SP Angel . Morning View . Volatility surges on costs and potential response to COVID-19

SP Angel . Morning View . Tuesday 03 03 20

Volatility surges on costs and potential response to COVID-19

 

 

MiFID II exempt information – see disclaimer below   

Danakali (DNK LN) – Completion of Phase 1 mobilisation at Danakali

Gem Diamonds (GEMD LN) – Letseng recovers 114 carat diamond

Serabi Gold (SRB LN) – Step out drilling further extends mineralised envelope at Sao Chico

Talga Resources* (TLG AU) – Environmental approval for Stage 1 trial mine of 25,000t graphite

Renascor Resources* Ltd (RNU AU) – Support from Australian government Export Finance Agency

 

Risks of coronavirus spreading worldwide have gone up as nearly eight times as many cases had been reported outside China as inside in the last 24 hours (WHO)

• The head of the World Health Organisation, warned outbreaks in South Korea, Italy, Iran and Japan were the greatest concern.
• Latvia, Saudi Arabia, Senegal and Morocco reported first cases taking the total to more than 60 countries with the coronavirus.
• Countries are boosting their monitoring and containment measures with the US is expecting to have capacity to perform 1 million coronavirus tests by the end of the week.
• China is reported to have allocated CNY 109bn ($15.6bn) in epidemic prevention funds as of March 2, according to a finance ministry official.
• Australia will be expanding the use of the biosecurity act that would either designate some places as out of bounds or place the patient in home detention, Reuters reports.
• On latest numbers, total number of infected stood at 91,308 with 3,120 deaths and 48,253 recovered; top three destinations with the highest numbers of cases outside China are South Korea (5,186), Ital (2,036) and Iran (1,501).

 

Coronavirus in Washington community virtually undetected for six weeks

There is a chance that the testing of the coronavirus is fundamentally flawed

• The US Center for Disease Control and Prevention confirmed a case on 20 January
• The center mapped the Genetic-DNA for the coronavirus and confirmed that a later case was probably was descended from that first case.
• The two people live in the same county, but are not known to have had contact with one another.
• The second case occurred well after the first would no longer be expected to be contagious.
• This indicated the the virus, which contained the same, rare, genetic variation, has been spreading through other people in the community for close to six weeks according to Trevor Bedford, an associate professor at the Fred Hutchinson Cancer Research Center and the University of Washington.
• This could mean that many more people have the virus than the authorities know about and just might indicate that the mortality rate is very much lower than we know
• The news certainly indicates that the Coronavirus been in the community undetected in Washington for around six weeks.

 

US Markets rallied strongly last night despite Coronavirus threat to corporate earnings

• Equity markets see-saw up and down as investors await news of the Coronavirus impact
• Corporate earnings likely to be severely affected H1 and possibly the full year due to Coronavirus disruption to supply chains and its impact on manufacturing and commodity prices (mainly oil).
• Interest rates likely to be cut further to help business survive Coronavirus disruption before a vaccine becomes available
• Markets may be bought up by investors looking for yield and investors with a more positive view on the impact of the Coronavirus.
• Our view:
• The Coronavirus will likely disrupt all parts of the economy if the rate of infection is not sufficiently slowed.
• Manufacturing, services and more importantly logistics will all be disrupted as workers self-isolate to slow rates of infection.
• The virus may not be as bad as indicated in the official statistics due to inaccuracy in testing for carriers of the virus. Hopefully, it may not be much worse than a virulent flu season.
• The Coronavirus is likely to infect a very substantial proportion of the population due to rapid infection rates. Hand washing and sanitisation of public transport should slow infection rates allowing healthcare to catch up.
• The Coronavirus is likely to overwhelm healthcare services with a disproportionate impact on the elderly and vulnerable
• Economic impact:
• Metals traders expect demand to recover relatively quickly despite the Coronavirus outbreak, partly due to new Stimulus and QE with China Inc. also returning to work.
• New emergency stimulus as promised by politicians is restoring confidence while manufacturers are restocking and some are raising inventory levels in case of future shortages.
• China is lifting restrictions for many regions and manufacturers to get the economy going again but is still in Lockdown in many areas
• Note: the Coronavirus does not appear prevalent in much of China and could still have a significant impact in other regions of China
• Dumping
• Other traders and consumers are still dumping metal into the LME to realise cash.
• The Automotive supply chain is in disarray with some component manufacturers cutting production as ‘auto assembly’ lines slow. Demand for new cars has been crushed.
• This is driving a physical demand shock in some sectors and may cause further metals price pain.
• China's Nonferrous Metals Industry Association has called for the government to buy-in and stockpile metals. This should provide liquidity for consumers and traders converting metal into cash while helping miners and smelters.
• New infrastructure spending and projects is driving confidence for steel producers though the slow restart of construction projects remains a concern.

 

Iron ore gains on stimulus hopes and falling Brazilian exports 

• Iron ore prices have climbed so far this week on hopes of stimulus support for the global economy due to the virus outbreak.
• According to Forbes, steel demand increases when China jump-starts the economy, as the packages often include ‘big ticket’ infrastructure projects such as railways and bridges.
• Iron ore prices also got a supply side boost – as Brazil reported a  17.5% month-on-month decline in iron ore exports in February (Reuters).
• The Dalian Commodity Exchange’s most-traded iron ore contract climbed as much as 4.2% to 666 yuan ($95.55) a tonne, adding to Monday’s 3.6% gain.
• Fresh Chinese data over the weekend showed manufacturing PMI fell to its lowest ever, raising expectations that the Chinese government would step in with an aggressive stimulus package.
• Elsewhere in China, the most-traded base metals contracts on the Shanghai Futures Exchange were up on average 0.9%, which Fastmarkets MB also attributed to the prospect of a stimulus package.
• April copper, April nickel and June tin were all up between 1.2-1.4% this morning, with the rest of the base metals in Shanghai up 0.5%.

 

Dow Jones Industrials		+5.09%	at	26,703
Nikkei 225		-1.22%	at	21,083
HK Hang Seng		-0.03%	at	26,285
Shanghai Composite		+0.43%	at	2,993

 

Economics

The OECD cut its central growth forecast from 2.9% to 2.4% while warning that a “longer-lasting and more intensive coronavirus outbreak” could see it slowing to 1.5% in 2020.

• The organisation called on governments and financial authorities to “act “swiftly and forcefully” to combat effects of the virus with supportive monetary and fiscal policies, FT reports.
• “More broadly, lower policy interest rates and stronger government spending can help boost confidence and assist with the recovery of demand once the outbreak eases and travel restrictions are removed,” the OECD said.

 

Global manufacturing gauge recorded the steepest contraction in over a decade.

• The JPMorgan Global Manufacturing PMI was down at 47.2 in February, down from 50.4 in January and marking the lowest level since May/09.

 

US – Equity markets posted the strongest one-day rebound in 14 months ending a seven-day losing streak on expectations for central banks to step in with a stimulus.

• G7 finance ministers and central bankers are scheduled to hold a teleconference today to discuss a response to the coronavirus outbreak.
• The ECB reiterated its readiness to take “appropriate and targeted measures, as necessary and commensurate with the underlying risks”.
• The Bank of England said it is working with the Treasury, the FCA and its international partners “to ensure all necessary steps are taken to protect financial and monetary stability”.
• The Bank of Japan announced yesterday it will provide ¥500bn in short term liquidity to banks and acquire a record ¥100bn in purchases of ETFs.
• The US Fed hinted it was prepared to consider cutting rates in response to the virus’ “evolving risks”.
• On a separate note, the manufacturing PMI suggested the sector continued to grow in February albeit at the weakest pace in six months.
• New orders growth slowed to the weakest since orders began rising in Jun/19; export orders dropped at a slightly faster pace while output registered only marginal expansion as firms cited supply chain issues following the outbreak of coronavirus in China.
• “While trade war fears have eased, helping push firms’ expectations for future growth to the highest since last April, coronavirus-related supply chain issues threaten to constrain production in coming months,” Markit commented on numbers.
• President Trump renewed calls for the Fed to cut rates saying the central bank “has us paying higher rates than many others, when we should be paying less… tough on our exporters and puts the USA at a competitive disadvantage… must be the other way around… should ease and cut rate big”.

 

Australia – The RBA cut interest rates by 25bp to 0.50% and signalled its preparedness to ease further as the coronavirus outbreak slows growth.

• The governor said the virus outbreak is having “a significant effect” on Australia’s economy.
• “The uncertainty that it is creating is also likely to affect domestic spending… the board is prepared to ease monetary policy further to support the Australian economy,” the RBA said.
• The move was broadly in line with expectations as the A$ is trading higher against the US$ this morning.

 

South Africa – The economy slipped into a recession in the final quarter of last year significantly underperforming expectations.

• GDP contracted at 1.4%qoq (annualised) in Q4/19 following a 0.8%qoq (revised from a 0.6%qoq drop) decline in the previous quarter and -0.2%qoq forecast.
• The economy was down 0.5%yoy, marking the first annual drop in nearly four years.
• Eskom load shedding in December saw a material drop in industrial production while weak business confidence weighed on fixed investment spending.
• The data heightens the risk that the nation will lose its last remaining investment grade rating from Moody’s.
• The currency is off more than 1% against the US$ this morning, despite a general rebound in emerging markets’ currencies.

 

Currencies

US$1.1115/eur vs 1.1071/eur yesterday.  Yen 108.12/$ vs 108.08/$.  SAr 15.520/$ vs 15.550/$.  $1.278/gbp vs $1.277/gbp.  0.656/aud vs 0.655/aud.  CNY 6.982/$ vs  6.960/$.

 

Commodity News

Gold US$1,593/oz vs US$1,605/oz yesterday

   Gold ETFs 84.6moz vs US$84.7moz yesterday

Platinum US$861/oz vs US$883/oz yesterday

Palladium US$2,535/oz vs US$2,671/oz yesterday

Silver US$16.72/oz vs US$17.01/oz yesterday

            

Base metals:    

Copper US$ 5,700/t vs US$5,686/t yesterday

Aluminium US$ 1,717/t vs US$1,706/t yesterday

Nickel US$ 12,700/t vs US$12,560/t yesterday

Zinc US$ 2,023/t vs US$2,040/t yesterday

Lead US$ 1,847/t vs US$1,870/t yesterday

Tin US$ 16,625/t vs US$16,335/t yesterday

            

Energy:            

Oil US$52.7/bbl vs US$51.6/bbl yesterday

Natural Gas US$1.775/mmbtu vs US$1.753/mmbtu yesterday

Uranium US$24.80/lb vs US$24.90/lb yesterday

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$85.7/t vs US$81.3/t

Chinese steel rebar 25mm US$530.2/t vs US$529.2/t - China’s top lop listed steel producer to issue bonds worth up to $430m

• Chinese company Baoshan Iron & Steel (Baosteel) announced today it would issue bonds worth 3 billion yuan ($430m), to boost working capital amid the coronavirus outbreak (Reuters).
• The bonds have a maturity of three years, and will be the first tranche of the company’s 20 billion yuan issuance plan from 2020.
• Beijing has increased financial support to businesses heavily affected by coronavirus, mostly through loans to medium-sized businesses (South China Morning Post).
• An official from Baosteel’s parent group told Reuters that the whole group’s first-quarter profit is expected to reduce by 2 billion yuan to 3 billion yuan due to the virus.

Thermal coal (1st year forward cif ARA) US$57.0/t vs US$57.5/t

Coking coal swap Australia FOB US$156.0/t vs US$156.0/t

            

Other:   

Cobalt LME 3m US$33,500/t vs US$33,500/t

NdPr Rare Earth Oxide (China) US$40,081/t vs US$40,374/t

Lithium carbonate 99% (China) US$5,746/t vs US$5,747/t

Ferro Vanadium 80% FOB (China) US$28.3/kg vs US$28.3/kg

Antimony Trioxide 99.5% EU (China) US$5.2/kg vs US$5.2/kg

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

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

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

 

Battery News

Canada – Government to extend zero-emission-vehicle incentive to mining industry

• Prime Minister Trudeau announced at the PDAC conference in Toronto on Monday that the government would make it more affordable for businesses to invest in zero-emission vehicles for mining operations.
• The incentive would see a 100% write-off of the purchase of eligible vehicles in the year they are put in use (Mining Weekly).
• Vehicles would need to be available for use before 2024 for a 100% deduction, and those ready later would see less deduction up until 2028.
• Trudeau told the conference “a thriving mining industry and a thriving natural resource sector don’t have to be impediments to fighting climate change.” – showing the importance of an environmentally friendly mining sector when trying to achieve net-zero emissions by 2050 (mining.com).

 

Western Australia’s battery minerals contributed A$6bn in 2018-2019 financial year

• According to a state government report, rare earth exports were valued at over A$355m during the same time (Australian Mining)
• The Implementation Progress Report released last week shows a 21% increase in employment within the state’s battery industry, and the sector now employs a total of 14,150 people within the state.
• In 2018, the state of WA accounted for 57% of global lithium production, 7% of nickel, 6% of manganese, 6% of rare earths and 3% of cobalt according to a report by the government of Western Australia.

 

German EV adoption bucks the trend in 2019 as momentum shifts to Europe 

• EV registrations rose 61% in 2019, compared to 24% in 2018 and amidst a backdrop of slowing demand in China and the US.
• This positive growth has continued into Q1 2020, Germany has surpassed Norway as Europe’s premier EV market with 109,000 sales compared to 81,540. EV market share in Germany increased from 2.5 to 6.5% in January, 2020. (Cleantechnica)
• Germany is set to be the key market in 2020 with a landmark climate related stimulus package delivering subsidies for EV sales. (Bloomberg)
• The trend is not unique to Germany, Europe more broadly is becoming the leading EV market as automakers scramble to hit emissions targets set by the EU and demand slows in China. Although now second to Germany when comparing sales Norway remains a trail blazer as 57% of new registrations are electric compared to 5% in China, 3% in Germany and 2% in the US. (Clean Energy Wire)
• This trend is likely to only strengthen in 2020, the coronavirus and related quarantines are likely to hamper Chinese demand and manufacturing. China remains the biggest market for EVs but the momentum is moving in the direction of Europe.
• Tesla contrary to the prevailing trend is not doing so well in Europe, registering just 83 cars in Norway in February 2020 compare to 1016 at the same time last year. Registrations for Norway and the Netherlands fell 77% and 42% respectively, a negative signal given these are 2 of only 4 markets where Tesla breaks out revenue on a quarterly basis. (Bloomberg)

 

Rensselaer researchers breakthrough in Potassium metal batteries 

• The research team at Rensselaer Polytechnic, NW State has overcome a persistent issue known as dendrites, an accumulation of metal deposits on the anode. Dendrites are formed as a consequence of non-uniform deposition of potassium metal after repeated charging cycles. Eventually the branch like conglomerates can pierce the insulating membrane separator shorting the battery. (Science Daily)
• The solution; the Rensselaer team found operating batteries at a high charge and discharge rate enabled them to raise the temperature inside the battery in a controlled manner which encouraged dendrites to self-heal and detach from the anode. (Techxplore)
• The team has previously tested a similar self-healing process in lithium batteries and found potassium batteries required a lower temperature for a successful healing process. This means a potassium metal battery could be more efficient, safe and practical. (New Atlas) 
• The research was published in Proceedings of the National Academy of Sciences.

 

Megacity residents driving the market towards cheaper EV batteries in China

• 2019 saw a surge in demand for cheaper, more cost effective lithium-iron-phosphate batteries as China cut subsidies and city residents don’t require long charge ranges. (Bloomberg)
• Cost-competitiveness, safety and lower sensitivity to commodity prices of LFP batteries makes them a more attractive proposition for cost pressured city dwellers.
• BYD, China’s biggest producer of EVs has a new cobalt-free battery in its Han SUV, sports utility vehicle. Cobalt is a very expensive metal at $33,500 per tonne and sourced in countries with difficult political environments. These factors serve to increase the costs involved in producing batteries with the metal in them. 
• This trend in Chinese demand shows the unsettled nature of the market as consumers weigh up what it important in the EV world we are moving towards. (Auto finance News)
• Tesla recently signed a deal with CATL which will see the Chinese battery maker supply the Californian EV giant with LFP batteries in a move to reduce costs. (Electrek)

 

Company News

Danakali (DNK LN) 29.5p, Mkt cap £94.0m – Completion of Phase 1 mobilisation at Danakali

• Danakali reports that Phase 1 of its mobilisation has been completed within the scheduled time and budget and that the second phase of mobilisation has now commenced.
• The work completed includes the mobilisation of its owner’s team, completion of geotechnical work and the investigation of optimisation opportunities as well as the purchase of critical equipment.
• The second mobilisation phase includes updating the front-end engineering design (FEED) and optimising the execution strategy and should prepare the project for construction ahead of a planned “module 1” production of from the Colluli deposit, located in the Danakali Depression of Eritrea, of 472ktpa of SOP during 2022.
• Subsequent production increases in modules II and III are planned to double production.
• Colluli has a JORC proven/probable reserve of 1.1bn tonnes at an average grade of 10.5% K₂O equivalent.
• Commenting on the bust start to the year, Project Director, Tony Harrington, said that “The FEED pricing reconfirmation is underway, and we are pleased to have identified several optimisation and cost saving opportunities which we are incorporating in further planning. We have now commenced Phase 2 of the Project development allowing us to further de-risk the development by greater definition of cost, schedule and design.”

 

Gem Diamonds (GEMD LN) 55.8p, Mkt Cap £77.6m – Letseng recovers 114 carat diamond

• Gem Diamonds reports on its website https://www.gemdiamonds.com/ that a 114 carat “high quality D colour diamond”  was recovered at its Letseng mine yesterday.
• The news of the latest large diamond to be recovered from the mines comes after the announcement, on 4th February, of the recovery of “the recovery of an exceptional 183 carat white Type IIa diamond on 3 February 2020.  On the same day, the Company also recovered two different high quality diamonds, one of 89 carats and the other of 70 carats, from the Letšeng mine in Lesotho”.
• The mine has consistently produced large high quality diamonds with a total of 11 stones in excess of 100 carats produced in 2019, including four during the final quarter, compared to 15 similar sized diamonds in 2018.
• The consistent recovery of valuable high quality diamonds from Letseng is a valuable enhancement to revenue – in October last year the company reported that the sale of a single 13.3 carat pink gem diamond realised US$8.8m achieving a record US$656,934 per carat. 
• The company also announced, in February this year that “The first tender of 2020 did not include the remarkable recoveries of the 183, 89 and 70 carat diamonds on 3 February” suggesting that further sales are still to be announced.

 

Renascor Resources Ltd (RNU AU) A$0.009, Mkt cap A$125m – Support from Australian government Export Finance Agency

BUY - Valuation A$0.09/s

Click for initiation note PDF

• Renascor Resources report the receipt of a letter of Support for the provision of finance from Export Finance Australia ‘EFA’.
• The EFA finance support covers both the mine and development of spherical graphite which should enable Renascor to add substantial value to its product.
• Renascor also has support from the Dutch government Export Credit Agency ‘Atradius’ for up to ~60% of the Siviour Graphite Project mine capital expenditure.
• ‘ECA cover typically supports favourable debt financing terms, including competitive margin and increased loan tenor’.
•  
• The Australian EFA letter envisages support for production of approximately 80ktpa of flake graphite concentrates as set out in Stage One of the Siviour DFS covering ~60% of the capex.
• Plus production of 29ktpa of Spherical Graphite from the processing of ~62ktpa of Siviour graphite concentrate.
• Australia’s EFA supports Australian exporters, with loans, guarantees, bonds and insurance particularly for projects which increase the extraction and export of value added materials.
• Renascor’s Siviour mine could help diversify the production of spherical graphite for lithium-ion battery anodes. Spheronising is currently done in China which captures a very large part of the value.
• Siviour project, key stats:
• Production: Stage 1: 80,000tpa.  Stage 2: 144,000tpa
• Capex: Stage 1 US$82m first 4 years.  Stage 2 Expansion US$54m
• Reserve: 45.2Mt grading 7.9% Total Graphitic Content. Resource:  87.4Mt of 7.5%

Year		2022	2023	2024	2025	2026
Stockpile	Kt	3,434	5,130	4,928	5,969	7,563
Grade TGC	%	8.3%	9.8%	7.6%	8.2%	8.3%
Milled ore	Kt	640	825	825	857	1,602
Production	Kt	68	97	76	78	146
Sales	US$m	41	58	45	46	87
Cash Cost/t	US$/t	427	299	336	367	296
Op Profit	US$m	12	22	17	15	35
Pre-Tax Profit	US$m	13	23	18	19	39
Tax	US$m	-19	6	2	-8	10
Post-Tax Profit	US$m	31	17	15	27	29

Renascor own 100% of Siviour Graphite Project

Source: SP Angel figures simplified from the DFS..         

*SP Angel acts as broker to Renascor Resources Ltd

 

Serabi Gold (SRB LN) 83.0p Mkt value £48.9m – Step out drilling further extends mineralised envelope at Sao Chico

• Serabi Gold reports that after completion of around 40% of a planned 9,600m surface and 8,000m underground diamond-drilling programme around the Sao Chico deposit the intersection of mineable widths and grades has extended the lateral limits of the known mineralisation for around 230m to the east and 300m to the west of the current mining area and for approximately 220m below the deepest current development.
• Among the intersections highlighted to the west of the current mining area are:
• A 1.72m wide intersection of the Main Vein averaging 25g/t gold from a depth of 71.30m in underground drill-hole SCUD304; and
  • A 2.40m wide intersection, also of the Main Vein averaging 5.04g/t gold from a depth of51.40m in underground drill-hole SCUD316; and
  • A 4.40m wide intersection of the Julia Vein averaging 4.28g/t gold from a depth of 67.23m in underground drill-hole SCUD318
• Intersection to the east of the mine area include:
  • A 1.15m wide intersection of the Main Vein averaging 11.65g/t gold from a depth of 348.45m in surface drill-hole SC152; and
• The underground drilling also intersected what CEO, Mike Hodgson identified as“the deepest intersection at Sao Chico” to date, with underground hole SCUD333 hitting 4.08m of the Main Vein averaging 25.37g/t gold from a depth of 139.7m. This intersection is 220m below the lowest current mine workings an approximately 480m below surface.
• Outlining the future drilling programme, Mr. Hodgson explained that the drilling“will continue until mid-2020 following which the Company intends to undertake a new mineral resource estimate during the second half of the year”.
• The current mineral resource for Sao Chico, which dates from June 2017, available on the company’s website at https://www.serabigold.com/projects/sao-chico/geological-resources-sao-chico/ totals 82,000 tonnes at an average grade of 13.7g/t (36,000oz) classified as measured and indicated with a further 123,000 tonnes averaging 13.77g/t gold (54,000oz).
• Further step-out drilling is planned “100 metres at a time and … [the company expects] … that continued success will expand the mineral resource further.”
• Mr. Hodgson also outlined the background to the development at Sao Chico explaining that “When the Sao Chico orebody first went into production drilling had been limited to testing of the orebody directly below the original artisanal workings. Subsequent terrestrial geophysics programmes undertaken in 2017 and 2018, highlighted the potential to extend the orebody to the east and west”. The drilling results released today and an earlier announcement on 6^th January vindicate the decision to follow up the geophysical results.

Conclusion: Further drilling success looks likely to expand the mineral resource of Sao Chico when the results are incorporated in a new mineral resource estimate in the latter part of 2020.

 

Talga Resources* (TLG AU) A$0.42, Mkt Cap A$111m – Environmental approval for Stage 1 trial mine of 25,000t graphite

Valuation: A$1.80

CLICK FOR PDF

• Talga Resources report the receipt of environmental approval for their Stage 1 trial mine at Vittangi in Sweden.
• The three-year permit allows Talga to mine up to 25,000t of high-grade graphite ore.
• The mine must be rehabilitated at the end of mining using the measures demonstrated at the previous trial mining campaign at the Nunasvarra South deposit.
• Talga will use the ore to feed Talnode®-C lithium-ion anode production to support the development of European Li-ion battery manufacturing which is not dependent on feedstock from China.
• Talga’s fully coated high-performance anode powder has been developed and extensively tested over several years to provide a sustainable and cost competitive choice for battery manufacturers,especially in Europe.
• Talga plans to submit its application for environmental and statutory permits for Stage 2 of the project in March along with plans for on-site processing plant at Vittangi with 100,000tpa capacity of graphite ore.
• The Vittangi concentrate will feed Talga’s planned downstream anode refinery at Luleå, some 250km to the south for 19,000tpa of Talnode-C as defined in the 2019 pre-feasibility study

*SP Angel acts as UK broker to Talga Resources. An SP Angel analyst has visited the leading battery R&D institution WMG partnering with Talga.

 

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%