SP Angel . Morning View . Wednesday 05 08 20


SP Angel . Morning View . Wednesday 05 08 20

Gold breaks $2,000/oz ahead of new US stimulus

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MiFID II exempt information – see disclaimer below 

AfriTin (ATM LN) – July concentrate production at Uis mine increases by nearly 80%

Europa Metals Limited (EUZ LN) – Board changes and progress report on Toral zinc, lead, silver project in Spain

Hummingbird Resources (HUM LN) – Production dips in Q2 but FY20 guidance maintained at 110-125koz and net cash status expected in H2/20

IronRidge Resources* (IRR LN) – High grade drilling results at the Zaranou Gold Project in Côte d’Ivoire

Prospect Resources* (PSC AU) – Assays confirm Arcadia as an ultra-low iron lithium producer

SolGold* (SOLG LN) – Board changes

Sunrise Resources (SRES LN) – Mine reclamation permit is granted 

Talga Resources* (TLG AU) – Feasibility Study and Talnode anode demand leads Talga to go directly to commercial production in 2022

 

Gold surges past $2000/oz mark on US stimulus hopes

  • The price of gold rose above the key level for the first time on Tuesday afternoon, as the US government looks set to agree further stimulus to help the coronavirus-hit economy.
  • Both gold and silver are continuing to see strong support from safe-haven demand driven by the rise in Covid-19 infections, geopolitical concerns and inflationary worries.
  • The SPDR Gold Shares ETF has seen its gold reserve increase to 1,258t- surpassing the central banks of Japan and India as investors see it as an easy way to gain exposure to gold (FT).
  • Gold’s performance throughout this crisis could be a sign that the market is losing confidence in the US dollar as the world’s reserve currency, which is deteriorating due to global debt and huge levels of quantitative easing (Kitco).
  • The US dollar has continues is depreciation against other currencies, sliding over 2% and 5% over the Australian dollar and the euro respectively so far this year (FX Street).
  • Spot gold built on yesterday’s 2% increase on Wednesday morning, up 0.8% to $2,034/oz, whilst US gold futures built on yesterday’s 1.7% increase- rising 1.4% to $2,049/oz (Reuters).
  • The market has been unusually volatile this week starting with equities marked heavily lower on Monday morning in London and then recovering fast as US manufacturing data showed a stronger than expected recovery.

 

COVID-19 – No second wave currently in Europe according to COVID-19 data

  • Proff. Karol Sikora, Oncologist, CMO of Rutherford Holdings and Founding Dean and Professior of Medicine at UoB says:
  • “Just scanning through a few European countries and it certainly doesn’t look to me like there is a second wave rolling across the continent.
  • Some problem areas, but no huge, dramatic spikes like in March.”
  • “Yet more evidence on the importance of T cells is emerging. It’s significant. This isn’t just one rogue study now, it’s being increasingly documented.”
  • Other expert sources agree but are too cautious to speak publicly
  • The Media love to focus on a story, build up the downside argument and ignore positive developments.
  • Our mining clients are faced with supporting the health and safety of hundreds of thousands of mine workers around the world.
  • While we are not expert immunologists we feel ‘T Cell immunity’, which is largely unseen, is significant and could naturally hold back infection rates.

 

China’s excavator sales rose 60% yoy to 17,500 units in July (Xinhua)

  • Flood defences along the Yangtze are driving demand for excavators in Chine while other new infrastructure projects are a major driver for new excavation equipment.
  • Chinese excavator sales are forecast to reach around 15,200 units in July according to Sinolink
  • Sinolink also reckons China will sell 7% more excavators yoy or 2,300 units for export
  • They also see excavator sales rising 25% yoy to 300,000 units.
  • Excavator sales are a good lead indicator for construction activity and rising metals / commodity demand

 

Fertilizer Explosions – ammonium nitrate is commonly used in open cast mining for blasting 

  • Yesterday’s tragic explosion in Beirut which was around 20% of the size of Hiroshima, highlights the danger of storing ammonium nitrate fertilizer  
  • Sources claim a welder sparked the initial fire igniting chemicals which then spread to the ammonium nitrate stockpile
  • This is not the first massive fatal ammonium nitrate explosion, in 1947 a massive explosion in Texas City killed 581 people
  • The explosion happened when a ship being loaded with ammonium nitrate was ignited by a fire at the dockside
  • The ships 1.5ton anchor was found two miles away.
  • Ammonium nitrate is commonly used in mining as ‘Anfo’ and was also used in WWII by the Army
  • Anfo is a mixture of ammonium nitrate and diesel which is normally pumped from tankers into dry boreholes for detonation
  • Ammonium nitrate decomposes rapidly into nitrous oxide and water vapor which then explode when ignited
  • While the mixture is highly explosive it is relatively insensitive to mechanical impact and requires detonation making it normally safe to store, transport and use.
  • If the concrete silo at the port had not blocked much the blast we suspect more of Beirut would have been flattened.

 

Yangtze floods – Typhoon Hagupit combines with Yangtze flooding to raise alert levels in coastal areas 

  • The Yangtze overflowed for the third time on 26 July
  • 2m people have been displaced in the flooding with 55 million people affected in 27 out of 31 provinces.
  • Flooding is normally a result of man made changes to infrastructure and agriculture.
  • Economic losses are estimate to be US$20bn (9 News)
  • The natural disaster will temporarily set back Chinese economic recovery but will also give the government good reason to build more flood defences and ramp up economic activity

 

Peru – copper and gold production fall in H1

  • The world’s second largest copper producer saw H1 production fall 20.4% YoY.
  • Copper production increased 40.8% in June to 181,000t compared to the month prior as mines resumed production.
  • Gold production fell 35% in H1, although like copper, June production recovered 50% compared to May.

 

Congo – Government suspend VAT exemption for mining imports 

  • The DRC is suspending its VAT on imports by mining companies in an effort to boost state revenue.
  • Congo exempt mining companies from paying VAT on imports in 2016, although the country’s economy is forecast to contract by 2.4% this year.

 

Dow Jones Industrials

 

+0.62%

at

26,828

Nikkei 225

 

-0.26%

at

22,515

HK Hang Seng

 

+0.34%

at

25,032

Shanghai Composite

 

+0.16%

at

3,377

 

Economics

US – Lawmakers and the White House remain far apart on agreeing the size of the fiscal stimulus package as emergency unemployment aid expired last week.

  • Democrats called for a $3.4tn stimulus package, while Republicans have said they would only support a smaller deal, FT reports.
  • There is a chance Senate will need to postpone its August recess that is currently planned for August 8 – September 8.
  • US and China are planning to hold a call on August 15 to discuss the implementation of their Phase I trade deal while the relationship between two nations remains strained.
  • The discussion will mark an initial six-month review of the pact agreed in January.

US  Vehicle sales were rose to 14.5m in July vs 13.1m in June 

  • Factory orders rose 6.2% in June vs a 7.7% recovery in May
  • Factory orders ex transport rose by 4.4% in June vs 2.6% in May  

 

China – Private sector business gauge showed the economy continued to grow in July at a slightly reduced rate due a softer expansion in the services sector.

  • Services sector, which accounts for ~60% of the economy, slowed from a decade high the previous month with new export business dropped and job losses continuing, Reuters reports.
  • New overseas business orders contracted again in July following a brief expansion with overall new orders being largely driven by the domestic market.
  • The report follows on strong manufacturing PMI released earlier in the week that showed the sector expanded at the fastest pace in almost a decade, although export orders and employment also remained weak.
  • Caixin Manufacturing PMI: 52.8 v 51.2 in June and 51.1 est.
  • Caixin Services PMI: 54.1 v 58.4 in June and 58.0 est.
  • Caixin Composite PMI: 54.5 v 55.7 in June.

 

Eurozone – Regional PMI showed business activity returned to growth in July recovering from a trough in April and four months of contraction.

  • Composite PMIs for France (29-month high), Germany (23-month high), Spain (15-month high) and Italy (24-month high) rebounded strongly last month.
  • New business orders increased for the first time in five months as lockdown restrictions eased, although, external demand remained weak.
  • New export business declined for a twenty-second consecutive month in July, although the rate of contraction was only marginal.
  • Employment continued to contract with staff levels reduced for a fifth consecutive month.
  • Quickest drops in employment were registered in Italy, Spain and Germany.
  • “Whether the recovery can be sustained will be determined first and foremost by virus case numbers, and the recent signs of a resurgence pose a particular risk to many parts of the service sector, such as travel, tourism and hospitality,” Markit commented on the data.
  • Eurozone Markit Manufacturing (released on Monday): 51.8 v 47.4 in June.
  • Eurozone Markit Services: 54.7 v 48.3 in June.
  • Eurozone Markit Composite: 54.9 v 48.5 in June.

 

Currencies

US$1.1816/eur vs 1.1794/eur yesterday.  Yen 105.71/$ vs 105.87/$.  SAr 17.257/$ vs 17.139/$.  $1.310/gbp vs $1.310/gbp.  0.719/aud vs 0.715/aud.  CNY 6.953/$ vs 6.983/$.

 

Commodity News

Precious metals:

Gold US$2,029/oz vs US$1,976/oz yesterday

   Gold ETFs 108.5moz vs US$108.2moz yesterday

Platinum US$946/oz vs US$927/oz yesterday

Palladium US$2,144/oz vs US$2,102/oz yesterday

Silver US$26.31/oz vs US$24.34/oz yesterday

            

Base metals:   

Copper US$ 6,469/t vs US$6,456/t yesterday – LME copper stocks fall to lowest since March 2019

  • Latest data from the bourse shows that LME copper stocks fell by 2.2%, or 2,700 tonnes to 122,450 tonnes.
  • The decrease was driven by drawdowns in the Netherlands, and the price of copper on the LME rose 0.6% to $6,490/t (Bloomberg).
  • Ongoing issues copper miners are expected to limit supply .
  • A decision by Maersk, probably the world’s largest shipper of copper scrap into China to abandon the business will also disrupt copper supply from 1 September. Other shippers may also follow Maersk’s decision to withdraw from a market where uncertainty over Chinese regulatory controls poses increasing risk for shippers.

Aluminium US$ 1,774/t vs US$1,748/t yesterday

Nickel US$ 14,185/t vs US$13,965/t yesterday

Zinc US$ 2,335/t vs US$2,321/t yesterday

Lead US$ 1,894/t vs US$1,856/t yesterday

Tin US$ 17,785/t vs US$17,845/t yesterday

            

Energy:            

Oil US$44.6/bbl vs US$44.0/bbl yesterday

  • Oil prices surged today to the highest level in nearly two weeks after an explosion at Lebanon’s main port rocked the capital Beirut, stoking fears over instability in the region
  • US benchmark crude futures climbed 1.7% as local authorities say it was caused by highly explosive materials at the port, but did not immediately say whether it was an accident or an attack
  • Meanwhile, analysts’ expectation of a decline in US crude inventory levels in this week’s government report released this afternoon is also helping to buoy crude prices
  • Analysts in a Bloomberg survey are expecting a 3.35MMbbl decline in oil supplies in the Energy Information Administration report
  • Still, a persistent supply overhang coupled with a souring demand outlook due to the coronavirus pandemic has kept US crude futures locked in a tight trading range near US$40/bbl
  • WTI for September delivery advanced 69 cents to settle at US$41.70/bbl yesterday, currently trading much higher at US$42.2/bbl
  • Brent for October settlement climbed 28 cents to end the session at US$44.43/bbl
  • In physical markets, Bakken crude jumped 5 cents US$1.70/bbl under Nymex oil futures, the smallest discount since May
  • This week, Mars Blend, a high-sulphur crude, rose to US$1.30/bbl above Nymex WTI futures, the widest premium in a month
  • OPEC+ is on track with its plan to ease historic output curbs this month, even with global virus cases above 18 million

Natural Gas US$2.174/mmbtu vs US$2.145/mmbtu yesterday

  • Natural gas prices continued to rally rising another 4.1% after climbing a robust 16.7% on Monday
  • Warmer than expected weather is expected to cover most of the US for the next two weeks buoying natural gas demand
  • There is one disturbance in the Atlantic Ocean that has a 30% chance of becoming a tropical storm according to NOAA
  • This storm is unlikely to generate any issues for natural gas infrastructure
  • US LNG exports were unchanged week on week

Uranium US$32.30/lb vs US$32.30/lb yesterday

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$110.8/t vs US$110.6/t

Chinese steel rebar 25mm US$545.2/t vs US$542.5/t

Thermal coal (1st year forward cif ARA) US$59.8/t vs US$59.5/t

Coking coal swap Australia FOB US$122.0/t vs US$123.0/t

            

Other:  

Cobalt LME 3m US$33,200/t vs US$30,500/t

NdPr Rare Earth Oxide (China) US$43,651/t vs US$42,891/t

Lithium carbonate 99% (China) US$4,991/t vs US$4,969/t

Ferro Vanadium 80% FOB (China) US$30.0/kg vs US$30.0/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

 

Battery News

Lordstown Motors to go public via merger 

  • Lordstown Motors has entered into a definitive merger agreement with a blank-check company DiamondPeak Holdings. (Reuters)
  • The new entity will be known as Lordstown Motors Corp and will trade on the Nasdaq under the ticker ‘RIDE’.
  • The deal values the new entity at $1.6bn. The transaction is expected to close in Q4.
  • The transaction includes a $500m PIPE, including investments from GM, Fidelity Management & Research, Wellington Management and Federated Hermes Kaufmann Small Cap Fund.
  • Lordstown Motors design and manufacture electric vehicles. Their first vehicle is the EV pick-up the ‘Endurance’ will be released in 2021. The vehicle will have a range of 250+ miles with a 10hr/0.5-1.5hrs charge/fast charge time.

 

Singapore start-up looking to solve e-waste concerns

  • Green Li-ion has developed a multi-cathode processor and control unit the GLMC-1 that can achieve enhanced recovery of battery metals and produce recycled content free of impurities.
  • The technology makes use of co-precipitation to process various types of used Li-ion batteries including LCO, LMO, NMC and NCA.
  • The technique recovers metal salts in their original for without separation of the metal elements.
  • The process recovers graphite and cathode metal salts at 99% purity levels.
  • GMLC-1 increases the efficiency of battery recycling by greater than 200% with a carbon footprint 8x lower than if the raw materials were mined according to developers. (Eco-business)
  • Green Li-ion is seeking a partner to fund the development of a prototype and become an early adopter.

 

Vulcan Energy Resources achieves 90% lithium extraction from geothermal brines 

  • Bench scale test work at Vulcan’s Upper Rhine Valley Geothermal brines demonstrated 90% lithium recovery via DLE. (Australian Mining)
  • The Company was able to produce lithium chloride (LiCL) concentrates using techniques similar to other commercial lithium brine projects.
  • The breakthrough proves the effectiveness of commercial mature extraction technology in the area and significantly de-risks the project.
  • Vulcan makes use of a DLE process alongside low-carbon power/heat from geothermal production with no evaporation loss as brine is reinjected into the reservoir.

 

 

Company News

AfriTin (ATM LN) – 2.3p, Mkt cap £14.4m – July concentrate production at Uis mine increases by nearly 80%

  • Afritin reports that concentrate production at its Uis tin mine in Namibia rose by 79% to 35 tonnes during July. The concentrate grades of 65% tin resulted in 93% payability according to the aannouncement.
  • The improvements in July, which delivered the highest monthly concentrate production this year, come as the debottlenecking of the fines dewatering circuit nears completion and bring total concentrate production so far this year to 112 tonnes.
  • Plant performance has also improved on a number of operating measures with availability, utilisation and throughput all achieving monthly highs for the year during July.
  • Further work to debottleneck the plant are continuing and, in particular, modifications to the fines dewatering circuit are nearing completion and are expected to result in improved concentrator plant throughput”.
  • The company confirms the renewal of its offtake agreement with Thaisarco for a further 12 months and says that AfriTin has dispatched its sixth shipment of tin concentrate from Uis. The tin in concentrate grade has averaged 65%, representing a premium product largely free from deleterious elements. The Company is achieving an average payability of 93%, referring to the percentage of the LME tin price realised for the tin contained in concentrate”.
  • Afritin confirms that it is able to continue operations at full scale despite the impact of Covid19 and reports that there have been no confirmed cases of the infection at the Uis mine.
  • CEO, Anthony Viljoen, said that the performance of our Uis operation is displaying improvement, which, together with the rebound in the tin price and the successful completion of our recent capital raising, provide a strong platform for the rest of 2020”.
  • Mr. Viljoen also welcomed the continuing relationship with Thaisarco  which demonstrates confidence in our Company. Building on the results of our improvement initiatives, we expect to further expand production at Uis, while simultaneously advancing our project studies towards the full implementation of Phase 1”.

 

Europa Metals Limited (EUZ LN) 14.25 pence, Mkt Cap £1.7m – Board changes and progress report on Toral zinc, lead, silver project in Spain

  • Europa Metals reports the resignation of its non-executive Chairman, Mr. Colin Bird, with immediate effect. Mr. Bird’s role as Chairman is to be assumed, in an executive capacity, by technical director, Myles Campion and fellow board member, Laurence Read, has been appointed CEO.
  • The company says that a new non-executive director is to appointed in due course and that meanwhile its core team working on the Toral Project remains unchanged, overseen by Europa Iberia COO, Jesus Montero”.
  • Europa Metals confirms that its current focus at Toral comprises:
    • A new, third phase, metallurgical study, being conducted by Wardell Armstrong International (“WAI”).
    • An ore sorting analysis programme conducted by Bara Consulting. 
    • A product marketing and sales initiative. 
    • EU grant application for project funding. 
    • Awaiting Investigation Permit decision by the Junta of Castilla y León for a further three years”
  • Europa Metals also confirms that it is updating the JORC mineral resources estimate to incorporate the results of its 2019 drilling programme which included high grade intersections not currently reflected in the estimate.
  • The Company’s main objective is to bring together the results of the ongoing workstreams with data generated from previous work, completed by Europa Metals since the 2018 scoping study, in order to establish the preliminary economic parameters of an eventual pre-feasibility study”.
  • CEO, Laurence Read thanked Colin for his contribution to the Company during its initial period of operations in Spain. The Toral Project is now emerging out of the exploration phase into the feasibility stage. The Board believes Toral should be a first-rate source of concentrate that, with high grades and recovery, can be developed through the outlay of relatively low capital expenditure”.
  • Newly appointed Executive Chairman, Myles Campion said that The diligent work of the team in Spain has enabled the project to move forward over this last six months despite the restrictions of the current Covid-19 pandemic and strict adherence to best health and safety practices. The studies we have completed over the preceding 12 months can now be integrated into a new economic plan”.

Conclusion: The gap left by the sudden departure of Chairman, Colin Bird, is being filled by existing directors who confirm that work at the Toral project is continuing as normal towards an eventual pre-feasibility study.

 

Hummingbird Resources (HUM LN) 41p, Mkt Cap £146m – Production dips in Q2 but FY20 guidance maintained at 110-125koz and net cash status expected in H2/20

  • Q2/20 gold production amounted to 24.1koz (Q1/20: 30.3koz).
  • Quarterly AISC averaged $983/oz (Q1/20: $875/oz) reflecting lower processed grades (2.36g/t v 2.98g/t in the previous quarter).
  • An increase in unit costs was compensated with a similar increase in realised gold prices that averaged $1,663/oz in Q2/20 (Q1/19: $1,568/oz).
  • The Company increased inventories of parts, consumables, reagents and stockpiles in H1 as supply chains and logistics of people, supplies and parts remain stressed.
  • 2020 guidance maintained at 110-125koz with $995/oz in AISC.
  • Cash balance was at $6m with additional 4koz in gold inventory on hand.
  • Bank debt was reduced to $26m, down $14m since the end of 2019.
  • Yanfolila is expected to generate $60m in EBITDA in H2/20.
  • The Company remains on target for net cash positive status in H2/20 with the current bank borrowings to be fully repaid by end of H1/21.
  • 2020 exploration programme is over 75% complete with more than 12,000m drilled testing aimed at growing the resource around existing mining operations and new greenfield targets and adding new ounces into the mine plan.
  • The team secured approval for the change of Control of the Kouroussa project in Guinea.
  • Dugbe earn in non-refundable deposit of US$2 million received from ARX with necessary consents/waivers received from Anglo Pacific Group Plc and the Government of Liberia.

 

IronRidge Resources* (IRR LN) 19.5p, Mkt Cap £79m – High grade drilling results at the Zaranou Gold Project in Côte d’Ivoire

  • The Company reported strong drilling results from the ongoing AC/RC drilling programme at the Ebilassokro and Ehuasso targets, both located within  the Zaranou Gold Project.
  • High grade intersections include:
    • 5m at 270.5g/t from 4m including 1m at 1,075g/t in the AC drillhole at the Ebilassokro target (ZAAC0321);
    • 24m at 13.6g/t from 136m including 4m at 76.2g/t in the RC drillhole at the Ehuasso target (ZARC0013).
  • The ZARC0013 confirmed down dip extension of high grade mineralisation intersected in ZARC0009; mineralisation now open from surface to a vertical depth of 125m.
  • Previously reported ZARC0009 intersections included 2m at 1.26g/t from 4m, 2m at 3.35g/t from 38m, 6m at 3.81g/t from 52m, 2m at 4.72g/t from 98m, 8m at 0.74g/t from 104m, 2m at 4.6g/t from 116m and 14m at 0.66g/t from 128m within the Ehuasso target.
  • Visible gold was observed within the ZARC0019 hole from 82m to 83m at from 86m to 87m at the Ehuasso main target with results pending.
  • The second phase AC drilling programme has now been completed with 20,312m drilled in 404 holes covering the Ehuasso and Abilassoko targets.
  • One RC drill rig is now active at the Ehuasso target for the remaining ~500m of drilling to take the total of the second phase planned programme to 21,000m, with further results to be reported in due course..

Conclusion: Strong drilling results released for AC and RC drill holes completed at the Zaranou Gold Project with the highest-grades intersection reported to date seen at the Ebilassokro target (5m at 270.5g/t from 4m) while the ZARC0013 drillhole at the Ehuasso target (24m at 13.6g/t from 136m) confirmed high grade mineralisation continuity at depth extending mineralisation 125m below surface.

*SP Angel act as Nomad IronRidge Resources

 

Prospect Resources* (PSC AU) A$0.13, Mkt cap A$37m – Assays confirm Arcadia as an ultra-low iron lithium producer

  • Prospect Resources report lithium to iron ratios are suitable for the premium glass & ceramics market from its Arcadia mine in Zimbabwe.
  • The confirmation means that production from Arcadia would make this the only lithium mine in the world able to supply both spodumene and petalite to the premium glass & ceramics market.
    • Spodumene product achieved 6.1% Li2O and 0.18% Fe2O3;
    • Petalite flotation product achieved 4.5% Li2O and 0.02% Fe2O3;

Conclusion: Confirmation of the ability to supply both markets is great for Prospect. Though it should not be a huge a surprise as concentrate from Arcaida were previously used for this purpose.

*An SP Angel analyst has previously visited the Arcadia mine site in Zimbabwe

 

SolGold* (SOLG LN) – 26.2p, Mkt cap £530.5m – Board changes

  • Following the recently announced appointment of former BP executive, Mrs. Elodie Grant Goodey, as a non-executive director, Solgold has announced further board-level restructuring and resolved to ensure that at least half of the Board is comprised of independent Non-Executive Directors by the end of this calendar year.”
  • As part of this strategy, Chairman, Brian Moller has stepped down to be replaced by independent non-executive director, Liam Twigger, although Mr. Moller is to remain on the Board as a non-executive director.
  • Mr. Twigger is described as “an experienced corporate advisory consultant and principal of PCF Capital in Perth, Western Australia, and was a founding partner for the establishment of Macquarie Bank in Perth. …  Mr Twigger was instrumental in advising Gold Road Resources with respect to financing the development of the AUD$600 million, 6Moz Gruyere Gold Project in Western Australia. He also acted as a corporate advisor to Doray Minerals Limited in relation to its AUD$650 million merger with Silver Lake Resources”.
  • On assuming the Chairmanship, Mr. Twigger expressed his gratitude “for the opportunity to Chair SolGold into its next phase of growth. The Company has unrivalled potential, not only through our operational control and 85% ownership of the Alpala project and its world class resource of 22Moz of gold, 10Mt of copper and 92Moz of silver, but also through our exposure to numerous highly prospective exploration targets across the Andean Copper Belt”.
  • In addition, long-serving non-executive director, Dr. Robert Weinberg,  “has indicated his intention to retire at the Company’s 2020 Annual General Meeting”.
  • CEO, Nicholas Mather thanked Dr. Weinberg for his service to the company describing it as exemplary. We will be sorry to see him leave and wish him well for the future”.
  • As part of its drive to recruit additional non-executive directors, Solgold has commenced an independently run process which will be overseen by Mr Liam Twigger, SolGold’s recently appointed Chairperson … [the purpose of which] … is to secure up to three new Non-Executive Directors that are based in close proximity to the Company’s stakeholder base in London, Toronto and Ecuador, enhance its mining development experience, promote liaison with the Ecuadorean Government and further improve diversity at Board level”.
  • In a further initiative, Both Mr Moller and SolGold CEO Mr Nicholas Mather have also indicated their intention to step down from a number of other listed company Boards on which they currently sit”.
  • The strengthening of the Board and establishing a majority of non-executives appears to us to be part of the company’s natural evolution and changing requirements for a more diverse range of skill-sets as it moves from its exploration success at Alpala to taking on the challenges of developing a major mine.
  • We also note that in its recent rejection of Solgold’s overtures, Cornerstone Capital made a number of attacks on Solgold management which the initiatives announced today would neutralise to a significant degree.

Conclusion: The evolving board level management restructuring is expected to see a majority of non-executive directors in-post by the end of this year and provides an opportunity to broaden the skills base of its leadership as Solgold  builds on its successful exploration roots and starts mine development at Alpala.

*SP Angel act as financial advisor and broker to SolGold

 

Sunrise Resources (SRES LN) 0.195p, mkt cap £6.5m – Mine reclamation permit is granted 

  • The company announced this morning that the Nevada Bureau of Mining Regulation and Reclamation (BMRR) has issued its notice of final decision to grant the required mine reclamation permit.
  • The permit relates to the company’s CS project in Nevada USA, and it is subject to a 10-day appeal period- therefore becoming effective on the 15th of August.
  • In a separate announcement, Beaumont Cornish Limited ceases to act as joint broker with effect today, although remains the company’s nominated advisor.

 

Talga Resources* (TLG AU) – A$0.52, Mkt cap A$128m – Feasibility Study and Talnode anode demand leads Talga to go directly to commercial production in 2022

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  • Talga Resources reports the results of feasibility study work.
  • The studies combined with huge demand for their Talnode anode product is leading management to go directly to commercial production in 2022.
  • This is in preference to the previously proposed and more cautious staged approach.
  • The yield of the Talnode-C product form graphite concentrate has risen to 99% from 88% assumed in the PFS making a significant difference to the economics.
  • The recovery of Talnode-C from graphite ore has therefore increased to 90% from 80% previously assumed in the PFS.
  • This results in a 30% saving in energy, which we note is all renewably sourced. Greta will be pleased, maybe? but more to the point this is significant for the highly environmentally sensitive battery automotive companies.
  • Talnode-C anodes are demonstrating high capacity and fast charge performance in the qualification tests needed for accreditation. It’s no surprise to those of us who have visited Talga’s test facilities and seen the expert development work done to achieve this performance.
  • Production will go directly to 19,000tpa starting in 2022
  • DFS study should be finished in late Q1 2021.
  • A Scoping Study is also running on the Niska graphite project to the north of the existing mine (quarry). The two projects should eventually amalgamate in the future.
  • The press release gives more technical detail on the Talnode-C enhanced graphite anode product highlighting the ‘supercharging’ characteristics of the coated graphite anodes.

Conclusion: Talga Resources is probably the most innovative and exciting listed battery anode company around. Its Talnode-C anodes enable enhanced battery performance and safety and are in substantial demand following testing by a number of battery and automotive manufacturers.

We suspect Talga will have to run fast to keep pace with future demand for the product and we expect to see further expansion to the Vittangi project in Sweden. If I was running Northvolt I would want to own Talga right now!

*SP Angel analysts have visited Talga’s battery research and development facilities and mine in Sweden and has acted as UK broker to Talga Resources

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490 / 07943031001

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

 

DISCLAIMER

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%

We believe investors should see the best resources companies and for the best companies to be seen by our investors

We offer the best analysts, sales and corporate finance in the Junior resources sector using the best information available

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