Adriatic Metals* (LON:ADT1) – Drill results at Raska

Altus Strategies* (LON:ALS) – BUY – £7.7m raise to fund exploration in Egypt and Mali as well as new royalty/project acquisition opportunities

Caledonia Mining* (LON:CMCL) – Record production year for Blanket underpins a further rise in dividend

Botswana Diamonds (LON:BOD) – Diamonds recovered in drilling at Thorny River

SP Angel . Morning View . Monday 22 03 21

Nickel and lithium prices jump higher on EV demand


Adriatic Metals* (LON:ADT1) – Drill results at Raska

* () – BUY – £7.7m raise to fund exploration in Egypt and Mali as well as new royalty/project acquisition opportunities

Caledonia Mining* () – Record production year for Blanket underpins a further rise in dividend

Botswana Diamonds () – Diamonds recovered in drilling at Thorny River

Galan Lithium () – Testwork points to 6% Li lithium chloride concentrate production potential

Kodal Minerals* () – Kodal raises £3.5m to advance Bougouni lithium project and other gold exploration


Shanghai nickel inventories fall 16% on strong EV demand

Deliverable nickel stocks fell 16.2% during the week to Friday 19th of March, with inventories down at 10,563 tonnes.

The drop in nickel inventory was attributed to strong battery demand from new energy vehicles in China, Fastmarkets MB reports.


Recent Interviews:

IGTV:  VW expansion driving battery metals prices:

Are we in a new commodity supercycle, or is one coming?

Is this a new Supercycle for commodities:

Metals expected to continue the last-year gains into 2021

Is 2021 the start of the new COVID-Supercycle or will Lockdowns delay the recovery?

VOX Markets:  12/03/20:



*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


Dow Jones Industrials -0.71% at 32,628

Nikkei 225 -2.07% at 29,174

HK Hang Seng -0.36% at 28,885

Shanghai Composite +1.14% at 3,443



 US – 10y sovereign bond yields pulled back below 1.68% as Richmond Fed President Thomas Barkin said in TV interview Sunday that there is no sign yet of unwanted inflation pressures

Separately, Fed Chairman reiterated in a WSJ editorial that the central bank will provide aid to the economy “for as long as it takes”.


Japan – A fire at one of Renesas Electronics’ semiconductor production facilities to add to challenges of tight automotive chip supply.

The Company expects the facility to be back on line with a month and anticipates JPY 17bn ($156m) in lost revenue due tot the incident.

Renesas has six production sites in Japan with the N3 building where the fire broke out hosts 300mm wafer production that makes it one of the company’s more advance lines.

Toyota is one of the biggest clients of Renesas accounting for ~7% of sales, Bloomberg reports.

Automakers have been struggling with a shortage of electronic chips driven by increased demand for laptops, tablets and home electronics by people working from home with supply chains under strain amid the continuing pandemic.


South Korea – Early March trade data point to a continuing pickup in global demand.

Exports (20 days of the month: %yoy): 12.5 v 16.7 in February.

Imports (20 days of the month: %yoy): 16.3 v 24.1 in February.


Turkey – Lira plunges as government replaces yet another Central Bank chief, its fourth in two years. The nation says it will

Unexpected central bank chief dismissal triggers the sharpest sell offs in local markets in years.

The Borsa Istanbul Index lost more than 8% while lira weakened almost 15% on the news.

The removal of Naci Agbal after four months as governor raises and the appointment of Sahap Kavcioglu, a critic of the recent interest-rate increases, raised concerns over the central bank’s credibility and a potential recurrence of a runaway inflation.

The central bank surprised markets and announced a higher than expected increase in rates to 19.0% (v 18.0% est.) amid accelerating inflation (15.6% in Feb).


Indonesia eases metal export restrictions due to pandemic

The government has announced that it will still issue export recommendation letters to mining companies even if they fail to meet the required progress in smelter construction due to the pandemic.

Mining companies require the recommendation letter issued by the energy ministry to secure a separate export permit from the trade ministry.

Miners are required to have reached at least 90% progress in two evaluation periods – and miners are still subject to fines related to the smelter requirement.

Indonesia continues to restrict exports of nickel ores by excluding the commodity from the incentive.


VW Temporarily halt production in Brazil due to rising Covid-19 cases

Volkswagen has temporarily suspended all production at all of its Brazilian plants due to the worsening situation of the Covid-19 pandemic in the country.

VW owns four production plants in the country, all located in southeastern cities.

On Thursday, Brazil reported 86,982 new cases of Covid-19, while new deaths amounted to 2,724.


Astra Zeneca vaccine – is shown to be 79% effective in major US Clinical trial. The result should enable approval for the vaccine in the US


France – Finance Minister reiterates his hopes for France to return to some kind of normal life


Hong Kong – CPI Composite 0.3% yoy vs 1.9% a year ago for February vs expectation for 0.7%


Currencies US$1.1898/eur vs 1.1927eur last week.  Yen 108.70$ vs 108.67/$.  SAr 14.839/$ vs 14.668/$.  $1.386/gbp vs $1.394/gbp.  0.772/aud vs 0.777/aud.  CNY 6.509/$ vs 6.504/$.


Commodity News

Precious metals:  

Gold US$1,730/oz vs US$1,743/oz last week

Gold ETFs 100.9moz vs US$101.1moz last week

US$1,173/oz vs US$1,212/oz last week

Palladium US$2,607oz vs US$2,675/oz last week

Silver US$25.49/oz vs US$26.17/oz last week


Base metals:  

Copper US$ 9,048/t vs US$8,956/t last week

Aluminium US$ 2,272/t vs US$2,210/t last week

Nickel US$ 16,395/t vs US$16,015/t last week

Zinc US$ 2,875/t vs US$2,792/t last week

Lead US$ 1,975/t vs US$1,933/t last week

Tin US$ 25,550/t vs US$25,000/t last week



Oil US$64.2/bbl vs US$63.8/bbl last week

Oil prices have opened the day slightly up following last weeks’ sell off

Nevertheless, Friday’s fall has created an atmosphere of uncertainty in the market, with investors questioning the sustainability of this year’s oil price rally

Market sentiment has also been dampened by extended lockdown measures in Europe, which have cast a shadow of doubt over initial expectations of an expedited recovery in global oil demand

France and Germany have added lockdown measures to combat a sharp rise in COVID-19 infections, with other countries across Europe considering the same

In addition, the market has been increasingly apprehensive over the April OPEC+ meeting, which would provide guidance on the coalition’s production plans for May onwards

OPEC+ cuts, which have taken up to 8MMbopd of oil supply out of the market, have been a key pillar of support for prices, and an easing of these cuts could send the market spiralling downwards

Despite the recent downtrend in prices, analysts remain broadly optimistic over the outlook for the market

It is broadly felt that the impact of a European lockdown will be muted, and that fundamentals are not sufficiently weak to justify a sustained sell off in the market


Natural Gas US$2.508/mmbtu vs US$2.502mmbtu last week

Natural gas futures closed higher on Friday for only the third time in 13 sessions as strong liquefied natural gas (LNG) demand offset worries over demand just ahead of the start of the spring shoulder season

Asian demand for US exports was strong throughout the winter and now, heading into spring, European demand is mounting as storage levels on the continent dwindled substantially in recent months

Since Winter Storm Uri resulted in reduced outages and gas conversation for residential use in Texas, LNG demand has risen 10.0Bcf/d in the past month

Further demand gains are possible – perhaps even eclipsing 12.0Bcf/d if all terminals achieve maximum demonstrated demand levels at the same time

Gains in LNG feed gas and Gulf Coast industrial demand for natural gas this week may help offset declines in weather-driven demand, allowing small withdrawals to continue near-term



Iron ore 62% Fe spot (cfr Tianjin) US$153.1/t vs US$159.9/t

Chinese steel rebar 25mm US$735.7/t vs US$726.0/t

Thermal coal (1st year forward cif ARA) US$71.3/t vs US$71.5/t

Coking coal swap Australia FOB US$127.0/t vs US$128.5/t



Cobalt LME 3m US$52,610/t vs US$52,610/t

NdPr Rare Earth Oxide (China) US$88,722/t vs US$88,796/t

Lithium carbonate 99% (China) US$12,905/t vs US$12,762/t

Spodumene 6% Li2O min, cif (China) US$510/t vs US$455/t

Ferro Vanadium 80% FOB (China) US$35.0/kg vs US$35.0/kg

Ferro-Manganese high carbon 78% Mn US$1,625/t vs US$1,625/t

Tungsten APT European US$270-275/mtu vs US$268-275/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$2,525/t vs US$2,625/t


Battery News

US Dept. of Energy begins design and construction of $75m grid energy storage research facility

The US Department of Energy (DOE) is set to begin the design and construction stage of a facility that aims to accelerate the development and deployment of long-duration, low-cost grid energy storage.

The facility in Washington will have 30 research labs including testing chambers for assessing prototypes and grid energy storage technologies under real world grid operating conditions.

Construction of the facility is to commence this year, with the building expected to be operation by 2025.

The facility will collaboration between multidisciplinary researchers, and industry; validation of next generation grid energy storage materials and systems under grid operating conditions; and the acceleration of technologies from benchtop to real-world systems.


Airbus flies its first 100% sustainable aviation flight 

Airbus has conducted its first flight of an aircraft, fuelled 100% by Sustainable Aviation Fuel. 

The flight is being conducted with Airbus, German research centre DLR, Rolls-Royce and SAF producer, Neste. Together, they have teamed up to start the pioneering “Emission and Climate Impact of Alternative Fuels” project looking into the effects of 100% SAF on aircraft emissions and performance. 

Findings from the study will support efforts currently underway at Airbus and Rolls Royce to ensure the aviation sector is ready for the large scale use of SAF as part of the wider initiate to decarbonise the industry. 

There will be a series of tests to ensure compatibility, followed by flight-emissions tests using DLR’s Falcon 20-E ‘chase plane’ to carry out measurements to investigate the emissions impact of using SAF. Meanwhile, further ground tests measuring particulate-matter emissions are set to indicate the environmental impact of SAF-use on airport operations. 


Company News

Adriatic Metals* (LON:ADT1) 117.5p, Mkt cap £252m – Drill results at Raska

Adriatic reports exploration results at its Kizevak and Sastavci prospects, expanding and confirming the previously known mineralised zones and demonstrating good continuity of the mineralisation.

At Kizevak, results identified in KZDD-051, located up-dip from a thick, deeper lens include:

5.0m at 2.5 % zinc, 1.7 % lead, 26 g/t silver, 0.3 g/t gold (4.6% ZnEq) from 7.0m, including 6.1m at 4.6 % zinc, 3.4 % lead, 41 g/t silver, 0.5 g/t gold (8.2% ZnEq) from 9.9m

KZDD-042 has extended mineralisation down dip and southeast from historically defined limits of mineralisation, which remains open:

10.2m at 2.1 % zinc, 1.0 % lead, 12 g/t silver, 0.4 g/t gold (3.5% ZnEq) from 70.8m, including 4.3m at 3.3 % zinc, 1.6 % lead, 22 g/t silver, 0.6 g/t gold (5.6% ZnEq) from 71.7m

At Sastavci, hole SSDD-006 intercepted two thick zones of mineralisation including:

15.8m at 3.8 % zinc, 1.5 % lead, 28 g/t silver and 0.2 g/t gold (5.2% ZnEq) from 122.5m, including 8.8m at 6.5 % zinc, 2.6 % lead, 48 g/t silver and 0.2 g/t gold (8.9% ZnEq) from 129.5m.

13.3m at 1.3 % zinc, 0.7 % lead, 9 g/t silver and 0.3 g/t gold (2.4% ZnEq) from 153.7m.

Hole SSDD-007 intercepted a broad, well mineralised zone from surface including:

36.0m at 3.7 % zinc, 1.4 % lead, 21 g/t silver and 0.2 g/t gold (4.9% ZnEq) from surface, including 8.4m at 8.1 % zinc, 1.9 % lead, 30 g/t silver and 0.3 g/t gold (9.4% ZnEq) from 4.6m

A third drill rig is to be deployed to focus on regional exploration as part of the 25,000m diamond drill programme at the Raska project for 2021.

Paul Cronin, Adriatic’s Managing Director and CEO, commented: “Our geological understanding of the Raska Project continues to evolve following the discovery of further sub-parallel vein zones at both Kizevak and Sastavci. The exploration work completed to date has demonstrated that there remains an incredible amount of potential across, not only these two prospects, but the wider project area.”

“Adriatic will continue to systematically explore around the Kizevak and Sastavci prospects, with the aim to generating a sizeable resource to support a significant open-pit mining operation.  Based on the results to date a maiden resource and scoping study at Raska will be delivered in the 2nd half of the year, once the DFS, ESIA and the project financing workstreams at Vares have been completed and construction is underway.”

*An SP Angel mining analyst has visited Adriatic Metals operations in Bosnia


* () 79p, Mkt Cap £55m – £7.7m raise to fund exploration in Egypt and Mali as well as new royalty/project acquisition opportunities


The Company raised £7.7m through an oversubscribed placing at 75p with existing and new institutional and private investors.

Proceeds will directed towards:

£2.0m for exploration in Egypt;

£2.0m for new royalty/project acquisitions;

£0.8m for up to 10,000m of drilling in Q2/21 and a PEA at the Diba gold project in Mali;

£2.8m general working capital.

La Mancha subscribed for 35.4% of the fundraise.

Altus Directors have also participated in the placing.

Conclusion: The placing provides capital to accelerate exploration at gold properties in Egypt and Mali as well as potential royalty/project acquisitions. The fundraising was supported by La Mancha that maintained its 35.4% interest and attracted new investors onboard while further strengthening the Altus balance sheet taking cash position to £12.5m with an additional £1.5m held in listed equities.

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


Caledonia Mining* () 1152.5p, Mkt Cap £137m – Record production year for Blanket underpins a further rise in dividend

Record gold production of almost 58,000oz of gold from the Blanket mine during 2020, a rising gold price and a successful containment strategy for controlling the Covid19 virus have contributed to improved profitability, margins and an increased dividend at Caledonia Mining.

The performance comes at the culmination of a five-year, US$67m, capital investment programme to develop the new Central Shaft and access deeper mineralisation ensuring the long-term future of Blanket into the 2030s at an increased production rate of 80,000oz pa.

Gross revenue increased by over US$24, to US$100m (2019 – US$75.8m) generating EBITDA of US$43.3m at an improved margin of 43% (2019 – US$29.9m at 39% margin).

After-tax profit for the year doubled to US$50.4m (2019 – US$25.3m) and the dividend is increased by almost 22% to 33.5cents/share. 

The declaration of an 11cent quarterly dividend in January represents the fourth increase and a 60% rise since October 2019 confirming both the company’s confidence and also underlines Caledonia Mining’s place as one of the AIM mining sectors most consistent dividend payers.

As the capital commitment of the new shaft project draws to a close, the company reports a 31st December 2020 cash balance of US$11.2m.

CEO, Steve Curtis, explained that “Once Central Shaft is commissioned, we can start to expect further increases in production: guidance for 2021 is a range of 61,000 to 67,000 ounces while from 2022 onwards it is 80,000 ounces – 38 per cent higher than in 2020”.

Operationally, the equipping of the new shaft was completed in November 2020 and its commissioning is “expected in the first quarter of 2021”.

The company also reports improved recovery rates of 93.8% (2019 – 93.4%) following the completion of an upgrade to the oxygen plant

Commenting on the impact of the Covid19 pandemic, Mr. Curtis confirmed that “The Blanket Mine continued to operate throughout the whole period with strict restrictions of movement put in place in and out of the Mine and local community. The measures to combat the coronavirus are constantly reviewed and monitored in line with WHO and government guidelines, and with our priority always being the safety of our people”.

Caledonia Mining has, rightly in our opinion, been focussed on delivering the expansion of the Blanket mine and on securing its long-term future however it is now also addressing the possible expansion opportunities available elsewhere in Zimbabwe where it has established profound operating expertise and insight, with the previously announced option agreements on the Glen Hume and Connemara North properties in the Gweru mining district of the Zimbabwe Midlands

At this stage, these options are for exploration rights however they include the option to “. acquire the mining claims over them. If our exploration is successful these properties will add further impetus to our growth”

Conclusion: The imminent completion of the five-year project to access deeper level mineralisation at the Blanket mine secures the long-term future of the mine at increased production rates and Caledonia Mining is now examining other opportunities to deploy its considerable in-country expertise with other projects elsewhere in Zimbabwe.

*SP Angel mining analysts have visited Caledonia’s mining operations in Zimbabwe


Botswana Diamonds () 0.9p, Mkt Cap £6.6m – Diamonds recovered in drilling at Thorny River

Botswana Diamonds reports that it has recovered 11 diamonds from its reverse-circulation drilling at the Thorny River site in Limpopo Province, South Africa.

The weight of the diamonds is not reported “as the sample size was small and they are not representative of a possible population”, however they were accompanied by a suite of diamond-indicator minerals and the diamonds are described as all of “good colour and clarity and are of commercial quality and in high demand by the market”.

The recovered samples come from an aggregate of 39.5m of kimberlite intersections from six drillholes and the company explains that it intends to move to a phase of core-drilling at the site during the dry season.


Galan Lithium () A$0.53, Mkt Cap A$127m – Testwork points to 6% Li lithium chloride concentrate production potential

Laboratory testwork produced 6% Li lithium chloride concentrate, an improvement on 4.8% Li used in the Scoping Study.

Results also show very low levels of contaminants including SO4, Ca and Mg.

The study suggests the flagship Hombre Muerto West (HMW) brine project in Argentina may produce high grade concentrate comparable to SQM’s and Albemarle’s LiCl concentrate from the Atacama basin in Chile.

The testwork was managed and conducted by lithium experts Ad-Infinitum.

The HMW project hosts one of the highest grade publicly known brine projects hosting 2.3mt LCE at 946ml/L Li.

The team is studying the commercial potential of the high grade LiCl concentrate as feed for lithium battery supply chain.

Galan expects initial HMW brine evaporation pilot works to start in Q2/21.


Kodal Minerals* () – 0.14p, Mkt cap £17m – Kodal raises £3.5m to advance Bougouni lithium project and other gold exploration

Kodal Minerals reports the rising of £3.5m at a price of 0.125 pence per share.

The fund are to be used for exploration on its priority gold targets and to advance the Bougouni lithium project.

Kodal is currently engaged with Sinohydro where it has an MoU on the potential development of Bougouni. Sinohydro is part of Power China.

Management are also in touch with Suay Chin and Shandong Ruifu Lithium Industry Co Ltd, which is expected to take the Bougouni spodumene concentrate.

Shandong Ruifu produces lithium carbonate and lithium hydroxide in China.

Bougouni lithium project key stats:

220,000tpa of 6% spodumene concentrate over an initial 8.5 years

71% recovery rate of contained lithium

>USD$1.4bn of total revenue at $680/t starting H2 2021 and rising 2%pa

2mtpa throughput with DMS and conventional flotation circuit. Recoveries are acceptable with the DMS on its own.

USD$431/t C1 cash costs or USD$466/t inc. royalties and sustaining capital.

US$117m Capex est. plus contingency:

1.7 year payback est.

58% IRR pre-tax

51% IRR post tax

US$300m NPV7% pre-tax

US$200m NPV7% post-tax

Key gold projects:

Dabakala (Ivory Coast): extensive artisanal workings and gold anomalies are seen running for 9km by 1km wide and 11km by 1km wide.

Nielle (Ivory Coast): shows positive results from initial drill program.

Fatou and Fininko (Mali): Kodal is just finishing a RC drill program where drilling has previously highlighting zones of high-grade gold mineralisation.

Kodal has eight gold projects in West Africa including Nielle, Tiebissou, M’Bahiakro, Dabakala and Korhogo in Cote d’Ivoire and Fatou, Nangalasso and SLAM in Mali

Conclusion: It is good to see Kodal better financed for its project work going forwards. Management are busy coordinating with the three involved Chinese groups on the Bougouni

lithium project while drilling on the Fatou licenses and making progress on Dabakala and other gold prospects

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



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



Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – Ab[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



*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, , Palladium, Silver

BGNL (Bloomberg Generic Composite rate, London)

Gold ETFs, Steel


Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt


Oil Brent


Natural Gas, Uranium, Iron Ore


Thermal Coal

Bloomberg OTC Composite

Coking Coal




Lithium Carbonate, Ferro Vanadium, Antimony

Asian Metal


Metal Bulletin


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