15 May 2021
In this month’s Big Picture, we take a look at some talking points from the past few weeks which have included two chocolate caterpillar’s going head-to-head and a new weather supercomputer – which would have been useful for the last few weekends when unpredictable weather hindered newly permitted social activities. Although nothing is certain, the proposed date for the end of social distancing measures is just around the corner which got us thinking about our team’s return to the office – something we explore later in this blog. As usual, we will also take a look at what our clients have been up to this month, including a significant update from Ionic Rare Earths and its Makuutu Rare Earth’s project.
If there’s anything we share in the Big Picture that you’d like to know more about please get in touch by emailing or reach out to us on Twitter - @blytheweigh.
The story that got us all talking this month? The biggest power struggle of 2021, really: The head-to-head (and subsequent social media furore) between Colin and Cuthbert. The respective caterpillar-based chocolate cakes of Marks & Spencer and Aldi that grace the table of kids’ birthday parties up and down the country were pitted against one another when M&S filed an intellectual property claim against Aldi with the High Court. The claim was based on the fact that Aldi’s rendition of the chocolate insect cake was too similar in appearance to M&S’s Colin which has led to Cuthbert being removed from the budget supermarket’s shelves since February. Whilst the story is trivial, the social media reaction has been genius, particularly from the Aldi team, as they embarked on a #freecuthbert campaign calling M&S “snitches” and threatening to “Colin” their lawyers.
Keeping with the unexpected consumer revelation, it was also reported that the retro and gentle-on the-liver refreshment, Shandy, was making a comeback as a nation favourite due to the popularity in no or low alcohol drinks. The change in consumer preference, which has led to sales of “nolo” (no or low alcohol) beer, wine and spirits soaring by 50 per cent, has meant that brewers have begun creating craft versions of nolo beverages. Most recently, fresh takes on the traditional Shandy, including an elderflower infused lager top by Oxford-based ‘Shandy Shack’, are being introduced to the market bringing the 70’s classic into the hands of millennial consumers.
There were also reports this month that the Met Office would be partnering with Microsoft to build a weather forecasting supercomputer that, by the time of its completion which is forecast to be next summer, will be one of the top 25 super computers in the world. The project, which has received a £1.2 billion investment from the UK government, will be able to form more detailed weather models, run more potential weather scenarios and predict severe weather more accurately. The computer will use 100% renewable energy to power its 1.5 million processor cores needed for the 60 quadrillion (60,000,000,000,000,000) calculations it will process per second.
Blytheweigh zooms in… Going back to the office
This month we will be zooming in on how, after a year of lockdown measures which have meant a large cohort of workers working from home, we are quickly approaching the proposed date that will see the end of all social distancing measures. The 21 June is set to be the day doors open up (both metaphorically and literally) and is likely to be the end date of the government’s “work from home if you can” policy, signalling earlier alarms and commutes for millions of office workers as they return to routines unrehearsed since March 2020.
It goes without saying there are huge issues at play here: the lifeline that the return of office workers will have for cafes and restaurants that rely on ‘9-5ers’ for custom, which will mean that hospitality and retail staff can return to work; the visual reminder of the businesses that didn’t survive the periods of closure many of us will notice as we walk around the streets surrounding our offices and, though not visible, the job losses incurred as a result. Another consideration is how businesses will navigate balancing the re-introduction of a working life that somewhat resembles ‘how things used to be’ (the team meetings, the shared spaces, tea rounds and commutes) with the newfound realisation of the benefits working from home can bring, as well as the obvious hesitance and safety considerations going back to work will mean. Baring this in mind, we’re all prepared for office-life to look quite a bit different this summer in comparison to the years before it.
Businesses’ disparate approaches to returning to the office have cropped up in the news this month, with Goldman Sachs advising its bankers to be prepared to return to the office in June, Nationwide introducing a flexibility scheme and informing its staff to work anywhere, and HSBC also opting for a hybrid model of working from home and in the office. The government is set to definitively report before 21 June whether social distancing measures will need to be maintained from that date onwards, which will have obvious ramifications for how office working will look. But if normal conditions do return, the Blytheweigh team have been talking about the things we’ll do to help prepare us for the transition:
- Jazzing up our office space. As well as the necessary measures we’re taking to ensure we can eventually go back to work safely, we have also used the time to clear out our office, tucked away in Castle Court. Shoes we haven’t worn in a year? Documents that are online anyway? All gone.
- A few of us have been setting our alarms early and getting in a morning workout or eating a good breakfast. This means that when it comes to allowing time for our commutes, the sound of our alarms first thing won’t hurt quite so much…
- …Which leads onto other positive routines we’ve embraced to add structure to our days - including meal preparation, less caffeine, midday walks – which we should try and maintain once we’re back at work.
- None of us have encountered tailored clothing in months so we’ll be treating ourselves to some new office clobber as an incentive.
- Another way to revitalise old habits is to consider alternative ways to get to the office. Perhaps you can figure out a good cycle route, take the bus as opposed to the tube etc.
- Another option available to those of us living with others also working from home is to congregate in a shared space or work with the door open to get back in the habit of concentrating with the background noises of people on calls or shouting ‘NO’ when they’ve accidentally deleted something.
- Get a social event booked in. As well as not having seen each other in over a year, Blytheweigh has also had two new starters in the past year, so we’ve provisionally booked an office meal for July as something to look forward to and as an opportunity to properly catch up.
A focus on... Ionic Rare Earths publish Scoping Study for Makuutu Project
This past month saw a significant milestone for Ionic Rare Earths and its Makuutu Rare Earths project, based in Uganda. The company announced the completion of its scoping study which demonstrated the potential for Makuutu to become a sustainable, long-life, low capital development cost project that could supply critical rare earth oxide and heavy rare earth oxides to a market facing increasing global demand (view release). The study considered an open pit mine with a run-of-mine feed to a modular heap leach plant, where rare earth oxide would be recovered in the form of a mixed rare earth carbonate.
The study highlighted a robust base case, setting the scene for the completion of a bankable feasibility study (“BFS”), which the company is looking to finalised by September 2022. It indicates an initial 11-year operation based on 84.5Mt of resources, with plenty of additional drilling opportunity to extend Ionic’s suite of rare earths as well as extend the life of mine. The base case assumes production from an initial 2.5Mtpa model in year one, eventually reaching 12.5Mtpa in year 10. Net revenue is estimated at A$3.63 billion, with life of mine earnings of A$1.71 billion and $1 billion of post-tax free cashflow. Post-tax net present value is estimated at $428 million, with an internal rate of return of 38 per cent.
The base case provided an encouraging backdrop to the project which hosts a considerable deposit of ionic absorption clay, where rare earths are bonded to the clay as opposed to existing as primary minerals in the ore, and represents a small minority of such deposits that exist outside of China. These deposits are becoming increasingly sought after in the current climate of increasing demand for critical and heavy REO minerals.
Tim Harrison, Managing Director of Ionic, said of the study: “The completion of this study with its positive project economics represents a critical milestone for the company. Combining the long life potential, with the low-cost modular capital development and high-margin basket potential at Makuutu, confirms the project as one of the best potential new sources of critical and heavy rare earths in the near term.
“We see this project as technically and financially robust and eminently financeable, and the company has received strong expressions of interest from strategic parties interested in accessing Makuutu’s unique basket composition that contains approximately 70 per cent to 75 per cent critical and heavy rare earths.”
The Company has set the wheels in motion for the BFS and is looking to reach first production by the first half of 2024.
The following updates were released from Blytheweigh clients from 15th April – 14th May.
Anglo Asian Mining (AIM:AAZ) announced at the end of April that it had obtained ratification for the first of the two permitted five-year extensions of the Production Sharing Agreement for its Gedabek Contract Area from the Azerbaijan Government. Negotiations with the Azerbaijan Government are ongoing to obtain an extension of the territory of Anglo Asian Mining’s contract areas (view release).
Arkle Resources (AIM:ARK) followed up its recent Gold find at Mine River by announcing that it is due to commence a 1,000 metre drilling programme at the Mine River project which is expected to take 10-12 weeks (view release).
Beowulf Mining (AIM:BEM) published a letter from its Chairman, Sven Otto Littorin, to Ibrahim Baylan, Sweden’s Minister of Enterprise and Innovation. The letter was concerning the status of Beowulf’s Kallak application (view release).
Exciting news for Botswana Diamonds (AIM:BOD) with the discovery of a new, kimberlite blow at Thorny River, with the expected discovery that this body connects with the river blow drilled in November 2020. The average diamond carats per one hundred tons of ore is expected to remain at the current average of 60. During the drilling programme a total of 71 metres of kimberlite was intersected, with the widest kimberlite down-the-hole intersection being 18 metres. By the end of May, the integration of the results into the previous drilling and ground geophysics campaigns are expected to be completed with samples from the drill chips to be analysed by mid-July (view release).
Bluejay (AIM:JAY), alongside it’s Joint Venture partner, schedules the maiden drill and field programme at its Enonkoski Project in Finland for May 2021. The programme will target 3000 metres and several geophysical targets in the Tevanjoki and Laukunsuo areas for mineralisation (view release).
Caledonia Mining (AIM:CMCL) released its Q1 2021 gold production from the Blanket Mine in Zimbabwe. The mine had produced 13,197 ounces of Gold during the Quarter and Caledonia remains on track to reach its production guidance of between 61,000 – 67,000 ounces for the year (view release). It also released the results for Q1 2021 with a Gross Revenue of $25.7 million (view release).
The Company also announced the results from its Annual General Meeting of shareholders, with shareholders representing 43.97 per cent of the company being present by proxy or in person. Shareholders voted to reappoint the eight nominees proposed for re-election as Directors (view release).
Central Asia Metals (AIM:CAML) published its 2020 Sustainability Report, covering activities for the year ending 31st December 2020. This report accounted for activities at Group level, the Sasa zinc-lead mine in North Macedonia and the Kounrad dump leach, solvent extraction and electro-winning copper recovery plant in Kazakhstan (view release).
AIM-listed Clontarf Energy (AIM: CLON) successfully raised £500,000 by way of placing. The proceeds will fund any costs associated with the ongoing negotiations regarding the Company's Bolivian lithium and Ghanaian assets and provide additional working capital as it continues to assess new projects (view release).
Drilling on the La India Starter Pits was completed by Condor Gold (AIM:CNR) at the end of April, with all assay results being received for the Northern Starter Pit. A total of 44 diamond core holes for 2,290 metres had been drilled with assay results returned for 29 of those holes (view release).
The company rounded off the month by announcing the results of its Annual General Meeting where all resolutions were passed (view release).
It was a busy second half of the month for European Metal Holdings (AIM:EMH) which it started by releasing the Quarterly Report for activities during the three month period ending 31st March 2021 (view release).
Furthermore, an Environmental Impact Assessment (EIA) and Measured Resourced Drilling update was provided in May. The Cinovec Project company Geomet submitted the documentation related to the initial EIA notification to the Czech Ministry of the Environment. Alongside this the company reported that 17 holes of the 19-hole drilling programme at Cinovec had been completed, with analytical results for six holes also being reported (view release).
To round off the month, European Metal Holdings adopted the gold standard for ESG reporting. Establishing an ESG Committee, initiating ESG reporting and a commitment to an independent lithium production Life Cycle Assessment and Carbon Footprint assessment (view release).
Griffin Mining (AIM:GFM) published its annual report and financial statements for the year ended 31st 2020 showing a revenue of $75.4 million and an operating profit of $15.15 million (view release).
Hummingbird Resources (AIM:HUM) provided an operational and trading update for Q1 2021. It announced that 22,781 ounces of gold had been poured with 22,019 ounces of gold being sold at an average realised price of US$1,788 per oz. Net cash for the quarter was US$4.9 million with Hummingbird expecting to move into a debt free position in Q2 2021 (view release).
Imperial X (AQSE: IMPP) reached a milestone as it announced the publication of its Prospectus in relation to the admission of its shares to the Official List of the London Stock Exchange. It is expected that Admission will become effective and that dealings will commence at 8.00 a.m. on 3 June 2021 (view release).
Ionic released its Quarterly Report for Q1 2021 providing licencing updates and drilling updates for the Makuutu project (view release).
At the beginning of May, Ionic commenced a Phase 4 Resource Drilling Programme at Makuutu. The aim of the programme is to increase the Inferred Resources on the site to an Indicated Resource Category (view release).
Los Andes Copper (TSX:LA) received environmental approval by the Regional Environmental Committee for drilling to be carried out at the Vizcachitas Project in Chile to complete the PFS. This approval allows Los Andes Copper to drill up to 350 holes on up to 124 platforms over the next four years (view release).
The company also announced an investment of US$5 million by Queen’s Road Capital by the way of Convertible Debentures. In conjunction with the investment CEO of Queen’s Road Capital, Warren Gilman, was appointed to the Board as a Non-Executive Director (view release).
A restructuring of the Board rounded off the month with the creation of an ESG committee, appointment of Corinne Boone as a Non-Executive Director and Chair of the ESG Committee, and the confirmation that Warren Gilman will be nominated to stand for election as Non-Executive Director at the next AGM (view release).
Love Hemp Group (AQSE:LIFE) stood out from the crowd as it announced a partnership with leading online mental health and wellbeing support service, Togetherall, to provide free access to the platform to anyone who subscribes to the Love Hemp newsletter (view release). The CBD company also re-signed the Ultimate Fighting Championship's current Welterweight Champion, Kamaru Usman, as a brand ambassador for a further year (view release).
Mkango Resources (AIM/TSX-V:MKA) appointed Jones Group International as its US strategy advisor in anticipation of Biden’s clean energy revolution and US stockpiling of Rare Earths (view release).
Mkango later released the Financial Statements and Management’s Discussion and Analysis for the period ending 31st December 2020 (view release).
Finishing off the month strongly, Mkango announced the results of the floatation pilot plant programme completed at ALS Metallurgy in Perth, Australia for the Songwe Hills Rare Earths Project in Malawi. The programme demonstrated that the floatation process is robust and straightforward to scale up and support a significant increase in flotation recoveries and concentrate grade for the feasibility study (view release).
Oriole Resources (AIM:ORR) posted its annual report and gave notice of the company’s AGM, which will occur in June (view release).
Following on from this announcement Oriole provided an update on the recently completed maiden diamond drilling programme at Bibemi Gold Project in Cameroon with 1,401 samples being assayed at the lab and a further 1,754 samples being prepared for dispatch (view release).
At the end of the month Oriole provided an update on the Senala project in Senegal, where joint-venture partner IAMGOLD has commenced its Year 4 exploration programme, which will comprise of 11,000 metres of reverse circulation and diamond drilling at Faré and Madina Bafé prospects (view release).
North Slope Alaska oil and gas exploration company, Pantheon Resources (AIM: PANR), announced receipt of Baker Hughes AHS Volatile Analysis Service report, which quoted the Talitha #A well as a “world-class petroleum system” (view release).
Exciting times ahead for Pharma C Investments, an investment company focused on ancillary businesses within the medical cannabis industry, which announced its intention to float on the Aquis Stock Exchange in the coming weeks (view release).
Board and Management changes were announced this month by Walkabout Resources (ASX:WKT) with the securing of debt funding of its Lindi Jumbo Graphite Project in Tanzania (view release).
Following this release Walkabout reported Quarterly activities for the Quarter ending March 31st 2021 (view release).
At the end of the month Walkabout raised $6.4 million in a first tranche equity raise for advance construction of the Lindi Jumbo Graphite Mine in Tanzania. The raise was led by institutional investors and will contribute to the project debt facility companion equity requirement and provide working capital (view release).