SP Angel . Morning View . Monday 04 01 21

SP Angel
SP Angel . Morning View
11:48, 4th January 2021

SP Angel . Morning View . Monday 04 01 21

Gold prices rally into new year on increasing Coronavirus infections



MiFID II exempt information – see disclaimer below 

Bushveld Minerals* (BMN LN) – BUY, Valuation 37.7p – Opportunity for Bushveld to lead grid storage developments. Vanadium prices rise in Europe

Caledonia Mining* (CMCL LN) – Quarterly dividend increased

Castillo Copper (CCZ LN) – Progress report on drilling at the Big One project in Queensland

Condor Gold* (CNR LN) – Director exercises options

Power Metal Resources* (POW LN) / Kavango Resources (KAV LN) – REE Exploration underway at Ditau Project, Botswana 

Tirupati Graphite (TGR LN) – Vatomina on-track to be commissioned by Q2 2021


Gold prices hit two-month high on rising Covid-19 restrictions and weak US dollar

Bitcoin price rally indicates investor concerns over weakening currencies

  • Gold prices have surged in the new year, as a novel strain of coronavirus rages in Europe- leading to doubts over a swift economic recovery over multiple regions.
  • It is being reported that stricter measures are currently being considered in the UK, Europe and Japan.
  • Spot gold rose 1.4% to $1,924/oz on Monday morning, while US gold futures climbed 1.8% to $1,929/oz (Reuters).
  • The US dollar continued its decline on Monday, with the dollar index falling 0.3%, driven by worries that the US is failing to effectively contain Covid-19 and inflation woes with the prospect of further US stimulus not ruled out. 
  •  Renewed declines in US real yields have also boosted gold’s appeal, with real yields at -1.092% on Friday. Gold traditionally outperforms when real interests rates are low (Bloomberg).  


Year of the Metal Ox set to lead China into new era of growth

  • The new Chinese year starts 12th February and ends on 30th January 2022.
  • According to mythology, the Jade Emperor said the order of the animals would be decided by the order in which they arrived to his party. The Ox was about to be the first to arrive, but Rat tricked Ox into giving him a ride. Then, just as they arrived, Rat jumped down and landed ahead of Ox. Thus, Ox became the second of the Zodiac animals. The Ox is seen as a hard working animal, intelligent and reliable, but never demanding in praise.


Dow Jones Industrials





Nikkei 225





HK Hang Seng





Shanghai Composite







China offering trade talks to the new US administration 


NYSE preparing to expel more Chinese companies with ties to China’s PLA ‘Peoples Liberation Army’.

  • Following an executive order from President Trump to expel companies with ties to the Chinese military.
  • Delisting of Chinese companies from the NYSE effectively downgrades these companies and will increase geopolitical tensions.
  • China Mobile, China Telecom and China Unicom are potential targets for NYSE delisting due to Trump’s executive order
  • CCNOOC, Petrochina and Sinopec may also be delisted if they are found to have links with China’s PLA.


Singapore – GDP growth falls by 5.8% in 2020 better than -6% forecast

  • Q4 GDP recovered to +2.1%. GDP est at 4-6% for 2021


Japan – Prime Minister Suga to consider placing Tokyo under a state of emergency

  • The country’s Prime Minister is under increasing pressure to take action to mitigate the rising Covid-19 cases in Japan.
  • Japan saw a record 4520 new cases on December 31 in a fresh wave of infections.
  • As an interim measure, restaurants and karaoke parlours in the Tokyo area are being asked to close at 8pm rather than 10 pm –  while businesses that serve alcohol should close at 7 pm.


Russia – 1.5m doses of Sputnik V vaccine already distributed

  • The Country’s health minister Mikhail Murashko claims that 800,000 Russian residents have already been vaccinated.


Eurozone – December Manufacturing PMI at 55.2 vs 53.8 last

  • Manufacturing in the bloc finished the year increasing at its fastest pace since mid-2018, suggesting that a second wave of restrictions throughout Europe hit economies less hard than the initial lockdowns.
  • The employment index rose slightly, although still in contraction, to 49.2 from 48.7.


India – December PMI at 56.4 vs 56.3 last

  • India’s manufacturing sector continued to strengthen in December, with manufacturers stepping up production and increasing buying in an effort to rebuild inventories. 


South Africa – Land Bank looks unsustainable as losses rise to ZAR2.8bn vs ZAR902m yoy

  • Land Bank is the major lender to the agricultural sector providing some 28% of debt to the agricultural sector.
  • If the state-owned bank collapses it will have a major disruptive impact on South African agriculture and this is likely to have a significant impact on state of the nation and the economy as a whole.


UK – potential to further tighten Lockdowns around the UK

  • Most of the UK is now under Tier 4 which allows business to continue except for . 
    • Sunday saw more than 50,000 new cases recorded in the UK for the sixth day running, with the government now admitting that tougher restrictions are likely. 
    • Nicola Sturgeon is expected to announce new restrictions for Scotland later today, with Wales and Northern Ireland already having their own lockdowns in place.
    • The UK’s second vaccine has begun its roll-out today, with Mr Brian Pinker, aged 82, the first to receive it. 
    • More than 500,000 doses of the Oxford vaccine are ready to go, with 730 vaccine sites already established.



US$1.2282/eur vs 1.2290/eur last week.  Yen 102.79/$ vs 103.15/$.  SAr 14.552/$ vs 14.646/$.  $1.368/gbp vs $1.365/gbp.  0.774/aud vs 0.771/aud.  CNY 6.462/$ vs 6.542/$.


Commodity News

Precious metals:  

Gold US$1,932/oz vs US$1,892/oz last week

   Gold ETFs 106.8moz vs US$106.7moz last week

Platinum US$1,106/oz vs US$1,070/oz last week

Palladium US$2,453/oz vs US$2,364/oz last week

Silver US$27.28/oz vs US$26.48/oz last week

Base metals:   

Copper US$ 7,937/t vs US$7,768/t last week

Aluminium US$ 2,002/t vs US$1,992/t last week

Nickel US$ 17,330/t vs US$16,685/t last week

Zinc US$ 2,796/t vs US$2,736/t last week

Lead US$ 2,048/t vs US$1,979/t last week

Tin US$ 20,700/t vs US$20,200/t last week


Oil US$53.3/bbl vs US$51.4/bbl last week

  • Oil prices touched multi-month highs on Monday on expectations that OPEC and allied producers may cap output at current levels in February as the coronavirus pandemic keeps worries about first-half demand elevated
  • Prices rose in line with broader financial markets with Brent futures reaching US$53.17/bbl, the highest since March 2020
  • WTI crude touched $49.71/bbl, the highest since February 2020
  • March Brent crude futures were at US$52.94/bbl, up US$1.14 or 2.2%, while February WTI crude futures rose 98 cents, or 2%, to US$49.50/bbl
  • Broader macro momentum trends including a weaker dollar and investors positioning for a recovery in the oil sector this year are likely to be the key support to oil prices
  • Prices ended 2020 about 20% below 2019's average, still recovering from the impact of global lockdown measures, which have slashed fuel demand, even though the world's major producers agreed record output cuts
  • OPEC+ decided last month to raise output by 500,000bopd in January, anticipating a boost in demand, and agreed to meet every month to review production
  • The International Energy Agency expects oil demand to remain weaker into 2021, with the Agency revising down its estimates by 170,000bopd in 2021 during December 2020
  • Global energy consumption is expected to be 96.9MMbbls in 2021 (2020: 91.2MMbopd)
  • OPEC’s postponed it Joint Technical Committee and Ministerial Monitoring Committee meetings will take place today
  • The group has also revealed its expectations of a slower demand recovery than originally expected, lowering its forecasts by 350,000bopd for 2021

Natural Gas US$2.614/mmbtu vs US$2.499/mmbtu last week

  • Thursday’s EIA weekly storage report surprised to the downside for the second week in a row
  • The US government report showed a much smaller-than-expected 114Bcf withdrawal from stocks for the week-ending 25 December
  • A Bloomberg survey of nine analysts showed an unusually wide range of withdrawal estimates from as low as 88Bcf to as large as 150Bcf, with a median of 126Bcf
  • A Wall Street Journal poll showed estimates within that same range, with an average of 129Bcf
  • A Reuters poll of 16 market participants showed withdrawals as low as 85Bcf, but the median was near those of other surveys, at 125Bcf. NGI pegged the pull at 124Bcf.
  • Last year, the EIA recorded an 87Bcf draw for the similar week, while the five-year average is a 102Bcf draw



Iron ore 62% Fe spot (cfr Tianjin) US$155.7/t vs US$156.1/t - Iron ore futures recover on strong factory data and falling Chinese stockpiles

  • Iron ore prices in Asia recovered some of last weeks losses on Monday, as improving factory data showed a recovery across Asian manufacturing sectors. 
  • Japan’s PMI rose to the highest level since April 2019, and Taiwan’s PMI jumped to its highest level in a decade while South Korea’s remained above the key expansion level of 50 (Bloomberg).
  • Port holdings of iron ore in China declined for the first time in three weeks, falling 0.2% to 127mt (SteelHome). 
  • Iron ore futures rose 3.4% to $164/t in Singapore, on Monday, while to the most traded contract on the Dalian exchange rose 2.4%.

Chinese steel rebar 25mm US$672.7/t vs US$659.8/t

Thermal coal (1st year forward cif ARA) US$69.0/t vs US$69.0/t

Coking coal swap Australia FOB US$136.0/t vs US$123.0/t



Cobalt LME 3m US$32,190/t vs US$32,190/t

NdPr Rare Earth Oxide (China) US$63,064/t vs US$62,308/t

Lithium carbonate 99% (China) US$7,506/t vs US$7,416/t

Ferro Vanadium 80% FOB (China) US$29.5/kg vs US$30.0/kg – 

Ferro-Manganese high carbon 78% Mn US$1,370/t vs US$1,330/t

Tungsten APT European US$230-235/mtu vs US$230-235/mtu

Graphite flake 94% C, -100 mesh, fob China US$520/t vs US$510/t                 

Graphite spherical 99.95% C, 15 microns, fob China US$2,475/t vs US$2,475/t

Spodumene 6% Li2O min, cif (China) US$395/t vs US$380/t


Company News

Bushveld Minerals* (BMN LN) 19.88p, Mkt cap £237m – Opportunity for Bushveld to lead grid storage developments. Vanadium prices rise in Europe

(Bushveld Energy has negotiated to holds 50% Enerox Holdings Limited (50% other investor) which holds 90% of Enerox GmbH along with 8.71% in Invinity) If no other investors participating then the €3.7m loan will be split between the Bushveld and the other investor.

BUY - Valuation 37.7p

  • Fortune Mojapelo, Bushveld’s founder and CEO refers to the opportunity for South Africa to develop the stationary energy storage market where substantial growth in developments is expected over the next 20 years on Miningmx.com today.
  • Fortune calls for South Africa to ‘develop vertically integrated opportunities that maximise South Africa’s share of the value chain.’
  • ‘South Africa already has the metallurgical infrastructure that can be leveraged to create or expand the downstream capabilities required.’.
  • ‘Gone are the days when it could be argued that China’s electricity costs and labour costs are significantly lower than South Africa’s and thus give China a competitive advantage for developing a downstream jobs-intensive processing industry.’
  • Bushveld Energy is preparing to build a new vanadium electrolyte plant in South Africa in jv with the Industrial Development Corporation to fill the next generation of VRFBs ‘Vanadium Redox Flow Batteries’
  • Bloomberg NEF estimate stationary energy storage deployments are set to grow 122 times over the next 20 years from a cumulative 17GWh in 2018 to >2,850 GWh by 2040.
  • Bushveld also holds stakes and first right of refusal agreements with Invinity Energy Systems (8.71%) and Enerox Holdings (50%) which are working on the instillation of VRFB systems
  • We see this as an important growth area in the support of wind and solar power developments for grid stability and for energy provision in areas where Li-ion battery packs work less well.
  • Vanadium prices rise in Europe by 3.8% to $24.67-25.3/kgV but pull back 3.3% in China to $29-30/kgV
  • The move reflects increasing shipments into China and rising confidence in Europe for recovery in the construction sector
  • Vanadium producers are exporting more of their output into China to take advantage of the higher prices
  • The move by producers to sell more into China lengthens supply Chains and effectively locks-up more material in transit which should cause prices to rise higher in the near future.
  • China imposes a 13% tariff on imported vanadium accounting for a portion of the price differential.

Conclusion: We see Bushveld Energy as paying an important and significant role in the development of grid storage solutions through VRFB battery developments in South Africa and around the world and for this part of the business to lead Bushveld’s valuation and rating higher going forward.

*SP Angel acts as Nomad and broker to broker to Bushveld Minerals. 

(Dec year end)








FeV price








Vanadium Production








Vanadium Sales
















Cash Op costs








Unit Cash Op costs+








Operating profit








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Post-tax profit








































Free Cash Flow (100%)








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



Caledonia Mining* (CMCL LN) 1260p, Mkt Cap £146m – Quarterly dividend increased

  • Caledonia Mining has announced a 10% increase in its quarterly dividend to 11UScents/share.
  • The announcement points out that Increasing production, a high gold price and good cost control have continued to result in increased cash generation which has given the Board confidence that the business can sustain a higher level of dividend distributions before the benefits of Central Shaft are realised”.
  • The company highlights that this is the fourth increase since October 2019 and comes at a time when the company is moving towards the completion of commissioning on the Central Shaft at its Blanket gold mine in Zimbabwe which provides access to deeper level mineralisation and helps ensure the future of production at around 80,000ozpa into the 2030s.
  • Caledonia Mining says that it expects production from the mine to be in the range 61-67,000oz of gold in 2021 before reaching the target 80,000oz level from 2022.
  • Commenting on the increased dividend, CEO, Steve Curtis, underlined that the increase is “the fourth increase in the past 15 months representing a cumulative 60 per cent rise in the dividend since the first increase in October 2019. The decision by the Board to increase the dividend reflects our continued and increasing confidence in the outlook for our business.”
  • Mr. Curtis also said that “As we approach the end of the six-year investment programme at Blanket Mine, we expect the combination of rising production and declining capital investment over the next two years will give us the scope to consider further increases in the dividend in addition to providing funding for investment in new projects, including the exploration prospects at Glen Hume and Connemara North as announced on 10 and 17 December 2020, respectively.”

Conclusion: In recent times, Caledonia Mining has delivered the fourth increase in its quarterly dividend since October 2019. The increase comes as the long term investment in the new Central Shaft is coming to fruition securing increased gold output, lower capital and operating costs and a long-term future for the mine. Current robust gold prices are likely to provide further opportunities to reward shareholders and also to advance other opportunities including the recently announced exploration projects at HGlen Hume and Connemara.

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


Castillo Copper (CCZ LN) 2.25p, Mkt Cap £20.8m – Progress report on drilling at the Big One project in Queensland

  • Castillo Copper reports that during Q4 2020, a total of 20 reverse-circulation drill holes were completed at its Big One project in Queensland.
  • Today’s announcement does not indicate the total metres drilled during the campaign but confirms that 14 holes were drilled as part of the 300 series campaign with a further six holes in the 200 series.
  • The company also confirms that the Board is targeting to release complete drill logs and relevant observations for all 20 drill-holes - in two to three batches – shortly”.
  • The company outlines its priorities for exploration at Big One during the first half of 2021, including “a comprehensive geophysical campaign to identify potential massive sulphide conductors that would extend known mineralisation and provide new test-drill targets along the strike extent” as well as extending its drilling to the Arya Prospect and starting to model the resources at the Big One Prospect to JORC standard.
  • Castillo Copper’s Managing Director, Simon Paull, explained that in view of “geological interpretations of historic and fresh assays suggesting a shallow, high-grade scalable copper system apparent at the Big One Deposit”.

Conclusion: We look forward to the release of full drilling results from the Big One prospect and to further news of the Arya Prospect when drilling starts there following the current work at Big One.


Condor Gold* (CNR LN) 51.5p, Mkt Cap £59.2m – Director exercises options

  • Condor Gold reports that non-executive director, Ian Stalker has exercised £22,000 of options at a subscription price of 22p/share.  
  • During December, the company announced the commencement of initial site preparation work, including clearing trees and scrub vegetation and providing access roads to the planned 2,800tpd processing plant, at its La India project site in Nicaragua.
  • We expect that with this initial work underway 2021 is likely to be a busy year for Condor Gold as it moves ahead with the development of La India where, “Following the permitting of the Mestiza and America open pits, together with the La India open pit Condor has 1.12M oz gold open pit Mineral Resources permitted for extraction, inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold”.

Conclusion: We interpret the exercising of options by a director as a positive indication of support and confidence as Condor Gold advances its of site preparation work at La India in the development of the mine planned to produce an average 120,000oz pa of gold over the first seven years of operations.

*SP Angel act as sole broker to Condor Gold


Power Metal Resources* (POW LN) 2.85p, Mkt cap £26m – REE Exploration underway at Ditau Project, Botswana 

Kavango Resources (KAV LN) 2.9p, Mkt cap £7.5m

  • Power Metal and Kavango have provided an update for their Ditau rare earth project, of which both companies have 50% of the strategic joint venture.
  • First stage orientation work is complete on mangnetic anomaly “I10”, the first of ten geophysical ring structures previously identified at the site. The ring structures are potential carbonatites, which are the principal source of REEs including Neodymium and Praseodymium.
  • Results from the I10 orientation exercise shape will allow the companies to calibrate survey equipment for follow on surveying of the remaining 9 ring structures.
  • Initial work completed on the I10 anomaly includes controlled-source audio-frequency magnetotellurics (CSAMT) geophysics orientation on a 5km line run at 50m station interval, along with soil geochemistry samples taken over the same line at 200m spacing- the results of which are expected by early February.
  • Follow up surveys at I10 planned for mid-January include gravity surveys at 50m intervals and ground magnetic surveys at 12.5m station spacing.
  • Further planned work at Ditau includes geophysical surveying and soil sampling planned in Q1/Q2 2021, along with an exploratory drill campaign anticipated for Q2/Q3 subject to successful initial exploration.
  • Paul Johnson, CEO of Power Metal Resources commented: "The Strategic Joint Venture with Kavango is surging ahead with work completed and announced from the Kalahari Copper Belt, and now from the Ditau Project. With the Ditau Project we are seeking a discovery of rare earth elements (REEs), which are highly valuable and sought after commodities, particularly from secure and stable jurisdictions such as Botswana.”.
  • Micheak Foster, CEO of Kavango Resources commented: "We have completed a lot of valuable work at Ditau over recent years. Drill cores from our 2019 campaign confirmed the presence of highly altered Karoo sediments, sitting above a mafic intrusive body. The alteration extended to depths >300m. Our job is now to confirm whether or not the ring structures contain carbonatite, and if so, evaluate them for valuable minerals. Once we have calibrated our equipment based on the results from the I10 anomaly, we will survey the remaining 9 ring structures to identify potential drill targets.”

*SP Angel acts as Nomad and Broker to Power Metal Resources


Tirupati Graphite (TGR LN) 69p Mkt Cap £48.6m – Vatomina on-track to be commissioned by Q2 2021

  • Tirupati Graphite is on-track to have its Vatomina Project in Madagascar commissioned by Q2 2021, and build production to 6,000tpa – taking the capacity across both Vatomina and Sahamamy, Madagascar to 9,000tpa flake graphite output. 
  • Work already completed at Vatomina includes but is not limited to: construction activities for the processing plant, strengthening internal road infrastructure, acquiring surface land rights, procuring earthmoving equipment and additional hiring. 
  • The Company estimate that earth work conducted annually is expected to increase from its current c.200,000tpa to c.600,000tpa across its projects upon completion, while the output of by-product sand is expected to increase from 30,000tpa to 90,000tpa.
  • Shishir Poddar, CEO of Tirupati Graphite, said, "The expansion of primary graphite output from our Madagascan projects to reach 9,000 tpa capacity is another important milestone and constituent of our development plan. The demand within the flake graphite market is increasing, which is helpful in our endeavours to expedite the delivery of additional capacity. We are on track to commission the Vatomina project in Q2 2021, which will help us further develop the existing markets for our flake graphite and provide quality inputs for our downstream speciality graphite projects."



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

Joe Rowbottom – Joe.Rowbottom@spangel.co.uk - 0203 470 0486



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

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471



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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