SP Angel – Morning View – Friday 16 11 18
Strict China auto emissions boosts palladium to record highs
MiFID II exempt information – see disclaimer below
Keras Resources* (KRS LN) – Bulk sampling update at Nayega Manganese Project in Togo
Ncondezi Energy (NCCL LN) – Restructuring of shareholder loan
Strict China auto emissions boosts palladium to record highs
- Palladium surges to record highs as the Chinese auto industry is expected to buoy global demand amid tight supplies consumed in ICE vehicle pollution-control catalytic converters. Spot palladium climbed as much as +4.6% to an all-time high of $1,180.26/oz, capping a third straight gain, and boosting the metal to the top 2018 major metal.
- China’s updated auto emissions standards have the potential to boost the intensity of platinum-group metal consumption, according to the World Platinum Investment Council. Citigroup Inc. has projected more production shortfalls, and said in a report this week that “extreme tightness” in the palladium market could help drive prices to as high as $1,300 in the second quarter of 2019.
- “The combination of tightening emissions standards and continued auto-production growth means that China’s appetite for these metals has significant room to grow,” said Brendan Clifford, manager of investor development at the platinum council.
- The tightness in supply has created a lucrative business of lending the metal, spurring withdrawals from exchange-traded funds. Consumers of the metal, which is used mostly to curb pollution in gasoline-fueled vehicles, have turned to the lease market for supply. Hedge fund attention is also rising, with money managers boosting their net-long position in palladium futures and options to the highest since March, according to US Commodity Futures Trading Commission.
Vanadium prices slow as price spread narrows
- Ferro-vanadium prices continue to rise in Western Europe albeit at a slower place as price range narrows.
- Fastmarkets MB estimate that ferro-vanadium prices rose by 0.1% in the week to US$124.25-126/kgV in Western Europe.
- Prices in China remain static at $130-140/kgV according to Fastmarkets MB but appear to have slipped to $137.5/kgV from $144/kgV on Monday according to Asia Metal Inc. as reported on Bloomberg
Antimony Metal prices continue to pull back
- Antimony Metal prices continue to pull back to $8,050-8,250/t from around $8,600/t on 14 September and a high of $8,700/t in March according to Fastmarkets MB.
- Prices are reported to be slipping due to persistent weak demand and sufficient supply as buyers delay orders awaiting lower price levels.
- “The ongoing month-long environmental checks in Hunan province seemed to have failed to support spot trading prices because its actual influence on the production side is not as severe as previously expected,” according to Fastmarkets.
|
Dow Jones Industrials |
+0.83% |
at |
25,289 | |
|
Nikkei 225 |
-0.57% |
at |
21,680 | |
|
HK Hang Seng |
+0.31% |
at |
26,184 | |
|
Shanghai Composite |
+0.41% |
at |
2,679 | |
|
FTSE 350 Mining |
+1.46% |
at |
17,213 | |
|
AIM Basic Resources |
+0.34% |
at |
2,163 |
Economics
US – October retail sales report released yesterday painted a mixed picture.
- Headline sales climbed by the most in five months, driven by automobiles, fule and building materials following hurricanes that restrained spending.
- Core measure that excludes autos and gas purhcases climbed less than forecast while downward revisions to the prior month’s data also weighed on the overall consumer demand.
- Nevertheless, tight labour market driving growth in earnings as well as lower oil prices are likely to provide support for demand in the fourth quarter and in 2019.
- The focus now shifts to holiday season (Nov-Dec) sales data.
- Retail Sales (%mom): 0.8 v -0.1 (revised from 0.1) in September and 0.5 forecast.
- Control Group Retail Sales (%mom): 0.3 v 0.3 (revised from 0.5) in September and 0.4 forecast.
ECB – Mario Draghi highlighted potential risks to inflation outlook in the Eurozone amid uncertainties on growth.
- ECB head noted that “uncertainties surrounding the medium-term outlook have increased”.
- “When the latest round of projections is available at our next meeting in December, we will be better placed to make a full assessment of the risks to growth and inflation,” Draghi added during his speech at a banking conference in Frankfurt today.
- Draghi reiterated the ECB commitment to withdraw the bond buying scheme by the end of the year with interest due to remain at historical lows by the end of summer 2019.
UK – PM May faced a number of resignation from her cabinet and an expression of no-confidence from one of leading Conservatives’ party members following the release of the final Brexit proposal.
- USDGBP is gaining back some of its earlier losses trading up at 1.2818 this morning.
Saudi Arabia – Th US imposed economic sanctions on 17 Saudi officials for their role in the killing of Saudi journalist Jamal Khashoggi.
- Among people sanctioned were Saud al-Qahtani, who has been removed from his position as a top aide to the powerful Crown Prince Mohammed bin Salam, as 2well as the Saudi Consul General Mohammad al-Otaibi and members of a 15-person team Turkey has identified as being involved.
- The sanctions limit access to the US financial system and freeze their assets.
- Senators from both parties have also introduced legislation that could suspend weapon sales to Saudi Arabia as punishment for Khashoggi’s death and for its role in Yemen’s devastating civil war.
Currencies
US$1.1357/eur vs 1.1351/eur yesterday Yen 113.30/$ vs 113.47/$ SAr 14.182/$ vs 14.227/$ $1.282/gbp vs $1.299/gbp 0.728/aud vs 0.729/aud CNY 6.948/$ vs 6.937/$
Commodity News
Precious metals:
Gold US$1,218/oz vs US$1,214/oz yesterday
- Safe haven assets received strong support amid uncertainties surrounding the political situation in the UK and the ongoing US-China trade war. Gold remains on track for the first weekly gain in three as British Prime Minister Theresa May is defying demands to quit as she battles to keep control of her fractious government long enough to deliver a Brexit deal.
- While negotiations appear to be back on the table, the US still plans to raise tariffs on Chinese imports in January with President Donald Trump and China’s Xi Jinping likely at best to agree to a ‘framework’ for further talks to resolve trade tensions at an upcoming meeting, according to Commerce Secretary Wilbur Ross.
- Federal Reserve Chairman Jerome Powell has also laid out a scenario for a pause in the central bank’s interest-rate hiking campaign sometime next year by highlighting potential headwinds to the U.S. economy.
- North Korean leader Kim Jong Un oversaw the test of a new “advanced tactical” weapon, according to the state-run Korean Central News Agency, while reports highlight US analysts have located 13 secret missile development sites. The report from the Center for Strategic and International Studies says the discovery illustrates the scope of the North’s weapon program and the country’s determination to conceal its military might.
- "The fact that North Korea has continued to build nuclear weapons and ballistic missiles in the midst of high-level diplomacy with China, South Korea and the U.S. should not come as a surprise," said Abraham Denmark, the Asia program director at The Wilson Center. "Despite all the summitry, North Korea is just as dangerous today as it was a year ago."
Gold ETFs 68.7moz vs US$68.6moz yesterday
Platinum US$844/oz vs US$839/oz yesterday
Palladium US$1,164/oz vs US$1,136/oz yesterday
Silver US$14.34/oz vs US$14.25/oz yesterday
Base metals:
Copper US$ 6,189/t vs US$6,206/t yesterday
Vedanta selling copper concentrates from inventory closed smelter at Tutacorin smelter in the south of India
- It’s a sad day when a smelter throws in the towel and sells the copper concentrate feedstock from its stockpile.
- The company is selling some 70,000t of copper concentrate following its effective closure by the state after anti-pollution protests.
- 13 protestors were killed when demonstrating over the poisoning of local water supplies.
- The state government of Tamil Nadu cut power to the smelter in May following the incident shutting the IsaSmet smelter down.
- The removal of the concentrates will help to reduce further pollution of the environment around the smelter area.
- The closure of the plant has disrupted Asian copper markets. Traders are expecting the facility to restart during 2019, with the selldown of stockpiles likely because the company are looking to raise cash and square away its books before the year-end.
Aluminium US$ 1,939/t vs US$1,955/t yesterday
Nickel US$ 11,350/t vs US$11,505/t yesterday
Zinc US$ 2,569/t vs US$2,576/t yesterday
- Zinc rose to the highest level in two weeks as data highlights demand outstripping supply and inventories tracked by the London Metal Exchange sinking to the lowest in a decade.
- Global refined zinc output was 1.10mt in September, compared with usage of 1.16mt, according to a report from the International Lead and Zinc Study Group. LME zinc inventories slid for a 30th day in the longest decline since January.
- “LME zinc is phenomenally tight, pressuring shorts and testing the availability of stocks,” according to Citigroup analysts. With reserves in Shanghai also shrinking, “the pressure on outstanding shorts will put the availability of off-warrant stocks to the test”.
Lead US$ 1,949/t vs US$1,970/t yesterday
Tin US$ 19,375/t vs US$19,390/t yesterday
Energy:
Oil US$67.6/bbl vs US$66.3/bbl yesterday
- Oil prices rose this morning amid expectations of supply cuts from OPEC, although record U.S. production dragged.
- U.S. West Texas Intermediate crude oil futures were at $56.84 per barrel at 0353 GMT, up 38 cents, or 0.7%, from their last settlement.
- Brent crude oil futures were up 48 cents, or 0.7%, at $67.10 per barrel
Natural Gas US$4.051/mmbtu vs US$4.633/mmbtu yesterday
Uranium US$29.15/lb vs US$29.15/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$71.4/t vs US$71.6/t
Chinese steel rebar 25mm US$670.0/t vs US$673.6/t
Thermal coal (1st year forward cif ARA) US$88.3/t vs US$85.8/t
Coking coal futures Dalian Exchange US$196.9/t vs US$197.2/t
Other:
Cobalt LME 3m US$55,000/t vs US$55,000/t
China NdPr Rare Earth Oxide US$45,482/t vs US$45,553/t
China Lithium carbonate 99% US$10,075/t vs US$10,091/t
Tungsten APT European US$275-295/mtu vs US$275-295/mtu
Ferro-tungsten prices pick up off low base
- Ferro-tungsten prices have picked up following a long fall since February.
- Tungsten APT prices remain low at $280-285/mtu following a high of $350/mtu since June.
- While tungsten markets have remained remarkably steady in recent months we do expect Chinese environmental restrictions to start to tighten the market to the longer term benefit of APT and ferro-tungsten prices.
Battery News
Lithium battery development
- Penn State researchers have reportedly developed a three-dimensional, cross-linked polymer sponge that attaches to battery anodes and will dramatically improve the life span, charging time and safety of lithium metal batteries.
- The material act as a porous sponge that not only promotes faster ion transfer, but is also more effective in preventing deterioration, which allows the metal plating to remain free of dendrites even at low temperatures and fast charge conditions.
Aluminium battery electrolyte development
- A New Zealand-lead research team claims to have developed a new electrolyte for use in batteries that can be made from plants.
- The team from the MacDiarmid Institute for Advanced Materials and Nanotechnology have stated that it will facilitate easier and cheaper production of aluminium batteries.
- According the Professor Thomas Nann, the leader of the research, the electrolyte is more affordable and more sustainable than the ionic liquids currently in use for aluminium batteries.
Zipcar to trial mobile electric vehicle charging in London
- Electric vehicles in London could soon recharge without having to search for the nearest available charging station, following an announcement of a trial for wireless technology from Zipcar and FreeWire.
- FreeWire’s mobile chargers are based on mobile battery units which, once charge via a mains outlet, can be moved freely to charge vehicles wherever they are parked.
Company News
Keras Resources* (KRS LN) 0.36p, Mkt Cap £8.4m – Bulk sampling update at Nayega Manganese Project in Togo
- Keras announce the development of 10,000t bulk sampling metallurgical testwork programme at the Nayega Manganese Project in northern Togo remains on schedule ahead of intended shipping by the end of January 2019. The initial mining and screening phase is on target with approximately 6,000t +12mm manganese already pre-screened on the scrubber plant feed stockpile.
- A 6km water pipeline feeding the plant is now 80% complete, with all water reticulation equipment air freighted to Lomé ready for installation.
- Further, the 6,500m³ lined storage dam has been completed with expectation to be at capacity prior to commissioning of the scrubber plant. Inclement sailing conditions are delaying delivery of the scrubber plant, expected in Lomé on or around 22nd November. CEO Russell Lamming adds “initial planning for the bulk sampling incorporated contingencies such as the delay in the delivery of the scrubber plant so the overall timetable is not expected to be negatively impacted.”
Conclusion: Keras appear to be systematically progressing components of the bulk sampling programme despite tough weather conditions and we look forward to the results of the 10,000t bulk sample pyrometallurgical testwork beginning early next year.
*SP Angel act as Nomad and broker to Keras Resources
Ncondezi Energy (NCCL LN) 7.25p, mkt cap £20.4m – Restructuring of shareholder loan
- Ncondezi Energy reports that it has now completed the previously announced restructuring of its US$5.1m shareholder loan.
- Among the revised terms is an extension of the term from 2nd September 2018 until 30th November 2019 and, as previously disclosed, a reduction in the interest rate to 12% payable at maturity and the ability for lenders to swap debt for equity, in full or in part, at a conversion price of 10p/share.
- The conversion rights give lenders “the option to swap debt for equity in full or in part at a conversion price of 10.0p per share” – known as the “First Conversion”.
- “After the First Conversion, if the Loan is not repaid at maturity, the Lenders for seven days will have the option to swap debt for equity in full at the higher of the 30% discount to the 60 day Volume Weighted Average ("VWAP") or 5.2p (the "Second Conversion") provided that Lenders representing more than 50.1% of the Loan outstanding elect to do so”.
- The company points out that the restructuring “allows the Company time to progress various alternative refinancing options” and the “updated work program and timetable for the Company's integrated 300MW power and coal mine project in Tete Mozambique (the "Project") is expected to be submitted to the Ministry of Mineral Resources and Energy ("MIREME") and Electricity de Mozambique ("EDM") during November 2018”.
- Commenting on the restructuring of the loan on what he described as “favourable terms”, Non-Executive Chairman, Michael Howarth said that “The restructuring of the Shareholder Loan is a key milestone for the Company, and positions it well to finalise binding agreements with it potential strategic partners on the 300MW Ncondezi Power Project and integrated coal mine. The completion of the Loan Restructuring has freed up Company resources to focus on delivering project milestones for the 300MW Ncondezi Project."
Conclusion: We look forward to news of the submission of documentation to the Ministry of Mineral Resources and Energy later this month and to further progress on the project.
Analysts
John Meyer – 0203 470 0490
Simon Beardsmore – 0203 470 0484
Sergey Raevskiy – 0203 470 0474
Phil Smith (Technology) – 0203 470 0475
Zac Phillips (Oil & Gas) – 0203 470 0481
Sales
Richard Parlons – 0203 470 0472
Jonathan Williams – 0203 470 0471
SP Angel
Prince Frederick House
35-39 Maddox Street London
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+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
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SP Angel – Morning View – Friday 16 11 18
Strict China auto emissions boosts palladium to record highs
MiFID II exempt information – see disclaimer below
Keras Resources* (KRS LN) – Bulk sampling update at Nayega Manganese Project in Togo
Ncondezi Energy (NCCL LN) – Restructuring of shareholder loan
Strict China auto emissions boosts palladium to record highs
- Palladium surges to record highs as the Chinese auto industry is expected to buoy global demand amid tight supplies consumed in ICE vehicle pollution-control catalytic converters. Spot palladium climbed as much as +4.6% to an all-time high of $1,180.26/oz, capping a third straight gain, and boosting the metal to the top 2018 major metal.
- China’s updated auto emissions standards have the potential to boost the intensity of platinum-group metal consumption, according to the World Platinum Investment Council. Citigroup Inc. has projected more production shortfalls, and said in a report this week that “extreme tightness” in the palladium market could help drive prices to as high as $1,300 in the second quarter of 2019.
- “The combination of tightening emissions standards and continued auto-production growth means that China’s appetite for these metals has significant room to grow,” said Brendan Clifford, manager of investor development at the platinum council.
- The tightness in supply has created a lucrative business of lending the metal, spurring withdrawals from exchange-traded funds. Consumers of the metal, which is used mostly to curb pollution in gasoline-fueled vehicles, have turned to the lease market for supply. Hedge fund attention is also rising, with money managers boosting their net-long position in palladium futures and options to the highest since March, according to US Commodity Futures Trading Commission.
Vanadium prices slow as price spread narrows
- Ferro-vanadium prices continue to rise in Western Europe albeit at a slower place as price range narrows.
- Fastmarkets MB estimate that ferro-vanadium prices rose by 0.1% in the week to US$124.25-126/kgV in Western Europe.
- Prices in China remain static at $130-140/kgV according to Fastmarkets MB but appear to have slipped to $137.5/kgV from $144/kgV on Monday according to Asia Metal Inc. as reported on Bloomberg
Antimony Metal prices continue to pull back
- Antimony Metal prices continue to pull back to $8,050-8,250/t from around $8,600/t on 14 September and a high of $8,700/t in March according to Fastmarkets MB.
- Prices are reported to be slipping due to persistent weak demand and sufficient supply as buyers delay orders awaiting lower price levels.
- “The ongoing month-long environmental checks in Hunan province seemed to have failed to support spot trading prices because its actual influence on the production side is not as severe as previously expected,” according to Fastmarkets.
|
Dow Jones Industrials |
+0.83% |
at |
25,289 | |
|
Nikkei 225 |
-0.57% |
at |
21,680 | |
|
HK Hang Seng |
+0.31% |
at |
26,184 | |
|
Shanghai Composite |
+0.41% |
at |
2,679 | |
|
FTSE 350 Mining |
+1.46% |
at |
17,213 | |
|
AIM Basic Resources |
+0.34% |
at |
2,163 |
Economics
US – October retail sales report released yesterday painted a mixed picture.
- Headline sales climbed by the most in five months, driven by automobiles, fule and building materials following hurricanes that restrained spending.
- Core measure that excludes autos and gas purhcases climbed less than forecast while downward revisions to the prior month’s data also weighed on the overall consumer demand.
- Nevertheless, tight labour market driving growth in earnings as well as lower oil prices are likely to provide support for demand in the fourth quarter and in 2019.
- The focus now shifts to holiday season (Nov-Dec) sales data.
- Retail Sales (%mom): 0.8 v -0.1 (revised from 0.1) in September and 0.5 forecast.
- Control Group Retail Sales (%mom): 0.3 v 0.3 (revised from 0.5) in September and 0.4 forecast.
ECB – Mario Draghi highlighted potential risks to inflation outlook in the Eurozone amid uncertainties on growth.
- ECB head noted that “uncertainties surrounding the medium-term outlook have increased”.
- “When the latest round of projections is available at our next meeting in December, we will be better placed to make a full assessment of the risks to growth and inflation,” Draghi added during his speech at a banking conference in Frankfurt today.
- Draghi reiterated the ECB commitment to withdraw the bond buying scheme by the end of the year with interest due to remain at historical lows by the end of summer 2019.
UK – PM May faced a number of resignation from her cabinet and an expression of no-confidence from one of leading Conservatives’ party members following the release of the final Brexit proposal.
- USDGBP is gaining back some of its earlier losses trading up at 1.2818 this morning.
Saudi Arabia – Th US imposed economic sanctions on 17 Saudi officials for their role in the killing of Saudi journalist Jamal Khashoggi.
- Among people sanctioned were Saud al-Qahtani, who has been removed from his position as a top aide to the powerful Crown Prince Mohammed bin Salam, as 2well as the Saudi Consul General Mohammad al-Otaibi and members of a 15-person team Turkey has identified as being involved.
- The sanctions limit access to the US financial system and freeze their assets.
- Senators from both parties have also introduced legislation that could suspend weapon sales to Saudi Arabia as punishment for Khashoggi’s death and for its role in Yemen’s devastating civil war.
Currencies
US$1.1357/eur vs 1.1351/eur yesterday Yen 113.30/$ vs 113.47/$ SAr 14.182/$ vs 14.227/$ $1.282/gbp vs $1.299/gbp 0.728/aud vs 0.729/aud CNY 6.948/$ vs 6.937/$
Commodity News
Precious metals:
Gold US$1,218/oz vs US$1,214/oz yesterday
- Safe haven assets received strong support amid uncertainties surrounding the political situation in the UK and the ongoing US-China trade war. Gold remains on track for the first weekly gain in three as British Prime Minister Theresa May is defying demands to quit as she battles to keep control of her fractious government long enough to deliver a Brexit deal.
- While negotiations appear to be back on the table, the US still plans to raise tariffs on Chinese imports in January with President Donald Trump and China’s Xi Jinping likely at best to agree to a ‘framework’ for further talks to resolve trade tensions at an upcoming meeting, according to Commerce Secretary Wilbur Ross.
- Federal Reserve Chairman Jerome Powell has also laid out a scenario for a pause in the central bank’s interest-rate hiking campaign sometime next year by highlighting potential headwinds to the U.S. economy.
- North Korean leader Kim Jong Un oversaw the test of a new “advanced tactical” weapon, according to the state-run Korean Central News Agency, while reports highlight US analysts have located 13 secret missile development sites. The report from the Center for Strategic and International Studies says the discovery illustrates the scope of the North’s weapon program and the country’s determination to conceal its military might.
- "The fact that North Korea has continued to build nuclear weapons and ballistic missiles in the midst of high-level diplomacy with China, South Korea and the U.S. should not come as a surprise," said Abraham Denmark, the Asia program director at The Wilson Center. "Despite all the summitry, North Korea is just as dangerous today as it was a year ago."
Gold ETFs 68.7moz vs US$68.6moz yesterday
Platinum US$844/oz vs US$839/oz yesterday
Palladium US$1,164/oz vs US$1,136/oz yesterday
Silver US$14.34/oz vs US$14.25/oz yesterday
Base metals:
Copper US$ 6,189/t vs US$6,206/t yesterday
Vedanta selling copper concentrates from inventory closed smelter at Tutacorin smelter in the south of India
- It’s a sad day when a smelter throws in the towel and sells the copper concentrate feedstock from its stockpile.
- The company is selling some 70,000t of copper concentrate following its effective closure by the state after anti-pollution protests.
- 13 protestors were killed when demonstrating over the poisoning of local water supplies.
- The state government of Tamil Nadu cut power to the smelter in May following the incident shutting the IsaSmet smelter down.
- The removal of the concentrates will help to reduce further pollution of the environment around the smelter area.
- The closure of the plant has disrupted Asian copper markets. Traders are expecting the facility to restart during 2019, with the selldown of stockpiles likely because the company are looking to raise cash and square away its books before the year-end.
Aluminium US$ 1,939/t vs US$1,955/t yesterday
Nickel US$ 11,350/t vs US$11,505/t yesterday
Zinc US$ 2,569/t vs US$2,576/t yesterday
- Zinc rose to the highest level in two weeks as data highlights demand outstripping supply and inventories tracked by the London Metal Exchange sinking to the lowest in a decade.
- Global refined zinc output was 1.10mt in September, compared with usage of 1.16mt, according to a report from the International Lead and Zinc Study Group. LME zinc inventories slid for a 30th day in the longest decline since January.
- “LME zinc is phenomenally tight, pressuring shorts and testing the availability of stocks,” according to Citigroup analysts. With reserves in Shanghai also shrinking, “the pressure on outstanding shorts will put the availability of off-warrant stocks to the test”.
Lead US$ 1,949/t vs US$1,970/t yesterday
Tin US$ 19,375/t vs US$19,390/t yesterday
Energy:
Oil US$67.6/bbl vs US$66.3/bbl yesterday
- Oil prices rose this morning amid expectations of supply cuts from OPEC, although record U.S. production dragged.
- U.S. West Texas Intermediate crude oil futures were at $56.84 per barrel at 0353 GMT, up 38 cents, or 0.7%, from their last settlement.
- Brent crude oil futures were up 48 cents, or 0.7%, at $67.10 per barrel
Natural Gas US$4.051/mmbtu vs US$4.633/mmbtu yesterday
Uranium US$29.15/lb vs US$29.15/lb yesterday
Bulk:
Iron ore 62% Fe spot (cfr Tianjin) US$71.4/t vs US$71.6/t
Chinese steel rebar 25mm US$670.0/t vs US$673.6/t
Thermal coal (1st year forward cif ARA) US$88.3/t vs US$85.8/t
Coking coal futures Dalian Exchange US$196.9/t vs US$197.2/t
Other:
Cobalt LME 3m US$55,000/t vs US$55,000/t
China NdPr Rare Earth Oxide US$45,482/t vs US$45,553/t
China Lithium carbonate 99% US$10,075/t vs US$10,091/t
Tungsten APT European US$275-295/mtu vs US$275-295/mtu
Ferro-tungsten prices pick up off low base
- Ferro-tungsten prices have picked up following a long fall since February.
- Tungsten APT prices remain low at $280-285/mtu following a high of $350/mtu since June.
- While tungsten markets have remained remarkably steady in recent months we do expect Chinese environmental restrictions to start to tighten the market to the longer term benefit of APT and ferro-tungsten prices.
Battery News
Lithium battery development
- Penn State researchers have reportedly developed a three-dimensional, cross-linked polymer sponge that attaches to battery anodes and will dramatically improve the life span, charging time and safety of lithium metal batteries.
- The material act as a porous sponge that not only promotes faster ion transfer, but is also more effective in preventing deterioration, which allows the metal plating to remain free of dendrites even at low temperatures and fast charge conditions.
Aluminium battery electrolyte development
- A New Zealand-lead research team claims to have developed a new electrolyte for use in batteries that can be made from plants.
- The team from the MacDiarmid Institute for Advanced Materials and Nanotechnology have stated that it will facilitate easier and cheaper production of aluminium batteries.
- According the Professor Thomas Nann, the leader of the research, the electrolyte is more affordable and more sustainable than the ionic liquids currently in use for aluminium batteries.
Zipcar to trial mobile electric vehicle charging in London
- Electric vehicles in London could soon recharge without having to search for the nearest available charging station, following an announcement of a trial for wireless technology from Zipcar and FreeWire.
- FreeWire’s mobile chargers are based on mobile battery units which, once charge via a mains outlet, can be moved freely to charge vehicles wherever they are parked.
Company News
Keras Resources* (KRS LN) 0.36p, Mkt Cap £8.4m – Bulk sampling update at Nayega Manganese Project in Togo
- Keras announce the development of 10,000t bulk sampling metallurgical testwork programme at the Nayega Manganese Project in northern Togo remains on schedule ahead of intended shipping by the end of January 2019. The initial mining and screening phase is on target with approximately 6,000t +12mm manganese already pre-screened on the scrubber plant feed stockpile.
- A 6km water pipeline feeding the plant is now 80% complete, with all water reticulation equipment air freighted to Lomé ready for installation.
- Further, the 6,500m³ lined storage dam has been completed with expectation to be at capacity prior to commissioning of the scrubber plant. Inclement sailing conditions are delaying delivery of the scrubber plant, expected in Lomé on or around 22nd November. CEO Russell Lamming adds “initial planning for the bulk sampling incorporated contingencies such as the delay in the delivery of the scrubber plant so the overall timetable is not expected to be negatively impacted.”
Conclusion: Keras appear to be systematically progressing components of the bulk sampling programme despite tough weather conditions and we look forward to the results of the 10,000t bulk sample pyrometallurgical testwork beginning early next year.
*SP Angel act as Nomad and broker to Keras Resources
Ncondezi Energy (NCCL LN) 7.25p, mkt cap £20.4m – Restructuring of shareholder loan
- Ncondezi Energy reports that it has now completed the previously announced restructuring of its US$5.1m shareholder loan.
- Among the revised terms is an extension of the term from 2nd September 2018 until 30th November 2019 and, as previously disclosed, a reduction in the interest rate to 12% payable at maturity and the ability for lenders to swap debt for equity, in full or in part, at a conversion price of 10p/share.
- The conversion rights give lenders “the option to swap debt for equity in full or in part at a conversion price of 10.0p per share” – known as the “First Conversion”.
- “After the First Conversion, if the Loan is not repaid at maturity, the Lenders for seven days will have the option to swap debt for equity in full at the higher of the 30% discount to the 60 day Volume Weighted Average ("VWAP") or 5.2p (the "Second Conversion") provided that Lenders representing more than 50.1% of the Loan outstanding elect to do so”.
- The company points out that the restructuring “allows the Company time to progress various alternative refinancing options” and the “updated work program and timetable for the Company's integrated 300MW power and coal mine project in Tete Mozambique (the "Project") is expected to be submitted to the Ministry of Mineral Resources and Energy ("MIREME") and Electricity de Mozambique ("EDM") during November 2018”.
- Commenting on the restructuring of the loan on what he described as “favourable terms”, Non-Executive Chairman, Michael Howarth said that “The restructuring of the Shareholder Loan is a key milestone for the Company, and positions it well to finalise binding agreements with it potential strategic partners on the 300MW Ncondezi Power Project and integrated coal mine. The completion of the Loan Restructuring has freed up Company resources to focus on delivering project milestones for the 300MW Ncondezi Project."
Conclusion: We look forward to news of the submission of documentation to the Ministry of Mineral Resources and Energy later this month and to further progress on the project.
Analysts
John Meyer – 0203 470 0490
Simon Beardsmore – 0203 470 0484
Sergey Raevskiy – 0203 470 0474
Phil Smith (Technology) – 0203 470 0475
Zac Phillips (Oil & Gas) – 0203 470 0481
Sales
Richard Parlons – 0203 470 0472
Jonathan Williams – 0203 470 0471
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*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.
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