Cairn Energy set for value upside but the market offer no shortcuts - Deutsche Fri, 20 Jan 2017 09:18:00 +0000 VSA Capital Market Movers - Mariana Resources Ltd, Shanta Gold Limited Thu, 19 Jan 2017 14:25:00 +0000 In the news: Mariana Resources, Shanta GOLD, West African Resources, Base Resources & The Alchemist


We have a few items of news today. In the Companies section we have a review of the amazingly robust results of a Preliminary Economic Assessment into the development of the Hot Maden Project in Turkey, in which Mariana Resources† has a 30% interest. The study delivered a post-tax NPV8 of US$1.4bn for the whole project and an IRR of 153%. We also review the quarterly production report from Shanta Gold, a company that is building a solid reputation for delivery from its New Luika operations in Tanzania.

You might have missed this on West African Resources (we did!). The company has now received the mining permit for its lead project in Burkina Faso; this has been renamed Sanbrado (it was formerly Tanlouka). With this significant milestone passed, the company is now focused on the delivery of the definitive feasibility study for the project, which is scheduled to be completed by the end of 1Q17.

Just to remind you about our latest publications. Jim Taylor put out Base Resources*† — December Quarterly Activities Report, 17 January 2017. The company’s latest quarterly figures show it continuing to offer quality exposure to improving mineral sands markets. Production was largely stable, with guidance for 2017 largely unchanged.

We also published our latest edition of The Alchemist. This was focused on zinc, which should benefit from rising commodity prices, production cuts, minimal new mine development and growth in demand. The piece looks at where investors can obtain exposure to zinc miners. It can be viewed here.




LON:MARL| £0.835 | US$128m

Stellar Economics Highlighted in the Hot Maden PEA

Mariana Resources has announced the results of its Preliminary Economic Assessment (PEA) of the 30%-owned Hot Maden gold-copper project in Turkey. Headline figures includes a base case of 1.0Mtpa mined, a nine-year mine life producing 2.6Moz Au and 142,000t Cu, an IRR of 153% and an NPV8 of US$1.4bn.

COMMENT: The Hot Maden PEA assumes very low operating costs and a low upfront capital intensity from a sizeable underground mining operation. The economics showing a post-tax NPV8 of US$1.4bn and an IRR of 153% highlight why Mariana’s stock price has quintupled over the last 12 months. The pace of development has been fast, with no sign of letting up. The current programme includes a further 10,000m of drilling, with the next milestone the planned publication of a pre-feasibility study in 3Q17. Subject to financing and permitting, we suggest that this could see the completion of a DFS and the project construction completed by the end of 2018.

Mariana’s flagship asset is the Hot Maden Project in Turkey — Hot Maden is a gold-copper project in north-eastern Turkey. It is a joint venture, of which Mariana owns 30%. The JV partner owning 70% is Turkey-based Lidya Madencilik Sanayi ve Ticaret AS (Lidya), the mining arm of Çalık Holding, a private Turkish conglomerate with operations in energy, construction, mining, textile, finance and telecommunications. The company’s 30% interest was acquired as part of its acquisition of Aegean Metals Group (announced in September 2014). Drilling commenced in December 2014 and was performed (and fully funded) by Lidya in order to earn its 70% interest.

Very low capital intensity is key to driving IRR — Upfront capex is expected to be US$169m, which equates to US$51/oz AuEq over life-of-mine. Total capex (upfront + sustaining) is expected to be US$261m, which equates to US$79/oz AuEq life-of-mine.

Low-cost underground mining adds to the positive economics — The mine plan assumed in the PEA is an all underground operation using transverse and longitudinal long-hole open stoping. The base rate for mining and processing is 1.0Mtpa, with an assumed mineable quantity of 7Mt at 11 g/t gold and 1.9% Cu over a nine-year mine life. Mining costs are assumed to be low at US$31.05/t.

The gravity and flotation process delivers high recoveries — Metallurgical testing to date has been done through flotation and concentration, and indicated high recoveries of both copper and silver. The assumed recoveries vary based on grade, but the life-of-mine weighted averages are 88% Au and 90% Cu. The flow sheet for the PEA assumes the production of one standard copper-gold concentrate, and a second gold-bearing pyrite concentrate for sale to smelters. Processing these concentrates is assumed to cost US$15.13/t.

Economics highlight a low-cost operation with a very high NPV — In calculating the NPV, the company assumed a gold price of US$1,250/oz and a copper price of US$2.75/lb. Royalties on the property include a 2.6% state royalty and a 2% NSR to pay to Sandstorm. The PEA highlights an NPV of US$1.4bn using an 8% discount rate, and an IRR of 153%.

The fast pace of development is expected to continue — Lidya and Mariana will continue to advance this project rapidly in order to capitalise on what appears to be a highly cash-generative asset. This went from early drill results to PEA in 20 months, and is expected to move to PFS by 3Q17. The PFS is expected to consider the economics of the hanging-wall zinc zone (2.8Mt at 4.0% Zn), which was not considered in the PEA. The study will be conducted concurrently with a 20,000m drill programme planned for this year, including exploration drilling aimed at the discovery of new resources south of the Main Zone in the area of the old Russian mine.


LON:SHG | £0.11 | US$81m

December Quarterly Production and Operational Update

Shanta Gold has announced that 4QFY16 production from New Luika in Tanzania was 18,897oz (-8% QoQ). Cash costs were US$486/oz (+26% QoQ) and AISC US$747/oz (+20% QoQ). For the full year, production was 87,713oz (+7% YoY) and AISC were US$661/oz (-22%).

At 15,285oz, gold sales for the quarter were 81% of the total produced over the period. This, and a lower gold price received of US$1,187/oz, contributed to cashflow from operations going from US$11m in 3QFY16 to an outflow of US$0.1m in 4QFY16. Capex of US$13m and the receipt of US$5m in cash from a silver streaming deal led to a US$5m increase in net debt QoQ to US$43m (debt of US$58m and cash of US$15m).

Production and cost guidance for FY17 was 80,000–85,000oz at AISC of US$800-850/oz. Production is expected be lower during 1H17, when the ramp-up of higher-grade underground ore is scheduled to commence, than in 2H17.

COMMENT: Annual production was a record for the operation and was ahead of guidance for the year of 82,000-87,000oz. Also, AISC for the year of US$661/oz were lower than guidance of US$690-740/oz, further building the current management team’s growing reputation for delivery. This was reinforced by statements that the all-important, fully-funded transition to underground operations is on budget and on schedule to deliver first ore by mid-year.

With respect to the future; an updated mine plan is planned to be completed by the end of 1Q17, which we expect to increase the planned mine life by two years (to 2023). The project retains considerable local and regional exploration potential, on which the company is now re-focusing its attention.

Encouragingly, the company also stated that its net debt will continue to decline in 2017, despite the completion of the underground development programme in 1H17.

In summary, the outlook for Shanta looks positive.

Production has been stable and costs have fallen — Commercial production was declared at the 100%-owned New Luika gold mine in south-west Tanzania in 2Q13. The company produced 64,000oz in 2013, 8,000oz in 2014 and 82,000oz in 2015; it has now delivered 88,000oz in 2016. Over each of these years, All-in Sustaining Costs (AISC) declined YoY (from US$1,049/oz to US$941/oz, to US$834/oz and to US$661/oz in 2016).

Much of cashflow hitherto has been re-invested in the project — A large proportion of the healthy cashflow generated by New Luika since coming on-stream has been reinvested in the operation. Between 2013 and 2016, Shanta’s operating cashflow totalled US$140m; over the same three-year period, a total of US$115m of this was reinvested in the operations (mainly on retrofitting the plant), resulting in net cashflow before finance over the four years of US$25m. In spite of the planned capex in 2017 of US$33m, much of which will be spent in 1H17, the company has stated that it expects to reduce net debt over the coming year.

New Luika commenced transition to underground in 2016 — Operations currently comprise production from two open pits — Ilunga and Jamhuri (which contained 39,000oz of gold reserves) — and from stockpiles. A further three small deposits (with total reserves of 49,000oz) are planned to be mined by open pit until the end of 2021. Under the current plan (‘Base Case Mine Plan’ of September 2015), production from underground mining operations is planned to commence at the Bauhinia deposit in early 2017, and at the Luika deposit by mid-2017. This plan included total production of 310,000oz from 2016 to early 2022, at average AISC of US$640/oz and pre-production capex of US$38m (excluding working capital). Assuming throughput of 600,000tpa, recoveries of 90% and a head grade of 4.8 g/t, the Base Case Mine Plan forecast average production of 84,000oz pa between 2016 and 2020.

New mine plan to be published in 1Q17 — The company plans to announce a new mine plan in 1Q17 that will update the previous ‘Base Case Mine Plan’ of September 2015. The new plan is expected to include a modest increase in reserves at the Elizabeth Hill deposit, and also the incorporation of a third planned underground operation at the Ilunga deposit. We expect that this will extend the mine life by two years (until mid-2023).

To date, development of the first underground operation at Bauhinia is on time and budget — The decline has now intersected the first ore levels and the first stope is planned to be in production by July 2017, with full production from Bauhinia to be reached by 1Q18. We anticipate first production from Luika underground by the end of 2017 and full production around mid-2018.

Current EV of US$124m — Net debt at the end of 2016 was US$43m, comprising US$15m of cash and US$58m of gross debt. We estimate that this comprised:

• US$3m of promissory notes, repayable April 2017

• US$37m loan from Investec (Libor +4.5%, repayable over four years)

• US$15m of convertible loan notes (maturing April 2019, 13.5% interest, convertible at US$0.47/share (equivalent to £0.38/share))

• US$3m of equipment finance and lease finance

At the company’s current share price and with 583m shares outstanding, the current market cap is equivalent to US$81m. With net debt at end-December of US$43m, the estimated enterprise value is therefore US$124m.


]]> Madalena Energy boosted by Argentina’s ‘market friendly’ policies says analyst Thu, 19 Jan 2017 14:17:00 +0000 Sound Energy shows no sign of slipping as it starts 2017 in a big way Thu, 19 Jan 2017 13:03:00 +0000 Zak Mir tips Xeros Technology shares to re-test 2015’s highs Thu, 19 Jan 2017 11:30:00 +0000 The Xeros Technology Group PLC (LON:XSG) shares could be set to revisit its 2015 highs, so sys leading technical analyst Zak Mir.

“It looks as though a break through £2.50 and this 2015 resistance line could take the shares up for a re-test of 2015’s best levels of above £3.50 for later in 2017,” he explains in the latest segment of the Proactive Investors Bulletin Board.

]]> Sound Energy Thu, 19 Jan 2017 10:42:00 +0000 A flash blog on Sound this morning but a genuine keynote deal to mention let alone a very good EWT reported by the company.

The EWT has clearly been a significant success and in line, or better than the company had expected. Just under 1 BCF was produced in 56 days of continuous flow and they have now started the final pressure build up phase. This is consistent with pre-test estimates and confirms good deliverability of the TAGI reservoir, it justifies the horizontal well and shows ‘significant potential’. Flow rates were were limited to 40% draw-down to preserve completion integrity and good average rates were achieved over decreasing choke sizes. With no formation water and no indication of barriers detected Sound will now check pressures at TE-5 and TE-6 for connectivity. The last piece of this jigsaw for now is the TE-8 well for which a fair bit of valuation lies, civil works are under way some 12km away from TE-7  and the company are expecting to spud next month.

In another announcement this morning the company has proposed that they acquire OGIF’s interests in Eastern Morocco for shares at what seems like an attractive discount. OGIF is a Moroccan fund owned by six large local institutions including the largest Bank and Pension Fund amongst others. The influence and access to capital in country should not be dismissed lightly and I suspect that the interest that OGIF may have in getting involved in the infrastructure solutions may help identify these with such help from the new shareholder.

The deal gives Sound and its shareholders a very strong position, by buying in before the outpost well is drilled gets an early start and the 30% discount to core NAV might achieve even more. This is hugely accretive to Sound and delivers scale on an impressive basis (75% gross, 47.5% net of Tendrara and 75% gross of Meridja), should this asset prove to be as big as some expectations, then it prepares the way for a classic asset sale if a suitor with deep pockets were to come along. These are exciting times for faithful retail holders, supportive Continental, and now OGIF who bring a local interest to the play engineered by Sound’s strong and enterprising management.

]]> Sound Energy deal 'one of the best in the industry for a while' says Malcolm Graham-Wood Thu, 19 Jan 2017 10:31:00 +0000 Oil analyst Malcolm Graham-Wood outlines to Proactive the significance of Sound Energy PLC's (LON:SOU) deal to acquire an extra 20% of the Tendrara gas project.

''The fact that Sound have tied all this up means that if the plan in a year or two's time was to sell this asset in one go ... then you've just made it possible for that to happen''.

Graham-Wood adds: ''Sound shareholders should like this very much''.

]]> VSA Capital Market Movers - Acacia Mining Thu, 19 Jan 2017 08:41:00 +0000 Acacia Mining (LON:ACA)

Acacia Mining (LON:ACA) has announced strong production results for Q4 2016. Production of 213koz was up 6% YoY resulting in record full year production of 830koz, up 13% YoY. Higher throughput and stronger recoveries offset a marginal YoY decline in grade driving cash costs down by 7% YoY whilst AISC were down 5% YoY to US$952/oz. For the full year AISC of US$958/oz, down 14% YoY, indicates strong free cash flow generation, which given the stronger gold price for much of the year, resulted in net cash rising from US$114m to US$219m.

Although full year guidance was not provided at this time, ACA indicated that production at Buzwagi would be extended by six months to the end of 2017 before two years of stockpile processing. This will likely result in an increase in annual production from 162koz in 2016 at Buzwagi.

It was announced recently that ACA is in talks to merge with TSX listed Endeavour Mining (EDV CN). EDV has assets in Mali, Ghana and Ivory Coast. EDV produces less gold per annum at below 625koz, however, this at a lower AISC of less than US$920/oz. EDV is currently capitalised at C$2.17bn (£1.3bn) versus ACA at £1.78bn. The merger would create a geographically diversified Sub-Saharan gold producer with significant growth potential from EDV’s Hounde project in Burkina Faso. With the gold price likely to be volatile in 2017, the strong cost position of both firms places them in a strong position.

]]> UK Oil & Gas Investments lands Isle of Wight extension Thu, 19 Jan 2017 07:58:00 +0000 Sound Energy strikes deal with Moroccan fund to consolidate its stake in Tendrara Thu, 19 Jan 2017 07:54:00 +0000 Sound Energy’s latest Morocco well flowed close to a billion cubic feet of gas during tests Thu, 19 Jan 2017 07:21:00 +0000 Protean Energy granted an ASX trading halt Thu, 19 Jan 2017 00:30:00 +0000 Riva Resources granted key cobalt license as shares rise Wed, 18 Jan 2017 23:30:00 +0000 Greka Drilling looks to diversify as uncoventional work slows Wed, 18 Jan 2017 15:24:00 +0000 PowerHouse shares power on as it appoints consultant for waste-to-energy projects Wed, 18 Jan 2017 12:11:00 +0000 Oil price, Faroe, SDX Energy, And finally... Wed, 18 Jan 2017 11:39:00 +0000 Oil price

Both the Saudi Oil Minister and the head of Saudi Aramco were on their hind legs at Dav-oh yesterday, the former saying that the US supply infrastructure was ‘decimated’ and the latter confirming that the oil market would have re-balanced by the end of the first half. He also snuck in that the IPO would aim to raise around $100bn.


Faroe has announced that it has received four new licences in the recently announced APA round. Three are in the Norwegian North Sea of which one looks very like a possible Brasse extension, one is the Pabow prospect east of Shango and one is the Goanna prospect. They have also received one licence in the Norwegian Sea which contains the Canela project. These awards being in the APA round, ie Awards in Pre-defined Areas, mean that Faroe are able to pinpoint such areas and adds exploration as well as concentrating on consolidating near Brasse for example. With few commitments Faroe have been wise to pick up these blocks which underscores my favourable valuation  for the future and will surely remain in the bucket list come the end of January…

SDX Energy

My weekly VoxMarkets Podcast was about SDX Energy where management have announced that they are looking at parts of Circle Oil and an equity raise to go with it. The link is below:

VOX Markets podcast: includes Malcy on SDX Energy

And finally…

Sensational news from down under this morning where Brit Dan Evans has beaten the No 7 seed Marin Cilic…

In the FA Cup replays there was indeed giant killing going on as Sutton beat Wimbledon and Lincoln beat the Tractor Boys.

Tonight in the cup, the HubCap Stealers go to Plymouth, the Magpies welcome Birmingham City and  the Canaries visit the Saints.

]]> Cairn Energy shares set to advance another 16% says Zak Mir Wed, 18 Jan 2017 11:18:00 +0000 Cairn Energy PLC (LON:CNE) shares may be set to advance another 16%, according to technical analyst Zak Mir, who dissects the oiler’s share price chart.

Mir, in a Tip TV segment for Proactive Investors, highlighted that in early 2016 the share broke above the 200-day moving average and last March there was a ‘golden cross’ buy signal triggering an uptrend in the chart.

“That momentum has been maintained. In the current situation you’re probably looking for the share to just make a little bit more progress,” he said.

Mir says the top of the rising trend channel is as high as 280p.

]]> VSA Capital Market Movers - Hochschild Mining Wed, 18 Jan 2017 09:08:00 +0000 Hochschild Mining (LON:HOC)

Production numbers for Q4 and the full year show a robust growth in output of both gold and silver for Hochschild (HOC). Total silver equivalent ounces for the year rose 31% to 35.5m ounces on the back of a rise in gold output to 246kozs while silver output rose to 17.3mozs.  AISC costs per equivalent ounce of Ag are looking to come in at $11/oz-$11.50/oz.  Cash grew by almost US$60m to US$140m over the year.

Forward guidance is rather conservative with growth of 2mozs to a 37moz target.  AISC costs are predicted to rise about $1/oz to above US$12/oz due to increased exploration budgets and capex on the Pablo vein development.

We see Inmaculada mine is proving its production worth for the company but also is its corporate vulnerability; being its flagship operation and significant source of cashflows.  It will be interesting to see what HOC may do with its rising cash on M&A opportunities in coming months.

]]> Petro Matad shares rise as Shell exit payment is now expected in matter of days Wed, 18 Jan 2017 08:56:00 +0000 Faroe Petroleum lands new exploration licences offshore Norway Wed, 18 Jan 2017 07:58:00 +0000 Angus Energy advances Brockham well near Gatwick Gusher Wed, 18 Jan 2017 07:36:00 +0000 Lion Energy in a trading halt pending update on well Tue, 17 Jan 2017 23:00:00 +0000 Boss Resources heads to market following uranium re-rating Tue, 17 Jan 2017 21:00:00 +0000 Madalena expects to realize average oil price of $54.00 in Q4 2016 Tue, 17 Jan 2017 20:21:00 +0000 Premier’s Dr Clark reappointed to United Nations’ B20 Task Force Tue, 17 Jan 2017 15:53:00 +0000 Cairn Energy set for an eventful year of drilling in Senegal Tue, 17 Jan 2017 09:46:00 +0000 Oil price, Tullow, Cairn, Cape, Velocys, And finally... Tue, 17 Jan 2017 09:38:00 +0000 Oil price

The above prices are slightly skewed as the US was shut for MLK day, I suspect that tomorrow will rearrange the order of things. I remain sceptical about bulls and bears sticking to their view, yesterday the Saudis said that after the May meeting the quotas may not need to be rolled over as ‘the market should have re-balanced by then’ especially as they are over cutting to make up for the likes of Libya. Cue whooping and shouting but no, the bears immediately went off saying that the game was over and the end was high, you pays your money and makes your choice.

Dav-oh starts today and all those people paying 30 grand each for the privilege cant be wrong, can they? They didnt expect Brexit or Trump and so far havent managed to fix the world in any way shape or form. They have said that you could put the richest 8 people in the world in a golf buggy and they would be worth the same as 50% of the rest of the world but do nothing about it, shame on you all….!


A nice discovery from Tullow today at Erut-1 in Kenya where the oil column was 100-125m which is indeed impressive. The well was to test the structural trap at the northern limit of the South Lokichar basin and de-risks multiple prospects. With Kenya looking better the farm-out to Total (right this time) in Uganda looks smarter and smarter.

Cairn Energy

A pre-close update from Cairn today but very little to add. The 3rd phase of drilling in Senegal is about to start with SNE-5 and 6 to be drilled at the southern end of the structure in an attempt to provide connectivity and deliverability. After that the selection process for the next wells takes place. Kraken plods on with first oil due in Q2 2017 and Catcher also looks likely to be onstream H2 2017. Here capex is $1.6bn which is $600m less than originally estimated. With $335m of cash and the RBL undrawn all looks good but after UK devex of $170m this year plus E&A of $125m those receivables will be handy. The arbitration re CIL continues and with some big cheques to write i’m sure they wish they could access some of that cash pile.


Same old, same old Cape, repeatedly delivering the goods and not always being appreciated…Today they announce a contract for the Saudi Aramco Jazan refinery in Saudi Arabia and also the scope of the contract with Daewoo on the same project has been increased. Whilst the legal matters do, I understand, hang over them, the company cannot be accused of slowing the rate of growth in the business proper and the market should be more appreciative.


The company announce a strategic alliance with Morimatsu Heavy Industry today which is intended to reduce the costs of the smaller scale GTL plants. MHI will be the preferred supplier of module engineering and fabrication services for all Velocys’ plants. I have a meeting in the book with David Pummell the Velocys CEO and look forward to a proper catch-up then.

And finally…

Wins this morning down under for Konta, Watson and Edmund with Sir Andy to come.

Valtteri Bottas signs for Mercedes on a one year contract hoping to be ‘equal with Lewis please’ and asking for the ability to race each other with no rules…

And of course it is FA Cup replay week, several tonight including Wimbledon v Sutton, the Eagles v Bolton and of course Lincoln v the Tractor Boys…

]]> Point Loma Resources Ltd looking to grow value in Alberta Tue, 17 Jan 2017 08:44:00 +0000 Chief executive of Alberta-focused oil junior Point Loma Resources  Ltd (CVE:PLX) Terry Meek runs Proactive through the firm's activity and its ambitions.
"We operate in West Central Alberta in what have typically been conventionally producing horizons. We are applying unconventional techniques to those horizons."
Looking ahead, the strategy will be a combination of further drilling out opportunities and "selective acquisitions, explains Meek.
"We still feel there's very good value in certain acquisitions in the market today before prices run up too far ahead of us."

]]> VSA Capital Market Movers - Rio Tinto Tue, 17 Jan 2017 08:25:00 +0000 Rio Tinto (LON:RIO)

Rio Tinto (LON:RIO) has announced mixed production results for Q4 2016 resulting in a robust full year result. Copper production was up by 20% YoY to 134kt meaning full year production was up 4% to 523kt, however, this was short of guidance owing to no contribution from Grasberg. This was despite strongly higher production at Kennecott and a marginal recovery at Escondida.

Iron ore shipments were modestly higher, up 4% YoY and 3% QoQ to 86mnt with full year shipments of 330mnt up 6% YoY. As well as a targeted increase in production which met guidance, RIO also benefitted from minimal disruption from poor weather. Coking coal production was up strongly by 15% QoQ and 1 % YoY to 2.2mnt although up just 4% YoY to 8.1mnt. Semi soft and thermal coal production was weak, down 13% QoQ and 3% YoY to 5.2mnt in Q4 2016 and 4% lower YoY at 21.4mnt although this was in line with guidance.

Bauxite and aluminium production was strong, with record annual aluminium production. Bauxite production of 12mnt was up 8% QoQ although down 2% YoY while full year production was up 9% to 47.7mnt, ahead of guidance. Aluminium production driven by the improved Kitimat smelter was up 7% QoQ and flat YoY to 925kt while full year production was up 10% YoY to 3.6mnt.

RIO should benefit from stronger commodity prices in Q4 2016 which should offset production weakness in copper and thermal coal and enhance revenues in aluminium and iron ore.

]]> Velocys agrees new partnership with Japan’s Morimatsu Tue, 17 Jan 2017 08:21:00 +0000 USOP says its shares are in demand Tue, 17 Jan 2017 08:05:00 +0000 DekelOil confirms maiden dividend Tue, 17 Jan 2017 08:02:00 +0000 Tullow Oil hits new discovery in Kenya Tue, 17 Jan 2017 07:26:00 +0000 Sacgasco secures farm-in partner to drill California gas prospect Tue, 17 Jan 2017 03:00:00 +0000 Petsec Energy brings near-term production opportunities to Proactive's CEO Spotlight Sessions Mon, 16 Jan 2017 22:00:00 +0000 City broker likes the look of DekelOil Mon, 16 Jan 2017 15:35:00 +0000 Can Hurricane Energy make it four successful wells in a row in the North Sea? Mon, 16 Jan 2017 14:50:00 +0000 Point Loma investor Madalena sells C$258,000-worth of shares Mon, 16 Jan 2017 14:02:00 +0000 Halifax well could be 'cherry on the cake' for Hurricane Energy Mon, 16 Jan 2017 13:45:00 +0000 Hurricane Energy Plc (LON:HUR) has now spudded the Halifax exploration well in the Rona Ridge Area in the West of Shetland region of the North Sea.

Proactive's Equity Reporter Jamie Ashcroft says: ''Hurricane's enjoyed a lot of success, shares are up around 400% this past year, mainly thanks to these positive well results and this is the fourth and final of this campaign so if it also comes off it'll be the cherry on the cake for Hurricane''.

]]> Oil price, Hurricane Energy, Independent Oil & Gas, And finally... Mon, 16 Jan 2017 13:16:00 +0000 Oil price

The week ended down a little as those who believe that quotas will be busted shouted more loudly than the believers, empty vessels and all that. The rig count actually fell, by 6 overall to 659 and in oil by 7 to 522 but the above were shouting too loudly about 9 or even 10m b/d from the USA in the future.

So now to my familiar rant, Dav-oh and all its pretentious and back slapping clap trap. I will be monitoring companies who waste shareholders money (tickets etc average €29,000 each person) and will try and find the wonderful graph that shows how badly companies perform after their Primadonna executives schmooze with other C suite grand fromages. 17th -20th if you have the 30 grand to spare and of course can find some lodgings…. The President of China is there tomorrow and Joe Biden and John Kerry have still got the White House Amex card with them at least until Friday morning when the swamp starts draining….

Hurricane Energy

Hurricane  announced this morning that it has spudded the 205/23-A well (Halifax well) which will drill below local structural closure  and then perform an open hole DST and subject to results, possibly deepen to investigate the oil water contact. The reason for all this is that the adjacent Lancaster Field possibly extends its boundary into the recently awarded P2308 licence which is contiguous to and extends North Easterly, from that discovery, indeed is is possible that it extends up to the Rona Ridge.  This will be the concluding well of this drilling programme and as such, by the time this well result is announced towards the end of Q1 of this year, have made the most significant oil find in British waters for many years.

Independent Oil & Gas

IOG has signed an MOU to buy a disused gas pipeline in the Southern North Sea for a nominal amount. After recommissioning (and a prize if anyone can think of another in the North Sea) the pipeline will provide for the evacuation of gas from the Blythe hub, the Vulcan satellites and possibly the recent Harvey discovery. It also comes with associated onshore facilities which makes sense but not as much sense as ownership confers which mean no tariff to pay and thus better economics, indeed one day they might be in a position to charge 3rd parties for its use. The company rightly suggest that this is an acquisition of strategic importance, comes for a ‘nominal cost’ and has the approval of the OGA, whats not to like.

The announcement also updates the market on the Skipper appraisal well which produced as expected 11º API oil that might be extractable but would ‘present a challenge for refining and marketing and trade at a significant discount to  the current Brent price’. Whilst there is little doubt that this will be hard work, it does have a very low wax content and is mobile in the reservoir so probably best not to rule it out altogether.

And finally…

In the USA we are getting closer to the Superbowl, to be held in Houston on 5th February, my invitation must be about to be sent out as it is getting late to ignore me… This weekend the Packers beat the Cowboys with three seconds left and will next up meet the Falcons whereas the Steelers beat Kansas and will face the Patriots to be in that in that final.

The Australian Open tennis is under way and this morning both Sir Andy and Mr Evans went through.

In the footy Chelski, Spurs and the Gooners all won easily whilst the HubCap Stealers went to the Theatre of Dreams and got a draw.

James DeGale got a draw and was probably happy to get that, he also left his two front teeth on the canvas….

And in the first cricket One Dayer England set India 350 and sat back and watched them win, not quite what they expected.

]]> Zenith Energy Ltd a 'low cost operator with big assets' says CEO Mon, 16 Jan 2017 10:33:00 +0000 Zenith Energy Ltd is a Canadian based publicly traded international energy exploration company.

Their main focus is the acquisition of large acreages in oil producing countries that offer an adequate protection of the ownership of petroleum assets by foreign investors.

CEO Andrea Cattaneo tells Proactive they're the only independent, junior oil producer in Azerbaijan.

''It's been quite an achievement to convince the national oil company that we are as good as the big names they've been dealing with for years''.      

Zenith Energy's also begun trading on London's AIM market.

]]> VSA Morning Agri Comment Mon, 16 Jan 2017 08:18:00 +0000 MPE Share Buy-back Programme

Indonesian palm oil producer MP Evans (LON:MPE) has announced a share buy-back programme.

£5m share buy-back programme

Duration of up to 12 calendar months

Programme will be kept under review and Board will make a decision in due course on whether to extend it

VSA Comment

Following its successful bid defence against Kuala Lumpur Kepong (KLK MK), one of the key concerns for us is that we may see a gradual drifting of the share price from current levels, as MPE naturally takes time to deploy its surplus cash into earnings enhancing assets.

Although fairly small, the commencement of a share buy-back programme should help address this issue and maintain the share price at around the current level, given the low levels of liquidity in the stock. Over the past 90 days, MPE has traded on average c60,000 shares a day (£350-400k).

Fellow palm oil producer REA Holdings (RE/ LN) carried out a similar share buy-back programme at the end of 2013 through to late 2014, which stabilised its share price somewhat. However, its share price fell significantly following completion of this programme.

In the case of MPE we feel this is less likely to happen, given the strength of its balance sheet, and this programme should give the company a little more time to implement its post-KLK bid strategy, including the completion of various acquisitions to support its long-term growth plans.

]]> Magnolia Petroleum says onshore activity is on rise in US Mon, 16 Jan 2017 08:15:00 +0000 LGO Energy awaits decision from Spanish authorities over Ayoluengo field’s future Mon, 16 Jan 2017 07:57:00 +0000 Hurricane Energy kicks off Halifax well Mon, 16 Jan 2017 07:29:00 +0000 Sacgasco to update on farm-out in California Mon, 16 Jan 2017 03:30:00 +0000 Octanex NL on track to commence oil production in Malaysia Mon, 16 Jan 2017 02:00:00 +0000 Carnarvon Petroleum safely completes operations at Phoenix South-2 Mon, 16 Jan 2017 02:00:00 +0000 Empire Oil & Gas NL to update on well testing at the Red Gully Sun, 15 Jan 2017 22:30:00 +0000 Pancontinental Oil & Gas NL gets ready to raise Sun, 15 Jan 2017 22:00:00 +0000 88 Energy shares could add more than a third in coming months Sat, 14 Jan 2017 09:00:00 +0000 The ‘King of Charts’ Zak Mir is tipping oil and gas explorer 88 Energy ltd (LON:88E, ASX:88E) to add more than a third to its share price over the coming weeks and months.

In the latest episode of the Proactive Investors Bulletin Board, Mir says: “The view at the moment is while we’re above the 50-day moving average of 2.3p we could at least retest the August resistance zone towards 3.5p.”

]]> What does Tullow Oil's US$900mln farm-out mean for its heavy debt pile? Sat, 14 Jan 2017 08:51:00 +0000 Iofina sees production return to normal levels Fri, 13 Jan 2017 14:45:00 +0000 Upland Resources gets green light for Hardstoft acquisition Fri, 13 Jan 2017 13:53:00 +0000 USOP sees over 1bn barrels in Nevada Fri, 13 Jan 2017 11:01:00 +0000 Oil price, Trinity E&P, Andes Energia, And finally... Fri, 13 Jan 2017 10:54:00 +0000 Oil price

Another good day yesterday as news that the Saudis production was falling more than expected came out. With production now below 10m b/d they are clearly making up for any quota busters such as Iraq. Bears of the deal will clearly take it as bad news that the Saudis have to make up for others but that’s how its going to be. Better news came from China where imports in December were a record 8.56m b/d with CNPC forecasting growth of 5% + in 2017.

Trinity Exploration and Production

Even though I wrote about it recently and compared Bruce Dingwall to Superman or similar, I had to rub my eyes and check that it really was Trinity returning at 7p after its lengthy suspension. As per its RNS it really has sorted its own debt mountain and it is now hopefully manageable, it has also got enough cash to drill four wells and do some serious work on a number of existing holes in the ground. With a target of 3/- b/d thinks are definitely looking up and with Range picking up too maybe Trinidad is back on the map.

Andes Energia

Longer term readers will know that AEN has been a favourite stock for some time, a slow burner due to Argentina’s historic malaise but one that will take full advantage of Macri’s attempts to get back on a better economic footing. Today I am seeing signs that there is a deal brokered by President Macri to enable a major ramp up of production at the Vaca Muerta by getting the Government, the oil and gas companies and the labour unions together in an agreement. AEN may take time but has significant value waiting to be unlocked.

Voxmarkets Podcast

This week’s podcast on Voxmarkets covers Premier Oil and Rockhopper, if you want to listen in the link is below, I come on at 40m 10s.

VOX Markets podcast: includes Malcy on Premier Oil and Rockhopper Exploration

And finally…

This weekend sees the rugby going back to the European Champions League Cup with all the great fixtures that involves.

Cricket resumes again in India with the first One Dayer starting at 0800 hours on Sunday whilst today at a snow covered Lords, Andrew Strauss meets up with Captain Cook to try and persuade him to stay as skipper until next winters Ashes…

A big night in the ring for James DeGale who takes on Badou Jack tomorrow night…

And in the footy the big game is obviously the visit of the HubCap Stealers to the Theatre of dreams. Elsewhere Chelski go to current Champions the Foxes, they should pick up the silverware and take it home with them, the Noisy Neighbours are at the Toffees, the Gooners go to the Swans and Spurs welcome the Baggies.

]]> 88 Energy now sees 1.5bn barrels of conventional oil resources in Alaska Fri, 13 Jan 2017 07:33:00 +0000 Range Energy borrows C$1.31mln from insiders Thu, 12 Jan 2017 19:08:00 +0000 Point Loma highlighted among growth stocks to watch by Mackie Thu, 12 Jan 2017 12:06:00 +0000 City analyst blasts council decision to block Wressle field development Thu, 12 Jan 2017 11:53:00 +0000 Oil price, SDX Energy, Ithaca, Faroe, Premier, Ophir, Wressle, And finally... Thu, 12 Jan 2017 10:06:00 +0000 Oil price

There are going to be a lot of weeks like this so get used to it! The Grand Old Duke of York would be proud of the ups and downs of the oil market mainly on the whim or rumour whirling around. Yesterday the good news was provided by the Saudis and the Russians who said that they were already increasing prices and cutting back production, mainly to Asian buyers but the strikes in the Niger Delta also steadied the ship. The EIA inventory stats were a mixed bag, crude rose by 4.1m barrels, higher than expected but products rose even more, record refinery runs were responsible for that with utilisation rates being the highest since September indicating strong demand, I hope…

SDX Energy

In what looked like a hastily prepared statement put out late yesterday, SDX announced that it ‘noted’ speculation concerning a potential acquisition and a ‘material equity raise’.  It has confirmed that it has entered into a non-binding agreement with Circle Oil for the acquisition of their Egyptian and Moroccan assets, subject to a fund raise. Clearly some on the roadshow has not understood the meaning of the phrase ‘you are now an insider’ and leaked the info.

All is not lost for SDX as this looks like a potentially very interesting deal, bought free and clear of debt, Circle has assets that would fit particularly well, especially those in Egypt. The onshore Morocco assets have needed a good shake-up and with Sound having made out so well and some signs of life at Gulfsands with John Bell having been recently appointed as MD this could be a very good deal for SDX. Obviously we will need to see how the next few days go but I am aware that the institutions are supportive and my inbox here and on Twitter shows that the retail investors are keen as well. As this moment in time I would give the benefit of the doubt to SDX, a company that is very much on the short list for the new bucket list.

Ithaca Energy

An operational update from IAE this morning, all will be revealed in the results but most things are going well here as one might expect. Production last year beat the guidance and this year is 19-22/- although Stella might improve that. Not in the short term as the start up has been delayed again but only to February but that makes no difference. The good news is that Harrier is now under way, a cheap development as it also uses FPF-1 and the GSA infrastructure. Opex is down 30% at $18 pb and net debt is falling too, this will only get better when the FPF-1 finally gets up and running. Still a top stock in the bucket list and a certainty to stay there, amongst the best in show.

Faroe Petroleum

Another very pleasing, well managed company, Faroe is also set fair for another good year I suspect. Dazzler has become Boné and is a high impact well that will be genius if it comes in, the company has also announced that a Brasse appraisal well is imminent. 2017 is set to be a ‘significant year for Faroe with a full program of exploration, appraisal, infill and early stage development’ set to keep investors happy and wealthy…

Premier Oil

Prems has also issued a trading statement, like London buses they all come along at the same time. Very little has changed for PMO though, we still wait for the debt talks to conclude but operationally things are going pretty well. Production beat the guidance although Solan looks like a walking disaster zone with production still ‘disappointing’. Catcher is still on target and Tolmount is up for approval soon just leaving Sea Lion to handle. At these industry prices Sea Lion should be profitable and as I have said before, other major projects around the world are now getting sanctioned, given how big this is for PMO they should be doing the same, although I know they will say that the bankers might say differently. Overall, Premier is looking in decent shape and subject to a lot of yeses, nos and maybes should stay with us…

Ophir Energy

Another to add to the update list for today and not much new here either, I am seeing the company soon so will update then. Fortuna is ‘on schedule’ for FID 1H 2017 but I am not convinced that Ophir will have much skin in that game when it comes onstream. Funnily enough, I imagine due to a printing error there was no CEO or Chairman’s statement in my RNS, how peculiar…


I may be wrong but I never thought that Wressle was a doubt on planning grounds, it is not a frac job as far as I am aware and so I need to chat to some of the participants before I say any more!

And finally…

Very briefly but the Saints could have done a lot of damage to the HubCap Stealers last night but won only 1-0 on the night after missing many chances.

]]> Premier Oil production continues to impress but investors still wait for refinancing Thu, 12 Jan 2017 09:34:00 +0000 VSA Capital Market Movers - Egdon Resources Plc, Premier Oil PLC Thu, 12 Jan 2017 09:00:00 +0000 Egdon Resources (LON:EDR)

Yesterday afternoon North Lincolnshire County Council’s Planning Committee refused planning consent for the development of the Wressle Oil Field. This is disappointing for stakeholders in the licence including Egdon Resources (EDR)#, which holds a 25% WI and is operator of the licence. Permission was refused by the council over concerns that it had insufficient information on ground contamination, effect on the local community and the local economy.

Wressle is a “conventional” oil field and does not require fraccing. Therefore, this result comes as a surprise to us. EDR will now consider its options on the project including its right to appeal and we await further updates.

However, Wressle only formed a small part of our 34p/sh valuation (1p/sh) and we therefore maintain our BUY recommendation.

Premier Oil (LON:PMO)

Ahead of its FY 2016 results Premier Oil (PMO) announced an operational update with record production of 71.4kboepd in 2016 (+24% YoY), in-line with its upgraded guidance. This strong operational performance was largely driven by the acquisition of E.ON’s North Sea portfolio and the Solan field coming online. Furthermore, estimated capex for 2016 is expected to be US$690m, below guidance of US$730m. Whilst net debt reduced in Q4 as anticipated to US$2.8bn with cash and undrawn facilities was cUS$600m.

PMO 2017 production guidance for 2017 is 75kboepd before any contribution from Catcher is considered and is revised for lower Solan production due to poorer than expected reservoir performance which is limiting water injection, production uplift from works to repair this is unlikely to be added before 2018.

Catcher is on schedule for start-up later this year with total capex now forecast at US$1.6bn (29% lower than originally sanctioned).

Approval of the Tolmount gas field in the Southern North Sea is expected shortly, however, we question if PMO should begin committing significant capex to greenfield development projects whilst it is still looking to reduce its net debt. Details on its refinancing are expected shortly.

]]> SDX Energy set to acquire Circle Oil’s Egypt and Morocco assets Thu, 12 Jan 2017 07:24:00 +0000 Octanex NL to update on forecast production Thu, 12 Jan 2017 03:00:00 +0000 Horizon Oil restarts production at the Maari oil field Thu, 12 Jan 2017 01:00:00 +0000 Madalena Energy closes Coiron Amargo stake sale Wed, 11 Jan 2017 19:40:00 +0000 Egdon Resources mulls appeal as Wressle application turned down Wed, 11 Jan 2017 16:24:00 +0000 Tullow Oil’s Kenya assets could be on auction block - expert Wed, 11 Jan 2017 14:02:00 +0000 Tullow Oil shares ease after it downgraded production guidance for 2017 Wed, 11 Jan 2017 11:14:00 +0000 Oil price, Tullow, Sundry-Wood Group-President- And finally... Wed, 11 Jan 2017 11:05:00 +0000 Oil price

Another down day as one might expect, this process is going to take some time and it wouldnt be normal if a combination of greedy hedgies and short term ambulance chasers didnt knock the market some days. The last couple of days have been all about Iraq and the extent to which they are cheating on their quota, to be fair it was obvious from the start that there would be an element of floutage and if this hasn’t been built in by the Saudis then i’m the Shah of Persia…

The API stats came out after the close and the 1.5m build was only slightly over the 1.2m guess, gasoline was in line at 1.7m but distillates were much higher than forecast at 5.5m barrels.

Tullow Oil

First the good news, I like the Uganda deal with Eni which takes away a lump of capex and probably speeds up the process, it does however take away from the potential upside for the portfolio. Indeed most of the trading statement continues with downsizing the portfolio one way or another. This is not in the plan as Jubilee is outwith their control and admittedly being paid for by the insurance Johnnies and TEN has come to a halt at 23,600 b/d net until the ITLOS ruling which may, come, 4Q of this year. Indeed, during the conference call the future of the Kenya investment was questioned, it looks as if the asset is on fast track to salesville. Tullow went into the bucket list this time last year and was in my view one of the braver calls, however it has more than doubled since then, not bad for a £3bn market cap stock but I am not so convinced that it will happen again, the jury is out.

Tullow also announced some management changes which gave the long term signal that Aidan has decided to call it a day, albeit in two years time. The excellent Paul McDade moves up to CEO and that means that Aidan will be Non-Executive Chairman for two years, words you never thought you would hear together, Aidan Heavey and Non-Executive….


Wood Group has managed to extend by another five years, with possible extensions, their framework deal with Aramco.

President has announced that it has contracted a rig for the Puesto Guardian programme, it will be mobilised in February and be under way in March. The company reaffirms its production target of 1,200 b/d by the end of the summer 2017 as forecast in the recent raise.

And finally…

The Red Devils beat the Hull City Tigers 2-0 last night in the Clueless Cup and the Saints take on the HubCap Stealers tonight.

FIFA has announced that in future anyone who pays the joining fee can turn up for the World Cup. This works with their existing policy of auctioning of the Finals to the highest bidder wherever it happens to be. Mr Infantino is certainly living up to his name and the leopard that is FIFA aint changing its spots as it pursues the quest for ever more money for the beautiful game…

Talking about selling off the family silver, it seems that the Jockey Club also needs a bit of a wallet warmer as it has decided to sell off Kempton Park to Redrow for a housing estate. Mind you, living in Mon Repose, King George Avenue does have a sort of ring abut it…

]]> Trinity Exploration & Production restructuring is now complete Wed, 11 Jan 2017 09:57:00 +0000 VSA Capital Market Movers - Tullow Oil plc Wed, 11 Jan 2017 08:57:00 +0000 Tullow Oil plc(LON:TLW)

In an operational update ahead of its FY 2016 results, Tullow Oil Plc (LON:TLW) confirmed production was in line with its recent guidance, with West Africa averaging 65,500boepd, whilst in Europe FY net production averaged 6,200boepd.

TLW successfully brought TEN online in August 2016. Gross annualised working interest production in 2016 averaged 14,600boepd (net 6,900boepd) but in early January the capacity of the FPSO was successfully tested at an average rate of 80,000boepd over a 24 hour flow test. However, TLW now expects production from TEN to average c50,000boepd gross in 2017 as no new wells can be drilled before the ITLOS ruling in Q4 2017 with regard to the maritime border dispute between Ghana and Cote d’Ivoire.

This follows TLW’s announcement yesterday over its major farm out for 21.57% of the Lake Alberta project to Total (FP FP) for US$900m. This will leave TLW with 10% of the project, which is expected to produce c230,000boepd once complete. The deal will consist of US$200m cash with Total to pay US$700m of TLW’s remaining development costs on the project. We view this as a positive deal as it will allow TLW to repair its balance sheet with cash flow from its producing assets and not enter into another intensive capex period. Indeed net debt at the end of 2016 stood at US$4.8bn and capex is expected to reduce from US$0.9bn in 2016 to US$0.5bn in 2017.

However, this update is likely to be largely overlooked by Aiden Heavey leaving his post as TLW’s CEO to become a non-executive chairman and will be succeeded by Paul McDade (the current COO) and we expect the stock to trade a little weaker today.

]]> President Energy inks rig deal for Argentina well workovers Wed, 11 Jan 2017 07:57:00 +0000 Gulf Keystone Petroleum signs up new chief operating officer Wed, 11 Jan 2017 07:28:00 +0000 Greenland Minerals and Energy is a stock on the move Wed, 11 Jan 2017 00:00:00 +0000 Carnarvon Petroleum brings gas and condensate discovery to Proactive's CEO Spotlight Sessions Tue, 10 Jan 2017 23:00:00 +0000 Grand Gulf Energy updates on Boleslaw as eyes focus on Alabama Tue, 10 Jan 2017 22:00:00 +0000 Cantor Fitzgerald still concerned about Tullow's debt after Uganda divestment Tue, 10 Jan 2017 15:55:00 +0000 Sam Wahab, oil analyst at Cantor Fitzgerald, says that the cash Tullow Oil (LON:TLW) will raise after selling more than two thirds of its interest in the Lake Albert project in Uganda to Total for US$900mln, is a "drop in the ocean" considering the company's huge debt pile.

"We do harbour some significant doubts over their net debt position," he says.

]]> Serica Energy advances as Sea production beats expectations Tue, 10 Jan 2017 13:16:00 +0000 Petro Matad on track for 2017 drilling but it still waits on Shell exit payment Tue, 10 Jan 2017 08:33:00 +0000 VSA Morning Agri Comment Tue, 10 Jan 2017 08:20:00 +0000 Carr’s Group#: AGM Statement

Ahead of its AGM later today, Carr’s Group (LON:CARR), the agricultural, food and engineering group, has provided a trading update for the eighteen weeks to 7 January.

CARR continues to trade in-line with expectations (FactSet consensus: revenues of £328.5m, +4.3% YoY, PBT of £14.4m, +2.1% YoY).

In agriculture (c80% of operating profit), the division is performing ahead of expectations. Compound feed and fuel volumes are ahead YoY, with machinery sales showing signs of recovery in Q1. Retail sales ahead of expectations; UK feedblock sales ahead YoY; US feedblock sales flat YoY.

In engineering (c20% of operating profit), the division is performing below expectations, driven by a significant contract delay in the UK manufacturing business.

Net debt at 3 December 2016 was £16.9m (3 September 2016: net cash of £8.1m).

VSA Comment

CARR has once more demonstrated the advantage of its diversified strategy. As we expected, CARR reports that it is operating in an improved environment with regards to its agriculture operations, perhaps best demonstrated by the reported signs of recovery in machinery sales, typically the first sector to suffer in a downturn and the last to pick-up in an upturn. With an improved outlook for farmers in 2017, particularly those in dairy, as discussed in our last VSA Agri Monthly publication, we believe the environment will continue to be beneficial for CARR for its remaining FY.

CARR again delivered compound feed volumes ahead of the overall UK ruminant animal feed market, which fell 0.7% YoY for September and October (November and December data not yet available) and again highlighting the market share gains that the larger producers are making. 

Although there has been little weather-related boost this winter to overall feed volumes so far, it is worth noting that sheep feed volumes have posted double digit increases in every month since the Brexit vote at the end of June and subsequent devaluation of the British pound. Key to this market will be whether these significant increases continue through the peak winter and early spring period.

More important to CARR will be UK demand for cattle and calf feed, for which the overall monthly YoY production decreases are moderating but have some way to go to reverse course, due to milk production continuing to be significantly lower YoY in recent months (last available data: -7.3% YoY in November, -4.2% YTD), despite steadily increasing milk prices.

As CARR had previously flagged would happen, US feedblock sales have slowed, as low US cattle prices begin to impact producers. CARR’s new facility at Shelbyville, Tennessee, expected to open by autumn 2017, should help a return to growth in this area over the medium-term. Although US cattle prices has staged somewhat of a recovery over the last two months, they remain significantly below those seen in 2014 and 2015 and farmers will need time to adjust to what may be a new normal.

No new information on potential acquisition targets was provided following the recent disposal of its flour milling division and the €7.85m acquisition of long-term strategic engineering partner STABER GmbH, except that management continues to review suitable acquisition opportunities. With £32.5m of undrawn facilities, CARR certainly has the firepower to make significant acquisitions in the coming year and we expect it will do.

As we move towards invoking Article 50 in March, considerable uncertainty has emerged in the UK and the unknown agriculture policy post-Brexit provides uncertainty for the sector over the medium-term, despite the guarantee of similar levels of funding until at least 2020. At the recent Oxford Farming Conference, Andrea Leadsom, Secretary of State for Environment, Food and Rural Affairs, outlined some of her views on this particular issue and professed her strong support for UK farmers, but it is also clear that much of detail remains unknown. Assessing the recent commentary, it seems that post-Brexit a focus on farming efficiency and high quality production seems most likely. This should support demand for CARR’s products in the market, which are particularly focused towards this segment of the UK farming sector.

]]> Roxi Petroleum shares fall after revealing problem with deep Kazakh well Tue, 10 Jan 2017 08:13:00 +0000 LGO Energy chairman Stephen Horton retires from company Tue, 10 Jan 2017 07:52:00 +0000 Northern Petroleum open offer was oversubscribed Tue, 10 Jan 2017 07:31:00 +0000 Peako Ltd among Tuesday's ASX % Gainer in morning trade Tue, 10 Jan 2017 00:30:00 +0000 Skyland Petroleum Group to provide update on acquisition Tue, 10 Jan 2017 00:00:00 +0000 Eco Atlantic shares jump; announces plan to float on London’s AIM Mon, 09 Jan 2017 16:42:00 +0000 Point Loma Resources starts producing from Nordegg well Mon, 09 Jan 2017 16:41:00 +0000 Oil price, Amerisur, Petrofac, Sundry-Plexus-Genel-Aminex-Sound Energy-Chariot-Trinity- And finally... Mon, 09 Jan 2017 13:02:00 +0000 Oil price

The oil price was steady enough last week, a pretty good performance under all circumstances. It battled with a strong dollar probably likely to be made stronger, as the NFP numbers were low field but wage growth indicated some heat in the US economy that will likely be treated by rate rise anti-inflammatory treatment. Add to that a modest growth of four oil rigs to 529 and a bearish reading from NYMEX  that in WTI money managers had cut their net exposure and you have a reasonable week. Expect the bears to start whinging about quotas not being adhered to any time soon but we have already had three of the biggest exporters cutting output and raising prices which is not a bad start. Remember that Russia is a good example of a country that cant turn on and off like the Saudis can.

Amerisur Resources

An update from the Platanillo-24 infill well which is located at the most northern developed lobe of the field. Again drilled under time and budget (under $2m), the well logged the reservoir section and has initially indicated the presence of 67.5 feet of gross oil and 38 feet of net oil in the U sands formation and 14 feet and 8 feet respectively in the T sands. There were no N sands here, as expected and it will be developed for commercial production from the U sands into Pas 3N. Meanwhile the rig heads north to Pad 2N to drill the Platanillo-22 appraisal well subject to some local social protests. Continued good progress here and eventually more for the OBA pipeline for exports.


PFC has announced a $600m contract at Salalah LPG, the gig, which will last 36 months is a lump-sum contract for the LPG unit and other facilities such as storage and jetty capacity. Having had an indifferent run last year I am expecting some contracts to materialise although after a recent meeting with the new CFO I am not running before walking and some contracts will have been lost permanently. The mood at PFC has undoubtedly changed for the better but Mr Cochran is pursuing a relentless war on costs, although my suggestion of taking money off the table across the board at IES wasnt part of the plan. I dont expect any major change in strategy, PFC is hunkering down and the group should pick up more orders soon, cash generation should remain positive and dividends do after all have to be paid, indeed delivery is most important and if growth cant be found, the value for shareholders can always be paid back…


Plexus has announced a four year framework agreement with Centrica in the Northern North Sea, it already supplies these but this makes the arrangements more solid.

Even Genel have come to the party with what looks like a half decent discovery at Tawke with 3,800 b/d at the Peshkabir-2 well.

Aminex has told us for some reason that drilling continues in Tanzania…

And Chariot has seen the ENI deal being ratified which is good but news already mostly in the price. Whilst I am full of admiration for Larry and his team, I am beginning think that with nothing to drill at all this year it may be dead money.

And Trinity has slipped the chains of those darned lenders and I am very much looking forward to welcoming Bruce and the team back into action.

On Friday I gave an interview to Proactive Investors following Sound Energy’s news from Badile, the link is below.

Proactiveinvestors interview: Sound Energy’s Badile project “ticks a lot of boxes”

And finally…

It was FA Cup weekend and few shocks, fielding a weakened team and drawing or losing does not constitute a shock so the Cherries and the HubCap Stealers have no hiding place. Most of the top teams are in the hat this evening including the Foxes, who beat the Toffees and Hull City Tigers who beat the Swans, the Canaries got a good draw against the Saints….

The ITV coverage of racing is taking us back to the dark ages and furthermore when it relegates racing to  ITV 4 having had it on normal ITV initially it shows just where racing fans are being placed….If you had it on the planner you missed the show….

And thank goodness for baby Rooooooooot who arrived at the weekend meaning that dad Joe could jump on a plane and be ready for the first one dayer in India on Sunday. As of now it is Joe senior who will be up all night being sick and poorly…

]]> Eland Oil & Gas and Serica Energy favoured by Peel Hunt oil analysts Mon, 09 Jan 2017 12:32:00 +0000 Can Chariot Oil & Gas shares head back up to 12p? Zak Mir thinks so Mon, 09 Jan 2017 11:35:00 +0000 Shares in Chariot Oil and Gas PLC (LON:CHAR) are set to climb again, with technical analyst Zak Mir tipping the stock to re-test the 12p mark it got close to in September last year.

“We’ve been in a trading range between 6p and 12p and I expect that range to continue,” Mir explains in the latest Tip TV Proactive Investors Bulletin Board segment.

“The 200-day moving average is rising at the moment to 7.7p and while we’re above that, re-testing the top of the range at 12p looks to be the favourite scenario.”

]]> Cairn Energy a ‘top pick’ as Jefferies looks at oil sector outliers Mon, 09 Jan 2017 11:13:00 +0000 Chariot Oil & Gas looks forward to drilling now Morocco deal with Eni is complete Mon, 09 Jan 2017 09:19:00 +0000 Genel Energy unearths new oil discovery in Kurdistan region of Iraq Mon, 09 Jan 2017 08:31:00 +0000 Plexus shares rise after it unveils deal with Centrica Mon, 09 Jan 2017 08:22:00 +0000 Dekeloil takes full ownership of Ivory Coast palm oil operation Mon, 09 Jan 2017 08:09:00 +0000 Highlands Natural Resources assets may be worth as much as US$600mln Mon, 09 Jan 2017 07:48:00 +0000 Aminex and Solo Oil give drilling update for Tanzania well Mon, 09 Jan 2017 07:24:00 +0000 Grand Gulf Energy logs untapped oil at well in Alabama Mon, 09 Jan 2017 03:00:00 +0000 Po Valley Energy eyes London Stock Exchange sub-market listing Sun, 08 Jan 2017 20:30:00 +0000 Point Loma shares up after tie-in of new well, update on operations Fri, 06 Jan 2017 20:46:00 +0000 No peaceful New Year for InfraStrata investors Fri, 06 Jan 2017 15:52:00 +0000 Hotly anticipated Badile well adds another exciting leg for Sound Energy Fri, 06 Jan 2017 14:48:00 +0000 Sound Energy’s Badile project “ticks a lot of boxes”, says Malcolm Graham-Wood Fri, 06 Jan 2017 11:55:00 +0000 Oil industry analyst Malcolm Graham-Wood joins Proactive Investors to discuss Sound Energy PLC’s (LON:SOU) portfolio of assets.

He talks about the progress Sound is making at Badile as well as the potential of the Italian gas project, telling Proactive that “it ticks a lot of boxes”.

]]> Gulf Keystone is one of few oil and gas takeover targets – Peel Hunt Fri, 06 Jan 2017 07:56:00 +0000 InfraStrata secures funding lifeline Fri, 06 Jan 2017 07:45:00 +0000 Marindi Metals raising $3.15M to pursue lithium, zinc opportunities Thu, 05 Jan 2017 20:30:00 +0000 Plexus Holdings shares gush higher on latest wellhead contract Thu, 05 Jan 2017 15:11:00 +0000 Agrichemicals firm Monsanto returns to profit in its first quarter helped by strength in South America Thu, 05 Jan 2017 14:30:00 +0000 Jersey Oil & Gas seen as a ‘buy’ ahead of summer exploration well Thu, 05 Jan 2017 12:57:00 +0000 Oil price, Sound Energy, Cape, Sundry-Tullow-Plexus- And finally... Thu, 05 Jan 2017 11:38:00 +0000 Oil price

Another good day for the oil price as the KPC confirmed that it was cutting production in January as part of the Opec agreement. Further good news came from Bloomberg as their survey showed that in December Opec output fell by 310/- b/d to 33.1m b/d. Another vaguely positive number was that US car and truck sales last year were a record 17.555m units, exceeding forecasts. It is interesting to note that whilst the millions of cars made in Mexico for the American market save a considerable amount of tax, they have also contributed to significant destruction of the domestic car industry and the jobs that go with it. Free traders might not like it, but if The Donald is going to revive the rust belt he may decide that the 750/- jobs created in Mexico should be better recreated in the USA…

The API stats came out late as usual and were rather obfuscating as usual at this time of the year, a draw of 7.4m barrels looked highly encouraging against forecasts but a build of 4.3m in gasoline and 5.2m in distillates was worse than expected. The EIA numbers out later should put them into some sort of perspective.

Sound Energy

A Badile update from Sound this morning where all appears to be going according to plan. The ground works are complete, the conductor pipe was set last week and the rig has been mobilised. Spud date is now March and this long awaited well will be underway albeit later than expected but it is in Italy after all…Having said that the delay hasn’t made the well any less meaningful, with a potential 85 Bscf of gas and 10 mmboe of condensate as net best-case prospective resources, a success here would still be almost as transformational as Tendrara has been.


Cape clearly put the burners on at the end of November, I have just re-read the trading statement of 18 November in which trading was described as being ‘slightly ahead of expectations’. According to today’s update trading is now expected to be ‘materially ahead of expectations’ due to ‘Additional work scope awarded at the Chevron-operated Wheatstone natural gas project’ and to be fair a strong performance in Asia-Pacific. The company has also felt able to say that ‘This improvement in performance is supported by strong cash generation with a consequent positive impact on net debt’. Only the good lord knows what might have happened by the time of the results which are coming out during the Cheltenham Festival…

Cape remains one of my top picks, like most followers I was rather put off by the announcement about the insurer PL industrial disease claims situation, which appeared to worsen last year and the company had to admit that the worst case scenario might threaten the divvi. (There is nothing in today’s release about this)  If one can put that to one side it is clear that the excellent management team continues to deliver and then some and in what has been a difficult environment has come through with flying colours.


Tullow Oil has announced that CFO Ian Springett is taking extended leave of absence in order to undergo medical treatment. Finance VP Les Wood steps up to the plate and I wish Ian all the very best and hope to see him back again fully fit before too long.

Plexus has announced that Masirah has awarded them a follow-on contract  for a second well offshore Oman. This contract is worth  $285/- and may extend again as there is potential for a third well in the drilling programme.

Two lots of interviews below, firstly I did a Vox Markets Podcast earlier this week talking about the recent Pantheon news, here is the link.

VOX Markets podcast: includes Malcy on Pantheon Resources

Also just before Christmas I did three interviews for Interactive Investor they can also be seen on these links.

Interactive Investor interview: Favourite oil major for 2017 named

Interactive Investor interview: Is oil sector a buy in 2017?

Interactive Investor interview: AIM’s most exciting oil stock for 2017


And finally…

Only the game at White Hart Lane needs to be discussed as the 13 run unbeaten run by Chelski was halted as Spurs and Deli Ali beat them 2-0. As I said yesterday that top of the table is getting mighty congested and will take a breather this weekend for the first round proper of the FA Cup.

]]> Still more upside to Ithaca Energy despite “great gains” in 2016 Thu, 05 Jan 2017 10:40:00 +0000 There is still more upside to Canadian oiler Ithaca Energy Inc. (LON:IAE) according to chartist Zak Mir, who thinks shares could add another 10% in coming weeks.

Mir is tipping the North-Sea focused group to continue its rise after almost quadrupling its share price last year.

“[We’ve got a] rising trend channel from the beginning of last year and that’s got its resistance line up to 110p, so there could be a bit more upside there even though we’ve already seen great gains,” the analyst claims.

“You would’ve thought that even if there is a pullback to the low 90s it would be a decent buying opportunity.”

]]> Hurricane Energy and EnQuest are London’s standout E&Ps - Macquarie Thu, 05 Jan 2017 09:26:00 +0000 VSA Capital Market Movers - Metal Tiger Thu, 05 Jan 2017 08:18:00 +0000 Metal Tiger (LON:MTR)

Metal Tiger (LON:MTR) has announced that it has appointed Alastair Middleton as a Technical Director to its Board. He has 27 years of experience in both underground and open pit operations as well as in financial markets. Having spent 4 years at Goldfields of South Africa he worked for 14 years for Datamine International. He is a qualified Competent Person for gold, base metals, coal and industrial minerals.

We reiterate our Buy recommendation and 5.68p/sh. target price.

]]> Sound Energy almost ready to go in Italy Thu, 05 Jan 2017 07:26:00 +0000 Trump's nominated Secretary of State, Rex Tillerson and Exxon Mobil agree to sever all ties Wed, 04 Jan 2017 13:27:00 +0000 LGO chief hails start of new drilling campaign after tough 2016 Wed, 04 Jan 2017 12:23:00 +0000 Neil Ritson, chief executive officer at LGO Energy PLC (LON:LGO) talks to Proactive Investors about the company's plans to drill its first infill well at the Goudron field in Trinidad after it obtained permission from the authorities.

"We should contrast the start of 2016 with now" he says. "This is the first of a programme of wells into the shallow Mayaro formation," he explains, adding he would expect to announce that drilling is underway in February.

"I look forward to a much brighter year both for the sector and for LGO specifically in 2017," he concludes.

]]> Centamin shares must do this one thing to hit 200p Wed, 04 Jan 2017 11:50:00 +0000 Shares in Centamin PLC (LON:CEY) have held fairly steady between the 135p and 145p mark over the past few months since coming down from their August highs.

“The shares peaked out in August just above 180p, [falling] back towards the 200-day moving average around the 135p level. This should be the support area,” Mir tells Proactive.

“We’ve also got an uptrend line which has been in place since February last year heading towards 120p. So basically, while above 120p we should head back towards the top of the triangle at 160p.

The ‘King of Charts’ Zak Mir reckons the Egypt-focused gold miner’s stock can even break through the 200p barrier if they manage to do this one thing.

“A weekly close above 160p is really required to get the big target towards 200p and beyond, which clearly the gold bugs will be looking for.”

]]> More upside to Drax despite recent rally Wed, 04 Jan 2017 10:15:00 +0000 Power station operator Drax Group PLC (LON:DRX) has added more than a third in recent weeks after the European Commission approved a key subsidy contract from the UK government at the beginning of December.

Despite the surge, technical analyst Zak Mir tells Proactive that the charts suggest there is more to come from the stock.

“Even though the shares are up already quite a lot over the recent past, it looks like there could be a bit more upside towards the top of a rising trend channel heading up towards £4.25,” Mir explains.

“That target is valid while we’re above the £3.50 to £3.60 area.”

]]> Shell upgraded as market improves for asset sales Wed, 04 Jan 2017 09:32:00 +0000 Oil price, Range Resources, And finally... Wed, 04 Jan 2017 08:30:00 +0000 Oil price

The strong dollar hit the crude price yesterday although traders reported some selling of WTI as it hit the landmark $55 level, not seen since June 2015. The US economy looks like it might benefit from some straight talking from the President-elect to the motor industry…

Range Resources

A Trinidad update this morning from Range and the good news just keeps on coming from the country. Exit production rate at the end of 2016 was over 800 bop/d, up 40% from the year before and  beating expectations. The GY 681 well looks good as log evaluations indicate 230’+ of pay and will go on production testing this month. The QUN well completed in November has already gone into production which will have helped that exit figure as well. Finally, in line with expectations, the Morne Diablo Water-flood has commenced on schedule another piece of good news. Despite having had a mountain to climb it seems that the company are delivering on promises made and  shareholders look like they may be rewarded for not insignificant patience, watch this space.

And finally…

Watching the Cherries v the Gooners last night and one knew that the equaliser would come after such a battering, almost a carbon copy of the game against the HubCap Stealers…Spurs are on tonight against Chelski…

And Hull City Tigers have lost patience with Mike Phelan and to be honest he is best out of there, if the new manager expects to get any dosh from the owners he or she is more deluded than they think they are…

]]> Range Resources completes latest well ahead of schedule Wed, 04 Jan 2017 07:47:00 +0000 InfraStrata in advancing negotiations over funding deal, but future remains uncertain Wed, 04 Jan 2017 07:35:00 +0000 LGO Energy gets green light for new drilling at Goudron field Wed, 04 Jan 2017 07:30:00 +0000 Grand Gulf Energy advancing Boleslaw well in central Poland Tue, 03 Jan 2017 22:00:00 +0000 Point Loma issues 37,500 shares for services Tue, 03 Jan 2017 18:48:00 +0000 ‘Innovative’ Plastics Capital a “sound” investment Tue, 03 Jan 2017 13:30:00 +0000 Niche plastics group Plastics Capital Plc (LON:PLA) is a “sound” investment according to Capital Network’s analyst Andy Brown.

Brown praises the company’s balance sheet and he’s also fond of the management team, too.

“What they have demonstrated is that they’re able to find the right deals and see them add value,” he says.

He likes the fact that Plastics Capital is coming up with new ideas to try and rock a mature, long-established industry.

“I like the idea that they’re actually driving innovation. You want companies that are working in an existing big marketplace and trying to push through positive changes,” Brown explains.

]]> Gulf Marine rallies on news of charter with a national oil company in the Middle East and North Africa Tue, 03 Jan 2017 11:55:00 +0000 Enquest still a “solid” bet but the best has been Tue, 03 Jan 2017 10:20:00 +0000 The best may have been and gone for oil and gas producer Enquest Plc (LON:ENQ), but it still might be worth a gamble says Zak Mir, who reckons the stock could another 10% or so.

In the latest Tip TV segment, Mir says: “The best of the move in the recent past has already been achieved, [but it is still] a solid looking situation both technically and fundamentally.”

“We had the breakout through 30p at the beginning of December and really it’s been up, up and away ever since.

“It looks as though we can head up towards the top of last year’s trend channel of 50p while we hold above 40p.”

]]> National Grid shares tipped to creep back towards £11 Tue, 03 Jan 2017 09:55:00 +0000 National Grid PLC (LON:NG.) could add another 20% in coming weeks according to chartist Zak Mir, who has hailed the “good set-up” of the company.

Mir tells the Tip TV Proactive Investors Bulletin Board that the gas and electricity firm wasa ‘technical buy’ before the sale of its UK gas distribution business made it a ‘fundamental buy’.

The technical analyst now expects the stock to re-visit the £10.70 no seen since October.

“We’re looking for a break in the 50-day moving average at £9.59 to take us back towards the 200-day line at £10.70,” he explains.

]]> On to the next one … there’s much more to come for Hurricane Energy in 2017 Tue, 03 Jan 2017 08:31:00 +0000 Horse Hill explorers step up momentum as confidence grows Tue, 03 Jan 2017 08:15:00 +0000 Sound Energy enjoys a scorcher in Morocco in 2016 Tue, 03 Jan 2017 08:00:00 +0000 Enhanced Oil & Gas Recovery tops ASX % Gainers in morning trade Tue, 03 Jan 2017 00:30:00 +0000 Dollar-earner BP could rally in 2017, claims technical analyst Mon, 02 Jan 2017 07:35:00 +0000 The stage could be set for oil giant BP plc (LON:BP.) to rally in the New Year given the strong US dollar and rising oil price, says the King of Charts Zak Mir.
“We may not believe that OPEC can hold everything together, but at least the oil price has stabilised,” Mir says in the TIP TV Proactive Investors Christmas special.
“BP has underperformed its peers and it’s had its issues, but…I’m looking for it to go over £6 over the next year.”
“With an extra [US interest] rate hike on the way allegedly, dollar earners like BP should do that much better as well,” Mir adds.
]]> San Leon encouraged by progresss at OML 18 Fri, 30 Dec 2016 07:55:00 +0000 Cantor’s Sam Wahab reflects on 2016’s top oil stocks and gives top picks for 2017 Tue, 27 Dec 2016 07:30:00 +0000 Speaking with Proactive Investors Stocktube Cantor Fitzgerald oil and gas analyst Sam Wahab reflects on a mixed 2016 and gives us some of his top picks for the New Year.

He talks about 2016 winners such as Ithaca Energy (LON:IAE) and SDX Energy Inc (LON:SDX), as well as Hurricane Energy PLC (LON:HUR) and Sound Energy PLC (LON:SOU).

Looking forward to the coming year, he highlights his ‘buy’ recommendations for 2017.

]]> Oil price, Rockhopper, Sundry- Cape- RockRose Energy- Falcon-, Aminex/Solo, And finally... Thu, 22 Dec 2016 11:59:00 +0000 WTI $52.49 -81c, Brent $54.46 -89c, Diff -$1.97 -53c, NG $3.54 +28c

Oil price

Just as I said that the inventory stats would remain helpful we got one that rather unsettled the market. With the EIA showing a build of 2.3m barrels after an API draw and forecasts of a draw of around 2.4m the market was flummoxed especially as refinery rates were up. It turns out that imports had a big week and indeed adding to the confusion there were substantial draws in gasoline and distillates. Finally Libya announced the gradual opening up of pipelines but nothing that can really rock the Opec ship at the moment.


I had a very useful update with Sam and Fiona at RKH yesterday, following their recent update I wanted to find out how things were going. It is easy to use the debt trouble that Premier are in to write off the Sea Lion development but that would be far too broad brush an attitude. Of course it is true to say that PMO have their minds on other things at the moment but that doesn’t mean that RKH cant get on with the day to day work in progressing the FEED requirements and with continually updated economics it is genuinely still getting cheaper with life of field costs of $35 pb and a phase 1 break even cost of $45. I get the strong impression that there are potential partners out there and with such excitement around Exxon’s Liza development in Guyana and the Cairn find offshore Senegal it would be odd if this billion barrel prospect with capex to first oil of $1.5bn didnt attract industry interest.

But RKH has diversified into the Greater Mediterranean and from Italy and Egypt is now producing around 1,350 boe/d which  with increased gas prices makes a meaningful contribution to G&A costs. Indeed costs across the board are falling and with the merger of the Salisbury and London offices will fall further next year. RKH is continuing to look at other opportunities in the Greater Med and I wouldnt be surprised if they did another deal in the area, indeed North Africa has proved to be of significant industry interest lately with high value production and exploration upsides. There are always some worries about payments in Egypt but given the recent IMF loan and floating of the Egyptian Pound it looks like the payment situation in Egypt should improve in 2017.  The Ombrina Mare case continues with the company attempting to get compensation and damages from the Italian Government.

Rockhopper still has a valuable asset in Sea Lion and with the significant cut back in capex in the last two years has a project that stacks up every bit as well as other international ones and probably better. With production from the Greater Med and cash of $80m at the upper end of guidance, RKH looks decidedly attractive with a market cap of £103m.


Cape has announced a five year contract extension with EDF for support on its coal and gas portfolio which is a useful win at this time.

RockRose Energy has announced that it has signed an agreement with Maersk Oil for non-operating interests in Wytch Farm (7.43%), Scott (5.16%) and Telford (2.36%). The shares will remain suspended until final conditions have been satisfied.

Falcon has announced that the final results from the extended production test at the Amungee NW-1H well were very good coming in at 1.11 mmcf/d over the 57 days and will be a useful determinant for commerciality. Hanging over Falcon of course is the moratorium on unconventional hydrocarbons but if one can assume some sort of settlement Falcon is as cheap as it gets.

And Aminex along with Solo has spudded the Ntorya-2 well in Tanzania, an appraisal one should get the results early in 2017.

And finally…

After the rather disappointing test series in India captain Cook is looking a tad isolated in his position. With many months before the next test match there is no reason to do anything silly right now so I would see how things look in the spring.

]]> VSA Capital Market Movers - Metal Tiger Thu, 22 Dec 2016 08:20:00 +0000 Metal Tiger (LON:MTR)#

Metal Tiger (LON:MTR) has announced that it has today received High Court approval to cancel its share premium account alongside the cancellation of Deferred Shares. In the event of an exit from one of MTR’s multiple projects this would enable the possibility of a dividend payout to shareholders.

Whilst this does not alter our outlook this is a positive development, in our view, which gives MTR greater flexibility.

We reiterate our Buy recommendation and target price of 5.68p/sh.

]]> Oil price, SOCO, Sirius Petroleum, And finally... Wed, 21 Dec 2016 10:41:00 +0000 WTI $53.30 +24c, Brent $55.35 +43c, Diff -$2.50 -30c, NG $3.26 -13c

Oil price

Trading continues to quieten down ahead of the Christmas break but the inventory figures should remain reasonably supportive. The API reported a 4.2m draw yesterday and the market expects something similar tonight from the API. Gasoline futures, often strong at this time of the year have also risen as retail demand picks up and the API stats showed a bigger than expected 2m barrel draw in gasoline stocks. Iran have entered the party of those proving they are cutting production by announcing lower January liftings and therefore sales to clients.

Proving that he can still throw a spanner in the works, Barry has, along with Trudeau Jnr, set a ban for arctic drilling, part of a series of scorched earth policies he plans to implement before he leaves the White House.


SOCO announced yesterday that it had received $10m from Daqing as part of the proceeds of the sale of its Mongolian assets, there is no sign of the remaining sum but SOCO plan to chase for it. The two TGT infill wells have both encountered hydrocarbons and are being analysed which is further good news. Readers know that I have long been positive about SOCO, with reservations about some of its African portfolio, and with cash of $90m odd and a strong balance sheet, not to mention a trophy asset in the Far East makes some E&P companies look shabby. I hope to catch up with the company in the new year, which is well overdue to see if I can identify any plans going forward.

Sirius Petroleum

I have been keeping an eye on Sirius as it builds its position in Nigeria, an area that I am not the only person to mistrust. Sirius is however, continuing to build its Vendor Finance Consortium and recently announced that it had signed an Integrated Services Agreement with Schlumberger for a multi well campaign in its shallow water offshore concession in Nigeria. Schlumberger will provide a comprehensive package of products and services for the Ororo field starting 1Q 2017. The company also announced that it raised $1m through an oversubscribed placing which keeps the company ticking over and pays the G&A. I expect to hear more from Sirius next year and whilst the venue is far from stable if San Leon can do it then so can Sirius…


I would like to apologise to all those of you who have sent emails in the last week or two, most of which are yet unreplied to. Whilst I cant promise to reply to every one I do try to briefly if I can but it has been so hectic lately there are a lot of unreplied to messages which I will try to get around to before Christmas!

And finally…

A short retirement for Massa as he returns to Williams only weeks after retiring as Bottas signs a contract at Mercedes after Niko abruptly called it a day.

]]> Oil price, Rockhopper, Amerisur, Faroe, And finally... Tue, 20 Dec 2016 10:04:00 +0000 Oil price

The only major item of note yesterday was a narrowing of the discount of WTI to Brent, this  came partly as traders feel that the the UK pipeline reopening brings more Brent to the market and slightly weakens the relative prices and partly as the gap has simply become too high. Apart from that with Christmas approaching traders are quietening down and leveling their books, also holidays are being taken early, something I can corroborate if out of office replies to the blog yesterday are to be believed….


An update from Rockhopper whose shares have been unfairly treated in recent weeks, the market tarring them with the Premier uncertainty brush. Today RKH show us that economic production from Egypt and Italy is 1,350 boe/d with realisations up from €0.12 to €0.18 which is handy enough. The company are making significant progress on Sea Lion through progress on the FEED with much improved economics giving an updated FDP, indeed life of field costs on phase 1 are now as low as $35pb.  Whilst on the Falklands the insurance settlement on the Isobel Deep fiasco resulted in RKH getting a net payment of $49m which seems ok under the circumstances.

In Italy the Ombrina Mare nonsense has resulted in the company going to arbitration, dont hold your breath for a settlement.  Overall costs are coming down still, Italy headcount is now down 50% and in the UK the Salisbury office is to go, with the London office now the only one left open. With $80m of cash on the balance sheet the shares are ludicrously cheap but I do understand the mechanics of the Premier/Sea Lion situation which is dominating sentiment. Having said that, if you compare Sea Lion with the Cairn/Far discovery offshore Senegal, and I think you can, Woodside, or anyone else for that matter would be better placed to farm-in in the Falklands on pure value grounds. More on RKH after I have seen the company tomorrow.


AMER has announced an acquisition of a couple of assets in Columbia from Talisman. They are taking the remain 50% and operatorship of PUT 30 and a 40% WI in PUT 9 at an ‘immaterial’ cost. This is the sign of the OBA cluster policy in action and at negligible cost, strengthens the asset portfolio by being the main player in the area. Amer shares are well below what I value them at and have suffered disproportionately to the sector, I would expect this to be re-balanced in due course as the local issues are sorted.


We have been waiting for the announcement of the new debt arrangements for a while and so today’s announcement comes as no surprise. With their extremely strong position a new $250m RBL + $100m accordion and a NOK 1Bn Norwegian debt facility +NOK 1/2bn Accordion  is just what the doctor ordered and concludes a highly successful year for the company.

And finally…

Win those games you might drop points in and you are halfway to the title and last night the HubCap Stealers nicked the three points with the only goal of the match in minute 95…

England are making hard going of chasing nearly 800 runs, as I write they are 190-4…

]]> Greater Lancaster area “exciting”, says Hurricane Energy boss Tue, 20 Dec 2016 09:40:00 +0000 Hurricane Energy PLC (LON:HUR) chief executive Robert Trice tells Proactive Investors that the Greater Lancaster area is an “exciting” area to be in.

The firm said on Monday that its Lincoln oil discovery is likely to be larger than first thought after it uncovered a “significant” oil column outside the structural closure.

“[An original well drilled by Arco] was the reference point and what we found was as we drilled past that depth we were still in oil. We drilled on another 168 metres deeper than in the Arco well,” Trice explains.

“This gives us high confidence that other ceiling faults further along the Rona ridge will also be present which helps us in our exploration de-risking.”

Trice also touches on the Halifax well, which is located on the same Rona ridge as Lancaster.

“That really is an exciting well. The whole objective of the well is to demonstrate unequivocally that there is mobile oil below the structural closure.”

]]> VSA Capital Market Movers - Goldplat plc Tue, 20 Dec 2016 08:19:00 +0000 Goldplat (LON:GDP)

Goldplat (LON:GDP) has announced that it has received a renewed license from the Ghanaian Government to purchase and deal in gold. The new license is valid for three years and its receipt was expected given GDP’s long operating track record in the region.

The terms of the new license include a 5% royalty on all minerals and a commitment to install an additional elution plant as previously announced. The timeframe stipulated in the license agreement is that the plant should be commissioned by June 30 2018, in line with our expectations. The additional capacity will enable GDP to progress with its strategy of sourcing additional feedstock from overseas and expand the group’s gold output.

The receipt of the license enables a small inventory of by-products which require further processing outside of Ghana to be shipped which will positively impact earnings, most likely, in H2 FY 2017.  Despite the recent weakness in the gold price, the shares have remained supported and within their recent trading range and we continue to expect the turnaround at Kilimapesa to support earnings in FY 2017.

We reiterate our Buy recommendation and target price of 11.2p/sh.

]]> Oil price,BP, Hurricane, Aminex/Solo, And finally... Mon, 19 Dec 2016 13:45:00 +0000 Oil price

A modest end to a tumultuous week and oil prices have pretty much kept to the highs after the Opec deal was announced. With a strong dollar after the Fed meeting and a few pessimists doubting the group’s ability to hold the deal together, that looks good enough to me for the time being. My long held year end price of $60 for Brent looks like by hook or by crook it may not be far away although I have been tempted to move it down often enough since May! The rig count was up, as expected and this week saw general rigs up 13 at 637 and oil units up 12 at 510, expect more on this front.


BP has announced that it has farmed into Kosmos’ acreage in Mauritania and Senegal. The spoils include the huge Tortue gas field and comes at a price of $1bn in exploration carry. Kosmos gain from BP’s deepwater exploration know-how and BP gain from Kosmos’ exploration expertise. BP has also announced that it has done a deal with ADNOC  for its ADCO onshore concession for $2.3bn in BP shares, clearly BP are starting to open up the wallet a bit if you add these to Mad Dog 2 which is now going ahead.


Yet again more success for Hurricane as the good Dr Trice returns from the rig bearing gifts. This time it is the well result from Lincoln where an oil column of 660m+ has been found which is even bigger than Lancaster, hydrocarbons were found at TD which is why they drilled deeper.  This is another ‘significant fractured basement’ discovery as the company put it and the key oil down to (ODT) @520m TVD below structural closure which is 168m TVD below the ODT in the old Arco well which is important as it was on the flank. The well was not tested, as expected, but I have a shrewd feeling that the API might be similar to that found at Lancaster, even though the Western transfer fault seal providing the barrier between the two was identified.

The first piece of good news to draw from this is that to me this has major implications for Warwick and that isnt even on the list to be drilled yet, but total reserves are adding up all the time. As a rough and I think conservative guide I am now using 500m barrels for Lancaster, 400m for Lincoln and will sit with 250m for Halifax which I think is the pre-drill estimate plus something for Warwick. The rig is in the process of P&A and will go to Halifax this week with the intention of spudding at the weekend, much I imagine to the chagrin of Lady Trice as the CEO will be aboard… If weather permits they may well actually test this one, if that is successful then maybe the testing kit will be taken off and they may go deeper with wireline logging.

After the Halifax well the hard work on the development starts, and of course the discussion about how to fund it will be at the fore. Given that the number looks like being around $400m, all options are being explored but undoubtedly a significant portion will be debt. The remainder might be equity of a farm-in or even a mixture depending on the circumstances. I understand that that there are new faces seen in the data room but farming out the prospects is no certainty, indeed if I was an equity holder and having come so far, I would want to participate one way or another.

Being aboard the good ship Hurricane has been exciting and it looks as if there is plenty of news to come after Christmas. Expect the Halifax result, the FDP, the EPS approval and sanction as well as the CPR of Lancaster to come in the first quarter just for starters. The show has only just begun, Dr Trice and his amazing fractured basements are here to stay…


Also good news from Tanzania where the Government has agreed an extension on the Nyuni Area to 27/10/19, the company also announce that drilling operations are underway and the Ntorya-2 well should spud ‘in the next few days’. All this comes as rumours of a funding by Solo is being considered which isnt exactly needed but probably wouldnt be turned away.

And finally…

The cricket is only now of interest as the final test match turns into a war of nerves for England. Batting is obviously extremely easy as India showed by declaring at 759-7 this morning after Nair got his 303.

The football at the weekend was fairly predictable, in the big one at Middle Eastlands the Noisy Neighbours saw off the Gooners 2-1 but with Spurs edging Burnley 2-1 and the HubCap Stealers at the Toffees tonight for the Giro derby expecting to win little changed. The Baggies lost 0-2 to the Red Devils and the Hammers contrived an unlikely win against the Hull City Tigers.

And finally, shame if ever any more was ever needed on FIFA as they fine the home countries £80,000 each for wearing poppies, lets hope they all enjoy spending the money the disgraced bunch of xxxxxxxs.

]]> Hurricane Energy plc's Lincoln drilling confirms portfolio's billion barrel potential Mon, 19 Dec 2016 13:42:00 +0000 Today's news from Hurricane Energy plc (LON:HUR) really proves the group has a significant asset base west of Shetland and reiterates the oiler's previous view that its portfolio could host a potential billion barrels.
So says FinnCap analyst Dougie Youngson after the firm  told investors its Lincoln oil discovery was  probably larger than first thought and that a ‘significant oil column’ estimated at 660 metres had been found.
It could add another 3 or 400mln barrels to the Hurricane portfolio, says Youngson.
The priority now is to get the Lancaster field on stream and the early production system up and running, said the analyst, so that Lincoln and any future discoveries can be tied into a central infrastructure hub, he said.
The rig will next go on now to drill the Halifax prospect, while the firm is working hard to get to field development plan status by the middle of next year.
"We should be seeing the field development plan being submitted by the middle of next year and then hopefully being signed off by the government in due course," said Youngson.

]]> VSA Morning Agri Comment Mon, 19 Dec 2016 08:27:00 +0000 NWF H1 Trading Update

UK specialist agricultural and distribution business NWF Group (LON:NWF) has announced a trading update for the six months ended 30 November 2016 (H1 2017).

Trading was lower YoY in H1 due to a weaker Q1

However, trading has increased in recent months and NWF remains on track to reach FY expectations for performance and net debt

VSA Comment

DEFRA data shows that overall UK ruminant feed production fell 3.0% YoY for the first five months of NWF’s H1 period (data not yet available for November; Q1 period was -4.7% YoY) as demand was impacted by lower milk prices and a smaller UK herd size.

Despite this overall market decline, NWF reports that for the first five months of its H1, its animal feed production actually increased 1.5% YoY. This reflects the trend that we have been discussing throughout the milk price downturn, whereby the larger feed producers, such as NWF, have been gaining market share at the expense of the smaller players.

Looking forward, UK milk prices have been steadily increasing since the middle of the year. There is now evidence that this is being translated into increased animal feed consumption.

Total UK ruminant feed production fell just 0.5% in October (last data available) and although this was against our expectations for an increase YoY, this is much better than the 5%+ monthly falls we saw earlier in the year. We believe the UK market will move into monthly YoY increases in the near-term, which will translate into increased sales volumes for NWF in H2 and into its FY 2018.

In terms of its input commodities, a typical basket used for compound feed has reportedly increased c20% since March. This has been reflected in increased compound feed costs for UK farmers. NWF reports that it has increased its prices twice during the year, in-line with competitors, so margins should be maintained.

NWF’s food division continues its solid performance with its Wardle warehouse fully utilised and high service levels maintained.

NWF’s fuel supply business was impacted by warm weather and lower demand for heating oil through summer and early autumn but reports a strong performance in November. FY performance in this division will depend on temperatures in the remaining winter months and resulting demand for heating oil.

In general, the most important factor for all of the UK agricultural input companies is whether winter extends into March, a factor which has historically provided the strongest boost to animal feed purchases and heating oil demand.

NWF remains trading in-line with market expectations. Current FY 2017 (Y/E May 2017) FactSet consensus is for revenues of £487.3m, +4.6% YoY, with an adjusted PBT of £8.3m, flat YoY.

]]> Nighthawk Energy technicals 'starting to feel friendly' says Mir Fri, 16 Dec 2016 11:32:00 +0000 US oil and gas group Nighthawk Energy PLC (LON:HAWK) has been helped by a cash raise in August and a settlement of a long-standing legal dispute.

As a result, the ‘technicals are starting to feel friendly’, says Zak Mir, chart analyst at Tip Tv.

He tipped the shares to hit 1.7p by early 2017 and as the shares have traded at or above the 200-day average since September that advice still holds.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC and Independent Oil & Gas PLC Fri, 16 Dec 2016 08:13:00 +0000 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced that it has raised a further £0.3m at 0.21p/sh. from the open offer which in conjunction with the prior placing, also at 0.21p/sh. brings total proceeds to £1.47m. Consequently a total of 702m shares will be issued. In addition, SULA has announced that in lieu of accrued fees SULA will pay certain directors of SULA and its wholly owned subsidiary a total of 8.8mn shares.

SULA is now in a strong position to commence its exploration programme focusing on the targets at Sanama Hill and the larger Eastern Target.

We reiterate our Speculative Buy recommendation and target price of 1.7p/sh. which was previously adjusted to reflect the full dilution of the share placing and open offer.

Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (IOG)# has announced an increase to its internal management resources estimate for the Elgood and Harvey discoveries, in its Southern North Sea portfolio, after technical work was carried out across the licences. Therefore, the P50 resources at Harvey have increased to 113BCF (previously 16BCF) and at Elgood P50 resources have increased to 22BCF (previously 11BCF).

Further to this IOG has agreed both a three month extension to the Harvey licence and a two year extension to the Skipper licence.  We maintain our BUY recommendation on the stock.

]]> Grand Gulf Energy well placed as drilling advances at Boleslaw well Thu, 15 Dec 2016 14:41:00 +0000 Managing director of Grand Gulf Energy (ASX:GGE) Mark Freeman told Proactive the group was very well placed looking ahead.
The firm, with a market cap of A$5.2mln has revenues from three producing fields, which generate over US$100,000 a month after costs, including royalties.
It has funding, production revenues, reserves and upside opportunity, he added.
It comes as the group's Boleslaw No.1 well was started earlier this week - and is expected to take just over three weeks to complete to a depth of about 1,500 metres.
The firm is targeting two zones - at 900 metres and 1400 m. The prospect has a best estimate unrisked prospective resource of 87 billion cubic feet of gas.
On supporting infrastructure in the event of successful drilling, Freeman also noted that: "Poland has a very extensive pipeline network and the joint venture will have a choice of which system to use - the closest is only 10km away.
"We also have the opportunity of generating electricity on site and selling the energy into the European grid," he added.

]]> Trinity Exploration shares must do this one thing to spark turnaround Thu, 15 Dec 2016 11:35:00 +0000 Trinity Exploration & Production PLC (LON:TRIN) shares need to break above its 50-day moving average if they’re to have any hope of recapturing its glory days, claims technical analyst Zak Mir.

The stock has been on a downhill slide, one that Mir reckons could continue unless it does break through that barrier.

“We’ve had a sinking feeling over the last year. From a technical perspective you want to see the shares at least back above the 50-day moving average of 2.38p,” the chartist says.

“That would be the first sign that a lasting turnaround otherwise we could still see the shares drift towards the 1.5p zone.”

]]> Range Resources shares heading for 0.7p says Zak Mir Thu, 15 Dec 2016 11:27:00 +0000 There’s good support in the chart for Range Resources Ltd (LON:RRL), so says technical analyst Zak Mir, who sees the shares rising into 2017.
“If you are cautious on the shares maybe wait for the 200-day moving average at 0.41p to break and take the shares up to the top of that rising trend channel up to the 0.7p area for the first quarter of 2017,” Mir said in a Tip TV segment for Proactive Investors.
]]> Solo Oil shares tipped to treble Thu, 15 Dec 2016 11:05:00 +0000 Investors in Solo Oil PLC (LON:SOLO) are primed for better news, according to technical analyst Zak Mir, who reckons the junior oilers share price could treble to 0.6p.
“The market seems to be anticipating better news, with the basing around to 0.2p area since the summer, just toying with 0.3p resistance and the 200-day moving average,” Mir said in a Tip TV segment for Proactive Investors.
“If we get a weekly close above 0.3p that should be enough to take the shares onto a new leg to the upside for 2017. Perhaps as high as 0.6p in the best case scenario.”
]]> Charts suggest Sirius Petroleum on course for a penny Thu, 15 Dec 2016 10:10:00 +0000 Shares in Sirius Petroleum PLC (LON:SRSP) are on track to hit the the 1p mark in the coming months, so says the ‘King of Charts’ Zak Mir.

Shares have been on a gradual ascent since July when Sirius got the environmental green light from Nigerian authorities with regards to the Ororo oil project.

“Since July the share have broken through the 200-day line which is a bullish sign and indicates that the trend is in an upward momentum category,” Mir says in the latest TIP TV segment for Proactive.

“Ideally over the next three to four months we’ll hit the top of this March trend channel at 1p and that remains the target while we hold above the 200 day line.”

]]> Take a punt on National Grid and get in at the bottom, says chartist Thu, 15 Dec 2016 09:45:00 +0000 Now could be the time to invest in National Grid PLC (LON:NG.) while shares are cheap, according to technical analyst Zak Mir.

Shares in the energy firm have been on the wane since July, but Mir thinks they’re starting to bottom out which could represent a decent buying opportunity.

In a TIP TV segment for Proactive Investors, Mir explains: “As long as we’re above [880p], you can regard this as buying at the bottom of the range opportunity.” 

]]> Oil price, Shell, Petrofac, Sound Energy, And finally... Thu, 15 Dec 2016 09:08:00 +0000 Oil price

Traders told me yesterday that the market was looking to have a correction so when the EIA inventory stats came out, although initially pleasing, they found some dirt. That was in the fact that although there was a useful draw of 2.6m barrels, better than forecast and the API number it was ‘in the wrong place’ as in on the West coast and in fact at Cushing it was a build. You can only please some of the people some of the time.


It is sad to see Simon Henry leaving Shell, for me and many others he has been Mr Consistent as head of IR and then CFO. But he deserves the rest it will become and a life of luxury although I suspect many non-exec jobs beckon. He is replaced by Jessica Uhl who was with Enron in Panama before which is scarier than it really is one hopes…


I will come back to PFC and other OFS companies later in the week, time is short today but the trading update this morning is a bit mixed. Net profits are expected to be in line with expectations at around $410m with the Group, ex IES, better at $465m but a worse situation at IES of a loss of $55m. The sooner Ayman can boot that lot into touch the better. As one might expect revenues are ‘record’ and the company is running very efficiently but order intake at $1.4bn is low field and the backlog is only $14.5bn. The market remains ‘challenging’ but I expect order inflow to pick up sharply in 2017 as delayed orders come through.

Sound Energy

An update from Sound this morning, at TE-7 the reservoir pressure correlates with previous wells which is further good news from Tendrara. They also announce that TE-8, the step-out well is going to be a full 12km from TE-7 a confident call and they will drill for the TAGI and the Palaeozoic there. As for numbers they have announced that they have put 1.5 TCF as the top end for TE-8 alone which puts the range at 0.5 (up from 0.3) – 1.5 TCF. After all that the company will produce a CPR and if all goes to plan add more value to the play. With this and Badile likely to spud also in February the momentum at Sound continues and shareholders have much to look forward to next year.

I will catch up with a number of other results etc tomorrow.

And finally…

A busy night of football last night as Chelski cemented top spot in the league and wins for the HubCap Stealers, Spurs, the Noisy Neighbours and the Red Devils keeping the pot boiling.

]]> VSA Capital Market Movers - Stratmin Global Resources PLC Thu, 15 Dec 2016 09:04:00 +0000 StratMin Global Resources (LON:STGR)

StratMin Global Resources (LON:STGR) has agreed to bring forward the payments due from its Share Purchase Agreement with Bass Metals (BSM AU) into an early discounted cash settlement. Under the agreement BSM equity was due to be issued to STGR in two tranches of A$3m and A$5m subject to certain share price performance criteria. However, with STGR currently identifying possible targets for an RTO and the upcoming dilution overhanging BSM the companies have agreed to strengthen both their positions through early settlement of the deal.

BSM will pay A$2.46m in cash in three tranches, the first of A$955k is to be paid by 16 December 2016, alongside the immediate placement of the entire remaining 70mn shareholding in Bass at a minimum price of A$0.013, equivalent to A$910k. Additionally, STGR has a royalty of 2.5% on BSM and BSM now has the option to buy out that royalty for A$500k prior to 30 June 2018. In total STGR will receive an immediate £1.1m of a total £2.1m with a potential further £296k from the royalty.

STGR had previously agreed a loan facility of US$1.5m using the BSM holding as collateral. However, given the latest announcement this facility, which was undrawn will be terminated. Whilst the company has taken a reduced amount of cash we believe that the upfront cash and simplified payment structure put STGR in a far stronger position ahead of a potential RTO.

]]> VSA Capital Market Movers - Metal Tiger Wed, 14 Dec 2016 08:55:00 +0000 Metal Tiger: Showing Its Claws

Botswana - Copper

Metal Tiger (LON:MTR) in partnership with MOD Resources (ASX:MOD) in a 30/70 JV has rapidly developed the T3 copper project on the Kalahari copper belt in Botswana. A Scoping Study was released in December 2016 having only discovered the deposit in March 2016. Our analysis suggests a post-tax NPV of US$170m on a 100% basis following initial capital of US$135m.

The open pit mine will exploit an initial 28mnt resource with a grade of 1.24% Cu along with a 15.7 g/t Ag credit. This high grade project will likely have lowest quartile cash costs after by-product credits and we expect these to average US$2,690/t over the nine year life of mine. The resource remains open in multiple directions and there are additional satellite deposits in the vicinity implying significant future exploration and expansion potential.

Thailand - Lead, Zinc, Silver

Metal Tiger (LON:MTR) has an effective 78% interest in a brownfield lead zinc silver project in Thailand. Lead and zinc prices have rallied 30% and 68% YTD and based on our analysis of a Primary Economic Assessment (PEA) released in 2013 we believe that the project has strong cash flow potential and attractive returns with a post-tax NPV of US$44m. Much of the original processing plant and underground infrastructure remain in good order and the restart costs are likely to be around US$15m, on a 100% basis.

MTR is currently progressing through a permitting process in order to gain a mining license as well as exploration licenses on the surrounding areas.

Attractive Valuation

Given the strong cash flow generative potential of both core assets in Thailand and Botswana, which on a 100% basis have post–tax NPVs of US$44m and US$170m respectively, we believe that MTR, is currently trading significantly below its NAV. Despite a strong turnaround in commodity prices, particularly base metals, during 2016, little credit has been reflected for the development of what are, in our view, attractive assets.

Recommendation and Target Price

Our analysis produces a target price of 5.68p/sh and we initiate with a Buy recommendation.

]]> Genel Energy is a better bet than Gulf Keystone Petroleum says Zak Mir Tue, 13 Dec 2016 11:28:00 +0000 Genel Energy PLC (LON:GENL) is a better bet for traders than Gulf Keystone Petroleum Limited (LON:GKP), so says technical analyst Zak Mir.
In a TIP TV segment for Proactive Investors he examines a possible pairs trade between the two Kurdistan based oil companies.
]]> Iofina plc expecting growth in demand to continue Mon, 12 Dec 2016 15:25:00 +0000 Iodine producer Iofina plc (LON:IOF) said total 2016 sales, through Iofina Chemical, have now surpassed 2015’s total.

President and chief executive Dr Tom Becker also explains to Proactive why second-half production will be lower: ''Recently we've run into some production issues that have caused our production levels to not quite meet our expectations.''

''We use water that is produced from oil and gas and we get that water from our partners in the field. When they have fracturing jobs they occasionally divert water and as oil prices have recovered ... they've actually completed some wells they'd previously drilled but not completed - so that's affected our supply of brine to our plants recently''.

The company now expects second half production of crystalline iodine to be 215-225 tonnes, with production returning to higher production levels in early 2017.

]]> Oil price, Sound Energy, Independent Oil & Gas, David Morrison, And finally... Mon, 12 Dec 2016 12:30:00 +0000 WTI $51.50 +66c, Brent $54.33 +44c, Diff -$2.83 -22c, NG $3.75 +5c

Oil price
The fact that the prices above, being the Friday night close, are out of date by well over two dollars indicates that the meeting in Vienna on Saturday between Opec and Non-Opec countries was deemed to be a success. As I write, WTI is $54.09 and Brent is $56.77, indicating that for the moment at least the benefit of the doubt is being given. There will be things that hit that confidence even before we know how much quotas are being adhered to, a bad monthly report here, a poor inventory number there but for the time being the Saudis telling customers to expect supply cuts to start in January will have to do.
The rig count is another dose of data that we will watch carefully although it is a given that the number will rise along with the oil price. Fridays number was slightly out of kilter post Thanksgiving but oil rigs up 21 to 498 is a portent of things to come. On a totally different note, the possible appointment as Secretary of State of Rex Tillerson has horrified the international community but confirmed the type of Government to expect, an albeit modest drain of the swamp maybe as the new broom sweeps its way in…

Sound Energy
Sound has announced that Sidi Moktar has received regulatory approval and transfer of the 75%  operated interest is complete. Sound has issued 43m shares to PetroMaroc and Maghreb Petroleum and will share 50% with PetroMaroc any sold over 50p. Various lock-ins are attached and dealings start in these shares on 16th December.

Independent Oil & Gas
IOG has announced that it has submitted the draft FDP for the Blythe gas field in the southern North Sea. No further appraisal is needed here and whilst it is subject to completion of development funding it is  a key milestone and a core of the eventual hub system. First gas is expected from here 2H 2018 and the company is in exclusive talks with ‘well known’ parties for distribution of said gas.

David DuBois Morrison
I couldnt finish my round up of World Oil Week without paying tribute to David Morrison, former Chairman of Wood Mackenzie who received the 2016 Lifetime Achievement Award at the World Oil & Gas Awards dinner. It was great to be sat very close to the great man and be able to chat and share reminiscences. I was fortunate enough to spend some valuable time with him and John Ogden in the offices of the North Sea service many years ago and the award is a highly appropriate one to a man with dedication and perfectionism along with a dry sense of humour.

And finally…
England subsided in the cricket which was  a shame as there are real grounds for optimism there except of course when you meet India on this sort of form at home.
In the Prem a few things are changing, all except Chelsea winning, 1-0 v the Baggies and the Gooners, 3-1 against the Potters. Elsewhere was a bit mixed with Spurs run ending by losing 1-0 at Old Trafford and the Noisy Neighbours went down  by 4-2 at the Foxes. With the HubCap Stealers dropping 2 points against the happy Hammers things are changing a little bit.
In todays Champions League draw the Gooners must have wept, win the group and get Bayern Munich, whilst the Foxes get Sevilla and the Noisy Neighbours have Monaco.
The boxing at the weekend presented some great bouts on a good card. AJ was magnificent but the Chisora v Whyte battle was immense and very difficult to call.

]]> LGO Energy 'beginning to take shape again', says Neil Ritson Mon, 12 Dec 2016 10:05:00 +0000 LGO Energy PLC (LON:LGO) expects to receive approval for the first well in a new drilling campaign in Trinidad before January after submitting a formal request to start work on the first infill well on the Goudron Field.

CEO Neil Ritson tells Proactive: ''We've made the application for the first, specific location on our programme of infill ... we've currently got 45 wells outlined approval and we're going in for the first one of those''.

''Further applications for additional wells for a programme of maybe 10 initial wells, from the 45, will be filed over the next few weeks and months and we're negotiating on a rig so we're beginning to take shape again''.

]]> VSA Capital Market Movers - Independent Oil & Gas Mon, 12 Dec 2016 08:32:00 +0000 Independent Oil & Gas (LON:IOG)
Independent Oil & Gas (IOG)# has announced that it has submitted the draft Blythe Field Development Plan to the Oil and Gas Authority (OGA) which was submitted on time as part of the licence extension.

Subject to development funding first gas from the field is expected in 2018, which we use for our modelling purposes. As a reminder the Blythe Field forms part of IOG’s Southern North Sea (SNS) gas hub with 2P reserves of 34.3BCF and all the subsurface work is complete.

We maintain our BUY recommendation.

]]> Oil price, Trinity Exploration & Production, EPI/PDF, Podcast VOG/HUR, And finally... Fri, 09 Dec 2016 11:19:00 +0000 Oil price

It is back to Vienna who are this weekend hosting the Opec/Non-Opec meetings which the market will hope confirms their part of the recent bargain. Yesterday the market was in believing mood as Russia said it would cut, as did Azerbaijan, others may be a touch more recalcitrant. Either way, in a speech in New York yesterday former Secretary General-El Badri indicated the deal would happen so that’s ok then…

Trinity Exploration & Production

There has been a story going round the market for several weeks now that has effectively said that Trinity has found a way out of its problems, that money had been raised and Bruce was back in business. Today’s announcement confirms that and by the look of it Trinity are back in business, at least for the time being.

The company is raising $15m at 4.98p which will pay off the creditors, restructure the balance sheet and even drill four wells. Money is being raised from the company’s largest shareholder and management and seems to be pretty much in the bag. Post all this, Trinity will actually look in quite good nick, operating break-even has fallen to $29.40 from $47.40 and concomitant with other e&p companies, costs are down, indeed after all that has gone on at Trinity I suspect that there are few other companies being run on such a shoestring. Indeed, following this process I imagine that Bruce Dingwall will be inducted into the Magic Circle post haste…


It has been announced that EPI Group, a leading private seismic consultancy has acquired PDF Limited which is a highly respected, also private, geoscience consultancy. Whilst both these companies are private, the combined group will provide an ever larger range of services to their blue chip client base be able to handle larger projects for a ‘broader spectrum of advisory services’.

Dr Mark Enfield, PDF founder will join the EPI board and Edward Bowen will remain CEO of the combined entity. This ‘transformational’ acquisition will create a broader range of advisory services to what is an increasing client base.  I mention this partly as industry readers of the blog will undoubtedly find it of interest and of course a company growing so fast will inevitably be considered for a quoted existence one day as this combination has the makings of a proper leader in its field.



This weeks podcast seems like a lifetime ago, World Oil & Gas week is a draining process! This week I spoke about VOG (28m 50s in) and HUR (32m 20s in) and the link is below should you wish to listen in.

Vox Markets podcast: includes Malcy on Victoria Oil & Gas and Hurricane Energy


And finally…

Another massive weekend of sport and top of the bill is Anthony Joshua who takes on Eric Molina in Manchester, no easy fight this. The other fight is Chisora v Whyte which is now not a title fight after the former threw a table at his oppo…

Rugby wise we are back to the European Champions Cup, too many great fixtures to mention here.

Racing is at Cheltenham and Donny both of which have great cards.

England played just about well enough yesterday in the test match yesterday but not so well this morning. 400 was ok but at the moment life is a cruise for the Indian batsmen who are 144-1 as I write.

So to the Premiership where there isn’t one standout match. Chelski host the Baggies, the Noisy Neighbours go to the Foxes, the HubCap Stealers entertain the happy Hammers and Spurs go to the Theatre of Dreams.

]]> Oil price, Shell, Plexus, EOG, Sundry-Faroe-Falcon-IOG- And finally... Thu, 08 Dec 2016 11:51:00 +0000 WTI $49.77 -$1.16, Brent $53.00 -93c, Diff -$3.23 +23c, NG $3.60 -3c
Oil price
Crude oil has drifted back in the last couple of days, production is obstinately high, reports yesterday that Opec output in November was up to 34.2m b/d and that Russia was up to 11.2m b/d. Add to that news of first Saudi Arabia and then Kuwait cutting prices to Asian customers and one can be rightly accused of wondering where these cuts are going to come from and if 1.5m b/d will be enough.
The inventory figures this week have been most confusing, mainly bigger draws than expected but yesterday’s 2.4m from the EIA disguised a 3.7m build at Cushing similar to the API number on Wednesday.

Shell has signed an MOU with Iran to partner on three oil and gas fields. Not of major significance but perhaps worth noting as it rather assumes that the Donald is not going to start reimposing sanctions- if he could- and also that those who are concerned about Shell’s finances can stop panicking about imminent penury.

Plexus Holdings
Just to prove that the Chairman can also produce statements that rival war and peace for length at least, Plexus has a detailed essay for shareholders today. Basically it says that the company is ready to ‘regain the momentum’ that was being built up before the downturn. Like all other OFS companies POS has had a hard time but it should have weathered the storm better than most. With a top of the range product portfolio, the bluest of blue chip clients, excellent management and supportive shareholders who have continued to stump up I have no doubt that recovery is a when, not an if, moment.

Europa Oil & Gas
A slightly shorter AGM statement from  EOG this morning, mainly explaining the corporate activity in the onshore UK portfolio, some assets have been moved on to fund the drilling at Holmwood and Wressle, the latter will provide useful cashflow. As ever the sex and violence is in the Irish part of the portfolio or what seems to be new to me and now labelled ‘Atlantic Ireland’ where the potentially considerable upside is located. I am interviewing Hugh Mackay next Tuesday on TipTV so will have much more to say after that.

Catching up on a couple of other items in a week busy due to a traditionally power packed Oil and Gas Council conference…
Faroe Petroleum announced that the Dong Energy deal had been completed, this will go down as one of the best for a very long time and the final price, at $26.7m  was way lower that the ticket price of $70.2m due to production and working capital adjustments.

Falcon noted that Origin have announced a major restructuring that involves an IPO of all its conventional upstream business leaving the Beetaloo on the outside. A nice word from Philip O’Quigley at Falcon explaining that the have kept the ‘crown jewels’ of APLNG and Beetaloo to themselves…

And IOG has gained an extension of another year, until December 2017, for its Blythe licence and will submit a draft FDP by the end of the year.

And finally…
The third test match against India is under way and with England winning the toss and batting a good score was necessary them being 2-0 down with two to go and that. England closed at 288-5 which at one stage was looking even better until a flurry of late wickets. Keaton Jennings made 112 on debut, his batting coming through his English mother’s side, obv…
Spurs managed to salvage something from the Champions League, winning last night to make it into the Boropa Cup where the Red Devils and the Saints are in action tonight. Already qualified as Group winners the fabulous Foxes changed 10 men and got done by 5…

]]> VSA Capital Market Movers -Sula Iron & Gold Thu, 08 Dec 2016 08:35:00 +0000 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold  has announced the results of further analysis of the historic drill core recovered prior to the November 2015 programme. SULA has also announced the issue of equity arising from the exercise of warrants. Consequently 65,468,750 new ordinary shares were issued at a price of 0.16p/sh resulting in gross proceeds of £104,750. The warrants related to fundraisings in February and March 2016.

The highlights of new assays included 0.7m at 28.9g/t Au from 13.6m depth, 1m at 1.64g/t Au from 35.3m depth and 6.45m at 1.72g/t Au all of which were oxide samples. There was also 1m at 1.26g/t Au from 108.3m depth from a sulphide sample.

In total 25 samples were collected from historic drill holes, all of which were part of the campaign now known to have drilled sub parallel to the dip of mineralisation. Whilst the November 2015 results are likely to demonstrate more accurately the potential of the deposit these latest assays highlight the existence of shallow oxide mineralisation with strong grades.

We reiterate our Speculative Buy recommendation although our target price is reduced marginally to 1.7p/sh to reflect the dilution.

]]> Solo Oil boss Neil Ritson says new drilling can turn Ntorya into a ‘big project’ Thu, 08 Dec 2016 07:00:00 +0000 Solo Oil PLC (LON:SOLO) boss Neil Ritson is excited about what he describes as a long awaiting drill programme in Tanzania, which kicks off with the imminent spudding of the Ntorya-2 appraisal well.

He highlights that much has changed on the surface since the original Ntorya well discovered gas - most notably there’s a new gas pipeline and infrastructure, and with partner Aminex the company has delivered another project into revenue generating production.

“Now is the time to get after the appraisal of the discovery we made in 2012,” he said.

Ritson the first well flowed gas and condensate at respectable rates, but expectations are high for Ntorya-2.

“We’re trying to turn this from a commercial project into a ‘big project’.

“It has already got enough gas from the first well to go into the pipeline system and make us some money, but, we think there’s a lot more to come here.”

]]> Green Dragon Gas Plc is ideally placed as China looks to ramp-up coal bed methane Thu, 08 Dec 2016 07:00:00 +0000 Green Dragon Gas Plc (LON:GDG) chief executive Randeep Grewal is set to be a key beneficiary as China looks to ramp up its use of coal bed methane.

“For a company that’s been focussed exclusively on coal bed methane for a better part of 20 years we are ideally positioned,” Grewal said in an interview with Proactive Investors.

He highlights that the company has expected and waited for the new commitments from the Chinese authorities.

"We’re ideally positioned, it has been a long time coming … but we are very fortunate that the government continues to be steady in the deployment of its commitment in terms of the policy that’s just been released.”

Grewal also talks investors through changes in China’s energy mix and the migration to cleaner energy sources rather than coal; he also discusses Green Dragon’s present share price and the possible catalysts in the coming months and years.

]]> Refinancing deal 'critically important' for LGO Energy PLC, says CEO Neil Ritson Wed, 07 Dec 2016 15:35:00 +0000 LGO Energy PLC (LON:LGO) has announced “a major turning point” with news of a refinancing deal which will allow drilling to recommence at the Goudron Field in Trinidad.

Speaking to Proactive's Stocktube, CEO Neil Ritson says: ''The combination of an affordable loan, robust and profitable production operations and an active drilling program, will allow LGO to quickly return to underlying growth.''

]]> VSA Capital Market Movers - Millennial Lithium Wed, 07 Dec 2016 09:12:00 +0000 Millennial Lithium (ML CN)

Millennial Lithium (ML CN) has released further results from its current drilling campaign. The previously announced first hole intercepted three brine aquifers over 94.5m to a maximum depth of 192m (the depth of the hole). The second hole drilled to a depth of 352m encountered significant presence of brine aquifers, once again. Eight samples were taken at varying depths from 92m-275m, all bar one of which encountered brine flow in excess of 0.5l/second.

As a result of the drilling results and flow rates obtained, ML is proceeding with the installation of a production scale pumping test well. A larger drill has been mobilised for this and will enable a 24 hour pumping test to be completed. Further work is required to determine precipitation sequencing and lithium recovery

]]> Zak Mir says there’s a chance Premier Oil shares can rally to 80p and beyond Tue, 06 Dec 2016 10:51:00 +0000 Seeing the glass half-full technical analyst Zak Mir says Premier Oil PLC (LON:PMO) shares could rally to 80p per share.

At the same time though he acknowledges that other traders might see it differently.

Mir, in a Tip TV segment for Proactive Investors, said: “I’m going for a glass half full scenario, so basically if we can hold above 50p area then [a rally up to] the top of the range at 80p.

“But I would understand if some traders decided they didn’t want to get involved, unless it broke 80p.”

“Presumably the big breakout won’t happen until the debt issue is finally sorted out.”

]]> Haydale underlines "significant" market opportunities after Huntsman j/v deal Mon, 05 Dec 2016 15:45:00 +0000 Ray Gibbs, chief executive officer at Haydale Graphene Industries (LON:HAYD) talks to Proactive Investors about the joint-venture agreement signed with Huntsman Advanced Materials, owner of the Araldite adhesives brand.

"They are very happy with what we are doing, and they know, as we know, that there are significant opportunities out there in the market," he says.

"They are our industrial partner and we are very pleased by that approach, which seems to indicate they have massive confidence in what we do," he added.

]]> Plastics Capital "delighted" with 1H organic growth Mon, 05 Dec 2016 11:00:00 +0000 Faisal Rahmatallah, chairman at Plastics Capital (LON:PLA), a niche manufacturer of specialist plastic products discusses the group's solid 1H results with Proactive Investors after strong increases in both revenues and profits.

"Organic growth has been widespread across the whole business and we are delighted about that. It reflects a lot of hard work completed over the past 2-3 years," he said.

"The second half should be good and beyond that we see some really positive momentum with the business" he added.

]]> Oil price, Range Resources, Aminex/Solo, And finally... Mon, 05 Dec 2016 09:33:00 +0000 Oil price

Whilst many commentators remain unconvinced, the oil price is tracking upwards and for the moment giving the deal the benefit of the doubt. A decent spin from the 1oth December non-Opec meeting should cement, at least for the time being the situation.

Range Resources

Range has announced that the QUN 160 development well encountered the Upper Cruse Formation at a shallower depth than expected (2140′) which is good. They found hydrocarbon sands and oil shows and production testing is expected soon. The GY 681 well spudded on the 1st of December on the Beach Marcelle water-flood and is expected to show results in around four weeks.


Aminex has announced that the Ntorya-2 appraisal well will be spudded mid-December and test the up-dip part of the Ntorya-1 discovery. Hopefully it will find a thicker gas resource section, if so the site is ready for Ntorya-3 and may drill back to back. Aminex has 75% of this and Solo, which I wrote about ironically on Friday, has 25%. Finally, it is good news to see Aminex saying that it has started receiving cash in which is modest but very positive news.

World Oil & Gas Week

This week the Oil & Gas Council hosts what is undoubtedly the best week of meetings, speakers and seminars, not to mention off-site catch ups anywhere in the industry. I hope to be able to report back a little of the occasion although a lot is held under Chatham House rules.

And finally…

Briefly as I run to the above….

The football was fast and furious at the weekend and both the Noisy Neighbours and the HubCap Stealers had ‘interesting’ ends to their games….

]]> VSA Morning Agri Comment Mon, 05 Dec 2016 08:19:00 +0000 Anglo African Agriculture Trading Update

On Friday Anglo African Agriculture plc (LON:AAAP), the London-listed food manufacturing and processing company with its main operations in Cape Town, South Africa, published a trading update ahead of its results for the year ended 31 October 2016 (FY 2016).

AAA expects to report FY 2016 sales in its spice manufacturing business of more than ZAR 34m (c£2.0m), +44% YoY (FY 2015: ZAR 23.6m (c£1.1m))

In November 2016 (first month of FY 2017) revenues have increased to ZAR 4.4m (c£0.26m), +16% YoY (November 2015: ZAR 3.8m (c£0.18m))

Volumes in November also increased to 150t, up from an average of 90t per month over FY 2016

VSA Comment

Although it is difficult to forecast a full-year trend off just one month’s trading, if AAA can sustain its current YoY growth rate across the rest of FY 2017 revenues are on track for c£2.2m (assuming current FX rate). However, given volumes are likely to increase in-line with planned capacity expansion (to 250t per month), this figure is likely to be significantly exceeded.

On the bottom line, profitable contribution should also be provided by the soon-to-be-acquired 46.8% stake in Dynamic Intertrade Agri (Pty) Ltd, which delivered revenues of ZAR 2.3m (c£0.13m) in November 2016 and recently secured a 1,000t fertiliser order for December 2016 worth ZAR 5.75m (c£0.33m) with an expectation of a 10,000t follow-on order to be spread over 2017.

Initial signs for FY 2017 appear positive and the new management team are clearly making significant operational improvements as the company seeks the scale it needs to reach profitability. With November being the last month before the holiday season, we wait to see whether AAAP can sustain this growth through the quiet December to January period and beyond. If it can, then FY 2017 could represent a significant turning point for the business.

]]> Oil price, BP, I Solo Oil, And finally... Fri, 02 Dec 2016 12:03:00 +0000 Oil price

I always think that it is rather nice when the market appears to be thinking with one voice, particularly if G Sucks is on the other side. The feedback from the Opec meeting is overwhelming cynical with most so called experts writing the obituary of the whole organisation let alone this agreement. Indeed everyone from Zak Mir to a visiting professor and chair of the Kings Policy Institute in London has written it off. The missing piece in the jigsaw is what GS has to say but as ongoing bears of the oil price they are coming from a position of weakness.

Disregarding all that, it seems that the telephone conversation that I mentioned earlier in the week between Presidents Putin and Rouhani may have swung things towards an agreement. Apparently this call took the heat out of the Saudi-Iran negotiations and may have sealed the deal, who knows, I have a healthy degree of cynicism myself but can believe anything on the right day. Recording of exports and production is better and more transparent than it used to be so I guess that come the new year we shall see who is and who isnt playing ball.

In the meantime if the agreement lasts only a while we shall see the inevitable continued rise in the rig count and something that will be welcomed by the US service companies as well as the likes of Hunting…

Finally in his first piece of policy in the energy sector it seems that President elect Trump has formally the Dakota Access pipeline as mentioned here after his election.


It’s almost as if BP were  waiting for the meeting to finish as they have announced that they have approved the spend of $9bn on the new platform for Mad Dog 2 in the Gulf of Mexico. The platform will produce 140/- b/d and will come onstream in 2021, oil price wise this is the interesting bit as I have been banging on for a long time about capex reductions causing a degree of tightness in the oil market, an approval now still means a five year wait by which time anything might have  happened. Reasons for being more positive between then and now are summed up by the $1.5tn loss of capex projects worldwide which, cannot be magicked back on to the market. Finally back to my point about costs, this platform which is budgeted at around $9bn would have been $20bn two years ago.

Solo Oil

I was fortunate to meet up the other day with CEO of Solo Neil Ritson and new FD Dan Maling. I have historically only had exposure in that part of Tanzania through Aminex but meetings with Solo and Wentworth in recent days is fast expanding my database. For Solo, Tanzania is the primary source of value, as they prepare to spud Ntorya-2 in the Ruvuma basin swiftly followed by the Ntorya-3 well should this well be a success. With 1-1.5 TCF of gas it would dwarf Kiliwani North but if my maths are correct they have enough cash to spare to drill this well, the N-3 well might need some funding. Kiliwani North pays the day to day G&A spend but at 15-20 scuffs a day looks disappointing, I’m sure I saw numbers nearer 30 doing the rounds.

One cant talk about Solo with mentioning Horse Hill where the company are awaiting planning approval which might get through early next year, any further success here would be relatively modest to the share price but no less welcome. Finally, I would expect more corporate activity from Solo who are a small but interesting team working in a specifically value enhancing area, Ntorya-2 when it spuds very shortly will be most important to the company.

And finally…

The autumn season of rugby internationals comes to a halt with England hosting the Wallabies at Twickenham, get the shopping done early tomorrow…

In the football it might be the winner takes it all game as the Noisy Neighbours host Chelski in the top of the table clash. With Spurs hosting the Swans and the HubCap Stealers at the Cherries it leaves the London derby at the London stadium where the happy Hammers take on the Gooners. In mid-table misery there is the sight of the Red Devils going to the Toffees.

And more great NH racing with the Welsh Grand National at Chepstow and a great card at Aintree featuring the Becher Chase.

]]> Obtala Ltd chief 'very pleased' to have oversubscribed on latest raise Fri, 02 Dec 2016 11:43:00 +0000 Obtala Limited (LON:OBT), the Africa-focused agricultural and forestry company has announced that it's raised a total $14.25mln cash investment into 40,728 Preference shares in Argento Limited, Obtala's 75%-owned forestry subsidiary.

They'd actually set out to raise $10 mln, Obtala's CEO Paul Dolan tells Proactive: ''I think the strength of the story certainly helped to sell it and our maximum headroom in terms of allowance that we could sell was just short of $20 mln''.

''The Preference Share is convertible at the holder's option into either the Argento forestry subsidiary or Obtala''.

Dolan also mentions they're expecting another $5 mln to come through which would take them to their maximum allowance of $19.25 mln.

''As a small company when you're going out to look to raise funds, you never count on definitely getting the deal done so we're very happy to have oversubscribed on this''.

In terms of where the money gets spent: ''We were very clear that the primary aim is to put the Argento business into full production. So we're looking at establishing a central sawmill and then mobile units in our concessions and a fleet of trucks to ferry the timber  from the concessions into the central sawmill'', Dolan says.

A portion of the funds raised will also go towards Obtala's agriculture project in Tanzania.

]]> Quadrise Fuels International shares are setting up to rally says Zak Mir Fri, 02 Dec 2016 11:04:00 +0000 Technical analyst Zak Mir sees support for Quadrise Fuels International Plc (LON:QFI) below current levels, and he reckons the share could be setting up for a strong rally.
Mir in a Tip TV segment for Proactive Investors said the Quadrise chart was “an improving picture”.
He highlights that the chart has a rising trend channel that has been in play since June, and said there are multiple support points at the 10p level.
He calls the upside ‘decent’ and says that the price could rise up to 16p, but cautious buyers may want to wait for the price to break above 12p, which where the 200-day moving average is.
]]> Opec deal driven by necessities, TD Investing's McGrade says Fri, 02 Dec 2016 07:34:00 +0000 Michelle McGrade, chief investment officer (CIO) of TD Direct Investing, tells Proactive Investors that the chances of the squabble-prone Opec states sticking to this week’s landmark agreement to cut production are good.

It is Opec’s first output cut in eight years, and McGrade believes that even these oil-rich countries are starting to feel the pinch, and they need the price of oil to go up.

McGrade also gives an insight to how retail investors are responding to the news, “as they pile into a range of stocks” – and it’s not just the old stand-by favourites BP and Shell; McGrade also name checks Tullow and Premier Oil from the mid-cap section of the market.

“You can buy the BPs and the Shells; they have good dividends, and if the oil price does go up to around US$70 a barrel, which is what Opec is indicating is what it would like, then the dividend would hold well for those companies,” McGrade opined.

“The other way to play it [the oil price rally] is to buy a fund, so one of the funds on our recommended list is specially orientated just to energy, and it’s called Guinness Energy Fund. They’ve got about 30 stocks within that fund,” TD’s CIO said.

She thinks the energy-focused fund managers are looking at a thirty to forty per cent rise in oil stocks over the next couple of years.

]]> Oil price, Northern Petroleum, Frontera Resources, And finally... Thu, 01 Dec 2016 10:28:00 +0000 WTI $49.44 +$4.21, Brent $50.47 +$4.09, Diff -$1.03 -12c, NG $3.35 +4c
Oil price
So, the organisation got it together roughly as expected but is this an early Christmas present or trouble by Easter? As with any Opec agreement, particularly those burnished with gilt, the proof of the pudding is in the eating, will they deliver on the agreement reached yesterday after an unusually long meeting? The 1.2m b/d is at the top end of expectations and individual countries are much as expected. Iran has actually had its reference production level increased to 3.975m b/d which they may not achieve but Iraq has taken a cut which shows more than a bit of willing. With the Saudi’s taking their 500/- cut it is clear that they have led by example, possibly influenced by the head of corporate finance and his warnings about needing a stable background for the Aramco float.
The stated aim for the price is somewhere in the $55-60 range which for most exporting Governments and companies even they would take your hand off for. Whatever the last two years has done for the industry it has re-balanced their costs, to such an extent that for many E&P companies that price means revenue and profit, for the majors the dividends are safe for the time being.
The EIA inventory stats put a thin layer of icing on the cake, the draw of 884/- was better than the whisper of a 678/- build and whilst inventories in products built, particularly in distillates the market breathed a sigh of relief all round.
Northern Petroleum
It has to be said that I’m sure that a number of people werent sure that they would be writing so positively about NOP, it has definitely been on the critical list for a little while. So it was very pleasing to see yesterday that they have introduced a strategic investor in the form of H2P who are investing in the asset portfolio and providing much needed financial and technical support. NOP are raising £5.1m at 3.5p which is a 12% premium plus a small Open Offer of a 1 for 7 at the same price. This is exactly the sort of deal that NOP should be doing and the buyer is taking a piece of some of the less desirable assets as well just to show that you have to kiss a few frogs en route…
Frontera Resources
After two years of not being able to meet with Frontera, despite many blog readers insisting I remain keen, and having my latest meeting being cancelled recently, I finally got a conference call earlier this week. I spoke with Steve Nicandros whom I suspect has been protected from reptiles like me by Investor relations for all this time. It is far to early to try and judge the company on one call and if you look at the share price, maybe too late to make something of the assets but I was actually quite impressed. Block 12 in Georgia looks to have a number of interesting prospects but I will have to suspend judgement on Moldova for a while. Early days yet, as I say but it certainly goes on the watchlist despite it being only an £8m market cap.
And finally...
Jose Mourinho should ‘get lost’ a bit more often as his hiding place was not discovered and the Red Devils went through 4-1 against the Hammers. They will meet Hull City Tigers in the semi finals, the other one is the HubCap Stealers against the Saints who knocked out the Gooners.

]]> VSA Capital Market Movers - Glencore and Stratmin Global Resources Thu, 01 Dec 2016 08:26:00 +0000 Stratmin Global Resources (LON:STGR)
Stratmin Global Resources has provided an update on its position as a cash shell. The company are reviewing potential opportunities and are focusing their resources on finding a suitable asset for completing an RTO. These opportunities have largely been focused on the precious metals sector in which management has prior experience.

Given STGR’s near term focus, it has decided with its JV partner, Tirupati Carbons and Chemicals to enable new investors to participate in the JV which is owned 1.47% and 98.53% respectively. The focus of the JV is the development of the Vatomaina large flake graphite project in Madagascar. Any new investment will be made at a minimum price equal to STGR’s existing investment. The proceeds would be used to accelerate the development of the project.    

Glencore (LON:GLEN)
Glencore  has provided an investor update which largely focuses on the progress on the deleveraging programme. GLEN states that it is on track for US$16.5-17.5bn net debt by end 2016. Divestments through the year have totalled US$6.3bn versus initial guidance of US$1-2bn which suggests that other areas of the programme may have disappointed.

The new target is for 2x net debt/EBITDA over the long term. GLEN anticipates robust free cash flow of US$6.5bn in 2017F. Furthermore, a new dividend policy has been announced commencing in 2017 in which US$1bn will be paid via equal instalments in H1 and H2. At the current price level this implies a dividend yield of around 2%. From 2018 onwards the minimum US$1bn will be maintained alongside a variable distribution which will represent a minimum payout of 25% of free cash flow from industrial segments.

]]> SSE has support and can power 10% higher Wed, 30 Nov 2016 11:00:00 +0000 British energy supplier SSE plc (LON:SSE) saw its share price dip following an underwhelming half-year report at the start of the month, but could it be ready to kick on from here?

Technical analyst Zak Mir certainly thinks so, and is tipping the stock to add the best part of £2 to its price over the next couple of months.

“You can see that the shares have been sideways in a range between 1350p and 1650p. At the moment we’ve bounced a support line from February at 1450p,” he explains in the latest segment of the TIP TV Proactive Investors Bulletin Board series.

“One would be looking for recovery towards that 1650p range.”

]]> Oil price, Faroe Petroleum, Jersey Oil & Gas, And finally... Wed, 30 Nov 2016 10:54:00 +0000 Oil price

The day of the Opec meeting dawns and no one is quite sure of what the end of the day will bring. I guess that the market is slightly favouring a  deal of some sort without too much confidence, intransigence rules in such situations…

The API reported an unexpected draw in crude stocks yesterday, if the Opec meeting runs on it could be that the EIA have their inventory stats around at the same time…

Faroe Petroleum

The company has announced that the FDP for the ODA( formerly Butch)  field has been submitted to the Norwegian Ministry for Petroleum and Energy. The company are using an innovative solution for the hydrocarbons, the field ties back to the Ula platform where the oil will go to the UK via the Norpipe system and the gas will be re-injected into the Ula reservoir to improve recovery. It looks like a win-win situation as over the last two years of developing the plans investments costs have fallen by 40%. This proves yet further advantages of the Dong acquisition and means that Faroe’s success with the drill bit in recent years is even more vindicated.

Jersey Oil & Gas

The company has announced that ‘following investor interest’ they have completed an oversubscribed placing to raise £1.6m at 110p, a discount of 6.8%. The interest exceeded demand and there was some scale back, management and family also participated in the exercise. Funds will be used for technical studies in support of the Verbier well due to be drilled next summer. JOG is looking increasingly well placed to take advantage of at the very least ‘warm’ investor sentiment and possibly a company making discovery next year, and whilst it has inevitable risk associated with other such small players I consider one that is very much worth taking.

And finally…

As the England cricket team relax on their mid-tour holiday it is sad that Haseeb Nameed has to return home with a broken hand, we will see much more of him I know. Replacing him is Keaton Jennings who will find life just as interesting out there and also it’s been a while since England had a South African in the side…

Last night in the Michael Mouse Cup the HubCap Stealers blooded some kids in their 2-0 defeat of the Peacocks, in the other tie the Hull City Tigers beat the Magpies on pens.

]]> VSA Capital Market Movers - Asiamet Resources and Sula Iron and Gold PLC Wed, 30 Nov 2016 09:56:00 +0000 Asiamet Resources (LON:ARS)

Asiamet Resources (ARS LN)

Asiamet Resources (ARS LN) has released Q3 2016 financial results and quarterly operating highlights. ARS is currently progressing towards releasing a PFS on its Beruang Kanan Main project in Indonesia which will most likely produce around 25ktpa of copper at lowest quartile costs. Recent work has been focused on infill drilling to increase the economic confidence of the resource to reserve status. The programme has so far confirmed expectations and demonstrated strong continuity of mineralisation within the resource. Additionally drill holes which have extended the bounds of mineralisation indicate the potential to reduce the stripping ratio of the project and therefore the unit costs. 56 holes for 5.6km have been completed with a further 62 holes for 5.4km planned.

Bulk sampling has also taken place and the results of the subsequent testwork were also positive. The results indicated low energy requirements for crushing which limits capital requirements. Environmental assessment work is currently underway also.

ARS expenses reached US$1.1m during 3Q 2016, of which US$946k related to exploration. For 9mo16 expenditures were US$2.0m with US$1.3m relating to exploration expenditure. Cash at the end of Q3 2016 stood at US$701k.

We reiterate our Speculative Buy recommendation and target price of 6.2p/sh.

Sula Iron & Gold (LON:SULA)

Following the previous announcement by Sula Iron & Gold (SULA LN) relating to its share placement, the company has announced the terms of the open offer. The record date for qualifying shareholders is the 29th November 2016 and for every 13 existing ordinary shares 1 open offer share is available.

The price of 0.21p/sh. is the same as the placing although given the strong performance of the shares since the placing this now represents a 16% discount to the last close versus 7% at the time of the placing. Consequently we believe that the open offer provides an opportunity to buy at an attractive valuation.

We reiterate our Speculative Buy recommendation and 1.8p/sh. target price.

]]> Oil price, Hurricane Energy, Pantheon Resources, Sound Energy, And finally... Tue, 29 Nov 2016 13:42:00 +0000 Oil price

There is little doubt that less than 24 hours away from one of the most crucial Opec meetings in recent history few if any people know what the outcome might be, and i’m talking participants as well as spectators here. In Vienna even a chance chat over a coffee is ‘an official meeting’ so yesterday was full of such discussions sometimes by phone. So, President Putin ‘met with’ President Rouhani and agreed to ‘coordinate’ their production, the Iranian delegation met with the Iraqi delegation and the former spent most of the meeting on the phone, likely receiving instructions. Iraq has been more amenable deal-wise, Iran less so I understand.

As has almost always been the case, the bottom line is totally dependent on what the Saudis want, after all the weight of any cuts which are ‘agreed’ will fall on their shoulders. Dont forget that the corporate finance department of the KSA will be whispering in their ears about how much easier the Aramco IPO will go at $60…..

If the statement starts off something like this ‘we are all confident that the oil market is re-balancing satisfactorily on its own’, head for the hills.

Hurricane Energy

There are fewer more interesting sights in the oil industry than watching the good Doctor Trice on the move when he spots an opportunity. After an incredibly busy few weeks in which Lancaster has gone from being a mere discovery to what might be a West of Shetlands hub, with wells on Lincoln underway and Halifax as of yesterday confirmed with the Transocean Spitsbergen next, what more might come out? Of course, how silly of me not to think that with all this going on and an imminent FID on Lancaster and first oil due in 2019, HUR would need an FPSO. Cue this mornings announcement, whereby the company announced that they had hired the BES  Aoka Mizu FPSO for the Lancaster EPS and up to ten years more if signed by this time next year. That of course means that first oil in 2019 is more likely, assuming that Lancaster gets the go-ahead next year, would we ever doubt it. Oh yes and in the middle of all that they raised £75m just to be going on with…Mind you, with all this drilling, head office will be quiet over Christmas…

Pantheon Resources

An operational update this morning but one which should never have been, at least not right now. The company has a bunch of meetings slated with its shareholders and I suspect that the Nomad or other advisors felt that they should go ahead even if it meant that the operational news is made to look distinctly second rate.

The announcement says that the VOBM#3 well flow testing is ongoing and that the data so far is ‘inconclusive’ with 1,500 mcf/d of natural gas and 274-740 b/d of 51º API oil but the ratio of gas to liquids needs stabilising and more work needs to be done. Frac fluids from a one-ff are only 60% recovered and it needs to be cleaned up and needs diagnostics. The company are saying that the well will be a commercial well but maybe just not as good as the VOBM#1 well to the East. Indeed, there is every likelihood that they have just found themselves right on the edge of the reservoir and that’s it. With gas processing, probably now by a third party and the third option in terms of selection next spring will see production and netbacks improved should this option be chosen.

The market has made its decision and PANR are off a short 20% today and to be frank that’s probably about right. The final knowledge about the well is a way off and it’s much easier to mark down than hope that all will be ok. The next few weeks now become more crucial, this well needs cleaning up big time and the VOBM#4 will be on us like Christmas in Texas. The more I look at this the more I think that although it was important to meet shareholders I would have done it later, if the story has legs, which I still believe it does then they will understand. This has been compounded by the last fiasco and why I can understand what they have done today, make no mistake I am still a believer, I think that they have cracked the code and that Jay and the operating team are onto something here and it will be worthwhile. Shame about the messaging though.

Sound Energy

Sound has announced this morning that they have confirmed the previous MOU with Pergemine and contracted a rig for the Badile exploration well. The rig is in Italy and will mobilise in January and be available for spudding 1Q 2017.

And finally…

India are now 2-0 up in the test series with two to play and the English players have been told that they can go on holiday before the next test. They are already on **** holiday staying in 5 star luxury and playing their favourite game. Maybe they should have been told that the nets was as good a place in the sun to be until the next test…

Its the Michael Mouse Cup again tonight and the draw has put up the Hull City Tigers against the Magpies and the HubCap Stealers against the Peacocks, enjoy….

]]> Oil price, Victoria Oil & Gas, Hurricane Energy, Falcon Oil & Gas, And finally... Mon, 28 Nov 2016 12:36:00 +0000 WTI $46.06 -$1.90, Brent $47.24 -$1.71, Diff -$1.18 +17c, NG $3.09 +6c
Oil price
It is now officially squeaky bum time with  the Opec meeting starting on Wednesday and many potential strategies still being discussed. The non-Opec meeting scheduled for today has been suspended as the Saudis have apparently decided to ensure that the Opec house is in order before anyone else joins the meeting. The downside of a failure on Wednesday is more than the upside, a ‘no-result’ would likely drop the oil price by $10, maybe more, an agreement to cut production would push the price up and the amount maybe dependent on the market’s perception of its validity.

Victoria Oil & Gas
Batch drilling is underway at Logbaba with La-107 having been drilled, cased and cemented down to 400m before being suspended and then skidded 10m down the track to do the same at La-108. The advantage of batch drilling is clearly obvious here as the cost savings and efficiencies of having materials and services on site only when they are needed and de-mobilised when they are not is accentuated by a 10m rail system. Despite the delay caused by the lightning strike, work is now proceeding apace at Logbaba and progress to the fairly shallow TD continues.

Hurricane Energy
HUR has exercised the option over the Transocean Spitsbergen drilling rig in readiness for moving to the Halifax well on the newly acquired P2308 licence. This well is hoping to prove the north eastern  extension of the Lancaster field and will move there when the current well is complete.

Falcon Oil & Gas
Interims today from Falcon but in reality there is little to report, certainly not from this accounting period. The Amungee NW-1 success is clear, Operator Origin has filed a ‘notice of discovery’ and has been very bullish about this significant well result. However, as I have written a number of times, the recently imposed moratorium on fraccing puts everything at best, on hold. It would be wrong to try and misjudge the outcome but many documents have already been presented on this matter that should mean that the programme goes ahead. If and when that does happen FOG remains in an extremely strong position as it is fully funded and with what looks like a cracking discovery in a world leading basin, until then it is purely a matter of patience.

And finally…
The cricket goes from bad to worse and its not even as if the sides are that much apart, England will lose this test.
The rugby was very good over the weekend with Ireland taking most of the credentials particularly beating both the All Blacks and the Wallaby’s on their tours. Less impressive wins for England, Scotland and Wales over inferior teams made up the weekend.

With wins at the weekend for the Noisy Neighbours, Chelski, the HubCap Stealers and the Gooners the top of the table is most exciting..
Hands up if you were thinking that Lewis was having a right laugh yesterday with his slowing down tactics, what a shame that young Max couldnt have just caught up…

]]> VSA Capital Market Movers - Metal Tiger Mon, 28 Nov 2016 08:43:00 +0000 Metal Tiger (LON:MTR)
Metal Tiger following the announcement on Friday 25 November that it had received an indicative offer from BMR Group (BMR LN) of 0.231 BMR shares for every 1 MTR share, MTR has rejected the offer. The BoD will not recommend the offer to shareholders on the grounds that it undervalues MTR.

On 24 November MTR’s share price closed at 2.275p/sh. whilst BMR closed at 5.875/sh with the bid therefore implying a valuation of MTR’s shares at 1.36p. BMR now has until 23 December 2016 to announce a firm intention to make an offer or announce that it does not intend to make an offer.

]]> Oil price, Ithaca, Sound, SDX, Lamprell, Sundry-Egdon- And finally... Fri, 25 Nov 2016 12:40:00 +0000 Oil price

The prices above are as at 0900 hrs this morning, what with Thanksgiving yesterday trade was thin. It might be today as well as we all gear up for Opec next week which might be as important a meeting as two years ago. At the moment -4.5% is still on the cards and whilst an agreement maybe announced it may not be deliverable. It’s an important one to get right, keep the price up through 2017 and a number of rewards will be bestowed upon the faithful, the impact of the trillion dollar capex cuts and of course the possibility of a successful Aramco float….

Ithaca Energy

Ithaca has been marked down this morning as the company updated as to a modest delay at the Stella field development. As a result of finding the inevitable teething troubles management have correctly instructed that all junction boxes are to be inspected resulting in a small slippage until January. This will make no difference whatsoever to the economics of the project and first oil should be in January so only a matter of weeks delay. As I write the shares are off by 10% which is plain daft and wise investors should take appropriate advantage.

Sound Energy

Following the raise of £24.1m yesterday at 81p the offer was left open for the day so retail and other investors could take part along with the underwriting institutions. Even though it was at market price, by the close the amount raised had swollen to £26.9m due to the over-subscription. This is no mean achievement and shows that despite the shares having risen by a multiple of five this year, shareholders remain incredibly supportive.

SDX Energy

SDX remains one of the most interesting plays in North Africa having accumulated an excellent  quality portfolio of high margin production assets as well as an exciting array of exploration prospects. Today’s 3Q financials are as ever not as important, as the potential that has been discovered at South Disouq where the company now possess a comprehensive dataset of information enabling them to select the location of the upcoming well for which they are carried. At Meseda the company are completing the final technical review and undertaking a tendering exercise in order to get the kit on site that will increase production next year. The next few months look most interesting to SDX who have a strong balance sheet, good management and some transformational wells to drill.


A new contract for Lamprell this morning and from an improbable source, ScottishPower Resources  have selected Lamprell for work on their East Anglian One offshore wind farm project. In a contract worth $225m Lamps will start next March and continue fabricating in Jebel Ali and Sharjah until October 2018 which will do wonders for next years revenue…


Egdon Resources has announced that its Open Offer was oversubscribed 1.3x and applicants will be filled accordingly. The total raise brought in £5.06m for the company who are now well set to go ahead with Wressle and other projects.

And finally…

These tests in India keep on coming, tomorrow sees the start of the third, England bring in Buttler for Duckett and Woakes will likely replace the injured Broad.

The rugby is also fast and furious, England host the Pumas, Scotland take on Georgia, Ireland have the Wallabies and Wales host the Springboks.

Last night Rooney added to his club tally in a 4-0 win against Feyenoord, the Saints will need something to go through in the last game in this round of the Boropa Cup.

In the Prem the big game is Chelski v Spurs while the Noisy Neighbours go to Burnley and the Maccams go to Anfield. With the Gooners hosting the Cherries the happy Hammers go to the Theatre of Dreams..

And the best til last as Jensen will race for the last time in F1 this weekend, Nico only has to come 3rd against any opposition to pick up the title.

]]> 'A great deal of support' for Sound Energy PLC, says Cantor's Sam Wahab Fri, 25 Nov 2016 11:34:00 +0000 Sound Energy PLC (LON:SOU) has raked in more than it anticipated in a fundraiser that allowed private investors to participate alongside City institutions.

Speaking to Proactive, Cantor Fitzgerald's oil analyst Sam Wahab says: ''An oversubscribed and underwritten placing announced yesterday and today, that's just over £26 mln in the coffers and they only set out to raise  £24.1 mln - and at a very modest discount as well''.

''It does show there's a lot of support both from private retail  investors as well as City institutions''.

On Thursday, Sound said its first horizontal well flowed at 32mln standard cubic feet of gas a day and could eventually go “significantly above” 40mln standard cubic feet.

Sam Wahab says 'It's very material for Africa in general but certainly for Morocco''

''This is very, very important for them''.

''It shows that they can produce at significant rates from the existing acreage - I suppose looking further ahead the key focus for investors will be the outpost well which will be TE-8 and I suppose that would determine how large this field is'', Wahab adds.

]]> Bowleven shares 'finally on the move' Fri, 25 Nov 2016 11:32:00 +0000 Shares in Africa-focused Bowleven PLC (LON:BLVN) are set to rise higher believes Zak Mir, technical analyst at Tip TV.

It’s been a turbulent period for the oil group, with an attempted boardroom coup recently adding to the uncertainty.

Mir believes this may have concentrated minds of management at the explorer, which has attractive assets but investors have been waiting a long time for it to come good.

The share price broke through the 200-day moving in August, which suggests the possible changes will be a positive.

Shares may re-test the August high of 28.5p over the next few months and it looks as if the shares are finally on the move says Mir.

]]> BP could end 2016 above 500p per share says Zak Mir Fri, 25 Nov 2016 10:31:00 +0000 BP Plc could see another leg up and close out 2016 above 500p per share, according to technical analyst Zak Mir.
In a Tip TV segment for Proactive Investors the chartist highlights the positive trend in the oil supermajor’s share price since June, thanks in part to steadier oil prices and the Brexit boost on the US dollar.
He says the base of the trend channel is 440p, while the top is presently seen up to 520p.
“We’re looking for that target on a one to two month timeframe …. the 50 day average at 464p is rising, so it looks as though we’ve got a new leg up towards 500p plus by the end of the year,” Mir says.
]]> VSA Capital Market Movers - Zambeef Products Fri, 25 Nov 2016 08:51:00 +0000 Zambeef: FY 2016 Results

Zambeef (LON:ZAM), a vertically-integrated agribusiness with operations in Zambia, Nigeria and Ghana, has released its full-year results for the period ended 30 September 2016 (FY 2016).

Revenue: US$219.4m, -0.4% YoY (FY 2015: US$220.2m); FactSet FY 2016 consensus was for US$202.2m.

Adjusted profit before tax (exc. unrealised FX and biological adjustment): US$8.6m, +390.9% YoY (FY 2015: US$2.2m)

Debt-to-equity ratio: 26% (30 September 2015: 60%)

Gross Profit by Segment (in US dollars):

Retailing: US$16.8m, -7.0% YoY (FY 2015: US$18.0m)

Cold Chain Food Production: US$24.6m, -11.3% YoY (FY 2015: US$27.7m)

Row Crops: US$23.3m, -35.2% YoY (FY 2015: US$35.9m)

Stockfeed: US$13.3m, +27.1% YoY (FY 2015: US$10.5m)

VSA Comment

ZAM’s year-end trading update on 30 September had already highlighted that its strong H1 trading performance had continued into H2, in particular highlighting significant volume growth across its beef, pork, dairy and stock feed operations, largely as a result of the ongoing roll-out of its macro retail stores (during the year ZAM’s total retail network expanded to 171 outlets from 154, and ten new macro stores are targeted for 2017).

These results confirm these more positive trends, with 10.8% volume growth in cold chain food products and 15.3% volume growth in stock feed reported, delivering a much improved group adjusted PBT. In Kwacha terms the performance was even more pronounced, with ZAM delivering a six-fold increase in group adjusted PBT and gross profit growth of more than 40% in retailing, more than 35% growth in cold chain food production and 95% in stockfeed (row crops Kwacha gross profit fell 0.6%).

This year ZAM has provided additional clarity on the specific financial impact on the group from its retailing operations, which contributed 20.7% of group gross profit in the year, up from 17.8% in 2015. This, combined with the strong reported volume growth, is evidence to us that the group’s macro store expansion strategy and general renewed focus on its retail network is starting to achieve results. With ZAM revealing its segmental results from its Zambian retail network for the first time, perhaps the most interesting new observation is that gross profit margins in Zambian retail are roughly half of that seen in its West African retail operations (GP margin: 12% vs. 23%).
With a much more stable local currency, an IMF support package likely soon and strong political support (as evidenced by Wednesday’s commendation for ZAM from the Zambian Agriculture Minister), the macro environment now appears to be much more positive for ZAM.

As we said at the time, the US$65m CDC transaction during the year was transformation for ZAM, strengthening its balance sheet and removing considerable uncertainty from the stock for investors. ZAM’s share price has increased c150% since the deal was announced on 4 August. However, we believe the stock still offers compelling value at these levels, especially with a progressive dividend policy likely to be re-instated from 2017 onwards.

]]> Sound Energy PLC opens up funding to private as well as institutional investors Thu, 24 Nov 2016 12:53:00 +0000 On the back of some impressive flow rates from its first horizontal well on the Tendrara licence and backed by its success to date in Morocco, Sound Energy PLC has unveiled plans to raise just over £24mln.

Sound is offering shares in two tranches and is using the PrimaryBid platform for private investors who have less than €100,000 to stake on the company’s success.

On why Sound may have taken this approach, PrimaryBid's CEO Dave Mutton tells Proactive: ''The company has a very loyal existing shareholder base and one of their specific requirements for this offer was to be able to open it up to that shareholder base and let them participate''.

Mutton says he wasn't at all surprised at the level of interest there was for the company's stock as it's a very large company with keen shareholders.

In a statement Sound Chief James Parsons said: “Sound Energy values its private investor base and has chosen this structure to enable the introduction of institutions to the register whilst also re-affirming our commitment to treat private investors fairly.”

]]> Oil price, Sound Energy, Providence Resources, Faroe Petroleum, CEO Interview, And finally... Thu, 24 Nov 2016 11:38:00 +0000 Oil price

A very Happy Thanksgiving to the many readers over the pond….
If I had written a blog yesterday the oil price piece might have said that the Opec technical committee had proposed that a 4-4.5% cut excluding Nigeria and Libya might do the trick. Not knowing what Iraq might do makes life more interesting but that would certainly take a tad under 1.5m b/d off Opec supply bringing the total down to around 32.25m b/d, certainly enough to bring some confidence back to the market. Today it seems there is good news and bad news, for the former it looks like Iraq might just be on board to participate but regarding the latter I suspect Iran won’t.  This just leaves Russia, who will be in Vienna for the pre-meetings and are likely freezers, which is probably about as good as one might hope for.
Finally because of Thanksgiving a lot of the data is out early this week, the EIA inventory stats showed a draw of 1.3m barrels when analysts were predicting a rise of 290/- and with refinery utilisation up 1.6% at 90.8% there was no surprise to see gasoline inventories up by 2.3m barrels.
Natural gas saw its first draw of the season as the price crept above $3 again and in the rig count oil units were up 3 at 474 units.

Sound Energy

Sound has announced the latest flow rates from the TE-7 well at Tendrara and a raise of £24m+. The flow rate was 32 mmscf/d , significantly above the company’s pre-drill estimates and they estimate that it has the potential of 40 mmscf/d with a 50% draw-down. The well now goes to the EWT for planning purposes.
As for the raise, the company is fully underwritten for £24.1m at 81p so no discount and under the platform retail as well as other investors can participate if they do it today. The proceeds are for the development of Tendrara and it makes eminent sense to raise money at this price if it is being offered. There is no surprise that CEO James Parsons has used this novel, and apparently first for Aim, way of enabling its substantial retail investor base to participate alongside institutions and it will be interesting to see how the process goes. Sound has with this discovery in Morocco and the enthusiastic backing of a large band of retail shareholders got to a market cap recently at £500m and with the outpost well scheduled for the new year there is plenty to look forward to.

Providence Resources

Providence is not letting the grass grow under its feet either, it has secured a rig by signing up with Stena for the well on Druid/Drombeg which is scheduled for June of next year. The rate is $185/- a day which is about a third of the rate once achieved and comes with a one well extension. Obviously some way off but this will be a key well next summer on many levels.

Faroe Petroleum

Faroe is a valuable member of the bucket list and for a long time now I have been trying to get CEO Graham Stewart into the TipTV studios for an interview. The link to the interview is below and I urge you to watch it even if you are not a Faroe shareholder, it demonstrates how the company is run and on what guiding principles it is based.

And finally…

Both the Noisy Neighbours and the Gooners will be joining the Foxes in the next round of the Champions League but i’m afraid that the party is over for Celtic this year.
Tonight it’s the Boropa Cup and the Saints are at Sparta Prague whilst Feyenoord are due at the Theatre of Dreams.
And there may be a few sore heads in the sector today after the Brindex Dinner last night, although a mole tells me that it was a rather muted affair, probably as the blog wasnt represented owing to a lack of an invitation!

]]> Today's Market View - IronRidge Resources Limited, SolGold Plc, ZincOx Resources Plc Thu, 24 Nov 2016 11:06:00 +0000 IronRidge Resources* (LON:IRR) – Gold portfolio secured in Ivory Coast

SolGold* (LON:SOLG) – Cascabel exploration update

ZincOx (LON:ZOX) Suspended – MOU signed with Korea Zinc on joint design and development of new recycling plant in Vietnam

The US$ index is trading at the highest in more than a decade amid solid economic data strengthening the policy tightening case.

Gold prices are flat trading close to the lowest level since Feb this year.

Holdings in gold ETFs contracted for a 10th consecutive day, as investors are reducing positions in the non-yielding metal.

On a positive note, copper, zinc and lead are having a good day while iron ore prices have nearly made up all losses incurred last week.

Iron ore futures climbed 2.9% today closing a little way off a one-year high (for Jan futures) recorded last week.

Brent is little changed today despite comments by Iraq’s prime minster that the country will agree to cut production as part of the OPEC deal in contrast to previous calls for an exemption.

US government debt – who is going to buy new US government bonds

We are wondering who is going to buy new US government bond issues – to fund Trump’s new infrastructure plans.

Middle Eastern sovereign funds are depleted by low oil prices and certain Trump comments may not have endeared him to leaders in this region.

China is also not happy with Trump comments about trade barriers and may not wish to support his growth plans.

The US dollar has strengthened making US Treasuries look more expensive compared with local currencies.

Fund flows back into the US dollar may potentially spark a collapse in weaker emerging market currencies and starve local markets of capital.

While many other investors will buy the relative safety of US Treasuries we wonder how high US rates will need to go to attract sufficient funds.

The world changed with the election of Donald Trump.  Trump’s selection of key personnel around him is further evidence of this change and of his likely hard line stance towards other nations.

Trump’s impact on the US dollar and on Fed interest rates is going to affect the rest of the world though it is still too early to know how this is going to play out.

If Trump gets the cash to rebuild American infrastructure then demand for metals will rise in the US but this may be tempered by slower growth elsewhere.

Skyscanner sold to Chinese group for £1.4bn

The sale serves to highlight the re-emergence of Chinese companies acquiring overseas businesses.

Lundin Mining is also selling its 30% share in the Tenke Fungurume copper, cobalt mine in the Congo for $1.14bn.

Health & safety going mad

The advertising watchdog has gone bonkers and banned an ad by Heinz which shows a teenager drumming out a tune on a tin of Heinz Baked beans.  Apparently teenagers might cut themselves by drumming out tunes on the serrated edges of opened cans.

Given that we all face greater dangers on a daily basis we have to wonder what else they the authorities will ban and where the teenagers of today will learn the basic skills that help them better avoid stupid accidents in the future.

Dow Jones Industrials  +0.31% at 19,083 Thanksgiving today. Market closed
Nikkei 225        +0.94% at 18,333 
HK Hang Seng   -0.30% at 22,608 
Shanghai Composite    +0.02% at   3,242
FTSE 350 Mining          0% at 14,986 FTSE 350 +104% since 1st January
AIM Basic Resources   -1.08% at  2,406 AIM Basic Resources +48% since 1st January

Economic News

US – Durable goods orders surprised on the upside in Oct while FOMC Nov meeting minutes showed members are thought it was appropriate to raise rates “relatively soon”.

A pick up in core durable goods suggest business investment may be finally changing its trend following declines in spending by the energy sector amid lower oil prices.

With US elections results uncertainty behind us and the latest economic data demonstrating good growth momentum, the Dec hike has now been fully priced by the market given the implied probability of the move at 100%, according to Bloomberg.

Looking past 2016, the FOMC members appeared unconvinced to accelerate the pace of tightening next year beyond the previously guided two rate increases.

Germany – Business sentiment came in strong in Nov confirming that “the economic upturn in Germany remains intact”, according to Ifo Institute.

Despite a slight drop in the expectations index this month, the sentiment held up well with the gauge hovering around a two-year high.

Ifo Current Assessment: 115.6 v 115.1 in Oct and 115.0 forecast.

Ifo Expectations: 105.5 v 105.9 in Oct and 106.0 forecast.

UK – New budget guides for an extra £122bn in borrowing by 2020-21 versus previous forecasts prepared in Mar with the OBR estimating than a little less to be due to the decision to leave the EU.

The economy is expected to grow at a slightly higher rate in 2016, while medium term forecasts have been brought down on “lower investment and weaker consumer demand, driven respectively, by greater uncertainty and by higher inflation resulting from sterling depreciation”.

2016 growth to come in at 2.1% v Mar estimates for 2.0%.

2017 growth expected at 1.4%, down from 2.2%.

Overall 2016-2020 growth has been brought down to 7.4% from 8.8% assuming the UK leaves the EU by Apr/19.

CPI inflation driven by the weaker pound is expected to climb from 0.9% in Oct to above 2% in early 2017 and peak at 2.6% in mid-18.

China – platform collapse at a new power station in China kills 40

The collapse serves to highlight the need for rigorous health and safety procedures in major construction projects.

Some workers remain trapped in the tangled remains of the collapsed steel platform and concrete slabs.

While these incidents appear more common in China this may partially be due to the ongoing high level of construction activity in the region.


US$1.0554/eur vs 1.0607/eur yesterday.   Yen 113.03/$ vs 111.04/$.   SAr 14.105/$ vs 14.085/$.   $1.245/gbp vs $1.238/gbp.    

0.740/aud vs 0.742/aud.   CNY 6.917/$ vs 6.898/$ – Yuan weakens further

Commodity News

Precious metals:

Gold US$1,188/oz vs US$1,212/oz yesterday 

Gold ETFs 61.2moz vs 61.6moz yesterday 

Platinum US$917/oz vs US$940/oz yesterday

Palladium US$733/oz vs US$744/oz yesterday 

Silver US$16.35/oz vs US$16.64/oz yesterday

Base metals:   

Copper US$ 5,865/t vs US$5,589/t yesterday 

Aluminium US$ 1,772/t vs US$1,764/t yesterday

Nickel US$ 11,630/t vs US$11,365/t yesterday 

Zinc US$ 2,698/t vs US$2,592/t yesterday

Lead US$ 2,242/t vs US$2,198/t yesterday

Tin US$ 21,285/t vs US$21,200/t yesterday


Oil US$49.1/bbl vs US$49.2/bbl yesterday 

Natural Gas US$3.011/mmbtu vs US$2.957/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$73.0/t vs US$71.5/t 

Chinese steel rebar 25mm US$452.5/t vs US$452.2/t

Thermal coal (1st year forward cif ARA) US$64.0/t vs US$68.5/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unch

Ordinary hard coking coal is $270.0/t vs $270.0/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-203/mtu unch last week – boringly unchanged.  Price will have to start rising sometime soon if Trump goes for growth.

Company News

IronRidge Resources* (LON:IRR) 16.5p, Mkt Cap £39m – Gold portfolio secured in Ivory Coast

IronRidge which holds concessions for iron ore in Gabon, gold in Chad, lithium in Ghana and gold, copper and other minerals Australia is taking on a highly prospective gold portfolio in the Ivory Coast.

The tenement portfolio covers 2,310sqkm including artisanal workings over an 8km strike at Kineta North.

The region covers Birimian greenstones which are generally known to host multi-million ounce gold deposits.

The license includes four principal gold bearing structures with two of these as splay structures off the Sassandra Shear zone.  Similar structures host the Syama at 7moz and Tongon 5moz gold mines in the north of the Ivory Coast.

Structures to the south also include Ahafo at 23moz, Bibiani 7moz and Chirano at 5moz.

Kineta North (100%):  The Kineta North appears to be located on the same structural shear as the Wa 2.2moz and Konkera 3.3moz which is now held by Centamin.

Pictures in the IronRidge press release show a larger scale artisanal pit and underground workings.  Atrisinal miners are good at finding gold mines but are often held back by the water table and ground conditions which often kill workers in lower levels.

Understanding the potential of these diggings to host much larger gold discoveries is a skill and an art with the potential to reveal multi-million gold discoveries particularly where the workings are show the presence of gold mineralisation at key intersections along structural shears.

Bianouan (100%):  lies at the south-western extension of a structural setting which hosts the Ahafo 23moz, Bibiani, 7Moz and Chirano 5moz structures.

Bodite (100%):  is a different sort of geology with gold seen in Birimian metasediments and a where a thicker package of turbidite sequence rocks are intruded by more fractionated granitic intrusives.  Turbidite structures are formed from deep water sedimentary flows often in underwater avalanches.

This setting is similar that which hosts Siguiri 13.3moz and Lefa 8moz.

The team:  The IronRidge team, led by Nick Mather are expert at identifying and locating interesting mineral prospects.  They have a proven track record as project generators and use a combination of high-tech and traditional geological techniques to evaluate the potential of their projects.  They know what makes a good project for sale to a major and equally they know how not to waste too much time on projects of lesser value.

The license agreement allows IronRidge to earn into 100% of each project through expenditure and feasibility study work and also gives an NSR of 2.5% to the vendors of which 40-50% may be acquired for US$2-3m at any time.  The deal demonstrates an new found co-operation between license holders and explorers which should serve to advance the projects for both parties.

SolGold* (LON:SOLG) 22.4p, Mkt Cap £334m – Cascabel exploration update

SolGold report that Hole 18 has intersected visibly strong copper mineralisation at Hole 18 on the Alpala property at Cascabel in Ecuador.

The company states that visible copper mineralisation is seen from 903.9m depth to 1,321.5m with the intensity and veining of the mineralisation increasing with depth as drilling continues towards the target depth of 2,300m.

Intense veining of up to 48% of the total rock mass has been observed.

The team currently have three rigs at Alpala.

Hole 19 is currently at a depth of 153m

Hole 20R is at a depth of 321m and should serve to enable another seven directional drilling daughter holes testing up to 650m below the thickest and richest part of the Alpala deposit.

ZincOx (LON:ZOX) Suspended – MOU signed with Korea Zinc on joint design and development of new recycling plant in Vietnam

ZincOx is looking to remerge from the ‘ashes’ or should we say the ‘Electric Arc Furnace Dust’ to develop a new recycling plant in Vietnam.

The press release is short on technical details on the project but does tell us that it’s a 51:49 joint venture in favour of Korea Zinc and that the ‘Definitive Development Study’ is expected to cost about $2.5m.  If this cost rises to >$3m then ZincOx’s interest will be diluted proportionately though ZincOx will be able to buy back its interest to 49% in the following six months.

The new Vietnam recycling plant will be based on ZincOx’s developed Rotary Hearth Furnace technology and with capacity to treat 100,000tpa of EAFD.  We guess this could result in 30,000t of high quality zinc oxide (80% zn) production worth around twice as much as zinc concentrate plus some by-product iron.

This should lead to a significant increase in sales for a relatively modest increase in overall operating cost leading to a substantial uplift in margin, value and profit compared with the last plant built.  We believe the ZincOx plant built in Korea is now working well and enjoying the benefits of the significant uplift in zinc prices since Korea Zinc took control of 91.3% of the plant as part of a financial restructuring during the prolonged commissioning process.

ZincOx shares were suspended on 28th October and must requote within six months to avert delisting.

Debt:  ZincOx is carrying £3.78m of corporate loan notes with interest accruing at 10%pa from 1st August 2016 and are due for repayment in January 2018.

Assets:  ZincOx retains an 8.7% interest in the Korea Recycling Plant which it designed and built.  Very sadly extended plant commissioning combined with prevailing low zinc prices allowed Korea Zinc to take control and majority ownership of the plant just ahead of a recent and sustained rise in Zinc prices.

The value of Zincox’s stake in Korean Zinc Recycling Plant should now be substantially more than the last implied value of $6.3m.

ZincOx also owns what is described as a valuable plot of industrial land in Turkey.

Conclusion:  It’s good to see ZincOx re-emerge from losing control of its Korea Zinc Plant.  It is interesting to note that Korea Zinc are still working as cooperating partners with the ZincOx team.  Korea Zinc must respect the skill and knowhow of the ZincOx team and must also need to utilise these skills to advance with their next EAFD project.

]]> Zak Mir says Sound Energy is a ‘star stock’ that can head back to 100p Thu, 24 Nov 2016 10:03:00 +0000 Sound Energy has been a ‘star stock’ of the year to date, says technical analyst Zak Mir, who is looking for the share to head back to the recent highs of 100p. 
Studying the Sound Energy chart, in a Tip TV segment for Proactive Investors, Mir says: “From July its up from 20p to hitting 100p in September, and it is still consolidating quite well.”
The chartist notes the share’s 50 day average is presently around the 83p, and support is at 70p.
“… a break above that [moving average], hopefully over the next few days or couple of weeks, and we could at least revisit the highs,” Mir says.
“Support is towards the 70p and for people who are not in this particular stock at the moment that would probably be the area to look to go long.”
]]> Today's Market View - BlueRock Diamonds Plc, Medusa Mining Limited, Norilsk Nickel, Shanta Gold Limited Wed, 23 Nov 2016 10:53:00 +0000 BlueRock Diamonds Plc (LON:BRD) – plant improvements finished ahead of time
Medusa Mining Limited (LON:MML, ASX:MML) – AGM statement shows infrastructure work at mine on track
Norilsk Nickel (NILSY US) - Norilsk joins United nations Global Compact
Shanta Gold Limited (LON:SHG) – Site visit presentation

Metal markets along with the US$ index and Brent are relatively flat this morning.

One of the exceptions is iron ore futures which climbed 7.3% today on the Dalian Commodity Exchange.

Iron ore prices volatility is reported at the highest level in six years with Dalian futures seen dropping 10% last week after climbing 23% in the period to Nov 11.

The benchmark spot price climbed to $74.9/t compared with a two year high of $79.8/t recorded earlier this month, according to Metal Bulletin.

Stornoway to sell 91,000cts of stones from new Renard diamond mine in the Otish mountains of Quebec

Dominion Diamonds moving HQ to Calgary in move to cut costs

Dow Jones Industrials  +0.35% at 19,024 Thanksgiving tomorrow
Nikkei 225    at 18,163  Bank Holiday in Japan today
HK Hang Seng   -0.01% at 22,677 
Shanghai Composite    -0.22% at   3,241
FTSE 350 Mining   +1.50% at 15,037 FTSE 350 +105% since 1st January
AIM Basic Resources   +0.51% at  2,433 AIM Basic Resources +49% since 1st January

Economic News

Eurozone – Activity in the single currency zone advanced to the highest in 11-months on climbing order books

Employment increased at one of the strongest rates since early 2008 with inflation pressures reported to be at the highest for over five years.

Markit Manufacturing PMI (Nov): 53.7 v 53.5 in Oct and 53.3 forecast.

Markit Services PMI (Nov): 54.1 v 52.8 in Oct and 52.9 forecast

Markit Composite PMI (Nov): 54.1 v 53.3 in Oct and 53.3 forecast.

Germany – Manufacturing held up well in Nov with the pace of growth holding up close to the highest level in nearly two years

Services PMI hit the strongest reading in six months.

New business orders including export markets came in strong.

Input inflation is reported to have accelerated to the fastest rate since Mar/12 on higher prices for raw materials including aluminium and steel as well as weaker euro.

“Although the PMI failed to further build on October’s ten-month high, the latest survey results highlight that Germany’s private sector economy remains in good shape in Nov,” Markit said.

“Moreover, the data suggest that economic growth has picked up from the meagre 0.2% rate in the third quarter.”

Markit Manufacturing PMI (Nov): 54.4 v 55.0 in Oct and 54.8 forecast.

Markit Services PMI (Nov): 55.0 v 54.2 in Oct and 54.0 forecast.

Markit Composite PMI (Nov): 54.9 v 55.1 in Oct and 55.0 forecast.

France – Private sector growth held up well in Nov driven by stronger performance from the services sector

New business increased for the fifth consecutive month with orders in manufacturing broadly unchanged and gains led by services sector.

Manufacturing input costs are said to have recorded the sharpest increase recorded in the manufacturing sector in nearly five years.

Markit Manufacturing PMI (Nov): 51.5 v 51.8 in Oct and 51.5 forecast.

Markit Services PMI (Nov): 52.6 v 51.4 in Oct and 51.9 forecast.

Markit Composite PMI (Nov): 52.3 v 51.6 in Oct and 51.9 forecast.

South Korea – State prosecutors raided offices of Samsung Group and the National Pension Service, the nation’s largest pension fund, as part of the investigation over Samsung contributions into foundations linked to Choi Soon-sil, a confidante of the current South Korea President.

Local media report that investigators are looking into NPS’s decision to vote through the $8bn merger of Samsung C&T and Cheil Industries.

Prosecutors allege that Samsung transferred €2.8m to a company co-owned by Ms Choi in return for the President approval of the deal.

Nigeria – central bank keeps rates on hold as economy deteriorates

Lowish oil prices continue to deepen the recession in Nigeria with the central bank holding rates in an attempt to support the economy.

South Africa – Q3 official unemployment rises to 27.1% highest level in 13 years

That’s 5.9m people without jobs vs 5.6m in Q2.

The unemployment rate is 36.3% when including people who have given up looking for jobs


US$1.0607/eur vs 1.0646/eur yesterday.   Yen 111.04/$ vs 110.72/$.   SAr 14.085/$ vs 14.091/$.   $1.238/gbp vs $1.249/gbp.     

0.742/aud vs 0.740/aud.   CNY 6.898/$ vs 6.885/$ – Yuan weakens further

Commodity News

Precious metals:

Gold US$1,212/oz vs US$1,218/oz yesterday 

Gold ETFs 61.6moz vs 61.8moz yesterday 

Platinum US$940/oz vs US$948/oz yesterday 

Palladium US$744/oz vs US$741/oz yesterday 

Silver US$16.64/oz vs US$16.87/oz yesterday

Base metals:   

Copper US$ 5,589/t vs US$5,664/t yesterday 

Aluminium US$ 1,764/t vs US$1,748/t yesterday 

Nickel US$ 11,365/t vs US$11,445/t yesterday 

Zinc US$ 2,592/t vs US$2,627/t yesterday

Lead US$ 2,198/t vs US$2,204/t yesterday

Tin US$ 21,200/t vs US$21,095/t yesterday 


Oil US$49.2/bbl vs US$49.6/bbl yesterday 

Natural Gas US$2.957/mmbtu vs US$2.981/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday 


Iron ore 62% Fe spot (cfr Tianjin) US$71.5/t vs US$69.0/t 

Chinese steel rebar 25mm US$452.2/t vs US$446.6/t 

Thermal coal (1st year forward cif ARA) US$68.5/t vs US$67.0/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unch

Ordinary hard coking coal is $270.0/t vs $270.0/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-203/mtu unch last week – boringly unchanged.  Price will have to start rising sometime soon if Trump goes for growth.

Company News

Dominion Diamonds moving HQ to Calgary in move to cut costs

Stornoway to sell 91,000cts of stones from new Renard diamond mine in the Otish mountains of Quebec

Stornoway is on track to hit commercial production by the year end with the diamond sale a meaningful part of this target.

The average diamond value is expected to be $155/ct for 1.9mctpa over the first 10-year mine life

BlueRock Diamonds* (LON:BRD) 6.8p, Mkt Cap £2.6m – plant improvements finished ahead of time

BlueRock, which is now being led by CEO Adam Waugh is ahead of schedule in terms of repositioning of certain parts of the diamond recovery plant.

The repositioning of the pans and scrubber is now done and this should improve the flow of material while improving recovery rates.

Testing of the new plant configuration using stockpiled ore will take place over the next few weeks.

The new primary crushing and pre-screening circuits are due for completion by mid-January at a cost of around R2.5m

This should cut process costs, deliver better feed material and improve recoveries.

Contractors African Mining and Crushing (AMC) are to run the Drilling and Blasting, Loading and Hauling work at the mine with operational and cost benefits expected to follow from this new relationship.

The team are working on water management and are re-lining and repositioning the main primary water reservoir.  South Africa either seems to have too much or too little water depending on where you are these days.

The team are also recruiting to support ramping up to 24 hour processing.

Conclusion:  Adam Waugh is working hard to turn around the diamond mining and recovery operations.  The calculated grade of the mine should support economic operation assuming the plant is able to meet reasonable industry standards with the potential for recovery of special stones to boost profits.  Once the first diamond mine is working properly then BlueRock may consider development of other kimberlite pipes within their license area.
*SP Angel acts as Nomad & Broker to BlueRock Diamonds

Medusa Mining (LON:MML, ASX:MML) – AGM statement shows infrastructure work at mine on track

Norilsk Nickel joins United nations Global Compact

The initiative run by the UN is in the area of Corporate Social Responsibility and Sustainable Development.

“The mission of the Global Compact is to promote recognition and practical application by businesses worldwide of ten basic principles on human rights, labour, environment and anti-corruption. Following these principles globally will provide for sustainable development going forward.”

Currently, the Global Compact brings together over 13,000 corporate participants and other stakeholders from more than 160 countries, with global industry leaders among them. By joining the initiative, the Global Compact participants gain access to the UN's knowledge and experience in corporate social responsibility and sustainable development, as well as to its expertise of the private sector.

Shanta Gold (LON:SHG) 11.4p, Mkt Cap £66.3m – Site visit presentation

Our intrepid mining analyst Simon Beardsmore is at the Shanta Gold, New Luika mine site today.  .

The company report production is stable at 60,000-90,000oz with a base case plan of 84,000ozpa from 2016 to 2020.

The plan will be updated in Q1 with new resources being added from the Ilunga and Elizabeth Hill prospects.

Costs which have been running at an impressive AISC 780/oz reflect the quality of the resource and the team.

Q3 costs were even better with Q3 AISC costs at US$621/oz and a cash cost of US$387/oz.

Initiatives could cut costs further with cheaper power, water, tailings, contractors and lower capital going foward

The Base Case mine plan does not include some 514,000oz of known resources. This give some confidence in the ability to extend the life of the mine by another 4-5 years in the short term depending on prevailing gold prices.

The mine started the new satellite Ilunga open pit in July.

Shanta finished mining at the Bauhinia Creek open pit in September

Underground operations at Bauhinia Creek in Q1 next year and should feed higher grade ore to the plant.

Open pit mining will continue at Ilunga, Shamba and Black Tree through most of 2017

While mining at the Jamhuri open pit finishes at the year end ore should be processed from this pit through most of 2017

Singida project:  further work is ongoing to better understand the potential of this resource with exploration ongoing and a pilot mining project in progress.

Higher expected grades should compensate for higher strip ratios expected through November and December.  We also expect lower contractor costs to help (this is our own assumption).

Exploration:  the exploration team have done well to add ounces to the production plan and we look forward to further news from Piet Prinsloo, the exploration manager and his team.

Conclusion:  Shanta’s presentation appears to deliver a positive message.  We look forward to confirmation of this from out analyst in the field.

]]> Today's Oil and Gas Update: Eland Oil and Gas PLC, JKX Oil and Gas, Pantheon Resources Plc Wed, 23 Nov 2016 10:17:00 +0000 Headlines

Eland Oil and Gas (LON:ELA – 36p) – Operational Update Underlines Opportunity and Issues

JKX Oil and Gas (LON:JKX – 17p) – October Production a Filip

Pantheon Resources (LON:PANR – 94p) – New Plan Needs to be Disclosed

In Brief

Eland Oil and Gas (LON:ELA – 36p) – Operational Update Underlines Opportunity and Issues: While today's update doesn't make for spectacular reading, what it does underline is the drive within the management team to continue to drive the Company forwards. Today's well results are a timely reminder of the scale of opportunity available in Nigeria, but again, the operational issues that continue to provide headwind to the Company’s progress, also underline the issues of operating in country. All in all, we believe that the Company outlook remains buoyant, and while production (and cash flow) is patchy currently, we believe that all necessary elements are in place to allow the Company to achieve sustainability.

JKX Oil and Gas (LON:JKX – 17p) – October Production a Filip: The production report for October underlines the fact that the management team are still focused on its task, despite the issues that have plagued it over the last 6 months, both internal and external. While this appears to be once again trending in the right direction, what is really needed is guidance and direction allied with measurable milestones. That way, management can start the process of rebuilding investor confidence and more importantly, value.

Pantheon Resources (LON:PANR – 94p) – New Plan Needs to be Disclosed: Today's results are a reminder of the progress that the Company has made over the last 12 months, albeit punctuated with the horizontal well drilling failure, which is still yet to be fully understood, especially when there is no issue drilling vertically, or indeed horizontally in the same formation elsewhere. With ample cash resources the immediate forward programme is assured, but given the fact that horizontal drilling will not be possible in its acreage, there is still a need to understand the impact that the new vertical development scenario has on its assumed horizontal development plan previously. More specifically, management need to highlight the differences in cash flows, and while costs are likely to be lower, the returns are too, and it’s how this all pivots on the programme's timing that's important.

]]> VSA Capital Market Movers - Millenial Lithium Wed, 23 Nov 2016 09:34:00 +0000 Millenial Lithium (CVE:ML)

Millenial Lithium (CVE:ML) has released the first results from its Phase 1 lithium brine drilling programme at its Pastos Grandes project in Argentina. The first drill hole encountered brine aquifers over a total of 94.5m, from surface to 13m, 19.5-66m and 157-192m. This was the depth of the hole meaning the brine remains open. Brine sampling demonstrated a density of 1.22g/cm3.

This initial programme is aiming to identify the depth of brine resources and this result which has identified deeper brines than historical drilling is therefore in line with the company’s expectations.

]]> Today's Market View - Amur Minerals Corporation, Asiamet Resources, DiamondCorp PLC, Sierra Rutile Ltd Tue, 22 Nov 2016 10:17:00 +0000 Amur Minerals Corporation (LON:AMC) – Agreement with the Far East Investment and Export Agency

Asiamet Resources (LON:ARS) – Metallurgical test-work from BKM

DiamondCorp PLC (LON:DCP) Suspended – Business rescue practitioner appointed

Sierra Rutile Ltd (LON:SRX) – Iluka merger cleared

Lundin – artisanal miners rush to Tenke Fungurume

13 clandestine miners have been killed in at the Tenke Fungurume mine site last week following an invasion of the property by artisanal miners.

The timing of this artisanal rush to the Tenke Fungurume mine which involved some 5,000-10,000 miners is interesting

We suspect the rush is related to some form of political interference with the timing potentially related to the agreement by Lundin Mining to sell its 30% stake in the mine to a Chinese group for $1.14bn.  Freeport also agreed to sell its 56% stake to China Molybdenum in May

Gecamines, the DRC state miner which holds a 20% stake in the mine is trying to block the sale

Risk on sentiment is driving metal prices and miners higher.

Four major US equities indices including Dow Jones, S&P500, Nasdaq and Russell 2000 hit record highs since 1999.

Brent climbed 5% yesterday reaching a three-week high on expectations for OPEC to agree a detailed plan to cut output during an official meeting next week.

Copper is up 1.7%/$94/t hovering around the highest in a week with reports demonstrating strong interest in the metal. US money managers hheld the largest net-long copper futures position on record as of Nov 15, according to the CFTC data.

Gold prices increased slightly amid flat US$ index.

Jan iron ore futures jumped 3.3% on the Dalian Commodity Exchange on the back of reports suggesting issues with deliveries of the material due to bad weather. A jump in iron ore is mirrored in steel and coking coal markets.

LME stocks fall as metal is withdrawn from warehouses

Copper stocks fell 4,800t to 242,275t

Aluminium fell 8,050t to 2,144,100t

Zinc fell 75t 445,000t

Nickel stocks rose 1,026t to 367,482t

Tin fell 75t to a relatively modest 3,010t

Lead stocks fell 1,025 to 187,825t

Dow Jones Industrials  +0.47% at 18,957
Nikkei 225   +0.31% at 18,163
HK Hang Seng   +1.43% at 22,678 
Shanghai Composite    +0.94% at   3,248
FTSE 350 Mining   +3.17% at 14,688 FTSE 350 +100% since 1st January
AIM Basic Resources   +1.39% at   2,420 AIM Basic Resources +48% since 1st January

Economic News

Japan – Authorities lifted the most severe tsunami warning issued in the country in the last five years as the risks to life reduced.

A 7.4 magnitude earthquake struck off the coast of Fukushima this night causing no significant damages to residents or onshore infrastructure recorded.


US$1.0646/eur vs 1.0646/eur yesterday.   Yen 110.72/$ vs 110.67/$.   SAr 14.091/$ vs 14.230/$.   $1.249/gbp vs $1.235/gbp.     
0.740/aud vs 0.736/aud.   CNY 6.885/$ vs 6.894/$ – Yuan strengthens a touch but remains at an eight-year low vs the US dollar

Commodity News

Precious metals:

Gold US$1,218/oz vs US$1,216/oz yesterday 

Gold ETFs 61.8moz vs 62.1moz yesterday – ETF holdings continue to fall as investors cut lower yield investments in favor of equities and potential rate rise

Platinum US$948/oz vs US$932/oz yesterday – Market deficit has been cut to 170koz in 2016, down from previous estimates for a 520koz shortage, according to the World Platinum Investment Council.

A revision is attributed to softer Chinese jewellery sales on stronger than forecast recycling by retailers.

Global jewellery demand is set to decline 10%yoy this year.

Global deficit is expected to narrow to 100koz in 2017, marking the sixth consecutive annual deficit, with both supply and demand estimated to drop.

Above ground stockpiles are estimated to further come down to 2.1moz (YE16) and 2.0moz (YE17) compared with 2.3moz (YE15).

This equivalent to 14, 13 and 14 weeks of demand respectively.

Palladium US$741/oz vs US$730/oz yesterday 

Silver US$16.87/oz vs US$16.73/oz yesterday

Base metals:   

Copper US$ 5,664/t vs US$5,576/t yesterday –

Aluminium US$ 1,748/t vs US$1,715/t yesterday –

Nickel US$ 11,445/t vs US$11,165/t yesterday –

Zinc US$ 2,627/t vs US$2,586/t yesterday

Lead US$ 2,204/t vs US$2,185/t yesterday

Tin US$ 21,095/t vs US$20,585/t yesterday – Prices may hit $30,000/t in 2018/19 on the back of a market deficit as new supply lags demand growth, ITRI estimates suggest.

Tin market is set to record a 10-15kt deficit this year and same in 2017.

China, the world’s largest supplier of the metal, is expected to post a recovery in mine output in 2017.

Ore output fell 17.6%yoy in 2015 and is set to decline 6.0%yoy in 2016, according to Yunnan Tin estimates.

Indonesia, the second biggest producer, is expected to come in at 60-70kt (2015: 50kt; 2014: 76kt (USGS).


Oil US$49.6/bbl vs US$47.5/bbl yesterday 

Natural Gas US$2.981/mmbtu vs US$2.928/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday – Latest Japanese tsunami is unlikely to accelerate the return to full scale nuclear power generation in Japan.


Iron ore 62% Fe spot (cfr Tianjin) US$69.0/t vs US$67.3/t 

Chinese steel rebar 25mm US$446.6/t vs US$443.4/t 

Thermal coal (1st year forward cif ARA) US$67.0/t vs US$63.0/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – remains unchanged for a week, not sure exactly why?

Ordinary hard coking coal is $270.0/t vs $270.4/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-203/mtu unch last week – boringly unchanged.  Price will have to start rising sometime soon if Trump goes for growth.

Company News

Amur Minerals Corporation (LON:AMC) 9.1p, Mkt Cap £46.9m – Agreement with the Far East Investment and Export Agency

The Company signed a Financial Advisory Agreement with the government Far East Investment and Export Agency (FEIE).

The FEIE Agency is a newly established organisation, a subordinate of the Far East Development Ministry, responsible for attracting investment and finding strategic partners in local projects.

In particular, the Agency is reported to have access to an extensive network of investors and trading companies in Russia, India and China.

“We will use our core investment banking experience and wide investor network to provide the development of Amur’s Kun Manie nickel project with necessary capital,” Petr Shelakhaev, the head of the FEIE said.

The team will continue cooperation with the Far East Development Fund (FEDF) regarding the Kun Manie infrastructure development

Conclusion: Local authorities remain supportive of the Kun Manie nickel/copper project with the FEIE Agency offering assistance in attracting development funds.

Asiamet Resources (LON:ARS) 2.7 pence, Mkt Cap £17.0m – Metallurgical test-work from BKM

Asiamet has reported results of metallurgical testing on samples from its Beruang Kanan Main (BKM) deposit in central Kalimantan.

The testing addressed two main aspects of the plant; the  crushing characteristics of the ore types within the proposed mining area; and the leachability and potential for the generation of acid drainage.

Tests have shown that “The BKM ore types will require mineral crushing [and will produce] … Relatively low wear rates … for the metal components within the crushing plant.” These characteristics will require low energy within the crushing circuit and are “expected to provide a favourable capital cost outcome for the BKM crushing facilities.”

Geochemical testing of 79 samples of ore and waste has demonstrated “that the mineralogy of the BKM heap leach feed material will be acid generating and limit the need for acid importation to support the processing activities on site. This is considered a favourable outcome for the operating and capital cost requirements at the BKM heap leach facility.”

In our opinion, the acid generating capacity of the ore at BKM, while it clearly offers economic benefits as described, will also require a detailed plan to manage fluid movements within the site area and ensure that any potential for leakage of acidic water to the wider environment is minimised.

Addressing this issue, “Detailed waste and water management plans will be developed to ensure protection of water resources and incorporated into the Feasibility Study and Environmental and Social Impact Assessment (AMDAL) for the project.” The company is planning a second phase of geochemical assessment work to support the continuing assessments.

Conclusion: Testing indicates that crushing and leaching of BKM ore should be relatively low-cost and this work will be incorporated into the feasibility studies currently underway. We look forward to the release of the study which will help provide a view on the economics of the project. Today’s news in addition to the resources drilling programme which is finding shallow mineralisation should have a positive impact.

DiamondCorp PLC (LON:DCP) Suspended – Business rescue practitioner appointed

DiamondCorp which entered into Business Administration last week has appointed Daniel Terblanche of Deloitte & Touche as their business rescue practitioner in accordance with the provisions of section 129 of the Companies Act, 71 of 2008.

The company put the Lace mine into South African Business Administration to protect the asset against its creditors and to preserve the mine for a potential rescue or sale.  Business Administration is the equivalent to Chapter 11 in the US.  The mine is likely to remain closed for more than 12 weeks according to a report on ‘’ which reckons the mine would take more than seven days to pump the production level dry.  That is once the pumps are reinstated.

The mine was forced to take this drastic action following severe flooding in the region which caused the Lace mine to suddenly flood in an event which overwhelmed the mine pumping system and forced its evacuation.

Pictures show water in the historic open pit and water in the decline.  There were two extreme thunderstorms on November 11 which resulted in almost 90mm of rain in just over an hour equivalent to almost a third of annual rainfall at the mine.

Sierra Rutile Ltd (LON:SRX) 34.5p, Mkt Cap £205.5m – Iluka merger cleared

Sierra Rutile and Iluka Resources have announced that the German Antitrust Authority has cleared the merger between the two companies.

In statements released by Sierra Rutile and Iluka Resources the companies stated “The Merger is now expected to become effective and closing is expected to occur on or around 29 November 2016.”

Sierra Rutile’s shareholders have previously approved the merger and  the clearance by the German investigation has removed the impediment to completion of the deal in which Sierra Rutile shareholders are to receive 36p/share in cash.

]]> Today's Oil and Gas Update: Union Jack Oil PLC Tue, 22 Nov 2016 09:03:00 +0000 Headlines

In Brief:
Union Jack Oil* (LON:UJO – 0.17p) – $4.9mm – $33.6mm (0.11p – 0.74p) – A Bigger Slice of Wressle

In Brief

Union Jack Oil* (LON:UJO – 0.17p) – $4.9mm – $33.6mm (0.11p – 0.74p) – A Bigger Slice of Wressle: Todays news that the Company has completed the acquisition of an additional 3.34% interest in PEDL180 and PEDL182 for ~$0.75mm, and provides the Company with access to cash flows (once the field is commissioned), which in turn provides it with greater flexibility. The valuation remains $33.6mm (0.74p), of which $4.9mm (0.11p) is core.


]]> VSA Capital Market Movers - Asiamet Resources Tue, 22 Nov 2016 08:58:00 +0000 Asiamet Resources (LON:ARS)

Asiamet Resources (LON:ARS) has released a further positive update on its progress towards completing a feasibility study for the Beruang Kanan Main (BKM) copper project in Indonesia. The latest announcement relates to metallurgical and geochemical testwork for the design of the crushing circuit.

The tests show that the majority of the ore has a low crushing energy requirement and low wear-metal consumption which will benefit operating costs. Therefore there is also no need for additional equipment for the processing of harder ores and we believe that only a single stage crusher would be required benefitting the project’s capital cost.

In total 79 ore samples were tested with ten sent for metal content and short term metal leaching tests. These tests confirmed previous results which demonstrated that the leach material can be considered Potential Acid Forming. This reduces operating costs as it limits the volume of acid which must be imported and transported to site.

The latest announcement further underpins our confidence that the feasibility study will confirm the potential for the development of a low cost copper project.

We reiterate our Speculative Buy recommendation and target price of 6.2p/sh.

]]> Today's Market View - Kibo Mining and Tethyan Resources Mon, 21 Nov 2016 10:40:00 +0000 Kibo Mining (LON:KIBO) 7.1 pence, Mkt Cap £25.3m – Agreement signed with GE on Mbeya Coal to Power Project

Tethyan Resources (LON:TETH) 2.5 pence, Mkt Cap £2.3m – Raising £353,000

Chinese investors pile into commodities as Yuan continues to weaken

Copper prices regain upward momentum on strong demand for infrastructure in China and weaker supply growth

Iron ore and coal prices pull back but remain at high levels despite China raising rates and margins on futures trading

Chinese investors are piling into commodities as the US dollar continues to strengthen and as China allows its currency to depreciate against the US dollar.

President elect-Trump is likely to lower US corporation taxes bringing US dollars back into the US and to rebuild American infrastructure

Markets are increasingly pricing in a Fed Rate rise this year and further rises next year as the Fed moves to issue new treasuries into the market to cover Trump’s spending aspirations.

Middle Eastern and Chinese sovereign wealth funds are reported to have been sellers of US Treasuries this year leaving us wondering on who will buy new issues of US Treasuries going forward.

The Fed dare not go too far in terms of raising interest rates as it may damage US growth when coupled with the strong dollar.

The US Treasury may need to print new US dollar bills to pay for Trump’s expenditure plans, a move which could reverse US dollar gains and allow the Fed to maintain lower rates for longer

The impact of a significantly stronger dollar is hurting US exporters and also serves to raise the effective cost of US energy production versus overseas energy producers.  Trump pledged to help US coal miners.

Mining and oil stocks trade higher as FTSE falls

US$ index is slightly off following a five sessions’ winning strake which saw the index hitting the highest level in more than a decade.

Gold prices are up (+0.7%/+$8/oz) trading at $1,216/oz after sliding below the $1,205/oz level on Friday on US$ index gains.

Brent crude is trading higher ahead of the OPEC meeting in Vienna next week and Iran’s Oil Minister suggesting it is “highly probable” members will agree details of production cuts

Base metals are all up this morning as buying accelerated as Chinese investors are using commodities as a hedge against depreciating yuan.

Iron ore futures continued to fall on the back of increased Chinese trading charges and falling steel prices.

Dow Jones Industrials  -0.19% at 18,868
Nikkei 225   +0.77% at 18,106
HK Hang Seng   +0.06% at 22,358 
Shanghai Composite    +0.79% at  3,218
FTSE 350 Mining   +2.13% at 14,282 FTSE 350 +94% since 1st January
AIM Basic Resources   -1.07% at 2,387 AIM Basic Resources +46% since 1st January

Economic News

US – Fed minutes are unlikely to alter Dec rate hike expectations with the latest economic data coming strong and more hawkish comments made by FOMC members.

Markets currently suggest that a hike is a done deal with the probability of an increase stading at 98%. 

China – The recent industrial private report showed industrial sector remained in contraction last quarter amid state driven cutbacks of overcapacity, according to responses of 2,000 surveyed businesses.

The headline business sentiment index came in at 46 in Q3 signalling a decline in the sector activity, the Cheung Kong Graduate School of Business quarterly report read.

Large firms with a significant share of state owned companies in the category favoured better than medium and small sized companies, with respective readings of 48, 46 and 45.

The outlook remains weak as with inflation and overcapacity are forecast to “increase costs and hinder the recovery of the industrial economy”.

Shijiazhuang city stops production at steel and cement plants and cuts thermal coal power generation

Shijiazhuang city is taking drastic measures to meet emissions targets for PM 2.5 fine particles for the year.

The city produces around 15mt of steel representing around 2% of Chinese production

Shijiazhuang has also cut production by drug manufacturers as part of the measures.

The action serves to highlight China’s determination to cut pollution and to force companies to clean up


US$1.0646/eur vs 1.0602/eur yesterday.   Yen 110.67/$ vs 110.61/$.   SAr 14.230/$ vs 14.575/$.   $1.235/gbp vs $1.241/gbp.    

0.736/aud vs 0.738/aud.   CNY 6.894/$ vs 6.888/$.   – Another low in the Yuan as China continues to depreciate currency against the US Dollar

Commodity News

Precious metals:

Gold US$1,216/oz vs US$1,205/oz yesterday 

Gold ETFs 62.1moz vs 62.4moz yesterday 

Platinum US$932/oz vs US$926/oz yesterday

Palladium US$730/oz vs US$717/oz yesterday 

Silver US$16.73/oz vs US$16.51/oz yesterday

Base metals:   

Copper US$ 5,576/t vs US$5,427/t yesterday 

Aluminium US$ 1,715/t vs US$1,685/t yesterday – Aluminum stocks fall 2.9% in Japan

Nickel US$ 11,165/t vs US$11,045/t yesterday 

Zinc US$ 2,586/t vs US$2,516/t yesterday

Lead US$ 2,185/t vs US$2,144/t yesterday

Tin US$ 20,585/t vs US$20,105/t yesterday 


Oil US$47.5/bbl vs US$46.1/bbl yesterday 

Natural Gas US$2.928/mmbtu vs US$2.725/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday 


Iron ore 62% Fe spot (cfr Tianjin) US$67.3/t vs US$69.0/t –

Chinese steel rebar 25mm US$443.4/t vs US$444.3/t –

Thermal coal (1st year forward cif ARA) US$63.0/t vs US$64.5/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – remains unchanged for a week, not sure exactly why?

Ordinary hard coking coal is $270.4/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News

Kibo Mining PLC (LON:KIBO) 7.1 pence, Mkt Cap £25.3m – Agreement signed with GE on Mbeya Coal to Power Project

Kibo Mining reports that it has now signed the previously announced agreement with General Electric (GE) to supply equipment, technology and services to the Mbeya Coal to Power Project (MCPP) in Tanzania.

Under the Agreement, GE will also assist in the implementation of the project which involves the development of a 250-350MW mine mouth thermal power station in at Rukwa in southwest Tanzania based on a 121m tonnes resource, of which 91% is classed as either measured or indicated, within 7 seams.

In addition to GE, Kibo Mining has previously  also signed an agreement with the China based contractor, SEPCO III, “granting it the right to become the the sole bidder for the contract to build the power plant component of the MCPP in exchange for SEPCO III refunding 50% of the development costs incurred by Kibo to date on the project. Kibo has alreadt received the first tranche of this funding in the amount of US$1.m million”.

As well as the technical partners for the MCPP, Kibo Mining uses Standard Bank as its Financial Advisor for the project.

The company is expecting to complete the integrated Bankable Feasibility Study (BFS), comprising a definitive coal mining study and a power pre-feasibility study shortly.

Conclusion: The MCPP appears to be moving forward as it assembles the team which will be required to turn the forthcoming BFS into reality.

Tethyan Resources (LON:TETH) 2.5 pence, Mkt Cap £2.3m – Raising £353,000

Tethyan Resources reports that Canadian listed Southern Arc Minerals has subscribed for 16.5m new shares at a price of CAD0.36 cents per share for a 15.44% interest in the company.

In addition, Southern Arc is purchasing a further 14.64m shares in the company from Newmont taking its interest to 29.15%. Two of Southern Arc’s nominees, John Proust and Michael Andrews are to join the Board of Tethyan.

Tethyan Resources is exploring copper and gold projects in Serbia and Bulgaria and recently started drilling at the Rudnitza porphyry copper prospect in Serbia where it is planning a programme of approximately 2500m of drilling in four or five holes to a maximum depth of 800m.

In addition to its investment in Tethyan Minerals, Southern Arc is reported to hold 43% of Canadian listed  Japan Gold Corp and a stake in Osisko Mining, also listed in Canada.

]]> Today's Oil and Gas Update: EnQuest PLC Mon, 21 Nov 2016 09:00:00 +0000 Headlines

In Brief:
EnQuest (LON:ENQ/ENQ SS – 28p/SEK3.09) – Coming Together

In Brief

EnQuest (LON:ENQ/ENQ SS – 28p/SEK3.09) – Coming Together: While the Company has faced significant headwinds fiscally, which to some extent will continue for some time to come, there is no doubt that operationally at least the Company has been firing on all cylinders. With the announcement of first oil from Scolty/Crathes and the impending sail away of the Kraken FPSO, we believe that provided oil prices don’t experience another significant downward leg, that the combined effect of Scolty/Crathes and Kraken (want is commissioned) will see the fiscal outlook of the Company improve significantly. Whilst further fundraising can’t be ruled out, the further into 2017 it goes without undertaking of fundraising, the less likely it comes. While investors can be rightly nonplussed at the way that the Company has run its finances, specifically failing to address the risks associated with its indebtedness, we believe that management has done well to get to this point and place the Company on more secure footing.

]]> VSA Capital Market Movers - Sula Iron & Gold Mon, 21 Nov 2016 08:42:00 +0000 Sula Iron & Gold (LON:SULA) has announced that it has raised approximately £1.17m through the issue of 558.7m shares at an issue price of 0.21p/sh. The directors of the company subscribed for a further 78m shares and in addition, the company has announced an Open Offer to raise up to £0.3m at the same price as the placing. The placing price represents a 7% discount to the previous close of 0.225p.

The proceeds will be used to further exploration work at the Ferensola gold project as well as for general working capital. A drilling campaign may now proceed and will likely take place both within the bounds of the existing JORC exploration target as well as the significantly larger Eastern Target area which was identified during the recent Induced Polarisation survey.

]]> Today's Market View - Randgold Resources, Strategic Minerals*, W Resources Fri, 18 Nov 2016 10:43:00 +0000 Randgold Resources (LON:RRS) – Exploration JV with Newcrest in Cote d’Ivoire
Strategic Minerals* (LON:SML) – Quarterly update September 2016
W Resources (LON:WRES) – Initial drilling results from Sao Martinho

Gold prices under pressure as US dollar hits 13.5 year high

India precipitated the fall in gold prices last Sunday under cover of news the Trump election with local press reports that the government may be considering a complete ban in the shipping of gold into India.  We presume this may have been prompted by the move by individuals to convert large denominated Rupee bills, which are being withdrawn, into gold with gold looking set to take over as India’s next black market currency.

Yellen says the Fed could raise rates relatively soon and that Trump has done nothing to change the Fed’s plan for a rate increase

The Fed may also raise rates to assist the Treasury in the issuance of bonds to fund future Trump infrastructure spending

Trump may also lower US corporation taxes as pledged to further repatriate US dollars held in overseas accounts

The flow of funds back into the US could strengthen the dollar further and cause further volatility in the Emerging Markets.

Emerging Markets are fragile and volatile markets at the best of times and a liquidity squeeze in S Korea and other developing nations could well precipitate further crisis.

The question for gold bugs is, how low will gold go as the US dollar strengthens before the next crisis causes the gold price to recover.

Given that currency markets have already priced much of the Trump move into the US dollar and that further strength will damage more exports then it may be that the move in the dollar and the fall in gold prices is largely done

It may also be that the Fed could print new US dollars rather than increasing its borrowings though we seem to be the only people considering this.  The inflationary impact of new money printing could be the deciding factor here.

Iron ore prices rising despite action taken by China’s authorities to reduce speculation in iron ore futures

The Iron ore 62% Fe spot (cfr Tianjin) rose to US$69.0/t from US$67.0/t yesterday despite the actions of the state to raise margins and increase costs in trading iron ore futures.

The resilience of the spot iron ore price suggests ongoing strong demand for imported seaborne iron ore reflecting a move to use better quality ores as coking coal prices remain at high levels.  Cutbacks in local iron ore and the virtual elimination of the use of titano-magnetite due to its higher cost is also helping Australian iron ore exporters to gain further sales and raise prices.

There are no current cyclones affecting iron ore shipping and production at present though the threat is elevated through the cyclone season

OPEC – Venezuela’s president, who badly needs the price of oil to rise comments that OPEC are ready to reach a forceful agreement to cut oil output

Trump’s election takes some of the pressure off oil producers to lower oil prices to remain competitive and defer the rollout of electric vehicles

Higher oil prices inevitably will feed through into significantly higher inflation in weaker currency regions serving to cut demand in these areas.

Egypt – to issue first gold licenses for seven years

Ethiopia – Newmont geologists comment that Ethiopia is particularly jumping out for its exploration teams

Kefi Minerals is one of very few western companies looking to develop and further explore gold assets in Ethiopia.

Dow Jones Industrials  +0.19% at 18,904
Nikkei 225   +0.59% at 17,967
HK Hang Seng   +0.37% at 22,344 
Shanghai Composite    -0.49% at  3,193
FTSE 350 Mining   -2.43% at 14,009 FTSE 350 +91% since 1st January
AIM Basic Resources   +0.38% at 2,413 AIM Basic Resources +48% since 1st January

Economic News

Mexico – raises overnight interest rate as Trump victory weakens the pesp
The victory of Donald Trump has increased the key overnight rate to 5.25% the highest since 2009 as Trump’s victory continues to hurt peso.

France – French finance minister lowers GDP growth for 2016 to 1.4% from 1.5%
The news contrasts with more positive economic in the UK suggesting that Brexit is hurting Europe more than the UK.

Chile – central bank maintains rates on hold
The Chile peso has fallen by 4.2% since Trumps election.  Higher copper prices are part of the decision

Japan - Prime Minister Shinzo Abe has described Donald Trump as a "trustworthy leader" after a meeting the US president-elect on Thursday
The Japanese leadership are proving themselves to be more diplomatic than many other leaders at present with positive comments of support towards the UK following Brexit.

Japan well understands the importance of strengthening its alliances with long term allies in the UK and US as China continues to undermine its economy through weakening the Yuan.

ECB - president comments, continued monetary support will a key ingredient for the economic outlook for the Eurozone
Greek debt issues are rearing their ugly head again with calls for IMF support again.

VW – cuts 30,000 jobs worldwide

Guinea – former minister of mines claims Stephen Din, head of Rio Tinto’s Guinea operation offered him a bribe in order to win back the half of Simandou which was sequestrated by BSG Resources
We wonder how credible this witness might be.

Donald Trump – refusing to go to court as the President-elect is too busy
The trial relates to claims of fraud over Trump’s Real Estate University.


US$1.0602/eur vs 1.0723/eur yesterday.   Yen 110.61/$ vs 109.51/$.   SAr 14.575/$ vs 14.265/$.   $1.241/gbp vs $1.247/gbp.     
0.738/aud vs 0.747/aud.   CNY 6.888/$ vs 6.872/$.   Yuan falls to lowest level for eight years

Euro falls to one year low against US dollar

Commodity News

Precious metals:

Gold US$1,205/oz vs US$1,228/oz yesterday –

Gold ETFs 62.4moz vs 62.7moz yesterday –

Platinum US$926/oz vs US$944/oz yesterday

Palladium US$717/oz vs US$719/oz yesterday –

Silver US$16.51/oz vs US$17.04/oz yesterday

Base metals:   

Copper US$ 5,427/t vs US$5,469/t yesterday – KGHM, the Polish copper miner is unlikely to drop its Sierra Gorda project in Chile despite a heavy writedown last year and political pressure in Poland.  KGHM has been looking to internationalise its business for as long as we can remember. (Reuters)

Aluminium US$ 1,685/t vs US$1,695/t yesterday

Nickel US$ 11,045/t vs US$11,315/t yesterday –

Zinc US$ 2,516/t vs US$2,535/t yesterday

Lead US$ 2,144/t vs US$2,158/t yesterday

Tin US$ 20,105/t vs US$20,260/t yesterday –


Oil US$46.1/bbl vs US$46.8/bbl yesterday –

Natural Gas US$2.725/mmbtu vs US$2.754/mmbtu yesterday

Uranium US$18.50/lb vs US$18.65/lb yesterday –


Iron ore 62% Fe spot (cfr Tianjin) US$69.0/t vs US$67.0/t –

Chinese steel rebar 25mm US$444.3/t vs US$446.3/t –

Thermal coal (1st year forward cif ARA) US$64.5/t vs US$64.5/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – remains unchanged, not sure why?

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News

Randgold Resources (LON:RRS) 5700 pence, Mkt Cap £5.3bn – Exploration JV with Newcrest in Cote d’Ivoire

Randgold Resources reports that it has signed a heads of agreement to establish a joint-venture for exploration, development and mining in the south-east of Cote d’Ivoire

Randgold, which already operates the 89% owned Tongon mine in the northern part of the country, is to manage the exploration programme and any new mines which result.

The area covers the extension into Cote d’Ivoire of known gold belts in Ghana which Randgold Chief Executive, Mark Bristow, characterises as offering “the potential for the discovery of truly world class gold deposits [in] … an area that has not yet been explored in depth.”

Although it is in a different area of the country, in central Cote d’Ivoire, Newcrest has another exploration joint-venture in Cote d’Ivoire where it is spending a minimum of US$1.7m  by December 2018 on exploration of Kodal Minerals’* Dabakala gold licence in order to earn a 75% interest in the property.

It is unclear whether Dabakala would fall under the scope of the joint venture with Randgold, however, it seems likely that Newcrest’s exploration team will benefit in a professional sense from the additional technical involvement of Randgold’s team with their experience in exploration developing and running the Tongon operation.

In a recent comment, Mark Bristow noted that “We’ve always believed in the prospectivity of Côte d’Ivoire and we are becoming increasingly confident that it will deliver our next world-class discovery.”

Conclusion: Randgold and Newcrest’s decision to pool their exploration efforts should highlight the gold exploration potential of Cote d’Ivoire and bring the resources to bear to maximise the chances of a successful discovery.

*SP Angel acts as Financial Advisor and Broker to the Kodal Minerals.  *Robert Woodridge, a partner at SP Angel is also Chairman of Kodal Minerals.

Strategic Minerals* (LON:SML) 0.43 pence, Mkt Cap £5.2m – Quarterly update September 2016

Strategic Minerals has provided an update of activities in its three main business areas; the Cobre magnetite tailings business in New Mexico; the nickel sulphide exploration activity in W Australia; and the Redmoor tin/tungsten joint-venture at Redmoor in Cornwall.

Following the previously announced deal to secure a new major customer for its magnetite product, sales tonnages increased sharply to 7,686 tonnes for the quarter bringing 12 months sales to 30th September to 23,477 tonnes, a 68% increase over the equivalent 12 months to September 2015. The average unit sales price for the twelve months declined slightly to US$65.17/t from US$67.77/t “due to “bulk” discount pricing being applied. However, overall net profitability is expected to be maintained at the historical level of 45% of sales.”

In July, an agreement was reached with “the rail provider to the Cobre mine for US$675,000 to be paid in instalments with the final payment being made by 30 June 2017.”

In Western Australia, the company recently announced that, in conjunction with its joint-venture partner Rarus, it was funding further exploration work, including drilling, at the Hanns Camp and Mount Weld nickel and gold prospects.

The company has re-negotiated the timing of its subscription to take its ownership of the Redmoor tin/tungsten project in Cornwall in order to match timing of the company’s receipts from the rail settlement and the earnings from Cobre to the working capital requirements at Redmoor. Earlier this week the company also announced that the joint-venture had invited tenders for a 2-phase drilling programme at Redmoor during H1 2017.

At 30th September, the company had cash of US$0.51m on its balance sheet.

Conclusion: Strategic Minerals is building up sales and cash generation at its Cobre operation in the US and laying the foundations for further exploration in Australia and in Cornwall. We look forward to results as they come through.

*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

W Resources (LON:WRES) 0.495p, Mkt Cap £21.6m – Initial drilling results from Sao Martinho

W Resources has reported results from its first exploration drill hole on the Sao Martinho gold prospect near Portalegre in Portugal.

The hole (SMD-04) forms part of a 1500m drilling campaign which started in September and adds to pre-existing drilling work which outlines an indicated and inferred resource totalling 3.04m tonnes at an average grade of 1.04g/t gold. Inferred resources comprise approximately 85% of this total 112,000 oz resource.

Hole SMD-04 “intersected significant gold mineralisation in 6 levels including 2m at 4.2g/t and 2m at 7.6g/t.”, with individual mineralised intercepts ranging up to 8m wide and down to a maximum depth of 187.60m.

The company’s Chairman, Michael Masterman, commented “The pick-up of visual gold in subsequent holes 10 and 11 together with these first results bodes well for a very successful program.”

Conclusion: These initial results are encouraging, however, we expect that until more of the programme has been completed, the significance and potential of today’s announcement to expand the existing small, relatively low grade resource will not become apparent. We look forward to additional results as the drilling programme progresses.

]]> Oil price, Cape, President, Parkmead, Sundry-Enteq-Simon Hawkins-IGTV interview- And finally... Fri, 18 Nov 2016 10:28:00 +0000 Oil price
Having started off well yesterday with good news from the Opec participants and Russia the market went into reverse when Mrs Yellen spoke suggesting December would likely be a good time for a rate rise. With that came a strong greenback and whoosh, the oil price came back and is another 50 odd cents off again this morning.

Markets hate uncertainty and today’s news from Cape on the litigation front has given a proper dose of that to which the share price had responded negatively. The company has provisions on the EL side and has increased them by £9.7m but it is the PL side of the statement that looks more open-ended. Obviously the company had to prepare for the worst but the most dire consequences such as abandoning the strategic plan and consequently the dividend is also a possibility. I have to say that the market has always known about these law suits which are claimed and counter claimed but today’s statement appears to be that much more severe than hitherto-far and has spooked the market.
On trading, it seems that overall it is ‘in line’ but better on favourable currency moves, some recovery in Asia pacific is offset by the UK and the Middle East.  I hope that I can at some stage speak to the company about all this, I am a committed fan of the management and operationally all seems pretty much in line with my expectations but the tenor of the statement about the litigation seems to have taken a turn for the worse, hanging on in there…..

President Energy
President has responded to press speculation about Argentinian oil prices although I am not sure that it was entirely necessary. Followers of President, as well as Andes are well aware that a well publicised part of the Macri plan is to realign oil prices with WTI. Accordingly, although this year will remain at $55 next year the two will slowly move together, and so it should be. President has said that the IRR’s are not materially impacted at approximately 150%. Indeed if there are any local marginal producers in trouble out there one might expect Mr Levine to take advantage of them…

Prelims from PMG and very much in line with expectations but no idea of production levels in a statement which remains hardly user friendly, what a surprise. The Netherlands is doing well and Tom Cross is doing plenty of deals, particularly in the PDL development increasing his position and the balance sheet is very strong. A bucket list stock but probably one that may not survive if visibility remains poor although despite that progress seems to be good…

Enteq Upstream Interims today and revenues remain ‘disappointing’ although strong management action on costs means that cash on the balance sheet has risen again. A decent contract win in Saudi Arabia is good but wont make up in 2H the disappointing revenues. Enteq seem to be doing well outside North America but are still worried about the rig count, it is rising you know…
I am writing on Sirius at the moment but am saddened to see that Simon Hawkins has left the board for medical reasons. I wish him all the very best for a speedy and full recovery.

And finally…

Although England managed to polish off India for 455 the signs on the pitch are not good, those runs in the bank will be crucial, 72-3 as I write.

And it’s back to the Prem in the footy with some stand-out matches. The Gooners head for the Theatre of Dreams supremely confident of a victory whilst North London rivals Spurs are equally sure of beating the Hammers at White Hart Lane. The Noisy Neighbours are down in London to visit the Eagles whilst the HubCap Stealers are down south at the Saints. With Chelski at the Boro and an interesting derby between the Maccams and the Hull City Tigers there are opportunities all over the place.

And of course rugby is international, Fiji visit Twickenham, Japan go to Wales and Scotland take on Argentina at Murrayfield while Ireland can dream about a double against the All Blacks…

]]> Today's Oil and Gas Update: Premier Oil, Great Eastern Energy Fri, 18 Nov 2016 09:45:00 +0000 Headlines

Comment: If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?
Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas


Following Great Eastern Energy’s (the “Company”) interim statement today, which we comment on below, the Company discloses the fact that it was able to achieve ~$10.0/mcf in the period, which is jarring when set against the backdrop of significantly lower state gas prices, which is $2.5/mcf (dry basis). This underlines what a disaster Indian gas price policy is and why ultimately, the country will be unable to drive its domestic gas production forward in a meaningful manner. It is clear that the market will support prices ~4x that which is set via a manipulated formula.

While these are a number of significant projects on the horizon in India, we see the government's intervention in artificially suppressing the market price hampering any rapid progress and actually forcing significant delays on the sector.

If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief

Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?: Today's announcement makes for good reading, especially with regards to cost control and production outlook. Assessment of covenant breaches continues to be delayed until such times as the Company is confident it can meet them, and we don't blame them. With ~$2.8bn on net debt it is difficult to imagine the stress the management must be enduring, especially in the wake of its share buyback. While we are provided comfort by the majority of the statement, the one uncomfortable line, which appears right at the end of the statement, reads "....going forward, Premier plans to be cash flow positive at oil prices above $50/bbl...." If this is true to its word, then the Company, at current prices, looks as if it will face further difficulties. Given that group opex hovers around the ~$20/bbl mark, this is either a statement out of context , or a statement that of management's belief that post the debt restructuring, once all debt payments capex and other items are taken in to account, that this will be the new "free cash flow" breakeven price. If so, we need greater clarity and understanding what has precipitated this statement, otherwise alarm bells will start to ring, if there isn’t a little tinkle already. We will await the full results before opining either way.

Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas: Today's results underline a business that is continuing to make progress, and with management of liquid resources and debt payments accounting for the marginal bottom line cash flow, operationally at least the business continues to flourish. That said, we would caution against the Company's debt pile, which although manageable currently, should there be significant amendment to the licence terms imposed, specifically undermining the ability of the Company to set pricing according to the market, then servicing its debt might be difficult.

]]> Savannah Petroleum PLC signs 'extremely significant' deal for Nigeria exploration Thu, 17 Nov 2016 12:20:00 +0000 Savannah Petroleum PLC (LON:SAVP) has signed a three-way agreement in relation to the Nigerian section of the Central African Rift System.

The memorandum of understanding was co-signed by the New Nigeria Development Company Ltd (NNDC) and Nigeria National Petroleum Corporation (NNPC).

Chief executive Andrew Knott tells Proactive: ''Alongside that agreement we've also made several other announcements which I think in aggregate represent a very big step forward for us as a company''.

''NNDC is one of the largest  corporations in northern Nigeria - it's a very important and influential partner to have''.

The AIM quoted company expects to  enter into additional agreements with NNDC and NNPC over time, and it added that separate talks are taking place between them regarding other potential opportunities in Nigeria.

]]> Nighthawk shares tipped to rise to 1.7p by early 2017 Thu, 17 Nov 2016 11:59:00 +0000 Nighthawk Plc (LON:HAWK) shares are in a rising trend and could hit 1.7p by early 2017, according to technical analyst Zak Mir.
In a Tip TV segment for Proactive Investors Mir highlights that the share has been basing over the past six months or so, and a chart signal in the summer suggests positive momentum is resuming.
He notes that since then the shares continued to move sideways, and the turnaround has a been a slow one.
“We’ve had a sideways move with higher lows above the 1p level … looks as though we’re in a rising trend channel from April,” Mir added.
]]> Premier Oil faces a ‘big wall of resistance’ says chartist Zak Mir Thu, 17 Nov 2016 11:45:00 +0000 Premier Oil PLC (LON:PMO) shares are in the halfway house as investors wait for funding news, and technical analyst Zak Mir says wait for more signs that the recovery is on.
He added that after the share price backed off from recent peaks, seen around 80p last month, the price now faces a “big wall of resistance” to get back to 80p and above though it remains supported above 50p.
“If you are looking for further evidence of recovery here you’d wait for a break of the 200-day moving average of 61p before assuming that we’ll see 80p again,” Mir added.
]]> Today's Market View - Metminco, Rio Tinto, Shanta Gold, SolGold, Vast Resources and Xtract Resources Thu, 17 Nov 2016 10:37:00 +0000 Metminco* (LON:MNC) – Raising A$4.85m to advance the Miraflores project
Rio Tinto (LON:RIO) –– Contracts terminated for key staff following investigation of payments at Simandou
Shanta Gold (LON:SHG) – Receipt of US$5.25m advance on silver streaming
SolGold* (SOLG LN) – Annual report
Vast Resources (LON:VAST) – AGM Resolutions 7 and 8 voted down by shareholder dissent
Xtract Resources (LON:XTR) –Manica review opts for open pit mining

FTSE 100 rises led by miners trading higher despite continuing sell off in China iron ore futures and little change in precious and base metals prices
• Janet Yellen to address Congress this afternoon with comments on the economy and possibly new president plans to cut taxes and raise infrastructure spending.
• Futures markets are implying a 94% chance of a US Fed rate hike during the Dec 14 meeting.
• Brent is little changed this morning as a rebound in oil prices paused on reports of increased US inventories.
• Gold seen stabilising as the US$ index rally paused following eight consecutive days of gains.
• Chinese iron ore futures continued to fall (-1.7%) extending losses to three days now (-10.3% since hitting this year’s high on Monday) and following weakening steel prices (-1.8%) lower.

Dow Jones Industrials  -0.29% at 18,868
Nikkei 225   0.00% at 17,863
HK Hang Seng   -0.08% at 22,263 
Shanghai Composite    +0.11% at  3,208
FTSE 350 Mining   +1.26% at 14,293 FTSE 350 +95% since 1st January
AIM Basic Resources   +0.12% at 2,404 AIM Basic Resources +47% since 1st January

Economic News
US – Industrial production came in weaker than forecast in Oct while core producer prices posted a mom decline same month driven by falls in the services sector.
• Industrial output saw a recovery in oil and gas drilling, while warmer temperatures depressed utility use.
• A decline in input prices is likely to prove temporary given increasing wage pressures and pro-stimulus new US president focus.
• Although, a continuing strength in the US$ is expected to exercise downwards pressure on imported goods.
• A fall in services prices is said to be driven by declines in fees charged by securities brokerages and related services.
• Consumer prices inflation is due later today with estimates for the gauge to have held up above the 2.0% level through Oct, a little lower than a multi-year high of 2.3% recorded in Aug.
Date Index Period   Actual Est Previous
Tuesday Retail Sales Oct %mom 0.8 0.6 1.0 (revised from 0.6)
  Core Retail Sales (ex Auto) Oct %mom 0.8 0.5 0.7 (revised from 0.5)
  Retail Control Group Oct %mom 0.8 0.4 0.3 (revised from 0.1)
Wednesday Core PPI Oct %mom -0.2 0.2 0.2
  Core PPI Oct %yoy 1.2 1.6 1.2
  Industrial Production Oct %mom 0.0 0.2 -0.2 (revised from 0.1)
  Capacity Utilization Oct % 75.3 75.5 75.4
Thursday Weekly Jobless Claims       257k 254k
Core CPI Oct %mom  0.2 0.1
  Core CPI Oct %yoy   2.2 2.2
Source: Bloomberg     

France – Domestic unemployment rate unexpectedly ticked up in Q3/16 contrasting from the recent trend of a declining number of people unemployed.
• Domestic Unemployment Rate (%): 9.7 v 9.6 in Q2/16 and 9.6 forecast.
• Change in Unemployment: +31k v -69k in Q2/16 (revised from -74k).

UK – Oct retail sales came in stronger than forecast with clothing and footwear being major growth contributors.
• “Cooler temperatures in Oct boosted clothing sales as shoppers took their cue to purchase winter clothing, while the supermarket benefited from Halloween,” ONS said.
• “This has also coincided with the strongest growth in internet sales seen in five years.”
• After having climbed slightly on good retail sales data the USDGBP exchange rate is trading flat at 1.248.
• Core Retail Sales (%mom): 2.0 v 0.1 (revised from 0.0) in Sep and 0.4 forecast.
• Core Retail Sales (%yoy): 7.6 v 4.0 in Sep and 5.4 forecast.
• The number of EU nationals working in the UK in Q3/16  climbed to a record high 2.3m making it 7.1% of total UK employment, according to the latest ONS numbers.

Philippines – The economy expanded 7.1%yoy, the fastest pace in three years, in Q3/16 making it one of the fastest growing economies in the region.
• GDP growth has been led by strong gains in consumer spending (+7.3%yoy), government spending (+3.1%) and investments (+20%yoy).
• The economy is forecast to grow at >6% through 2018 led by increased infrastructure spending among other things.

US$1.0723/eur vs 1.0710/eur yesterday.   Yen 109.51/$ vs 109.53/$.   SAr 14.265/$ vs 14.248/$.   $1.247/gbp vs $1.245/gbp.     
0.747/aud vs 0.752/aud.   CNY 6.872/$ vs 6.871/$.   Yuan falls to lowest level for eight years

Commodity News
Precious metals:
Gold US$1,228/oz vs US$1,228/oz yesterday –
     Gold ETFs 62.7moz vs 62.8moz yesterday –
Platinum US$944/oz vs US$933/oz yesterday
Palladium US$719/oz vs US$700/oz yesterday –
Silver US$17.04/oz vs US$17.03/oz yesterday

Base metals:   
Copper US$ 5,469/t vs US$5,476/t yesterday – Jiangxi Coppper, the largest producer in China, agreed a drop in TC/RCs for concentrates delivered next year on the back of strong growth in smelting capacity and slowing mine supply growth.
• TC/RCs settled at $92.5/t and 9.25c/lb compared to $97.4/t and 9.7c/lb agreed with Antofagasta for this year.
• Mine supply is forecast to be little changed after a 4% increase in 2016, according to the ICSG estimates.
• Earlier, spot TC/RCs were reported to have hit $100/t and 10c/lb in Oct, down from $105/t and 10.5c/lb in the three months to Sep, the highest level since Feb/15, according to Bloomberg.
Aluminium US$ 1,695/t vs US$1,718/t yesterday
Nickel US$ 11,315/t vs US$11,320/t yesterday –
Zinc US$ 2,535/t vs US$2,560/t yesterday
Lead US$ 2,158/t vs US$2,190/t yesterday
Tin US$ 20,260/t vs US$20,050/t yesterday –

Oil US$46.8/bbl vs US$46.8/bbl yesterday –
Natural Gas US$2.754/mmbtu vs US$2.705/mmbtu yesterday
Uranium US$18.65/lb vs US$18.65/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$67.0/t vs US$67.1/t – iron ore prices pulling back – should not feel like much of a surprise to anyone
Chinese steel rebar 25mm US$446.3/t vs US$454.5/t – HRC steel prices falling as steel futures prices collapse
Thermal coal (1st year forward cif ARA) US$64.5/t vs US$69.7/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unchanged

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
Metminco* (LON:MNC) 0.16 pence, Mkt Cap £6.7m – Raising A$4.85m to advance the Miraflores project
• Metminco reports that has secured commitments to raise A$4.85m to progress the Miraflores gold project in Colombia towards production. The funds are to be raised in two tranches and “will be sufficient to complete the Miraflores Feasibility Study, and some but not all of the permitting including baseline environmental monitoring”.
• The first tranche will raise approximately A$0.5m through placing approx. 212.6m shares with sophisticated and professional investors. The second tranche, which is subject to shareholder approval at a meeting to be held on 20th December, consists of placements of approximately 548.5m shares by Redfield (A$1.3m), 1,625.8m shares to Lanstead (A$3m) and 31.6m shares to the company’s Managing Director, William Howe.
• If the tranche 2 transaction is approved, Lanstead will hold a 19.9% interest in Metminco and Redfield will hold 8.6%.
• The new funding places Metminco in a position to complete the Feasibility Study work on the Miraflores Project, located in the Cauca gold belt of Colombia, which was acquired as part of a portfolio of gold projects (the Quinchia Gold Portfolio) which also includes the promising gold porphyry targets at Dosquebrados, Tesorito and Chuscal.
• In addition, the recent transaction to finance the company’s Los Calatos project in Peru, where CD Capital is earning up to 70% of the project through spending US$45m on feasibility study work and development in a series of stages, leaves Metminco with a meaningful 30% interest in the project while freeing management to concentrate on moving Miraflores ahead.
Conclusion: Metminco has secured sufficient funding to proceed with the completion of its feasibility study work at Miraflores and we look forward to further updates on progress as the technical work proceeds.
*SP Angel act as broker to Metminco.  SP Angel analysts have previously visited Los Calatos in Peru and Miraflores project in Colombia.

Rio Tinto (LON:RIO) – 2996 pence, Mkt Cap  £55,8billion – Contracts terminated for key staff following investigation of payments at Simandou
• Rio Tinto reports that, following its announcement on 9th November of the suspension of key staff in relation to an investigation of payments at Simandou in Guinea, it has now “terminated the contracts of Energy & Minerals chief executive Alan Davies and Legal & Regulatory Affairs Group Executive Debra Valentine.”
• The Company’s announcement states that, after consideration by the Board, although it does not pre-judge the outcome of any further external investigattions, “the board concluded that the executives failed to maintain the standards expected of them under our global code of conduct … In the circumstances, the board terminated the contracts of both executives”.
• The terminations mean that both individuals forgo awards under the relevant incentive rewards schemes.
• The company has announced that the role of chief executive of Energy and Minerals at Rio Tinto is to be taken by the current managing director of Marine and vice-president of Iron Ore Sales and Marketing and former JP Morgan investment banker, Bold Baatar.

Shanta Gold (LON:SHG) 11.4p, Mkt Cap £66.3m – Receipt of US$5.25m advance on silver streaming
• Shanta Gold reports that it has now received US$5.25m from its silver streaming agreement with Silverback Limited for its by-product silver production from the New Luika mine in Tanzania.
• Under the agreement, the mine has an obligation to deliver a minimum of 608,970 oz of silver over a period of 6.75 years. The company has  reminded investors that silver production in 2015 amounted to 121,682 oz and contributed approximately 2 percent of revenue.
• “As previously stated the Company will also receive an ongoing payment of 10 percent of the value of silver sold at the prevailing silver price at the time of deliveries.”
Conclusion: The silver streaming agreement helps manage the company’s debt repayment and capital expenditure management as it moves underground at New Luika, brinds some of the satellite deposits to account and advances its feasibility work at Singida.

SolGold* (LON:SOLG) 26.3p, Mkt Cap £375m – Annual report
• SolGold have issues their annual report which is available through the following link.
• The Chairman’s statement describes the financing recently entered into with Newcrest, the Australian miner and Maxit Capital which is based in Canada.
• The report goes on to repeat the 12-month drill program for 36,000m with up to six drill rigs and the aim to drill 95,000m in total over two years to end October 2018 using up to 10 rigs.
• SolGold raised US$54.5m post the year end and now reports US$44m in the treasury post fees and the repayment of other bills and debt.
• New shareholders include Guyana Goldfields and Newcrest Mining.  Scott Caldwell, President and CEO of Guyana Goldfields is now a non-executive director of SolGold.
• The statement goes on to comment on the evaluation of further exploration plans for the Mt Perry, Rannes and Normanby projects in Queensland, Australia and the receipt of proposals to participate in new projects in the Solomon Islands.
• The review of operations refers to the work being done at Cascabel in Ecuador where SRK Consultants have been commissioned to qualify the complex geological modelling and a technical report on the exploration at the Alpala prospect with the Cascabel license area.
• Solomon Islands: the review states ‘The exciting Kuma project in Guadacanal has emerged as a significnant porphyry copper-gold target upgraded by recent geochemical and spectral work by Guadalcanal Exploration Pty.
• Ecuador: the review goes on to describe the geological setting of the Cascabel project within the Eocene and Micoene Belts which stretch along the Andean mountain range though Colombia, Ecuador, Peru and Chile.
• SolGold are now progressing with a listing on the TSX market.
Conclusion:  SolGold continue to drill the Alpala prospect at Cascabel with further kilometre long intersections of mineralisation expected.  There is much to be discovered in drilling around the Cascabel license area and we look forward to the potential discovery of high-grade copper/gold mineralisation in porphyry style mineralisation within new areas of the license area.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has previously visited the Cascabel project. 

Vast Resources (LON:VAST) 0.17 pence, mkt Cap £6.6m – AGM Resolutions 7 and 8 voted down by shareholder dissent
• Vast Resources suffered another blow from activist shareholders with two key resolutions voted down at the AGM.
• Resolutions 7 and 8, which were special resolutions proposing to enable the directors of the company to allot securities on a non pre-emptive basis were not passed.
• This is the second time where shareholders have voted against the issue of new shares by management.
• This time shareholders are unhappy with a facility signed with Bracknor fund for a one-year convertible loan note.  Bracknor had already started to convert loan notes into stock in accordance with the terms of note.
• The first time shareholders voted against the issue of new share to a facility signed with Crede CG III Ltd facility following a fall in the company’s share price.  The voting down of the resolutions effectively enabled Vast Resources to walk away from its commitments to supply new stock into the £5m Crede facility into by the company.
• A Darwin Bridge Loan Note facility was subsequently put in place to bridge the gap
Conclusion:  Vast Resources is looking to develop polymetallic mines in Romania and in Zimbabwe.  The Pickstone-Peerless gold mine in Zimbabwe is reported to be profitable and offers good potential for greater production in our view.  The Manaila mine is also reported to be moving towards efficient, profitable steady state production.
We struggle to understand why Vast Resources has felt the need to sign not one but three ‘creative’ financing facilities over the past 12-months, two of which have been effectively cancelled by shareholders, and why it has not simply raised funds through more conventional equity placing methods.

Xtract Resources (LON:XTR) 0.03 pence, Mkt Cap £4.6m –Manica review opts for open pit mining
• Xtract Resources has reviewed the development strategy for the Manica gold project in Mozambique and concluded that development solely as an open-pit mine is preferable to the alternative of a high-grade open-pit mine followed by an underground mine development.
• The conclusion reflects the resource sterilisation which would be incurred by the need to leave ore pillars underground and the additional cost of backfilling the mined-out areas which “would have a serious effect on underground operating cost.”
• As currently envisaged, Manica would have a 7 year life as an open pit mine producing 480,000 tpa of ore at a grade of 2.26 g/t of gold and incurring an average waste:ore stripping ratio of 7.2:1.
• The “break-even all-in cost including capital recovery is USD908 per oz.”
• The Executive Chairman, Colin Bird, also highlights “The exploration potential, if successful, could lead to extended mine life with the processing plant paid for.”
• Discussions with the original owners of the Manica project, Auroch Minerals, are continuing  in a “constructive” manner “concerning the USD1.65 million outstanding payment and a mutually agreeable outcome is expected to be documented and announced before the end of the year.”
Conclusion: The development of Manica as an open-pit mine seems to offer the most effective utilisation of a resource which sounds as if it would be difficult to mine underground requiring widespread support pillars and backfill.

]]> Oil price, Premier Oil, And finally... Thu, 17 Nov 2016 09:45:00 +0000 Oil price

Oil prices drifted yesterday, to begin with there wasnt much news so the API news from after the close eased things off a bit. Later the EIA numbers proved to be worse, at a build of 5.3m barrels of crude and modest rises in products were bigger than expected, despite a rise in refinery utilisation from 87.1% to 89.2%, the EIA put this down to a rise in imports, last week 910/- barrels.

Fortunately Russia came to the rescue saying that they would support ‘any Opec’ decision at the upcoming meeting. Secretary General Barkindo is still travelling, at the moment he is meeting the Venezuelan oil Minister in Caracas.

Premier Oil

A trading update from Prems this morning which is pretty much the same as other recent trading news, ie operationally things are going very well with the usual exception of Solan of course. Production continues to beat estimates, at the moment it is 80/- b/d with an annual average of 69/- b/d and recently upgraded guidance of 68-73/- b/d still very much achievable. Catcher is still on target for production in 2017 and down 24% on costs, whilst at Sea Lion FEED work is ongoing and break even costs are $45pb and falling. As to the debt which stands at $2.8bn the good news is that the term sheet for the refinancing is in the ‘final stages’ of renegotiation and it looks as if it is pretty well what the company needs. It is for the full amount, gives headroom for Catcher, gives security and appropriate economics to the lenders and as one might expect has governance controls in the process. This has all taken longer than expected and of course given rise to speculation in the market that some of the lending group were keen to jump ship, thus ever was I suspect but it looks as if it has got far enough to be a runner…At the moment I am still giving the Premier team the benefit of the doubt for doing a great job.

And finally…

The second test is under way and after taking two quick wickets it has all gone India’s way, as I write they are 232-2….most exciting news so far is that ‘tea was taken early after a dog invaded the pitch’….

Muzza had a long hard battle against Nishikori but should be through to the semi’s at the 02…

And for goodness sake, Wayne Rooney having a swift one with a wedding party, where’s the story, game had been won and he wasnt in the friendly, I mean if I ran into a blog reader at their wedding party….

]]> Today's Oil and Gas Update:Premier Oil, Great Eastern Energy Thu, 17 Nov 2016 09:27:00 +0000 Headlines

Comment: If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?
Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas

Following Great Eastern Energy’s (the “Company”) interim statement today, which we comment on below, the Company discloses the fact that it was able to achieve ~$10.0/mcf in the period, which is jarring when set against the backdrop of significantly lower state gas prices, which is $2.5/mcf (dry basis). This underlines what a disaster Indian gas price policy is and why ultimately, the country will be unable to drive its domestic gas production forward in a meaningful manner. It is clear that the market will support prices ~4x that which is set via a manipulated formula.

While these are a number of significant projects on the horizon in India, we see the government's intervention in artificially suppressing the market price hampering any rapid progress and actually forcing significant delays on the sector.

If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?: Today's announcement makes for good reading, especially with regards to cost control and production outlook. Assessment of covenant breaches continues to be delayed until such times as the Company is confident it can meet them, and we don't blame them. With ~$2.8bn on net debt it is difficult to imagine the stress the management must be enduring, especially in the wake of its share buyback. While we are provided comfort by the majority of the statement, the one uncomfortable line, which appears right at the end of the statement, reads "....going forward, Premier plans to be cash flow positive at oil prices above $50/bbl...." If this is true to its word, then the Company, at current prices, looks as if it will face further difficulties. Given that group opex hovers around the ~$20/bbl mark, this is either a statement out of context , or a statement that of management's belief that post the debt restructuring, once all debt payments capex and other items are taken in to account, that this will be the new "free cash flow" breakeven price. If so, we need greater clarity and understanding what has precipitated this statement, otherwise alarm bells will start to ring, if there isn’t a little tinkle already. We will await the full results before opining either way.

Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas: Today's results underline a business that is continuing to make progress, and with management of liquid resources and debt payments accounting for the marginal bottom line cash flow, operationally at least the business continues to flourish. That said, we would caution against the Company's debt pile, which although manageable currently, should there be significant amendment to the licence terms imposed, specifically undermining the ability of the Company to set pricing according to the market, then servicing its debt might be difficult.

]]> VSA Capital Market Movers - Premier Oil Thu, 17 Nov 2016 09:14:00 +0000 In its trading update Premier Oil (LON:PMO) has maintained its strong operational performance with production averaging 69kboepd and it remains on track to meet its increased full year guidance of 68-73kboepd (2015: 57.5kboepd). Its current rate is in excess of 80kboepd and is driven by the outperformance of the Huntington, Chim Sai and Natuna Sea Block A fields.

On the Solan field whilst new production from it has added to PMO’s increased output production is currently constrained at 10-13kboepd due to lower than anticipated water injection capability and the underperformance from the P2 well. The Catcher development remains on schedule with total project capex now forecast at US$1.7bn, a 24% reduction on PMO’s original estimate.

Discussions on its refinancing have taken longer than originally anticipated but it is now in the final stages of negotiation with its banks and private bondholders such that the refinancing should be implemented during Q1 2017, whilst PMO should also receive deferrals on its financial covenants until the refinancing process concludes. Further to this PMO has slashed its exploration and development capex for 2017 which is anticipated to be materially lower than US$300m, whilst it is also expected to be lower for than the initial guidance of US$730m for 2016 due to the weaker sterling exchange rate and efficiencies on Catcher.

With the conclusion of the refinancing process now in sight we remain cautiously optimistic on PMO with its strong operational performance and additional production to be added from Catcher in 2017 allowing it to pay down its debt, which still stands at a significant US$2.8bn.

]]> Zak Mir: One-way traffic for Frontera Resources shares (and it’s not upwards) Wed, 16 Nov 2016 12:30:00 +0000 The self-proclaimed ‘King of Charts’ Zak Mir reckons it will take something special for oil and gas explorer Frontera Resources Corporation (LON:FRR) to reverse its share price fortunes.

In the latest segment for TIP TV’s Proactive Investor Bulletin Board, Mir explains: “It’s one way traffic as the market fell in love and then fell out of love.

“You’d want to see a break back of 0.15p, which is quite a long way away from current levels.”

As for whether or not there is any reason to get involved with the oil and gas explorer, Mir thinks – based on the charts – investors should leave this alone for the time being at least.

“Not unless you had some particular fundamental insight [should you invest]. On the technical front you still want to see that 0.15p broken.”

]]> Today's Market View - DiamondCorp, European Metals, Georgian Mining Corp, Savannah Resources and Strategic Minerals Wed, 16 Nov 2016 10:30:00 +0000 DiamondCorp (LON:DCP) Suspended – Lace mine put into Business Administration in South Africa
European Metals (LON:EMH) – Additional lithium – tin intercepts in recent drilling at Cinovec
Georgian Mining Corporation* (LON:GEO) – Raises £2.6m
(formerly Noricum Gold.  Ticker changed to GEOfrom LON:NMG)
Savannah Resources (LON:SAV) – Additional high grade copper intersections in Oman
Strategic Minerals* (LON:SML) – Drilling tender for Redmoor with drilling expected in H1 2017

FTSE 100 slips as miners trade lower on weaker iron ore prices.
• The US$ index continues to climb trading at the highest level in nearly a year.
• Crude is trading around $47.7/bbl after surging 5.7% yesterday marking the strongest increase in seven months on expectations for the OPEC to successfully reduce production rates.
• Saudi Energy Minister is expected to meet representatives of OPEC members in Doha this week on the side lines of the an energy forum.
• The official OPEC meeting is due on Nov 30.
• Both precious and base metals are little changed while Chinese iron ore futures posted the first back to back daily decline since mid-last month.
• Chinese steel mills are reported to have slowed purchases while traders decided to lock in their rally gains.
• Iron ore futures came down 7.1% today taking the two day decline to 8.8% as Jan futures contracts hit this year’s high on Monday.
• Spot iron ore with 62% Fe delivered to Qingdao fell 6.5% to $72.7/t as of Tuesday following a 2.6% decline on Monday taking prices down 8.9% from $79.8/t, the highest level since Oct/14, hit on Friday.

Lundin Mining to sell 30% minority stake in Tenke Fungurume to China’s BHR Partners for $1.14bn in cash (WSJ)
• The $1.14bn cash price might also be boosted by a further $51.4m depending on future copper and cobalt prices
• A termination fee of $100m is reported to be payable under certain circumstances
• The deal is expected to close in H1 2017
• Lundin has waved its right to acquire Freeport’s 56% stake in the mine
Freeport-McMoRan hold 70% of the Tenke Fungurume copper/cobalt mine.

Economic News
US – Positive retail sales data for Oct with upwards revisions to Sep numbers point to a continuing growth momentum in consumer spending.
• Consumption is led by growing employment levels and rising earnings.
• Sales growth was relatively broad based with 11 of 13 major categories posting a second consecutive monthly increase.
• Retail control group sales, the numbers that are used to calculate GDP, saw the strongest increase since Apr.


Eurozone – Single currency region growth held at 1.6%yoy in Q3/16 putting the annual pace on track for a slowdown when compared to the previous year.
• The economy expanded at 2.0% in 2015 and is expected to grow 1.6% this year and 1.3% in 2017.
• Eurozone Q3 GDP (%qoq): 0.3 v 0.3 in Q2/16 and 0.3 forecast.
• Eurozone Q3 GDP (%yoy): 1.6 v 1.6 in Q2/16 and 1.6 forecast.

Germany – Investment sentiment and the outlook over  the coming six months improved in Nov suggesting a rebound in economic activity in the final quarter of the year.
• ZEW Current Situation Index: 58.8 in Nov v 59.5 in Oct and 61.6 forecast.
• ZEW Expectations Index: 13.8 in Nov and 6.2 in Oct and 8.1 forecast.

UK – Employment climbed less than forecast with earnings growth keeping steady in three months through Sep.
• While unemployment rate fell to the lowest level in 11 years, earnings growth is a figure to follow closely given expectations for stronger inflation moving forwards that would weigh on consumers’ real income.
• Employment change (rolling 3m change): 49k v 106k in 3m to Aug and 91k forecast.
• Earnings (rolling 3m, %yoy): 2.3 in Sep v 2.3 in Aug and 2.4 forecast.
• Unemployment rate (%): 4.8 v 4.9 in 3m to Aug and 4.9 forecast.

DRC – signs royalties held by the state mining company to a company controlled by Kabila ally (Global Witness)
• Gecamines is said to have transferred royalties from Kamoto Mines in January 2015 to an anonymous Cayman company called Africa Horizons Investment Limited.
• According to a report in the Daily Mail, Africa Horizons is owned by Israeli billionaire Dan Gertler, who Global Witness said was involved in murky mining deals in DR Congo and was Kabila's close friend.

US$1.0710/eur vs 1.0798/eur yesterday.   Yen 109.53/$ vs 108.17/$.   SAr 14.248/$ vs 14.178/$.   $1.245/gbp vs $1.243/gbp.     
0.752/aud vs 0.756/aud.   CNY 6.871/$ vs 6.853/$.   Yuan falls to lowest level for eight years

Commodity News
Precious metals:
Gold US$1,228/oz vs US$1,226/oz yesterday –
     Gold ETFs 62.8moz vs 63.2moz yesterday –
Platinum US$933/oz vs US$943/oz yesterday
Palladium US$700/oz vs US$705/oz yesterday –
Silver US$17.03/oz vs US$17.04/oz yesterday

Base metals:   
Copper US$ 5,476/t vs US$5,422/t yesterday –
Aluminium US$ 1,718/t vs US$1,718/t yesterday
Nickel US$ 11,320/t vs US$11,105/t yesterday – Finland continues to operate the Talvivaara nickel mine with €800m spent to date on the business by the government in keeping the operation going.  The mine is now run by Terraframe, a government agency since the mine went into insolvency in 2014.  The mine is expected to see positive cash flow in 2018 according to the chairman of Terraframe.
Zinc US$ 2,560/t vs US$2,548/t yesterday
Lead US$ 2,190/t vs US$2,168/t yesterday
Tin US$ 20,050/t vs US$20,295/t yesterday –

Oil US$46.8/bbl vs US$45.4/bbl yesterday –
Natural Gas US$2.705/mmbtu vs US$2.793/mmbtu yesterday
Uranium US$18.65/lb vs US$18.65/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$67.1/t vs US$72.9/t – iron ore prices pulling back – should not feel like much of a surprise to anyone
Chinese steel rebar 25mm US$454.5/t vs US$465.1/t – HRC steel prices falling as steel futures prices collapse
Thermal coal (1st year forward cif ARA) US$69.7/t vs US$69.7/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t –

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
DiamondCorp (LON:DCP) Suspended – Lace mine put into Business Administration in South Africa
• DiamondCorp have placed the Lace mine into Business Administration in South Africa to protect the business from its creditors
• The process is similar to Administration in the UK and Chapter 11 in the US
• While this is not good news it should protect the business so that the Lace mine may be restarted once the flood water has receded from the mine

European Metals (LON:EMH) 36.5 pence, Mkt Cap £31.8m – Additional lithium – tin intercepts in recent drilling at Cinovec
• European Metals has announced the results of 3 additional drill holes at its wholly owned lithium – tin property at Cinovec where the company has now completed ten diamond drill holes and has three currently underway.
• The results from holes CIW-13, CIW-14 and CIW-18 include an 82m wide intersection averaging 0.48% Li2O from a depth of 132m and a 175m intersection averaging 0.40% Li2O both in hole CIW-14 which was drilled “at the southern edge of the Cinovec Main  sector of the deposit near its boundary with Cinovec South. The area is marked by relative sparsity of historic drill data and lithium analyses.”
• Hole CIW-13 was drilled in a similar part of the deposit and encountered 152.3m of mineralisation at an average grade of 0.37% Li2O at a depth of 277m. The major mineralised intercept in hole CIW-18 was encountered at a depth of 151m in a 243m wide intersection at an average grade of 0.30% Li2O.
• The results to date will be incorporated in an interim update to the resource model which is expected to be released in the next two weeks. “in the meantime, drilling will continue to both expand the resource and increase its level of confidence to allow a further resource upgrade in the first half of 2017.”
• Currently, Cinovec has an indicated resource of 49.1m tonnes at an average grade of 0.43% Li2O with an additional inferred resource of 482mt at 0.43% Li2O. Cinovec also contains an undeveloped tin resource with an indicated 15.7mt at an average grade of 0.26% tin and an additional inferred tonnage of 57.7mt grading 0.21% tin.
Conclusion: The results reported today are generally deeper than some of the holes reported earlier in the programme and appear to come from an area which has less historical geological and drilling information available. The forthcoming resource model update may help put these results into context, however, it appears that there may still be further detailed investigation required to identify the optimum area for initial mine development though all the indications at this stage point to the economic logic of starting in shallower parts of the deposit.

Georgian Mining Corporation* (LON:GEO) 9p, Mkt Cap £7.3m – Raises £2.6m
(formerly Noricum Gold.  Ticker changed to GEO LN from NMG LN)
• Georgian Mining have raised £2.6m by way of an oversubscribed placing of 32.5m new shares at 8 pence per share.
• The placing is to work up a resource of 3-5mt of copper-gold mineralisation within the Kvemo Bolnisi project in Georgia.
• The idea is to utilise around 1mtpa of spare process capacity at the joint venture partner’s Madneuli mine just 7km from the project.
• This capacity is available to Georgian Mining Corp under its existing joint venture agreement.
• Capex:  The use of local contractors and the jv partners process plant means that Georgian Mining could start mining with virtually no capital cost.
• We expect costs to be relatively low at under $600/oz including mining and transport
• Grades should run at around 1% copper with 0.7-0.8% copper to start plus a significant gold credit
• Blending this in with material from the Madneuli mine might also improve recovery rates for both mines.
• Funds will be used for:
o 10,000m drilling program
o mine scoping study,
o plant optimisation review to potentially further expand plant capacity at jv plant
o metallurgical test work
o internal pre-feasibility studies.
o Production should start in Q4 2017 reaching full production of around 1mtpa expected early in 2018
 Processing; copper sulphides will float and gold recovery is via heap leach.
 Exploration:  25 drill holes at the Kvemo Bolnisi site show significant results and has yielded a geological exploration target of 50mt and is considered to offer much greater potential than the current 3-6mt plan.
Conclusion:  The ability to simply dig and deliver copper/gold ore to the existing Madneuli plant should be of great benefit to shareholders.  The opportunity to start mining at relatively low cost and virtually no capital cost presents an unusual opportunity for a junior listed mining company.
*SP Angel acts as Nomad and Broker to Noricum.  The company has agreed to issue 267,750 warrants to SP Angel exercisable at 10p/s

Savannah Resources (LON:SAV) 5.25 pence, Mkt Cap £23.6m – Additional high grade copper intersections in Oman
• Savannah Resources has reported the final results from its drilling at the Mahab 4 prospect which lies within the Block 5 exploration area where the company is earning a 65% interest.
• Hole 16B5DD018 has intersected 14.25m at an average of 3.86% copper, 0.62% zinc and 0.22 g/t gold from a depth of 109.1m in a shallow dipping hole angled at 25⁰ towards 256⁰ (WSW).
• These results, as well as those from previously reported earlier drill-holes in the programme, including a 67.4m wide intersection averaging 4.64% copper and 1.13% zinc in hole 16BDD009 from a depth of 18.6m which was drilled obliquely to the structure in order to produce a larger sample of mineralisation for metallurgical testing, will be incorporated in an updated resource estimate expected during Q4 2016.
• The current indicated and inferred resource of high grade VMS (volcanogenic massive sulphide) mineralisation is 1.7mt at an average grade of 2.2% copper.
• The company is now underway with a new 600m diamond drilling programme to “establish a JORC compliant resource estimate at the Dog’s Bone lens, which is part of the Aarja deposit”, which also lies within Block 4.
• Savannah Resources is working towards a “potential mine development for late 2017” and the resource drilling at Aarja is intended to ensure “that it can be considered as part of the potential mine development”.
Conclusion: With the completion of the drilling at Mahab 4, we look forward to the updated resource estimate later this year and results from the current drilling programme on the Dog’s Bone prospect.

Strategic Minerals* (LON:SML) 0.4 pence, Mkt Cap £5.2m – Drilling tender for Redmoor with drilling expected in H1 2017
• A drilling tender has been issued to eight companies for a two phase, 23-hole drilling programme at the Redmoor  tin tungsten project in Cornwall.
• The first phase consists of 13 holes, followed by a second, 10 hole programme. Discussions and site visits for short-listed companies are expected to occur during December with drilling to start during H1 2017.
• Commenting on the recent appointment of Jeff Harrison as the Community Advisor and the invitation of tenders for the start of drilling a Redmoor, Managing Director, John Peters, said “These developments continue to reinforce our intention to fully exercise our option over 50% of the Redmoor project and to commence drilling at Redmoor in the first half of 2017.”
• Strategic Minerals has also announced that its joint venture partner in the Redmoor, New Age Exploration has changed its name to Cornwall Resources Limited.
Conclusion: The move to drill at Redmoor will provide additional information over a wider area to help update the current inferred resource estimate of 13.3mt at an average grade of 0.56% tin equivalent, which is largely based on limited historic drilling.
*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

]]> Oil price, IGas/Egdon, SOCO, Sundry-Bowleven-Seacrest/Antrim, And finally... Wed, 16 Nov 2016 10:16:00 +0000 WTI $45.81 +$2.49, Brent $46.95 +$2.52, Diff -$1.14 +3c, NG $2.71 -4c
Oil price
The Opec machine decided that enough was enough and some serious plugging was needed for the ‘agreement’ at the 30th November meeting. Secretary General Barkando has been sent on a tour of friendly and not so friendly member states and the KSA Oil Minister is to attend the energy forum in Doha where he will meet Opec and non-Opec delegates to try and get the message across.
With Nigerian production down due to terrorist action in the southern Niger Delta becoming more aggressive markets took the opportunity to bounce by 6%. After hours the news wasn’t so good, the API inventory data showed a build of 3.6m barrels of crude against the whisper of +1.5m.

Yesterday it was announced that the Springs Road site had been given the go-ahead by Nottinghamshire CC for two exploration wells, one vertical, one horizontal. For both companies this is good news, lets just hope it comes in time for IGas who are having their own ‘cash flow’ crisis at the moment. Egdon has subsequently announced that it has picked up a further 12.5% stake in PEDL 201 from Corfe for £50/-in shares.

Only a few days after its recent update, SOCO has announced that CNPC has delayed by ‘at least’ 30 days the payment of $52.7m due following the 2005 sale of its Mongolian assets. There is another detailed operational update which is surely superfluous given how recently the company updated the market and the company has a strong balance sheet despite this payment delay.

Bowleven announced yesterday that Crown Ocean Capital or ‘COC’ had attempted to put a resolution to the upcoming AGM to remove three non-exec directors and replace them with their own, COC owns around 7.8% of BLVN stock. The paperwork was apparently invalid but could be resubmitted. Today the company has announced that the deadline has passed and no new such resolutions have been received, how strange….
And Seacrest Capital has splashed out $250/- on behalf of Azeire to buy 3D seismic data from Antrim Ireland. Apparently the database is complimentary so probably worth the money but it does show how spectacularly Antrim have fallen from grace.

And finally…
The friendly last night at Wembley between England and Spain was actually quite competitive and after a couple of acts of generosity the ref had to make use of his cards a fair bit as tackles got fiercer. With England leading 2-0 and five minutes to go it was a salutary lesson as Spain scored twice to get the draw. The only question now is when and not if Gareth Southgate gets the call from the FA, after which his beginners luck will surely leave him…
And in the FA Cup replays last night the giant killing was done by Eastleigh who went to Swindon and won 1-3. Another great success for Swindon Director of football, Tim Sherwood…

]]> Today's Oil and Gas Update - Egdon Resources,Frontera Resources, Gulf Keystone,Providence Resources and others Wed, 16 Nov 2016 09:54:00 +0000 Headlines
• In Brief:
o Egdon Resources (LON:EDR– 15p) – Portfolio Building
o Frontera Resources (LON:FRR– 0.10p) – Another 10 Years?
o Gulf Keystone (LON:GKP– 1.15p) – (HOLD – $203 – 519mm; 0.65 – 1.66p) – Wrong Focus
o Providence Resources (LON:PVR– 10p) – Solid, But Not the Focus
o Sirius Petroleum (LON:SRSP– 0.50p) – The Action Begins… Sort Of
o Soco International (LON:SIA– 134p) – Time to Look to the Future
o Tethys Petroleum (LON:TPL, TSE:TPL  – 1.38p/C$0.02) – Rock and a Hard Place

In Brief
• Egdon Resources (LON:EDR – 15p) – Portfolio Building: Today's acquisition of a 10% interest in PEDL201 serves to consolidate its position in the midlands basins, with which not only adds volumetric prospectivity, but also provides it with additional currency to negotiate with prospective farminees. The wider impact, however, is, in this case, more marked, especially as the unconventional prospectivity is yet to be assessed, and while it may be that the shale series is ultimately unproductive, until such times as that is proven, it represents significant optionality.
• Frontera Resources (FRR LN – 0.10p) – Another 10 Years?: While ordinarily a new country entry would be assessed on its merits as a geological province, but given that it has taken over 10 years to get a more mature province to the point of potential declaration of reserves, we believe that even if this were a mature province such is the management's track record that it is actually a negative. Given that the progress to date in Georgia was the net effect of 100% of management time, now that this time will be spread more thinly, we find ourselves wondering what effect the inclusion of Moldovan acreage will have on the progress of both assets. Either way, a fundraising will be in the offing.
• Gulf Keystone (LON:GKP – 1.15p) – (HOLD – $203 – 519mm; 0.65 – 1.66p) – Wrong Focus: Today's announcement isn't really a surprise, but it isn't the right thing to do, not yet anyway. The smaller shareholders have supported the Company through a significantly trying period, and for shareholders holding less than 100 shares to see such an albeit significant destruction in value, essentially reduced to nil, will gall some. However, and we need to be frank here, the alternative was nil for all shareholders had the conversion not happened. While we can appreciate that the management want to separate themselves from the past and move forwards, but given that past, and the lingering debt that remains, we think that the number of shares in issue should be the least of their worries. What will change investors' perception of the Company is delivery and free cash flow generation . Our valuation range remains $203 – 519mm, 0.65 – 1.66p using the current shares in issue, but post the share consolidation the per share valuation range will be 65 – 166p. Reiterate HOLD
• Providence Resources (LON:PVR– 10p) – Solid, But Not the Focus: Today's news is a shot in the arm for the Company's portfolio, and as we have said previously, is a reflection of the esteem in which its technical capability is held in governmental circles. However, what is undeniable is the fact that no matter how much good news the Company receives on its exploration prospects, these make little contribution to the current valuation, and the market sees this as medium to longer term opportunities to peruse once the Company is generating cash flow from Barryroe. As a result, and while we can appreciate the step forwards that this undoubtedly is, the announcement that investors are looking for is on the next stage of Barryroe. Until then, we believe that everything else will be viewed as a side show.
• Sirius Petroleum (LON:SRSP– 0.50p) – The Action Begins… Sort Of: After much delay, it appears that Sirius may finally start drilling the Ororo wells. While this is good news, and the Company’s shares should rightly trade ahead on the news, there are a number of concerns, namely: (i) that management state “if successful,” which to us is a step back from their previous language of “bring the Ororo field (OML 95) in Nigeria… …into production” where that spoke of development. This can now fairly and squarely be called an appraisal well; (ii) given that it is an appraisal well, we need more information on how it will get to production in under 6 months given that management talk of “first hydrocarbons in 1H 2017;” and (iii) given that only 4.2mm bbl of the 2C Resources of 11.4mm boe are liquids, to what extent is the $3.5/mcf gas solu tion necessary for a commercial development. Of these points, the last is the more pressing, as it transcends the timing issue. Interesting times ahead for the Company, and we suspect that a funding round will be required post the well results, it will be a question of what level and how much.
• Soco International (LON:SIA– 134p) – Time to Look to the Future: today's update is significant not because of the operations, which remain on track, but because of the fact that the delay in the Mongolian payment has a minimal impact on the overall progress of the Company. Given this, we believe that it is now the right time for the Company to start to start to expand its exploration efforts, which in turn will hopefully feed the appraisal, development and production portfolios in due course, quite a luxury problem to have in this current market. All in all, investors should be happy with the Company, and more importantly, the way that it is being managed.
• Tethys Petroleum (LON:TPL – 1.38p/C$0.02) – Rock and a Hard Place: Today's results make sobering reading, especially as the Company is essentially one quarter away from closing down. What is needed is a resolution with Olisol and funds to be able to satisfy creditors (initially), and intervene in its asset base to lift production. The focus on Olisol has meant that the Company has proceeded too far down one funding route to effectively be able to enter in to any wider funding programme, and now needs to pursue the “rifle shot” approaches from other stalking horses. While there is a glimmer of hope, unless it is of a size that enables the Company to address its deficiencies currently and achieve a significant proportion of the production necessary to grow its business, we do not see how this provides anything other than a Band-Aid to the Company. Still, the monies have to be remitted first, which is now the only focus for the Management team, and rightly so.

]]> VSA Capital Market Movers - Egdon Resources Wed, 16 Nov 2016 08:22:00 +0000 Egdon Resources (LON:EDR)

Egdon Resources (EDR)#ce and this will add 2,471 net acres to EDR’s portfolio which is considered to be prospective for both conventional and unconventional resources.

Further to this, yesterday afternoon Nottinghamshire County Council granted IGas (IGAS) planning consent to explore for shale gas at Springs Road in PEDL140, which EDR holds a 14.5% WI in. IGAS has proposed to drill two wells, the first a vertical well to a depth of 3.5km and dependent on the results it may drill a second vertical well to 4.3km before deviating it horizontally.

This is clearly a positive result for both IGAS and EDR, and removes this uncertainty over the licence, but is also another win for the UK shale industry following several major decisions going its way in recent weeks.

]]> Centamin shares to rally if gold stays above US$1,200 Tue, 15 Nov 2016 11:20:00 +0000 Technical analyst Zak Mir thinks shares in gold miner Centamin PLC (LON:CEY) could rally as long as the gold price maintains its position above the US$1,200 level.

The stock gathered a lot of momentum in the run-up to the election, although Donald Trump’s election appears to have left a lot of investors out of pocket.

“I was noting before the election that people were piling into Centamin, pushing it through 160p and then all of sudden – when [Trump] won, it went all the way back down again,” Mir tells Proactive.

“So people were really wrong-footed, they were looking for Centamin to go higher.”

Mir explains that this weakness might represent a good buying opportunity for investors as long as the gold price plays ball as well.

“The uptrend has still remained intact and I think as long as gold remains above the US$1,200 level we should be ok.”

]]> Today's Market View - Anglo American, Asiamet Resources, Botswana Diamonds, Edenville Energy and Sula Iron & Gold Tue, 15 Nov 2016 10:46:00 +0000 Anglo American (LON:AAL) – Latest De Beers diamond sales in line with expectations.
Asiamet Resources (LON:ARS) – Additional drilling confirms the continuity of shallow mineralisation
Botswana Diamonds (LON:BOD) – Exploration update on drilling at Orapa and Gope
Edenville Energy (LON:EDL) -  Initial bulk test results confirm coal suitability for power generation
Sula Iron & Gold (LON:SULA) – Visible gold find indicates potential extension to Ferensola gold project

US dollar strength higher potential Fed rates and inflation cause equities to pull back
• The election of Donald Trump is having an interesting impact on equities worldwide.
• Trump’s drive to fund new construction is seen as likely to cause the Fed to raise interest rates in order to borrow more money.
• This is driving the US dollar higher as funds flow back into the US in anticipation of better rates and a stronger dollar.
• New US construction spending is also seen as potentially driving inflation higher as money flows into the economy.
• The downside to all this is the rapid withdrawal of funds from other regions with potential to collapse certain markets and destabilise Asian and other economies.  Political instability in South Korea alongside some expensive corporate mishaps is a concern.
• China is trying to pull back the run in commodity prices through increasing the cost of futures positions through raising fees and margin requirements causing steel futures prices to fall

Miners are off today dragged by lower iron ore and base metal prices.
• Sovereign bond prices are taking a pause from a recent sell off with yields on US 10y Treasuries down 7bp after having climbed 41bp over the last three trading session marking the steepest climb in more than seven years.
• Brent is up for the first time in the last four days helped by a modest correction in the US$ index (-0.6%) which climbed more than 3% since early Nov.
• Gold prices are level this morning trading close to the five-month low with base metals broadly trading lower.
• A correction in iron ore prices saw Singapore AsiaClear contracts dropping as much as 11% to $67.6/t before settling at $70.5/t. Jan one-year iron ore futures were down 1.7% coming off the highest level since the start of the year.
• Chinese steel prices are off as well with both rebar and HRC trading lower.

Dow Jones Industrials  +0.11% at 18,869
Nikkei 225   -0.03% at 17,668
HK Hang Seng   +0.46% at 22,324 
Shanghai Composite    -0.11% at 3,207
FTSE 350 Mining   -3.55% at 14,385 FTSE 350 +96% since 1st January
AIM Basic Resources   -1.85% at 2,417 AIM Basic Resources +48% since 1st January

Economic News
Date Index Period   Actual Est Previous
Tuesday Retail Sales Oct %mom   0.6 0.6
  Core Retail Sales (ex Auto) Oct %mom   0.5 0.5
Wednesday Core PPI Oct %mom   0.2 0.2
Core PPI Oct %yoy  1.6 1.2
Industrial Production Oct %mom  0.2 0.1
  Capacity Utilization Oct %   75.5 75.4
Thursday Weekly Jobless Claims       257k 254k
Core CPI Oct %mom  0.2 0.1
  Core CPI Oct %yoy   2.2 2.2
Source: Bloomberg     

UK – The pound came off against the US$ this morning (-0.6%) following the release of weaker than forecast inflation numbers.
• CPI (%mom): 0.1 in Oct v 0.2 in Sep and 0.3 forecast.
• Core CPI (%yoy): 1.2 in Oct v 1.5 in Sep and 1.4 forecast.

Germany – Economic growth came in below estimates slowing to the weakest level in a year in Q3/16.
• Growth was driven by private and government spending with both vestments and export acting as a drag on GDP expansion.
• The dynamics contrast with the first two quarters when net export contributed positively to growth.
• Meanwhile, low unemployment helped to extend growth in consumption for a tenth consecutive quarter.
• Preliminary data point to a strong finish to the year with the economy likely to hit 1.8% growth in 2016, up on 1.5% recorded in 2015.
• Q3/16 GDP (%qoq): 0.2 v 0.4 in Q2/16 and 0.3 forecast.
• Q3/16 GDP (%yoy): 1.7 v 1.8 in Q2/16 and 1.8 forecast.

Portugal – The nation beat forecasts climbing 0.8%qoq/1.6%yoy in Q3/16 on stronger exports.

US$1.0798/eur vs 1.0757/eur yesterday.   Yen 108.17/$ vs 107.81/$.   SAr 14.178/$ vs 14.428/$.   $1.243/gbp vs $1.250/gbp.     
0.756/aud vs 0.755/aud.   CNY 6.853/$ vs 6.843/$.
Yuan falls again as China continues to depreciate its currency as US dollar surges

Commodity News
Precious metals:
Gold US$1,226/oz vs US$1,225/oz yesterday –
     Gold ETFs 63.2moz vs 63.4moz yesterday –
Platinum US$943/oz vs US$940/oz yesterday
Palladium US$705/oz vs US$676/oz yesterday –
Silver US$17.04/oz vs US$17.24/oz yesterday

Base metals:   
Copper US$ 5,422/t vs US$5,624/t yesterday – Copper – Funds booked record net-long positions in the week before US presidential elections, according to the CFTC data released yesterday.
Total net long contracts held by hedge funds and other large speculators more than doubled to 59.3k last week.
• Chilean copper mine production declined in Sep led by losses at Codelco operations (-1.1%yoy) and Antofagasta’s Los Pelambres (-5.8%yoy).
• Total output totalled 459.7kt with 322.3kt in the form of concentrates and 137.4kt in SX-EW refined copper, according to the state Cochilco commission.
• Production in the first nine months of the year was down 3.9%yoy coming in at 4.1mt.
• The nation remains on target to hit 5.4mt by the end of the year, the commission said.
• Production at Escondida was up 2.5%yoy at 77.0kt in Sep

Aluminium US$ 1,718/t vs US$1,746/t yesterday
Nickel US$ 11,105/t vs US$11,240/t yesterday
Zinc US$ 2,548/t vs US$2,533/t yesterday
Lead US$ 2,168/t vs US$2,149/t yesterday
Tin US$ 20,295/t vs US$21,235/t yesterday –

Oil US$45.4/bbl vs US$44.8/bbl yesterday –
Natural Gas US$2.793/mmbtu vs US$2.682/mmbtu yesterday
Uranium US$18.65/lb vs US$18.45/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$72.9/t vs US$75.5/t – HRC steel prices falling as steel futures prices collapse
• Iron ore stocks at Chinese ports are close to a two-year high at 108mt.
• Tangshan city in China is to spend $5.5bn to consolidate and relocate 10 steel companies with 8mtpa of steel production capacity to the coast
• The city has already closed 32mtpa of steel capacity out of a total of around 100mtpa
• This restructuring should move 8mtpa of capacity 40km away to the coast to the new Tangshan Bohai Steel Project and will cut 3.5mtpa of capacity in the process.
Chinese steel rebar 25mm US$465.1/t vs US$469.4/t
Thermal coal (1st year forward cif ARA) US$69.7/t vs US$73.1/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$307.3/t –

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
Anglo American (LON:AAL) 1128 pence, Mkt Cap £14.55bn – Latest De Beers diamond sales in line with expectations.
• Anglo American reports that De Beers has realised US$470m from the latest, 9th of the year, diamond sale.
• The sales are slightly lower than the US$494m recorded for the previous sale this year but the company comments that they “continued good demand for De Beers rough diamonds, with sales in line with expected seasonal demand patterns”.
• We estimate that De Beers has sold approximately US$5.5 bn of diamonds so far this year, almost US$1bn more than the US$4.67bn of sales achieved in the calendar year 2015.
Conclusion: De Beers diamond sales are in line with company expectations and substantially ahead of the results in 2015 suggesting a modest firming of the market for rough diamonds.

Asiamet Resources (LON:ARS) 2.9 pence, Mkt Cap £17.9m – Additional drilling confirms the continuity of shallow mineralisation
• Asiamet reports the latest tranche of results from a further 10 holes in its resource evaluation drilling programme at the Beruang Kanan Main (BKM) copper project in central Kalimantan.
• A total of 56 holes (5600m) has now been completed and a further 62 holes (5400m) remain outstanding to complete the programme. Among the results reported today are a 42m wide intersection at an average grade of 0.56% copper from a depth of 33m in hole BKM32320-01, 29.5m at an average grade of 0.85% copper from a depth of 97.5m in hole BKM32200-04 and 4m at 2.02% from a depth of 6.6m and 19m at 1.16% copper from a depth of 28.6m both in hole BKM32300-02.
• The company highlights that “Excellent continuity of copper mineralisation has been established across a significant portion of the deposit” and that “coherent higher grades established within the BKM044 and 058 zones provide an excellent opportunity to selectively mine and enhance production early in the project life.”
• Although its programme is still only partially complete, “Extensive areas of very shallow mineralisation with potential to further reduce the already low stripping ratio … have been delineated”.
Conclusion: Asiamet’s resource evaluation drilling programme at BKM is now approximately half complete and is already identifying areas of higher grades and lower overburden (waste) cover which should provide scope for optimisation of the mine design and opportunities to enhance the economic returns of the project when the updated resource estimation is available for use in the feasibility studies.

Botswana Diamonds (LON:BOD) 1.7 pence, Mkt Cap £5.7m – Exploration update on drilling at Orapa and Gope
• Botswana Diamonds has announced that, following 1290m of drilling on 3 licences at Orapa and Gope in Botswana, it has recovered a second visible diamond in drill core from the AK21 licence in the Orapa area. Two 200kg samples have been sent to S Africa for detailed mineralogical and microdiamond analysis which is expected to take around 3 months.
• Two drill holes have been completed on each of the PL260 and PL085 licences at Orapa with a further 4 holes on PL135 in the Gope area. The holes drilled on the PL085 licence “encountered a dolerite sill instead of kimberlite” while at Gope, “Rather than the hoped for kimberlite an intensively weathered part basalt dolerite rock was found. The results are being reviewed”.
Conclusion: We note that the area has extensive sand cover extending up to 150 metres depth and at this early stage of exploration the targets are challenging. Discovery of diamonds on the AK21  kimberlits provides a potential follow up target but the interpretation of the geology of the other areas appears to have been more intractable than originally anticipated

Edenville Energy (LON:EDL) 0.6 pence, Mkt Cap £4.5m -  Initial bulk test results confirm coal suitability for power generation
• Edenville Energy has reported the first test results from the recent bulk sampling programme at the Mkomolo and Namwele coal deposits in western Tanzania have confirmed the suitability of the coal for use as power plant feed.
• The results from sample MK2, which come from the southern end of the Mkomolo deposit, show that “Only moderate, or in certain cases, no washing, will be required for Rukwa coal to be used in the combustion process in a coal fired thermal power plant.”
• The company further comments that where washing is needed, high yields of around 75% are achievable in the production of suitable plant feed.
• The coal “is accessible at the surface which will result in both low mining costs and the deposit being able to be opened up in a short timeframe”. Although clearly there is other work to do, including the testing of other samples from the bulk sampling programme, these initial results imply that in addition to relatively low mining costs, there may also be relatively low treatment costs required to produce a consistent feed for power station development.
• “Further test results on the other Mkomolo near surface coal seam are expected shortly” but  “The Company can now confirm the suitability of this coal to provide a sustained and reliable fuel supply to a power plant project.”
Conclusion: The initial bulk test results suggest that the Mkomolo coal is able to produce suitable power plant feed from near surface sources. We look forward to the results of further testing in the relatively near future.

Sula Iron & Gold (LON:SULA) 0.2p, Mkt Cap £2.8m – Visible gold find indicates potential extension to Ferensola gold project
• Sula report visible gold has been recovered from weathered iron oxide / quartz samples collected from a road exposure that cross-cuts the 4km long Induced Polarisation ‘IP’ anomaly.
• The team have also collected additional samples from the location and is now trenching select targets across the anomaly.
• Sula expect to materially extend the Ferensola JORC Exploration Target’ of 5-7mt grading at 4-8g/t Au for 0.8moz to 1.5moz Au and are likely to upgrade this to a more certain JORC resource in time.
• Similar mineralisation is seen in trenches near the Sanama Hill drill site.
• There are six similar looking IP anomalies interpreted to be associated with potentially mineralised sulphides over 8.5km of strike length indicating the potential for good scale is enough of this is mineralised.
Conclusion:  Ferensola looks like a promising gold prospect but is still in the relatively early stages of its evaluation.  The main prospect and its extension will need to be drilled to materially increase its scale and confidence in the resource.

]]> Today's Oil and Gas Update - Wentworth resources and President Energy Tue, 15 Nov 2016 09:17:00 +0000 o Wentworth Resources (LON:WRL) – Starting to Canter
o President Energy (LON:PPC) – Restructuring Provides Space
In Brief

• Wentworth resources (LON:WRL)– Starting to Canter: Today's news, while likely to disappoint and worry some, underlines the progress that the Company continues to make. While limited sales during the period, whether out of the Company's hands or not, is not an issue in isolation (per se), should this represent a pattern, there will be some concern as to the reliability of the end market. We, however, do not have those concerns currently. The forward plan continues to take shape, which we believe is coming at the right time, with production having been established and the outlook improving. One area where we have a small concern is managements use of debt to fund a forward programme. While we believe that debt is a valid tool to use, we believe that the timing and structure has to be such that it replaces the existing debt or is done on such terms and at such a quan tum that it minimises the likelihood of default, as we can't see any way around the cross default provisions. There is no doubt that the Company is at the start of its expansion period (albeit undermined by the sales in 3Q), and we believe that it will continue to build out its footprint. We believe that the trigger for enlarging the debt capacity (opposed to refinancing the existing debt) should be the point at which the Company has a cash position net of current receivables and payables of ~$10mm, which would provide sufficient headroom for the Company to operate and ride through any periodic downturns.

• President Energy (LON:PPC) – Restructuring Provides Space: Today's placement and announcement of its loan restructuring is welcome, as it will alleviate some of the pressure on the balance sheet and provide the Company with greater access to the cash flows given that the net profit interest has been extinguished. What the Company has to do now is ensure that the wells that it is working over and the development wells that it drills add enough surplus cash flow so that the debt obligations can be met, albeit proportionately to the cash that they require initially. The remainder needs to deployed in such a way that it creates returns sufficient to support the debt at least, which to our mind do not include exploration wells. Only if the investment generates sufficient returns over and above that required to service the debt and provide sufficient headroom to amortise the principal, should that then be deployed on exploration wells. While the loans may be from a connected party, the Company should not rely on Levin's largess or kindness, and the Company's approach should place loan servicing front and centre the same way that they would a third party creditor. Today's restructuring provides the Company with space to execute a measured and successful programme, but it can't be side-tracked excessively by high risk exploration, especially when it's in blocks held by production.Cash generation must be the focus in the near and medium term to rebuild the Company's base.

]]> VSA Capital Market Movers - Sula Iron & Gold and Asiamet Resources Tue, 15 Nov 2016 08:22:00 +0000 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold (SULA) has announced the recovery of visible gold at the Ferensola Project. The samples were taken from weathered iron oxide and quartz exposed by a road which cross cuts the large Eastern Target area that was highlighted as a prospective zone in the Induced Polarisation survey and lies outside the current JORC Exploration target.

These finds have previously described by the company as “goldstones” and they are a common occurrence across the license area. Previously, rock sampling had not been carried out in this specific location and we believe that this additional discovery of visible gold further underpins SULA’s exploration strategy. Indeed, the drilling programme in 2015 which yielded encouraging results and significant sulphide hosted gold bearing mineralisation also demonstrated the link between the IP anomalies and such mineralisation. The goldstones which represent the oxidised gold mineralisation are also correlated with these anomalies and as such represent a low cost method of directing the focus of exploration work.

Given the combination of the significant IP anomaly and the presence of goldstones, underpinned by this latest discovery, we believe that the Eastern Target offers significant exploration potential and could be far more significant than the original JORC target defined in 2015. SULA is now undertaking manual trenching of specific IP targets.

We reiterate our Speculative Buy recommendation and 3.1p/sh. target price.

Asiamet Resources (LON:ARS)
Asiamet Resources (ARS) has announced further encouraging drill results from its infill drilling programme related to the BKM project in Indonesia which is currently progressing towards the completion of a Feasibility Study. The new holes have confirmed continuity of copper mineralisation across much of the resource which should result in strong rates of conversion from Inferred to Measured and Indicated levels of confidence. Further confirmation of extensive shallow mineralisation was also achieved which is key to the low strip ratio of the potential project.
Highlights included;
• 29.5m @ 0.85% Cu from 97.5m depth including 11m @ 1.25% Cu
• 17m @ 1.57% Cu from 1m depth including 7m @2.54% and 3m @ 1.87%
• 42m @ 0.56% from 33m depth including 7m @ 1.43% Cu
Additional drilling is also seeking to determine the limits of the mineralisation. One hole was drilled 50m to the East of the BK044 Zone which yielded mineralisation thus extending the footprint of mineralisation whilst two holes drilled to the West of the current Resource also yielded copper mineralisation, extending the footprint by 150m. Further drill holes were also drilled on different orientations and angles to verify the robustness of the BKM Resource.

Overall, the results confirm our prior view that ARS is making good progress and we expect the Feasibility Study to confirm the potential for a low cost copper project. 56 holes have been drilled from the current programme with a further 62 to drill.

We reiterate our Speculative Buy Recommendation and target price of 6.2p/sh.

]]> Oil price, SDX Energy, Ithaca Energy, Jersey Oil & Gas, Sound Energy, And finally... Mon, 14 Nov 2016 13:25:00 +0000 WTI $43.41 -$1.25, Brent $44.75 -$1.09, Diff -$1.34 +16c, NG $2.62 -1c

Oil price
Last week WTI fell 66 cents and Brent 83 cents, to be honest it felt worse than that. With the agencies predicting a continued or ‘relentless’ rise in production and the Opec machine unusually silent coupled with stock increases, a Trump victory and an albeit modest rise in the rig count we should probably say that we ‘got away’ with it.
In Colombia there is a new peace pact between the President and the FARC, with enough modest changes to apparently to appeal to all sides. Further good news for Amerisur I  suspect who have been building an exciting portfolio of assets in the South of the country.

SDX Energy
Another very positive announcement this morning from SDX who have updated the market with further news from South Disouq. In its earlier report SDX suggested that after initial assessment of the 3D data it had proved positive and identified both oil and gas prospects. Today the company say that  further interpretation has indicated several Abu Madi and Kafr El Sheikh prospects displaying strong class 111 AVO responses. Testing of similar responses in offset area has resulted in numerous discoveries at these stratigraphic levels and these really bode well for SDX. Indeed the findings have allowed SDX to high grade several prospects for drilling in the near term in addition to the already agreed site of the carried well and subject to permitting etc should spud ‘by early 1Q 2017’.
The previous announcement was so positive that a number of operators made contact about potentially farming into this licence for which SDX is already fully carried for remaining obligations. Whilst the company is ‘unlikely’ to farm-down any additional equity it has ‘agreed to let selected companies submit proposals to acquire an interest in the concession’ which seems like common sense to me. Although they would be reluctant to reduce its 55% equity here and have absolutely no need to, should there be a substantial  offer that franked a much higher value on the licence it may be wise to let a little go. Most importantly these findings have further de-risked the prospectivity in the area and justified the SDX team in their approach.

The company also mention Meseda in the release where it has completed the final design work on the ESP programme which will, when fully installed, double the treating capacity of the CPF and enable it to significantly raise net production from the concession. Overall things go from strength to strength for SDX, the announcements today have put 10% on the share price to 25p, there is little doubt in my mind that the shares would have to double from here before they were anything other than very cheap.

Ithaca Energy
Results today from Ithaca and a conference call at noon, after which I will publish the blog. Ithaca is up there amongst the very best in the sector and has fully justified its place in the bucket list having risen 400% so far this year. Production is ahead of the 9/- guidance at 9,585 boe/d and opex is also better than expectations at $23 pb against thoughts of $25. The company continue to hedge, now out until the end of 2017 with 7,800 barrels hedged at an average floor of $52 and some exposure up to $60.
With Stella due onstream very soon, thus providing total production of 20-25/- b/d and with it a reduction of opex to below $20, revenues are set to rise sharply thus bringing down debt at the same time. Next year costs will fall again as IAE switches from tanker loading to the pipeline and with acquisitions being made in the Greater Stella hub and satellite portfolio. The management of Ithaca is concentrating on all the right things at the moment, the hedging enables it to concentrate on growing production and deleveraging the business and the costs are falling across the board.

Jersey Oil & Gas
I have recently added JOG to the list of stocks that readers should be looking at and given how exciting the Verbier prospect is to ensure that it is on the radar screen for next year. Statoil has today announced that as operator for the project it has communicated to the OGA that it will drill a well on P.2170 next summer and this is very good news for JOG. Now that the timetable is beginning to take shape and that Statoil are to pay for the first $25m of the well, visibility is well and truly clear, with 18% of this JOG are truly in the pound seats. I have had a number of questions about liquidity and JOG’s small market cap and whilst I understand the risks involved I am coming round to thinking that it is a risk worth taking. Given the restrictions on capex at the moment and the choice of prospects that Statoil have in their portfolio the fact that this has been elevated so fast is educational and makes JOG a serious candidate for the 2017 bucket list, you have been warned….

Sound Energy
Although I wasnt in attendance at the Shares awards dinner last thursday news spread quickly that Sound Energy picked up the big gong and had been awarded the Aim Company of the year 2016. Many congratulations to James Parsons and all the team for a fully deserved win and I know that they will have, after appropriate celebration, got straight back to making the most of Tendrara and developing the rest of the exciting portfolio. #Dreams in the desert….

And finally…
England have a sniff of a chance in the cricket and played very well to get that far. In the second innings an opening stand of 180 was very creditable and I was most impressed with young Haseeb Hameed on debut.
At Cheltenham it was good to meet a blog reader on the gate, I should have stayed and got some tips as I couldnt pick a winner to save my life, a great day however.
Watching the GP from Brazil was quite frightening, amusing as half the drivers wanted to pack it in and the rest wanted to race. Accordingly next year Vettel will be driving for team Uber…..
In the football the sweaties looked very pretty in pink, why dont they just wear a normal plain, dark blue shirt like they always have, apparently one of the pretty stripes clashed…They might have been a bit closer but on genuine chances I think it should have been 5-2… N Ireland beat Azerbaijan 4-0 whilst the Welsh drew 1-1 with Serbia.
And the rugby was also interesting, with fast Eddie rating England as 6/10 what might it have been like with the first team out?

]]> Today's Market View - Amur Minerals, Aureus Mining, DiomondCorp, Caledonia Mining, Metals Exploration, Serabi Gold and Strategic Minerals Mon, 14 Nov 2016 10:46:00 +0000 Amur Minerals* (LON:AMC) – Access road update
Aureus Mining (LON:AUE) – Q3 Operational update
DiamondCorp (LON:DCP) Suspended – Lace Diamond mine closed as storm causes production level to flood
Caledonia Mining (LON:CMCL) – Looking for a 20% increase in gold production in 2017.
Metals Exploration* (LON:MTL) – Equity placement
Serabi Gold (LON:SRB) – Record Q3 gold production and increased 2016 guidance
Strategic Minerals* (LON:SML) – Exploration of Australian gold and nickel projects

Global growth looks set to continue to pick up as Japan and China see growth in Q3 GDP and investment activity
• Expectations for global growth may rise following better numbers from Japan Q3 GDP and Chinese investment and factory activity.
• The election of Donald Trump is seen as good for US growth with Trump pledging to fix inner cities, rebuild bridges, highways and other infrastructure.
• Trump has also pledged to raise trade barriers against cheap imports which may lead to the need to generate more local materials.
• Many ‘Democrat’ policies may be repealed with less emphasis on the environment and on emissions controls
• Meanwhile China continues to depreciate the Yuan to counteract the impact of US dollar strength

Rio Tinto, BHP, Vale, Fortescue, Glencore and Anglo American benefit from continuing rise in iron ore and coking coal prices
• Rio Tinto is the major beneficiary of the strong recovery in iron ore prices#
• BHP is also well exposed but may be held back by the pull back in oil prices.
• Fortescue is relatively highly leveraged despite an amazing reduction in operating costs.
• Anglo and Glencore are by comparison relatively small iron ore producers but both benefit from sizeable coking coal production .

Russia – President Putin may step down due to ill health
• The Daily Mail Online, the most popular website in the world, reports that President Putin may step aside due to ill health.
• Professor Valery Solovey, dean at Moscow State University hinted at health problems and concerns about relations with the West.
• Solovey’s comment posted on a Kremlin-friendly website was taken down within three hours.
• We have to wonder if President Putin is currently unwell or if his illness is still being planned.

Dow Jones Industrials  +0.21% at 18,848
Nikkei 225   +1.71% at 17,673
HK Hang Seng   -1.37% at 22,222 
Shanghai Composite    +0.45% at  3,210
FTSE 350 Mining   +2.36% at 15,029 FTSE 350 +105% since 1st January
AIM Basic Resources   -1.73% at 2,463 AIM Basic Resources +51% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
Date Index Period   Actual Est Previous
Friday UoM Consumer Sentiment Nov   91.6 87.9 87.2
  UoM Current Conditions Nov   105.9 103.0 103.2
  UoM Expectations Nov   82.5 77.5 76.8
Tuesday Retail Sales Oct %mom   0.6 0.6
  Core Retail Sales (ex Auto) Oct %mom   0.5 0.5
Wednesday Core PPI Oct %mom   0.2 0.2
Core PPI Oct %yoy  1.6 1.2
Industrial Production Oct %mom  0.2 0.1
  Capacity Utilization Oct %   75.5 75.4
Thursday Weekly Jobless Claims       257k 254k
Core CPI Oct %mom  0.2 0.1
  Core CPI Oct %yoy   2.2 2.2
Source: Bloomberg     

China – fixed asset investment rose by 8.3% for the first 10 months of the year slightly ahead of the 8.2% expected
• A mixed bag of economic news released today point to a consolidation of economic growth rate on the way to meet the government’s minimum annual target 6.5%.
• Fixed Assets Investment (%ytd): 8.3 v 8.2 in Sep and 8.2 forecast.
• Fixed asset investment refers to expenditure on physical assets including machinery, land, vehicles and buildings
• Private investment growth rose to 2.9% vs 2.5% seen in the first 9 months of the year
• Retail sales rose by 10% in October, slightly slower than the 10.7% expected as see in September
• Industrial Production (%yoy): 6.1 in Oct v 6.1 in Sep and 6.2 forecast.
• Retail Sales (%yoy): 10.0 v 10.7 in Sep and 10.7 forecast.
• A slowdown in retail sales is a bit of a concern given the authorities’ focus on the development of local demand.
• Private FAI are seen accelerating 0.4pp to 2.9% after hitting record low few months earlier with the state sector continuing to drive growth as state FAI climbed 20.5% (-1.1pp from the previous month).
• The data released on Friday showed new credit dropped in Oct falling by nearly 50% from the previous month which is reported to be driven by seasonal factors such as a week long holiday and US presidential elections related causes.
• Bloomberg said that a 16% increase in total social funding combined with local government’s issued bonds was little changed from Sep suggesting the economy remains leverage-biased.
• Property investments growth climbed 0.8pp to 6.6% in the first 10 months of the year marking the third straight month of acceleration since a low of 5.3% in Jul.
• Aggregate Financing (CNY bn): 896 in Oct v 1,721 in Sep and 1,000 forecast.

Japan – Q3 GDP growth hits 2.2% annualised (vs expectation of 0.9%) as exports beat expectations

South Korea - We are wary of the political crisis in South Korea and potential for further contagion and potential disruption to the economy

US$1.0757/eur vs 1.0881/eur yesterday.   Yen 107.81/$ vs 106.35/$.   SAr 14.428/$ vs 13.248/$.   $1.250/gbp vs $1.264/gbp.     
0.755/aud vs 0.760/aud.   CNY 6.843/$ vs 6.807/$.

Interesting move in the Yuan as China continues to depreciate its currency against as stronger US dollar

Commodity News
Precious metals:
Gold US$1,225/oz vs US$1,257/oz yesterday –
     Gold ETFs 63.4moz vs 65.6moz yesterday – surprise major fall in ETF holdings following Trump election on expectations for a Fed rate rise
Platinum US$940/oz vs US$976/oz yesterday
Palladium US$676/oz vs US$689/oz yesterday –
Silver US$17.24/oz vs US$18.75/oz yesterday

Base metals:   
Copper US$ 5,624/t vs US$5,975/t yesterday –
Aluminium US$ 1,746/t vs US$1,780/t yesterday
Nickel US$ 11,240/t vs US$11,885/t yesterday
Zinc US$ 2,533/t vs US$2,555/t yesterday
Lead US$ 2,149/t vs US$2,190/t yesterday
Tin US$ 21,235/t vs US$21,730/t yesterday –

Oil US$44.8/bbl vs US$45.8/bbl yesterday –
Natural Gas US$2.682/mmbtu vs US$2.620/mmbtu yesterday
Uranium US$18.45/lb vs US$18.25/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$75.5/t vs US$73.6/t – Dalian iron ore futures prices continue to rise indicating iron ore prices may rise to >$80/t
• Higher coking coal prices are causing steel mills to buy imported higher grade iron ore to feed their blast furnaces.
• The very rapid and continuing rise in coking coal prices is forcing steel producers to become more energy efficient and to dump lower quality iron ore in preference for higher grade ores for more rapid conversion.
• China’s drive to continue to develop infrastructure, housing and suburban rails systems is leading demand while Donald Trump’s election to the White House is also leading expectations for greater steel demand going forward.
Chinese steel rebar 25mm US$469.4/t vs US$468.5/t
Thermal coal (1st year forward cif ARA) US$73.1/t vs US$76.2/t yesterday
Premium hard coking coal Aus fob US$307.3/t vs US$307.2/t –

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
Amur Minerals* (LON:AMC) 4.5p, Mkt Cap £23.2m – Access road update
• The 8m wide gravel road fit to handle concentrate and supplies trucking from the Kun Manie site is estimated to be 316km long.
• Preliminary results suggest the project will require five bridges and 200 stream and drainage crossings.
• The team is planning to proceed with field verification programme including the preparation of topographic maps, studies on permafrost conditions and geotechnical and soil stability drilling programme to identify the final route.
• Special attention will be devoted to the design of proposed bridges given highly volatile water levels of local rivers during rains and spring snow melts.
• The cost per km of the road is expected to be brought down considerably reflecting the rouble depreciation.
• The currency currently trades at 65 RUBUSD v 30 RUBUSD assumed in previous studies.
• The average cost per km on a similar road construction project is estimated at $400k/km, down from $1,000k/km budgeted by the Company previously, as suggested by the data provided by the Far East and Baikal Region Fund.
Conclusion: Road access is one of the major project capex components along with processing plant infrastructure, mining equipment and power supply solution. A major cost saving on road construction budget in US$ terms is a welcome news with the Company planning further works to finalise the route and narrow cost estimates range.
* SP Angel act as Nomad and broker to Amur Minerals

Aureus Mining (LON:AUE) 1.7 pence, Mkt Cap £20.2m – Q3 Operational update
• Aureus Mining reports that it produced 14,392 oz of gold during the quarter to 30th September, however, the impact of plant restarts and intermittent stoppages during the quarter, in conjuction with the write-off of low grade stockpiles, resulted in operating cash costs of US$1971/oz and all –in sustaining costs of US$2,153/oz.
• The New Liberty mine treated 221,360 tonnes of ore at a grade of 2.92 g/t, implying that recovery rates are running at around 69%.
• The company, with the strengthened team following the arrival of MNG Gold is continuing with its plant optimisation and remedial work and is reporting that “Throughout Q3 2016 and to date, the process plant detoxification system [which was one of the key problems during the ramp up phase] has continued to operate to specification and all discharges into and out of the TSF [Tailings Storage Facility] have remained fully compliant with the Company’s environment and operating permits.”
• Under the new management team, New Liberty is moving to owner operations of the mining activity and “Management believe that the low gold recovery is primarily attributable to inadequate oxygen generating capacity of the existing plant.” Additional capacity is expected to be installed by mid - 2017. “Management now expects production for the fourth quarter of 2016 will be in the range 17,000-20,000 ounces.”
Conclusion: The turn - around of the New Liberty operation looks like it will be relatively drawn out with some key additional equipment not expected to be installed before mid-2017

DiamondCorp (LON:DCP) Suspended – Lace Diamond mine closed as storm causes production level to flood
• DiamondCorp are possibly the unluckiest mining company around.
• Just as the team were ramping up towards full production the mine has been hit by yet another flood, this time caused by an unusually heavy storm dropping a third of a year’s expected rainfall in a single event.
• The Lace diamond mine is seen as a wet mine so dealing with water seems to be a bit of a regular event.
• The company estimates around 10,000 cubic meters may have entered the mine running down the new decline and through the historic open pit and into the lower levels of the mine.
• All personnel were evacuated in time but the pumping system was inundated unable to prevent the 310m production level from flooding to the hanging wall (normally the roof).
• Sadly this means the longhole drill rig was flooded and cannot return to operation till its electrics are replaced / refurbished which may take around 12 weeks.
• We hope there is not much additional damage to the mine and that the rest of the systems on the 310 level should operate once the water is pumped out.
Solution:  If someone has a spare longhole drill rig, and there will be lots around, please could they drive it round to the Lace Mine PDQ and get this mine back in action.
The company is acutely short of cash but we reckon the loan of a rig is worth more than a few shares not to mention the satisfaction and goodwill associated with saving the jobs of quite a number of mine workers.   Furhermore, if you do have a rig in the region this might be the best deal you will ever do.
Dare we suggest that even the local labour union might find a rig somewhere to bail the mine out to rescue the inherent BEE value contained in the mine.
It is times such as these that our brother miners should dust off their boots and get stuck in.  There are good people at the Lace mine and they really deserve the help.

Caledonia Mining (LON:CMCL) 113.5 pence, Mkt Cap £59.3m – Looking for a 20% increase in gold production in 2017.
• Caledonia Mining has reported quarterly earnings of 24.4US cents/share for the quarter to 30th September bringing the earnings for the year to date to 13 US cents (2015 7.2 cents).
• The result reflects a 23% increase in quarterly gold production to 13,428 oz bringing the total production to date to 36,760 oz of gold at a cash cost of US$643/oz (2015 US$701/oz) and an all-in cost of US$952/oz (2015 US$1006/oz).
• The improved production and reduced costs reflects the ramp of tonnage and increased flexibility of the underground mine infrastructure which is being established as a result of the long-term plan currently underway with the development of the new Central Shaft remaining on track for completion in mid 2018.
• The company now has net cash of US$12.4m and has previously indicated that it has now passed the peak funding requirement for the development plan which aims to deliver production of 80,000 oz pa by 2021.
• CEO, Steve Curtis, commented “The completed shaft down to a level of 1,080m will establish Blanket as a large, low cost operation with excellent prospects to extend the existing mine life.”
• The company has provided production and cost guidance for 2017. The Blanket mine is expected to increase gold production by 20% to 60,000 oz at a cash cost of US$600-630/oz and all in sustaining cost of US$810-850/oz. These figures are consistent with the long term plan which the company described back in 2014
Conclusion: Caledonia Mining’s Blanket mine is steadily increasing production as the benefits of the development plan deliver increased throughput and operational efficiency. The company’s confidence is underlined by the publication of production guidance indicating a 20% increase  in gold production for 2017.

Metals Exploration* (LON:MTL) 5.3p, Mkt Cap £100m – Equity placement
• The Company received commitments to raise $10.3m (£8.4m) through placing of 166.9m shares at 5.0p.
• Additional funding will cover working capital needs given “ongoing delays experienced in realising revenue from gold sales” and as the Runruno ramps up operations.
• Loan rescheduling negotiation continue with a waiver for the $15m debt amortisation payment extended until 30 Nov/16 from 31 Oct/16 set previously.
• The Company continues to make monthly interest payments on the waived $15m capital payment. 
Conclusion: The Company struggles to realise maiden revenues from the Runruno project with the management previously highlighting difficulties in proceeding with gold exports before the MGB confirms the change of the project status from Development and Construction to Operating Stage. While the latest announcement does not refer to causes of revenue delays, we wonder if those are local authorities related issues. Operationally, the ramp up process is reported to be progressing “satisfactorily”, with the BIOX plant previously planned to ramp up to nameplate capacity before year end.
We believe the project continues to offer value at current gold prices driven by budgeted low unit cost production; however, debt refinancing will need to be completed to allow the project to ramp up its operations and realise forecast strong FCFs.
*SP Angel act as Broker to Metals Exploration

Serabi Gold (LON:SRB) 5.1 pence, Mkt Cap £35.8m – Record Q3 gold production and increased 2016 guidance
• Serabi gold reports record Q3 gold production of 10,233 oz of gold bringing year to date output to 29,900 oz and cash costs to US$ 772/oz (all in sustaining costs US$951/oz).
• The company is now guiding for 39,000 oz of gold production in 2016, which increases the previous guidance of 37,000 oz. The cost guidance of US$950-985/oz on an all in sustaining basis is maintained “reflecting the continued strength of the Brazilian Real which has appreciated by 19 percent since March 2016.”
• The improving production profile is reflected in earnings of 0.35 US cents per share for the year to date (2015 - 0.03 cents)
• The company is now showing net cash of US$1.48m, reversing the net debt of US$1.93m at the beginning of 2016.
Conclusion: The management team at Serabi are delivering increased gold production and a stronger balance sheet and have lifted their production expectations for 2016 to 39,000 oz.

Strategic Minerals* (LON:SML) 0.48 pence, Mkt Cap £5.8m – Exploration of Australian gold and nickel projects
• Strategic Minerals has announced that, in conjunction with its joint-venture partner, Rarus Limited, it has agreed to fund A$250,000 of exploration at Central Australia Rare Earths’ (CARE) Mount Weld gold and rare earths project and Hanns Camp nickel project.
• The proposed programme  will involve a 1200m programme of reverse-circulation (RC) drilling and associated data compilation at Mt Weld and additional geophysical exploration and assaying for platinum-group metals at the Hanns Camp project.
• Initially, Strategic Minerals is providing a an interest free loan of A$75,000 to CARE) which is due to mature on 31st March 2017. In the event that, at that date, CARE has less than A$150,000 available, Rarus and Strategic Minerals will  subscribe an additional A$75,000 each in shares and commit to a  further subscription of A$50,000 each at the end of September 2017.
• The Mt Weld project is located in an area of historical gold mining and adjacent to Lynas Gold’s Mt Weld rare earths mine while the Hanns Camp project is reported to exhibit similar characteristics to the Rosie Nickel Sulphide Mine which is located to the north west.
• Elaborating on the plans to help fund the Australian projects, Managing Director, John Peters commented that “ The funding of these arrangements is to be undertaken internally and has been factored into our overall cash flow budgeting, taking into account our recent equity raising, cash flows from Cobre, the completion of the option on the Redmoor Tin/Tungsten project and the expenditure required here.”
Conclusion: Strategic Minerals is following up on its Australian nickel and gold exploration projects and is gearing up to start drilling its Redmoor tin/tungsten project in Cornwall next year.
*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

]]> Range Resources' share price tipped to double Mon, 14 Nov 2016 09:45:00 +0000 Increasingly positive news flow and fundamentals could drive the share price of Range Resources Limited (LON:RRL) much higher according to the ‘King of Charts’ Zak Mir.

In the latest segment of TIP TV’s Proactive Investors Bulletin Board, Mir tips shares in Range to almost double in the coming months.

“It looks like things are finally getting underway in a decent fashion [and] that’s reflected on the charts,” Mir says.

“[There are] multiple support points at 0.3p. I’m looking for 0.4p to be broken – that’s the 200-day moving average – to take us back up towards the recent range of 0.6 to 0.65p.”

]]> Angus Energy a small company with big plans Mon, 14 Nov 2016 09:30:00 +0000 Angus Energy (LON:ANGS) made its AIM debut Monday having raised £3.5mln and is a junior with some big plans.

Proactive's Andrew Scott recently caught up with managing director Paul Vonk from the firm, which has interests in two recently producing oilfields in southern England.

Providing the upside to the base case is an asset called the Brockham Oilfield in Surrey.

It shares many geological similarities with the nearby Horse Hill discovery, over the border in Sussex and better known as the Gatwick Gusher.

In fact Angus was one of the driving forces behind Horse Hill before it divested its stake to concentrate on Brockham, one of two assets it is bringing to market.

The initial plans are fairly modest. It will perform a side-track at Brockham and drill a new horizontal well on the other licence, Lidsey, in West Sussex.

]]> Today's Oil and Gas Update - Ithaca Energy and Mosman Oil and Gas Mon, 14 Nov 2016 09:25:00 +0000 In Brief

Ithaca Energy (LON:IAE, TSE:IAE – 81p/C$1.34) – Solid Performance: Today's 3Q results announcement underlines the steps that the Company has taken to maximise growth while minimising the risks associated with the balance sheet. While we have known that the operational side of the business is solid, and the production outlook is a testament to that, to our mind the principal take away from today's announcement is the Company's approach to its risk management. While some might focus on the limitation on participation in the upside in the oil price above $60/bbl for a proportion of the crude, this would indeed a be a luxury problem to have, and one in the current environment that is not worth considering given the fact that the far more disastrous downside has been mitigated. All in all, we think that today's announcement will do more for the share price than just th e potential increase in value from the additional cash flow as the confidence in the management team to address every risk (operational and financial) grows.

 Mosman Oil and Gas (LON:MSMN – 1.50p) – ($9.80mm – 3.20p) – Step in the Right Direction: News last week that the Company has secured an interest in an operating field is, to our mind, a step in the right direction in that this acquisition provides prized cash flow. What is required next, however, is a plan to workover the field such that the cash flow generated is at such a level so as to allow for costs to be recovered and investment elsewhere in the portfolio. Until such times as a plan is disclosed, we can't assess the contribution that this acquisition makes to the portfolio. As such our valuation remains unchanged, which ranges up to $9.80mm (3.20p). Given the current ratings system utilised by SP Angel, this represents a BUY.

]]> Finncap's Dougie Youngson likes what he sees with Hurricane Energy Fri, 11 Nov 2016 12:32:00 +0000 Hurricane Energy PLC (LON:HUR) is one of the most exciting development stories in the North Sea today, according to City broker finnCap. Analyst Dougie Youngson tells Proactive: ''The key excitement is that it's a junior oil stock listed on AIM which has successfully raised a lot of money over the last 12 months and is drilling very exciting prospects in the North Sea - a region which people seem to have written-off incorrectly.''
Asked how he sees the stock performing in the months ahead, he said: ''It's largely dependent on the next two-well programme - if they can prove there's more resources then the Greater Lancaster area becomes a very critical infrastructure hub in the future. But even if the two wells don't come up with the goods, Lancaster is still a key project in its own right.''

]]> Today's Market View - Bacanora Minerals and Stratex International Fri, 11 Nov 2016 10:51:00 +0000 Bacanora Minerals (LON:BCN) – Lithium project update
Stratex International (LON:STI) – Exploration update on Goldstone’s Homase/Akrokerri project in Ghana

Copper driving higher on expectations for new US infrastructure growth and higher inflation
• Fed may move to raise rates to draw in funds for new infrastructure spending.
• Gold prices pull back on Fed rate concerns despite new buying in India as government withdraws high denomination bank notes.
• Emerging markets rose on the news of a Trump victory but may pull back as the prospect of higher Fed rates causes funds to flow back into the US dollar

Shanghai composite index over last five weeks has had best run of gains since May 2015
• Gains were led by miners, smelters and construction companies.

Dow Jones Industrials  +1.17% at 18,808
Nikkei 225   +0.18% at 17,375
HK Hang Seng   -1.35% at 22,531 
Shanghai Composite    +0.78% at 3,196
FTSE 350 Mining   -1.56% at 14,879 FTSE 350 +103% since 1st January
AIM Basic Resources   +0.72% at 2,506 AIM Basic Resources +54% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
China – October new Rmb loans at 651.3bn  (US$95.6bn) vs Rmb1.22t in September

UK – construction output at 4-year low
• UK construction volumes fell by 1.1% from July to September
• Repair work suffered largely offset by better infrastructure and public building

US$1.0881/eur vs 1.0900/eur yesterday.   Yen 106.35/$ vs 106.17/$.   SAr 14.248/$ vs 13.409/$.   $1.264/gbp vs $1.241/gbp.     
0.760/aud vs 0.770/aud.   CNY 6.807/$ vs 6.797/$.

Commodity News
Precious metals:
Gold US$1,257/oz vs US$1,285/oz yesterday – Indian market buying gold as government cancels large Rupee banknotes
• Gold prices pull back on profit taking and on expectations for new growth.
• Ironically, the Fed may feel the need to raise interest rates to enable the issue of new bonds to fund President Trump’s new infrastructure spending
     Gold ETFs 65.6moz vs 66.1moz yesterday –
Platinum US$976/oz vs US$997/oz yesterday
Palladium US$689/oz vs US$689/oz yesterday –
Silver US$18.75/oz vs US$18.85/oz yesterday

Base metals:   
Copper US$ 5,975/t vs US$5,669/t yesterday – Chinese TC/RCs fell for the first time since the start of the year posting a 5% decline in Oct, according to Bloomberg.
• Local TC/RCs are reported to currently stand at $100/t and $c10/lb v 105/10.5 in Sep.
• Despite a decline, processing charges continue to stand close to the highest level since the start of 2015.

Aluminium US$ 1,780/t vs US$1,771/t yesterday
Nickel US$ 11,885/t vs US$11,845/t yesterday
Zinc US$ 2,555/t vs US$2,558/t yesterday
Lead US$ 2,190/t vs US$2,151/t yesterday
Tin US$ 21,730/t vs US$21,620/t yesterday –

Oil US$45.8/bbl vs US$46.0/bbl yesterday – The IEA estimates 2017 may become another year of “relentless” global supply growth should OPEC members fail to implement production cuts while output outside the cartel continues to climb.
• OPEC production is at record high of 33.8mmbbl as of Oct which significantly above the output range agreed in Algiers, with production in Nigeria and Libya recovering and Iraq output reaching record levels.
• Saudi Arabia and Kuwait are pumping oil at near all-time high levels with Iran reported to have reached its pre-sanctions rate output.
• Global production is estimated to have climbed 800kbbl in Oct compared to the previous month with non-OPEC producers accounting for 485kbbl of the increase and hit 97.8mmbbl per day. Non-OPEC production hit 57mmbbl as production recovered in the North Sea, Russia and Kazakhstan.
• “If the supply surplus persists in 2017 there must be some risk of prices falling back,” the IEA said.

Natural Gas US$2.620/mmbtu vs US$2.623/mmbtu yesterday
Uranium US$18.25/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$73.6/t vs US$71.4/t – regulators
• Prices surged to the highest level since Jan/15 with Chinese futures up 7.5% from yesterday and currently trading at CNY 580/t ($85.4/t) driven by a potential pro-stimulus Trump administration and continuing Chinese government economic growth support measures.

Chinese steel rebar 25mm US$468.5/t vs US$462.5/t
Thermal coal (1st year forward cif ARA) US$76.2/t vs US$76.9/t yesterday
Premium hard coking coal Aus fob US$307.2/t vs US$307.2/t – coking coal price unchanged again today but still more than 4x that seen last year

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News
Bacanora Minerals (LON:BCN) 75p, Mkt Cap £83.1m – Lithium project update
• Bacanora report progress on their Sonora lithium clay project in Mexico.
• Samples of Sonora battery-grade lithium carbonate sent to off-takers in Asia and Europe.
• IMC preparing the preliminary reserve model and mine plan.
• Ausenco is a third of the way through the Feasibility Study process engineering.
• Initial process flow sheet now finalised.  Optimisation of lithium recoveries and reagent consumption continues.
• Quotes being sought larger equipment and machinery
• Development and optimisation of preliminary operating cost models now running
• Ventana area drilling confirms intercepts of the Upper Clay range from 11 to 49m and in the Lower Clay range from 7 to 26m with average thicknesses in the upper clay unit of 30.7m and 20.7m in the lower clay.
• “Analyses received for the recent infill drillholes indicate that lithium content in the Upper Clay Unit varies from 25 ppm to 6,900 ppm Li with a weighted average of 1,791 ppm Li; for the Lower Clay Unit lithium content varies from 172 ppm to 10,000 ppm with a weighted average of 4,345 ppm Li.“
Conclusion:  Bacanora continue to progress the Sonora lithium project.  The publication of the their lithium production operating cost curve indicates there should be room for a new producer with costs below the Australian hard-rock and Chinese mineral producers

Stratex International (LON:STI) 1.95p, Mkt cap £9.1m – Exploration update on Goldstone’s Homase/Akrokerri project in Ghana
• Stratex International has announced the results of a recent drilling programme undertaken by Stratex’s 33.45% owned associate, Goldstone Resources, at the AK02 target within the Homase / Akrokerri project in Ghana.
• The programme comprised 3000 metres of auger drilling and 1424 metres of reverse circulation (RC) drilling (in 13 holes) to follow up a 750m long zone of gold enriched saprolite identified by an auger drilling programme in 2015.
• The results  of the RC programme included a 14m wide intersection at an average grade of 1.18 g/t gold from a depth of 16 metres in hole 16AKRC011 and an 8 metres intersection grading 1.88 g/t gold from 102m in hole 16AKRC005.
• The Goldstone Resources announcement also shows that a number of the RC holes showed multiple gold intersections within individual boreholes underlying the Stratex comment that “RC drilling indicates a complex structural zone between Homase and AngloGold Ashanti’s Obuasi mine”. Stratex goes on note that “the south-western extension of the main Homase mineralised zone has been offset 200 metres by faulting.”
• Although the drilling has confirmed the continuity of the zone in the southern part of the structure, it shows “limited potential for identifying additional oxide resource” in that direction.
• The drilling has, however, provided sufficient positive encouragement that “Diamond drilling, targeting vertical depths of 200-300 metres, commenced to evaluate high-grade ore shoots beneath the known Homase oxide resource.”
• The auger drilling infill programme has defined “a new 1250 metre x 350 metre zone of gold enrichment in saprolite located approximately 100-200 metres east of the 2015 auger anomaly.”
Conclusion: The recent drilling at Homase / Akrokerri has identified oxide mineralisation which is now being followed up by deeper diamond drilling and also identified additional near-surface targets to the east of the previously identified mineralisation. The area has complex geology but in view of the results reported by Goldstone and the proximity to the historic Obuasi mine, we look forward to the results of the diamond drilling.

]]> Oil price, Range Resources, And finally... Fri, 11 Nov 2016 09:54:00 +0000 Oil price
The IEA put the boot into the oil price yesterday, their report was decidedly not what the Opec grandees wanted to hear just three weeks away from the crucial meeting. Relentless appears to be the word du jour which is how they described current supply and backed that up with figures that showed global supply up by 800/- b/d in October. With demand growth staying at 1.2m b/d for 2016 Mr Micawber would have pronounced misery, at least unless the cartel can work some magic…

Range Resources
The QUN 160 development well spudded on 9/11 and is the fourth development well and a re-drill of the QUN 158 well targeting the Upper Cruse and Lower Forest sands in the Morne Diablo field. The fifth development well is the GY 218 in the Beach Marcelle field and is currently being mobilised ahead of spudding in early December.
I would expect reasonable production increases from the waterflood projects as the company moves to hit production targets next year. With recent funding giving clarity to its finances and what seems like a good relationship with its partner, RRL looks very strongly placed to deliver and the next few months should be exciting.

And finally…
What a weekend of sport awaits us and everyone should be catered for.

Tonight its the old rivalry between England and Scotland at Wembley, this time it’s a crucial World Cup Qualifier so even more spice into the process. Of course both sides will be wearing poppies to honour Armistice Day and will take any punishment meted out by those toe rags at FIFA, unfortunately neither Wales nor Northern Ireland are wearing them to avoid any action that might cost them points…
Another big weekend of rugby with England entering the autumn internationals hosting the Springboks at Twickenham. The Wallabies are at Murrayfield whilst Wales entertain the Pumas. Elsewhere Italy face a chastened All Black side after their defeat to Ireland last week who themselves meet Canada in Dublin.
The Brazilian GP is almost the last chance saloon for Lewis, with two races to go he needs to win and have a DNF for Nico into the bargain.
The cricket looks quite boring at the moment, India are batting on what looks like a road and are 250-1 as I write.
Finally, and where I will be tomorrow, it’s the Open meeting at  Cheltenham, for some people the first real jumps meeting of the season. With a bit of rain I am hoping that we get decent fields and a few old favourites come out for seasonal reappearances.

]]> Oil price, Siccar Point, Ophir Energy, Hurricane Energy, And finally... Thu, 10 Nov 2016 11:28:00 +0000 Oil price
So, a victory for The Donald had equity markets as well as currencies and commodities in a right twist, early falls were mainly trimmed although the greenback weakened which helps oil. Knock on effects for crude are probably marginally favourable, he hasn’t Obama’s zeal for climate change and the environment so certainly in the US industry may be better placed and that goes for pipelines as well I guess. Internationally there will be interesting developments in  foreign policy and finding out who are friends of the US and who aren’t, that may  determine who the USA buys crude oil from…And who it fights with…..#new friends….
WTI had fallen to $43 at one stage before the rally kicked in, partly aided by the EIA inventory stats. After the API build of 4.4m barrels the EIA number of +2.4m was higher than the whisper of +1.6 but bearable, with bigger than expected draws in gasoline and distillates and imports falling overall stocks actually fell on the week.

Siccar Point
Does the announcement of SP acquiring OMV UK and its assets West of Shetland finally mean the Private Equity has finally decided to dip its toe in the energy  water? For $750, potentially $1bn, the company funded by Blue Water Energy and Blackstone has acquired stakes in Schiehallion, Rosebank and Jade which is a reasonable move into the trendy West of Shetland postcode but hardly the size of investment in the company mission statement. At least the former BP crew will know what they are dealing with even though not all is profitable at the moment.

Finally Ophir has managed to find a way of getting Schlumberger back to the table although at quite a cost in terms of field equity. OPHR are forming a JOC with OneLNG (Golar and Schlumberger) to develop the Fortuna FLNG project offshore Equatorial Guinea. They have 33.8% with the others taking the 66.2% against their field interest of 80%. With a FID likely 1H 2017 and first gas 1H 2020 the company expect to be producing 2.2-2.5 mtpa for 15-20 years ie monetising 2.6 TCF of gas. Costs to first gas are $2bn of which quite a lot will be debt financed and it appears that OPHR’s costs will be capped at $150m. I presume that this means that other partners are prepared to take some of the risk off OPHR and that they can farm-down as well if necessary. Overall it is a tick in the box to get Fortuna finally close to some action but at what cost, others are reluctant to take on debt even if it is against a potentially profitable development although until 2020 investors nerves may jangle.

Hurricane Energy
HUR announced yesterday that they had spudded the Lincoln well targeting a similar prospect to the recent find at Lancaster. If in line with expectations the discovery may be of the order of around 250m unrisked resource barrels which given its closeness to Lancaster would make those barrels all the more valuable. Given the weather out there timings are more than usually difficult to predict, I would expect around 45 days plus or minus for bad conditions. There is no EWT planned and I assume that with the weather in mind the well will be logged but not tested, perfectly satisfactory if the result is what they are hoping for after the analysis of the Arco oil interval below the sandstones.

And finally…
Today it’s the cricket that dominates as England scored a very reputable 537 all out on what to be fair was a pretty easy track. With India 63-0 at the close it shows how difficult it will be to take the required amount of wickets but this is an excellent start with centuries from Joe Root, Moeen Ali and Ben Stokes. Tomorrow’s and finally already looks like a weighty tome!

]]> Today's Market View - Condor Gold, Dalradian Resources and Gem Diamonds Thu, 10 Nov 2016 10:32:00 +0000 Condor Gold (LON:CNR) – Scout drilling of new exploration targets in La India area underway
Dalradian Resources (LON:DALR) – Quarterly update – Feasibility Study nearing completion
Gem Diamonds (LON:GEMD) – Q3 Results – Guidance intact despite adverse weather at Letseng

Industrial metals prices have taken off with iron ore and copper prices accelerating yesterday
• The Trump victory is seen as good for US infrastructure development following pledges for new roads and bridges
• Iron ore prices were already having a good run due to strong demand for steel in China and in Asian markets
• Copper which had been strangely subdued through much of the year due to new production coming through from Peru and Indonesia finally gained its legs
• While iron ore prices may now be seen at unsustainably high prices, copper should still have far to go

European equities are up taking cues from US markets that closed higher on Trump pro-fiscal stimulus promises.
• Miners climbed on stronger commodity prices while financial and healthcare sector posted gains on expectations for Trump to suggest less stringent regulatory measures.
• Gold prices are trading higher this morning (+1.1% or $14/oz) after the c.$60/oz intraday jump the previous session has been completely undone by the end of Wednesday.
• US presidential elections results ultimately have done little to change investors’ expectations of the Fed raising rates in Dec with currently implied probability standing at 82%.
• Base metals gains are suggested to be led by Trump plans to spend more than $500bn on infrastructure projects including roads, airports and bridges.
• Copper is the biggest winner among other base and precious metals from the US presidential elections results with prices seen climbing 8% in the last two days.
Price change since 08/11/16 close (%)
Copper 8.0
Aluminium 2.0
Nickel 5.3
Zinc 3.0
Lead 2.3
Tin 0.5
Gold 1.0
Silver 2.5
Platinum -0.2
Palladium 3.6
Source: Bloomberg 

Anglo may choose to cut loose South African assets after rejecting offer for Australian coking coal mines from Apollo and Xcoal
Anglo American are reported as having rejected a potential $2bn bid for its Australian metallurgical coal assets from Apollo and Xcoal.
• The news is hardly surprising with coking coal prices rising more than 4x from $75/t a year ago to over $300/t today generating very substantial returns for the mines.  
• The rise in prices is caused by strong demand for seaborne met in China caused by the closure of inefficient Chinese mines and stronger than anticipated demand for Chinese steel within China and in Asia as a whole.
• While the rise in the coking coal price may cause some Chinese mines to restart many have been closed for environmental and health and safety reasons.
• It is our view that Anglo American may now choose to distance its self from the chaos of South African politics and union disruption now that its overseas assets are performing better.  Note higher copper prices will add significantly to overseas profits.
• Strong opposition in South Africa from the Public Investment Corporation, the official South African government pension fund has tried to dissuade the Anglo board with the PIC thought to be increasing its stake in order to have greater influence.
• The Anglo board would be forgiven for wanting to leave South Africa given the poor economics of running many South African mines, union disruption and BEE conditions imposed in recent years.
• At least the PIC recognise the value of Anglo American to its national economy and Anglo’s contribution to the wellbeing of its people

Norilsk Nickel – contract with SNC Lavalin to build $1.7bn sulphur dioxide capture project
• Norilsk Nickel have signed a $1.7bn contract with SNC Lavalin to build a sulphur dioxide capture project at the Nadezhda Metallurgical Plant on the Kola Peninsula in Russia.
• This is great news from Norilsk and for the people who live and work around the Nadezhda Metallurgical Plant as well as for the environment as a whole.
• It is interesting to note the cooperation between Norilsk, an important Russian company and SNC Lavalin which is a major North American contractor.
• We look forward to news of further refineries, smelters, furnaces and power plants adopting this sort of technology.

Polyus – bidders from Qatar considering offers for potential 25% in Polyus (Bloomberg)
• Polyus is listed in Moscow with a market value of around $13.3bn
• While the freefloat in Moscow is around 5% of total Polyus stock making the market valuation a little variable we would still expect investors to offer >3bn for a 25% stake
• A sale may be good for other listed Russian gold miners.  Petropavlovsk, Highland Gold, Polymetal, Nordgold and Trans-Siberian Gold may all be lifted by a positive sale

Dow Jones Industrials  +1.40% at 18,590
Nikkei 225   +6.72% at 17,344
HK Hang Seng   +1.89% at 22,839 
Shanghai Composite    +1.37% at 3,171
FTSE 350 Mining   +3.01% at 15,404 FTSE 350 +110% since 1st January
AIM Basic Resources   +1.93% at 2,488 AIM Basic Resources +53% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
Date Index Period   Actual Est Previous
Tuesday JOLTS Job Openings Sep '000 5,486 5,488 5,453 (revised from 5,443)
Thursday Weekly Jobless Claims   '000   260 265
Friday UoM Consumer Sentiment Nov     87.9 87.2
UoM Current Conditions Nov   103.0 103.2
  UoM Expectations Nov     77.5 76.8
Source: Bloomberg     

Ethiopia – state of emergency continues
• News reports indicate the government six-month state of Emergency in declared October in Ethiopia remains
• The state of emergency was imposed after violence following a stampede at an Oromo religious festival that killed more than 50 people on 2 October.  The stampede was blamed on police firing tear gas at anti-government protesters.
• Agencies claim at least 1,500 have been arrested since the crackdown.
• Most of the arrests were in the Oromo ethnic group towns of Shashemene and West Arsi south of the capital for violence and property damage.
• The state of emergency means that foreign diplomats are banned from travelling more than 25 miles outside Addis Ababa.  It is also illegal to watch television stations set up by the diaspora.
• Our contacts in the region suggest that all is quiet and business as usual and the government are determined to keep development moving in a straight line of 7=10%pa gdp growth.  At the end of the day, this should be good for the nation and hopefully all its ethnic groups.

Mexican fence
• Donald Trump’s proposed wall on the US border with Mexico would cost billions so we reckon we have a better idea
• We reckon a fence used to hang solar panels with suitable transmission lines could generate electricity, facilitate the grid and provide security.
• While monumental walls look interesting from a historical perspective, aka Hadrian’s Wall and the Great Wall of China the economics are less well determined.

US$1.0900/eur vs 1.1069/eur yesterday.   Yen 106.17/$ vs 103.32/$.   SAr 13.409/$ vs 13.556/$.   $1.241/gbp vs $1.240/gbp.     
0.770/aud vs 0.767/aud.   CNY 6.797/$ vs 6.779/$.

Commodity News
Precious metals:
Gold US$1,285/oz vs US$1,300/oz yesterday
     Gold ETFs 66.1moz vs 66.0moz yesterday – big move in buying gold ETFs this week
Platinum US$997/oz vs US$1005/oz yesterday
Palladium US$689/oz vs US$665/oz yesterday – interesting turn around in prices
Silver US$18.85/oz vs US$18.65/oz yesterday

Base metals:   
Copper US$ 5,669/t vs US$5,404/t yesterday – Chinese TC/RCs fell for the first time since the start of the year posting a 5% decline in Oct, according to Bloomberg.
• Local TC/RCs are reported to currently stand at $100/t and $c10/lb v 105/10.5 in Sep.
• Despite a decline, processing charges continue to stand close to the highest level since the start of 2015.

Aluminium US$ 1,771/t vs US$1,745/t yesterday
Nickel US$ 11,845/t vs US$11,560/t yesterday
Zinc US$ 2,558/t vs US$2,500/t yesterday
Lead US$ 2,176/t vs US$2,151/t yesterday
Tin US$ 21,720/t vs US$21,620/t yesterday –

Oil US$46.5/bbl vs US$46.0/bbl yesterday – The IEA estimates 2017 may become another year of “relentless” global supply growth should OPEC members fail to implement production cuts while output outside the cartel continues to climb.
• OPEC production is at record high of 33.8mmbbl as of Oct which significantly above the output range agreed in Algiers, with production in Nigeria and Libya recovering and Iraq output reaching record levels.
• Saudi Arabia and Kuwait are pumping oil at near all-time high levels with Iran reported to have reached its pre-sanctions rate output.
• Global production is estimated to have climbed 800kbbl in Oct compared to the previous month with non-OPEC producers accounting for 485kbbl of the increase and hit 97.8mmbbl per day. Non-OPEC production hit 57mmbbl as production recovered in the North Sea, Russia and Kazakhstan.
• “If the supply surplus persists in 2017 there must be some risk of prices falling back,” the IEA said.

Natural Gas US$2.664/mmbtu vs US$2.623/mmbtu yesterday
Uranium US$18.50/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$71.4/t vs US$65.3/t –
• Prices surged to the highest level since Jan/15 with Chinese futures up 7.5% from yesterday and currently trading at CNY 580/t ($85.4/t) driven by a potential pro-stimulus Trump administration and continuing Chinese government economic growth support measures.

Chinese steel rebar 25mm US$462.9/t vs US$462.5/t
Thermal coal (1st year forward cif ARA) US$77.4/t vs US$76.9/t yesterday
Premium hard coking coal Aus fob US$307.2/t vs US$307.2/t – coking coal price unchanged today but still more than 4x that seen last year

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News
Condor Gold (LON:CNR) 70p, Mkt Cap £37.0m – Scout drilling of new exploration targets in La India area underway
• Condor Gold has announced that it has commenced a 4000m scout drilling programme at its La India property in Nicaragua. Additional soil sampling commenced in June and has now covered more than half the district.
• The first 2000m of the programme has 3 main objectives:
• Firstly, the expansion  of the mineralized envelope and identification of additional ore-shoots at El Calao where, as of 9th November, 87m of drilling has been completed
• Secondly, expansion of known mineralisation at the Csistalito Tatescame target and
• Thirdly, to test the previously undrilled Andrea Vein
• The deployment of the remaining 2000m of drilling will depend upon the early results and may also be used to test other targets.
• The drilling programme and wider exploration of the area seems to have been given additional impetus following the injection of funds earlier this year by the Canadian mining entrepreneur Ross Beatty and by associates of the Sprott fund.
• The recent re-election of Nicaraguan President Daniel Ortega for a third term in office, in an election which has been criticized in some quarters as unfair and potentially unconstitutional as it allowed President Ortega’s wife to run for the vice-Presidency, should nevertheless provide a welcome degree of continuity to Government policy towards industrial and mining development in the country.
Conclusion: The start of drilling in new or relatively untested areas of the La India licence may eventually add to the existing resource of 18.1mt at a grade of 4g/t gold (2.3m oz). We look forward to results of the programme as it proceeds.

Dalradian Resources (LON:DALR) 86.8 pence, Mkt Cap £210.2m – Quarterly update – Feasibility Study nearing completion
• Dalradian Resources reports that its feasibility study on the development of the Curraghinalt gold deposit in N Ireland is nearing completion and that a number of the technical aspects have been de-risked through closer spaced drilling, test mining and flowsheet optimisation.
• The geotechnical studies, test stoping and paste backfill fill trials are all now complete and mine development and production sequencing are almost finished. The Feasibility study is on course for release during Q4 2016.
• Work on the environmental baseline study is complete and the impact studices are on track for completion during the current quarter.
• The Planning Application process is underway and Dalradian Resources expects to make the formal submission “early in Q1 2017”.
• The company is well financed for the completion of its work with  a cash balance of C$43.1m at 30th September.
Conclusion: We look forward to the results of the feasibility study in the coming weeks.

Gem Diamonds (LON:GEMD) 114.8 pence, Mkt Cap £158.8m – Q3 Results – Guidance intact despite adverse weather at Letseng
• Gem Diamonds reports that “Letseng remains on track to achieve all of its guided production targets for 2016 … despite production interruptions during July and August due to the worst weather conditions experienced since the Letseng mine opened.” We understand that 2016 production guidance is in the range 105-108,000 carats.
• As a result of the weather, the mining fleet was unable to mine waste for a period of ten days, though, by implication ore production was able to continue, though possibly at a reduced rate. Alluvial material and stockpiled ore was used to help maintain plant feed.
• During the three months to 30th September, the Letseng mine treated 6% less ore at a 10% lower grade to recover 15% fewer diamonds (24,388 carats vs 28,862 carats in Q2 2016) than in the previous quarter.
• The company also comments that although there is a “continued paucity of large high value diamonds” at Letseng it has sold twelve diamonds at prices in excess of US$1m during the quarter.
• At the Ghaghoo mine, Gem Diamonds reports positive progress on reducing costs and “Encouraging recoveries of larger diamonds as mining moves into the undiluted portions of kimberlite ore.”
• Gem Diamonds comments that while overall market sentiment in the rough diamond business “remains cautious, the demand for Letseng’s high quality large white diamonds has continued as prices … remained firm during the Sales Period.” There were no sales of diamonds from Ghaghoo during the quarter.
• At 30th September, Gem Diamonds held US$44.1m in cash and had drawn US$28.2m of its debt facilities with US$53.2m remaining available and undrawn.
Conclusion: Letseng appears to have managed to overcome the effects of severe weather and although production was reduced during Q3 the company is maintaining its production guidance for the full year.

]]> VSA Capital Market Movers - Vedanta Thu, 10 Nov 2016 08:27:00 +0000 Vedanta (LON:VED)

Vedanta Resources (VED LN) has released weak H1 2016 results. Revenue was down 15% YoY to US$4.9bn while EBITDA was down 4% YoY to US$1.2bn. The net loss, however, narrowed YoY from US$325m to US$64m. VED announced an interim dividend of US$0.2/sh compared to US$0.3/sh for the full year in FY 2016, paid entirely in H2.

Despite a recovery in zinc prices, planned maintenance and mine sequencing meant that earnings in the Zinc division were weakened. Given the stock’s relatively high exposure to zinc prices and the significant recovery YTD this is particularly disappointing. Revenue was down 25% YoY to US$1bn while EBITDA was down 15% YoY to US$546bn. Copper revenues were down 19% YoY to US$1.8bn while EBITDA was down 1.8% YoY to US$144m as an operational recovery in Zambia stabilised profits, offsetting weakness in India and Australia. The impact was largely due to weaker average copper prices in the period. Oil and gas was also weak owing to lower prices which resulted in a 22% decline in revenue YoY to US$586m and 27% decline in EBITDA to US$274m.

The aluminium and iron ore division demonstrated strong recovery, however, these both represent minor contributions to the group overall. Aluminium revenue was up 1.5% YoY to US$864m while EBITDA was up fivefold to US$102m as higher production offset weaker prices. Iron ore revenue benefitted from stronger prices and was up 58% YoY to US$218m while EBITDA rose tenfold to US$72m as prices were up sharply.

]]> Mosman 'excited about production potential' at Pine Mills Wed, 09 Nov 2016 13:21:00 +0000 Shares in Mosman Oil And Gas Ltd (LON:MSMN) more than doubled on Wednesday morning after it confirmed it had bought an 80% interest in a producing Texas oil field.
Technical director Andy Carroll tells Proactive: ''The technology that's being applied is simple drill and produce technology and hasn't changed since the 1950s when production started.''
Carroll added that they're excited about the potential to increase production at Pine Mills and also the further exploration potential they reckon can be accessed by acquiring seismic data.
''We had a strategic review as to the best place to be in the current oil environment and the U.S. is outstanding because you're close to market with very small transportation costs''.

]]> Victoria Oil & Gas shares can rise to 50-60p says Zak Mir Wed, 09 Nov 2016 11:10:00 +0000 Technical analyst Zak Mir reckons Victoria Oil & Gas plc (LON:VOG) shares can potentially rally from its current level of around 34p up to 50-60p in the coming months.
Mir, in a Tip TV segment for Proactive Investors, highlighted that the chart for the stock shows an extended base of support and he notes that the 200-day moving average presently sits slightly higher at 36p.
He said: “if we can close above that, it should then take the shares back towards the main resistance on the daily chart between 50 and 60 pence for early in 2017.”
]]> Today's Market View - Kefi Minerals, Diamond Corp, Premier African Minerals, Rio Tinto, Stellar Diamonds and Strategic Minerals Wed, 09 Nov 2016 10:34:00 +0000 DiamondCorp (LON:DCP) – Loan drawdown
Kefi Minerals* (LON:KEFI) – Tulu Kapi project and financing update
Premier African Minerals (LON:PREM) – Further Drilling on the Zulu Lithium Project
Rio Tinto (LON:RIO) – Suspension and departure of key staff following investigation of payments at Simandou
Stellar Diamonds (LON:STEL) Suspended – joint venture agreements signed over projects in Guinea and Liberia
Strategic Minerals* (LON:SML) – SP Angel appointed as Nomad and broker to Strategic Minerals


Risk off sentiment on the Republican candidate winning presidential elections in the US drive equities lower with safe haven assets including gold, JPY and US Treasuries.
• The US$ is off against the GBP and EUR with emerging markets’ currencies recording losses including Mexico’s peso that fell to a record low on the results.
• Chances of a rate hike in Dec recovered to 84% after falling to less than 50% overnight as Treasuries rallied.
• S&P 500 index futures were down 5.0% at one stage as first results over Trump lead started to come in triggering trading curbs on the CME. Contracts bounced back since then and currently trade 2.0% down.
• Gold is up 2% or $25/oz holding above the $1,300/oz level. Gold futures posted 4.8% gains earlier in the morning hitting $1,337/oz.
• FTSE 350 Mining Index is up 1.9% led by gains in precious metals miners with “big four” diversified miners’ trading higher at 0.5-1.4%.
• Brent dropped as much as 3.5% earlier today slipping below the $44.5/bbl level but has regained some of its losses currently hovering around $45.5/bbl levels.
• Iron ore futures on the Dalian exchange climbed 6.3% reaching its daily limit of CNY 551/t ($81/t), the highest level in two years. Benchmark steel contracts also posted strong gains.

Dow Jones Industrials  +0.40% at 18,333
Nikkei 225   -5.36% at 16,252
HK Hang Seng   -2.16% at 22,415 
Shanghai Composite    -0.62% at 3,128
FTSE 350 Mining   +4.08% at 14,697 FTSE 350 +100% since 1st January
AIM Basic Resources   -0.95% at 2,441 AIM Basic Resources +50% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
US – The latest results show Republicans winning majority seats in Senate securing both houses of Congress for the first time since the start of the President Barack Obama’s first term.
• Charles Evans, the Chicago Fed President, expressed concerns current inflation expectations warrant a hike in Dec.
• “I am worried that inflation expectations have been moving down in a way that’s not consistent with 2%,” he said.
• “We’ve finally gotten core PCE inflation of 1.7%. We’re close, we’re getting there, and if I had even more confidence about getting to 2% I’d feel better about monetary policy re-normalization. We’ll see how that goes.”
• Evans is one of the most dovish officials of the US Fed and will become the voting member of the FOMC next year.
Date Index Period   Actual Est Previous
Tuesday JOLTS Job Openings Sep '000 5,486 5,488 5,453 (revised from 5,443)
Thursday Weekly Jobless Claims   '000   260 265
Friday UoM Consumer Sentiment Nov     87.9 87.2
UoM Current Conditions Nov   103.0 103.2
  UoM Expectations Nov     77.5 76.8
Source: Bloomberg     

China – Inflation pressures are building up as suggested by the latest PPI and CPI data.
• An acceleration in producer prices is particularly encouraging given its multi-year stretch of negative growth rates up to Sep this year.
• Higher input costs may see some of inflation exported overseas that should in turn help disinflationary pressures elsewhere, Bloomberg reports.
• CPI (%yoy): 2.1 in Oct v 1.9 in Sep and 2.1 forecast.
• PPI (%yoy): 1.2 in Oct v 0.1 in Sep and 0.9 forecast.

US$1.1069/eur vs 1.1048/eur yesterday.   Yen 103.32/$ vs 104.52/$.   SAr 13.556/$ vs 13.407/$.   $1.240/gbp vs $1.241/gbp.     
0.767/aud vs 0.770/aud.   CNY 6.779/$ vs 6.781/$.

Commodity News
Precious metals:
Gold US$1,300/oz vs US$1,284/oz yesterday
     Gold ETFs 66.0moz vs 66.0moz yesterday – big move in buying gold ETFs this week
Platinum US$1005/oz vs US$1006/oz yesterday
Palladium US$665/oz vs US$650/oz yesterday – interesting turn around in prices
Silver US$18.65/oz vs US$18.31/oz yesterday

Base metals:   
Copper US$ 5,404/t vs US$5,055/t yesterday –
Aluminium US$ 1,745/t vs US$1,715/t yesterday
Nickel US$ 11,560/t vs US$11,195/t yesterday
Zinc US$ 2,500/t vs US$2,448/t yesterday
Lead US$ 2,151/t vs US$2,084/t yesterday
Tin US$ 21,620/t vs US$21,750/t yesterday – tin prices continue to climb despite other base metals pulling back

Oil US$46.0/bbl vs US$46.0/bbl yesterday
Natural Gas US$2.623/mmbtu vs US$2.776/mmbtu yesterday
Uranium US$18.75/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$65.3/t vs US$65.3/t – Port Hedland iron ore shipments hit high as China buys ahead of cyclone season
Chinese steel rebar 25mm US$462.5/t vs US$458.6/t
Thermal coal (1st year forward cif ARA) US$76.9/t vs US$75.3/t yesterday
Premium hard coking coal Aus fob US$307.2/t vs US$289.3/t

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News
DiamondCorp (LON:DCP) 2.1p, Mkt Cap £10.1m – Loan drawdown
• DiamondCorp has announced that is drawing down the £300,000 second tranche of the Rasmala financing facility announced last month.
• On the operational side, the company expects to complete the processing of the 5000 carats of diamonds which provide collateral for the loan by the end of the day shift today.
• Production at the Lace diamond mine is reported to be meeting management’s expectations and “is on schedule to exceed 15,000 tonnes” during the month of November with a grade so far of 29 carats per hundred tonnes.
• Conclusion: Today’s announcement should provide reassurance that, with the additional financial support from Rasmala, the Lace mine is getting on track and coupled with the announcement last week that mining conditions are improving, we see a modest recovery underway.

Kefi Minerals* (LON:KEFI) 0.38p, Mkt Cap £14.6m – Tulu Kapi project and financing update
• Kefi Minerals has provided an update on its Tulu Kapi gold development project in Ethiopia following a site visit this week by project financiers.
• The company reports that its mining contractor has confirmed details of the required mining fleet while the lenders’ independent technical advisors have confirmed that the “proposed mining method and equipment specification are considered straightforward and technically sound”.
• The processing plant contractor, Lycopodium, is currently finalising its contract review of the “fixed price lump-sum construction and commissioning contract”.
• Mining specialist lenders are in discussions to “potentially participate alongside the Development Bank of Ethiopia and the other non-specialist banks” and the company indicates that it expects to draw down on its debt facilities during H1 2017.
• Ethiopia’s new Government is said to have “welcomed KEFI’s invitation to increase equity above the $20m committed to date and the discussion will be concluded upon the new Government Ministry settling in.” The company also notes that “The Prime Ministerial Committee established to fast-track the Project has reinforced its commitment to and collaboration with Kefi.”
• The company also stresses its constructive engagement with the Government of Ethiopia both with regard to the core Tulu Kapi project itself but also comments that Government is encouraging it “to plan an ambitious exploration programme in the district around Tulu Kapi and elsewhere in Ethiopia.”, where “targets have been identified for both satellite gold deposits and stand-alone development projects”.
• Conclusion: Kefi Minerals is continuing to press ahead with the development of Tulu Kapi where it expects to develop a mine capable of producing an average 100,000 oz pa of gold over at least a ten-year life for an all-in-sustaining cost of US$766-787/oz
*SP Angel act as Nomad and broker to Kefi Minerals

Premier African Minerals (LON:PREM) 0.35 pence, Mkt Cap £6.9m – Further Drilling on the Zulu Lithium Project
• Premier African Minerals reports that it has now encountered lithium mineralisation in each of the 8 drillholes completed to date at its Zulu lithium exploration project near Fort Rixon, Zimbabwe.
• The holes reported today, ZDD-14 and ZDD-16 both show multiple intersections of lithium mineralisation with grades of individual sampled intervals ranging up to 2.67% lithium oxide (Li2O)
• Hole ZDD-14 is reported to have intersected 4 separate zones of lithium mineralisation from depths as shallow as 11.59m, with a higher grade sample of 1.44% Li2O over an interval of 2.49m between 44.17m to 46.66m in the hole.
• Hole ZDD-16 reports eight separate lithium bearing horizons from as sjhallow as 20.25m depth. The highest grade intersection reported an average of 2.67% Li2O over an interval of 0.90m from a depth of 54.82m.
• Conclusion: At this stage, and in the absence of more specific information on the location and relative positions of the individual boreholes and possible correlation of the lithium bearing horizons, it may be hard to support the company’s assertion that Zulu “is potentially amongst the best hard rock lithium exploration projects at this time”, however the results obtained to date are encouraging and we look forward to further news as exploration progresses.

Rio Tinto (LON:RIO) – 2964 pence, Mkt Cap  £54,447million - Suspension and departure of key staff following investigation of payments at Simandou
• Rio Tinto reports that “On 29 August 2016, Rio Tinto became aware of email correspondence from 2011 relating to contractual payments totaling US$10.5 million made to a consultant providing advisory services on the Simandou project in Guinea.”
• The company has investigated the circumstances under the leadership of external counsel and “Based on the investigation to date, Rio Tinto has today notified the relevant authorities in the United Kingdom and United States and in in the process of contacting the Australian authorities.”
• The company announces that “Energy and Minerals chief executive, Alan Davies, who had accountability for the Simandou project in 2011, has been suspended with immediate effect.” The Legal and Regulatory Affairs group executive, Debra Valentine, has brought forward her planned departure on 1st May 2017 and stepped down.
• On 28th October 2016, Rio Tinto announced that it had agreed a non-binding agreement with Chinalco for the sale of Simandou; binding terms are expected within six months.

Stellar Diamonds (LON:STEL) Suspended – joint venture agreements signed over projects in Guinea and Liberia
• Stellar Diamonds has signed a number of joint venture agreements with Citigate Commodities Trading a Dubai based commodities group.
• The joint venture applies to the Baoule kimberlite project in Guinea and two early stage exploration projects in Western Liberia.
• Citigate can earn a 75% stake in the Baoule joint venture through the expenditure of US$3m and the funding of a pre-feasibility study.
• Citigate can also earn into the Liberian projects through US$6.25m of exploration expenditure spread over three phases.
• The establishment of the joint ventures should enable Stellar’s team to better focus on developing diamond production at its principal Tonguma and Tongo projects in Sierra Leone.
• Tonguma and Tongo in Koidu are the subject of a proposed transaction between Stellar Diamonds and Octea
• The projects are reported to hold a recoverable diamond resource of 4.0mcts (+1.18mm) with 1.45mcts at Tongo grading 165cpht and 3.45mcts at Tonguma at a grade of up to 290cpht worth US$193/ct.  A further 8mcts may exist within the exploration target at Tonguma.
*The author of this comment has previously visited the diamond mines at Koidu in Sierra Leone.

Strategic Minerals* (LON:SML) 0.475 pence, Mkt Cap £5.8m – SP Angel appointed as Nomad and broker to Strategic Minerals
• SP Angel has been appointed as Nomad and broker to Strategic Minerals.  Optiva Securities has also been appointed as joint broker to the company alongside SP Angel.
• “The appointment of SP Angel reflects both its acknowledged resource sector expertise and the Company's increased resource exploration activity, most notably at the Redmoor tin/tungsten project in Cornwall.”
• "The recent three times oversubscribed placement of new shares in the Company by SP Angel and Optiva Securities has highlighted the efficacy of the working arrangements between the parties and has provided the Company with a broad and supportive shareholder base.”
• Strategic Minerals is working in joint-venture with ASX listed New Age Exploration on the potential reopening of the Redmoor tin mine in Cornwall.
• The company recently appointed Jeff Harrison, an experienced mining engineer who most recently served as Operations Manager for Wolf Minerals on the new Drakelands mine in Devon and was instrumental in gaining landowner and community support.  Drakelands is just 40km from the Redmoor mine site.
• Redmoor has two known high-grade veins with the Johnson lode running at around 1.4% tin equivalent and the Great South lode running at 1.1% tin equivalent
• Previous drilling has established an inferred resource of 13.3mt at an average grade of 0.56% tin equivalent.
• The company has plans for further drilling to better define the resource starting in the first half next year.
• Cobre (New Mexico); the company’s Cobre magnetite operation in the US reported a profit of US$62,000 vs US$162,000 a year earlier in its interim result due to lower mangnetite iron ore prices and a costs associated with a legal claim over rail work compensation.  We expect profits from this operation to substantially recover due to the resolution of the legal claim and better iron ore prices.
• Hann’s Camp (W Australia). Strategic Minerals has also acquired a 50% interest in CARE, which has nickel exploration projects at Hann’s Camp in W Australia. Initial drilling intersected nickel sulphides and, in conjunction with its joint venture partner, the company is reviewing the results of the drilling and down-hole electromagnetic surveys “to define the most appropriate strategy for the future.”
Conclusion:  Strategic Minerals offers potential for the reopening of a significant new tin mine in Cornwall.  Profits from the Cobre operation should support much of the cost of running the company with the recent funding enabling further work to be done towards the eventual development of more or more new projects.
*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

]]> Oil price, Bowleven, San Leon, Charlie McQueen, And finally... Tue, 08 Nov 2016 11:24:00 +0000 WTI $44.89 +82c, Brent $46.15 +57c, Diff -$1.26 -25c, NG $2.82 +5c

Oil price
‘Twas the Hilary effect across most markets yesterday as the FBI revealed the results of its speed reading competition and commodities and equities rallied ahead of today’s election. Apart from that news was thin on the ground, the EIA announced that US production reached a record in April last year, 9.42m b/d was the highest since 1972 but is already falling, the August 2016 figure was down to 8.74m b/d. Import figures from China were bearish with the October number down 12.9% and product exports up. Last weeks CFTC numbers also showed money managers taking flight with long positions being cut and shorts increasing. Finally, Dong has decided to pull out of oil and gas altogether in order to concentrate on renewables, stand by for some asset deals…

Bowleven announced prelims today but that is not why they are in the bucket list, Etinde is. And at Etinde, operator NewAge is continuing to evaluate its development options including the key plans for the off-take, from what I gather it is a close run thing between providing domestic gas and an FLNG project. Once these decisions have been made, BLVN is carried for $40m worth of carry over two wells plus a final $25m payout. With existing cash of $99m and no debt or commitments this puts the company in an extremely strong position, indeed the shares trade at a discount to said cash.
With Bomono ongoing, although I suspect hardly core, BLVN is well placed to take advantage pretty much whatever happens. The worry for shareholders has been the delay on Etinde which I can understand, the Operator seems in no hurry and whilst I am highly confident that it is a huge oil and liquids discovery, the delay is not helpful. Now, whilst I have continued to call this stock a ‘slow burner’, I can understand why management gets stick on a recurring basis which is overall not exactly fair, they took a large amount of cash off the table at the top of the market and although the asset under different hands has taken longer than expected to develop I am convinced that it will repay many-fold in due course.  A great deal of patience is required with BLVN but from its strong financial position and a carried position in a top class asset that patience will be strongly rewarded.

San Leon
San Leon announce this morning that it has settled all its disputes with Avobone and is left with a bill of €23.3m plus interest to pay by December 2017. This will be a bitter pill to swallow but the medicine is sugar coated owing to the Nigerian success in recent months. It appears that that is ring fenced and that distributions from Nigeria will not be affected.

Charles McQueen
This evening I am sure that I, like many, many people will gather in the City at the celebration of the life of Charlie McQueen who died a little while ago. If CJJM touched your life, as he did with many people in and out of the square mile it was not something to be forgotten. Forever loyal to Wood Mackenzie and all those who worked there, and in its later incarnations, he was generous, kind and unfailingly courteous, as a colleague or a client ‘Charlie’ was a friend which is about as high an accolade that I can offer.

And finally…
Quiet on the sporting front as dreaded international weeks can be we can look ahead to the first test against India which starts tomorrow morning. England have decided to blood the young Lancastrian opener Hasseeb Hameed whilst patience has been lost with Gary Ballance and young Duckett slips into the No 4 slot. England are firm second favourites for this series against the world No1 side so expect little and you won’t be disappointed…

]]> Today's Market View - Avocet Mining, European Metals, Savannah Resources and Scotgold Resources Tue, 08 Nov 2016 10:51:00 +0000 Avocet Mining (LON:AVM) – Resumption of operations at Inata expected this week
European Metals (LON:EMH) – Shallow lithium – tin mineralisation at Cinovec
Savannah Resources (LON:SAV) –Savannah declares 3.5bnt ilmenite mineral sands resource at Mutamba
Scotgold Resources (LON:SGZ) – Scotgold auctioning first Scottish gold pour for 10 1oz fine Scottish Rounds

Ecuador – BHP Billiton and Hancock Prospecting, a private exploration entity led by Gina Rinehart, are holding talks with officials on a potential entry into mining and exploration projects in Ecuador, Mining Minister Javier Cordova said.
• Newcrest recently took up a 10% stake in Solgold, for its giant Cascabel copper porphyry copper project in Ecuador while Lundin Mining bought Furta del Norte from Kinross Gold in December 2014.
• “This is the perfect time for us and the industry. It’s the reason why the likes of BHP are looking around, because many of the projects in Chile are declining and they are looking for new opportunities,” according to the Ecuadorian Minister of Mines.

Equities are in the wait and see mode ahead of the US presidential elections results.
• Gold is little changed at $1,285/oz after posting a 1.8% or $25/oz drop the previous day on increased chances of Democratic candidate winning the presidential race.
• Brent is flat trading around $46.3/bbl with base metals mixed.
• Iron ore futures continued to climb (Chinese Jan contract +2.3%) coupled with stronger markets for steel (Chinese rebar +1.9%)

Samsung offices raided in corruption probe
• So why are we interested?
• The Asian Financial Crisis which began in 1997 was fuelled by the unravelling of corrupt lending practices in South Korea which caused the currency to meltdown and the country to fall into economic crisis.
• A rerun of the Asian Crisis in South Korea would not be good for economic growth.
• Samsung is a major employer and a major part of the South Korean economy.  The scandal follows on from the collapse of Hanjin.

Dow Jones Industrials  +2.08% at 18,260
Nikkei 225   -0.03% at 17,171
HK Hang Seng   +0.47% at 22,909 
Shanghai Composite    +0.46% at 3,148
FTSE 350 Mining   +0.38% at 13,873 FTSE 350 +89% since 1st January
AIM Basic Resources   -0.27% at 2,465 AIM Basic Resources +51% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
Date Index Period   Actual Est Previous
Tuesday JOLTS Job Openings Sep '000   5,488 5,443
Thursday Weekly Jobless Claims   '000   260 265
Friday UoM Consumer Sentiment Nov     87.9 87.2
UoM Current Conditions Nov   103.0 103.2
  UoM Expectations Nov     77.5 76.8
Source: Bloomberg     

China – Weak trade data released this morning point to a sluggish external demand despite a yuan depreciation with local demand favouring better and imports posting a decline in the contraction pace.
• Exports (US$-terms, %yoy): -7.3 v 10.0 in Sep and -6.0 forecast.
• Imports (US$-terms, %yoy): -1.4 v -1.9 in Sep and -1.0 forecast.
• Auto sales grew for an eighth consecutive month in Oct with deliveries up 15%yoy in the first 10 months of the year as consumers bring their purchases forwards as a tax cut due to expire at year-end.

Germany – Industrial production contracted more than forecast in Sep reflecting an abnormally strong Aug reading with the third quarter posting good performance overall.
• Recently released industrial surveys point to improved dynamics to continue through Q4.
• Industrial Production (%mom): -1.8 v 3.0 (revised from 2.5) in Aug and -0.5 forecast.
• Industrial Production (%yoy): 1.2 v 2.4 (revised from 1.9) in Aug and 2.0 forecast.
• Trade balance climbed in the final month of Q3 led by a drop in imports helping to partially compensate for a weak Jul/Aug period with the sector likely to
• Trade Balance (€bn): 24.4 v 19.9 in Aug and 22.4 forecast.
• Exports (%mom): -0.7 v 3.4 in Aug and -0.8 forecast.
• Imports (%mom): -0.5 v 1.9 in Aug and -0.2 forecast.

UK -  Manufacturing output growth accelerated in Sep to a five month high which coupled with a weak start to Q3 suggests that manufacturing contracted 0.9% over the three months, according to Bloomberg estimates.
• Manufacturing is reported to be performing “broadly in line with recent trends”, according to the Office for National Statistics.
• “There are no obvious signs so far of either the weaker pound or post-referendum uncertainties affecting the output of UK factories.”
• Industrial production, a broader measure of activity in the sector, fell 0.4%mom dragged by a weaker output in North Sea oilfields.

US$1.1048/eur vs 1.1068/eur yesterday.   Yen 104.52/$ vs 104.43/$.   SAr 13.407/$ vs 13.480/$.   $1.241/gbp vs $1.240/gbp.     
0.770/aud vs 0.767/aud.   CNY 6.781/$ vs 6.776/$.

Commodity News
Precious metals:
Gold US$1,284/oz vs US$1,285/oz yesterday
     Gold ETFs 66.0moz vs 65.7moz yesterday – big move in buying gold ETFs despite Trump losing ground to Clinton
Platinum US$1006/oz vs US$990/oz yesterday
Palladium US$650/oz vs US$624/oz yesterday – interesting turn around in prices
Silver US$18.31/oz vs US$18.10/oz yesterday

Base metals:   
Copper US$ 5,055/t vs US$5,051/t yesterday – Refined copper imports fell 15%mom/32%yoy to 290kt in Oct as the nation increasingly relies on concentrate imports and increasing smelting capacity.
• Copper ore and concentrates inbound shipments Totalled 1.36mt in Oct, up 29%yoy, with imports in the first ten months totalling 13.6mt, up 32%yoy.
Aluminium US$ 1,715/t vs US$1,725/t yesterday
Nickel US$ 11,195/t vs US$10,945/t yesterday
Zinc US$ 2,448/t vs US$2,478/t yesterday
Lead US$ 2,084/t vs US$2,114/t yesterday
Tin US$ 21,750/t vs US$21,650/t yesterday – tin prices continue to climb despite other base metals pulling back

Oil US$46.0/bbl vs US$46.1/bbl yesterday
Natural Gas US$2.776/mmbtu vs US$2.851/mmbtu yesterday
Uranium US$18.75/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$65.3/t vs US$62.1/t – Port Hedland iron ore shipments hit high as China buys ahead of cyclone season
Chinese steel rebar 25mm US$458.6/t vs US$450.4/t
Thermal coal (1st year forward cif ARA) US$75.3/t vs US$77.8/t yesterday
Premium hard coking coal Aus fob US$289.3/t vs US$270.5/t

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News

Avocet Mining (LON:AVM) 73 pence, Mkt Cap £15.3m – Resumption of operations at Inata expected this week
• Avocet Mining reports that a judge in Ouagadougou has ordered the lifting of a seizure of gold from the Inata mine by bailiffs acting on behalf of former mine employees which occurred on 7th October.
• As a result, Avocet is aiming “to resume operations at Inata later this week if possible”.
• The company is taking steps “to recover the seized gold for export and to reinstate normal gold shipments thereafter.”
• The seizure was originally pursued by the former employees in pursuance of a 2bn CFA (US$3.4m) claim relating to unpaid benefits outstanding when their employment was terminated following an illegal strike in December 2014. The company is continuing to explore means to resolve the underlying dispute.
Conclusion: The decision by the court in the company’s favour should expedite the resumption of normal production at Inata and may give the wider audience of outside investors in Burkina Faso confidence in the probity of the country’s mining and commercial  law.

European Metals (LON:EMH) 37 pence, Mkt Cap £32.2m – Shallow lithium – tin mineralisation at Cinovec
• European Metals has announced the results of 2 additional drill holes at its wholly owned lithium – tin property at Cinovec in the Czech Republic.
• Two holes collared close to the old shaft have encountered shallow mineralisation, including a 226.7m wide intersection at an average grade of 0.45% Li2O from a depth of 35 metres in borehole CIW-07 and a 246.3m wide intersection averaging 0.405 from a depth of 10.7m in borehole CIW-08. The intersection in hole CIW-08 is reported to represent the shallowest lithium mineralisation encountered so far at Cinovec.
• Drilling is continuing in order to firm up resources estimation at  Cinovec where the company has previously published an indicated resource of 49.1mt at an average grade of 0.43% Li2O and a larger inferred resource of 482mt grading 0.73%. Nine holes have been completed so far this year and 3 more are currently underway.
• In particular, the company is aiming to establish a high grade, near surface resource which is capable of improving the economic viability of a previously published scoping study by accessing early feed for the processing plant.
• The identification of near surface high grade mineralisation has already enabled the company to reduce its estimated capital cost to develop the project at a throughput rate of 2mtpa to produce around 16,000tpa of lithium carbonate by approximately US$85m (33%) to US$169m compared with the scoping study.
Conclusion: The company’s drilling programme continues to encounter near surface lithium mineralisation which should enhance the pre-feasibility study resource estimation. Much of the existing resource at the Cinovec site is currently classified as inferred and the drilling will need to establish greater confidence in the resource for it to form the basis of more detailed pre-feasibility studies. We look forward to further news as the evaluation proceeds.

Savannah Resources ((LON:SAV)4.6 pence, Mkt Cap £20.8m –Savannah declares 3.5bnt ilmenite mineral sands resource at Mutamba
• Savannah Resources has declared a 3.5bnt mineral resource at Mutamba in Mozambique.
• The Mutamba project was previously operated by Rio Tinto and is part of the larger Mutamba / Jangamo project which is being very slowly delineated under a consortium agreement between Savannah and Rio Tinto.
• So why is Rio Tinto working with a junior company like Savannah which clearly has other priorities such as its copper in Oman and Lithium in Finland in its portfolio.
• Rumour has it that the Mozambique government is unsurprisingly unhappy with Rio Tinto over its dealings with Riversdale Mining.   We suspect some may have suggested to the government that Riversdale would become a shining new coal mine providing valuable export revenues to Mozambique.
• We suspect Rio Tinto is also unhappy over its substantial loss on the sale of the Riversdale Mining which was bought by Rio Tinto for $3.7bn at the height of the market in 2011.  The asset was later sold for $50m in 2014.  The reasons for the sale are varied but appear to relate to the nature of the coal resource and routes for potential coal export.
• Back to the resource, the initial indicated and inferred mineral resource estimate comes in at 3.5bnt grading around 3.8% Total Heavy Minerals
• The resource therefore contains around 81mt of ilmenite, 2.2mt rutile and 3.8mt zircon.  The lowish grade of the ilmenite is supplemented by the rutile and zircon co-products as seen down the road at Kenmare’s Moma mineral sands operation which lies on the coast of Mozambique and is dredge mined.
• Within the resource some 52% is in the Indicated Category, 48% is inferred and covers the Jangamo and Dongane deposits at Mutamba
• The company notes that the Jangamo deposit includes both Rio Tinto’s Jangamo deposit and Savannah’s Jangamo deposit where an established resource of 65Mt at 4.2% of total heavy minerals (THM) was previously defined.
• Savannah states that Mutamba compares favourably against Mozambique mineral sands producer Kenmare Resources 31 December 2015 global resource of 6.5Bt grading 2.9% THM and mining reserve of 1.6Bt at 3.3% THM
• A scoping study which is expected to take 3-4 months will commence shortly
Conclusion:  Savannah in co-operation with Rio Tinto have a very substantial mineral sands project in Mozambique.  With an expected increase in pricing and demand for titanium mineral sands we would expect this to gain in value.
The mood at the main industry TZMI conference is reported to be quite upbeat this year with Chinese ilmenite prices moving higher on short Sichuan supply. Prices now offered reaching ~$200/t CFR  for imported ilmenite which is promising.
We note that FinnAust’s Pituffuk ilmenite project in Greenland carries a grade of around 10 times that seen in Mozambique. Average ilmenite grades in early work are estimated to be around >35% at Moriusaq Bay with some areas of >85% ilmenite in this low-medium sized tonnage target.  See recent initiation note on FinnAust Mining.  CLICK FOR PDF

Scotgold Resources (LON:SGZ) 0.58p, Mkt Cap £7.7m – Scotgold auctioning first Scottish gold pour for 10 1oz fine Scottish Rounds
• Scotgold are shamelessly auctioning gold from their first Scottish gold pour at their Cononish Gold mine in Tyndrum.
• The fine Scottish gold rounds can be bought in a sealed bids auction with the deadline of 4pm on 28th November.
• The Gold Rounds have been minted by Baird & Co Bullion Merchants. Each Gold Round features the official registered Scottish Gold Mark of the stag's head and is presented in a luxurious presentation box.
• It will be interesting to see just how much a Scottish gold round, which is after all is only a piece of gold, is worth to a Soctsman?

]]> San Leon Energy shares are in recovery mode and Zak Mir reckons they can reach 70p Tue, 08 Nov 2016 09:58:00 +0000 San Leon Energy Plc’s (LON:SLE) share price has been in recovery mode, according to technical analyst Zak Mir, who reckons the now Nigeria focussed oil can potentially rise as high as 70p.

Mir, in a Tip TV segment for Proactive Investors, said: “San Leon’s chart reflects the recovery mode that the company has been in over the last six months or so.”

“For those who are cautious, maybe wait for a break above the 50-day moving average at 45p before getting involved on the long side, but it does look as though the recovery is here for San Leon Energy.

San Leon shares currently trade at 41p each.

]]> Quadrise fuels International could double price in the coming months says Zak Mir Tue, 08 Nov 2016 09:48:00 +0000 Quadrise Fuels International Plc (LON:QFI) shares could be set to more than double in the coming months, so says technical analyst Zak Mir.

Mir, in a Tip TV segment for Proactive Investors, said: “Looks as though we’re starting to see the shares ratchet up a gear as far as recovery is concerned, with the 10p level being the main support area over the last year /year-and-a-half.”

He added: “Ideally what we would want to see before the end of this year is a break of the 12p zone … If we can break back above that, then maybe for early 2017 we could head up towards the 22p area which was resistance at the end of last year.”

The analyst cautioned, however, that he wouldn’t want to see the share drop beyond the current support, the 9-10p level.

]]> VSA Morning Agri Comment Tue, 08 Nov 2016 08:15:00 +0000 REA Proposed Swap and Trading Update
Yesterday, Indonesian palm oil producer REA Holdings (RE/ LN) announced a swap offer for its US dollar note holders alongside a trading update.
• REA is offering holders of some US$34m 7.5% US dollar notes due in 2017 the opportunity to exchange them for 7.5% US dollar notes due in 2022. Including a top-up option to cater for those holders with less than a US$120k holding (allowing holders to top up to the minimum US$120k unit size), the total amount of new notes that could be issued is US$37.5m, which would increase REA’s net debt by c1.5%. 
• Discussions continue with a development institution and local banks for additional funding to be used for current and planned extension planting, with the final amount dependent on the level of swap acceptances resulting from this offer.
• For the 10 months to 31 October, the group has harvested 367,495t of fresh fruit bunches (FFB), -24.3% YoY, with a further 76,286t, -33.5% YoY, provided by third parties, producing 101,510t of crude palm oil (CPO), -22.1% YoY.
VSA Comment
This debt offer is in-line with REA’s overall strategy to push out debt maturities into the 2020s, when current planting plans complete, capital expenditure drops and cash flows increase. Over the last few years REA has refinanced more than US$180m of debt with cUS$45m in short-term financing left on the balance sheet (US$34m dollar notes, cUS$10.4m sterling notes). This offer is an attempt to resolve the largest proportion of that.

A similar swap of sterling notes in late 2015 saw some 75% of holders accept longer dated notes. The same result here would reduce REA’s total debt due in 2017 to cUS$20m.

In terms of the production update there were no surprises, with a much improved CPO extraction rate (23.1% vs. 22.0%) continuing to partially offset the negative lagged impact of the El Niño-induced dryness and the YoY production shortfall continuing to widen as the year progresses. Rainfall levels have significantly improved this year with 2,759mm recorded on its estates to 31 October, as opposed to just 1,705mm over the same period last year, which suggests a normalisation of conditions and the potential for improved crops in 2017.

On a monthly basis, crops were reported poor in August, recovering in September and much improved in October. This is reflected in the wider region with Malaysian Palm Oil Board data showing that CPO production in that country fell 17% YoY in August before improving slightly in September (-12.5% YoY). We are expecting to see a further improvement in regional CPO production for October in the next data release, due Thursday.
Planting continues to be impressive with 5,308ha planted in the first 10 months and remaining on target for 6,000ha. This presents a considerable achievement given REA’s historical failure to meet annual planting targets and must be commended as such. We would also highlight that, given the elevated M&A activity in the sector at present and the value ascribed to “planted hectares” in such transactions (whether that hectare was planted yesterday or 20 years ago!), this provides even more of an incentive for CPO producers to get trees in the ground as quickly as possible.

On the topic of recent M&A activity, on our calculations, the recent low-ball offer for MP Evans (MPE LN) by Kuala Lumpur Kepong (KLK MK) values REA at c380p on a read-through basis. Based on our thoughts for an acceptable bid range for MPE at the current time (780p-850p), this translates to a read-through value for REA of 630-770p, suggesting REA is also significantly undervalued at the current share price level.

]]> Today's Market View - ASA Resource Group, DiamondCorp, Kodal Minerals Mon, 07 Nov 2016 10:42:00 +0000 ASA Resource Group* (LON:ASA) – Quarterly operational update shows substantial cost savings
DiamondCorp (LON:DCP) - Speculative Buy – Termination of formal sale process
Kodal Minerals* (LON:KOD) – Gold exploration results from Cote d’Ivoire

Base Metals and Equities rally as FBI clears Clinton
US$ index climbed on the back of higher odds of Clinton winning the presidential race with safe haven assets posting declines.
• Upon a review of new emails contained at Hillary Clinton private server, the FBI confirmed its previous decision not to prosecute the Democratic candidate.
• “Based on our review, we have not changed our conclusions that we expressed in Jul with respect to Secretary Clinton,” Mr Comy, direct of the FBI, wrote to congressmen.
• Gold is off $17/oz trading at $1,288/oz.
• Brent is rebounding following three weeks of losses that saw oil losing more than 10% over the period with prices currently holding up above $46/bbl level.
• Iron ore hitting new high this year with steel rebar prices trading at the highest in two years.

Sentix index rises
• Sentiment in the Eurozone improved in November to its highest level this year taking pressure of the ECB for further stimulus.
• Sentix said the survey showed sentiment in the Eurozone, Germany, Switzerland and Asia, excluding Japan, were all in the "boom" zone.(Reuters)
• While Eurozone growth rates may remain significantly lower than many other economies policy makers should remember that it’s still difficult for young people in the Southern European states to find work and that policies driven by big business may be stifling the growth of small start-up businesses in these areas.

UK Online Fraud – 20,000 Tesco customers lose money
• Cyber crime and online fraud is a fast growing problem with Tesco Bank suffering on a major scale.
• We reckon savers might find better security through investing their money in equities than in storing it in the bank.
• During the Global Financial Crisis professional investors stored cash in LME brokerage accounts as these were seen as more secure than other financial institutions.
• Online equity broking services may also provide an additional level of security for savers wishing to keep funds away from the cyber criminals.  Savers are covered for up to £75,000 under the Financial Services Compensation Scheme.

Dow Jones Industrials  -0.24% at 17,888
Nikkei 225   +1.61% at 17,177
HK Hang Seng   +0.70% at 22,801 
Shanghai Composite    +0.26% at 3,133
FTSE 350 Mining   +2.90% at 13,695 FTSE 350 +86% since 1st January
AIM Basic Resources   -1.06% at 2,471 AIM Basic Resources +51% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock down 28% in two days

Economic News
US – Oct NFPs released on Friday showed a slight slowdown in jobs growth during the month, although a continuing acceleration in hourly earnings pointed to a tightening l;abour market.
• The market implied probability the Fed will  raise rates in Dc climbed to 76%.
Date Index Period   Actual Est Previous
Friday NFPs Oct '000 161 173 191 (revised from 156)
  Unemployment Rate Oct % 4.9 4.9 5.0
  Av Hourly Earnings Oct %mom 0.4 0.3 0.3 (revised from 0.2)
  Av Hourly Earnings Oct %yoy 2.8 2.6 2.7 (revised from 2.6)
Tuesday JOLTS Job Openings Sep '000   5,469 5,443
Thursday Weekly Jobless Claims   '000   260 265
Friday UoM Consumer Sentiment Nov     87.9 87.2
UoM Current Conditions Nov   103.0 103.2
  UoM Expectations Nov     77.5 76.8
Source: Bloomberg     

China – Falling home sales suggest government efforts to limit a surge in property prices are taking effect.
• Beijing home sales fell 41%yoy in Oct while Shanghai sales were down 18%yoy.
• Transactions are down 50%yoy in smaller cities, Bloomberg reports.

Japan – Labour earnings climbed by a modest 0.2%yoy in Sep; although, in real terms, thanks to negative rate of inflation, labour pay was up 0.9%yoy.

UK – House prices continued to post new gains with an 1.4%mom  increase in Oct and a 5.2%yoy climb in the three months to Oct; although the 3m growth rate has been trending downwards since hitting the highest for the year of 10.0% in Mar.
• “Very low mortgage rates and a shortage of properties available for sale should help support price levels,” Halifax said.
• Halifax House Prices (%mom): 1.4 v 0.3 in Sep and 0.2 forecast.
• Halifax House Prices (3m %yoy): 5.2 v 5.8 in Sep and 4.9 forecast.

US$1.1068/eur vs 1.1098/eur yesterday.   Yen 104.43/$ vs 102.97/$.   SAr 13.480/$ vs 13.516/$.   $1.240/gbp vs $1.249/gbp.     
0.767/aud vs 0.768/aud.   CNY 6.776/$ vs 6.757/$.

Commodity News
Precious metals:
Gold US$1,285/oz vs US$1,302/oz yesterday
     Gold ETFs 65.7moz vs 65.7moz yesterday
Platinum US$990/oz vs US$994/oz yesterday
Palladium US$624/oz vs US$620/oz yesterday
Silver US$18.10/oz vs US$18.35/oz yesterday

Base metals:   
Copper US$ 5,061/t vs US$4,956/t yesterday
Aluminium US$ 1,725/t vs US$1,723/t yesterday
Nickel US$ 10,945/t vs US$10,460/t yesterday
Zinc US$ 2,478/t vs US$2,460/t yesterday
Lead US$ 2,114/t vs US$2,090/t yesterday
Tin US$ 21,650/t vs US$21,305/t yesterday

Oil US$46.1/bbl vs US$46.3/bbl yesterday
Natural Gas US$2.851/mmbtu vs US$2.784/mmbtu yesterday
Uranium US$18.75/lb vs US$18.75/lb yesterday – “Markets are awash in excess material,” the Ux Consulting said describing the situation in the uranium space with prices trading sub-$19/lb, the lowest level in 12 years.
• Russia’s Rosatom Corp, the world’s fourth largest producer, estimates a rebound in prices is unlikely before 2019.
• Slower than expected return of Japanese nuclear reactors back online exacerbates the situation with Ux estimating the nation holding some 130mlbs in uranium stockpiles

Iron ore 62% Fe spot (cfr Tianjin) US$62.1/t vs US$62.3/t – Australian iron ore export growth accelerated in Oct amid stimulus-driven demand for steel in China.
• Port Hedland iron ore shipments totalled 41.6mt, up 14%yoy, taking YTD tonnages to 393.9mt, up 6%yoy.
• Shipments hit an all-time record monthly high in Aug this year with 42.9mt exported during the month.

Chinese steel rebar 25mm US$450.4/t vs US$434.5/t
Thermal coal (1st year forward cif ARA) US$77.8/t vs US$76.0/t yesterday
Premium hard coking coal Aus fob US$270.5/t vs US$268.6/t

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News
ASA Resource Group* (LON:ASA) 2.4 pence, Mkt Cap £40.2m – Quarterly operational update shows substantial cost savings
• ASA Resources’ quarterly operational results show that the company has made substantial cost savings and delivered operational improvements across its gold, nickel and diamond divisions and that corporate overheads are “at an all-time historical low of approximate $3m per annum”.
• The group has “streamlined” its offices in London and Hong Kong and closed its Johannesburg and Harare offices, which, in addition to helping generate cost savings, has the positive impact of bringing management functions closer to operations.
• In the gold division, the Freda Rebecca mine delivered improved gold grades (up 16.3% to 2.28 from Q1 – 1.96 g/t) and recovery rates (up 2% qtr –on –qtr to 84%), and increased gold sales by 10% to 15,904 oz while lowering cash costs by 5% to $944/oz (all-in-sustaining costs also declined by 3% to US$1,115/oz). The company is targeting all-in- sustaining cost levels belowUS$1,000/oz by Q4.
• Mill throughput was constrained by mechanical issues with the milling circuit, partially offset by additional CIL plant capacity coming on stream. The company expects that “When Mill 1 is back online and the new additional mill reaches full capacity this will boost revenues in the second half of the of this financial year (FY 2017) particularly fromQ4 onwards.”
• At the group’s 80% owned Zani Kodo deposit in DRC, which currently contains an estimated resource of 3m oz of gold at a grade of 2.43g/t, the company is hoping “to have a basic gravity operation in place by early 2017. Part of our rationale for expediting these plans is to save the substantial licensing fees the Group pays for not converting its licences from exploration to mining status. These charges can amount to as much as $3m per annum”
• ASA’s nickel operations delivered a 20% increase in nickel concentrate production from the Trojan mine tonnages of mined and milled ore rose by 6.5% to 104,018 tonnes and by 2.5% to 103,857 tonnes respectively. Ore grades increased 14.6% to 2.016% while recovery rates rose by 2.1% to 89.1%.
• Costs of nickel production fell by 16.6% to $4782/t on a cash basis and by 20.6% on an all-in sustaining basis to US$5,151/t.
• At the Klipspringer diamond mine, sales rose by 21% during the quarter to 36,282 carats although the realised price declined by 14% to 18.53/carat. Costs, however, fell by 18% to $8.88/carat protecting margins to around $10/carat. The company reports that results of bulk sampling of the coarse tailings, where processing is expected to start in December, show higher than anticipated grades.
Conclusion: The quarterly results provide encouragement that management’s efforts to reduce costs at both the corporate and operational levels are generating results. The reduction in corporate costs to the lowest historical level is of particular note while the forthcoming start of small scale gold production at Zani Kodo should, in our view, provide an operational base from which to assess the wider development opportunity
*SP Angel act as Nomad and broker to ASA Resources

DiamondCorp (LON:DCP) 2.4p, Mkt Cap £11.4m – Termination of formal sale process
Speculative Buy
• DiamondCorp have terminated the formal sale process which they entered into in order to invoke City Takeover Code rules.
• We congratulate the EIIB for stepping in with emergency funds from its Rasmala fund to save the business, protect their investment and see the business through this difficult time.  This was the right and proper course of action from our perspective and will hopefully enable the company to recover towards target operational levels and a significantly better valuation.
• Importantly, management report “Pleasingly, ground conditions on the 310m level are improving and trough blasting moves away from old workings” (call us if you want a better explanation on this).  Diamond recoveries are also close to plan and the next diamond sale process of >5,000cts is expected to be completed at end November.  We would expect this to bring in a much needed >US$820,000 at the base case value of $164/ct helping to further dig the company out of its ultra-tight cash flow predicament.
• Management go on to state that the mine still contains some 9.39mcts with an in-ground value of $1.5bn at the $164/ct valuation.  It will be interesting to see this valuation confirmed at the next auction.  It will also be interesting to see if this valuation rises with the future discovery of some better quality stones.  We do not believe any hugely valuable stones have yet been recovered but we note there is good potential for their recovery as seen with some other diamond producers.
• DiamondCorp are holding a General Meeting on 16 November asking shareholders for authorisation to issue new shares to Rasmala under the terms of the convertible facility.
• Shareholders may feel aggrieved at the dilution to Rasmala but in our view should be grateful that the EIIB/Rasmala plc have stepped up to the plate saving the company from low-ball and opportunistic offers which would have excluded long-suffering shareholders from any further potential upside.
• With the company up against the wall, virtually no cash left in the bank and significant hurdles still to overcome it was no surprise that opportunistic offers were being made.
• “approaches included an early stage non-binding indicative cash proposal at a substantial premium to the share price at the time, which remained subject to, inter alia, amendment and due diligence.”
• Given that the shares hit a low of 1.65p and are today at 2.4p we suspect there is still some premium left in this opportunistic offer.
Conclusion:   While there are still mining and potential further financing risks present we are sufficiently reassured by the ongoing management that the company should be able to work through this period of underground commissioning and uncertainty.  Investors may wish to buy further shares to ensure better participation in the company’s probable recovery.

Kodal Minerals* (LON:KOD) 0.1p, mkt cap $4.9m – Gold exploration results from Cote d’Ivoire
• Kodal Minerals reports results of gold exploration conducted by its joint venture partners, Resolute Mining and Newcrest Mining at the Tiebissou, Nielle and Dabakala concessions in Cote d’Ivoire.
• At Tiebissou, Resolute has defined a geochemical gold anomaly and folloed it up with 99 aircore drill holes which have generated assays including  12m intersection at an average grade of 0.34g/t gold from a depth of 4m and a 4m wide intersection at an average grade of 0.7g/t from a depth of 48 metres.
• Resolute has also generated results at Nielle where geochemical sampling has defined two new zones of gold anomalism over wide areas of 3km x 1.5 km and of 3km x 2 km. Planned follow up work includes infill geochemical sampling and trenching to assess the anomalies more fully.
• At Dabkalala, Newcrest is undertaking an auger drilling programme to obtain geochemical samples and structural geological information over what are believed to be complex geological structures. With two auger drilling crews on site the campaign is expected to be completed as soon as possible.
• Resolute Mining and Newcrest are earning into the projects and with Resolute committed to spend US$3m over four years for a 75% interest in Tiebissou and Nielle  and Newcrest spending US$1.75m for a 75% interest in Babakala, Kodal is benefitting from the work while being able to focus on its recently acquired lithium target at Bougouni.
Conclusion: In our opinion. the results from the early stage exploration work by the joint venture partners provide a level of encouragement that the geochemical anomalies are sensible follow up targets. We look forward to further results from Resolute and Newcrest as the exploration progresses.
*SP Angel acts as Financial Advisor and Broker to the company.  *Robert Woodridge, a partner at SP Angel is also Chairman of Kodal Minerals.

]]> Sound Energy tipped to rally again to re-test 100p Mon, 07 Nov 2016 10:22:00 +0000 Bullish investors could see Sound Energy PLC shares rally again to re-test 100p, says technical analyst Zak Mir.

“As far as the price action is concerned, you can see that we’ve had the big rally, effectively from the beginning of July through to the middle of September. Since then we’ve been in consolidation mode,” Mir said in a Tip TV segment for Proactive Investors.

The chartist added: “if you are cautious on the shares, if you wait for a break of the September resistance line at 82p before going long again.”

Mir also noted that those that are bullish on the stock ought to keep an eye on a zone of support at around 70p, as below that level he would question whether the best of the rally was over.

Sound Energy shares are up some 350% in 2016 to date.

]]> VSA Capital Market Movers - Sula Iron and Gold Mon, 07 Nov 2016 08:19:00 +0000 Sula Iron and Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced that its wholly owned Sieera Leone subsidiary Blue Horizon has received a renewed Exploration license from the Government. The license is valid for a period up to five years to 22 August 2021 although the company has applied for an initial period of three years to 2019 which it may extend for an additional two years.

We reiterate our Speculative Buy recommendation and target price of 3.2p

]]> Sound Energy’s latest Tendrara well results is “extremely promising” - analyst Sat, 05 Nov 2016 11:53:00 +0000 Sound Energy PLC’s (LON:SOU) latest results from the Tendrara gas discovery in Morocco are described as “extremely promising” by Cantor Fitzgerald analyst Sam Wahab.

The gas flows measured at Tendrara 7 are “well ahead of expectations”, the analyst highlighted in a Proactive Investors interview.

“Prior to the first [Sound Energy] well, Tendrara 6 which was drilled some months back, the company had said anything over 3.5mln cubic feet per day would be commercial for them,”

“It is also important to note that this [result at Tendrara 7] is unstimulated, so we’re still at very early stages of testing but it all bodes well from here.”

]]> Oil price, Faroe, IGas, IOG, Lamprell, And finally... Fri, 04 Nov 2016 11:26:00 +0000 WTI $44.66 -68c, Brent $46.35 -51c, Diff -$1.69 +17c, NG $2.77 -2c
Oil price
Various things impacted the oil price yesterday but the overhang from the massive EIA inventory stat from Wednesday was still a ghost and the Genscape numbers showing a build of 1.2m barrels at Cushing only made it worse. News that Opec production continues to rise, as does Russia’s was not lost on the market and the 200/- b/d lost after the attack on the Nigerian Forcados pipeline was lost in the ether.
In the UK, earning a ‘you couldnt make it up’ award from the blog, a little known South African hedge fund multi millionairess has used British justice to try and overturn the wishes of 17.4m duly qualified voters…
Faroe Petroleum
Faroe has announced that the Njord facilities have been selected as the preferred concept for the Pil and Bue development. No great surprise there as they are clearly backing the infrastructure they know well and are the JV economics are likely to stack up best.
IGas Energy
An interesting few days for IGas who are spending more time fighting off unpleasant bondholders rather than running the business as i’m sure they would prefer to do. Having a few of their own bonds in the store cupboard was quite handy as they sold them off yesterday at 75% of par which looked a good price to my, probably until they find out who they have sold them to…The $6m apparently sees them through to next March but they will break the leverage covenant in December which apparently means that they will need an ‘equity cure’ whatever that is, probably a well telegraphed rights issue.
Independent Oil & Gas
A short word on IOG as I interviewed Mark Routh and Peter Young on TipTV yesterday and the link is below to catch it. Having only been in the studio in August, before the Skipper results were known, it gave Mark an opportunity to explain exactly how the well has changed the field economics. In the interview we also discussed the Blythe news from Wednesday and how the Vulcan acquisition should bed down, amongst other things.
Tip TV CEO interview: Mark Routh, Independent Oil & Gas
Lamps has announced the delivery of the Ensco 141 jackup rig but rather ignominiously into a ‘warm stack’ which probably tells you a bit about the market. Lamprell still has plenty of work but not so many orders coming in which is  a modest challenge for the new CEO whom I am hoping to meet before too long.
And finally…
Completed on Wednesday night but with no blog yesterday I couldnt go without checking out the Cubs who beat the Indians in the deciding game of the World Series.
Last night in the Boropa the Saints got a good win and the Red Devils didnt, in a grim old game. This weekend, apart from the 1st round of the FA Cup there are few exciting fixtures in the Prem where the standout fixture is the North London derby between the Gooners and Spurs. Elsewhere the Noisy Neighbours host the Boro, the Hornets go to Anfield, Chelski entertain the Toffees and the Red Devils go to the Swans,
Much more exciting will be the start of the autumn rugby internationals in the Northern Hemisphere although a number of sides appear to be ravaged by injury. Tomorrow sees Wales v Australia and Ireland take on the All Blacks while the Ba-Ba’s play the Springboks.

]]> Today's Market View - Berkeley Energia, IronRidge Resources, Strategic Minerals and Tri-Star Resources Fri, 04 Nov 2016 10:31:00 +0000 Berkeley Energia (LON:BKY) – Raising US$25-30m to accelerate development of the Salamanca uranium project
IronRidge Resources* (LON:IRR) – Porphyry mineralisation offers potential for bulk tonnage gold target
Strategic Minerals* (LON:SML) – Appointment of key consultant for the Redmoor project
Tri-Star Resources* (LON:TSTR) – Progress update on antimony roaster


Investors are reducing risk ahead of the US presidential elections next Tuesday with major equity indices extending losses while developed sovereign bonds are on track for the best weekly run since Jul.
• S&P500 Index came down in eight consecutive sessions posting a 3.0% decline during the period and marking the longest stretch of losses since Oct/08.
• US$ index is flat today ahead of the US Oct NFP data due later today.
• Gold prices held above $1,300/oz supported by the risk off sentiment on increasing uncertainty regarding the result of US elections next week.
• Brent is trading around the lowest level since late Sep/16 as markets grow concerned over OPEC members commitment to cut production.
• Base metals are little changed while iron ore futures hit new high for the year in China with local steel prices climbing higher.

The US dollar, sterling, the Fed and gold
• Substantial funds are long of the US Dollar and short on Sterling
• The assumption is that the Fed may well raise rates by a quarter point after the US election and that Brexit concerns are generally negative for the UK
• This trade may start to unwind over the next few days with potential for a Trump victory and a successful legal challenge to Brexit.
• It is our view that the Fed is unlikely to raise rates if Trump wins next week but that a Clinton win may see a quarter point added.
• Longer term we can not see the Fed raising rates much, if at all, next year as the impact on sustaining the cost of US Government borrowings is likely to be a significant factor in Fed thinking.
• While the US economy is likely to continue to grow this growth will be at risk if the US has to raise taxes to help pay its interest bill.
• The longer rates stay low the higher gold prices are likely to grow.  If you add the uncertainty a Trump presidency might bring to the table then we can see gold prices heading towards $1,400/oz relatively quickly, while a Clinton win may be slightly depressing for the metal.

Lithium – mainly come from the supernovae of exploding white dwarfs
• It may account for why lithium as a metal is so very reactive but scientists have discovered that most of the lithium found in the universe is formed when white dwarf stars explode.
• The metal is the lightest solid element so far discovered and was also created almost immediately after Big Bang along with large amounts of hydrogen, helium and beryllium.

Dow Jones Industrials  -0.16% at 17,931
Nikkei 225   -1.34% at 16,905
HK Hang Seng   -0.18% at 22,643 
Shanghai Composite    -0.12% at 3,125
FTSE 350 Mining   -1.66% at 13,389 FTSE 350 +82% since 1st January
AIM Basic Resources   -4.69% at 2,498 AIM Basic Resources +63% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock down 28% in two days

Economic News
Bank of Shanghai IPO is reported to have raised CNY 10.7bn ($1.6bn) being oversubscribed 763 times.
• The IPO attracted CNY 8.2tn or $1.2tn, FT reports.
• Local securities regulations impose de facto caps on IPO prices allowing investors to potentially book gains on the first day of trading, FT reports.

US – The economy is expected to have added 170k jobs in Oct marking an acceleration in monthly gains above the average level seen year to date of 162k.
• While growth in employment has been slowing down lately, the labour market shows signs of tightening supported by average hourly earnings trending upwards.
• The latest US PMI report suggested jobs to grow by “a respectable 130k” in Oct adding that “there’s… nothing in this month’s PMI reports to deter the Fed from raising interest rates again, with a move likely to be seen in Dec.”
Date Index Period   Actual Est Previous
Monday Personal Income Sep %mom 0.3 0.4 0.2
  Personal Spending Sep %mom 0.5 0.4 -0.1
  PCE Core Sep %mom 0.1 0.1 0.2
  PCE Core Sep %yoy 1.7 1.7 1.7
Tuesday ISM Manufacturing Oct   51.9 51.7 51.5
  Auto Sales Oct mln 17.9 17.6 17.7
Wednesday ADP Employment Change Sep '000 147 165 202 (revised from 154)
  FOMC Rate Sep % 0.25-0.50 0.25-0.50 0.25-0.50
Thursday Weekly Jobless Claims Sep '000 265.00 256 258
  Factory Orders Sep %mom 0.3 0.2 0.4 (revised from 0.2)
Friday NFPs Oct '000  173 156
Unemployment Rate Oct %  4.9 5.0
Av Hourly Earnings Oct %mom  0.3 0.2
  Av Hourly Earnings Oct %yoy   2.6 2.6
Source: Bloomberg     

Japan – Latest PMI surveys point to an acceleration in economic growth in the final quarter of the year led by increase in new orders and improved business expectations.
• “The PMI data and HIS Markit’s GDP forecast of 0.9%yoy in Q4 (the highest reading since Q3/15) both suggest the short -term outlook for the economy looks bright.”
• “Moreover, business sentiment at Japanese services picked up to a six-month high linked to expectations of greater demand from preparations in hosting the 2020 Tokyo Olympic Games, the launching of new products and the opening of new businesses.”
• Nikkei Manufacturing PMI (released earlier this week): 51.4 in Oct v 51.7 in Sep.
• Japan Services PMI: 50.5 v 48.2 in Sep.
• Nikkei Composite PMI: 51.3 v 48.9 in Sep.

UK – The BoE raised its inflation forecasts and dropped its guidance on the next rate change likely being a cut.
• New inflation estimates point to consumer prices growth to exceed 2% target by spring next year, peak at 2.8% in early 2018 and remain above 2.5% will into 2019.
• “There are limits to the extent to which above-target inflation can be tolerated,” the minutes of the MPC meeting read.
• The High Court ruling on the A50 and a change in the BoE monetary policy outlook saw the pound climbing 1.6% at one point and approaching the 1.25 level against the US$. The currency is little changed this morning holding onto its gains and trading arouond 1.247.

US$1.1098/eur vs 1.1101/eur yesterday.   Yen 102.97/$ vs 102.88/$.   SAr 13.516/$ vs 13.514/$.   $1.249/gbp vs $1.235/gbp.     
0.768/aud vs 0.767/aud.   CNY 6.757/$ vs 6.763/$.

Commodity News
Precious metals:
Gold US$1,302/oz vs US$1,294/oz yesterday
     Gold ETFs 65.7moz vs 65.7moz yesterday
Platinum US$994/oz vs US$987/oz yesterday
Palladium US$620/oz vs US$631/oz yesterday
Silver US$18.35/oz vs US$18.20/oz yesterday

Base metals:   
Copper US$ 4,956/t vs US$4,919/t yesterday
Aluminium US$ 1,723/t vs US$1,725/t yesterday
Nickel US$ 10,460/t vs US$10,440/t yesterday
Zinc US$ 2,460/t vs US$2,453/t yesterday
Lead US$ 2,090/t vs US$2,073/t yesterday
Tin US$ 21,305/t vs US$20,810/t yesterday

Oil US$46.3/bbl vs US$47.1/bbl yesterday
Natural Gas US$2.784/mmbtu vs US$2.763/mmbtu yesterday
Uranium US$18.75/lb vs US$18.75/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$62.3/t vs US$61.0/t
Chinese steel rebar 25mm US$434.5/t vs US$428.7/t
Thermal coal (1st year forward cif ARA) US$76.0/t vs US$75.0/t yesterday
Premium hard coking coal Aus fob US$268.6/t vs US$265.5/t

Tungsten - APT European prices $195-199/mtu vs $190-198/mtu unch last week

Company News
Berkeley Energia (LON:BKY) 44.75 pence, Mkt Cap £89.8m – Raising US$25-30m to accelerate development of the Salamanca uranium project
• Berkeley Energia is to raise US$25-30m (£16.1-24.1m) at 49p per share in order to accelerate the development of its Salamanca uranium project in Spain.
• The funds will facilitate the construction of the crushing circuit and other infrastructure at the project site in western Spain where the company is establishing “one of the world’s lowest cost uranium producers” which, once in production, is expected to supply over 4m pounds per annum of uranium concentrate.
• The fundraising will also assist in land purchases and the funding of the environmental bond as well as construction of buildings and storage facilities.
• The funds are to be raised in two tranches; Tranche A (the Firm Placing Shares) consisting of 35.7m new shares to raise approximately US$20m followed by Tranche B in mid-December (the Conditional Placing Shares) of up to a further 17.9m shares to raise up to a further US$10m.
• Based on the current issued shares, plus the unlisted options and performance rights, we estimate that if all of the Tranche A and Tranche B shares are issued the financing will represent approximately 20% of the enlarged capital of Berkeley Energia.
Conclusion: The company is pressing ahead with the development of the Salamanca Uranium Project and the extra funding should help maintain the momentum. The company is also currently drilling additional high grade mineralisation which could translate into further resource upgrades.

IronRidge Resources* (LON:IRR) 11.4p, Mkt Cap £26.9m – Porphyry mineralisation offers potential for bulk tonnage gold target
• IronRidge Resources report the intersection of significant copper and gold grades in drilling at its May Queen gold deposit in Queensland, Australia.
• The company drilled eight Reverse Circulation holes for a total of 567m
o 2m @ 13.5 g/t Au in hole MQN5
o 3m @ 6.95 g/t Au in MQN5
o 3m @ 2.58 g/t Au in MQN6
o 1m @ 0.62 g/t Au & 1.3% Cu in MQN2
• These are good gold grades with a particularly interesting copper grade in the last hole though they are over relatively short intersections at present
• Drill hole MQN5 is interpreted within Figure 2 of the press release to be drilling down the variably mineralised structure hence the four intersections shown in Table 1 in the press release and the two intersections shown above
• Skarn type mineralisation which is often associated with copper-gold porphyries was intersected in the north-east of the prospect showing grades of 1.3% Cu & 0.62g/t Au where surface copper oxide staining had been recognised in reconnaissance mapping.
• Skarns sometimes host major orebodies and are normally associated around the edges of porphyry intrusions.  The mix of skarn and epithermal styles of mineralisation is a good indication for the sort of ground conditions which have trapped and precipitated out significant mineralisation in a specific area.
• Mineralisation seen in one of the drill holes bears similarities to the Red Dome copper-gold project within the Mungana District in Northern Queensland indicating potential for a target of some size and potential value.
• Mineralisation is seen over 100m of strike and is open along strike and at depth indicating potential for more results to come.
Conclusion:  The IronRidge team are keen to repeat the success seen at SolGold with the delineation of a sizeable copper, gold porphyry system at Cascabel in Ecuador.  SolGold are drilling kilometre lengths of copper, gold mineralisation at Cascabel and the team’s expertise in the targeting of mineralised porphyry systems may assist IronRidge in the making of its next discovery.  SolGold is the subject of a proposed joint venture with BHP and recently accepted $22.9m by way of investment from Newcrest.  SolGold’s market capitalisation is £395m on the back of interest in its joint venture proposals.
*SP Angel act as Nomad and Broker to IronRidge Resources

Strategic Minerals* (LON:SML) 0.475 pence, Mkt Cap £5.8m – Appointment of key consultant for the Redmoor project
• Strategic Minerals reports the appointment of an experienced consultant to assist it in developing community relations and negotiating access agreements for its forthcoming drilling programme at the Redmoor tin/tungsten project  in Cornwall.
• Strategic Minerals is in joint-venture with Australian listed New Age Exploration at Redmoor, and following the recent oversubscribed share issue is “in a good position to exercise its option over a further 33.6% of shares in Redmoor and hence, provide the funds required to undertake the planned drilling programme scheduled for the first half of 2017.”
• The appointment of Jeff Harrison, an experienced mining engineer with over 35 years industry experience in operational and general management roles who most recently served as “Operations Manager for Wolf Minerals, where he provided similar services that were instrumental in gaining landowner and community support necessary for the development of the Drakelands tungsten mine, commissioned in 2015 and located 40km from the Company’s mine site in Devon.”
• Mr Harrison, who lives within approximately 20km of the Redmoor site, has recent relevant experience in managing community relations and the detailed interaction with local regulatory and mineral permitting authorities in south west England and will be able to draw on this extensive experience to assist in the Redmoor project.
Conclusion: Strategic Minerals is gearing up to start drilling to establish the full potential of the brownfield Redmoor tin / tungsten project where previous historic drilling has established an inferred resource of 13.3mt at an average grade of 0.56% tin equivalent. The appointment of a key consultant to ensure effective engagement with the local community and other stakeholders from the outset should assist in establishing a constructive dialogue.
*SP Angel act as joint broker to Strategic Minerals

Tri-Star Resources* (LON:TSTR) 0.135p, Mkt Cap £11.4m – Progress update on antimony roaster
(Tri-Star holds 40% of SPMP)
• Tri-Star has released an update outlining progress with its antimony roaster project in Oman, where Tri-star’s 40% owned operating company, SPMP, took formal control of the site on 24th October following completion of initial preparatory works.
• Since the appointment, in February of the internationally recognised contracting firm, Worley Parsons, as the EPCM contractor, procurement of the long-lead-time items has been progressing well and with the manufacture of key plant components now underway, “major capital items are expected to arrive on site during the first half of 2017”.
• Details of the plant design have been enhanced to provide a more streamlined design, which reduces the site footprint to 15 hectares from the previously envisaged 22 hectares while at the same time increasing the maximum potential annual throughput capacity to 50,000 tonnes from 36,000 tonnes.
• A particular, previously announced, enhancement to the project is the inclusion of capacity to recover gold which would provide a second revenue stream to the Oman project and, in our view open up opportunities for the treatment of complex gold ores which over time could justify rolling out the technology into a potentially larger market than that available for the treatment of antimony alone.
• Tri-Star has also disclosed that it is in discussions with potential suppliers of concentrate and expects to start test-work on concentrate sample shortly. The company also confirms that “a contractual trading arrangement with a major commodity trader is under negotiation.”
Conclusion: Now that SPMP is commencing work on the ground in Oman and the major plant items are expected to start arriving next year, there should be increasingly frequent communications from the company as it reaches intermediate milestones in the construction. The identification of opportunities to enhance the design, expand the throughput and develop a gold recovery stream are welcome enhancements to the original project.
*SP Angel acts as Nomad and Broker to Tri-Star Resources

]]> In The News - Millenial Lithium Fri, 04 Nov 2016 08:34:00 +0000 Millenial Lithium (ML CN)#
Millenial Lithium (ML CN), the Argentinean lithium brine project developer, has announced the signature of a Letter of Intent between its wholly owned subsidiary Proyecto Pastos Grandes (PPG) and Southern Lithium Corp (SNL CN) to grant an option to acquire up to an 80% stake in PPG’s 2,500ha Cruz property in the Pocitos basin in Argentina.

The LoI calls for PPG and SNL to enter into a definitive agreement on or before 10 November 2016, the terms of which have been set out as follows: To earn a 70% interest in the Cruz property SNL has already paid US$150k and must pay a further US$50k on execution of a definitive agreement. SNL must also issue US$100k worth of common SNL shares to PPG or ML on equivalent terms as SNL’s next fundraising. Over the next year, SNL must complete US$500k in exploration expenditures and pay PPG US$1m by October 2017 and a further US$1m by October 2018. PPG will act as the operator until the exploration expenditures are completed. SNL may earn a further 10% by completing a DFS within three and a half years of the definitive agreement.

As of October 11 2016 PPG holds an option to acquire 100% of the Cruz property from its current vendor and intends to use the funds from the option agreement with SNL to exercise this option. The deal would increase ML’s portfolio outside of its Pastos Grandes and Cauchari East projects in Argentina within the “lithium triangle”.

]]> Coalswitch will be important third leg to business says Active Energy chairman Thu, 03 Nov 2016 16:00:00 +0000 Active Energy’s Coalswitch business has reached an important threshold as it aims to tap into the power industry's move to find cleaner alternatives to coal says Michael Rowan, chairman.

AEG CoalSwitch has developed an environmentally-friendly process that cleanses raw timber biomass by removing salts, minerals and other contaminants that harm the atmosphere and damage power plant furnaces.

It can then be used by thermal power stations as a cheaper alternative to clean coal conversion.

Coalswitch has just been consolidated into the Active Energy PLC (LON:AEG) with its main shareholder giving its backing by switching a chunk of debt into equity.

The rationale is that it complements the existing Ukraine forestry and Timberlands development businesses very nicely and will allow all three to grow in step.

]]> Today's Market View - BlueRock Diamonds, Glencore, Golden Star Resources, Highland Gold, Kodal Minerals and Sirius Minerals Thu, 03 Nov 2016 11:11:00 +0000 BlueRock Diamonds* (LON:BRD) – Fund raising and extension to convertible loan note
Glencore (LON:GLEN) –Q3 reduced copper, zinc coal and oil production but rebound in nickel
Golden Star Resources (TSE:GSC) – Q3 results
Highland Gold (LON:HGM) – Quarterly production slows in Q3/16 on weaker BG numbers; annual guidance unchanged
Kodal Minerals* (LON:KOD) – H1 Results and project update
Sirius Minerals – Completion of placing and convertible bond issue

Gold is trading lower following a c.$30/oz rally in prices over the last two trading sessions on increased safe haven demand.
• US$ is little changed as the Fed pointed to strengthened chances of a rate rise in Dec and after posting a c.2% drop over the last week.
• Chances of a rate hike in Dec are currently standing at 78%.
• The pound is posting gains against the US$ on the High Court ruling that MPs will need to vote on Article 50 to trigger the EU exit procedures and the latest reports pointing to increased inflation pressures in Oct. A sudden surge in the USDGBP currency pair is likely to have few funds short supporting a further strengthening of the pound.
• Brent climbed slightly after recording a 2.9% drop in the last session on US data showing US inventories climbing by 14.4mmbbl last week beating forecasts for a 2mmbbl gain.

Dow Jones Industrials  -0.43% at 17,960
Nikkei 225      17,135 Bank holiday
HK Hang Seng   -0.56% at 22,684 
Shanghai Composite    +0.84% at 3,129
FTSE 350 Mining   -1.06% at 13,772 FTSE 350 +88% since 1st January
AIM Basic Resources   -1.07% at 2,621 AIM Basic Resources +61% since 1st January

Economic News
US – The Fed left rates unchanged, in line with estimates, but signalled its tightening bias amid reports of accelerating inflation.
• “The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress towards its objectives,” the FOMC said.
• Inflation gains have “increased somewhat since earlier this year” with the FOMC leaving words over inflation probably remaining “low in the near term” out of the statement.
Date Index Period   Actual Est Previous
Monday Personal Income Sep %mom 0.3 0.4 0.2
  Personal Spending Sep %mom 0.5 0.4 -0.1
  PCE Core Sep %mom 0.1 0.1 0.2
  PCE Core Sep %yoy 1.7 1.7 1.7
Tuesday ISM Manufacturing Oct   51.9 51.7 51.5
  Auto Sales Oct mln 17.9 17.6 17.7
Wednesday ADP Employment Change Sep '000 147 165 202 (revised from 154)
  FOMC Rate Sep % 0.25-0.50 0.25-0.50 0.25-0.50
Thursday Weekly Jobless Claims Sep '000  256 258
  Factory Orders Sep %mom   0.2 0.2
Friday NFPs Oct '000  175 156
Unemployment Rate Oct %  4.9 5.0
Av Hourly Earnings Oct %mom  0.3 0.2
  Av Hourly Earnings Oct %yoy   2.6 2.6
Source: Bloomberg     

China – Private PMI reports released this morning come in line with previous state data showing an acceleration in the expansion pace through Oct and pointing to a strong start to the quarter.
• Caixin Manufacturing PMI (released earlier in the week): 51.2 v 50.1 in Sep and 50.1 forecast.
• Caixin Services PMI: 52.4 v 52.0 in Sep.
• Caixin Composite PMI: 52.9 v 51.4 in Sep.
• “It may be possible to sustain this stable condition throughout the fourth quarter, but its important that supportive policies are not relaxed because the economy still lacks sufficient growth momentum,” the report read.

UK – The High Court ruled parliament will need to hold the vote on the triggering of the Article 50 as opposed to the government claims that MPs would not need to vote on Brexit following the referendum results.
An appeal submitted by ministers will be heard at the Supreme Court which is expected to be early next month.
Services sector growth accelerates in Oct with respondents to the market PMI survey highlighting an increase in input prices at the strongest pace since Mar/11.
• New business increased at the strongest rate since Jan.
• “Business activity is growing at a rate consistent with solid economic growth of 0.4-0.5% in Q4,” the report said.
• “What especially reassuring is that growth estimate is also becoming more balanced. Manufacturing is leading the expansion as exporters benefit from the weaker pound, but services growth is also reviving and construction is being boosted by renewed house building.”
• Markit Services PMI: 54.5 v 52.6 in Sep and 52.5 forecast.
• Markit Composite PMI: 54.8 v 53.9 in Sep and 53.5 forecast.

US$1.1101/eur vs 1.1077/eur yesterday.  Yen 102.88/$ vs 103.55/$.  SAr 13.514/$ vs 13.464/$.  $1.235/gbp vs $1.226/gbp.     
0.767/aud vs 0.765/aud.  CNY 6.763/$ vs 6.762/$.

Commodity News
Precious metals:
Gold US$1,294/oz vs US$1,296/oz yesterday
     Gold ETFs 65.7moz vs 65.7moz yesterday
Platinum US$987/oz vs US$990/oz yesterday
Palladium US$631/oz vs US$632/oz yesterday
Silver US$18.20/oz vs US$18.53/oz yesterday

Base metals:   
Copper US$ 4,919/t vs US$4,874/t yesterday
Aluminium US$ 1,725/t vs US$1,711/t yesterday
Nickel US$ 10,440/t vs US$10,380/t yesterday
Zinc US$ 2,453/t vs US$2,440/t yesterday
Lead US$ 2,073/t vs US$2,053/t yesterday
Tin US$ 20,810/t vs US$20,780/t yesterday

Oil US$47.1/bbl vs US$47.5/bbl yesterday
Natural Gas US$2.763/mmbtu vs US$2.825/mmbtu yesterday
Uranium US$18.75/lb vs US$18.90/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$61.0/t vs US$62.2/t
Chinese steel rebar 25mm US$428.7/t vs US$423.2/t
Thermal coal (1st year forward cif ARA) US$75.0/t vs US$73.8/t yesterday
Premium hard coking coal Aus fob US$265.5/t vs US$258.5/t

Tungsten - APT European prices $195-199/mtu vs $190-198/mtu unch last week

Company News
BlueRock Diamonds* (LON:BRD) 6.8p, Mkt Cap £2.6m – Fund raising and extension to convertible loan note
• BlueRock Diamonds report the company has raised £750,000 of nee equity funding and has extended its £75,000 convertible loan note.
• The funds are to be used to progress production to 30,000 tonnes per month under the company’s revised plans to manage its own mining and processing.
• Mining costs should fall and work on the process plant should improve recovery rates from what has been relatively poor performance.
• The improvements are designed to turn the Kareevlei diamond mine in South Africa into a profitable enterprise.
• BlueRock is working its way through a number of issues which typically hold back mining operations.
Conclusion:  If the revised mining plan and improvements to the processing plant work then the Kareevlei mine should start to turn a profit with the potential for discovery of a few ‘special stones’ to significantly add to the value of the operation if recovered.
*SP Angel acts as Nomad & Broker to BlueRock Diamonds

Glencore (LON:GLEN) 242.8 pence, Mkt Cap £34.95bn –Q3 reduced copper, zinc coal and oil production but rebound in nickel
• Glencore reports its Q3 production results and that “Year to date production was in line with expectations, reflecting the various operational suspensions / supply reductions … notably in coal, oil, copper and zinc.”
• Year to date - copper production from the group’s operations fell by 6%, to 1.06mt compared to 2015 as a result of the curtailment of operations in Africa at Katanga and cut backs at Mopani in Zambia  partially offset by increases in the South American operations. The company is guiding full year production of around 1.42mt of copper for the year.
• Zinc output on a year to date basis fell 30% to 789 kt as management cut back production in Australia and in Peru. Guidance for the full year is for 1.1mt of zinc production.
• The return to full production  at the Sudbury nickel smelter following a major period of maintenance during during 2015 resulted in a rise of 20% in group nickel production to 82.4kt. Nickel production at the integrated operations during the 3rd quarter almost doubled to 13.8kt (Q3 2015 -7.6kt) , YTD production at Murrin Murrin declined by around 7% to 25.2kt while output from Koniambo rose by 23% to 9.5kt.
• Coal output fell 11% as a result of planned closures of mines in S Africa, the effect of adverse weather conditions in Colombia and the divestment of Optimum Coal. Oil output declined as fields were depleted.
Conclusion: Glencore has taken the lead in managing supply across its commodity suite and therefore although there have been falls in production of a number of commodities, these were the result of planned cutbacks which leave the company in line with published expectations and guidance for 2016

Golden Star Resources (TSE:GSR) C$1.16, Mkt Cap C$381m – Q3 results
• Golden Star reports that it produced a total of 44,974 oz of gold at a cash cost of US$964/oz during the quarter ended 30th September. All in sustaining costs are reported at US$1,153/oz. Production comprised 22,290 oz of gold at a cash cost of US$1.110/oz from the Wassa mine and 22,684 oz at US$835/oz from the Prestea mine.
• The production generated a positive operating margin of US$5.8m reversing a negative US$4.3m margin in Q3 2015.
• The company incurred capital expenditure of US$21.7m during the quarter (YTD US$60.6m) as it moves ahead with the development of underground mining which, is part of the strategic shift to higher grade underground mining of metallurgically straightforward mineralisation  and away from the more complex refractory open-pit ores.
• The company reports a cash balance of US$17.5m at the quarter end and notes that this does not include a US$20m advance payment streaming payment received froma subsidiary of Royal Gold on 3rd October.

Highland Gold (LON:HGM) 166p, Mkt cap £541m – Quarterly production slows in Q3/16 on weaker BG numbers; annual guidance unchanged
• Quarterly production totalled 63.1koz, down 11%yoy (Q3/15: 70.9koz; Q2/16: 71.8koz), on the back of lower output at Belaya Gora.
• Both MNV and Novo performed in line with management estimates through the quarter.
• At MNV, gold production totalled 24.8koz (Q3/15: 24.8koz; Q2/16: 26.0koz) driven by an improvement in underground ore grades.
• The Company continues with the drilling programme at MNV in an effort to expand the life of mine.
• At Novo, production was 28.1koz (Q3/15: 27.5koz; Q2/16: 31.1koz) with a 10% quarterly decline on the back of lower processed grades.
• Preparatory construction works for the capacity expansion to 1.3mtpa from current 0.7mtpa are on schedule with the project completion expected by late 2018.
• At Belaya Gora, production came in at 9.6koz (Q3/15: 18.6koz; Q2/16: 14.7koz) driven by the processing of low grade stockpiles and weak gold recoveries as SRK consultants are reworking mining plan and processing flowsheet.
• The management is considering expanding CIL capacity at BG for a potential accommodation of the higher grade Blagodatnoye ore processing.
• At Kekura, preparatory works for the 2017 construction season and selection of major contractors are ongoing together with finalisation of a detailed FS.
• 25,000m exploration programme at Kekura this year focussed on eastern part of the deposit testing mineralisation extensions for a potential inclusion in the updated reserve.
• New JORC reserves statement for the Company’s assets is expected in Q1/17.
• 2016 production guidance range reiterated at 255-265koz.

Kodal Minerals* (LON:KOD) 0.118p, mkt cap $5.3m – H1 Results and project update
• Kodal Minerals reports a reduced H1 loss of £206,402 down 25% on the £374,971 loss reported in H1 2015.
• The result reflects lower administration costs, impairment charges and share based payments and following a £640,000 fundraising leaves the company with cash of approximately £315,000 at 30th September.
• The period has seen a major transformation in the company’s focus with the acquisition of a portfolio of gold exploration projects in west Africa from ASX listed Taruga Gold and the subsequent move into lithium exploration with the acquisition of 500sq km of promising exploration licences at Bougouni in Mali.
• Gold exploration on the Dabkala licence area in Cote d’Ivoire is being funded by Newcrest Mining as part of a farm-in agreement to earn a 75% interest in the project while a similar farm in arrangement on additional properties at Nielle and Tiebissou is being funded by Resolute Mining.
• The company has started reconnaissance exploration at Bougouni and has already established that the lithium bearing pegmatite veins are more extensive than earlier published exploration studies had indicated. Kodal is progessing systematic exploration to establish initial drilling targets and “moving the project towards JORC compliant status in the near term.”
•  Major exploration activity on the company’s Scandinavian projects is being cut back to enable the company to focus on West Africa, although the licences at the Kodal project are being maintained and remain valid until July 2023.
Conclusion: Kodal Minerals is now focussing on West Africa with its own and joint-venture funded gold exploration and the recently acquired lithium exploration project at Bougouni.
*SP Angel acts as Financial Advisor and Broker to the company.  *Robert Woodridge, a partner at SP Angel is also Chairman of Kodal Minerals. 

Sirius Minerals 27.5 pence, Mkt Cap £636m – Completion of placing and convertible bond issue
• Following yesterday’s announcement of placing and a convertible bond issue to fund the development of its North Yorkshire polyhalite project, Sirius Minerals has announced that it has completed a £370m placing and also successfully completed a US$400m convertible bond financing.
• Sirius has placed approximately 1,666m new shares at a price of 20 pence, representing approximately 40% of the enlarged capital and has , in addition, conditionally placed a further 185m shares at the same price.
• Taken together, we estimate that the new shares represent 44.4% of the enlarged company.
• Approximately 10% of the of the shares issued under the firm placing and open offer are to be offered to existing shareholders on the basis of 2 new shares for every 25 existing shares held.
• Speaking on behalf of the company CEO and Managing Director, Chris Fraser, said “The completion of the convertible bond and equity placing is great news for the Company, and delivers the financing that allows us to start construction of our North Yorkshire polyhalite project.”
Conclusion: The speedy conclusion of the equity issue and convertible bond suggests that there is a strong appetite for the project which, as we indicated yesterday, represents the largest single fundraising for an AIM listed mining project this year. AIM Market Statistics show that up to 30th September all the mining companies listed on AIM had raised a total of less than £270m this year.

]]> Roxi Petroleum shares tipped to rise as high as 16p in coming months Thu, 03 Nov 2016 11:06:00 +0000 Roxi Petroleum Plc (LON:RXP) shares could rise to around 15 to 16p in the coming months, according to technical analyst Zak Mir.
In a Tip TV segment for Proactive Investors Mir highlights the ongoing recovery in the group’s share price over since the early part of the year.

He notes a number of key technical features in the chart which point to support for the share between 9p and 10p, and suggests the trend is now pointing upwards.
]]> VSA Capital Market Movers - Randgold Resources and Glencore Thu, 03 Nov 2016 08:22:00 +0000 Randgold Resources (LON:RRS)
Randgold Resources  has released robust results for Q3 2016 delivering gold production of 301koz, up 7% QoQ although down 1% YoY. However, we note that strong performance at Tongon alongside higher gold prices offset weaker operational performance elsewhere in the portfolio. Revenues of US$393m were up 11% QoQ and 15% YoY largely as a result of the increase in gold prices. Mining profits of US$197m were up 31% QoQ and 54% YoY while net income of US$77m was up 32% QoQ and 58% YoY.

Group cash operating costs of US$597/oz were down 10% QoQ and 7% YoY while total cash costs of US$663/oz were down 9% QoQ and 5% YoY. Tongon has in recent quarters suffered from power outages which have hindered production and raised unit costs, however, in Q3 2016 these outages were avoided resulting in a 21% QoQ and 14% YoY decline in total cash costs to US$732/oz. This was sufficient to offset weakness at Kibali where total costs increased 18% YoY as a result of lower grades and production.

RRS has announced that it will develop three projects over the next five years as part of a new strategy. There have been concerns for some time over RRS growth pipeline and by its own standards its current exploration portfolio appears underweight indicating that RRS is now in acquisition mode.

Glencore (LON:GLEN)
Glencore has released Q3 2016 production results which although reflect significant declines appear to be largely in line with expectations. Copper production of 1.1mnt was down 6% YoY owing to the shuttering of the Zambian operations. Zinc production was down 30% YoY again due to planned cuts. Coal production of 92mnt was down 11% following the divestment of Optimum Coal and other planned closures. Oil production of 6mmboe was down 25% YoY as existing fields were depleted; production is likely to remain muted as replacement wells are being held for a stronger oil price environment.

]]> Oil price, Shell/BP, Sound Energy, Victoria Oil & Gas, Pantheon, Egdon, IOG, And finally... Wed, 02 Nov 2016 12:35:00 +0000 Oil price
The good news happened during the day for the oil price yesterday, the fire at the Colonial pipeline at Shelby Alabama stopped up to 2.5m b/d of product travelling from Houston to Washington and New York and had an immediate effect on prices. Crude less so but products fizzed even though the problem should be short-lived, after all, workmen only put a digger through a 2.5m b/d line, it could happen to anybody huh?
No the main problem for crude actually came through after the bell in the shape of the API inventory stats which showed a build of 9.3m barrels some 8m above the market whisper. If the EIA numbers are equally grim tonight the 70 odd cents that oil has fallen today may be accentuated somewhat. Elsewhere, Nigeria has said that it has upped production from 1.8m b/d to 2.1m b/d which cant help as we are now formally in Opec meeting month…

Both reported yesterday and whilst Shell comprehensively beat the whisper BP could only do so with a tax credit, shorn of that it slightly disappointed. For Shell the quarter was indeed surprisingly good and the costs keep falling, annualised this year they will be around $40bn, some $9bn less that the combined Shell/BG numbers. BP couldnt quite match the cost fall but to be fair had Aker BP in the process this quarter. Both companies are cautious as one might expect, Shell sees the oil price ‘remaining a challenge’ and with an uncertain outlook whereas BP are slightly more optimistic seeing the market ‘moving broadly into balance with production in line with consumption’. Both companies appear to be working on $50-55 oil, which presumably means that any concerted sub $50 prices are the dividend trigger points.

Sound Energy
More good news from Sound today as they announce the pre-stimulation flow rates from the TE-7 well at Tendrara, onshore Morocco. The initial, unstimulated open hole well test of the first 28%of gross reservoir interval, over 24 hours using a 32/64 choke, showed 8.8 mmscf/d with strong pressure build up post the test. This is ‘significantly better than company estimates’ and the Company will now complete the planned mechanical stimulation and well test of the entire sub-horizontal section. Those post stimulation tests should be completed by mid-November and following that the company will initiate the EWT which will then become extremely important in terms of flow sustainability and longer term field development. Sound is featured, along with a number of my other current selections in an interview I recently did with London South East, here is the link.
London South East Share Views interview: Hurricane, Sound and Faroe Petroleum

Victoria Oil & Gas
After a delay caused by lightning striking the rig, the company has announced that its two Logbaba wells have been spudded. The La 107 well which is a twin of the old La 104 well and the La 108 well which is a step-out designed to prove up more of the companies probable reserves. Both wells are intended to be production wells and will meet the growing demand for gas in Douala. With firm plans to develop its Logbaba reserves and move some P2 into P1, VOG is continuing to significantly enhance the value of the company. Indeed, the 107 well may, should well conditions prove satisfactory, attempt an ‘exploration tail’ by drilling down to 4,200m and to test the Lower Cretaceous Mundeck Formation which during the drilling of La 104 had gas shows and a significant gas kick.

Whilst this is an important drilling campaign it should be noted that in a short period of time VOG has created a significant and highly profitable exploration and distribution business in Cameroon. With 45km of pipeline, and growing and huge demand for gas as demonstrated by their 24 major customers, who pay highly realistic prices not heavily regulated by Government, the model is not only robust but could be recreated elsewhere in central Africa. This is even before any material assessment of the huge Matanda project bought from Glencore earlier this year. I consider that as the company moves into a new phase of highly profitable growth the market will realise that the current share price way undervalues the potential for VOG, indeed recent conversations with management lead me to believe that the 5 year plan to target 50 mmscf/d are not only realistic but achievable, if that is the case then the upside is substantial. VOG is featured along with Amerisur and Jersey Oil & Gas in my latest Vox Markets podcast, the link is below, I come in at 18m 38s.
Vox Markets podcast: Malcy on Victoria Oil & Gas, Amerisur Resources and Jersey Oil & Gas

Pantheon Resources
Pantheon announced yesterday that it had spudded the VOBM#4 well in Tyler County, this is a significant step-out and will take 60-65 days to complete. If this well were to come in it would be a massive validation of the programme and prove that the structure is really as big as some early estimates. Meanwhile the company also announced that they have managed to hire a workover rig for VOBM#3 which will start in 10-14 days, whilst this is somewhat later than one might have hoped, it shows a degree of realism in not pre-booking, but means that results will not be with us until at least the end of the month.

Egdon Resources
Egdon announced yesterday its results, a new CPR and a placing and open offer at 13.5p a share. The placing is to be done with Heyco International, a shareholder who will go from around 4% of the company to 13% and the open offer might raise around £2m. The proceeds will progress the recent successful 14th round applications, get on with moving the ‘A’ prospect to drillable status and enable assessment of other portfolio assets. With Wressle coming onstream early next year and Holmwood beginning to become a reality with others to follow, EDR has built a meaningful array of conventional and unconventional prospects. Following the raise, and with the likelihood of further farm-out activity it looks in a strong position, albeit having taken longer than planned.

Independent Oil & Gas
IOG announced yesterday that following further analysis of 3D data that it was happy that the Blythe hub GIIP data looked better than previously expected. However the data for Cronx has materially diminished and that the company will not complete the licence acquisition. Given that Cronx was a very small element of the company’s portfolio this is not significant news but still a disappointment. CEO Mark Routh and CFO Peter Young are with me on TipTV tomorrow to expand a bit on this and hopefully Skipper as well.

And finally…
Last night in the World Series the Cubs beat the Indians 9-3 to draw the series 3-3 with the decider tonight. The Cubs havent won in 108 years and the Indians in 68 so whoever wins will have at long last laid the ghost to rest.

In the Champions League the Noisy Neighbours at last beat Barcelona after many attempts, 3-1 on the night. With the Gooners coming back from 2-0 down to win and Celtic getting a draw it wasnt such a bad night. This evening both Spurs and the Foxes play in the Champions League.
And there are some horrible people about….I heard a cat crying outside and so I opened the door and saw four guys in Man Utd shirts playing football with it.
I was just about to ring the RSPCA when the cat went 1-0 up……………………….

]]> Northern Petroleum boss Keith Bush “very pleased” with new reserves upgrade Wed, 02 Nov 2016 12:20:00 +0000 Keith Bush, chief executive of Northern Petroleum Plc (LON:NOP), says he is very pleased with the outcome of the group’s new oil reserves assessment for its assets in Canada.

“We’ve done an amount of work this year that has enabled us to increase the production from the wells on the asset and it has really shown dividends with the increased reserves report,” Bush says in an interview with Proactive Investors.

“This gives us a good footprint to go forward.”

Bush also gives us an insight into the work Northern Petroleum is undertaking to overcome the continued tough conditions for oil and gas juniors.

“This is just the start of the potential for these assets,” he adds.

]]> VSA Capital Market Movers - Egdon Resources Wed, 02 Nov 2016 11:48:00 +0000 FY 2016 In Line With Expectations
Egdon Resources (EDR)# reported its results for the year ended 31 July 2016 with production during the period averaging 177boepd (+2% YoY) in line with our expectations and company guidance of 180boepd. However, revenue was 23.3% lower YoY to £1.59m (2015: £2.07m) due to continued weak hydrocarbon prices. EDR recorded a net-loss of £2.69m for the year, a reduction of 40% YoY (2015: £4.47m net-loss) as write downs on exploration costs and impairments were reduced to £0.72m (2015: £3.6m).

£3m Placing to Heyco International
EDR has also completed a £3m placing of c22.2m at 13.5p/sh to HEYCO International, a US holding company based in New Mexico and Texas with subsidiaries and affiliates active in upstream onshore oil and gas operations in the US and Europe. HEYCO has an interest in a number of projects in the leading horizontal plays in the US including the Bone Springs Sand and emerging plays such as the Wolfcamp Shale and Penn Shale. Alongside this EDR has proposed up to £2m will be raised separately via an open offer to take the total funds raised to £5m. Given HEYCO’s experience in the world leading North American shale sector we view this investment as a show of confidence in EDR’s strategy going forward.

71% Increase in GIIP Across EDR’s Shale Licences
Separately EDR has announced an independent assessment of the undiscovered gas initially in place (GIIP) over ten licences (eight of which were awarded in the 14th licencing round) as 20TCF. This represents a 71% increase in its previous mean undiscovered GIIP.

Recommendation and Target Price
We view the additional funding from HEYCO, a specialist in US shale gas, as particularly positive. EDR remain debt free with a strong balance sheet and we maintain our BUY recommendation but adjust our TP to 34p from 38p to take into account the additional shares issued in line with our NAV.

]]> Sirius Petroleum is showing a gradual turn around, chartist eye rally to 1p per share Wed, 02 Nov 2016 11:22:00 +0000 Sirius Petroleum Plc (LON:SRSP) has seen a gradual improvement in both fundamentals and technicals, so says chartist Zak Mir.

Looking at the chart Mir highlights key technical signals through the summer weeks that point to a new rising trend for the AIM quoted oil share.

“We’re gradually turning around and hopefully, at this rate over the next 6 months or so, we could get up to a penny,” Mir said in a Tips TV segment for Proactive Investors.

“It is common sense to say that people are gradually going into it, it is gradually improving and the slower the turnaround normally the more reliable it is.”

]]> Today's Market View - Caledonia, Coal of Africa, Sirius Minerals and Vast Resources Wed, 02 Nov 2016 10:42:00 +0000 Caledonia Mining (LON:CMCL) – Currency effects on 2016
Coal of Africa (LON:CZA) –Update on Makhado Environmental Authorisation
Sirius Minerals  – Progress on the Stage 1 Financing
Vast Resources (LON:VAST) – Drilling starts on Baita Plai polymetallic tailings

European equities following US markets lower on the back of latest polls showing a tightening gap between US presidential candidates with gain recorded in safe haven assets such as gold and the yen.
• The US$ index is at the lowest level in nearly a month as the Fed is expected to announce no changes to its monetary policy a little less than a week ahead of US presidential elections.
• Brent is off 1% this morning and trading around $47.6/bbl marking the weakest level since late Sep
• Iron ore futures closed nearly flat today holding onto gains recorded through Oct with rebar prices posting a 2.2% increase and trading at the highest in two months.

Base and precious metals continue to rise as US election polls cause dollar to fall
• Voting polls indicate a potentially close call in the US election raising the possibility of a Trump victory.
• The US dollar is taking fright over this uncertainty and is more likely to recover if Hilary Clinton takes the lead.
• Markets are bracing for a rise in the potential for a Trump victory with funds moving into hard assets.
• A Trump victory would bring economic and political uncertainty and would likely cause longer term flight of capital out of the USA and out of the US dollar
• This is good for metals prices and it may be that Trump will move decisively to stimulate new infrastructure and house building (more Trump Towers) it is, after all, what he knows best.
• Our simple view is that voters tend to vote for the party which they wanted to win at the start of the election process with relatively few voters actually swayed by the political rhetoric in the run-up to the election, as happened with Brexit.  Many voters started out with the idea to vote out the Democrats after two consecutive terms and to bring in the Republicans who are generally seen as a more nationalistic party.  It may be that Trump could win more by default despite recent revelations.
• You do have to wonder how they are going to organise the photograph at the next G20 summit.  President Trump could feel a bit hemmed in with Mrs May, Mrs Merkel on each flank.

Lithium Batteries – Toyota engineers claim more power at no significant extra cost (Japan Today)
• Toyota look set to grow their lead in the production and sale of electric vehicles with the claim that they can pack more power into their lithium batteries at no significant extra cost.
• While Toyota has concentrated on hybrid vehicles it now looks set to enter the market for all-electric vehicles.
• Toyota claim to have double braced and triple braced their battery pack to make sure they’re fail-safe.

Brexit – Wetherspoon’s chairman offers wise words to Europe
• "Angela Merkel of Germany and François Hollande of France have supported the stance of the unelected EU 'President' Juncker in stating that the "UK must pay a price" for leaving the EU and that there "must be a threat" to the UK. According to press reports, Juncker told European business leaders, in October, not to negotiate with UK companies and to adopt an "intransigent" attitude. This suggested approach puts an unfair burden on the excellent European suppliers with which UK companies, like Wetherspoon, have traded for many decades. For example, Wetherspoon normally agrees on trade deals with suppliers for 3 to 10 years. If we, and companies like ours, are unable to agree on tariff-free transactions, it will inevitably result in a loss of business for European companies which have done nothing to deserve this outcome. Indeed, the ultimate sanction will be in the hands of UK consumers, should they take offence at the hectoring and bullying approach of Juncker and co. Fren ch wine, Champagne and spirits, German beer and Swedish cider, for example.

Dow Jones Industrials  -0.58% at       18,037 
Nikkei 225   -1.76% at       17,135 
HK Hang Seng   -1.45% at       22,811  
Shanghai Composite    -1.63% at         3,103 
FTSE 350 Mining   -1.51% at       13,703  FTSE 350 +87% since 1st January
AIM Basic Resources   +0.21% at        2,649  AIM Basic Resources +62% since 1st January

Economic News
US – In line with separate reports, ISM reported an acceleration in manufacturing sector growth in Oct.
• Previously, Markit said manufacturing expanded at the fastest pace in a year in Oct benefiting from “rising domestic and export sales”.
• Markit report also pointed to building inflationary pressures with factory prices climbing by the most in five years suggesting it “will will further fuel speculation that the Fed will hike interest rates again in Dec”.
• YTD (Jan-Oct) auto sales were little changed at 14.4m from the previous year, a record sales year for the industry, on the back of consumer incentive programmes.
Date Index Period   Actual Est Previous
Monday Personal Income Sep %mom 0.3 0.4 0.2
  Personal Spending Sep %mom 0.5 0.4 -0.1
  PCE Core Sep %mom 0.1 0.1 0.2
  PCE Core Sep %yoy 1.7 1.7 1.7
Tuesday ISM Manufacturing Oct   51.9 51.7 51.5
  Auto Sales Oct mln 17.9 17.6 17.7
Wednesday ADP Employment Change Sep '000  165 154
  FOMC Rate Sep %   0.25-0.5 0.25-0.5
Thursday Weekly Jobless Claims Sep '000  255 258
  Factory Orders Sep %mom   0.2 0.2
Friday NFPs Oct '000  175 156
Unemployment Rate Oct %  4.9 5.0
Av Hourly Earnings Oct %mom  0.3 0.2
  Av Hourly Earnings Oct %yoy   2.6 2.6
Source: Bloomberg     

Germany – Positive employment numbers bode well for estimated strengthening growth forecasts in H2/16.
• Unemployment change (‘000): -13 in Oct v 0 in Sep and -1 forecast.
• Jobless rate (%): 6.0, a fresh record low, in Oct v 6.1 in Sep and 6.1 forecast.

UK – House prices stagnated for the first month in the last 15 in Oct, according to Nationwide Building Society.
• The report pointed to the housing activity remaining “fairly subdued”.
• The recent slowdown has been partly the consequence of the consequences of the stamp duty introduction of stamp duty on second homes back in Apr which led to a surge in activity ahead of the implemented regulation, Nationwide said.
• Nationwide House Price Index (%mom): 0.0 v 0.3 in Sep and 0.2 forecast.
• Nationwide House Price Index (%yoy): 4.6 v 5.3 in Sep and 4.9 forecast.
• Previously the CEBR (centre for Economics and Business Research) said Brexit is expected to weigh on Uk housing with growth in the secotr expected to slow to 2.6% in 2017, down from an estimated 6.9% growth in 2016.

Italy – Oct manufacturing growth rate remained little changed from the one in Sep and “well below its average seen during the first half of the year”.
• Modest growth pace is reported to be led by weaker increases in new orders.
• At the same time cost inflation reached 15-month high.
• Markit Manufacturing PMI: 50.9 v 51.0 in Sep and 51.4 forecast.

Spain – Manufacturing growth improved in Oct on “stronger rises in new orders and output”, according to Markit PMI.
• “Another development from the latest survey was a pick-up in cost inflation.”
• Markit Manufacturing PMI: 53.3 v 52.3 in Sep and 52.6 forecast.

US$1.1077/eur vs 1.0995/eur yesterday.   Yen 103.55/$ vs 104.94/$.   SAr 13.646/$ vs 13.555/$.   $1.226/gbp vs $1.225/gbp.
0.765/aud vs 0.767/aud.   CNY 6.762/$ vs 6.772/$.

Commodity News
Precious metals:
Gold US$1,296/oz vs US$1,283/oz last week –
     Gold ETFs 65.7moz vs 65.6moz last week –
Platinum US$990/oz vs US$987/oz last week
Palladium US$632/oz vs US$627/oz last week
Silver US$18.53/oz vs US$18.09/oz last week

Base metals:   
Copper US$ 4,874/t vs US$4,872/t last week –
Aluminium US$ 1,711/t vs US$1,733/t last week –
Nickel US$ 10,380/t vs US$10,430/t last week
Zinc US$ 2,440/t vs US$2,451/t last week –
Lead US$ 2,053/t vs US$2,065/t last week
Tin US$ 20,780/t vs US$20,735/t last week

Oil US$47.5/bbl vs US$48.7/bbl last week
Natural Gas US$2.825/mmbtu vs US$2.971/mmbtu last week –
Uranium US$18.90/lb vs US$18.75/lb last week

Iron ore 62% Fe spot (cfr Tianjin) US$62.2/t vs US$61.6/t
Chinese steel rebar 25mm US$423.2/t vs US$417.0/t –
Thermal coal (1st year forward cif ARA) US$73.8/t vs US$74.1/t last week
Premium hard coking coal Aus fob US$258.5/t vs US$257.7/t

Tungsten - APT European prices $195-199/mtu vs $190-198/mtu unch last week

Company News
Caledonia Mining (LON:CMCL) 120 pence, Mkt Cap £62.7m – Currency effects on 2016
• Caledonia Mining has updated the market with respect to earnings expectations for 2016,
• Although 2016 earnings are expected to be “significantly higher than reported earnings for 2015” they have been impacted by a number of factors  which, taken together, lead to a situation in which reported profitability “seems likely to be below market expectations.”
• Describing these underlying factors, the company points out that the recent strength in the Rand against the US$ has increased the US$ cost of expenses incurred in Rand and that although the costs and operating performance of the Blanket gold mine are in line with expectations there will be an adverse currency impact.
• The company also reports that the rise in its share price “from $0.59 at the start of 2016 to $1.77 at the end of the third quarter has resulted in an increase in share based expenses.” In addition, the company has “incurred non-recurring costs in the evaluation of a number of investment opportunities.”
Conclusion: As was clearly apparent during the recent site visit for UK-based analysts, the Blanket mine is well advanced on its plans to increase gold production to 80,000ozpa by 2021 as it implements the long term plan for deeper level mining which underpins the long term future of the mine. The mine “remains robustly cash generative” and we believe that any adverse impact of today’s announcement should be short lived if investors look ahead to the benefits of the rejuvenation of what is already a mine with a century long production history.

Coal of Africa (LON:CZA) 3 pence, Mkt Cap £57.8m –Update on Makhado Environmental Authorisation
• Coal of Africa reports that South Africa’s Minister of Environmental Affairs has dismissed an appeal against the Environmental Authorisation Amendment for the Makhado coal project in the Limpopo Province.
• The appeal related to the transfer of the Authorisation “from  CoAL to Baobab Mining and Exploration Limited (Pty) Ltd, the legal entity for the Makhado Project”.
• The company is continuing its discussions with the Department of Water and Sanitation in relation to a, possibly separate, appeal lodged by the Vhembe Mineral Resources Stakeholders’ Forum in relation to the Integrated Water Use Licence for the project.
Conclusion: It appears that some of the issues are being resolved and that the company has received some support from the SA Government in its proposed development of the Makhado project. Outstanding appeals remain to be resolved, however.

Sirius Minerals 32.3 pence, Mkt Cap £646.1m – Progress on the Stage 1 Financing
• Following last week’s announcement of a US$250m royalty financing agreement for its North Yorkshire polyhalite development, Sirius Minerals has announced that it also secured a US$400m convertible bond financing and is making an open offer and placing of shares to raise a further £330-400m (approximately US$400-490m).
• The bonds, which are due in 2023 and expected to carry a coupon of 8-8.5%pa, are expected to have a conversion price “in the range 25-30% above the clearing price of the equity placement”. The bonds also have an increase option of up to an additional US$50m.
• A general meeting to approve the placing and the convertible bond issue is to be held on 25th November.
• The three elements of the financing together represent approximately 90% of the US$1.2bn Stage 1 financing to begin the construction of the North Yorkshire polyhalite project. According to the definitive feasibility study, the overall capital expenditure is estimated at US$2.9bn. The project requires US$1.4bn of this Total to bring the mine to production by the end of 2021 and build up to a production capacity of 10mtpa by mid-2024. The additional US$1.5bn to complete an expansion to 20mtpa “is expected to be funded with operating cash flow”.
Conclusion: Sirius Minerals has made significant progress in securing the financing required to bring its North Yorkshire project up to the initial 10mtpa production rate by 2024. We observe that, the £330-400m equity portion of the financing significantly exceeds the £266.5m total raised by all the mining companies listed on the AIM Market for the first 9 months of 2016. Optimists may conclude that this could be a turning point for the financing of mining projects on AIM – we hope they are right.

Vast Resources (VAST LN) 0.21 pence, mkt Cap £7.8m – Drilling starts on Baita Plai polymetallic tailings
• Vast Resources reports that it has started drilling at the Baita Plai polymetallic tailings dam.
• The dam is thought to contain some 4,080 tonnes of copper, 6,640 tonnes of zinc, 3,100 tonnes of lead, 35 tonnes of silver and 309kg of gold in-situ on historic drilling.
o A maiden JORC resource is due in Q1 next year with independent flotation test work and recovery optimisation to be done in the first quarter.
o Vast Resources’ also expects to produce around 630tpa of contained zinc metal in concentrate from its Manaila poymetallic mine in Romania
o The concentrates contain around 2.5g/t gold, 250 g/t silver and potentially some copper.
o Finance:  finance is tight for Vast with the company holding assets in Zimbabwe and Zambia as well as starting new operation in Romania
o Vast recently repaid the balance of a Darwin Bridge Loan Note for £325,000 + interest of £13,000.
o Bracknor Fund Limited gave converted £900,000 of its one-year convertible notes of £1,608,500 ($2m) into 428,571,428 new shares at an exercise price of 0.21p in accordance with the convertible loan as first reported on 11 October being 11.66% of the company.  The company also reported a further $3m of loan notes agreed with Braknor in tranches of US$1m each should Vast, without obligation, request this.
o The Bracknor Fund then converted a further £200,000 worth of is convertible notes on 28 October at 0.1p adding a further 105,263,158 new shares to the register.
o It was also agreed that the $2,000,000 Convertible Loan Notes issued to Bracknor on 11 October 2016 should be denominated in Sterling, with the aggregate initial value being £1,608,500.  Meaning that £508,500 of Convertible Loan Notes now remain outstanding.
o Total number of shares now is a vast 3,812,768,647 and we suspect the remainder of the convertible will be exercised delivering a significant number of additional shares to the Bracknor Fund.
o Turning to the website indicates a total facility for US$6m in October 2016 which looks US$1m higher than the facility reported on 11 October.  Perhaps we missed something?
o The Bracknor Fund Investment Philosophy states “At the Bracknor Investment Group there is no such thing as traders nor traditional asset managers but entrepreneurs who believe in other entrepreneurs.”
Conclusion:  Vast is working hard to develop a mining business in Romania with relatively little cash to support its efforts.  While the Romanian business looks relatively small it should give the company an important base from which to work from.  Recourse to the use of convertible loan instruments has enabled the company to expand its operations but at the cost of delivering much of the company into the hands of the Bracknor Fund.

]]> Shell’s quarter clearly beat BP’s but both need a better oil price Tue, 01 Nov 2016 15:07:00 +0000 Royal Dutch Shell Plc (LON:RDSB) emerged as the obvious winner on ‘super Tuesday’ as the oil supermajor and its rival BP Plc (LON:BP) both released their figures for the most recent quarter, but according to Jasper Lawler, analyst at CMC Markets, both companies need better oil prices.

In an interview, Lawler said: “US$50 per barrel is clearly a lot better than US$27 but it is still not enough to take these companies anywhere close to where they were before the downturn.”

Nonetheless, the analyst notes that Shell is now seeing something of an inflection point.

“They’ve managed to see some profit growth after a couple of years of really tough times,” he said.

But turning attentions to BP, Lawler said: “BP is still suffering from their legacy of the Deepwater Horizon, it has had its final settlement there but it is still knocking onto costs each quarter,”

He added: “obviously the low oil price is hurting the upstream business as it is at Shell, but the refining margins are hurting the downstream business as well.

]]> Ascent Resources plc readying itself for production in Slovenia Tue, 01 Nov 2016 14:55:00 +0000 Ascent Resources plc (LON:AST) has just raised around £4.5 million to bring its gas field in Slovenia into production early next year. Ascent’s an independent oil and gas exploration company focused predominantly on European onshore projects.

Chief executive Colin Hutchinson tells Proactive: ''Ascent's primary asset is this gas field in Slovenia. Ascent's been involved there since 2007, drilled two wells in 2011, proved it was a significant asset and we've been working since then to bring that asset into production''.

''We had a major breakthrough in August of last year when we signed a gas sales agreement with INA to sell the gas to them at the border and then last week we announced that we've raised the money to fund the capex that we need to get it into production'', Hutchinson added.

]]> Today's Market View - Amur Minerals and Metminco Tue, 01 Nov 2016 10:26:00 +0000 Amur Minerals* (LON:AMC) – Record 2016 field season completed
Metminco* (LON:MNC) – Quarterly report highlights value at Miraflores in Colombia and value of Los Calatos transaction

Iron ore, steel and coal prices climb on strong Chinese PMI numbers with precious metals trading higher led by a weaker US$ index.
• Brent is up following a two day decline that saw prices slide to $48/bbl on concerns over the implementation of the OPEC decision to cut production.
• Iron ore futures prices extended gains to seven consecutive days supported by stronger steel prices.

Base metals prices rise as LME week gets going
We expect Chinese traders may raid the market traders nurse their hangovers after the LME dinner tonight
We are looking for these traders to lift the market as producers become price setters
• Base metals prices gained new upward momentum as the US dollar weakened and China reports better PMI figures.
• Ongoing demand strength combined with news of some recent mine closures to help copper and zinc prices go better.
• Inflation pressures in China served to strengthen aluminium prices as larger Chinese producers move to becoming price setters in this new market environment.
• Chinese producers are faced with operating at unstainable margins unless they raise prices and we expect to see more price setting within China as the cycle of destocking what was investment inventory draws to an end.
• New weakening of the US dollar prompted by political issues and ahead of the Fed meeting today and tomorrow makes it easier for local producers to raise metal prices as local currencies gain.
• Base metals prices look likely to post further gains with the above issues driving the market ahead

Dow Jones Industrials  -0.10% at       18,142 
Nikkei 225   +0.10% at       17,442 
HK Hang Seng   +0.93% at       23,147  
Shanghai Composite    +0.71% at         3,122 
FTSE 350 Mining   +0.85% at       14,051  FTSE 350 +91% since 1st January
AIM Basic Resources   +0.21% at        2,644  AIM Basic Resources +62% since 1st January

Economic News
Date Index Period   Actual Est Previous
Monday Personal Income Sep %mom 0.3 0.4 0.2
  Personal Spending Sep %mom 0.5 0.4 -0.1
  PCE Core Sep %mom 0.1 0.1 0.2
  PCE Core Sep %yoy 1.7 1.7 1.7
Tuesday ISM Manufacturing Oct     51.7 51.5
  Auto Sales Oct mln   17.6 17.7
Wednesday ADP Employment Change Sep '000  165 154
  FOMC Rate Sep %   0.25-0.5 0.25-0.5
Thursday Weekly Jobless Claims Sep '000  255 258
  Factory Orders Sep %mom   0.2 0.2
Friday NFPs Oct '000  175 156
Unemployment Rate Oct %  4.9 5.0
Av Hourly Earnings Oct %mom  0.3 0.2
  Av Hourly Earnings Oct %yoy   2.6 2.6
Source: Bloomberg     

China – PMIs released this morning point to an acceleration of broad based growth at the start of Q4/16.
• Manufacturing PMI (Official): 51.2 in Oct v 50.4 in Sep and 50.3 forecast.
• Services PMI (Official): 54.0 v 53.7 in Sep.
• Manufacturing PMI (Private): 51.2 v 50.1 in Sep and 50.1 forecast.
• The private study showed a strong pick up in domestic new orders while overseas demand slowed slightly.
• “The economy seems to be stabilising for the moment, owing primarily to policies implemented to sustain growth,” the report said.
• “Supportive policies must be continued, or industrial output may be dragged down by a slowdown in investment.”

Japan – The BoJ, in line with expectations, left the benchmark rate unchanged at -0.1% and brought its inflation estimates down.
• The bank expects inflation to increase towards 1.5% in fiscal 2017, down from 1.7% estimated previously, while 2% target is now estimated to be reached towards the end of FY18.
• In a sign revisions have already been priced in, the yen was little changed against the US$ this morning trading at ¥104.9.

UK – Sterling got a little boost from the news Mark Carney will remain at governor of the BoE to Jun/19 (one more year than previously planned) with the currency gaining 0.8% following the yesterday’s news release.
• “Recognising the importance to the country of continuity during the UK’s Article 50 negotiations, and notwithstanding those personal circumstances, I would be honoured to extend my time service as governor for an additional year to the end of Jun/19,” Carney said.

Australia – The A$ gained against the US$ (+0.8%) after as the RBA left rates unchanged saying the economy performed broadly in line with estimates with growth “forecast to grow at close to its potential rate, before gradually strengthening”, and inflation picking up “gradually over the next two years”.

US$1.0995/eur vs 1.0953/eur yesterday.   Yen 104.94/$ vs 104.98/$.   SAr 13.555/$ vs 13.631/$.   $1.225/gbp vs $1.218/gbp.
0.767/aud vs 0.760/aud.   CNY 6.772/$ vs 6.773/$.

Commodity News
Precious metals:
Gold US$1,283/oz vs US$1,274/oz last week –
     Gold ETFs 65.6moz vs 65.5moz last week –
Platinum US$987/oz vs US$980/oz last week
Palladium US$627/oz vs US$617/oz last week
Silver US$18.09/oz vs US$17.82/oz last week

Base metals:   
Copper US$ 4,872/t vs US$4,841/t last week – Codelco is suggesting to start selling a share of annual sales in Asia on a quarterly or monthly premium basis amid increased supply of copper under long-term contracts.
• Previously, Codelco is reported to have cut its premium for shipment to Europe for 2017 by 11%.
Aluminium US$ 1,733/t vs US$1,728/t last week – Rising energy costs raising aluminium prices.
Nickel US$ 10,430/t vs US$10540/t last week
Zinc US$ 2,451/t vs US$2,412/t last week –
Lead US$ 2,065/t vs US$2,082/t last week
Tin US$ 20,735/t vs US$20,630/t last week

Oil US$48.7/bbl vs US$49.6/bbl last week
Natural Gas US$2.971/mmbtu vs US$3.114/mmbtu last week –
Uranium US$18.75/lb vs US$19.65/lb last week

Iron ore 62% Fe spot (cfr Tianjin) US$61.6/t vs US$61.7/t
Chinese steel rebar 25mm US$417.0/t vs US$412.2/t –
Thermal coal (1st year forward cif ARA) US$74.1/t vs US$70.8/t last week
Premium hard coking coal Aus fob US$257.7/t vs US$256.4/t

Tungsten - APT European prices $195-199/mtu vs $190-198/mtu unch last week

Company News
Amur Minerals* (LON:AMC) 3.9p, Mkt Cap £20.2m – Record 2016 field season completed
• The Company ended the 2016 exploration field season by completing a total of 19,785m of drilling achieving the following objectives:
o Expansion of the MKF mineralisation zone by more than 40% to a total length of 3,000m;
o Both step out and infill drilling completed at a narrow enough grid to allow for the estimation of Indicated category resources;
o 21 metallurgical holes completed with a 7.4t bulk sample collected (average sample grades 0.75% Ni and 0.20% Cu) for metallurgical test works and plant design;
o 0.5kt of trenches excavated at Kubuk to identify additional drill targets.
o The total cost of the programme amounted to $1.7m or $40.2/m using own equipment (including Alex Stewart assaying costs) which comes in at half the cost Amur would have spent with contract drilling, the Company estimates.
o The newly purchased LF-90 BL drill rig which cost $0.4m has already more than paid for itself.
o Additionally, the Company reports that Runge, Pincock, Minarco Ltd (RPM) is working on updating the combined open pit underground mine design of the MKF deposit while Gipronickel is reviewing previously released SGS Minerals metallurgical test results.
Conclusion: The record drilling programme should allow the Company to update the available resource at the MKF (expected Q1/16) and progress with metallurgical studies for the suitable plant design while reported incurred expenses point to a cost conscious approach the Amur team is taking in managing its operations.
* SP Angel act as Nomad and broker to Amur Minerals

Metminco* (LON:MNC) 0.16 pence, Mkt Cap £6.9m – Quarterly report highlights value at Miraflores in Colombia and value of Los Calatos transaction
• Metminco report that Los Calatos Holding Ltd, which holds the Los Calatos project in peru has received the first equity investment of US$16m.
• CD Capital are subscribing for US$45m worth of new shares in Los Calatos Holdings Ltd to fund the completion of pre-feasibility and Feasibility Studies on the Los Calatos Project.  CD Capital will eventually hold 70% of Los Calatos and their involvement cuts Metminco’s expenditure on the project by around A$100,000 per month.
• Metminco has given an undertaking to CD Capital that it will use its best endeavours to distribute at least 90% of its holding in Los Calatos Project to shareholders within six months of completion of the transaction which should be value creative for shareholders.  The CD Capital Tranche 1 values Metminco’s stake in the business at 0.32 pence per share though we see significant potential upside on this valuation.
• The Los Calatos resource which currently stands at 352mt grading 0.76% copper and 318ppm of molybdenum.
• Metminco also raised A$1m in October for work on advancing the new Miraflores gold project in Colombia and the board has approved the move to work up a feasibility study subject to available funding.
• The quarterly report reminds us of their updated Scoping Study on the Miraflores gold project in Colombia today.  The project appears to have significant value as it stands, subject to further verification, and offers greater potential for value on the addition of gold resources at a number of near-by licenses.
• Scoping study details:
o Mine life: 9 years producing 50,000oz of recovered gold per annum at steady state
o Mined Tonnes : 4.03mt
o Life of Mine capital: US$98m, including initial capital of US$81m and sustaining capital of US$17m
o Life of Mine C1 cash costs: US$555/oz
o Life of Mine AISC costs: US$648/oz
o EBITDA: US$31.7mpa over 9 years
o NPV (after tax): US$73.4m @ 8% discount rate.  This rises to US$91m at $1,400/oz gold
o IRR (after tax): 26% rising to 29% at $1,400/oz gold
o Gold price assumption: US$1,300/oz
The scoping study ore reserve does not yet provide sufficient detail to be NI 43-101 or JORC 2012 compliant.
• We note the revised JORC 2012 Mineral Resource Estimate for Miraflores published in July uses a 1.2g/t cut off and replaces the former NI 43-101.
o M & I Mineral Resources                       832,000oz gold and 817,000 silver  in (9.19Mt grading 2.81g/t Au and 2.76g/t Ag)
o Measured Mineral Resources                282,000oz gold and 237,000 silver (2.95Mt grading 2.98g/t Au and 2.5g/t Ag
o Indicated Mineral Resources                 549,000gold and 580,000  (6.24Mt grading 2.74g/t Au and 2.89g/t Ag)
o Inferred Mineral Resources                   8,000oz gold and 32,000 silver (0.18Mt grading 1.44g/t Au and 5.49g/t Ag).
Conclusion:  Today’s quarterly provides a useful reminder of the progress being made at Metminco and the value to be distributed to Metminco shareholders as a result of the US$45m investment being made by CD Capital into the Los Calatos copper project.  The deal enables the Metminco team to focus on the future development of the new Miraflores gold mine in Colombia the potential expansion of gold resources in the area.
*SP Angel act as broker to Metminco.  SP Angel analysts have previously visited Los Calatos in Peru and Miraflores project in Colombia.

]]> VSA Capital Market Movers - Egdon Resources and Independent Oil & Gas Tue, 01 Nov 2016 08:22:00 +0000 Egdon Resources (LON:EDR)
Egdon Resources (EDR)# has reported its results for the year ended 31 July with production during the period averaging 179boepd (+2% YoY) in line with our expectations and company guidance of 180boepd. However, revenue was 23.3% lower YoY to £1.59m (2015: £2.07m) due to continued weak hydrocarbon prices. EDR recorded a net-loss of £2.69m for the year, a reduction of 40% YoY (2015: £4.47m net-loss) as write downs on exploration costs and impairments were reduced to £0.72m (2015: £3.6m). This resulted in loss per share of 1.21p (2015: loss per share of 2.02p).

Separately EDR has also completed a £3m placing of c22.2m at 13.5p/sh to HEYCO Energy, a US holding company based in New Mexico and Texas with subsidiaries and affiliates active in upstream onshore oil and gas operations in the US and Europe. Alongside this EDR has proposed up to £2m will be raised separately via an open offer to take the total funds raised to £5m.

Furthermore EDR has announced an independent assessment of the undiscovered gas initially in place (GIIP) over ten licences (eight of which were awarded in the 14th licencing round) as 20TCF. This represents a 71% increase in its previous mean undiscovered GIIP to a total of c48TCF.

Given HEYCO’s experience in the world leading North American shale gas sector we view this investment as a particular show of confidence in EDR’s strategy going forward. EDR remain debt free with a strong balance sheet and we maintain our BUY recommendation.
Independent Oil & Gas (LON:IOG)#
Independent Oil & Gas (IOG)# has received the initial results from the reinterpretation of 250km2 of 3D seismic data from the 1990s covering the Blythe Hub licences in its Southern North Sea (SNS) portfolio.

On the positive side, these initial results suggest the GIIP, and therefore the recoverable reserves over the licences, is greater than previously estimated. However, the interpretation of data on the Cronx, which lies 14km north west of the Blythe field, suggests the GIIP is lower than estimated in the competent persons report from 2012. Therefore, IOG has chosen not to complete the acquisition of the Cronx licence. Seismic data over the Harvey and Hambleton discoveries and the Truman prospect will now be reinterpreted.

We view the increase in GIIP over the Blythe licences as the materially important news here as Cronx did not form a part of our NAV. We maintain our BUY recommendation.

]]> Oil price, Range Resources, Plexus Holdings, IGas, Sundry-BHI/GE- Far/COP/WPL-And finally... Mon, 31 Oct 2016 11:25:00 +0000 WTI $48.70 -$1.02, Brent $49.71 -76c, Diff $1.01 +31c, NG $3.11 +4c

Oil price
The meeting at the weekend between various Opec members and other producers has done nothing to alleviate concern creeping into the market that a deal on November 30th is anything but a faint hope at the moment. The pressure on the Saudis is significant and with a number of dissenting voices chances of a deal are beginning to fade. The KSA might, and probably will try to keep the pressure on Russian and other Gulf states but will it be enough?
Friday’s stats were mixed, the rig count showed an overall rise of 4 units to  557 but oil was down 2 at 441 which should have been more positive. The CFTC numbers however showed that those money managers with long positions fell for the first time in five weeks.
Range Resources
More sensible financial work from RRL this morning as they announce a $20m convertible loan note with LandOcean over three years at 8% convertible at 0.88p per share. This will replace part of the LandOcean IMS agreement and LO will continue to provide Range with finance for work undertaken in Trinidad. Range are continuing to tidy up its finances and clearly the relationship with LO remains strong and will help them as they push forward next year to bring onstream and finance the waterflood projects.
Plexus Holdings
It is no surprise to see oilfield services company Plexus Holdings report a loss as it has been badly hit by the malaise in the industry. A loss of £5.7m, (6.39p a share) was not as bad as I was expecting and the company has net cash of £9.9m. Cost cutting has been unsurprisingly tough and are down by 50% following similar figures in the trade. With subscriptions of £8m by Jereh, £5m by Gusar and a placing of £6m to new and existing shareholders (including Chairman Ben van Bilderbeek) customers, management and shareholders have acknowledged their support this year. With a rental business that protects against some of the vagaries of  the downturn and a clearly industry leading set of technologies POS looks like it is here to stay to me.
IGas Energy
In further comment on press speculation IGas have been forced to announce that Trans European Oil & Gas as bondholders want the company to sell its conventional oil and gas assets. The company ‘continues to engage with key stakeholders to recapitalise the business’ which presumably means some amount of equity dilution, thus making the possibility of the company remaining in its current guise extremely unlikely. I imagine that Jim Ratcliffe is looking on with interest…
News is slowly filtering through about the GE/Baker Hughes merger or as they put it, ‘GE and Baker Hughes Agree to Create New Fullstream Digital Industrial Services Company’. The £30bn entity might be of significance but will likely only taint BHI with GE’s non-expertise in the sector.
More interesting is the verbal jousting between COP/WPL and Far ltd regarding the Senegal situation. COP and WPL have announced that their deal is to complete which seems at odds with Far’s view that they still have farm-in rights. This is Far’s statement,  ‘As previously reported to the ASX, FAR believes a valid pre-emptive rights notice has not been issued to the JV partners by COP and, FAR has invoked its right to resolve this dispute in accordance with the Joint Operating Agreement. FAR is not aware that the Government has advised COP of its approval of the transaction. FAR continues to reserve its rights…’ Seems like it’s not quite over yet…
And finally…
With  most of the top sides winning at the weekend any one of about 8 teams could be in the shake-up although it is very early days. The marketing department at Sky have a hard day ahead of them selling us Stoke v Swansea tonight….
Well done to Muzza for winning yet another competition, fatherhood is definitely good for him, if he wins next week and Djocko doesnt make the final then he will become world No 1.
In the cricket, England reverted to type and after a great start chasing 50 too many after 5 dropped catches they fell apart just like they used to and conceded to a team of highly enthusiastic if inexperienced spinners. If that’s what they are like against this lot then the Injun’s are hardly likely to be shaking in their cricket boots…
And with only two races to go Lewis has not only got to win but hope that Nico has a  DNF which is unlikely as Mercedes keep all of those for non-German drivers, or hope that someone else gets him in a tangle, er Max……

]]> Today's Market View - Amur Minerals, Anglo American, Centamin, Savannah Resources, Stellar Diamonds, Wolf Minerals, Petropavlovsk Mon, 31 Oct 2016 11:09:00 +0000 Amur Minerals (LON:AMC) – An EPCM MOU signed Jinchuan
Anglo American (LON:AAL) – Sale of the Callide mine
Centamin (LON:CEY) – Rising production, cash flow and earnings
Savannah Resources (LON:SAV) – High grade copper intersections seen in Oman VMS drilling
Stellar Diamonds (LON:STEL) Suspended – CPR on Tonguma and Tongo projects (Koidu) in Sierra Leone confirms 4mct recoverable resource
Wolf Minerals (LON:WLFE) – Quarterly Activity Report – implementation of process plant improvements
Petropavlovsk (LON:POG) HOLD – Refinancing update

FTSE 100 pulls lower led by losses in energy stocks
Gold prices is holding above $1,270/oz after drifting down from $1,283/oz hit on Friday amid news of the FBI investigating the case of the Democratic candidate using private emails while she was Secretary of State.
Brent is off today following as OPEC members failed to agree a detailed plan to production cuts over the weekend in Vienna.
Iron ore futures continue their ascend despite reports showing steel making material stockpiles hit at Chinese ports hit the highest level in nearly two years.
Chinese iron ore stockpiles are reported to have climbed 15% this year standing at 107mt following four consecutive quarterly gains.

Toyota claims to have tamed lithium battery technologies
Toyota new hybrid, The Prius Prime is to use lithium-ion batteries with 80km range when fully charged before gasoline engine kicks in

Cornish tin mining – Captain Poldark finds mineral lode
Yet another gripping episode of Poldark on BBC1 last night
Sadly not enough scenes down the mine but at least Poldark and his investors have at long last struck it rich in the Grace copper, tin mine
We have yet to see the new discovery but are told the lode split into two seams with one seam larger and richer than seen before
With Britain going to war with the French and the price of copper and tin about to rise, Poldark’s Weal Grace discovery may be all the richer
Today, we are not at war with the French, but we are hoping for similar success with Strategic Mineral’s Redmore tin project in Cornwall

Economic News
US – GDP numbers released on Friday outperformed estimates rebounding from a lacklustre H1 driven by increases in inventories and exports compensating for a weaker consumer spending.
Inventories positively contributed to growth for the first time since early 2015.
Exports added the most to GDP growth since Q4/13.
Consumer spending stripping changes in inventories and exports out expanded at an annualised rate of 1.4%qoq versus a 2.4%qoq increase in Q2/16.
On a less positive note, business spending on equipment remained weak posting a decline for fourth consecutive quarter.
An acceleration in the growth rate together with a robustness in the consumer spending is likely to convince the FOMC to continue with tightening the monetary policy before year end.
Chances of a rate hike in Dec currently stand at 69.2%.

Germany – Retail sales dived in Sep posting the strongest weekly decline in two years pointing to a slowdown in consumer spending during the quarter.
Estimates are for personal consumption to slow down to 1.3%yoy in Q3/16, down from 1.5%yoy in Q2/16 and 1.7%yoy in Q1/16.
GDP growth rate is expected pick up 0.1pp to 1.8% in Q3/16 on the back of stronger growth in business investments. Numbers are due on 15 Nov.
On a different note, inflation is seen picking up with Oct CPI numbers showing a 0.2pp increase in rates from the previous quarter, according to the data released on Friday.
CPI (EU Harmonised, %mom): 0.2 v 0.0 in Sep and 0.1 forecast.
CPI (EU Harmonised, %yoy): 0.7 v 0.5 in Sep and 0.7 forecast.

UK – The BoE is expected to leave rates and the pace of assets purchases unchanged at 0.25% and £435bn, respectively, this Thursday.
There is a chance Mark Carney will make an announcement on his tenure as the Governor of the BoE.
The BoE did not comment on speculations that Carney might leave the BoE in 2018 saying the Governor will make a statement by a self-imposed deadline of year end.

US$1.0953/eur vs 1.0905/eur yesterday.   Yen 104.98/$ vs 105.31/$.   SAr 13.631/$ vs 13.846/$.   $1.218/gbp vs $1.214/gbp.
0.760/aud vs 0.758/aud.   CNY 6.773/$ vs 6.780/$.

Commodity News
Precious metals:
Gold US$1,274/oz vs US$1,266/oz last week –
     Gold ETFs 65.6moz vs 65.5moz last week – significant fall in ETF holdings
Platinum US$980/oz vs US$967/oz last week
Palladium US$617/oz vs US$615/oz last week
Silver US$17.82/oz vs US$17.59/oz last week

Base metals:  
Copper US$ 4,841/t vs US$4,807/t last week –
Aluminium US$ 1,728/t vs US$1,706/t last week –
Nickel US$ 10,540/t vs US$10,420/t last week
Zinc US$ 2,412/t vs US$2,373/t last week –
Lead US$ 2,082/t vs US$2,064/t last week
Tin US$ 20,630/t vs US$20,530/t last week

Oil US$49.6/bbl vs US$50.5/bbl last week
Natural Gas US$3.114/mmbtu vs US$3.047/mmbtu last week –
Uranium US$19.65/lb vs US$19.70/lb last week

Iron ore 62% Fe spot (cfr Tianjin) US$61.7/t vs US$60.8/t
Chinese steel rebar 25mm US$412.2/t vs US$410.0/t –
Thermal coal (1st year forward cif ARA) US$70.8/t vs US$69.8/t last week
Premium hard coking coal Aus fob US$256.4/t vs US$252.4/t

Tungsten - APT European prices $190-198/mtu vs $191-197/mtu unch last week

Company News

Amur Minerals (LON:AMC) 4.3p, mkt cap £22.1 – An EPCM MOU signed Jinchuan
The Company signed a non-binding Memorandum of Understanding with Jinchuan Nickel & Cobalt Research and Design Institute relating to EPCM activities on the nickel/copper sulphide Kun Manie project.
The party to the MOU is a subsidiary of the Jinchuan Group, the world’s third largest and the biggest Chinese producer of nickel.
The subsidiary is responsible for the group’s EPCM activities with the MOU marking the start of the due diligence process regarding a potential cooperation with Amur Minerals over development options of the project.
Conclusion: The signed MOU with a subsidiary of an integrated nickel producer offers an exciting opportunity to study development options for the project which in case of a positive result of the due diligence process may lead to a closer cooperation between parties involved.
* SP Angel act as Nomad and broker to Amur Minerals

Anglo American (LON:AAL) 1111.5 pence, Mkt Cap £14.34bn – Sale of the Callide mine
Anglo American reports that it has completed the sale of the Callide thermal coal mine in Queensland to Batchfire Resources.
The terms of the transaction, which was originally announced in January, have not been disclosed.
The Callide mine is an open cut mine supplying two adjacent power stations under long term contracts. The mine produces at a rate of around 7.5mtpa and some 84% of the output is supplied under the power contract.

Centamin (LON:CEY) 156.4 pence, Mkt Cap £1802m – Rising production, cash flow and earnings
Centamin has announced that its Sukari mine produced 148,674 ounces of gold at a cash cost of US$466/oz and an all-in sustaining cost of US$644/oz during the three months to 30th September.
The production represents a 6% increase on the previous quarter but a 41% rise over the equivalent period in 2015 while costs are 39% lower than in 2015 on a cash cost basis and 30% lower on an AISC basis.
Recovery rates improved to 89.7%, (Q2 2016 – 89.5%) reflecting improved optimization of the plant.
As a result, Centamin is maintaining its production guidance for the full year at the upper end of 520-540,000 ounces of gold at cash costs within the range US$530-550/oz (AISC US$720-750/oz).
During August, the company started a new exploration decline to test the potential for future reserve growth within the north-eastern Cleopatra zone and assess the possibility of an additional 1mtpa of underground production. The assessment is expected to take approximately 9 months at a cost of some US$11.5m.
The company sold 150,201 oz of gold during the quarter at an average price of US$1335/oz generating US$122m of EBITDA and attributable profit of US$70.8m.
The company has also started its profit share arrangement with the Egyptian state entity, EMRA with a distribution of US$28.75m during the quarter and a further US$6.67m during October.
During the quarter, Centamin generated free cash flow, after investment of US$34.4m, of US$105.4m and  is debt free with US$388.4m of cash at 30th September.
Conclusion: Centamin is in a strong position with rising production, cashflow and earnings and is now looking at possible additional reserve development at Sukari via the new exploratory decline

Savannah Resources (LON:SAV) 4.1 pence, Mkt Cap £18.5m – High grade copper intersections seen in Oman VMS drilling
(Savannah is earning into a 65% stake in Block 4 and holds 65% of Block 5)
Savannah Resources reports ‘broad high grade copper’ intersections in their VMS projects in Oman.
The company reports results from a further six drill holes at Mahab 4 and four holes at Maqail South.
The results are said to point towards a potential expansion of the current high-grade portions of both the Mahab 4 and Maqail South resources.
These are part of the current indicated and inferred mineral resource of 1.7mt grading 2.2% copper for 37,400t of contained copper.
These resources sit underneath the bottom of the Aarja pit which was mined between 1988 and 1994 with underground access via existing portals and working.
Mahab 4
67.4m at 4.64% copper, 1.13% zinc and 0.3g/t gold from 18.6m incl. 35.4m at 8.30% copper, 2.1% zinc and 0.4g/t gold from 18.6m
10.05m at 10.51% copper, 2.67% zinc and 0.4g/t gold from 34.95m
19.8m at 6.15% copper, 1.8% zinc and 0.4g/t gold from 65.2m
13.55m at 6.43% copper, 0.68% zinc and 0.2g/t gold from 84.45m
47m at 6.07% copper, 1.43% zinc and 0.3g/t gold from 52m
* drilled oblique to section to maximise sample size for metallurgical test work
Maqail South
5.8m at 4.42% copper and 0.2g/t gold from 58.6m
2.15m at 3.7% copper and 0.1g/t gold from 80.7m.
Conclusion:  While these are good looking results it is normal to drill relatively high grade mineralisation in VMS projects where they are found.
Savannah has stated it wishes to fast-tracking its Oman projects for late 2017 copper concentrate production and we hope the joint venture partners in Oman, Al Thuraya LLC (Block 4) and Al Fairuz Mining (Block 5) will contribute to the capital cost of a copper concentrator and that sufficient water is available to support its operation.   Savannah is aiming for 151,500-702,500to of contained copper and 55,000-362,000oz of gold.
It will take some effort to build a mine and plant for production in Oman and with a new lithium project in Finland and a mineral sands jv in Mozambique the company may be stretching itself a bit thin.

Stellar Diamonds (LON:STEL) Suspended – CPR on Tonguma and Tongo projects (Koidu) in Sierra Leone confirms 4mct recoverable resource
Stellar Diamonds report the completion of its Competent Persons Report on the Tonguma and Tongo projects in Sierra Leone.
The report confirms an initial recoverable diamond resource of 4.0mcts (+1.18mm) and endorses the mine plan for the projects.
The proposed transaction combines Stellar’s
1.45mcts at Tongo grading 165cpht worth US$270/ct
with Octeas’s:
3.45mcts at Tonguma at a grade of up to 290cpht worth US$193/ct. 
A further 8mcts may exist within the exploration target at Tonguma.
Diamond production:  The combined mines may produce around 250,000ctpa
Stella agreed to buy the Tonguma kimberlites from Octea Mining Limited which is owned by the Benny Steinmetz Group (BSG Resources Ltd) and to bring both assets into production using the same production infrastructure.
A recent press article in Sierra Leone comments that “BSG Resources is set to fund the future operations of all of Octéa companies (Koidu Limited, Tonguma Limited & Boroma Limited) as OCTEA is fully committed to remain a valued and long-term stakeholder in Sierra Leone.”
The deal with Octea (BSG), if completed, means Stellar Diamonds should hold 100% of the voting “A” shares in a “NewCo” holding the combined assets and giving Stellar fill legal and management control. Octea would hold 100% of the non-voting “B” shares in “NewCo” which will entitle Octea’s existing shareholders to receive “royalty payments of between 5% to 10% of the combined revenues of Tonguma and Tongo (the “Enlarged Project”) and a 25% economic interest in the net cash flows of the Enlarged Project.”
The two companies will be entitled to preferential repayment of their investment in the respective projects with Stellar’s contribution to Tongo assessed at “at least US$25m” and Octea’s investment on Tonguma set at “a maximum of US$5m during the same period.” “Any royalty payments and net profit share due to Octea under the Agreement will only commence once the total initial investment amount of both parties has been fully repaid by NewCo. There is therefore no upfront acquisition cost to Stellar in terms of the Potential Transaction.”
Stella Diamonds is currently suspended pending the completion of its reverse takeover under AIM Regulations in relation to its consolidation of ownership to a 75% economic interest in the Tonguma and Tongo diamond projects.
Stellar needs to raise a minimum US$25m to fund the projects into production.  We note an initial capital requirement of around US$40m which we assume may be partly funded by Octea (BSG).
*The author of this comment has previously visited the diamond mines at Koidu in Sierra Leone.

Wolf Minerals (LON:WLFE) 4.75p, Mkt Cap £51.5m – Quarterly Activity Report – implementation of process plant improvements
Wolf Minerals’ report for the quarter to 30th September discloses that the processing plant at the Drakelands mine treated a total of 505,414 tonnes of ore to produce 29,981 metric tonne units (mtu – equivalent to 10kg) of tungsten concentrate. The company points out that both the throughput and concentrate production are quarterly records.
As a result of the dry summer, Wolf Minerals has made better than expected progress on mine waste stripping and on the mine-waste facility allowing the company to temporarily reduce the size of the waste removal truck fleet ahead of what are likely to be more difficult operating conditions during the winter months and with benefits to overall costs.
The company generated A$4m of revenue during the quarter with cash expenditure of A$28.5m comprising A$6.1m of development, A$13.8m on production and A$8.7m on debt service.
The softer, weathered, near surface material within the upper levels of the open-pit mine contains fine grained tungsten mineralisation which is more challenging from a recovery point of view within the processing plant. Drilling has, however, confirmed that “as mining gets deeper, the weathering will reduce such that hard granite rock becomes the principal feed to the processing plant. A gradual transition from the soft ore currently being experienced to the harder granite is expected to take place over the next twelve months and should result in a consequential improvement in recoveries and plant throughput.”
Wolf Minerals is in the process of implementing design modifications to the plant to help address these issues. The company expects that “Production is expected to increase during the implementation of the programme over the coming quarters, however, completion of all elements of the programme, expected in the first half of 2017, is required before the full effects on processing plant performance can be ascertained.”
The benchmark ammonium paratungtstate (APT) prices remain below the historically weak level of US$200/mtu, though they moved up slightly last week to US$195/199/mtu from US4190/198/mtu. The company reports that demand for tungsten concentrate remains firm in Europe and Japan but “demand from other regions remained low as a result of soft conditions in the mining, oil and fracking industries and the economic slowdown in China.”
As previously announced, the company has received £20m of bridging finance from its major shareholder, Resource Capital Funds which allows it the breathing space to work through the softer, upper ore horizons and to implement the plant modifications.
Conclusion: The Drakelands mine is currently being supported by its major shareholder while it resolves issues of the quality of its ore feed and implements improvements to the processing plant. These changes will take some time. The current APT price remains at historically low levels, and demand for tungsten concentrates is mixed, however, the company could perhaps be fortunate if prices recover as its operational performance improves over the medium term.

Petropavlovsk (LON:POG) 8.2p, £268m – Refinancing update
The Company continues to work on extending debt maturities of the existing debt facilities with Sberbank (75% of total bank debt) and VTB (25% of bank debt).
As parties work towards an updated debt maturity profile, the Company announced that “Sberbank has deferred the repayment instalment of principal due under its facilities on 31 oct/16 to 20 Dec/16”.
VTB is reported to be working “towards execution of the necessary documentation, and satisfaction of all necessary Conditions Precedent on Monday, 31 Oct/16”.
Conclusion: It is a positive development to see support provided by major lenders with the Company expecting to deliver an update refinancing plan “shortly”.
In our calculations we assumed an extension to the outstanding bank debt to match the Company’s cash flows with the news bearing little effect on our estimates.

]]> Centamin Mon, 31 Oct 2016 08:08:00 +0000 Following Centamin’s (LON:CEY) previous production announcement which showed a 6% QoQ and 41% YoY increase to 149koz the company has released strong Q3 2016 earnings. Revenue of US$201m was up 12% QoQ and 69% YoY. EBITDA of US$122m was up 21% QoQ and almost three times YoY while profit before tax was up 27% QoQ and 14x YoY to US$93m.

Favourable gold pricing as well as the robust production result benefitted the top line while cost performance was strong also. Cash costs were up 1% QoQ although down 39% YoY to US$466/oz. AISC were down 4% QoQ and 30% YoY to US$644/oz resulting in strong free cash flow generation.

Following the strong cost performance in the quarter as well as CEY’s expectation that production will likely be at the upper end of the 520-540koz guidance for 2016 CEY’s full year costs are likely to be towards the lower end of guidance of US$530-550/oz for operating cash costs and US$720-750/oz for AISC.

]]> Green Dragon Gas Ltd 'confident of string of successes' Fri, 28 Oct 2016 10:46:00 +0100 2016 was an auspicious year for China-focused coal bed methane producer Green Dragon Gas Ltd (LON:GDG).

Founder, chairman and chief executive officer Randeep Grewal talks Proactive Investors through the highlights of a year in which the company has started to reap the rewards of its hard work.

With the company’s maiden profit under its belt in 2015, Grewal said: “What we’re truly focused on is completing what we have started, so this is our year to … start monetising the returns that we’ve been working so hard to do over the last 20 years.”

Green Dragon had eight exploration blocks and two in production, and one of the targets at the start of the year was to move a third block from exploration into development, and this was achieved last month with the Guizhou block.

Asked whether the company is being affected by the rocky ride for commodities this year, Grewal replied: “The beautiful thing about working in China is, we’re not.”

The decline in the value of the Chinese currency in dollar terms has had a bit of an effect, “but when it comes to commodity prices, certainly we’ve seen a bit of a down-take in terms of energy prices in China, but the government’s been … very creative and constructive. They’ve doubled our subsidy and essentially offset that change in pricing.”

“Again, the benefit of working in China is that it provides us with stability, and we really enjoy that,” Grewal said.

Green Dragon has applied for approval of the Chinese Reserve Report for Guizhou from the Ministry of Land Resources, which is a precursor to approval of the overall development plan (ODP) and expected to come through in 2017.

“Our doors are wide open to invite a partner in, because we do see that as a farm-out block,” Grewal disclosed.

A “solid partner” who is interested in domestic gas production in China is the company’s preferred funding option for development of the block.

Grewal also talked about GSS 008, which has been in production since 2008, describing it as “the gift that keeps on giving”.

“I think it is a great example of the potential of the LiFaBric technology,” Grewal asserted. LiFaBric is the technology the company developed for tapping into unconventional gas sources in China.

“We’ve truly mastered producing gas, without a drop of chemical, without frakking, in highly faulted coals. GSS is the first of many LiFaBric wells.

“It is the beginning of a string of successes,” the Green Dragon founder promised.

]]> Powerhouse Energy chairman sees significant demand for breakthrough green technology Fri, 28 Oct 2016 08:57:00 +0100 Proactive Investors’ Andrew Scott interviews Keith Allaun, chairman of Powerhouse Energy PLC (LON:PHE), which has developed a technology that turns waste material into synthesis gas.

He talks about the challenges of the last two years, telling Scott they “have been a significant development experience during which we’ve created a novel technology”.

The Powerhouse advance can turn carbon-based waste material into a fuel similar to natural gas.

So, Allaun sees a huge potential market for the company’s G3-UHt system.

“A lot of thought and effort and design has gone into converting the complex into a simple solution,” he says.

“The solution we have created is the most economical use of advanced material science, thermal science and thermal treatment that exists today.”

]]> Chariot Oil & Gas is setting up to rally to 12p says Zak Mir Thu, 27 Oct 2016 12:20:00 +0100 Chariot Oil & Gas (LON:CHAR) shares could be set to rally, according to technical analyst Zak Mir, who reckons the price could reach 12p in the coming weeks.

Having stabilised from lows of around 4.3p earlier this year Chariot currently changes hands at 8.44p.

“It has been a bit of rocky ride, but overall it has seemed to be stabilising and building an extended base,” Mir said in a Tip TV segment for Proactive Investors.

Highlighting a big technical plus, Mir notes that a ‘golden cross’ buy signal in the chart this month.

]]> 88 Energy’s Wall says “we are seeing a lot more than we were expecting” in Alaska Wed, 26 Oct 2016 13:38:00 +0100 The conventional oil potential at Project Icewine, in Alaska, may be the ‘sleeper’ in the 88 Energy Ltd (LON:88E) portfolio, but it’s the kind of noisy sleeper that has become very hard to ignore.

88 Energy’s seismic and partial desktop analysis has identified some 20 exploration leads – the interpretation process is only half way through.

The detailing of the ‘top five’ thus far gives the company around 750mln barrels of potential resources.

The ever-growing catalogue of exploration opportunities is the reason for the over-run on the current phase of desktop work, according to 88 Energy boss Dave Wall.

“I think one of things that we haven’t really managed that well is people’s expectations in the market about timing of when this (seismic interpretation) would be complete.

“I guess the short story is that if we were seeing nothing or very little – it would have been complete a long time ago, but, because we are seeing a lot more than we were expecting to see it is taking longer.”

]]> “Encouraging” fundamentals and technicals for Nu-Oil and Gas Wed, 26 Oct 2016 10:50:00 +0100 Chartist Zak Mir thinks oil and gas minnow Nu-Oil and Gas (LON:NUOG) has the potential to re-test this year’s previous highs.

Mir tells Proactive that the signs for the company are “encouraging”, both from a technical standpoint and fundamentally-speaking.

“It [recently] went from 0.1p to 0.9p [and] it’s basically held half of that move, which is encouraging,” the chartist says.

He adds that the share price has held above previous resistance levels of 0.4p, and is now expecting it to climb back up towards a penny and test the levels hit earlier this month. 

]]> Shell tipped for £24 on Brexit and better crude prices Tue, 25 Oct 2016 10:32:00 +0100 FTSE 100 heavyweight oil share Royal Dutch Shell Plc (LON:RDSB) has got some gas left in the tank, according to technical analyst Zak Mir, who sees it going to £24 – just over 10% above the current price of £21.77.

Mir, in a Tip TV segment for Proactive Investors, highlighted that the recent focus has been on Shell’s ‘dollar earner’ status following the Brexit vote as well as the improvement in crude oil prices – nonetheless, he notes that the chart shows the share price recovery started earlier.

The technical analyst said: “interestingly enough I would say that Shell started to turnaround even before the oil price really started to turn around as well.

“It shows the market is back with this company.”

]]> Hurricane Energy PLC 'genuinely thrilled' with £70 mln cash raise Fri, 21 Oct 2016 10:36:00 +0100 Hurricane Energy PLC (LON:HUR) has raised £70mln of new capital. The extra cash will be used to take the Lancaster oil project into development.

Chief financial officer Alistair Stobie tells Proactive: ''We were genuinely thrilled with the quality of the institutions and the amount of demand we managed to get in this raising. It's a real thumbs-up for what the company's managed to achieve this year''.

Hurricane told investors that the new funds would secure the timeline for the development of an early production system at Lancaster and would pay for the drilling of two more wells.

]]> Shell vs Tullow Oil: As oil prices are rising which is THE buy Fri, 21 Oct 2016 08:52:00 +0100 Zak ‘King of Charts’ Mir puts the spotlight on London oil stocks Royal Dutch Shell Plc (LON:RDSB) and Tullow Oil plc (LON:TLW) amid rising oil prices and in the wake of the EU referendum vote.

The technical analyst highlights that both charts show stocks that have tracked higher through 2016, as crude recovered, though Mir points out that Shell has been the outperformer in the months following the referendum vote, whilst Tullow was the underperformer.

He notes that before the vote, which triggered a rush toward big dollar earning companies, Shell was not looking too clever, as it maintained its dividend despite falling profits.

But since then, the attention has the oiler’s dollar earner status and, Mir says, investors haven’t really cared about the earnings situation. He adds that crude moving back above US$50 a barrel now underpins companies like Shell.

]]> Tendrara could add more than 400% to Sound Energy’s share price Fri, 21 Oct 2016 06:00:00 +0100 Oil analyst Malcolm Graham-Wood tells Proactive Investors that Sound Energy PLC’s (LON:SOU) Moroccan gas discovery, Tendrara, has the potential to add more than £5 to its share price.

He says that the rough rule of thumb is that every 1 trillion cubic feet (tcf) of gas that Sound finds at Tendrara this will add around £1 per share.

“My estimate for this at the moment is something between 3-5 tcf (trillion cubic feet of gas) and it could be a lot more.

“So my numbers say they maybe should be between £5 and £5 a share, but if it’s a huge discovery it could be 25tcf or more.”

He adds that everything is falling in place for the discovery to be considered ‘world-class’.

“It could be a game-changer for the country not just the company,” Graham-Wood concludes.

]]> Hyperdynamics excited about its high risk/high reward programme Thu, 20 Oct 2016 08:34:00 +0100 Hyperdynamics Corporation (OTCMKTS:HYDN) is an independent exploration company exploring offshore the Republic of Guinea for new sources of oil and Gas and has a 100% share in an ultra-deep water two-well drilling programme.

President and chief executive Ray Leonard tells Proactive: ‘’We’re gearing up to spud the next well in April and we’re really excited about it.’’

‘’In terms of why Guinea right now really there are two things -  first of all northwest Africa was an area that was pretty much an exploration wasteland until 2007 when Tullow Oil made a huge discovery called the Jubilee Field which is about a billion barrels of oil and after that there was a tremendous amount of leasing of other companies and over time the results have pointed in our view to Guinea being the closest analogy in geology to offshore Ghana. The other plus is that this contract was negotiated in 2006 – the year before Jubilee. What you often get in the oil industry is that once someone makes a discovery, not only do the companies rush into the area but the host governments realise that this is something very attractive and the terms start getting more difficult – royalties increase, the profit split to the host nation increases and this is the only contract left that’s pre-Jubilee times so not only do you have excellent geology but you have excellent fiscal terms’’, Leonard adds.

]]> The Ithaca Energy chart features classic bullish signals, Zak Mir says Wed, 19 Oct 2016 10:35:00 +0100 Technical analyst Zak Mir says the chart for Ithaca Energy Plc (LON:IAE), which shows the North Sea oil stock’s recovery from 20p to as high as 80p in 2016, feature the signals of a ‘classic bullish situation’.

“I suppose the key events here are really the breaking back above the 50-day moving average in February and the 200-day line in April,” he highlights in a Tip TV segment for Proactive Investors.

“Since then, as you normally see in the classic bullish situations, the shares have bounced near or on the 50-day moving average.”

Noting the support for the share at around 70p, Mir highlights that using technical analysis can help keep traders in positive situations like this.

]]> Hurricane Energy share price chart points to 55p, says Zak Mir Wed, 19 Oct 2016 09:10:00 +0100 Hurricane Energy PLC (LON:HUR) is a favourite of retail investors, and technical analyst Zak Mir is a fan too.

Mir, in a Tip TV segment for Proactive Investors, says the share price - which at around 38p is already up nearly 300% in the year to date – looks like it can go further, up to the 55p level.

“It is a retail investor’s favourite, and for me also a charting favourite in the sense that it came up with the right signals and they worked,” the chartist says.

]]> Ntorya-2 appraisal well 'moving along quite nicely', says Solo Oil's Fergus Jenkins Tue, 18 Oct 2016 14:01:00 +0100 Solo Oil PLC (LON:SOLO) has announced that preparations for the Ntorya-2 appraisal well have now been completed and the rig from the nearby Ntorya 1 wellsite’s being moved into place.

Solo Oil's technical director Fergus Jenkins tells Proactive: ''It's taken a little while to get to the point we're at now but it's moving ahead quite nicely. The civil works for the Ntorya-2 wellsite are now complete and that's meant that the rig and other equipment  can start to move onto the site. There's quite a lot of equipment to be collected together to drill a well so that's going to take just over two weeks. Once that's all on site then the rig and associated equipment will be rigged up and tested.''

''What we're trying to achieve is that all the maintenance can be carried out before  the drilling starts so there aren't any major surprises when we get going'', Jenkins added.

Solo holds a 25% interest in the Ruvuma Petroleum Sharing Agreement, which contained the Ntorya gas condensate discovery made in 2012 with the Ntorya-1 well.

]]> Buru Energy in 'pretty good shape with strong balance sheet' says exec chairman Fri, 14 Oct 2016 10:15:00 +0100 Buru Energy (ASX:BRU) is an Australian listed oil and gas exploration and production company. They’re focused primarily on the petroleum resources of the Canning Superbasin – in  Western Australia.

]]> Advanced nanomaterials will drive Haydale Graphene Industries PLC forward says boss Thu, 13 Oct 2016 12:21:00 +0100 “The building blocks are in place it’s all about commercialisation now.”
So says Haydale Graphene Industries’ chief executive Ray Gibbs.
Adding nanomaterials to existing materials to enhance their performance is Haydale’s skill.
Graphene, as the company’s name implies is one of these materials, but recently it added silicon carbide whiskers (think carbon brake pads and saucepan linings) capability in the US and a Thailand-based printing inks specialist.
Investors clearly see the potential as a recent open offer was over three times oversubscribed.

]]> Faroe Petroleum may rally to 100p in coming months says Zak Mir Thu, 13 Oct 2016 10:25:00 +0100 Faroe Petroleum (LON:FPM) shares could see 100p in the coming months according to technical analyst Zak Mir.

Mir, in a Tips TV segment for Proactive Investors, says Faroe’s recovery from lows of 20p in 2016 up to nearly 75p today would reflect the company’s good fortunes as well as the improvement in crude prices over a similar period.

Having rebounded from the ‘bear trap’ in February, Faroe shares hit a key indicator in April when it crossed the 200-day moving average, he notes.

He highlights that the share remains in an upwards trend and any dips back towards that average have been buying opportunities.

]]> Falcon boss: Beetaloo shale gas discovery “terribly exciting” Wed, 12 Oct 2016 13:45:00 +0100 Falcon Oil & Gas Ltd (LON:FOG) boss Philip O’Quigley joined Andrew Scott in Proactive Investors’ Stocktube studio to talk about the group’s now official shale gas discovery in the Beetaloo basin, within Australia’s Northern Territory.

It comes after Origin Energy, the US$7.5bn valued Australian oil and gas major, officially declared the Amungee project as a new discovery, following the analysis of positive results from a new well.

“It is a very exciting development, it is not every day you have a declaration of a discovery,” O’Quigley said.

“Origin came on board couple of years ago and started drilling only last year, this project is just going from strength to strength.

“This declaration of discovery is a huge leap forward, so it is terribly exciting.”

]]> Kolo licence could be a “key company-maker”, claims Prospex MD Wed, 12 Oct 2016 09:40:00 +0100 Ed Dawson, managing director at natural resources investor Prospex Oil and Gas PLC (LON:PXOG), says the firm’s acquisition of a 49% stake in Hutton Poland could prove to be “a key company-maker”.

Hutton Poland owns 100% of the Kolo licence in Poland, and Dawson tells Proactive that he is “very pleased” with the investment so far.

“It was a key first investment,” he says.

“There’s 87 billion cubic feet [of natural gas] on a mid-case [at Kolo], so if it comes in it will be a meaningful gas field in Europe.”

Dawson describes the project as “relatively low-risk”, and hopes that a well will be drilled there at some point in the fourth quarter of this year.

The managing director also talks about new transactions, explaining that the Prospex team has already looked at numerous potential opportunities.

He adds that the firm will continue to “actively” explore other “relatively late” projects.

]]> Oil potential at South Disouq an 'unexpected but fantastic find', says SDX boss Mon, 10 Oct 2016 09:42:00 +0100 SDX Energy Inc (LON:SDX, CVE:SDX) has announced that the quality of new 3D seismic data, covering 300 square kilometres of the South Disouq concession, has surpassed expectations and is allowing the group to see additional exploration targets.

Chief executive Paul Welch tells Proactive: "The data's revealed something that was unanticipated in that we can see deeper horizons that we feel are oil-prone in the Abu Roash and AEB formations."

Welch adds: "We arrived at this acreage focused on shallower horizons but based on the quality of the seismic data we see oil potential on the block which is fantastic news and something that wasn't anticipated originally."

]]> UKOG set to rise to 2.5p so traders should go long, Zak Mir says Mon, 10 Oct 2016 08:43:00 +0100 Chartist Zak Mir sees an opportunity for a trade in the shares of UK Oil & Gas Investment Plc (LON:UKOG).

Mir, the ‘King of Charts’, in a TIP TV segment for Proactive Investors is expecting to soon see a ‘golden cross’ buy signal, and he reckons the price can rise from current levels (1.75p) to around 2.5p per share.

“What technical people will be enjoying at the moment is the way we’ve got both the 50-day and 200-day moving average rising,”  the technical analyst says.

“They’re both rising and they’ll probably deliver a golden cross buy signal over the next couple of weeks.

“So that would be a decent technical reason to go long.”

]]> Zak Mir sees a chance for Providence Resources shares to recover Fri, 07 Oct 2016 06:01:00 +0100 Examining the chart for Providence Resources PLC (LON:PLC) technical analyst Zak Mir sees a share price rise to an initial target of around 13p for the Irish oiler.

Moreover Mir, aka the King of Charts, predicts the end of the longer term bearish run on Providence is coming to an end, should the share price breakout beyond the initial 13p target.

He explains that the Providence chart features a ‘falling wedge reversal’, an indicator that there may be the “start of a decent move” for the share price.

Mir also notes that the Providence price has broken above its 50 day moving average, and “while above that I’m quite optimistic there will be a decent turnaround here.”

“Maybe it is just the one month rallies that we’ve seen before but this situation here, under 10p, it looks as though the buyers were coming in quite well,” Mir said in a Tips TV segment for Proactive Investors.

]]> Rockhopper Exploration is looking stable, but buyers may have to wait Wed, 05 Oct 2016 10:27:00 +0100 Technical analyst Zak Mir describes the chart for Rockhopper Exploration (LON:RKH) as ‘stable looking’, whilst noting that traders will be waiting for a buy trigger.

Mir, in a Tips TV segment for Proactive Investors, acknowledges that the chart does appear a little dull at present and wouldn’t be something that bullish traders would be rushing into.

“The main headline here would be that we’re not heading downwards at a rate of knots, which is what the share price was doing into the beginning of this year.”

]]> FTSE 100 seemingly ignoring Brexit uncertainty, says Brooks Tue, 04 Oct 2016 16:20:00 +0100 Kathleen Brooks, research director at spreadbetter City Index, mulls over with Proactive Investors the recent ascendency of the FTSE100 while the UK pound hits a fresh low.

On Tuesday, October 4 the index of leading shares broke through 7,000 while the UK currency hit the lowest level since 1985.

Brooks said Footsie appeared to be ignoring the uncertainty caused by Brexit "largely because we haven’t actually seen in the real hard economic data, those concerns actually come through".

FTSE100 hasn't caught up yet in the way that has been seen in other markets, like FX, she suggested.

It is also being boosted by gains from big oilers on plans by OPEC to cut production, she highlighted.

The weakness of the pound is largely due to worries over the so-called hard Brexit, where the UK withdraws from the single market.

"This conservative party conference has been a real sell for the pound this time round," said Brooks, who added that it appeared Prime Minister Theresa May, in comments, appeared willing to accept that the economy was going to suffer, if we withdraw from the single market

]]> Europa Oil & Gas (Holdings) Plc on cusp of break even at US$30 a barrel Mon, 03 Oct 2016 14:46:00 +0100 Europa Oil & Gas Holdings Plc (LON:EOG) is on the cusp of doubling production at the Wressle field, which will come on stream in 2017, turning the firm into a robust oiler.
So says chief executive Hugh Mackay. Speaking to Proactive's Andrew Scott, he said it will provide 150 barrels  a day net to Europa.
And on top of the 123 barrels a day produced from its other three fields, will double revenues.
It will mean the company will break even at US$30 a barrel.
That's quite an important metric for us and distinguishes us from many companies on AIM who can’t do that."
The company now has five offshore licences in Ireland, and excitingly over the next two to three years hopes to deliver half a dozen drillable targets -  any one of which could be a company maker.
Mackay also noted the arrival of the majors and supermajors now in the basin, which augurs well for Europa- one of the leading explorers in the  region.
For the Holmwood exploration well in the Weald basin, Surrey, Mackay is very excited, and confident of drilling in 2017.
What's also positive he said is the read -across from the Horse Hill well - just 12 km away, where 1300 barrels a day were flowed , which is good for an onshore well, he noted.
In the  12 months to July 31, Europa said group revenue amounted to £1.3mln compared to £2.2mln.
Cost of sales was cut by 33% and administrative expenses were 39% lower, the firm said.

]]> BP ‘just getting started’, as analyst claims it can add 20% Mon, 03 Oct 2016 12:15:00 +0100 Technical analyst Zak Mir has said that BP plc (LON:BP.) is only “just getting started” and believes there is headroom to add another 20% to the current share price.
The share price has rallied hard over the summer, gaining a third in the last six months alone, which Mir puts down to solid fundamentals.
“Near-term, most of the fundamentals have been positive and it’s trying to put a line under the Gulf of Mexico issue,” he said.
Speaking in the latest edition of TIP TV’s Proactive Investor bulletin board series, Mir is now targeting upwards of 500p for BP.
“While we’re above 440p, I’m looking for at least the highs of the year to be revisited. The technical target here is at the top of that rising trend channel from June, around the 530p area.”
]]> Iodine market set to continue growth path, reckons Iofina boss Mon, 03 Oct 2016 11:26:00 +0100 Iodine producer Iofina plc (LON:IOF) says it's happy with its growth and a new debt structure, which gives it a fresh US$10mln facility to expand production.
Speaking to Proactive, Dr Thomas Becker, chief executive, said the firm had five producing plants and a chemical company.
"The iodine market is definitely growing," he said.
"Applications for iodine, including in  health care, pharmaceticals, biocides, LCD screens are all in growth pattern. However, there still seems to be a little bit of excess iodine in the  market."
This is still driving down the price, said Becker, but he added he doesn’t expect these depressed prices to maintain much longer.
The iodine market has been steadily growing for the last 20 years, he said, and he sees this trend continuing, which gives the group a lot of opportunities.
Last week, Iofina revealed first half revenues to end June increased to US$11.58mln, up from US$11.06mln in 2015. The company reported a US$2.18mln loss, including a US$469,263 impairment relating to the Montana water depot project.
Earnings (EBITDA) amounted to US$180,437 for the period, compared to US$1.4mln in the comparative months of 2015.

]]> Don’t touch Gulf Keystone Petroleum says chart guru Zak Mir Mon, 03 Oct 2016 09:47:00 +0100 “You wouldn’t really want to be touching that.” Chart guru Zak Mir gives his view on Gulf Keystone Petroleum Limited.

Mir, in a Tips TV segment for Proactive Investors, recalls how when Gulf Keystone shares traded at 180p investors were unhappy with him and his call that the price would drop to 10p.

“That didn’t go down very well, but that’s exactly what we’ve had. In fact it has gone even lower than that.

“It [back then] just looked like a massive topping out formation, and in fact if you look at the fundamentals and where the company is situated in Iraq it is amazing it even lasted that long, and it held out for so long.”

]]> 88 Energy price could more than double in the coming months, says chart guru Zak Mir Sat, 01 Oct 2016 07:00:00 +0100 88 Energy Plc (LON:88E) shares are in an uptrend, highlights chart guru Zak Mir, who reckons the Alaska focussed explorer could more than double in the coming months.

Mir, in a TIP TV segment for Proactive Investors, says a rally up as high as 5p could come in the next three to six months.

Studying the chart he notes that a ‘golden cross’ trigger preceded a sharp rise in 88 Energy’s share price early in 2016, and it has remained in an uptrend since.

That is positive for traders even if they don’t want to know anything else about the chart he says, though he adds that the stock has also broken through the 50 day moving average which is a key momentum signal.

“Being above the 200 day line, and while it is above it at 1.9p, you’ve got to be positive [about the share],” Mir said.

]]> Plenty left in the tank for Sound Energy Plc: TIP TV’s Zak Mir says next stop is 120p Sat, 01 Oct 2016 06:59:00 +0100 Sound Energy PLC (LON:SOU) has plenty left in the tank, even after a three-month move that has seen the stock gush 400% higher.
That, at least, is chart guru Zak Mir’s take on the gas development group that has enjoyed huge success in Morocco and has a big well coming up in Italy.
Mir, who has been following Sound closely now for months, said it has adhered to all the basic rules of technical analysis in its journey so far.
“You had the break-out through 20 [pence], which was the first signal. You had a bull flag at in the 30s…I remember talking to somebody about that,” he told host Nick Batsford on the Proactive Investors bulletin board show earlier.
“The shares haven’t traded below the 20-day moving average since the beginning of July.”
So where does Mir expect the next stop will be? Around the 120p-mark he reckons, which leaves some 40% upside from current levels.
He also provides some helpful hints to Sound investors when it comes to setting their stop-loss on the stock.
Earlier on Twitter, the company announced ground works had begun ahead of work on the Badile well in Italy.
With a net present value of over £400mln, success could move the dial again for this darling of private investors.

]]> Things falling into place for Providence, says Malcolm Graham Wood, who also looks at GKP Fri, 30 Sep 2016 17:27:00 +0100 Hydrocarbon Capital's Malcolm Graham Wood turns attention to two AIM oil firms grabbing headlines currently - Providence Resources PLC (LON:PVR) and Gulf Keystone Petroleum (LON:GKP).
There is renewed optimism around the former as a farmout of its Barryroe field, off the coast of Ireland, edges closer, after what has been a torrid time, and with the latter, it is looking to turn the corner with a restructuring of its balance sheet.
Graham Wood notes that Providence was just "a few months ago on its back" with a law suit and next to no money.
But roll the clock forward and include a US$73.8mln financing and "everything all of a sudden" is falling into place" for Providence".
The irony is, says Graham Wood, that companies who wouldn't have farmed into the Barryroe field are now looking at a farm out potentially next year.
Gulf Keystone's woes at the huge Shaikan field in Kurdistan have been sparked by war and payments not coming from the government, says the Malcy blogger, but things are looking better now, he reckons.
It comes after a chequered history, which included, again, equity shareholders losing most of their interest.
"The company is getting paid- that's the important thing," notes Graham Wood, adding that equity shareholders will never make as much as they might have owned before but it is a proper oil field, he said.
]]> The contrasting fortunes of Jersey Oil & Gas and Xcite Energy - Malcolm Graham Wood Fri, 30 Sep 2016 17:06:00 +0100 Hydrocarbon Capital's Malcolm Graham Wood walks us through two North Sea oil explorers Jersey Oil and Gas PLC (LON:JOG) and Xcite Energy (LON:XEL).
The former is doing pretty well in looking to develop smaller fields as bigger players pull out of the region, as seen by its recent deal with major Statoil faming ou a licence, while the latter is in a difficult position, he says.
It also told investors it continues to “work actively” on a number of opportunities in the UK, which it expects will lead to the acquisition of producing oil and gas assets in the near future.
Big news for the firm recently has been the successful farmout to Norwegian oil major Statoil on the P.2170 licence, in which the latter will take a 70% stake and be operator.
Meanwhile, developer of the Bentley heavy oil field, Xcite Energy Limited shareholders this week learned they’ll be left with only 1.5% of the company if a debt for equity restructuring is pushed through.
As well as exchanging all of Xcite’s bond debt for shares, equating to 98.5% of the company’s soon-to-be enlarged share capital, it is also expected that a new US$10mln working capital facility will be provided by the lenders.
Graham Wood said he had been impressed by Jersey's Statoil deal and notes that with a number of major firms moving away from the North Sea, except where there are particularly large prospects, there are assets available and companies like Jersey are able to make money from smaller fields.
On Xcite, he says the ironically he always felt Statoil would have been the preferred partner of the  Bentley firm, but he says in his experience companies are reluctant to invest in heavy oil where there are alternatives.
]]> New-look Obtala expects better results in second half Fri, 30 Sep 2016 11:50:00 +0100 A restructured and rebranded Obtala Ltd (LON:OBT) is looking to scale up operations throughout 2017.
The firm is focused on developing a focused agricultural and forestry business in Africa and has released its first half numbers to end June - a period which saw it sell off the last of its non-core ventures - the retail arm LCS - for US$100.
Miles Pelham,  the chairman, told Proactive's Sarah Lowther that the first half had been challenging and conceded the results were "not  stellar", not least due to that sale of the Lesotho retail  chain but also that traditionally the rainy season is not good for revenues in agriculture and forestry.
"It was a difficult time and certainly a time when we had to retrench and restructure and that has happened and I'm pleased to say we're in a much better place now so we should expect certainly significantly better results in the second half," he said.

]]> Jersey Oil & Gas set up to build sizeable company, says boss Fri, 30 Sep 2016 08:10:00 +0100 Chief executive of  Jersey Oil & Gas PLC Andrew Benitz told Proactive Investors the firm was well positioned to build a "sizeable company going forward".
He says the hard work undertaken and its knowledge now of the North Sea market, means the firm  is in a good position to make a transaction and evaluate assets.
"There hasn't been a huge amount of successful transactions partly because of low oil prices in the  first part of the year, but secondly, vendors have had to get used to the new environment.,” he said.
But Benitz thinks  with range bound oil between US$40 and US$50  a barrel , there is a "growing appetite" for increasing acquistions  and disposals across the North Sea, he suggests.
Big news for the firm recently has been the successful farmout to  Norwegian oil major Statoil on the P.2170 licence, in which the latter will take a 70% stake and be operator.
"That was a great achievement for us," said Benitz, who added it was s a very promising prospect, with the larger of the two targets, having 300mln barrel potential.
In its interims, the AIM firm said work was currently focused on obtaining the customary regulatory approvals to complete the farm-out.
It also told investors it continues to “work actively” on a number of opportunities in the UK, which it expects will lead to the acquisition of producing oil and gas assets in the near future.

]]> Premier Oil could see 100p in the next three to six months, says chart guru Zak Mir Thu, 29 Sep 2016 08:50:00 +0100 It’s not surprising that Premier Oil PLC (LON:PMO) shares have been stuck in a range, says chart guru Zak Mir, though he reckons the oil stock may move towards 100p over the next three to six months.

In a TIP TV segment for Proactive Investors Mir says he’d be looking for Premier Oil shares to stay above 58p, the 200-day moving average, and then the share could see a ‘top of channel’ target in the next three to six months towards a pound.

Premier Oil presents a convincing chart, he added.