Today’s Market View – Chaarat Gold, Kavango Resources, SolGold and more…

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SP Angel . Morning View . Friday 05 02 21

Tin break $23,000 driven by strong electronics demand and supply issues


Chaarat Gold* (LON:CGH) – Placing and debt-for-equity conversion as Tulkubash development funding nears completion

Kavango Resources (LON:KAV) – Warrants exercised by Directors & Senior Management

SolGold* (LON:SOLG) – Progress of the Alpala PFS


Tin – prices break through US$23,000, their highest since 2014 driven by demand for electronics >50% of consumption and.

Tin prices have rallied in the first five weeks of the year, driven by robust demand from the electronic sector and an acute shortage of material in the LME system.

Along with increasing electronics demand, tin has a number of new applications in growing sectors including solar panels, EV batteries and as a catalyst in hydrogen fuel cells.

Production in Bolivia and Africa is hit by the pandemic and we expect further shortages of tin concentrates when new sanctions are applied to Myanmar after the Military jailed democratically elected politicians the day before they were due to assume power following last year’s elections.

Prices have gained 13% so far this year, building on gains of 18% in 2020.

Inventories in LME approved warehouses have slumped from 5,500t in October to currently sit at an all-time low of 810t.

Meanwhile, Shanghai stocks are up 18% today to 7,450t, reflecting the majority of metals production and consumption takes place in Asia.

The premium for cash tin over three-month prices eased to $990/t from $1,585/t – the highest in decades, reflecting a shortage of nearby material.

The International Tin Association expect the market to be in a deficit of 2,700t in 2021 after a 5,200t deficit in 2020 according to their last report in December.


Yoga and beer at Cambodia brewery helps people relieve Covid-19 stress (SCMP)

At long last, there is a proper Coronavirus treatment, though only currently available in Cambodia

We petition the government to allow this form of strenuous exercise at the earliest opportunity


Vale ordered to pay $7bn for Brumadinho mine disaster

Vale have reached a settlement agreement with Brazilian authorities for a dam collapse that sadly killed 270 people and resulted in vast environmental damage in 2019.

The miner will pay 37.7bn reais ($7.03bn) including cash payments to affected people and investments in environmental projects.

A spokesman for the state of Minas Gerais commented: “This is the largest reparation agreement ever signed in Latin America in financial terms and with the participation of the state”.


Recent Interviews:

VOX:    03/02/20



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

Africa set to gain from Covid stimulus as East and West compete for metals in the new COVID-Supercycle:


IGTV:   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?

As traders continue to bid up Tesla, is the EV sector approaching a bubble?


iiTV:     The mining stock to own in 2021:

Small Cap Mining Share tips for 2021 –

*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 2020Fastmarkets 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

2020 was probably the most difficult year for forecasting anything so we are very pleased to have ranked so well in the two key metals

Please contact us directly for our updated metals price forecasts for 2021 and beyond


Dow Jones Industrials +1.08% at 31,056

Nikkei 225 +1.54% at 28,779

HK Hang Seng +0.63% at 29,296

Shanghai Composite -0.16% at 3,496



Manufacturers, industry, builders and government gearing up for sharp V shaped recovery

Manufacturing, industry, construction and government are gearing up for a strong V-shaped recovery.

Risk is that suppliers to manufacturers who have struggled through 2020 may struggle to gear up for the recovery.

The withdrawal of state guarantees supporting smaller manufacturers will, in many cases, hamper the financing of the supply chain and could pose a serious threat to the recovery opening yet more opportunities for overseas imports.

A shortage of empty containers and unhelpful port logistics may also serve to hamper the recovery as manufacturers look to take advantage of the new construction and other stimulus projects.

Key manufacturers are seeing order books double but are wondering if the rest of the supply chain will be able to keep up.

We expect the UK economy to bounce back quickly depending on the availability to loans to business once government guarantees are withdrawn.


China – significant restrictions on Chinese NY migration this year

Concerns are growing over the level of coronavirus infection in China as the authorities clamp down on the ‘Chunyun’ or New Year travel for the annual Chinese NY festival.

The Lunar New Year, also know as the Spring Festival has sparked a frenzy of buying by Chinese people with purchases stimulated this year with vouchers and discounts encouraging people not to travel and as part of China’s new Dual Circulation policy for stimulating domestic purchases.

This is the year of the Metal Ox – and China fully intends to emerge as a strong superpower with the

China likely to use Covid-19 vaccines as tool to gain economic and political advantage in developing nations

China had four of the nine vaccines undergoing stage 3 human trials at end September.

These vaccines if approved by the WHO will likely be used to spread Chinese influence around the world.

China may now have >1bn internet users

China reported 989 internet users at end 2020 indicating that the nation’s internet user count may already be >1 billion (SCMP).

The coronavirus pandemic has caused households to subscribe to internet services.

China’s live-stream retail market value more than doubled in the year to US$145bn (Rmb961bn up from Rmb433.9bn yoy).


US – Jan Challenger job cuts 79.5k vs 77k in December

weekly jobless claims 779k vs 812k in December

Total vehicle sales were 16.6m units in December vs 16.3m in November and 17.0m yoy

Preliminary Q4 nonfarm productivity fell 4.8%

Unit labour costs rose 6.8%% revised to -7% from -6.6%

Dec factory orders 1.1%vs vs 1% in December, ex transport 1.4% vs 0.8% in December


EU – Construction PMI remains in contraction 44.1 in January vs 45.5 in December

The data highlights how slow and ineffective Brussels and the ECB are when it comes to Stimulus.

As we have highlighted may times over the years, the EU is usually around nine months behind the US when it comes to stimulus. The US seems to be around 3-6 months behind China.

We are not making a political point, just stating the facts as they appear to us.


Germany – Factory orders fall for the first time in eight months, down -1.9% in December

German factory orders fell more sharply than expected in December, suggesting that lockdowns across Europe are beginning to impact Germany and its main trading partners.

Domestic orders decreased by 0.9% while foreign orders dropped by 2.6% in December, with new orders from the eurozone falling 7.5%


France – December trade balance narrowed to -€3.39bn vs -€4.29bn expected

The French trade deficit narrowed in December as exports fell by 0.1% MoM while imports fell by 1.0%MoM.


UK – Construction PMI also remains slow at 49.2 in January vs 54.6 in December

Dec EU retail sales rose 2% (-5.7%), yoy 0.6% (-2.2%).

Jan UK new car sales fell 39.5%yoy (Dec’20 was132k units, Jan ’20 at 149k units and Apr’20 4.3k units).

UK House prices decline 0.3% in January as stamp duty holiday nears its end

House prices declined the most since April last month, falling 0.3% to an average of £251,968- although values were 5.4% higher year-on-year.

Property prices in the UK were propped up by a temporary cut on housing transactions worth as much as £15k, although the scheme is due to end in March and house prices have begun falling as transactions made now are unlikely to quality in time.

UK to return to work by the Summer

CityAM comment the ‘UK could see ‘significant return to normality’ by summer’ accompanied by a picture of workers cramming onto an already crowded tube train.

While most Londoners are looking forward to freedom from Lockdown, we are not keen to go back to overcrowded tube cartridges and cramped working conditions.

We have discovered we can work perfectly well from home and travel and working conditions will need to improve to attract many back to the pre-pandemic way of life.


Zambia – Government officially requests to restructure debt under G20 common framework

The adopted framework will see Zambia offered temporary debt relief before the G20 encouraging governments to defer or negotiate down external debt.

All G20 and Paris Club creditors are expected to coordinate their engagement with Zambia via the common framework

Zambia is due to begin negotiations to establish a programme with the IMF next week.


Australia – exports rose 3% in December vs 3.3% in November

imports fell 2% in December vs 9.3% in November


Johnson & Johnson ONE-SHOT vaccine prevents 100% of COVID-19 hospitalizations and deaths may be authorised by the US FDA in weeks

The vaccine is 66% effective at preventing COVID-19and prevents 100% of COVID-19 deaths and hospitalizations

The vaccine was shown to be 72% effective in the US and 57% effective against the new South African variant

The US has ordered 100m doses at $10 a shot.


Currencies US$1.1977/eur vs 1.1998eur yesterday.  Yen 105.45/$ vs 105.19/$.  SAr 14.921/$ vs 14.960/$.  $1.370/gbp vs $1.359/gbp.  0.762/aud vs 0.763/aud.  CNY 6.473/$ vs 6.463/$.

Sterling set to strengthen against the dollar for fourth straight week after BoE avoid sub-zero rates for now

The pound edged higher against the dollar and the euro on Friday after the BoE indicated the negative rates are not a possibility for at least six months.

Sterling rose 0.2% against the dollar this morning while rising to its highest since May 2020 against the Euro.

The UK’s swift vaccine rollout compared to many of its peers has also helped the pound on hopes that Britain’s economy can rebound faster as a result.


Commodity News

Precious metals:  

Gold US$1,806/oz vs US$1,823/oz yesterday

Gold ETFs 107.0moz vs US$106.9moz yesterday

Platinum US$1,114/oz vs US$1,088/oz yesterday

Palladium US$2,305/oz vs US$2,262/oz yesterday

Silver US$26.66/oz vs US$26.56/oz yesterday


Base metals:  

Copper US$ 7,915/t vs US$7,867/t yesterday

Aluminium US$ 2,000/t vs US$1,985/t yesterday

Nickel US$ 17,925/t vs US$17,660/t yesterday

Zinc US$ 2,659/t vs US$2,631/t yesterday

Lead US$ 2,048/t vs US$2,032/t yesterday

Tin US$ 23,000/t vs US$22,955/t yesterday



Oil US$59.4/bbl vs US$58.9/bbl yesterday

Oil prices have climbed to a fresh monthly high on news that US crude inventories narrowed 994K in the week ending 29 January following the 9.910MMbbl decline the week before, with field production sitting at its lowest level since 2018

The update from the EIA showed US output holding steady at 10.9MMbopd for the second consecutive week, and key market themes may keep oil prices afloat in 2021 as OPEC continue to regulate the energy market, with Saudi Arabia still on track to reduce supply by 1MMbopd until April

The press release following the Joint Ministerial Monitoring Committee (JMMC) suggests OPEC and its allies will regulate production throughout 2021 as the group agrees to be “vigilant and flexible given the uncertain market conditions,”

The price of WTI oil may continue to retrace the decline 2020 high (US$65.65) ahead of the next meeting on 3 March 2021 as the committee acknowledges that “the gradual rollout of vaccines around the world is a positive factor for the rest of the year, boosting the global economy and oil demand”

In turn, subdued supply along with signs of stronger consumption may keep crude prices above pre-pandemic levels, and the technical outlook remains constructive as the price of oil continues to track the upward trending channel carried over from November

Saudi have also increased the prices of all its crude that will go to the US and Europe in March while leaving unchanged the official selling prices of its crude to its key market in Asia

Aramco raised the prices of all its crude grades to the US by US$0.10/bbl, while the Saudi oil prices to Europe were lifted by between US$1.30/bbl and US$1.40/bbl

The price of the Saudi flagship Arab Light crude grade to Northwest Europe was raised by US$1.40/bbl for March compared to February and set at a discount of US$0.50/bbl against ICE Brent

Natural Gas US$3.036/mmbtu vs US$2.761/mmbtu yesterday

Natural gas prices rebounded yesterday, breaking the US$3/mmbtu threshold following a larger than expected draw in natural gas inventories

The weather is expected to be much colder than normal through all of the United States for the next two weeks

According to the EIA, natural gas in storage was 2,689Bcf as of 29 January 2021

This represents a net decrease of 192Bcf from the previous week

Expectations were for a 172 Bcf draw in stockpiles according to survey provider Estimize Stocks were 41Bcf higher than last year at this time and 198Bcf above the five-year average of 2,491Bcf

At 2,689Bcf, total working gas is within the five-year historical range



Iron ore 62% Fe spot (cfr Tianjin) US$152.4/t vs US$146.7/t

Chinese steel rebar 25mm US$666.5/t vs US$667.8/t

Thermal coal (1st year forward cif ARA) US$66.0/t vs US$65.5/t – Australian thermal coal exports slump to four-year low in 2020

Exports fell 6% in 2020 compared to the year prior to 199.15mt, largely due to a 30% decline in shipments to China after Beijing began restricting imports from Australia as trade tensions escalated.

Shipments to Japan fell -3% YoY, South Korea -13%, Vietnam +32% (Argus Media).

Coking coal swap Australia FOB US$158.0/t vs US$159.0/t



Cobalt LME 3m US$45,225/t vs US$44,500/t

NdPr Rare Earth Oxide (China) US$70,911/t vs US$70,729/t

Lithium carbonate 99% (China) US$10,583/t vs US$10,602/t

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

Ferro-Manganese high carbon 78% Mn US$1,575/t vs US$1,560/t

Tungsten APT European US$245-250/mtu vs US$240-245/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

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


Battery News

Vestas commissions its first intertidal wind turbine 

Vestas has commissioned its first-ever intertidal wind turbine at Bac Phuong JSC’s Dong Hai 1 intertidal wind project.  

They won a project in 2020 to supply 13 V150-4.2MW turbines for the second phase of the project.  

In this second phase, 10 turbines will be in a 2.8MW operating mode and 3 turbines in a 4.0MW mode in order to optimise energy production for the site’s specific wind conditions.  

On completion, the 100 MW Dong Hai 1 will be the largest wind project in Vietnam,  


Ballard to develop compressed hydrogen ship with GEV 

Ballard Power Systems has signed a deal with Australia’s Global Energy Ventures (GEV) for the development of a compressed green hydrogen ship that will transport the zero-carbon. 

The C-H2 Ship will have a storage capacity of up to 2,000 tonnes of compressed green hydrogen.  

The power required for a small-scale demonstration of the C-H2 Ship is expected to be under 10MW. At full scale it will have a propulsion power requirement of 26MW.  

GEV is responsible for design approvals, development, financing, and operation of C-H2 Ship, along with integration of the required power system. 

Ballard’s FCwaveTM system will obtain its hydrogen fuel from the compressed green hydrogen stored onboard and transported by the vessel. 


Company News

Chaarat Gold* (LON:CGH) 26p, Mkt Cap £143m – Placing and debt-for-equity conversion as Tulkubash development funding nears completion

Valuation being Updated

The Company announced a fundraise for around $25m at 26p as well as a potential conversion of the outstanding term loan of $22m held by Labro Investments into equity.

The equity raise is comprised of:

$23.5m in committed legally binding subscriptions;

$1.4m in the form of non-binding commitments.

New institutional investors and family offices are reported to have committed a total of $19.9m with existing shareholders offering another $5.0m.

The Company is keeping the fundraise open until next Tuesday to allow completion of non-binding commitments as well as accommodate additional potential demand.

Additionally, Labro Investments, a major shareholder in the Company, notified Chaarat of its willingness to convert all of its outstanding term loan of $22m plus accrued interest into equity at 26p.

The conversion would yield a significant deleveraging of the balance sheet reducing outstanding debt to $46.5m form current $68.5.

The conversion would see 62.4m of new shares issued and is subject to approval by the independent directors of the Company.

Most of proceeds are expected to be directed towards the remainder of the upfront equity portion of the Tulkubash development funding.

The equity raise and debt-for-equity conversion fulfils one of key requirements for future Tulkubash debt financing with the team expecting to close $80m project loan facility in H1/21 allowing to accelerate development works and meet reiterated target of first gold in Q4/22.

Funds in excess of those required for Tulkubash will be used for metallurgical testwork at Kyzyltash (5.4moz at 3.6g/t resource), initial development of the East Flank extension at the Kapan operation as well as assessment of potential M&A opportunities.

Conclusion: The equity fundraise and debt-for-equity conversion allows the Company to progress Tulkubash debt funding discussions with the potential $80m project loan facility expected to be closed in H1/21. The gold heap leach project in Kyrgyzstan is targeted to come online in Q4/22 adding ~110kozpa at $1,080/oz AISC to group production and generating nearly $100m in EBITDA per year (at our $1,925/oz gold price).

*SP Angel act as Broker to Chaarat Gold


Kavango Resources (LON:KAV) 2.75p, Mkt cap £8.3m – Warrants exercised by Directors & Senior Management

Kavango reports this morning that it has received notices to exercise warrants by directors and senior management over 9,085,875 new ordinary shares of £0.001 each in the Company at an exercise price of 1p per share, as follows:

Hillary Gumbo – 2,625,000 Ordinary Shares

Michael Foster – 2,445,875 Ordinary Shares

Ben Turney – 2,187,500 Ordinary Shares

John Forrest -1,350,000 Ordinary Shares

Mike Moles – 477,500 Ordinary Shares

The Warrant Shares are being issued pursuant to the exercise of warrants granted and announced on 15 April 2020. Subscription monies of £90,859 have been received by Kavango in respect of these exercises.


SolGold* (LON:SOLG) 23p, Mkt Cap £563m – Progress of the Alpala PFS

SolGold has clarified the progress of its pre-feasibility study (PFS) on the Alpala copper/gold project in Ecuador and now indicates that “publication of a PFS is not expected until late 2021”.

The company explains that its Project Committee, chaired by non-executive director, Keith Marshall whose mining career of over 40 years includes managing the transition to block-caving at Palabora for Rio Tinto , has recommended that “it would be advisable to consider adjusting the current draft mine development plan and the draft mine production plan to de-risk the project with a view to facilitating the expeditious development and optimised capital requirements”.

Today’s announcement highlights several aspects for review including:

An examination of “an alternative mine access to accelerate the development of the cave”; and

A review of “the draft mine production plan with a view to ascertaining the optimum production rate, with the most likely scenario being a reduction of the previously contemplated mining rate but at higher grades from a reduced footprint in the early stages of operations”; and

“to study an optimised block cave footprint targeting higher grade material in the early stages, whilst maintaining expansion capabilities through plant and infrastructure addition strategies”; and

Optimisation of “the capital cost and construction schedules of all related downstream milling, processing and tailings operations”; and

Re-assess “all potential near-surface mining options at the Alpala Deposit … [and] … the resource potential at satellite targets on the Cascabel concession, including Tandayama-America, Aguinaga and Moran”.

The company is also “investigating other options and scenarios to deliver further value, including adoption of dedicated hydro-power plants, and the improvement of metallurgical recoveries”.

Meanwhile, the company is continuing “Further drilling, including the collection of more extensive geotechnical, hydrogeological and metallurgical data sets, has been underway over the last six months. The provision of more extensive data sets will address uncertainties, which are typical for a project of this scale and stage”.

Additional resource extension drilling is also underway at Alpala with resource definition drilling also panned at “the three satellite prospects for 2021”.

In addition to the drilling in and around Alpala and the exploration work the company reported yesterday, recent drilling of the Tandayama-America target approximately 3km north of Alpala and drilling at the nearby Aguinaga target in 2018 “has intersected mineralised porphyry copper-gold systems with potential to ultimately yield further resources which may be included in the development plan”.

In our opinion, Solgold is prudent to harness the extensive and detailed technical and operational expertise of its recently strengthened board to examine every aspect of the Alpala development thoroughly before irrevocably committing to a development plan.  Block-caving can be a relatively unforgiving mining method and with a potential mine life in excess of 50 years additional assessments to get the right plan at this stage may help avoid long term operational difficulties and help to deliver a technically and financially robust solution for the entire mine life.

The May 2019 PEA for Alpala envisaged production rates in the range 40-60mtpa which would make Alpala among the largest, and possibly most complex, block caving operations in the world.  For example,  Rio Tinto’s Oyu Tolgoi Lift 1 cave at the Hugo North deposit in Mongolia envisages production of only at around 33mtpa served by 5 shafts extending to depths of 1300m.

Given the high-grade core to Alpala, it is entirely understandable that the Project Committee is reviewing the optimal scale, required financing profile and ways to extract the higher grade material early in the project life.

Conclusion: We endorse Solgold’s decision to extend the timetable to deliver the Alpala PFS and, although some observers will be disappointed at the deferral of the original delivery date, we believe that it provides the company the opportunity to develop a project which can be more robust technically and financially and which avoids continuing long-term operational bottlenecks.  We look forward to the PFS later in the year.

SP Angel act as Financial Advisor to SolGold.



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 – [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, Platinum, 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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