SP Angel . Morning View . Tuesday 05 01 21

December PMIs present sturdy restoration as Gold and Nickel costs soar

 

 

MiFID II exempt data – see disclaimer under 

Bluejay Mining* () – BUY, Valuation 29.4p – Board reorganisation sees Dr. Bo Møller Stensgaard takeover as CEO with McIllree taking up as Chairman

Lucara Diamonds () – Karowe licence renewal

Mkango Sources* () – Talaxis strikes to 11.3% following train of warrants on amended phrases

Shanta Gold () – Appointment of exploration supervisor

.

Economics

China – Official Chinese language nonmanufacturing PMI was 55.7 for December vs 56.4

Manufacturing made up 27% of GDP in 2019

PMI 51.9 in December vs 52.1 in November

Caixin China 53.0 in December vs 54.9

 

PBOC permits small and micro firms to increase principal + curiosity funds until finish March

China has authorised 64 main new infrastructure initiatives price round $42bn

 

China CSI 300 Inventory benchmark closes at 13-year excessive

China’s CSI 300 Index rose 1.9% on Tuesday to shut at its highest stage since 2008, with the benchmark surging greater than 50% from March final 12 months.

The fairness rally in China surged final 12 months after Beijing made it simpler to purchase shares utilizing borrowed cash.

The advance seen in current weeks has pushed the worth of Chinese language home equities to $11 trillion.

Chinese language equities have benefitted from a robust onshore renminbi, in addition to knowledge displaying that China’s financial system was rebounding quicker than different main economies.

 

China – continues to press forward with new infrastructure developments

The NDRC accredited an US$13bn 340 mile excessive pace rail hyperlink from Xiong’an to Henan province (Xinhuanet)

The brand new high-speed line follows the opening of the Beijing-Xiong’an line which connects Beijing to Xiong’an New Space in simply 50 minutes down from 90 minutes

It now takes simply 19mins to journey from Beijing Daxing Worldwide Airport to Xiong’an connecting the New Space to the capital and its airports.

The Beijing-Xiong’an high-speed line may also prolonged to attach with different high-speed strains throughout the nation.

The concept is for Xiong’an in Hebei Province to alleviate Beijing of non-essential features to its function as China’s capital decreasing site visitors and air pollution.

London tried to do one thing related when it created Milton Keynes. We sincerely hope Xiong’an seems higher and can much less roundabouts.

Xiong’an New Space, is seen as China’s ‘metropolis of the longer term’ with the station roof generated some 5.8mkWh of energy via photovoltaic cells highlighting China’s drive to greener energy era.

Xiong’an has a deliberate space of 1,770 sq. km giving some thought of the size envisaged as a brand new space of nationwide significance following the Shenzhen Particular Financial Zone and the Shanghai Pudong New Space.

Planners need 70% of the Xiong’an New Space to be lined by water or bushes for sturdy competitiveness and harmonious human-environment interplay.

>100,000 staff are at the moment engaged on some 300 development websites in Xiong’an with >18m bushes planted over 22,246Ha

 

World – JP Morgan world manufacturing unchanged at 53.8 in December

 

US – December Manufacturing PMI at 57.1 vs 56.7 final signifies better-than-expected restoration

US manufacturing exercise expanded at its quickest tempo in additional than six years final month, additional extending the manufacturing unit restoration within the States.

In line with IHS Markit, the development was pushed largely by a robust pricing surroundings, with companies partially passing on greater enter costs to shoppers.

Knowledge launched on Monday additionally confirmed US development spending rose to a document excessive in November, on account of a sturdy housing market amid traditionally low mortgage charges.

Development spending elevated 0.9% to $1.459tr- the best stage because the authorities began monitoring such a statistic in 2002.

US – Markit PMI 57.1 in December vs 56.7

Nov US development spending 0.9% (Oct 1.3%).

 

Germany – PMI rose to 58.3 in December vs 57.8

Retail gross sales rise 1.9% in November as Germans spend via pandemic

Knowledge launched this morning reveals that retail gross sales climbed 1.9% on the month prior, on account of sturdy progress in on-line gross sales and residential enhancements.

German unemployment unexpectedly fell in December, with jobless numbers falling by 37,000 in comparison with the earlier month.

German hospitals reporting an ‘extraordinarily tough scenario resulting from Coronavirus’ in accordance with a authorities spokesman

 

Japan – PMI 50.0 in December vs 49.0 in November

South Korea – PMI 52.9 in December unchanged

Taiwan – PMI 59.4 in December vs 56.9

Singapore – PMI 50.5 in December vs 50.4

India – PMI 56.4 in December vs 56.3

Turkey – PMI 50.8 in December vs 51.4

France – PMI 51.1 in December vs 49.6

EU – PMI 55.2 in December vs 53.8

UK – PMI 57.5 in December vs 55.6

Brazil – PMI 61.5 in December vs 64.0

Mexico – PMI 42.4 in December vs 43.7

Canada – PMI 57.9 in December vs 55.8

Australia – PMI 55.7 in December vs 55.8

 

UK – Third lockdown begins in UK as authorities intention for swift vaccine rollout

The UK have been ordered to now keep at residence apart from a handful of permitted causes, with England’s guidelines to be reviewed on the fifteenth of February.

It’s anticipated that each one care residence residents and their carers, frontline well being employees, the extraordinarily susceptible, and everybody over the age of 70 will probably be vaccinated by mid-February.

This morning, Chancellor Rishi Sunak introduced a £4.6bn assist package deal for struggling UK firms.

The treasury will present one-off “top-up grants” for an estimated 600,000 companies, every of which might declare as much as £9,000.

 

China – providing commerce talks to the Joe Biden administration

NYSE – U-turn on delisting Chinese language telecoms firms

Yesterday we coronary heart the NYSE was to delist three Chinese language telecoms firms.

At the moment the NYSE shouldn’t be in accordance with the BBC

President Trump signed an government order in November barring American investments in Chinese language companies owned or managed by the navy.

The NYSE introduced on 31 December that it could delist China Cellular, China Telecom and China Unicom.

The choice is reported to be based mostly on additional session with the regulatory authorities.

Sustaining the itemizing will enable non-US buyers to nonetheless put money into these firms although a US itemizing.

We suspect the NYSE will wait to see if Joe Biden may overturn Trump’s extra aggressive coverage in the direction of China

Whereas we perceive the Democrats share many Republican views on China we might even see Biden take a extra diplomatic method in the direction of China

US telecoms firms are nonetheless required to interchange Huawei tools

Conclusion: US buyers have a protracted historical past of investing in China with each nations intently linked by way of commerce and finance. Breaking the 2 aside is like separating Siamese twins, eg it’s a protracted operation which might end in killing one or each sufferers.

 

US – Rental property belongings might grow to be poisonous in Manhattan as tenants in bankrupt house buildings demand money via the courts to repair buildings

Tenants in a bankrupt Manhattan house block have utilized to court docket for money to right away handle rats and mattress bugs.

If the court docket awards the funds, which it’s prone to do, then related rental properties will grow to be liable to supply sure providers regardless of chapter

 

Saudi Arabia – Borders reopened with Qatar for the primary time in three years

Saudi Arabia has reopened its land, air and sea borders with Qatar forward of a regional summit this week.

 

Currencies

US$1.2270/eur vs 1.2282/eur yesterday.  Yen 102.91/$ vs 102.79/$.  SAr 14.745/$ vs 14.552/$.  $1.359/gbp vs $1.368/gbp.  0.771/aud vs 0.774/aud.  CNY 6.462/$ vs 6.462/$.

 

Commodity Information

Valuable metals:  

Gold US$1,943/oz vs US$1,932/oz yesterday

   Gold ETFs 107.3moz vs US$106.8moz yesterday

US$1,073/oz vs US$1,106/oz yesterday

Palladium US$2,392/oz vs US$2,453/oz yesterday

Silver US$27.37/oz vs US$27.28/oz yesterday

Base metals:  

Copper US$ 7,925/t vs US$7,937/t yesterday

Aluminium US$ 2,030/t vs US$2,002/t yesterday

Nickel US$ 17,475/t vs US$17,330/t yesterday – Nickel surges over 5% on Wednesday amid panic-buying after Sulawesi earthquake

Nickel costs jumped essentially the most in 9 months on Monday, extending final 12 months’s 18% achieve, after earthquakes shook the Indonesian island of Sulawesi.

The earthquake triggered minor injury to buildings within the Morowali Industrial Park, the place Tsingshan Holding Group produces nickel pig iron.

Most of Indonesia’s confirmed nickel reserves are situated on the islands of Sulawesi and Halmahera, and the nation has the biggest annual manufacturing and reserves of nickel on this planet.

Together with nickel’s surge, all metals superior on the primary buying and selling day of the 12 months on the LME, with commodities benefitting from a weaker dollar- which sank to its lowest stage since February 2018 on Monday (Bloomberg).

Regardless of the earthquake, Reuters experiences that the panic-buying of nickel is a “knee-jerk response” and that manufacturing shouldn’t be anticipated to be affected.

We suspect the market was trying to rise in any occasion.

Zinc US$ 2,799/t vs US$2,796/t yesterday – Zinc – Closure of Younger Poong smelter might take away 350ktpa if the smelter shouldn’t be allowed to reopen

Lead US$ 2,049/t vs US$2,048/t yesterday

Tin US$ 21,240/t vs US$20,700/t yesterday

Power:           

Oil US$51.1/bbl vs US$53.3/bbl yesterday

Pure Fuel US$2.680/mmbtu vs US$2.614/mmbtu yesterday

 

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$161.4/t vs US$155.7/t – Iron ore costs rise as considerations over tight provide enhance

Chinese language iron ore futures rose for a 3rd straight session on Tuesday, with costs rising to a one-week excessive and again over $160/t.

Iron ore arrivals at Chinese language ports declined over Dec 28-Jan 3 by 4.3% from the week earlier than, in accordance with Mysteel.

In the meantime, portside inventories shrank to 126.8mt, down 4% in comparison with November final 12 months.

Essentially the most traded iron ore contract on the Dalian Commodity alternate rose as a lot as 4.5% to 1,044 yuan ($162)/t (Reuters).

Brazil’s iron ore exports rose 33% YoY in December to 33.17mt, with miners benefiting from greater costs resulting from sturdy Chinese language demand (Fastmarkets MB).

 

 

Chinese language metal rebar 25mm US$675.5/t vs US$672.7/t

Thermal coal (1st 12 months ahead cif ARA) US$72.8/t vs US$69.0/t

Coking coal swap Australia FOB US$136.0/t vs US$136.0/t

           

Different: 

Cobalt LME 3m US$33,000/t vs US$32,190/t

NdPr Uncommon Earth Oxide (China) US$63,294/t vs US$63,064/t

Lithium carbonate 99% (China) US$7,660/t vs US$7,506/t

Ferro Vanadium 80% FOB (China) US$30.0/kg vs US$30.0/kg

Ferro-Manganese excessive carbon 78% Mn US$1,370/t vs US$1,330/t

Tungsten APT European US$230-235/mtu vs US$230-235/mtu

Graphite flake 94% C, -100 mesh, fob China US$520/t vs US$510/t                

Graphite spherical 99.95% C, 15 microns, fob China US$2,475/t vs US$2,475/t

Spodumene 6% Li2O min, cif (China) US$395/t vs US$380/t

 

Battery Information

Foxconn to begin mass manufacturing of latest Electrical Car in early 2022 in three way partnership with Byton.

Byton is investing $200m into manufacturing services for Byton’s EV M-Byte SUV

Byton buyers embody state-owned China FAW Group Corp. and EV battery maker Modern Amperex Know-how Co. Ltd., which provides batteries to Tesla.

 

Tesla Mannequin Y receives sturdy curiosity after launch in China, places stress on competitors

Tesla Mannequin Y is receiving sturdy curiosity from the Chinese language market following its launch, in accordance with native experiences, and it’s placing stress on the competitors in an vital phase..

The Mannequin Y is being produced in Shanghai for the native market following approval from the Ministry of Trade & Data Know-how in November.

Chinese language Tesla’s will price Rmb339,900 for the Lengthy Vary Twin Motor SUV and 369,900 yuan ($56,600) for the Mannequin Y Efficiency model.

Electrek experiences Tesla shops with the Mannequin Y on show had been flooded with potential patrons over the weekend.

Mannequin 3 manufacturing deliveries began a 12 months in the past only one 12 months from the beginning of manufacturing unit development in Shanghai. The Mannequin 3 is now the nation’s greatest promoting EV sedan.

Tesla providing 30% reductions on China-built automobiles to stimulate demand for deliveries after the Lunar New 12 months

Native analysts reckon Tesla’s new Mannequin Y goes to promote nicely in China main new curiosity in EVs

Panasonic is to supply the new-design Tesla 4680 cells with 5x extra vitality, >16% vary and 6x the facility

We’re nonetheless unsure how 5x vitality and 6x energy solely interprets into +16% vary however perhaps Tesla is being cautious with the numbers

Tesla gross sales enhance 36% in 2020 as automaker delivers just below 500,000 automobiles

Supply and gross sales from the US automaker noticed sturdy progress final 12 months, regardless of financial setbacks and logistical disruptions on account of Covid-19.

Tesla produced 509,737 automobiles and delivered 499,550 EVs in 2020, just below its goal of 500,000 for the 12 months.

This 12 months noticed Tesla ramp up manufacturing at its manufacturing unit in China, which has fueled gross sales on this planet’s largest EV market.

The automaker additionally started constructing factories in Berlin and Austin, Texas.

 

Airbus removable hydrogen gas cell wing ‘pods’ might revolutionise industrial aviation

Airbus has revealed a design for removable hydrogen gas cell wing ‘pods’ that might allow giant industrial aircrafts to fly lengthy distances with out producing CO2 emissions.  

They connect beneath the plane wing and include propellers, motors and gas cells. 

The pods will be disassembled and reassembled shortly to allow them to be simply maintained and refuelled. 

Engineers intention to scale up this know-how for bigger aircrafts on lengthy haul flights. At the moment, smaller experimental hydrogen aircrafts as much as 20 seats can depend on a conventional configuration with two propellers.  

Pods away!

 

Firm Information

Bluejay Mining* () 12.16p, Mkt cap £118m – Board reorganisation sees Dr. Bo Møller Stensgaard takeover as CEO with McIllree taking up as Chairman

BUY, Valuation 29.4p

Bluejay has reorganised its board in order that Dr. Bo Møller Stensgaard, Bluejay’s Chief Working Officer can take over as CEO.

Bo Møller Stensgaard has been main the Dundas ilmenite venture in Greenland and is nicely positioned to take the venture via funding and improvement.

Bo’s connections inside Greenland and Denmark ought to assist with the organisation of multilateral funding from the Greenland, Danish and EU to assist the offtake and venture finance.

Bluejay proceed to optimise the Dundas venture with the expectation of firming up and decreasing the $245m capital price of the venture.

Mr. Rod McIllree has moved to Government Chairman of the Board, whereas Mr. Mike Hutchinson turns into a Non-Government Director and Chair of the Remuneration Committee.

Ian Henderson is retiring from his non-executive board place whereas Mr. Peter Waugh, a revered titanium market knowledgeable, stays a Non-Government Director.

Share transaction: Rod McIllree was additionally reported to have offered 20m shares yesterday at 14.5p representing a big 2.225p/s premium value to the earlier closing value by way of an off-market transaction. ‘The buying entity has additionally expressed an curiosity in buying additional shares “on market” throughout 2021.’

McIllree continues to carry 7.69% of Bluejay shares.

Conclusion: We see Bo Møller Stensgaard as nicely positioned to steer the Dundas venture and firm ahead together with his native and multilateral connections. It is usually good to listen to that the buying entity which purchased Rod McIllree’s shares is concerned about buying extra inventory throughout 2021.

*SP Angel act Nomad and dealer to Bluejay. The analyst has beforehand visited the Hammaslahti, Enonkoski and Outukumpu mines in Finland in addition to Bluejay’s Dundas mine web site in Greenland

 

Lucara Diamonds () C$0.56, Mkt Cap C$222m – Karowe licence renewal

Lucara Diamonds experiences that it has obtained a renewal of its Karowe Mining Licence in Botswana for an extra 25 years till January 2046.

President and DEO, Eira Thomas, defined that the renewal “is a crucial milestone for the Karowe underground growth venture, paving the way in which for the completion of a supplemental debt financing and full venture sanction later this 12 months”.

The deliberate “underground growth program has an estimated capital price of $514 million and a five-year interval of improvement, with first ore anticipated from underground in 2026”.

Lucara continues to analyze “debt financing choices for the underground growth for these quantities that are anticipated to exceed the Firm’s money stream from operations in the course of the development interval”.

 

Mkango Sources* () 17.25p, Mkt cap £23.3m – Talaxis strikes to 11.3% following train of warrants on amended phrases

(Mkango’s 75.5% subsidiary, Maginto Ltd holds a 25% stake in HyProMag which is a companion within the ‘Uncommon–Earth Recycling for E-Machines’ RaRE venture)

Mkango Sources introduced yesterday that it had agreed amended phrases for the train of warrants held by Talaxis which enhance Talaxis’ curiosity within the firm from 10.7% to 11.3%.

“Below this modification Talaxis has agreed to a cashless train of the Warrant for 1,000,000 frequent shares (“New Shares”) in lieu of fee for 12,000,000 Shares at 6.6 pence”.

The corporate explains that it’ll difficulty 1m new shares and that dilution will probably be decreased because it avoids “issuing 12,000,000 shares at a big low cost to the present market value of Mkango Shares”.

The corporate additionally experiences {that a} non-executive director, Mr. Shaun Treacy, “has exercised warrants for 1,200,000 New Shares at a value of 6.6 pence every, for complete proceeds to Mkango of £79,200 (US$107,000). Following the warrant train, Mr. Treacy will personal a 1.4% curiosity in Mkango” and the corporate confirms that “After these two transactions, there aren’t any additional warrants excellent”.

*SP Angel act as Nomad and Dealer to Mkango Sources

 

Shanta Gold () 18.38p, Mkt Cap £177m – Appointment of exploration supervisor

Shanta Gold has introduced the appointment of Mr. Yuri Dobrotin as Group Exploration Supervisor.

Mr. Dobrotin, who joins from Barrick Gold the place he was a Senior District Geologist in Tanzania, is described as “a worldwide knowledgeable in gold exploration with 35 years’ expertise” together with in “the world-famous Pink Lake, Abitibi, Kalgoorlie and Lake Victoria greenstone belts”.

Commenting on the exploration potential on the New Luika mine, Mr. Dobrotin defined that “It’s not unbelievable that the Luika, Bauhinia Creek, Shamba and Illunga deposits are completely different orebodies of the bigger single hydrothermal cell, and with extra exploration and modelling might be seen as simply separate limbs of 1 deposit which might considerably enhance contained gold sources”.

He additionally highlighted the potential of the Lake Victoria Goldfields explaining that “The district is younger and potential for a number of new deposits.”

Welcoming the appointment, CEO, Eric Zurrin, stated that Yuri Dobrotin was becoming a member of Shanta Gold at “an thrilling time” and confirmed that “Exploration is anticipated to be the first driver for delivering shareholder worth within the coming years”.

Conclusion: The appointment of a brand new exploration supervisor brings a recent perspective on the geological potential of the realm surrounding New Luika and extra extensively throughout the corporate’s exploration portfolio.

 

 

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

 

Gross 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 Home

35-39 Maddox Road London

W1S 2PP

 

*SP Angel are the No1 built-in nomad and dealer by variety of mining brokerage purchasers on AIM in accordance with the AIM Advisers Rating Information (joint brokerships excluded)

+SP Angel workers might have beforehand held, or at the moment maintain, shares within the firms talked about on this notice.

 

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Sources of commodity costs

 

Gold, Platinum, Palladium, Silver

– BGNL (Bloomberg Generic Composite charge, London)

Gold ETFs, Metal

– Bloomberg

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

– LME

Oil Brent

– ICE

Pure Fuel, Uranium, Iron Ore

– NYMEX

Thermal Coal

– Bloomberg OTC Composite

Coking Coal

– SSY

RRE

– Steelhome

Lithium Carbonate, Ferro Vanadium, Antimony

– Asian Steel

Tungsten

– Steel Bulletin

 

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