Risk warning: The value of investments and derived income can fall. Investors may get back less than they invested.

October 2021 Commodity Derivatives Report

In this month’s Commodity Report, Ashley Boolell, Partner at Shard Capital and Head of Commodity Derivatives covers the usual 10 commodities, which includes: oil, precious metals, forex and base metals and this time an additional commodity, natural gas.

You can download the full report on the Shard Capital website here: https://www.shardcapital.com/capital-markets/commodities/#report

Executive Summary:

Paul Tudor Jones, the American billionaire hedge fund manager, conservationist and philanthropist once said: “There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market.”

The “last third” of a trend that Jones refers to is that Mad Max moment where the decision to get in or get out of a position becomes increasingly perilous since two fears combine to mess with the trader’s head: the fear of losing money and the fear of leaving money on the table. It is in that final third that these fears become very difficult to control.

Well, let us take two examples: natural gas and palladium. The first one is facing serious supply issues while the latter is rapidly losing its status as the best-performing precious metal. To put this into perspective, going simultaneously long on the Dutch TTF Natural Gas Futures Contract and short on palladium on July 1, 2021 would have resulted in a 200% gain on September 30, 2021 assuming that the positions were closed. Not a bad return over 66 trading days.

Now the key question is: are we in the last thirds of the natural gas bull run and the palladium bear run?

Please note: This report is intended for Professional Investors only. By inputting your details, you are confirming that you are a Professional Investor.

Our stock picks for 2020 report

Our stock picks for 2020

Due to the popularity and success of our 2019 report, we have written a “Top Stock Picks for 2020” report. You can can download the full report here.


Below is a preview of the 2020 report:

Key events in the year ahead and potential risks


The past year has been a difficult one in global manufacturing and trade as there has been a significant slowdown. The ongoing concerns about the US-China trade deal have not helped matters and certainly contributed to the drop. There has been a domestic slowdown in China as households become more cautious and German auto sales have added further concerns. There is a high level of uncertainty across the globe and that may continue to keep growth subdued.


Brexit still appears to be no closer to a resolution. October’s “Brexit bounce” gave a taste of what might happen should sentiment improve. A Conservative majority would lead to worries about the length of the transition period, while a hung parliament raises the prospect of a second referendum and prolonging the uncertainty. One thing is for certain and that is there is no immediate end in sight to Brexit.


Tensions between the US and China appear to have eased in recent weeks as both side work to finalise a limited agreement. However, the markets still face continued uncertainty surrounding this issue. President Trump cast doubts recently by not agreeing to roll back tariffs on China, which dampened hopes of a resolution. The Trump administration slapped tariffs on more than $500 billion in Chinese goods, while Beijing has put duties on about $110 billion in American products. China has pushed for the U.S. to remove tariffs as part of the “phase one” deal. A conclusion is yet to be reached.


President Trump is on the campaign trail for re-election. His tenure has been littered with controversy, but he is still the favourite for re-election. A handful of billionaire investors are spending a lot of time fretting about the 2020 presidential contest, particularly the rising prospects of Democratic candidate Elizabeth Warren. But Paul Tudor Jones warned in a CNBC interview that the stock market is certain to fall if any Democrat wins the 2020 race, and that’s because it all comes down to taxes. Trump has been great for investors in the US but this creates the potential for inequalities between the rich and the poor.

2020 Stock Picks

Uncertainties aside, in this report we have highlighted stocks that we believe offer excellent value and potentially fantastic rewards for investors in 2020.

New record – 131 Investor Visas granted in Q1 2019

By Farzin Yazdi – Head of Investor Visa at Shard Capital.

Today’s data release reminds me of the pre Nov 2014 rush we saw ahead of the increase of minimum investment from £1m to £2m – and the results are similar too. In 2014 from Q3 to Q4 we saw numbers double. This morning’s data release show an increase of over 40% from last quarter with 131 visas granted – with nearly 60% of all applicants coming from China*. 

And what a memorable quarter it has been; with the Statement of Changes on March 7 and new rules going live on the 29th of March. 

Is Britain still open for business?

When new rules are announced, it takes time for advisors and clients to fully understand them – and their subsequent implications. This time is no different. Many are still coming to terms with the implications of showing source of wealth for 2ys.

I’ve had more than one client explain to me that their cash has only been held for a short period of time, but they will seek to apply once it has been there for 2ys! In fact, from a financial perspective nothing has changed. Immigration rules have aligned closer to those in the financial world.

Given the above, I expect a few slower quarters before a return to the mean, which I believe will be a slightly higher average as some who may have chosen the Tier 1 (Entrepreneur) Visa, may now choose the Investor Visa category.

Managing money for Investor Visa purposes is a specialist service which differs significantly from ordinary investment management; requiring detailed knowledge, expertise, and capabilities in other areas in order to achieve with the ultimate objective – to get ILR. 

Overall I welcome the new rules, and whilst not perfect, it does help to protect the UK from unscrupulous sources of wealth and bring greater economic benefit to the country.

Thank you again to all those who took part in our survey. Together we have made a difference! 

If you would like more information on the Tier 1 (Investor) Visa, or would like to discuss this ONS release, please contact Farzin Yazdi – farzin.yazdi@shardcapital.com 

Important Information

“Shard Capital LLP is authorised and regulated by the Financial Conduct Authority. Important information: The information above is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. It does not constitute a personal recommendation as defined by the Financial Conduct Authority (FCA) or take into account the particular investment objectives, financial situations or needs of individual investors. The value of investments and any income from them can fall as well as rise. You may not get back the amount you invested. It should be remembered that past performance is not a guarantee of future performance. Every effort is made to ensure the accuracy of any information provided and no assurances or warranties are given. If you are unsure of the suitability of this product then you should contact and Independent Financial Adviser, authorised by the Financial Conduct Authority.”

Ashley Boolell – Shard Capital Commodities – April Overview Update

Ashley Boolell, Commodities partner at Shard Capital, provides his insight on the latest commodity market developments following the release of the latest monthly report.

Watch the overview update.

Ferro‐Alloy Resources Limited – Admission to Trading on the Main Market and First Day of Dealings

Ferro‐Alloy Resources Limited, the Guernsey vanadium mining and mineral processing company with operations based in Southern Kazakhstan, is pleased to announce that its entire issued ordinary share capital will commence trading on the standard listing segment of the Official List of the Financial Conduct Authority and on the Main Market of the London Stock Exchange at 8.00 a.m. today under the ticker FAR.L and ISIN GG00BGDYDZ69 (“Admission”). The Company is dual listed on the Kazakhstan Stock Exchange (KASE).

As part of the Admission process, the Company has successfully raised £5.2 million (before expenses) from institutional shareholders through a Placing and Subscription of 7,507,761 new ordinary shares of no‐par value (the “Ordinary Shares”) at a placing price of 70p each, implying a market capitalisation of £219.1 million on Admission. Following Admission, the total number of  Ordinary Shares in the Company in issue will be 312,978,848 each with equal voting rights.

Company Highlights

  • Established and profitable vanadium producer in Southern Kazakhstan focused on expanding and developing the Balasausqandiq Vanadium Project (“Balasausqandiq” or the “Balasausqandiq Deposit”)
  • Operations located at the Balasausqandiq site with two main business activities:
    • the Balasausqandiq Vanadium Project (the “Project”), which has a reserve of over 70 million tonnes estimated on the locally required basis, of which ore‐body number one (of five) has estimated reserves on a JORC basis of 23 million tonnes. There is significant upside potential from exploration; and
    • an existing profitable vanadium concentrate processing operation (the “Existing
  • Raised £5.2 million to be used to further develop and expand production at Balasausqandiq;
    – initiate Phase 1 of the development of the Project, giving annual production of 5,600
    tonnes vanadium pentoxide; and
    – expanding production at the Existing Operation to around 1,500 tonnes per annum
  • Unusual sedimentary deposit allows for much lower processing costs than usual, being only around 40% of the operating costs of typical primary vanadium producers
  • Existing road access, nearby rail and power availability, together with a simple processing route, make for very low capital costs per annual tonne of vanadium, around 40% of other typical projects
  • Low capital and high margin give the project an NPV of $2 billion at a long term forecast vanadium pentoxide price of $7.50/lb (or $3.6 billion at the current price)
  • Staged development plan allows for the development of later phases to be substantially paid for from earnings, with only very small shareholder dilution
  • Targeted overall annual production is c. 23,000 tonnes of vanadium pentoxide
  • Surge in demand for vanadium driven by steel producers that utilise it for its strengthening qualities and the emerging use of vanadium in clean energy storage in the form of vanadium redox flow batteries
  • Strong pricing backdrop: vanadium pentoxide price up +450% in three years to circa $14/lb as at 22 March 2019
  • Highly experienced board and senior management team with proven track records

Nick Bridgen, CEO, commented: “Today marks a significant milestone for Ferro‐Alloy with the completion of our successful listing on the London Stock Exchange. We’re excited to be entering the next phase as we look to advance Balasausqandiq; this unique project has the potential to be one of the world’s largest and lowest cost producing mines. Given our existing production and defined development path to build a low capex mine and production facility, Ferro‐Alloy offers a fantastic opportunity to gain exposure to the growing vanadium market, the fundamentals of which continue to strengthen in line with the emergence of vanadium batteries used in clean energy storage. With incomparable economics in tandem with a world‐class team of scientists and technicians, we aim to be at the forefront of this market. I would like to welcome our new shareholders to our register and
thank existing shareholders for their continued support. We look forward to the future with optimism.”

For further information, including the Company’s prospectus, visit www.ferro‐alloy.com or contact:

Ferro‐Alloy Resources Limited

Nick Bridgen (CEO) info@ferro‐alloy.com

Shard Capital Partners
(Corporate Adviser & Broker)
Dr Wang Chong +44 207 186 9948

St Brides Partners Limited
(Financial PR & IR Adviser)
Catherine Leftley/Gaby Jenner +44 207 236 1177

Further information about Ferro‐Alloy Resources Limited

The Company’s operations are all located at the Balasausqandiq Deposit in Kyzylordinskaya oblast in the South of Kazakhstan. Currently the Company has two main business activities:
(a) the high grade Balasausqandiq Vanadium Project; and
(b) an existing profitable vanadium concentrate processing operation

The Project
Balasausqandiq is a very large deposit, situated in Kyzylordinskaya Oblast in Southern Kazakhstan. The ore contains vanadium as the principal product, together with by‐products of carbon, molybdenum, uranium, rare earth metals, potassium, and aluminium (the last two of which can be extracted as potassium alum for sale or can be further processed into alumina and potassium fertilizers).

The geological resource has progressively been delineated by a number of exploration phases since its discovery in 1940 by Soviet era geo‐scientists. More recently, Ferro‐Alloy has carried out further exploration drilling, trial open‐pit mining operations, and pilot plant optimisation studies using alternate metallurgical and mineral process treatment technologies. A full feasibility study in accordance with local Kazakhstan requirements has been completed and the reserve and resource estimates and financial appraisal have been prepared on both the locally required GKZ basis and on the Australasian JORC basis.

The resource is divided into five ore bodies, although only the first has been explored sufficiently, and sufficient records remain, to put it into the resource category under the JORC 2012 system of classification. This single ore‐body is estimated to contain 24.3 million tonnes which, with normal mining dilution, is sufficient for the first eight years of operations. Ore‐bodies 2 – 5 have been classified in the JORC 2012 system in the category of  exploration Targets and although further exploration is required to bring these into JORC resource categories, a total Vanadium JORC resource of over 100 million tonnes is considered to be a rational prediction by the consulting geologists in the Competent Person’s Report. 100 million tonnes could contain the equivalent of around 670,000 tonnes of Vanadium Pentoxide, equal to almost five times the annual world production of 2017.

A reserve on the JORC 2012 basis has been estimated only for ore‐body number 1 which amounts to 23 million tonnes, not including the small amounts of near‐surface oxidised material which is in the Inferred resource category. On the GKZ basis, the Reserves are estimated to be over 70m tonnes in ore‐bodies 1 to 5 but this does not include the full depth of ore‐bodies 2‐5. The deposit is sedimentary in origin, containing low levels of iron and other acid‐consuming minerals. The proposed process methods therefore do not include concentration or roasting steps usual for vanadiferous titano‐magnetite deposits. Instead the vanadium and by‐product metals are
brought into solution by pressure oxidation in sulphuric acid at relatively low temperature and pressure, followed by ion exchange onto resin.

Existing Operation
The existing concentrate processing operation is situated at the site of the Balasausqandiq Deposit. The production facilities were originally created from a 15,000 tonnes per year pilot plant which was constructed to test the proposed process which will be employed to treat the ore mined at Balasausqandiq. The pilot plant was then adapted to treat low‐grade concentrates and is now in the process of being expanded and further adapted to treat a wider variety of raw‐materials. Currently, two main types of raw material are being processed, namely vanadium‐containing lowgrade concentrates and higher grade concentrates which contain vanadium from the demetallisation of oil in refineries.

The Company has already completed the first steps of a development plan which is expected to result in annualised production capacity increasing gradually to around 1,500 tonnes of contained vanadium pentoxide. The development plan includes upgrades to infrastructure, an extension to the existing factory and the installation of equipment to increase the throughput and to add the facilities to convert AMV into vanadium pentoxide.

Company Strategy
The strategy of the Company is to develop both the Existing Operation and the Project in parallel. Although they are located on the same site and use some of the same infrastructure, they are separate operations. Expanding the Existing Operation will be simpler and quicker to accomplish. It is already profitable and yielding a small operating cash flow surplus. Production levels will be raised incrementally without major shutdowns and the plant is expected to reach its target annualised sustainable production of around 1,500 tonnes per year of vanadium pentoxide by the end of the first quarter of 2020. Further development of the Existing Operation is likely but will depend upon trading conditions at the time.

The Project will take longer to develop and in spite of the size of the deposit, the Directors have decided to adopt a gradual development plan so that:

  • expansions can take place in step with increases in world demand;
  • technological risk is reduced; and
  • shareholder dilution is reduced prior to the generation of substantial cash flows that can be used to fund later expansions

The site is already well served with road access, power and water but some further development is required, including connection to the nearby high capacity power‐line, provision of railway sidings and employee accommodation.

Vanadium Market
Currently, the main use of vanadium is in the production of high strength low alloy steel where small quantities of vanadium are added to steel to increase its strength. In future, it is expected that increasing quantities will be used as the electrolyte in vanadium flow batteries. There are several reasons for anticipating large annual increases in the world demand for Vanadium. Firstly, there is expected to be an increase in the number of countries mandating the use of highstrength low alloy steels for construction. China mandated the use of high strength low‐alloy steels several years ago but has recently tightened the required specifications. This is expected to have the effect of forcing the industry to use more vanadium. Other countries which currently do not use such steels are expected to follow. Secondly, vanadium is already being used for batteries for electrical storage and this use is expected to grow markedly over the coming years. For these and other reasons available forecasts indicate an expectation of rising demand and continuing high prices.

The Board
On Admission, the board of the Company shall comprise the following directors:

Nicholas Bridgen, Chief Executive
Mr. Bridgen started his career in 1975 as a Chartered Accountant at KPMG (formerly Peat Marwick Mitchell). In 1979, he moved to the Rio Tinto Group, becoming senior group accountant in 1981, before moving to Business Evaluation Department for the Group in 1985 and Group Planning Manager for the RTZ Pillar Group which held the engineering, building products and chemical companies. Nick spent 14 years in all with Rio Tinto. In the mid‐1990s, he was a finance director at Bakyrchik Gold Plc. and in 1998, Mr Bridgen founded Hambledon Mining Plc which acquired the Sekisovskoye gold project, listing the company on AIM and taking the project from exploration, through construction, and into a producing mine. Since 2006, Nicholas has been a director and more recently, CEO of Ferro‐Alloy Resources Limited. He holds a bachelor’s degree with honours from Exeter University, is a Chartered Accountant and has also studied corporate finance at London Business School. He is a fluent Russian speaker.

Andrey Kuznetsov, Director of Operations
Andrey started his career in 1981 as an industrial engineer at Kirov Engineering Plant in Almaty. After three years he became Chief of the Scientific Department in Central Committee of Youth (Comsomol). In 1987, Andrey became general director of the Almaty NTTM “Kontakt” centre. In 1995‐1996, he was the CEO of the Kazakhstan subsidiary of Alfa‐Bank. Andrey has been the general director of TOO Firma Balausa since 2006. He holds a Specialist’s degree in electrical engineering from Bauman Moscow State Technical University and a PhD in non‐formal mathematical logic. He has also studied management at Coventry University.

Chris Thomas, Non‐executive Director
Chris Thomas has nearly 35 years’ experience in the communications industry. He has held various high level management positions including CEO of Proximity London from 2003 to 2006 ‐ one of the largest direct and digital agencies in London. In 2006, Chris was appointed Chairman & CEO of BBDO and Proximity in Asia, subsequently adding the Middle East and Africa to his responsibilities. He worked with major multinational companies across the growth markets of SE Asia, China, India and Africa. In May 2015, Chris moved to New York to take up the role of CEO of BBDO in the Americas, with responsibility for 21 agencies in the U.S., Canada and Latin America. In February 2019 he stepped down from his BBDO role to pursue his other business. He also served as a non‐executive director on the board of Hambledon Mining from 2004 to 2011.

James Turian, Non‐executive Director
James started his career in 1986 and has a background in accounting, trust and management. James has previously been involved with several mining companies in Perth, Australia, including assisting Cooper Energy in their restructuring in the early 2000’s. From 2000 to 2011 James owned and operated a trust company in Guernsey which he sold to concentrate on accountancy and currently is a director of “Accounts For You Limited”, a Guernsey accountancy firm. He holds several other directorships. James is a Chartered Fellow of the Securities Institute IAQ and is a Fellow of the Institute of Directors.

Total Voting Rights
Following Admission, the total number of Ordinary Shares in the Company in issue will be 312,978,848 each with equal voting rights. The total voting rights figure can be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change of their interest in, the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

Ashley Boolell gives an update on the global Commodities market

Ashley Boolell, Partner at Shard Capital Commodity Derivatives gives an overview of the March Commodities report, and what affect Brexit may or may not have on the global market.

Watch his full overview

For more information on Shard Capital Commodities, please contact Ashley Boolell on 0207 186 9921 / ashley.boolell@shardcapital.com

Office of National Statistics Data Release : UK grants 92 Investor Visas

As expected, today’s release of the latest ONS figures for Q4 2018 applications for the Tier 1 Investor Visa remains high. This comes as no surprise as on the 5th of December, the Home Office announced that it would ‘halt’ applications which led to many intended investors to apply in those 24 hours in order to have their application fall within the current rules.

The Home Office then later announced that it would not halt the program, however at a later stage it would reform the program. Therefore, we expect the high number of applicants to continue as more and more people make a decision to move to the UK whilst they know what the rules are.

“While in discussion with clients they explain that the uncertainty of future rules is something that worries them, especially with regards to which investments are permitted”, said Rafael Steinmetz Leffa, Head of China Desk at Shard Capital Investor Visa. “This concern is mostly referring to direct investments in the UK government, in the form of Government Bonds which is the preferred financial instrument for the vast majority of this type of investor.”

Whilst we note that the overall number of applications is slightly lower than the third quarter of 2018, it is worth highlighting that 50% of applications in the fourth quarter were from China and its SARs (Special Administrative Regions).  We also saw a rise in applications from countries in the Middle East.

2018 also saw the largest number of applicants since the Home Office increased the investment threshold from £1mil to £2mil in November 2014. This shows that investors remain bullish about the UK’s status as a hub for education, finance and investments overall.

If you would like more information on Shard Capital Investor Visa or the UK Tier 1 (Investor) Visa, please contact us.