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SP Angel . Morning View - Markets look to recovery from Coronavirus disruption

10:44, 9th April 2020
Vox Markets
SP Angel

SP Angel . Morning View . Thursday 09 04 20

Markets look to recovery from Coronavirus disruption



MiFID II exempt information – see disclaimer below


Arc Minerals* (ARC LN) – Royalty agreement signed with royalty agreement with Golden Square Equity Partners Limited

Bluejay Mining* (JAY LN) – Greenland waives mineral exploration license obligations for 2020

Caledonia Mining* (CMCL LN) – Q1 production rises 19%

Central Asia Metals (CAML LN) – Maintaining 2020 production guidance for now

Cora Gold* (CORA LN) – Drilling suspended at Madina Foulbe on official COVID-19 related instructions

Eurasia Mining (EUA LN) SUSPENDED – Operations and corporate update

Kenmare Resources (KMR LN) – Draws on facilities to weather Coronavirus storm

Rambler Metals* (RMM LN) - Click for full research PDF– Appointment of non-executive director

Renascor (RNU AU) - Work Continues on Siviour Graphite Project despite COVID-19

Serabi Gold* (SRB LN) –– Amended payment schedule for Coringa acquisition

SP Angel Healthcare team - Vadim Alexandre, Liam Gascoigne-Cohen

Silence Therapeutics (SLN.L): COVID-19 Partnership

Tiziana Life Sciences (TILS.L): Development of TZLS-50 for COVID-19

Advanced Oncotherapy (AVO.L): £15m fundraise and Covid-19 update


REE magnets not coming out of China. Holding up the supply of ventilators at Siemens

  • Siemens is unable to complete ventilators because they lack the permanent rare earth magnets needed to power their motors according to an internal source.
  • This very critical problem which may be down to the allocation of REE magnets in China, logistical issues or due to ongoing Coronavirus infections in China.
  • Siemens should have buying power as a major electrical manufacturer but may be competing with preferred local and international buyers for the parts.
  • Either way, the west is now beginning to understand why it is critical to develop REE processing and Permanent Magnet manufacturing closer to home.


Markets find stability as France dives into recession with Germany likely to follow

  • France and Germany were already on the brink of recession before the Coronavirus struck largely due to the impact of collapsed diesel auto sales and partly due to ongoing economic troubles in the Eurozone.
  • Germany currently plans to rescind its lockdown on 19 April which provide a template for other Western economies to reopen
  • Austria and Denmark have also set lockdown exit dates though we suspect infection rates in smaller nations may be easier to manage.
  • The Financial Services sector appears to have managed to continue relatively uninterrupted with higher trading volumes reported.
  • Other services such as Leisure and Transport have been decimated by the Lockdowns and will take longer to recover as consumers will be reluctant to immediately return to old ways.
  • Less new funds have been raised through the crisis as investors focus on opportunities offered in the pullback in bonds, equities and other instruments.
  • The race to the exit for oil-rich Sovereign Wealth funds, hedge funds and other investors saw the near-indiscriminate sale of mostly liquid assets.
  • The Sovereign Wealth funds are expected to make up the deficit caused by lower oil prices for the support of local economies and may remain asset sellers till oil prices rise to >$70/bbl again.


Metals prices hold new level as mines continue to close in Latin America

  • Metals Supply/Demand balances are a moving target right now with daily news on mines closing in Mexico, Chile, Peru, South African and Zambia as well as other locations
  • Metals supply has also been disrupted through boarder closures, port and shipping issues. Many containers remain stranded making shipments yet more compicated.
  • Hedge funds and CTAs have reduced positions ahead of the Easter break and as the supply/demand picture becomes less clear.
  • Lower demand in China and the West was a major driver on the downside for metals traders
  • China is now restocking and Germany is coming out of Lockdown showing the way to recovery.
  • Nations with shorter Lockdowns will likely gain economic advantage over their trading competitors.


Stimulus funding pledged

US – debating another $250bn help to businesses (not agreed with the Congress yet)

EU Finance Ministers failed to agree on a strategy to mitigate the economic impact of the pandemic. Further talks scheduled for Thursday

  • $2tn US fiscal package approved by Congress. US may add $0.6t state aid for mortgage markets and travel industries
  • $2tn US – Trump looking at $2tn infrastructure fund
  • $700bn – US + Fed rate cut to 0-0.25% last night. The $700bn QE to buy Treasuries and mortgage-backed securities.
  • $963bn (€750bn) ECB scraps limits on sovereign bond purchases. ECB PEPP buying running at around €250bn
  • $825bn (€756bn) Germany – Bundestag approved €156bn in extra borrowing and ~€600bn in emergency funds
  • $344bn - China stimulus + $127.2bn. China stimulus was $586bn in 2009
  • $996bn (108.2tn yen) was. $544bn (¥60tn) - Japan
  • $400bn (£330bn) UK + $242bn (£200bn) UK QE from BoE & no business rates plus £25,000 cash grants for hospitality sector
  • $387bn (€304bn) France, $200bn (€200bn) Spain, $214bn (A$320bn) Australia, $78bn (C$107bn) Canada, $32bn Saudi Arabia, US$43.7bn Singapore, $22.6bn India, $19.3bn HK, $13.7bn South Korea, $10bn Switzerland, $8.4bn Italy, $7bn NZ, $3.5bn Ireland, $2bn Taiwan, $0.75bn Indonesia,
  • Argentina to default on $10bn of dollar debt issued til the end of the year. Does no affect the $70bn that Argentina is currently in talks to restructure.
  • $1,000bn - IMF available + $12bn World Bank,
  • >11.9tn Total


Dow Jones Industrials





Nikkei 225





HK Hang Seng





Shanghai Composite







 Japan – Machine tool orders dropped by the most since the financial crisis in March.

  • Orders fell 40.8%yoy.


ECB urged members of the Eurozone to settle differences and work towards the fiscal package to support ailing members.

  • ECB President Christine Lazard argued governments must support each other highlighting that economic and financial linkages mean that no country can avoid damage, Bloomberg reports.
  • “If not all countries are cured, the others will suffer… solidarity is in fact self-interest,” Lagarde said.
  • Finance ministers are holding a second round of talks today.


UK – GDP unexpectedly contracted before the onset of the coronavirus crisis.

  • Economic growth came in at -0.1%mom in February led by a huge drop in construction, according to the Office for National Statistics.
  • Activity as hurt by storms and flooding during the period with construction down 1.7%mom with the series sector remaining flat.
  • GDP was up 0.1%qoq in the three months to February.


Turkey – The government is preparing steps to support the labour market in the face of the pandemic.

  • Proposed measures include banning layoffs for three months and offering a daily spend aid of almost 40 liras ($5.8) to people who are not eligible for unemployment benefits and lost their jobs after March 15.
  • The government has previously announced a 100bn lira package to fight the economic fallout(<2% of GDP) with estimates pointing to potential 3.6% contraction for this year, Bloomberg reports.


Zimbabwe - Mineral exports jump 37% in first two months of 2020

  • Zimbabwe earned $410m from mineral exports during January and February, compared with $300m generated in 2019.
  • The government is forecasting a $4bn contribution from the industry in 2020, compared $2.7bn last year.
  • Mining accounts for more than 50% of Zimbabwe's export earnings - led by platinum, gold and chrome shipments.


Chile - $2bn fund to benefit informal workers

  • President Pinera announced the fund as the coronavirus outbreak continues to escalate in the South American country.
  • The new measures announced yesterday seek to aid those not covered by the previously offered $12bn stimulus package, instead helping 2.6 million informal workers who lack unemployment coverage.
  • Despite the sharp increase in virus cases, Codelco said on Wednesday that its production is in line with its expectations, despite the measures it has implemented to limit the spread of the virus.



US$1.0869/eur vs 1.0857/eur yesterday.  Yen 108.93/$ vs 108.81/$.  SAr 18.110/$ vs 18.373/$.  $1.240/gbp vs $1.231/gbp.  0.624/aud vs 0.614/aud.  CNY 7.068/$ vs 7.063/$.


Commodity News

Gold US$1,656/oz vs US$1,652/oz yesterday - WGC - Gold ETF assets see largest ever quarterly gain in Q1 2020

  • Gold-backed ETFs added 298 tonnes across all regions in the first quarter of 2020 according to the World Gold Council.
  • The ETF gains in Q1 were worth $23bn, the highest quarterly amount ever in absolute terms and the largest tonnage additions since 2016.
  • Gold ETFs added 151 tonnes in March, boosting holdings to new all-time highs of 3,185 tonnes.
  • Last month saw trading volumes and assets under management reach record highs as gold volatility increased to levels last seen during the financial crisis, however the gold price remained relatively flat. 

   Gold ETFs 92.0moz vs US$91.7moz yesterday

Platinum US$739/oz vs US$742/oz yesterday

Palladium US$2,184/oz vs US$2,196/oz yesterday

Silver US$15.13/oz vs US$15.07/oz yesterday


Base metals:    

Copper US$ 5,030/t vs US$5,027/t yesterday - MMG declares force majeure at Las Bambas copper mine

  • The Chinese- Australian miner has declared force majeure at its major copper project in Peru after the government extended its national state of emergency.
  • The decision was made last week, due to the logistical challenges of transporting copper concentrates.
  • A halt in the supply of copper concentrate from Las Bambas could lead to a supply shortage in the market, as the mine is one of the world's biggest copper mining facilities and is expected to produce 350,000-370,000 tonnes of copper per year (Fastmakrets MB).
  • According to Fastmarkets, Las Bambas supplies copper raw materials to several Chinese smelters on a contractual basis, and this halt has come at a time when the world's largest consumer of copper is ramping up manufacturing.

Aluminium US$ 1,471/t vs US$1,470/t yesterday - Chinese aluminium inventories fall for the first time since Lunar New Year

  • Inventories fell as low aluminium prices prompted smelters to hold back on sales and reduce deliveries as demand improved.
  • Inventories of primary aluminium ingots across eight areas in China decreased 69,000 tonnes this week to 1.61mt - the first week-on-week decline since the end of January (SMM).

Nickel US$ 11,530/t vs US$11,545/t yesterday - 

Nickel nears three-week high on Philippine supply disruption 

  • The price of nickel in both London and Shanghai are nearing three-week highs as it was reported yesterday that major ore producer Philippines suspended operations.
  • Three-month nickel on the LME rose as much as 1% to $11,625/t and the most-traded nickel contract on the SHFE climbed 1.8% to 95,860 yuan/t - both the highest since the 20th of March (Reuters).
  • The Philippines was the world's second-biggest producer of nickel ore in 2019 according to the International Nickel Study Group.


Zinc US$ 1,903/t vs US$1,918/t yesterday

Lead US$ 1,710/t vs US$1,714/t yesterday

Tin US$ 14,565/t vs US$14,600/t yesterday



Oil US$33.7/bbl vs US$32.2/bbl yesterday - 

  • We have finally arrived at the day the sector has been waiting (im)patiently for. The emergency OPEC+ meeting is due to commence at 2pm GMT today
  • It is very unlikely we will see another standoff similar to early March, and market consensus is that a material cut will be announced later today
  • Last week, President Donald Trump tweeted that he expects Saudi Arabia and Russia to cut oil production by 10MMbopd to as much as 15MMbopd
  • However, the market is more cautious, predicting a cut of 8 -10MMbopd over 90 days, with the meeting likely focussing on the fine tuning the amount and allocating the amount to each member
  • The key question is will this be enough?
  • IHS Markit forecasted a drop in second quarter global oil demand of 16.4MMbopd from a year ago, and estimated April’s oil demand decline at around 20MMbopd citing “the closure of a large share of the global economy” due to the COVID-19 pandemic, according to a report issued on 31 March
  • SP Angel forecasts a minimum 10MMbopd cut, although we do see an outside chance of 15MMbopd

Natural Gas US$1.810/mmbtu vs US$1.877/mmbtu yesterday - Natural gas prices fell yesterday ahead of today’s inventory report from the Department of Energy

  • Expectations are for inventories to climb by 28Bcf according to survey provider Estimize
  • The weather is expected to remain colder than normal for the next 6-10 and 8-14 days according to a recent forecast from the National Oceanic Atmospheric Administration
  • Demand moved lower driven by declines in power generation

Uranium US$29.10/lb vs US$28.70/lb yesterday



Iron ore 62% Fe spot (cfr Tianjin) US$81.1/t vs US$79.3/t

Chinese steel rebar 25mm US$524.6/t vs US$523.2/t - Japan's crude steel output forecast to fall 26% in Q2

  • The Ministry of Economy, Trade and Industry announced this morning that crude steel output is forecast to fall 26% from April- June compared to a year earlier.
  • Demand for steel products, including exports, is forecast to fall 18.1% to 18.28mt in Q2 according to an industry survey in Japan.

Thermal coal (1st year forward cif ARA) US$56.0/t vs US$56.2/t

Coking coal swap Australia FOB US$134.0/t vs US$142.0/t



Cobalt LME 3m US$30,000/t vs US$30,000/t

NdPr Rare Earth Oxide (China) US$36,857/t vs US$37,167/t

Lithium carbonate 99% (China) US$5,589/t vs US$5,593/t

Ferro Vanadium 80% FOB (China) US$26.5/kg vs US$26.5/kg

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

Tungsten APT European US$240-245/mtu vs US$240-245/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

BYD to supply face masks to California

  • Californian State officials have signed a contract with BYD North America for the delivery of 150 million N95 masks and 50 million surgical masks. (Market Watch)
  • Californian taxpayers will pay $495m upfront for the masks, with a further $495m paid in instalments as shipments arrive.
  • The money for the masks is part of the $1bn aid package approved by the legislature in March. A further $1.3bn has been provided by via the disaster emergency response fund.
  • BYD has built a mask production facility in Shenzhen, China with capacity to make 5 million masks and 300,000 bottles of disinfectant a day. (Nikkei Asian Review)


Coronavirus inspires consumers to look to EVs

  • A study conducted by Venson Automotive Solutions has shown an increasing number of consumers in the UK are open to the idea of buying an EV as their next vehicle. (Auto Evolution)
  • The study does not mention the number that participated but suggests 45% are quoted as seeing the positive impact of the coronavirus lockdown on the environment. (Motor1.com)
  • 19% said their next car would be an EV and a further 26% said they would purchase an EV in the next 5yrs.
  • A similar study conducted in July 2019 showed 31% of people would not consider buying an EV in the next 10-15yrs.
  • The study also revealed respondents would like to see more action from the government in the UK to expedite the take up of EVs. (Renewable Energy Magazine)


Tesla coming out of hibernation in China

  • The Californian EV makers Shanghai facility is back online as China comes out of lockdown and is producing more cars than it was prior to the shutdown.
  • The factory produced 3000 cars per week last month. (BusinessDay) 
  • The Company is close to debuting a new longer range Model 3 in China, built locally. (Bloomberg)
  • The vehicle will have a range of 404 miles (650km) and pricing starts at 323,800 yuan ($45,800). The cost would be 350,000 yuan before rebates.
  • The current US and Chinese versions of the Model have ranges of 280-320 miles. (Cnet)
  • Like the existing version the longer range Model 3 would qualify for EV subsidies and be exempt from China’s car purchase tax.
  • Tesla meanwhile has the largest stock of unsold inventory in its history at the end of Q1. (Seeking Alpha)
  • Tesla achieved record deliveries in Q1, 88,400 cars were delivered to customers. However, the surplus between deliveries and vehicles produced was also the largest since Q1’19.
  • 14,272 units were surplus in Q1 which added to previous quarters leaves 26,961 units of inventory, a 112% increase from Q4’19.
  • On the plus side the Company has at least a month’s worth of inventory to cushion the effects of a prolonged factory shutdown.


Lithium Chile enters into option agreement with Inform Resources

  • Inform resources Corp. will earn up to 65% in Lithium Chile’s Apolo/Sancarron prospects by paying up to $600,000 and investing a minimum of $3m into the sites over a 3yr period. (Lithium Investing News)
  • Inform may earn an additional 25% interest on the properties by making additional cash payments of $750,000 in two further instalments of $250,000 and $500,000. The Company must also incur aggregate expenses of $5m on the properties within a 5yr period. (FinanzNachrichten)
  • The retransfer of gold/silver/copper properties to Lithium Chile is subject to a binding agreement with Kairos Metals Corp. Closing awaits final regulatory approvals. The Option Agreement remains subject to this agreement closing


Company News

Arc Minerals* (ARC LN) 1.5p, Mkt Cap £11.6m – Royalty agreement signed with royalty agreement with Golden Square Equity Partners Limited

  • ARC Minerals reports it has signed a royalty agreement with Golden Square Equity Partners for the sale of Arc stake in Casa Mining.
  • The royalty should pay ARC 3% on gold sold from Casa projects upto the value of $45m.
  • Golden Square will need to finance and develop Casa’s gold projects in the DRC through to production before any royalty is payable
  • As part of the agreement Arc have also issued a US$5m loan note to Golden Square which is repayable to Arc on 19 March 2021. 

Conclusion: Arc continues to evaluate its options over the new drill results at Cheyeza and other exploration targets in Zambia. The company are due to update the market on work to complete the Kalaba Commercial Scale Demonstration plant and on the drilling programme shortly.

*SP Angel act as Nomad and broker to Arc Minerals. An SP Angel analyst has visit the Kalaba mine site in Zambia


Bluejay Mining* (JAY LN) 4.13p, Mkt cap £40m – Greenland waives mineral exploration license obligations for 2020

  • Greenland has moved to protect and encourage exploration on licenses through 2020 through the waving of mineral exploration license obligations and expenditures through to the end of the year.
  • The move is part of emergency measures to help prospective miners keep working through the coronavirus pandemic.
  • Greenland is also considering further relief measures to encourage explorers and miners to keep working as the closure of any operation can have a marked impact on local communities.
  • Hudson Resources (HUD CN) continues limited activity at its White Mountain mine with no personnel travel allowed in or out of the site according to Mining.com.
  • The company is also evaluating the Sarfartoq rare earth and niobium exploration license with a focus on the high-grade niobium targets with work dependent on Coronavirus restrictions.

*SP Angel act as nomad and broker to Bluejay Mining plc. An SP Angel analyst has visited the Dundas site in Greenland


Caledonia Mining* (CMCL LN) 735p, Mkt Cap £82.3m – Q1 production rises 19%

  • Caledonia Mining reports that its Blanket gold mine in Zimbabwe achieved a 19% increase in Q1 gold output with production of 14,233oz in the quarter to 31st March 2020 compared with 11,948oz in the equivalent quarter of 2019.
  • Recognising the achievement of the operational team at the mine, CEO, Steve Curtis said thatʺthe operational improvements in the latter part of 2019 have continued into 2020. Notwithstanding restrictions in Zimbabwe, referred to in our RNS of 30 March 2020, we remain in production and are maintaining good levels of output.ʺ
  • Mr. Curtis went on to explain that ʺIn previous years, gold production was lower in the first quarter of each year and increased in the following quarters. Subject to the mine not experiencing any unforeseen production interruptions associated with the COVID-19 Pandemic, I expect the quarterly production profile to be more evenly balanced throughout 2020 because of the increased focus on developmentʺ.

Conclusion: In our opinion, the production increase from the Blanket mine underlines the benefits of both of the long term capital investment programme currently nearing completion as well as the operational improvements including improved control of underground mining dilution implemented during 2019. The solid start to 2020 will help provide a stable platform and provide the company with a measure of resilience in the uncertain business climate of the Covid19 virus

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


Central Asia Metals (CAML LN) 137 pence, Mkt Cap £227m – Maintaining 2020 production guidance for now

  • Central Asia Metals reports  that it produced 3,201t of copper from its Kounrad operation during Q1 2020 while the Sasa mine in North Macedonia, produced 6,127t of zinc in concentrates and 7,607t of lead in concentrate.
  • The company says that production is currently on track to meet its guidance for 2020 for copper production in the range 12,500-13,500t of copper, in line with 2019 and slightly increased to 23-25,000t of zinc in concentrate and 30-32,000t of lead in concentrate.
  • CEO, Nigel Robinson, said that ʺWe are today reporting strong Q1 2020 production numbers for all three of the base metals that we produce, with increases quarter on quarter for copper, zinc and lead. We experienced no disruptions to either the production or sales of our metal products during Q1 2020ʺ.
  • Mr. Robinson also said that ʺWhile we retain our 2020 production guidance, we remain cautious for the Q2 2020 outlook in particular as cases of COVID-19 in both Kazakhstan and North Macedonia are increasing, and government measures are understandably escalating. That said, having made the difficult recent decision not to recommend a 2019 final dividend, we believe we have ensured the continued financial strength of our business while the pandemic continuesʺ.
  • Reporting on the measures in force to contain the spread of the virus in both Kazakhstan and North Macedonia, the company explains that the Kazakh Government has declared a State of Emergency including a ʺtotal lock-down of the cities of Nur-Sultan and Almaty as well as some other larger cities. The borders have been closed for the movement of people but not goods. Currently, 704 people have tested positive for COVID-19 in Kazakhstan, with the numbers rising daily.ʺ
  • In North Macedonia, there is also a State of Emergency in force including ʺmeasures such as school closures, night-time curfews and closure of borders to the movement of people and in some cases the movement of trade vehicles. Sasa has to date been able to continue truck movements across the borders and has particular arrangements in place regarding the curfew to enable its night shift to continue to operate. Currently, 599 people have tested positive for COVID-19 in North Macedonia, with the numbers rising daily.ʺ

Conclusion: The company is currently maintaining its 2020 production guidance while expressing caution as to the impact of measures to curtail the spread of Covid19 in both Kazakhstan and North Macedonia both of which have implemented States of Emergency.


Cora Gold* (CORA LN) 4.7p, Mkt Cap £6.0m – Drilling suspended at Madina Foulbe on official COVID-19 related instructions

  • The Company suspended its current drilling programme at the Madina Fouble Permit in eastern Senegal after receiving official advice from the government.
  • The team has completed 642m of the planned 2,000m RC drill plan that started on 30 March 2020 with sample being delivered to the laboratory for assay analysis.
  • Results will be announced once received in due course.
  • Exploration works continue at the Sanankoro Project Area in Mali.

*SP Angel acts as Nomad and Broker to Cora Gold


Eurasia Mining (EUA LN) SUSPENDED – Operations and corporate update

  • The Company provided a general operations on its West Kytlim and Monchetubdra PGM assets as well as a corporate update this morning.
  • The Company remains in discussions with CITIC Merchant Co, a subsidiary of the Citic Group, regarding possible strategic options as well as potential buyers.
  • The management assessed the impact of COVID-19 on the business and believes operations are unlikely to be affected.
  • The Company has £0.6m in cash at the moment and access to an unused credit line of $1m (available until Aug/20, 9% interest and repayable in five years after the drawdown).
  • The cash balance already accounted for capital expenditures incurred at West Kytlim for a new wash plant, mining equipment and other items acquired at the end of last year and the start of this year.
  • The team expects available cash balances and proceeds from West Kytlim to allow for the Company to operate without using the $1m credit line over next 12 months even if there are interruptions in production.
  • In terms of new equipment, as part of the Leasing-Trade In agreement, two new excavators arrived on site with another one awaiting shipment, a 30t bulldozer was delivered on site in mid-March with additional 4 20t haul trucks expected to arrive in April ahead of the start of the production season (April/May to November).
  • The Company is working on a feasibility study for the West Kytlim project that would include the entire mining license area upgrading available resources to mineable categories that would allow to ramp up production levels.
  • Russia rouble latest depreciation against the US$ with the exchange rate going from ~60RUB to current ~75RUB is benefiting West Kytlim operations as well as Monchetundra project economics.
  • The Company is awaiting a formal issued of the license for the Tipil area located to the west of the West Kytlim Flanks.
  • The area is prospective for further discoveries of PGMs supported by historical exploration and its location next to the Ust-Tylai area of the current mining license.
  • Monchetundra Flanks license application has been approved by the last remaining federal body, the Federal Security Service (FSB), and is expected to be issued by Sevzapnedra in due course.
  • The Company is expecting to announce further proposed board changes, including new appointments, shortly.
  • The Company received a resignation notice from its Nomad and Joint Broker WH Ireland which is due to expire on 30 April.
  • Trading in shares will remain suspended if the Company does not find a new Nomad by 7am on 30 April 2020 and will be cancelled should the Company not appoint a new Nomad by 7am on 29 May 2020.
  • The Board believes that the new Nomad will be appointed before the notice period expires.

Conclusion: The Company remains in discussions with various parties over a potential strategic transaction while putting in lace contingency plans to safeguard operations from the COVID-19 outbreak. Alluvial mining operations at West Kytlim are expected to start as normal as the beginning of the season comes closed while the management is looking to add to mineable reserves ahead of the ramp up of production run rates. Monechtundra Flanks license is expected to be secured shortly that potentially significantly expands the scale of the project. The management decided to delay some of its capital investments during the period leaving a cash buffer on top of available credit facility.


Kenmare Resources (KMR LN) 187p, Mkt cap $203m – Draws on facilities to weather Coronavirus storm

  • Kenmare Resources report they have drawn down on all debt facilities and had Cash and cash equivalents were US$102.4m at end Q1
  • Debt was US$111.4 m resulting in net debt of US$9.0m.
  • The company continue to ship ilmenite concentrate and related products.
  • Measures put in place to restrict the spread of the virus will impact Kenmare’s operations this year.
  • The move to the Wet Concentrator Plant B may be delayed bythe COVID-19 restrictions which would cut production for the year.
  • Management have duly suspended production guidance.
  • Kenmare production fell 31% yoy to 248,100t of Heavy Mineral Concentrate in Q1 2020 due to a 17% fall in grades and a 12% fall excavated ore.
  • Total shipments of finished products rose to 194,600 tonnes in Q1 vs 176,500t yoy
  • The new Wet Concentrator Plant is ramping up with first HMC production in late February targeting 500tph capacity in Q2 2020 – probably delayed by COVID-19
  • Zircon prices remain under pressure due to oversupply though this may change as production from other mines is restricted
  • Ilmenite concentrate prices remain stable at $210-230/t.
  • Ilmenite prices rose through Q4 as demand continued to outstrip supply.
  • The UK Lockdown was preceded by strong demand for paint at DIY stores as many workers planned to paint their houses while confined at home. This may partially account for why so many people were out in the parks waiting for the paint to dry and the smell to dissipate.
  • Richards Bay in South Africa is closed, cutting off a significant source of feedstock for smelters.
  • Inventories in the ilmenite feedstock supply chain remain low with the market expected to need new production to meet demand going forward.

Conclusion: Life was already tough for Kenmare. If the impact of the Coronavirus is severe then Kenmare may need it’s available cash to survive.


Rambler Metals* (RMM LN) 1.25p, Mkt Cap £16m – Appointment of non-executive director

Click here for full research note PDF

  • Rambler Metals has announced the appointment of Dr. Toby Bradbury as a non-executive director with immediate effect.
  • Dr. Bradbury is an experienced mining engineer who previously served as Chief Executive of Shanta Gold where he spearheaded the transition to underground mining at the Tanzanian operations. Previous roles include those of Senior Vice President with AngloGold Ashanti, Chief Operations Officer for Anvil Mining, a copper producer in the DRC, and General Manager Surface Operations with Glencore Coal Australia
  • Welcoming on the appointment, Chairman, Brad Mills, said that ʺToby’s experience and knowledge will bring another dimension to our multi-skilled Board. The Board is looking forward to working with Toby to further strengthen Rambler’s position as a growing coppergold producer with a long life and promising growth opportunitiesʺ.

Conclusion: The appointment of Dr. Bradbury brings additional underground mining and copper production expertise to Rambler Metals as it expands the underground Ming mine in Newfoundland and the associated Nugget Pond mill and Goodyear Cove port facility.

*SP Angel act as Nomad and broker to Rambler Metals & Mining


Renascor (RNU AU) A$0.07, Mkt cap £9.2m - Work Continues on Siviour Graphite Project despite COVID-19

  • Renascor report work continues on the Siviour project in South Australia
  • Cash:  $2.1m. The company has no debt.
  • Costs have been cut by ~35% including savings in cash payments to directors and staff
  • Renascor expect to be able to fund work programs over the next 12 months.
  • The team are planning to develop an integrated graphite mine and concentrate processing plant at the Siviour mine to produce a purified spherical graphite product.
  • This should give the product substantial added value for sale into battery manufacturing.
  • Discussions are ongoing with potential offtake partners and anode manufacturers in Asia and Europe some of whom are looking for secure sources outside China.
  • All battery grade spherical graphite is currently manufactured in China making this a critical issue for Western and some other battery manufacturers.
  • Much of the desk-top and laboratory work being done remains unaffected by the Coronavirus outbreak though there will be some minor disruption due to travel restrictions and shipping delays.
  • Work program:
    • Advanced Purified Spherical Graphite study,
    • Customer sample material,
    • Advanced mineral processing.

Conclusion:  Renascor is attempting to emulate Talga Resources in the development of spherical grade graphite outside China. It will take some time for Renascor to develop its spherical graphite product and to work through the accreditation process which is necessary to gain acceptance for the sale of battery grade spherical graphite to battery manufacturers.

*SP Angel acts as broker to Renascor Resources Ltd


Serabi Gold* (SRB LN) – 60.5p, Mkt cap £30.3m – Amended payment schedule for Coringa acquisition

  • Serabi Gold reports that, as a result of the restrictions in force to curb the spread of the Covid19 virus, it has agreed with Equinox Gold to extend the final date for the US$12m payment due for the acquisition of the Coringa gold project in Brazil.
  • Under the revised terms it will make payments of US$0.5m on the first day of May, June and July 2020 and thereafter of US$1m per month ʺuntil such time as the Travel Restriction Condition is satisfied.  The balance outstanding of the Coringa Acquisition Payment is expected to be settled within six weeks of the Travel Restriction Condition being satisfied.ʺ
  • Serabi also advises that it is ʺin advanced discussions with Greenstone II LP (“Greenstone”) to amend the Loan Note subscription deed to allow for partial subscriptions in respect of US$12 million of Convertible Loan Notes (the “Loan Notes”) in individual amounts of US$500,000. The partial subscriptions would provide funds to the Company to assist Serabi in paying the monthly instalments to Equinox during the Deferral Period, until such time as the balance of the Coringa Acquisition Payment can be satisfied in fullʺ.
  • Commenting on the changes, CEO, Mike Hodgson, said ʺWe are extremely grateful for the continued support of Greenstone and the understanding and flexibility shown by Equinox. It goes without saying we are living testing times, but we are delighted that we have identified a very workable solution for the Company to complete the acquisition of Coringa which is key to the growth plans of Serabiʺ.
  • He went on to confirm that ʺwe have enjoyed an excellent end to the quarter and, subject to final reconciliation, I expect the production for the quarter to be slightly above 9,000, not quite as high as budgeted but considering we lost 1 of our 3 ball mills in February for 15 days, an excellent result and reflecting a strong performance in March 2020ʺ.
  • The company has also published results for 2019 which reports after tax profits of US$3.8m (2018 -  loss of US$5.8m) driven by the production of 40,101oz of gold (2018 – 37,108oz) at a cash cost of US$832/0z (2018 – US$821/0z) and an all-in-sustaining cost of US$1,081/oz (2018 – US$1,093/oz).
  • Confirming the resilience of the operation, EBITDA for 2019 of US$17.2m compares with US$6.3m in 2018.

Conclusion: The amended payment timetable for Coringa shows the impact of the current medical restrictions on the conduct of operating business not only for Serabi but, we infer, for many other operations as well.

*An SP Angel analyst has visited the Serabi’s gold mining operations in Brazil


SP Angel Healthcare team - Vadim Alexandre, Liam Gascoigne-Cohen

Silence Therapeutics (SLN.L): COVID-19 Partnership

Market capitalisation: £369m; Share price: 446p

·      Silence Therapeutics, a developer of RNAi-based therapies, announced an initiative to produce critical reagents for a COVID-19 test developer.

·      The Group is repurposing equipment at its Berlin site, where the majority of the Group’s R&D facilities are located, to produce reagents for COVID-19 PCR-based diagnostics.

·      The Group is working on a cost only basis for TIB Molbiol GmbH, a test manufacturer based in Berlin, and confirmed the initiative would not impact Silence's core business.

·      Silence stated any funds generated from this initiative will be donated to the fight against COVID-19.

PCR diagnostics are nucleic acid-based tests which can identify presence of virus in patients. These tests are core to managing the current pandemic and as demand for these tests grow, supply chains for reagents are coming under increasing pressure. As an RNAi developer, Silence has access to specialist nucleic acid laboratory equipment which would be highly useful for PCR kit development. Initiatives such as this can help public health authorities meet their testing requirements. Yesterday, a collaboration with GSK, AZ and Novacyt* was announced to help the UK Government reach its testing target. Part of the collaboration involves evaluating the use of alternative reagents in these test kits to overcome supply shortages.

*SP Angel act as Nomad and Broker to Novacyt plc


Tiziana Life Sciences (TILS.L): Development of TZLS-50 for COVID-19

Market capitalisation: £57.5m; Share price: 37.5p 

·      Drug developer, Tiziana Life Sciences, provided an update regarding the development of TZLS-501 the Group’s anti-interleukin-6 receptor (anti-IL6R) monoclonal antibody.

·      The Group have developed a system which can directly deliver antibodies into the lungs via a handheld inhaler or nebuliser. 

·      The Company has submitted a provisional patent application for this delivery technology. 

In March, the Group announced it was expediting development of TZLS-501, a preclinical stage antibody-based treatment for patients infected with COVID-19. The novel delivery system is a step forward in the development of TZLS-501. TZLS-501 has been shown to bind to IL-6, a pro-inflammatory cytokine which is a key driver of inflammation. Anti-IL6 antibodies are thought to be of benefit to COVID-19 patients. This is because COVID-19 infection is thought to provoke an aggressive immune reaction which is thought to be associated with the severe lung damage observed in some COVID-19 patients.  


Advanced Oncotherapy (AVO.L): £15m fundraise and Covid-19 update

Market capitalisation: £63.6m; Share price: 26p

·      Proton therapy developer, Advanced Oncotherapy, announced a £15m fundraise.

·      The funds are intended to progress the regulatory approval of LIGHT, the Group’s novel proton beam therapy system for cancer treatment.

·      The subscription, conditional upon shareholder approval, was completed at 25p/share.

·      In response to the COVID-19 pandemic, AVO noted the Daresbury Laboratory and Harley Street sites have been temporarily closed 

·      The Company expects the first LIGHT System to become operational with first patient treatment in 2021 (previously expected end of 2020).

The completion of a double-digit fundraise in current market conditions is an achievement and should ensure AVO is well capitalised for the current period of uncertainty driven by the coronavirus pandemic. The delay in first patient treatment to 2021 is unsurprising given the current lockdown conditions. LIGHT is classified as a medical device and is therefore going through the CE and FDA 510(k) pathways. Under remote working conditions the Group is still able to progress documentation work for the regulatory submission. Proton therapy has been observed to have benefits over conventional radiotherapy, such as a more focused dose of radiation to the tumour site and a reduction in damage to healthy tissue surrounding the tumour site. 



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.


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