SP Angel . Morning View . Tuesday 26 11 19
China rare earth magnet exports to US jump 21.7% in October
MiFID II exempt information – see disclaimer below
AfriTin Mining* (LON:ATM) –– Issue of £3.8m of convertible loan notes as Uis ramps up tin concentrate production
Altus Strategies* (LON:ALS) – Q3/19 corporate and operational highlights
Asiamet Resources (LON:ARS) – Near term exploration targets
Aura Energy Limited* (LON:AURA) – Extraordinary General Meeting
Keras Resources* (LON:KRS) – Distribution of Calidus Shares
Thor Mining (LON:THR) – Drilling results from Kapunda
Chinas rare earth magnet exports to US jump 21.7% in October (Reuters)
China exported 477t to the US, the highest level since at least 2016 according to customs data.
Rare earth exports to all countries was 3,091t last month up 5.4% from September and 22.9% from a year earlier.
China is the worlds largest producer of rare earths, and has threatened to restrict their supply due to the US-China trade war, however since then it has raised annual outputs.
*SP Angel acts as nomad and broker to Mkango Resources and broker and financial advisor to Rainbow Rare Earths
Battery marker Northvolt aims to triple number of planned factories (FT)
Northvolt (Sweden) has raised €1bn this year from BMW, Goldman Sachs and others to further its ambitions to become Europes leading battery manufacturer.
Northvolts ceo, is aiming for 150GWh of battery capacity by 2030, for ~25% market share in Europe equal to around 2m Tesla cars.
The company has entered into a joint venture with VW, and is set to open a battery factory in Lower Saxony with a capacity of 16GWh by 2023.
Metals find new uses in fast developing robot animals
If anyone thinks the world is going to use less metals as it continues to develop, think again
Boston Dynamics are trailing a new robot dog to assist the police in Massachusetts.
The robo-dog is allegedly being used with the bomb squad though other, similar robots like the SWAT-Bot have been trialled for some time.
Its only a matter of time before the robot dogs become more widely used for law enforcement and given the industrys use of anachronisms we wonder if PICNIC will become Problem In Criminal Not In Computer
Dow Jones Industrials +0.68% at 28,066
Nikkei 225 +0.35% at 23,373
HK Hang Seng -0.29% at 26,914
Shanghai Composite +0.03% at 2,907
FTSE 350 Mining +0.57% at 18,525
AIM Basic Resources -0.66% at 2,092
US – Jerome Powell delivered an optimistic take on the US economic outlook while signalling interest rates are likely to remain on hold.
- “At this point in the long expansion, I see the glass as much more than half full,” Powell said on Monday.
- “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook.”
- “The full effect of these monetary policy actions will be felt over time, but we believe they are already helping to support consumer and business sentiment and boosting spending in interest-sensitive sectors, such as housing and consumer durable goods.”
- The Chinas Ministry of Commerce said China and the US “reached consensus on properly resolving relevant issues” and agreed to stay in contact on the remaining points for a “phase one” trade deal during a phone call Tuesday morning.
Germany – Consumer confidence picked up slightly from the weakest level in more than two years in a sign that the worst may be over.
- GfK Consumer Confidence: 9.7 v 9.6 in November and 9.6 forecast.
Hong Kong – Trade continues to contract at accelerating rates amid ongoing protests as well as overall weaker growth background.
- Exports (%yoy): -9.2 v -7.3 in September and -8.4 forecast.
- Imports (%yoy): -11.5 v -10.3 in September and -10.6 forecast.
US$1.1018/eur vs 1.1017/eur yesterday. Yen 108.92/$ vs 108.85/$. SAr 14.819/$ vs 14.697/$. $1.288/gbp vs $1.288/gbp. 0.678/aud vs 0.679/aud. CNY 7.040/$ vs 7.035/$.
Gold US$1,457/oz vs US$1,459/oz yesterday – Poland repatriates 100t of gold from Bank of England (kitco)
- Poland has purchased 125t of gold in the last two years, increasing its reserves to nearly 229t and becoming the 22nd largest holder of bullion.
- According to the central bank Governor Adam Glapinski, Poland is bringing 100t of gold home in a bid to demonstrate the strength of its $586bn economy.
- Glapsinski has also said that Poland isnt planning on selling its gold, and did not rule out more gold purchases in the future.
- Central banks around the world have been accelerating their gold buying this year in a bid to diversify and de-dollarize due to trade tensions, geopolitical risk and recession fears.
Gold ETFs 81.2moz vs US$81.0moz yesterday
Platinum US$900/oz vs US$894/oz yesterday
Palladium US$1,805/oz vs US$1,786/oz yesterday
Silver US$16.92/oz vs US$16.90/oz yesterday
Copper US$ 5,888/t vs US$5,891/t yesterday – ICSG: Global copper market in deficit by 330k tonnes
- According to the International Copper Study Group, the global copper market posted a 330kt deficit in the first eight months of the year.
- Global copper production dropped 0.5% yoy, and top producer Chiles production also fell 0.5% yoy due to lower grades and supply disruptions.
- Refined global production was down 0.3% in the first eight months of the year, with Chiles output falling 32%. Secondary production from scrap increased by 1.8%.
The first stage of Northvolts first big factory is set to open in 2021 and will have a capacity of at least 32GWh by 2024, with the possibility to go up to 40GWh
Aluminium US$ 1,740/t vs US$1,742/t yesterday
Nickel US$ 14,555/t vs US$14,535/t yesterday – Chinese nickel imports from Indonesia jump 23.4% in October as ban nears (Reuters)
- Chinese buyers continued to stock up ahead of a ban on exports which is due to come into effect in January.
- Indonesia exported 3.1mt in October compared to 2.5mt in September. This is up 132% from 1.34mt a year earlier.
- China imported 6.85mt of nickel ore last month of which 3.1mt was from Indonesia.
- Chinas total nickel imports in October were down 3.9% from the 7.13mt in September, but up 23.2% from 5.56 million tonnes a year earlier.
Zinc US$ 2,277/t vs US$2,304/t yesterday
Lead US$ 1,9212/t vs US$1,958/t yesterday
Tin US$ 16,450/t vs US$16,300/t yesterday
M&A activity builds momentum across the oil sector
- The past 12 months has seen the acquisition of Faroe Petroleum (FPM.L) by DNO (DNO ASA); a £380m bid for Eland Oil & Gas (ELA.L) by Seplat Petroleum (SEPL.L); and Amerisur Resources (AMER.L) currently engaged in a competitive bid.
- Aramcos proposed IPO is another good barometer for sector sentiment in our view. Saudi Arabia has yet again delayed the much-hyped listing by at least several weeks, with international investors seemingly not buying the Saudi insistence that the biggest oil company in the world is worth US$2tn.
Oil US$63.6/bbl vs US$63.5/bbl yesterday
- Saudi Arabia saw its crude oil sales to the worlds top oil importer, China, increase by 76% yoy in October, driven by increasing demand and US sanctions restricting Chinese imports of Iranian and Venezuela crude
- A Reuters investigation has concluded that an Iranian coalition was behind the September 14 attack on the oil facilities of oil giant Saudi Aramco, with Irans Supreme Leader Ayatollah Ali Khamenei giving the order to attack, according to Arab News
- US crude futures were flat at US$62.1/bbl on the New York Mercantile Exchange
Natural Gas US$2.473/mmbtu vs US$2.608/mmbtu yesterday
- Natural gas prices rose sharply in early trading yesterday, then fell back late to close the session near the lows of the day
- The outside day reversal is a negative sign for prices and likely points to continued lower levels as well as additional volatility
- LNG exports declined week over week a sign of softening demand
- There is one tropical disturbance in the lower Atlantic that NOAA projects 10% chance of turning into a tropical cyclone over the next 48-hours
Uranium US$26.00/lb vs US$25.95/lb yesterday
Iron ore 62% Fe spot (cfr Tianjin) US$88.5/t vs US$86.5/t
Chinese steel rebar 25mm US$613.5/t vs US$612.5/t
Thermal coal (1st year forward cif ARA) US$63.7/t vs US$65.0/t
Coking coal futures Dalian Exchange US$187.3/t vs US$187.5/t
Cobalt LME 3m US$36,000/t vs US$36,000/t
NdPr Rare Earth Oxide (China) US$40,482/t vs US$40,440/t
Lithium carbonate 99% (China) US$6,605/t vs US$6,610/t – Lithium – Geo40, based in New Zealand claims to have made a breakthrough in extracting near battery-grade lithium from geothermal fluid
- Forgive us if we are sceptical but we have heard representations from a number of lithium companies using osmosis for the extraction of lithium directly from brines in Argentina and elsewhere.
- Reports of consistent lithium production from this type of processing have proved elusive.
- We suspect the process works well in the lab for there to be so much interest and investment into this technology but it does not appear to work on the upscaling needed for
Ferro Vanadium 80% FOB (China) US$29.5/kg vs US$29.5/kg
Antimony Trioxide 99.5% EU (China) US$5.2/kg vs US$5.2/kg
Tungsten APT European US$225-245/mtu vs US$225-245/mtu
Graphite flake 94% C, -100 mesh, fob China US$540/t vs US$540/t
Graphite spherical 99.95% C, 15 microns, fob China US$2,550/t vs US$2,550/t
AfriTin Mining* (LON:ATM) – 3.3p, Mkt cap £21m – Issue of £3.8m of convertible loan notes as Uis ramps up tin concentrate production
AfriTin holds 85% of the Uis tin project in Namibia with the remaining 15% owned by The Small Miners of Uis (SMU).
(Bushveld Minerals* holds 8% of AfriTin)
- AfriTin report the raising of £3.8m worth of convertible loan notes bearing a 10%pa coupon.
- The unsecured notes have an 18m term are convertible at 4p/s and are with a strategic African tin trading group and existing shareholer.
- The funds are for general working capital purposes relating to the progression of the Uis project towards feasibility studies for the Phase 2 expansion and on initial testwork on the lithium discovery within the pegmatite ore body.
- A first shipment of tin concentrate is scheduled for the end of this month as the mine ramps up to 60t of tin concentrate a month expected early next year.
- This represents a slight delay on the expectation for 60t/m by the year end as reported in August.
- The new power line to the Uis site has been completed and energised enabling the Phase 1 plant to ramp up and lowering power costs.
- Phase 1: Pilot plant throughput capacity 500,000tpa for 60t of tin concentrate per month
- Phase 2: 3mtpa plant for 5,000tpa of tin concentrate containing approximately 60% tin on an 85% recovery rate.
- Dense Media Separation plant is being used and tested in the pilot plant for the upgrading of low-grade tin for further processing into a saleable tin concentrate.
- Recoveries of tin are estimated to be 71%-91% in Stage 2 of the process.
- Uis JORC resource of 71.54mt grading 0.134% tin, 85ppm tantalum, 0.63 % Lithium Oxide for 95,539t of in-situ tin, 6,091t tantalum and 450,265t lithium oxide
- Offtake contract with Thaisarco, (Thailand Smelting and Refining Co., Limited) for 12-months offtake with concentrate transshipment through Walvis Bay.
- Debt facility: Nedbank previously agreed a N$35m (approximately £2m) working capital facility as well as an N$8m (approximately £465,000) VAT facility with its Namibian subsidiary Afritin Mining Namibia in August. Bushveld Minerals have offered surety for the loan to Nedbank
*SP Angel acts as nomad and broker to Bushveld Minerals which listed AfriTin on AIM and still holds a meaningful stake in AfriTin.
Altus Strategies* (LON:ALS) 4.4p, Mkt Cap £7.7m – Q3/19 corporate and operational highlights
- The team signed a JV Term Sheet with Glomin with regards to to Lakanfla and Tabakorole gold projects located in southern and western Mali, respectively.
- The Term Sheet has been extended by both companies until 30 November 2019 for Glomin to complete the due diligence on the project and prepare final documentation.
- The company has also signed a Term Sheet with Desert Gold for the sale of and future royalty on Sebessounkoto Sud and Djelimangara licenses in western Mali.
- Altus has subsequently successfully completed the transaction in return for cash, equity milestone payments and 2.5% NSR.
- Desert is planning to complete 15,000m of drilling in 2020 including the aforementioned properties located within the prolific Kenieba window of western Mali.
- In Cote dIvoire, the Company signed an option agreement with Firering Holdings over the nickel Toura license that involves Firering earning a 95% interest in the project with Altus receiving €15k, a 5% capped free carried interest and a royalty linked to the nickel price.
- In Ethiopia, the team started exploration at the recently granted Zager where a number of artisanal gold workings as well as areas of polymetallic mineralisation have been identified.
- In total, the Zager licence covers an area of 285km2 within a geological unit known as the Nakfa terrane which “hosts a number of significant VMS base metal and gold deposits and mines. These include Bisha, a polymetallic mine operated by Zijin Mining Group Co. Ltd. 136km northwest of Zager, the Asmara project … 125km northeast of Zager and the Harvest and Adyabo projects … 10km south and east of Zager.”
- In Mali, the discovery of a significant new target was announced at the Diba VMS project including a 1.2km lond discontinuous gold in soil anomaly.
- Loss from operations amounted to £0.4m in Q3/19 (Q3/18: £0.5m) with the exploration spend distributed between Mali (£60k), Marocco (£48k), Ethiopia (£47k), Cameroon (£42k) and Liberia/Cote dIvoire (£35k combined).
- Loss for the period totalled £0.5m (Q3/18: £0.0m) largely reflecting the change in the value of Canyon Resources shares held at the Company.
- Closing cash balance together with marketable securities stood at £0.4m (including £0.27m held in Canyon Resources shares) as Of Q3/19.
- On 12 months outlook, the Company is planning to close the $4m private placement along with the proposed La Mancha $8.5m investment securing fuds for further exploration and evaluation works across current license areas as well as new targets.
- Additionally, the Company is expecting to receive 15m Canyon shares shortly (subject to a 12m voluntary escrow) of the potential total 30m in respect of the sale of Birsok and Mandoum bauxite licenses in Cameroon.
Conclusion: The Company currently holds 18 precious metal and base metal exploration projects across six African countries (Morocco, Ethiopia, Cameroon, Liberia, Cote dIvoire and Mali) with the team continuing early exploration works across existing licenses as well as evaluating new targets. A number of projects have either attracted a JV partner or have been divested in return for cash/equity/NSR, in line with the project generator business model. A potential strategic investment by a $1bn La Mancha fund serves as an endorsement of the Altus team as well as will be providing capital to further advance and grow the existing asset base.
*SP Angel acts as nomad and broker to Altus Strategies
Asiamet Resources (LON:ARS) 2.85p, mkt cap £31.4m – Near term exploration targets
- Asiamet Resources has announced plans to drill several targets close to its BKM project area in Kalimantan before the end of this year.
- The company released details of its feasibility study for the development of the BKM project in June indicating that at a copper price of US$3.30/lb (US$7,275/t), an initial capital expenditure of $192m is expected to generate an after tax NPV of $133.5m at an 8% discount rate and an IRR of 19.5% excluding closure costs from the production of around 25,000tpa of copper cathode at an all-in-sustaining cost of US$1.78/lb over a nine-years mine life.
- Establishing additional resources close to the planned BKM development has obvious potential to enhance the project economics and at this stage the company has identified four targets for immediate attention comprising:
- The “Link Zone” area between the BKM copper mineralisation and the polymetallic high-grade zinc/lead/copper volcanic-hosted massive sulphide mineralisation encountered in the BKZ zone. The company considers that the “BKM and BKZ could be part of the same mineralisation … [and evaluation of the exploration data] … shows that there is 500metres of untested potential … between BKZ and BKM.”
- The “BK West” Zone is characterised by a geophysical induced-polarisation anomaly which “like BKM has coincident silica sericite alteration and copper sulphides in veining which remains untested. This North West BKM Target appears to be about 200 metres long (50% of the size of the BKM IP chargeability high)”.
- The “Root Zone” represents depth extensions to the known copper mineralisation at BKM. The company points out that a number of the drill-holes it used for the BKM resource evaluation “intersected mineralisation copper mineralisation which is open at depth. For example, drill hole BKM31750-06, intersected 7m @ 1.02% Cu at end of the drill hole”. Deep mineralisation in earlier drilling, in conjunction with the identification of an induced-polarisation anomaly “which dips at 40 degrees to the west for at least 250 vertical metres” provides an opportunity to target deeper level targets beneath the BKM deposit.
- Asiamet has also identified potential near-surface oxide copper mineralisation covering an area approximately 300 metres square located to the south of BKM. Previous drilling results include a 12m long intersection averaging 2.15% copper from a depth of 17.5m in hole BKM30500-01 and a 10.25m long intersection averaging 0.62% copper from a depth of 4.25m iRead More – Source