Today’s Market View – Panthera Resources, Jubilee Metals Group, Botswana Diamonds and more…

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SP Angel . Morning View . Monday 12 10 20


Copper rises on stronger China Yuan and US stimulus expectations




Ariana Resources* (LON:AAU) – 2020 guidance maintained as plant expansion considered at Kiziltepe


Bluebird Merchant Ventures (LON:BMV) – Independent expert appointed for valuation to consolidate South Korean gold mines


Botswana Diamonds (LON:BOD) – Geophysics to refine November drilling targets at Marsfontein and Thorny River


Jubilee Metals Group (LON:JLP) – Q3 production sees operating earnings rise to GBP15m


Orosur Mining* (LON:OMI) – Funds received for exploration at Anza project


Panthera Resources (LON:PAT) – Exploration plans for the Bassala project


Pensana Rare Earths (LON:PRE) – Study into UK REE processing facility


Scotgold Resources* (LON:SGZ) – GBP3m raise to accelerate Phase II expansion and fund exploration


Strategic Minerals* (LON:SML) – Cobre Q3 magnetite sales


Vast Resources* (LON:VAST) – Indicative timeline for asset backed debt funding




China – ongoing flooding along Yangtze continue to disrupt towns and crops along the river


China fears more devastating floods along the Yangtze river (HealthyLifestyle)


1.8m people evacuated with >140 people dead or missing


Rate of flow hit a record flow at 55,000m3/s on Friday night


Crops have been inundated around the Poyang lake


The rice harvest is likely to be devastated in many areas with crops which should be ready for harvesting still under water


Rmb49bn (US$7bn) of losses are estimated


The disruption means that China’s recovery is more regional than the government might prefer


Major repair, reconstruction and lifting of flood barriers will require significant cement and structural steel


The reconstruction of housing and fields damaged by the floods will also serve to stimulate further economic activity




Chin’s Yuan / Renminbi posted significant gains against the US dollar on Friday


The move may mark a major turning point in Chinese policy towards the potential free trade of its currently tightly regulated currency


It may also reflect China’s need to buy in vast tonnages of food and seed to replace crops devastated by flooding along many parts of the 6,300km Yangtze River


The Renminbi rose as China allowed further freedom in currency trading through the relaxation of deposits required for the sale of foreign exchange contracts


Previously banks had to set aside 20% of the value of certain forex contracts.




ICL Boulby Mine Underground marathon – in support of Mental Health


A group of six runners from ICL’s Boulby potash mine in Yorkshire are preparing to run the world’s deepest underground race.


The team will run four laps of a circuit in the mine some 1,100m below the surface running along salt roadways.


They will need to cope with 40C heat, dust and the impact of running on salt


Four members of the mine are being joined by two army cadets for the run supported by two support vehicles, a paramedic and plenty of water.


Sky News interview


Just giving page: https://uk.virginmoneygiving.com/beneaththesurfacemarathon




Dow Jones Industrials +0.57% at 28,587


Nikkei 225 -0.26% at 23,559


HK Hang Seng +2.08% at 24,620


Shanghai Composite +2.64% at3,358




Economics


Lack of liquidity in repo market financing for commodities threatens commodity supply chains


We understand that a lack of financing by Western banks in repurchase agreements for commodities is threatening the financing of commodity market transactions


Many banks withdrew from the market following the introduction of stricter lending rules following the Global Financial Crisis


Increasing pressure of banks and on the viability of buyers may be exacerbating banking activity in this area causing the potential for further disruption in commodity transactions particularly with so much now going into China.


The situation benefits the major trading houses like Glencore and Cargill who have access to massive credit lines and revolving credit facilities.




US – President Trump was cleared by his doctor and is no longer considered a virus transmission risk to others allowing him to resume election campaign.


Trump trails Biden by 12pp in an national poll with a little more than three weeks left before Election Day, according to a Washington Post/ABC News poll released on Sunday.


No resolution on the stimulus package has been reached so far with President Trump and House Speaker Pelosi blaming each other for a lack of progress on a deal, Bloomberg reports.


US markets are closed today as the nation celebrates the Columbus Day.




China is set to launch a mass coronavirus testing programme at the city of Qingdao after discovering several asymptomatic cases with links to the local hospital as well as revealing additional cases using the contact tracing system.


Local health authorities said that all residents of the city (~9m) will get tested over five days.




UK – The central bank sent a letter to lenders asking banks over their readiness to sustain zero or negative bank rates as well as potential steps that they need to take to prepare for those, FT reports.


Banks should reply to the request of information November 12.


The Bank of England is studying potential further cuts to interest rates from historic lows of 0.1% as latest reports showed that economic growth momentum waned in August even before a surge in infections in September and as restrictions were tightened.


UK PM Johnson is expected to announce a three-tier regional lockdown system in England later today aimed at limiting the spread of the virus.


The level of restrictions will be contingent on the number of infections with worst hit areas to be put on “very high” alert (set to include Liverpool city region and Warrington) involving the closure of pubs and residents asked not to travel without good reason.




India – The government announced $10bn stimulus package supporting schemes including support to civil servants, an increase in infrastructure spending and additional funds to cash-strapped stat government.


Economists argued the programme is unlikely to have much of an impact on consumer demand as it puts more money into hands of those least affects, FT reports.




Currencies


US$1.1808/eur vs 1.1775/eur last week. Yen 105.51/$ vs 105.94/$. SAr 16.509/$ vs 16.467/$. $1.305/gbp vs $1.297/gbp. 0.723/aud vs 0.719/aud. CNY 6.715/$ vs 6.714/$.




Commodity News


Precious metals:


Gold US$1,925/oz vs US$1,909/oz last week – Indian gold imports fall 34% YoY to 8.4t


The world’s largest imported of gold saw imports decline from 13.5t a year earlier and 35.5t in August.


Imports briefly rebounded after dropping 95% as a result of the coronavirus pandemic, as Indians were unable to go out and purchase gold jewellery.


It is likely that the current high prices have priced many Indians wishing to buy gold to give as a gift out of the market.




Gold ETFs 111.1moz vs US$111.0moz last week


Platinum US$887/oz vs US$879/oz last week


Palladium US$2,449/oz vs US$2,403/oz last week


Silver US$25.17/oz vs US$24.27/oz last week




Base metals:


Copper US$ 6,757/t vs US$6,743/t last week – Escondida supervisors reject final labour deal fuelling copper supply uncertainty


The union of supervisors of Chile’s Escondida mine have rejected BHP’s final offer in contract negotiations on Friday, although the mining company said that it would meet the union again in a last-ditch effort to avoid strike action.


According to Reuters, 78% of the union members voted against the offer.


Conversely, the union of workers at Chile’s Collahuasi copper mine have come to an agreement in labour talks with the mine operator, avoid a strike at the 565,000tpa mine.


LME copper prices rose of the fifth straight day on Monday, driven largely by this supply uncertainty and also in part by higher demand expectations from top consumer China.


State media announced that China will invest close to $900bn over the next five years to develop the country’s power girds, power being responsible for a majority of copper consumption in China.


Aluminium US$ 1,844/t vs US$1,813/t last week


Nickel US$ 15,200/t vs US$15,040/t last week – LME nickel prices gain 5.6% last week


Nickel prices rose 3% on Friday, as Chinese traders returned to work after the Golden Week holiday- extending gains seen earlier in the week.


The price of nickel saw its steepest weekly advance in more than 13 months on the LME, on China’s economic recovery and the prospects of a US stimulus package.


Zinc US$ 2,450/t vs US$2,433/t last week


Lead US$ 1,818/t vs US$1,799/t last week


Tin US$ 18,210/t vs US$18,175/t last week




Energy:


Oil US$42.4/bbl vs US$43.4/bbl last week


Oil prices continue to trade within the US$40-US$45/bbl range as high uncertainties about COVID-19 and the economic recovery continue to weigh on the oil market as the world still has a lot of excess crude and oil product stocks to process


Stocks are drawing down in the world’s top petroleum consumer, the US, but the pace is very slow


The market is moving toward rebalancing, but this process will likely take many months more and certainly more than initially expected


A number of uncertainties put downward pressure on every oil demand forecast and on oil prices including when an effective vaccine could be available to many people in many countries when economies recover, and whether consumer behaviour has changed for good with work from home and virtual corporate events and conferences


Oil market rebalancing also hangs on the future policies of the OPEC+ group, which, as-is, is planning to additionally taper the oil production cuts from 7.7MMbopd to 5.8MMbopd beginning in January 2021


This would come in Q1, in which oil demand in the world is typically at its weakest


The weekly inventory reports in the world’s largest oil consumer and most transparent market have provided some encouraging signs in recent weeks


Still, we are a long way off to a market balance because the record-high stocks that were built earlier this year need to be drawn down




Natural Gas US$2.921/mmbtu vs US$2.661/mmbtu last week


Natural gas futures have risen significantly as production fell to its lowest in over two years after Gulf Coast energy firms shut wells ahead of Hurricane Delta and on forecasts for colder weather and higher demand in mid-October


That price increase came despite a drop in gas flows to LNG export plants as operators either shut or reduced their Louisiana facilities before Delta makes landfall


According to reports, Delta hit Southwest Louisiana near the Cameron LNG export plant over the weekend


Natural gas in storage was 3,831Bcf as of 2 October according to the EIA


This represents a net increase of 75Bcf from the previous week


Expectations were for a 76Bcf build according to survey provider Estimize


Stocks were 444Bcf higher than last year at this time and 394Bcf above the five-year average of 3,437Bcf


At 3,831Bcf, total working gas is above the five-year historical range.




Bulk:


Iron ore 62% Fe spot (cfr Tianjin) US$119.5/t vs US$117.9/t – Chinese iron ore stocks hit highest in seven months


Total iron ore stocks at 45 major Chinese ports climbed for the seventh straight week, to a seven-month high of 120.6mt according to Mysteel.


According to Mysteel’s shipment tracking, about 26.1mt of iron ore reached the 45 ports over September 28-October 4, or 1.6mt higher than the week prior.


Despite increase in stocks, Chinese iron ore futures edged higher on Monday on hopes that demand foe steelmaking commodities will remain robust.


Iron ore prices on the Dalian Commodity Exchange was up 0.9% at 829 yuan ($123)/t earlier this morning, and jumped 3.8% when Chinese traders returned to work on Friday after the holiday (Reuters).


Chinese steel rebar 25mm US$564.0/t vs US$553.1/t


Thermal coal (1st year forward cif ARA) US$59.8/t vs US$59.9/t


Coking coal futures Dalian Exchange US$146.5/t vs US$154.0/t




Other:


Cobalt LME 3m US$33,780/t vs US$33,780/t


NdPr Rare Earth Oxide (China) US$48,550/t vs US$48,546/t


Lithium carbonate 99% (China) US$5,138/t vs US$5,138/t


Ferro Vanadium 80% FOB (China) US$29.8/kg vs US$30.0/kg


Antimony Trioxide 99.5% EU (China) US$5.2/kg vs US$5.2/kg


Tungsten APT European US$212-220/mtu vs US$220-225/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


BP Chargemaster to install more than 1,000 EV chargers for Police Scotland


BP Chargemaster, a wholly owned subsidiary of BP Group has been awarded a GBP21m contract to install 1000 chargers across 265 Police Scotland premises.


The deal is reportedly the largest of its kind in the UK and will be delivered in partnership with WGM Engineering.


BP Chargemaster offers home, private and public charging solutions and standard and fast charge points. BP Group is targeting being net zero emissions by 2050, the Company currently produces around 55m tonnes of CO2 equivalent a year.


These sort of deals are becoming more common as businesses look to align themselves with clean energy vehicles. Pod Point, now owned by EFD Energy has partnered with Tesco to install 2,400 chargers across 600 stores whilst Green King has partnered with Drive Energi who will provide charge points at the Green King sites across the UK.


The build out of charging infrastructure at businesses is happening alongside EV leasing schemes. Octopus Energy revealed last week that EV leasing sales has increased 91% since the 0% benefit-in-kind tax break was introduced by the UK government in April.


Octopus has launched a 100% EV salary sacrifice scheme which its says enables price parity with petrol/diesel vehicles.




European emissions standards see continent racing towards EV transition


In 2021 EU emissions standard will mandate that automakers reduce their average emissions to 95g of CO2 per km or face heavy fines. The deadline seems to be ample incentive for European carmakers as average emissions fell from 122g to 111g in H1, the biggest six-month drop in a decade. (Reuters)


The green policy group Transport & Environment projects that the share of EVs and hybrids will rise to 15% next year based on H1 sales data.


2020 has already seen Europe making great strides, passenger EV sales surpassed those of China in H1, 380,000 (BEV and PHEV) vehicles were sold across European markets. In July European sales passed 500,000, ahead of China where 486,000 such vehicles had been sold.


12 of the 17 largest government offered EV grants come from Europe states and the EU has set a goal of reaching 1m charging point by 2025. Whilst a number of European countries have committed to eliminating the sale of ICE vehicles, France y 2040, the UK by 2035, Germany, Ireland and the Netherlands by 2030 and Norway by 2025.


As part of the standards Companies can generate credits by selling electric or a select number of hybrid vehicles. These credits can be used to meet emission rules or can be sold to other automaker to help them to comply.


Volvo announced earlier this month that is open to selling credits to competitors suggesting it is in a comfortable position where as the like of Daimler, Hyundai and Kia are behind their targets, the pandemic slowing launches and demand.




Company News


Ariana Resources* (LON:AAU) 6.1p, Mkt Cap GBP63.2m – 2020 guidance maintained as plant expansion considered at Kiziltepe


Ariana Resources reports that preliminary production results showing 5,125oz of gold production during Q3 (Q2 2020 – 4,679oz) at the Kiziltepe gold mine in Turkey confirm its full year production guidance of 18,000oz.


The output results from the processing of approximately 57kt of ore (Q2 2020 – 55kt) at an average head grade of 2.21g/t gold.


The company confirms that “Planning … [is] … underway regarding a proposed mill expansion to provide for an increase in throughput to 400,000 to 500,000 tonnes per annum”.


“Production from our highest-grade pit, Arzu South, came to a close during August and production has shifted entirely to the Arzu North and Derya pits. Meanwhile, the mine continues to maintain a stockpile of over 160,000 tonnes, sufficient to cover about ten months of mill feed at average throughput rates”.


Commenting on what he described as the flawless operation of Kiziltepe, Managing Director, Dr. Kerim Sener, explained that, despite the effects of the Covid19 virus, “Material movements remain very high, while process plant throughput remains well above average, setting yet another record for the operation; the mill reached an annualised throughput rate of almost 230,000 tonnes per annum which represents an increase of over 53% above the feasibility designed rate.”


Looking at future production levels, Dr. Sener said that “the further development of the Arzu North area … is yielding substantially more ore tonnage than modelled previously. We are confident that despite the expected reduction in grade, this increased tonnage coupled with continued high mill throughput will ensure output is maintained at the highest possible levels”.


*An SP Angel mining analyst has visited Ariana’s licenses in Turkey




Bluebird Merchant Ventures (LON:BMV) – 5.35p, Mkt cap GBP21m – Independent expert appointed for valuation to consolidate South Korean gold mines


Click for our 2018 note


Bluebird Merchant Ventures report the appointment of an independent valuer for the 50% of the South Korean gold mines that it does not yet own.


The company has an agreement to buy Southern Gold’s 50% for 90% of the value determined by the independent expert.


Management remain confident that they will be able to fund the acquisition.


Bluebird is financing the mine refurbishment and plant development using debt finance from its South Korean funding partners including a pre-payment facility for around 25% of planned gold production at a 20% discount to the prevailing gold price.


Capital costs are estimated at $28m to reopen the mines at Kochang and Gubong.


First production is now planned to start at Kochang next year at 7,000oz due to its lower initial capital cost requirements.


Gold production is then expected to rise to 40,000oz in 2024 and then onto 100,000ozpa from 20205


Management are targeting production of 100,000ozpa within five years of initial production.


The company reported it had received key permit approval for the Gubong and Kochange mines in December last year.




Botswana Diamonds (LON:BOD) 0.63p, Mkt Cap GBP4.5m – Geophysics to refine November drilling targets at Marsfontein and Thorny River


Botswana Diamonds reports that a precision ground geophysics programme is underway to help refine targets for its November drilling campaign at Marsfontein and Thorny River.


A review of the historical information at Marsfontein has identified new targets at the M9 and M17 anomalies and “Our own detailed geophysical survey is required to accurately geo-reference the targets for drilling in November … [and] … Two thick intersections on Frischgewaagt suggest multiple kimberlite ‘blows'”, We understand that these ‘blows’ have historically proved productive ore sources at Marsfontein.


In addition, detailed ground geophysics cover is to be extended over the Marsfontein alluvial deposit “following an independent assessment of the potential for diamondiferous alluvial deposits by Professor Tania Marshall, the current Chairperson of the SamCode Standards Committee and a recognised expert in the geology and assessment of diamondiferous alluvial deposits”.


The planned surveys will use a combination of ground electromagnetic, gravity and magnetic surveys which “previously been used to delineate kimberlite dykes, which were later confirmed by drilling. The detailed ground gravity survey specifically focuses on delineating kimberlite pipes”.


The company says that the geophysical work is expected to take around six weeks from which we infer that drilling results may become available in 2021.




Jubilee Metals Group (LON:JLP) – 6.13p, Mkt cap GBP130m – Q3 production sees operating earnings rise to GBP15m


Jubilee Metals Group reports it has achieved its highest quarterly Platinum Group Metals production for a quarter to date


The group produced 15,044 PGM ounces through Q3 along with 136,162t of chrome concentrate under tolling agreements from third party ore suppliers


Q3 attributable sales rose to GBP23.1m driven by GBP17.7m from PGM concentrate and GBP5.4m from Chrome concentrate sales


Operational earnings rose to GBP15.17m through the addition of third party ore


Inyoni: Jubilee was appointed as operator to recommission and operate a run of mine chrome plant at Inyoni in South Africa in August.


The agreement guarantees a further 40,000t per month for the plant of chrome and PGM ore potentially rising to 80,000tpm.


This may expand PGM production by a further 3,500oz of PGMs a month


Zambia: Jubilee continue to report progress with their Sable Refinery nearing completion.


Project Roan is said to be set to more than double Jubilee’s copper production in the short term


Jubilee also secured joint venture rights to mine around 150mt in Zambia for upgraded at site and refining at Sable


Copper production should exceed >14 000tpa from the Sable refinery with a further 10,000tpa of Copper ‘equivalent’ units to come from project Roan which gives access to ~2mtpa of copper run-of-mine material and potentially a further 2.5mt of copper bearing tailings in a 50/50 joint venture.


The two projects could raise total production to >250,00tpa copper equivalent.


Conclusion: Jubilee is turning a profit out of cleaning up old tailings and processing third-party in South Africa. The strategy appears similar in Zambia but with more joint venture participation in the reprocessing of tailings .


While the reprocessing of toxic tailings is admirable this material will still needs to be carefully disposed of for longer-term safe storage.


*An SP Angel mining analyst has visited Jubilee Metals Group assets in Zambia in 2018




Orosur Mining* (LON:OMI) 18.3p, Mkt Cap GBP26.5m – Funds received for exploration at Anza project


Orosur’s wholly owned Colombian subsidiary Minera Anza rreports it has received COP$2.52bn Colombian Pesos (~US$650,000) from Monte Aguila as the first payment to fund exploration at the Anza project for the 12-month period commencing 7th September 2020. Monte Aguila is the new name for Newmont Colombia SAS which is owned 50-50 by Newmont and Agnico.


Management are developing detailed exploration plans for the restart of field work at Anza, including Covid-19 protocols related to movement and testing of staff, which are now complete.


These include the refurbishment and expansion of the camp, recruitment of additional technical staff, liaising with government bodies in relation to permitting, importation of geophysical equipment and advanced discussions with drill contractors are underway.


Management hope geophysical surveys and drilling should start within the next few weeks.


CEO Brad George commented: “Clearly the Covid-19 pandemic is presenting challenges to remote exploration that were not expected at the start of the year. However, the operating protocols that we have established are allowing our diligent and professional staff to plan and implement as near to a full exploration program as could be achieved under these trying circumstances.”


*SP Angel acts as Nomad and Broker to Orosur Mining




Panthera Resources (LON:PAT) 5.5p, Mkt Cap GBP4.7m – Exploration plans for the Bassala project


Panthera Resources was announced it plans for the exploration of its Bassala gold exploration project located in south west Mali approximately 200km south of the capital, Bamako.


A programme of soil sampling and mapping is expected to start later this month and extend to early December with a ground magnetic geophysical survey of the entire license area to be undertaken concurrently.


The company says that these programmes aim “to define and rank drill targets for a drilling programme which is expected to commence in the first half of 2021”.


The licence lies within an established gold belt which hosts existing gold mines at Kalana, Kodieran within 5-8km of Bassala. The company explains that the area was previously explored by Anglogold in 2010-11 and that it “hosts prolific artisanal mining activity”.


The Anglogold soil sampling programme is said to have “identified several gold in soil anomalies but it was difficult to interpret major trends due to the broad sample spacing”.


Subsequent wide-spaced RAB drilling by Anglogold “was very successful and identified significant mineralisation beneath the laterite cover, including:


21m @ 1.15g/t Au from 15m including 3m @ 4.52g/t Au from 33m


15m @ 0.56g/t Au from 3m to the end of the hole


3m @ 0.78g/t Au from 21m to the end of the hole


6m @ 0.49g/t Au from 39m to the end of the hole


3m @ 1.55g/t Au from 9m


3m @ 1.16g/t Au from surface”


Subsequent closer spaced and more detailed soil sampling by Panthera has improved the definition of the anomalous gold trends helping to define a “main trend… [which] … is roughly north-south with the only significant gaps in the anomalous trend being due to depositional regimes associated with recent alluvium that mask any underlying gold mineralisation”.


The orientation of artisanal working is said to support this trend and “Artisanal miners have recently obtained some coarse angular gold from these workings suggesting it is close to the original bedrock source”.




Pensana Rare Earths (LON:PRE) 88.5p, Mkt Cap GBP162m – Study into UK REE processing facility


Pensana has appointed Wood Group to undertake a study into the establishment of an integrated rare earth processing facility in the UK, as the company works towards creating the world’s first sustainable magnet metal supply chain.


The Company is exploring the potential of establishing a rare earth oxide production facility in the UK, after last week Pensana reported that it had progressed the design of the Longojo project to include the production of a mixed rare earth carbonate.


This latest update from the Company shows Pensana exploring the potential for it to make one further step downstream and to create additional value by establishing a rare earth oxide production facility in the UK.


Pensana’s Longonjo project is well-placed to become the first producing major rare-earth mine in over a decade, and a UK-based processing facility would mean the company can take advantage of Europe’s clean-energy transition- such as providing REEs for the Dogger Bank windfarm.


Chairman Paul Atherley commented: “The UK and the EU lead the world in the Offshore Wind and EV industries, both of which are dependent on permanent magnets. Both have recognized that the green recovery requires critical raw materials and that a sustainable magnet metal supply chain is needed to support the green economy.”




Scotgold Resources* (LON:SGZ) 116p, Mkt Cap GBP60m – GBP3m raise to accelerate Phase II expansion and fund exploration


BUY – TP under review


The Company raised GBP3m through a placing of 2.7m shares at 110p to accelerate plans to double production at the high grade Cononish gold mine as well as to fund exploration programme at the 2,900km2 land package in the Dalradian Belt in Scotland.


First production guidance at the Cononish mine reiterated at November with new funds expected to move Phase II commissioning nearly a year (11 months) forward to May 2022.


Phase II doubles mining and processing capacity to 72ktpa taking gold production to 23.5kozpa, up from 9.9koz under Phase I.


High grade nature of the deposit (198koz at 11.1g/t in PP reserves) translate into low unit operating costs with AISC expected at GBP461/oz ($600/oz) and ~69% EBITDA margins.


The mine is forecast to generate GBP96.2m in NPV8% (post-tax) at GBP1,400/oz gold price and 1.3 GBPUSD rate.


Additionally, the team is planning to continue with exploration works targeting potential extensions to the Cononish mineralisation as well as regional prospects including gold/silver anomalies identified to the NE of the Cononish mine and from the Beinn Udlaidh and Inverchorachan targets.


Conclusion: The GBP3m fundraising helps the Company to bring Phase II expansion by nearly a year taking advantage of strong gold price environment as well as allows to progress with close to mine and regional exploration programme across the prospective 2,900km2 land package in the Dalradian Belt.


*SP Angel act as Nomad and broker to Scotgold




Strategic Minerals* (LON:SML) 0.43p, Mkt Cap GBP7.4m – Cobre Q3 magnetite sales


Strategic Minerals reports sales of magnetite during the 2nd quarter of 2020 of 10,305 tons generating revenue of approximately US$0.6m at a stable unit price we calculate at US$58.93/t..


This brings sales, excluding the disputed sales to CV Investments Inc which were the subject of a recent arbitration decision in favour of Strategic Minerals’ wholly owned Southern Minerals Group, for the 12 months ending 30th September 2020 to 74.364 tons and revenues of US$4.86m.


The company confirms that “Sales volumes at Cobre continued to grow strongly in the September 2020 quarter, up 55% year on year. Despite US activity slowing in this quarter, sales remained robust and the positive annual growth highlights the strength of demand being maintained despite the Covid-19 Pandemic”.


Strategic Minerals confirms a 30th September cash balance of US$0.26m


The company also points out that “Despite the continued suspension of mining activities at the adjacent copper mine due to the Covid-19 pandemic, operations at Cobre continue to operate under protocols established to ensure contactless sales and have been successful in safeguarding both the Company’s employees and its clients”.


Managing Director, John Peters, said that “Sales at Cobre continue to show excellent annual growth providing the Company the opportunity to repay outstanding liabilities and benefit from surplus cash generated from operations”.


As previously announced, among the company’s other operations, Strategic Minerals has confirmed a re-optimised scoping study for its Redmoor tin/tungsten project in Cornwall which enhance the project’s economic returns through a rescheduling of higher grades earlier in the mine’s life.


The company also reiterates that it expects its plan for the Environmental Protection and Rehabilitation of the Paltridge North depoits at Leigh Creek in South Australia to be approved during the December quarter of 2020.


Conclusion: Robust sales continue at Cobre with around 38,000t sold so far in 2020 at an average price of approximately USGBP59/t. The site is continuing to operate effectively while observing the restrictions implemented to control the Covid19 virus. Permits for the Paltridge North deposit are expected to be received during the current quarter and the recently announced re-optimisation of the Redmoor scoping study brings higher grade ore production earlier in the project’s life generating benefits to the overall economics.


*SP Angel acts as Nomad and Broker to Strategic Minerals




Vast Resources* (LON:VAST) 0.17p, Mkt Cap GBP24m – Indicative timeline for asset backed debt funding


The Company offered an indicative timeline to the conclusion of the asset backed debt finance facility for the Baita Plai operation in Romania.


Subject to finalisation of technical, environmental & legal due diligence, the Company and the lender are targeting completion of a Binding Term Sheet by the end of November with final approval expected in December.


*SP Angel acts as Broker to Vast Resources




Analysts


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




Sales


Richard Parlons –[email protected] – 0203 470 0472


Abigail Wayne – [email protected] – 0203 470 0534


Rob Rees – [email protected] – 0203 470 0535




SP Angel


Prince Frederick House


35-39 Maddox Street London


W1S 2PP




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


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






Sources of commodity prices


Gold, Platinum, Palladium, Silver


BGNL (Bloomberg Generic Composite rate, London)


Gold ETFs, Steel


Bloomberg


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


LME


Oil Brent


ICE


Natural Gas, Uranium, Iron Ore


NYMEX


Thermal Coal


Bloomberg OTC Composite


Coking Coal


SSY


RRE


Steelhome


Lithium Carbonate, Ferro Vanadium, Antimony


Asian Metal


Tungsten


Metal Bulletin

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