SP Angel Morning View -Today’s Market View, Monday 6th January 2025

Gold finds support higher as dollar weakens despite Treasuries falling further

MiFID II exempt information – see disclaimer below

SP angel received great news this morning from the LSEG StarMine commodities forecast polling team

• SP Angel – 1^st in LSEG StarMine Precious Metals poll for 2024
• SP Angel – 2^nd in LSEG StarMine Base Metals poll for 2024

Atalaya Mining (ATYM LN) – Timetable for redomiciling to Spain

Bellevue Gold (BGL AU)– Revised guidance as ore grade disappoints

Great Southern Copper (GSCU LN) – Diamond drilling underway at Cerro Negro

Guardian Metal Resources (GMET LN) – £750,000 funding

Libero Copper & Gold (LBC CN) – First drilling results from the new 14,000m programme at Mocoa

Tirupati Graphite (TGR LN) SUSPENDED – Management Changes

Ramelius Resources (RMS AU) – High grade Cue ore supports record free cash flow

Gold finds support higher as dollar weakens despite Treasuries falling further

• Gold prices have found support around the $2,633/oz mark, having fallen from recent highs of $2,663/oz last Friday.
• The macro environment is presenting an intriguing picture, with the 10 year US Treasury yield pushing higher again to 4.62%.
• Meanwhile, the dollar rally seems to have paused, with the index sliding from 109.3 to 108.6.
• This week’s labour data from the US will be a key indicator of the strength of the economy.
• JOLTs openings on Tuesday are expected to show a slight monthly uptick, whilst ADP employment is set to slow slightly.
• However the primary focus for gold traders will be the Non-Farm Payroll data due on Friday, with forecasts at c. 160k new jobs vs 227k last month.
• A miss of this could reverse the aggressive sell-off in Treasuries and lift gold, with focus also set to be on the unemployment rate rising above 4.3%, with expectations suggesting 4.2%.
• However, another beat to the 160k number could see yields climb again, potentially hurting gold’s relative strength.

Economics

US – December labour numbers are due this Friday with expectations for 160k vs 227k in November.

• Jobless rate expected to remain unchanged at 4.2%.

Poorest US state, Mississippi is close to German GDP

• Europe is struggling with the impact of the Ukraine war on energy prices
• But we also blame, endemic unionisation, excessive bureaucracy and overregulation.
• Germany’s decision to close its last three nuclear reactors in recent years, during the Ukraine war has probably not helped either.
• Dunkelflaute anyone!

China – Main stock exchanges asked large mutual funds to curtail selling at the start of the year as authorities are trying to calm markets down.

• At least four large mutual funds received calls asking to buy more stocks than they sold each day, Reuters cites sources familiar with the matter.
• CSI 300 lost 2.9% on the first day of trading and has been trading more than 5% down last week.
• Earlier, authorities provided swap and relending schemes totalling CNY 800bn for market participants to limit stock selling.
• Services sector growth accelerated to the highest in seven months in December in a contrast to a slowing momentum in the manufacturing sector.
• Growth was supported by stronger new business inflows.
• Of note, exports pulled back for the first time since August 2023 as front loading ahead of promises of new trading barriers from the incoming new administration in the US may be slowing down.
• Employment dropped for the first time since August amid a reduction in business optimism.
• Caixin Services PMI (Dec/Nov/Est): 52.2/51.5/51.4
• Caixin Composite PMI (Dec/Nov/Est): 51.4/52.3/NA

Japan – Services PMI rises to 50.9 in December vs 50.5 in November

• The Composite PMI also rose to 50.5 from 50.1
• New orders grew at their fastest pace for four months.
• Employment in services continued to rise marking more than 12-months of gains.
• Sentiment weakened for business on uncertainty over Trump tariffs and general slowing global outlook

France – New Finance Minister laid out a slower rate of fiscal deficit reduction to gain political support and get budget through National Assembly.

• Previous efforts by former government failed to succeed offering to reduce the gap to 5% from current 6.1% through a serries of tax increases and spending cuts.
• “If we target 5%, it’s more than a 1% gap — which is considerable — and I think too much as we also need to support the economy,” Lombard said on France Inter radio.
• “So we are targeting a deficit that would be between 5% and 5.5%.”

UK – Business confidence is at its lowest since Liz Truss’’ mini budget more than two years ago, according to latest British Chambers of Commerce data.

• A number of companies are expecting prices to increase over the next three months as companies are trying to pass on higher taxes and another increase in the minimum wage onto consumers.
• Higher inflation may in turn complicate BOE plans to bring borrowing costs down.

Canada – PM Trudeau may announce his resignation as early as today quitting as leader of the ruling Liberal Party after nine years in office

• The departure of Trudeau comes amid reports that Conservatives are set to claim a confident win in an election that must be held by late October.
• Calls to step down have increased after Trudeau tried to replace Finance Minister Chrystia Freeland, one of his closest cabinet allies, after she pushed back against proposals for more spending.
• High rates of inflation post Covid spending increase and immigration policy were also cited as criticisms of the government, according to Reuters.
• Reminds us of the saying ‘go woke, go broke’

Russia – Military dissatisfaction may spell beginning of the end for Russian offensive.

• Media reports of a growing reluctance by Russian commanders to commit troops to an offensive across the Dnipro River suggests potential for a new Russian revolution.
• Reports indicated the build-up ~2,000 troops and ~300 speedboats on the left bank of the Dnipro.
• A report also suggests Russian soldiers in Crimea have been damaging their boats to avoid being brought into the offensive.
• Biden administration is planning to impose more sanctions on Russia targeting oil tankers carrying its crude.

Ukraine – President Zelenskiy said that security guarantees for Kyiv to end was with Russia will be effective only if provided by the US.

• Zelenskiy is hoping to meet with Trump following his inauguration due later this month.
• A ceasefire without security guarantees is feared to be used as a break to prepare another Russian offensive.

Shipping – Russia is now sending ships to China via the Northern Sea Route without an icebreaker.

• Nornickel claims to have set a new record for the eastern section of the Northern Sea Route
• The eastern segment of the Northern Sea Route is treacherous in winter with Nornickel planning for its ship to return the same way.
• The company is looking to ship ~1.6mt via the Northern Sea Route from 2024-26, to increase this to 2.1mt in 2027 and then on to 3mtpa in 2028-30.
• Nornickel has six Arc-7 ice class vessels and also rents up to nine dry cargo vessels and a tanker.

Currencies

US$1.0354/eur vs 1.0282/eur previous. Yen 157.61/$ vs 157.33/$. SAr 18.662/$ vs 18.786/$. $1.248/gbp vs $1.239/gbp. 0.625/aud vs 0.621/aud. CNY 7.350/$ vs 7.315/$.

Dollar Index 108.95 vs 109.15 previous.

Precious Metals

Gold US$2,633/oz vs US$2,653/oz previous

Gold ETFs 82.8moz vs 82.8moz previous

Platinum US$954/oz vs US$932/oz previous

Palladium US$920/oz vs US$920/oz previous

Silver US$30.3/oz vs US$29.6/oz previous

Rhodium US$4,575/oz vs US$4,575/oz previous 

Base metals:   

Copper US$8,900/t vs US$8,808/t previous

Aluminium US$2,496/t vs US$2,517/t previous

Nickel US$15,876/t vs US$15,050/t previous

Zinc US$2,894/t vs US$2,902/t previous

Lead US$1,922/t vs US$1,926/t previous

Tin US$29,108/t vs US$28,705/t previous 

Energy:           

Oil US$76.2/bbl vs US$75.9/bbl previous

Natural Gas €48.9/MWh vs €49.6/MWh previous

Uranium Futures $72.8/lb vs $74.4/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Tianjin) US$103.6/t vs US$103.6/t

Chinese steel rebar 25mm US$487.9/t vs US$487.6/t

HCC FOB Australia US$204.0/t vs US$203.0/t

Thermal coal swap Australia FOB US$126.5/t vs US$127.0/t

Other:  

Cobalt LME 3m US$24,300/t vs US$24,300/t

NdPr Rare Earth Oxide (China) US$54,407/t vs US$53,776/t

Lithium carbonate 99% (China) US$9,842/t vs US$9,933/t

China Spodumene Li2O 6%min CIF US$790/t vs US$790/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$985/t

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

China Graphite Flake -194 FOB US$435/t vs US$435/t

Europe Vanadium Pentoxide 98% US$4.8/lb vs US$5.0/lb

Europe Ferro-Vanadium 80% US$25.6/kg vs US$26.3/kg

China Ilmenite Concentrate TiO2 US$290/t vs US$294/t

China Rutile Concentrate 95% TiO2 US$1,087/t vs US$1,089/t

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

Brazil Potash CFR Granular Spot US$295.0/t vs US$295.0/t

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

China Gallium 99.99% US$395.0/kg vs US$415.0/kg

Company News

Atalaya Mining (ATYM LN) 369p, Mkt Cap £514m – Timetable for redomiciling to Spain

• Atalaya Mining reports that, following the filing of the required documents on 27^th December, it expects to complete the redomiciling the company from Cyprus to Spain shortly.
• The company confirms that “Upon the confirmation of the Deed registration by the Spanish Commercial Registry, which is expected to take place on or around 9 January 2025, the re-domiciliation will be completed with retrospective legal effect from the Registration Date”.
• Atalaya Mining plc will be renamed as Atalaya Mining Copper SA and shares are expected to trade under the new name from 10^th January.

Conclusion: Apart from the November announcement of a move into exploration in Sweden, Atalaya Mining’s operations are located in Spain and we see formal Spanish domicile as appropriate recognition of the operational reality of its business.

Bellevue Gold (BGL AU) A$0.99, Mkt Cap A$1.3bn– Revised guidance as ore grade disappoints

• Australian gold producer Bellevue shares fell 14% in Australia after issuing updated production guidance.
• December 2024 quarter gold sales stood at 26.2koz Au at average sale price of A$3,339/oz (c.US$2,170/oz).
• Bellevue has a 70% exposure to the spot gold price through to 31^st December 2027 under its hedging programme.
• Lower production a result of lower grade as mining progressed to the outer edges of the orebody as they worked towards the ‘higher-grade core.’
• Plant operating at 95% recoveries in December processing 1.1mtpa rate over the quarter
• The Company revises FY25 gold production guidance to 150-165koz vs previous guidance of 165-180koz Au at AISC of A$1,750-1,850/oz.
• Bellevue states they are ‘on track to reach a production rate of >200kozpa from early in the June 2025 quarter.’
• The Company will review FY25 AISC guidance in the quarterly report due this month.
• Cash and gold fell from A$109m in September quarter to A$81m.

Great Southern Copper (GSCU LN) 1.4p, Mkt Cap £7.2m – Diamond drilling underway at Cerro Negro

• Great Southern Copper reports that it has started drilling at its Cerro Negro copper/gold/silver target within its Especularita project located 170km from the port city of Coquimbo, and 130km from Antofagasta Minerals’ copper concentrate port at Los Villos in Chile.
• Initial drilling is underway at the historic Mostaza mine prospect area where the company plans “up to 5 to 10 diamond drill holes for up to 500-1,000m” to investigate “historical drilling grades and thickness plus … [the drilling of] … step-out holes … designed to extend the known mineralised zone to depth and along-strike”.
• The company confirms that copper/silver mineralisation “at Mostiza is open in all directions”.
• The company also confirms that “scout RC drilling … [at its Viuda prospect which is also located within the Especularita project area] … has been completed and successfully identified porphyry type alteration in all drill holes. Assay results are awaited”.
• Commenting that “Historical drilling at Mostaza has clearly not tested the extents of mineralisation and was focussed on high grade lenses ignoring broader zones of copper-silver mineralisation” CEO, Sam Garrett, said that “drilling will initially focus on confirming historical grades and drilling out the known high-grade copper-silver-gold mineralisation at the Mostaza mine, before testing along trend to the south where our recent exploration results have confirmed evidence of similar mineralisation at surface”.

Conclusion: Planned drilling is now underway at the old Mostaza mine in Chile aiming to confirm historical results and extend the mineralised envelope.  We await further news as the campaign progresses.

Guardian Metal Resources (GMET LN) 31p, Mkt Cap £37m – £750,000 funding

Power Metals Resources* (POW LN) 13p, Mkt cap £15m – (Power Metals* holds a 45% stake in Guardian Metal Resources)

• Guardian Metal Resources reports that it has placed an additional 2.5m shares with “a single existing institutional investor … [identified as Premier Miton] … at an issue price of £0.30 per share” raising £750,000.
• The net proceeds of the fundraising, representing some 2% of the expanded capital of the company, “is targeted for accelerated exploration and project development activities … [of the company’s tungsten projects in Nevada] … at Pilot Mountain as well as, subject to the signing of the definitive agreement, at Tempiute”.
• Welcoming the additional support from an existing shareholder, CEO, Oliver Friesen, expressed confidence in “the Company’s direction as we head into 2025 … [and said that] … the additional financing allows us to accelerate and expand key exploration and development activities”.

*SP Angel acts as Nomad and Broker for Power Metals

Libero Copper & Gold (LBC CN) C$0.37, Mkt Cap C$21m – First drilling results from the new 14,000m programme at Mocoa

• The Company released results from the first diamond drill hole of its 14,000m resource expansion programme at the Mocoa Copper Project in Putumayo, Colombia.
• MD-044 intersected 1,141m at 0.27% Cu and 0.04% Mo (0.46% CuEq) from surface to end of hole.
• The intersection included high grade intervales including:
• 542m at 0.41% and 0.07% Mo (0.69% CuEq) from 281m and
• 389m at 0.45% Cu and 0.07% Mo (0.76% CuEq) from 293m.
• MD-044 tested the high grade zone plunging to the northeast below the existing conceptual pit constrained Inferred resource in a “gap” area suggesting a potential connection between two high grade zones.

Tirupati Graphite (TGR LN) SUSPENDED – Management Changes

• Graphite producer Tirupati provides an update on management changes.
• The Company has appointed co-CEO Anthony James Nieuwenhuys, who was previously a director of Eurasia and currently serves as CEO of Zeb Nickel.
• Full executive powers are being transferred from Shishir Poddar to Mr Nieuwenhuys ‘over the course of time.’
• The Company is also working to appoint an interim-CFO.
• Tirupati has also engaged ‘an experienced and qualified mining industry accounting and finance professional, located in India’  to support the ongoing audit.
• Mark Rollins was appointed as Executive Chairman of the Company last week.

Ramelius Resources (RMS AU) A$2.2, Mkt Cap A$2.5bn– High grade Cue ore supports record free cash flow

• Australian gold producer Ramelius, which has operations in West Australia, provides an update.
• The Company produced 85.3koz over the period, with 67koz from Mt Magnet and 18.3koz from Edna May.
• The results mark an increase on the 62.4koz produced in September 2024.
• Cash flows of A$175m reported and a cash and gold balance of A$502m (A$440m previous quarter).
• The cash flow number excludes a A$68m purchase of Spartan shares to boost their stake to 19.9% alongside a A$43m dividend payment.
• The quarter was boosted by higher-grade ore from Cue open pit into the Mt Magnet mill.

LSE Group Starmine awards for Q3 commodity forecasting:

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Previous Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q3 2024

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q3 2024

No.1 in Copper:  “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”

No1. In Gold:  “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”

The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020

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

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.

DISCLAIMER

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

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

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

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

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

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

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

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

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

A full analysis is available on our website here  If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).

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