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Today’s Market View – Adriatic Metals, Anglo American, Vast Resources and more…


SP Angel . Morning View . Thursday 28 01 21

Metals pull back following equities lower on vaccine delays and GameStop


Adriatic Metals* (LON:ADT1) – Exploitation permit granted for Veovaca

Anglo American (LON:AAL) – Q4 continues production recovery

Anglo Asian Mining* (LON:AAZ) – STRONG BUY – New presentation focuses on exciting growth opportunities

Vast Resources* (LON:VAST) – Interims highlight the commissioning of the BPPM

Arkle Resources* (LON:ARK) – Stonepark drilling results

Eurasia Mining* (LON:EUA) – Veles International buys 27.4m shares off Alexi Churakov

Greatland Gold (LON:GGP) – Further drilling results from Havieron

SolGold* (LON:SOLG) – Confirms 2020 exploration expenditure of over US$50m


EU MEPs threaten trade war with UK over AstraZeneca Oxford vaccine supply

The ink is barely dry on the Brexit agreement and EU MEPs are already threatening to a trade war.

The European Commission reckons AstraZeneca is obliged to meet contractual agreements to supply vaccines to the EU despite the UK placing its order months earlier.

We also believe the EU has not yet authorised the AstraZeneca Oxford vaccine for use in Europe.

The issue blew up since AstraZeneca warned the EU that it would receive around a quarter of its 100m doses by April due to complexities in scaling up the supply.

The situation is hugely embarrassing for the EU which is often slow to react to crises due to its involved bureaucracy.

We estimate the EU generally reacts around nine months slower than the US when it comes to actioning economic stimulus

China is by far the fastest nation to act in terms of stimulus due to the ability to immediately fund large numbers of drill-ready infrastructure projects and inject liquidity into active urban and suburban developments.


GameStop shares keep climbing as short sellers capitulate

Ironically, the GameStop saga may have marked the top of the US Tech market despite its shares continuing to climb.

Robinhood traders are said to have bought up GameStop shares exposing hedge fund short sellers to multi-billion-dollar losses.

While the activity of a small distressed gaming retailer in the US should not have a significant impact on the rest of the world there we believe the situation is causing hedge funds and their funders to go ‘risk-off’ and deleverage their investments causing funds to liquidate positions across the board.


West Australian miner’s shares rise 50% on case of mistaken identity

GME Resources saw its shares soar 50% on Thursday, having been caught up in the investing craze around US company GameStop (Sydney Morning Herald).

GME Resource’s ticker matches that of the American video game retailer on their respective exchanges.

The miner’s market cap is A$40m, however shares rose 50% to 12 cents on Thursday, their highest level since 2018 with volumes of nearly $7m.

Although the less diligent group of investors have not bought stock in the company they intended, at least they now have exposure to nickel and cobalt exploration in a favorable jurisdiction.


Glencore – Complaint over wastewater spill in Chad at Glencore’s Badila oilfield in Chad in 2018

The spill occoured when an earth bank supporting a wastewater basin collapsed spilling contaminated water into fields and a local river.

The waste water is alleged to have killed livestock and fish and to have caused some 50 local people to fall sick.

The group are demanding compensation from Glencore due to its connection with PetroChad (Mangara).


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 we cover

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


Recent Interviews:

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?

Copper price rise:


VOX:    28/01/20




iiTV:     The mining stock to own in 2021:

Small Cap Mining Share tips for 2021 –

Miners for a green industrial revolution –

A Mining megatrend and three solid dividend stocks –

*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, one and all, 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.


Dow Jones Industrials -2.05% at 30,303

Nikkei 225 -1.53% at 28,197

HK Hang Seng -2.57% at 28,544

Shanghai Composite -1.91% at 3,505



US – economists expect US GDP growth of 3.9% in Q4 2020

US core capital goods orders rose 0.6% in December for non-defense capital goods excluding aircraft.

Core capital goods orders climbed 1.8% yoy in December.

Factory output remains ~2.6% below pre-pandemic levels.

Manufacturing accounts for ~12% of the US economy

Shipments of core capital goods rose 0.5% in December

The US added nearly $900bn to its $3tn pandemic relief funding by end December

Orders for durable goods rose 0.2% in December vs 1.2% in November.

Orders for transportation equipment gained just 1.0% vs 1.9% increase in November.

Orders for civilian aircraft collapsed 51.8%, though Boeing reported orders for 90 new aircraft in December.

Orders for vehicles and parts rose 1.4% in December vs 2.8% in November..

FOMC to continue asset purchases of $80b in Treasuries and $40b in Agency MBS to continue at current pace

Purchases will continue until “substantial further progress” has been made toward employment and inflation goals.


Currencies US$1.2107/eur vs 1.2146eur yesterday.  Yen 104.28/$ vs 103.72/$.  SAr 15.316/$ vs 15.101/$.  $1.366/gbp vs $1.374/gbp.  0.763/aud vs 0.773/aud.  CNY 6.477/$ vs 6.467/$.

EU vaccine delay likely to weaken the Euro against other major currencies

Any delay to the EU vaccine rollout is likely to slow the expected economic recovery costing the EU billions in lost economic activity

Members of the ECB have already complained about the high valuation of the Euro suggesting the ECB may reduce its -0.5% deposit interest rates.


Commodity News

Precious metals:  

Gold US$1,841/oz vs US$1,847/oz yesterday – India – Gold demand fell 35% to 446t in 2020

India’s gold demand fell by over a third last year to a 25-year low, as a result of pandemic-induced lockdowns and record high prices.

In terms of value, gold demand declined 14% amid the higher prices in 2020 compared to a year prior.

Total jewellery demand fell 42% to 315.9t, a drop in value of 22.4%.

Net imports of gold fell 47% to 355.2t, however imports during that final quarter of 2020 rose 19% YoY on pent up demand and renewed global optimism.

The World Gold Council expect India’s renewed optimism for bullion to continue in 2021, with demand recovering to pre-pandemic levels.


UK car output fell to lowest level since 1984 amid Covid-19 pandemic

Automobile output slumped in 2020 as the pandemic shut factories and hurt demand, with a total of 920,928 cars produced- down 29% compared to the year prior according to the Society of Motor Manufacturers and Traders.

Output is only expected to recover to 1 million units in 2021, amid lingering uncertainty regarding the pandemic as well as Honda closing its Swindon factory.

Vauxhall is also mulling the closure of its Ellesmere Port factory in northern England.

Investment in the auto industry was the highest since 2014 last year, rising to £3.2bn, largely a result of Britishvolt’s plan to build a Gigafactory in Northern England.

Gold ETFs 107.1moz vs US$107.2moz yesterday

Platinum US$1,065/oz vs US$1,093/oz yesterday

Palladium US$2,307/oz vs US$2,318/oz yesterday

Silver US$25.13/oz vs US$25.35/oz yesterday


Base metals:  

Copper US$ 7,762/t vs US$7,973/t yesterday

Aluminium US$ 1,977/t vs US$2,017/t yesterday

Nickel US$ 17,615/t vs US$18,085/t yesterday

Zinc US$ 2,565/t vs US$2,629/t yesterday – Zinc prices continue to fall on LME stock surge

Three-month zinc prices continued to decline on Wednesday, falling 2.7% and decreasing 4.5% since the start of the week.

LME zinc stocks have seen a 60% surge over the past two days, with deliveries totaling 105,800t (Fastmarkets MB).

Lead US$ 2,017/t vs US$2,057/t yesterday

Tin US$ 22,720/t vs US$22,680/t yesterday



Oil US$55.5/bbl vs US$56.3/bbl yesterday

Natural Gas US$2.633/mmbtu vs US$2.708/mmbtu yesterday



Iron ore 62% Fe spot (cfr Tianjin) US$159.9/t vs US$161.8/t

Chinese steel rebar 25mm US$666.2/t vs US$666.8/t

Thermal coal (1st year forward cif ARA) US$69.3/t vs US$66.5/t

Coking coal swap Australia FOB US$157.0/t vs US$153.0/t



Cobalt LME 3m US$41,250/t vs US$40,390/t – Cobalt prices hit two-year highs driven by Chinese EV demand

Cobalt prices have risen over 28% since the start of the year, driven by the renewed EV push in China and the EU, as well as Chinese stockpiling.

EV sales rose 10.9% YoY in the second half of 2020 after a weak H1, resulting in a surge in demand of battery metals which has resulted in both cobalt and lithium seeing healthy price rises in the first month of 2021.

Rising demand compounded in late 2020 when the Chinese State Reserve Bureau announced another round of strategic cobalt buying, according to Benchmark Mineral Intelligence.

Benchmark forecast a cobalt market deficit of 1,000t in 2021- widening to 27,000t in 2025.

NdPr Rare Earth Oxide (China) US$69,859/t vs US$69,971/t

Lithium carbonate 99% (China) US$10,421/t vs US$10,438/t

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

Ferro-Manganese high carbon 78% Mn US$1,490/t vs US$1,430/t

Tungsten APT European US$240-245/mtu vs US$235-240/mtu

Graphite flake 94% C, -100 mesh, fob China US$530/t vs US$530/t                

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

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


Battery News

Winterwatch delivers first zero emission broadcast

BBC’s Winterwatch series has delivered a 60-minute episode powered entirely by green hydrogen and batteries.  

A hydrogen generator has been deployed at Winterwatch’s outside broadcasting hub at BBC Bristol and is helping to replace the use of a diesel-powered generator.  

At the show’s presenter locations across the country, the production team has installed batteries powered by intelligent hybrid generator systems which use spare energy to charge batteries, significantly minimising the use of diesel fuel and CO2 emissions.  

The BBC said using green hydrogen and energy saving batteries during one live episode of Winterwatch had allowed it to avoid 3.3 tonnes of carbon emissions.  


Shell buys majority stake in floating offshore windfarm

Shell has purchased a majority stake in Simply Blue Energy’s Emerald Project, a floating wind far in the Celtic Sea off the south coast of Ireland.  

The Emerald Project will be built about 20nm offshore, taking advantage of the higher winds found further off the coast by using anchored floating platforms in deep water. Commercial bottom-fixed wind farms are limited to areas with depths of less than 200 feet and floating technology is key to harnessing the full potential of the world’s offshore wind resources.  

It will start with an initial 15-25 turbine, 300-megawatt floating array, with plans to scale up to one GW over an 8-to-10-year period.  


Company News

Adriatic Metals* (LON:ADT1) 122.5p, Mkt cap £241m – Exploitation permit granted for Veovaca

Adriatic has received an exploitation permit for its Veovaca project from the Federal Ministry for Energy, Mining and Industry, initiating the formal exploitation period for the project of 30 years under the terms of the Concession Agreement.

The Concession Agreement covers both the Veovaca open pit and plant areas as well as the Rupice underground mine areas.

The receipt of the permit enables Adriatic to complete the mai0n mining project for the Veovaca open pit mine, flotation plant and tailings management facility at a detailed engineering level for the start of construction in Q3 2021.

*An SP Angel mining analyst has visited Adriatic Metals operations in Bosnia


Anglo American (LON:AAL) 2,359p, Mkt Cap £32.1bn – Q4 continues production recovery

Anglo American reports that its operations are operated at around 95% of normal capacity during the second half of 2020 continuing the recovery seen in Q3.

The company highlights the 6% recovery in copper production at its Los Bronces as an important factor in the group’s overall copper production of 647,000t in 2020 (2019 – 638,000t) partially offsetting lower output from Collahuasi as a result of lower throughput arising from planned maintenance.

Copper production guidance for 2021 remains intact at 640-680,000t.

Anglo American also reports that iron ore production at Minas Rio in Brazil “increased by 5% to a record 6.5 million tonnes for the quarter”. Guidance for 2021 is maintained at 64-67mt.

“Rough diamond sales continued to improve, with midstream demand supported by an encouraging holiday selling season for diamond jewellery”, although the company has reduced its 2021 production guidance to the range 32-34m carats (previously 33-35m carats) to reflect “ongoing operational challenges and lower expected production from the final cut at Venetia”.

Anglo American reports a 27% decline in exploration expenditure to US$32m “driven by decreased drilling activity across most businesses due to Covid-19. Evaluation expenditure was consistent with the prior period at $49 million, with increased spend at Sakatti (Copper/PGMs) in Finland, offset by lower activity in the Metallurgical Coal business”.

Conclusion: Anglo American reports that it is continuing to operate at around 95% capacity maintaining the production recovery delivered in Q3.


Anglo Asian Mining* (LON:AAZ) 156p, Mkt Cap £178m – New presentation focuses on exciting growth opportunities


The Company released an updated presentation highlighting strong cash flow generating operations at the Gedabek complex as well as exciting growth potential.

A significant share of presentation is focused on growth strategy including both medium and longer term opportunities:

Medium term: expand the life of mine at Gedabek by fast tracking new discoveries into production (Avshancli 1 and 3, Ugur Deeps, Gilar, Zafer and Cell 9) as well as commence production from mines in the former occupied territories (high grade Zod operating open pit mine with 2.8moz at 3.4g/t in reserves and 130koz at ~$750/oz TCC) and Nagorno Karabakh (the Kashen copper-molybdenum porphyry deposit with 56mt in resource at estimated grades of ~0.5% Cu and 0.01% Mo grades and the 2mtpa processing plant).

Longer term: ongoing exploration over restored contract areas, Gosha and Ordubad, potential new concessions in Azerbaijan and possible JV with Conroy Gold for exploration and development in Ireland.

Make sure you tune in and listen to team presenting at the One2On2 Investor Forum , hosted by Proactive investors, this evening (18.00 start).


*SP Angel act as Nomad and broker to Anglo Asian Mining


Vast Resources* (LON:VAST) 0.12p, Mkt Cap £25m – Interims highlight the commissioning of the BPPM

Vast released Interims report yesterday highlighting commissioning of the Baita underground polymetallic operation in Romania.

The Company had no revenues during the period with the first sale of the BPPM concentrate reported in Nov/20, shortly after the end of the reporting period.

PAT amounted to -$1.0m (H1/20: -$3.5m) with $1.7m reported in general administrative costs (H1/20: -$2.0m).

Cash flow wise, the Company had a $2.9m operating cash outflow and $2.8m worth of capital expenditures in the period funded through a $5.3m in new equity.

Closing cash balance stood at $0.2m with outstanding debt at $8.6m most of which would be related to the $7.1m Atlas senior convertible loan facility.

Maiden JORC-compliant BPPM mineral resource estimate was released in Oct/20 showing the polymetallic deposit hosting 608kt at 1.11% Cu, 0.45g/t Au, 66.87g/t Ag, 0.02% Mo with traces of lead and zinc (~62% in the Measured and Indicated category).

The resource is estimated to cover first four years of production with ongoing exploration programme likely to extend the life of mine further as the mineralisation remains open at depth.

Exploration target for BPPM was increased from 1.8-3.0mt to 3.2-5.8mt in Nov/20.

The Company consolidated 100% interest in the BPPM in Nov/20 through an equity issue of 2.9bn shares at 0.17p (~£5m) to owners of the non-controlling interest including Andrew Prelea and Roya Tucker.

Separately, the Company expanded the exploitation license area at the Manaila Carlibaba project to include adjacent mineral deposit as the team is re-examining options to potentially restart mining operations in the area.

The Company has also secured a time extension of five years on the Manaila Carlibaba license area in accordance with local regulation.

In Zimbabwe, the team continued discussions to finalise the agreement with ZCDC regarding the right to mine diamonds for the Company at the community diamond concession.

*SP Angel act as joint Broker to Vast Resources


Arkle Resources* (LON:ARK) 1.05p, Mkt Cap £3.4m – Stonepark drilling results

Arkle Resources has reported an announcement by its partner on the Stonepark zinc project, Group Eleven Resources, in County Limerick (Arkle Resources 23.44%) on the recent step-out drilling.

Two holes were drilled and “intersected strong mineralisation beyond the boundary of the existing …[inferred] … resources estimate” of 5.1mt at an average grade of 8.7% zinc and 2.6% lead.

Hole G11-2638-04 “targeted a 135m gap within the Stonepark North portion” of the area containing the published resource estimate.  The hole “intersected a thick package of brecciation and low-grade mineralization yielding 17.95 metres of 1.02% zinc and 0.23% lead (1.25% combined) from 213.05 metres, including two higher-grade zones” comprising:

An intersection of 2.15m averaging 3.39% zinc and 0.92% lead from a depth of 218.10m and

A deeper interval of 1.55m width from a depth of 228.05m which averaged 3.46% zinc and 1.04% lead.

The company explains that the “intercept in G11-2638-04 is very similar to the nearest historic hole TC-2638-038 (located 50metres away) which also intersected a wide zone of low grade mineralisation with two narrower high-grade layers”.

The second of the two recent holes, G11-2638-05, was located on the Stonepark West part of the mineral resources area.  “This hole intersected moderate mineralisation (2.0m of 1.21% zinc and trace lead… from 451.00 metres; and a number of lower grade intercepts elsewhere in the hole”.

The announcement says that the second intercept “confirms the presence of the mineralised system at this locality and suggests the focus of further exploration for higher-grade and wider mineralisation should be further to the east, along trend towards historic hole TC-2638-068 (0.95 metres of 9.01%zinc and 1.69% lead …) located 585 metres to the southeast”.  Group Eleven says that “Further drilling is strongly warranted”.

Conclusion: Recent result from Stonepark suggest that future drilling should be directed further to the east of the Stonepark West part of the current mineral resource where wider and higher grade mineralisation may be located.

*SP Angel are Nomad and broker to Arkle Resources


Eurasia Mining* (LON:EUA) 25.26p, Mkt Cap £713m – Veles International buys 27.4m shares off Alexi Churakov

Eurasia Mining report the sale of 27.4m shares by Alexi Churakov.

The sale was reported by Alexi Churakov yesterday in accordance with Takeover Panel rules

Eurasia Mining made enquiries of Mr Churakov and commented on the share sale today

The shares were bought by Veles International, a subsidiary of investment company, Veles Capital based in Nicosia, Cyprus.

Cyprus has been long used for offshore banking by Russian oligarchs due to the islands code on secrecy.

We note Blackrock have also been slowly increasing their holding in Eurasia Mining from 33.3m shares on 15 December to 34.5m shares reported yesterday representing 1.25% of the company.

Alexi Churakov has stated that he has no intention to sell his remaining shares in the market.

Eurasia Mining is currently subject to certain UK Takeover Panel disclosures and regulations as it is running a formal sale process with UBS appointed UBS as a lead advisor to assist in a review of its strategic options and to run a formal sale process under the UK Takeover Code in order to maximise value to its shareholders.

The company also has an agreement with Citic Merchant bank and has been working with VTB Capital.

Eurasia operates a small palladium ‘PGM’ mine at West Kytlim in Russia and is looking to develop the much larger Monchetundra hard rock palladium ‘PGM’ mine near the town of Monchegorsk on the Kola Peninsula

The company holds licenses over the Monchetundra deposit and the Monchetundra flanks including NKT where some 48,000m of drilling has been done.

Eurasia received a production permit in November 2018 and have a EPCF ‘Engineering Procurement Construction and Finance’ agreement with Sinosteel for the turn key launch of production and providing for full financing of Monchetundra (as per the Company’s announcement of 4 December 2019).

Monchetundra contains two potential ore bodies at West Nittis and Loipishnune just 2km apart.

The license lies to the north and east of West Nittis stands out within the Flanks with extensive drilling from 1996 and 2001.

Further work in 2015-2017 in the NKT area and areas to the east of the Loipishnune deposit resulted in pre-feasibility studies lodged with the State Cadastre of Mines in Russia at a time when PGM prices were very much lower than they are today.

The area is known to contain type examples of the majority of the layered intrusion and contact-hosted PGM deposit types.

*SP Angel act as Nomad and Broker to Eurasia Mining


Greatland Gold (LON:GGP) 28.25p, Mkt Cap £1,043m – Further drilling results from Havieron

Greatland Gold has drawn attention to the announcement issued today by Newcrest Mining, its joint-venture partner on the Havieron gold project in the Paterson region of Western Australia, of further drilling results contained in Newcrest’s Quarterly Exploration Report to the ASX.

The company reiterates that “Drilling since May 2019 has outlined an ovoid shaped zone of variable brecciation, alteration and sulphide mineralisation with dimensions of 650m x 350m trending in a north west orientation” and that work during the final quarter of 2020“ primarily focused on ongoing infill drilling of the South East Crescent and Breccia Zone” in order to “support the potential delivery of an Indicated Mineral Resource”.

The initial, inferred mineral resource estimate at the Havieron project is 52mt at an average grade of 2.0g/t gold (3.4moz) and 0.31% copper.

Greatland Gold confirms that the infill drilling confirms the continuity of higher-grade mineralisation in the SE Crescent and Breccia zone and that “Mineralisation is open at depth below the Inferred Mineral Resource shell” which offers the potential for resource expansion at depth.

Among the new results from the SE Crescent and Breccia Zones highlighted in today’s announcement are”

An intersection of 111.7m averaging 3.6g/t gold and 0.46% copper from a depth of 804.7m in hole HAD025W1 including a 40.2m long section averaging 8.4g/t gold and 0.53% copper from 816.8m depth; and

An intersection of 37.7m averaging 9.8g/t gold and 0.27% copper from a depth of 814.3m in hole HAD109; and

An intersection of 140.3m averaging 2.5g/t gold and 0.48% copper from a depth of 554m in hole HAD110 including a 37.7m long section averaging 8.2g/t gold and 1.40% copper from 580.4m depth; and

An intersection of 134m averaging 3.1g/t gold and 0.45% copper from a depth of 558m in hole HAD110W1 including a 22.9m long section averaging 12g/t gold and 0.56% copper from 659.1m depth; and

An intersection of 121.7m averaging 2.0g/t gold and 0.43% copper from a depth of 708m in hole HAD113; and

An intersection of 108.6m averaging 2.5g/t gold and 0.64% copper from a depth of 742.4m in hole HAD113W1

The company confirms that there were nine drilling rigs in operation at Havieron during Q4 2020 and that 18 further holes have been completed since the previous announcement on 10th December.

Targets remain open at depths below 1000m as well as to the east, northwest and southeast and the company is planning “Approximately 65,000m of growth-related drilling” over the next 2 quarters included further work on the Northern Breccia Zone to “support the potential expansion of the existing Inferred Mineral Resource” as well as drilling to test mineralisation controls of the Eastern Breccia Zone.

CEO, Gervaise Heddle said that “The latest drill results increase our confidence in the continuity of higher-grade mineralisation and support the potential delivery of an Indicated Mineral Resource. Meanwhile, Newcrest’s plans for 65,000 metres of growth drilling will target several zones which could represent potential extensions to mineralisation outside of the Inferred Mineral Resource estimate”.

The company has also announced plans “to launch our Juri Joint Venture exploration programme for 2021, which will focus on drill testing priority targets, including the Parlay target within the Black Hills Project and the Goliath, Outamind and Los Diablos targets within the Paterson Range East Project.”

Conclusion: Further drilling continues to expand the footprint of the Havieron mineralisation with an additional 65,000m planned over the next six months to investigate lateral extensions and at depth.


SolGold* (LON:SOLG) 28p, Mkt Cap £618m – Confirms 2020 exploration expenditure of over US$50m

In response to what the company describes as “potentially misleading statements” relating to Article 38 of Ecuador’s Mining Law, Solgold has confirmed that it spent in excess of US$50m on exploration over its 76 concessions, including Alpala, in Ecuador during 2020.

Solgold explains that Ecuadorean regulations require an annual report to be submitted to the Ministry detailing audited exploration expenditure incurred during the year and outlining the planned expenditure for the current year.

Solgold explains that In the event that expenditure falls short of that detailed in the plan, the regulations say that “the expiration of the mining concession can be avoided by paying a financial compensation equivalent to the amount of investment not made” provided that the actual expenditure incurred is 80% or more of that originally planned.

Solgold confirms, however, that it its activities have “met all annual investment plan commitments to date. For instance, SolGold’s annual investment commitment for 2020 was US$13,603,450 for all 76 concessions (including Cascabel). Upon the conclusion of the year, this amount was significantly exceeded for an aggregate amount in excess of $US50,000,000”.

Solgold further confirms that “The same policy of meeting or exceeding annual investment commitments has been applied consistently to all tenements every year … [and that] … Full compliance by SolGold under Article 38 is factually beyond question”.

The company says that, as the largest concession holder in Ecuador, it is continuing its “regional exploration programme across the 13 identified priority projects via four 100%-owned subsidiaries. The Company is fully funded for its regional exploration programme until mid-to-late 2021”.

We speculate that the introduction of Covid19 containment measures must have posed unexpected challenges to completion of exploration work planned prior to the pandemic. We are, however, encouraged that Solgold has been continuing its exploration in Ecuador at such a significant level and that it has achieved important successes as, for example, at its wholly owned Porvenir project where initial drilling included an intersection of 644m at an average grade of 0.47% copper and 0.24g/t gold in its first hole as well as advancing Alpala.

Conclusion: Solgold has confirmed that it is in full compliance with the exploration expenditure commitments for its licenses in Ecuador and that, at over US$50m its 2020 expenditure significantly exceeds the US$13.6m required by the authorities.

*SP Angel act as Financial Advisor to SolGold.



John Meyer – – 0203 470 0490

Simon Beardsmore – – 0203 470 0484

Sergey Raevskiy – – 0203 470 0474

Joe Rowbottom – – 0203 470 0486



Richard Parlons – – 0203 470 0472

Abigail Wayne – – 0203 470 0534

Rob Rees – – 0203 470 0535

Grant Barker – – 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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Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.

SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA is registered in England and Wales with company number OC317049.  The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.

MiFID II – Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.

A full analysis is available on our website here If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (

SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return of less than 15%

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