SP Angel . Morning View . Volatile markets question the shape of potential recovery 

SP Angel . Morning View . Friday 24 04 20

Volatile markets question the shape of potential recovery 

 

MiFID II exempt information – see disclaimer below

       

Bluejay Mining* (JAY LN) – US aid and consulate to help Greenland develop mineral resources

Gem Diamonds (GEMD LN) – Resumption of operations at Letseng

KEFI Minerals (KEFI LN) – Tulu Kapi project update

Serabi Gold* (SRB LN) – Amended terms for Coringa acquisition confirmed

 

Markets fall as Chinese trial is unable to show if Gilead Science’s remdesivir improves patient’s condition

• The trial in China did not have enough participants and was therefore was considered inconclusive.
• Gilead Science may wish to run further trials outside China in order to replicate the benefits reported at the Chicago School of Medicine.

 

South Africa – Mine to reopen on partial lift of lockdown with some businesses to return to work with 1/3^rd of employees

• The South African government is looking to selectively lift the near-total lockdown on a sector by sector basis (FT).
• Open cast mines, process plants and related transport are likely to reopen relatively quickly.
• South Africa has recorded 75 fatalities and 3,953 cases of Coronavirus having slowed the infection through the lockdown
• The nation which has been in Lockdown since 27 March is faced with destitution of informal workers or reopening parts of the economy
• The government has put 70,000 troops on the streets to enforce the lockdown but tensions are building the longer the situation persists
• Alcohol sales remain prohibited – alcohol is an immune suppressant and restricting sales should help in the fight against the virus.
• Banning the sale of alcohol will also help in other ways. Some schools will also reopen.

 

Miners ensuring good health and safety for mining communities to limit the impact of COVID-19

• Health and safety is second nature to most miners these days with a great deal of pride set in store by miners in relation to safe working practices.
• The wearing of gloves and masks is relatively normal in the workplace and the extension of this into the general environment is simple.
• Social distancing is also relatively easy to achieve in open cast mines and process plants and is also possible underground with limited labour.
• Mines are often the only significant employer in many remote communities and provide the only real access to practical PPE kit and education.
• We are pleased to continue to report on the activities of miners in this respect:
• Savannah Resources*: moved early and offering PPE to the local community in Portugal and have offered funding to the local council to support their COVID-19 programs. In Mozambique Savannah have issued masks to staff from its stores from the exploration camp clinic.
• Bushveld Minerals* has established a Covid-19 Task Team. Workers are being protected through a programme of awareness, infection prevention and intervention protocols including social distancing, hygiene, sanitisers and more frequent deep cleaning, temperature testing and the establishment of isolation facilities for dealing with any suspected cases of infection along with detailed protocols for testing and follow up.
• Bushveld is supplying its local communities with free hand sanitisers produced at its operations and continued water supply.
• Anglo Asian Mining* are busy at the Gedabey mine in Azerbaijan including help for local Government with masks, PPE, etc.
• Management ensure that there is no contact on the shift change and new arrivals to the camp are quarantined for a week. Social distancing is being observed in all working places with full masks, gloves etc.
• Impala Platinum: is working at reduced capacity of not more than 50% in South Africa with precautionary measures aimed at protecting employees and limiting the spread of the virus. Implats reckon operating in a ‘business as usual’ environment will not be possible in the near term.
• The group is establishing a mechanism so that members of its Board, the Group Executive Committee and all Implats employees can donate up to one third of their salaries over the next three months to the Solidarity find or used to provide care and support to our mine host communities.
• Care and maintenance was done through the lockdwn on the underground operations while the furnaces were kept hot through the treatment of  some process inventory.
• Implats are providing PPE kit to employees at work and have raised stocks of medical protective equipment and PPE along with regular large-scale disinfection of workplaces. Implats is also screening and testing all employees reporting to work though no COVID-19 cases have been diagnosed at the Group’s South African and Zimbabwean operations.

 

Teleremote remote drilling – implemented by Byrnecut and OZ Minerals 

• Byrnecut Australia and OZ Minerals have successfully implemented a teleremote drilling first using a Sandvik development drill (im-mining.com)
• The team are teleromotely controlling a two boom drill rig which is monitored and controlled from surface.
• The rig has sophisticated boom-collision-avoidance systems and has been working for three weeks.
• The machine should increase in productivity by >10% through more consistent working with operators at surface and no interruption during shift changes. The rig has drilled 60-70 holes in autonomous working at Prominent Hill

 

Dow Jones Industrials		+0.17%	at	23,515
Nikkei 225		-0.86%	at	19,262
HK Hang Seng		-0.38%	at	23,887
Shanghai Composite		-1.04%	at	2,809

 

Economics

 US – The House passed $484bn aid package addressed for small businesses, hospitals ($75bn) and coronavirus testing ($25bn).

• The latest initiative brings the total fiscal response to more than $2.5tn across four bills.
• The administration is considering a lending facility for struggling oil companies.
• Meanwhile, the economy continues to struggle amid self-isolation containment measures that saw business activity slumping to record lows.
• Composite PMI fell to 27.4 this month marking new series low.
• “The large swathe of non-essential business that has been shut down temporarily amid efforts to contain the virus means the blow has been most heavily felt in the service sector, and especially for consumerfacing companies in the recreation and travel industries,” Markit wrote.
• Weekly jobless claims amounted to 4.43m following 5.24m recorded the previous week.
• Markit Manufacturing PMI: 36.9 v 48.5 in March and 35.0 est.
• Markit Services PMI: 27.0 v 39.8 in March and 30.0 est.
• Markit Composite PMI: 27.4 v 40.9 in March.

United Automobile Workers ‘UAW’ union representing >400,000 auto workers reckons it is not yet safe for its members to return to work.

• The US union does not view scientific data as sufficiently conclusive with insufficient testing to reopen assembly lines.
• The union represents more than 400,000 workers and is an influential voice in the labor movement and manufacturing industry.
• The union reckons is asking for an extension of the stay-at-home order in Michigan which is due to expire on April 30 and reckons an early May return is too soon for the safety of union members and their families.

 

China – As expected, the PBoC cut the rate charged on its targeted medium-term facility by 20bp to 2.95%.

• Markets forecast a drop after the central bank lowered rates on some of its other policy tools to all-time lows, Bloomberg reports.

 

Japan – The central bank will discuss unlimited bond purchases compared to the current target of JPY 80tn, according to Nikkei.

• Governor Kuroda and other members of the policy committee are also expected to double purchase targets for their purchases of commercial paper and corporate bonds, according to the news agency.

 

Eurozone reported to be close to economic collapse as output falls

• Germany prepared to join other EU countries in contributing towards the €1tn recovery fund to support ailing economies and prevent an asymmetric recovery once lockdown is lifted, Angela Merkel said.
• The European Commission will be accelerating its work on rewriting the multiannual financial framework (MFF) that includes the recovery fund.
• The debate is also cantered around the form of the financial aid with Franc, Italy and Spain arguing for grants while Germany favoured loans.
• Ms Von der Leyen, the president of the EC, said the EU would find a “sound balance” between the two.

 

UK – Retail sales dropped the most since the start of the series in March posting a 5.1%mom drop.

• The survey covered the period from March 1 to April 4 reflecting the effect of the lockdown announced by the government in late March.
• Further declines are likely to follow in April amid a full month of self-isolation measures with only supermarkets, pharmacies and other essential stores remaining open.
• Retail Sales (%mom): -5.1 v -0.3 in February and -5.0 est.
• Retail Sales Ex Auto Fuel (%mom): -3.7 v -0.5 in February and -4.0 est.
• UK - Health Minister says he understand economic pressures but will not allow changes to be made to lockdown which are unsafe

More than 1 in 4 staff laid off in UK

UK chancellor offers 100% guarantees on loans to UK small businesses

UK construction, auto manufacturing and retail announce plans to return to work

CBI calls for 3-month holiday from Business Rates to alleviate financial stress

Unemployment at least double official figures according to Capital Economics

Wealth tax could raise £174bn a year according to City University professor

• Taxing UK’s 10% wealthiest nationals could bring in £174bn a year in theory.
• The effective tax rate for the wealthiest 10% in the UK on income and wealth combined is calculated to be just 18%.
• This is less than half the 42% effective tax rate paid by bottom 10% of the UK population.

 

Philippines – The nation extended the lockdown to May 15.

 

South Africa - Oppenheimer family lent over half billion rand fund to small businesses in just 11 days

• The Oppenheimer family have put up a billion rand fund to support struggling small businesses in South Africa.
• The South African state is not likely to provide much support if any for struggling businesses leaving companies and families to step in to support struggling businesses.
• The fund is said to have loaned funds to thousands of small businesses in interest free loans through local banks..
• The Oppenheimer family are looking for further support to boost the new South African Future Trust ‘SAFT’ and have already raised another R40m.

 

Preliminary April PMI estimates: 

Australia 

• manufacturing 45.6 was 49.7

• services/nonmanufacturing 19.6 was 38.5
• composite 22.4 was 39.4

Japan 

• manufacturing 43.7 was 44.8, 
• services/nonmanufacturing 22.8 vs 33.8 
• composite 27.8 (36.2) respectively, 

France 

• manufacturing 31.5 (43.2),
• services/nonmanufacturing 10.4 (27.4),
• composite 11.2 (28.9),

Germany 

• manufacturing 34.4 (45.4),
• services/nonmanufacturing 15.9 (31.7)
• composite 17.1 (35.0),
• GfK consumer confidence index for May -23.4 (Apr +2.3),

EU 

• manufacturing 33.6 (44.5),
• services/nonmanufacturing 11.7 (26.4)
• composite 13.5 (29.7),

UK 

• manufacturing 32.9 (47.8),
• services/nonmanufacturing 12.3 (34.5)
• composite 12.9 (36.0),
• US Markit data 36.9 (48.5), 27.0 (39.8), 27.4 (40.9).

 

Currencies

US$1.0729/eur vs 1.0806/eur yesterday.  Yen 107.70/$ vs 107.81/$.  SAr 19.160/$ vs 18.950/$.  $1.231/gbp vs $1.233/gbp.  0.635/aud vs 0.634/aud.  CNY 7.082/$ vs 7.075/$. 

 

Commodity News

Czech state agency for emergency reserves is preparing to sell off just under 12mt of excess non-ferrous metals from its stocks this year.

• The Administration of State Material Reserves ‘SSHR’ plans to sell 8.89mt of aluminium, 1.36mt of copper and 1.43mt of zinc.

Precious metals:          

Gold US$1,729/oz vs US$1,712/oz yesterday - Australian gold refinery to produce kilo bars for New York market to help settle ETFs

• The country's largest gold refinery has ramped up production of kilo bars to ease the supply squeeze in the US.
• The Perth Mint have reopened a kilo-bar production line in response to the elevated demand.
• The collapse in air travel has vastly disrupted the market for kilo bars which are used to settle Comex futures contracts in New York City.
• Last month, the premium for New York futures over the London stop price rose above $70 - the highest in 40 years due to a lack of kilo gold bars for settlement. The premium and is usually just a few dollars in normal times.
• Spot gold has continued to rise this week, as was up over 2.3% this week so far at $1,724/oz (Reuters).

   Gold ETFs 95.2moz vs US$95.1moz yesterday

Platinum US$772/oz vs US$763/oz yesterday

Palladium US$2,022/oz vs US$1,979/oz yesterday

Silver US$15.29/oz vs US$15.24/oz yesterday

            

Base metals:    

Copper US$ 5,137/t vs US$5,162/t yesterday – Shanghai copper stocks fall 15% this week

• Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell nearly 15% to 259,037t this week (Refinitiv).

MMG Q1 copper production fell 20% to 92kt, mainly from Las Bambas in Peru due to lockdown.

• Ongoing community issues are also disrupting the movement of Las Bambas concentrates.

Aluminium US$ 1,508/t vs US$1,518/t yesterday - Chinese aluminium imports hit 6-year high

• Aluminium imports more than tripled in March compared to a year earlier, coming in at 121,025t compared to 35,420t in March 2019 according to customs data.
• China exported almost 520,000t of aluminium last month, down 5% compared to March 2019 (Reuters).
• It is thought that the sharp increase in imports is due to overseas demand being especially weak as Covid-19 peaks in other countries, so more metal flowed to China where demand is starting to recover.

Nickel US$ 12,175/t vs US$12,215/t yesterday

Zinc US$ 1,883/t vs US$1,904/t yesterday - ILZSG Feb zinc in surplus at 130,000t for a 188,000t surplus this year.

Lead US$ 1,650/t vs US$1,667/t yesterday

Tin US$ 15,095/t vs US$15,235/t yesterday

            

Energy:            

Oil US$21.8/bbl vs US$21.4/bbl yesterday – 

• Oil prices have somewhat stabilised following an unprecedented week for two major benchmarks on further news of a cut in supply • US oil rigs have fallen to their lowest since 2016 and US crude output dropped 100,000bopd last week to 12.2MMbopd
• In addition, yesterday news from Kuwait confirmed that the country has begun cutting oil supply to the international market, ahead of the May 1 date when the deal was supposed to take effect
• Whether that will be sufficient to offset weak demand is unclear. Rystad Energy cut its forecast for oil demand in 2020 to 89.2MMbopd, a 10% decline from 2019
• Last week, the energy consultant projected demand would fall to 90.3MMbopd in 2020
• Russia is looking for options to cut its production and may go as far as burning its own oil, whilst its production has not changed materially from March until now
• The market was also higher after Donald Trump said he had instructed the US Navy to fire on any Iranian ships that harass it in the Gulf, although he added later he was not changing the military's rules of engagement
• The head of Iran's Revolutionary Guards said Tehran will destroy US warships if its security is threatened in the Gulf

WTI price fall raised a glitch in option pricing models leading to several unforeseen events (Bloomberg).

• Black-Scholes assumes a price cannot go below zero.  
• If you sell a put based on WTI, and hedge the exposure, the model assumes pricing cannot go below zero therefore mispricing the hedge.
• The entire oil and financial industry use the Black-Scholes standard.
• So the CME have switched options pricing and valuation modelling to Bachelier to accommodate negative prices in the underlying futures and allow for listing of options contracts with negative strikes. 
• The change was effective yesterday and will remain in place until further notice.
• Bachelier (1870 –1946) a French mathematician who lived and died in relative obscurity, never knew of the theories of modern option pricing.

Asian tanker freight rates at record high amid supply squeeze 

• Tanker freight rates were at record highs across vessel sizes on Thursday as trading companies loaded low-price refined products, but were unable to unload it at destination ports due to a sharp fall in consumption.
• Tankers are being used for floating storage or stranded in long queues which has resulted in rates skyrocketing as ships are unable to pick up their next cargoes.
• The spike in rates means that an owner can now earn around $180,000/day for a Long Range 2 (LR2) tanker (Hellenic Shipping News).

Natural Gas US$1.816/mmbtu vs US$1.938/mmbtu yesterday - Natural gas futures edged lower yesterday as the recovery in oil prices dampened expectations of lower production

• Additionally, investors were shying away from the long side ahead of the latest government storage report
• The EIA reported that domestic supplies of natural gas rose by 43Bcf for the week-ended 17 April That would compare with last year’s 92Bcf injection and the five-year 49Bcf build, according to the EIA
• A Bloomberg survey showed estimates ranging from 32Bcf to 51Bcf, with a median build of 44Bcf

Uranium US$33.20/lb vs US$32.85/lb yesterday

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$81.5/t vs US$82.4/t

Chinese steel rebar 25mm US$527.4/t vs US$528.6/t

Thermal coal (1st year forward cif ARA) US$54.0/t vs US$53.8/t

Coking coal swap Australia FOB US$126.0/t vs US$127.0/t

            

Other:   

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

NdPr Rare Earth Oxide (China) US$36,928/t vs US$36,886/t - NdPr Rare Earth Oxide (China) US$36,886/t vs US$36,769/t - MP Materials awarded US funding for rare earth facility

• The company announced yesterday it has been awarded funding by the US Department of Defence for its rare earth processing facility in California.
• The amount of funding was not disclosed, however the company said it will used the funds for planning and design work.
• Yesterday, we reported that rare earth producer Lynas has been awarded a Phase-1 contract by the US DoD to build a US-based heavy rare earths separation facility.

Lithium carbonate 99% (China) US$5,366/t vs US$5,441/t

Ferro Vanadium 80% FOB (China) US$27.0/kg vs US$27.0/kg

Antimony Trioxide 99.5% EU (China) US$4.9/kg vs US$4.9/kg

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

Graphite flake 94% C, -100 mesh, fob China US$530/t vs US$540/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,450/t vs US$2,550/t

De Beers to cut diamond production by 20% in 2020

• The world's second largest diamond miner cited disruption along the supply chain as a result of Covid-19 as the reason for its supply cut.
• The diamond industry is particularly struggling due to the lockdown in India, as the country cuts and polishes 90% of the world's diamonds (FT).
• The miner expects to produce between 25m and 27m carats in 2020, compared to the 32m and 34m in its original projection it announced yesterday.
• Lockdown measures in top retail nations such as the US have further dented the outlook for the diamond market, whilst a diamond analyst told mining.com -  "the relative volume of transactions has been minimal due to travel restrictions, and ultimately a lack of downstream demand".

 

Battery News

Hydro-Quebec working on multiple next generation technologies

• Public Utility Hydro-Quebec is working with Mercedes-Benz on a solid-state lithium metal polymer battery. (Electrek)
• The polymer materials have been found to reduce the operating temperature of the electrolyte to 50 degrees enabling a significant increase in energy density whilst reducing costs.
• The team suggests energy density of 500 Wh/kg and costs of $100KWh per pack are possible.
• Mercedes is designing the cells and modules the technology will be used in.
• The work is referred to as Gen 2 and the technology could be used in battery production in 2026.
• Hydro-Quebec is also working on what they refer to as Gen 3, a ceramic oxide electrolyte which reduces operating temperatures to 25 degrees.
• The Company has admitted the material has potential but manufacturing a thin film ceramic material that can withstand 1000 full charging cycles is difficult.
• No date was provided for how long it will take until commercialisation.

 

EV metal index comes off as China becomes concerned about supply

• Mining.com’s EV metals index has fallen 19.1% compared to the same time last year. (Mining.com)
• Reduced demand and curtailed production of EVs as a result of the COVID-19 pandemic resulting is weak prices.
• Cobalt and nickel have provided some support to the index as demand was robust in the early weeks of 2020 in Europe which favours higher density, longer range nickel-cobalt-manganese cathodes.
• Adoption of nickel-rich cathode chemistries like NCM811 provided a boost to raw material values per vehicle in Jan/Feb.
• As China’s begins to re-emerge from lockdown there are concerns about metals supply to the country as regions across the globe remain shut down.
• China imports the majority of its manganese and chromium from South Africa which has extended lockdown to the end of April but is enabling mines to produce at 50% capacity.
• Cobalt exports from the DRC have fallen 15% in Q1.
• Tianqi and Ganfeng Lithium, China’s two largest lithium producers have both issued profit warnings.

 

Nano One patented cathode material tests positively in solid state batteries

• Nano One Materials Corp has reported its patented cathode material tested positively in solid state batteries. (Pro Active Investors)
• The Company has been working with auto manufacturers to test its ‘One Pot’ process and coated lithium nickel manganese oxide (LMNO) cathode materials also called ‘high voltage spinel’ (HVS).
• The LMNO stabilizes the interface between cathode and electrolyte reducing supply chain risk, increasing power and energy density, and enabling faster charging. (Markets Insider)
• The LMNO does not expand creating stress on the interface and the coating protects the cathode from side reactions with the electrolyte. (Stockhouse)

 

Company News

Bluejay Mining* (JAY LN) 3.32p. Mkt Cap £34m – US aid and consulate to help Greenland develop mineral resources

• The US is donating $12.1m in aid to Greenland upsetting the Danes in the process.
• The $12.1m will go towards priorities including assisting in the development of mineral resources, tourism and links with the US.
• The US is also planning to open a consulate in the capital in the next few months.
• Bluejay Mining is actively developing and exploring for mineral resources in Greenland with two new major mineral prospecting licenses recently awarded to Bluejay.
• Bluejay is also developing the Dundas ilmenite project with Rio Tinto’s RTIT division in Canada scheduling a smelter test for Bluejay’s ilmenite concentrate next year.

*SP Angel act as Nomad to Bluejay Mining

 

Gem Diamonds (GEMD LN) 39.9p, Mkt Cap £49.8 – Resumption of operations at Letseng

• Gem Diamonds reports plans, approved by the Government Lesotho, to restart operations at the Letseng diamond mine on Monday.
• Although the Government has extended the country-wide Covid19 lock-down until 5^th May, it has approved the plan to reopen the mine ʺin accordance with a phased ramp-up plan which is compliant with health and safety protocols formulated by health experts for the prevention of Covid-19 disease. This plan also reflects the practical supply chain and market considerations arising from the continued lockdown in Lesotho, South Africa, Belgium and other relevant jurisdictionsʺ.
• The company also reports the encouraging news that ʺTo date, there have been no reported instances of any Covid-19 positive test cases in Lesotho, at the Letšeng mine or any of the Company's international operationsʺ.
• Travel and other restrictions remain in force for the company’s personnel and the flexible tender sales process for Letseng’s diamond output is to remain in place.
• Gem Diamonds ʺcontinues to assess the full extent of the operational and financial impacts of the Covid-19 disease and updated 2020 guidance will be provided once this process is completedʺ. Last year, the mine produced 113,974 carats of diamonds selling for an average price of $1,673/carat including 11 individual stones larger than 100 carats in size and 27 worth in excess of $1m each.

Conclusion: News that Lesotho remains free of Covid19 is welcome and restarting production at Letseng next week will need to conform to the strictest practices to maintain the virus-free status. Sales of diamonds internationally will be using the company’s flexible tendering process in order to preserve the integrity of disease containment measures.

 

KEFI Minerals (KEFI LN) 0.74p, Mkt Cap £9.6m – Tulu Kapi project update

• The team provided a status update of the Tulu Kapi gold project in Ethiopia.
• The Company is working closely with its personnel, contractors and all stakeholders to implement and follow pandemic related safeguards.
• There was no cases of COVID-19 reported at the Tulu Kapi project.
• On Tulu Kapi funding, ANS Mining, the investment vehicle of leading Ethiopian financial institutions and the party to the equity funding to the project, confirmed its commitment to participate in the project despite the local liquidity pressures amid the coronavirus pandemic.
• The government has also offered its support and advised the Company and ANS that it will “look to arrange either direct or indirect funding into TKGM from its investment institutions for the required amounts if there is any further delay in investment via ANS Mining”.
• Equity stakes between government affiliated parties and ANS will be adjusted according to the funding provided with the KEFI 45% interest in the project remaining intact.
• The Company reiterated the budgeted timing for the closure of the full funding package in October 2020 and commissioning of the project in 2022.
• The team highlighted benefits favourable gold price environment yields for Tulu Kapi project economics.
• Combined Tulu Kapi open pit (DFS-based) and underground (PEA-based) operations are valued at $207m, $393m and $576m using $1,300/oz, $1,600/oz and $1,900/oz gold prices as per after tax NPV8% (100% based).

Conclusion: The team is maintaining close dialogue with all parties involved in the Tulu Kapi project development aiming to minimise the impact of the COVID-19 on project funding and commissioning timing. The Government is considering to step in for other equity partners to keep the project on track.

*SP Angel act as Nomad and Broker to KEFI Minerals

 

Serabi Gold* (SRB LN) – 85p, Mkt cap £44.5m – Amended terms for Coringa acquisition confirmed

• Serabi Gold confirms that Greenstone Capital has confirmed the previously announced (9^th April) alterations to its US$12m convertible loan notes  for the purchase of the Coringa project in Brazil from Equinox Gold.
• Under the amended terms, payments to Equinox Gold payments of US$0.5m are to be made on 1^st of May, June and July and thereafter monthly payments of US$1m ʺuntil such time … as there are no international travel restrictions imposed by the Brazilian authorities and also no travel restrictions within or into the State of Para, Brazil … Once the Travel Restriction Condition is satisfied, the balance outstanding of the Coringa Deferred Consideration has to be settled within six weeks of the Travel Restriction Condition being satisfied.ʺ
• CEO, Mike Hodgson acknowledged the continuing support of Greenstone Capital and the flexibility of Equinox Gold during ʺtesting timesʺ. He continued; ʺThis continued support from Greenstone in what are extremely challenging and uncertain times is a major endorsement and strong confirmation of the belief of Greenstone and its management in the longer term prospects for Serabi and the potential growth that not just Coringa will bring to the Company but can also be generated from the opportunities to expand existing production from the Palito Complex, particularly through successful exploration in and around the Sao Chico deposit.”

Conclusion: Serabi Gold reported a record monthly production of 3,674oz of gold during March from its Palito/Sao Chico operations in Brazil. Continuing exploration success, particularly recent results from Sao Chico and the Coringa project are the cornerstone of plans to increase gold production from the current 40,000ozpa level to 100,000ozpa  by 2024.

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

 

 

Analysts

John Meyer – 0203 470 0490

Simon Beardsmore – 0203 470 0484

Sergey Raevskiy – 0203 470 0474

 

Sales

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

W1S 2PP

 

*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

 



Sources of commodity prices
Gold, Platinum, Palladium, Silver	BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel	Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt	LME
Oil Brent	ICE
Natural Gas, Uranium, Iron Ore	NYMEX
Thermal Coal	Bloomberg OTC Composite
Coking Coal	SSY
RRE	Steelhome
Lithium Carbonate, Ferro Vanadium, Antimony	Asian Metal
Tungsten	Metal Bulletin

 

DISCLAIMER

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

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

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

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

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

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

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

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

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

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

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