IPPR proposes creation of ‘shared market’ for UK and EU

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Today’s edition features:

  • Kibo Mining (KIBO.L)
  • Savannah Resources (SAV.L)

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The FTSE-100 finished Friday’s session 0.57% higher at 7,490.57, whilst the FTSE AIM All-Share index was up 0.02% at 1,015.16. In continental Europe, the CAC-40 finished 0.15% lower at 5,349.30 whilst the DAX was up 0.27% at 13,103.56.

Wall Street
Last Friday in New York, the Dow Jones closed 0.58% higher at 24,651.74, the S&P 500 added 0.9% to end the week at 2,675.81 and the Nasdaq gained 1.17% to reach 6,936.58.

In Asian markets this morning, the Nikkei 225 was up 1.62% at 22,917.62 and the Hang Seng was 0.71% higher at 29,053.73..

In early trade today, WTI crude was 0.3% higher at $57.47 per barrel and Brent was up 0.33% at $63.44 per barrel.


IPPR proposes creation of ‘shared market’ for UK and EU
A think tank is proposing a post-Brexit trading deal based on the UK and the EU sharing each other’s markets. It would see the UK and EU continuing the regulatory alignment that exists today, and the formation of a new customs union similar to the existing one, the centre-left IPPR said. It would allow tariff-free trade, and the UK to benefit from EU trade deals. IPPR director Tom Kibasi said it “honours the referendum result” while securing Britain’s economic interests. The group said that the EU would also benefit from the scale of the UK’s economy in future trade negotiations. The group believes that a new shared market model would aim to keep the benefits of single market while allowing divergence from EU rules over time. The proposal would mean no interruption to the UK’s trade with the EU and avoid a hard border between Northern Ireland and the Republic of Ireland, the report says.

Source: BBC News

Company news

Kibo Mining (KIBO.L, 4.12p) – Speculative Buy
Kibo Mining announced that the newly formed Tanzania Ministry for Energy is committed to an indicative timeline for the completion of the MoU for fast tracking the Mbeya Coal to Power Project (MCPP). The MCPP is viewed as the most advanced Independent Power Producer (IPP) project in the Tanzania energy strategy pipeline and is expected to make a significant contribution towards achieving the 2020 targets. Focus is now on signing MOU with TANESCO (Tanzania Electric Supply Company) within the next 10 to 12 working days and agreeing to a final Power Purchase Agreement (PPA) during Q1 2018 with TENESCO. The PPA is the Power Purchase Agreement that is crucial for the development of the project. The MoU will provide a framework within which the fundamental commercial and technical components of the PPA will be agreed.

Our view: It’s good to see that all stakeholders are on the same page with the goal to streamline the process towards finalisation of the all-important PPA. We are encouraged with the commitment to sign the MoU within in the next 10 to 12 days followed by the all-important PPA in Q1 2018. As such, we look forward to the details of the MoU which will be the precursor to the crucial PPA. In the meantime, we maintain a Speculative Buy on the stock.

Beaufort Securities acts as corporate broker to Kibo Mining plc


Savannah Resources (SAV.L, 6.12p) – Speculative Buy
Savannah Resources announced a maiden JORC (2012) compliant resource estimate for its Reservatorio deposit, which is one of three targets being advanced within the highly prospective lithium project, Mina do Barroso, in Portugal. Initial inferred mineral resource for Reservatorio is 3.2Mt grading 1.0% Li2O for 32,000t of contained lithium oxide within a strike length of 500m and the deposit remains open at depth and down dip. Reservatorio is one of eight pegmatite deposits on the Mina do Barroso mining licence and one of three currently being drilled. A maiden resource estimate from the Grandao deposit is expected during Q1 2018. Recent drill results from the Grandao returned some of the thickest zones to date, for example, 109m grading 1.04% Li2O including 52m grading 1.32% Li2O. Preliminary metallurgical testwork confirms that a high quality spodumene concentrate can be produced using conventional processing technologies.

Our view: The maiden resource estimate for Reservatorio underpins the significant potential of the Mina do Barroso lithium project as a source for spodumene concentrates. We note that the project has an existing mining licence within a mining friendly jurisdiction which could potentially lead to near-term production. We are also encouraged with the near-surface mineralisation and thick intercepts (c.100m) and grades over 2% Li2O. With multiple deposits and excellent existing infrastructure, we believe Mina do Barroso could be a significant source for spodumene concentrates. Given that the global lithium demand is expected to treble by 2025 on the back of the burgeoning battery market, Savannah is looking to capitalise on the lithium market with a strategic European lithium (spodumene) source. We look forward to further updates as the Company now works towards a maiden resource estimate for the Grandao deposit in Q1 2018. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as a corporate broker to Savannah Resources plc


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Compiled by:
Charles Long, Ben Maitland, Sheldon Modeland & Kazunaga Senga
(t) +44 (0) 207 382 8384
(e) info@beaufortsecurities.com

Weekly diary

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During the three months to end-November 2017, the number of stocks on which Beaufort Securities published recommendations was 237, and the recommendations were as follows: Buy – 37; Speculative Buy – 187; Hold – 11; Sell – 2.

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