SP Angel . Morning View . Wednesday 24 06 20
Vox Markets
SP Angel . Morning View
10:35, 24th June 2020

SP Angel . Morning View . Wednesday 24 06 20

Gold prices look to break out higher on potential for COVID outbreaks

 

Copper continues to rise on warehouse drawdowns

MiFID II exempt information – see disclaimer below    

Amur Minerals* (AMC LN) – BFS strategy

Bushveld Minerals* (BMN LN) - Strong Buy - (Valuation 58 from 54p) - Vanadium price to recover on strong demand for structural steel for Stimulus projects

Click here for pdf 

Nano One Materials (NNO CN) - Coated single crystal cathode material provides 4x the longevity  

Power Metals Resources* (POW LN) – Covid19 delays some gold license applications around Ballarat in Australia

Strategic Minerals* (SML LN) – 2019 financial results

Strogbow Exploration (SBW CN) – Drilling restarted in Cornwall at new discovery site

Sunrise Resources Plc (SRES LN) – Outcome of CS Project environmental consultation

Talga Resources (TLG LN) – Talga shares take off as interest in Li-ion anode exceeds 300% of Vittangi anode project capacity

 

Industrial battery demand has risen during the pandemic as industrial plants look for power back up, (Reuters)

  • Industrial batteries account for 20/30% of global consumption,
  • Auto batteries account for 55% of total demand.

 

Copper and gold prices continue to rise as Lockdowns come to an end but COVID-19 threat remains

  • Manufacturer restocking continues to draw metal out of warehouses in Shanghai and the LME as factories return to work
  • New construction and infrastructure projects are also drawing demanding for materials particularly in China which is able to move faster than many nations

Shanghai warehouse copper stocks down 9.1% since Friday 

  • Base metal stocks monitored by the Shanghai Futures Exchange were mixed on Wednesday morning, with copper and tin experiencing notable drawdowns. 
  • Copper stocks fell 9.1% to 38,541 tonnes. 
  • Aluminium stocks fell 6.3% to 92,036 tonnes.
  • Zinc stocks rose 0.9% to 37,250 tonnes. 
  • Lead stocks rose 1.5% to 16,709 tonnes. 
  • Nickel stocks rose 2.2% to 27,801 tonnes. 
  • Tin stocks fell 10.1% to 2,894 tonnes. 

 

UK – Lockdown restrictions ease from the 4th of July

  • Boris Johnson announced sweeping changes to England’s lockdown on Tuesday.
  • Pubs, restaurants, cinemas and hairdressers will be able to open from the 4th of July, and the 2m social-distancing rule will be replaced with a “one-meter plus” rule.
  • Villages up and down the country are in uproar, as amateur cricket has not been given the go ahead for this summer.

 

Beijing Coronavirus outbreak at Seafood market has been contained

Mainland China is reported to be capable of testing 3.78m people a day for COVID-19 (Reuters)

  • Chinese journalist has been arrested for posting videos of Wuhan crematoriums burning bodies casting doubt on the 4,634 official Wuhan COVID-19 death toll (The Sun).

 

Shipping - Baltic index hits over seven-month-high 

  • The Baltic Exchange's main sea freight index rose as rates across all vessel segments surged on increasing trading activity. 
  • The Baltic dry index rose 3.8% to 1,617, its highest since the 5th of November (Hellenic Shipping News). 

 

Stimulus tally

  • $304bn - China Ministry of Finance Rmb550bn (US$77bn) of special purpose debt. 
  • + another Rmb1,600bn (US$226bn) is available for issue before the year end. Much of this will be for housing and connecting infrastructure
  • $140bn - China PBOC buying CNY1tn of bank loans issued by local lenders to small firms this week in an effort to ease the flow of credit.
  • $56bn - The PBOC also announced a Rmb400bn ($56bn) purchase loan program to boost available credit by supporting bank loans to small businesses.
  • $1.55tn – China - Bloomberg estimates a ‘fiscal impulse of more than 11% of nominal GDP’ which was estimated at US$14.14tn
  • We have previously assumed China at $909m comprised $344bn of China stimulus + $565bn in special bonds for infrastructure by local authorities
  • $2tn - US fiscal package approved by Congress. US may add $0.6t state aid for mortgage markets and travel industries
    • The House passed a $484bn aid package to rescue small small businesses, hospitals ($75bn) and coronavirus testing ($25bn).
    • $2tn US – Trump looking at $2tn infrastructure fund
    • $700bn – US + Fed rate cut to 0-0.25% last night. The $700bn QE to buy Treasuries and mortgage-backed securities.
    • US Fed may soon start buying in up to $750 billion of corporate debt and ETFs
    • US Fed has flooded all markets with dollar liquidity through repo and swap lines.
  • US$1.02tn - Japan - BoJ injecting US$1.02tn into the economy through a variety of programmes. (will check if this is in addition to the Y117tn stimulus announced)
    • US$1.1tn - 117tn-yen stimulus, funded partly by a second extra budget, will be on top of another 117tn package already rolled out takes total spending in Japan at 234tn yen ($2.18tr) - 40% of Japans GDP.  Japan to issue Y31.9tn in government bonds. 
  • $825bn (€750bn) EU - European Commission aid package yesterday aimed at supporting EU nations hit by the pandemic.
  • This is an expansion on the previous $543bn (€500bn ) EU Crisis Recovery fund backed France and Germany + $963bn (€750bn) ECB scraps limits on sovereign bond purchases. ECB PEPP buying running at around €250bn
  • EU Finance Ministers have so far failed to agree on a strategy to mitigate the economic impact of the pandemic.
    • The pandemic emergency purchase programme (PEPP) and asset purchase programme (APP) have been reiterated with a cap of €750bn and €120bn, respectively.
    • The bank is reported to have used €100bn of the PEPP so far.
  • $825bn (€756bn) Germany – Bundestag approved €156bn in extra borrowing and ~€600bn in emergency funds
  • $298bn Japan parliament passed ¥31.9tn ($298bn) second extra budget today to help struggling economy.
  • ¥117tn stimulus programme + ¥10tn as a coronavirus reserve fund
  • $934bn (£745bn) – UK Bank of England injects another £100bn ($125bn) 
  • $387bn (€304bn) France, $200bn (€200bn) Spain, $214bn (A$320bn) Australia - RBA ready to buy bonds again.
  • US$260bn - India representing 10% of GDP.
  • $62bn - South Korea – The government unveiled a 76tn won ($62bn) “New Deal” aimed at supporting the economy amid the pandemic focused on creating jobs and new industries through 2025. South Korea - New Deal will create jobs and foster new industries like 5G.
  • $13.3bn - Saudi Arabia central bank will inject 50bn riyals ($13.3bn) into the banking system on top of US$43.7bn already pledged
  • $78bn (C$107bn) Canada, $32bn, Singapore, $22.6bn India, $19.3bn HK, $13.7bn South Korea, $10bn Switzerland, $8.4bn Italy, $7bn NZ, $3.5bn Ireland, $2bn Taiwan, Philippines further $26bn proposed, Indonesia - adding $43bn,  Thailand creating a corporate bond fund.
  • South African buys ZAR10.2bn (US$119m) government bonds in May. Argentina to default on $10bn of dollar debt issued till the end of the year.
  • $438m Zambia - Government approves $438m stimulus package 
  • $1,000bn - IMF available + $12bn World Bank, 

>16tn - Total stimulus reported. Figures may include some political double counting and some funds may not be spent

 

Dow Jones Industrials

 

+0.50%

at

26,156

Nikkei 225

 

+0.31%

at

22,534

HK Hang Seng

 

+2.47%

at

24,860

Shanghai Composite

 

+0.31%

at

2,980

 

Economics

Thailand - Bank of Thailand predicts -8.1% GDP in 2020

  • The BoT have predicted a GDP drop of -8.1% vs -5.3% previously anticipated. 
  • The bank has kept its benchmark rate on hold at 0.5% on Wednesday.

 

Germany - IFO Business Confidence Index at 86.2

  • June's business climate survey posted better than the expected 85.0, and up from 79.5 last month. 

 

New Zealand - Reserve bank maintains 0.25% interest rate 

  • The RBNZ has committed to keeping the cash rate at 0.25% until March next year.

 

United States - New-home sales surge in May 

  • Purchases of single-family houses climbed 16.6% to 676,000 in May, the second-largest monthly advance since 1992. 
  • Existing home sales fell 9.7% in May to 3.91m vs Apr -17.8% at 4.33m, 
  • Record-low interest rates have put new homes within reach of more buyers despite record unemployment levels and the global pandemic. 
  • Richmond Fed manufacturing index improved to zero vs -27 in May
  • Markit PMI 49.6 (39.8), 46.7 (37.5) and 46.8 (37.0),
  • May Chicago Fed national activity index turned positive 2.61 (Apr-17.9).

 

Zambia - Government approves $438m stimulus package 

  • Zambia's cabinet has approved an 8 billion kwacha (US$439m) economic stimulus package financed through a COVID-19 bond.
  •  The country is struggling with growing public debt and lower international demand for raw materials. 
  • Zambia has reported 1,416 confirmed coronavirus cases and 11 deaths so far. 

 

Japan - PMI pulled back to 37.8 in June vs 38.4 in May ,

  • Services 42.3 vs 26.5
  • Composite 37.9 vs 27.8

 

France – PMI 52.1 in June vs 40.6 in May

  • Services 50.3 (31.1)
  • Composite 51.3 (32.1),

 

Germany – PMI 45.8 in June vs 32.3 in May

  • Services 47.3 (30.5)
  • Composite 47.5 (31.9)

 

EU – PMI 46.9 in June vs 39.4 in May

  • Services 47.3 (30.5)
  • Composite 47.5 (31.9)

 

UK – PMI 50.1 in June vs 40.7 in May

  • Services 47.0 (40.0)  
  • Composite 47.6 (30.0),

 

Australia – PMI 49.8 in June vs 44.0 in May

  • Services 53.2 (26.9)
  • Composite 52.6 (28.1)

 

South Africa - Q1 unemployment was 30.1% at 7.1m vs 29.1% in Q4 2019

  • Leading business cycle indicator -5.1% in April from -0.9% highlighting the slowdown in the economy

 

Currencies

US$1.1319/eur vs 1.1269/eur yesterday Yen 106.60/$ vs 107.19/$.  SAr 17.235/$ vs 17.325$.  $1.251/gbp vs $1.247/gbp.  0.694/aud vs 0.691/aud.  CNY 7.066/$ vs 7.076/$.

 

Commodity News

Precious metals:          

Gold US$1,770/oz vs US$1,750/oz yesterday - Gold prices rise to highest since October 2012

  • The price of gold surged to its highest level since October 2012 on Tuesday- driven by a weaker US dollar, widespread stimulus packages by central banks and a jump in Covid-19 cases.
  • Spot gold climbed 0.7% to $1,766/oz yesterday afternoon, whilst US gold futures settled up 0.9% at $1,782/oz (Reuters). 
  • Yesterday's substantial gains were almost an equal combination of buyers entering the market and US dollar weakness (Kitco). 
  • Holdings in SPDR Gold Trust, the world's largest gold-backed ETF, rose 0.58% to 1,166 tonnes on Monday- a level last seen in April 2013. 

   Gold ETFs 102.2moz vs US$102.0moz yesterday

Platinum US$831/oz vs US$818/oz yesterday

Palladium US$1,931/oz vs US$1,919/oz yesterday

Silver US$17.92/oz vs US$17.71/oz yesterday

            

Base metals:   

LME weighs opening trading floor on 4th of July 

  • The LME will examine whether the easing of social-distancing restrictions apply to its open-outcry floor.
  • The Exchange's CEO has said he is working to get back to the ring as soon as possible, as long as the government's social-distancing legislation can be adhered to. 

Copper US$ 5,913/t vs US$5,883/t yesterday - Global cu surplus at just 1,000t in March ICSG

Q1 copper surplus at just 130,000t which sounds like a relatively small surplus given the closure of much of the world’s manufacturing industry. Refined use fell 2.5%

Aluminium US$ 1,592/t vs US$1,595/t yesterday

Nickel US$ 12,700/t vs US$12,600/t yesterday

Zinc US$ 2,041/t vs US$2,060/t yesterday

Lead US$ 1,756/t vs US$1,762/t yesterday

Tin US$ 16,900/t vs US$16,900/t yesterday

            

Energy:            

Oil US$42.8bbl vs US$42.9/bbl yesterday

Natural Gas US$1.632/mmbtu vs US$1.648/mmbtu yesterday

Uranium US$33.10/lb vs US$33.10/lb yesterday

            

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$99.4/t vs US$98.9/t

Chinese steel rebar 25mm US$526.0/t vs US$526.6/t - India imposes steel tariffs on China, Vietnam and South Korea 

  • India has imposed an anti-dumping duty on flat rolled steel products that are plated or coated with alloy of aluminium and zinc, according to a government order issued on Tuesday. 
  • The duty will be in the range of $13.07-$173.10/t for five years (Reuters). 

Global crude steel output fell 8,7% in May on April to 148.8mt - The World Steel Association

  • The World Steel Association forecast global demand to fall 6.4%
    • China steel output +4.2% to 92.3mt
    • US -37%,
    • Japan -32%,
    • Europe -26%,
    • India -39%
    • South Korea -14%

Thermal coal (1st year forward cif ARA) US$56.4/t vs US$55.0/t

Coking coal swap Australia FOB US$114.5/t vs US$114.5/t

            

Other:  

Cobalt LME 3m US$29,000/t vs US$29,000/t 

NdPr Rare Earth Oxide (China) US$40,757/t vs US$40,349/t

Lithium carbonate 99% (China) US$4,812/t vs US$4,805/t

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

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

Tungsten APT European US$205-215/mtu vs US$215-225/mtu 

Graphite flake 94% C, -100 mesh, fob China US$460/t vs US$460/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,350/t vs US$2,350/t

 

Battery News

Electrolyte design increases stability in lithium metal batteries

  • Stanford researcher’s novel electrolyte design increases the stability of lithium metal batteries. (The Driven)
  • The team hypothesized adding fluorine atoms to the electrolyte molecule to increase its stability and prevent the buildup of dendrites.
  • The fluorine infused electrolyte provided impressive results in testing, cycling 420x in the lab, significantly greater than the normal 30 cycles.
  • The coulombic efficiency of the battery with fluorine electrolyte was 99.52% in half cells and 99.98% in full cells.
  • To be commercially viable cells need a score of 99.9%. To achieve a battery life of 20yrs a score of 99.95% is required.  
  • The research is published in Nature.

 

Company News

Amur Minerals* (AMC LN) 1.36p, Mkt Cap £13.3m – BFS strategy

  • Amur Minerals has provided an outline of The Company announced on 11 June 2020 that it had received non-binding indicative offtake terms for both the nickel and copper concentrates its strategy for the delivery of a bankable feasibility study (BFS) on its Kun Manie nickel-copper sulphide project in the Russian far east.
  • The intermediate step of completion of the ʺPermanent Conditionsʺ (TEO) is expected to be completed in December 2020.
  • The BFS strategy is made up of three parts:
    • The technical plan and costings; and
    • Securing binding offtake agreements for the production; and
    • Initiating the requisite funding for the BFS.
  • The technical work is expected to build on the pre-feasibility study released in February 2019 which was based on a 6mtpa processing capacity using both open-pit and underground ore production over a 15 years life producing between 24-29,000tpa of nickel equivalent depending upon the detailed processing route selected. As would be expected, the BFS studies will include  more detailed engineering and ʺwill also cover … costing for the access road, the proposed rail siding and logisticsʺ.
  • ʺThe Company announced on 11 June 2020 that it had received non-binding indicative offtake terms for both the nickel and copper concentrates …[and] … will continue to engage with the wider metals commodities market with the objective of obtaining binding offtake agreementsʺ.
  • The company explains that it envisages primary funding for the BFS ʺthrough debt with a further component funded through equity and / or a supporting investment from an offtake partner.ʺ
  • Amur Minerals points out that Kun Manie is ʺlocated adjacent to the largest nickel consuming nations of China, Korea and Japanʺ.
  • The company also says that it ʺis actively seeking to invest in mining opportunities that are either near cash flow or are already in production in established mining jurisdictionsʺ in order to ʺprovide revenue streams to fund the Company’s corporate activities through the BFS and beyond.ʺ

Conclusion: Amur Minerals has explained the key components of its forthcoming DFS and indicated that it expects the TEO to be complete by December 2020.

*SP Angel act as Nomad and Broker to Amur Minerals

 

Bushveld Minerals* (BMN LN) - Strong Buy - (Valuation 58 from 54p) - Vanadium price to recover on strong demand for structural steel for Stimulus projects

Click here for pdf 

 

Nano One Materials (NNO CN) C$1.33, Mkt cap C$105m - Coated single crystal cathode material provides 4x the longevity  

  • Nano One Materials Corp has developed a coated, single crystal cathode material for lithium ion batteries.
  • Traditional polycrystalline structures fracture during charge cycles exposing crystals in the clusters to deleterious side reactions.
  • Prolonged firing can produce monocrystalline structures but damages the lithium nickel structures.
  • Nano One has a patented ‘One-pot’ process which combines all input components in a single reaction to produce a precursor that when dried and fired forms a single crystal cathode material simultaneously with the protective coating.
  • Half-cell data from Nano One shows capacity fade is 4x less for coated NMC811 than for uncoated NMC811.
  • Nano One develops technology for the low-cost production of high-performance lithium ion battery cathode materials.

 

Power Metals Resources* (POW LN) 0.58p, Mkt cap £3.2m – Covid19 delays some gold license applications around Ballarat in Australia

(Power Metals holds a  49.9% interest in Red Rock Australasia Pty Ltd)

  • Power Metal Resources reports that its Australian joint venture partner with Red Rock Australasia ‘RRAL’ is experiencing some delays on the processing of gold licence applications in Victoria as a result of administrative backlogs arising from the measures implemented to contain the spread of Covid19.
  • The company says that ʺit is likely that some at least of RRAL’s applications will not proceed to grant for some time.ʺ
  • Power Metals further explains that ʺRRAL expects that it will be able to prioritise the grant of certain key application areas, but its planning including planning for a possible listing does not rely on assumptions about the timeframes for grant.ʺ
  • The announcement explains that RRAL is not expected to lodge any further applications but it also says that ʺRRAL is currently considering potential corporate transactions to acquire granted licences where immediate ground exploration is possible, which would complement the application portfolio ʺ.
  • Power Metals’ CEO, Paul Johnson, said that ʺThe pace at which the Victoria Goldfields JV is progressing is somewhat dramatic.  Whilst we have been working in the background on this opportunity for some time, the increasing interest in the Victoria Goldfields region in Q1 2020 necessitated an expediting of effort.  The work undertaken and that expedited effort has seen the JV secure applications for one of the largest strategic land packages in the region.ʺ

Conclusion:  Covid19 induced delays to the exploration licencing process in Victoria are prompting Power Metals’ partner, RRAL to consider potential corporate moves to expand its ground position in an area of increasing interest to explorers.

*SP Angel acts as Nomad and broker to Power Metals Resources

 

Strategic Minerals* (SML LN) 0.43p, Mkt Cap £7.8m – 2019 financial results

  • Strategic Minerals reports that it recorded a loss of $0.845m for the year to 31stDecember 2019 (2018 – loss of $1.933m).
  • The result includes an impairment charge of $1.122m relating to Central Australian Rare Earths (CARE) and the company points out that ʺExclusion of this non-cash write off would result in a 2019 pre-tax operating profit of $0.277m (2018: pre-tax loss of $0.229m after excluding the non-cash recognition of the bargain LCCM purchase).ʺ
  • The company reports a year end cash balance amounting to $0.519m and also reports on the progress of its operations during 2019.
  • The Cobre magnetite operation in New Mexico continued to operate profitably with sales of approximately 42,500 tons of material realising revenues of approximately $2.5m.
  • The operator at Cobre, wholly owned Southern Minerals Group, ʺhas now absorbed its previous tax losses and has become a tax paying entityʺ incurring a tax expense of $0.385m.
  • Subsequent to the year end, as previously reported, arbitrators awarded Southern Minerals approximately US$21.9m in costs and damages in its long running dispute with a major customer, now in receivership and Strategic Minerals has previously cautioned that the outcome remains uncertain.
  • At the Leigh Creek Copper project in South Australia, where in early May 2019 the company was able to announce its first sale of copper product ʺHowever, due to the high cost of production and the poor yield from previously utilised heaps, production only continued for a few months. Since that time the Company has focussed on obtaining the approvals and funding required to take the project into production by the end of 2020 … which should, subject to finance, see full operations at Leigh Creek before the end of 2020ʺ.
  • Strategic Minerals moved to full ownership of the Redmoor tin/tungsten project in Cornwall via the acquisition of New Age Exploration’s share of the joint venture vehicle, Cornwall Resources.
  • During 2020, Cornwall Resources’ team has maintained and developed local relationships and awareness of the project’s merits and is assessing ʺa limited exploration drilling programme aimed at testing the potential to expand the significant resource already developedʺ which currently amount to an inferred estimate of 11.7mt at an average grade of 0.56% tungsten, 0.16% tin and 0.50% copper.
  • In order to conserve resources and focus on its other projects, Strategic Minerals has minimised expenditure on the CARE project and fully impaired the balance sheet value of the project. The company ʺconsiders that there may still be substantial value in these tenements but acknowledges that it may take time to realise this value.ʺ

Conclusion:  Strategic Minerals weathered a ʺchallengingʺ year in 2019 which saw impairment of the CARE tenements  but is moving ahead with the Leigh Creek copper project where it expects to see the resumption of operations by the end of 2020. Plans are under consideration for additional resource expansion drilling at Redmoor and profitable operations at Cobre continue to provide cashflow to underpin group operations.

 

Strogbow Exploration (SBW CN) C$0.085, Mkt cap £11.4m – Drilling restarted in Cornwall at new discovery site

  • Strongbow Exploration report drilling has restarted at South Crofty just 8km from their new United Downs discovery in Cornwall.
  • The discovery was made by Cornish Lithium which was drilling for lithium brines just 8km from Strongbow’s South Crofty mine site.
  • South Crofty hold title over the United Downes licenses within their exploration tenements with agreement that Cornish Lithium could extract lithium-bearing brines.
  • Strongbow are drilling 2,000m at South Crofty to test the extension of high-grade copper and tin mineralisation seen in the the No. 4 and No. 8 Lodes in the central section of the South Crofty mine complex.
  • The holes will be drilled with One ‘parent’ and up to three ‘daughter’ drill holes wedged off the ‘parent’ hole.
  • Historic drilling intersected grades of 2.17% Sn over 2.54m in the target area beneath the No. 4 Lode.
  • Drilling should restart soon at United Downs after the South Crofty drilling is done with permitting currently in process
  • United Downs results showed:
    • 14.69m @ 8.45% Cu, 1.19% Sn and 0.15% Zn – though the intersection is not a true width
  • The lode may be accessed via a decline from the Wheal Maid mine next door which appears to pass within meters of projections of the newly intersected lode at United Downes offering quick and possibly inexpensive access to the ore orebody when it is better defined
  • The latest drill hole is projected to cross the ‘CLL’ lode at ~94m which is also the point at which the Wheal Maid decline also comes close to the lode.
  • The first hole intersected meaningful tin grades at 1,000m.
  • 14.69m grading 8.45% Cu, 1.19% Sn and 0.15% Zn (from 90.60m –105.29m).
  • Other historic tin results in the area:
    • 2.46m @ 2.1% Sn
    • 6.9m @ 0.94% Sn
    • 1.51 @ 1.19% Sn
    • 5.46m @ 0.19% Sn
    • 1.33m @ 2.41% Sn
    • 1.91m @ 0.71% Sn.

Conclusion: Strongbow look like they are onto a meaningful discovery here. We look forward to further drill results as they come through.

 

Sunrise Resources Plc (SRES LN) 0.17 pence, Mkt Cap £5.3m – Outcome of CS Project environmental consultation

  • Sunrise Resources reports that when the public consultation period on the environmental assessment for its CS Perlite-Pozzolan project in Nevada closed on 22nd June, only three comments had been received.
  • ʺAll three comments were federal and state agency comments of a minor nature that will be addressed by minor edits to the EA. Responses to the comments will also be provided as an appendix to the Final EAʺ.
  • The company says that there were no comments received from either the general public or from Non-Governmental Organisations (NGOs) and that consequently it ʺawaits the issuance of the Decision Record and Finding of No Significant Impact (FONSI) from the BLM being the final approvals in the BLM permitting process.ʺ
  • Executive Chairman, Patrick Cheetham, welcomed this ʺgood news for the CS Projectʺ which, he said, ʺwe believe, reflects the limited impact of the Project on the local environmentʺ.

 

Talga Resources (TLG LN) A$0.58, Mkt cap A$141m – Talga shares take off as interest in Li-ion anode exceeds 300% of Vittangi anode project capacity

  • Talga Resources shares rose to 125% to 58Asc in Australia today on news that interest in their new Li-ion anode product is more than three times greater than their current planned plant capacity.
  • Battery manufacturers have been testing Talga’s enhanced Talnode® product for some time with 36 ongoing commercial engagements.
  • Talga is engaged with the majority of planned European Li-ion battery manufacturers and six major global automotive equipment manufacturers.
  • The team are now expanding the scale of the Scoping Study on the Niska graphite project to meet the new demand for their enhanced anode product.
  • Talga report ‘commercial samples of Talnode-C, and in some cases Talnode-Si, are progressing through confidential qualification processes’.
  • This will be in addition to the current Nunasvaara South PFS production plan of 19,000tpa.
  • This scoping study is underway on Talga’s three Vittangi graphite resources not currently in the
  • The Niska Scoping Study is on resources within ~2.5km of Nunasvaara South includes some 6.5mt grading 26.8%Cg
  • Li-ion battery megafactories are set to consume over 2.5mtpa of active anode material by 2029, up from ~450,000tpa of anode production today
  • European battery manufacturing growth is expected to exceed China and the US over the next few years.

Conclusion: Talga appear to have a winning, leading graphite anode product that enhances Li-ion battery performance. More importantly the Talnode products have been working through the exhaustive accreditation process and are though to be acceptable for large-scale battery manufacturer.

The exhaustive accreditation process and the benefits of the high quality Talnode anode mean that Talga should be able to rival or even exceed other anode products in term of pricing. Talga is now more a battery technology company than a resources business with significant value add in its Talnode preparation and high-tech processing.

 

 

 

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

 

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.

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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.

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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%


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John Meyer

 

Mining Analyst, Partner

 

SP Angel

Prince Frederick House

35-39 Maddox Street

London W1S 2PP

 

Direct:   +44 (0) 203 470 0490

Mob:     +44 (0) 794 303 1001

 

john.meyer@spangel.co.uk

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SP Angel Corporate Finance LLP, is authorised and regulated by the Financial Conduct Authority.  Registered in England No. OC317049.  Registered Office: Prince Frederick House, 35 - 39 Maddox Street, London  W1S 2PP

 

DISCLAIMER

This note has been issued by S P Angel Corporate Finance LLP  in order to promote its investment services.

This information is a marketing communication for the purpose of the European Markets in Financial Instruments Directive (MiFID) and FSA’s Rules. It has not been prepared in accordance with the legal requirements designed to promote the independence or objectivity of investment research.

This document is not based upon detailed analysis by S P Angel Corporate Finance LLP  of any market; issuer or security named herein and does not constitute a formal research recommendation, either expressly or otherwise.

The value of investments contained herein may go up or down. Where investment is made in currencies other than the base currency of the investment, movements in exchange rates will have an effect on the value, either favourable or unfavourable. Securities issued in emerging markets are typically subject to greater volatility and risk of loss.

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.

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. This information is for the sole use of Eligible Counterparties and Professional Customers only and is not intended for Retail Clients, as defined by the rules of the Financial Services Authority (“FSA”) and  subject to S P Angel Corporate Finance LLP  Terms of Business as published or communicated to clients from time to time.

It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. This document should not to be relied upon as authoritative or taken in substitution for the exercise of you own commercial judgment.   S P Angel Corporate Finance LLP  is not responsible for any errors, omissions or for the results obtained from the use of the information in this document.

This document has been prepared on the basis of economic data, trading patterns, actual market news and events, and is only valid on the date of publication. S P Angel Corporate Finance LLP does not make any guarantee, representation or warranty, (either expressly or implied), as to the factual accuracy, completeness, or sufficiency of information contained herein. This document has been prepared by the author based upon information sources believed to be reliable and prepared in good faith.

S P Angel Corporate Finance LLP officers, directors and 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).

SP Angel Corporate Finance LLP, is authorised and regulated by the Financial Conduct Authority.  Registered in England No. OC317049.  Registered Office: Prince Frederick House, 35 - 39 Maddox Street, London  W1S 2PP.  S P Angel Corporate Finance LLP  is authorised and regulated by the Financial Services Authority whose address is 25, The North Colonnade, Canary Wharf, London E14 5HS and is a Member of the London Stock Exchange plc

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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