Gold trades higher as physical ETF inflows ramp up and mining funds see inflows
MiFID II exempt information – see disclaimer below
Galileo Resources (GLR LN) – Moving to a 4th phase of drilling at the Shinganda copper project, Zambia
Kore Potash* (KP2 LN) – BUY, TP 4.4p – Valuation update: Kola EPC contract signed ahead of FID and project funding
Panther Metals (PALM LN) – Latest drilling results from the Dotted Lake project, Ontario
Tertiary Minerals* (TYM LN) – Mushima North silver results show holes ending in mineralisation
Montage Gold* (MAU CN) – Koné construction progress and acquiring stake in exploration company
Gold ($3,021/oz) higher as physical ETF inflows ramp up and mining funds see inflows
- Gold prices have bounced back from yesterday’s weakness but remain below the recent highs of $3,057/oz.
- Physical ETF holdings jumped again, rising to 87.9moz but well below COVID highs of 113moz.
- LSEG reports gold mining funds saw outflows of net $4.6bn in 2024, largest in a decade.
- However, they report the first monthly inflows in six months, seeing $555m net, highest since November 2023.
- Miners are ramping up shareholder returns on widening margins amid steady inflation and record high gold prices.
- Barrick and Gold Fields are boosting buybacks, whilst AngloGold Ashanti are boosting dividends.
- Tariff concerns are fading, with Trump easing his position on tariffs, potentially weighing on gold.
Iron ore holds above $100/t as Brazilian shipments slow whilst steelmakers cut output
- Iron ore has bounced back above $100/t but remains in focus amid weakening China steel demand.
- China iron ore imports in Jan-Feb fell 9%ytd on less ore from Brazil.
- Reports suggest improving China steel mill profitability, with lower coking coal prices.
- Bloomberg reports Ba Yi iron is set to cut crude steel production by 10%, although reports don’t give an expected timeline.
- Rebar prices hit six month lwos in China last week, down 10%yoy.
- China new builds in Jan-Feb fell 30%yoy, worst start to a year in over 20 years.
- However, state spending is rising and the construction purchasing managers’ index moved into expansion in February.
- Beijing continues to reiterate their 5% growth target, however the focus has shifted to consumption vs large scale housing and infrastructure construction.
Commodity markets evolving into multi-tier pricing with huge premiums developing in the West
- Commodity markets have been slowly evolving for some years driven by China determination to reduce input costs for its manufacturing industry.
- Trump has accelerated and accentuated this evolution with sudden tariff introductions, but multi-tier pricing has been coming at us for a long time.
- But, even without Trump’s tariffs premiums for physical deliveries in the West would be rising as China uses more of its commodity production at home.
- Huge Chinese investment / subsidy in mineral processing means processed commodities are naturally cheaper in China than elsewhere.
- Yes, China has probably overshot its CCP central plan through the development of so much copper smelting, but we believe China intends to eventually use all this material.
- Western smelters and furnaces have largely failed to expand or simply closed as China undercut all other producers.
- This means the West is going to have to develop new production as China exports less, and this will inevitably require higher pricing or some form of subsidy.
- Personally, we were hoping western metallurgists would develop new and radical forms of hydrometallurgy to replace the polluting open furnaces so often used in China.
- There has been some success with this with more copper now processed via leaching than before.
- The Bayer Hydromet process works for aluminium and copper ores while Anglo built the Skorpion zinc oxide mine and Sherritt developed a process for making nickel powders.
- Rare Earth refining works with hydrometallurgical processes but there are previous few experts in this field and China has banned all non-Chinese visitors from its REE regions.
Other factors affecting physical premiums:
- Liquidity driving volatility: Many banks were forced to exit commodity trading after the Subprime crisis reducing liquidity in these markets.
- Trading strategies: a new range of risk-taking oil traders have moved into physical markets
- Traditional trading houses: are more like logistics companies, eg Glencore sees itself as the DHL of commodities
- Regulation: physical trading is less covered by the regulators enabling traders to trade new strategies more freely
- Physical squeezes: traders look likely exacerbate moves in market prices far beyond normality over short periods.
Conclusion: While the $1,320/t premium for copper is down to Trump, we are likely to see increasing physical premiums across a range of metals in West as Chinese smelters and refiners sell more metal into China’s growing manufacturing base.
We see physical premiums widening across a range of industrial metals over time unless the West is able to develop more efficient and less-polluting processes for their production.
Transformers – Shortage of larger-scale transformers is extending lead times
- There is a severe shortage of larger-scale transformers in the world according to Bloomberg Green this morning.
- NovoGrid spokesman says there is a lead-time of >1 year for a new transformer of the size that exploded near Heathrow.
- Manufacturers are struggling to respond to new demand to upgrade and repair substations as utilities move to upgrade and repair grid systems.
- Russian targeting of grid infrastructure in Ukraine will have used much of the available European stock.
- Manufacturers include: Hitachi Energy, GE Vernova, Siemens Energy, ABB, Schneider Electric, Winder Power and Royal SMIT Transformers.
- The UK National Grid have installed and energized >20 supergrid transformers in the last five years for upgrades and to connect wind and solar farms, rail electrification and other industrial network connections.
Key commodities in transformers: Silicon Steel, nano-crystalline alloys using boron, niobium and copper.
Sharepickers: Gold & Copper Small Caps:
- Gold, copper, 13:05 Orosur*, 13:38 Oriole*, 15:25 Resolute, 16:44 Goldstone*, 17:46 Antofagasta, 18:23 Central Asia Metals, 19:56 Kavango, 20:52 Power Metal Resources, 24:25 Kefi*, 25:18 Tertiary Minerals*
- Video:
- * SP Angel act as nomad and or broker
ii / interactive investor – video interviews:
FCA To Encourage Retail Investors To Increase Their Risk Levels:
| Dow Jones Industrials | +1.42% | at | 42,583 | |
| Nikkei 225 | +0.46% | at | 37,781 | |
| HK Hang Seng | -2.35% | at | 23,344 | |
| Shanghai Composite | -0.00% | at | 3,370 | |
| US 10 Year Yield (bp change) | +1.0 | at | 4.34 |
- Exchange of messages between VP JD Vance and Defence Secretary Pete Hegseth that was exposed to an Atlantic magazine top editor who was accidentally added to the group chat highlighted that European allies were “free-loading” off US efforts.
- “I just hate bailing Europe out again,” JD Vance is believed to have messaged.
- “VP: I fully share your loathing of European free-loading,” Hegseth responded. “It’s PATHETIC.”
- Growth momentum picked up in March as demonstrated by preliminary PMI data exclusively driven by a strong increase in the services sector while manufacturing slipped into a contraction.
- A fall in manufacturing output may be attributed to an earlier front loading of tariffs at the start of the year.
- On a less positive side, business expectations for 12m ahead fell to the second lowest since October 2022.
- Jobs growth was subdued while input price inflation kicked up to a near two yea high with respondents often blaming the impact of tariff policies.
- Preliminary Manufacturing PMI (Mar/Feb/Est): 49.8/52.7/51.7
- Preliminary Services PMI (Mar/Feb/Est): 54.3/51.0/51.0
- Preliminary Composite PMI (Mar/Feb/Est): 53.5/51.6/50.9
- Both US and Russian sides report progress following more than 12 hours of talks on Monday but no clear results have been announced yet.
- Bot parties are currently working on a joint statement.
- IFO Business Climate (Mar/Feb/Est): 86.7/85.3(revised from 85.2)/86.7
- IFO Current Assessment (Mar/Feb/Est): 85.7/85.0/85.5
- IFO Expectations (Mar/Feb/Est): 87.7/85.6(revised from 85.4)/87.3
Venezuela – Trump to hit countries that buy Venezuelan oil with 25% tariff
Dollar Index 104.460 vs 103.900 previous
Gold US$3,017/oz vs US$3,026/oz previous
Gold ETFs 87.8moz v 87.1moz previous
Platinum US$979/oz vs US$986/oz previous
Palladium US$957/oz vs US$971/oz previous
Silver US$33.2/oz vs US$33.3/oz previous
Rhodium US$5,575/oz vs US$5,650/oz previous
Copper US$10,006/t vs US$10,012/t previous
Aluminium US$2,614/t vs US$2,636/t previous
Nickel US$15,975/t vs US$16,205/t previous
Zinc US$2,969/t vs US$2,965/t previous
Lead US$2,051/t vs US$2,057/t previous
Tin US$34,500/t vs US$34,655/t previous
Oil US$73.3/bbl vs US$72.2/bbl previous
- Shell announced plans to grow hydrocarbon production, cut costs and increase shareholder returns to 40-50% of operating cash flows as part of a revised 5-year plan at its capital markets day.
- Media reports the UK Chancellor confirming the Rosebank and Jackdaw fields would receive the necessary consents to progress, which requires new approval processes that include consideration of scope 3 emissions.
Natural Gas €41.6/MWh vs €42.0/MWh previous
Uranium Futures $64.4/lb vs $64.6/lb previous
Iron Ore 62% Fe Spot (China CFR) US$101.7/t vs US$102.3/t
Chinese steel rebar 25mm US$478.2/t vs US$478.9/t
HCC FOB Australia US$173.5/t vs US$174.0/t
Thermal coal swap Australia FOB US$100.8/t vs US$100.8/t
Cobalt LME 3m US$33,610/t vs US$33,610/t
NdPr Rare Earth Oxide (China) US$61,130/t vs US$61,285/t
Lithium carbonate 99% (China) US$9,844/t vs US$9,858/t
China Spodumene Li2O 6%min CIF US$805/t vs US$805/t
Ferro-Manganese European Mn78% min US$1,005/t vs US$1,005/t
China Tungsten APT 88.5% FOB US$358/mtu vs US$358/mtu
China Graphite Flake -194 FOB US$435/t vs US$435/t
Europe Vanadium Pentoxide 98% US$5.0/lb vs US$5.0/lb
Europe Ferro-Vanadium 80% US$24.3/kg vs US$24.3/kg
China Ilmenite Concentrate TiO2 US$299/t vs US$300/t
Global Rutile Spot Concentrate 95% TiO2 US$1,506/t vs US$1,506/t
Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t
Brazil Potash CFR Granular Spot US$335.0/t vs US$335.0/t
Germanium China 99.99% US$2,825.0/kg vs US$2,825.0/kg
China Gallium 99.99% US$390.0/kg vs US$390.0/kg
VW and BMW EVs outsell Tesla in Europe
- Data from JATO Dynamics published yesterday showed that Tesla EV sales in Europe have fallen behind Volkswagen and the BMW Group in February.
- Tesla sales in Europe fell to under 16,000 units, while in comparison, VW EV sales were up 180% to just under 20,000 units and BMW Group sales were about 19,000.
- Tesla’s market share fell to 9.6%, its lowest percentage share for February in the last five years.
- The data from JATO also showed that Chinese-owned brands, combined, had also outsold Tesla in the month.
BYD surpass Tesla as sales reach $100bn in 2024
- Chinese EV and battery maker BYD, reported revenue of $107bn, for the 12 months ended 31st December 2024.
- By comparison, Tesla’s revenue for the same period was $97.7bn.
- BYD have climbed rapidly to the top of the global EV market thanks to their rapid innovation and high-tech offerings at accessible prices.
- BYD has forecast sales of between 5m and 6m this year and has made a strong start selling 623,000 units in the first two months of 2025, up 93% yoy.
Global EV battery capacity up 25% yoy in 2024, battery metals cost down 44.5%
- Global EV battery capacity was up 25% yoy in 2024, reaching 865.5GWh.
- The batteries for EVs, including PHEVS and HEVs, contained a combined 1.76mt of graphite, LCE, nickel, cobalt and manganese.
- Adamas Intelligence, a Toronto-based EV supply chain research firm, more than 1TWh will be added in 2025.
- Due to weakened lithium prices throughout 2024, the cost of battery metals totalled $14.0bn, down 44.5% from 2023.
- Data from Adamas technology shows the top 20 automakers based on battery metals spend:
- 1st: Tesla – $2.07bn
- 2nd: Volkswagen – $1.30bn
- 4th: BYD – $1.05bn
- Despite selling 2m more EVs last year than Tesla, BYD’s materials expenditure was $1bn below that of its Texas-based rival.
- BYD’s in-house manufactured batteries cost the Chinese company $1.07bn in 2024, down almost 50% from 2023.
- BYD has also focused on reliable LFP batteries which has kept weighted average battery materials cost to $259/vehicle.
- Tesla’s weighted cost is $1,152/vehicle.
| Overnight Change | Weekly Change | Overnight Change | Weekly Change | ||
| BHP | -0.7% | -1.5% | Freeport-McMoRan | 3.4% | 5.3% |
| Rio Tinto | -0.3% | -0.6% | Vale | -1.3% | -1.4% |
| Glencore | 0.6% | -4.5% | Newmont Mining | -1.1% | -1.5% |
| Anglo American | 0.4% | -2.4% | Fortescue | -1.3% | -3.4% |
| Antofagasta | -0.1% | -4.2% | Teck Resources | 0.9% | -1.8% |
- Galileo Resources reports that following the completion of its Phase 3 drilling campaign at its 75% owned Shinganda copper project in western Zambia it now plans a Phase 4 programme.
- The company explains that the third phase of work “extends the shallow oxide copper-gold mineralisation reported previously at the Shinganda outcrop zone to an area of 350m x 150m within the large Shinganda Splay Fault zone that is intermittently mineralised over more than 20km … [but adds that] … Assay results were inconclusive in some areas due to poor diamond drill core and RC chip recoveries owing to unfavourable ground conditions”.
- Phase 3 drilling comprised 2,213m of reverse-circulation in 30 holes and results included “22m @ 0.34% Cu from 18m depth in RC hole SHRC010, as well as several one metre sample intervals assaying up to 1.13% Cu and 0.16% Co in separate holes”.
- Galileo Resources explains that “More than half of the known and projected Shinganda Splay structure remains untested by drilling … [and says that it] … will focus further drilling on the identification of structural mineral trap sites related to pressure shadows surrounding the magnetic highs in this extensive IOCG … [iron-oxide copper gold] … setting”.
- Chairman and CEO, Colin Bird, explained that a “better understanding of the scale of mineralisation will in time require further drilling both along strike to pick up the individual mineralised lenses and to test the full extent of each dilation zone”.
- Mr. Bird clarified that “Before embarking on this programme, we will turn our attention to the Main Fault” where, he said, “earlier drilling intersected a substantial iron-rich breccia which is indicative of a permeable host rock through which large amounts of … [potentially mineral-bearing] … fluid have passed”.
- He pointed out that this area around the Main Fault also hosts “multiple magnetic anomalies … [making it] … a very prospective target.
- We release an update note on Kore Potash highlighting latest milestones achieved by the Company.
- We also update our valuation to account for the EPC contract, updated FS, revised potash price forecasts as well as a >$10m equity raise.
- The Company signed a binding EPC contract with PowerChina for the Kola Potash Project, ROC, in Nov24 in a major derisking event advancing the project further along the development curve on course for funding completion and FID.
- Structure of the contract controls for a number of key risks typical of capital intensive projects including construction cost overruns, time to completion delays and product quality compliance.
- US$1.9B EPC is a fixed cost contract subject to delivery timelines (penalties/bonuses for delays/early completion) and guaranteed performance including MOP production to marketable specs (MOP ≥95%KCl among others).
- Construction period is 43m from triggered Full Notice to Proceed (FNTP) that can be issued at any time after signing the EPC and subject to satisfactory results from the Beneficiation Tests and legally binding Financial Close.
- Beneficiation Tests will be carried by PowerChina using available drill core testing DFS findings, making sure that MOP product can be delivered to specs.
- Along with Beneficiation Tests, more geological work will be carried at shaft and marine terminal areas as well as final FEED relating to the shaft as part of Early Works programme that is to start imminently and take up to six months.
- The FNTP has a long stop date of 12 months post Early Works.
- Latest ~$11m raise (incl. assumed $0.5m from Chairman for ~480m new shares) covers $5m in Early Works related costs, $0.9m for ESIA update, $0.8m due to PowerChina for 2022-23 optimisation works along with working capital needs; Company is debt free.
- Funding wise, Summit Consortium is expected to present a non binding financing term sheet by late Mar25. Proposal will be in the form of debt and royalties with the Company not expected to invest any equity retaining its ~90% in the Project.
- Next catalysts include – Summit term sheet (late Mar25), Early Works completion and re-permitting (2025), FID, binding Financial Close, FNTP, start of construction (2H25/early 2026), maiden production (2029).
- Updated FS released Feb25 highlights 23y LOM at 2.2mtpa MOP utilising shaft hoisting and conventional room and pillar mechanised mining method and involving a typical processing flowsheet (crushing/flotation/debrining/drying).
- AISC/total development costs are estimated at ~$130/MOP CFR Brazil (+20% on Optimisation Study 2022) and $2.1B (+10%) reflecting inflationary pressures. Potential for one of the lowest cost MOP (CFR Brazil basis) given shallow depths of mineralised seams (~250m v ~1,000m for a typical Canadian op), next to coast location (30km vs ~2,000km in Canada) and short delivery routes to Brazil.
- Updated FS based Kola NPV10 (post tax) of $1.7B (on 90% attributable basis) assuming MOP prices gradually recover from 2029 averaging ~$450/MOP CFR Brazil over LOM.
*SP Angel acts as Nomad and Broker to Kore Potash
- Panther Metals reports more drilling results from its Dotted Lake project on the northern limb of the Schreiber-Hemlo greenstone belt near Marathon Ontario.
- Results highlighted from diamond drill hole DL24-002 include:
- A 12.0m wide zone averaging 0.18% nickel, 0.02g/t palladium, 0.6% chromium, and 19.7% magnesium from a depth of 304m;
- Hole DL24-002 also intersected shallower mineralisation with 7.5m averaging 0.20% nickel, 0.04g/t palladium, 0.49% chromium, and 20.0% magnesium from a depth of 258.5m and 36.3m at an average grade of 0.13% nickel, 0.01g/t palladium, 0.43% chromium, and 18.8% magnesium from a depth of 216m.
- Results from hole DL24-003 are not reported but the announcement explains that DL24-002 shows “increased grade layering in the bottom 112m of the open-ended hole with the highlighted intersections contained within:
- “214.7m wide open-ended zone of Mg-rich serpentinite intrusive”.
- Explaining that the “final batch of drill core assay results from the Phase 1 Drill Programme have confirmed a further wide zone of magnesium-rich serpentinite intrusive and additional high grade Cr overlimit intercepts … [CEO, Darren Hazelwood welcomed the] … strengthening nickel grade layering with depth” in hole DL24-002.
- He said that this “bodes very well for grades continuing to increase with depth towards the base of the intrusive … [and confirmed that the layering within the intrusion] … is the subject of ongoing interpretation and modelling work, whilst we await the re-assay results from the high grade Cr samples”.
Rome Resources (RMR LN) 0.18p, Mkt Cap £15m – Issue of equity to BAC Helicopters
- Rome Resources, which is exploring for tin in Eastern DRC reports the issue of ~£32,286 worth of new shares at 0.255p/s.
- The company recently reported a 148m long drill intersection grading 0.35% copper from 73.6m depth containing “a 62.25m cumulative higher-grade zone at 0.61% Cu” at the Mont Agoma prospect in North Kivu Province, DRC.
- Recent drilling has identified visible tin across a 40m interval in hole MADD024 and an associated visible copper zone totalling 179m.
- Tertiary has announced additional drill intersections from their A1 Target at Mushima North.
- The Mushima North project has showed wide intersections of silver, with copper and zinc mineralisation.
- Drilling was undertaken using Air Core, restricting the depths of the programme.
- Highlights from today’s results include:
- 24TMNAC-004: 57m at 25 g/t Ag, 0.20% Cu, 0.15% Zn from 14m downhole
- 24TMNAC-005: 65m at 23 g/t Ag, 0.14% Cu, 0.27% Zn from 9m downhole
- 24TMNAC-006P: 66m at 26 g/t Ag, 0.13% Cu, 0.26% Zn from 13m downhole
- 24TMNAC-008P: 37m at 24 g/t Ag, 0.11% Cu, 0.34% Zn from 46m downhole
- 24TMNAC-015: 63m at 14 g/t Ag, 0.15% Cu, 0.11% Zn from 7m downhole
- The Team notes that mineralisation remains open-ended, with six of the nine holes ending in silver mineralisation.
- Management comments that the silver mineralisation correlates with the silver-in-soil anomaly.
- Going forward, Tertiary will evaluate this prospect and nearby geochemical and geophysical targets to advance and expand the project.
*SP Angel acts as Nomad and Broker to Tertiary Minerals
- Montage Gold, developer of the Koné project in Cote D’Ivoire, reports an update on construction.
- The Company has begun process plant concrete works and poured the Carbon-in-Leach tank foundations ahead of schedule.
- Project remains on track for first pour in 2Q27.
- Montage has committed 25% of the US$835m CAPEX so far, with ‘prices in line with expectations.
- Kone is expected to produce 301koz over the first eight years of production, with LOM estimated at $998/oz.
- Strip ratio of 1.18:1, average mill throughput 11mtpa, average LOM head grade 0.72g/t Au.
- Total LOM gold production of 3.6moz.
- CAPEX is US$712m, with SUSEX of US$165m.
- NPV5 of $1,089m at $1,850/oz Au.
- The project holds 4moz in reserves at 0.72g/t Au.
- Montage is aiming to deliver a maiden resource from their exploration efforts over the past 12 months, targeting >1moz of M&I Resources at a grade 50% higher to the current deposit grade.
- Montage sees the addition of the exploration target as supporting annual production of >300kozpa over the first 10 years LOM.
- 2025 drilling campaign underway, targeting 90,000m of resource definition and new target testing.
Acquisition of stake in African Gold
- Additionally, Montage announced yesterday the acquisition of a 19.9% stake in African Gold for an aggregate consideration of C$6.3m.
- The Company will elect its EVP Silvia Bottero and CEO Martino De Ciccio as NED and Strategic Advisers respectively.
- African Gold currently holds 4.93mt at 2.9g/t Au for 452koz Au inferred at its Didievi project.
- Montage has been appointed operator of Didievi, which lies to the East of Perseus’ Yaoure operation and north of Allied Gold’s Bonikro and Agbaou operations.
- African Gold is currently drilling 10,000m at Didievi.
- African Gold sees ‘significant flexibility to expand the Company’s resource base at Didievi, which has the potential to develop into a multi-million ounce gold deposit.’
*An SP Angel analyst holds shares in Montage Gold
LSE Group Starmine awards for 2024 commodity forecasting:
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
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
| 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, Tungsten, Spodumene, Ferro-Manganese, Graphite, Rutile | Asian Metal |
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