Weak H1 results, but takeaways that the West shouldn’t ignore

While the H1 results were weak (like most peers), there were some critical takeaways. Other than the firm managing to maintain its healthy margin profile, growing western animosity vs. China, Nornickel restraining 2023 capex and production guidance being soft (vs. prior years) – both of which could becoming lasting realities, and Asia emerging as a big customer are (clearly) indicative of growing China-Russia relations. This could be start of Nornickel’s much-awaited recovery momentum and perhap

Weak 2022 results; attractiveness intact, despite (unsettled) risks

While Nornickel did well to avert a major operational crisis although, post the outbreak of war, the 2022 results did weaken more than expected due to various sales volumes and cost-related challenges (in the H2). Moreover, with sizeable capex, there was material leverage build-up. However, with promising long-term virtues for most focus metals, operations that are are expected to remain resilient and a unique metals proposition, Nornickel remains a strong miner. The geo-political risks-induced

Weak H1, but not a big disaster

Nornickel’s H1 results were weak, but ahead of the street expectations. Pricing gains and a volume recovery (after the H1 21 disruption) were more than offset by logistical challenges and spiralling costs. While geo-political uncertainties are not expected to diffuse soon, the firm’s sector-dominance – which also helped avert a complete collapse in operations, further remedial actions, unchanged long-term attractiveness and possible gains via a potential deal with Rusal support the investment ca

Decent results; well-placed to capitalise on various market opportunities

On the back of the 2021 pricing euphoria, Nornickel did well to overcome the impact of production disruptions and higher costs (particularly taxes and social expenses). While prices could rationalise in the coming months/quarters and the firm is committed to its mega-capex plan, Nornickel remains well-positioned to maintain its healthy operating performance metrics – largely supported by dominance in some key metals and ownership of (cost) competent assets. Overall, our stock recommendation is r

Impressive H1, though somewhat scarred by operational limitations

On the back of pricing euphoria, and like most peers, Nornickel reported impressive H1 results. Although the performance was partly restrained by temporary operational disruptions. By virtue of its focus commodities exposure, the group remains an attractive bet to capitalise the global green transition-driven opportunities – which should also support attractive dividends. However, a bigger near-term performance metric is likely to be the firm’s ability to fix its various ESG issues.

SP Angel Morning View:

Atalaya Mining (ATYM LN) – Improved recovery and throughput at Proyecto Riotinto delivers increased Q1 copper production B2Gold Corp (BTO CN) - commissions world's largest off-grid solar plant KEFI Gold and Copper (KEFI LN) – Tulu Kapi project funding targeted for H2/21 and Hawiah Phase 4 drilling launched ahead of the MRE update Nornickel (GMKN) – Nornickel to boost output of nickel products in Finland for EV battery market Orosur Mining* (OMI LN) – Q3 results highlight strong progress at A

SP Angel Morning View: EV and battery metals prices catching up fast with listed base metals

Anglo American (AAL LN) – Iron ore performance underpins 2020 EBITDA Horizonte Minerals (HZM LN) – Araguaia granted power-line licence Norilsk Nickel (MNOD LI) – Water inflow triggers partial suspension of operations in 2 Siberian mines Impala Platinum (IMP JSE) – Gross profit rises 263% in HY ended December 31st

Environmental disaster scarred an otherwise solid 2020

Thanks to the markets’ dash for greener commodities plus mega-stimulus supports, Nornickel had a good 2020. While the Arctic environmental disaster-induced provision took a toll on ‘reported’ profitability measures, cash flows remained healthy. Hence, despite record 2020 dividend outflows and increasing capex, deleveraging continued. While this performance renders an apt cushion for the pursual of growth ambitions and limits the prospect of any major and/or sustained divided rationalisation, fur

An intriguing Russian ‘green’ metals play

Nornickel’s meteoric rise as a mining giant has been a function of (through the business cycle) impressive operating performance – also translating into enviable dividends. By virtue of its commodity exposure, plus a slew of newer stringent emission regulations and the COVID-19 further catalysing dash for green metals, the group is well-positioned to capitalise on market euphoria. Fortunately, ambitious growth plans are underway to capitalise growing market potential and also work towards improv

SP Angel – Morning View

BlueRock Diamonds* (BRD LN) – plant improvements finished ahead of time | Medusa Mining (MML AU) – AGM statement shows infrastructure work at mine on track | Norilsk Nickel (NILSY US) - Norilsk joins United nations Global Compact | Shanta Gold (SHG LN) – Site visit presentation

NextSource Materials - Initiation

NextSource is uniquely positioned to build a leading vertically integrated position, ex China, in the supply of Lithium-ion battery anode material which is essential for the Energy Transition. The company is commissioning phase 1 of its world-class Molo graphite mine in Madagascar and is in the final permitting process for its first Battery Anode Facility (BAF) to be located in Mauritius. The company is backed by Vision Blue, established by Sir Mick Davis, former CEO of Xstrata. On our calculat

Falcon Oil & Gas - Funding a Multi TCF Resource

Falcon has raised gross proceeds of US$8.9m via a placing and subscription at a price of 6p/share and the granting of overriding royalty interests. The net proceeds, together with Falcon’s existing cash resources (cUS$4.3m) will be used to fund Falcon’s net share of 2024 capex (cUS$9m) associated with the 40MMscf/d Shenandoah South Pilot Project, including the drilling, stimulation, and flow testing of two 10,000ft horizontal wells. The funds will also enable Falcon to fund its share of the cost

Initiation of Coverage - Critical raw materials for Europe’s green transition

Beowulf is advancing a portfolio of projects in Europe focussed on metals and minerals that are critical to enabling the continent’s transition to a greener economy. Awareness of Europe’s over-reliance on external supply sources for such vital raw materials is driving growing political support for ‘home-grown’ projects. Beowulf is strategically positioned to leverage this fast-evolving trend – its Kallak project in Sweden holds potential to deliver high-quality iron ore to lower the carbon-inten

Morning Note – 22 April 2024

Sintana Energy Inc. (TSX-V: SEI): Constrained test rate of 14 mboe/d at Mopane-1X. 10+ bn boe in place confirmed.

• Multiple tests over multiple zones in multiple horizons were run at the Mopane-1X exploration well. The flows achieved during the well test reached the maximum allowed limits of 14 mboe/d. The flow rate was constrained by the size of the available surface facilities. • The AVO-1 horizon encountered at Mopane-1X and Mopane-2X are in the same pressure regime, suggesting that the entire area (8 km diameter) between the two wells is connected. Overall, in the Mopane complex alone, and before dril

Touchstone Exploration+ (TXP, House Stock at 44p) - Closing of expanded bank facilities

LIBERUM: Ferrexpo: Production triples

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

Jubilee Metals - Operational Update Q3 FY2024

Jubilee today reports its Q3 and third quarter operational results from its expanding operations in Zambia (copper) and South Africa (chrome and PGM). South Africa is on a growth trajectory with record chrome production of 409kt in the quarter (Q2 FY2024 381kt) and a monthly record in March of 145kt and production YTD of 1.13Mt (0.94Mt). Jubilee is well underway to its annual target capacity of 2,1Mt/yr especially with the new 300kt/yr chrome plant at Thutse expected to be operational in August

Alien Metals - Hancock Project, Mining Lease Granted

Alien today reports intraday that the Western Australian Government has granted a mining licence for the Hancock iron ore project for a 21-year term. The granting of the mining licence is the latest milestone delivered by Alien as it advances the project towards development and production.

SP Angel Morning View: Gold prices slide following profit taking as traders look to US data

Transition to Mining Operator

Adriatic Metals has announced their transition from mining contractor to mining operator at Rupice. The transition is expected to continue to benefit the development and productivity rates being achieved at Rupice mine, as well as result in cost efficiencies and improved HSE standards. The company has also announced a short-term loan facility with Orion of $25m, that is drawable at the option of the company in Q3/4 this year.

I3 Energy (I3E LN) - Canada royalty assets sale

I3 has announced the sale of the majority of its royalty interests in Canada, for US$24.8m cash. This allows the company to fully repay amounts drawn on its debt facility and create a working capital surplus, giving I3 significant additional funding flexibility going forward

Jersey Oil & Gas (JOG LN) - Share price fall creates opportunity

Since November, the JOG share price has moderated from a high of 250p to current levels of 149.5p. This is despite JOG having now made significant progress towards FID on its c.70mmboe Buchan project, with FID upcoming later this year. In our view this share price move is unjustified, with current levels further enhancing the value on offer, and making an attractive opportunity for investors.

Trinity Exploration and Production - Reserves Reduction but Solid Core Business

Trinity has announced a c28% reduction to its 2P reserves following a YE23 review. Despite the decrease in the Company’s 2P reserves, Trinity’s core business remains robust, with a reserves/production ratio of >12.5 years at YE23. Whilst there is significant potential for growth within the current portfolio, this will be difficult to unlock from the current balance sheet and we believe further financing will be required. We update our target price to 76p (from 202p), a c85% premium to the curren