SP Angel . Morning View . Monday 18.05.26

MiFID II exempt information – see disclaimer below

Anglo American (AAL LN)  – Agreement to sell Australian coal business

Ariana Resources (AAU LN)  – Sale of Turkish interest to support Dokwe mine development in Zimbabwe

Challenger Gold (CEL AU) – Hualilan PFS and A$85m equity raise supported by Peter Marrone

Rio2* (RIO CN)  – Focus on hitting commercial production at Fenix as ramp up continues

New Frontier Minerals* (NFM LN)  – field visit to the Big One Deposit with Austral Resources

Rockfire Resources (ROCK LN)  – Drilling results from Malaoi, Greece

Savannah Resources* (SAV LN)  – BUY, 18.5p – Environmental permitting application timeline update

Gold ($4,547/oz) holds ground following US Treasury-led sell-off as miners hit hard

• Gold prices have stabilised lower, around the $4,550/oz mark, following a sell-off led by higher US Treasury yields.
• The 10 year yield has risen to 4.6% as investors dump government bonds over concerns of a rebound in inflation.
• Sustained higher energy costs from the Iran Conflict are feeding into global inflation data, reducing the appeal of holding government debt.
• Whilst strong central bank demand has shielded gold from its historical vulnerability to higher yields, the dollar rebounded last week, fuelling a wave of profit taking in gold.
• Gold is trading in increasing lockstep with peace talks in Iran, rallying on signs of a resolution to the conflict and weakening as tensions escalate.
• Negotiations continued over the weekend, with both Iran and the US consistent with their demands and concessions.
• Brent prices are at $110/bbl, suggesting no imminent reopening of the Straits of Hormuz.
• The Van Eck Gold Miners ETF sold off 7% on Friday as traders rotated out of gold equities.

Copper ($13,462/t) slides as bullish hedge fund positioning hit on Iran volatility

• Copper has fallen 3% over the past week, having made a run for record highs on Wednesday.
• The metal was hit hard following a sharp jump in global bond yields, lifting the dollar and causing a sell-off in the wider base metals spectrum.
• Copper has fallen to recent levels of $13,500/t.
• Bloomberg reported last week a major jump in bullish hedge fund positioning on COMEX, with net longs rising to the highest level in 20 weeks.
• Traders boosted copper exposure ahead of further tariff updates from the White House in June, pushing the US premium over LME back to elevated levels.
• The sharp move lower likely reflects some positioning unwind in the copper sector, with COMEX prices having hit record highs of $6.7/lb last week.
• However, we have noted strong Chinese downstream appetite once copper slides below $13,000/t. suggesting sustained appetite from fabricators.
• Inventory levels remain high globally, although much of this copper is being held on US exchanges, with elevated premiums reducing the incentive to relocate the metal into Asian warehouses.

Countries introducing emergency measures amid energy crisis keeps rising amid logistics disruptions in the Strait of Hormuz continue. (FT)

• The IEA estimates that the number has now reached 76 counties, up from 55 at the end of March.
• Further increases in energy prices, broader fuel rationing, industrial shutdowns and a potential of a global recession are expected unless the Strait not reopened indue course.
• The IEA suggests the market has been 6mmbbl per day in deficit since March with the shortfall met with destocking including the release of strategic reserves.
• More than 2mmbbl is being released from strategic reserves, although, many of those releases are planned to end by July.
• Global reserves dropped by ~380mmbbl since the war began excluding stocks that are locked inside the Gulf.

The Strait remans closed with President Trump threatened a resumption of military attack on Iran unless Tehran accepts US terms.

• "They better get moving, FAST, or there won't be anything left of them," he wrote on his Truth Social platform. "TIME IS OF THE ESSENCE!"
• Brent is trading around the $110 mark (+5% on the previous week).

IG TV Gold report: https://youtu.be/PliTL-z0n54?si=HvvFdldYY7oHK7s7

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Currencies

US$1.1633/eur vs 1.1642/eur previous. Yen 158.97/$ vs 158.37/$. SAr 16.715/$ vs 16.612/$. $1.334/gbp vs $1.337/gbp. 0.715/aud vs 0.717/aud

CNY 6.806/$ vs 6.803/$. Dollar Index 99.21 vs 99.07 previous

Economics

Cuba: US eyes attack-drone threat from Cuba

• Cuba is reported to be in discussions to use drones to attack the US base at Guantanamo Bay and US military vessels and possibly Key West, in Florida (Axios).
• The government of Cuba recently acquired >300 military drones which the US sees as a threat on its doorstep due to developments in drone warfare.
• Cuba is just 90 miles from Florida and is reported to have been acquiring attack drones from Russia and Iran for the past few years storing the hardware across the island.

Fund flows: Middle Eastern fund to move into more liquid investments

• Expect Middle Eastern sovereign wealth and other private funds from the Middle East to reorientate towards more liquid investments.
• Evolution of the conflict in the Middle East into a longer-running battle between Iran and its near-neighbours is likely to cause local sovereign wealth and other funds to reorientate their portfolios.
• Saudi, the UAE, Kuwait, Oman and Qatar are all likely to move to acquire more air defences and retaliatory defense systems.
• We suspect this will cause these funds to move to liquidate less liquid investments such as property in favour of more liquid equities ahead of buying defense equipment.

Iran - US conditions for a possible agreement with Iran (Iranian media and Fars News Agency)

1. The United States will not pay compensation for damages to Iran  
2. Iran must transfer enriched uranium to the United States
3. Only one Iranian nuclear facility will remain operational
4. Less than 25% of Iran’s frozen assets will be released
5. A ceasefire on all fronts would be conditioned on continued negotiations

UAE – Fire at generator plant at the Barakah Nuclear Power Plant in Abu Dhabi .

• Explosions were heard in the area following a drone strike. There has been no impact on radiological safety levels.
• Drone strike likely from an area outside Iran
• US is encouraging the UAE take more of a role and seize one of Iran’s Lavan Island which was previously bombed in secret Emirati strikes in early April (Telegraph)

UK – Mortgage rates are surging on the back of climbing bond yields driven by higher inflation outlook as well as political uncertainty.

• Average quoted rate on a 2y fixed mortgage (75% LTV) climbed to 5.1% in April and from ~4.0% in February.

Andy Burnham is intending to quit his job as the mayor of Greater Manchester to become an MP again.

• He is expected to be officially accepted as Labour’s candidate for the Makerfield in the Greater Manchester later today.
• Winning the by-election and securing the MP seat will allow Burnham to challenge Sir Keir Starmer for the leadership.

DRC – An Ebola outbreak in the DRC and Uganda has been declared a public health emergency of international concern following 80 registered deaths.

• The WHO said the outbreak has not met the criteria of a pandemic emergency yet.
• Although, there was a high risk of spreading further to nations with shared borders.
• Most cases are reported in the Ituri province in the east.
• It is the 17th outbreak in the country since the virus was first identified in 1976.
• The outbreak is reported to be unlike the previous ones caused by the Bundibugyo virus.
• All but one of the nation’s previous outbreaks were caused by the Zaire strain.

Russia - Russian cargo ship reportedly carrying two nuclear reactors, possibly destined for North Korea, sank under mysterious circumstances off the coast of Spain (CNN)

• The incident is raising major questions about illicit nuclear cooperation and maritime security.

Precious metals:

Gold US$4,541/oz vs US$4,577/oz previous

   Gold ETFs 98.8moz vs 98.9moz previous

Platinum US$1,975/oz vs US$2,009/oz previous

Palladium US$1,400/oz vs US$1,430/oz previous

Silver US$75.6/oz vs US$79.1/oz previous

   Silver ETFs 796.6moz vs 795.4moz previous

Rhodium US$9,900/oz vs US$9,975/oz previous

Base metals:   

Copper US$13,494/t vs US$13,653/t previous

Aluminium US$3,567/t vs US$3,598/t previous

Nickel US$18,610/t vs US$18,645/t previous

Zinc US$3,530/t vs US$3,521/t previous

Lead US$1,981/t vs US$1,997/t previous

Tin US$52,410/t vs US$52,500/t previous

Energy:

Oil US$110.7/bbl vs US$107.2/bbl previous

• Crude oil prices moved higher in early trading following a drone attack on the UAE over the weekend, which caused a fire at a nuclear facility and highlighted the fragility of the ceasefire.
• The US Baker Hughes rig count rose 3 to 551 units last week (-25 or -4% y/y), as oil rigs rose 5 to 415 units (-50 y/y) and gas rigs fell 1 to 128 units (+20 y/y), with the Permian adding 4 to 246 rigs (-36 y/y) as the Haynesville lost 2 to 56 rigs.
• Caturus has taken Final Investment Decision for its $13bn Commonwealth LNG project, which includes closing of $9.75bn in project financing for construction of the 9.5mtpa LNG export facility in Louisiana.  The long-term offtake agreements are expected to support over $3bn of annual export revenues when operations commence in 2030.

Natural Gas €51.8/MWh vs €48.7/MWh previous

Uranium Futures $86.2/lb vs $86.0/lb previous

Bulk:

Iron Ore 62% Fe Spot (Singapore) US$108.2/t vs US$109.1/t

Chinese steel rebar 25mm US$488.5/t vs US$487.2/t

HCC FOB Australia US$239.0/t vs US$239.0/t

Thermal coal swap Australia FOB US$136.5/t vs US$133.5/t

Other:  

Cobalt LME 3m US$56,290/t vs US$56,290/t

NdPr Rare Earth Oxide (China) US$108,728/t vs US$112,449/t

Lithium carbonate 99% (China) US$27,402/t vs US$27,561/t

China Spodumene Li2O 6%min CIF US$2,790/t vs US$2,810/t

Ferro-Manganese European Mn78% min US$1,035/t vs US$1,035/t

China Tungsten APT 88.5% FOB US$1,833/mtu vs US$1,903/mtu

China Tantalum Concentrate 30% CIF US$203/lb vs US$198/mtu

China Graphite Flake -194 FOB US$420/t vs US$420/t

Europe Vanadium Pentoxide 98% US$6.0/lb vs US$6.0/lb

Europe Ferro-Vanadium 80% US$28.4/kg vs US$28.4/kg

China Ilmenite Concentrate TiO2 US$246/t vs US$246/t

US Titanium Dioxide TiO2 >98% US$2,809/t vs US$2,809/t

China Rutile Concentrate 95% TiO2 US$1,153/t vs US$1,154/t

Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t

Brazil Potash CFR Granular Spot US$405.0/t vs US$405.0/t

Germanium China 99.99% US$3,725.0/kg vs US$3,725.0/kg

China Gallium 99.99% US$400.0/kg vs US$400.0/kg

Europe Molybdenum Oxide 57% US$30.0/lb vs US$30.5/lb

EV & Battery new:

BYD eyeing idle European car plants as it seeks global expansion

• Chinese EV giant BYD is in talks with Jeep maker Stellantis and other carmakers about taking over their EU plants as part of its international expansion drive, Bloomberg News reported last week.
• The news has come after Stellantis announced a €22m write-down on its EV operations, saying it overestimated demand for EVs.
• Stella Li, BYD's vice president in charge of international operations, said that the company is "looking for any available plant in Europe because [BYD] do want to utilise this kind of spare capacity,"
• BYD became the world's biggest EV seller last year, but its earnings have slumped due to recent weak domestic demand, pushing it to seek expansion into overseas markets.

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Company news:

Anglo American (AAL LN) 3,755p, Mkt Cap £45bn – Agreement to sell Australian coal business

• Anglo American reports agreement for the ~US$3.9bn sale of its Australian steel-making coal business to Dhilmar Limited.
• The US$3.875bn price includes an initial US$2.3bn cash payment plus “a price-linked earnout of up to US$1.575 billion”.
• Confirming that the proceeds will be used “to reduce net debt”, today’s announcement explains that the sale includes “an 88.0% interest in the Moranbah North and Grosvenor joint ventures; a 70% interest in the Capcoal joint venture; an 86.36% interest in the Roper Creek joint venture; a 51.0% interest in the Dawson joint venture, Dawson South joint venture, Dawson South Exploration joint venture and the Theodore South joint venture; and a 50.0% interest in the Moranbah South joint venture”.
• Anglo American is continuing arbitration “with Peabody in relation to its November 2024 agreement to acquire the Steelmaking Coal Portfolio. Anglo American remains confident that the incident at Moranbah North relied upon by Peabody in support of its purported termination of its agreement did not constitute a Material Adverse Change”.
• The purchaser, Dhilmar, is described as bringing “considerable experience of operating major mining assets, including in steelmaking coal, in Southeast Asia and Canada”.
• CEO, Duncan Wanblad, said that the disposal agreement for the business is “another major step in the simplification of our portfolio ahead of completing our merger with Teck”.
• In a separate announcement today, the company explains that it is seeking clarification from the Chilean authorities in relation to “the 15 May 2026 ruling in Chile by the Second Environmental Tribunal (the 'Tribunal') which purports to set aside the Environmental Authorization (RCA) issued by the Environmental Assessment Service (SEA) to the independently managed Collahuasi copper mine in 2021 for the "Infrastructure Development and Production Capacity Improvement" project”.
• The project “includes the development of a water desalination plant for Collahuasi, which is now almost complete” and the company explains its understanding that the ruling “is limited to two specific aspects relating to analysis on the effects on a local community and on the marine environment”.
• Anglo American confirms that it does not “currently expect any immediate impact on production” at Collahuasi.

Conclusion: Agreement to sell its Australian steel-making coal business is the latest step in simplifying the business ahead of the merger with Teck which the company has previously indicated is expected to conclude between September 2026 and March 2027.

Ariana Resources (AAU LN) 1.95p, Mkt Cap £49m – Sale of Turkish interest to support Dokwe mine development in Zimbabwe

• Ariana Resources is reducing its 23.5% interest in Zenit Madencilik,the operator of the Turkish mines at Kiziltepe and Tavsan and the Salinbas project, to 9.9%.
• Ariana’s local partner, Özaltin is increasing its interest.
• The US$19.5m, gross, sale of a 13.6% interest equates “to an estimated c.US$17.2 million after local taxes”.
• The “sale proceeds provide significant non-dilutionary funding as Ariana progresses its Feasibility Study at the 100% owned 1.1Moz  Dokwe Gold Project in Zimbabwe”.
• Managing Director, Dr. Kerim Sener, welcomed the agreement and said that it “reflects our disciplined capital allocation strategy and active portfolio optimisation, with a clear focus on accelerating the development of the flagship Dokwe Gold Project while minimising shareholder dilution”.
• He said that “Zenit is a mature, cash-generative minority investment in producing operations. This transaction crystallises significant embedded value from that holding while retaining meaningful upside exposure”
• He described Dokwe as “a transformational asset for Ariana, which represents a large-scale, long-life asset, underpinned by strong economics”.

Conclusion: Crystallising value from Turkish assets to support development in Zimbabwe

Challenger Gold (CEL AU) A$0.13, Mkt Cap A$306m – Hualilan PFS and A$85m equity raise supported by Peter Marrone

• Challenger Gold report PFS results for its Hualilan Gold Project in Argentina.
• The study envisages a 14 year LOM operation from an open pit operation.
• The flowsheet envisages two processing options, with a 1.5mtpa flotation plant and an 8mtpa heap leach circuit.
• Challenger reports reserves of 1.5moz Au at 0.75g/t, 7.7moz Ag at 3.82g/t and 170kt Zn at 0.27% Zn.
• The flotation plant is expected to be funded from first two years of heap leach cash flows, bringing an average annual production target of 135kozpa AuEq for the next 10 years.
• LOM AISC estimated at $1,618/oz from contractor mining, with a pathway to reduce to $1,422/oz via owner operated fleets.
• The study outlines a post-tax NPV5 of $1.1bn at $3,500/oz, rising to $2bn NPV5 at $4,600/oz.
• CAPEX guided at $232m, excluding a $35m contingency.
• A DFS will explore further optimisation options, including a Power Purchase Agreement to remove c.$48m of CAPEX and potential for improved heap leach recoveries to 82% vs assumed 70%.
• Challenger has raised A$85m at A$0.12/share, with Allied Gold Chairman and CEO Peter Marrone joining the Company at Non-Executive Chairman.
• Marrone will subscribe for A$8m in the placing.
• The placing will support further resource growth drilling, completion of the Hualilan DFS, early CAPEX items and working capital costs.
• Ex-Yamana Gold COO Yohann Bouchard is also joining Challenger, as COO.

Rio2* (RIO CN) C$3.03, Mkt Cap C$1.66bn – Focus on hitting commercial production at Fenix as ramp up continues

• Chilean gold developer and copper producer Rio2 report 1Q26 results.
• The Company reported consolidated revenue of $66m, with adj. EBITDA of $30.8m and net income of $22.9m.
• Rio2 sold 6.2mlb Cu, 6.7koz Au and 47koz Ag.
• At Fenix, the gold heap leach project in Chile currently in ramp up, 808kt of ore was mined, 657kt stacked at grades of 0.45g/t Au.
• Fenix gold production over the quarter stood at 4.6koz for AISC of $3,131/oz.
• Management notes Fenix ramp up was impacted over the quarter by a delayed blasting permit, pushing back the mine plan by six weeks.
• Mining efficiency was also constrained at the Fenix South pit, which has now been resolved.
• Additionally, management notes truck driver availability has been hindered by the high altitude of the project, with availability expected to be resolved in 2Q26.
• Rio2 is also replacing the mine truck fleet from the 35t capacity trucks to 42t capacity trucks.
• Water trucking has been consistent with ample water inventory on site.
• Rio2 expects to hit commercial production at Fenix in 4Q26 and reiterates production guidance of 60-65koz for 2026.
• The Company expects to release the Fenix Gold Expansion study, which is expected to boost production to 80ktpd for gold production over 300kozpa in 3Q26 as they work on desalinated water alternatives.
• Condestable, the Company’s copper mine in Peru, reported 2.9kt copper production, with 474kt processed at 0.7% Cu, 0.24g/t Au and 4.1g/t Ag.
• Gold production stood at 3.2koz and silver at 48.7koz.
• AISC from Condestable reported at $2.84/lb Cu, with average realised prices of $5.69/lb.
• Rio2 expects to deliver an updated MRE/reserve estimate for Condestable this quarter, and has begun a 45,000m resource replacement drilling programme.
• The Company is also aiming to boost production to 10ktpd from Condestable from the current 8.4ktpd, supported by ore sorting.
• Rio2 guides for 21.5-23.5kt of CuEq production in 2026 from Condestable.
• Debt reported at $113m and cash increased to $93m with a $20m debt reduction payment reported over the quarter

Conclusion: Rio2 management are addressing ramp up issues at the Fenix project and expect gold production to increase through to year-end. Copper production at Condestable is performing in line with expectations, with focus on longer-term expansion plans and licence-wide exploration.

*SP Angel analyst(s) hold shares in Rio2

New Frontier Minerals* (NFM LN) 0.35p, Mkt Cap £5.6m – field visit to the Big One Deposit with Austral Resources

• New Frontier Minerals report on their recent joint field visit to the Big One Deposit with Austral Resources
• NWQ Copper Project, Queensland.
• Big One: JORC 2012 Inferred Mineral Resource Estimate of 2.1mt @  1.1% Cu
• Big One North anomaly and the historic Mt Storm prospect
• Historic records from the Mt Storm prospect shows ~1,100t @ 6% copper within the NWQ Copper project area
• The joint Austral / NFM team are assessing the historical copper stockpile and Big One deposit to feed Austral’s Mt Kelly mill under a proposed toll treatment arrangement.
• The joint team examined pit walls, mineralised exposures and historical mine dumps remaining from prior small-scale operations.
• Preliminary metallurgical test work shows recoveries of 83%-99% for the copper and ~99% compatibility with the Mt Kelly flowsheet under laboratory conditions.
  • “Big One and Big One North represent 2 of 14 prospects evaluated as Exploration Targets (ranging from 12-58mt @ 0.3-1.5% Cu …. across the wider NWQ Copper Project”
• Strategic alliance with Austral Resources
• A formalised MoU between NFM and Austral sets the foundation for a strategic alliance for toll treatment of NFM ores at Austral's Mt Kelly copper process plant.
• Austral is developing a regional multi-hub process plant platform to take ore from nearby mines including their recently acquired Rocklands mine and concentrate plant.
• Austral is also looking to redevelop the nearby Rocklands sulphide mine to significantly expand up to a 3.0mtpa of throughput by mid-2027.
• Austral produced some 12,000t of copper from Mt Kelly last year with the quarterly production rate rising to 4,148t of contained copper in Q4 2025 and is reported to have 30,000tpa of SX-EW plant capacity at Mt Kelly.
• Austal are also looking to add Hydro-Jex injection technology to extract a further ~45,000t of unrecovered, residual copper trapped in historical legacy heap leach pads.

*SP Angel acts as broker to New Frontier Minerals

Rockfire Resources (ROCK LN) 0.13p, Mkt Cap £11m – Drilling results from Malaoi, Greece

• Rockfire Resources reports assay results from drillhole, HMO-015, at its Malaoi zinc project in Greece.
• The drilling forms part of its programme to upgrade the current ‘Inferred’ resource of “15.0 million tonnes @ 7.26% Zn, 1.75% Pb and 39.50g/t Ag”.
• Today’s announcement of results from HMO-015 highlights:
  • A 0.82m interval at an average grade of 8.7% zinc, 28.5g/t silver and 27.4g/t germanium from 350m depth; and
  • 11.9m at an average grade of 8.8% zinc, 49.0g/t silver and 25.2g/t germanium from 354.90m depth; and
  • 3.02m at an average grade of 7.5% zinc, 40.9g/t silver, 19.0g/t germanium and 1.3% lead from 386.28m depth.
• Hole HMO-017 is currently underway and “Results of core samples from hole HMO-016 are awaited from the laboratory”.
• Chief Executive, David Price, explained that “Hole HMO-015 is drilled within the main zone of mineralisation at Molaoi, which extends for more than 1,300m north-south … [and noted that] … every hole in the main lode has intersected zinc, silver, germanium and lead … [and that the mineralisation remains] … robust and predictable”.
• Mr. Price also acknowledged the support of the local host community and the Athens Government.

Conclusion: the latest drilling from Maloai continues to intersect mineralisation in the 1.3km long main zone. Drilling continues and further assay results are awaited.

Savannah Resources* (SAV LN) 7.0p, Mkt Cap £180m – Environmental permitting application timeline update

BUY – 18.5p

• The Company released an update on technical work programmes at the Barroso Lithium Project, Portugal.
• The team will bring forward planned detailed engineering work for the water infrastructure following discussions with a local governmental body (LNEC) advising the environmental regulator (APA).
• Previously, the work was scheduled to be completed before the construction.
• The decision should enhance its environmental permitting (RECAPE) application.
• The Company appointed an experienced Portuguese Engineering contractor, COBA, with works to begin later this month.
• RECAPE submission is now expected in 4Q26 (from previously expected early 3Q26) to accommodate additional water related infrastructure design work.
• Given the 50 working day review period for the application, the decision is expected in or before late February 2027.
• The team reiterated DFS completion target (July 2026) and maiden production target 2028.
• Separately, the team reports that preparatory works for the planned geotechnical drilling following the grant of the temporary land access are ongoing.
• The tendering process for the FEED study contract is well advanced and expected to be completed in the coming weeks.
• First capital equipment purchase as part of the Project’s overall development spend completed (a power transformer for the Barroso electrical infrastructure).

Conclusion: The team is expecting to complete the RECAPE submission in 4Q26 to incorporate addiitonal detailed engineering on water infrastructure strengthening its application with the decision now expected in or before February 2027. DFS completion and maiden production targets reiterated for July 2026 and 2028, respectively.

*SP Angel acts as Nomad and Broker to Savannah Resources

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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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