SP Angel Morning View -Today’s Market View, Monday 17th February 2025

US and Russian officials to meet in Saudi Arabia to discuss Ukraine ceasefire

MiFID II exempt information – see disclaimer below

Anglo American (AAL LN) – Progress towards demerger of the platinum business

Apollo Minerals (AON AU) – Capital Drilling takes equity stake to support Gabon gold project progression

East Star Resources (EST LN) – Drilling results from Verkhuba, Kazakhstan

Empire Metals* (EEE LN) – Drilling programme to provide bulk samples for further flowsheet development

Europa Metals Limited (EUZ LN) – Financing constraints prompt decision not to pursue Tynagh acquisition

Mkango Resources* (MKA LN)– Land lease agreement for the separation facility in Poland

BUY

Orosur Mining* (OMI LN) – Progress at Argentina sees ownership rise to 51% as drilling looms

Petra Diamonds (PDL LN) – H1 results and management changes.

Phoenix Copper* (PXC LN)– Roger Turner

Thor Energy (THR LN) – Acquisition of Go Exploration

Gold ($2,903/oz) recovers Friday’s losses as focus shifts to Fort Knox audit

• Gold prices have recovered after sliding sharply on Friday, falling from record highs of $2,940/oz to $2,880/oz.
• The move followed commentary from US senator Rand Paul to audit the US gold reserves, with Elon Musk expressing an interest in the audit.
• The recent move higher in gold follows substantial flows from the LBMA to the US, potentially reflecting concerns over US tariffs.
• However, this has been supported by commentary from US Treasury Secretary Bessent over ‘monetising’ the US balance sheet, potentially revaluing the US current gold reserves.
• Gold bullion stockpiles have risen by 116% in New York since the election, triggering reports of shortages in the Bank of England vaults.
• There has been a consistent theme of gold flowing from West to East since the Ukraine triggered the sanctioning of dollar reserves on foreign balance sheets.
• This has pushed predominantly BRIC countries to boost their Central Bank gold reserves, with China leading the charge.
• Whilst Asian ETF buying has accelerated, suggesting mostly Chinese retail buyers are taking positions in gold, US retail is yet to get overweight in the metal.
• This is reflected in global ETF holdings, at 83.7mt vs 2020 highs over 110mt.
• North America saw $500m of outflows from gold ETFs in January, whilst Europe saw $3,400m worth of inflows.
• US Treasury yields may need to fall for US buyers to rotate into bullion, with the 10 year still holding at 4.5%.
• However, hedge funds have boosted long positions, with COMEX net longs at the end of January seeing a 25%mom increase.

Economics

Ukraine/Russia – US and Russian officials are meeting in Saudi Arabia over coming days to discuss a potential ceasefire in Ukraine.

• Earlier, President Trump said that Putin wants to end the war and added that he is expecting to meet with his Russian counterparty in Saudi Arabia “very soon”.
• Understanding is that those are preliminary talks and Secretary of State marc Rubio said that if “real negotiations” begin, Ukraine and European representatives will “have to be involved” (CBS).
• Separately, President Zelensky rejected the US proposal to provide rights to 50% of nation’s rare earth deposits as a way to reimburse US for provided military assistance (NBC).
• President Zelensky said that the agreement did not include adequate security guarantees for Ukraine.
• “Binding economic ties with the United States will be the best guarantee against future aggression and an integral part of lasting peace. The U.S. recognizes this, the Russians recognize this, and the Ukrainians must recognize this,” one US official said commenting on the matter.
• Ukraine is trying to negotiate a better deal that may also involve European countries.
• Keir Starmer proposed to send UK troops to Ukraine to enforce the ceasefire agreement.
• The news comes ahead of the Paris summit to be attended by European leaders to discuss Europe’s role in ending the war in Ukraine.
• PM is expected to meet President Trump in the last week of February trying to convince the US to provide security guarantees to Ukraine as well as discuss potential US tariffs.

UK – A quarter of UK businesses are planning to cut staff before Budget tax increases come into force in April (FT).

• The survey showed “the most significant downward changes in employer sentiment we’ve seen in the last 10 years”, excluding the pandemic, the Chartered Institute of Personnel and Development data showed.
• The biggest impact to be seen in retail and hospitality.

Mali – 43 artisanal miners killed in an open pit wall slide in western Mali.

• The accident happened near the town of Kenieba in the gold rich Kayes region, the head of an industry union said.
• Most of deceased were women.

Currencies

US$1.0479/eur vs 1.0413/eur previous. Yen 151.88/$ vs 154.10/$. SAr 18.415/$ vs 18.514/$. $1.259/gbp vs $1.248/gbp. 0.636/aud vs 0.627/aud. CNY 7.256/$ vs 7.296/$.

Dollar Index 106.817 vs 107.692 previous.

Precious metals:         

Gold US$2,901/oz vs US$2,911/oz previous

Gold ETFs 83.7moz vs 83.9moz previous

Platinum US$988/oz vs US$999/oz previous

Palladium US$981/oz vs US$983/oz previous

Silver US$32.3/oz vs US$32.2/oz previous

Rhodium US$4,650/oz vs US$4,650/oz previous

Base metals:   

Copper US$9,442/t vs US$9,445/t previous

Aluminium US$2,636/t vs US$2,608/t previous

Nickel US$15,410/t vs US$15,445/t previous

Zinc US$2,848/t vs US$2,859/t previous

Lead US$2,001/t vs US$1,979/t previous

Tin US$32,480/t vs US$31,645/t previous

Energy:           

Oil US$75.0/bbl vs US$74.7/bbl previous

Natural Gas €49.9/MWh vs €52.8/MWh previous

Uranium Futures $66.4/lb vs $68.0/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$106.6/t vs US$106.9/t

Chinese steel rebar 25mm US$488.0/t vs US$485.6/t

HCC FOB Australia US$188.0/t vs US$188.0/t

Thermal coal swap Australia FOB US$105.0/t vs US$106.6/t

Other:  

Cobalt LME 3m US$21,550/t vs US$21,550/t

NdPr Rare Earth Oxide (China) US$59,811/t vs US$59,694/t

Lithium carbonate 99% (China) US$9,991/t vs US$10,006/t

China Spodumene Li2O 6%min CIF US$815/t vs US$815/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$1,005/t

China Tungsten APT 88.5% FOB US$338/mtu vs US$338/mtu

China Graphite Flake -194 FOB US$430/t vs US$430/t

Europe Vanadium Pentoxide 98% US$4.6/lb vs US$4.6/lb

Europe Ferro-Vanadium 80% US$24.8/kg vs US$24.8/kg

China Ilmenite Concentrate TiO2 US$296/t vs US$294/t

Global Rutile Spot Concentrate 95% TiO2 US$1,543/t vs US$1,588/t

Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t

Brazil Potash CFR Granular Spot US$317.5/t vs US$315.0/t

Germanium China 99.99% US$2,725.0/kg vs US$2,725.0/kg

China Gallium 99.99% US$385.0/kg vs US$385.0/kg

Battery News

BYD hold mining rights in Brazil’s Lithium Valley, documents show

• BYD acquired mineral rights for two plots of land in a lithium-rich part of Brazil in 2023, entering the mining business in its biggest market outside of China, according to public records viewed by Reuters.
• The previously unreported acquisition of the mineral rights in late 2023 was made by BYD subsidiary Exploracao Mineral do Brasil, which was created in May of that year, the documents showed.
• The EV producer’s acquisition of mineral rights in Brazil is its most concrete step so far toward mining strategic minerals in the West.

Trump hints at auto tariffs by April

• President Donald Trump has kept alive his tariff threats, saying levies on automobiles would be coming as soon as 2^nd April.
• Answering a question during an executive-order signing session in the Oval Office, the president responded by saying “Maybe around April 2^nd…I would have done them on April 1^st… But we’re going to do it on April 2^nd.”
• President Trump was vocal throughout his campaign on protecting US business and regularly mentioned introducing tariffs on China, but this has now grown to include Mexico and Canada.
• According to auto data collector Ward’s Intelligence, close to 25% of new vehicles sold in the US last year were classified as imported, which in their data excludes vehicles built in the US, Canada or Mexico.

Company News

Anglo American (AAL LN) 2,481.5p, Mkt Cap £33bn – Progress towards demerger of the platinum business

• Anglo American reports that it will seek shareholder approval for the demerger of Anglo American Platinum at its AGM on 30^th April.
• Subject to the outcome of the AGM, the planned demerger will leave Anglo American retaining a 19.9% interest.
• In 2024, Anglo American Platinum generated EBITDA of R19.8bn (~US$1.1bn) and, this morning, “announced its final dividend for 2024, and an additional cash dividend, together totaling R16.5 billion (approximately $0.9 billion), which will be payable to all Anglo American Platinum shareholders ahead of the demerger”.
• Chief Executive, Duncan Wanblad, explained that Anglo American is “on a clear timeline towards demerging Anglo American Platinum – the world’s leading PGMs producer – in June, with its primary listing on the Johannesburg Stock Exchange and an additional listing on the London Stock Exchange”.
• The progress on plans to demerge the platinum business follows recent disposals of coal interests in Australia including the A$1.6bn sale of a 33.3% minority interest in the Jellinbah East & Lake Vermont steel-making coal mines in Queensland to Zashvin and the US$3.8bn sale of Australian its steel-making coal businesses to Peabody Energy.

Apollo Minerals (AON AU) A$0.018, Mkt Cap A$14m – Capital Drilling takes equity stake to support Gabon gold project progression

• Apollo recently received a A$2m equity investment from drilling company Capital DI.
• The funds will be used to progress the Company’s Salanie gold project in Gabon.
• Earlier in February, Apollo announced Capital has begun drilling at the Salanie project, focusing on extensions to the A1 prospect.
• A1 previously reported drilling of:

• • 5.8m at 8.2g/t Au from 16m

• Trenching had returned mineralisation of 10.3m at 3.4g/t Au
• The Company suggests that the A1 mineralised trend remains open along strike and dip, which is the priority for Phase 2.
• Salanie lies within an Archaean greenstone belt.

East Star Resources (EST LN) 1.15p, Mkt Cap £5.4m – Drilling results from Verkhuba, Kazakhstan

• East Star Resources reports initial results from recent core drilling at its Verkhuba copper project in the East Region of Kazakhstan.
• Today’s announcement highlights results from 3 holes drilled in Q4 2024 and confirms that “Assays from all 238 core samples taken from three drill holes have been received with several new mineralised zones intersected”, including:

o   Intersections of 0.7m averaging 2.94% copper and 0.17% zinc from a depth of 60.1m and of 4.0m averaging 0.69% copper from 201m depth in hole VU-DD-007A; and

o   Intersections of 0.6m averaging 1.99% copper from a depth of 54.2m, of 5.1m averaging 1.43% copper from 170.2m depth and 0.5m averaging 1.63% copper from 221.5m depth in hole VU-DD-008A; and

o   1.4m averaging 2.88% zinc and 0.28% copper from a depth of 172.8mdepth in hole VU-DD-027A.

• The announcement confirms that “All holes intersected ore grade mineralisation … [and that] … Mineralisation is recorded outside the current modelled ore bodies but within the open pit shell, potentially leading to a Mineral Resource increase”.
• Emphasising the additional intercepts were in zones within the planned pit shell which had previously been classified as waste, CEO, Alex Walker, explained that they support “our view that the ore lenses comprising the current resource model extend further and so additional drilling in these areas will potentially grow the resource and improve the economics”.
• Mr. Walker also commented that “the three drill holes completed were not targeting the thickest, shallowest or highest-grade portions of the resource and so we look forward to getting the drill rig turning again in Q2 2025”.
• The company’s website says that Verkhuba hosts a JORC compliant ‘Inferred’ resource of 20.3mt at an average grade of 1.16% copper, 1.54% zinc and 0.27% lead based on a cut-off grade of 0.86% copper equivalent and data from 46,616m of drilling.
• In our opinion, the lenticular nature of VMS (Volcanogenic Massive Sulphide) mineralisation can sometimes lead to the identification of additional mineral lenses as closer drill spacing is implemented to firm up resource classification.

Conclusion: Identification of additional mineralised lenses within the existing pit shell at Verkhuba is encouraging and seems likely to prompt a revised MRE in due course.  We look forward to further news as resource drilling proceeds.

Empire Metals* (EEE LN) 9.25p, Mkt Cap £60m – Drilling programme to provide bulk samples for further flowsheet development

• Empire Metals has issued an update on their Pitfield Titanium project in Western Australia.
• The Company is planning to conduct an 84 Air Core drillhole programme over 4,340m.
• The drilling is intended to test the extent of the higher-grade titanium mineralisation zones.
• Additionally, the drilling will provide up to 806 of bulk mettalurgical samples, with the samples expected to be representative of a mineral inventory.
• The Company will progress ongoing gravity and flotation testwork, ahead of a product development trial.
• Last week, testwork was carried out on material recovered from depths of up to 50m in10 diamond drill holes, focussed on the deslimed fine mineral fraction below 38µm in size.
• The results showed that “Gravity separation recovered 60-80% of Ti-bearing minerals into a heavy mineral concentrate… [and that] … Acid leach tests on gravity concentrates achieved 95% dissolution of … [the titanium bearing mineral] …anatase” (TiO2).
• The met testwork suggested that “Separate flotation test work on whole of ore samples achieved 78% TiO₂ recovery into a rougher mineral concentrate”.
• Empire Metals explains that “Key features and benefits of the current flowsheet include:

o   Highly friable, weathered ores allow for simple, low-energy scrubbing and desliming circuit

o   Conventional mineral separation processes (gravity/flotation) to concentrate the Ti-bearing minerals, rejecting the gangue silicates

o   Acid leaching and precipitation to produce a high-quality TiO₂ product (>80% TiO₂ )

o   Further refining to achieve final product (>95% TiO₂) suitable for:

o   Chloride pigment market and the manufacture of paints and coatings, plastics and paper; and

o   Production of titanium metal (sponge)”.

• The use of flotation draws on the long-established experience of the kaolin (china-clay) industry where this technology is used “to remove any anatase present as this may discolour the kaolin products”.
• Empire Metals confirms that its “initial diagnostic work tested a range of reagent conditions, achieving a recovery high of 61% TiO₂”.

Conclusion: Today Empire builds on last week’s update regarding the potential flowsheet at Pitfield, where the team is aiming to deliver a high-grade titanium product. Air Core drilling will provide up to 80t worth of bulk samples which will further support their path to economic production.

*SP Angel acts as nomad and broker to Empire Metals

Europa Metals Limited (EUZ LN) 1.6p, Mkt Cap £2m – Financing constraints prompt decision not to pursue Tynagh acquisition

• Citing difficulties in procuring finance for a Euopean minerals project, Europa Metals reports that it will not proceed with the proposed with its proposed acquisition of Viridian Metals Ireland and its wholly-owned Tynagh lead/zinc/copper/silver project.

Executive Chairman, Myles Campion, said that “Tynagh had all the right qualities to be an operating mine in the near term and could be producing significant cashflow for its size and relatively modest expected CAPEX, but with current market conditions, finding the near term funding to realise that goal has proved very difficult in Europe”.

Mr. Campion confirmed that “Europa will now renew its search for projects that can be brought into the Company and add value for all shareholders”.

Mkango Resources* (MKA LN) 11.4p, Mkt Cap £38m – Land lease agreement for the separation facility in Poland

BUY

• Mkango Polska, a wholly owned subsidiary of the Company, signed a revised exclusive land lease agreement with Grupa Azoty Pulawy for the RE Separation Plant.
• The agreement covers 8 ha site adjacent to Grupa Azoty Pulawy’s fertilizer and chemicals complex in Pulawy Poland.
• The Company has been working with Grupa Azoty since 2021.
• The site benefits from good infrastructure including transport links, access to utilities and reagents.
• The Company plans to complete a DFS on the RE separation plant and move to construction in a development drive of the mid stream part of the Group.

*SP Angel acts as nomad and broker to Mkango Resources

Orosur Mining* (OMI LN) 14p, Mkt Cap £38m – Progress at Argentina sees ownership rise to 51% as drilling looms

• Orosur provides an update on its El Pantano gold project in Argentina.
• The Company has now earned a 51% interest in the Project, having invested US$1m worth of exploration expenditure into the JV.
• Orosur will be able to earn a 100% interest in the JV, Deseado, with a further investment of US$2m over the next two years.
• Should Orosur earn the 100% interest, the original owners will retain a 2% NSR, with Orosur able to repurchase 1% for US$1m.
• Orosur has now completed base level geoscience surveys, including ground magnetics, geological mapping, and surface geochemistry over a 25km long rift structure.
• The Company has identified ‘pervasive silification, quartz veining, and geochemical anomalism’ over the land package.
• Going forward, Orosur is set to begin an IP survey to support the delineation of salified drill targets.

Conclusion: Orosur has now earned a 51% in El Pantano via the completion of necessary early stage exploration expenditure, identifying a 25km long rift structure. Further geophysics will support the delineation of drill targets, with the Company now permitted for drilling, set to take place this year.

*SP Angel acts as Nomad and Broker to Orosur Mining

Petra Diamonds (PDL LN) 24p, Mkt Cap £56m – H1 results and management changes.

• In its interim report for the six months to 31st December 2024, Petra Diamonds reports the sale of ~1.1m carats of diamonds (H1 2024 – ~1.5m carats after allowing for the sale of the Williamson mine in Tanzania announced in January).
• Diamond sales generated revenues of US$115m (H1 2024 – US$164m) and EBITDA (adjusted) of US$15m (H1 2024 – US$38m).
• The announcement explains that the reduced revenue reflects “the deferral of 456kcts (ca. US$50 million based on average prices achieved for tender 1 of FY 2024) of sales from FY 2023 which were sold in H1 FY 2024”.
• The Cullinan mine contributed ~68% (US$78m) of the revenue (H1 2024 – 59% or US$97m) with the balance from the Finsch mine.
• “Consolidated net debt increased to US$215 million as at 31 December 2024 (30 June 2024: US$193 million) due to diamond market weakness and the timing of our tender sales, with three tenders taking place in H1 FY 2025 and four scheduled in H2 FY 2025, partially offset by cost control and capital spend profile efficiencies”.
• Capital expenditure at Cullinan amounted to US$16m (H1-2024 US$27m) with a further US$13m at Finsch (H1 2024 – US$16m).
• In a separate announcement, Petra Diamonds has announced the departure of CEO Richard Duffy, “by mutual agreement and with immediate effect”, and the appointment of Vivek Gadodia and Juan Kemp as joint CEOs.
• Mr. Duffy has served as CEO since 2019 and Vivek Gadodia, who joined the company in 2021 from Sasol where he spent “nearly 15 years … in a wide range of engineering, project management and corporate positions”.
• Juan Kemp “joined Petra in 2009 when the Cullinan Mine was purchased from De Beers. Juan became General Manager at Cullinan Mine in 2011, Chief Technical Officer in 2019 and Operations Executive, Cullinan Mine in 2024. Juan has over 30 years’ experience, with a deep knowledge of the Cullinan Mine and before his time at De Beers, he worked at Anglo Gold in the East Rand Gold and Uranium Division”.

Phoenix Copper* (PXC LN) 4.15p, Mkt Cap £7.7m – Roger Turner

• We are sad to report the death of Phoenix Copper’s co-founder, Roger Turner, who retired from the post of Chairman of PXC at the end of 2021, peacefully at home in West Sussex.
• Combining technical expertise in both mining engineering and geology with an entrepreneurial drive, Roger Turner’s long career included early experience at the Kilembe mine in Uganda and operational management of a large UK quarry.
• Subsequent experience in Rio Tinto’s head office engineering division and a later involvement in central Asia, ultimately in leading Oxus Gold, was followed by leadership roles in a number of UK based mining companies with operations ranging from Russia to Mexico before a vision to regenerate a major historic mine in Idaho led to the founding of Phoenix Copper.
• His enthusiasm, wide technical expertise and boundless energy will be sorely missed by his many friends and colleagues throughout the mining industry.

*SP Angel acts as Nomad to Phoenix Copper

Thor Energy (THR LN) 0.65p, Mkt Cap £3.1m – Acquisition of Go Exploration

• Thor Energy has confirmed the completion of its acquisition of 80.2% of Go Exploration Pty, as it moves into South Australia’s hydrogen and helium exploration business.
• Today’s announcement explains that Go Exploration is “positioned for rapid generation of drill ready targets (PEL 120) and follow up in high generative potential areas (PELAs)”.
• Managing Director, Andrew Hume, described the opportunity provided by Go Exploration as “truly transformative … [and expressed enthusiasm for] … the potential of these assets, especially as we look forward to the upcoming resource statement, and the opportunity to rapidly advance exploration and development”.
• Executive Chairman, Alastair Clayton, commented that the “acquisition represents a significant milestone for Thor Energy and is the culmination of a great deal of hard work and we are pleased to have been able to bring this transaction to a successful close”.
• The issue of ~446m shares for the acquisition plus a further 25m ‘Consultant Shares’ represents ~49% of the enlarged company.

LSE Group Starmine awards for 2024 commodity forecasting:

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

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

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

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

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

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

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

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