Today’s Market View – Kodal Minerals, Beowulf Mining, Altus Strategies and more…

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SP Angel . Morning View . Friday 28 05 21

Copper holds above $10,000/t as Biden to announce $6tn budget 

 

We are raising funds for a private Graphene producer – EIS scheme approval applied for

The company is selling a number of graphene products to industrial and retail customers.

Sales of certain products have sold out unexpectedly quickly.

The company wishes to fund a ramp up in production to get ahead of demand and to develop markets for a number of new, graphene products

The business is also able to upgrade graphite to a higher grade/specifications using its process – rolling out this process also requires funding

The company has also applied for EIS scheme approval from HMRC

Please let me know if you wish to invest in the company

*SP Angel’s role is limited to making introductions and interested parties should be aware that investment in a private company can present certain risks not present in listed companies (e.g. limited or no liquidity and no rules compelling disclosure of information to investors). This offer is open to professional investors only and is not offered to retail investors.

 

Altus Strategies* (LON:ALS) – Quarterly operational and financial update

Beowulf Mining* (LON:BEM) – Q1 results highlight progress in Kosovo and Finland

Kodal Minerals* (LON:KOD) – Drilling commences at Nielle gold project

SolGold* (LON:SOLG) – Compliance with UK Corporate Governance Code

 

Dow Jones Industrials +0.41% at 34,465

Nikkei 225 +2.10% at 29,149

HK Hang Seng +0.13% at 29,151

Shanghai Composite -0.22% at    3,601

 

Economics

US – President Biden is set to announce $6tn US federal budget for the 2022 fiscal year marking an increase of ~$1.3tn on this year, according to the New York Times.

This is set to be the first budget by the new president as he plans to push his priorities of investing in infrastructure, childcare and other public works.

Commenting on the size of the budget, Janet Yellen supported the size of government spending allowing to increase the economy’s supply capacity and allow faster growth in future years.

Yellen highlighted low interest rates allowing the government to service its increasing debt.

US treasury highlighted that a recent pick up in inflation is likely to prove temporary and is expected to last “several mote months”.

Durable goods dropped reflecting a drag from the volatile transportation sector in April led by defence aircraft and parts and motor vehicles due to a shortage of computer chips disrupting production, Bloomberg writes.

Durable goods orders excluding transportation were actually up on the previous month

Jobless claims dropped to a fresh pandemic low.

Revised GDP and inflation numbers showed the economy grew 6.4%qoq (annualised), unchanged from the previous estimate), helped by a 11.3%qoq jump in personal consumption while consumer prices’ growth was revised upwards in Q1/21.

GDP (%qoq, annualised): 6.4 v 6.4 estimated previously and 4.3 in Q4/20.

Personal Consumption (%qoq, annualised): 11.3 v 10.7 estimated previously and 2.3 in Q4/20.

Core PCE (%qoq, annualised): 2.5 v 2.3 estimate previously and 1.3 in Q4/20.

Durable Goods Orders (%mom): -1.3 v 1.3 in March and 0.8 est.

Durable Goods ex Transportation (%mom): 1.0 v 3.2 in March and 0.7 est.

 

Japan – The government recommended extending a state of emergency that includes Tokyo adding to doubts that Olympics will be carried as planned in less than two months.

 

UK – The government highlights that further easing of restrictions will be subject to the number of new infections.

A pick up in new cases driven by the variant linked to the new India’s variant has attracted concerns on whether the government will move forward with its plan to announce the fourth and final stage of “roadmap” out of lockdown.

3,452 new infections were recorded on Wednesday and more than half of all news cases and “potentially as many as three quarters” involved the new B1.617.2 variant.

The new variant is also reported to be spreading around 50% more easily than the Kent variant.

Ministers will reach a decision on June 14.

 

France – Q1 GDP numbers were revised lower to indicate a contraction meaning the nation slipped into a recession for the second time since the start of the pandemic.

GDP was down 0.1%qoq marking a downward revision from the 0.4% expansion reported in the first estimates.

The drop follows on a 1.5%qoq drop in Q4 last year.

Household consumption, construction and services were the hardest hit, FT reports.

Currencies

US$1.2182/eur vs 1.2206/eur yesterday.  Yen 109.90/$ vs 109.09/$.  SAr 13.862/$ vs 13.965/$.  $1.418/gbp vs $1.413/gbp.  0.772/aud vs 0.775/aud.  CNY 6.376/$ vs 6.377/$.

 

Commodity News

Tin surges to 10-year high as supply woes persist

Tin prices on the LME hit fresh 10-year highs on Friday morning, rising 3% to over $30,000/t and up 4.3% this week.

China’s Yunnan province is currently experiencing power outages affecting smelters, with the International Tin Association estimating that smelters will shut for about 10 to 20 days an impact 1000-2000t of refined production.

Earthquakes following a volcanic eruption in Congo are disrupting exports of tin concentrate from mineral-rich North Kivu province, with Congo accounting for 8% of the world’s tin concentrate.

Precious metals:  

Gold US$1,890/oz vs US$1,900/oz yesterday

Gold ETFs 101.1moz vs US$101.0moz yesterday

Platinum US$1,178/oz vs US$1,198/oz yesterday

Palladium US$2,816/oz vs US$2,761/oz yesterday

Silver US$27.64/oz vs US$27.74/oz yesterday

           

Base metals:  

Copper US$ 10,190/t vs US$10,033/t yesterday

Aluminium US$ 2,466/t vs US$2,431/t yesterday

Nickel US$ 18,045/t vs US$17,415/t yesterday

Zinc US$ 3,072/t vs US$3,025/t yesterday

Lead US$ 2,209/t vs US$2,192/t yesterday

Tin US$ 30,700/t vs US$29,705/t yesterday

           

Energy:           

Oil US$69.3/bbl vs US$68.5/bbl yesterday

Oil prices rose 1% yesterday following reports of strong US economic data that offset investors’ concerns about the potential for a rise in Iranian supplies

The number of Americans filing new claims for unemployment benefits dropped more than expected last week, according to data from the US Labour Department

The US economy, which in the first quarter notched its second-fastest growth pace since the third quarter of 2003, is gathering momentum, with other data yesterday showing business spending on equipment accelerated in April

The prospect of Iranian supplies re-entering the market has pressured prices

Iran and global powers have been negotiating since April about Washington lifting sanctions on Iran, including its energy sector, in return for Iranian compliance with restrictions on its nuclear work

Those talks will be a major issue for OPEC’s 1 June meeting

The group is likely to continue gradually easing oil supply curbs at a meeting on Tuesday, as producers balance expectations of a recovery in demand against a possible increase in Iranian supply

Any increase in supply from Iran would be gradual, potentially adding 500,000bopd by the end of this year and a further 500,000bopd by August 2022

Natural Gas US$2.959/mmbtu vs US$3.013/mmbtu yesterday

 

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$183.4/t vs US$172.4/t

Chinese steel rebar 25mm US$776.3/t vs US$776.3/t

Thermal coal (1st year forward cif ARA) US$80.4/t vs US$81.3/t

Coking coal swap Australia FOB US$155.0/t vs US$153.0/t

           

Other: 

Cobalt LME 3m US$43,650/t vs US$43,650/t

NdPr Rare Earth Oxide (China) US$76,465/t vs US$76,442/t

Lithium carbonate 99% (China) US$12,705/t vs US$12,701/t

China Spodumene Li2O 5%min CIF US$640/t vs US$640/t

Ferro-Manganese European Mn78% min US$1,785/t vs US$1,788/t

China Tungsten APT 88.5% FOB US$270/t vs US$270/t

China Graphite Flake -194 FOB US$515/t vs US$515/t

Europe Vanadium Pentoxide 98% $8.2/lb vs $8.1/lb

Europe Ferro-Vanadium 80% $37.25/kg vs $36.75/kg

Battery News

Ford to spend $30bn on EVs by 2030

Ford reported this week that it plans to boost EV spending by more than a third, aiming to have more than 40% of its global volume all-electric by 2030.

Ford expects to spend more than $£30bn on EVs by 2030, up from prior estimates of $22bn.

The announcement send Ford’s share price to a five-year high, rising as high as 9% on the day.

 

Company News

Altus Strategies* (LON:ALS) 62p, Mkt Cap £5m – Quarterly operational and financial update

BUY

The Company released a Q1/21 operational and financial update this morning.

Operational highlights included:

Expansion of activities in Egypt with four new gold licenses for 1,565km2 secured following a competitive international bidding process.

All four project (Wadi Jundi 696km2, Bakriyah 348km2, Abu Diwan 346km2, Wadi Dubur 175km2) are located within the highly prospective but relatively underexplored Arabian Nubia Shield (ANS) hosting a number of major gold and copper deposits including Sukari, Bisha and Jabal Sayid.

The Company is assembling a technical team in Egypt to kick start on the ground exploration following on identified priority targets.

Grant of three new coper and silver concessions covering 252km2 in the prospective western Anti-Atlas region of Morocco with exploration works expected to commence shortly following up on targets identified from remote sensing.

Completion of strategic review of Bikoula iron ore project in southern Cameroon to plan next project development steps.

Drilling results from the ongoing programme at the Tabakorole gold project in southern Mali that extended the strike length by 150m to over 3km as well as the discovery of a potential new and parallel gold zone with an intersection of 2.0g/t over 16m from 75m located some 50m east of the current deposit.

The 6,300m RC programme has been funded and completed by Marvel Gold, a JV partner, with a goal to both expand the MRE testing along strike extensions (NW and SE) as well as infill drill areas of plunging high grade shoots within the resource.

A 6,000m AC drilling programme is currently in progress in the southeast testing on strike extensions.

Financially, the Company closed an oversubscribed £7.7m placing (75p) in late March with La Mancha maintaining its 35% in Altus and proceeds to be primarily directed to towards exploration programmes in Egypt and Mali as well as potential acquisition opportunities.

The Company had £7.4 in cash and £2.0m in listed securities (Canyon Resources, Desert Gold and Stellar Africa Gold) as of Mar/21 and no debt.

Loss after tax stood at £1.3m (Q4/20: -£1.9m) with expensed exploration costs accounting for majority of that (£0.8m).

Conclusion: The Company continued to grow its portfolio of assets adding new gold licenses in Egypt and copper/silver concessions in Morocco during the quarter as well as raising new capital for exploration work including new drilling programme at the Diba Gold Project and potential royalty acquisition opportunities.

*SP Angel acts as Nomad and Broker to Altus Strategies plc

 

Beowulf Mining* (LON:BEM) 4.15p, Mkt cap £34.8m – Q1 results highlight progress in Kosovo and Finland

Beowulf reports its unaudited financial results for the three months ended 31 March 2021, with the company also providing an operational update for the period.

Beowulf report a consolidated loss of £0.53m over the period vs £0.22m Q1 2020. The increased loss is attributable to a translation loss of £265,985 on the revaluation of the Swedish Krona bank account. Further contributing to the loss was an increase in consultants and legal costs of £28,679, and staff training costs of £13,449.

Cash held at the end of the period amounted to £4.7m vs £0.79m Q1 2020.

Administrative expenses rose to £0.48m vs £0.16m in Q1 2020.

On the 8 February, Beowulf announced that the Company had invested £200,000 in Vardar Minerals, increasing its ownership in the company from 46.1% to 48.4%. The funds are to be used for preparatory works across the Mitrovica license in northern Kosovo, lead-zinc targets at Wolf Mountain and gold targets at Majdan Peak.

Beowulf also announced the signing of a MoU between its 100% owned graphite subsidiary, Oy Fennoscandian Resources AB (“Fennoscandian”), and Epsilon Advanced Materials Private Limited. The MoU will enable Fennoscandian to build its downstream capability as it develops its business to be a future supplier of anode material to lithium-ion battery manufacturers in Finland and Europe.

Beowulf announced that a contract had been awarded to Afry Finland Oy to conduct a scoping study on Fennoscandian’s Aitolampi Graphite Project in Finland.

Post period, Beowulf continued to press the relevant authorities for a decision over the Kallak project in Sweden. The company also announced results of a Mineral Resource Estimate Upgrade for the Kallak project, including an additional 19mt or iron mineralisation equating to a 12.5% increase in the resource.

Kurt Budge, Chief Executive Officer of Beowulf, commented: “As the Chairman wrote in the 2020 Annual Report, we are at a tipping point where global issues are converging to drive demand for primary raw materials. Metals are critical to achieving the transition to a Green Economy to address the Climate Emergency; transparent, secure, and sustainable supply chains need to be established; and Governments are considering how to power economic growth in a post-pandemic recovery.”

“Beowulf is seeking to be a leader in sustainability, as the Company recognises its ESG policies, procedures and performance are essential to demonstrating the Company is well-run and fulfilling its purpose in society. The results of the upgraded Mineral Resource Estimate for Kallak and the doubling of the Exploration Target, clearly demonstrate the potential for a mine at Kallak to supply high-quality iron ore over several decades for fossil-free steel production in Sweden. The potential global resource now stands at 389 million tonnes, which could support mining for 40 years.”

“To the community in Jokkmokk, Kallak is about investment, jobs and a sustainable economic future. When it comes to Sweden’s ambitious plans for fossil-free steel production, Kallak represents a strategic source of high-quality iron ore for projects such as H2 Green Steel.  When investors look to upstream and downstream investment opportunities in Norrbotten, an integrated fossil-free supply chain is a compelling investment and business case.”

*SP Angel act as Nomad and Broker to Beowulf Mining

 

Kodal Minerals* (LON:KOD) – 0.27p, Mkt cap £38m – Drilling commences at Nielle gold project

Kodal has commenced drilling at the Nielle Project in northern Cote d’Ivoire, designed to test for gold mineralisation along the interpreted strike extensions of the defined gold mineralised zone, as well as complete reconnaissance of surface geochemical anomalies surrounding the mineralised structures.

The 5,000m drilling programme is expected to take two weeks to complete and samples will be submitted for assay at completion.

Kodal has also mobilised a second drill rig to site, an RC rig which is designed to confirm previously intersected gold mineralisation, provide confidence in the geological interpretation and to extend the defined gold mineralised zone.

The RC drilling programme is expected to take approximately two weeks to complete and consists of a planned 1,000m programme with samples to be sent for analysis following the completion of the programme.

Regarding the company’s Bougouni Lithium Project, Kodal confirms that the updated Feasibility Study has been lodged with the DNGM in Bamako. The study has been updated to refer to the new Mali 2019 Mining Code and make other minor amendments.

Kodal notes the recent political unrest and reporting in Mali and continues to monitor closely the developments in country, commenting that country representatives and employees are all reporting that the situation remains calm and that commercial activities in the country are continuing as normal.

Kodal representatives have been liaising with the DNGM and understand that it is continuing to process the Company’s Mining Licence application.  The Company’s operations in Mali are currently continuing uninterrupted.

*SP Angel acts as Financial Advisor and Broker to Kodal Minerals

 

SolGold* (LON:SOLG) 31.3p, Mkt Cap £718m – Compliance with UK Corporate Governance Code

SolGold has announced that, following the “recent appointment of Mrs Maria Amparo Alban to the Nominations Committee of the Board has brought that Committee into full compliance with” the UK Corporate Governance Code.

Solgold says that “each of the Audit, Remuneration and Nominations Committees now fully comply with the requirements of the Code”.

The company says that, following opposition to a number of resolutions at the 2020 AGM it has “consulted with a range of the Company’s corporate and institutional shareholders over the past months” and determined that “The shareholders consulted are supportive of the Company’s approach to its Pre-Feasibility Study being undertaken in relation to the Alpala Project, and the international search being conducted for the appointment of a new permanent CEO to lead the Company through its next stage of growth and development”.

Today’s announcement cites support for the recent US$73.8m fundraising “by a range of the Company’s existing corporate and institutional shareholders including BHP, Newcrest and Valuestone … [as a demonstration of] … the alignment of its strategy and capital management approach with that of the Company’s shareholders”.

In a separate announcement today, the company provides notification of the impending retirement of its long-serving Company Secretary,  Karl Schlobohm, which will take effect on 30th June, and confirms that the company is in the process of appointing his successor. He will, however, remain available in a consultative capacity during the transition period.

 Conclusion: Solgold is updating its corporate governance practices and confirms that it is now fully compliant with the requirements of the UK’s Corporate Governance Code and is strategically aligned with its corporate and institutional shareholders.

*SP Angel act as Financial Advisor to SolGold.

 

Recent Interviews:

BBC:  Catalytic converters  https://www.bbc.co.uk/sounds/play/p09jl6c9

IGTV:  Evolution of Chinese construction and implications for commodity demand: https://youtu.be/jB2nURL8uPw

Improved global economic forecasts from the IMF provides trading opportunities:  https://www.youtube.com/watch?v=_GXKPqzuCG0

VW expansion driving battery metals prices: https://youtu.be/7vqSrONBaWw

VOX Markets:  28/04/20: https://www.voxmarkets.co.uk/media/60896b3f017903524c8e0936/?context=/listings/LON/BMN/multimedia/

21/04/20: https://www.voxmarkets.co.uk/listings/LON/BMN

*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.

 

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 – [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, Tungsten, Spodumene, Ferro-Manganese, Graphite

Asian Metal

 

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