SP Angel . Morning View . Friday  29 06 20
Vox Markets
SP Angel . Morning View
10:32, 29th June 2020

SP Angel . Morning View . Friday  29 06 20

Fears of second wave continue to drive gold higher


MiFID II exempt information – see disclaimer below


Dow Jones Industrials





Nikkei 225





HK Hang Seng





Shanghai Composite






Gold gains this morning as virus cases surpass ten million 

  • Gold prices rose on Monday as worries over a surge in COVID-19 infections drove investors toward safe-havens such as bullion. 
  • Spot gold was 0.1% higher at $1,772/oz this morning, sustaining the uptick in price seen on late on Friday. US gold futures rose 0.3% to $1,786/oz (Reuters). 
  • Bullion is heading for its best quarter since 2016 as deaths surpass 500,000 worldwide and confirmed cases exceed 10 million, and the precious metal is up 17% so far this year (Bloomberg). 
  • Many analysts expect gold to breach the $1,800/oz level this week, after prices hit 7.5-year highs climbing to $1,796/oz on Wednesday (Kitco). 



Australia - Biggest daily rise in COVID-19 cases in two months

  • Australia has recorded 85 new cases in the past 24 hours, its biggest daily outbreak since the 11th of April. 
  • The recent surge has sparked fears of a second wave after several weeks of fewer than 20 cases a day. 
  • The state of Victoria has reported 75 cases in 24 hours and is considering reimposing social distancing restrictions. 


Chile – mine output forecast to fall by 250,000t this year to around 5.56mt despite limited impact so far from COVID-19 (Capital Economics)

  • We expect further disruption to supply as the virus works its way through the population causing selective lockdowns as seen with Codelco closing sites in the Atacama.


Japan - Retail sales drop -12.3% YoY in May

  • Retail sales fell -12.3% vs -13.9% previous and -11.6% expected.


Peru – Coronavirus loss affects ~2mt of copper capacity


UK – auto production fell 95.4%yoy in May vs a fall of 99.7% in April

  • Consumers were not able to visit showrooms, are confused about more expensive EVs vs combustion engine vehicles and are cautious in an uncertain environment


US - personal income fell 4.2% in May vs 10.8% in April (due to helicopter money)

  • Personal spending rose 8.2% in May (Helicopter money) vs -12.6% in April
  • Uni of Michigan consumer confidence index was 78.1 in June vs 72.3 in May


Singapore - industrial production fell 16.5% in May vs -0.5% in April

  • industrial production fell 7.4% in May yoy


Sweden – Top virus expert has said the 'world went mad' with coronavirus lockdowns which 'fly in the face of what is known about handling virus pandemics' (Daily Mail).

  • Tegnell said the WHO had 'totally misinterpreted' the data, saying the 'spike' is down to improved testing and pointing to falling deaths as evidence.
  • He pointed to a steady fall in deaths, hospital admissions and ICU admissions as evidence that Sweden's outbreak is actually retreating, not getting worse.
  • UK Health Secretary Matt Hancock threatens to CLOSE beaches despite bright sun and >35c temperatures which kill viruses.
  • WHO chief warned last week that the world is entering a 'dangerous new phase' of coronavirus.


Baltic index up for sixth straight week

  • The Baltic Exchange's main sea freight index rose 0.6% on Friday, taking total gains for the week to 12.5%. 
  • The index has surged 60% so far this year, and recouped losses brought about by the coronavirus pandemic (Reuters). 
  • The year-on-year industrial production data for China highlights the recovery that the country has made- as production is already 4.4% higher than the same time last year (Hellenic Shipping News). 
  • China's recovery, along with relentless stimulus implemented by the US is bolstering commodity prices and driving shipping prices higher. 


Pet prices have surged through the lockdown with the Kennel club reporting a 168% increase in enquiries

  • Most pets are for families with kids who are bored in the Lockdown
  • But be warned, there are many scammers out there and you might get sold a pup.

IG TV interview on gold and gold companies

VOX Markets podcast on mining



US$1.1257/eur vs 1.1214/eur yesterday Yen 107.17/$ vs 107.07/$.  SAr 17.211/$ vs 17.186$.  $1.237/gbp vs $1.241/gbp.  0.689/aud vs 0.688/aud.  CNY 7.076/$ vs 7.078/$.


Commodity News

Precious metals:          

Gold US$1,769/oz vs US$1,764/oz yesterday

   Gold ETFs 102.8moz vs US$102.6moz yesterday

Platinum US$812/oz vs US$805/oz yesterday

Palladium US$1,886/oz vs US$1,844/oz yesterday

Silver US$17.82/oz vs US$17.81/oz yesterday


Base metals:   

Copper US$ 5,977/t vs US$5,942/t yesterday - China refined copper imports grew 22.7% YoY in May 

  • Imports of refined copper increased 6.2% compared to April and 22.7% compared to May 2019, totalling 505,700 tonnes according to Chinese customs data. 
  • Chile remained the top supplier of refined copper last month, with deliveries of 81,700t in May- up 21.6% YoY while down 4.1% from April 2020 (SMM News). 
  • The price of copper was up 0.6% this morning at $5,979/t, driven by concerns over supply as South American producing nations are struggling to contain the spread of COVID-19 (Fastmarkets MB). 


Aluminium US$ 1,607/t vs US$1,576/t yesterday

Nickel US$ 12,765/t vs US$12,595/t yesterday - China nickel ore imports rose 25% in May month-on-month

  • Imports of nickel ore and concentrate rebounded from a month ago to 1.68mt, as deliveries resumed from top supplier the Philippines as the country eased lockdown measures. 
  • Nickel exports were 67.6% lower compared to the same period last year. 
  • China imported 1.34mt of nickel ore and concentrate from the Philippines last month, up 22.4% from April but 60% lower than May 2019 (SMM News). 


Zinc US$ 2,035/t vs US$2,062/t yesterday

Lead US$ 1,793/t vs US$1,776/t yesterday

Tin US$ 16,730/t vs US$16,635/t yesterday



Oil US$40.4bbl vs US$41.2/bbl yesterday

Natural Gas US$1.598/mmbtu vs US$1.450/mmbtu yesterday

Uranium US$33.05/lb vs US$33.05/lb yesterday



Iron ore 62% Fe spot (cfr Tianjin) US$100.8/t vs US$101.0/t

Chinese steel rebar 25mm US$524.7/t vs US$525.1/t

Thermal coal (1st year forward cif ARA) US$57.9/t vs US$57.0/t

Coking coal swap Australia FOB US$117.5/t vs US$116.0/t



Cobalt LME 3m US$28,500/t vs US$28,500/t 

NdPr Rare Earth Oxide (China) US$40,984/t vs US$40,971/t

Lithium carbonate 99% (China) US$4,805/t vs US$4,803/t

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

Antimony Trioxide 99.5% EU (China) US$5.0/kg vs US$5.0/kg

Tungsten APT European US$205-215/mtu vs US$215-225/mtu 

Graphite flake 94% C, -100 mesh, fob China US$460/t vs US$460/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,350/t vs US$2,350/t


Battery News

CATL 21C Lab to work on battery technologies

  • CATL has announced their 21C Lab which will develop batteries technologies including:
    • Metal lithium batteries
    • All solid-state batteries
    • Sodium-ions batteries (Inside EVs)
  • Construction at the site has begun and the 3.3bn yuan ($466m) facility will be partially operational by the end of 2021. (Electrive)
  • Built on 18 hectares of land in Ningde, Fujian Province, China the lab will focus on next-gen electrochemical energy conversion and storage systems and commercial applicability of the technology.
  • The lab will also develop reliability models and non-destructive testing technology.
  • CATL will also begin construction on a new battery cell factory in Ningde in the next 2yrs and construction has begun on a battery cell factory in Yibin. CATL plans to build 52GWh of battery cell production capacity.


Volvo and Waymo announce autonomous EV project

  • Volvo and Waymo will partner on a new electric vehicle platform for ride-hailing services. (Cnet)
  • The partnership is an exclusive arrangement where Waymo’s self-driving technology will be integrated onto Volvo’s vehicle platform. (Forbes)
  • The vehicles will be capable of SAE Level 4 autonomy: no driver engagement in a geofenced area or specific road, weather, and traffic conditions.
  • It is not yet clear who will operate the ride-sharing platform for which the new technology will be developed.


Company News

Altus Strategies* (ALS LN) 31.5p, Mkt Cap £22.1m – Sale and royalty agreement on Cote d’Ivoire gold properties

  • Altus Strategies reports a non-binding agreement for the sale of its Prikro and Zenoula gold properties in Cote d’Ivoire to TSX-V listed Stellar Resources.

·       Subject to final agreement and a 30 days period of due diligence, Altus Strategies ʺwill receive an initial payment of:

o   2,500,000 Stellar shares, with a current value of approximately C$87,500 and 2,500,000 share purchase warrants exercisable for a period of 24 months at C$0.07 per share

o   A 2.5% Net Smelter Return (“NSR”) royalty on the Projectsʺ

  • Altus Strategies will, subject to progress, receive stage payments amounting to US$250,000 in shares on the definition of a 500,000oz resources estimate, including 250,000oz classed as indicated and a further US$250,000 in shares on the completion of a definitive feasibility study.
  • Steven Poulton, Chief Executive, said that ʺWe believe that the proposed Transaction not only validates the value we have identified in the Projects but that in Stellar, we have the right company to progress these Projects through to the next key phasesʺ.

Conclusion: The proposed sale of two gold properties in Cote d’Ivoire for a combination of shares in the acquirer and a long term NSR exemplifies the Altus Strategies model in action

*SP Angel acts as Nomad and Broker to Altus Strategies


Arc Minerals* (ARCM) - Drilling starts at new Fwiji target in Western Zambia

  • Arc Minerals has restarted drilling in Zambia following the end of the rainy season within its license area
  • The team plan to drill 8,000m this year starting with the Fwiji target following promising exploration work
  • Follow up work at Cheyeza East and Muswema is also ongoing where we expect the better definition of the scale and extent of the resource.
  • Drilling will extend to 100m – 250m below surface to test deeper structures and follow mineralisation in the down-plunge hinge component to the anticline.
  • The current interpretation for Fwiji postulates that the copper mineralization is hosted in the hinge of plunging south westerly anticline.
  • Near surface oxide mineralization is expected to intersect with the primary sulphide mineralization down plunge.D
  • Zambia has suffered relatively little in terms of COVID-19 fatalities with just 22 recorded deaths so far.
  • We understand from a major mining company which has been regularly testing its staff in the region that the government statistics appear accurate and are in accordance with the very low incidence seen on a number of significant mines in the region.
  • One theory is that Zambia’s BCG vaccination programs have helped boost immunity to the disease in the population.

Conclusion: ARC Minerals is well funded and likely to make good progress with drilling this field season.

*SP Angel acts as Nomad and broker to Arc Minerals. The analyst holds stock in Arc Minerals.



Caledonia Mining* (CMCL LN) 1280, Mkt Cap £138.3m – Increased quarterly dividend

  • Caledonia Mining reports a 13% increase in its quarterly dividend to US8.5ȼ per share from the US7.5ȼ per share declared in January 2020, which was itself an increase on the previously established quarterly distribution level of US6.875ȼ per share
  • The company confirms that its 2020 production guidance range of 53-56,000oz of gold production remains intact as does the longer term target of 80,000ozpa from 2022.
  • Work on the new Central Shaft, which is a key element of the longer term production increase giving access to deeper level mineralisation remains on course for completion during Q4 2020.
  • Commenting on the twin benefits to the company of increased production and higher gold prices, CEO, Steve Curtis, said that "As we approach the end of the five-year investment programme at Blanket Mine, we anticipate the rate of capital expenditure will begin to reduce towards the end of 2020, which gives us greater flexibility to consider deploying some of our cash reserves on an increased dividend.ʺ
  • Looking forward to the commissioning of the new shaft later this year and the resulting expected increased production and cash flow  Mr. Curtis also explained that ʺThe Board will review Caledonia's future dividend distributions as appropriate while considering the balance between delivering returns to shareholders, pursuing the significant growth opportunities within Zimbabwe and maintaining a prudent approach to financial management."

Conclusion: Caledonia Mining remains one of the comparatively few AIM listed mining companies which consistently delivers dividends to its shareholders. The increased distribution is further confirmation of the Board’s confidence as a five-year long capital programme at the Blanket mine nears completion.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe


Oriole Resources (ORR LN) 0.35p, Mkt cap £2.6m – Drilling underway at Senala gold project

  • Oriole Resources reports that a 10,000m aircore drilling programme has stared at its Senala gold project in Senegal where Iamgold has an option to spend up to US$8m in order to earn a 70% interest in the project.
  • Initial results from the programme are expected during Q4 2020. CEO, Tim Livesey explained that  the Faré prospect, which lies in the north of the Senala licence area and forms the target of this current drilling programme includes ʺgold anomalism [which] extends in excess of six kilometres ('km') in the main trend, with several potential additional offsets of mineralisation identified by previous soil sampling programmesʺ.
  • Mr. Livesey also pointed out the broader potential of the area saying that ʺRecent success by Chesser Resources (ASX: CHZ) on its Diamba Sud prospect just 10 km east, combined with historical drilling at Faré, confirms the prospectivity of the area and the potential for the discovery and development of a stand-alone mining projectʺ.
  • ʺdespite the restrictions imposed by the Covid-19 pandemic … [Iamgold] … is now carrying out their planned 10,000 m AC drill programme which marks its third year of investment with Orioleʺ.


Phoenix Copper* (PXC LN) 29p, Mkt Cap £16.2m – Empire mine metallurgical results

Phoenix holds 80% of the Empire mining property in Idaho

  • Phoenix Copper has reported positive results from initial metallurgical testing of a 400lb sample using an environmentally benign reagent, ammonium thiosulphate (ATS).
  • The initial results showed comparable recovery rates to the use of the more widely used sodium cyanide with gold recoveries of over 97% and silver recoveries of around 70%.
  • The test samples were derived from various locations close to existing channel samples and the bulk sample is reported to have an average grade of 12.8g/t gold.
  • The company characterises ammonium thiosulphate as an environmentally friendly, low-toxicity reagent which is ʺ lower cost when compared to sodium cyanideʺ and comments that it ʺperformed equally as well as sodium cyanide in both precious metal recovery and reagent consumptionʺ.
  • Future metallurgical work ʺwill be the preparation of a pilot scale test plant sited in the AuRIC Laboratory in Salt Lake City and scaled to run multiple tonnage leach samples from various locations around the Empire open pit deposit using the ATS reagent.  The laboratory pilot testing will be followed by pilot scale testing on the project site.ʺ 
  • Phoenix Copper confirms that it has mobilised a ʺreverse-circulation drill rig that is currently drilling extensions to the existing gold and silver resources with the intent of adding additional resource, as well as upgrading the inferred tonnes to the measured and indicated categories.ʺ
  • The company also confirms that it has recently completed the sixth diamond-drill hole at its Red Star silver/lead project located close to the Empire site and that it intends to provide a progress report ʺin the next couple of weeksʺ.
  • CEO, Ryan McDermott, explained that, prior to these results, ʺ We had anticipated that the precious metal ounces associated with the Empire oxide-copper would be processed using cyanide leach at sometime after the primary copper leaching due mostly to the time frame necessary for permitting a sodium cyanide operation.  That may very well have changed with the receipt of these latest metallurgical results.ʺ

Conclusion: Initial test results show that an environmentally benign reagent can match the precious metals recovery rates achieved using more conventional sodium cyanide at a comparable cost. Follow up work, including pilot scale testing may give Phoenix Copper an opportunity to reduce the permitting timetable for Empire through demonstrating the efficiency of a non-toxic reagent for precious metals recovery.  

*SP Angel acts as Nomad to Phoenix Copper




John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk - 0203 470 0474



Richard Parlons –Richard.Parlons@spangel.co.uk - 0203 470 0472

Abigail Wayne – Abigail.Wayne@spangel.co.uk - 0203 470 0534

Rob Rees – Rob.Rees@spangel.co.uk - 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



This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.

Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.

Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

MiFID II - Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).

SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

Login or register to post comments

Recent Articles