Today’s Market View – Anglo Asian Mining; Amur Minerals; Condor Gold; Directa Plus; IronRidge Resour

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SP Angel . Morning View . Tuesday 27 10 20

Gold prices rangebound ahead of contentious US elections 



MiFID II exempt information – see disclaimer below  

Anglo Asian Mining* (AIM:AAZ) – BUY – 200p – Vejnaly Contract Area under control of Azerbaijan

Amur Minerals* (LON:AMC) – NRR shareholders invest $10m in equity

Bluejay Mining* (AIM:JAY) – Extension to offtake negotiations for Dundas titanium mineral sands

Condor Gold* (AIM:CNR) – Detailed geotechnical investigations underway at La India

Directa Plus (AIM:DCTA) – Directa Plus agrees to supply graphene nanoplatelets to NexTech

Empire Metals* (AIM:EEE) – Deal offers stake in new Mexican gold mine and cash flow while retaining interest in Georgian assets

IronRidge Resources* (AIM:IRR) – Final Phase-two drilling results at Zaranou Gold Project

Adriatic Metals* (ASX:ADT1) – $28m financing to progress Vareš Silver Project

Kodal Minerals* (LON:KOD) – Drawdown of financing

Pure Gold Mining (LON:PUR) – Drilling results from Red Lake

Sunrise Resources (AIM:SRES) – Progress reports on Nevada projects

Vast Resources* (AIM:VAST) – Mining license extended at Manaila and Carlibaba


US dollar continues to slide on election uncertainty

We see the US dollar continuing to fall due to stronger economic recovery in China and the ongoing impact of COVID-19

Further monetary stimulus in the US is required to restore economic growth and to compete with China which is likely to manage its currency into an increasingly stronger position.

Metals prices are likely to continue to gain in US dollar terms alongside a strengthening Renminbi


China’s expects NEV sales to reach 50%of total by 2035

China’s Society of Automotive Engineers (SAE), an influential body which is involved in setting the country’s mid-long term energy policy aims has said NEV sales will represent 50% of total sales by 2035.

The SAE also predicts 95% of NEV sales will be BEVs in 2035. The body said hybrid vehicles will make up the other 50% of new vehicle sales in 2035.

China remains the industry leader in EV sales with 1.1m NEVs expected to be sold this year. These predictions would be in line with government deadlines in Europe where the sale of ICE vehicles is to be banned in France by 2040, the UK by 2035, Germany, Ireland and the Netherlands by 2030 and Norway by 2025.


APEX survey rankings for SP Angel commodity forecasts:

2nd in Gold, 2nd in Copper, 2nd in Nickel, 1st in Tin, 5th in Iron ore


Recent interviews:

EV revolution, gold and other ideas (Interactive Investor):

Metals Markets: Are they totally dependent on stimulus? (IG TV):

Tesla Battery Day (IG TV):

SolGold interview: :

Stock ideas (VOX, 21/10/20):

(VOX, 14/10/20):





US – The bipartisan fiscal deal is unlikely to come in before elections next week as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continue with talks.

While the two sides are reported to “have narrowed” some of differences, “the more it narrows, the more conditions come up on the other side,” White House economic adviser Larry Kudlow said.

Preliminary Q3 GDP numbers are due this Thursday with estimates for a strong quarter (+32.0%qoq, annualised) following a record drop in Q2 (-31.4%qoq).

US Q3 GDP expected on Thursday. Expectations range from 18-30%.

Q2 GDP fell by 31.4%.


China – 14th Five Year Plan, expected to be dominated by the theme of Dual Circulation which is self sufficiency, domestic demand and environmental protection.

The Chinese Communist Party is hosting its key policy meeting to set the pace of development over the next five years.

The Party will set its 14 consecutive 5-year plans (Global Times).

China has developed:

146,000km of rail including 38,000km of high speed rail

7,000km of urban rail

155,000km of intercity expressways

241 airports servicing 5,521 routes to 92% of all Chinese cities.

Key projects: Daxing International Airport, HK Zhuhai-Macau Bridge, Beijing Zhangjiakou high-speed railway, Yangshan Port, C919 large passenger jet, Fuxing bullet train ..

More major projects will be planned to continue to drive economic activity, reduce poverty, increase self-sufficiency, and transform China from being a producer of low-quality commodity products to an added value manufacturer.

China is behind on US purchases agreed under its Trade Deal with the US

Farm sales have shown improvement, but like other categories are well below 2020 target (WSJ)

China says it will impose sanctions on Boeing and Lockheed Martin over Taiwan arms sales (China News)

China Industrial profits growth slowed in September on the back of lower producer prices and higher costs

Profits are still down YTD (-2.4%).

Profits are expected to pick up pace supported by a recovering private demand and strong exports in coming months, Bloomberg reports.

Industrial Profits (%yoy): 10.1 v 19.1 in August.


ECB – WTO Approves EU Request For Tariffs On $4B Of US Trade.


US dollar continues to slide on election uncertainty

We see the US dollar continuing to fall due to stronger economic recovery in China and the ongoing impact of COVID-19

Further monetary stimulus in the US is required to restore economic growth and to compete with China which is likely to manage its currency into an increasingly stronger position.

Metals prices are likely to continue to gain in US dollar terms alongside a strengthening Renminbi


Turkey/France – President Erdogan urges Turks to boycott French goods

That’ll learn the French!


ANT – IPO in Shanghai sets market cap at RMB68.8bn



US$1.1810/eur vs 1.1820/eur yesterday.  Yen 104.81/$ vs 104.88/$.  SAr 16.226/$ vs 16.321/$.  $1.301/gbp vs $1.302/gbp.  0.713/aud vs 0.712/aud.  CNY 6.713/$ vs 6.698/$.


Commodity News

Precious metals:         

Gold US$1,903/oz vs US$1,897/oz yesterday

   Gold ETFs 111.1moz vs US$110.9moz yesterday – Gold ETFs post back-to-back weekly outflows ahead of US election

Gold ETFs witnessed two consecutive weekly outflows for the first time this year, as investors exited their positions ahead of the US election.

Withdrawals from gold-backed ETFs totalled 145,533oz in the past two weeks, although 111Moz of gold are still held by the funds.

Gold prices rose on Tuesday morning, as the resurgence of Covid-19 has led to a broader risk-off sentiment in global markets.


Platinum US$878/oz vs US$890/oz yesterday

Palladium US$2,378/oz vs US$2,370/oz yesterday

Silver US$24.44/oz vs US$24.16/oz yesterday


Base metals:  

Copper US$ 6,782/t vs US$6,819/t yesterday – ICSG estimate a 255kt copper deficit globally in July following from a 351kt deficit in June.

Aluminium US$ 1,823/t vs US$1,837/t yesterday

Nickel US$ 15,655/t vs US$15,510/t yesterday – Chinese nickel ore imports surged 66% in September

Nickel imports surged last month compared to the month prior, as weather conditions in top supplier the Philippines improved, and ports made up for lower exports in previous months caused by the pandemic.

China imported 6.21mt of nickel ore and concentrate last month, up 66% compared to August but down 30% compared to the same period last year, according to Chinese customs data.

Imports from the Philippines jumped 62.2% compared to August but fell YoY to 5.49mt in September (SMM News).

Zinc US$ 2,537/t vs US$2,539/t yesterday

Lead US$ 1,780/t vs US$1,764/t yesterday

Tin US$ 18,110/t vs US$18,080/t yesterday



Oil US$40.8/bbl vs US$40.5/bbl yesterday

Oil markets retained strength over the past week following the OPEC+ JMMC meeting which had sent positive signals to the oil markets

CFTC data shows that money managers increased their net-length in WTI crude contracts by 38.431MMbbls to 332.26MMbbld, the highest in two months, while also increasing their net-length positions in Brent crude contracts by 20.022MMbbls to 140.130MMbbls in the week ending 20 October, the highest in seven weeks

A statement from the Russian President showed that Saudi Arabia and Russia are in agreement about the extension of the current cuts of 7.7MMbopd through 2021

This possibility has now become very likely as Libya continues to ramp up production, which currently stands at 525,000bopd

Another Important factor is the likelihood of lockdown measures being imposed in many of the bigger economies around the world including France, Spain, and the UK

Bearish forces in the markets include the rising concerns about lockdown measures in Europe, rising production from Libya, and rising gasoline stocks in the United States

Last week, a permanent ceasefire agreement was signed between the fighting parties, which is expected to boost the stability of oil production and export operations

As a result, Libyan oil production is expected to rise to 1MMbopd within the next four weeks

Elsewhere we are now seeing reduced US oil demand as we move into the winter season and weak transport fuel demand as a result of pandemic lockdowns continue to weigh on prices

Tropical storm Zeta made landfall in the Yucatan Peninsula on Monday and is expected to hit the northern part of the gulf coast this week

The storm is expected to impact oil production in the Southern US States from Wednesday

BP, Chevron, BHP, Shell and Equinor have all evacuated platforms and curtailed production as the storm moves towards the Gulf of Mexico

Energy producers have halted 16% (293,656bopd) of production and 6% of natural gas output (162.57MMcf/d) according to Reuters


Natural Gas US$3.051/mmbtu vs US$2.984/mmbtu yesterday

Tropical storm Zeta is now entering the Gulf of Mexico and is expected to be upgraded to a Hurricane

The storm is taking a similar track to Laura and is expected to hit Louisiana

Hedge funds have now added to long position and reduced short position in futures and options according to the latest commitment of trader’s report

According to the CFTC, managed money increased long position in futures and options by 4.7K contracts while reducing short positions in futures and options by 11.5K contracts

Managed money open interest that is long futures and options outnumbers open interest that is short by 2.2 to 1



Iron ore 62% Fe spot (cfr Tianjin) US$112.6/t vs US$113.1/t – China Iron and Steel Association see crude steel output rising 3.5%. to over 1bnt for the year

Chinese steel rebar 25mm US$563.8/t vs US$565.4/t

Thermal coal (1st year forward cif ARA) US$58.6/t vs US$59.4/t

Coking coal futures Dalian Exchange US$129.5/t vs US$129.5/t



Cobalt LME 3m US$33,305/t vs US$33,305/t

NdPr Rare Earth Oxide (China) US$48,787/t vs US$48,750/t

Lithium carbonate 99% (China) US$5,288/t vs US$5,256/t

Ferro Vanadium 80% FOB (China) US$28.5/kg vs US$28.5/kg

Antimony Trioxide 99.5% EU (China) US$5.3/kg vs US$5.3/kg

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

Graphite flake 94% C, -100 mesh, fob China US$440/t vs US$440/t

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


Battery News

Nidec reveals plans to spend big on EV

Motor producer Nidec revealed on Monday its intention to invest close to $10bn (Nikkei) over the next 5yrs on electric vehicles in order to secure a 25% market share in 2025 and 40-45% share in 2030 of the e-axle market.

The Company is building out its capacity to enable it to produce 2m drive motors for the Chinese EV makers and a further 1m to European makers. Nidec’s production capacity is expected to reach 5m units by 2025.

Chairmen and CEO Shigenobu Nagamori said the Company has supply agreements confirmed with 22 automakers, the majority in China and Europe.

Nidec’s e-axle/e-drive is a combination of an EVs gear, motor and power electronics, fully integrated into the front or rear axle, providing power to the wheels.   

The e-axle technology has emerged as a prominent technology as it provides the opportunity for efficiency gains and recued costs at a time when automaker, particularly those in Europe are under pressure to meet carbon emissions targets.  


Solar pavements in Hungary

Platio, a Budapest based tech company, is starting to use plastic waste to make solar panels built into pavements to power buildings and charge electronic devices in public areas.

The solar cells are covered with hardened glass tiles, which allow the pavements to carry the weight of vehicles. The small-scale approach and strong recycled plastic makes the panel very durable.

One solar panel unit produces around 20 Watts of energy. They are integrated into pavements with recycled materials and Platio pavements can be fitted where some other, more controversial solar technology cannot be. 

A 20 square meter pavement can provide enough green energy to power a house. Platio’s biggest project has been an 80 square meter pavement in Kazakhstan to power the air conditioning of a shopping centre.

Platio’s solar pavements do however cost more than the classic, roof solar panels. Despite this, they believe their product is more straightforward and adaptable.


Japan’s net zero emissions pledge

Japan will have to shut down coal mines four times faster than it is currently, and notably increase renewable energy capacity over the next ten years in order to reach its new climate pledge of zero emissions by 2050.

Prime Minister, Yoshihide Suga, confirmed yesterday that Japan would set a goal in line with the Paris Agreement.

Antonio Guterres, a spokesman for the UN Secretary General, said that they look forward to “concrete policy measures” from Japan including a revised 2-3- climate target, known in UN terms as a Nationally Determined Contribution.

Japan’s recently published 2030 climate policy is currently out of line with the new target. Under this plan, coal, oil and gas still make up 56% of the energy mix in 2030. Renewables are only expected to provide 22-24% of power generation. A new plan is to be published in June 2021.

For Japan to be in line with the Paris Agreement they must cut their use of coal to 4% of the energy mix by 2030. This means that coal power capacity would fall from 51 gigawatts in 2019 to 17 gigawatts by 2040. Renewable sources such as solar, wind and hydrogen would also have to account for a third of energy by 2030 and by 2040 they would be supply about half of all power.

This is a hopeful sign for Japan which has historically slowed progress in international climate talks.


Company News

Anglo Asian Mining* (AIM:AAZ) 118p, Mkt Cap £134m – Vejnaly Contract Area under control of Azerbaijan

BUY – 200p


The Zangilan district that hosts the Company’s Vejnaly Contract Area is reported to have come under control of Azerbaijan.

A mineral rich district is located in the south west of Azerbaijan with the Company holding rights to the Contract Area under the PSA with the government.

Vejnaly cover 300km2 and is estimated to host 6.5t (0.2moz, C1+C2 categories) and 2.3t of gold (0.1moz, P1).

The PSA will kick in once the security for the locals and personnel is established and guaranteed, therefore, “resetting” the agreement to year zero for contract areas in the occupied territories to the standard five years of exploration and 15 years of mining (with two five-year extensions).

While there has been mining activity in the Zangilan district under the Armenian control, the Company is reporting that to its best knowledge the Vejnaly deposit has had only limited exploitation.

The timeline for exploration works and mineral potential assessment is currently unknown and is conditional on safe access to the Zangilan district.

Conclusion: The mineral rich Zangilan district hosting the Vejnaly Contract Area in the occupied territories has come under Azerbaijani control allowing the Company to potentially test exploration potential of the area once safe access and security in the area are established.

*SP Angel act as Nomad and broker to Anglo Asian Mining


Amur Minerals* (LON:AMC) 2.2p, Mkt Cap £30m – NRR shareholders invest $10m in equity

The Company reports that certain existing shareholders of Nathan River Resources (NRR) decided to provide further $10m in equity.

The investment offers additional working capital to expedite the shipment of stockpiles and processing of mined blocks at the Roper Bar Iron Ore project in the Northern Territories, Australia, taking advantage of the current high iron ore prices.

Amur Minerals has not taken on the opportunity to participate maintaining the exposure through a $4.7m secured convertible loan note paying a 14% interest.

The Company decided to focus its financial resources on the Kun Manie sulphide nickel/copper project.

New shares will reduce the potential interest of Amur in NRR to 13.4% if outstanding notes are converted.

*SP Angel act as Nomad and Broker to Amur Minerals


Bluejay Mining* (LON:JAY) 9.94p, Mkt cap £96m – Extension to offtake negotiations for Dundas titanium mineral sands

Bluejay Mining advise that there is a four-week extension to offtake negotiations for the sale of ilmenite from its Dundas project in Greenland.

The offtake negotiations currently cover up to 250,000-300,000tpa of ilmenite concentrate a 50% increase on the 200,000tpa previously agreed.

Dundas currently plan to mine between 390,000-490,000tpa of ilmenite concentrate.

The current MOU covers around 70% of Dundas’ current production plan with further time to negotiate a definitive distribution agreement.

The Offtaker is a major ilmenite market participant and is also willing to participate in the Dundas project financing.

Ilmenite prices: remain steady at $230-250/t for 47-49% TiO2 with a relatively tight market caused by supply disruption and ongoing demand for pigment for paint. The ilmenite price has risen four times this year as titanium dioxide / pigment producers compete for new feedstock.

Management recently installed further accommodation at Dundas and set up a logistics office in Ilulissat for the new Dundas mine and for exploration.

Rio Tinto Iron and Titanium ‘RTIT’ is due to run a smelter test next year on 5,000t of Bluejay ilmenite feedstock shipped from the Dundas mine site.

RTIT are said to have been running flat out to meet demand causing the smelter test to be pushed into 2021.

Cash: Bluejay recently reported a healthy £7.0m cash balance plus £720,000 of receivables due and £914,870 of VAT receivable from HMRC.

Mining license: we expect news on confirming the issuance of a mining license for the Dundas mine from the Greenland Government quite soon.

Exploration: Bluejay continue to expand their exploration effort in Greenland. Anglo American have taken ground close to Bluejay’s Dundas project indicating potential for a larger-scale discovery in the area.

Bluejay have also secured licenses close to and along strike from AEX Gold which is defining a larger resource and multiple high-grade gold-bearing structures around the Nalunaq Gold Mine.

Conclusion: Bluejay are moving closer to completing the elements required for financing the Dundas project which has a peak capital cost of US$245m.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company.


Condor Gold* (AIM:CNR) 44.5p, Mkt Cap £47.8m – Detailed geotechnical investigations underway at La India

Click here for Initiation note pdf

Condor Gold reports that geotechnical drilling and test-pitting is underway to establish detailed information for the design of the tailings storage facility (TSF) and water retention reservoir at its La India mine-site in Nicaragua where the company is fast-tracking the development of open-pit mining of a 1.1moz gold resource.

The geotechnical work entails 20 drill holes and 58 test-pits on the site of the TSF and at the La Simona reservoir and processing plant and Condor Gold describes the “purpose of the geotechnical drilling and some of the test pits is to characterize subsurface geology and foundation conditions below the proposed TSF and water retention dams’ footprints. Test pits will also characterize the surficial geology along the TSF’s proposed diversion channel alignments, the water retention properties of the soil and subsurface geology within the TSF and water retention reservoir, and the foundation conditions within the processing plant site”.

The company explains that it has decided to “accelerate the Project, by-passing a Feasibility level design, which is typically required for bank lending and go directly to a TSF Final level of design, which will, subject to funding, allow the fast tracking of the Project to future operational status”.

Conclusion: Recent high profile problems with tailings dams elsewhere in the mining industry has resulted in increased scrutiny of these facilities both by regulators and certain investors. In our opinion, the detailed investigative work Condor Gold has started should not only lay the basis for a  well-engineered design for the facility but may also expedite the required permitting and provide reassurance to financiers.

*SP Angel act as sole broker to Condor Gold


Directa Plus (AIM:DCTA) – 70p, Mkt cap £42m – Directa Plus agrees to supply graphene nanoplatelets to NexTech

Directa Plus has signed an initial agreement to supply NexTech with its pristine graphene nanoplatelets.

NexTech is a US lithium sulphur battery company based in Nevada.

Directa Plus has granted NexTech a 5-year exclusivity in the field of Lithium Sulphur batteries.

NexTech is using technology licenses from Berkeley National Labs


Empire Metals* (AIM:EEE) 3.66p, Mkt cap £9.3m – Deal offers stake in new Mexican gold mine and cash flow while retaining interest in Georgian assets

Empire Metals is to receive an initial C$2m worth of Candelaria Mining Corp stock in return for the transfer of its rights to the Bolnisi licenses in Georgia.

Empire’s Russian joint venture partners, Caucasian Mining Group ‘CMG’ have a right of first refusal to acquire the 50% of the assets they do not own on similar terms to the Candelaria deal.

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.

Candelaria is developing the Pinos gold project in Mexico which offers an IRR of 25% on a modest $13.5m initial capital investment based on low $1,250/oz gold and $17/oz silver price assumptions according to a PEA done in 2018.

The rate of return should be substantially higher if run at current metals prices.

Conclusion: Empire Metals now has a meaningful stake in a developing gold mine and the prospect of significant cash flow. Mike Struthers will move as part of the deal to Candelaria and should be able to better manage the potential development of the Bolnisi copper/gold assets from within the new structure, but will also remain on the Empire board to continue to contribute to Empire’s development of the Eclipse project in Australia.

Empire’s jv partner CMG will need to contribute their share of exploration and development costs to match Candelaria’s higher level of expenditure or risk substantial dilution according to the current agreement.

Alternatively, the Russian partner may choose to match Candelaria’s offer to Empire to wholly own the assets.

Combining the Georgian assets with Candelaria’s expected cash flow looks like a good combination for future development without the need for further dilutive funding.

*SP Angel act as nomad and broker to Empire Metals


IronRidge Resources* (AIM:IRR) 17.6p, Mkt cap £75.1m – Final Phase-two drilling results at Zaranou Gold Project

IronRidge has reported final Phase-2 RC & AC drilling results at its Ebilassokro and Ehuasso targets within the Zaranou Gold Project area in Côte d’Ivoire, West Africa.

The latest drill results confirm continuous mineralisation over a 1.7km strike at the Ehuasso Main target, with mineralisation open to the South-west and at depth, with Phase-3 infill drilling now underway. 

Highlights at the Ehuasso target at a 0.1g/t cut-off and maximum 1m of internal dilution (from the previously reported 4m composites on 17 September 2020) include:

5m at 33.63g/t from 138m in hole ZARC0013

14m at 4.67g/t from 46m in hole ZARC0022

9m at 4.16g/t from 81m in hole ZARC0019

Highlights at the Ebilassokro target at a 0.1g/t cut-off and a maximum 4m of internal dilution (from the previously reported 4m composites on 17 September 2020) include:

3m at 5.02g/t from 21m in hole ZAAC0491

4m at 2.06g/t from 44m in hole ZAAC0477

21m at 0.39g/t from 17m in hole ZAAC0543

All results have now been received for the P2 drill programme, with a total of 20,312m of AC in 404 holes and 2,077m of RC in 12 holes completed. Phase-3 drilling is expected to amount to 50,000m RC and AC drilling at the Ehuasso, Ebilassokro, Yakassé, Mbasso and Coffee Bean targets- with three drill rigs active on site. 

Drilling results to date for the P1 and P2 programmes at amount to a total of 27,760m AC in 555 holes and 3,670m RC in 22 holes which has defined the 1.7km long mineralisation, with up to 70m wide apprent thickness Ehuasso Main target within roughly 160m spaced AC-RC traverses.

Chief Executive Officer of IronRidge, Vincent Mascolo commented: “Ehuasso Main is our most advanced target area with mineralisation continuity now defined in 160m spaced AC and RC drill traverses over 1.7km strike and up to 70m of apparent thickness, drilled to a maximum vertical depth of 100m which remains open along strike and at depth.”

“With only 12km of 47km of potential strike having been drill tested to date, we have already uncovered three exciting target zones – Ehuasso, Yakassé and Ebilassokro with additional targets M’Basso and Coffee Bean/Super Pit – complementing an additional untested 8km strike of hard-rock artisanal workings and 27km of untested soil anomalies to deliver a pipeline of further discoveries. “The third phase 50,000m combined AC and RC programme is now well underway with three drill rigs active on site.”

*SP Angel act as Nomad for IronRidge Resources


Adriatic Metals* (ASX:ADT) 114.5p, Mkt cap £219m – $28m financing to progress Vareš Silver Project

Adriatic Metals has entered into binding agreements for a US$28m financing, comprising a $20m private placement of 8.5% unsecured convertible debentures to Queen’s Road Capital (QRC) investment and a subscription by the European Bank for Reconstruction and Development (EBRD) for £6.2m (~$8m) in ordinary shares of the Company at a price of £1.175 per share.

The Debentures are unsecured and will have a four-year term from closing, wish a cash coupon of 8.5% per annum payable quarterly. The Debentures will be convertible at the holder’s option into Ordinary Shares at a conversion price of A$2.7976, representing a 30% premium to the 20 day volume weighted average price of the Company’s Chess Depository Interests on the ASX to 23 October 2020.

The Company shall be entitled to redeem the Debentures early at par plus accrued and unpaid interest:

At any time that the 20-day VWAP on the ASX exceeds 125% of the Conversion Price;

On or after the third anniversary of the date of the issuance of the Debentures;

From the proceeds of any project financing or other secured debt financing completed after the Closing Date.

The debentures may not be transferred, other than to a wholly owned affiliate, without the consent of the Company, and Adriatic will pay to QRC on the closing date an establishment fee equal to 3% of the principal amount of the Debentures, payable in either cash or ordinary shares issued at A$2.1520 per share.

In terms of the subscription agreement with the EBRD, the agreement entitles the subscriber to 5,276,595 ordinary shares at a price of £1.175 per share, for gross proceeds of £6.2m (~$8m) representing a 4.5% discount to the 20 day VWAP on the London Stock Exchange on 23 October 2020.

In addition to the subscription, Adriatic have entered into a project support agreement with EBRD, which requires commitments to ERBD’s environmental and social requirements- including undertaking an International Environmental & Social Assessment for Vares that is currently being prepared by the Company.

The recent round of financing allows the company to progress at its Vares Silver Project in Bosnia & Herzegovina, where the company released a pre-feasibility study earlier this month.

Adriatic Metals CEO, Paul Cronin commented: “This financing follows the recent publication of a robust and highly attractive pre-feasibility study on the Vareš Silver Project and leaves the Company very well-funded to complete the definitive feasibility study, detailed engineering work and remaining permitting processes. The financing also positions the Company to aggressively explore our highly prospective Serbian assets following the acquisition of Tethyan Resource Corp and our recently acquired wider land holding in Bosnia.”

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


Kodal Minerals* (LON:KOD) – 0.076p, Mkt cap £8.75m – Drawdown of financing

Kodal Minerals report the second and final part of its US$1.5m financing facility with Riverfort Global Opportunities PCC and YA II PN Ltd.

Sinohydro continue with their technical review and will visit the Bougouni site in November.

Sinohydro are working in conjunction with Suay Chin and Shandong Ruifu who have already tested a bulk sample of Kodal’s concentrate.

The idea is for Sinohydro which is a part of PowerChina to help construct and finance the new Bougouni spodumene mine and concentrator plant.

220,000tpa of 6% spodumene concentrate over an initial 8.5 years

71% recovery rate of contained lithium

>USD$1.4bn of total revenue at $680/t starting H2 2021 and rising 2%pa

2mtpa throughput with DMS and conventional flotation circuit. Recoveries are acceptable with the DMS on its own.

USD$431/t C1 cash costs or USD$466/t inc. royalties and sustaining capital.

US$117m Capex est. plus contingency:

1.7 year payback est.

58% IRR pre-tax

51% IRR post tax

US$300m NPV7% pre-tax

US$200m NPV7% post-tax

The company also remind us that they are well funded to continue with the Bougouni development plan.

The team led by Bernard Aylward also continue with their gold exploration with field visits also planned for November.

Key stats:

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


 Pure Gold Mining (LON:PUR) 146.5p, Mkt Cap £538m – Drilling results from Red Lake

Pure Gold Mining has released further drilling results from its surface and underground drilling programmes at Red Lake, Ontario.

Surface drilling to assess the Wedge Zone within a 7km long structural corridor is establishing both strike and down-plunge continuity of the known high grade mineralisation and highlighted results  include:

A single metre long intercept averaging 66.3g/t gold from a depth of 110.1m in hole PG20-769; and

Another single metre long intercept averaging 24.3g/t gold from a depth of 302.5m in hole PG20-775; and

A single metre long intercept averaging 20.5g/t gold from a depth of 11m in hole PG20-766; and

A 1.5 long intercept averaging 16.6g/t gold from a depth of 211.5m within a wider 4.5m long intersection averaging 6.3g/t gold from 208.5min hole PG20-767; and

A 2m long intercept averaging 11.4g/t gold from a depth of 37.2m in hole PG20-773.

President and CEO, Darin Labrenz said that “Today’s exploration results continue our success at Wedge where we are pushing well beyond the boundaries of our phase I mine plan, demonstrating the high grade nature and growth potential of our large gold system.1 Deep pierce points along the entire seven kilometre trend intersecting the same style of mineralization, geology, alteration and high-grade gold support the opportunity for growth and scalability of the project for the long term”

As well as the surface drilling, Pure Gold reports underground drilling results which extend “mineralization out from planned stopes and confirming stopes planned for near-term production.  New grade control drilling has highlighted the potential for bonanza grades in stopes planned for near term production”. Among the underground results highlighted in today’s announcement are:

A 4.9m wide intersection averaging 296.1g/t gold from a depth of 3.7m in hole PGL-0003 which included 1.2m averaging 1,117.1g/t gold from  3.7m depth. Both intersections form part of a 7.3m wide intersection with an overall average grade of 198g/t gold; and

A 2.2m wide intersection averaging 40.0g/t gold from a depth of 18.8m in hole PGB-0170; and

A 2.8m wide intersection averaging 18.7g/t gold from 10.7m depth in hole PGB-0165; and    

A 6.7m wide intersection averaging 11.1g/t gold from 0.0m depth in hole PGB-0178

We comment that, with a number of the underground drill-holes intersecting high-grade mineralisation at shallow down-hole depths indications are strong that this material is likely to be relatively easily accessible from existing mine infrastructure and should enable the company to “further delineate and expand stopes scheduled for near-term production”. The particularly high grades in some of the holes may be a challenge to grade-control but it’s a nice challenge to have.


Sunrise Resources (AIM:SRES) 0.28p Mkt Cap £9m – Progress reports on Nevada projects

Sunrise Resources reports that it has assembled a commercial scale pilot plant and is to test a 100 ton bulk sample of perlite at it its CS Pozzolan-Perlite project in Nevada “at the end of this week”.

The company says that around 20-30 tons of coarse horticultural grade perlite will be provided to a total of “five different customers across the USA for expansion testing” and that “Raw perlite fines … [are] …to be prepared for larger scale pozzolan grinding test and concrete pour”.

The company confirms that it is aiming for its first commercial production from the CS project in the spring of 2021 with Executive Chairman, Patrick Cheetham, saying that “We are moving forward with more detailed engineering and financial planning as we aim for first commercial  production in Spring 2021.”

Also in Nevada, drilling at the Clayton silver-gold project is expected to start “on or around 29th October”. The initial work will “follow up historic exploration where a number of holes ended in mineralisation or did not reach the target depth e.g. CL-15 which intersected 7.6m grading 4.8 ounces/ton (165 grammes/tonne) silver from 82.3m depth to the base of hole, ending in mineralisation”.

The company expresses the view that historical grades could have been underestimated “due to loss of fine silver-bearing sulphide minerals during previous percussion drilling programmes”.

Sunrise Resources also confirms that it has submitted a “Notice of intent to drill” the Newark Gold project in Nevada to the Bureau of Land Management and also that it is planning to drill the Bakers gold project in Western Australia.


 Vast Resources* (AIM:VAST) 0.16p, Mkt Cap £22m – Mining license extended at Manaila and Carlibaba

The Company extended the Manaila mining license for another five years (to 29 October 2025).

New license includes the adjacent larger Carlibaba license area that hosts 3.6mt at 0.93% copper and 0.23g/t gold along with other base and precious metals by-products in the Measured and Indicated category as well as 1.0mt at 1.10% copper and 0.24g/t gold in the Inferred resource.

Carlibaba is considered as a potentially standalone operation allowing to locate processing facilities next to mining operations and to save on expensive transport of mined ores to the current processing plant located at Iacobeni, around 30km away.

Given the adjacent location of the Carlibaba license area, new processing plant may then be used to process Manaila ores.

The Manaila Polymetallic Mine was commissioned in 2015 and is currently on care and maintenance.

*SP Angel acts as Broker to Vast Resources



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                                                            

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.


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