Today’s Market View – Panther Metals, Kobold Metals and Scotgold Resources.

SP Angel . Morning View . Wednesday 08 07 20

Gold breaks by way of the $1,800/ozmark as virus circumstances climb

MiFID II exempt info – see disclaimer under 

Kobold Metals – to make use of information analytics to map the earth’s crust to seek out cobalt in northern Quebec

Panther Metals () – Early exploration outcomes from Annaburroo

Scotgold Assets* (), BUY – 119p – Cononish undertaking growth replace

Gold breaks over $1,800/ozas dangers to world economic system drive traders to security of gold

Dangers are:

Foreign money volatility – the US greenback appears set to weaken additional serving to gold and different metals rise in US greenback phrases

China unemployment – excessive migrant unemployment has potential to spark unrest. New safety laws in Hong Kong are additionally of concern

Flooding on the Yangtze River is disrupting Wuhan and different cities placing additional stress on companies and the state

Dubai & Singapore – more likely to see additional monetary scandal as unstable markets expose points in buying and selling teams, banks and funds

Coronavirus outbreaks – inflicting additional regional lockdowns and slowing the reopening of air journey, leisure and tourism

Chinese language Uncommon Earth equities ‘restrict up’ at present as stimulus more likely to be directed to new Wind Farm developments utilizing bigger direct drive motors

We’re ready on information of additional stimulus for brand spanking new substantial offshore windfarm developments

These, bigger windfarms use direct drive windmills because of their effectivity and higher reliability and decrease servicing wants

These windmills use vital quantities of REEs specifically Praseodymium (Pd), Neodymium (Nd), Dysprosium (Dy) and Terbium (Tb)

EV and hybrid automobiles 23.7% of UK gross sales in June  

SMMT gross sales information reveals BEV, PHEV and hybrid automobiles accounted for 23.7% of the UK auto market in June. (Enterprise Inexperienced)

New automotive registrations fell 34.9% in June YoY, however BEV, PHEV and hybrid gross sales rose 73% to 24,470 items.

Demand for petrol automobiles fell 39.9% YoY.

BEV gross sales elevated 262% YoY and PHEV gross sales doubled, accounting for ~10%of the market. 

V-shaped, W-shaped, L-shaped restoration – all of it is determined by what sectors / elements of the economic system you’re looking at

There may be a lot debate amongst economists on the form of the financial restoration

Our view is that many might be appropriate relying on their perspective and which elements of the economic system they’re taking a look at

Commodities and mining corporations look like in a ‘V’-shaped restoration, much like that seen in after the GFC ‘International Monetary Disaster’

Stimulus measures and classes learnt from the GFC and the price of the collapse of Lehman Bros present an instruction handbook for coverage makers

Whereas, politicians and policymakers might not want to admit to following the GFC stimulus playbook the stimulus appears related if not enhanced

Fortunately, it’s broadly accepted the price of unemployment outweighs the price of getting individuals again to work and new infrastructure makes good stimulus

Dubai – Collapse of companies in Dubai more likely to result in additional main scandals threatening monetary stability

The fast growth of enterprise in Dubai mixed with lax regulation has led to a lot of vital monetary failures lately

The Abraaj personal fairness fund was compelled into liquidation and fined $315m by Dubai for the misappropriation of funds

EY was accused final 12 months of authorized and moral violations in its audit work for a Dubai gold refiner in alleged cash laundering by Kaloti Jewelry Worldwide.

Kabul Financial institution scandal in relation to the Kabul to Dubai pipeline the place it’s alleged $1bn has been embezzled in fraudulent mortgage schemes

Dow Jones Industrials -1.51% at 25,890

Nikkei 225 -0.78% at 22,439

HK Hold Seng +0.38% at 26,074

Shanghai Composite +1.74% at 3,403

Economics

US – New examine reveals Individuals should not ready to return to pre-pandemic spending ranges simply but, Bloomberg studies.

Greater than 40% of people that spent cash on films, occasion tickets or at bars earlier than the virus outbreak now plant to spend much less on these actions, in line with CreditCars.com.

Individually, the US launched the method of withdrawing from the WHO.

Japan – Bankruptcies climbed within the first half of the 12 months for the primary time in 11 years as courts resumed work.

Curiously, solely 240 companies of 4,001 circumstances are reported to have been pushed out of business by the pandemic associated points, in line with the report.

“Whereas coronavirus is likely one of the causes of the rise in chapter, many of the them are ascribed to extend in labour prices and October’s gross sales tax hike”, the analysis agency (Tokyo Shoko Analysis) that carried the survey stated.

India – Mumbai is planning to ease restrictions on testing permitting walk-in check-ups and not using a physician’s prescription, the transfer which may be taken up by different cities and areas of the nation, FT studies.

Extremely restrictive protocol was applied to protect scarce take a look at kits and laboratory manpower, FT studies.

India has ramped testing lately however stays amongst international locations with the bottom variety of exams carried (7,398 per million v 20,500 in Brasil and 117,200 within the US).

The nation is the at present trailing solely behind the US and Brazil on the variety of confirmed circumstances.

China – Flooding alongside the Yangtze River more likely to result in additional development of flood defences and reconstruction of broken property

We suspect the flooding won’t result in a collapse of the Three Gorges Dam although there may be all the time some danger

China Railway invests $46bn in mounted belongings in H1 2020 (China Each day)

China Railway elevated spending on development of mounted belongings by 1.2% to spent $46.1bn in H1 202 in line with the China Folks’s Each day.

The corporate invested +3.7% yoy ($35bn) in in railway infrastructure with 1,178km of recent rail opened together with 605km of high-speed rail

Q1 funding fell 21% yoy because of a scarcity of development employees and disruption to the uncooked materials provide chain by way of the COVID-crisis however was greater than made up in Q2

China Railway has ‘began preliminary works on a lot of key initiatives together with the Sichuan – Tibet line, Yanjiang high-speed line and the Xining – Chengdu line. (Insurance coverage Journal)

Work is progressing on the Lhasa – Linzhi line, Beijing – Shenyang high-speed line, Beijing – Hebei line, Taiyuan – Jiaozuo high-speed line, Lianyungang – Xuzhou high-speed line, Ganzhou – Shenzhen high-speed line, Guiyang – Nanning high-speed line and the Hetian – Ruoqiang line.

A lot of key initiatives, together with the Yinchuan – Xi’an high-speed line, the Hebei part of the Hebei – Xiongan inter-city line, the Hefei – Anqing high-speed line, and the Huai’an – Zhenjiang line, are additionally on monitor to open within the second half of the 12 months as scheduled.’

China Railway expects to open 4,400km of recent line in 2020, together with 2,300km of high-speed traces.

This equates to round 230,000t of metal for typical rail plus 320,000t for the high-speed rain to boost metal demand to over 550,000t not together with the bolts, overhead gantries, bridges, stations, wagons, trains and so on

China – state reserve to promote extra frozen pork from state reserves to stem a rally in costs and maintain again meals inflation

Possibly in the future the UK might do that with fish & chips

UK – The federal government outlined greater than £4bn of measures to assist jobs, abilities and power effectivity over the previous week, Bloomberg studies.

Moreover, PM Johnson introduced £5bn of infrastructure spending on colleges, hospitals and roads.

Authorities have additional outlined a £1.6bn bailout earlier this week to assist struggling theatres and music venues which might be but to be reopened.

Chancellor is predicted to additional unveil a £2bn programme to pay wages of greater than 200,000 younger employees.

On a special word, PM Johnson instructed German Chancellor Merkel that the UK will leaving and not using a commerce deal if the EU will not be ready to compromise.

Negotiations are caught over questions together with fishing rights, the longer term affect of EU courts in U.Okay. legal guidelines, and the way far Britain will have the ability to loosen its guidelines and nonetheless take pleasure in entry to the one market, in line with Bloomberg.

The UK authorities might make Face Masks obligatory in retailers

Brazil – President Bolsonaro introduced yesterday he had examined optimistic for COVID-19 and began taking hydroxychloroquine to deal with the virus.

Australia – The cupboard will focus on enacting a possible restrict on the variety of worldwide arrivals into the nation amid an outbreak in Melbourne and the state of Victoria closing its borders.

Victoria reported an additional 134 coronavirus circumstances at present with the state gong right into a lockdown for six weeks.

Currencies

US$1.1291/eur vs 1.1285/eur yesterday.  Yen 107.45/$ vs 107.57/$.  SAr 17.088/$ vs 17.140/$.  $1.256/gbp vs $1.247/gbp.  0.695/aud vs 0.694/aud.  CNY 7.018/$ vs 7.024/$.

Commodity Information

Valuable metals:         

Gold US$1,795/ozvs US$1,782/ozyesterday – Gold briefly surpasses $1,800/ozmark

The worth of gold rose above the important thing stage of resistance which it has to this point failed to interrupt since 2011, with traders getting ready for the rise above $1,800/ozfor the final couple of weeks.

Regardless of the rise, the value of gold has been comparatively unchanged this week, buying and selling above $1,790/ozbut not keen to rise above the spherical quantity.

Traders are monitoring the Fed and assessing the probability of additional stimulus, which is supportive of metals costs as they’re traditionally a hedge in opposition to inflation (Kitco).

Spot gold hit a earlier excessive of $1,797/ozyesterday- while US gold futures eased 0.2% to $1,807/oz (Reuters).

South Africa – Principal inventory index hits four-month excessive

Gold shares have pushed the Johannesburg benchmark index to the very best stage in additional than 4 months (Bloomberg).

Miners gaining on Wednesday embrace: Gold Fields +1.4%, Concord +2.7%, AngloGold +0.7%, DRDGold +2.4%, Pan African Assets +0.3%.

Gold ETFs 104.0moz vs US$103.6moz yesterday

US$843/ozvs US$821/ozyesterday

Palladium US$1,931/ozvs US$1,933/ozyesterday

Silver US$18.35/ozvs US$18.12/ozyesterday

Base metals:  

Copper US$ 6,200/t vs US$6,110/t yesterday – China approves ninth spherical of scrap steel import quotas

China has issued an additional spherical of scrap import quotas for 2020, approving significantly bigger volumes than in earlier rounds.

A complete of 176,746 tonnes of copper scrap has been authorized for import into China within the ninth spherical of quotas, in comparison with 1,570 tonnes allowed within the eighth batch.

Up to now in 2020, China has allowed importers to purchase as much as 718,500 tonnes of copper scrap from overseas.

The most recent batch of quotas additionally permits a further 209,660 tonnes of aluminium scrap imports, and 4,990 tonnes of metal scrap.

China’s Ministry of Ecology and Environments stated the nation will proceed to launch import quotas till the tip of 2020 after which will ban all imports of strong waste from subsequent 12 months (Fastmarkets MB).

Aluminium US$ 1,644/t vs US$1,631/t yesterday

Nickel US$ 13,430/t vs US$13,310/t yesterday

Zinc US$ 2,100/t vs US$2,046/t yesterday

Lead US$ 1,832/t vs US$1,787/t yesterday

Tin US$ 16,995/t vs US$17,100/t yesterday

Power:           

Oil US$43.0/bbl vs US$42.6/bbl yesterday

In one other optimistic growth, the EIA raised its worth outlook for Brent to US$41/bbl for the second half of 2020, US$4/bbl (or 11%) larger than the EIA’s forecast final month

In its Quick-term Power Outlook report, the company expects that world oil inventories will proceed to say no within the second half of the 12 months and all through subsequent 12 months.

As well as, the EIA expects excessive stock ranges and surplus crude oil manufacturing capability will restrict upward worth pressures within the coming months, however as inventories decline into 2021, these upward worth pressures will improve

Particularly, the EIA is forecasting that world liquid gasoline inventories will rise at a price of 6.7MMbopd in H1 2020, after which decline at a price of three.3MMbopd in H2 2020

Lastly, in 2021, the EIA expects that inventories will decline additional by 1.1MMbopd

The EIA expects US oil manufacturing to fall this 12 months and subsequent, with WTI costs sitting under US$50/bbl by way of subsequent 12 months

The EIA’s expectation is that oil manufacturing within the US will common 11.6MMbopd this 12 months, and 11.0MMbopd subsequent 12 months

That is off from a mean of 12.2MMbopd final 12 months

The company additionally expects US liquid fuels consumption to fall this 12 months by a mean of two.1MMbopd from 2019, to 18.3MMbopd

Pure Fuel US$1.868/mmbtu vs US$1.854/mmbtu yesterday

Pure fuel costs moved larger yesterday however had been unable to pierce by way of the US$1.9/MMbtu resistance stage

Demand elevated final week because of an uptick in energy era

The climate is predicted to be hotter than regular over the following two weeks, which ought to additional buoy energy era

There no tropical cyclone exercise within the decrease Atlantic or the Gulf of Mexico, whereas a Tropical storm Christina continues to maneuver away from land within the Pacific which won’t affect any power set up.

Exports of pure fuel are set to rise into Mexico in line with a latest report by the EIA

Uranium US$33.00/lb vs US$33.00/lb yesterday

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$99.4/t vs US$97.7/t

Chinese language metal rebar 25mm US$529.1/t vs US$525.2/t – Japan’s metal manufacturing to fall to the bottom stage since 2009

Japan’s metal output is predicted to drop 28% from a 12 months earlier to 17.7mt within the three months by way of September, in line with the Ministry of Financial system.

The outlook is a recent warning for the worldwide metal trade, which has been struggling in most international locations exterior of China.

The chairman of Japan’s metal federation and head of prime producer Nippon Metal says that annual output might fall under 80mt this 12 months, a stage not seen in over 50 years (Bloomberg).

Thermal coal (1st 12 months ahead cif ARA) US$59.0/t vs US$58.9/t –

Indian thermal coal imports decline 36% in April-Might

Thermal coal imports fell to 12.29mt throughout April and Might, because the nation locked-down to mitigate COVID-19 which resulted in a drop in power demand.  

Coking name imports fell by 24% to 7.47mt over the identical interval (Financial Occasions of India).

Coking coal swap Australia FOB US$123.5/t vs US$123.0/t

Different: 

Cobalt LME 3m US$28,500/t vs US$28,500/t

NdPr Uncommon Earth Oxide (China) US$41,393/t vs US$41,098/t

Lithium carbonate 99% (China) US$4,773/t vs US$4,764/t

Ferro Vanadium 80% FOB (China) US$29.5/kg vs US$29.5/kg

Antimony Trioxide 99.5% EU (China) US$4.9/kg vs US$4.9/kg

Tungsten APT European US$205-215/mtu vs US$215-225/mtu

Graphite flake 94% C, -100 mesh, fob China US$460/t vs US$460/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,275/t vs US$2,350/t

Battery Information

Promising room-temperature liquid battery steel

College of Texas staff has developed the primary all liquid steel battery. (New Atlas)

The battery comprises metallic electrodes which stay liquid at temperatures as little as 20 levels , the bottom recorded temperature for a liquid steel battery. (The Engineer)

This liquid steel battery is able to higher power capability, elevated stability, and is extra flexibility than conventional chemistries.

The anode is a sodium-potassium alloy and the cathode a gallium-based alloy. The 2 liquid steel electrodes are separated by an natural electrolyte heart, additionally liquid.

The liquid elements allow straightforward scalability and the pliability supplies a number of makes use of from small gadgets to infrastructure.

The examine is printed in Superior Supplies.  

Hitachi signal UK rail battery traction settlement

Hitachi and Hyperdrive Innovation have signed an MOU to collectively develop a battery pack appropriate for powering trains. (Railwaygazette)

The battery packs can be manufactured at Hyperdrives HYVE plant in Sunderland. The ability at present provides lithium-ion batteries for automotive and power functions.

The batteries can be put in at Hitachi Rails plant at Newton Aycliffe.

Hitachi estimates the PMO to be ~400+ battery trains within the UK.

The Italian transport firm wholly owned by Hitachi has beforehand provided electrical battery items to Japan’s Kyushu Railway and First Group for his or her London to Edinburgh route.

Firm Information

Kobold Metals – to make use of information analytics to map the earth’s crust to seek out cobalt in northern Quebec

Kobold Metals is utilizing Synthetic Intelligence to look at information over ~1,000sqkm in near Raglan in northern Quebec

The corporate is searching for cobalt and trying to make use of information analytics to construct a map for the Earth’s crust to direct it to a discovery

The corporate is backed by Invoice Gates, Jeff Bezos and Ray Dalio to seek out battle free cobalt whereas additionally opening up new strategies of discovery.

The thought is to deliver collectively extra information than you’re a staff of geologists can deal with and to statistically analyse this for discovery.

Kobold is to gather geophysical information within the subsequent 3-6 months with drilling estimated inside two years south of Glencore’s Raglan nickel mine in an space which is potential nickel, cobalt and PGMs.

Up to now this appears extra like near-ology than Synthetic Intelligence however information from Raglan might present clues relying on the standard and amount of the information. Eg ‘rubbish in – rubbish out’. Nevertheless, we really feel certain they’ll kobold one thing collectively.

We’ve seen a lot of ‘black field’ options utilized to exploration through the years, none have labored from our recollection with discoveries nonetheless made extra by artisanal miners and subject geologists.

Conclusion: The corporate already has an concept of its space of exploration however might wrestle to get enough information for correct modelling.

Expertise suggests Geology is as a lot an artwork type as a science. Given restricted regional information the Earth’s crust and it will be fascinating to match the outcomes of skilled geologist with Kobold’s information analytics. Both approach we suspect the information will want a great geologist to help in its interpretation.

Panther Metals () 7p, Mkt Cap £3.3m – Early exploration outcomes from Annaburroo

Panther Metals has reported the outcomes of early stage exploration from the Annaburroo gold undertaking positioned roughly 70km southest of Darwin within the Northern Territory, Australia,

The prospect was initially found within the early 1990s by Newmont Australia because of following up anomalous stream sediment geochemical samples and by subsequent mapping and prospecting within the Donkey Hill space.

Rock chip assays reported at present vary ʺup to 9.Four g/t Au, 33.1 g/t Au, 39.Four g/t Au and 61.2 g/t Au, with as much as 6.5 g/t Ag and 9.Zero g/t Agʺ although it’s not clear whether or not these are outcomes from the historic prospecting or from latest work.

The corporate studies that ʺHistorical reverse circulation drilling outcomes have yielded encouraging gold outcomes from floor corresponding to 7m @ 1.2 g/t Au together with 2m @ 3.1 g/t Auʺ and that ʺTrenching at Donkey Hill supplied outcomes together with 5m @ 6.7 g/t Au and 5m @ 3.5 g/t Auʺ.

Commenting that the world stays extremely underexplored and that the central and western elements of the just about 150km2 licence stay utterly untested the corporate explains that  ʺMajor fault, anticlinal and synclinal constructions stay utterly untested within the southern portion of the licence, which stay excessive precedence structural targets for future explorationʺ.

CEO, Darren Hazelwood, defined that ʺOver 95% of the present tenure stays underexplored with historic exploration having been centered virtually solely on the Donkey Hill Gold Prospect. Main structural zones, that are recognized to host financial gold deposits elsewhere throughout the Pine Creek Orogen, stay utterly untestedʺ and stated that ʺPanther has commenced the acquisition of all geophysical information over the licence space.  Following reprocessing, this can enable the delineation of recent gold targets related to the regional constructions.  Specifically, anticlinal constructions elsewhere throughout the area host main gold deposits corresponding to Brock’s Creek, Chinese language Howley, Cosmo Howley, Enterprise, Glencoe and Woolwonga, which have produced collectively 1.6Moz of goldʺ.

Conclusion: The observe up of historic exploration in a recognized gold producing geological setting and area might show fruitful for Panther Metals. We await additional outcomes as exploration proceeds.

Scotgold Assets* () 72p, Mkt Cap £37m – Cononish undertaking growth replace

BUY – 119p

Full underground growth staff returned to work with blasting actions at present in progress.

The staff has additionally secured a second new T1D drill rig and a second hand ST2G scooptram on a rental with an choice to buy foundation.

A set second set of apparatus improves mechanical availability, helps with the longer term ramp as much as Part 2 (from 36ktpa to 72ktpa) that will now require solely a further truck in addition to permits the staff to offer extra coaching to its workers.

Different on-site actions embrace supporting processing plant infrastructure works, ROM ore stockpiles pad earthworks and a brand new settlement pond for the positioning and tailings stacks drainage system development.

The Firm is anticipating to offer a revised growth plan sooner or later.

Conclusion: The Firm supplies an replace on resumed development actions on the excessive grade Cononish Gold and Silver undertaking with an up to date growth plan to be launched shortly.

*SP Angel acts as Nomad and Dealer to Scotgold Assets

Analysts

John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474

Gross sales

Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

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

+SP Angel workers might have beforehand held, or at present maintain, shares within the corporations talked about on this word.

Sources of commodity costs

Gold, Platinum, Palladium, Silver

BGNL (Bloomberg Generic Composite price, 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 Metallic

Tungsten

Metallic Bulletin