rate: 3.8 v 3.8 in October and 3.8 forecast.


South Africa – Chrome firms warn of more than 1,200 job cuts

  • Chrome firms warned of the job cuts on Monday, citing power cuts, rising electricity tariffs and increased competition from overseas.
  • The announcement piles further pressure on President Ramaphosa to sort out state power utility Eskom, which has struggled with breakdowns causing citywide blackouts.
  • Glencore and Merafe Resources announced they could cut up to 665 jobs at their Rustenburg ferrochrome smelter.



US$1.1088/eur vs 1.1089/eur last week.  Yen 109.97/$ vs 110.17/$.  SAr 14.552/$ vs 14.553/$.  $1.301/gbp vs $1.297/gbp.  0.685/aud vs 0.687/aud.  CNY 6.903/$ vs  6.864/$.


Commodity News

Gold US$1,561/oz vs US$1,561/oz last week

   Gold ETFs 81.7moz vs US$81.7moz last week

Platinum US$1,006/oz vs US$1,027/oz last week

Palladium US$2,454/oz vs US$2,570/oz last week

Silver US$18.02/oz vs US$18.07/oz last week


Base metals:   

Copper US$ 6,153/t vs US$6,273/t last week

Aluminium US$ 1,814/t vs US$1,812/t last week

Nickel US$ 13,830/t vs US$13,890/t last week

Zinc US$ 2,430/t vs US$2,437/t last week – Zinc prices hit two-month high on Monday (Reuters)

  • A flurry of buying saw the price rise, as the market worried about historically low inventories.
  • LME zinc stocks are close to 20 year lows at about 50,000t, having been trending downwards since October 2015.

Lead US$ 1,956/t vs US$1,989/t last week

Tin US$ 17,660/t vs US$17,795/t last week



Oil US$64.5/bbl vs US$65.2/bbl last week – Oil prices nudged higher yesterday as the civil war in Libya forced two of the nation’s largest oilfields to begin shutting down

  • Commander Khalifa Haftar’s forces closed a pipeline connecting Libya’s largest oilfield and another major production base
  • Brent crude rose about 1.1% before retreating to hover at about $65.11. It reached the highest price since  9 January
  • Prices subsequently retreated on open this morning as global leaders met in Berlin and agreed that no external forces will be entertained and major powers are “fully committed” to a peaceful resolution in Libya
  • Brent futures are down 0.2% to $65.5/bbl, whilst WTI futures were down 0.2% to US$59.4/bbl

Natural Gas US$1.914/mmbtu vs US$1.932/mmbtu last week – US natural gas prices fell to the lowest level in four years on Monday, plunging below US$2/MMbtu as ample supplies and warmer-than-expected weather weigh on the market

  • According to Natural Gas Intelligence, citing Bespoke Weather Services, “The latest guidance showed a huge change in the warmer direction”
  • The latest European model still shows colder air into the northern US January 17-24 for stronger demand, just not nearly as cold

Uranium US$24.60/lb vs US$24.60/lb last week



Iron ore 62% Fe spot (cfr Tianjin) US$94.7/t vs US$94.7/t

Chinese steel rebar 25mm US$571.1/t vs US$574.3/t – China – steel prices pull back as buying slows ahead of New Year holiday migration and on slower housing demand

  • Steel futures prices have unsurprisingly pulled back in China following recent gains.

Thermal coal (1st year forward cif ARA) US$60.1/t vs US$60.4/t

Coking coal futures Dalian Exchange US$181.0/t vs US$181.4/t



Cobalt LME 3m US$32,250/t vs US$32,250/t

NdPr Rare Earth Oxide (China) US$40,418/t vs US$40,649/t – Australia opens critical minerals office (Mining Weekly)

  • The Australian government has opened the new Critical Minerals Facilitation Office, to support the development and growth of the sector.
  • Government officials hope that this will help Australia become an international powerhouse in the supply of critical minerals, with increasing demand from the rising use of EVs, renewable energy and smart phones.
  • Critical minerals projects will also be able to apply for financial support with the help of the office, tapping into funds such as the Defence Export facility and Export Finance Australia.

Lithium carbonate 99% (China) US$5,577/t vs US$5,609/t

Ferro Vanadium 80% FOB (China) US$28.5/kg vs US$28.5/kg – European ferro-vanadium price hits four-month high in active spot market (Fastmarkets MB)

  • Fastmarkets assessed the Ferro-vanadium basis 78% V min, 1st grade, ddp Western Europe at $24.80-26.20/kg on Friday, the strongest it has traded since early October.
  • Prices have now risen for four consecutive pricing sessions, amid tightening prompt availability and speculation led by traders.

Antimony Trioxide 99.5% EU (China) US$5.0/kg vs US$5.0/kg

Tungsten APT European US$235-245/mtu vs US$235-245/mtu

Graphite flake 94% C, -100 mesh, fob China US$540/t vs US$540/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,550/t vs US$2,550/t


Battery News

Korean battery makers to benefit from an expanding European EV market (Pulsenews)

  • Moves by Korean companies to build manufacturing facilities in Europe could pay off with them now well positioned to benefit from EV growth in Europe.
  • Momentum is with the European EV market, it is now the 2nd largest globally whilst US and Chinese markets grew at a slower pace last year. The growth is driven by the pro-EV stance of the European Union.
  • LG Chem, Samsung SDI and SK Innovation are each considering output increases at their European plants. SK Innovation is currently constructing a second plant in Hungary and could expand its output from 10GWh to 16GWh to better supply Volkswagen with whom it is intalks with about a JV. (Reuters)


India’s shift to EV reliant on Chinese imports of lithium chemicals (Bloomberg)

  • In 2019 Prime Minister Modi unveiled a $1.4b plan to make India a manufacturing hub for EV, but today the country has little battery or EV manufacturing or supply chain infrastructure.
  • India in the short term will be reliant on imported Chinese lithium chemicals whilst domestic companies seek stakes in overseas resources and look to onshore manufacturing. National Aluminium, Hindustan Copper Ltd and Mineral Exploration Corp have formed a JV to acquire lithium and cobalt mines abroad.
  • A ‘National Energy Storage Mission’ draft document in 2018 highlighted that the country lacks the natural resources common in batteries. It noted that in the short term India could focus on assembling battery packs domestically using imported cells. (Energy Storage News)
  • Another potential stumbling block is resistance to invest in the battery space in India due to a lack of demand for EV. Bloomberg Quint reported in October that Amara Raja Batteries Ltd. was hesitant to set up lithium-ion battery manufacturing units in India for this reason.
  • In 2018 only 3,000 electric vehicles were sold in India but the country is forecast to become the fourth largest market for EV by 2040.


Company News

Adriatic Metals* (ADT AU) A$1.85, Mkt cap A$329m – Rupice metallurgical results

  • Adriatic Metals reports results of metallurgical testing of material from the Rupice deposit in Bosnia conducted by Wardell Armstrong International. The testing follows an initial programme of work announced in September 2019 which showed recovery rates of 82.7% for copper, 66.7% for gold, 92.6% for silver, 81.7% for zinc and 90.4% for lead.
  • The sample material consists of half drill core from a total of 9 drill-holes suggesting that sample volumes are relatively modest, consistent with the relatively early stage nature of the testing.
  • The results for the recent work show recovery rates of 89.7% for copper, 69.3% for gold, 92.1% for silver, 75.8% for zinc and 84.9% for lead.
  • Although the test work is still at a relatively early stage, today’s results broadly confirm the earlier work with improved recovery rates for copper and precious metals and slightly lower rates for the lead and zinc.
  • The company comments that “Optimisation work is expected to improve …[the zinc recovery in the zinc concentrate] …to 80-85% as obtained in the previous average grade test work.”
  • The company also comments that barite concentrate assayed 92.3% BaSO4 at a recovery of 77.6% which is an increase of 6% recovery over the average grade results. Based on previous test work and the grade of this barite produced the specific gravity (SG) has been estimated at this time to be 4.4, well above the American Petroleum Institute (API) specification”.
  • Testing has also shown that A number of deleterious elements, such as Antimony, are concentrating to a sufficient grade that in certain smelters they would either attract no penalty or be payable”.
  • Today’s announcement also reports the appointment of the consultants, Ausenco Engineering Canada as the lead consultant and manager for the preliminary feasibility study.
  • Commenting on the appointment and the metallurgical results, Managing Director, Paul Cronin, said that “Although this program of test work has only just begun, and I am hopeful of further progress that can be incorporated into our feasibility work recently commenced by Ausenco.”

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


BHP (BHP LN) FOLLOW 1,796p, £101.7bn – Half-Year Production report

  • BHP’s production report for the six months ending 31st December 2019 sees full year production guidance unchanged across the group’s entire commodity spread although petroleum output is expected to be at the lower end of the indicated 110-116 MMboe.
  • Copper output across the group rose by 7% to 885,000t led by a 4% increase at Escondida to 602,000t where “unit costs [are] tracking below full year guidance … largely as a result of higher by-product credits”. Guidance for full year production from Escondida is maintained in the range 1.16-1.23mt.
  • At Olympic Dam, copper output rose by 32% to 85,600t compared to the H1 last year which experienced availability problems with the acid plant. Annual guidance for Olympic Dam remains intact at 230-250,000t.
  • Iron ore output is broadly unchanged at 121.4mt (+2% compared to H1 2019) and full year guidance is maintained at 242-2536mt. Mining remains suspended at Samarco in Brazil.
  • Coal production showed a slight decline of 2% in metallurgical coal output to 20mt (full year guidance 41-45mt) while energy coal output declined by 12% to 12mt as a result of lower production from Cerrejon in Colombia where the focus is on the production of higher quality and where operations were also adversely affected by weather.
  • Greenfield exploration focussed “on advancing copper targets within Chile, Ecuador, Mexico, Peru, Canada, South Australia and the south-west United States”.
  • The company comments that Consistent with our focus on copper, in November 2019, BHP increased its interest in SolGold* Plc, the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador, by 3.6 per cent to 14.7 per cent.”

*SP Angel act as Financial Advisor and broker to Solgold


BlueRock Diamonds* (BRD LN)  FOLLOW122p, Mkt Cap £4.0m – Achieves profitable operations during H2 2019

  • BlueRock diamonds reports that it achieved profitablility for the first time during the second half of 2019.
  • The result reflects the new, and more experienced, management which has raised production and processing throughput rates through a combination of better scheduling, machinery availability, some new process plant and better working practices.
  • Overall diamond sales rose by 118% to 12,675 carts (2018 – 5,805 carats) reflecting higher production volumes (up 70% to 323,000t)  and improved grades (4.34cpht compared to 3.28 cpht in 2018).
  • The company achieved a 24% increase in average prices per carat to US$415/carat (FY 2018 – US$334/carat) and combined with the increased sales volume, led to a 190% increase in revenues to £4.1m.
  • Operating at or near “current capacity (40,000 tonnes per month), it continues to benefit from increased economies of scale and management remains focussed on cost reduction” and the company reports that unit costs, on an unaudited basis, fell to US$275/carat during the second half of 2019 ”compared with the cost per carat for August and September 2019 (the first two months of operating at near capacity) of approximately USD300.  This compares to the sale price per carat in Q4 2019 of USD410.”
  • Commenting on the result, Executive Cjhairman, Mike Houston, expressed pride in the “continued success at Kareevlei, having achieved the aggressive guidance for 2019 and operated profitably for the first time in the second half of 2019.  We are proud of this key milestone, which is a testament to the implementation of the revised production strategy brought in by the Company’s new management team in Q2 2019.”
  • He went on to emphasise that the focus for the future is “on stabilising production ahead of maximising the exploitation of the resource.  To that end, we are developing plans to effect a further step change increase in production and lower unit costs.”

Conclusion: Achieving profitability for the first time is an important milestone as the new management team focuses on cost containment and maintaining stable production.

*SP Angel acts as Nomad & Broker to BlueRock Diamonds


Base Resources (BSE LN) FOLLOW 13.5p, Mkt Cap £158m – Assays indicate likely high-grade extension to Toliara project in Madagascar

  • Base Resources report results from 770 aircore drill holes to the west of the current Ranobe ore reserve at Toliara
  • The good news is that mineralogical work indicates that two high grade lower sand unit intercepts show that ilmenite, rutile and zircon make up some 50% of the heavy mineral assemblage.
  • There is also an increasing proportion of chloride ilmenite which is currently saleable at higher values.
    • Hole R2076 – 81m @ 15.7% HM and 8.5% slimes, including LSU of 67.5m @ 18.3% HM and 9.3% slimes.
    • Hole R2074 – 87m @ 13.9% HM and 5.1% slimes, including LSU of 69m @ 16.4% HM and 5.4% slimes.
    • Hole R2084 – 71.5m @12.2% HM and 5.4% slimes, including LSU of 41.5m @ 17.6% HM and 6.7% slimes.
    • Hole R1507A – 72m @11.6% HM and 8.2% slimes, including LSU of 43.5m @ 16.5% HM and 7.1% slimes.
    • Hole R2022 – 87m @ 9.1% HM and 5.8% slimes, including LSU of 52.5m @ 13.8% HM and 7.3% slimes.
  • LSU ‘Lower Sand Unit’.

Key figures from the DFS reported in December are:

  • Production:
  • 780kt ilmenite (sulphate, slag and chloride)
  • 53kt zircon
  • 7kt rutile
  • Throughput:
  • 13mtpa – Stage 1
  • 19mtpa – Stage 2
  • Capex:
  • Stage 1 – US$442m
  • State 2 – US$69m.
  • Op costs:
  • US$4.31/t of ore mined.
  • US$94/t produced inc. 2% royalty
  • IRR:
  • 21.4%.
  • NPV:
  • US$652m post tax at @ 10% discount
  • US$461m post tax at @ 12% discount
  • Payback:
  • 4.25 years
  • Life of Mine – 33 years.

Conclusion: The release of high-grade heavy mineral assays from Toliara looks like good news for future estimates of the life and value of the project.

On-the-ground work was suspended in November by the Government of Madagascar though this did not prevent the publication of the revised DFS and ongoing assessment of the project.


Caledonia Mining (CMCL LN) FOLLOW 655, Mkt Cap £70.4m – Increased holding in the Blanket gold mine

  • Caledonia Mining has announced that it has increased its holding in the Blanket gold mine in Zimbabwe to 64% through the acquisition of an additional 15% interest from Fremiro which acquired its interest in2012 as part of the Zimbabwean Indigenisation and Empowerment legislation.
  • The transaction is valued at US$16.667m which has been settled through the cancellation of a loan between Fremiro and Caledonia and the issue of 727,266 new shares in Caledonia” giving Fremiro approximately 6.3% of the enlarged Caledonia Mining.
  • The potential acquisition of the Fremiro stake was first announced in November 2018 and commenting on today’s announcement, Caledonia Mining’s Chief Executive, Steve Curtis, said I am pleased to report that the Company has concluded its transaction with Fremiro to increase Caledonia’s shareholding in Blanket to 64 per cent. I would like to thank Fremiro for its support as a shareholder in Blanket during the last seven years and am confident that Fremiro, now as a significant shareholder in the Company, will continue to be supportive of Caledonia’s business going forward.”

Conclusion: The acquisition of an additional 15% interest in the Blanket mine comes at a time when a major capital investment programme aimed at accessing deeper level mineralisation and securing the mine’s life into the mid-2030s is coming to fruition. The acquisition demonstrates that, despite its many economic challenges, Zimbabwe is an increasingly attractive destination for mining investment.


Highland Gold (HGM LN)  FOLLOW184p, Mkt Cap £669m – 300.7koz produced in FY19 v 290-300koz guided

  • Q4 production totalled 83.4koz, up from 65.8koz recorded in Q4/18 that excluded ounces from the Valunisty mine and related assets (Q4/18: 9.5koz) that were acquired at the end 2018.
  • At MNV and Novo production climbed to 35.5koz (+9.1%yoy) and 27.0koz (+25.2%yoy) reflecting better processed grades in the final quarter of the year.
  • MNV FY19 production came in at 123.8koz (+9.9%yoy) on improved head grade and ore processing volumes.
  • The team continued exploration works at both known mineralised orebodies as well as satellite greenfield targets at MNV with updated JORC MNV reserves due in early 2020.
  • Novo FY19 production was 106.7koz (-5.3%yoy), higher than planned, but still down on the year due to a drop in throughput grades and lower conversion rates for base metals given a strong increase in gold prices.
  • Expansion project for the mine and the processing plant from 800ktpa to 1,300ktpa is scheduled for completion later this year.
  • At Belaya Gora production increased to 12.6koz (+8.9yoy) as higher gold recoveries more than compensated for lower throughput rates.
  • Belay Gora FY19 production was 40.1koz (-9.1%yoy) due to processing plant challenges recorded in Q2/19 and lower processed grades in Q2-Q3.
  • The Company is planning to commission the CIP circuit at Belaya Gora by the end of the year to improve recoveries from current 75-78% up to 90%.
  • At Valunisty output totalled 8.2koz (-13.0%yoy) as the mill in line with the mine plan processed lower grad material from the Glavanaya and Novaya zones instead of the main Valunisty deposit and satellite Gorny mine.
  • Valunisty FY19 production was 30.0koz (-20.4%yoy).
  • At Kekura, the major growth and development project of the Group, pre-stripping and initial mining commented in the latter part of Q4/19 with pilot processing plant expected commissioning in 2020 and full scale project start in 2023.
  • FY19 production was 300.7koz (FY18: 269.5koz), slightly above the 290-300koz annual management guidance.
  • Average realised gold price climbed to $1,482/oz in Q4/19 and $1,395/oz for FY19 ($1,230/oz in Q4/18 and $1,255/oz in FY18).
  • Anton Kim, COO, will be leaving the Company as of January 24 with Sergey Baikalov, a Managing Director for the Khabarovsk cluster, to be temporarily filling in the position before the Company finds new candidate on a permanent basis.

Conclusion: Stronger production at MNV compensated for weaker performance at other operations of the Group in FY19 with annual production coming in at the top end of the guided 290-300koz range. The team continued to progress with optimisation projects across its portfolio of assets including 1.3mtpa project at Novo and the installation of the CIP circuit at Belaya Gora, among other things, while advancing preparatory works at Kekura ahead of the commissioning of the pilot processing plant.


Jangada Mines (JAN LN)  FOLLOW2.15 pence, Mkt Cap £5.2m – drilling starts at vanadium property

  • Jangada Mines report the start of drilling at their Pitomberias vanadium prospect in Brazil.
  • The 2,500m drill program is expected to last 90 days and will test the prospect’s three most prospective magnetic anomalies.
  • “A preliminary JORC (2012) Exploration Target has been projected from drilling, magnetic survey and rock chip geochemistry to range between 40 Mt to 60 Mt tonnes at 0.3% to 0.6% V2O5, 40% to 55% Fe2O3 and 8% to 10% TiO2.”

Conclusion:  The hurdles to the evaluation, financing and construction of a vanadium mine are many and considerable in our view. The lack of a liquid LME vanadium price does not help financing while the cost of developing a new vanadium process plant is expected to be over $300m.

Some relatively high grade mines with low impurity levels may be able to produce a saleable primary concentrate but transport costs can make this impractical for mines that do not have easy access to existing transport links. By-product credits for titanium concentrate may also serve to add some value though this can add to capital costs with offtakers again demanding low impurity levels.


Premier African Minerals* (PREM LN)  FOLLOW0.093p, Mkt Cap £10.4m – Power supply connected at RHA

  • Premier African Minerals reports that grid power has now been connected to its 49% owned RHA tungsten mine in Zimbabwe  and that “adequate power is available from the national grid to consider the resumption of plant operations at the end of January to reprocess historic tailings”.
  • The company explains that the potential to reprocess the tailings material is supported by the fact that historic tailings are already mined and milled such that the tailings may be fed directly to the gravity recovery sections of the plant, with the added benefits of only needing to run a portion of the plant and reaping the benefits of much lower overall operating costs, better plant availability, reduced maintenance and lower manpower requirements”.
  • The company also comments that “the availability of electrical power has substantially reduced the cost associated with operating the plant. Similarly, and by arrangement with MN Holding Limited (“MNH”) in which Premier has recently acquired a shareholding, the capital plant needed to feed the tailings at RHA is now expected to be potentially available to RHA at net operating cost only.”
  • The volume of tailings available for reprocessing is not readily apparent, however in an announcement on 29th June 2016 referenced in today’s announcement, the company said that metallurgical test work has resulted in recoveries of up to 60%, at acceptable concentrate grades”.
  • Commenting on today’s announcement, CEO, George Roach said that “I believe that it is completely logical that RHA should now look to consider the reprocessing of the tailings dumps as soon as possible.”

Conclusion: The ability to draw grid power allows the company to consider the resumption of limited production through the reprocessing of historic tungsten bearing tailings at the RHA mine in Zimbabwe. We await further news

*SP Angel have an agreement with Premier African Minerals as a result of the acquisition of Northland Capital Partners


Sunstone Metals Limited (STM AU) A$0.17, Mkt cap A$23.5m – Bramaderos Main assays extend strike length of mineralisation to 650m

  • Assays from drilling at Sunstone’s Bramaderos project in Ecuador appear to extend the known mineralisation at the Bramaderos Main gold-copper deposit.
  • Intervals include:
    • 127m at 0.57g/t gold and 0.1% copper from 216.8m in BMDD005,
      • including 39m at 0.72g/t gold and 0.13% copper from 295m
    • 46.2m at 0.45g/t gold and 0.18% copper from 15m, and 72.5m at 0.42g/t gold and 12% copper from 319.15m
  • The results appear to demonstrate that Bramaderos Main may be a larger-scale gold-copper porphyry system.



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



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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.

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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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