SP Angel . Morning View . Friday 29 11 19

Copper pulls back on a risk off sentiment


MiFID II exempt information – see disclaimer below 


Aura Energy Limited* (AURA LN) – Consistent and high recovery rates observed in metallurgical tests from Häggån Vanadium

Bushveld Minerals* (BMN LN) – Combination of synergies and near-term production growth at Vametco and Vanchem to drive value as Bushveld Energy develops

Edenville Energy* (EDL LN) – Corporate update


Tesla – Cybertruck orders rise to 250,000

  • Deposits are just $100. Prices are:
    • Single-motor, rear-wheel drive: $39,900 – max range est. >250 miles
    • Dual-motor, all-wheel drive: $49,900 – max range est. >300 miles
    • Tri-motor, all-wheel drive: $69,900 – max range est. >500 miles
  • The Self-Driving option is and extra $7,000 but there is no guarantee that it will be allowed to drive you back from the pub.


Dow Jones Industrials





Nikkei 225





HK Hang Seng





Shanghai Composite





FTSE 350 Mining





AIM Basic Resources







Japan – Industrial production crashed at the fastest pace since early last year on the back of typhoon related disruptions as well as waning growth outlook both at home and abroad.

  • Factories temporary shutdown factories due to the typhoon while firms also reduced output of big-ticket items following the sales tax hike in October.
  • Weaker output was led by a drop in production of passenger cars and car engines, as well as general purpose and production machinery, the data showed.
  • Industrial Production (%mom/yoy): -4.2/-7.4 v 1.7/1.3 in September and -2.0/-5.2 forecast.


Germany – Retail sales dropped the most since December last year last month suggesting private spending slowed ahead of the Christmas shopping season.

  • On a separate note, inflation numbers released yesterday further highlight weak price pressure in the largest single currency zone economy.
  • Given a contraction in the industrial sector and waning growth elsewhere, that is unlikely to change any time soon, Bloomberg reports.
  • Retail Sales (%mom/yoy): -1.9/+0.8 v 0.0/3.4 in September and 0.2/3.0 forecast.
  • CPI (%mom/yoy, Harmonised): -0.8/+1.2 v 0.1/0.9 in October and -0.7/+1.1 forecast.


UK – The pound briefly touched a seven month high against the euro after YouGov poll showed Conservatives could secure a considerable majority in December.

  • PM Johnson is on course to win a majority of 68 in parliament, according to a model from pollsters YouGov.
  • Results put Conservative at 359 seats (out of 650), up from 317 in 2017, potentially marking the best result for the party since Margaret Thatcher’s 1987 vistory.
  • The pound trade around 1.1720 and 1.2903 against the euro and US$, respectively, this morning.

Labour plans to plant 2 billion trees by 2040 (BBC)

  • Labour’s manifesto promises to plant 2 billion trees by 2040 to help tackle climate change.
  • While efforts to tackle climate change by political parties are to be commended, this promise seems unrealistic.
  • To keep this promise, labour would have to plant roughly 100m trees a year, which equates to 200 trees per minute for 24 hours a day, for 20 years.



US$1.1007/eur vs 1.1013/eur yesterday.  Yen 109.55/$ vs 109.43/$.  SAr 14.678/$ vs 14.753/$.  $1.291/gbp vs $1.294/gbp.  0.678/aud vs 0.677/aud.  CNY 7.022/$ vs  7.033/$.


Commodity News

Gold US$1,456/oz vs US$1,457/oz yesterday - Gold set for worst month in 3 years on US-China trade deal hopes (Reuters)

  • The price of gold remained on track for its worst month in three years, despite remaining relatively flat this morning.
  • Prices have fallen nearly 4% this month,  the largest drop since November 2016.
  • Positive talks between the US and China has seen investors move away from safe-haven assets.
  • Wednesday saw Trump sign a bill which looked to be supportive of protestors in Hong Kong, leading China to promise retaliation, raising fears that the trade truce could be off the table.
  • However, some analysts believe that China’s response was largely a “symbolic retaliation” and will make no impact to the trade negotiations.

   Gold ETFs 81.2moz vs US$81.2moz yesterday

Platinum US$896/oz vs US$892/oz yesterday

Palladium US$1,841/oz vs US$1,832/oz yesterday

Silver US$16.90/oz vs US$16.98/oz yesterday


Base metals:   

Copper US$ 5,880/t vs US$5,896/t yesterday

Aluminium US$ 1,756/t vs US$1,762/t yesterday

Nickel US$ 13,890/t vs US$13,985/t yesterday - Nickel set for fourth weekly loss due to China demand worries (Reuters)

  • LME nickel has fallen nearly 5% this week, and has seen a 3.5% fall in Shanghai.
  • This month, Nickel has fallen nearly 17% in London and 14% in Shanghai.
  • Operating rates at stainless steel plans have been falling, which has resulted in demand falling for refined nickel and NPI in the Chinese market (ING).
  • Nickel was up 67% for the year in early September as Indonesia announced an export ban, however nickel began to fall as traders realised that part of the rally had been speculative and lacked fundamental support (FT).

Zinc US$ 2,272/t vs US$2,290/t yesterday

Lead US$ 1,955/t vs US$1,931/t yesterday

Tin US$ 16,420/t vs US$16,375/t yesterday



Oil US$63.6/bbl vs US$63.6/bbl yesterday

Natural Gas US$2.462/mmbtu vs US$2.506/mmbtu yesterday

Uranium US$25.95/lb vs US$25.95/lb yesterday



Iron ore 62% Fe spot (cfr Tianjin) US$85.0/t vs US$85.0/t

Chinese steel rebar 25mm US$609.9/t vs US$610.3/t

Thermal coal (1st year forward cif ARA) US$63.3/t vs US$63.7/t

Coking coal futures Dalian Exchange US$187.8/t vs US$189.1/t



Cobalt LME 3m US$36,000/t vs US$36,000/t

NdPr Rare Earth Oxide (China) US$40,514/t vs US$40,455/t

Lithium carbonate 99% (China) US$6,551/t vs US$6,612/t - Australian lithium-ion battery recycling plant up and running (AuManufacturing)

  • Lithium Australia’s Envriostream subsidiary has produced its first metals from its new Melbourne recycling plant, recovering 95% of the materials from spent batteries.
  • The plant is capable of recycling 3,000t of battery waste a year, and expects its first production of nickel, cobalt, lithium and carbon to be shipped imminently to a South Korean customer.
  • Envriostream is the only company with the capacity to collect, sort, shred and separate battery metals ready for reuse, built upon technology as a result of three years of R&D work with ANSTO.  
  • Lithium Australia has recently increased its holding in Envrirostream from 23.9% to 73.7% (The West Australian).

Chile’s SQM to decide on Maricunga salt flat by end of year (Mining.com)

  • The Chilean government has asked SQM to decide what it will do with its holdings in the Maricunga salt flat, the country’s second richest lithium source.
  • The high-grade battery quality lithium source has made the area attractive to several prospective miners, however fractured ownership has slowed development.
  • SQM’s reported a 30% fall in earnings in Q3 largely attributed to slowing Chinese demand (FT)
  • Chile’s lithium output has barely increased in recent years as bureaucracy and environmental hurdles have slowed development.

Ferro Vanadium 80% FOB (China) US$29.0/kg vs US$29.0/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


Battery News


Company News

Aura Energy Limited* (AURA LN) FOLLOW 0.35p, Mkt Cap £4.6m – Consistent and high recovery rates observed in metallurgical tests from Häggån Vanadium

  • Aura Energy reports that metallurgical tests on three composite samples from cored drill holes at its Häggån Vanadium project in Sweden have shown vanadium pentoxide recovery rates averaging up to 96.9% and averaging 96.5%.
  • The tests, on samples ranging between 0.22% to 0.30% vanadium pentoxide, used acid pressure leaching and the company comments that the results “exceeded the expectations for recovery of vanadium from the Häggån Resource and provide the company with great confidence that it has developed a robust flow sheet.”
  • The detailed test parameters were based on recommendations from METS Engineering which advised on the original metallurgical work identifying acid pressure leaching as “the best technically viable process option … for extraction of vanadium from Black Shale resources” which host the mineralisation at Häggån.
  • The additional metallurgical work addresses technical questions “regarding vanadium leach recovery”, arising from the ASX review process after Aura Energy’s initial submission of its scoping study for the project in early September 2019.
  • As a result of the concerns raised by ASX, the company has not, so far, been in a position to disseminate the scoping study findings; we are optimistic that now that the concerns related to vanadium recovery have been addressed, this situation will be rectified as the company says that, “Aura is currently incorporating these results into the Häggån Vanadium Scoping Study and expect to deliver the scoping study shortly allowing progress of the project to its next stages”.
  • Conclusion: The  test-work shows high and consistent recovery rates and allows the company to update its scoping study by addressing issues raised as part of the ASX review process. We look forward to the results of the scoping study which should give investors the opportunity to consider the technical and economic merits of the Häggån Vanadium project.

*SP Angel act as Nomad & Broker to Aura Energy


Bushveld Minerals* (BMN LN) FOLLOW 23p, Mkt Cap £265m – Combination of synergies and near-term production growth at Vametco and Vanchem to drive value as Bushveld Energy develops

(Bushveld Minerals owns 74% of Vametco, 100% of Vanchem, 84% of Bushveld Energy in South Africa, 100% of Lemur Holdings, 9.5% of Afritin)

Valuation 82p

  • Production growth:
  • Bushveld are busy ramping up production at Vametco while planning new production growth at the newly acquired Vanchem.
  • Vametco: We see Vametco production rising from around 2,900t this year to 3,149t in 2020, 3,914t in 2021 and 4,149t in 2022. We see the Vanchem plant producing around 4,200tpa in future years.
  • Vanchem: we see production at Vanchem running at a consistent 80mtV per month through 2020 for 965t for the year supported by concentrates from the Vametco mine before rising to 1,519t in 2021.
  • Feedstock from the new Mokopane vanadium mine will add new throughput to the plant leading to significant cost savings.
  • Management also expect Vanchem to achieve 4,200tpa on completion of their 5-year refurbishment program.
  • Vanadium concentrate from Mokopane should enable Vanchem to raise production to 3,305t in 2023 and have guided to 4,200mtV post a 5-year refurbishment.
  • The two process plants combined with the Vametco, Brits and Mokopane mines should enable significant production synergies and further cost savings in future years.
  • Group Transformation: Bushveld is transforming it’s business on five key fronts:
    • Vametco – production and efficiency transformation.
    • Vanchem – acquisition and restart of idled plant capacity with new mine production and improved plant utilisation.
    • Bushveld Energy – VRFB instillation and electrolyte production.
    • VRFB investment platform (VIP) – the following investments are part of a strategy to capture more of the market for VRFB instillation and electrolyte sales
    • The investment in Enerox and Avalon/redT are in line with the strategy of establishing a ‘VIP’ VRFB Investment Platform to lead investments in VRFB ‘OEMs’ original equipment manufacturers with upside potential.
      • Enerox – Bushveld are part of a consortium to acquire Enerox for €11m and may make a potential investment of 25-49% stake costing ~US$2.75-5.39m

Enerox have developed a new <10kw vrfb="" costing="" us="" 220-295="" kwh="" for="" a="" 4="" hour="" solution="" with="" 78="" roundtrip="" efficiency="" p="">

      • Avalon / redT – Avalon acquisition of redT to enable development of new VRFB sites. Bushveld is advancing interim funding of US$5m.

Avlon/redT are looking to raise US$30m to support the rollout of VRFB contracts into Germany and the UK.

  • Vametco transformation: higher production rates, better grade control and better initial feedstock processing is improving Vametco’s operational performance.
  • Vanchem acquisition: enables faster expansion towards a group production target of 8,400tpa (Vanchem + Vametco) at lower capital cost while improving flexibility and potentially diversifying the range of vanadium products sold.
  • Bushveld Energy: is advancing towards vanadium electrolyte production in South Africa to enable the roll-out of VRFBs for renewable energy and grid support in the local market.
  • Demand for new grid-scale VRFB batteries could take up all of Bushveld’s new vanadium production in future years assuming VRFB’s make up a significant proportion of expected grid-battery demand in South Africa.
  • Electrolyte: Bushveld is in an unusually commanding position to supply vanadium electrolyte into new VRFB instillations being managed by Enerox and Avalon/redT as well as instillations in its local South African market.
  • VRFB demand: there is significant ongoing demand for grid-scale battery storage with VRFBs now reported to be price competitive with Lithium-ion battery packs while offering better reliability, safety, longevity and terminal values.
  • Leasing and terminal values: Bushveld’s innovative rental / lease finance model to spread the cost of the vanadium in VRFB instillations makes these batteries financeable and competitive at higher vanadium prices while also offering high terminal values in the event of battery scrappage as all the vanadium in the battery can be recycled back into vanadium.
  • Transactions:
  • Bushveld has entered into a number of transactions and potential transactions this year starting with the transformational Vanchem deal with completion announced on 7th November.
  • Management also put in place US$25m of new loan facilities in October to support strategic initiatives at Bushveld Vanadium and Bushveld Energy.
  • Vanadium prices: Vametco’s realised Vanadium prices may exceed our forecast for the year given the approximate one-month look back in pricing on standard contracts for ferro-vanadium.
  • Costs: we expect a number of one-off costs this year including the cost relating to the Vanchem transaction, the completion of recent battery deals and some additional transaction costs.
  • Estimates: we are adjusting our forecast estimates for this year on our view of costs associated with the above points though we are reluctant to raise our assumed vanadium price as we do not know how much vanadium has been sold into the US this year.
  • Valuation: We maintain our valuation of 82p for Bushveld. We see lower risk within the group through the acquisition of Vanchem and development of the Mokopane mine which we see as diversifying the primary production base and have reduced our discount rate to reflect this. Vanchem has a number of discrete process plants which offer good flexibility in terms of production and product diversification. We have adjusted our assumed rand/USD exchange rate to reflect some further slippage to SAR18/USD from 2022.
  • We do not include any additional value for Bushveld’s involvement in Enerox and Avalon/redT though we can see the ‘VIP’ VRFB Investment Platform adding to our valuation of the group in future years.
  • We maintain our valuation on Bushveld Energy at 8.4p/s.

Conclusion: Bushveld has made significant progress in transforming its primary vanadium business in efficiency and production. We expect strong growth from both Vametco and Vanchem. We are also looking forward to growth in market for VRFB technology and for this to lead to new value at Bushveld Energy and within the new ‘VIP’ VRFB Investment Platform.


(Dec year end)








FeV price








Vanadium sales
















Cash Op costs








Unit Cash Op costs+








Operating profit








Pre-tax profit
















Post-tax profit








































Free Cash Flow (100%)








Source: SP Angel, Company. +Vametco & Vanchem figures combined.


*SP Angel acts as Nomad & Broker to Bushveld Minerals.


Edenville Energy* (EDL LN) FOLLOW 0.33p, Mkt Cap £1.6m – Corporate update

  • The reported significantly reduced run rates at its flagship Rukwa Coal Project in Tanzania.
  • The Company produced 820t and sold 1,021t (including changes in stockpiles) of washed coal over last two months since 21 September 2019.
  • This compares to 4,411t produced in H1/19 and 730t produced in just a couple of weeks of early July.
  • A drop in production is attributed to working capital constraints and the start of the rainy season in the beginning of November.
  • The company has $190k in cash and has recently drawn on a non-convertible £100k loan (20%pa interest, 25 Feb/20 due date) in order to address some of working capital needs.
  • However, the Company highlights “it does not provide sufficient working capital to enable the Project to operate at its planned capacity, nor to continue the 2020 monthly payments to Lind in cash”.
  • The Company currently owes $836k under the funding agreement with Lind repayable in monthly tranches of $51k.
  • In order to cover future working capital commitments, the Company is in discussions with a potential strategic investor with experience in Tanzania and the neighbouring region for a project level investment in Rukwa.
  • The Company will be looking for further capital raise should the transaction not be completed by Q1/20.
  • The management reiterated the guidance to reach cash flow positive levels of production next year once additional funding is sourced.

Conclusion: Rukwa washed coal production dropped on the back of the start of rainy season in November and working capital constraints leading the management to seek additional funding to bring operating rates back on track towards breakeven levels (6,000tpm), first, and ultimately towards processing plant capacity levels (~12,000tpm).

*SP Angel acts as Nomad and Broker to Edenville Energy




John Meyer – 0203 470 0490

Simon Beardsmore – 0203 470 0484

Sergey Raevskiy – 0203 470 0474



Richard Parlons – 0203 470 0472

Abigail Wayne – 0203 470 0534

Rob Rees – 0203 470 0535


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.


Sources of commodity prices


Gold, Platinum, Palladium, Silver

BGNL (Bloomberg Generic Composite rate, London)

Gold ETFs, Steel


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


Oil Brent


Natural Gas, Uranium, Iron Ore


Thermal Coal

Bloomberg OTC Composite

Coking Coal




Lithium Carbonate, Ferro Vanadium, Antimony

Asian Metal


Metal Bulletin



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