SP Angel Morning View -Today’s Market View, Wednesday 12th February 2025

Gold little changed on Fed rate cuts pause and ahead of US inflation numbers

MiFID II exempt information – see disclaimer below

ACG Metals (ACG LN) – Gediktepe copper/gold mine in Turkey delivers 50% production increase in 2024

Andrada (ATM LN) – Largest shareholder provides loan finance for plant expansion at the Uis tin mine, Namibia

Bezant Resources (BZT LN) – Completion of ore-sorting tests on core from the Hope and Gorob projects in Namibia

Gem Resources (formerly URA Holdings) (GEMR LN) – Initial results from the Gravelotte emerald mine, South Africa

Goldstone Resources* (GRL LN) – 0.5koz gold poured in February with 1kozpm target reiterated

Landore Resources (LND LN) – Geochemical anomalies east of the BAM gold project, Ontario

Lucara Diamonds (LUC CN) – Sale of large diamonds from Karowe, Botswana

Mkango Resources* (MKA LN) – BUY – CFO acquires ~£50k worth of stock

Economics

US – Fed Chairman Jerome Powell said the central bank is in no rush to lower interest rates as the economy remains strong and the labour market seen “broadly in balance”.

• “With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” Powell told the Senate Banking committee as part of his two day address to the US Congress.
• 2y bond yields edged higher but only marginally currently trading around 4.29% (+1bp) while S&P500 and Nasdaq closed a little lower.
• Markets left rate cut odds largely unchanged with the first one not until September and less than two cuts in total for 2025.
• Inflation numbers are due later today with headline and core CPIs expected to come in at 0.3%mom and 0.3%mom in January compared to 0.4% and 0.2% in the previous month.

China – Authorities are working on a proposal to bailout China Vanke helping struggling developer to close a CNY 50bn ($6.8bn) funding gap this year.

• Under the plan, Vanke would be able to us CNY 20bn in local government bond quota for the sale of its properties and vacant land.
• The Company would also be allowed to use other financing sources including new bond sales and bank loans for debt repayments.
• The Company said it had CNY 36bn of public debt due this year while repaying CNY 3bn so far in January.

Japan – 10y yields continue to march higher trading at the highest level in more than a decade on expectations for further monetary policy tightening.

• Rates are currently around 1.34%, the highest level since early 1H11.
• BOJ Governor Kazuo Ueda made hawkish remarks commenting on inflationary pressures from higher food prices on Wednesday.
• “We’re deeply aware that a rise of more than 2% in prices of fresh foods and other commonly purchased products are negatively impacting people’s lives,” Ueda told parliament.
• “Rises in the prices of food, including fresh food, won’t necessarily be temporary and there’s the chance that this will impact people’s mindsets and price expectations,” he added.
• The government asked US President to exclude Japanese companies from his fresh tariffs on steel and aluminium.

EU – Brussels is considering to temporarily cap EU gas prices that reached the highest level in more than two years this week.

• Low temperatures and a lack of wind that hampered renewable energy production saw larger than expected drawdowns from available gas storage.
• Prices are now between three and four times higher than in the US.
• Authorities considered a similar cap in 2022 amid a Russia’s invasion into Ukraine, although, the measure was never implemented as prices remained below the €180/MWh benchmark.

UK – Economists expect the UK to register a 0.1%qoq contraction in 4Q24 with surveys pointing to a slow start to 2025, Bloomberg reports.

• The BOE is estimating there is a 40% chance that the country is already in a technical recession for the second time in just over a year.
• Consumers and businesses are struggling from the £40bn in tax increases announced in the budget as well as risks from potential new US tariffs.
• The government may need to consider new spending cuts after latest OBR downgraded its growth forecasts leading to a small deficit that will need to be addressed when Chancellor delivers her update on the UK economy March 26, Bloomberg cites people familiar with discussions.
• Weaker growth and higher interest rates are expected to have wiped out £9.9bn margin that was left in the budget.
• 4Q24 GDP numbers are out this Thursday.

Russia – Kremlin released Marc Fogel, an American schoolteacher, after having been detained in Russia since 2021.

• President Trump greeted Fogel at the White House describing Russia’s decision as a show of “good faith” that would help talks to end the war in Ukraine, according to FT.
• It is unclear if US promised Moscow anything in exchange for Fogel’s release and the White House did not provide further details.
• Mark Fogel was arrested in August 2021 for trying to enter the country with 0.6oz of medical marijuana that was found in his luggage and was sentenced to 14 years.

Mali – Discussion between Barrick Gold and the Malian government are reported to have bee suspended without a resolution.

• The government is seeking a $197m payment from the Company as well as a transfer onto the new Mining Code that involves higher government equity stake, increased royalties and other charges as well as elimination of tax exemptions.
• Loulou-Gounkoto operations were suspended in January after talks stalled with the government seizing on site gold inventories and restricting any gold exports from the site.

Currencies

US$1.0372/eur vs 1.0307/eur previous. Yen 153.52/$ vs 151.73/$. SAr 18.453/$ vs 18.478/$. $1.244/gbp vs $1.235/gbp. 0.628/aud vs 0.628/aud. CNY 7.310/$ vs 7.306/$.

Dollar Index 107.948 vs 108.358 previous.

Precious metals:         

Gold US$2,891/oz vs US$2,913/oz previous

Gold ETFs 83.8moz vs 83.7moz previous

Platinum US$986/oz vs US$986/oz previous

Palladium US$976/oz vs US$976/oz previous

Silver US$31.8/oz vs US$31.8/oz previous

Rhodium US$4,650/oz vs US$4,625/oz previous

Base metals:   

Copper US$9,393/t vs US$9,367/t previous

• China is tightening regulations for new copper smelters amid an overcapacity in the industry seeing a drop in TC/RC charges weighing on operations’ profitability.
• Companies developing new copper smelters should control enough mine supply to feed new capacities, according to a 2025-27 development plan.
• The condition is likely to be met by only a small number of major Chinese companies, Bloomberg reports.
• China currently imports around 85% of copper concentrates used to produce refined metal.
• The government is looking to boost domestic copper mine resources by 5-10% in three years to secure raw material.

Aluminium US$2,631/t vs US$2,651/t previous

Nickel US$15,390/t vs US$15,395/t previous

Zinc US$2,863/t vs US$2,827/t previous

Lead US$1,989/t vs US$1,986/t previous

Tin US$31,405/t vs US$31,025/t previous

Energy:           

Oil US$76.3/bbl vs US$76.6/bbl previous

• Crude oil prices edged lower as the API estimated a 9mb/d w/w build to US crude inventories, which was well above consensus expectations for a 2.8mb build.
• European natural gas prices remain elevated as France’s nuclear generation was stable w/w at 79% of the country’s 61.4MW maximum capacity.
• The EIA’s monthly short-term energy outlook report expects higher global supply growth this year of 1.9mb/d (up +0.3mb/d m/m) to exceed liquids demand growth of 1.4mb/d, placing downward pressure on prices in 2025. The EIA also forecasts supply growth of 1.6mb/d in 2026 to outpace slowing demand growth of 1mb/d.

Natural Gas €56.7/MWh vs €57.8/MWh previous

Uranium Futures $67.6/lb vs $68.1/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$107.8/t vs US$106.4/t

• Futures jumped nearly 2% to $108/t in Singapore as cyclone Zelia is approaching WA’s Pilbara coast disrupting shipments from Port Hedland.
• Port authorities said they would close operations this evening with all berths being cleared.

Chinese steel rebar 25mm US$484.6/t vs US$484.7/t

HCC FOB Australia US$188.0/t vs US$187.0/t

Thermal coal swap Australia FOB US$106.6/t vs US$108.5/t

Other:  

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

NdPr Rare Earth Oxide (China) US$59,443/t vs US$60,018/t

Lithium carbonate 99% (China) US$9,987/t vs US$9,992/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$293/t vs US$294/t

Global Rutile Spot Concentrate 95% TiO2 US$1,588/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$315.0/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

Company News

ACG Metals (ACG LN) US$5.55, Mkt cap £84m –Gediktepe copper/gold mine in Turkey delivers 50% production increase in 2024

• ACG Metals produced 13,097oz of gold and 215,660oz of silver (reported as 15,651oz on a gold equivalent basis) at its Gediktepe mine during the 3 months to 31st December 2024 bringing 2024 production to 46,993oz of gold and 709,380oz of silver (55,374 oz AuEq).
• Quarterly production costs of US$572/oz on a cash basis and US$1,108/oz on and all-in-sustaining basis bring annual cash costs to an average of US$606/oz and an AISC of US$1,139/oz.
• The company confirms that cash costs “remained within the budget at $606 per ounce, with all-in sustaining costs of $1,139 per ounce representing a 4% and 2% decrease for the year respectively”.
• Over the year, the mine produced ~713kt of ore at an average grade of 2.17g/t gold and 62.41g/t silver and treated ~801kt of ore, 18% more than in 2023, at an average grade of 2.53g/t gold and 71.84g/t silver implying recovery rates of around 72% for gold and 38% for silver.
• Chairman and CEO, Artem Volynets described 2024 as “a transformative year for ACG Metals … [and asserted that]… the Gediktepe Mine continues to deliver solid results, maintaining a stellar safety record while outpacing last year’s production by nearly 50%”.
• He described the US$200m bond placement in December as an indication of “investor confidence in our strategy, providing the capital needed to execute our growth plans … [while confirming that the] … landmark EPC contract with GAP İNŞAAT will enable the transition to sulphide ore processing, unlocking long-term copper production potential and establishing our position in the copper sector”.
• Mr. Volynets confirmed that “Our focus in 2025 remains on operational excellence, the completion of the sulphide expansion project and execution of identified value-accretive opportunities in the copper space”.

Andrada (ATM LN) 2.45p, Mkt Cap £40m – Largest shareholder provides loan finance for plant expansion at the Uis tin mine, Namibia

• Andrada Mining reports that its 15.8% shareholder, Orange Trust, has provided a US$2.5m loan facility to expand processing capacity by 100tph at its Uis tin mine in Namibia.
• In the six months to 31^st August 2024, the mine treated an average of 132tph and an additional 100tph of capacity is an increase of around 75% which offers the “Potential for immediate, significant increase in tin production and therefore enhanced cashflow”.
• The six-month loan, which is secured against the plant, is interest free though subject to a ‘Facility Fee’ of “USD50 000 per month. Fees for the first two months are capitalised and repaid in the third month as a cumulative sum of USD100,000. The total facility fee for the six months is USD300,000”.
• Repayments totalling US$2.6m comprise an initial US$100,000 described as “cumulative capitalised facility fees for the first two months” with a final repayment of the US$2.5m loan.
• CEO, Anthony Viljoen, said that the “additional plant provides a modular pathway to scale up operations within our existing mining footprint as we evaluate new pits and validate historical resources. Importantly, the new plant will operate independently, ensuring there is no disruption to current mining activities or to the ongoing expansion aimed at boosting tantalum and lithium revenues at our primary plant”.
• He also commented that “the strong support from our existing shareholder, reflected in this financing, underscores the broad confidence in our growth strategy and reinforces our commitment to sustainable, scalable production and expansion”.

Conclusion: Andrada Mining’s largest shareholder is providing a US$2.5m loan to secure an increase of around 75% in processing capacity at the Uis mine

Bezant Resources (BZT LN) 0.03p, Mkt cap £3.7m – Completion of ore-sorting tests on core from the Hope and Gorob projects in Namibia

• Bezant Resources reports that it has now completed optimisation tests on ore-sorting of material expected to be mined during the first three years of operations at its Hope & Gorob copper and gold project in Namibia.
• The test results demonstrate that “ore sorting and pre-concentration can produce the required mill feed volumes at a grade consistent with financial modelling inputs of contained copper … [returning] … a feed grade of up to 2.95% Cu with substantial gold and silver credits also applicable” exceeding the 2.4% copper feed grade assumed in the project evaluation.
• The optimisation study “revealed a high percentage of chalcocite (copper content 79.9%) … [Cu₂S] … preferentially reporting to fines generated during crushing due to its high friability. This enrichment results in:

• Minimisation of the dilutionary effect of fines on mill feed grade
• Reduces pressure on mill capacity
• Provides scope for additional mill feed to fill the extra capacity due to higher fines content”

• Today’s announcement also confirms that “Recovered gold grades confirmed expectations … [and that] … Silver grades significantly exceeded expectations”.
• Hope & Gorob’s mineral resources comprise:
  • Indicated: 10mt @ 1.89% Cu & 0.31g/t Au
  • Targeting >3mt @ >1.8% Cueq – in open pit resource subject to independent mineral resource estimation
• The company’s “financial evaluation and projected returns have been based on the premise that 180ktpa of pre-concentrate can be produced from 480ktpa of RoM mined (37.5% mass yield) at a grade of 2.4% contained Cu. Test results have indicated that these base financial model inputs have been achieved and well exceeded”.
• Executive Chairman, Colin Bird, said that the company’s “Ore sorting optimisation test work has been very successful, and results have more than met the requirements of our financial model. There is scope for further improvement in copper recovery particularly from material currently reporting to waste”.
• He also commented that “The results justify our commitment to ore sorting technology that not only allows us to operate efficiently in a challenging environment but also in a manner that is more beneficial for the environment. Excellent advice and guidance from the ore sorting experts at Steinert have further improved Project economics with scope for yet further improvements in copper recovery being possible”.

Conclusion: Ore-sorting tests on drill core from the Hope & Gorob project have validated and exceeded the company’s modelling assumptions. We look forward to further news as the project moves towards development.

Gem Resources (formerly URA Holdings) (GEMR LN) 0.63p, Mkt Cap £1.7m – Initial results from the Gravelotte emerald mine, South Africa

• Gem Resources reports that production from the Cobra pit at is recently re-opened Gravelotte emerald mine in South Africa have exceeded “historical results”.
• “Initial mining from the newly exposed ore zone in the Cobra Open pit has yielded both high-grade and high-quality emerald-bearing material … [while the] … processing plant has now successfully achieved grades of up to 60 carats per tonne, underscoring the strong potential of the deposit”.
• Continuing work to upgrade the plant is proving “highly successful, resulting in significantly improved throughput”.
• Expressing satisfaction with the operations, which resumed in January, Non-Executive Chairman, Ed Nealon said that the “ initial ore recovered is consistent with our expectations of the quality and output potential of the deposit, at the same time the efficiency of our upgraded processing plant has been a key driver in optimizing production. We look forward to further scaling our operations and remain on track for our first sale in the first half of the year”.

Goldstone Resources* (GRL LN) 1.1p, Mkt Cap £9.8m – 0.5koz gold poured in February with 1kozpm target reiterated

• The Company reported record gold pour of 16kg (0.5koz) in February.
• Monthly gold production has doubled since November last year.
• 2024 monthly gold production averaged 225oz.
• The team continues to target 1,000oz pm production rate.
• Mining at Pit 2 that is nearing depletion of its oxide ore and is reported to have encountered areas of lower grade material impacting production levels.
• Mining operations are set to re-enter higher grade Pit 1 within a month allowing to deliver 1-1.2g/t material onto leach pads.
• On processing side, on average 48kt of agglomerated ore a month was stacked onto leaching pads.
• Extension of Cell 5 is nearing completion while civil engineering work is underway for Cells 6 and 7.

Conclusion: Production picks up in 2025 with a record gold pour of 0.5koz in February, just over a double the monthly rate record in 2024. Production rate is guided to pick up within a month as higher-grade material is mined at Pit 1. The team previously targeted to reach 1kozpm in 1Q25.

*SP Angel acts as broker to Goldstone Resources

Landore Resources (LND LN) 4.25p, Mkt Cap £13m – Geochemical anomalies east of the BAM gold project, Ontario

• Landore Resources has announced that geochemical soil sampling east of its BAM gold project in Ontario has identified anomalous gold for a further 2.8km beyond previously known anomalies “into the highly prospective Toronto Lake gold area”.
• Describing the results of the survey as “potentially representing a significant extension to the deposit or a complementary gold system” today’s announcement explains that “20.8 kilometres along the Junior Lake shear zone from the Placer Dome Gold prospect in the west to the BAM Gold deposit and east into the Toronto Lake area has now been covered by extensive soil sampling”.
• Landore Resources plans to start a 3,500m drilling programme at BAM early next month “designed to provide greater clarity on the structure of the ore body, prove the validity of the block model and increase overall confidence in the grade size and continuity of the resource, as well as testing the considerable down-dip potential of BAM Gold”.
• Welcoming the results of the geochemical work, CEO, Alexander Shaw, said that they confirm “the presence of anomalous gold along strike – thereby confirming our belief that the gold system, which hosts BAM extends far beyond the currently-defined deposit area”.
• He also said that “There is also significant potential for higher grades at BAM Gold, which could add high-grade ounces to an updated MRE, which we are targeting for completion in mid 2025”.
• Currently, BAM hosts an ‘Indicated & Inferred’ mineral resource of ~ 1.5m oz within an ‘Indicated’ resource of ~31mt at an average grade of 1.0g/t gold (1.0moz) and an ‘Inferred’ resource of ~18mt at an average grade of 0.8g/t gold (~0.5m oz).

Conclusion: The recent geochemical work extends the known gold anomalism along the Junior Lake Shear Zone and offers scope for extensions to the BAM deposit where further drilling is scheduled to start next month.  We await further news and the new MRE expected later this year with interest.

Lucara Diamonds (LUC CN) C$0.345, Mkt Cap C$156m – Sale of large diamonds from Karowe, Botswana

• Yesterday, Lucara Diamonds announced the sale of two large diamonds from its Karowe mine in Botswana for a combined US$54m.
• The company says that the 549 carat Sethunya diamond, which was recovered in 2021, and the 1,080 carat Eva Star diamond, discovered in 2023, demonstrate the “unique characteristics of Karowe’s kimberlite, particularly in the South Lobe”.
• Lucara diamonds is currently working on developing underground mining at Karowe with a 2024 feasibility study envisaging pre-production capital expenditure of US$683m and a total of US$906m over the mine’s 15 year life producing 6.8m carats of diamonds from the processing of a total of 52.2mt of ore, including open-pit sources, with production focussed on the South Lobe of the AK06 kimberlite.

Mkango Resources* (MKA LN) 11p, Mkt Cap £35m – CFO acquires ~£50k worth of stock

BUY

• Robert Sewell (CFO) acquired 450k shares at 11p, equivalent of £50k, on February 11.
• The purchase takes his interest in the Company to 700k shares.

*SP Angel acts as nomad and broker to Mkango Resources

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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