SP Angel . Morning View . Thursday 23 07 20
SP Angel
SP Angel . Morning View
10:14, 23rd July 2020



MiFID II exempt information – see disclaimer below 


Greatland Gold (GGP LN) – New zone of mineralisation discovered at Havieron

IronRidge Resources (IRR LN) – Visble gold seen in Zaranou gold project in Ivory coast

Petra Diamonds (PDL LN) – FY 2020 confirms Covid19 disruption of the diamond pipeline 

Petropavlovsk (POG LN) – POX Hub drives 42% growth in production in H1

Rambler Metals* (RMM LN) CLICK FOR PDF – H1 operating results impacted by Covid19 containment measures

Serabi Gold* (SRB LN) –– Q2 production results

Syrah Resources (SYR AU) – Balama graphite mine in Mozambique remains closed through Q2 as work continues at Vidalia anode plant


Chinese fuel inventories build up as Yangtze flooding hits demand

  • Chinese domestic fuel stocks have been building up in recent weeks, as industrial activities along the Yangtze grind to a halt.
  • Chinese refineries appear blind to the economic disruption caused by the flooding and have maintained high production run rates. 
  • Sinopec, who manage almost all of the refineries along the Yangtze have announced that its oil storage tanks in Wuhan are full. 
  • Tankers with a combined total of 80mbbls are still waiting in Chinese waters for over 15 days because of port congestion (Kpler data intelligence) . 
  • China's fuel exports are set to increase, as the country aims to offload the excess supply. 
  • Exports of gasoline are expected to be between 1.3-1.5mt in August, compared to just 676,000t in May (Hellenic Shipping News). 


Gold continues to rise on weak dollar and Second wave fears

Copper pulls back despite Mersk pulling out of shipping copper scrap to China as Yangtze flooding slows China’s economic recovery

Iron ore prices hold up as steel producers continue to ramp up output 

  • Mersk is the major shipper of scrap into China and this move will disrupt supplies and copper production


US – potential for Lockdown 2 in the US on second wave as COVID-19 cases fill hospitals

  • The Open Table restaurant reservations index has stabilised but at >50% below normal levels (Bloomberg).
  • Dallas Federal Reserve Mobility and Engagement Index has risen to near 50% below normal levels but is turning south again.


Copper - Instillation of EV charging points in China and EV vehicle construction to drive new demand for copper

  • China has pledged to invest RMB 10bn (US$1.5bn) this year into improving the country's charging network with a some 600,000 charging points to be installed this year, with private charging points accounting for 2/3 of the total number (Xinhua). 
  • Last month, total charging volume of China's public charging infrastructure surpassed 600m kWh up 48.8% YoY (China Electric Vehicle Charging Infrastructure Promotion Alliance). 
  • China had installed 1.32m charging points for electric vehicles by the end of June 2020- including 558,000 public charging points (National Energy Administration). 
  • Sales of passenger EVs rose 25% month on month in China to 83,000 units in June according to the China Passenger Car Association. 
  • Accumulative sales in the first half of the year stood at 313,000 units- down 44% compared to last year but are recovering fast. 

Copper Supply: 

  • Global refined copper production saw a significant 86,000t deficit in April according to the ICSG vs 3,000t surplus in March giving a 59kt surplus to end-April vs a 181kt deficit this time last year.
  • This surplus is likely to easily shift back to a deficit again as further Coronavirus disruption combined with other production issues hits mine production through the second half.
  • BHP see copper production falling 14% in their next financial year to end June. Antofagasta copper production fell 8.4% in Q2 as lower grades and Coronavirus disruption hit output.
  • The big mines in Chile become ever deeper and more challenging to mine as each year passes with grades expected to fall and rising risk of in-pit problems. 
  • While some traders fear Chinese traders may be spoofing the market these traders may be looking ahead to feeding growing copper demand for the cabling of new charging points, EVs and other infrastructure.
  • We also see higher risk / incidence of disruptive events to global copper supply. Ongoing coronavirus issues may not help either 


MiFID II – EU looks to roll back MiFID II regulations on trading and investment research (Bloomberg)

  • The MiFID II rules have been seen as removing the incentive for analysts to write on smaller stocks.
  • Unfortunately much damage has been done to the industry by the MiFID II rules in our opinion.
  • Investors will need to find the funds to pay to incentivise banks and analysts to write the research they require.
  • With fund fees having fallen to new low levels rules on the use of investee funds may also need to change to allow payment of research.


Stimulus tally – Expect $1tn from US to drive total pledged stimulus to $18 trillion

  • $860bn – EU Stimulus package for EU economic recovery €390bill in grants + €360bill loans. The €390bn is less than the €500bn targeted
  • The EU package needs to be passed by European Parliament and ratified by all member states 
  • The summit also approved the 2021/27 EU budget of €1.1 trillion which we are not including as stimulus
    • + former $825bn (€750bn) EU - European Commission aid package yesterday aimed at supporting EU nations hit by the pandemic which was itself an expansion on the previous $543bn (€500bn ) EU Crisis Recovery fund backed France and Germany + $963bn (€750bn)
    • ECB scraped limits on sovereign bond purchases. ECB PEPP buying running at around €250bn
    • EU Finance Ministers have so far failed to agree on a strategy to mitigate the economic impact of the pandemic.
    • The pandemic emergency purchase programme (PEPP) and asset purchase programme (APP) have been reiterated with a cap of €750bn and €120bn, respectively.
    • The ECB bank was reported to have used €100bn of the PEPP so far.
  • $304bn - China Ministry of Finance Rmb550bn (US$77bn) of special purpose debt. 
  • + another Rmb1,600bn (US$226bn) is available for issue before the year end. Much of this will be for housing and connecting infrastructure
  • $140bn - China PBOC buying CNY1tn of bank loans issued by local lenders to small firms this week in an effort to ease the flow of credit.
  • $56bn - The PBOC also announced a Rmb400bn ($56bn) purchase loan program to boost available credit by supporting bank loans to SMEs
  • $1.55tn – China - Bloomberg estimates a ‘fiscal impulse of more than 11% of nominal GDP’ which was estimated at US$14.14tn
  • We previously assumed China at $909m comprised $344bn of China stimulus + $565bn in special bonds for infrastructure by local authorities
  • €105bn – Italy announced a further €25bn yesterday in a third package taking the total to €105bn.
  • $438m Zambia - Government approves $438m stimulus package 
  • $2tn - US fiscal package approved by Congress. US may add $0.6t state aid for mortgage markets and travel industries
    • The House passed a $484bn aid package to rescue small small businesses, hospitals ($75bn) and coronavirus testing ($25bn).
    • $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.
    • US Fed may soon start buying in up to $750 billion of corporate debt and ETFs
    • US Fed has flooded all markets with dollar liquidity through repo and swap lines.
  • US$1.02tn - Japan - BoJ injecting US$1.02tn into the economy through a variety of programmes. (will check if this is in addition to the Y117tn stimulus announced)
    • US$1.1tn - 117tn-yen stimulus, funded partly by a second extra budget, will be on top of another 117tn package already rolled out takes total spending in Japan at 234tn yen ($2.18tr) - 40% of Japans GDP.  Japan to issue Y31.9tn in government bonds. 
    • $298bn Japan parliament passed ¥31.9tn ($298bn) second extra budget today to help struggling economy.
    • ¥117tn stimulus programme + ¥10tn as a coronavirus reserve fund
  • $825bn (€756bn) Germany – Bundestag approved €156bn in extra borrowing and ~€600bn in emergency funds
  • $934bn (£745bn) – UK Bank of England injects another £100bn ($125bn)
  • $387bn (€304bn) France, $200bn (€200bn) Spain, $214bn (A$320bn) Australia - RBA ready to buy bonds again.
  • US$260bn - India representing 10% of GDP.
  • $62bn - South Korea – The government unveiled a 76tn won ($62bn) “New Deal” aimed at supporting the economy amid the pandemic focused on creating jobs and new industries through 2025. South Korea - New Deal will create jobs and foster new industries like 5G.
  • $13.3bn - Saudi Arabia central bank will inject 50bn riyals ($13.3bn) into the banking system on top of US$43.7bn already pledged
  • $78bn (C$107bn) Canada, $32bn, Singapore, $22.6bn India, $19.3bn HK, $13.7bn South Korea, $10bn Switzerland, $7bn NZ, $3.5bn Ireland, $2bn Taiwan, Philippines further $26bn proposed, Indonesia - adding $43bn,  Thailand creating a corporate bond fund.
  • South African buys ZAR10.2bn (US$119m) government bonds in May. Argentina to default on $10bn of dollar debt issued till the end of the year.
  • $1,000bn - IMF available + $12bn World Bank, 

>16.96tn from ($16.86tn) - Total stimulus reported. *Figures may include some political double counting and we suspect some funds may not be spent


IG TV interviews on copper and gold

VOX Markets podcast on mining


Dow Jones Industrials





Nikkei 225





HK Hang Seng





Shanghai Composite







US – Government officials and Republicans said they agreed in principle on portions of another round of stimulus that could be presented to Democrats as early as this week, Reuters reports.

  • US Treasury Mnuchin confirmed that there was an agreement on sending round of direct payment checks to Americans to help get through the crises.
  • Mnuchin did not specify on the amount of money individuals and families will receive.
  • The considered bill is for no more than $1tn, far below the $3tn envisaged by Democrats and approved by the House of Representatives in May.
  • In a sign of a deterioration in relations between the US and China, the US State Department gave China 72 hours to close its consulate in Houston amid accusations of spying.
  • Separately, California reported the largest one day increase in new coronavirus cases and surpassed New York as the state with the most number of confirmed cases.

US - Chicago Fed national activity index was 4.11 in June vs 3.50 in May

  • US house price index fell 0.3% in June vs 0.1% in May
  • Existing home sales rose 20.7% in June to 4.72m units vs a fall of -9.7% to 3.91m units in May 


Italy – Authorities approved a €25bn extra spending package to battle Covid-19 related economic challenges.

  • This comes on top of two previously released stimulus programmes taking the total to €105bn.
  • Italy benefits from the ECB bond buying programme helping to lower the nation’s borrowing costs.
  • The country is also set to receive the biggest share of a €750bn recovery fund approved by the EU this week with PM Conte suggesting that Italy may be in for €209bn provided under grants and loans, Bloomberg reports.


South Korea – The economy fell into a recession for the first time in almost two decades despite managing to avoid a nationwide lockdown and unprecedented government stimulus, FT reports.

  • GDP dropped 3.3%qoq (-2.9%yoy) during the second quarter following a 1.3%qoq (+1.4%yoy) decline in Q1/20.
  • Exports, that accounted for 40% of the nation’s GDP, dropped 16.6%qoq in Q2, the sharpest decline since early 1960s.
  • Private spending climbed 1.4%qoq helped by state aid.
  • Estimates were for a smaller -2.4%qoq drop.


Japan - Manufacturing PMI rose to 42.6 in July vs 40.1 in June

  • Services barely moved to 45.2 in July from 45.0 in June
  • Composite 43.9 in July vs 40.8 in June
  • CPI rose 0.1% in June vs 0% in May and remains stable at 0.1%.


Taiwan  - Unemployment fell to 3.97% in June vs 4.16% in May


Canada - Retail sales rose 18.7% in May vs a -26.4% in April during the lockdown.

  • Retail sales remain down 18.4% in May yoy but are better than April sales which were -32.5% lower yoy
  • CPI rose 0.8% in June vs 0.3% in May. CPI rose 0.7% yoy vs a yoy fall of -0.4% in May


Daimler Expects to Make Operating Profit This Year Despite Virus


Australia – In line with estimates, the government announced the largest budget deficit since WW2 (27% of GDP) due to stimulus measures and falling growth rates.

  • Budget deficit is set to come in at A$185m or 9.7% this financial year (Jun YE), up on 4.3% recorded the previous year.
  • Unemployment is forecast to peak at 9.25% in December, up from 7.4% in June.
  • “Australia is experiencing health and economic crisis like nothing we have seen in the last 100 years,” Australia’s treasurer said.


Saudi Arabia – The government is looking to privatise a number of assets in the education, healthcare and water sectors over the next four to five years.

  • Privatisation may raise more than 50bn riyals ($13.3bn) as the government is trying to avoid introducing income tax.


Thailand - Domestic car sales fall 32.6% YoY

  • Domestic car sales shrank for a thirteenth straight month in June to 58,013 vehicles, according to the Federation of Thai Industries. 


Ecuador unveils tighter rules for tailings dams

  • Ecuador has unveiled new legislation for the design and construction of mining waste dams, as it seeks to avoid disasters seen in Brazil as a result of collapses. 
  • The government is set to ban upstream tailings dams and has given companies 18 months to adjust infrastructure to comply with the new rules (Reuters). 


New York invests in charging infrastructure

  • New York Governor Andrew Cuomo has announced $750m (£596m) of investment into charging infrastructure. (Energy Live News)
  • 50,000 charging points will be deployed by as part of the initiative which will be funded by investor-owned utilities in New York.
  • $48.8m (£38.8m) will be made available from the diesel emissions settlement with Volkswagen and will be used to fund electric school and transit buses.



US$1.1579/eur vs 1.1539/eur yesterday.  Yen 107.12/$ vs 106.81/$.  SAr 16.472/$ vs 16.424/$.  $1.272/gbp vs $1.272/gbp.  0.715/aud vs 0.716/aud.  CNY 6.999/$ vs 6.975/$.


Commodity News

Precious metals:          

Gold US$1,874/oz vs US$1,860/oz yesterday

   Gold ETFs 106.2moz vs US$105.8moz yesterday

Platinum US$922/oz vs US$888/oz yesterday

Palladium US$2,165/oz vs US$2,175/oz yesterday

Silver US$22.78/oz vs US$22.32/oz yesterday


Base metals:   

Copper US$ 6,500/t vs US$6,571/t yesterday – 

Aluminium US$ 1,696/t vs US$1,700/t yesterday – China aluminium imports rise to 11-year high on low prices in the rest of the world

  • China doesn’t import much aluminium so imports of 354,038t in June stand out vs imports of 816,592 for the year to end June.
  • China exported 2.37mt of aluminium in the same period so is still a net exporter of 1.5mt of aluminium and aluminium products this year.
  • Alumina exports also surged 783.1% yoy in June (Refinitiv)

Nickel US$ 13,320/t vs US$13,425/t yesterday

Zinc US$ 2,225/t vs US$2,242/t yesterday - LME zinc inventories near two-year high 

  • Zinc inventories jumped 12% to 150,050 tonnes- the highest since October 2018. 

Lead US$ 1,813/t vs US$1,834/t yesterday

Tin US$ 17,540/t vs US$17,695/t yesterday



Oil US$44.5/bbl vs US$44.1/bbl yesterday

Natural Gas US$1.696/mmbtu vs US$1.668/mmbtu yesterday

Uranium US$32.85/lb vs US$32.75/lb yesterday



Iron ore 62% Fe spot (cfr Tianjin) US$107.4/t vs US$108.2/t - Iron ore futures rise as COVID-19 cases surge in Brazil

  • A surge in virus cases in Brazil has led to an increase in the price of iron ore on supply concerns from the major producer. 
  • New infections were more than 20% above the previous record, which came as a surprise to many as the WHO said the country had reached a plateau. 
  • Iron ore rose 0.5% to 845.5 yuan/t on the Dalian Commodity Exchange, while futures rose 0.6% to $107.96/t in Singapore (Bloomberg). 

Chinese steel rebar 25mm US$537.1/t vs US$538.6/t

Thermal coal (1st year forward cif ARA) US$60.8/t vs US$60.9/t

Coking coal swap Australia FOB US$112.0/t vs US$110.5/t



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

NdPr Rare Earth Oxide (China) US$42,007/t vs US$42,294/t

Lithium carbonate 99% (China) US$4,929/t vs US$4,946/t

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

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

Tungsten APT European US$205-210/mtu vs US$205-215/mtu 

Graphite flake 94% C, -100 mesh, fob China US$430/t vs US$430/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,275/t


Battery News

COVID pandemic accelerating Thailand’s shift to EV

  • Forced shutdowns have shifted the focus towards EVs in Thailand which could negatively affect auto parts makers. (Reuters)
  • Auto related businesses in Thailand have begun reopening after months of lockdown but many are looking to move into industrial, medical, packaging and aviation parts.
  • Car demand is expected to be down up to 50% this year around 1.14m vehicles according to forecasts. 
  • The shift towards EV will negatively affect parts makers as clean energy vehicles require only 20% of the parts of combustion engines.
  • The shift towards EV began before the pandemic, in March the government began targeting EV representing 30% of production by 2030.


Researchers propose alternative dual-ion battery

  • A team from the Shenzhen Institutes of Advanced Technology (SIAT) and the Chinese Academy of Sciences have developed an LTO/carbon composite with in-situ implanted carbon nanofilms and a 3D porous structure (LTO@3DC). (Phys.org)
  • The structure is created through organic molecule coupling, freeze drying and pyrolysis.
  • The carbon nanofilm and 3-D porous structure could elevate the electron conductivity and Li+ ion diffuses kinetics.
  • Battery chemistry could lead to improved cycling stability and high rate performance.
  • Researchers also constructed a DIB configuration combining an LTO@3DC anode and environmentally friendly expanded graphite.
  • The structure had a specific capacity of 110mAhg-1 at 2C, a good rate capability up to 10C long cycling stability and capacity retention of ~100% after 700 cycles at 5C.                                                                                                              
  • The study is published in the Chemical Engineering Journal.


Company News

Greatland Gold (GGP LN) 14.75p, Mkt Cap £562m – New zone of mineralisation discovered at Havieron

  • Greatland Gold draws attention to the discovery of a new zone of high-grade mineralisation in the north-west of its Havieron project in the Paterson region of Western Australia announced to the ASX today by Newcrest Mining which is earning a 70% interest by funding exploration and pre-feasibility work.
  • The new zone has been intersected in hole HAD046W1, which intersected 134.6m averaging 2.5g/t gold and 0.07% copper from a depth of 923m  and in HAD066 which intersected 82.1m averaging 2.4g/t gold and 0.08% copper from 557.6m depth.
  • Maps shown on the company’s website show the new zone approximately 400m NW of the crescent zone which has to date attracted the most exploration drilling. Mineralisation in both zones is relatively deep with some 400-500m of post-mineralisation cover and mineralised intersections for as deep as 1km down-hole.
  • In addition, infill drilling has shown continuity of mineralisation over 600m vertically within “the high-grade crescent zone and surrounding breccia”. The infill drilling is continuing with the objective of delivering an initial mineral resources estimate during H2 2020.
  • Among the new drilling results highlighted today are:
    • A 169m wide zone averaging 1.3g/t gold and 0.21% copper from a depth of 582m from a depth of 582m in hole HAD021W1, including a 40m wide intersection averaging 2.1g/t gold and 0.31% copper from 612m depth; and
    • A 134.6m wide zone averaging 2.5g/t gold and 0.07% copper from a depth of 923m including a 27.3m wide section averaging 10g/t gold and 0.13% copper from a depth of 944.7m in hole HAD046W1; and
    • A 45.7m wide zone averaging 6.5g/t gold and 0.70% copper from a depth of 934.8m within a broader 182.1m wide section averaging 2.1g/t gold and 0.40% copper from a depth of 871m in hole HAD054W4; and
    • An 10.1m wide zone averaging 20g/t gold and 0,79% copper from a depth of 631.9m within a broader 58m wide section averaging 6.2g/t gold and 0.49% copper from a depth of 588m in hole HAD057W2; and
    • A 118m wide zone averaging 1.5g/t gold and 0.08% copper from a depth of 944m in hole HAD057W3; and
    • A 128.7m wide zone averaging 1.0g/t gold and 0.13% copper from a depth of 734.1m from a depth of 734.1m in hole HAD066.
  • Environmental and associated studies are “progressing to support fast tracking of decline commencement at Havieron by end of calendar year 2020 or early 2021, subject to market and operating conditions and receipt of all necessary permits, consents and approvals”.
  • CEO, Gervaise Heddle, welcomed the new discovery saying that “The identification of a new zone of breccia mineralisation in the north west is an important and exciting development which further highlights the potential scale and significance of the Havieron gold-copper deposit. The early results from step out drilling indicate significant potential for additional breccia and high-grade, crescent-style mineralisation in the north west of the system, similar to that observed in the south east where the bulk of drilling has occurred to date”.

Conclusion: The discovery of an additional mineralised zone at Havieron hints at the potential scale of the wider licence area. We look forward to the forthcoming initial mineral resources estimate expected in H2 2020.


IronRidge Resources (IRR LN) – 15.10, Mkt cap £61m – Visble gold seen in Zaranou gold project in Ivory coast

  • IronRidge Resources report the identification of visible gold in chippings from reverse circulation drilling at their Ehuasso target.
  • The Ehuasso target lies within their Zaranou gold project area in the Ivory Coast and is along strike from a number of large gold mines in Ghana.
  • The visible gold in seen in cuttings from 139-141m down hole and a further 60m below previously reported high-grade gold intersections.
  • Previous results include:
    • 5m at 11.4g/t from 38m inc. 1m at 20.8g/t & 1m at 20.4g/t
    • 11m at 3.45g/t from 50m inc. 1m at 22.9g/t & 1m at 10.5g/t
    • 2m at 18.28g/t from 46m inc. 1m at 35.1g/t
    • 4m at 6.75g/t from 52m inc. 1m at 23.4g/t
    • 3m at 8.58g/t from 44m inc. 1m at 20.7g/t
    • 8m at 2.25g/t from 28m inc. 1m at 12.1g/t
    • 3m at 4.72g/t from 16m inc. 1m at 13.1g/t
    • 3m at 4.63g/t from 24m inc. 1m at 9.64g/t

Conclusion: Visible gold is good news as it indicates a proportion of the gold may be recovered through simple gravity separation. This generally lowers recovery costs and speeds up recovery times. However many gold mines with visible gold also use other processing methods to recovery the non-gravity separated part of the gold resource. The news reminds us that the mineralogy of the gold in any resource is a critical first step for economic evaluation alongside the calculation of the resource.


Petra Diamonds (PDL LN) 1.6p, Mkt Cap £14.3m – FY 2020 confirms Covid19 disruption of the diamond pipeline 

  • Petra Diamonds reports a 7% decline in diamond production for the year to 30th June 2020 to 3.59m carats reflecting the impact of the measures it is taking to assist in the control of the Covid19 virus which infected 39 employees and claimed one life at the Cullinan mine.
  • The company’s debottle-necking programme, Project 2022, achieved “the highest ROM production recorded in the Company’s history for the nine months up to 31 March 2020, but overall performance for the full Year was negatively impacted by the COVID-19 measures affecting Q3 and Q4 production”.
  • As a result, “Revenue decreased 36% to US$295.8 million (FY 2019: US$463.6 million), reflecting weaker prices during the period to February 2020, exacerbated by significant price reductions and major disruptions to the planned sales cycles following the outbreak of the COVID-19 pandemic”.
  • Commenting on the wider diamond market, which prompted it to cancel its diamond tenders in May and June, Petra Diamonds reports that “COVID-19 has significantly reduced activity throughout the diamond market pipeline from production, rough sales, trading, cutting and polishing, right through to consumer sales”.
  • Operational restrictions have led to a 58% reduction in capital expenditure to US$34.2m (FY 2019 –US$81.4m) and below the company’s expected US$43m. As previously announced, FY 2021capital expenditure is expected to be US$28m.
  • Petra Diamonds confirms that it “is continuing to explore strategic options to evaluate the optimal capital structure for the long-term success of the business, which includes running a Formal Sale Process to invite suitable and deliverable offers for either the Group or one or more of its assets”.

Conclusion: Petra Diamonds confirms the widespread disruption to the diamond indusrtry of the Covid19 pandemic  with “significantly reduced activity throughout the diamond market Pipeline”


Petropavlovsk (POG LN) 35p, Mkt Cap £1,156m – POX Hub drives 42% growth in production in H1

  • Production climbed 42%yoy to 320.6koz (H1/19: 225.0koz) driven by processing of the 3rd party concentrate at the POX Hub.
  • Refractory gold production from the processing of own and 3rd party concentrates accounted for 178.0koz or more than half of total output.
  • All four autoclaves are now in operation at their design parameters highlighting flexible setup of POX operations enabling the Company to treat multiple concentrates of different quality and composition.
  • At Malomir, production totalled 81.6koz (H1/19: 93.1koz) with refractory production climbing to 67.3koz (H1/19: 62.0koz) and RIP plant non-refractory gold output dropping to 10.5koz (H1/19: 31.9koz) reflecting lower processed grades and a drop in recoveries.
  • At Pioneer, production came in at 60.3koz (H1/19: 52.7koz) as higher processed grades and better gold recoveries compensated for lower throughput rates.
  • Pioneer flotation facility that would double the Company’s refractory ore processing capacity from 3.6mtpa to 7.2mtpa remains on schedule for commissioning in Q4/20.
  • Malomir and Pioneer flotation lines are expected to supply ~240kt of concentrate from own mines in 2021.
  • At Pokrovskiy POX Hub, 3rd party concentrate contributed 106.9koz to total production (H1/19: - ) with the plant demonstrating good recoveries (~94%) and higher grades of processed concentrates.
  • Some delays were experienced in the delivery of concentrates in Q2/20 which was compensated by higher than expected grades of the third-party concentrate.
  • At Albyn, production came in at 71.8koz (H1/19: 79.2koz) reflecting a drop in mined and processed grades as mining operation ready to move to the Elginskoye deposit.
  • Elginskoye open pit development continued as planned with first ore production targeted for Q4/20 replacing Albyn ore and ensuring the processing plant continues to operate at full capacity.
  • Gold sales totalled 312.4koz (H1/19: 225.0koz) at an average realised gold price of $1,640/oz (H1/19: $1,286/oz).
  • The Company’s operations and logistics continued uninterrupted by the pandemic.
  • Net debt fell to $538.0m (Dec/19: $561.3m) with gold prepayment balance (on top of Net Debt) reduced to $121.0m (Dec/19: $187.4m).
  • On 30 June 2020, during a debate at its Annual General Meeting, the Company announced its intention to put in place a dividend policy in H2 2020, with further updates to follow.
  • 2020 production guidance reiterated at 620-720koz (430-460koz excluding gold from 3rd party concentrate).


Rambler Metals* (RMM LN) 1.3p, Mkt Cap £17.5m – H1 operating results impacted by Covid19 containment measures


  • Rambler Metals and Mining, the copper/gold miner operating in Newfoundland has released Q2 and H1 2002 operating results for its underground Ming Mine and Nugget Pond treatment plant.
  • Production of 3,499t of concentrate containing 898 tonnes of copper brings concentrate production for the first six months of 2020 to 8,149 tonnes (H1 2019 – 10,222t) with a contained copper content of 2,108t (H1 2019 – 2,624t).
  • We note that copper head grades of 1.53% during H1 are higher than the 1.36% achieved in H1 2019 and with recovery rates slightly improved at 96.0% (H1 -2019 94.9%) the reduced concentrate and copper output is a function of reduced plant throughput rates  attributable to the impact that the Covid-19 pandemic has had on the operations. 
  • The company says that “While we are pleased that we have been and remain free of infection within our group of employees and contractors, we are determined to begin ramping up development and production during H2 2020 as operating limitations are relaxed.”
  • The company explains that daily production during Q2 averaged 1,244 dry tonnes and confirms that its focus is “to regain its production profile at 1350 metric tonnes per day at 2% copper by the end of 2020 and evaluate expansion opportunities from that base”.
  • CEO and President, Toby Bradbury, Mr. Bradbury also confirmed that “Our staff and contractors are focussed on producing safely and improving operational efficiencies with evidence of positive signs achieved in the last quarter, despite the loss of economies of scale as a result of Coronavirus.  These improvements will be further enhanced and capitalised upon as we open up the operations to make full use of existing capacities and expansion opportunities.”
  • In our March 2020 report on the company, we estimated that, based on our prevailing metal price forecasts Rambler Mines’ operations generated an NPV7.5% of US$178.7m or £138.5m equivalent to 10.7p/share.
  • The recent rise in copper prices has led us to increase our forecast long-term copper price to US$7,500/t and in our view the improved commodity pricing combined with the  relative weakening of sterling from US$1.30/£ in March to current levels of US$1.26/£ more than outweighs the negative impact of a short-term reduction in throughput rates imposed as a Covid19 containment measure.
  • Reviewing our previous analysis indicates that, provided throughput rates recover next year as expected, our new forecast copper price and at current exchange rates at  Rambler Metals operations generate an NPV7.5% of US$211m or £168m.

Conclusion: A short-term reduction in throughput arising from mitigation measures to contain Covid19 during Q2 has reduced copper and concentrate output, however, in our opinion, these short-term negatives are outweighed by the positive impact of improved copper pricing and exchange rates leading us to increase our estimated NPV7.5% to US$211m. We look forward to improving throughput during H2 and into 2021 as virus mitigation measures ease.

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


Serabi Gold* (SRB LN) – 84.5p, Mkt Cap £45.1m – Q2 production results

  • Serabi Gold reports Q2 gold production of 8,504 oz bring the H1 output to 17,525oz and the company comments that, subject to caveats relating to the Covid19 pandemic, “we anticipate, third quarter performance being similar to that of the second quarter, and a return to full levels of production in the early part of the fourth quarter.  Should this be achieved full year production would be expected to be between 34,000 and 37,000 ounces.”
  • Covid19 containment measures have resulted in on-site operations continuing with only around 65% of the normal complement with “a reduction in the workforce at site to 240 people, liberating space and allowing accommodation of these remaining employees under improved social distancing conditions”.
  • The company explains that “Whilst we have not reached been able to achieve our initial production forecasts for the first six months of a little in excess of 20,000 ounces, we have benefitted from improved gold prices and a favourable exchange rate.”
  • Adding background context to the production results, CEO, Mike Hodgson said that “In light of the unique challenges with the pandemic that we have faced over the past months, I am delighted with the gold production level for the second quarter of 8,504 ounces, which is beyond my expectation at the start of the quarter”.
  • The company also describes the progress of its exploration efforts where surface and underground drilling at Sao Chico has established that “the Main Vein structure now continues to host gold bearing mineralisation for approximately 375 metres to the west of the current mine limits, an extension of a further 75 metres”.
  • At Coringa, “there has been modest progress with the permitting”.

Conclusion: Serabi Gold has reduced its on-site workforce in response to Covid19 mitigation measures and, with 17,525oz of H1 production, is now targeting full year gold production in the range 34-37,000oz.

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


Syrah Resources (SYR AU) A$0.35, Mkt cap A$145m – Balama graphite mine in Mozambique remains closed through Q2 as work continues at Vidalia anode plant

  • Syrah Resources reports no production at the Balama graphite mine in Mozambique due to the ongoing impact of COVID-19..
  • The company produced no natural graphite in Q2 vs just 12,000t of graphite in Q1
  • The company sold 9,000t of graphite in Q2 vs 7,000kt in Q1 from stockpiles with inventory at Balama and the port of Nacala at just 8,000t
  • The ongoing closure of the mine should serve to starve the battery industry of surplus graphite feedstock.
  • Syrah claims to have demonstrated production of anode precursor material to battery specifications at commercial scale at its Vidalia plant in the US.
  • Vidalia has 200tpa anode capacity with management working on a study to further expand Vidalia to 10,000tpa and then 40,000tap in time.
  • The “Anode precursor material from Vidalia will be further processed to Active Anode Material via toll treatment and from a furnace to be installed at Vidalia over the coming quarters, which will further facilitate ongoing strategic, financial partnership, and end-customer interactions.”
  • Cost reduction measures at Balama expected to cut costs to US$7m a quarter once implemented.
  • Syrah are cutting 65% of all staff but retain a core team to maintain operational expertise including 220 roles of which 93% are national and local personnel.
  • Cash balance US$53m.

Conclusion: Accreditation for battery anodes can take a long time on top of the time taken to produce consistent battery anode spherical graphite and we suspect it will take some time before Syrah is able to ramp up production from this plant.

The COVID-19 shutdown give the company time to work on improving the quality and specification of its output without the distraction of having to operate a mine in Mozambique.



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.


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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.

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