Today’s Market View – Condor Gold, Cornish Metals, Empire Metals and more…

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SP Angel . Morning View . Monday 22 02 21


Copper shifts into overdrive China Central Committee reports




Bluebird Merchant Ventures (LON:BMV) – Funding proposed through digital token linked to gold


Condor Gold* (LON:CNR) – Drilling underway on the Cacao Vein


Cornish Metals* (LON:CUSN) – Osisko converts its note to a royalty


Empire Metals* (LON:EEE) – Empire complete acquisition of Eclipse gold project


IronRidge Resources* (LON:IRR) – GBP3.6m raised from warrant conversion


Orosur Mining* (LON:OMI) – High-grade gold intersections received at Anza


Phoenix Copper* (LON:PXC) – GBP2m debt facility to accelerate the Empire project


Rambler Metals and Mining* (LON:RMM) – New non-executive appointment to strengthen the board


Tertiary Minerals* (LON:TYM) – Lucky Copper Project drilling




China – Xi Jinping address to Central Committee sends Copper into overdrive


China does not plan to slow down according to our view of press reports from the Central Committee meeting on Friday.


President Xi told a high-level committee to ‘deepen reforms’ to ensure ‘high standards’ of self-sufficiency and economic independence (SCMP).


The CCP CPC’s first official statement on the economy focusses on the eliminating poverty and boost rural economies.


China is striving for independence from imports and outside nations


President Xi is looking to modernise farming practices following the floods along the Yangtze last year which devastated crops and is causing China to buy substantial produce from overseas.


President Xi was a just a boy when China suffered the Great Famine which killed around 45m people and was largely the result of man-made policies relating to the ‘Great Leap Forward’ as well as flooding along the Yangtze in 1958 coupled with a series of droughts.


The official statement prioritises the construction of rural infrastructure which is why investors have bought heavily into copper and related commodities


Hi-tech industries are also a key part of China’s economic plans with the leadership indicating its economic strategy will increasingly focus on technological innovation and domestic demand.


The US and China are on path to ‘inevitable’ economic decoupling according to the South China Morning Post with the ‘Central Committee told to take advantage of nationwide support, remove institutional barriers that restrict the improvement of core science and technology, speed up research into key technologies, and “firmly grasp the initiatives of innovation and development”‘.


China will release it’s annual government work report in two weeks at the annual meeting of the National People’s Congress.


‘”Measures will be introduced to strengthen the protection of property rights and intellectual property rights, promote upgrades to the industrial and supply chains, establish a modern logistics system and build a unified national market.’


The meeting also called for more efforts to expand domestic demand, integrate urban-rural development, speed up an internationalised business environment and facilitate the establishment of an open economy at a higher level.


President Xi also stressed efforts to promote environmental policies, including reaching peak carbon emissions before 2030.


President Biden to put focus on China, pandemic and economic recovery at G7 talks




Copper rises above $9,000/t for the first time since 2011


Base metal prices rose on Monday morning, with LME copper prices climbing as much as 4% as industry in China rushes to expand output following the week long Lunar New Year celebrations.


As the US, China, EU, UK and beyond all look to roll out their own packages of environmental initiatives, the post-crisis consumption of industrial metals is widely expected to outstrip near-term and medium-term supply.


Inflation expectations have also helped base metals, with copper prices rising 18% for every 1% in consumer prices since 1992.


Goldman Sachs reported last week that the copper market is facing the largest deficit in a decade this year, with a high risk of scarcity over the coming months.


Relief that vaccine programmes are being rolled out across many countries to underpin economic recovery sent all base metals on the LME setting fresh multi-month of year highs (Fastmarkets MB).


LME volume as of 6.59am London time was super-high at 23,972 lots this morning, compared with a more normal volume at a similar time of day of around 6,000 lots.




IG raising margin requirements from Friday to 100% on >100 stocks


The move is almost certainly a result of the GameStop saga in the US and is likely to create new opportunities in some smaller companies for investors.




Recent Interviews:


VOX Markets: 11/02/20 https://audioboom.com/posts/7803378-john-meyer-covers-arc-mins-cornish-metals-rambler-rainbow-rare-earths-mkango-bluejay


11/02/20 https://audioboom.com/posts/7798441-john-meyer-talks-about-the-commodities-super-cycle


IGTV: Is this a new Supercycle for commodities: https://youtu.be/BIWb-wqoLpM


Metals expected to continue the last-year gains into 2021 https://youtu.be/afrB9cJe8L0


Is 2021 the start of the new COVID-Supercycle or will Lockdowns delay the recovery? https://youtu.be/7LO0tDc-pNc


121 Conference panel: Investment Leader’s Discussion: Van Eck, Qora Capital, Nedbank, SP Angel



iiTV: Mining stock to own 2021: https://www.youtube.com/watch?v=4x7SuSLQwCI&t=11s.


Mining share tips for 2021 – https://www.youtube.com/watch?v=G_6RKAp91k4


*SP Angel almost invariably acts as nomad or broker or nomad and broker to companies mentioned in the above videos and podcasts.


We speak more about these companies as we have a good understanding of their business and can talk with a greater degree of confidence. As ever, however, it should be noted that our views do not take into account the circumstances and needs of any particular investor or investor type. So enjoy the talks, but please do your own research, including other companies not mentioned by us but operating in the same areas, and get professional advice where appropriate.




Metals price forecasting through 2020 – 2020 was probably the most difficult year for forecasting anything


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




Dow Jones Industrials +0.00% at 31,494


Nikkei 225 +0.46% at 30,156


HK Hang Seng -1.06% at 30,320


Shanghai Composite -1.45% at 3,642




Economics


US – Democrats rush to pass the $1.9tn bill before jobless benefits expire.


The President Biden supported package is expected to be voted on as soon as Friday leading the way for a Senate vote next week.


Risks of faster inflation are being priced in the bond market with the benchmark 10-year US Treasury climbing to the highest in about a year (1.39%).


US COVID-19 hospitalisations fell for a 40th consecutive day at the number of new cases and fatalities also declined.


Patients receiving treatment for COVID-19 dropped to 56,159 on Sunday from 58,222 a day earlier, while the number of casualties kslowed to 1,286 from 2,074 on Saturday as the total tally neared 500,000.


Fed Chairman will hold a semi-annual monetary policy testimony before Congress with a meeting with the Senate Banking Committee on Tuesday and an address to the House Financial Services Committee on Wednesday.


Powell is expected to defend accommodative policy in the form of near zero rates and $120bn in monthly bond purchases given disappointing weekly jobless claims reports and weak January and December monthly employment data.




China – A rebound in economic activity sees the nation overtaking France as the second largest market for German exports.


Shipments to China were relatively unchanged at EUR96bn in 2020 compared to a 15%yoy drop in France.




Japan – Manufacturing PMI 50.6 for February vs 49.8 in January


Services 45.8 (46.1) and


Composite 47.6 (47.1),


CPI rose 0.5% in January vs -0.3% in December and -0.6% yoy in January and -1.2% in December




Germany – Business sentiment picked up to 94.2 in February from 91.5 in January on hopes for recovery.


Although, the government warned that the rate of new infections should slow further before Germany may consider easing restrictions further.


Some children in 10 of the nation’s 16 states are returning to schools and daycare today.


IFO Expectations: 94.2 v 91.5 in January and 91.7 est.


IFO Current Assessment: 90.6 v 89.2 in January and 89.1 est.




UK – The pound is trading at a three year high against the US$ supported by one of the fastest roll out of vaccination in the world.


PM Johnson will deliver a reopening plan later today.


Schools are expected to reopen on 8 Mach, up to six people or two households will be allowed to meet outdoors from March 29.


Further easing of restrictions will be subject to a number of conditions including vaccine deployment, evidence that jabs are reducing hospital admissions and deaths, the pressure on the NHS and assessment of the risks of new virus variants.


Health Minister reiterated plans to offer a jab to adults aged 50 and over and those in the top priority groups by 15 April, followed by all adults by the end of July.




Australia – The nation commenced the vaccination programme with PM Morrison among the first to receive the jab.


The government said quarantine and border workers, frontline healthcare staff, elderly and disability residents and staff would be among the first groups to get a vaccine.


Australia secured more than 150m Pfizer/BioNTech and AstraZeneca doses.




Philippines – Local FDA highlights low efficacy of 50% of the China-made Sinovac Biotech COVID-19 vaccine suggesting a different treatment is offered to staff at serious risk of infection like medical personnel.




Ecuador – Conservative businessman Guillermo Lasso made it to the second round of the national presidential election overtaking indigenous candidate Yaku Perez.


Lasso will face left-wing economist Andres Arauz in the run-off on April 11 for the four year term in the office.


Arauz had 32.72% of the vote in the first round versus 19.74% for Lasso and 19.39% for Perez.




Tanzania – The WHO urged Tanzania to take more measures to control the pandemic and provide regular updates on cases.


John Magafuli, Tanzania’s president, last year declared the nation “coronavirus free” with the last report on the number of cases submitted more than nine months ago.


The WHO highlighted evidence that a number of Tanzanians travelling to neighbouring countries and beyond had tested positive for COVID-19.




Currencies US$1.2107/eur vs 1.2112eur last week. Yen 105.78/$ vs 105.55/$. SAr 14.860/$ vs 14.570/$. $1.400/gbp vs $1.398/gbp. 0.786/aud vs 0.780/aud. CNY 6.469/$ vs 6.461/$.




Commodity News


Precious metals:


Gold US$1,792/oz vs US$1,772/oz last week


Gold ETFs 105.5moz vs US$105.7moz last week


Platinum US$1,266/oz vs US$1,259/oz last week


Palladium US$2,391/oz vs US$2,355/oz last week


Silver US$27.34/oz vs US$26.86/oz last week




Base metals:


Copper US$ 9,037/t vs US$8,716/t last week


Aluminium US$ 2,146/t vs US$2,153/t last week


Nickel US$ 19,700/t vs US$19,480/t last week


Zinc US$ 2,904/t vs US$2,876/t last week


Lead US$ 2,160/t vs US$2,128/t last week


Tin US$ 26,570/t vs US$24,970/t last week




Energy:


Oil US$63.4/bbl vs US$63.0/bbl last week


The oil price rally appears to have cast a shadow over OPEC+’s resolve to keep cutting as much production as they are cutting now


Oil had been recovering steadily even before the United States lost some 40% of its oil production because of the Arctic cold wave that swept across the country


The Texas deep freeze certainly helped it, but its effect is already dwindling as traders take profits: Brent was down to US$63.5/bbl at the time of writing, and WTI has slipped below US$60/bbl


Yet a substantial upside potential remains that could increase internal tensions between OPEC+ members


For one thing, US demand for oil is recovering starting with the vaccination drive that began in December, and since then, refiners have been ramping up fuel production


The last couple of weeks have seen gasoline stocks rise but so has production


While demand in the world’s top consumer of oil recovers, production is stalling


According to the EIA, US output will remain below 12MMbopd next year


This imbalance will turn the US into a net exporter this year and next, the EIA estimated in its latest Short-Term Energy Outlook


But more importantly for OPEC+, this would push oil prices higher still, tempting barely compliant members to become even less compliant


Elsewhere, according to an industry consensus, global crude demand will increase by 5.5-6MMbopd, implying that a full return to pre-COVID demand levels will require several years to take place


The underlying question whether crude output levels can actually follow this demand growth this year has been growing in importance, steep backwardation on the Brent curve might suggest has serious qualms about it


With divergent trends abounding, Middle Eastern national oil companies have opted for nuance after the January-February price increases


As usual, Saudi Arabia has led the way, rolling over all of its February 2021 OSPs into March completely unchanged


Overall, the reports pointed to a still-fragile energy market that is highly susceptible to the course of Covid-19


The robustness of Asian demand remains a key gauge for Middle Eastern NOCs


China and India have been leading the continent with fuel consumption almost returning to pre-COVID levels in both


On the other hand, insular economies such as the Philippines, Indonesia or Taiwan have been running their refineries below maximum capacity or temporarily halting several units amidst poor margins


At the same time, turnaround season is just around the corner and Japan’s month-on-month import drop in February is the first of many to come


Albeit smaller in terms of overall output, refinery maintenance in Thailand, Taiwan and Sri Lanka will also tighten the markets a bit


February turnaround will blaze the path for next month’s large-scale works, China alone will have at least 0.9MMbopd of refinery capacity going offline in March 2021


Natural Gas US$2.977/mmbtu vs US$3.065/mmbtu last week


Natural gas price rose 5% last week largely due to the Texas freeze


The weather is expected to be warmer than normal throughout most of the US east coast and mid-west for the next two weeks but cooler on the west coast Overall, this should reduce heating demand

In the wake of record-low temperatures affecting most of the country, dry natural gas production in the United States fell by 21Bcf/d


There is still a disconnect between cash and futures prices, but the cash price is declining which is weighing on the futures contract


Natural gas in storage was 2,281Bcf as of 12 February 2021, according to the EIA


This represents a net decrease of 237Bcf from the previous week


Expectations were for a 237Bcf draw according to survey provide Estimize


Stocks were 105Bcf less than last year at this time and 57Bcf above the five-year average of 2,224 Bcf


At 2,281Bcf, total working gas is within the five-year historical range


The frigid weather in Texas and throughout the US midwest has generated an enormous demand for natural gas and cash prices continued to surge


Even at Henry Hub, where the NYMEX contract is traded, the cash values were more than double the price of the future contract




Bulk:


Iron ore 62% Fe spot (cfr Tianjin) US$168.2/t vs US$169.3/t


Chinese steel rebar 25mm US$714.4/t vs US$667.7/t – Japan – Steel production rises 3.9% YoY in January to 7.92mt


Pig iron production fell 7.1% YoY to 6.01mt.


Thermal coal (1st year forward cif ARA) US$65.8/t vs US$65.1/t


Coking coal swap Australia FOB US$154.5/t vs US$154.5/t




Other:


Cobalt LME 3m US$50,000/t vs US$49,000/t


NdPr Rare Earth Oxide (China) US$73,200/t vs US$72,514/t – China raises first-half REE production quotas


China’s Industry and Information Technology Ministry (MIIT) has raised the first batch of 2021 production quotas to 84,000t, up by 27% from 66,000t in the same batch in 2020, Argus Media reports.


The quotas for rare earth mining products include 72,510t for light rare earths and 11,490t for ion-absorption rare earths.


MIIT has allocated the quotas to the country’s six rare earth groups — Northern Rare Earth, Southern Rare Earth, Chinalco, Xiamen Tungsten, China Minmetals and Guangdong Rare Earth.


The rise in quotas is in response to stronger demand from major downstream sectors following a significant recovery in the country’s economy from the impact of Covid-19.




Lithium carbonate 99% (China) US$10,822/t vs US$10,602/t


Spodumene 6% Li2O min, cif (China) US$455/t vs US$395/t


Ferro Vanadium 80% FOB (China) US$31.0/kg vs US$30.5/kg


Ferro-Manganese high carbon 78% Mn US$1,610/t vs US$1,610/t


Tungsten APT European US$250-255/mtu vs US$250-255/mtu


Graphite flake 94% C, -100 mesh, fob China US$560/t vs US$560/t


Graphite spherical 99.95% C, 15 microns, fob China US$2,625/t vs US$2,625/t




Battery News


British Gas makes largest ever UK commercial EV order


British Gas announced this morning that it is ordering 2,000 new all-electric Vivaro e-vans from Vauxhall and has introduced plans to never produce another combustion engine vehicle (Fleet Point).


As part of its commitment to become a net-zero organisation, Centrica has committed to electrify its 12,000 strong operational fleet by 2025.




Company News


Bluebird Merchant Ventures (LON:BMV) – 3.9p, Mkt cap GBP13m – Funding proposed through digital token linked to gold


Click for our 2018 note


Bluebird reports the creation of a digital token which will be linked to the delivery of gold from the Kochang gold mine in South Korea.


The token, created by Auric Network have created an blockchain financing mechanism linked to the delivery of gold from the mine.


Bluebird has received a second tranche of this ‘non-dilutive’ funding from Auric as prepayment for gold at a 20% discount at the time of delivery.


A third funding tranche for Kochang is scheduled to be delivered in the week of 15 March 2021 as part of a US$5-20m commitment.


Bluebird is also negotiating with Southern Gold to consolidate its 50% stake in the Kochang and Gubong mines.


Management reported an independent valuation of US$11.05m for the 50% stake of which Bluebird has agreed to pay 90% or US$9.945m.


Bluebird’s gold production is due to start at 7,000oz this year rising to 40,000oz in 2024 and then onto 100,000ozpa from 2025.


Capital costs are estimated at $28m to reopen the two mines at Kochang and Gubong.


Gold production was forecast last year to start around April 2021.


Phase 1 capex is around US$2.2m with Bluebird contributing 50% of the joint venture cost.


Management forecast a cash cost of just US$576/oz.




Condor Gold* (LON:CNR) 52p, Mkt Cap GBP61.1m – Drilling underway on the Cacao Vein


Condor Gold reports that it has started a 5,000m drilling programme on the Cacao Vein at its La India project in Nicaragua.


Previous work on the Cacao structure has defined an inferred 60,000oz gold resource of 662,000t at an average grade of 2.8g/t based upon 2,890m of drilling. The additional drilling aims to build on this by increasing the known strike length of the mineralisation towards the Santa Barbara prospect located approximately 3km to the east.


The earlier work has demonstrated that the mineralisation is open at depth and in addition to potential lateral extensions beneath a large alluvial fan, the new work may establish further down-dip mineralisation.


The company clarifies that “The Cacao Vein reappears from the alluvium in the Rio Viejo, about 1.6 km east of Cacao. There, several parallel veins are exploited by informal miners. Grab samples give up to 11.6 g/t Au. The structure(s) then disappears below more alluvium, before re-emerging on Condor’s Santa Barbara Concession, about 3 km east of Cacao.”


Condor Gold explains that the El Cacao Vein is “one of the thickest in the district, comparable to the main La India Vein” and that its mineral textures are “identical to La India”.


It also explains that the Cacao target “is separated from the La India, America and Mestiza veins by the Highway Fault” which drops down the block containing the Cacao vein towards the east and that consequently, the entire vertical extent of the mineralised epithermal vein system may well be fully intact.


“This contrasts with the veins west of the Highway Fault, including La India, where erosion directly exposes the high grade (bonanza) level of the epithermal system. This made the veins west of Highway Fault significantly easier to locate. Cacao is therefore a ‘concealed’ target that failed to attract the attention of both Noranda Mining, which mined at La India before 1956, and informal miners”.


Condor Gold has already permitted a 2800tpd plant for the La India project and is currently refining its engineering design in order to generate initial production of 120,000ozpa of gold based on the La India, Mestiza and La America pits.


The decision to extend the drilling of La Cacao is described by Executive Chairman, Mark Child as the initial focus of “the exciting second part” of Condor Gold’s strategy to demonstrate “the potential for a 5Moz Gold District”.


Conclusion: The decision to re-start drilling on the Cacao Vein system is an opportunity to investigate the broader extent of mineralisation in the La India district as the company moves towards production initially centered around the La India, Mestza and La America pits.


*SP Angel act as sole broker to Condor Gold




Cornish Metals* (LON:CUSN) – 10p, Mkt cap GBP27m – Osisko converts its note to a royalty


Cornish Metals has announced that it its previously announced agreement with Osisko Gold Royalties for the conversion of Osisko’s C$7.17m convertible note has been completed.


Osisko will now hold a 1.5% Net Smelter Return (NSR) royalty in relation to the South Crofty tin project and a 0.5% NSR on other Cornish mineral rights of Cornish Metals.


As part of the transaction “Osisko has agreed to release the security entered into by the Company and has agreed to enter into a more simplified and reduced security package with the Company”.


Cornish Metals made its AIM Market debut last week and expects to restart drilling on its United Downs property in Cornwall in late March or early April.


* SP Angel acts as broker and financial advisor to Cornish Metals




Empire Metals* (LON:EEE) 3.3p, Mkt cap GBP10m – Empire complete acquisition of Eclipse gold project


(Empire has acquired 75% of the Eclipse project)


Empire Metals has completed the acquisition of a 75% interest in the Eclipse gold project just north of Kalgoorlie in Western Australia


The consideration paid consists of A$1m (~GBP550,000 in cas) and A$500,000 (GBP277,750) though the the issue of 7,095,510 new shares at 3.91p and 7,095,510 warrants exercisable at 4.70p


In addition, a finder’s fee has been paid to an unrelated party of AUD$500,000 (GBP277,750) with 7,095,510 new shares at 3.91p and 7,095,510 warrants at 4.70p.


Recent results from 4,589m of drilling confirm the presence of a number of parallel veins in addition to the main Eclipse vein and alongside a stockwork style of mineralisation .


The results show:.24m @ 1.44 g/t Au from 46m downhole


including 2m @ 2.86 g/t Au; and 3m @ 5.08 g/t Au


8m @ 2.83 g/t Au from 118m


3m @ 2.61 g/t Au from 134m


8m @ 2.32 g/t Au from 70m


6m @ 5.52 g/t Au from 33m


5m @ 4.77 g/t Au from 49m


Conclusion: Confidence in the potential for the Eclipse gold project continues to grow as the results come in. We now see this as a potentially mineable gold prospect.


*SP Angel act as Nomad and Broker for Empire Metals




IronRidge Resources* (LON:IRR) 21p, Mkt cap GBP94.2m – GBP3.6m raised from warrant conversion


IronRidge reports that it has raised net proceeds of GBP3.6m by way of a warrant conversion at an exercise price of 12 pence per share.


All warrant holders elected to exercise their warrants of 32m shares.


*SP Angel acts as nomad to IronRidge Resources




Orosur Mining* (LON:OMI) 33.25p, Mkt Cap GBP72m – High-grade gold intersections received at Anza


Orosur reports progress if Minera Anza’s initial 2,300m drill programme that is currently underway at the company’s Anza project in Colombia, with the programme designed to answer several outstanding orientation and structural questions and to provide insight into the style of mineralisation.


Four holes were drilled on three sections and returned what the company described as attractive intersections, including:


MAP-073 21.60m @ 6.02g/t Au, 6.02g/t Ag and 3.23 %Zn from 271.75m


MAP-074 5.20m @ 1.17g/t Au 4.97g/t Ag and 3.02% Zn from 195.40m


MAP-075 19.85m @ 0.90g/t Au 2.17 g/t Ag and 6.46% Zn from 226.15m


MAP-076 12.25m @ 5.39g/t Au, 1.65 g/t Ag and 0.18 % Zn from 228.65m


Orosur report that wide intersections of high-grade zinc add weight to potential for a hybrid polymetallic VMS/Epithermal model.


The preliminary 2,300m drill programme has now been largely completed at Anza, and has succeeded at providing the company with guidance to the nature and distribution of mineralisation, allowing future drilling to be more efficiently targeted.


Orosur will now move into the next phase of drilling with a 7,000m program that will see a 4th diamond drill rig mobilised to site in the coming days.


CEO Brad George commented: “After much excellent work and several phases of drilling, it is pleasing to be at the point where we are now developing a greater understanding of APTA, its nature and genetic controls. It is also testament to the benefits of being in a JV with major companies that gives us access to a depth and breadth of experience and technical expertise that Orosur alone does not possess.”


“The emerging picture of APTA as a polymetallic, gold rich, VMS deposit is both an opportunity and a challenge – a challenge in having to now understand the zonation that is inherent in VMS deposits, but an opportunity in that the polymetallic nature (especially at high grades) is invariably a positive for project economics”


*SP Angel acts as Nomad and Broker to Orosur Mining




Phoenix Copper* (LON:PXC) 38p, Mkt Cap GBP24.7m – GBP2m debt facility to accelerate the Empire project


(Phoenix holds 80% of the Empire mining property in Idaho)


Phoenix Copper has announced that it has drawn down a GBP2m debt facility in order to expedite the development of its Empire mine open pit copper project located close to Mackay, Idaho.


CFO, Richard Williams, explained that the new facility, which pays interest at 8%pa, “will allow the Company to accelerate project development whilst we work on the final project financing package, which will be primarily debt related, and will be used to repay the Facility.”


Mr. Williams also commented that “Our next objective is to submit the project Plan of Operations to the relevant authorities as soon as possible, so that we can commence the final stages of construction permitting”.


Last week, the company announced the results of a revised economic plan involving the extraction of a total of 14.3mt of mineralised material currently within the measured and indicated resources in order to produce an average of 8,550tpa of copper, 1,970tpa of zinc, 17,235oz pa of gold and 680,050oz pa of silver at a life-of mine copper equivalent cash cost of US$1.83/lb or US$1,190/oz of equivalent gold.


Unlike earlier plans, which focused largely on the recovery of copper, the new study reflects the recovery of gold and silver made possible by the use of the environmentally benign reagent, ammonium thiosulphate.


Implementing a ten-year, two-phase development plan, with precious metal recovery commencing in the fourth year of operations, Phoenix Copper’s plan envisages that pre-production capital investment of US$52.6m generates a pre-tax NPV7.5% of US$105m and IRR of 57%. The company’s analysis shows an after-tax NPV7.5% of US$88m and IRR of 47%.


The study estimates commodity prices of US$3.60/lb for copper, US$1.20/lb for zinc, US$1,825/oz for gold and US$27/oz for silver.


Conclusion: The debt facility will enable Phoenix Copper to accelerate the Empire mine open-pit copper mine project which will now also recover precious metals using an environmentally friendly processing method which, in our view, should facilitate the project permitting.


*SP Angel act as Nomad for Phoenix Copper




Rambler Metals and Mining* (LON:RMM) 0.35p, Mkt Cap GBP36.3m – New non-executive appointment to strengthen the board


(Rambler owns 100% of the Ming Copper-Gold Mine)


Executive Chairman, Rambler Metals and Mining has announced the appointment of a new non-executive director, Ms Priya Patil with immediate effect.


Ms Patil, who is a member of both the California Bar and the Ontario Bar, will join the company’s Audit Committee and the Corporate Governance and Nominating Committee and was formerly “Global Head of Business Development of Diversified Industries covering Financial Institutions; Communications and Media; Real Estate; Utilities and Pipelines; Consumer and Industrial Manufacturing and Services; and Paper and Forest Products at the Toronto Stock Exchange and TSX Venture Exchange for over two years”.


Welcoming the appointment, Non Executive Chairman, Brad Mills, recognised Ms Patil’s “legal and investment banking expertise and for the strategic acumen she brings to the Company. With her appointment, the Company has strengthened its corporate governance and we look forward to starting work with our new directors and operating as a strong and cohesive unit”.


*SP Angel act as Nomad and broker to Rambler Metals & Mining




Tertiary Minerals* (LON:TYM) – 0.54p, Mkt cap GBP6.3m – Lucky Copper Project drilling


Tertiary Minerals has announced that it is commencing drilling today at its Lucky Copper project in Nevada.


The drilling target is described as a “disseminated sediment hosted, intrusion-related copper deposit”.


Patrick Cheetham, explained that the decision “to drill at an early stage on this project … [is based on] … historical exploration results [which] present an immediate target with reported copper mineralisation that needs to be confirmed and put into a better geological context.”


Conclusion: We consider that the early move into drilling at the Lucky Copper project is an indication of management enthusiasm for the historical data it has gathered on the project. We look forward to further information as the drilling programme proceeds.


*SP Angel act as Nomad and Broker to Tertiary Minerals




Analysts


John Meyer – [email protected] – 0203 470 0490


Simon Beardsmore – [email protected] – 0203 470 0484


Sergey Raevskiy [email protected] – 0203 470 0474


Joe Rowbottom – [email protected] – 0203 470 0486




Sales


Richard Parlons [email protected] – 0203 470 0472


Abigail Wayne – [email protected] – 0203 470 0534


Rob Rees – [email protected] – 0203 470 0535


Grant Barker – [email protected] – 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.




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

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