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Today’s Market View – AEX Gold, Trident Royalties and more…


SP Angel . Morning View . Friday 19 03 21

Rare earth and lithium prices continue to rise as base metals pause on stronger US dollar


MiFID II exempt information – see disclaimer below

AEX Gold Inc (AIM:AEXG) – Ausenco conducting an independent review on technical aspects of Nalunaq gold mine development

Trident Royalties (LON:TRR) – £20m raise to fund an interest over Tacker Pass royalty securing lithium exposure


Base metal prices fall on firmer US dollar

  • LME base metal prices fell across the board on Friday, as rising US Treasury yields strengthened the dollar, making dollar-denominated metals more expensive.
  • Three-month copper price dipped back below the $9,000/t mark, falling 0.7% earlier this morning, while the most most-traded May copper contract on the Shanghai Futures Exchange fell 0.6% to 66,740 yuan/t.


Baltic shipping index hits 18-month high on stronger demand for all vessel segments

  • The Baltic Exchange’s main sea freight index hit its highest level since September 2019 on Thursday, with the Baltic dry index rising 5.2%.


Iron ore futures fall amid persistent Tangshan output uncertainty as China curbs pollution

  • Iron ore prices once again slumped on Friday, as China’s steelmaking hub extended pollution cuts that have already cut demand for steelmaking ingredients.
  • Seven steelmakers will halve production between the 20th of March and the 30th, while another 16 mills will cut production 30%.
  • Tangshan’s utilization rate will drop to 70.6% until June and rise 74.4% in the second half of the year, from 73% currently (Mysteel).
  • Futures in Singapore dropped more than 3%, heading for a third weekly loss, while futures in Dalian dropped 4.3% (Bloomberg).


Oxford AstraZeneca vaccine – Half of the mining research team are now covered by the Oxford AstraZeneca COVID-19 vaccine

  • Thank you to the NHS for organising such a smooth vaccination process.



US – Weekly jobless claims unexpectedly increased highlighting fragile state of the labour market.

  • Although a less volatile 4w rolling average edged lower extending a downward trend that is expected to continue amid the latest round of fiscal stimulus and as the economy reopens.
  • Initial Jobless Claims: 770k v 725k (revised from 712k) and 700k est.
  • Continuing Claims: 4,124k v 4,142k (revised from 4,144k) and 4,034k est.
  • The US Fed duly left monetary policy unchanged expecting GDP to grow at 6.5% vs -2.4% in 2020
  • US inflation expected to be 2.2% (Feb 1.7%)
  • unemployment rate of 4.5% (Feb 6.2%).
  • US 10-year treasury yields rose to high of 1.73% for the year



Nikkei 225 drops 1.4% after the BOJ unexpectedly changed its stock-buying programme to focus on Topix index tracking funds.

  • The Uniqlo operator Fast Retailing Co with a 11% weighting in Nikkei tumbled 6.1%, the most since March following the announcement.


Japan – The central bank left its target of -0.1% for short-term rates and 0% for the 10-year yield unchanged under its yield curve control policy.

  • The BOJ has also announced slight tweaks to its monetary policy tools allowing long term rates to move up and down by 0.25% around the 0% target, instead of by the current 0.2%.
  • Additionally, giving itself more room to wind down asset purchases the central bank removed an explicit guidance to buy ETFs at an annual pace of ~6tn JPY and saying it will now step in when needed under a 12tn JPY ceiling set last year.
  • Nevertheless, the central bank stressed that the changes should not be viewed as a prelude for a withdrawal of the stimulus while saying that the changes instead would make it sustainable and more effective.
  • Meanwhile, the latest inflation report showed consumer prices fell for a seventh month
  • CPI (%yoy): -0.4 v -0.6 in January and -0.4 est.
  • CPI ex Food (%yoy): -0.4 v -0.6 in January and -0.4 est.


European Medicines Agency (EMA) clears the Oxford-AstraZeneca vaccine as “safe and effective” arguing it was “not associated” with a higher risk and the benefits outweigh any risks.

  • Germany, France, Italy, Spain and Portugal said they will resume using the jab following the report.


France – The government put Paris and several other French regions home to ~21m people under strict lockdown for a third time as hospitals run out of intensive care beds for COVID-19 patients, FT reports.

  • Under the new measures, non-essential businesses will be closed down but schools will remain open.
  • People will be allowed to exercise outdoors within 10km of their home and are not allowed to travel to other parts of the country without a valid reason.
  • New restrictions come on of the nationwide all night curfew starting at 7pm currently in place.
  • France recorded 35,000 new cases within the past 24 hours.


UK – Consumer confidence continued to recover climbing to a one year high in March on improving economic outlook and expectations for better personal finances, GfK survey data showed.

  • The monthly index climbed to -16 from -23 in February.
  • While below its long-run average of -9, the survey showed increasing optimism in all of its categories.
  • PM Johnson is to get his first dose of the Oxford-AstraZeneca vaccine aiming to reassure the public that the jab is safe and urging people to get inoculated.
  • The government said that slower rollout of the vaccine will not affect the reopening of the economy.
  • Government borrowing climbed to £19.1bn last month marking the highest February number since records began 1993 amid national lockdown.
  • In 11 months from the start of the pandemic public sector net borrowing increased to a record estimated £279bn.


Currencies US$1.1927/eur vs 1.1951eur yesterday.  Yen 108.67/$ vs 109.16/$.  SAr 14.668/$ vs 14.682/$.  $1.394/gbp vs $1.397/gbp.  0.777/aud vs 0.782/aud.  CNY 6.504/$ vs 6.503/$.


Commodity News

Precious metals:  

Gold US$1,743/oz vs US$1,738/oz yesterday

   Gold ETFs 101.1moz vs US$101.2moz yesterday

Platinum US$1,212/oz vs US$1,215/oz yesterday

Palladium US$2,675oz vs US$2,610/oz yesterday

Silver US$26.17/oz vs US$26.40/oz yesterday


Base metals:  

Copper US$ 8,956/t vs US$9,048/t yesterday

Aluminium US$ 2,210/t vs US$2,226/t yesterday

Nickel US$ 16,015/t vs US$16,085/t yesterday

Zinc US$ 2,792/t vs US$2,807/t yesterday

Lead US$ 1,933/t vs US$1,918/t yesterday

Tin US$ 25,000/t vs US$25,600/t yesterday



  • Oil US$63.8/bbl vs US$67.3/bbl yesterday
  • Oil prices saw a significant pull back yesterday afternoon with WTI sliding 8.68% to US$58.99/bbl whilst Brent fell below US$63/bbl
  • It is the biggest drop in absolute terms since April 2020, when US oil prices slipped into negative territory
  • The market has been broadly conflicted in its predictions during the recent price rally, with bulls signalling there is more room to run, making proclamations of a coming super cycle
  • Others, more cautious in their outlook, have warned for a couple of weeks that the optimism present in the oil markets were unjustified
  • The recent rally was largely on the back of OPEC+ production cuts instead of ramping up production as the market had anticipated
  • The passing of the third round of stimulus in the US had also bolstered oil market sentiment
  • But a rising dollar, increased crude inventories in the US, growing fears of a resurgence in coronavirus cases and vaccine safety concerns in Europe have proven to weigh on any gains
  • Those concerns are linked directly to oil demand resurgence and markets are viewing this demand picture as less favourable today, as shown by crude futures which show the market backwardation is waning
  • WTI’s front-month contract is once again trading at a discount to the following month
  • Crude oil WTI April contract is now trading at US$59.46/bbl while the May contract is trading at US$59.57/bbl


Natural Gas US$2.502/mmbtu vs US$2.521mmbtu yesterday

  • Natural gas prices moved lower on Thursday following a smaller than expected draw in natural gas stockpiles according to a report from the US Department of Energy
  • Natural gas in storage was 1,782Bcf as of Friday 12 March 2021, according to the EIA
  • This represents a net decrease of 11Bcf from the previous week
  • Expectations were for a 31Bcf draw in stockpiles according to survey provider Estimize
  • Stocks were 253Bcf less than last year at this time and 93Bcf below the five-year average of 1,875Bcf
  • At 1,782Bcf, total working gas is within the five-year historical range
  • The weather is expected to remain warmer than normal for most of the US East coast for the next 6-10 day as well as during the next 8-14 days



Iron ore 62% Fe spot (cfr Tianjin) US$159.9/t vs US$159.4/t

Chinese steel rebar 25mm US$726.0/t vs US$725.1/t

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

Coking coal swap Australia FOB US$128.5/t vs US$128.0/t



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

NdPr Rare Earth Oxide (China) US$88,796/t vs US$88,811/t

Lithium carbonate 99% (China) US$12,762/t vs US$12,610/t

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

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

Ferro-Manganese high carbon 78% Mn US$1,625/t vs US$1,625/t – Manganese prices expected to rise following smelter production cuts

Chinese manganese prices are expected to rise following planned production cuts from five key smelters in China.

Chinese smelters cutting production include the country’s largest, Ningxia Tianyuan, who have agreed to suspend output for over 10-15 days from the 20th of March.

The suspensions are forecast to remove 2,200-2,400 t/d of combined output from these key producers, accounting for 60-70pc of China’s total production (Argus Media).


Tungsten APT European US$268-275/mtu vs US$263-268/mtu

Graphite flake 94% C, -100 mesh, fob China US$560/t vs US$560/t                

Graphite spherical 99.95% C, 15 microns, fob China US$2,525/t vs US$2,625/t


Battery News

UK Government cuts EV grant and alters eligibility criteria

The government has downsized the financial incentive package offered to EV owners in the UK, reducing the ‘plug in car grant’ from £3,000 to £2,500.

Buyers of electric cars costing more than £35,000 will now no longer quality for an incentive, which was previously available on vehicles costing up to £50,000.


Breakthrough technology could produce green hydrogen at $1/kg 

Israel based H2Pro has secured a $22mm investment to push forward the production of its water splitting device that could produce hydrogen at $1/kg. 

H2Pro hopes it can make a big impression in the hydrogen space, with its device expected to reach 95% efficiency, operate at a higher pressure and cost significantly less than an electrolyser.  

That combined with anticipated reductions in the cost of renewable energy, the technology will enable the low-cost production of hydrogen. 


Company News

AEX Gold Inc (AIM:AEXG) – 29p, Mkt cap £53m – Ausenco conducting an independent review on technical aspects of Nalunaq gold mine development

AEX Gold report today on the extension of the temporary travel ban to Greenland to end April.

The company has also engaged Ausenco, the Australian and well respected consulting firm to do a thorough and independent review on all aspects of the Nalunak gold mine.

Management are focussed on continued exploration of the mineralisation within the license area.

Conclusion: The delay to construction at Nalunaq gives management the chance to reassess the mine plan and bring in more potential resource as highlighted through the last round of exploration.  The presence of repeating and ongoing gold-bearing structures along strike and contiguous to the existing resource could result in significant expansion of the mine plan realising greater future value for shareholders.


Trident Royalties (LON:TRR) 37p, Mkt Cap £39m – £20m raise to fund an interest over Tacker Pass royalty securing lithium exposure

The Company is looking to acquire a 60% interest over Thacker Pass gross revenue royalty from Orion for $28m.

The consideration will comprise of $26.0m in cash and 4.2m new shares to be issued to Orion.

Funding of the transaction will be undertaken by a ~£20.2m equity raise at 34p.

Additionally, the Company is planning to allocate 1.5m new shares at 34p for potential £0.5m proceeds for willing retail investors through

Thacker Pass is a major lithium-rich clay deposit 100% owned and operated by Lithium Americas in Nevada, US.

The project hosts 179mt at 0.71% Li2O for 3.1mt LCE with an anticipated 46y LOM making it the largest lithium reserve in the US; total mineral resource stands at 533mt at 0.63% Li2O for 8.3mt LCE.

Lithium Americas raised $400m in January for project development after securing key permits earlier in the year, with Thacker Pass DFS targeted for completion in 2021 followed by start of construction works later in the year or early 2022.

Open pit project development includes commissioning of Phase I for 30ktpa LCE in 2024 with an expansion to 60ktpa LCE in 3.5 years.

In addition to Thacker Pass, Lithium Americas is currently advancing its 49% owned Cauchari-Olaroz Lithium Brine Project in Argentina with JV partner and major shareholder Ganfeng Lithium; the project is expected to come online in 2022 producing 40ktpa LCE.

The royalty involves 8% (4.8% TRR share) on all mineral products generated at the mine reducing to 4% (2.4% TRR share) after royalties totalling $22m have been paid.

Lithium Americas has an option to reduce the royalty to 1.75% (1.05% TRR share) at any time for $$22m ($13.2m TRR share).

The option is expected to be exercised within the first year of operation that still leaves Trident with $13.2m in buyback proceeds and an estimated $3.8mpa revenue stream under Phase I increasing to $7.6mpa under Phase II (using $12,000/t LCE price).

Conclusion: Trident Pass royalty acquisition provides an exposure to a well advanced development project in a growing lithium market led by transport electrification drive and diversifies the existing portfolio of copper, iron ore and gold royalties.



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 – Bloomberg

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

Oil Brent – ICE

Natural Gas, Uranium, Iron Ore – NYMEX

Thermal Coal – Bloomberg OTC Composite

Coking Coal – SSY

RRE – Steelhome

Lithium Carbonate, Ferro Vanadium, Antimony – Asian Metal

Tungsten – Metal Bulletin



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