SP Angel Morning View: Copper continues to slide as short-squeeze unravels and inventories climb

Kenmare Resources: Quarterly production impacted by seasonal rains

Kenmare Resources (“KMR”) released its quarterly results for Q1’24 with ilmenite production coming in line with guidance as the seasonal rains caused operational difficulties. KMR produced 316.4kt of Heavy Mineral Concentrate (“HMC”) (23% of H&Pe full year) with 308kt processed, for ilmenite production of 205.5kt (21% of H&Pe full year). Q1 is regularly impacted by power instability caused by seasonal rains, however this quarter was impacted more than any in the last five years. This brought pro

SP Angel Morning View: Shenzhen exports and imports by private companies rose 72.4% yoy through January & February

Kenmare Resources: Solid FY23 results and FY24 guidance unchanged

Kenmare Resources (“KMR”) released FY23 financial results, with EBITDA of US$220m and EPS of US 137cps, 3% and 5% above H&Pe, respectively, due to lower-than-expected P&L costs. A final dividend of US 38.5cps was declared bringing the FY23 payout to US$50m as previously guided. KMR’s operational outlook is unchanged with ilmenite production expected to be 950-1,050kt in FY24, weighted to H2, with Q1’24 output now guided to be similar to Q1’23 (204kt). Despite a falling trend in TiO2 feedstock ma

Kenmare Resources: Michael Carvill, Founder and Managing Director of KMR, to step down after almost four decades

Kenmare Resources (“KMR”) announced on 15th March that Michael Carvill will step down as Managing Director having founded and led the company since 1987. In this time, Mr Carvill steered KMR to become one of the world’s largest titanium feedstock producers with over US$230m returned to shareholders since 2019. During his tenure, the Kenmare Moma Development Association has invested over US$20m into local communities with three health centres, >80 classrooms and 30 water supply systems installed.

Kenmare Resources: Upping target as near-term malaise exacerbates long-term deficits; investor unease highlights valuation gap

Kenmare Resources (“KMR”) has bolstered its balance sheet with a proposed new US$200m revolving credit facility (“RCF”), announced on Feb 6th. The RCF should provide KMR a funding cushion of at least US$50m (H&Pe), whilst still allowing a 40% dividend payout ratio as Moma enters a period of elevated capital expenditure with the relocation of WCP A to Nataka. Nonetheless, falling ilmenite prices and weak production in 2023 due to weather impacts have driven poor share price performance in recent

Kenmare Resources: Q4’23 trading update - a more solid quarter albeit with shipment delays; full 2024 guidance announced

Kenmare Resources (“KMR”) released its Q4’23 operational results from its Moma Titanium Minerals mine, hitting revised guidance across its diverse product list. 2023 Heavy Mineral Concentrate (“HMC”) production of 1,448kt was just 9% below FY22, with H2 more than 28% above weather-impacted H1. The mining rate fell in the final quarter, offset slightly by grade, however production still lagged Q4’22 due to lower recoveries from HMC and unplanned stoppages, as well as a HMC shortage. Ilmenite prod

Kenmare Resources: Capital projects update – WCP A move sanctioned by Board; capex estimate upped

Kenmare Resources (“KMR”) has provided an update on its capital projects, including the transition of Wet Concentrator Plant A (“WCP A”) to the Nataka ore zone, expected to complete by 2026. KMR’s Board has now approved the construction of a new de-sliming circuit and tailings storage facility (“TSF”) required once operations move to Nataka. With a definitive feasibility study (“DFS”) still underway on remaining infrastructure items, the total estimated capex has been updated to US$316-331m, vs

SP Angel Morning View: Gold and copper soar as Jerome Powell indicates 75bp cut in rates next year

Kenmare Resources: Q3 Results – improved production performance after challenging H1; shipments lower due to vessel timing

Kenmare Resources (“KMR”) has released a solid Q3 trading update, with output improving after a challenging first half of the year. Heavy mineral concentrate (“HMC”) production in Q3 was 414.6kt, 10% above H&Pe and up 30% QoQ, on the back of better-than-expected grades and ore throughput, as operations stabilised after a lightning strike in Q1 and power issues in Q2. Nonetheless, production was lower than the same period last year, down 7% YoY, driven by lower ore grades. Ilmenite end-product ou

Kenmare Resources: Q3 Preview- operations expected to stabilise after challenging H1

Kenmare Resources will release its Q3 trading update on Thursday 12th October. The key focus will be the delivery of operational improvements after a challenging first half, in our view. We estimate heavy mineral concentrate (“HMC”) production in Q3 of 378kt, delivering ilmenite end-product output of 276kt, zircon of 14kt and rutile of 2.2kt. Including solid H1 financial results (reported o 15th Aug), we revise our FY23E EBITDA upwards by 5% to US$236m. Our Dec’24E target price is unchanged at G

SP Angel Morning View: Metal prices pull back on weaker than expected Chinese economic data

Kenmare Resources: Challenging H1 saved by strong pricing & shipment volumes to hit record revenue and US17.5cps

Kenmare Resources (“KMR”) has released solid interim financial results, supported by higher ilmenite prices and shipments. Despite a poor operational performance at Moma in H1, semi-annual EBITDA was US$110.4m, +12% vs H&Pe and +5% YoY. Net profit also beat our estimate by 13%, allowing KMR to declare an interim dividend of US17.5cps, +58% vs H&Pe and +59% YoY. As previously mooted, the Company has also confirmed a US$30m share buyback. We believe this underlines management’s commitment to share

Morning Note – 24 June 2024

Jubilee Metals - Zambia copper update

Project Roan – the large plant capable of feeding Jubilee's Sable cathode – concentrate plant has been bult and is now being commissioned with full utilisation expected in July 2024. Although delayed this is a perfect test bed for the roll out of similar plants as part of the LG project with Abu Dhabi based IRH – Jubilee's partner in this project.

Sound Energy (SOU LN) - Managem announced as Moroccan partner

Sound Energy (SOU LN) - NAV Update - Managem announced as Moroccan partner

Chariot Limited (AIM: CHAR): Key step towards developing future gas to industry business onshore Morocco

• Chariot has signed Heads of Terms with Vivo Energy for the future offtake from the Loukos onshore licence where natural gas has been encountered at Dartois. • Up to 3 mmcf/d would be initially sold to the CNG midstream business under a long-term gas sales agreement. • Vivo intends to design, fund, construct and operate a CNG plant and virtual distribution network to transport natural gas from a number of sources to existing and new industrial customers in Morocco. Chariot will have the option

Serica Energy Plc (AIM: SQZ): Initiating Coverage

Serica Energy is a ~US800 mm market cap company with >40 mboe/d production and 140 mmboe of 2P reserves in the UK North Sea. The investment case is about value and generous shareholder distributions. The strategy is to maximize the value of two key producing hubs, depending on the UK’s tax policy, to develop a third one at Buchan Horst and to grow via M&A. Over the last 2 years, the share price has been negatively impacted by the reduction in UK gas prices and fiscal uncertainty. Serica’s divide

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

SP Angel Morning View: Iron ore prices hold despite weak China property construction data

NextSource Materials - Conditional $91m IFC funding for Molo expansion

NextSource has signed a Mandate Letter with the International Finance Corporation (IFC) for a senior debt facility totalling US$91m. This facility should fund approximately 50% of the cost of the expansion of the Molo graphite mine in Madagascar to an annual capacity of 150kt pa of SuperFlake® graphite concentrate from the current 17kt pa of Phase 1. This funding is in line with our expectations as published in our recent initiation. We expect public confirmation of support from the IFC will pr

Sound Energy (SOU LN) - Initiation: The sound of progress

Sound Energy is a UK-listed E&P with gas assets onshore Morocco. The company has made material progress in development of its Tendrara asset, with Phase 1 development underway, and the larger Phase 2 advancing towards FID. There is an ever clearer route to material, sustained cash flows, with regular catalysts from development progress updates and new high-impact E&A drilling.

SP Angel Morning View: Chinese traders hold back metal buying as Yuan slides against strong US dollar

i3 Energy (I3E LN) - Sweet as maple syrup

I3E is a UK and Canada listed E&P company, with a significant producing asset position onshore Canada in Alberta.

Oil & Gas - Cavendish sector note

Longboat Energy, Baron Oil, Falcon Oil & Gas, Tamboran Resources, Energean, Arrow Exploration, Enwell Energy, Gulf Keystone Petroleum, UK Oil & Gas. Source: FactSet, weekly change 17/06/2024-21/06/2024 Oil fell after futures crossed into overbought territory, although crude still notched a weekly gain amid shrinking US stockpiles and signs of rising fuel demand. West Texas Intermediate dropped about 1% to slip below $81 a barrel on Friday. Crude had edged into overbought territory on Thursday af

Petro Matad (MATD LN) - Equity raise for Block XX drilling

Petro Matad has raised US$8.9m through an issue of 350m shares at 2.0p. The company is currently preparing to bring onstream the existing Heron-1 well on its field in Mongolia, and the raise is planned to fund the subsequent drilling of the Heron-2 development well. The raise is also planned to fund drilling of the high impact Gobi Bear-1 exploration well, on the same Block XX as Heron. All this activity is expected in 2024.

SP Angel Morning View: Chinese lithium producers rally sharply on reports major mine has gone on maintenance

SP Angel Morning View: Gold prices push higher as yields slide on Fed rate cut hopes