SP Angel . Morning View . Trade optimism draws metals higher
Paul Kettle
SP Angel Research Note -3 min read
11:18, 6th February 2019

SP Angel – Morning View – Wednesday 06 02 19

Trade optimism draws metals higher

MiFID II exempt information – see disclaimer below

  

Amur Minerals (AMC LN) – Alex Stewart Laboratory final results

Bluebird Merchant Ventures (BMV LN) – Progress update

Keras Resources (KRS LN) - Calidus Resources Increases Warrawoona High Grade Resource by 75% to 1.25Moz Au

Phoenix Global Mining (PGM LN) – Placing and subscription to raise £950,000

 

Vale disaster strikes miners’ image problem

  • Vale’s latest deadly dam disaster is acting as a beacon to refocusing trust issues and creating a serious image problem for miners. If mining has a poor safety and community image, it becomes "uninvestable", as Reuters report the words of a senior global banker, talking at the 121 Mining Investment event in Cape Town this week.
  • The mining industry appears to be increasingly aware of its image problem, with Reuters reporting speakers at both the 121 Mining and Mining Indaba events referring repeatedly to the concept of their "licence to operate", a term that includes working with local communities, governments and consumers of their products.
  • Mining’s poor image across a range of stakeholders is creating a major issue for the industry, with the human tragedy of more than 300 lives in Brazil only serving to emphasise risks across the sector.
  • A broad lack of commitment to invest into the mining industry could starve the development of new mines and exploration efforts, while the withdrawal of major banks and pension funding will put downward pressure on share prices.
  • In particular, miners are increasingly working towards supporting the green revolution, feeding fundamental metals into sustaining battery and renewable technology growth.
  • The mining industry is working hard to disassociate itself from its dirty past, with ‘clean commodity’ producers promoting themselves as leaders in a decarbonised economy.

 

China blamed as US pulls out of INF pact

  • Both Washington and Moscow have officially suspended compliance with the Intermediate-Range Nuclear Forces (INF) Treaty.
  • The pact banned all ground-based missiles with ranges between 500km and 5,500km, ridding Europe of an entire category of destabilizing weapons — nearly 3,000 ground-launched intermediate ballistic and cruise missiles were destroyed.
  • The ‘real reason’ for the US pull out, according to Fitzpatrick, the non-proliferation expert, was Washington’s concern over China’s build-up of intermediate-range missiles in the Western Pacific.
  • China’s inventory contains more than 2,000 ballistic and cruise missiles, approximately 95% of which would violate the INF Treaty if Beijing were a signatory, according to US officials.
  • The Trump administration list China as the top threat of the national security.

 

Dow Jones Industrials

 

+0.68%

at

  25,412

Nikkei 225

 

+0.14%

at

  20,874

HK Hang Seng

 

+0.21%

at

  27,990

Shanghai Composite

 

+1.30%

at

   2,618

FTSE 350 Mining

 

+0.21%

at

  18,951

AIM Basic Resources

 

+0.73%

at

   2,238

 

Economics

 

Currencies

US$1.1386/eur vs 1.1416/eur yesterday  Yen 109.68/$ vs 109.92/

nbsp; SAr 13.463/$ vs 13.399/
nbsp; $1.294/gbp vs $1.303/gbp  0.713/aud vs 0.725/aud  CNY 6.745/$ vs 6.742/$

 

Commodity News

Precious metals:         

Gold US$1,315/oz vs US$1,313/oz yesterday

   Gold ETFs 73.1moz vs US$73.1moz yesterday

Platinum US$818/oz vs US$822/oz yesterday

Palladium US$1,376/oz vs US$1,363/oz yesterday

Silver US$15.81/oz vs US$15.90/oz yesterday

           

Base metals:   

Copper US$ 6,240/t vs US$6,210/t yesterday

  • Optimism on China-US trade talks draw metal prices higher, as President Donald Trump’s State of the Union speech announced a trade deal with China will have to address not only what he called the chronic U.S. trade deficit but also changes in Chinese policies to protect American workers and businesses.
  • I have great respect for President Xi, and we are now working on a new trade deal with China,” Trump said Tuesday at the Capitol in Washington, referring to Chinese counterpart, Xi Jinping.
  • Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin will lead delegation to Beijing next week to lay groundwork for a Trump-Xi meeting later this month.
  • Trump previously set March 1 deadline for the U.S. and China to reach a satisfactory solution before tariffs on $200bn of Chinese goods more than double to 25%.  

Aluminium US$ 1,933/t vs US$1,926/t yesterday

Nickel US$ 13,085/t vs US$13,240/t yesterday

Zinc US$ 2,738/t vs US$2,808/t yesterday

Lead US$ 2,108/t vs US$2,133/t yesterday

Tin US$ 20,895/t vs US$20,875/t yesterday

           

Energy:           

Oil US$61.8/bbl vs US$62.6/bbl yesterday

Natural Gas US$2.676/mmbtu vs US$2.653/mmbtu yesterday

Uranium US$28.95/lb vs US$28.95/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$86.0/t vs US$85.8/t

Chinese steel rebar 25mm US$597.1/t vs US$597.1/t

Thermal coal (1st year forward cif ARA) US$80.3/t vs US$81.9/t

Coking coal futures Dalian Exchange US$196.2/t vs US$196.2/t

           

Other:  

Cobalt LME 3m US$33,000/t vs US$34,000/t

China NdPr Rare Earth Oxide US$46,202/t vs US$46,202/t

China Lithium carbonate 99% US$10,012/t vs US$10,012/t

China Ferro Vanadium 80% FOB US$70.9/kg vs US$70.9/kg

China Antimony Trioxide 99.5% EU US$7.0/kg vs US$7.0/kg

Tungsten APT European US$260-270/mtu unchanged from previous week

 

Battery News

EVgo network powered 75m EV miles in 2018

  • The fast charging network plans to double again by 2020.
  • The network claims it now serves more than 125,000 EV drivers with 1,100 public fast chargers in 34 states and 66 markets across the U.S.
  • GM recently announced a partnership with EVgo that extends to its MAvin service as well as fleet vehicles. The carmaker also announced partnerships with ChargePoint and Greenlots — the last of which was just acquired by Shell for an undisclosed sum.
  • EVgo announced another partnership last year with Nissan, launching an east coast fast-charging route between Washington D.C. and Boston.

 

Company News

Amur Minerals* (AMC LN) FOLLOW2.9p, Mkt Cap £20.8m – Alex Stewart Laboratory final results

  • Amur Minerals report results of its annual Quality Assessment Quality Control (QAQC) programmes on its wholly owned Kun-Manie nickel copper sulphide project based on the combined work of the company and Alex Stuart Laboratory (“ALS”).
  • The Company announce two of the three QAQC phases are complete to confirm the integrity of the 2018 analytical results used to validate for inclusion in a Master Data Set to be utilised in the compilation of Mineral Resource Estimates.
  • ASL results are indicated to be devoid of cross sample contamination, devoid of analytical drift and that ASL has successfully internally replicated its results to within the western industry accuracy of 10% and the industry accuracy of 5% for Russia. The original and check assays for nickel grades are within 0.5%.  For copper, the difference is projected to be 0.7%.
  • The final validation phase is being conducted by SGS Minerals.
  • Inclusion of the outstanding five drill holes are mutually supportive of the previously reported average mineralised thickness located along the IKEN thorough KUB zone (ranging 22-30m) in vertical thickness and contained average grade range for nickel is between 0.68 - 0.84% with associated copper being from 0.20 - 0.31%.

*SP Angel act as Nomad and Broker to Amur Minerals

 

Bluebird Merchant Ventures* (BMV LN) FOLLOW2.8p, Mkt Cap £6.4m – Progress update

  • The Korean Resources Corporation ("KORES"), a company wholly owned by the South Korean government, has invited Bluebird's Kochang project joint venture company, Kochang Project Company ("KPC"), to apply for a government grant for an assisted drilling programme, with results expected by the end of February.
  • As part of the application, Bluebird has supplied its drilling programme, which seeks to identify the position of three veins in a major unmined corridor of the deposit above and below the recently accessed workings.
  • The work will help confirm the modelled vein structures and grades derived from surface and underground work previously undertaken, with the objective of building a resource model for future planning, development and mining.
  • Upon granting of the application, KORES will fund 70% of the drilling programme costs.
  • KORES partially funded two drill programmes in the area around Kochang during 2016 and last year carried out a technical survey. It is understood that the findings of the report led KORES to upgrade their expectations of the Kochang mine.
  • A subsequent application for a ‘permit to develop’ the Gubong mine was completed on the 23rd January, with the forty-day process in the public domain.
  • In addition, the report on the feasibility of reopening the Kochang mine was submitted to working partner, Southern Gold, which completes the farm in requirements.  The Kochang tenements will shortly be transferred to the joint venture company.

*SP Angel act as broker to Bluebird Merchant Ventures

 

Keras Resources* (KRS LN) FOLLOW0.4p, Mkt Cap £9.2m - Calidus Resources Increases Warrawoona High Grade Resource by 75% to 1.25Moz Au

  • Calidus Resources, whom Keras Resources hold current 32.3% interest, report a significant increase in both quantum and confidence level in the JORC Complaint Mineral Resource at the Warrawoona Gold Project located in the Pilbara of Western Australia.
  • Total JORC 2012 Mineral Resource (Measured, Indicated and Inferred) for Warrawoona now stands at 21.2Mt at 1.83 g/t Au for 1.25Moz, rising 75% in total contained ounces from the previously announced Dec. 2017 resource.
  • The Mineral Resource contains a high-grade component estimated to contain 14.6Mt @ 2.37g/t Au for 1.1Moz
  • The resource remains open both at depth and along strike, with drilling planned for a number of new prospects targeting additional resource growth.
  • Exploration work underpins the ongoing PFS study, targeting Q3 2019 completion, which will unlock allotment of an additional 256m performance shares for Keras Resources.

*SP Angel act as Nomad and broker to Keras Resources

 

Phoenix Global Mining* (PGM LN)FOLLOW 19.5p, Mkt Cap £6.5m – Placing and subscription to raise £950,000

  • North American-focused base and precious metals exploration and development company, is pleased to announce that it has raised £950,000 (before expenses) by way of a placing and subscription of 5,588,235 new ordinary shares of nil par value each at a price of 17p.
  • The Company will also issue 1 Warrant for every 4 New Shares subscribed for, exercisable at 28p/share and valid until 31 January 2022.
  • Directors and members of senior management of the Company have indicated their intention to subscribe for an aggregate of £35,000 at the Issue Price, via the issue of 205,882 New Shares subject to approval by the Board.
  • The Fundraising is in addition to the funding announced on 24 December 2018. Accordingly, the total gross amount raised across the two fundraisings will be £1.3m.
  • The proceeds will be used to further advance the Company's flagship historically producing Empire Mine in Idaho, United States, with the acquisition of acreage surrounding the mine to accommodate the expanding resource.
  • The new resource statement is underway following the 2018 drill programme and is now scheduled for completion at the end of Q1 2019.

*SP Angel acts as Nomad and broker to Phoenix Global Mining

 

Analysts

John Meyer – 0203 470 0490

Simon Beardsmore – 0203 470 0484

Sergey Raevskiy – 0203 470 0474

Phil Smith (Technology) – 0203 470 0475

Zac Phillips (Oil & Gas) – 0203 470 0481

 

Sales

Richard Parlons – 0203 470 0472

Jonathan Williams – 0203 470 0471

 

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.

 

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