Today’s Market View – Empire Metals; Galantas Gold; IronRidge Resources and more…

Copper prices continue to rise on strong demand prospects, low inventory levels and stimulus prospects

Copper prices were driven higher through stop levels yesterday as the market gained on new confidence in the end of the Coronavirus Crisis.

Copper rose 0.9% to $7,360/t on the LME earlier this morning, before pulling back to $7,300/t while futures in New York also neared six-year highs.

SP Angel . Morning View . Wednesday 25 11 20

Copper stabilises after strong run on stimulus prospects


MiFID II exempt information – see disclaimer below 


Empire Metals* () – ​CMG indicates interest in acquiring Georgian assets

Galantas Gold () – Reviewing strategic direction while underground operations suspended

IronRidge Resources* () – Improved recoveries at Ewoyaa Lithium Project

() – Special diamond sale realises US$40m


Copper prices continue to rise on strong demand prospects, low inventory levels and stimulus prospects

Copper prices were driven higher through stop levels yesterday as the market gained on new confidence in the end of the Coronavirus Crisis.

Copper rose 0.9% to $7,360/t on the LME earlier this morning, before pulling back to $7,300/t while futures in New York also neared six-year highs.

Strong Equity markets helped drive copper along with low LME stock levels and increasing demand for stimulus projects in China.

Chinese copper inventories have also fallen to the lowest level since 2014 at 97,766t.

The inevitable inauguration of Joe Biden in the US is likely to keep interest rates lower for longer helping to drive money from bonds into equities.

The US dollar is forecast to fall and greater stimulus is now expected to help restore US economic activity under the Democrats. We note the Republicans had a similar agenda.

A major Democrat focus is on climate change and the move to renewable energy requiring more copper cabling for turbine windings, EVs charging points and other forms of renewable distributed power.


Global crude steel production rises 7% YoY

Global production rose to 161.9mt in October, according to the World Steel Association.

China produced 92.2mt over the period, up 12.7% YoY.


EU boasts of battery self-sufficiency by 2025

EU Commission VP Maros Sefcovic said on Tuesday that he expects the EU to be able to produce enough EV batteries to satisfy domestic demand by 2025.

Sefcovic suggested that by 2025 planned European facilities would be able to produce enough batteries for 6 million vehicles.

Average EV pack sizes increased in September to ~50kWh according to RhoMotion suggesting that 6m EVs will require some 300Gwh

We expect new EV SUVs such as the Cyber Truck (200kWh) to use higher capacity batteries requiring battery manufacturing capacity to rise fast.

The next generation of batteries such as Tesla’s 4680 cells are significantly higher unit capacity which should reduce the overall weight and cost.

We believe Europe is aiming for 500GWh of new battery capacity though we are not sure there is a target date.

Last year McKinsey forecast EV battery demand in Europe to reach 1,200GWh annually by 2040. This would require 80 gigafactories with annual capacity of 15GWh to satisfy.

This projected demand is more than 5x the capacity of confirmed projects in Europe.

Sefcovic suggested the EU’s $890bn coronavirus fund could be used to provide the much needed investment to get this vision over the line.  




US – Consumer confidence pulled back in November to a three month low on the back of a pick up in new COVID-19 infections, according to the Conference Board data.

“Heading into 2021, consumer do not foresee the economy, nor the labour market, gaining strength… in addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook,” Conference Board commented on the data.

Consumer Confidence: 96.1 v 101.4 in October and 98.0 est.


China National Biotec Group, a subsidiary of state-owned pharmaceutical group Sinopharm, submitted an application to start commercial sales of its medication ahead of concluding final stage efficacy trials.

The two vaccines developed by CNBG are among five other projects currently in phase 3 efficacy trials.


UK – Chancellor is expected to up investments in such sectors as defence, healthcare, education and infrastructure in a scheduled spending review later today.


Germany – Authorities are considering boosting fiscal support to businesses by additional €20bn as plans to extend current restriction until at least December 20 are being discussed.

This will take total commitments since early November to some €34bn.

The government promised businesses to reimburse for around 75% of lost revenue in November, that is estimated to come in at €14bn.

The nation implemented partial lockdown this month shutting down restaurants, gyms and cinemas while keeping most of the rest of the economy running.

Draft proposals are for an increase in the number of people allowed to meet (up to 10) over Christmas and New Year allowing families and friends celebrate together.

While the number of new cases per 100k over seven days stabilised in recent days, the rate remains nearly tripled a government target at the moment.


France – Lockdown restrictions will be eased following this weekend allowing non-essential shops to reopen as the number of new infections reduced to less than 10k per day this week, down from more than 60k recorded in early November.

Although, bars and restaurants will remain closed until 20 January at least when the situation and infection rates will be reviewed.

Following the recent positive vaccine news, President Macron suggested the nation may proceed with the start of vaccination “at the end of December or at the beginning of January”, starting with elderly and most vulnerable.


Austria and Spain are planning to launch vaccination plans for January next year prioritising nursing home residents and health professional.


South Africa – Inflation beat expectations picking up to 3.3%yoy in October marking the strongest reading in seven months and driven by food, non-alcoholic beverages, housing and utilities.

Despite a pick up, the rate remained close to the lower end of the central bank’s target range of 3-6%.

CPI (%yoy): 3.3 v 3.0 in September and 3.0 est.


Ethiopia – A 72-hour government deadline for Tigray forces to surrender is due to expire this evening as military clashes over the last three weeks in the northern region leave hundreds of people killed and more than 41,000 refugees fleeing to Sudan.

The Tigray People’s Liberation Front (TPLF), a local political party supporting the insurgence, has rejected the ultimatum.


Poland – Raw steel production falls 18% YoY

Output over the period fell to 620kt last month, according to the World Steel Association.

Production over the first 10 months of 2020 declined 15.9& to 6.47mt.



US$1.1928/eur vs 1.1872/eur yesterday.  Yen 104.38/$ vs 104.32/$.  SAr 15.150/$ vs 15.334/$.  $1.338/gbp vs $1.337/gbp.  0.736/aud vs 0.736/aud.  CNY 6.579/$ vs 6.578/$.


Commodity News

Precious metals:         

Gold US$1,813/oz vs US$1,827/oz yesterday

   Gold ETFs 108.5moz vs US$109.0moz yesterday

US$969/oz vs US$939/oz yesterday

Palladium US$2,334/oz vs US$2,334/oz yesterday

Silver US$23.44/oz vs US$24.43/oz yesterday


Base metals:  

Copper US$ 7,300/t vs US$7,313/t yesterday

Aluminium US$ 1,996/t vs US$1,985/t yesterday

Nickel US$ 16,215/t vs US$16,160/t yesterday

Zinc US$ 2,747/t vs US$2,740/t yesterday

Lead US$ 2,032/t vs US$2,017/t yesterday

Tin US$ 18,660/t vs US$18,665/t yesterday



Oil US$48.5/bbl vs US$46.5/bbl yesterday

Oil prices continued their steady climb upwards as hopes of a 2021 return vaccine news outweighed new of higher than expected US crude stockpiles

Brent was up 3.8% to US$47.80/bbl yesterday and January contracts are tracking closer to parity, a sign traders expect an improved demand outlook

’s trial is reported to be 70% effective and can be stored at temperatures of 2-8 degrees for up to 6-months

This makes storage and distribution far easier particularly in low income countries

Like Moderna’s and ’s vaccines it will take a few months for widespread distribution of the vaccine to occur so demand expectations remain for a return to more normalised demand levels in H2’21

US government crude inventory data will come out later today, inventories rose to 4.2MMbbls last week, well above the expectations of a 1.7MMbbl rise

Consensus expectations are for a 0.127MMbbl increase in inventories this week

Natural Gas US$2.720/mmbtu vs US$2.722/mmbtu yesterday

Natural gas prices moved higher yesterday rebounding for a second consecutive trading session

Prices were buoyed following a report that showed that the weather was expected to be cooler than normal for most of the south over the next 8-14 days

There is one storm in the Atlantic that has a 10% chance of turning into a tropical cyclone but it should not impact any natural gas installations



Iron ore 62% Fe spot (cfr Tianjin) US$124.8/t vs US$123.5/t

Chinese steel rebar 25mm US$621.5/t vs US$626.5/t

Thermal coal (1st year forward cif ARA) US$58.0/t vs US$56.3/t

Coking coal swap Australia FOB US$108.2/t vs US$111.2/t



Cobalt LME 3m US$32,390/t vs US$32,390/t

NdPr Rare Earth Oxide (China) US$58,820/t vs US$56,251/t

Lithium carbonate 99% (China) US$5,928/t vs US$5,929/t

Ferro Vanadium 80% FOB (China) US$27.0/kg vs US$27.0/kg

Antimony Trioxide 99.5% EU (China) US$5.5/kg vs US$5.4/kg

Tungsten APT European US$220-225/mtu vs US$220-225/mtu

Graphite flake 94% C, -100 mesh, fob China US$445/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,475/t vs US$2,275/t

Spodumene 6% Li2O min, cif (China) US$375/t vs US$385/t


Battery News

Chinese EV shares slide on news of government investigation

Chinese state planners (NDRC) have informed local governments of their intention to investigate new energy vehicles projects linked to property developers Evergrande Group and Shenzhen Baoneng. (Reuters)

The NDRC has asked local officials to investigate construction and production details of projects from 2017-2020 relating to the two companies.

It is not yet clear in what way the companies have breached the regulations.

Late 2018 the NDRC published new rules governing how automaker could invest in new capacity, part of a strategy to consolidate the industry.

The new rules stipulated auto companies would not be able to build new capacity unless minimum annual capacity exceeded 100,000 units.

Start-ups and overseas firms would be barred from setting up mainland factories unless they reported global sales in excess of 30,000 units or 3bn yuan in the previous two years.


Indian government building out EV infrastructure

The Indian Government has announced plans to install 69,000 e-charging kiosks at petrol pumps nationwide.

India plans to retain its import tax rate of 5% for certain types of batteries including EVs until 2022, but will then increase it to 15% to support local manufacturing.

The government has been reviewing Federal think tank proposals that $4.6bn of incentive should be offered to companies manufacturing advanced batteries by 2030.

The Power Ministry is expected to concentrate EV charging infrastructure in cities and main roads in the Delhi National Capital Region, Kolkata, Chennai, Hyderabad Bengaluru, Vadodara and Bhopal.

A lack of charging facilities and a hefty premium over ICE vehicles have been suggested as reasons for the slow take-up of electric vehicles in the country.


Company News

Empire Metals* () 3.39p, Mkt cap £8.6m – ​CMG indicates interest in acquiring Georgian assets

Empire Metals have raised £2m to acquire 75% of the High-Grade Eclipse Gold Project in Australia at 3.25p/s.

Funding will be also used to complete the latest drilling program and other work being done on the project.

The team are also looking for further assets to help add value in the short term as well as to boosting working capital.

Empire are confident of the potential to discover a significant high-grade gold resource at the Eclipse with encouraging results so far confirming mineralisation remains open at depth and along strike suggesting an extension to the main high-grade gold lode.

Re: Georgian assets: CMG ‘Caucasian Mining Group’ have indicated their potential interest in exercising their Right of First Refusal on acquiring the Empire’s 50% stake in the Kvemo Bolnisi and other Georgian licenses. They would need to pay the equivalent to

The licenses will be worth more to CMG than to any other investor due to CMG’s Madneuli copper/gold mine which operates close by.

CMG will need to at least match the deal for C$7m worth of shares in Candelaria (CAND CN)

Drill assays for Eclipse show gold grades of:

3m grading 21.96 g/t from 45m downhole

8m grading 3.2 g/t from 133m

14m grading 2.57 g/t from 94m

8m grading 2.14 g/t from 42m 

Conclusion: Empire is now relatively well funded to further its work at Eclipse and to look for further value adding assets. If CMG acquire the Georgian assets this will add further value to the business.

*SP Angel act as Nomad and Broker for Empire Metals


Galantas Gold () 16.25p, Mkt Cap £5.7m – Reviewing strategic direction while underground operations suspended

Galantas Gold reports a net loss of C$0.78m for the three months to 30th September (2019 – loss of C$0.72m) bringing the year to date loss for the first nine months of 2020 to C$2.25m (2019 – loss of C$2.39m).

Net operating cash outflow after working capital of C$1.30m for the year to date (2019 outflow of C$1.43m) and net investment of C$0.53m (2019 –  C$4.78m) offset additional financing of C$0.56m (2019 – C$1.47m) resulting an overall net cash outflow of C$1.27m (C$4.74m) leaving Galantas Gold with a net cash balance of C$0.64m at 30th September 2020 (2019 – C$1.36m).

The company explains that while the “processing plant continued to operate on a limited basis with feedstock for the plant being from low grade stock … Certain underground work continued during the first nine months of 2020, but ore production is suspended until finance is available to expand the underground operation”.

Operations were suspended between March and May as a result of UK Government measures to address the coronavirus pandemic. However, “Feedstock for the processing plant is now from low grade stock until suitable arrangements are in place to recommence development underground”.

Galantas Gold also confirms that it “is seeking strategic alternatives including reviewing its licenses and operations and considering the possibility of engaging in a sale, joint venture, partnership or other options with third parties and alternative financing structures”.

In October 2020, the company announced that it was reviewing its exploration in and around its Omagh gold mine in Northern Ireland in the light of recent work examining the geological controls to mineralisation. We await the outcome of the technical review with interest.


IronRidge Resources* (IRR LN) 14p, Mkt cap £58.5m – Improved recoveries at Ewoyaa Lithium Project

IronRidge has completed additional metallurgical test results from the Ewoyaa project within the Cape Coast Lithium Portfolio in Ghana, West Africa.

The additional test work has improved lithium recoveries in both the coarse grained P1-type pegmatites and the finer grained P-2 type pegmatites- with results based on laboratory bench scale Heavy Liquid Separation (‘HLS’) variability testing, yielding indicated idealised recoveries of 6% Li2O concentrates ranging from:

62% to 78% for P1 mineralisation at mass yields of 12-22% and

30-50% for P2 mineralisation at mass yields of 5-10%.

Mass yields of up to 22%, are considered to be high by peer comparison and support an economic case for a lower throughput and lower capital intensity starter project.

Re-crushing of the intermediate grade gravity middlings fractions has been shown to liberate more spodumene, which for P1 fresh mineralisation demonstrated a gravity recovery of 74% can be achieved and that this method assists in maintaining recovery.

Preliminary HLS tests also show P2 ores benefit from re-crushing the middlings with the recovery of fresh ore increasing from 42% to 46% at a grade of 5.5% and the recovery of transitional ore increasing from 55% to 61%at a grade of 5.6%. Extrapolation of the data suggests an overall recovery of about 51% when normalising to 6% concentrate.

Further project enhancement is generated by processing of fines generated by crushing, with 6% concentrates being produced at a flotation recovery of 57% (49% overall after allowing for desliming and magnetic losses) and a mass yield of 11.1%.

Preliminary analysis showed that upwards of 20% of the plant feed material could be recovered as a saleable feldspar product, which for a plant designed to process 1mtpa, translates to around 200,000t of more of this product per year. This product could be suitable for use in the ceramic industry.

X-ray Diffraction mineralogical data demonstrated that spodumene was the dominant lithium bearing mineral in all concentrations produced, with a ratio of P1 to P2 of 60:40 and in terms of mineralisation type, the ratio of weathered transitional to primary fresh material is 88:12.

Noel O’Brien, metallurgical consultant to IronRidge, said: “We are very pleased to have refined recoveries and mass yields, which we believe are high by peer comparison, without loss of concentrate grade achieved through further larger scale test work at Ewoyaa. All of this was achieved whilst maintaining a simple gravity only process flow sheet design philosophy.

“The Ewoyaa Project can be further enhanced by later stage flotation to capture lithium losses in fines generated during crushing, albeit this represents a relatively small volume of the lithium credits in the project.”

 Vincent Mascolo, CEO and MD of IronRidge Resources, said: “We are very pleased with the recovery improvements achieved through re-crushing of middlings whilst maintaining concentrate grade.” “The recognition of further lithium recoveries from fines generated by crushing, as well as the favourable composition of our feldspar tailings waste stream for potential sale into the ceramics industry, represent valuable project enhancements.”

*SP Angel acts as Nomad to IronRidge Resources


Petra Diamonds () 1.64p, Mkt Cap £13.8m – Special diamond sale realises US$40m

Petra Diamonds reports that a special sale of five blue diamonds, collectively known as the ’Letlapa Tala’ collection, has realised a total of US$40.36m.

The collection, weighing a total of 85.6 carats, are to be sold, in cash to a “partnership between De Beers and Diacore” at a price we calculate averaging over US$470,000 per carat.

The company explains that its Cullinan mine “is renowned as a source of large, high-quality gem diamonds, including Type II stones, as well as being the world’s most important source of very rare blue diamonds”.

Petra Diamonds describes recent notable discoveries of blue diamonds from the mine including the 29 carats ‘Blue Moon of Josephine’ which sold for US$25.6m (US$883,000/carat) in 2014 and the 122 carats ‘Cullinan Dream’ which sold for US$25.3m (US$207,000/carat) in May 2019.

Chief Executive, Richard Duffy, commented that “The result of this special tender affirms the very high value placed on blue diamonds, which are undoubtedly one of nature’s rarest treasures. We believe this to be the first time that five rough blue diamonds of significant size, colour and clarity have been offered for sale at one time and we are delighted that the collection has been bought in its entirety.”

Conclusion: The sale of a single parcel of 5 blue diamonds for over US$40m underlines the scarcity of the production of these gemstones. The Cullinan mine remains a significant source of blue diamonds as well as high quality white diamonds.




John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474

Joe Rowbottom – [email protected] – 0203 470 0486



Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

Grant Barker – [email protected] – 0203 470 0471



SP Angel                                                            

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




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