SP Angel . Morning View . Wednesday 23 09 20

SP Angel . Morning View . Wednesday 23 09 20

Eurozone services sector contracts in September amid new lockdown concerns

Tesla’s battery day highlights expansion to 20mpa vehicles

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MiFID II exempt information – see disclaimer below  

Anglo Asian Mining (AAZ LN) – BUY – Dividend up ~30% on robust FCF with a potential for a special dividend in Q1/21 on expected strong H2/20 

Base Resources* (BSE LN) – Director change 

Bluejay Mining* (JAY LN) – Ilmenite prices rise further as demand for feedstock lifts already tight market

European Metal Holdings (EMH LN) – German engineering firm appointed for Cinovec

Hummingbird Resources (HUM LN) – Dugbe funding update

Panther Metals (PALM LN) – New exploration targets identified at Big Bear gold project

Vast Resources* (VAST LN) – Chiadzwa Community Diamond Concession update

 

Tesla Battery Day highlights battery material supply and expansion to 20mpa vehicles

• Elon Musk promised much but let the air out of investors tires with Tesla’s share price falling 5.6% before dropping a further 6.9% after hours on a mixed battery day.
• There was no mention of a million mile battery or a specific mention of an EV cheaper than an ICE counterpart and each new innovation mentioned is at least 18 months away from production and it will take 3yrs to fully realise the advantages. Each new announcement caveated with how hard the process of achieving it is and reiteration of no guarantees.
• So what does the future look like for Tesla: 
  • New battery technology: Tesla has developed a new 4680 battery cell, named because it is 46x80mm.
  • The new battery is tab-less and able to produce 5x more energy, 6x more power and 16% additional range. The Company has begun production ramp of this battery and will take 12 months to reach a 10GWh production target at its pilot plant.
  • Silicone anode: The battery has a silicon based anode and will reduce the amount of cobalt in the cathode. Full production remains 3yrs away.
  • We note the new silicone anode is still in development.
  • Further vertical integration: Tesla’s internal battery cell production targets are 100GWh by 2022 and 3TWhs by 2030. This production will be supplemental to their existing battery partnerships with Panasonic, CATL  and LG Chem.
  • Halving the cost of production: This will enable Tesla to produce a $25,000 electric car in 3yrs. It will be in Musk’s usual slightly incoherent presentation style “basically on par (with), maybe slightly better than a comparable gasoline car”.  
  • A focus on improving manufacturing as well as engineering will allow the company to reduce the cost of battery production by 56% and reduce investment per GWh by 69%.
  • Musk was not specific about exact battery cost targets per kWh.
  • Tesla hopes to make 20m vehicles a year and new production lines assembly lines will be able to produce 20GWh per year, 7x what current lines are capable of.
  • Recycling: The Nevada Gigafactory will recycle cells. Musk suggested that the goal would be for all batteries to be made from recycled cells.  
  • We suspect the target for all battery cells to be made from recycled materials is many years away as there is likely to be insufficient battery material for recycling for some time.
  • Model S Plaid: Musk unveiled a new high performance version of its flagship sedan. The vehicle is capable of 520 miles on a single charge, a 200mph top speed and 0-60mph in 2 seconds. Sounds fantastic…if you can afford the $139,990 starting price!
  • Musk also expressed a desire for Tesla to eventually make EV batteries with cobalt-free cathodes, citing costs as the reason for the shift.
  • Cobalt is the most expensive material used in batteries, and cost-cutting measures in the battery department are going to be vital for the company to be able to build its affordable EV in the next three years.
  • The lithium space was also mentioned, with Musk confirming that the company is securing the rights to a 10,000-acre lithium clay deposit in Nevada, progress from last year’s shareholder meeting when Musk first suggested the company might get into mining business.
  • Of note was Elon Musk suggesting a battery supply bottle neck around 2022. This is driving Tesla’s internal production shift and his plea to miners to produce more nickel.
  • Musk suggested 10TWh of battery production per year will be required to move the global fleet to fully electric. In 2019 global production was less than 0.1TWh.
  • If Tesla can pull off each of its promises and do so on time (inside the next 3yrs) then this battery day may be hailed as a significant moment in the EV revolution. There is however as Musk would agree a lot still to do with many of the announced technologies a few years away from deployment and other like the raw metallurgical silicon anode powder still experiencing teething problems.

 

IG TV / SP Angel interview

• https://youtu.be/1YVne_cOtbE

 

VOX Markets / SP Angel podcast

• https://www.voxmarkets.co.uk/media/5f5a00679f98da001bbc4b22/?context=/listings/LON/KOD/multimedia/

  

Dow Jones Industrials		+0.52%	at	27,288
Nikkei 225		-0.06%	at	23,346
HK Hang Seng		-0.11%	at	23,690
Shanghai Composite		+0.21%	at	3,281

 

Economics

UK – Top scientist warns full second lockdown on the way as PM mulls ban on household visits

• The Prime Minister warned that Briton faces a long hard winter of police-enforced restrictions
• New lockdown measures:
• Pubs and hospitality venues must close at 10:00pm from Thursday
• Those who can work from home should do
• Use of face masks to be extended to more areas – fines to be increased to £200 for non-compliance
• All adult indoor team sports are off – not sure that includes things people do in their cars!
• Weddings reduced to a maximum of 15 people – no doubt including the vicar or person of some other religious persuasion.

 

COVID-19 – Long term effects present worrying outlook for patients, health professionals and governments

• A number of formal studies have hinted at the lingering damage that COVID-19 can inflict according to theAltantic.com.
• In an Italian study, 87% of hospitalized patients still had symptoms after two months with a British study showing similar trends.
• A German study that included many patients who recovered at home found that 78% had heart abnormalities after two or three months.
• A team from the Centers for Disease Control and Prevention found that a third of 270 non-hospitalised patients hadn’t returned to their usual state of health after two weeks. (For comparison, roughly 90% of people who get the flu recover within that time frame.).

 

China - China beats US with pledge to be ‘carbon-neutral’ by 2060 in surprise move

• The new policy announced at the virtual UN General Assembly in New York sets a bold target for the world’s largest polluter.
• China is to speed up ‘green development’ as the ‘human race cannot ignore the warnings of nature over and over again’.
• The EU and the UK have targeted zero emissions by 2050 but the US does not have a carbon-neutral target despite cutting coal fired power generation and the planned installation of massive offshore windfarms.
• China’s move indicates the nation will cut its reliance on oil and coal imports over the next 40 years.

 

Eurozone – Business activity stagnated in the single currency zone in September amid a renewed downturn in the service sector.

• Employment continued to decalin for a seventh consecutive month.
• Inflation dropped at the steepest rate since June highlighting weak demand and as firms offered discounts to stimulate sales.
• On a positive note, business expectations over the coming 12 months hit the highest level since February as businesses believe that disruptions from Covid-19 will ease over the course of the coming year.

Eurozone – Composite PMI at 50.1 vs 51.9 last

• Faster growth in manufacturing led by Germany was offset by a renewed downturn in the service sector as a result of Covid-19 restrictions.
• Services PMI at 47.6 vs 50.5 last
• Manufacturing PMI at 56.8 vs 55.6 last – a 31-month high

 

Germany – September PMI data show a growing divergence between services sector that slipped back into a contraction mode and manufacturing where growth rate accelerated to the strongest in more than two years, according to Markit.

• Manufacturing reported stronger new orders that were up at the strongest pace in more than a decade helped by a recovery in export markets.
• Service providers recorded only modest increase new business marking the slowest rate in three months.
• Meanwhile, consumer confidence came in weaker than expected for October showing slower sentiment recovery amid concerns over rising number of pandemic-related job losses, according to GfK numbers.
• “The further course of the infection events in Germany and the labour market will decide whether the damper in the previous month remains a flash in the pan and consumer sentiment may start recovery in the coming months,” GfK commented on the data.
• GfK Consumer Confidence: -1.6 v -1.8 in September and -0.8 est.

Germany – Composite PMI at 53.7 vs 54.4 last 

• A sharp rise in manufacturing production was responsible for a further increase in business activity, despite a slight contraction in the services sector.
• Services PMI at 49.1 vs 52.5 last
• Manufacturing PMI at 56.6 vs 52.2 last – a 26-month high

 

France – Economic activity fell for the first time in four months as deteriorating service sector output more than offset a modest increase in factory production.

• Markit Manufacturing PMI (Flash): 50.9 v 49.8 in August and 50.6 est.
• Markit Services PMI (Flash): 47.5 v 51.5 in August and 51.5 est.
• Markit Composite PMI (Flash): 48.5 v 51.6 in August and 51.9 est.

 

UK – Chancellor Rishi Sunak is looking at extending the job retention scheme that is scheduled to end in September, FT reports.

• The pressure to provide more support to the labour market that may see a spike in unemployment escalated yesterday as the government dropped attempts to persuade workers to return to the office reversing the policy that came into a effect only last month.
• Authorities have also confirmed plans to shut down pubs and restaurants at 10pm while delaying sporting events from October 1.
• Number of new cases has been on the rise hitting nearly 5,000 yesterday with a second wave of infections challenging quick reopening and recovery of the economy.
• PMI numbers released today showed fading growth momentum with services firms faring the worst.
• New orders increased at the weakest pace in three months in September while employment continued to decrease at a sharp pace with services sector posting steeper losses.
• The degree of optimism over the 12m outlook pulled back for the second month and reached the lowest since May with main worries cited including pandemic and Brexit related concerns.

UK - Composite PMI at 55.7 vs 59.1 last

• UK figures show both services and manufacturing are still in expansion as the country recovers from the covid-19 pandemic, although new restrictions this week show raise questions over a similar expansion in October, particularly in services.
• Services PMI at 55.1 vs 58.8 last
• Manufacturing PMI at 54.3 vs 55.62 last

 

Baltic index scales two week high

• The main sea freight index for shipping dry bulk commodities rose 3.8% on Tuesday to 1,364.
• Rates across all vessel segments rose, with the index gaining for the fourth consecutive session (Hellenic Shipping News).

 

Currencies

US$1.1694/eur vs 1.1726/eur yesterday.  Yen 105.01/$ vs 104.64/$.  SAr 16.886/$ vs 16.926/$.  $1.270/gbp vs $1.274/gbp.  0.713/aud vs 0.718/aud.  CNY 6.792/$ vs  6.796/$.

 

Commodity News

Precious metals:          

Gold US$1,883/oz vs US$1,898/oz yesterday – Gold prices remain volatile as dollar hits eight-week high

• Gold prices touched a six-week low on Wednesday, with spot gold falling 1% to $1,880/oz earlier this morning and US gold futures down 1.5% at $1,879/oz (Reuters). 
• Rising cases in Europe has unsettled investors regarding the economic recovery of the region, causing inflows into US dollars which has weighed on gold prices. 
• On Tuesday, both the Fed’s Jerome Powell and Treasury Secretary Steven Mnuchin were upbeat regarding the current recovery in the US economy, also contributing to a stronger dollar (FX Street). 

Venezuela – Appeal launched over $1bn gold reserves held in BoE

• The Maduro-backed Venezuelan central bank (BCV) launched an appeal yesterday over $1bn of gold reserves which are being withheld by the UK government, who recognise Juan Guaido as the country’s interim president.
• Lawyers representing the BCV say that selling the gold would fund the country’s response to the coronavirus and bolster the health system.
• The hearing is expected to last three days and will be conducted in the London Court of Appeal.

   Gold ETFs 110.9moz vs US$111.0moz yesterday

Platinum US$860/oz vs US$882/oz yesterday

Palladium US$2,193/oz vs US$2,272/oz yesterday

Silver US$23.50/oz vs US$24.01/oz yesterday      

      

Base metals:    

Copper US$ 6,689/t vs US$6,708/t yesterday - Glencore to extend life of Queensland copper smelter and refinery beyond 2022

• Glencore are to spend A$500m extending the life of its Mount Isa copper smelter and Townsville refinery, with the Queensland government offering “multi-million dollar” support.
• The extension, secured ahead of the state election at the end of next month, will help protect jobs and maintain critical industrial capability and supply chains, according to Queensland’s Premier.
• In 2016, Glencore received $15m from the state government to extend the operation until 2022- today’s decision extends the lift of the operations for a further three years (ABC News).

Aluminium US$ 1,770/t vs US$1,799/t yesterday

Nickel US$ 14,490/t vs US$14,490/t yesterday – 

• Tesla plans to increase its use of nickel cathode content in batteries and is keen to ensure it will not be constrained by nickel availability.

Zinc US$ 2,432/t vs US$2,465/t yesterday

Lead US$ 1,868/t vs US$1,892/t yesterday

Tin US$ 18,810/t vs US$18,025/t yesterday

            

Energy:            

Oil US$41.5/bbl vs US$41.6/bbl yesterday

• Bucking the trend of recent inventory draws, latest figures from the API reported yesterday afternoon show a build in crude oil inventories of 691,000bbls for the week ending 18 September
• This was against an analyst consensus of an inventory draw of 2.256MMbbls.
• In the previous week, the API reported a significant draw in crude oil inventories of 9.517MMbbls, after analysts had predicted a smaller draw of 1.271MMbbls
• Oil prices were trading up modestly on yesterday afternoon before the API’s data release, despite the worsening demand sentiment in the market brought on by reports of increasing coronavirus cases
• Oil production in the United States rose last week, but it is still down significantly from a high of 13.1MMbopd in March
• US oil production currently sits at 10.9MMbopd, according to the EIA, 2.2MMbopd under those March highs
• The API reported a draw in gasoline inventories of 7.735MMbbls of gasoline for the week ending 18 September, compared to last week’s 3.762MMbbl build
• Analysts had expected a much smaller 614k draw for the week
• Distillate inventories were down by 2.104MMbbls for the week, compared to last week’s 1.123MMbbl draw, while Cushing inventory rose by 298,000bbls

Natural Gas US$1.824/mmbtu vs US$1.870/mmbtu yesterday

• Natural gas prices moved lower during trading yesterday reversing Monday’s rally
• Cooler than normal weather is expected to cover most of the US mid-west for the next two weeks while the weather is expected to be warmer than normal on the east coast
• This would create a wash in heating demand
• Tropical Depression Beta is moving inland in Texas, dropping significant rain in Houston There is another storm over the Caribbean, but it has a very small chance of becoming a tropical cyclone in the next 48-hours according to NOAA

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$114.0/t vs US$115.9/t 

Chinese steel rebar 25mm US$547.4/t vs US$548.0/t

Thermal coal (1st year forward cif ARA) US$58.4/t vs US$57.8/t – China pledge to go carbon neutral by 2060 will hit longer term demand for thermal coal.

Coking coal futures Dalian Exchange US$151.0/t vs US$151.0/t

            

Other:   

Cobalt LME 3m US$34,200/t vs US$34,200/t

NdPr Rare Earth Oxide (China) US$48,955/t vs US$48,925/t

Lithium carbonate 99% (China) US$5,050/t vs US$5,047/t

Ferro Vanadium 80% FOB (China) US$30.1/kg vs US$30.1/kg

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

Tungsten APT European US$220-225/mtu vs US$212-220/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

LG Chem to spin off battery business in December 

• Last year LG Chem announced their intention to spin off the battery business. The COVID-19 pandemic forced a change of plans with the Company suggesting they may not spin the Company off in 2020.
• The Company has now announced that they will spin off the business in December. The battery business will be called LG Energy Solutions, it will be 100% owned by LG Chem and will be a separated as of Dec 1.
• There is the possibility of LG Chem will IPO the unit, the Company is said to be considering this and if so will seek approval to do so at the shareholder meeting in October.  
• The Company has led the battery market in 2020, deploying 13.4GWh of capacity up to August while its market share has doubled to 25.1%.  
• LG Chem reported quarterly sales and profit records in Q2. The Company achieved 2.82trn won in sales and 155.5bn won in profit. LG Chem supply Tesla, Hyundai Motor, Kia Motors, GM, Ford, VW, Renault, Volvo, Audi, Daimler, Jaguar and Porsche.
• The Company estimates the battery business will generate more than Won30trn of annual sales by 2024.

 

Tel Aviv electric road pilot project 

• The city of Tel Aviv has begun a pilot program, installing 0.37miles of copper coils under the asphalt of a 1.2mile route from the University Railway station to the Klatzkin Terminal in Rama Aviv.
• The pilot program is led by the Tel Aviv-Yafo Municipality in partnership with ElectReon the company developing the electric road system. The Company is conducting similar tests in Germany.
• Vehicles would have to be installed with receivers on their undercarriage to transmit energy to the battery whilst driving.  
• The ability to charge a vehicle while in transit would eliminate the need for charging stations or the requirement to be operationally bound to terminals.
• If the pilot is successful the city will expand the infrastructure to more sections of road in the city.

 

Company News

Anglo Asian Mining (AAZ LN) 135p, Mkt Cap £154m – Dividend up ~30% on robust FCF with a potential for a special dividend in Q1/21 on expected strong H2/20 

BUY

• Revenue totalled $45.8m (H1/19: $43.3m) with 24.0koz in bullion gold sales at $1,649/oz (H1/19: 26.6koz at $1,319/oz) and $6.2m generated from the sale of 6.3kt copper/precious metals concentrate (H1/19: $8.1m for 4.3kt).
• H1/20 production amounted to 32.5koz GEO (H1/19: 39.9koz GEO) including 27.9koz gold and 1.2kt copper (H1/19: 34.3koz and 1.0kt).
• FY20 guidance is reiterated at 75-80koz GEO (using budgeted metal prices as of Jan/20) including 67koz gold and 2.2-2.4kt copper.
• This implies stronger production in H2/20 which together with higher gold and copper prices is expected to deliver >$100m in turnover in FY20.
• AISC averaged $743/oz (H1/19: $603/oz) reflecting lower production.
• EBITDA was $21.5m (H1/19: $24.0m) implying strong 47% EBITDA margins.
• PAT and EPS was $8.6m and 7.49c (H1/19: $6.6m and 5.81c).
• Net CFO (ex interest) came in at $21.4m (H1/19: $15.0m) after $5.7 in tax payments (H1/19: $5.2m).
• FCF (ex interest) amounted to $13.4m (H1/19: $10.0m) after accounting for $5.6m in sustaining capex (H1/19: $3.0m) including tailings $2.1m damn wall raise (final 6m raise providing space for another six years’ worth of production) among deferred stripping of $1.5m other things as well as $2.4m in exploration and evaluation expenditures (H1/19: $2.0m).
• Cash balance closed at $29.2m with no debt (excluding $3.1m in outstanding leases) as at 30 Jun/20 (Dec/19: $17.8m in cash (excluding cash in transit) and 1$1.7m in debt); the Company has an $18mm stand-by credit facility that is currently unused.
• The Company declared 4.5c interim dividend (H1/19: 3.5c) with ex-dividend date of 8 October 2020.
• Additionally, the Board will consider a special dividend in Q1/21 given on-going strong cash generation.
• Exploration works progress at the five new discoveries (Avshancli 1 and 3, Gilar, Ugur Deep and Zefer) aiming to fast-track deposits into production and extend the life of mine at Gedabek that is currently estimated to run to at least 2024.
• First ore from newly discovered deposits is expected to be supplied to the processing plant in 2022.
• Updated mineral resources and reserves statement at the existing operations are to be announced shortly.
• The team is in the process of agreeing the first 5y of the 10y permitted extension to the PSA at Gedabek that currently runs to Mar/22 as well as in disucssions with authorities over new exploration areas in the country.
• The Company agreed heads of terms for a JV with Conroy Gold and Natural Resources agreed to further develop the Clontibret licence area and other gold properties in Ireland, marking the first venture outside Azerbaijan.
• The Company reported no C-19 cases on site reflecting implemented effective health and safety measures while since early August, the government is reported to have also started easing restrictions helping human, equipment and gold logistics.
• The Company remains unhedged offering 100% exposure to commodity prices upside.

Conclusion: The Company reported good earnings results with the Board declaring a 4.5c interim dividend, up on 3.5c in H1/19, on the back of strong FCF generation. H2/20 is expected to yield stronger results on higher production and gold/copper prices with the Board considering a potential special dividend to be announced in Q1/20. Balance sheet is in a strong condition with no bank debt and nearly $30m in the bank. The team progressing with an active exploration programme aiming to extend the life of mine at Gedabek as well as building a pipeline of organic growth projects. Updated Gedabek mineral resources/reserves statement is expected to be released shortly.

*SP Angel acts as nomad and broker to Anglo Asian Mining

 

Base Resources* (BSE LN) 13.5p, Mkt Cap £167m – Director change 

• Base Resources has appointed Ms Janine Herzig to the board as an independent non-executive director replacing Sam Willis who is retiring from the company after 13 years of service.
• Janine Herzig is a Fellow and Chartered Professional (Metallurgy) of the AusIMM and has been on the Board of the AusIMM since 2013.
• Ms Herzig is a metallurgical engineer and has worked at Mount Isa Mines, Western Mining Corporation, Consolidated Rutile Limited , RGC and Iluka Resources.
• She has worked on dredging, dry mining operations, wet concentrators, dry mills, synthetic rutile and tailings management and has commissioned a number of projects and brownfields operations
• Ms Herzig was the Principal Metallurgist for Iluka’s greenfields Murray Basin projects highlighting her expertise in this area.

Conclusion:  With all this, very relevant, experience in mineral sands and their processing the appointment of Ms Herzig looks like a good hire.

*An SP Angel analyst has visited Base’s operations in Madagascar

 

Bluejay Mining* (JAY LN) 7.6p, Mkt cap £73m – Ilmenite prices rise further as demand for feedstock lifts already tight market

• Ilmenite prices rose a further 4.3% last week to 230-250/t in China last week according to FastmarketsMB
• The move reflects the impact of ongoing demand on an already tight market for ilmenite and rutile feedstock supply.
• The price rise comes at a good time for Bluejay Mining which is looking forward to receiving approval to mine from the Greenland government sometime soon.
• The company continues negotiating for further offtake supply contracts having previously announced that it is closing in on securing an offtake contract for some 70% of its planned mine output with a major ilmenite market participant.

Conclusion: Higher ilmenite prices demonstrate the imbalance between mine supply and ongoing demand. We look forward to further news on offtake contracts, the mining permit and the future financing of the Dundas project. We expect the financing to be largely if not entirely done through a number of multilateral agencies and institutional support.

*SP Angel act Nomad and broker to Bluejay. The analyst has previously visited the Dundas ilmenite project in Greenland and has bought stock in the company. 

 

European Metal Holdings (EMH LN) 22.75p, Mkt Cap £34.9m – German engineering firm appointed for Cinovec

• European Metals Holdings reports that it has appointed the Dusseldorf based SMS Process Technologies to develop front-end engineering design (FEED) for the Cinovec lithium/tin project in the Czech Republic.
• The FEED study “will include all of the process steps - comminution, beneficiation, roasting, leaching and purification” and will integrate the production chain “from the point of delivery of ore to the underground crusher through to the delivery of finished battery-grade lithium chemicals for battery and cathode manufacturers”.
• “The FEED is intended to deliver a binding fixed price lump sum turnkey EPC contract with associated process guarantee and product specification guarantees for battery-grade lithium chemicals. The combination of these will greatly assist to underwrite project financing from leading European and global financial institutions”.
• The study, which is a major part of the Definitive Feasibility Study (DFS) currently underway,  is expected to be complete by the end of Q4 2021.
• The SMS Group is described as a family-owned plant construction and mechanical engineering company with over 14,000 employees in over 50 countries with a global 2019 turnover of more than €2.9bn.
• Executive Chairman, Keith Coughlan, explained that “SMS is the ideal engineering partner for the Cinovec Project as it is based in neighbouring Germany with a globally-respected process design capability … [and that EMH and its local operator Geomet and partners CEZ have been] … consistently impressed by SMS group's capabilities and insights into the development of efficient high recovery plants capable of producing very high-quality end-products. Successful delivery of the FEED study will provide a gateway to financing institutions and off-takers of the highest quality. We believe that the intended product and process guarantees will greatly enhance the Project finance either directly through commercial lenders or through the recently announced collaborative agreement with EIT InnoEnergy”.

Conclusion: Since concluding its agreement with CEZ in April securing a €29m investment, European Metals Holdings has progressed Cinovec with the securing of the preliminary mining permits and the commencement of additional drilling to upgrade a portion of the current indicated mineral resource to the measured level. The appointment of SMS to lead the FEED study is an important component in the planned delivery of the  by the end of 2021.

 

Hummingbird Resources (HUM LN) 38p, Mkt Cap £134m – Dugbe funding update

• Pasofino Gold acquired ARX Resoruces, the Company’s JV partner for the Dugbe Project in Liberia, as well as raised C$10m in equity to fund exploration and development work at Dugbe.
• The Company will be earning its 49% interest in the project over a two year period and involving:
• Completion of a mutually agreed exploration programme;
• Completion of a DFS, under joint management committee oversight.
• Pasofino will cover all overhead and operating costs related to the Project during the earn period.
• Dugbe has a PEA completed on the project in H1/13 with the latest resource estimate of 4.2moz at 1.38g/t over two deposits – Dugbe F and Tuzon.

 

Panther Metals (PALM LN) 9.85p, Mkt Cap £4.9m – New exploration targets identified at Big Bear gold project

• Panther Metals reports that through a combination of airborne geophysics outcrop sampling and a programme of gridded soil sampling, it “has identified two new, hitherto unknown, prospects in the central and western parts of the project area” at its Big Bear project in Ontario.
• The Cook Lake East area has been identified as a broad linear target of anomalous gold mineralisation “with a current north-west to south-east strike length of 600m and a width up to 250m.  An additional outcrop sampled 400m to the south-east shows there may be potential to extend the total strike length of the target area to 1km subject to further sampling”.
• ”Cook Lake East correlates well with magnetic anomalies identified from the airborne geophysics programme”.
• The 2020 summer field exploration work has also highlighted the Big Duck Creek area located “approximately 1.2km east of Cook Lake East and to the west of the historical Schreiber Pyramid Gold Mine, is a new target area outlined by anomalous gold in soil over an area of 580m east-west by 350m north-south.  Geophysical data indicates that there is potential to extend the footprint by at least 500m to the north-west”.
• As well as Cook Lake East and Big Duck Creek, the recent exploration has located further areas for follow up at Big Duck West, which lies between the two, and where coincident geochemical and geophysical anomalies cover an “Elongated area 400m east-west by 100m north-south”.
• A coincident magnetic feature and gold geochemical anomaly has been identified at the Lizard Lake South area and a similar east/west coincident geochemical and geophysical feature at Lizard Lake North shows “there is the potential to link the Lizard Lake North area to the previous soil sampling anomaly at Big Bear lake (an along strike distance of 1.7km).”
• The company reports that individual rock samples analysed during the exploration have “ranged up to 25g/t Au, 202 g/t Ag or 5.94% Cu”.
• CEO, Darren Hazelwood, said that the follow-up work on the 39 targets identified by geophysics gave the company confidence that “there will be a pipeline of potential new discoveries as we now focus attention on our priority prospects”.

Conclusion: Panther Metals is developing a pipeline of exploration targets at Big Bear using a combination of geophysics, geochemistry and field sampling. Initial results have identified priority targets at Cook Lake East and the nearby Big Duck Creek while a number of less advanced prospects are also showing promise. We await further news with interest.

 

Vast Resources* (VAST LN) 0.16p, Mkt Cap £20m – Chiadzwa Community Diamond Concession update

• Mark Mabhudhu accepted an offer to join the Government owned Zimbabwe Consolidated Diamond Company “ZCDC” as Chief Executive Officer starting immediately.
• As a result, he will be leaving his current role with Vast Resources.
• The Company identified a candidate to take up the role of managing the project upon confirmation of the signing of the Chiadzwa Community Diamond Concession JV.
• There are currently no details on the timing of the JV completion available.
• “Whilst we are of course sad to see Mark (Mabhudhu) leave Vast Resources PLC, we are extremely excited that we will be able to continue to work with him in his new role within the diamond mining sector in Zimbabwe,” the Company commented on the news.

*SP Angel acts as Broker to Vast Resources

 

Analysts

John Meyer – John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk - 0203 470 0474

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

 

Sales

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

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.

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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%