Klondex Mines well-placed to deliver on 2017 production guidance Fri, 20 Oct 2017 15:12:00 +0100 Thor Mining brings in £565,000 via financing to advance core assets Fri, 20 Oct 2017 13:54:00 +0100 NioCorp boss lends the company money to speed up development of Elk Creek Fri, 20 Oct 2017 13:50:00 +0100 Cadence Minerals: Macarthur Minerals confirms potential for high grade gold at Pilbara Fri, 20 Oct 2017 13:40:00 +0100 Asiamet Resources continuing to hit high grades at BKZ Fri, 20 Oct 2017 11:35:00 +0100 Steve Hughes, VP of exploration for Asiamet Resources PLC (LON:ARS), tells Proactive's Andrew Scott their drilling programme at BKZ continues to deliver high grades of a number of metals.

What began as a five-hole programme has now become 12 with Hughes saying he's just finished the tenth hole today.

''We've got two holes left .. I suspect it's about another week and then we'll move the rig. I think we'll probably go down to southern BKM where there's more massive sulphides''.

]]> Tertiary Minerals looks to build bulk in industrial minerals Fri, 20 Oct 2017 11:25:00 +0100 Russia, Brexit and Catalonia Fri, 20 Oct 2017 10:50:00 +0100 Bacanora Minerals further de-risks Sonora lithium project with environmental approval Fri, 20 Oct 2017 10:40:00 +0100 Acacia nears deal to end dispute with Tanzania government but posts quarterly revenue slump Fri, 20 Oct 2017 10:30:00 +0100 Pan African Resources on recovery track Fri, 20 Oct 2017 08:20:00 +0100 Tethyan Resources building a strong pipeline of projects Fri, 20 Oct 2017 07:33:00 +0100 Fabian Baker, chief operating officer for Tethyan Resources PLC (LON:TETH)(CVE:TETH) tells Proactive they're looking to release the results of substantial geophysical surveys at their Suva Ruda and Gokcanica projects in Serbia in the coming weeks.

Tethyan holds an option over the Suva Ruda project under the terms of which it can take 100% ownership via a €6 mln payment that can be made at any time with in an eight year period.

Suva Rudia covers an 87 square kilometre area and lies approximately 240 kilometres south of Belgrade.

The Gokcanica project covers 110 square kilometres in southern Serbia, five kilometres to the north of the town of Josaniska Banja.

]]> BHP Billiton‘s new chairman defends CEO Andrew Mackenzie after attacks from activist investor Elliott Advisors Fri, 20 Oct 2017 06:53:00 +0100 Segue Resources proposes a name change to Arrow Minerals Fri, 20 Oct 2017 05:49:00 +0100 Pioneer Resources funds drilling with oversubscribed capital raising Fri, 20 Oct 2017 04:41:00 +0100 European Lithium continues international transition Fri, 20 Oct 2017 03:23:00 +0100 OreCorp pauses trade to digest update from Barrick Gold Corporation in Tanzania Fri, 20 Oct 2017 02:08:00 +0100 Alice Queen eyes resource expansion at Horn Island gold project Fri, 20 Oct 2017 00:25:00 +0100 NTM Gold has gold drilling results on the table Fri, 20 Oct 2017 00:22:00 +0100 Hannans to divulge latest from Forrestania Lithium Thu, 19 Oct 2017 23:26:00 +0100 Elysium Resources pounces on asset, potential for a gold focus Thu, 19 Oct 2017 23:08:00 +0100 Red River rated a Buy from Melbourne-broker as zinc production returns to Thalanga Thu, 19 Oct 2017 22:40:00 +0100 Arafura Resources climbing valuation provides capital raising opportunity Thu, 19 Oct 2017 21:43:00 +0100 Altura Mining continues to progress construction at lithium project Thu, 19 Oct 2017 21:42:00 +0100 Explaurum commences intensive exploration phase Thu, 19 Oct 2017 20:28:00 +0100 Barsele Minerals shares up on latest positive findings at Swedish project Thu, 19 Oct 2017 19:58:00 +0100 Barrick Gold strikes deal with Tanzania, sending Acacia Mining shares higher Thu, 19 Oct 2017 18:49:00 +0100 Stratex's management backed by corporate governance advisory firm Thu, 19 Oct 2017 14:34:00 +0100 Cadence Minerals: Macarthur Minerals completes acquisition of 15% of Yalgoo Exploration Thu, 19 Oct 2017 14:20:00 +0100 Amur Minerals 'in the right place, at the right time with the right commodity' Thu, 19 Oct 2017 13:01:00 +0100 Robin Young, chief executive of Amur Minerals Corporation (LON:AMC), brings Proactive up to speed on latest developments at their Kun-Manie project in Russia and answers investors questions.

This week Young announced they’re testing four drill defined deposits with new results allowing them to assess the economic potential of the open-pit only project, with subsequent analysis set to determine the potential to access deeper ores via underground mining.

]]> Shanta Gold sees sharp increase in underground production at New Luika Thu, 19 Oct 2017 10:21:00 +0100 Papua Mining very active in cracking on with exploration in Queensland Thu, 19 Oct 2017 09:34:00 +0100 David Price, chief executive of Papua Mining PLC (LON:PML) tells Proactive's Andrew Scott he's delighted with the response from investors to their recent £1.5mln raise.

''We had good participation from our existing shareholders and also the board - the board participated which is important for investors''.

Price, who took over as CEO just last week, goes on to the say the cash puts them in a very comfortable position now to use it on the ground as part of their exploration programmes.

]]> Marshalls snaps up pre-cast concrete maker CPM for £38mln Thu, 19 Oct 2017 09:22:00 +0100 Rambler Metals and Mining inks short term US$1mln loan Thu, 19 Oct 2017 08:17:00 +0100 VSA Capital Market Movers - Egdon Resources Plc Thu, 19 Oct 2017 08:09:00 +0100 Egdon Resources (LON:EDR)#

Egdon Resources (LON:EDR) has provided an update on PEDL143, the Holmwood prospect, following a meeting of the Surrey County Council Planning and Regulatory Committee yesterday. EDR holds an 18.4% interest in the prospect.

The results of the meeting were the approval of a security fence for the drill site. However, the Committee elected to defer a decision on traffic management following requests for further information. As a result, EDR has indicated that drilling of the conventional oil exploration well is now likely to take place in H1 2018.

We reiterate our Buy recommendation and 35.5p target price.

]]> Horizonte Minerals files construction licence for Araguaia nickel mine Thu, 19 Oct 2017 08:07:00 +0100 Galantas Gold updates on accelerated mine development at Omagh Thu, 19 Oct 2017 07:12:00 +0100 Travis Perkins says on track to achieve full year expectations despite challenging market backdrop Thu, 19 Oct 2017 07:12:00 +0100 Tertiary Minerals says in advanced discussions regarding acquisition opportunities in the fluorspar and industrial minerals sector Thu, 19 Oct 2017 06:54:00 +0100 Capital Drilling confirms it had another strong quarter Thu, 19 Oct 2017 06:52:00 +0100 Landore Resources raises £1mln through a share subscription of 50,000,000 at a price of 2.0p each Thu, 19 Oct 2017 06:35:00 +0100 Sayona Mining shares spike on conglomerate hosted gold opportunity Thu, 19 Oct 2017 03:43:00 +0100 Pacific American Coal swells cash position after recovering investment Thu, 19 Oct 2017 02:40:00 +0100 Caeneus Minerals joins the search for conglomerate hosted gold in Pilbara Thu, 19 Oct 2017 02:16:00 +0100 Peel Mining positively re-rated after zinc-rich discovery near Cobar Wed, 18 Oct 2017 23:46:00 +0100 European Lithium updates on the Paynes Find Gold Project Wed, 18 Oct 2017 23:39:00 +0100 Pioneer Resources shares continue upward momentum at the open Wed, 18 Oct 2017 23:15:00 +0100 Estrella Resources eyes next steps following nickel acquisition Wed, 18 Oct 2017 22:47:00 +0100 Rise in electric vehicles puts lithium price rises and companies in spotlight Wed, 18 Oct 2017 16:46:00 +0100 Lionsgold roars after update on its gold-backed digital currency Wed, 18 Oct 2017 14:14:00 +0100 Mawson Resources poised for more drilling as it continues to find gold at Rompas- Rajapalot Wed, 18 Oct 2017 13:53:00 +0100 Renaissance Gold agrees amendment to Magna Terra property sale Wed, 18 Oct 2017 13:08:00 +0100 Klondex Mines to pay in shares for Bison Gold acquisition Wed, 18 Oct 2017 12:36:00 +0100 Bryah Resources begins trading on ASX after $5mln float Wed, 18 Oct 2017 09:38:00 +0100 Neil Marston, managing director of Bryah Resources (ASX:BYH) chats to Proactive following their initial public offering (IPO) this week on the ASX which raised $5 million.

The new copper-gold explorer has two projects totalling over 900 square kilometres near Meekatharra located in mid-west Western Australia.

]]> VSA Capital Market Movers - Independent Oil & Gas PLC, Sula Iron and Gold PLC, Goldplat plc Wed, 18 Oct 2017 08:35:00 +0100 Independent Oil & Gas (LON:IOG)#

Independent Oil & Gas (IOG LN) has announced that it has signed an LOI with Offshore Design Engineering for multiple contractor roles in the development of the Blythe and Vulcan Satellites project beginning with technical and operational support in preparation for the final investment decision.

ODE will provide technical and operational support both before and after the FID and will act as the operations and maintenance service provider. Pre-FID costs will be fully deferred while pre first gas costs will be 50% deferred until first gas. The Thames Pipeline will also be included in ODE’s remit along with an onshore operational base in Great Yarmouth.

The announcement demonstrates further support from external contractors underpinning confidence in the project. Furthermore, the terms of the LOI with significant deferrals reduce the upfront funding requirement strengthening IOG’s ability to advance the project as a 100% operator.

We reiterate our Buy recommendation.


Sula Iron & Gold (LON:SULA)#

Sula Iron & Gold (LON:SULA) has provided a corporate update. Structural interpretation work following the recent drilling programme and soil sampling is ongoing. The results of this analysis will aid in identifying the most appropriate next steps for development and management is of the opinion that finding a JV or farm in partner may be the most advantageous way of developing the Ferensola project.

The board have also indicated that it intends to expand SULA’s asset base and is considering opportunities in this regard.

We reiterate our Speculative Buy recommendation and 1.2p target price.


Goldplat (LON:GDP)#

We note the purchase of share’s by CEO, Gerard Kisbey Green.

We reiterate our Buy recommendation and target price of 17p.

]]> Pan African higher after concluding Barberton Mines wage agreement Wed, 18 Oct 2017 08:24:00 +0100 Hummingbird Resources says Yanfolila on-track and on-budget for first gold Wed, 18 Oct 2017 08:18:00 +0100 Asiamet Resources continues to hit high grades at BKZ in Kalimantan Wed, 18 Oct 2017 07:49:00 +0100 Sula surges after strategy update reveals plans to farm-out Ferensola or find a joint venture partner Wed, 18 Oct 2017 07:38:00 +0100 Shanta Gold says new bank still working on due diligence after Tanzania changes Wed, 18 Oct 2017 07:29:00 +0100 Amur Minerals encouraged by latest findings for Kun-Manie open pit proposals Wed, 18 Oct 2017 07:18:00 +0100 BHP Billiton sees quarterly iron ore output fall but still expects to hit annual production targets Wed, 18 Oct 2017 07:16:00 +0100 Rio Tinto hit with FCA fine over financial reporting process for Mozambique purchase; US, Australian regulators also investigating Wed, 18 Oct 2017 06:50:00 +0100 Vast Resources highlights “significant progress” for Baita Plai approval Wed, 18 Oct 2017 06:49:00 +0100 Montezuma Mining Company reveals high-grade gold anomaly Wed, 18 Oct 2017 06:13:00 +0100 European Lithium to fast-track lithium pre-feasibility study Wed, 18 Oct 2017 04:51:00 +0100 De Grey Mining’ shares rise after securing strategic gold prospect Wed, 18 Oct 2017 04:49:00 +0100 King River Copper looks to confirm high-grade gold with drilling Wed, 18 Oct 2017 03:44:00 +0100 Riva Resources calls for halt intra-day to reveal acquisition Wed, 18 Oct 2017 03:22:00 +0100 Tyranna Resources drills high-grade gold near the Challenger Gold Mine Wed, 18 Oct 2017 02:57:00 +0100 Castle Minerals' shares rise after lifting cash for conglomerate-hosted gold project Wed, 18 Oct 2017 00:17:00 +0100 WPG Resources adds further experience to the board Tue, 17 Oct 2017 23:47:00 +0100 Peninsula Energy tightens its focus on the Lance Projects Tue, 17 Oct 2017 23:39:00 +0100 Tawana Resources has lithium and tantalum news on the radar Tue, 17 Oct 2017 23:36:00 +0100 Xstate Resources to lift funds following legal stoush Tue, 17 Oct 2017 23:08:00 +0100 Australian Mines' trading activity raises ASX eyebrows Tue, 17 Oct 2017 22:46:00 +0100 Magnum Gas & Power aims to monetise asset Tue, 17 Oct 2017 21:54:00 +0100 Berkwood Resources hits graphite with every hole in first phase drilling at Lac Gueret Tue, 17 Oct 2017 20:00:00 +0100 Kincora Copper shares boosted as it starts exploring Red Well licence Tue, 17 Oct 2017 19:34:00 +0100 Liberty One Lithium set for milestone start of drilling at Pocitos West property Tue, 17 Oct 2017 18:34:00 +0100 Klondex Mines says Bison Gold now has court approval for acquisition Tue, 17 Oct 2017 18:30:00 +0100 Eastmain Resources shares tick higher as it uncovers new high grade gold at Eleonore South Tue, 17 Oct 2017 17:39:00 +0100 Coro Mining consolidates land position in Chile as it's poised to buy Naguayan property Tue, 17 Oct 2017 17:08:00 +0100 Vast Resources kicks off prospecting activities at Piciorul Zimbrului and Magura Neagra Tue, 17 Oct 2017 14:42:00 +0100 MGX Minerals and partner make major stride with lithium brine processing technology Tue, 17 Oct 2017 13:00:00 +0100 Cashed-up Kincora Copper now raring to dish up major discoveries in Mongolia Tue, 17 Oct 2017 10:06:00 +0100 Rio Tinto cuts full year copper production guidance after third quarter decline Tue, 17 Oct 2017 09:06:00 +0100 Ferrum Crescent targeting maiden JORC resource at Toral by year end Tue, 17 Oct 2017 07:39:00 +0100 Ferrum Crescent PLC (LON:FCR) executive directors Laurence Read and Myles Campion tell Proactive they're to changing their near-term approach to the exploration and evaluation of FCR's key asset in Spain, the Toral zinc project.

The first full-scale historical review of core samples from Toral has now been undertaken. That’s allowed all historical information to be processed into a central model with a single data format, which the company will be able to use to plan around more effectively in the future.

It will also lead to a maiden JORC resource for Toral, to be completed by the end of this year, incorporating the data from the 2017 drilling programme.

]]> Bellway positive as full year revenue rises 14% Tue, 17 Oct 2017 07:33:00 +0100 Stratex sells out of Goldstone, Priestley steps down Tue, 17 Oct 2017 07:05:00 +0100 Ferrum Crescent reviews and revises exploration strategy, appoints new director Tue, 17 Oct 2017 06:53:00 +0100 Pioneer Resources has a new substantial holder Tue, 17 Oct 2017 06:40:00 +0100 Petropavlovsk reiterates full year gold production guidance Tue, 17 Oct 2017 06:23:00 +0100 Silver City Minerals discovers new copper-cobalt belt near Broken Hill Tue, 17 Oct 2017 06:18:00 +0100 Segue Resources adds Pilbara Gold Project to active schedule Tue, 17 Oct 2017 04:16:00 +0100 Peel Mining has exploration news on the table Tue, 17 Oct 2017 03:16:00 +0100 Fe Limited’s shares surge after multiple copper hits at the Forrest Project Tue, 17 Oct 2017 03:04:00 +0100 Investigator Resources to use new cash to ramp up drilling at Paris silver project Tue, 17 Oct 2017 01:50:00 +0100 Alkane Resources maintains focus to refresh board Tue, 17 Oct 2017 00:31:00 +0100 Primary Gold confirms positive project economics for Coolgardie Gold Project Tue, 17 Oct 2017 00:06:00 +0100 Bryah Resources debuts on ASX as it hunts next DeGrussa in Bryah Basin Mon, 16 Oct 2017 22:28:00 +0100 Coro Mining closes second tranche of financing to advance Marimaca copper project Mon, 16 Oct 2017 19:58:00 +0100 Berkwood Resources shares surge as it buys Roscoe vanadium property in Quebec Mon, 16 Oct 2017 19:44:00 +0100 Gold Resource Corporation produces 6,465 ounces of the yellow metal in third quarter Mon, 16 Oct 2017 18:21:00 +0100 Leading Edge Materials' Swedish gov't research project will assess Woxna graphite Mon, 16 Oct 2017 16:12:00 +0100 Vast Resources enjoys record third quarter Mon, 16 Oct 2017 15:04:00 +0100 The team at Vast Resources PLC (LON:VAST) tell Proactive they've seen a record third quarter, with operations at the Manaila polymetallic mine in Romania and the Pickstone-Peerless gold mine in Zimbabwe outperforming the previous quarter in terms of tonnes mined, tonnes milled, copper concentrate produced and gold produced.

At Manaila there was a 31% increase in copper concentrate produced, although grade dropped marginally. Zinc production fell, but gold production rose.

At Pickstone-Peerless, in which Vast holds a 25% stake, ore mined and milled hit their highest levels since June 2016.

Gold production by 17% increased to 4,738 ounces.

]]> Strategic Minerals quickly building up pieces of the puzzle with copper acquisition Mon, 16 Oct 2017 14:22:00 +0100 Strategic Minerals chairman Alan Broome and director Peter Wale tell Proactive's Andrew Scott they've entered into a binding term sheet to acquire, subject to due diligence, the Leigh Creek copper mine in South Australia from Resilience Mining Australia.

The project represents a near-term low-capex copper production opportunity with early cashflow generation potential.

They also update on developments at Redmoor and CARE as well as giving a few words following on from Cobre's quarter of record sales.

]]> Strategic Minerals signs term sheet to acquire copper mine Mon, 16 Oct 2017 13:58:00 +0100 Greatland Gold applies to extend exploration area at the Ernest Giles gold project Mon, 16 Oct 2017 13:21:00 +0100 VSA Capital Market Movers - Columbus Energy Resources PLC, Polymetal International Mon, 16 Oct 2017 08:14:00 +0100 Columbus Energy Resources (LON:CERP)#

Columbus Energy Resources (CERP LN) has provided an update on the recently announced Open Offer. The Open Offer for up to 20.1mn shares at 5p per share is being made to qualifying shareholders as of close of business 13 October 2017. Qualifying shareholders are existing shareholders as of the record date and are entitled to 1 open offer share for every 31 existing ordinary shares.

Qualifying shareholders are also eligible to apply for additional open offer shares through an excess application facility for which full details are available in the circular which will be on the company’s website today.

The last date for application for qualifying shareholders is 11am on 1 November.


Polymetal (LON:POLY)#

Polymetal (POLY LN) has announced strong Q3 2017 production results. Gold equivalent production of 470koz was up 26% YoY meaning that in the first 9mo17 POLY has produced 1.03mnoz GE, up 15% YoY. This strong operational performance was achieved via the full ramp up at Svetloye as well as record production at Albazino (89koz, up 24% YoY) and Varvara and a strong performance at Mayskoye (81koz, up 70% YoY). As a result of higher prices and production group revenue was up 17% YoY to US$546mn, which also benefitted from delayed sales from prior periods and POLY has indicated that this timing gap is due to be closed during Q4 2017.

POLY appears comfortably on track to meet its guidance of 1.4mnoz GE production in 2017 and has maintained cost guidance also at US$600-650/oz and AISC of US$775-825/oz. Given that the ramp up has been driven by the low cost heap leach operation at Svetloye this is likely to benefit group margins particularly as grades at the project were up 27% YoY to 4.8g/t.


]]> Low & Bonar suffers hurricane fall-out as prices rise Mon, 16 Oct 2017 08:08:00 +0100 Vast boosts production in Romania and Zimbabwe Mon, 16 Oct 2017 07:27:00 +0100 Metal Tiger increases stake in Kingsgate Consolidated Limited Mon, 16 Oct 2017 07:12:00 +0100 Is big money finally ready to flow towards West African gold juniors? Fri, 13 Oct 2017 12:19:00 +0100 Have mining markets turned for the better ? Fri, 13 Oct 2017 10:13:00 +0100 Mining Capital's Alastair Ford asks whether we could be beginning to see a pattern of junior mining recovery emerging.

He says early 2017 saw a couple of new listings in London and a spate of activity in Canada as the gold price and mining in general found support in the utterings and policies of Donald Trump.

But as the year's gone on new money into the sector at the smaller end has been a trickle rather than a flow.

However with the listings in August of Altus Strategies (LON:ALS), Cora Gold on Monday and the planned IPO next year of Toro Gold, Ford reckons we could now have a clear direction of travel for the mining market.

]]> VSA Capital Market Movers - Goldplat plc, Millennial Lithium Fri, 13 Oct 2017 08:05:00 +0100 Goldplat (LON:GDP)#

Ashanti Gold Corp (AGZ CN), the joint venture partner and operator of the Anumso gold project in Ghana of Goldplat (GDP LN) reports significant gold soil anomalies encountered in a completed program. In aggregate up to 400m wide and with an underlying host rock of conglomerate, the anomalies show a significant number of samples with grades at or above 30ppb (.03ppm) gold; deemed highly anomalous among explorationists who work the W Africa gold belts. At least 24 samples gave results at or above 0.1ppm gold.

Mineralized rock grab samples grading 1gAu/t or better were submitted for metallurgical recovery of gold. Oxidized samples were crushed, ground, and bottle rolled for cyanide leach recovery and showed excellent results of greater than 85% gold recovery in 48 hours across all types of samples in the batch.

No comment was made of what comes next on the project but these results certainly put a fire in the field geologist’s mind we believe to get ready for drilling. GDP will retain no less than 25% interest in this ground in the JV.

We retain our BUY rating and 17p price target.

Millennial Lithium (CVE:ML)#

Millennial Lithium (ML CN) has opted to pay off the debt early incurred in the acquisition of the initial core license ground at Pastos Grandes with a portion of the funds raised in the past few weeks. This ground had been set up with a payment schedule upon the announcement of its acquisition on 19 July, 2016. Due to highly successful drilling results to date on the ground, ML has consummated a full and final 100% ownership of this first 1,219 hectares with the transfer of deeds completed 5 October, 2017.

In other news, drilling results from the ‘Cruz’ property have proved disappointing. ML has notified the original vendor of the ground that it is terminating its further interest. ML was to have received US$1m in the next option payment from the JV partner by 1 October, 2017.

Though the drilling results from ‘Cruz’ have been disappointing, the early exit from ground which is not prime preserves capital for better opportunities in the ML property portfolio.

We retain our SPEC BUY recommendation.

]]> Harvest Minerals bags first sales for KPfertil Thu, 12 Oct 2017 13:22:00 +0100 Mark Heyhoe, chief operating officer for Harvest Minerals Limited (LON:HMI), tells Proactive they've recorded first sales of their fertiliser replacement KPfertil.

The sales were in response to requests from customers even though the company is waiting for formal certification for KPfertil as a remineraliser from the Brazilian Ministry of Agriculture.

]]> Asiamet's 'Mr Zinc' a happy man as BKZ increasingly looks like a stand-alone project Thu, 12 Oct 2017 09:41:00 +0100 Steve Hughes, VP of exploration at Asiamet Resources PLC (LON:ARS), caught up with Proactive for a quick update on the back of latest exploration work at BKZ.

He says he's increasingly confident they've found a new stand-alone polymetallic deposit at the prospect in Kalimantan, Indonesia.

Hughes says they've still got the drill rig in the immediate area - one hole's in progress and they're starting to head further south.

''We'll finish up two more holes and then that'll be all the scout drilling completed'', Hughes says.

''Then we'll do some evaluation and I'm pretty sure we'll upgrade the program to delineation drilling''.

]]> VSA Capital Market Movers - NuLegacy Gold Corp, Independent Oil & Gas PLC Thu, 12 Oct 2017 08:34:00 +0100 Independent Oil & Gas (LON:IOG)#

Independent Oil & Gas (LON:IOG) has announced the results of its recent CPR on the Vulcan Satellites, Blythe and Elgood assets. The key finding of the report is a significant increase in gas reserves from 34 BCF to 303BCF on a 2P basis with the uplift coming primarily from the Vulcan Satellites which now have 2P reserves of 248 BCF. At Blythe 2P reserves were unchanged at 33 BCF while at Elgood reserves increased to 22 BCF.

The increase in reserves has enabled IOG to demonstrate the economic viability of the project following 3D seismic analysis, well design and placement as well as hydraulic stimulation on the Vulcan Satellite. Consequently, IOG has received production forecasts for each field with peak production from 2P reserves indicated at 200 MMcfd. Initial capital for the whole field is projected at £466mn while the pre-tax NPV using a conservative 10% discount is £453m.  

We do expect a further increase to resources at Harvey with a CPR due. The gas hub strategy using the Thames pipeline should enable IOG to scale the project at relatively limited capital expense. We therefore view this CPR as a robust base and additional exploration success is likely to further enhance the economics.

We reiterate our Buy recommendation

Multi-Million Ounce Potential

NuLegacy (CVE:NUG) holds the largest independently owned land package within the Cortez gold trend in Nevada. During 2017 the company has significantly expanded the footprint of mineralisation amongst Carlin Type Gold Deposits (CTGDs) within the license area, building on the existing exploration target* of 90-110mnt at between 0.9-1.1g/t Au. New zones, Serena and the Western Slope drilled for the first time in 2017 yielded intercepts of 85.4m at 0.64g/t including 50.3m at 1.00g/t Au from 133m.

NUG has identified a significant cluster of oxidised gold deposits; however, it has yet to identify the high grade zones of mineralisation typically associated with the centre of CTGDs. We believe that identifying these zones offers significant upside potential for investors, however, we stress that this is not a binary investment case reliant on this type of discovery. The region’s strong infrastructure, the shallow depth of the mineralisation and potential for low cost heap leaching indicate to us that the deposits determined to date are sufficiently attractive to warrant further development.  

Support From the Region’s Experts

Barrick (NYSE:ABX) has discovered some of the world’s leading gold deposits in the immediate vicinity of NUG’s license area, including Cortez Hills (15mnoz+), Pipeline (21mnoz+) and Goldrush (10mnoz+). ABX opted to take equity in NUG and now holds approximately 10.9% of the shares. There is a strong relationship between the two companies and three former ABX executives hold directorships at NUG. Also, NUG’s Chief Geoscience Officer and Co-Founder, Roger Steininger, is credited with discovering the Pipeline deposit and is one of the region’s foremost geologists. The senior management team and Board of Directors in place at NUG significantly strengthen the investment case, in our view.


We believe that the large footprint of oxidised gold mineralisation that NUG has established to date across multiple deposits forms an attractive base for future exploration. With C$11m in cash, backing from ABX and a strong senior management team we believe that NUG is well placed to further the development of these attractive assets. We expect strong newsflow over the balance of 2017 as a 14 hole (c.4.9km) programme has just begun.

We initiate coverage with a Speculative Buy recommendation.

]]> Tharisa on the lookout for opportunities after excellent year of production Wed, 11 Oct 2017 10:56:00 +0100 Phoevos Pouroulis, chief executive of Tharisa PLC (LON:THS) tells Proactive they produced 360,500 tonnes of chrome concentrates during the fourth quarter of the financial year, up 8% quarter-on-quarter.

Full year production totalled 1.3mln tonnes of chrome concentrates, an increase of 7% on the corresponding period a year ago.

This production also included 323,000 tonnes of higher margin specialty chrome and 143,600 tonnes of platinum group metals.

]]> Greatland Gold identifies multiple targets at Ernest Giles East Wed, 11 Oct 2017 10:41:00 +0100 Gervaise Heddle, chief executive of Greatland Gold plc (LON:GGP), tells Proactive's Andrew Scott they've identified multiple gold targets at Ernest Giles East following a programme of mobile metal iron (MMI) surface geochemistry and ground gravity surveys.

Specifically, multiple gold anomalies were identified over 60 kilometres of strike.

Several clusters of MMI anomalies were seen, with ‘key clusters’ having shown strikes of more than 9 kilometres long and 3 kilometres wide.

]]> VSA Capital Market Movers - Gulfsands Petroleum plc, Novo Litio Ltd Wed, 11 Oct 2017 07:30:00 +0100 Novo Lítio (ASX:NLI)

Novo Lítio (ASX:NLI) has provided an update on the Sepeda project. Although NLI has opted to progress legal proceedings through the Courts of Portugal via an expedited process, the vendors of the project (Lusorecursos) have threatened violence towards NLI staff on site as part of their attempts to frustrate NLI’s acquisition of the license and license applications. NLI maintains that it has a binding agreement to acquire 100% of the granted license and license applications from Lusorecursos and anticipates that injunction proceedings will commence in November 2017 in time for a Mining License application to be made.

We highlight, however, that NLI has received support from the Baldios of Carvalhais demonstrating that it maintains strong local support and relationships with key Portuguese stakeholders. The Baldios are the administrators of the communal land on which Sepeda is located with whom NLI have exclusive access and land rights for the site. They have intervened to provide support via the local gendarmerie when Lusorecursos have entered the site.

In addition, NLI have brought the actions of Lusorecursos to the attention of the Director General of the Portuguese mines Department and now await a response. Although this represents a frustrating setback for NLI this course of action is unlikely to favour Lusorecursos in the legal process and we await further updates from NLI.

We reiterate our Speculative Buy recommendation and target price of A$0.2/sh.

Gulfsands Petroleum (LON:GPX)

We note that Gulfsands Petroleum (LON:GPX) has announced that it has secured a reset of its PUT-14 Licence terms in Putumayo, Colombia. This means that Phase 0 which focuses on stakeholder and community consultation will restart giving GPX the necessary time to carry out this process and will have a full three year period to then carry out the Phase 1 exploration. The PUT-14 license will now run until at least mid-2021 thereby providing a more attractive timescale for potential partners for a seismic and drilling programme.

The minimum work programme is unchanged along with the other commercial terms and GPX as part of Phase 1 will need to complete 98km2 of 2D seismic and drill one exploration well. The announcement is a positive step which will enable GPX to better demonstrate the potential of its asset base in what is, in our view, an attractive region for exploration.

]]> Resource at Azarga Metals' Unkur project to easily exceed 165mln tonnes Tue, 10 Oct 2017 13:18:00 +0100 Dusty Nicol, chief executive of Azarga Metals Corp (CVE:AZR), updates on latest developments at the Unkur Copper-Silver project in Russia.

The current inferred resource stands at 42mln tonnes at a grade of 0.9% copper equivalent.

]]> ''Show me the money!'', says Strategic Minerals' John Peters as Cobre clocks up record sales Tue, 10 Oct 2017 10:18:00 +0100 John Peters, managing director of Strategic Minerals Plc (LON:SML), tells Proactive's Andrew Scott sales of US$2.036 mln from the Cobre magnetite tailings project for the three months to September 2017 marked a new record for the company.

The latest sales record is based around production of 29,539 tonnes.

The sales in dollar terms represent a 300% increase on the sales figure for the corresponding period a year ago.

]]> NioCorp getting traction with financing activities in full swing Mon, 09 Oct 2017 14:56:00 +0100 Mark Smith, executive chairman and chief executive of NioCorp Developments Ltd (TSE:NB) updates Proactive on the latest with their financing discussions to advance their huge superalloy project in  Nebraska.

Up to 1,200 workers are likely to be needed at the peak of construction.

It will cost $1bn to put together and bring the facility into operation.

The pre-tax net present value (NPV) has been put at US$2.3bn at an 8% discount rate, with an internal rate of return (IRR) of 24.3%.

]]> KEFI Minerals focused on the size of the prize Mon, 09 Oct 2017 13:12:00 +0100 Harry Adams, executive chairman of KEFI Minerals plc (LON:KEFI), tells Proactive's Andrew Scott they're now focused on 'bolting together' project finance for the Tulu Kapi gold project in Ethiopia.

"It has been an exceptionally busy quarter,” he says.

The company implemented its preferred finance plan for Tulu Kapi in July, with the goal of closing the funding package this year.

Meanwhile, work in Saudi Arabia is also continuing.

]]> Cora Gold raises £3.45mln through AIM listing to advance flagship Mali project Mon, 09 Oct 2017 12:27:00 +0100 Cora Gold Limited (LON:CORA) has debuted on AIM at a price of 16.5p per share, following a £3.45mln fundraising.

Chief executive Jon Forster tells Proactive the majority of the net proceeds of the fundraising will be used for a planned exploration programme that will principally focus on the Sanankoro gold discovery in southern Mali.

The ultimate aim will be to establish a resource estimate, although some exploration on other properties will also take place.

]]> Ortac Resources' Vasillios Carellas sees huge potential with their African assets Mon, 09 Oct 2017 08:10:00 +0100 Vassilios Carellas, chief executive of Ortac Resources Ltd (LON:OTC), talks Proactive through the “extremely encouraging” results reported from Casa Mining Ltd's first two diamond core drill hole assays at the Akyanga gold deposit in the Democratic Republic of Congo.

The AIM-listed exploration and mine development company said the initial results support the existing geological and structural understanding of the gold deposit and further confirm Akyanga as an open-pit resource of over 2mln ounces.

Carellas also discusses the company's new focus on their African assets as well as the recent additions of Chairman Nick von Schirnding and non-exec Brian McMaster.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC, Columbus Energy Resources PLC Mon, 09 Oct 2017 07:49:00 +0100 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced the departure of Howard Baker as Non-Executive Technical Director. In place, John Gould, who is a geologist and Partner at Madini (SULA’s technical advisors) will fulfil this role alongside and experienced South African based geologist who has significant experience of Archean greenstone gold deposits. The pair will continue the ongoing structural interpretation work at Ferensola.

We reiterate our Speculative Buy recommendation and target price of 1.2p


Columbus Energy Resources (LON:CERP) has announced a fundraising of up to £4.1m. The placing is structured in three parts; £3m via Schroders Investment Management for 60m shares at 5p, a £0.1m subscription from the senior management team (Leo Koot; Executive Chairman, Gordon Stein; CFO, Stewart Ahmed; MD for Trinidad and Michael Douglas; NED) at 5p as well as an open offer available to existing shareholders. The open offer is proposed as a 1 for 31 offer of up to c.20m shares at 5p with the timing to be announced in due course. Schroders’ holding of 60m will represent a 9.65% interest in CERP’s enlarged share capital. The price of 5p represents a discount of 16.7% to the prior close and a premium of 14.4% to the one month VWAP.

The investment by Schroders’ represents, in our view, an endorsement of CERP’s turnaround strategy which we believe can unlock significant unrealised value potential at the Goudron field and South West Peninsula. The funds will be utilised to accelerate the execution of this turnaround strategy as well as for targeting potential new opportunities.

Our estimates our Under Review following this announcement.

]]> Catalonia, gold and bitcoin Fri, 06 Oct 2017 12:13:00 +0100 Bitcoin and Gold to retain popularity following Catalonia vote Fri, 06 Oct 2017 09:16:00 +0100 Mining Capital's Alastair Ford discusses with Proactive's Andrew Scott the wider ripples from the vote in Catalonia for Independence.

''The implications here are quite significant - we've got a nation within a nation that's trying to declare independence inside the European Union''.

''Investors are going to watch with interest ... I think we'll see things like bitcoin and gold  retaining popularity with investors''.

Ford also mentions he's been speaking to the team at Arizona Silver Exploration Inc (CVE:AZS)  and updates on progress with their projects.

Plus he touches on  Galantas Gold Corporation (LON:GAL) (TSXV:GAL) and Stratex International plc (LON:STI).

]]> MoU sees Czech Republic give stamp of approval to European Metals' Cinovec project Thu, 05 Oct 2017 19:32:00 +0100 Keith Coughlan, managing director of European Metals Holdings Limited (LON:EMH), discusses with Proactive's Andrew Scott the MoU they've signed with the Czech government regarding the development of the Cinovec lithium-tin project in the country.

Coughlan says the agreement shows willingness from both sides to work together to support not only this project but also the future of mining in the local area.

]]> Stratex International's Marcus Engelbrecht reinforces transformative potential of Crusader deal Thu, 05 Oct 2017 18:46:00 +0100 Marcus Engelbrecht, chief executive of Stratex International plc (LON:STI), chats to Proactive following the release of a circular to shareholders updating them on the proposed Crusader acquisition.

Englebrecht is keen to acquire Crusader primarily because of its exciting Borborema gold asset in Brazil, which he's confident can be moved into production quickly and generate US$30mln in cash per year.

]]> Caledonia Mining expecting strong finish to 2017 after record quarter Thu, 05 Oct 2017 18:15:00 +0100 Mark Learmonth, chief financial officer of Caledonia Mining Corporation (LON:CMCL), tells Proactive they've enjoyed record quarterly gold production from the Blanket Mine in Zimbabwe for the quarter ended 30 September  2017.

Approximately 14,389 ounces of gold were produced during the quarter, 15% higher than the previous quarter and 7% higher than the corresponding quarter of 2016.

]]> Otis Gold pleased with first three drill holes from 2017 campaign Thu, 05 Oct 2017 08:32:00 +0100 Craig Lindsay, president and chief executive of Otis Gold Corp (CVE:OOO), discusses with Proactive some encouraging assays they've received from the first three holes of this year's drilling at the  Kilgore project in Idaho.

The main aim of the work was to follow-up on previous open-ended drill intercepts in the prospective Aspen formation.

]]> Rainbow Rare Earths on track to ship first concentrate by year-end Wed, 04 Oct 2017 10:53:00 +0100 Martin Eales, chief executive of Rainbow Rare Earths Ltd (LON:RBW) tells Proactive they're expecting run-of-mine (ROM) ore production at their Gasagwe asset will be in the range of 3,000 to 4,000 tonnes.

The production guidance was issued alongside the company's results for the year to the end of June.

The completion of construction and commissioning of the plant is expected in the coming weeks, which should allow Rainbow to meet its target of shipping the first concentrate before the end of the year.

]]> VSA Capital Market Movers - Millennial Lithium Wed, 04 Oct 2017 07:24:00 +0100 Millennial Lithium (CVE:ML)

Millennial Lithium (CVE:ML) has announced an update to its activities across its portfolio. At Pastos Grandes, ML has four drill rigs currently operating and for which results will be used in the anticipated Q4 2017 resource update. Two holes have been drilled with brine analytic results outstanding while four holes are currently being drilled. Also in relation to the Pastos Grandes project, the company has engaged SGS-Lakefield to conduct advanced processing studies which will include on site evaporation test work across 16 trial ponds as well as purity trial test work to create plant grade Li-rich brine (1-2%) from 600 litres of sample brine. In addition, Ausenco has been engaged to conduct ML’s baseline environmental studies.

In relation to the Cruz property to which Southern Lithium (SNL CN) is earning in a two hole drilling programme has been completed. The holes reached depths of 476m and 500m and results from brine analytics are now outstanding.

The announcement follows the closure of the recent financing for which gross proceeds of C$11.5m were raised at a price of C$1.25/sh.

We reiterate our Speculative Buy recommendation.

]]> Greatland identifies new gold and cobalt targets at Panorama Tue, 03 Oct 2017 11:24:00 +0100 Gervaise Heddle, chief executive of Greatland Gold plc (LON:GGP) tells Proactive initial exploration work has kicked off at the Panorama project in the Pilbara region of Australia.

Following a comprehensive review of historic data, the group has identified around twenty gold anomalies across the project area.

Five cobalt targets are, meanwhile, seen in the southern area of the project.

All gold and cobalt targets will be subject to field reconnaissance during the coming weeks.

]]> Asiamet Resources drooling over initial BKZ assays Tue, 03 Oct 2017 09:55:00 +0100 Steve Hughes, VP of exploration at Asiamet Resources PLC (LON:ARS) tells Proactive they've intersected further near surface high grade base and precious metal rich mineralisation along strike of earlier hits at the BKZ prospect in Indonesia.

Further drilling is required to determine the ultimate dimensions and continuity of the mineralised body.

But the results of this scout drilling provide confidence for a potential standalone high grade polymetallic deposit.

BKZ is located approximately 800m north of Asiamet's feasibility-stage BKM copper project.

]]> VSA Capital Market Movers - Independent Oil & Gas PLC, REDT Energy Tue, 03 Oct 2017 07:26:00 +0100 Independent Oil & Gas (LON:IOG)#

Independent Oil & Gas (LON:IOG) has announced that it has signed an LOI with Heerema Fabrication Group for the front end engineering and design as well as the engineering, procurement and installation of up to four Normally Unmanned Installation platforms (NUIs).

The NUIs will be installed on the SNS project with costs front end costs fully deferred and procurement and installation costs 50% deferred until first gas. The final investment decision on the SNS project is due to be made by the end of Q1 2018 and a full contract following on from this LOI is now expected to be signed before year end.

We reiterate our Buy recommendation.


redT Announces 1MWh Order in Australia

redT energy (LON:RED)#, a developer of vanadium redox flow machines for large-scale energy storage applications, has announced its entry into the Australian storage sector with the commercial sale of a 300kW-1MWh hybrid vanadium flow machine/lithium-ion battery system to Monash University in Melbourne.

• System will consist of 900kWh of flow machines (12 x 75kWh tank unit modules) and a 120kW lithium-ion battery

• To be housed at the University’s Biomedical Learning and Teaching building, be coupled with on-site solar PV and integrated into the ‘Monash Microgrid’

VSA Comment

The recent high profile announcement by Elon Musk’s Tesla (TSLA US) to construct the world’s largest lithium-ion battery project in South Australia (129MWh) has highlighted the significant potential for energy storage in the Australian market.

RED has previously announced its intention to enter this market in H2 2017. It has now delivered on this promise. The company believes that the country’s energy storage market will require investment of between A$20bn and A$30bn up until 2030. The extremely high cost of electricity in Australia means that the payback period of a RED flow machine could be as little as 1-2 years (assuming energy trading is implemented).

This system sale will build on the hybrid system work currently being carried out by RED in partnership with the University of Newcastle (UK) as part of a three-year programme announced in September 2016. The basic premise of such a system is that the lithium-ion battery component provides high power, when required, over a short duration (c20% of a customer’s overall requirements) with the vanadium flow machine providing the long duration output due to its much higher energy storage capability and lack of degradation (c80% of a customer’s overall requirements).

Pairing with lithium-ion battery technology should also make flow machine sales slightly easier, as customers are familiar with the more established lithium storage technology (despite its well-understood shortfalls). 

Although no order value was quoted in the RNS, we estimate that this sale will be worth cUS$1m (cA$1.3m) to RED. Aside from being its first sale in Australia, this will provide an extremely high-profile marketing site for the stimulation of potential further orders in a country which will require significant investment in energy storage capacity for many years to come. 

We maintain our BUY recommendation and target price of 22p.

]]> Royal Road Minerals hails landmark binding framework agreement Tue, 03 Oct 2017 07:07:00 +0100 Dr Timothy Coughlin, president and chief executive of Royal Road Minerals Ltd (CVE:RYR) tells Proactive they've advanced their Colombian exploration ambitions after striking a binding framework agreement with Economias Sociales del Comun.

It's a joint social and economic organization established in May this year, in the wake of the final peace agreement, between the Government of Colombia and the Revolutionary Armed Forces of Colombia People's Army (FARC-EP), inked in November 2016.

Royal Road has gold and copper exploration projects in the Narino province in southern Colombia as well as two drill ready projects in Nicaragua.

]]> Savannah Resources back to business in Oman Mon, 02 Oct 2017 09:13:00 +0100 David Archer, chief executive of Savannah Resources Plc (LON:SAV), tells Proactive they've received a number of approvals for the first of their planned copper mine developments in Oman - Mahab 4 and Maqail South.

Regulatory approval or "No Objection" letters have been received from five Ministries (out of nine) for the Maqail South Licence, while Mahab 4 has four approvals.

]]> Fox Marble continuing to secure 'multiple customers in multiple territories' Mon, 02 Oct 2017 07:49:00 +0100 Chris Gilbert, chief executive of Fox Marble Holdings PLC (LON:FOX), talks Proactive through the firm's interim results for the 6 months to the end of June 2017.

Among the highlights: their new Kosovo factory's now fully operational and they've continued to secure offtake, distribution and sales agreements across Europe, US and Asia.

Post period they entered in a sales contract with OM Enterprises to purchase a minimum of 5,000 tonnes of material over three years.

]]> Mining Capital's Alastair Ford on positive judicial review outcome for Galantas Gold Fri, 29 Sep 2017 18:35:00 +0100 Mining Capital's Alastair Ford discusses with Proactive's Andrew Scott the positive outcome which has been achieved to a Judicial Review into the planning consent for underground development at Galantas Gold's wholly-owned Omagh Gold Mine in Northern Ireland.

The AIM-listed firm said a third party's request for quashing the planning consent decision was denied following the Judicial Review in Belfast High Court.

The consent was granted in July 2015 following an exhaustive study and examination by the Department of Environment Northern Ireland (DOENI). It permitted the underground mining of gold veins that were recently worked in upper levels within an open pit.

Ford also touches on the fascinating story which is Neo Lithium Corp.

Their project is in the Catamarca Province of Argentina and are eying production by 2021.

]]> Technology and information are rendering today’s political structures increasingly obsolete Fri, 29 Sep 2017 13:02:00 +0100 Strategic Minerals eyeing profitability and transactions in the second half Fri, 29 Sep 2017 10:41:00 +0100 John Peters, managing director of Strategic Minerals Plc (LON:SML), caught up with Proactive's Andrew Scott on the back of their first half 2017 results.

Operating profit at Cobre in New Mexico rose to US$690,000 in the six months compared to US$62,000 a year ago, leading to a profit before tax for the group of US$158,000 compared to a loss last year.

Cash flow from Cobre is expected to accelerate in the second half after a substantial contract was won in June.

The period also saw an investment of £843,649 (US$1.068mln) into Cornwall Resources Limited (CRL), the owner of the Redmoor tin/tungsten project, increasing Strategic's interest to 50%.

]]> Pan Asia Metals raising US$1.5M to advance drill-ready projects in Thailand Fri, 29 Sep 2017 09:07:00 +0100 Paul Lock, managing director of Pan Asia Metals (PAM) stopped by the Proactive Investors studio in London to chat through their exciting drill-ready projects - one Tungsten and the other Lithium - in southern Thailand.

PAM is working together with Medea Natural Resources in their pre-IPO capital raise.

]]> VSA Capital Market Movers - Independent Oil & Gas PLC, Obtala Ltd Fri, 29 Sep 2017 07:17:00 +0100 Independent Oil & Gas (LON:IOG) has announced interim results for H1 2017. In the period the company made a net loss of £1.4m versus a loss of £1m on year earlier; as despite a reduction in administrative expenses of 20% YoY to £750k finance expanses were higher at £663k.

During the period IOG made significant progress, advancing the development of its core assets. The Thames pipeline acquisition is a key milestone in development of the Southern North Sea (SNS) gas hub and will save around £100m in costs whilst opening up these assets via a fully owned export route. IOG will now undertake an assessment programme to understand any necessary repair work ahead of dewatering. In addition, 3D seismic work was carried out on the Harvey asset demonstrating significant potential. IOG received an extension on the Harvey license in March 2017.

Post period end, the company made previously announced changes to the senior management team and board. In July IOG was awarded Licence P2343 by the OGA strengthening the position at the Vulcan Satellites where positive seismic and hydraulic stimulation studies were completed in June 2017. Furthermore, an LOI was signed with Schlumberger providing a framework for the two companies to work towards the Final Investment Decision on the SNS project.

In the remainder of 2017 we expect a CPR to be commissioned which will cover the entire SNS project which will support funding negotiations for project advancement. Negotiations with creditors relating to the Skipper Well are ongoing in order to determine whether liabilities due at the end of 2017 will be repaid, rescheduled or converted to equity in part.

We reiterate our Buy recommendation.

Obtala Limited#: Q3 Update

African forestry and agriculture business Obtala Limited (LON:OBT)# has announced a Q3 operational update.

• Forestry: 15,000m3 of logs harvested across Mozambique and Gabon in the quarter; 4,500m3 of export grade timber produced, with a proportion of logs stockpiled for future processing; 100m3 per day sawmill in Mozambique remains on track to be completed at the end of 2017; rapidly scaling of timber production in Gabon, increasing from 900m3 in July to 1,500m3 in August; remains in discussions for a US$25m trade finance facility to significantly scale timber trading business

• Agriculture: First significant Melon harvest processed through upgraded packhouse with product exported through Mombasa, Kenya

VSA Comment

Once again OBT has had an extremely busy operational quarter. However, unlike previous quarters, Q3 2017 marks the first period where OBT has also delivered significant revenues, following its acquisition of WoodBois on 30 June and the harvest of cash crops in Tanzania.

Our FY 2017 forecast for OBT’s log harvest across Mozambique and Gabon is c24,000m3, with c10,700m3 of timber produced. Given the levels achieved in Q3, the company is currently trading in-line with our expectations. Prices are reported in the range of US$400-900/m3, dependent on species and grade. Again, this is in-line with our expectations, with our FY 2017 average selling price forecast at US$400/m3 in Gabon and US$850/m3 in Mozambique.

Although its expansion plans are ambitious, OBT appears to be successfully executing its strategy in-line with our aggressive expectations.

We maintain our BUY recommendation and target price of 36p.

]]> Neo Lithium moving at pace to bring high grade project into production Thu, 28 Sep 2017 12:29:00 +0100 Waldo Perez, chief executive of Neo Lithium Corp outlines to Proactive their Lithium project in the Catamarca Province of Argentina and steps towards production - which they're targeting for 2021 

Perez says there are many factors which are unique in terms of the project's location -  the elevation, the isolation and the scarcity of water and rain.

]]> Thor Explorations 'at a great time' with two exciting projects in West Africa Thu, 28 Sep 2017 12:16:00 +0100 Segun Lawson, Chief executive of Thor Explorations Ltd (CVE:THX) introduces the company to Proactive telling Andrew Scott they're a gold explorer with a particular focus on early stage projects in West Africa.

Lawson discusses in detail their assets in Nigeria, Senegal and Burkina Faso and what plans they've got in store for driving them forward.

]]> Mustang Resources' to monetise rubies at maiden auction Thu, 28 Sep 2017 11:20:00 +0100 Christiaan Jordaan, managing director for Mustang Resources, speaks with Proactive Investors.

]]> VSA Capital Market Movers - Obtala Ltd Thu, 28 Sep 2017 08:15:00 +0100 Obtala Limited#: H1 2017 Results

African forestry and agriculture business Obtala Limited (LON:OBT)# has released its interim results for the six months to 30 June 2017 (H1 2017).

• Revenue: US$0.2m (H1 2016: US$0.4m); VSA FY 2017 forecast US$13.7m

• Operating loss: US$3.8m (H1 2016: US$2.5m); VSA FY 2017 forecast US$2.0m

• Net assets: US$152.5m (H1 2016: US$120.2m)

• Cash and cash equivalents as of 30 June 2017: US$1.9m (31 December 2016: US$3.4m)

VSA Comment

Having carried out its transformational acquisition of WoodBois International at the end of the period, H1 2017 looks set to be the last period of minimal financial performance for the company, given WoodBois generated US$9.2m in revenues in H1 and OBT has near-term plans to rapidly scale up the trading side of this business through additional trade finance facilities.

The biological assets of WoodBois have been assessed by the same valuer used on its existing concessions and a value of US$53m has been provided. This provides a significant non-cash ‘gain from bargain purchase’ contribution to OBT’s P&L for the H1 period and adds to the already significant biological assets on its balance sheet, which now total US$228m.

OBT has also announced this morning that it will be creating individual Board of Directors’ for each of its forestry (Argento) and Agriculture (Montara) divisions. This additional separation of the business should make it easier for the company to attract new investors and partners into the specific areas of the OBT business that are most relevant in each case. It will also assist in the potential sale or IPO of its agriculture division if such an opportunity arises in the future.

The company has also announced the appointment of Martin Collins as Deputy Chairman of the OBT board as well as Chairman and CEO of the agriculture business, replacing COO Warren Deats, who has resigned from the company.  

We maintain our BUY recommendation and target price of 36p.

Zambeef: Crop Damage Not as Bad as Feared

Following its announcement on 6 September, African agribusiness Zambeef (ZAM LN) has announced that crop damage to its winter wheat crop from the Septoria fungal disease has not been as bad as originally feared. It now expects crop yields to be c10% lower than original expectations, rather than a fall of 20%. The company therefore now expects to report a small profit for the year to 30 September 2017.

NWF Group: In-Line AGM Statement

Ahead of its AGM later today, UK agricultural input business NWF Group (NWF LN) has announced trading in its first quarter (June-August, traditionally its quietest period) has been ahead of last year and in-line with expectations.

Summer feed volumes are reported as robust with margins in-line with expectations. DEFRA data shows that the overall UK ruminant feed market increased by a significant 12% YoY over June and July (no data yet available for August). However, it must be remembered that these months are the quietest in terms of feed demand, so YoY changes can be quite volatile.

Its food division is also in-line with expectations with three new customers adding an additional 4,000 pallets at its Wardle site, leaving 4000 pallets of spare capacity left to fill (of c100,000 total capacity).

Its fuel division has experienced increased commercial business, with lower margin road diesel the main contributor to this growth.

]]> VSA Capital Market Movers - Novo Litio Ltd, REDT Energy Wed, 27 Sep 2017 07:21:00 +0100 redT energy#: H1 2017 Results

redT energy (LON:RED)#, a developer of vanadium redox flow machines for large-scale energy storage applications, has announced its interim results for the six months ended 30 June 2017.

• Revenue: €4.5m, flat YoY (H1 2016: €4.5m), VSA FY estimate is €12.2m

• EBITDA: loss of €3.2m (H1 2016: loss of €2.2m), VSA FY estimate is a loss of €7.2m

• Net Cash as of 30 June 2017: €13.2m (31 December 2016: €2.8m)

VSA Comment

RED’s H1 results are pretty academic as the company was busy significantly scaling up its workforce (+100% YoY) during this period, following the December fundraise (administration expenses increased to €5.2m from €3.6m in H1 2016). As revealed in its operations update in mid-July, RED sold just six tank unit modules in H1. However, EBITDA remained in-line with our expectations due to strong performance from its legacy carbon business.

More importantly to us is the fact that commercial sales are now beginning, evidenced by the recent announcement of a 12 tank unit order (as part of a 300 unit pipeline) for certain distributors and a 14 tank unit order (as part of a 150+ unit pipeline) for a Botswana-based client, both announced in the last month.

Of these, we would highlight the Botswana order as most notable given RED’s flow machines are replacing failing lithium-ion and lead-acid products at each of the 14 sites. This is a key marketing angle for the company and we are hopeful that additional potential customers in the sector will also begin to appreciate the advantages of flow machines over more traditional forms of storage in the coming months/years.

In its July trading update, RED revealed that it had €15.9m of potential orders in the final stage of customer selection (up from €6.5m when it released its FY 2016 results in April) and an active customer pipeline of €314m (vs. €246m in April). It also outlined plans to enter the Australian market in H2.

It has delivered on the later goal through its announced distributor agreements and has increased its pipeline even further since this announcement with €16.5m (205 units) now in the final stages of customer selection and an active customer pipeline of €323m.

We maintain our BUY recommendation and target price of 22p.


Novo Lítio (ASX:NLI)#

Novo Lítio (NLI AU) has announced strong drill results from the Sepeda project in Northern Portugal as well as progress regarding drill permitting for its Swedish lithium prospect, Spodumenberget.

At Sepeda Phase 4 drilling results included 80.3m at 1.36% Li2O and 80.45m at 1.3% Li2O. Both these results relate to infill drilling and confirm the continuity of the mineralisation, providing further support for NLI’s geological model. A resource update is due in Q4 2017, subject to tenure issues, and we believe that these results confirm our view that an increase in confidence from Inferred will be possible.

Furthermore, one of the key finding of the PEA was that in order to support the second stage of processing, i.e. a lithium carbonate conversion plant, a larger resource would be necessary. We are confident that this will be achievable and the latest drilling results confirm this with 68.06m at 1.26% Li2O as part of the extensional drilling, down plunge. This high grade mineralised zone remains open at depth.

In addition to the strong results at Sepeda, NLI has announced that its permitting process is now under way to drill at Spodumenberget in Sweden. Surface sampling earlier this year produced encouraging results and NLI has been able to identify appropriate drill targets as a result. 4 drill holes will test the area which has known pegmatite outcrops over a strike of 340m by 100m partially masked by glacial cover. Drilling is expected to commence in late 2017 once approval is received.

We reiterate our Speculative Buy recommendation and target price of A$0.2/sh.

]]> Ferensola grades 'verging on Bonanza' says Sula Iron & Gold chief Tue, 26 Sep 2017 17:47:00 +0100 Roger Murphy, chief executive of Sula Iron & Gold PLC (LON:SULA),  tells Proactive's Andrew Scott they hit 19.3 grams per tonne over 1.2 metres in one hole in the Southern target at Ferensola in Sierra Leone, where four holes out of six in the latest phase of drilling have hit mineralisation.

They also hit intervals of 8.6 grams over two metres and 7.5 grams over 0.7 metres at the Sanama Hill target on Ferensola.

On top of this a regional soil sampling programme designed to investigate structural targets shows anomalous gold grades to the northeast of Sanama Hill and so provides a low cost means to highlight new untested gold zones.

]]> Amur Minerals looking at a material increase to current resource at Kun-Manie Tue, 26 Sep 2017 11:08:00 +0100 Robin Young, chief executive of Amur Minerals Corporation (LON:AMC), tells Proactive that drilling designed to link the Ikenskoe/Sobolevsky (IKEN) and Kubuk (KUB) deposits in Russia, has already identified a minimum 2,200 metres of new mineralisation along ISK, the three kilometre exploration anomaly.

Newly acquired drill results are expected to materially increase the current resource, which stands at 770,000 tonnes of nickel and 207,000 tonnes of copper.

]]> VSA Capital Market Movers - Eco Atlantic Oil & Gas Ltd, Sula Iron and Gold PLC Tue, 26 Sep 2017 07:33:00 +0100 Sula Iron & Gold (LON:SULA)#

Sula Iron & Gold (SULA LN) has announced further results from its 5,185m Phase 3 drilling campaign including high grade intercepts at the new TZ4 target as well as at Sanama Hill. These are the final results from this programme.

The results at TZ4 included 1.2m at 19.3g/t Au from a depth of 287m which follows on from the earlier result of 5.2g/t Au from hole FDD021 around 600m away. We note, however, that SULA has stated that the structural orientation of these holes is different which indicates multiple controls and that as at Sanama Hill the structural geology is complex. This is something that management is putting significant effort into understanding and will help with future drill targeting and understanding the potential of the mineralisation discovered to date.

Additional drill results were from Sanama Hill and also included encouraging high grades such as 8.6g/t Au over 2m from 134m deep as well as 7.5g/t Au in near surface oxide ore from 31m deep. The drilling campaign has provided robust results including high grade intercepts such as these although now the focus at Sanama Hill will be on low cost analysis of the data with a particular focus on structural geology.

Soil sampling across 8 of 19 identified targets has demonstrated multiple zones with anomalous gold values. One of these includes a new gold target to the northeast of Sanama Hill yielding anomalous gold grades, underpinning the company’s view that there is further potential for gold targets beyond those that have been tested to date.

We reiterate our Speculative Buy recommendation and 1.2p target price.


Eco (Atlantic) Oil & Gas (LON:ECO)#

Eco (Atlantic) Oil & Gas (ECO)# has announced it has entered into an option agreement on its interest in the Orinduik Block, offshore Guyana, with Total (FP FP). The option allows FP to acquire a 25% working interest (WI) in the block from ECO, of which it currently holds a 40% WI, Tullow Oil (TLW) is the operator and holds the remaining 60% WI.

FP will make an immediate payment of US$1m to ECO for the option and will make a further cash payment of US$12.5m upon exercise of the option. The Orinduik Block is located up dip and just a few kilometers from Exxon’s (XOM US) recent Liza and Payara discoveries confirming, by XOM estimates, between 2.25-2.75Bbbls of recoverable oil. ECO has reviewed 2D seismic data across the block and leads have been identified which TLW estimates contain prospective resources of 900mmboe. This 3D seismic programme is now the next stage of the exploration programme over the block and is being completed on time as per ECO’s guidance.

The option is entirely exercisable at FP’s right and must be done so within 120 days of completion of processing the 3D seismic survey, which has been underway for three weeks now. Should the 3D seismic survey back up or improve the initial resource estimates from the 2D data then we believe it would be highly likely that FP would exercise this option. Should this be the case then ECO will be left with a 15% WI on the Orinduik Block.

Each partner on the block will pay its pro-rata WI from the date of exercise of the option and ECO estimate exploration wells offshore Guyana on the Orinduik block will cost cUS$35m. ECO’s participating interest on a well would then be cUS$5.25m per well, therefore, the successful completion of this option would provide funding to meet ECO’s commitments on two wells and re-cooperate its contribution to the 3D seismic survey.

Following the success of the XOM at Liza, offshore exploration in Guyana has been high on the priority list for many of the majors as they seek to gain exposure to a basin with world class prospectivity but has been de-risked somewhat by XOM. We see this announcement as confirmation of this and as extremely encouraging news for ECO that will likely help move the licence further along the value chain.

We re-iterate our BUY recommendation and 25p TP.

]]> Global Energy Metals ahead of the Cobalt curve Mon, 25 Sep 2017 18:30:00 +0100 Mitchell Smith, president and chief executive of Global Energy Metals Corp (TSXV:GEMC), discusses with Proactive's Andrew Scott their "transformational" acquisition of an option from Hammer Metals for the Millenium cobalt-copper project in Queensland, Australia.

The property covers five separate mining leases with an existing JORC compliant mineral resource defined by drilling from a 2016 programme.

Millennium is the firm 's first acquisition to complement its wholly-owned Canadian primary cobalt project.

]]> Savannah Resources kicks off second round of drilling in Portugal Mon, 25 Sep 2017 11:49:00 +0100 David Archer, chief executive of Savannah Resources Plc (LON: SAV), tells Proactive they've begun a second round of reverse circulation drilling at the Mina do Barroso lithium project in Portugal.

The aim is to define a JORC resource.

Drilling will focus on the NOA deposit and targeting potential extensions to the significant zones of mineralisation identified at Grandao and Reservatorio in recent drilling.

]]> VSA Capital Market Movers - REDT Energy, Independent Oil & Gas PLC Mon, 25 Sep 2017 07:16:00 +0100 redT Secures 14 Unit Order in SSA

redT energy (LON:RED)#, a developer of vanadium redox flow machines for large-scale energy storage applications, has announced the sale of 14 units in sub-Saharan Africa.

• 14 5kW-40kWh machines sold to a Botswana-based customer for deployment in the country’s critical communications infrastructure sector

• Machines will be hooked up to solar power installations, storing power generated during the day for use in the evening, effectively ‘firming-up’ solar power

VSA Comment

Following on from last week’s announcement of an initial 12 unit order (as part of a 300 unit pipeline), RED has delivered a further sales announcement in a key market. The units will be delivered next year and are expected to generate cUS$850k in revenues for FY 2018 (unit sales + add-on services). We also understand that this single customer has a significant pipeline of additional projects that could eventually require more than 150 RED units.     

This multiple-unit sale into the African market highlights RED’s strong networks in the region, which originally stemmed from its legacy carbon project development business.

Aside from the monetary benefit, this deal also explicitly highlights the advantage of flow machines over lithium-ion and lead-acid solutions, which RED notes that in many cases have already failed on these specific project sites.

It also shows that its business model of deploying seed units in certain key markets (two Gen1 machines are deployed in Africa) is beginning to pay off.

We are hopeful that, once operational, the Olde House installation in Cornwall should have a similar stimulating effect for the UK market and lead to significant orders for RED’s bigger and more lucrative units.

We maintain our BUY recommendation and target price of 22p.


Independent Oil & Gas (LON:IOG)#

Independent Oil and Gas (IOG LN) has announced that it has signed an LOI and Consultancy Master Services Agreement with Schlumberger in relation to development of two of its North Sea gas hubs; Blythe and Vulcan Satellites. This provides a framework for a joint team to complete field development plans in the period prior to the final investment decision.

We reiterate our Buy recommendation.

]]> Stratex International's Marcus Englebrecht to 'vigorously defend' Crusader merger Fri, 22 Sep 2017 12:12:00 +0100 Marcus Englebrecht, chief executive of Stratex International plc (LON:STI) tells Proactive's Andrew Scott he plans to 'vigorously defend' the Crusader merger which was announced back in May.

Opposition to the deal has taken the official form of a valid requisition to hold a general meeting, the date of which will be announced shortly and the purpose of which is to vote Englebrecht off the board, stop his proposed transaction and appoint new directors.

]]> Bezant Resources sells first batch of platinum and gold from Choco Fri, 22 Sep 2017 10:47:00 +0100 Laurence Read, executive director of Bezant Resources plc (LON:BZT), discusses with Proactive's Andrew Scott the sale of their first kilogramme of platinum and gold which was produced from the FKJ-083 licence area on the Choco project in Colombia.

The metals were extracted from the excavation and processing of the lower-grade material, including tailings and overburden, located on top of higher-grade gravels.

]]> Fed turns hawkish, gold outlook still favourable Fri, 22 Sep 2017 10:42:00 +0100 Thor Mining wraps up drilling at Pilot Mountain Fri, 22 Sep 2017 10:31:00 +0100 Mick Billing, executive chairman of Thor Mining PLC (LON:THR) tells Proactive they've completed drilling at the Pilot Mountain tungsten project in Nevada - adding that mineralisation has been identified extending a further 60 metres down dip at Desert Scheelite.

Detailed logging of the drill core is now complete and samples submitted for laboratory assay.

]]> Leading Edge Materials' Blair Way on potential 'game-changing' development process Fri, 22 Sep 2017 09:42:00 +0100 Blair Way, chief executive of Leading Edge Materials Corp (CVE:LEM), discusses with Proactive the positive results they've received back from testing of material from their Norra Karr heavy REE (rare earth element) deposit.

The research was completed under the European Commission-financed EURARE project and made significant technical milestones.

]]> Stonewall Resources opens a share purchase plan to push ahead with South African gold projects Fri, 22 Sep 2017 08:19:00 +0100 Rob Thomson, managing director for Stonewall Resources, speaks with Proactive Investors.

]]> Kincora Copper raises C$1.4mln through second EBRD placement Fri, 22 Sep 2017 07:01:00 +0100 Sam Spring, president and chief executive of Kincora Copper Ltd (CVE:KCC), tells Proactive they've entered into a subscription agreement for a second tranche of units with the European Bank for Reconstruction and Development to raise C$1.4mln.

Following on from the first tranche which which closed on August 22nd - it takes the total gross funds raised to C$5.92mln.

Spring also updates on drilling which is ongoing at their East Tsagaan Suvarga target.

]]> Asiamet Resources sinks teeth into BKZ prospect Thu, 21 Sep 2017 12:16:00 +0100 Steve Hughes, VP of exploration at Asiamet Resources PLC (LON:ARS), says drilling's begun on the readily accessible BKZ prospect in Indonesia, a stand-alone high value polymetallic target, located less than 800 meters north of the feasibility-stage BKM copper deposit.

A total five holes are planned and first assays are expected by end September.

]]> Mozambique disposal refocuses Premier African on key assets Thu, 21 Sep 2017 11:02:00 +0100 George Roach, chief executive of Premier African Minerals Limited (LON:PREM) tells Proactive's Andrew Scott they've agreed to the disposal of their Mozambique forestry interests but will retain a stake in a limestone deposit in the country.

Roach also discusses the continued wait for assays at Zulu and the expectation of profitable, full production at RHA by the end of the year.

]]> Pan African's Cobus Loots confident after overcoming setbacks at key mines Wed, 20 Sep 2017 17:36:00 +0100 Cobus Loots, chief executive of Pan African Resources plc (LON:PAF) tells Proactive he's anticipating a better twelve months ahead after a number of operational challenges cut profits in the year just ended.

Shaft repairs have been completed at Evander Mines with a substantial increase in gold production expected to be the result.

The other core mine, Barberton, meanwhile is currently mining high-grade panels in its Fairview 11-block and is likely to contribute substantially to their 2018 production guidance.

]]> La Parrilla funding advancing well as tungsten price continues to strengthen Wed, 20 Sep 2017 11:36:00 +0100 Michael Masterman, chairman of W Resources PLC (LON:WRES)  sat down with Proactive's Andrew Scott for an extended Q+A on La Parilla funding, construction plans as well as developments as to the separate listing of their gold asset in Portugal.

Masterman also added further detail to their news out this morning that they've received a two-year extension to their Tarouca tungsten project in Portugal.

The licence will now expire on 23 March 2019.

During this period, W Resources expects to complete a 15 hole/1,500m reverse circulation drilling campaign.

]]> London Finance Show: Fed's tightening plans, Kingfisher, Thor Mining Wed, 20 Sep 2017 10:46:00 +0100 Matt Brown discusses Fed interest rate meeting, Kingfisher's French woes while Thor Mining (LON:THR) finds lot of tungsten

]]> Bannerman Resources upbeat despite pain in the uranium sector Tue, 19 Sep 2017 09:53:00 +0100 Brandon Munro, chief executive for Bannerman Resources, speaks with Proactive Investors.

]]> GoldPlat now firing on all cylinders with all operations profitable Mon, 18 Sep 2017 11:39:00 +0100 Gerard Kisbey-Green, chief executive of Goldplat PLC (LON:GDP) stopped by the Proactive Investors studio to chat through their results for the year to the end of June 2017.

The company produced 42,857 ounces of gold during the year, up 13.7% year-on-year and due in part to the successful implementation of a turnaround strategy at the Kilimapesa gold mine.

]]> Australian Vanadium delivers resource upgrade at world-class Gabanintha project Mon, 18 Sep 2017 09:24:00 +0100 Vincent Algar, managing director for Australian Vanadium, speaks with Proactive Investors.

]]> VSA Morning Agri Comment - M.P. Evans Group PLC Mon, 18 Sep 2017 07:32:00 +0100 MP Evans: H1 2017 Results

MP Evans (LON:MPE), the Indonesian palm oil producer, has announced interim results for the period ended 30 June 2017.

• Revenue: US$57.5m, +89.4% YoY (H1 2016: US$30.4m)

• Adjusted Operating profit: US$15.9m (H1 2016: US$3.4m)

• Fresh fruit bunches (FFB) processed (own, majority-owned estates): 213,800t, +25.5% YoY (H1 2016: 170,300t)

• Crude palm oil (CPO) produced: 70,500t, +55.6% YoY (H1 2016: 45,300t)

• Interim dividend: Increased to 5.0p (H1 2016: 2.25p)

VSA Comment

As expected, MPE continues to increase its cropping levels as its young estates develop into maturity and, more specifically for H1, production levels in the sector recover from the 2015/16 El Niño. Stronger CPO prices (+10% YoY) and a c15% YoY fall in its cost of production (US$380/t) also contributed to a much improved financial performance, with its adjusted operating profit increasing by more than 4.5x.

In terms of the outlook for pricing, palm oil prices have increased c10% over the last month, touching six month highs in Malaysia, as expectations of a relatively muted peak production cycle have been played out in the market. The latest data from South East Asia suggests that for July and August at least, these expectations have not yet been realised to the extent that some were forecasting.

However, we are likely to see strong near-term export demand with the approach of the Mid-Autumn Festival in China (4 October) and the Hindu festival of Diwali (19 October). Although this is likely to be supportive to CPO pricing in the near-term, production will likely be strong in September and October, which may lead to weaker pricing as we move towards the end of the year. Last week’s upgrade to the US soybean crop by the USDA is also a bearish indication for vegetable oil pricing (soybean oil premium over Malaysian CPO is currently around its historic average at cUS$110/t). 

Having completed c99% of its £5m share buy-back programme, last Friday MPE announced that it would be extending the programme by a further £2.5m. Extrapolating from the rate of share purchases so far, this extra allocation should last through to at least mid-January. Given the low liquidity in the stock (the buy-back has accounted for c20% of all traded volume since the scheme began), we believe this programme is an important factor in maintaining the share price at the current levels.

Having perhaps made a slower start on its post-KLK bid strategy than we had originally expected, MPE has now impressively disposed of its Agro Muko joint venture (and paid a special dividend of 10p per share as a result), acquired a new majority-owned 10,000ha newly planted plantation in Kalimantan, extended its share buy-back scheme and now more than doubled its interim dividend.

With MPE anticipating that its crop levels will double between 2016 and 2020 (as they did between 2010 and 2016), it is clear that the company is set for significant levels of growth in the coming years, which is precisely the reason it remains such an attractive acquisition target.

]]> VSA Capital Market Movers - REDT Energy Mon, 18 Sep 2017 07:19:00 +0100 redT Signs Partnership Sales Agreements

redT energy (LON:RED)#, a developer of vanadium redox flow machines for large-scale energy storage applications, has signed partnership agreements with a number of distributors in Central & Eastern Europe, South East Asia and the Pacific region. It has also announced two new senior hires.

• Combined, the distributors have made an initial commitment of 12 units as part of a qualified pipeline of more than 300 units

• Bengt Stahlschmidt has been announced as Global Business Development Lead, alongside Adam Whitehead who has joined as Research Principle. Both join from flow battery peer Gildemeister, which has recently entered the administration process in Germany

VSA Comment

RED has secured its first commercial orders from a group of specialist energy sector distributors with longstanding experience selling flow machines from Gildemeister and others into the global market. The fact that RED has now been selected to deploy its machines through these channels highlights the company’s move towards becoming the flow machine manufacturer of choice in the market.

The apparent demise of key flow competitor Gildemeister has given RED access to its key people, the first two being Bengt and Adam as detailed above, as well as its future pipeline, with the Austrian company having done much to promote the benefits of flow machines in the global energy storage sector.

Although RED’s commercial sales have started slower than we had anticipated, this announcement is clearly good news for the company and we hope a sign of things to come as the company looks to move from generating a limited number of individual sales, to becoming the low cost mass market producer of flow machines for the global energy storage sector.

We maintain our BUY recommendation and target price of 22p.

]]> The 19th Chinese Party Congress is coming, and will have an interesting effect on markets Fri, 15 Sep 2017 11:15:00 +0100 Renaissance Gold enjoying a pretty good run of activity Fri, 15 Sep 2017 10:05:00 +0100 Bob Felder, president of Renaissance Gold Inc (CVE:REN), fills Proactive in on the broad range of progress they've made in recent months, including drilling at their Nevada projects, which has been financed by major Kinross Gold USA Inc.

As reported back in February this year, Renaissance inked a letter of intent (LOI) with Kinross Gold USA Inc (NYSE:KGC), which could grant Kinross the option to acquire a 70% interest in the Spruce East, Diamond Point, and Buffalo Canyon exploration projects  in Nevada within 10 years.

]]> Anglo Pacific widens portfolio with nickel-cobalt acquisition Thu, 14 Sep 2017 07:15:00 +0100 Julian Treger, chief executive of Anglo Pacific Group plc (LON:APF TSX:APY) tells Proactive they've broadened their portfolio with the acquisition of a royalty on a nickel-cobalt mine in Brazil.

Initially, the royalty specialist will pay Brazilian Nickel Limited US$2mln for a 1% gross revenue royalty (GRR) on the Piauí nickel – cobalt project in the north-east of the country.

]]> Alopex Gold honing in on commercial production in Greenland Wed, 13 Sep 2017 12:04:00 +0100 Eldur Olafsson, founder and chief executive of ‎Alopex Gold Inc (TSXV:AEX) discusses with Proactive their Nalunaq mine and Tartoq gold properties across Greenland.

Nalunaq hosts a high-grade NI43-101 resource of 263,000 ounces grading 18.7 grams per tonne and historically produced over 350,000 ounces of gold at grades of upwards of 15 grams.

“The largest challenge we face is weather and services,” says Olafsson. “But everything else is manageable. The access is good – we have open sea access. All the big discoveries have come from assets similar to Nalunaq.”

]]> Golden Saint's new CEO keen to maximise potential of their diamond licences Wed, 13 Sep 2017 08:28:00 +0100 Proactive Investors chats to Pierre Fourie, the new chief executive of the alluvial diamond miner Golden Saint Resources PLC (LON:GSR).

Fourie says he's excited to be joining the team mainly because the diamond licences they have are 'quite good' licences and they deserve the right team to develop them.

]]> VSA Capital Market Movers - Columbus Energy Resources PLC Independent Oil & Gas PLC Wed, 13 Sep 2017 08:06:00 +0100 Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (LON:CERP) has announced interim results for H1 2017 which with operational changes enacted in late H1 2017 are likely to mark a turning point in the company’s development. CERP has set out the strategy to restore profitability at the core operations which will provide stable cash flow for unlocking CERP’s exploration potential.

Group oil sales of 108k barrels of oil were down 32% YoY as production in Spain ended in January 2017. While in Trinidad production was disrupted by Tropical Storm Bret alongside declines in well pressure in the Goudron field. However, higher average oil prices and favourable timing of sales more than offset the decline in production and revenue of £2.5m was up 28% YoY. The operating loss of £1.88m was in line YoY, as although CERP has made significant progress and reduced SGA by 16% YoY to £1.4m, cost of sales were higher as a result of one offs relating to Spain while a positive non cash gain in H1 2016 benefitted earnings in the prior period. We note, however, a 33% YoY reduction in operating costs at Trinidad to £700k. The net loss of £1.96m was therefore broadly in line YoY.

However, we believe that H1 2017 is likely to mark a turning point for CERP. With the new management team in place from May 2017, CERP has indicated the early success of its low cost initiatives to restore profitability and positive cash flow at its core operations. In line with previous experience the performance of the first two wells drilled as part of the Mayaro infill programme (GY-682, GY-683) resulted in strong initial production of 55bopd and 65bopd, however, this declined to 8bopd and 18bopd respectively within a few months as pressure declined. Consequently and with 160 historic wells of which around 90 are shut in, management has decided to utilise the existing wells and address the issue of declining pressure via well stimulation rather than continue with the Mayaro sand infill programme.

Yesterday, CERP announced that it had received a CEC enabling the first programme of the waterflood pilot injection to commence. This is planned to increase production from 30bopd to over 150bopd on a stable and consistent basis at a cost of just US$300k compared to US$500k for each Mayaro well. On a larger scale the potential is therefore likely to be significant and by utilising water injection and other well stimulation techniques such as smart pumping systems CERP is targeting over 550bopd by year end. Early injectivity tests have resulted in tenfold increases in production rates so far.

CERP’s cash position at the end of H1 2017 was £1.7m and on Monday CERP announced an additional US$750k in Lind funding due in Q4 2017. CERP have guided that the turnaround strategy based on well stimulation and the waterflood injection programme will be achievable using existing cash resources and are targeting positive cash flow generation by Q4 2017.

While restoring profitability at the core Goudron operations in the near term is in itself highly positive we highlight the announcement that based on the existing cash resources and the projected cash flow from Goudron, CERP intend to bring forward development of the significant exploration potential at the South West Peninsula (SWP). CERP intend to drill SWP in mid-2018 using existing cash resources. This is subject to completion of permit approval and completion of commercial negotiations which have begun following the acquisition of the BOLT license and production of 200 barrels of oil sold to Petrotrin in May 2017. SWP represents CERP’s transformational growth opportunity and the ability to develop the asset internally is a significant positive step, in our view.

We reiterate our Buy recommendation and target price of 25p/sh.

Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (LON:IOG) has announced changes to management as James Chance, previously IOG’s Commercial Director, has been appointed Chief Financial Officer with immediate effect. James has not been appointed to IOG’s Board of Directors. Hywel John, has stepped down from CFO and resigned as a Director with immediate effect to pursue other interests. The IOG project team has been strengthened by the addition of Ian Pollard as HS&E Manager and Jonathan Walker as Engineering Manager.

We reiterate our Buy recommendation.

]]> Excelsior Mining sitting on a world class copper project in Arizona Wed, 13 Sep 2017 07:48:00 +0100 Stephen Twyerould, president and chief executive of Excelsior Mining Corp (TSX: MIN) tells Proactive they've recently reached an important milestone - with the receipt of a state operating permit for their Gunnison copper project in Arizona.

Specifically, it is the aquifer protection permit (APP) - the primary operating permit to be issued by Arizona.

The project is an advanced staged, low cost, environmentally friendly in-situ recovery copper extraction project that is scheduled for commercial production in 2018.

]]> Kestrel Gold hits highly attractive results at Clear Creek Tue, 12 Sep 2017 11:28:00 +0100 Kevin Nephin, president and chief executive of Kestrel Gold Inc (CVE:KGC) discusses with Proactive some of their recent and very impressive gold sampling results - upwards of 100 grams per tonne - from their Clear Creek property in the Yukon.

Clear Creek is in highly prospective country, just 60 kilometres west of Victoria Gold’s Eagle Gold project and 55 kilometres south of Golden Predator’s Brewery Creek project.

]]> VSA Capital Market Movers - Columbus Energy Resources PLC Tue, 12 Sep 2017 07:28:00 +0100 Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (LON:CERP) has announced that it has received a Certificate of Environmental Compliance (CEC) for the Goudron field Waterflood programme from the Environmental Management Authority of Trinidad. The approval will enable CERP to commence work on the Goudron Field Water Injection Pilot Programme which is intended to increase reservoir pressure consequently sweeping oil towards production wells resulting in an increase in production rates. The forecast increase is from the current 30BOPD to in excess of 150BOPD which will require an injection of 450 barrels of water per day.

CERP intend to commence the programme immediately and crucially, as the new management team have reviewed the project they have concluded that the first of the four pilot programmes can be completed from internal cash. Costs committed to date for the first programme for pumps, filters, tanks and pipework etc, total just US$300k. These have been tested during well injectivity trials and the system is expected to be running with continuous water injection within the next few weeks. Ongoing operating costs will be minimised by the fact that the source of injection water is already produced water from the Goudron field.

The data on recovery and incremental production rates will be key to determining the extent of the waterflood expansion, with a decision now expected in 18 months’ time. Proposals for the next three programmes will be submitted shortly and will target two areas in the shallow Goudron Mayaro well and the GY-670 well. 

The application was submitted in late June and has been approved far quicker than expected bringing project commissioning forward by around a year. This reflects three key positives for CERP going forward which underpin our positive view on the stock. Firstly, as with the improved Lind facility terms it demonstrates the new management’s proactive approach to restoring profitability at the core CERP operations. Secondly it demonstrates that despite the changes in senior management, strong relationships with the Trinidad authorities have been maintained. Thirdly, it highlights the attractiveness of Trinidad as an operational jurisdiction.

We reiterate our Buy recommendation and 22p target price.

]]> VSA Capital Market Movers - Goldplat plc Mon, 11 Sep 2017 09:13:00 +0100 Goldplat (LON:GDP)

Goldplat (LON:GDP) has announced an update to the ongoing dispute over a contract with Rand Refinery. With no resolution having yet been achieved GDP has now decided to issue an application to the High Court of South Africa for recovery of the fees owed by Rand Refinery.

It is not clear at this point how long resolution might take, however, the impact on our outlook for GDP remains unchanged. From an operational perspective we highlight GDP’s efforts to reduce its exposure to Rand Refinery by increasing internal elution capacity and using alternative refiners. Consequently our earnings estimates are unchanged and reflect the strong operational performance achieved in FY 2017.

We reiterate our Buy recommendation and 12.2p target price.


]]> VSA Capital Market Movers - Columbus Energy Resources PLC Mon, 11 Sep 2017 07:26:00 +0100 Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (LON:CERP) has announced a favourable revision to the terms on its lending facility with Lind Partners. Following the agreement announced in December 2016 for a US$8.9m convertible loan facility of which US$1.825m (T1) has been drawn down, CERP has negotiated an increase in the conversion price, an increase in the facility and an improvement in payment terms.

• T1 conversion price increased by 50% to 4.5p/sh.

• Issue of 17.9mn shares to Lind, held in escrow for at least six months from 23rd September.

• The next monthly repayment of T1 will be paid in shares (2.3m) at a price of 3p/sh.

• Lind intends to exercise its right to increase the size of the facility by US$750k (T2) with funds available to CERP in Q4 2017. T2 will be repaid at a monthly rate of US$38.7k in cash or shares as determined by CERP.

• Lind will be eligible for 7.6mn share options on provision of T2 exercisable at a price of 50% above the preceding 20 day average to the award date for up to 40 months.

The additional funds will aid in furthering the new management’s turnaround strategy. This includes field optimisation, well stimulation and the water injection pilot programme for which an application has been submitted. CERP expect to be cash flow positive during Q4 2017 as a result of these initiatives and we believe this can be achieved from the expanded cash resources given their low cost nature.

Furthermore, we believe that Lind’s decision to improve the terms of the facility, which has weighed upon the shares in recent months, reflects positively on the new management and their strategy, underpinning our positive outlook.

We reiterate our Buy recommendation and 22p target price.

CERP will announce interim results on 13 September and hold an AGM and investor presentation on 14 September at the company's solicitors, Kerman and Co LLP, who are located at 200 Strand, London WC2R 1DJ

]]> Lydian International full steam ahead with construction building Armenia's largest gold mine Fri, 08 Sep 2017 19:59:00 +0100 Howard Stevenson, chief executive of the Armenia-focused gold mine developer Lydian International Ltd (TSE:LYD), updates Proactive's Andrew Scott on the construction of their Amulsar project.

Gold output, beginning in 2018, is targeted to average greater than 200,000 ounces per year over an initial 10 year mine life.

The group is aiming for first gold production in mid-2018.

]]> Xanadu Mines liking what they see from drilling at Kharmagtai Fri, 08 Sep 2017 15:00:00 +0100 Andrew Stewart, chief executive for Xanadu Mines, speaks with Proactive Investors.

]]> Gold mining in Tanzania gets riskier, and more attractive too Fri, 08 Sep 2017 12:58:00 +0100 Shanta Gold now leaner and stronger as they respond to changes in Tanzania Thu, 07 Sep 2017 14:38:00 +0100 Shanta Gold PLC's (LON:SHG) recently appointed chief executive Eric Zurrin talks Proactive's Andrew Scott through the Tanzania miner's new focus and strategy.

''We've been experiencing some changes in Tanzania and we've been responding as a company with our own improvements'', Zurrin says.

''There's been some positive changes made to management, positive changes to cost reductions and really around improving the structure of our business to ensure we're as strong and as lean as possible going into the current cycle''.

]]> Strategic Minerals encouraged by early drill results at Redmoor Thu, 07 Sep 2017 13:30:00 +0100 John Peters, managing director at Strategic Minerals Plc (LON:SML), talks through the highlights from their recent 10 hole drill programme at Redmoor.

Peters also touches on their August sales figures from Cobre in which they notched up a new record - more than doubling the previous record posted in July this year.

]]> Toral results 'a great boost to our story and team', says FCR's Justin Tooth Thu, 07 Sep 2017 13:07:00 +0100 Justin Tooth, executive chairman of Ferrum Crescent Ltd (LON:FCR), discusses with Proactive's Andrew Scott their latest drill results from the Toral project in Spain.

''I'm extremely encouraged'', Tooth says.

''I've got to say I was very pleasantly surprised when these came through ... I was over in Spain when the drill core was coming out and there was some excitement''.

''We did have visual mineralisation at all of our holes which is one of the reasons why we were encouraged to shorten that programme and get the results back''.

]]> New Age Exploration encouraged by first drill results at Redmoor Thu, 07 Sep 2017 08:47:00 +0100 Gary Fietz, managing director for New Age Exploration, speaks with Proactive Investors.

]]> Ariana Resources batting away interest in Salinbas while exploration work continues Wed, 06 Sep 2017 07:59:00 +0100 Kerim Sener, managing director at Ariana Resources Ltd (LON:AAU), tells Proactive's Andrew Scott they've now completed an initial exploration programme across the Hot Gold Corridor within its wholly-owned Salinbas gold project in Turkey.

The Hot Gold Corridor is named after the 4 mln ounce Hot Maden deposit located approximately four kilometres south of the project licences.

]]> VSA Capital Market Movers - Eco Atlantic Oil & Gas Ltd Wed, 06 Sep 2017 07:41:00 +0100 Eco Atlantic (LON:ECO)

Eco Atlantic (LON:ECO) has announced that along with its operating partner Tullow Oil (TLW LN) it has completed a 2,500km2 3D seismic survey on the Orinduik block in Guyana. The block is owned 60% by TLW and 40% by ECO and the test was completed by Schlumberger on schedule with stable seas and no weather disruptions. Orinduik is a few kilometres up dip from ExxonMobil’s (XOM US) Liza and Payara discoveries which XOM estimates contain between 2.25-2.75bnboe.

The 3D survey had originally been conceived as a 1,000km2 study, however, owing to the positive results of 2D survey data and down dip discoveries ECO and TLW opted to increase the scope of the study. On the enlarged study TLW agreed to carry ECO’s cost of the share to 1,000km2 (capped at US$1.25m) with the balance of the programme funded pro-rata. ECO and TLW will now begin interpreting the data with results to be released in due course.

We reiterate our Buy recommendation and target price of 25p

]]> CanAlaska makes high-grade uranium discovery at West McArthur Wed, 06 Sep 2017 07:26:00 +0100 Peter Dasler, president of CanAlaska Uranium Ltd (CVE:CVV), tells Proactive they've made a "significant" uranium discovery at the West McArthur uranium project, where drilling is being carried out by partner Cameco Corporation (TSX: CCO; NYSE: CCJ).

The latest assays come from one hole -  WMA042 - which is testing a fault on what's called Grid 5.

The highlight is 1.34% eU3O8 (equivalent triuranium octoxide) over an intercept of 5.65 metres at a depth of between around 773 and 778 metres (m).

]]> Michelmersh expecting strong second half following Carlton acquisition Tue, 05 Sep 2017 11:51:00 +0100 Frank Hanna, joint CEO of Michelmersh Brick Holdings Plc (LON:MBH), tells Proactive they saw a 6% increase in first half turnover and are expecting a strong second half following the  acquisition of Carlton Main Brickworks.

Turnover in the six months ended 30 June 2017 rose to £16.2mln from £15.3mln the same period a year earlier, supported by an increase in average selling prices and a seven-day contribution from Yorkshire-based Carlton.

]]> Premier African Minerals puts brakes on further Circum acquisitions Tue, 05 Sep 2017 11:40:00 +0100 In a wide ranging discussion George Roach, chief executive of Premier African Minerals Limited (LON:PREM), talks through why he's temporarily putting a lid on upping Prem's stake in Circum, as well as what the latest drill results are revealing about the southern portion of Zulu's Main Zone.

Roach also touches on latest developments with regards to the TCT project plus ongoing efforts towards full production at RHA in Zimbabwe.

]]> Mustang Resources transitions towards monetising its rubies Tue, 05 Sep 2017 08:42:00 +0100 Christiaan Jordaan, managing director for Mustang Resources, speaks with Proactive Investors.

]]> Greatland Gold to kick off exploration at Panorama Mon, 04 Sep 2017 09:42:00 +0100 Gervaise Heddle, chief executive of Greatland Gold plc (LON:GGP) sits down with Proactive's Andrew Scott to discuss their exploration plans at the Panorama project in Western Australia.

The focus will be on working up potential cobalt and gold mineralisation.

The key objective is to outline and refine the primary target areas for further detailed ground work and potential drilling campaigns.

]]> Sunrise Resources firms up intervals of Pozzolan and Perlite at CS Project Mon, 04 Sep 2017 09:00:00 +0100 Patrick Cheetham, executive chairman of Sunrise Resources Plc (LON:SRES), tells Proactive preliminary testing of drill samples at the CS Project in Nevada have confirmed thick intervals of pozzolan and perlite.

A number of meetings have been held with potential US customers for both perlite and pozzolan and samples are being readied to be submitted to interested parties for their internal laboratory testing.

]]> Trump will use North Korea to palliate long-standing domestic tensions in the US Mon, 04 Sep 2017 08:20:00 +0100 Gold maintaining its upward rally and 'looking likely to continue' Fri, 01 Sep 2017 10:02:00 +0100 Mining Capital's Alastair Ford discusses the continued strength of gold and the health of the US economy.

He also touches on the wider context - using Black Iron Inc (TSE:BKI) as an example.

''Black Iron's an interesting case and point ... if you put aside the media reports and the geopolitical fears, the economic situation is relatively healthy and the Iron Ore price has been shooting back up from lows it hit last year'', Ford says.

''Black Iron has a very useful project in Ukraine that actually was only de-railed by Russian President Putin's invasion of Ukraine''.

]]> Amur Minerals close to switching focus to engineering and mine planning Thu, 31 Aug 2017 13:43:00 +0100 Robin Young, chief executive of Amur Minerals Corporation (LON:AMC) tells Proactive's Andrew Scott drilling this summer has confirmed the presence of another massive nickel deposit at their Kun-Manie licence in Far East Russia.

A 20,000m drill campaign showed that the Ikenskoe/Sobolevsky and Kubuk targets are likely to be a single deposit of more than 4km in length and possibly as much as 5km.

]]> Blackham Resources gets funding boost to advance expansion feasibility study Thu, 31 Aug 2017 09:05:00 +0100 Bryan Dixon, managing director for Blackham Resources, speaks with Proactive Investors.

]]> Vast Resources hoping to kick off production at Baita Plai by year-end Thu, 31 Aug 2017 08:32:00 +0100 Roy Pitchford and Andrew Prelea of Vast Resources PLC (LON:VAST)  tell Proactive's Andrew Scott they're hopeful mining will start by the end of the year at the Baita Plai mine in Romania.

Baita, the holder of the head licence at the site, chose Vast’s subsidiary African Consolidated Resources after a competitive process, which means 'a major hurdle' has been overcome they said.

]]> Strategic Minerals kicks off first phase of 2017 drilling at Hanns Camp Wed, 30 Aug 2017 11:25:00 +0100 John Peters, managing director of Strategic Minerals Plc (LON:SML), tells Proactive their wholly-owned subsidiary, Central Australian Rare Earths, has commenced the first phase of the 2017 Hanns Camp drilling programme.

Peters also talks through his move to double his stake in the company to 20 mln shares after exercising a portion of his currently vested options.

Plus, he adds more detail to a recently announced options programme designed to incentivise the Board and Management to target, over the next five years, a market capitalisation of £100 mln.

]]> VSA Capital Market Movers - Millennial Lithium Wed, 30 Aug 2017 07:23:00 +0100 Millennial Lithium (CVE:ML)

Millennial Lithium (ML) has announced a placement of up to C$5m at a price of C$1.25/sh per unit. Each unit will consist of one common share and one warrant. Each warrant will be exercisable into one common share at C$1.50 for a period of 24 months post the offering. The offering is expected to close on September 26 2017.

Following the recent announcement of strong drill results and the acquisition of additional ground adjacent to the flagship project the funding will be used to advance the ongoing work programme.

We reiterate our SPEC BUY recommendation.

]]> Berkeley Energia inks 'phenomenal' $120mln strategic financing deal Wed, 30 Aug 2017 07:08:00 +0100 Paul Atherley, managing director of Berkeley Energia Limited (LON:BKY) tells Proactive they've arranged the finance to bring their Salamanca uranium project into production through a US$120mln convertible loan and option package with Oman’s sovereign wealth fund.

The deal will see Oman become a substantial shareholder in the company and have the opportunity to become an offtake partner.

]]> Gold punches through US$1,300 as reality of North Korean missile attack is brought home Tue, 29 Aug 2017 16:45:00 +0100 North Korea fires missile, shoots down risk assets - Core Finance Tue, 29 Aug 2017 09:45:00 +0100 Presenter Matt Brown and Core London CEO Nick Batsford take note of the risk aversion in the markets after North Korea fired a missile over Japan. Brown says the traders should keep an eye on Trump's response later today.

]]> VSA Morning Agri Comment Tue, 29 Aug 2017 07:47:00 +0100 MPE Acquires New 10,000ha Block

Indonesian palm oil producer MP Evans (LON:MPE) has acquired a privately-held Singapore-based company whose local subsidiary holds 95% of a 10,000ha oil palm project in East Kalimantan.

• Of the 10,000ha land block, 8,240ha are company-owned estates with 1,300ha contained in a smallholder scheme and the balance being infrastructure and conservation areas

• Of the 8,240ha owned by the company, 7,400ha are planted with young oil palms (non-producing), 440ha are mature oil palms (producing) with a further 400ha in the process of being planted

• Total consideration is US$108m, with US$88m cash consideration and US$20m of assumed debt

• Significant growth is expected in the coming years as the trees mature along the yield curve. MPE expects the project to produce 270,000t+ of FFB per annum within ten years

• MPE plans to build a mill in due course as well as register the land with the Roundtable on Sustainable Palm Oil (RSPO), in line with its existing estates and mills

VSA Comment

Following the sale of the group’s 36.84% stake in Agro Muko in January, investors have been eagerly awaiting the deployment of the received funds into another palm oil project. Although it has taken longer than many expected, the transaction appears to be a good one, more than replacing the share of planted land lost through the Agro Muko disposal (7,200ha) for a price in-line with other recent transactions in the sector (cUS$13,100 per planted hectare).

However, it will take much longer for this project to replace the financial contribution lost as a result of the disposal of Agro Muko, given the early stage nature of the estate. The new project has just c5% of its palms currently producing, compared with Agro Muko that had c90% of mature oil palms. The new project made an operating loss of US$0.4m in 2016 compared to Agro Muko which contributed a share of profits to MPE of US$7.1m and gross dividends of US$3.7m in 2016.

With its ongoing share buy-back coming to an end (now 96% complete), the pressure was on for MPE to deploy its excess cash into an attractive transaction with strong growth prospects to support its share price. It appears to us that this deal fits the criteria. However, the end of the hands-off period for Kuala Lumpur Kepong (KLK LN) is now only four months away. We still expect it to return for a second try at acquiring MPE once this restricted period expires.

]]> VSA Capital Market Movers - Polymetal International Tue, 29 Aug 2017 07:13:00 +0100 Polymetal (LON:POLY)

Polymetal (LON:POLY) has announced weak results despite increased revenues. The reversal of the USD, despite its positive impact in the dollar gold price was more than offset by the impact of the stronger RUB on costs. Revenue was up 15% YoY to US$683m, as gold sold increased 19% YoY to 380koz offset in part by a 5% YoY decline in silver sales to 12.4moz.

EBITDA of US$257m was down 12% YoY as cash costs increased 28% YoY to US$656/oz. Meanwhile, AISC increased 20% YoY to US$906/oz. This is expected to moderate somewhat in H2 with POLY maintaining its guidance for a full year average of US$600-650/oz and US$775-825/oz for total cash costs and AISC respectively. However, we do not expect the dollar to weakness to reverse in H2 indicating that the RUB is likely to remain strong.

Net earnings of US$120m were down 27% YoY as a result of higher cost pressures. Despite this, POLY announced a dividend of US$0.14/sh. equivalent to 50% of net earnings and a 56% increase YoY.

]]> Trump’s threat to shut down the government is no bluff Fri, 25 Aug 2017 11:24:00 +0100 One commentator from one of London’s smaller financial trading institutions used the word “bluff” several times in a note this week analysing the likelihood or not of Donald Trump following through on his threat to shut down the government if funding for his Mexican wall is withheld.

The mechanism for Mr Trump to follow through on his threat is already there: the US has once again hit its “debt ceiling” and has been resorting to what’s known by Washington insiders - and increasingly now by the outsiders that Mr Trump has been bringing in – as “extraordinary measures.”

WATCH: 'Trump to deliver a golden opportunity' says Alastair Ford

But in order for the sprawling edifice of US government to be able to afford to continue to fulfil its manifold functions, this debt ceiling needs to be raised again, and soon: by 29th September, according to the US Treasury Department.

It requires the agreement of the legislative and the executive branches of government, and if Mr Trump wants to make extending the debt ceiling about the wall, he can do.

Is he bluffing?

Maybe, but not for the reasons the far-removed commentator in London gives. Mr Trump doesn’t want to be seen as responsible for failure, runs the simplistic analysis, and certainly not for a failure so huge as the creditworthiness of the US government.

But think again about what Mr Trump has said he stands for, and about what he does. He is no friend of big government. Not at all. Even if he hadn’t been elected on a platform which if it had any coherence at all was about rolling back the state, his own personal circumstances are unlikely to make him well disposed to the technocrats about whose roles he may or may not be bluffing.

The other side of the same coin is the failure itself. If the debt ceiling is not raised and the US government does cease to function effectively it may or may not be the fault of Donald Trump, but who in their right minds thinks he’s going to allow that narrative to dominate?

Not even the Democrats, who must be taking a good, long hard look now at a President using as a bargaining chip a policy he was clear enough about in his manifesto and his campaigning, and which he legitimately won an election on.

To make things worse, though, Republican party in-fighting has seized on the debt ceiling as a bargaining chip to forward other measures. Trump has taken down leading Republicans before, and there is little doubt he’s capable of doing it again, but each time he does it the stakes get a little higher.

In the Presidential primaries, all that was at stake was the global credibility of the Grand Old Party. Now, what’s at stake is the functionality of the US government itself. Small wonder that some in the security industry are beginning to get nervous about what may be next - the nuclear button?

Recent rhetoric

Given some of the recent rhetoric about North Korea, the fears are at least understandable in the form in which they are aired in the media. But hard to know what this President is really thinking.

So, to return to before the beginning, is it likely that there will be a US government shutdown some time in the fourth quarter? It’s not likely, but it’s possible. Mr Trump is grappling with issues as complex and as varied as the US has faced at any time since the end of the Cold War, and not the least of which is the diminishing influence of the US itself at a global level, and the predominant culture within the US at the national level.

Mr Trump says he has the answers to these questions. But if he can’t get enough people to agree with these answers, it may just be that he prefers conflict to resolution in order to keep pushing on with his own agenda.

So, although the wall on the Mexican border may not be the most pressing of all the issues on his agenda, if Mr Trump chooses to use it as the touchstone to set off the next round of his assault on government, then there’s not much anyone can do about it.

Gold has now ticked up to US$1,290. The price is being set by US domestic developments, and little else. For now at least, sell gold at your peril.


]]> VSA Capital Market Movers - Millennial Lithium Fri, 25 Aug 2017 07:42:00 +0100 Millennial Lithium (CVE:ML)

Millennial Lithium (ML) has reported that it has been awarded 2,492 hectares of claims from The Salta Provincial Energy and Mining Company (REMSA). This acreage is in the Pastos Grandes basin where drilling is currently underway to define a compliant JORC lithium resource. The land position at Pastos Grandes now totals 8,664 hectares.

ML will move on to this acreage to begin drilling in the coming days once an environmental plan is submitted for approval.  ML paid US$3,000 per hectare for this acreage and considers it of strategic and critical importance to the ultimate scale of lithium resources on this project. With approval of the environmental plan, ML begins an intensive Stage 1 program of preparation for pilot lithium production at commercial scale upon which it is obligated to spend at least US$15.54m.

In addition, ML’s partner on its Pocitos basin Cruz property reported on 23 August that fluid density measurements on the first drill hole are consistent with brine and in agreement with prior historic drill hole information elsewhere in the Pocitos basin. Drilling is ongoing.

The two announcements are highly positive and important to the progress and expansion of ML’s lithium activities and total resource in Salta Province of Argentina. The REMSA deal effectively doubles the ground ML controls on Pastos Grandes. We believe this to be the heart of the best lithium brines. With two projects currently drilling, we expect strong newsflow in the coming weeks.

We reiterate our Speculative Buy recommendation.


]]> VSA Capital Market Movers - Eco Atlantic Oil & Gas Ltd Fri, 25 Aug 2017 07:17:00 +0100 Eco Atlantic (LON:ECO)

Eco Atlantic Oil & Gas (LON:ECO) has announced FY Q1 2017 results. The net loss increased from C$667k to C$2,122k as a result of increased operating expenses. This was partially offset by a modest increase in interest income. ECO finished the quarter with cash of C$4.9m.

Operationally, ECO is nearing completion of a c.2,550km2 3D seismic survey on the 1,800km2 Orinduik Block offshore Guyana along with its operating partner Tullow Oil (TLW LN). Completion of the survey will be roughly two years ahead of schedule. The targets are a few kilometres up dip of Exxon Mobil’s (XOM US) recent discoveries which are estimated to contain between 2.25-2.75mmboe.

We reiterate our Buy recommendation and 25p target price.


]]> Shiny new 5yr deal with the Chinese for Tharisa Thu, 24 Aug 2017 13:27:00 +0100 Platinum group metals and chrome producer Tharisa (LON:THA) is reflecting on it's new five year agreement to supply 240,000 tonnes of metallurgical- grade chrome concentrate to the Chinese for its huge stainless steels industry.
CEO Phoevos Pouroulis told us the deal represents about 25% of Tharisa production and he said, ''Its been encouraging to note that spot chrome prices have increased on the back of stainless steel production improvements". Tharisa has been working with TISCO, an existing Chinese partner for years and this is a natural progression for them within the industry.

]]> Logan Resources snaps up an interest in four Nevada gold properties Thu, 24 Aug 2017 10:45:00 +0100 Mark Morabito, chief executive of Logan Resources Ltd (CVE:LGR) tells Proactive they've now completed the initial earn-in on four gold properties in Nevada.

Logan has satisfied the conditions of an option agreement with Liberty Gold signed back in July of last year and has earned a 51% participating interest in the properties known as Brik, Viper, Antelope and Easter.

Logan now has the option to earn a participating interest of up to 80% on the four properties.

]]> Premier African takes bigger slice of Circum Wed, 23 Aug 2017 12:01:00 +0100 George Roach, chief executive of Premier African Minerals Limited (LON:PREM) tells Proactive they've increased their holding in a company developing an Ethiopian potash project worth US$2.8bn.

Premier’s deal may on the face of it look modest – it is has acquired a 1% stake in Circum Minerals for US$1.36mln.

But it says it now has a “meaningful” 5.2% interest in the company.

The vendor was Sabona Investment who was paid in shares.

]]> Significant income, cash flow and profits growth in first half for Anglo Pacific Group Wed, 23 Aug 2017 08:12:00 +0100 Julian Treger and Kevin Flynn of Anglo Pacific Group plc (LON:APF) caught up with Proactive to discuss the firm's first half results.

The mining royalty business reported a 300% jump in free cash flow to £18.9mln in the six months ended 30 June, compared to the same period a year earlier, including an impact of the Denison financing arrangement of £3.3bn.

Royalty income shot up 295% to £16.1mln with a record performance at the Maracás Menchen project in Brazil due to strong production and a significant improvement in vanadium prices to an average of US$5.46 per pound from US$3.15 last year.

]]> VSA Capital Market Movers - Goldplat plc, Vedanta Resources Wed, 23 Aug 2017 07:21:00 +0100 Goldplat (LON:GDP)

Goldplat (LON:GDP) will today hold its shareholder conference call. Shareholders may submit questions in advance of the call via email using or alternatively via the following link:

The link will enable shareholders to access the call and submit questions via a chat function.

Telephone dial in details are as follows: 0808 109 0701 or for international callers +44 (0) 20 3003 2701 with participant pin 9478969#.

The call will begin at 12pm UK time.

Vedanta (LON:VED)

Vedanta (LON:VED) has announced robust results for FY Q1 2018 benefitting from stronger zinc and aluminium prices in particular. Group revenue of US$3.1bn was up 32% YoY while primarily as a results of the stronger top line group EBITDA was up 48% YoY to US$778mn. VED continues to deleverage with a US$1.4bn decline in net debt since March 2017. 

As well as a 35% YoY increase in zinc prices and a 26% increase in lead prices VED increased zinc production in India by 90% YoY to 194kt while lead production was up 42% YoY to 35kt. This was partially offset by a decline in output at the international assets of 25% YoY to 32kt. Total aluminium production of 352kt was up 44% YoY while prices averaged 21% higher YoY. Copper production of 90kt was down 10% YoY in India due to planned maintenance while in Zambia copper production was up 5% YoY to 47kt.

Oil and gas production was weaker, however, down 5% YoY to 17mmboe on a 100% basis. This was due to largely to the natural decline of the fields. Iron ore production was largely unchanged at 3.2mnt, however, realised prices were lower YoY due to a widening in the spread for low quality iron ore.

]]> Honduras expansion plans on track for Wishbone Gold following new funding deal Tue, 22 Aug 2017 12:18:00 +0100 Richard Poulden, chief executive of Wishbone Gold PLC (LON:WSBN) catches up with Proactive Investors to explain some of the detail around their recently announced new funding deal with institutional investors - arranged by RiverFort Global Capital.

The arrangement comprises a £800,000 share subscription and a separate equity sharing agreement. Up to US$2mln of investment potentially comes from YA II PN Ltd, arranged by RiverFort, with an initial drawdown of US$400,000. Share warrants were also issued as part of the new arrangement.

Funding to one side Poulden also discusses the potential roll out to other countries of their Honduras mining model.

''It's a model that works really well for this sector'', he says.

]]> Argosy Minerals executes transformational binding off-take deal with Chinese battery company Tue, 22 Aug 2017 09:00:00 +0100 Jerko Zuvela, managing director for Argosy Minerals, speaks with Proactive Investors.

]]> VSA Capital Market Movers - Antofagasta Plc, BHP Billiton plc Tue, 22 Aug 2017 08:42:00 +0100 Antofagasta (LON:ANTO)

Antofagasta (LON:ANTO) has released strong results on the back of stronger copper prices, output and robust cost control. Revenue of US$2bn was up 42% YoY as copper sold increased 14% to 310kt YoY while copper prices averaged 25% higher. Unit costs of US$1.56/lb were down 2.5% YoY. EBITDA was consequently up strongly by 88% YoY to US$1.1bn. Net income of US$455m was up 187% YoY while the interim dividend of USc10.3/sh. was more than double that of 2016.

Delayed shipments from H2 2016 at Centinela offset the impact of port disruption at Los Pelambres. Production is expected to increase further in H2 with full year guidance of 685-720kt. This is primarily expected to come from the ramp up at Centinela.


BHP Billiton (LON:BLT)

BHP Billiton (LON:BLT) has released strong results for full year FY 2017. Revenue of US$38.3bn was up 24% YoY while underlying EBITDA of US$20.3bn was up 64% YoY. This was primarily driven by stronger earnings in from bulk materials and copper although petroleum earnings were also stronger. Iron ore EBITDA increased by 62% to US$9bn while coal EBITDA was up five-fold to US$3.8bn. The full year dividend of USc83/sh. was up from USc30/sh. in 2016 with an H2 contribution in 2017 of USc43/sh.

FY 2018 production guidance is for increases across the board bar the petroleum division which has been declared non-core and available for sale. Iron ore production is expected to increase on an attributable basis from 231mnt to between 239-243mnt with cash costs down from US$14.6/t to below US$14/t. Copper production is expected to increase from 1.3mnt to between 1.66-1.79mnt as production is normalised at Escondida, however, cash costs are expected to increase to US$1/lb (up 8% YoY). Coal costs are guided as flat YoY although met coal production is expected to increase from 40mnt to 44-46mnt whilst thermal coal production is expected to increase by 7% YoY to 29mnt. Petroleum output is expected to fall from 208mmboe to between 180-190mmboe.

]]> Capital Network's Sam Catalano on European Metals Holdings Tue, 22 Aug 2017 08:32:00 +0100 Sam Catalano, Capital Network's mining analyst talks through European Metals Holdings (LON:EMH , ASX:EMH) key assets as well as strategy and outlook.

]]> Sula Iron & Gold's £900k raise provides 'the juice' to help them continue exploring Mon, 21 Aug 2017 10:54:00 +0100 Roger Murphy, chief executive of Sula Iron and Gold PLC (LON:SULA) adds more detail to the news they're raising £900,000 at 0.146p per share.

The net proceeds of the subscription are expected to fund the company's exploration activities at its Ferensola gold project in Sierra Leone well into 2018.

As part of the financing and to maximise funds available for exploration, the board has agreed to a 50 per cent reduction in its salaries until December 2017.

]]> Thor Mining upbeat on back of first Good Hope drill hole results Mon, 21 Aug 2017 10:39:00 +0100 Mick Billing, executive chairman of Thor Mining PLC (LON:THR) (ASX:THR), talks through the “very positive” preliminary results from the first drill hole at Good Hope - the company's wholly-owned Pilot Mountain tungsten project in Nevada.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC Mon, 21 Aug 2017 07:50:00 +0100 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (SULA LN) has announced an equity subscription to raise £900k at a price of 0.146p/sh. The investment by Riverfort Global Capital will be structured so that an initial £400k is received by SULA with subsequent investment made in monthly instalments. Accordingly, 616m new shares will be issued taking the share capital to 3.1bn implying dilution of 24.6% with Riverfort holding 19.77% of the enlarged share capital. A formula has been determined to account for future fluctuations in the share price which will mean that share dilution from this investment will not increase. SULA has also announced that the Board will take a 50% reduction in salaries until December 2017. This along with the new investment should provide sufficient capital to advance exploration into 2018.

Operationally, SULA has announced that the remaining samples collected in the Phase 3 drilling have left Sierra Leone for analysis. The results are expected to be received in mid to late September for the remaining eight holes. Depending on the results it may be possible to complete a maiden JORC resource at Sanama Hill.

We reiterate our Speculative Buy recommendation although adjust our target price to 1.2p/sh. to reflect the dilution.

]]> Australian Vanadium nearing resource update at Gabanintha Mon, 21 Aug 2017 06:27:00 +0100 Vincent Algar, managing director for Australian Vanadium, speaks with Proactive Investors.

]]> Latin Resources aligns a plan for potential near-term lithium production in Argentina Sun, 20 Aug 2017 22:00:00 +0100 Chris Gale, managing director for Latin Resources, speaks with Proactive Investors.

]]> Civil War, Gold and Donald Trump Fri, 18 Aug 2017 11:24:00 +0100 Bushveld Minerals riding high on back of strengthening Vanadium prices Thu, 17 Aug 2017 14:13:00 +0100 Mining Capital's Alastair Ford looks back on what's been a busy few weeks for Bushveld Minerals Limited (LON:BMN).

They've announced they're moving forward with plans for a vanadium electrolyte plant in South Africa after a study predicted battery demand is set to soar.

They've also started work on an AIM listing for its tin business, Greenhills Resources.

]]> European Metals' Keith Coughlan 'very encouraged' by first result from in-fill drilling at Cinovec Thu, 17 Aug 2017 12:27:00 +0100 Keith Coughlan, managing director of European Metals Holdings Ltd (LON:EMH, ASX:EMH) tells Proactive he's pleased with the first assay results from its infill drilling programme at the Cinovec lithium-tin project.

Infill drilling continues in the south-west section of the deposit, targeting two gaps in the resource model that could be potentially targeted for mining in the initial years.

So far, five out of six planned holes have been drilled this year, and test results (assays) have been received for the first of them, drill hole CIS-4.

]]> 'Really good rise in revenue' sees Capital Drilling back in the black Thu, 17 Aug 2017 12:20:00 +0100 Jamie Boyton, chairman of Capital Drilling Ltd (LON:CAPD) tells Proactive a sharp rise in revenues helped the firm return to profitability in the first half of the year.

The AIM-listed drilling solutions company saw revenues for the six months ended 30 June jump 49% to US$62.3mln (H1 2016: US$41.7mln).

That helped it swing to a post-tax profit of US$2.6mln (H1 2016: Loss of US$0.8mln).

]]> Finishing touches being made as Anglo Asian gears up for Ugur production Thu, 17 Aug 2017 12:01:00 +0100 Bill Morgan, chief financial officer for Anglo Asian Mining Plc (LON:AAZ) talks Proactive's Andrew Scott through their update to the resource estimate for the Ugur gold deposit on the Gedabek licence area.

Ugur remains on track to commence production in September 2017, as mining and haulage of ore to the processing facility stockpile are planned to commence before the end of August 2017.

]]> Greatland Gold spots potential new targets at Paterson in Western Australia Thu, 17 Aug 2017 11:29:00 +0100 Gervaise Heddle, chief executive of Greatland Gold plc (LON:GGP) tells Proactive that regional targeting across their Paterson project area in Western Australia has highlighted the potential for a new iron oxide copper gold ore (ICOG) district.

Approximately fifty IOCG targets have been identified by the company in the broader region, with around half located in ground held by Greatland.

]]> VSA Capital Market Movers - Goldplat plc, Kaz Minerals Thu, 17 Aug 2017 07:36:00 +0100 Goldplat (LON:GDP)

Goldplat (GDP LN) has announced that it will hold a shareholder conference call whereby shareholders and interested investors are invited to email questions to the Board which will be address in a Q&A session.

The call will be held at 12pm UK time on Wednesday 23 August 2017.

Questions should be sent in advance of the call to:

To participate in the call please dial 0808 109 0701 or if outside the UK using +44 (0)20 3003 2701

KAZ Minerals (LON:KAZ)

KAZ Mineral (KAZ LN) has reported strong results for H1 2017 with strong increases in revenue and earnings on the back of increased output and higher prices. Copper production of 118kt of copper was up 109% YoY as the primary sulphide concentrator at Bozshakol reached 93% of capacity. While at Aktogay where the ramp up was faster the plant is running at full capacity.

EBITDA of US$429m was up 273% YoY driven primarily by higher prices and output although unit costs were also down 18% YoY to USc64/lb after by-product credits. As a result of the strong H1 performance, Akotgay unit cost guidance has been reduced to USc110-130/lb and at Bozshakol to USc115-135/lb on a before by product credit basis. Net income of US$195m was up 157%.

Copper fundamentals have not been as supportive in recent months with Chinese imports disappointing. That said, copper prices have been more moving higher in dollar terms owing largely to recent US political events. There is further downside potential in our view for the dollar with the Fed likely to face difficulty winding down its balance sheet and continuing its implied rate of rate hikes. This is likely to benefit commodity prices across the board. KAZ has traditionally been a highly operationally leveraged producer, however, the current transition to low cost mining is likely to change this and reduce future share price volatility on the back of more stable earnings and stronger free cash flow.

]]> Bezant Resources looking to be operational break-even 'within months' Wed, 16 Aug 2017 13:32:00 +0100 Laurence Read, executive director of Bezant Resources plc (LON:BZT) tells Proactive they've achieved the first commercial gold and platinum production at their Choco project in Colombia.

The milestone's been reached within two months of plant commissioning.

]]> Massive upside in India for Lionsgold after ‘critical’ Jonnagiri feasibility study Wed, 16 Aug 2017 11:57:00 +0100 Cameron Parry, chief executive of Lionsgold Limited (LON:LION) tells Proactive preliminary results from the feasibility study being run on the Jonnagiri gold project in India show that the project has the potential to be an economically robust mine.

]]> Zulu looking set to be 'bigger than the others' in Zimbabwe Wed, 16 Aug 2017 11:29:00 +0100 George Roach, chief executive of Premier African Minerals Ltd (LON:PREM), updates Proactive's Andrew Scott on the wait for the Zulu assay results.

''The excitement is definitely building - the intersections we're seeing, the continuous and ongoing drilling that's happening at Zulu is all very exciting''.

Roach also discusses the latest at RHA and says the wheels are in motion towards a PEA for the project.

]]> Intermin's Jon Price outlines the company's cash generating gold projects and expansion plans Wed, 16 Aug 2017 09:12:00 +0100 Jon Price, managing director for Intermin Resources, speaks with Proactive Investors.

]]> VSA Capital Market Movers - Obtala Ltd, Hochschild Mining Wed, 16 Aug 2017 07:35:00 +0100 Obtala Limited (LON:OBT): 2016 - A Year of Strategic Change

On Friday 30 June 2017, African forestry and agriculture business Obtala Limited (LON:OBT)# released its results for the year ended 31 December 2016. Since then, OBT has made a number of additional announcements, which we cover in this note. 2016 was a year of strategic review and change for OBT, with a new chairman arriving in the middle of the year with a mandate to effect change and transform the company into a leading agriculture and forestry company in Africa. Shareholders have shown considerable support since then, providing the group with cUS$27m in various funding rounds.

WoodBois Acquisition Complete

OBT now has to execute its plan successfully, with the first stage being the successfully integration of its US$14.6m acquisition WoodBois International into the group, the completion of which was announced on 3 July. As a reminder, WoodBois operates a significant wood trading business headquartered in Copenhagen with a trading hub in Côte d'Ivoire, a forestry concession in Gabon with a sawmill, as well as a veneer factory under construction, which is scheduled for completion in H2. This acquisition should provide the business with an opportunity to significantly expand its sub-Saharan African forestry business.

Agriculture Profit Share Increases

On 4 July, OBT made a complex announcement concerning ownership of the land, processing assets and economic benefit on its two farms in Tanzania – Magole and Wami. The end result is that OBT’s economic ownership of Magole has increased to 71.2% from 60% and has increased to 67.5% from 52.5% for Wami. In addition, OBT’s effective economic stake of the processing assets at Magole is now 75%, up from 60% previously.

Recommendation and Target Price

We have made a number of changes to our forecasts, including converting them to US dollar from British pound, reflecting the company’s decision to switch its presentational currency to the former. We maintain our BUY recommendation and DCF-derived target price of 36p.


Hochschild Mining (LON:HOC)

Hochschild Mining (LON:HOC) has reported weak results despite rising production. H1 2017 production of 17.9mnoz on an attributable equivalent ounces basis was up 5% YoY with a 9% YoY increase in silver production to 8.9mnoz and 3% increase in gold production to 121koz.  Revenue of US$341m was flat YoY.

Adjusted EBITDA was, however, down 20% YoY to US$136m while profit before exceptionals was down 49% YoY to US$18.2m. The earnings weakness was largely due to unplanned stoppages in Q1 2017 and unit costs were up 35% YoY to US$6.6/oz at Inmaculada where the stoppage took place. Full year cost guidance at Inmaculada is for AISC of US$9.5-10/oz (US$8.8/oz in H1 2017) indicating further cost inflation. The revised mine plan at Arcata following a number of reduced stopes and narrower veins also impacted costs negatively and AISC were up 35% YoY to US$17.6/oz with full year guidance now increased to US$17/oz.

The interim results demonstrate cost inflation across the group’s key assets which has negatively impacted performance during the recent period. HOC does remain on track for 37mnoz while AISC guidance of US$12-12.7/oz remains unchanged. The cost inflation at Inmaculada, Arcata and San Jose has been partially offset by stronger performance at Pallancata where guidance was reduced enabling HOC to maintain its full year target.

]]> VSA Capital Market Movers - Egdon Resources Plc Mon, 14 Aug 2017 07:55:00 +0100 Egdon Resources (LON:EDR)

Egdon Resources (EDR) has this morning provided the market with an extensive review of its operations after making significant progress across its entire portfolio since the start of the year and ahead of a potentially key period for the company to year end.

Unconventional Resources

We view the UK shale gas industry as one of the key value drivers to EDR’s share price and it has built up an impressive portfolio across its core area in the north of England of c201,000 net acres.

H2 2017 will see a number of catalysts for both the industry and EDR, of particular interest to investors will be the news that IGas (IGAS) intends to drill the potentially play opening Gainsborough Trough exploration well Springs Road-1 (PEDL140, Egdon 14.5% carried) later in 2017. This is a key well for EDR, which will see it drilling a thick Lower Carboniferous tight sand and shale sequence. This will be extensively logged and cored to provide a full suite of modern data with which to evaluate the play properly. Other shale catalysts are summarised below;

• Cuadrilla plans to drill and hydraulically fracture two horizontal wells at Preston New Road

• Hydraulic fracturing and testing operations by Third Energy at Kirby Misperton-8 (“KM-8”), this onshore well will have potential read through to the neighbouring Cloughton gas discovery (EDR 17.5%) and Resolution Prospect (EDR 100%).

• 3D seismic acquisition by INEOS in the East Midlands including over parts of EDR’s PEDL001 and PEDL130 licences

• We also note IGAS has applied for planning permission to test gas shows in the Pentre Chert in the 2014 Ellesmere Port-1 exploration well, located very close to PEDL 191 (EDR 100%), and is a newly identified potential gas play

Conventional Resources Exploration and Appraisal

EDR’s next drilling activity is likely to be the Holmwood-1 conventional exploration well in Weald Basin licence PEDL143 (EDR 18.4%) where the operator, Europa Oil and Gas (EOG), has advised that they expect to commence operations later in 2017 once approvals are in place. This well will test the Portland sandstone, Kimmeridge Clay and Corallian targets, in an analogous trap configuration to the Horse Hill-1 oil discovery and tested 323bopd from the Portland Sandstone and 1,365bopd in total from two intervals in the Kimmeridge Limestone. Further catalysts on the conventional portfolio are summarised below;

• Licence extensions for both Biscathorpe (7.4mmbbls net-prospective resource) and North Kelsey (5.2mmbbls net-prospective resources) to 30 June 2018, drilling operations at Biscathorpe-2 are expected to commence in early 2018 whilst EDR hopes to drill North Kelsey in mid-2018

• EDR continues to make progress on the Resolution Prospect (160BCF, 100% WI) and plans to acquire a new 3D seismic survey during 2018 to confirm the potential resource volumes and enable optimisation of the planning for an offshore appraisal well. EDR continues to seek an industry partner and/or investors to share the forward costs

• EDR completed its withdrawal from its French licences and is now solely focussed on the UK

Producing Assets

Full year guidance remains in-line with previous expectations of 100-110boepd this is despite the timing of the maintenance shut-downs changing from 2016 to 2017 meaning only 9 months of production from Ceres contributed to production in the 2016/17 financial year. The Keddington and Avington oil fields also continue to produce in-line with expectations.

On 10 July 2017 EDR announced that it will acquire a 100% WI and take on operatorship of the Fiskerton Airfield Oil Field from Cirque Energy for a cash consideration of US$750k (c£590k). This will be paid for out of existing cash resources and will have an effective date of 1 January 2017. EDR estimate that 100,000bbls of high quality 32.5°API oil remain recoverable from the existing wells.

Finally EDR has experienced difficulty with the Wressle Oil Field and was refused planning for the second time by North Lincolnshire County Council 2 July 2017. This decision was taken despite the project receiving a positive recommendation from planning officers on both occasions. EDR will now submit an appeal against the second refusal and seek to co-join it with the appeal it has already made against the original refusal which is due to be heard in November 2017, the outcome of which we now expect early next year. We have updated our forecasts accordingly and now do not expect production from Wressle until H2 2018. In the case of a successful outcome this would add 125bopd to EDR’s production.

VSA Comment

We remain impressed by the progress EDR continues to make. Although we believe EDR’s investment case is turning increasingly towards the UK shale gas industry, we note the company continues to make good progress on its conventional fields by adding immediate production at Fiskerton Airport, for a relatively modest fee, and it has now provided updated timing on Biscathorpe. Holmwood has the potential to provide significant upside with little downside risk to EDR as it is mostly carried by UKOG on this well where the CPR estimates mean un-risked prospective resources of 5.6mmbbls, which would make it one of the largest onshore oil fields in the UK, if successful. We maintain our BUY recommendation and 35.5p TP, which we recently updated.

]]> VSA Capital Market Movers - Glencore International Thu, 10 Aug 2017 07:45:00 +0100 Glencore (LON:GLEN)

Glencore (LON:GLEN) has announced strong interim earnings reversing a loss of US$369m in H1 2016 to a net profit of US$2.45bn. Full year net profit for 2016 was US$1.38bn. Revenue of US$100bn was up 44% YoY whilst EBITDA of US$6.7bn was 68% YoY. The stronger earnings were primarily driven by the recovery in commodity prices, particularly base metals. Although commodity prices in dollar terms benefitted from the recent depreciation the positive earnings impact was partially offset by the consequent strength of EM currencies where GLEN’s operations are based.

Capital expenditure of US$1.7bn was up 7% YoY in H1 while net debt fell a further 11% YoY to US$13.9bn.

With the strong rally in cobalt prices, 115% YoY, GLEN has highlighted its positioning for the growing focus on electric vehicles and battery storage. Although production of 12.7kt in H1 2017 makes GLEN one of the largest global producers of the metal, production was flat YoY. Ramping up production in this small market is challenging and quality assets are scarce. The impact of soaring prices which impact the cost of batteries is likely to show that the fight for preferred battery chemistries remains wide open.

]]> VSA Capital Market Movers - Carr's Group Plc Mon, 07 Aug 2017 07:16:00 +0100 Carr’s Acquires US Nuclear Engineering Firm

Carr’s Group (LON:CARR) the agricultural, food and engineering group, has announced the acquisition of ESI Holding Company, the holding company of US-based nuclear engineering firm NuVision Engineering.

• NuVision supplies engineering services and products to the commercial nuclear and power plant industries, government waste remediation facilities and waste clean-up sector

• Initial cash consideration of US$11.5m (£8.8m), with a total cash consideration of up to US$20m (£15.4m) payable, dependent on future financial performance

• Initial consideration financed through £6.0m of new and £2.8m of existing undrawn debt facilities with the balance paid through NuVision's future retained earnings

• NuVision had revenues of US$8.8m and an adjusted EBITDA of US$2.3m for the year to 31 March 2017. For comparison purposes, CARR’s group EBITDA in FY 2016 was cUS$22m with its engineering division contributing cUS$4.7m of this.

VSA Comment

CARR has long harboured ambitions to expand into the US nuclear engineering services market, a sector dominated by domestic businesses. This acquisition provides the company with the platform to do that. Current clients of NuVision include the US Department of Energy, major nuclear suppliers and public utilities in the country.

We see synergies with CARR’s German engineering business Wälischmiller, which will be able to supply its remote handling products into upcoming projects and an area that is currently trading ahead of expectations.

There are also opportunities for collaboration with CARR’s UK engineering business Bendalls, which has worked in the past with NuVision and is due to do so again on a recently signed major nuclear contract.

We would anticipate an initial year of consolidation, before significant collaborative benefits begin to be realised from year two onwards.  

This is a highly complementary acquisition of a high-tech engineering firm, providing the group with a platform to develop into the extremely important US nuclear sector, bringing specialised IP and innovative technology into the group to complement CARR’s existing remote handling and engineering operations.

At 8.7x EBITDA/2.3x Sales (assuming total consideration conditions are reached), the acquisition is more expensive than a traditional CARR’s acquisition. However, we believe the strategic rationale for the acquisition more than makes up for this. We would also note that more than 40% of the total consideration is based on future financial performance, which means the existing management team has considerable motivation to continue to deliver over the next few years.

]]> The conflict between liberty and democracy will keep the gold price high for decades Fri, 04 Aug 2017 13:27:00 +0100 VSA Capital Market Movers - Millennial Lithium, Vedanta Resources Fri, 04 Aug 2017 07:36:00 +0100 Millennial Lithium (CVE:ML)

The latest drill hole completed at Pastos Grandes salar has proved the best to date. Reported late yesterday, hole PGMW17-05/5c, drilled in the southern part of the surface salar has been completed to a depth of 601m with a continuous brine bearing interval from 382m to 593m grading 545 mg/L Li. A 33m interval uphole starting at 27.5m also carried brine at 523mg/L Li.

The host sediments in both intervals is poorly consolidated sands and constitutes the deepest confirmation and thickest interval of brine yet encountered in the basin. The magnesium to lithium ratio is improved at 6.0. Potassium values range from 4680 mg/L to 6186 mg/L and average 5847 mg/L. The hole was stopped due to reaching depth capacity of the drill rig.

We view these results as very exciting. The grade of lithium is increasing with depth in the basin, brine bearing thickness is increasing without degradation of apparent porosity and permeability, and the chemistry of the brine is improving for the economics of lithium extraction. With three rigs now working the basin for ML, we expect more good drilling news to come as the company works toward a first compliant resource declaration later this quarter or in October. The size of that lithium resource gets bigger with every drill hole completed.

We retain our SPEC BUY recommendation.


Vedanta (LON:VED)

Vedanta (LON:VED) is offering US$1.0b in bonds with maturity in 2024 with a 6.125% coupon in order to re-purchase two different existing bond series that have a shorter duration and a higher coupon rate. The total value of the existing bonds eligible for redemption is US$1.67b with the majority of it being at a coupon rate over 8%.

As separately announced today, after cancelation of those bonds already tendered under the offer, US$252,259,000 of the 2019 bonds and US$670,157,000 of the 2021 bonds will remain outstanding.

]]> VSA Capital Market Movers - Centamin PLC Randgold Resources, Sula Iron and Gold PLC Thu, 03 Aug 2017 07:35:00 +0100 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (SULA LN) has announced positive initial results from the Phase 2 drilling programme. The first three results, all from Sanama Hill, extend the continuity of gold mineralisation down dip and along strike. Highlights include 1.6m at 6.9g/t Au from 257.4m including 1m at 10.2g/t Au as well as 1.2m at 2.5g/t Au from surface and 3m at 2.8g/t Au from 294m which includes 5.7g/t Au over 1.1m. The results are broadly in line with previous findings at Sanama Hill and the mineralisation remains open at depth.

The drill programme consisted of 14 holes and the remaining samples are due to be shipped from Sierra Leone within the next week while a significant soil sampling programme has also been carried out with analysis also due to be carried out shortly. The additional drilling along with the soil sampling programme will further enhance SULA’s understanding of the structural geology which will benefit future drill targeting.

In addition Equity Drilling have elected to receive 50% of their payment in equity; consequently SULA will issue 67.3mn shares at 0.225p/sh.

We reiterate out Speculative Buy recommendation and 1.6p/sh. target price.

Centamin (LON:CEY)

Centamin (CEY LN) has announced results for Q2 2017, largely in line with expectations as the short transition period continues. Whilst gold production in Q2 was up 14% QoQ, it was down 11% YoY to 124.6koz. Revenue of US$151m was up 7.5% QoQ and down 16% YoY largely due to production differences.

EBITDA of US$66m was up 24% QoQ although down 31% YoY. Changes in the grade profile have been the key to recent results and the higher production in Q2 2017 was due to a recovery in grades as well as an increase in throughput. The recovery in grades also benefitted costs in part, however, cash costs of US$609/oz (down 17% QoQ and up 32% YoY) remain above the full year target of US$580/oz. AISC of US$829/oz, up 24% YoY and down 7% QoQ, were also above the full year target of US$780/oz.

CEY announced an interim dividend of 2.5 US cents per share, up 25% YoY. H2 is guided to be stronger with production weighted towards this period driven by access to higher grade areas. This should benefit cash costs also.

Randgold (LON:RRS)

Randgold (LON:RRS) has announced strong results for Q2 2017 with revenue up and costs down. Production of 341koz was up 6% QoQ and 21% YoY while revenue of US$422m was up 3% QoQ and 19% YoY.

Total cash costs of US$572/oz were down 8% QoQ and 21% YoY due primarily to an increase in throughput at Loulo-Gounkoto and Tongon. This offset some weakness at Kibali where total cash costs were up 2% QoQ and 4% YoY to US$859/oz owing to stoppages and a higher strip ratio. Overall profit from mining was up 14% QoQ and 53% YoY. Net income of US$84m was up 20% QoQ and 71% YoY. RRS is now guiding towards the top end of its production range for 2017 at less than US$600/oz.

]]> VSA Capital Market Movers - Rio Tinto Wed, 02 Aug 2017 08:07:00 +0100 Rio Tinto (LON:RIO)

Rio Tinto has released strong results largely driven by higher commodity prices. Group revenue of US$19.9bn was up 22% YoY with iron ore revenue up 38% to US$8.8bn and aluminium revenue up 18% YoY to US$5.4bn. Indeed, it has been RIO’s higher exposure to the strong performance of aluminium prices which has driven the relative outperformance of the shares versus peers in the past few months.

Group EBITDA of US$9bn up 68% YoY was primarily driven by the stronger top line with a 63% YoY increase in iron ore EBITDA to US$5.6bn and a 55% YoY increase in aluminium EBITDA to US$1.7bn. Copper and diamonds posted a modest increase in EBITDA of 16% YoY to US$771bn as stronger copper pricing was offset by weak operational performance. The energy and minerals division also performed strongly, again largely due to the stronger top line which was up 30% to US$3.9bn directly translating to a strong EBITDA increase of 170% YoY to US$1.4bn.

Capex was up by a third YoY to US$1.8bn as spending on capital projects ramped up, we also not a 10% increase in exploration expenditure to US$85mn. Net debt was down US$2bn to US$7.6bn owing to the strong earnings performance which drove free cash flow generation. The shares were also supported in the recent period by the US$252mn share repurchase programme. Furthermore, RIO announced a dividend of US$1.1/sh. up from US$0.45/sh.

]]> VSA Morning Agri Comment - NWF Group plc Tue, 01 Aug 2017 07:27:00 +0100 NWF Group: FY 2017 Results

UK-focused specialist agricultural and distribution business NWF Group (LON:NWF) has released results for the year ended 31 May 2017 (FY 2017).

• Group results: Revenues £555.8m, +19.3% YoY (FY 2016: £465.9m) and an adjusted operating profit £9.0m, +3.4% YoY (FY 2016: £8.7m)

• FY 2017 FactSet consensus was for revenues of £539.4m and an adjusted operating profit of £9.0m

• Feeds Division: Operating profit £1.5m, -28.6% YoY (FY 2016: £2.1m)

• Fuels Division: Operating profit £4.5m, +15.4% YoY (FY 2016: £3.9m)

• Food Division: Operating profit £3.0m, +11.1% YoY (FY 2016: £2.7m)

• Net debt at 31 May 2017: £13.0m (31 May 2016: £9.9m)

• Final dividend of 5.0p delivers a full year dividend of 6.0p, +5.3% YoY (FY 2016: 5.7p).

VSA Comment

NWF delivered a strong recovery in the second half, which saw its operating profit improve from being more than 20% behind YoY in H1 (mainly due to a very poor Q1) to posting an increase of 3.4% YoY over the FY, supporting the Board’s assertions at the half year stage that its full-year result would indeed still be in-line with expectations.

This was particularly impressive in its feeds division, which swung from a small H1 loss to an operating profit for the FY, and its fuels division, which posted a 20% YoY operating profit decrease in H1 but a 15% YoY increase over the FY. The turnaround in fuels was due to a revised sales & marketing strategy and new outlets exceeding expectations (FY volumes were 513 million litres, +8.2% YoY).

In feeds, the group achieved the improvement despite having significant margin pressure, as commodity costs increased in H2 (feed wheat ended the FY at c£140/t from c£100/t at the start of the FY in June 2016) with increased prices difficult to pass through to farmers in the key winter period. NWF’s total feed volumes for FY 2017 were 589,000t, +1.6% YoY, in-line with the wider UK market, +1.5% YoY, which also showed a significant recovery in NWF’s second half (-0.9% in H1, +3.4% in H2).

Despite the group having £9.4m of capital expenditure during the year, including £5.2m spent on a significant mill development programme in the Cheshire and Northern mills, net debt was kept at 1x EBITDA.

We believe the outlook for the group looks quite positive with solid performance expected to continue in its food division (having showed considerable resilience in FY 2017 following the previously announced lower contracted volumes with a major customer), an improving dairy market likely to spur compound feed volumes, and the operational improvements in its fuels division made in H2 likely to be sustained.

As usual, the main risk for the coming year is the potential for a warm winter and/or a rapid decrease in input commodity prices after NWF’s key commodity buying period for the winter in August and September. Of course, the first is impossible to predict but the second feels unlikely this year given the continued weakness of the GBP.

]]> VSA Capital Market Movers - Fresnillo Tue, 01 Aug 2017 07:26:00 +0100 Fresnillo (LON:FRES)

Fresnillo (LON:FRES) has announced strong results on the back of production increases. Silver production of 28mnoz was up 11.2% YoY in H1 and revenue of US$1,070m was up 11.5% YoY. Gold production of 446koz was broadly unchanged. The incremental production came primarily from the San Julian phase 1 ramp up.

EBITDA of US$523m was up 10% YoY due largely to the stronger top line as production costs were up at all assets bar Cienega. The key driver which resulted in a 14% increase in production costs to US$343m was the additional cost of the ramp up at San Julian. We also note a 23% increase in exploration costs to US$64m. Net income of US$310m was up 87% YoY owing to the stronger earnings and reduced non-cash charges. FRES increased the interim dividend by 23% YoY to 10.6c/sh. FRES maintained guidance for 58-61mnoz silver in 2017.

]]> US central bank back to cautious old self amid Trump fury Fri, 28 Jul 2017 14:02:00 +0100 VSA Capital Market Movers - Goldplat plc Thu, 27 Jul 2017 08:28:00 +0100 Goldplat (LON:GDP)#

Goldplat (GDP LN) has announced full year production results which demonstrate production increases across the board at GDP's operations; up 14% YoY to 42,857oz overall. Ounces sold or transferred were marginally lower YoY (-1%), which is largely due to a delay in shipping material produced in Ghana. This will now be reflected in Q1 FY 2018.

In South Africa, production of 29,418oz exceeded the strong FY 2016 result and our estimate of 28koz. This was largely due to the successful processing of a major batch of carbon from a new Africa based-client and demonstrates GDP's progress in securing new sources of by-product material. Metallurgical test-work is ongoing for the South African tailings dam and whilst we do not currently include the processing potential in our forecasts we recognise the positive potential. GDP has indicated that approval from the relevant authorities is taking longer than planned, however, in the current climate in South Africa that is to be expected.

FY 2017 gold production at Ghana of 10,031oz was up 46% YoY despite the ongoing depletion of local sources of by-product material, however, was modestly lower than our full year estimate of 11koz. Having altered the plans for installing new elution capacity at the plant, GDP has bought forward its target for adding this new capacity to the end of December 2017. The increase in annual production at Ghana has yet to include the benefits of the South American initiative with the first batches of material due to be processed in Q1 FY 2018 following successful trial processing as well as delivery of material from the first large, long term contract from Uruguay. We also note that GDP is working with the Ghanaian Government to assess the viability of processing artisanal tailings. This could provide a stable source of material whilst helping the regeneration of former mine sites. Early sampling programmes are now underway and we await the results which could provide significant benefits to GDP and the Government.

At Kilimapesa, although GDP did not hit maximum planned capacity for the Stage 3 ramp up, as initially hoped, the successful completion of Stage 2 has meant that GDP returned to a profitable run-rate in the final two months of FY 2017 whilst production of 3,408oz was up 70% YoY. This is a significant achievement for GDP and we expect the strong positive benefits of this turnaround to be felt in FY 2018. We had initially expected 4.5koz of production in FY 2017, however, this was not achieved and is key reason for our full year target of 45koz group production not being met. Final commissioning of the crusher section is now expected in Q1 FY 2018 and should enable higher tonnage, grade and recoveries in FY 2018 which will likely have a positive impact on the operation's earnings.
Aside from GDP's key operations, the company's JV partner on the Anumso project in Ghana continued to make positive progress with early stage exploration. Meanwhile at the Nyieme project in Burkina Faso, GDP has decided to allow its rights to the project to expire given the capital required to further develop the project. Consequently, a write down of £980k will impact FY 2017. However, as a one off write down of historic sunk costs this has little bearing on our outlook for GDP.

Overall, despite the modest delay in the ramp up at Kilimapesa the group has performed strongly. Indeed, GDP's main objective for the year was to return Kilimapesa to profitability in which it has succeeded. GDP has demonstrated in FY 2017 its ability to source material from new clients in new regions which underpins our confidence in the company's longer term outlook.

We reiterate our BUY recommendation and 12.2p/sh target price.

]]> VSA Capital Market Movers - REDT Energy, Eco Atlantic Oil & Gas Ltd Thu, 27 Jul 2017 07:42:00 +0100 Eco (Atlantc) Oil & Gas (LON:ECO) #

Eco (Atlantic) Oil & Gas# (ECO) has announced its results for the 12 months ended 31 March 2017. ECO reported a net operating loss of C$4.05m. Sale of its interest in Ghana reduced the net loss to C$3.56m. The listing on AIM and oversubscribed placing of £5.09m in February 2017 has left ECO’s balance sheet in a healthy position with C$6.09m of cash. On top of this ECO has brought down its costs in a number of areas.

• General and administrative expenses down 22% YoY to C$386k (2016: C$497k)

• Compensation down 25%  YoY to C$483k (2016: C$642k)

• Professional fees down 12% YoY to C$287k (2016: C$325k)

• Occupancy and office expenses down 72% to C$82k (2016: 295k)

Operationally ECO had a very good year and in a joint venture with its partner, Tullow Oil (TLW), it has commenced its 3D seismic survey on the Orinduik Block, offshore Guyana, almost two years ahead of schedule, thereby seeking to de-risk the existing defined targets. ECO and TLW is gathering 2,550km2 of seismic data over the 1,800km2 block amid the ongoing success in the region, indeed the Orinduik block is up-dip and in close proximity to ExxonMobil’s (XOM) recent Liza, Snoek, and Payara discoveries on the Stabroek block estimated to contain oil recoverable resources of between 2.25 and 2.75Bboe. The seismic programme is now over double the size of what ECO and TLW originally planned with TLW covering the costs for c1,000km2 up to a maximum of US$1.25m with the remaining costs being covered by ECO’s cash reserves. TLW also has further interests in Guyana in the Kanuku licence which it is also collecting seismic over and plans to drill prospects in 2018/19 which should drive further news flow from the basin in the meantime.

Further to this ECO has also made progress in Namibia by extending the Cooper, Sharon and Guy licences into the first renewal period until March 2018. Whilst it has also advanced the 3D interpretation on Cooper and Guy blocks, applied for drilling permits and pre and post drilling EIA surveys are underway.

We maintain our BUY recommendation and 25p TP


redT energy (LON:RED) : Positive Market Changes

There has been a flurry of announcements in the last few days from a number of parties regarding the future shape of the UK’s energy sector. Although many of these provide a generally supportive backdrop for the future of the UK renewable energy sector, we believe the most important of these specifically with regards to flow machine energy storage developer, redT energy (RED LN)# are:

• A joint publication from Ofgem and the Department for Business, Energy & Industrial Strategy (BEIS), the Smart Systems and Flexibility Plan, which outlined a raft of new measures to support the development of the UK energy storage sector, including the removal of double-charging (network payments made when both charging and discharging a battery) and the addition of an explicit definition of storage as a sub-set of generation within UK policy terms

• The launch of a consultation from BEIS into the Capacity Market, which included a proposal to reduce the de-rated capacity for those energy storage projects that cannot provide their stated energy output for the maximum four hours specified under the scheme

VSA Comment

Although the removal of double-charging and regulatory recognition of energy storage is positive, this was largely expected. However, to us the second point came as more of a surprise.

If agreed after the consultation period, which ends on 8 September, this proposed de-rating of high power/low energy assets into various technology classes, depending on their minimum discharge time, could significantly reduce the IRR for large-scale lithium-ion battery parks, increasing their dependence on the two frequency response schemes by reducing the payments they can generate from the Capacity Mechanism. For high energy storage solutions, such as RED’s flow machines, they will likely still be able to access the current level of Capacity Mechanism payments, as these can provide power for the full four hour period (and will likely stay at 96% de-rated capacity).

It appears that there is now a clear understanding in government regarding the difference between power and energy and, although subject to a consultation period, there is now a clear direction of travel regarding the deployment of large-scale grid storage.

It appears to us to be similar to Ofgem’s decision to slash embedded benefits for small generators from April 2018, which, although impacting other technologies, looks set to hit the economics of existing, and limit the expansion of, small diesel farm generation facilities.

We see these changes as sensible to correct certain market distortions and would highlight the ability of RED’s flow machines to cover all of the grid-related revenue streams available to it. Other storage projects that cover just a segment of these (such as the two frequency response revenue streams) will likely gain significant competition in the market from flow machines as they are deployed, which can address these extra revenue streams at little extra cost.

RED has been surprised by the pace at which the UK market has developed this year and we expect the measures announced this week will only contribute to this increasingly economic market for its machines.

]]> VSA Morning Flow Test - Tullow Oil plc Wed, 26 Jul 2017 07:45:00 +0100 Tullow Oil (LON:TLW)

Tullow Oil (TLW) has reported its half year results for the six months ended 30 June 2017 broadly in line with consensus, with its key financials highlighted below.

• Revenue of US$0.8bn. Gross profit of US$0.3bn. Free cash flow of US$0.21bn. Loss before tax of US$0.5bn after impairments.

• Net debt reduced by just short of US$1 billion YoY to US$3.8bn  following the generation of free cash flow and US$750m Rights Issue in April 2017. Facility headroom and free cash is now US$1.2bn.

• 2017 Capex guidance reduced from US$0.5bn to US$0.4bn and this is anticipated to reduce to US$0.3bn on completion of the Uganda farm-down.

Operationally TLW performed in line with expectations with West Africa net working interest oil production, including production-equivalent insurance payments, averaged 81.4kbopd in H2 2017. Full year guidance of 78-85kbopd remains unchanged. The Kenya exploration and appraisal programme continues with a further three wells planned in H2 2017 whilst working towards FID.

Further to this, TLW has made progress across its exploration portfolio, which in our opinion will be the key driver for the stock going forward. It remains on track to drill the high impact Araku-1 well in Suriname in Q4 2017 and has also completed or commenced seven seismic campaigns so far this year. This includes a seismic programme in Guyana which commenced in May and will be used to define prospects for drilling on the Kanuku licence in 2018/19.

We are particularly excited by TLW’s exploration acreage in South America, particularly in Guyana which is directly updip of the giant Liza and Payara discoveries made by ExxonMobil (XOM). The progress made by TLW in these basins will also be positive for TLW’s partners across its licences, including Eco (Atlantic) Oil & Gas (ECO)#, which has a 40% working interest in the TLW operated Orinduik Block in Guyana. TLW estimates this block contains prospective resources of 900mmboe. We have a BUY recommendation and 25p TP on ECO.

]]> VSA Capital Market Movers - Antofagasta Plc, Fresnillo Wed, 26 Jul 2017 07:23:00 +0100 Antofagasta (LON:ANTO )

Net cash costs fell more than 5% to US$1.20/lb in the latest quarter reported by Antofagasta (ANTO LN). Copper production was 174,400t or 1.4% higher QoQ while gold production rose 10.5% QoQ to 58,900ozs due to improved grades at Centinella mine. Molybdenum grades improved at Los Pelambres mine which drove a 36% increase in output YoY and was reflected by 2,400t produced this quarter.

For the six month period, net cash costs were 1.6% lower at US$1.24/lb YoY due to improved productivity at mines and commodity price increases.

Forward guidance remains unchanged at 685kt to 720kt copper produced for the year, expecting higher output in the remaining half. Cash costs pre-by-product credits should come in at US$1.55/lb and net cash costs a bit higher at around US$1.30/lb.

Not much note of it, but foul weather did cause some disruption to shipments both at mines and away from ports which delayed an even better sales result. Hopefully, this won’t be repeated and will drive a better comparative sales result in H2.

Fresnillo (LON:FRES)

Fresnillo (LON:FRES) quarterly silver production of 14.5moz (including Silverstream) led improved production numbers which were up 11.7% YoY and up 7.3% QoQ. First half silver production of 28.0moz (including Silverstream) was up 11.2% YoY, primarily due to the start of operations at San Julián Phase I, higher ore processed at Fresnillo and higher ore grade at Ciénega. Cost comparative data was not disclosed in the release.

FRES is on track to achieve 2017 production guidance of 58moz to 61moz silver (including Silverstream) and 870koz to 900koz gold. San Julian Phase II should be operational in the coming quarter.

FRES has been delivering significant production growth according to plan and management expectation for several quarters now, demonstrating its premier global primary silver producer status.

]]> VSA Capital Market Movers - Petra Diamonds, Randgold Resources Mon, 24 Jul 2017 07:34:00 +0100 Petra Diamonds  (LON:PDL)

Production results for the year released by Petra Diamonds (PDL LN) today show total carats produced up 8% YoY to 4mcts and revenue up 11% to US$477m. Diamond prices in the rough market were largely stable with a change upward of just 2% YoY. Cash at bank rose over 3x to US$205m as capital is allowed to accrue against the increased debt level which now stands at US$554m. Capital expenditure will now be declining from here.

The production pipeline is looking good with guidance supporting a forecast of 23% more carats produced to circa 5mcts for 2018. Tailings derived stones will be diminishing from here on out which should improve the product mix on sales. Net debt should stay relatively level in H1 this coming year and fall thereafter PDL predicts. Preliminary financial results will be released on 19 September.

If we can see an increase in stone size distribution from mined ore in the product sales over the coming 12 months as well as an increase in the number of carats as tailings production falls away, this should give the company an added revenue boost above just more carats produced alone.

Randgold Resources (LON:RRS)

In a media briefing on Saturday, Randgold (RRS LN) disclosed a significant discovery of gold in Cote d’Ivoire at Boundiali but also complained of the encroachment of large numbers of illegal miners to the site as a result. CEO Mark Bristow typified unhindered illegal mining as the single biggest challenge to the industry now.

Mark reported that Tongon ramp up is proceeding to plan with a 2017 target of 285kozs but admitted that the investment of US$28m into the government grid infrastructure has not yet been agreed with the local tax office as to when and how it should be repaid in the accounts, despite the government having already earned US$100m in revenue on the power distribution to RRS and regional users.

]]> Who will set the gold price this summer: Trump, Yellen, or Black Swan? Fri, 21 Jul 2017 19:43:00 +0100 VSA Capital Market Movers - Acacia Mining, Metal Tiger Fri, 21 Jul 2017 08:30:00 +0100 Metal Tiger (LON:MTR)

Interpretation of results of airborne geophysics around the T3 dome complex in Botswana has found 19 targets worth investigating further. Four of the targets have similarities to the airborne and ground geophysics signature of the T3 Dome copper deposit in which MTR has a 30% interest. Three of these four are also directly on stratigraphic strike from the Banana zone copper deposit held by Cupric Canyon Capital.

Field geologists and sampling crews are now following up the results with ground surveys to do some mapping and sampling as appropriate to prioritize drilling targets in coming months. Given the success of finding new deposits in this part of the Kalahari by simply doing proper modern exploration, we believe the potential for more copper is very, very good indeed.

We reiterate our 4.57p price target and BUY recommendation.

Acacia Mining (LON:ACA)

Six month results released today by Acacia Mining (ACA LN) give us an insight into the impact of the Tanzanian ban on export of gold bearing concentrates affecting it. The cost to the cash balance of the company was a decline from US$318m to US$176m at period end 30 June. Revenue fell 22% YoY to US$391.7m. Gold sales amounted to just 312,438ozs though production overall rose 4% to a record 428,203ozs. AISC was US$893/oz, a figure the company suspects would have been over 10% lower if it had been able to sell all its cons.

The company has reduced its full year production guidance to 850,000 to 900,000ozs but will leave AISC guidance unchanged.  The company cannot and will not continue to haemorrhage cash it would appear while unsold concentrates pile up. Job losses will have to come if the tax dispute with Tanzania remains unresolved.

]]> VSA Capital Market Movers - Anglo American Thu, 20 Jul 2017 07:25:00 +0100 Anglo American (LON:AAL)

Anglo American (LON:AAL) has released a positive trading update for Q2 2017 demonstrating strong performance in the iron ore, diamond and platinum divisions whilst copper production was modestly lower. Met and thermal coal production was, however, negatively impacted in the quarter.

Iron ore production at Kumba was up 28% QoQ and 23% YoY to 11.4mnt with the reworked mining plan delivering operational efficiencies. Full year guidance has been upgraded from 40-42mnt to 41-43mnt. At Minas Rio the ramp up slowed, however, with QoQ production flat at 4.3mnt.

At De Beers, rough diamond production increased 36% YoY and 18% QoQ to 8.7mncts. The increase was driven by the ramp up at Gaucho Kue in Canada and means the company is on track to meet guidance of 31-33mncts for the full year. However, the product mix appears to have weakened with a 12% YoY decline in prices despite a modest improvement in diamond prices in the wider market.

Copper production of 141kt was down 2% YoY and 1% QoQ. Unplanned disruptions at El Soldado offset strong performance at Los Bronces while poor weather affected Chile’s ports and therefore AAL’s shipments. Guidance remains unchanged for the full year at 570-600kt.

Platinum production of 617koz was up 5% YoY and 8% QoQ as declines from the sale of Rustenburg were offset by strong increases at the JV mines at Mogalakwena, Amandebult and Unki.

Met coal production of 4.9mnt was own 19% YoY an 24% QoQ largely due to the impact of Cyclone Debbie. Thermal coal production was also negatively impacted by unexpected stoppages which resulted in a 4% decline YoY to 6.5mnt. Guidance for both remains unchanged for the full year.


Carr’s Group#: FY 2017 Trading Update

Carr’s Group (LON:CARR)#, the agricultural, food and engineering group, has provided a trading update for the 19 week period ended 16 July 2017.

• Trading remains in-line with expectations

• UK agriculture operations continue to recover with feed & like-for-like retail sales ahead YoY and machinery sales significantly ahead YoY; Feed block sales remain in-line with expectations, with the US business still underperforming but recovering

• UK engineering business continues to be impacted by previously reported issues. However, the delayed contract has now been signed and will be delivered through 2018/19; CARR’s remote handling business is performing ahead of expectations with a pipeline at its highest level for years, and is transacting a significant level of Chinese business

• Last month CARR made a small acquisition, Mortimer Feeds, a feed merchant business principally operating in Cheshire

• Second interim dividend of 0.95p to be paid on 6 October (2016: 0.95p)

• FY 2017 results for year-ending 2 September due 13 November

VSA Comment

An in-line trading update from CARR, following its warning on FY 2017 performance at the end of March, which saw consensus forecasts for PBT fall to £11.6m, -17.7% YoY, from £14.4m, +2.1% YoY, previously.

Although expected, it is nonetheless positive to see the delayed significant engineering contract signed and due to be delivered through FY 2018 and FY 2019. An increased pipeline for both its UK manufacturing and remote handling business also provides confidence that the engineering division may move to recovery in FY 2018.

In agriculture, US cattle prices have continued to show strength with benchmark prices having increased more than 20% since the start of CARR’s FY 2017 period. US operations will also benefit from the opening of CARR’s new feedblock facility in Shelbyville, Tennessee, which remains on track to open in October 2017.

In the UK, for the first nine months of CARR’s FY 2017, compound feed volumes in the overall market have increased 3.2% YoY, compared with decreases of 3.9% in FY 2016, 1.1% in FY 2015 and 5.9% in FY 2014. It is therefore likely we will see the first YoY growth in the market for four years.

Given the extensive media coverage concerning the increasing price of some dairy products and a forecasted milk shortage, we would expect the average milk price to increase in the last few months of FY 2017, having decreased slightly to 26.78ppl in May (last available data). Having been higher than 27ppl earlier in the year, this level should again be surpassed in the coming months.

Both of these factors should continue to support CARR’s UK agriculture business for the rest of the year and into FY 2018.

]]> VSA Morning Agri Comment Wed, 19 Jul 2017 07:24:00 +0100 Obtala Limited#: Q2 2017 Business Update

African forestry and agriculture business Obtala Limited (LON:OBT)# has provided an update on its operations for Q2 2017.

The announcement is largely a reiteration of previously announced information, including the completion of the significant US$14.6m acquisition of African forestry business WoodBois International.

The most relevant new information:
• Six forestry management plans have now been approved over 153,500ha of its concessions in Mozambique
• The cutting season has begun, after a delay, but with better productivity due to new equipment, processes and procedures (250 logs per day vs. 90-180 logs per day last year). This is expected to increase even further as the season progresses
• The land has been purchased for OBT’s larger sawmill at Nampula and construction has now started
• The company has continued to make a number of important hires, including an experienced sawmill manager, Henning Visser, who will oversee production at Uape and the new development at Nampula.
• In Tanzania, the group has planted melons and its market garden. The packhouse renovation is now complete, which has increased its capacity and improved the cold room technology
• OBT has decided to plant mangoes for its first orchard crop
VSA Comment
A positive operational update from OBT and we continue to be impressed by the speed at which the company is progressing a number of separate, but related, operations, given the challenging countries in which it operates.

We see the Mozambique government’s continued efforts to restrict illegal logging, evidenced by the delay in issuing logging licences for this season and the recently announced first project under the Mozambique Forest Investment Project (MozFIP) framework agreement with the World Bank and the Food and Agriculture Organization of the United Nations (FAO), as positive for OBT, given OBT’s core focus on sustainability and its ability to produce and export added-value forestry products, not just unprocessed timber, from the country.
This first project will see the FAO providing technical support to develop a 20-year national strategy for the forestry sector, a revision of institutional frameworks for forest concessions to ensure greater transparency, accountability, equity and sustainability of forest production, and the establishment of 'model' concessions that implement best practices.

For FY 2017, our forecasts should be supported by the consolidation of WoodBois’ H2 results, an operation which recorded total revenues of US$9.15m in H1.

We maintain our BUY recommendation and target price of 36p.

]]> VSA Capital Market Movers - BHP Billiton plc, Independent Oil & Gas PLC Wed, 19 Jul 2017 07:22:00 +0100 Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (IOG)# has submitted the Field Development Plan (FDP) for the Blythe Hub, which comprises the Blythe and Elgood fields.

The Blythe and Elgood gas fields are 100% owned and operated by IOG and located in the UK Southern North Sea (SNS) close to existing infrastructure and other IOG-owned licences.  Blythe contains independently verified 2P reserves of 34.3BCF and Elgood 22 BCF of 2C resources.  A new CPR currently being completed for the Blythe Hub will soon provide up-to-date independently verified estimates of the reserves and resources. Neither Blythe nor Elgood requires further appraisal and on FDP approval the Elgood resources would be upgraded to 2P.

The Blythe Hub is expected to provide the first gas for IOG via the recommissioned Thames Pipeline and therefore the first revenues to the Company from its current portfolio of assets. IOG is in the process of completing the 100% acquisition of the pipeline which is intended to be tested and recommissioned. There are significant synergies with the 100%-owned Vulcan Satellites Hub, containing independently verified 2C resources of 321 BCF, which is also intended to be exported via the Thames Pipeline. IOG is also 100% owner of the Harvey discovery, which lies between the Blythe and Vulcan Satellites Hubs. Harvey needs further appraisal and is currently estimated to have P50 recoverable resources of 113 BCF.

The submission of this FDP brings IOG a step closer to developing its SNS gas assets and generating revenues but it must now find a way to finance its development, we await an update on this in due course.

BHP Billiton (LON:BLT)

BHP Billiton (BLT LN) has announced production results for FY 2017. Despite robust performance in the iron ore and thermal coal divisions where production met guidance, with a 4% and 7% YoY increase to 231mnt and 29mnt respectively, production declined in other key divisions. Iron ore production is guided to another modest increase in FY 2018 to 239-243mnt while thermal coal guidance is for flat production in FY 2018.

Copper production of 1.3mnt was 16% lower YoY largely due to the strikes at Escondida as well as unplanned maintenance at Olympic Dam. Consequently, BLT now believes that unit cost guidance for FY 2017 in the copper division may now not be achievable. However, FY 2018 production guidance is for a 7% increase YoY as production is normalised.

Petroleum production of 208mmboe was down 13% YoY as onshore US development activity was deferred owing to the current pricing environment. FY 2018 guidance is for further cuts to between 180-190mmboe as natural field decline as well as planned maintenance at Mad Dog is expected to more than offset new production.

Met coal production declined 6% YoY to 40mnt although is expected to be between 44-46mnt in FY 2018. Unplanned disruption caused by Cyclone Debbie was the main driver of the FY 2017 decline and the higher production in FY 2018 represents a normalisation.

]]> Egdon Resources - Now Boarding at Fiskerton Airfield Mon, 17 Jul 2017 09:10:00 +0100 On 10 July 2017 EDR announced that it will acquire a 100% WI and take on operatorship of the Fiskerton Airfield Oil Field from Cirque Energy for a cash consideration of US$750k (c£0.59m). This will be paid for out of existing cash resources and will have an effective date of 1 January 2017. EDR estimate that 100,000bbls of high quality 32.5°API oil remain recoverable from the existing wells.

The field is currently producing at 19bopd but has suffered from a lack of investment in recent years. However, EDR plans to commit capital, which should bring production up to 30-40bopd, increasing both the profitability and cash flows from the field.

Further Appeals to be Made at Wressle

On 2 July 2017 North Lincolnshire County Council refused planning for the Wressle Oil Field for the second time. This decision was taken despite the project receiving a positive recommendation from planning officers on both occasions. EDR will now submit an appeal against the second refusal and seek to co-join it with the appeal it has already made against the original refusal which is due to be heard in November 2017, the outcome of which we now expect early next year. We have updated our forecasts accordingly and now do not expect production from Wressle until H2 2018.

Biscathorpe Permits Issued

The Environmental Agency awarded the environmental permits on 13 July 2017 to enable the drilling and possible subsequent testing operations of the Biscathorpe-2 exploration well, which is targeting 14mmbbls gross prospective resources. We anticipate EDR to commence operations including site construction later in 2017.

Recommendation and Target Price

EDR remain debt free with a strong balance sheet and we re-iterate our BUY recommendation with an updated target price of 35.5p, following the acquisition of the Fiskerton Airport Oil Field.

]]> Trump’s influence on gold beginning to diminish, as world tunes out Fri, 14 Jul 2017 12:16:00 +0100 VSA Capital Market Movers - Independent Oil & Gas PLC Fri, 14 Jul 2017 08:01:00 +0100 Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (IOG)# has been awarded a new licence (Block 48/25a) by the UK Oil and Gas Authority (OGA) in the 2016 supplementary Offshore Oil and Gas Licensing Round. The licence includes the western part of the Vulcan North West discovery that extends into 48/25a and also includes the Hogsback, Hobson and Goacher prospects.

Vulcan North West

Vulcan North West is a key part of the Company's Vulcan Satellites hub development.  It is a discovery with independently estimated P50 gas initially in place of 215 BCF and 2C recoverable resources of 131 BCF.  18% of the discovery is estimated to be in the new licence 48/25a, so the award of this licence secures 24 BCF of 2C resources for the Company.

The Vulcan Satellites field development planning is progressing very well with all three fields expected to be tied back to the Thames Pipeline which is in the process of being acquired and recommissioned by the Company.

The new licence will be included in the Field Development Plan ("FDP") that is currently being drafted and will also be included in the new Competent Person Report ("CPR") that is being prepared by ERC Equipoise.  The CPR for the Blythe hub, consisting of the Blythe and Elgood fields, should be received within the coming weeks.  The CPR for the Vulcan Satellites is targeted by the end of the third quarter.

Hogsback, Hobson and Goacher

The Hogsback Leman gas prospect is a tilted fault block to the west of Vulcan North West.  It is on-trend and up-dip from the 48/24b-2 gas discovery drilled by Hess in 1990.  It is estimated by the Company to have a technical chance of success of 44% with a most likely gas in place of 30 BCF and most likely resources of 18 BCF of which 96% is on block.

Hobson is an oil discovery but currently there is significant uncertainty regarding its size with minimum, most likely and maximum oil in place estimates of 1 MMBbls, 2 MMBbls, 18 MMBbls respectively.  59% of the Hobson discovery is on the newly awarded block.  Should any decision be taken to drill, Hogsback and Hobson could be appraised with a single well.

Goacher is a Leman gas prospect which is a relatively low relief faulted anticline with a most likely gas in place of 71 BCF.  The Company currently estimates that the technical chance of success is 29% with 36% on the newly awarded block.

]]> VSA Capital Market Movers - REDT Energy, Egdon Resources Plc, Millennial Lithium, Sunrise Resources Plc Thu, 13 Jul 2017 07:46:00 +0100 Millennial Lithium (CVE:ML)#

Millennial Lithium (CVE:ML) has announced that the Phase 1 drill programme at the Cruz lithium property in the Pocitos Salar in Argentina. ML are operating the programme on behalf of Southern Lithium (SNL CN) who may earn up to 80% in the project. This programme consists of two holes to a minimum depth of 250m based on drilling conditions and brine content. The programme is seeking to confirm the findings of the prior Transient Electromagnetic Survey (TEM) which indicated a continuous N-S conducive unit over more than 6km length. Indications are that brine may be as shallow as 30m and to depths of at least 250m.

We reiterate our Speculative Buy recommendation.

Sunrise Resources (LON:SRES)

Sunrise Resources (SRES LN) has announced that drilling is due to commence imminently at its CS Pozzolan-Perlite project with the trenching programme now complete. 11 trenches in an area of 1,300m x 700m were dug to gain samples from the bedrock, of which ten were successful. The bedrock sampling has been used to better identify suitable drill targets and an extra hole has been added as a result.

Egdon Resources (LON:EDR)#

Egdon Resources (EDR)# has announced it will appeal against the decision of North Lincolnshire Council’s Planning Committee to refuse a second planning application to develop the Wressle oil field.

EDR will also request the planning inspectorate to co-join this new appeal with EDR’s initial appeal against the refusal of planning permission on 11 January 2017, which is currently scheduled for early November 2017.

Separate to this EDR will appeal against the decision to refuse a 12 month extension to the existing planning consent for the site. We retain our BUY recommendation whilst our TP remains under review.

redT energy# Operations Update

redT energy (LON:RED)#, a developer of vanadium redox flow machines for large-scale energy storage applications, has announced an operations update ahead of its AGM later today.

• Significantly lower than expected orders of its low to break-even margin Gen2 product. RED has sold six tank unit modules in H1 2017 (five machines), compared to our FY 2017 estimate of 185 units (50 machines)

• However, the expected EBITDA loss for FY 2017 remains in-line with our expectations due to strong performance from its legacy carbon business

VSA Comment

RED has attributed its slower sales to a fundamental lack of understanding among potential customers of the benefits of flow machines versus alternative large-scale storage products, such as lithium-ion battery systems, a delay in recruiting specific employees, and the expedited closure of Jabil’s Livingstone facility (to August 2017 from December 2017) and relocation of RED’s stack manufacturing operations to a Jabil site in Southern Italy. Although delivering short-term disruption, this relocation will in fact mean lower cost manufacturing for its stack component and, longer-term, lower cost volume manufacturing of Gen3 and subsequent machines.

Despite slower sales, RED has revealed that it now has 265 tank unit modules (€15.9m) in the final stage of customer selection (up from 101 units and €6.5m when it released its FY 2016 results in April) and an active customer pipeline of €314m (vs. €246m in April).

RED has also highlighted the UK and Australia as two markets where the economic payback for energy storage solutions has improved ahead of its initial expectations. RED is now looking to enter the Australian market in H2. In the UK, RED expects to have its 1.08MWh Olde House energy storage project in Cornwall operational within the next few months. This will allow significant marketing opportunities for the company to target potential UK-based customers and should help accelerate its pipeline conversion efforts.

RED has undergone considerable change since the fundraise in December, rapidly scaling up its workforce by some 70%, managing the impact from the closure of Jabil’s Livingston plant by adding a low volume manufacturing partner in Yorkshire, all the while continuing development of its important Gen3 product. Although it is disappointing that Gen2 sales are occurring slower than originally anticipated, in our view, this operational progress is impressive and the focus has to be on the margin-providing Gen3 product, due to be launched in 2018.

We maintain our BUY recommendation and target price of 22p.

]]> VSA Capital Market Movers - Hochschild Mining Wed, 12 Jul 2017 07:23:00 +0100 Hochschild Mining (LON:HOC)

Hochschild Mining (LON:HOC) has reported robust production figures which indicate that it is on track for full year guidance of 37mnoz silver equivalent. H1 2017 production of 17.9mnoz on an attributable basis was up 5% YoY with a 9% increase in silver production to 8.9mnoz and a 3% increase in gold production to 121koz.

At Inmaculada ore throughput returned to the full run rate in Q2 after a weak Q1 while production benefitted further from higher silver grades. Production at Pallancata of 1.9mnoz was up 52% YoY in Q2 while in H1 production of 3.2mnoz silver equivalent was up 81% YoY. This strong performance was offset by a reduction in throughput at Arcata where production was down 22% YoY to 2.9mnoz silver equivalent. This was due to a change to the mining plan.

HOC has strengthened its already robust balance sheet, reducing net debt by 14% through the period to US$160mn. In addition to production guidance, cash cost guidance was also maintained at US$12-12.7/oz.

]]> VSA Capital Market Movers - Columbus Energy Resources PLC, Egdon Resources Plc Mon, 10 Jul 2017 08:29:00 +0100 Columbus Energy Resources (LON:CERP)#

This morning Cloumbus Energy Resources (CERP)# has released its first awaited operations update since Leo Koot and his new management team took over in May. The management team have now completed its review of the Trinidad operations with the key aim being to develop a work programme over its assets using its existing cash resources with the objective of generating free cash flow in Q4 2017. In completing its review management has identified a number of key changes to the strategy held by previous management.

Operations Update

Primarily, CERP intends to increase its short term revenues through increased production of its current wells. This means that CERP has decided to place the Mayoro well infill programme on hold as analysis of the reservoir has shown that without artificially increasing the pressure in the reservoir any new wells drilled will decline rapidly and not deliver as previous management expected. The plans CERP intends to employ on its current wells to increase revenues over the short term are outlined below.

Water Injection Pilot Programme

Firstly CERP plans to increase production rate and recovery in the reservoir by increasing the reservoir pressure from current reduced levels by injecting water into the reservoir and sweeping oil towards the production wells. CERP plans to implement a multi-pilot approach on the Goudron Field through testing a number of reservoir intervals and field areas prior to deciding on whether to expand water injection over the entire field in 2018 and beyond.               


CERP has already applied for approval of this programme from the Enironmental Management Authority of Trinidad to begin a planned water injection pilot “A” programme for the Gross Morne 665 Area in the hope it is approved this quarter. This pilot “A” programme will be financed from existing funds and forecast revenues from current oil sales and will replace the previously announced single pilot waterflood strategy which targeted just one area of the Gros Morne reservoir.

Pilot “A” will consist of injecting c500 barrels of water per day (BWPD) of currently produced water from the Goudron Field via three injection wells. CERP are forecasting an increase in production from the Pilot “A” reservoir interval from the current level of 30bopd to a peak of over 150bopd. Further to this three additional water injection pilot programmes (B, C and D) are being planned to target two areas of the shallow Goudron Mayaro reservoir and as potential pressure support for the GY-670 well, which initially peaked at 1,150bopd in December 2014.

Goudron Field Well stimulation campaign

In parallel, CERP has started planning a well stimulation campaign targeting wells close to mapped faults that have historically responded well to this technique by previous operators. This will be carried out in the coming month and is expected to provide a sustained incremental rate of 30-100bopd.

Smart pumping systems using downhole sensors

Smart pumping systems using downhole sensors will be installed firstly on well GY-644 in the coming weeks allowing automatic pump optimisation and will simultaneously acquire continuous downhole reservoir pressure data which can be used to monitor the pilot “A” water injection programme.

Quarterly Production Update

Average production from the Goudron Field in Q2 2017 was 327bopd, however, production was lower at the end of the quarter due to Tropical Storm Bret hitting the island on 19 June and damaging external power supply. Permanent repairs have now been made to overhead power lines and operations in the field have returned to pre-storm levels of 380-420bopd.

South West Peninsula

CERP is also awaiting approval from the Trinidad and Tobago Ministry of Energy and Energy Industries for the renewal of the petroleum licence at the Bonasse Field as part of the BOLT licence. Whilst CERP awaits this renewal it has completed several tests on the field to determine potential for sustained production. During this testing the oil quality from the individual wells was measured and was proved to be of higher quality than the heavy oil that was first expected (25°API).

CERP remains focussed on gaining approval for the licence applications in the South West Peninsula, which will allow it to develop material exploration prospects in the area.

VSA Comment

We view this operations update as particularly important as it has now outlined the new management’s plans and expectations going forward. We view the decision to place the Mayaro well infill programme on hold and instead focus capital investment on increasing the reservoir pressure as a positive one.

We still view the South West Peninsula as potentially the most exciting asset in CERP’s portfolio which will drive the long term value in the company. CERP intends to work up 3-4 large prospects (c200mmboe) in this area which, if successful, will be materially game changing to a company the size of CERP. Clearly CERP is not the sort of company that would then go on to develop projects of this size and we would expect a major or large cap E&P to step in and operate projects of this scale. We would expect CERP to profit in this situation either from a direct sale of the asset or it could farm-out the licence for a free-carry on the full capex costs whilst retaining a material working interest. Furthermore, we still expect CERP to announce M&A activity in South America in due course.

We maintain our BUY recommendation and our TP remains under review whilst we update our model with this new information.

Egdon Resources (LON:EDR)#

Egdon Resources (EDR)# has announced it will acquire a 100% WI and operatorship of the Fiskerton Airfield oil field from Cirque Energy for cash consideration of US$750k payable from its existing cash resources upon completion of the deal.

The Fiskerton Airfield oil field is located approximately 7 kilometres to the East of the City of Lincoln. The field was discovered in 1997 and cumulative production has totalled around 440,000bbls from the most likely mapped Oil in Place estimate of 2.2mmbbls. The oil is of good quality (35.2°API) and is exported by road tanker to Immingham, North East Lincolnshire. EDR estimate that in excess of 100,000bbls remain recoverable from the existing wells on the field.

Currently the field is producing c19bopd from one of two producing wells, whilst the second producing well is currently shut-in and awaiting a workover. Whilst this field has suffered from a lack of investment over recent years EDR now plans to enhance cash flows and profitability by increasing production to initially to 30-40bopd via low cost well interventions. EDR plans to carry out this work over both wells in 2017.

Following the disappointment of Wressle this will come as very welcome news and add immediate production and near term cash flow to EDR. We reiterate our BUY recommendation and our TP remains under review, whilst we add the Fiskerton Airfield oil field into our core NAV.

]]> VSA Capital Market Movers - Millennial Lithium Mon, 10 Jul 2017 07:17:00 +0100 Millennial Lithium (CVE:ML)

Millennial Lithium (ML CN) has announced positive results from its extended pumping tests at Pastos Grandes in Argentina. Tests were conducted over a 60 hour period with an average pumping rate of 27.7 litres per second. Lithium content over the course of the test was consistent; fluctuating between 438.7-430.5mg/l, indicating the aquifer is robust. Furthermore, drawdown over 24 hours was around 9m while the brine level recovered after pumping to within 0.5m of the original level.

The strong flow rates and lithium content are encouraging and underpin our confidence in the project. Indeed, ML is now using brine from the pump test to feed a number of trial evaporation ponds. In addition, a second pumping well is being constructed to test the area where recent drilling intersected lithium-bearing brine.

We reiterate our Speculative Buy recommendation.

]]> Western civilisation at stake, says Trump: gold tracks sideways Fri, 07 Jul 2017 12:47:00 +0100 Donald Trump has argued this week that the future of Western Civilisation is at stake.

If true, you’d expect a fire to be set under the gold price and immigrants to be streaming away from Europe and the US by the million, bound, presumably, for China and perhaps to a lesser extent India.

But when the content of the speech was leaked ahead of Trump’s actual delivery of it in Poland net immigration to the West showed no sign of reversing and the reaction of the gold price was muted, to say the least. It actually moved up US$3.06, to US$1,223 per ounce.

So, either the end of Western Civilisation has already been priced in, or Donald Trump’s views on it are not actually relevant to the decisions international investors actually make.

In the short-term, of course, the international investors are right. People have been talking about the decline of Western Civilisation as such at least since the days of Oswald Spengler.

It’s nothing new, but so far Spengler’s theories have survived Hitler and Stalin, and frankly you only have to walk the streets of London, New York, Washington, or Manchester to see that it’s doing a pretty good job of surviving Islamic fundamentalism too.

But Trump’s pitch is more nuanced and subtle than the intellectual misfire some liberals might at first take it for.

The location of the speech in Krasinksi Square in Warsaw is ostensibly designed to highlight the heroism of those who took part in the rising against the Nazis in the summer of 1944.

That sets it at the centre of an apocalyptic fire that didn’t end well for anybody, no matter how much Trump or anyone else paints the efforts of the Polish resistance as “noble in spirit”.

But evoking images of this kind of destruction actually plays well in certain Trump heartlands. Millenarian fear, or a belief that the end of the world is nigh, is central to the theology of the Baptist and other ultra-Reformed faiths that dominate small-town America and the Midwest.

According to them, the end of the world has been looming since the Zwickau prophets picked up the baton that Martin Luther had left lying around in the early 1500s and ran with it straight into the Peasants War.

But when the world didn’t actually end in Europe, the descendants of these cheery people upped sticks and emigrated to the North American colonies, and became known in a cheerful rebranding orchestrated by later generations as the Pilgrim Fathers.

So whether the main threat to Western Civilisation is Islamic fundamentalism, or North Korean nuclear weaponry, or government bureaucracy, or Mexicans, the important fact is that there is a threat, that it is God’s will that there is a threat and that key people recognise and articulate that threat.

Global warming doesn’t fit this bill particularly well though. For one thing, it’s too gradual. For another thing, it’s a threat articulated by science and which can be fixed by science, and scientists are neither crediting God nor asking for his help in the matter.

So, if you’re wondering why a terrorist bomb in Manchester or Mosul is more of a threat to Western Civilisation than global warming, one answer is to be found in the roots of the European Reformation and its transference to Middle America.

It’s also why North Korea is more dangerous in a world in which Donald Trump is President than in a world in which he isn’t – because the Christian apocalypse is what the faith of many of his supporters is built around.

What all this may mean for the gold price in the long term is interesting. It may be that the initiatives of the likes of Elon Musk  in driving progressive technology forward outweigh US electoral skittishness.

But it may also be that being left behind may sit increasingly ill with the people who originally believed that they were “chosen” and whose right to dispossess the original owners of the land they now live on was enshrined in political doctrine called “Manifest Destiny.”

It appears to sit ill enough already. But the real question for analysts of global political uncertainty now which be which way American demographics will carry government in the future, and if as predicted the progressives eventually win by weight of numbers, whether open internal conflict in the US can be avoided.

After all a greater willingness to engage in open conflict, reduced recourse to human reason and negotiation to mitigate that conflict, and a fanatical belief the correctness of the course chosen is not new in the tide of human affairs. And we’ve seen where it ends up.

For now the gold price is sanguine in the face of President Trump’s rhetorical flourishes. But it may turn, as they say in the American heartlands, on a dime.


]]> VSA Capital Market Movers - Sula Iron and Gold Wed, 05 Jul 2017 07:57:00 +0100 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold (LON:SULA) has announced that the first six holes in the Phase 3 drilling programme have been completed at Sanama Hill whilst samples from the first three of those have been sent for assay. These six holes cover over 2,000m. One of the two rigs has been moved to TZ4, the newly discovered area of mineralisation identified during Phase 2 drilling.

The company anticipates that the early results from the initial assays will likely be received towards the end of July.

Sula has issued 7.92m shares at 0.25p in settlement of advisers’ fees over the past six months. The enlarged share capital is now 2.44bn shares.

We reiterate our Speculative Buy recommendation and 1.6p/sh. target price.

]]> VSA Capital Market Movers - Egdon Resources Plc Tue, 04 Jul 2017 07:43:00 +0100 Egdon Resources (LON:EDR)

Egdon Resources (EDR)# announced yesterday afternoon that North Lincolnshire County Council has refused planning consent for the Wressle Oil Field for the second time since January 2017. We were surprised at the initial refusal by the County Councillors in January and this decision has come as a further surprise after the project received positive recommendation from the planning officers on both occasions.

Seven of the 10 person committee voted against the development, near Scunthorpe, with the Councillors citing the reasoning behind the rejection being there was not enough information in the officers’ report to convince them that the application would not have a negative impact on people and the environment in the local area.

EDR will now proceed with the appeal it has already submitted against the original refusal which is due to be heard in November 2017, the outcome of which we now expect early next year. This is clearly disappointing for EDR as it pushes the development of the project back even further from the first delay. However, the Wressle development made up only 1p/sh in our core NAV for EDR, therefore, we maintain our BUY recommendation but place our TP under review whilst we await a further update from the company.

]]> VSA Capital Market Movers - Obtala Ltd Mon, 03 Jul 2017 07:40:00 +0100 Obtala Limited#: FY 2016 Results

On Friday afternoon, African forestry and agriculture business Obtala Limited (LON:OBT)# released its results for the year ended 31 December 2016.

This morning, OBT has also announced the completion of the recently announced acquisition of WoodBois International (with upside on many of its initial assumptions) as well as the immediate retirement of Frank Scolaro and Philippe Cohen (CFO search now underway) from its Board of Directors.

• Revenue: US$0.6m (FY 2015: US$0.9m); VSA forecast US$0.9m

• Pre-tax loss from continuing operations: US$5.3m (FY 2015: US$14.8m); VSA forecast US$5.9m

• Total assets: US$181.1m (FY 2015: US$179.7m)

• Cash and cash equivalents as of 31 December 2016: US$3.4m (31 December 2015: US$1.0m)

• During 2016, OBT secured US$18.25m through the issuance of preference shares into its forestry subsidiary Argento, with a further US$3.0m secured in March 2017. In addition, OBT announced a US$5m equity subscription in May 2017.

• Given the strong involvement of Asian investors in recent fundraises, OBT is now investigating the potential of a dual-listing in Asia.

• Presentational currency switched to US$ from GBP

VSA Comment

2016 was a transformative year for OBT, with its new Chairman carrying out a comprehensive review of the business that resulted in disposal of certain non-core operations and a renewed focus on the twin sectors of forestry and agriculture in Africa.

To support this new strategy, OBT carried out a number of fundraises, largely involving the issuance of preference shares in its forestry subsidiary, raising more than US$25m in 2016 and H1 2017. We view this as an extremely significant achievement, considering the financing difficulties that many other companies operating in similar sectors and countries have experienced.

OBT continues to advance its new strategy, with key staff now in place across its businesses. Deploying the recently raised funds into its existing operations, as well as through acquisitions, such as the US$14.6m WoodBois International acquisition, should help the new management team quickly build OBT into an African agriculture and forestry business with the required scale to successfully operate on the continent.

We maintain our BUY recommendation and target price of 36p.

]]> IMF downgrades growth prospects for Donald Trump’s America Fri, 30 Jun 2017 12:12:00 +0100 VSA Capital Market Movers - Millennial Lithium, Metal Tiger, Sula Iron and Gold PLC Fri, 30 Jun 2017 07:46:00 +0100 Metal Tiger (LON:MTR)

Metal Tiger (MTR LN) has announced full year results for 2016. Following the strong performance in mining equities in the period, MTR experienced a significant increase in the valuation of its equity investments with a net gain of £2.2m in 2017 versus £287k in 2016. Administrative expenses which include much of the project related work were up from £887k to £3.2m owing to the significant progression of MTR’s flagship projects in Botswana and Thailand. The overall net loss was £720k in 2017 versus £599k in 2016.

MTR’s balance sheet at December 2016 was in a strong position with £6.2m in cash, which has subsequently been strengthened by a £4.85m investment primarily by Sprott Wealth.

Our target price and recommendation remain under review.

Millennial Lithium (CVE:ML)

Millennial Lithium (ML CN) has announced an option agreement to significantly expand its interest in the Cauchari East Project. The additional 8,742 hectares is contiguous to ML’s existing interest which would bring the total acreage at Cauchari East to 11,742 hectares. The tenements lie to the East of the Lithium Americas/SQM joint venture which is currently being developed. In order to exercise the option ML will be required to pay US$250k via staged payments.

We reiterate our Speculative Buy recommendation.

Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (SULA LN) has released financial results for the 6 months ended March 2017. The loss for the period of £698k was somewhat lower than £924k in the prior period owing to lower administrative expenses. SULA’s cash position at the end of the period was £923k supported by a raise in July 2017 for £0.4k to fully fund the Phase 3, 5,000m, drilling programme which is currently underway.

Phase 3 follows a successful Phase 2 which underlined the potential of Sanama Hill with a 21m intercept at 3.65g/t Au. In addition, scout drilling at TZ4 which also yielded positive gold results demonstrated the potential for further mineralisation outside of the Sanama Hill Exploration Target.

We reiterate out Speculative Buy recommendation and 1.6p target price.

]]> VSA Capital Market Movers - Egdon Resources Plc Fri, 30 Jun 2017 07:21:00 +0100 Egdon Resources (LON:EDR)

We note that North Lincolnshire County Council’s Planning Committee will meet this Monday 3 July to decide on the new planning application for the Wressle Development, for which Egdon Resources (EDR)# is operator and owns a 25% working interest.

This new application was submitted by EDR to address the specific concerns raised by North Lincolnshire County Council following its original decision to refuse the application on 11 January 2017. This new application was also submitted in addition to an appeal made by EDR over the original ruling as EDR believe this double approach will produce the desired outcome with the shortest delay.

This new application has already received recommendation for approval from North Lincolnshire County Council’s Planning Department and we assume the outcome is successful in our model. We have a BUY recommendation and 34p TP on EDR.

]]> VSA Capital Market Movers - Millennial Lithium, Petra Diamonds Wed, 28 Jun 2017 07:13:00 +0100 Millennial Lithium (CVE:ML)

Drilling results for hole PGMW17-04b at Pastos Grandes have shown yet further depth of lithium brine. The hole bottomed in brine at a depth of 564m, over 150m deeper than the deepest prior drilling so far. Grades were significantly better than prior drill holes with a continuous interval from 93.5m to 475m grading an average 535mg/l. Potassium values range from 4,906 mg/L to 6,148 mg/L and average 5,610 mg/L over the 381.5m intersection.  Similar to magnesium, the sulphate/lithium ratio is also lower in this region, averaging 17.4 compared to an average of approximately 22.1 in holes PGMW16-01 and 02. The sediments continue to be highly permeable gravels and sands to the bottom of the hole.

Two rigs are operating and a third will be added in coming days. Two more holes currently underway are expected to TD this week. An upgraded resource estimate will be deferred until later in calendar Q3 or early Q4 2017 given the far better than expected depths and grades of brine being encountered. We suspect management wants to get a better idea of just how much bigger this resource might be.

The smaller surface area of the Pastos Grandes basin is proving to be highly deceptive as to the actual lithium volumes and grades within it. Looking to the longer term this would increase the scale of annual LCE output and significantly increase the potential mine life.

We re-iterate our SPEC BUY recommendation.

Petra Diamonds (LON:PDL)

Petra Diamonds (PDL LN) has announced that it is likely to significantly miss its production targets by 8-9% owing to slow progress at its expanding projects. Prior full year guidance had been 4.4mncts. Revenue is therefore expected to be lower, also by 8-9%, and there will consequently be a negative effect on earnings for FY 2017.

This announcement follows a series of soft trading updates by PDL, however, given the company is at the target run rate of 5mnctpa FY 2018 production guidance remains unchanged. The announcement also indicates that PDL may technically break its debt covenants relating to financial ratios but believes that this can be resolved with its lenders.

]]> VSA Capital Market Movers - Metal Tiger Tue, 27 Jun 2017 13:54:00 +0100 Metal Tiger (LON:MTR)

Metal Tiger has announced the results of recent exploration work on its Spanish gold and tungsten JV. A significant soil sampling programme as well as limited shallow RAB drilling has been carried out resulting in the identification of significant gold and tungsten anomalies. At Logrosan South two parallel structures of 6km by 950m have been identified as a gold anomaly. At Logrosan East an anomaly of 5km in length and up to 80m in width has been identified that combines two previously known gold anomalies into one larger block. Additionally at Logrosan East a new tungsten anomaly has been identified following positive soil sampling results which measures 2.3km by 900m. At Logrosan East a gold anomaly of 2.5km long has been identified.

MTR in conjunction with its JV partners is now identifying possible drill sites to follow up on the recent work.

]]> Global growth will continue to spur mining, but watch for political upheaval along the way Fri, 23 Jun 2017 12:53:00 +0100 VSA Capital Market Movers - Goldplat plc Wed, 21 Jun 2017 08:02:00 +0100 Goldplat (LON:GDP)

Goldplat (LON:GDP) has announced an update demonstrating robust operational progress as well as the potential impacts from the recently proposed changes to the South African Mining Charter. The notable changes that GDP would need to make relate to BEE ownership and board quotas. Currently the required BEE stake, with which GDP is compliant, is 26%. However, the new proposals would increase the stake to 30%. The Chamber of Mines of South Africa had not been consulted on the proposed changes and given the controversial nature of the new Charter; it is taking legal action against the Government to prevent its implementation. This is likely to be a drawn out process.

Operationally, GDP has announced that Kilimapesa is now running profitably, this is a major step for the company and one we expect to unlock significant value in the coming years. Installation of Stage Two at Kilimapesa was completed in mid-June and commissioning of the new crusher and leach tanks should be completed by the end of the month. Target Stage 2 run rate using stockpiled ore was achieved in May 2017 at 120tpd. GDP has found a solution to switch to grid power earlier than planned which should have a positive impact on costs and once production is stabilised on this basis Stage 3 can be commenced.

GDP has altered its plans for adding an elution plant in Ghana, saving US$1m of the original US$2m budgeted. This has been achieved by purchasing a second hand plant rather than moving an existing one from the South African operations. This will also bring forward the planned completion date.

In South America, GDP has reported signing its first recurring contract demonstrating clear positive progress as the company looks to diversify and expand its network of suppliers of processing material.

We reiterate our Buy recommendation and 12.2p/sh. target price.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC Tue, 20 Jun 2017 07:22:00 +0100 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has provided an update on its current drill programme and financing. The first hole on the new programme has been completed with the core now being logged whilst two further holes, also at Sanama Hill, are underway. One of the two currently operating drill rigs will soon be moved to TZ4 where recent scout holes yielded encouraging results.

In addition, Sula has announced that it has raised £340k of the planned £400k, of which the outstanding balance is expected to be received in the coming days. The planned issue price has been adjusted downwards marginally from 0.268p to 0.25p and will result in a further 160m shares being issued.

We reiterate our Speculative Buy recommendation and target price of 1.6p

]]> Long-term outlook for gold remains favourable, despite Fed tightening Fri, 16 Jun 2017 12:23:00 +0100 VSA Capital Market Movers - Columbus Energy Resources PLC Fri, 16 Jun 2017 11:09:00 +0100 Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (CERP)# presented to investors yesterday evening to officially launch its rebranding and gave an outline for its strategy going forward. Having spoken to the almost entirely new management in place we now view this as a materially different company. In short, we are extremely impressed by CERP’s new leadership and the significant progress that has been made both in Trinidad and London in the 5 weeks since Leo Koot was announced as CEO. Our key takeaways from the event are summarised below.


Leo Koot - CEO

In the coming years we will probably view 10 May 2017 as the day that realistically transformed LGO Energy into CERP upon the appointment of Leo Koot as CEO. We view Leo’s appointment as an extremely positive step made by the company for a number of reasons and, in truth, the announcement was a very welcome surprise to us at the time.

Primarily we are excited by LEO’s wealth of experience, not just his 28 years of expertise in the oil and gas industry but by the fact he has built an oil company effectively from scratch before as Managing Director of TAQA (Abu Dhabi National oil Company) UK. In this role he built the organisation from a few people to an organisation of over 2,000 staff and contractors and delivered a mature E&P operating company that managed 60kboepd production with US$1.7 billion in annual revenues. Further to this he has been a board member of AIM listed Sterling Energy (SEY), Managing Partner of MENA Gulf Investment Partners (Abu Dhabi), whilst prior to TAQA he was CEO of Energy Development Partners an oil and gas business creating ways to match capital and resources with developing production, for which he helped raise a US$350 million private equity fund. Leo has a Master in Petroleum Engineering and a business degree from Harvard Business School.

Gordon Stein – CFO

Further to Leo’s appointment Gordon Stein was announced as the new CFO on 15 June 2017. Gordon has already made his influence felt in the very short time he has been appointed as at the briefing yesterday it was announced CERP was moving its London office, which is estimated to be saving the company c£20,000 per month.

Gordon has over 24 years of international experience in the oil and gas sector and was most recently CFO of Madagascar Oil. Prior to this, he was CFO at Cadogan Petroleum, Vanguard Energy Limited and Regal Petroleum. Gordon is a member of the Chartered Institute of Public Finance & Accountancy.

Stewart Ahmed – Managing Director, Trinidad

Stewart Ahmed’s appointment as effectively country manager in Trinidad is another appointment we view as being important in turning the company around. Previously under the old management CERP did not have a board member in country, however, Stewart will be based in Trinidad to oversee operations and as outlined at the briefing has already made a number of operational improvements at the field to make it more productive at minimal cost. Significantly by having Stewart both on the board and working on site in Trinidad we believe this will remove any disconnect between the two and will bring his wealth of technical and commercial expertise from his international career.

Stewart has 32 years oil industry technical, commercial and management experience, most recently as Chief Operating Officer and General Manager of Madagascar Oil in Antananarivo from 2013-2016. Operating the Tsimiroro Field steam flood pilot, he gained the first Field Development License in Madagascar’s history.

Geological Potential

From the presentation made to investors yesterday it is clear that Leo is extremely enthusiastic about the potential in CERP from a geological and technical perspective. The first point he makes is that the quality of the oil is particularly good (38° API) i.e. the oil is light. This is particularly unusual when considering that the reservoir depth at Goudron is shallow (c500m), ordinarily at these shallow depths one would expect the quality of the oil to be much lower and viscous due to biodegradation of the oil and interaction with bacteria. However, as this is not the case this would indicate that the oil is leaking and, therefore, migrating from a deeper and much larger source which the management indicated it will be targeting to exploit.


Strategic and Operational Improvements

CERP has already moved on from the days of LGO and its strategy has moved accordingly and it plans to implement a 3-5 year strategy to add incremental value to the business. Previous management indicated it wanted to drill 45 new wells into the Goudron Field which were expected to produce c50bbls/d initially before gradually tailing off. The new management has now confirmed this strategy will not be followed and will be implementing a new one. Whereby, instead of drilling new wells CERP plans to increase the pressure in the reservoir through water injection in order to encourage the existing wells to produce at or close to their initial production rates. Indeed the field has produced c2000bbls/d in 2014 and these are the sort of numbers that the new management is targeting.

Management are confident by implementing these changes and a number of other cost cutting measures this will allow it to become cash flow positive in a matter of months. CERP will then use some of this cash to build up production further.


South America

Finally CERP indicated its intention to export its expertise into South America, therefore, we expect it to announce M&A activity in this region in due course.


We have summarised the key points of the meeting below and we now view CERP as an entirely different investment proposition to LGO and we are excited to see the new management follow through on these plans.

• CERP plans to implement a 3-5 year strategy to add incremental value to the business

• The first part of its strategy is to grow its production organically from its currently producing assets in Trinidad to allow it to become cash flow positive through a number of cost cutting measures

• CERP then intends to invest part of this free cash flow into its exploration portfolio in the South West Peninsula where it is targeting several large prospects

• CERP plans to build on its asset base in Trinidad with a portfolio of assets across South America

]]> VSA Capital Market Movers - Columbus Energy Resources Thu, 15 Jun 2017 07:30:00 +0100 Columbus Energy Resources (LON:CERP)

As of this morning LGO Energy (LON:LGO), the oil and gas E&P company focussed on onshore Trinidad, has officially changed its name to Columbus Energy Resources (CERP).

Further to this, CERP has announced that Gordon Stein has been appointed as Chief Financial Officer. Mr Stein has over 24 years of international experience in the oil and gas sector and was most recently CFO of Madagascar Oil. Prior to this, he was CFO at Cadogan Petroleum, Vanguard Energy Limited and Regal Petroleum. Mr Stein is a member of the Chartered Institute of Public Finance & Accountancy. James Thadchanamoorthy has stepped down from his position as finance director effective immediately.

As a reminder, CERP will be holding a re-branding launch event this evening at Patch St Paul’s at 18:00.

]]> VSA Capital Market Movers - Metal Tiger Wed, 14 Jun 2017 07:30:00 +0100 Metal Tiger (LON:MTR)

Metal Tiger (MTR LN) has announced the results of its updated CPR for its Thai lead zinc silver assets. A CPR was previously completed in 2013 by ACA Howe and formed the basis for our assumptions. The new report completed by SRK Consulting indicates that on a 10% discount rate the study has shown an NPV of US$45.9m with an IRR of 33% and upfront capex of US$50.3m.

In addition a JORC 2012 resource update to that defined in 2012 has been announced. This has increased the confidence categories of the resource, however, resulted in a slight reduction in tonnage. The scheduled mine life remains unchanged at 14 years.

The project is brownfield and the CPR highlights that mines are in good condition and that much of the existing infrastructure including the processing plant may be utilised.

Our target price and recommendation are withdrawn

]]> VSA Capital Market Movers - Metal Tiger, Sula Iron and Gold PLC Tue, 13 Jun 2017 07:40:00 +0100 Metal Tiger (LON:MTR)

Metal Tiger (MTR LN) has announced an update on its 30% owned T3 copper project in Botswana. Assay results from geotechnical drilling using wide diameter holes are encouraging and confirm the initial pit design whilst wide intersections such as 46.6m at 2.1% Cu and 6g/t Ag may benefit the resource update due in July 2017. These wide holes are primarily to determine a greater understanding of rock strength and stability as well as to provide samples for metallurgical testing, further drilling will seek to determine the potential for an expanded pit design.

MTR has stated that it expects the remaining assays from Zone 2 drilling to be returned by the end of June. A resource update is due in July 2017 covering Zones 1 and 2 although further drilling is also due to take place on nearby anomalies at the same time. In August drilling will focus on Zone 3, below the current T3 resource while in Q3 2017 the company aims to complete metallurgical, mining and processing testwork for the PFS.

We reiterate our Buy recommendation and 4p target price.

Sula Iron & Gold (LON:SULA)

Sula Iron and Gold (SULA LN) has announced that its Phase three drilling programme has commenced. The new programme is for 5,000m and will again be carried out by Equity Drilling. The focus of this drilling will follow up on the promising results from Sanama Hill as well as the Southern Target TZ4 where the initial scout hole yielded 5.2g/t over 1.2m.

The final assay results from the recent programme have now been received. The second scout hole at TZ4 also returned mineralisation with two intervals of 0.8m at 1.59g/t and 1.79g/t. At Sanama Hill hole FDD020 hit intervals of 1.3m and 1.8m at 0.97g/t and 1.48g/t respectively and in total 10 of the 14 holes at Sanama Hill returned mineralisation with an average 2.05m at 3.9g/t (average true thickness and length weighted grade).

Sula has also announced that a detailed structural review of the local geology has been carried out resulting in the identification of a total of 19 target zones including Sanama Hill and the Southern Target which includes TZ4. Given the recent results we believe that a stronger understanding of the structural geology will significantly benefit future drill targeting and enable Sula to capitalise on this drilling programme which demonstrated the potential at Ferensola for multiple zones of gold mineralisation as well as thick mineralised structures.

We reiterate our Speculative Buy recommendation and target price of 1.6p/sh.

]]> VSA Capital Market Movers - Egdon Resources Plc Mon, 12 Jun 2017 07:39:00 +0100 Egdon Resources (LON:EDR)

Egdon Resources (EDR)# has acquired a 50% interest in PEDL278 in its core area of the East Midlands from Celtique Energie Petroleum and Investcan who were originally awarded the licence in the 14th licencing round. The licence contains the Kirk Smeaton tight gas discovery and further conventional and unconventional prospectivity.

IGas (IGAS) is acquiring the other 50% and will act as operator. Therefore, this acquisition adds 4,695 net acres to EDR’s unconventional resources position, which now totals c205,800 acres. The acquisition was completed for a nominal cash consideration.

This acquisition is in-keeping with EDR’s strategy within its core area. We now await further update on the development and exploration programme on this licence from EDR and IGAS.

We maintain our BUY recommendation and 34p TP.

]]> UK election shows era of Conservatives as natural party of government is over Sat, 10 Jun 2017 07:09:00 +0100 VSA Capital Market Movers - Eco Atlantic Oil & Gas Ltd Thu, 08 Jun 2017 07:23:00 +0100 Eco (Atlantic) Oil & Gas (LON:ECO)

Eco (Atlantic) Oil & Gas (ECO)# has announced that its operating partner Tullow Oil (TLW LN) have approved a c2,550km2 seismic survey on its Orinduik Block offshore Guyana. ECO anticipate the survey to commence in the next two weeks and will be completed by Schlumberger Guyana.

As a reminder ECO owns a 40% working interest in the Orinduik block with TLW owning the remaining interest and acting as operator. The Orinduik Block is located up dip and just a few kilometers from Exxon’s (XOM US) recent Liza and Payara discoveries confirming, by XOM estimates, in excess of 1.5Bbbls of recoverable oil. ECO has reviewed 2D seismic data across the block and leads have been identified which TLW estimates contain prospective resources of 900mmboe. This 3D seismic programme is now the next stage of the exploration programme over the block and is being completed on time as per ECO’s guidance.

TLW will fully carry ECO over the first 1,000km2 of the survey at a cap of US$1.25m with the balance being funded by both parties on a pro-rata basis. ECO is well funded to cover this by its own cash following its £5.1m raise in February. We maintain our BUY recommendation and 25p TP

]]> VSA Capital Market Movers - Sula Iron and Gold PLC Wed, 07 Jun 2017 07:47:00 +0100 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (SULA LN) has announced an additional assay result from its recent drilling programme at Ferensola. Hole FDD021, a scout hole 2km South of Sanama Hill and beyond the Southern extent of the Eastern Target Zone at an anomaly known as TZ4, has yielded encouraging results.

The assay shows 5.22g/t over 1.2m at a depth 116m and is the first of two holes in this programme drilled at TZ4. Although only a single data point at this stage, the result does confirm the exploration potential beyond the existing target at Sanama Hill. Previously trenching and grab samples at TZ4 have yielded grades of 3.28g/t and 2.54g/t and the IP anomaly has a strike length of c.1km with a shallower dip than at Sanama Hill; as confirmed by the initial drill result which showed a dip of 38⁰.

A total of seven assays remain outstanding from the current programme, including a second from TZ4.

We reiterate our Speculative Buy recommendation and 1.6p target price.

]]> Peter Hambro’s relationship with retail investors could prove as crucial as Tiny Rowland’s Mon, 05 Jun 2017 12:11:00 +0100 Trump climate change decision good for coal and gold, bad for stability Fri, 02 Jun 2017 13:13:00 +0100 VSA Capital Market Movers - Dakota Minerals Wed, 31 May 2017 07:25:00 +0100 Dakota Minerals (ASX:DKO)

Reported this past Monday, DKO confirms metallurgical suitability for production of Li2CO3 for the battery market from its petalite mineralisation from the Sepeda pegmatite in Portugal. Dorfner-Anzaplan of Germany conducted the work and accomplished 99.88% purity prior to bicarbonation and 99.97% purity after. This quality is quite suitable as battery grade and was accomplished with industry standard methodology of calcination (roasting), acid baking, and leaching.

DKO reported back on 24 April that metallurgical testing had confirmed the petalite would produce technical grade products suitable for the ceramic industry. It is now shown that the producible Li2CO3 will also be prime for the battery market off-takers as well.

DKO expects to have a Scoping Study completed incorporating these results by mid-June.

All the signs and results are still pointing to a robust lithium project being put forward in coming weeks for definitive feasibility studies and eventual construction finance.

]]> VSA Capital Market Movers - Metal Tiger Tue, 30 May 2017 07:38:00 +0100 Stratmin Global (LON:STGR)

Released on Friday, STGR announced the resignation of director Shishir Poddar. He will now focus on the development of the Vatomaina graphite mine in Madagascar, which is a joint venture between Tirupati Resources Mauritius and STGR. Mr. Poddar retains a 3.55% shareholder stake in STGR. STGR holds 1.45% of Tirupati Resources Mauritius (TRM). TRM is passing its interest into private firm Tirupati Graphite plc with the intent of a future IPO.

Stratmin is proceeding to transform to a gold exploration company with the Scheme of Arrangement now filed with the Australian authorities for the reverse takeover of private firm Signature Gold by STGR. Shareholders of STGR will have a vote on the transaction at a future date.

Our recommendation and target price are suspended while STGR is not trading.

Sula Iron and Gold (LON:SULA)

SULA is not allowing any lapse in drilling activity at Ferensola with the signing of a new 5,000m contract with Equity Drilling (EQD) under largely the same terms as the previous one just completed. EQD will take a portion of its fees and costs in shares of SULA just as it did in the prior contract.

The contract is valued at US$700k and is intended to be infill and step out drilling concentrating on the TZ0 target of Sanama Hill where the latest program encountered 21m true width at 3.65gAu/t in assay. Some assays from the previous round of drilling are still pending.

As the company completes more holes into the gold and geophysical anomalies of the Ferensola gold targets, the better it understands the controls to gold mineralisation on this very big anomaly.

We retain our SPEC BUY recommendation and 1.6p price target.

]]> Peace be upon you: Trump wrong-foots critics with foreign travel, US dollars and religion Mon, 29 May 2017 09:19:00 +0100 VSA Capital Market Movers - Metal Tiger Thu, 25 May 2017 07:09:00 +0100 Metal Tiger (LON:MTR)

Announced yesterday, MTR plans significant exploration work in the Kalahari Copper Belt in support of MOD Resources (MOD AU) field work on the T3 area of Botswana. This work will take place over the summer and be led by the joint venture local operating company Tschukudu Metals Botswana.

Airborne geophysics over the wider T3 Dome area of the licenses will be undertaken beginning in June to identify areas where the apparent geology and mineral signature is a repeat of that which has localised the current high grade copper discovery at T3. The even larger T20 Dome feature will get its first detailed look as well.

The Botswana government has determined that it does not need a formal EIA completed for the next phase of exploration activity. This means the current drillers on break can return to punching holes to find new orebodies from July rather than having to wait for those more exhaustive environmental studies and measurements to be undertaken and completed. Targets to test in the next phase of 30 drillholes include under the current Zone 1 and Zone 2 compliant resources to give further definition to the size and grade of Zone 3 at the sandstone contact and a new geophysical target lying 800m north of the T3 mineralisation.

Further studies toward completion of a PFS on T3 will be undertaken over the next two quarters as well.

There are many, many kilometres of favourable rock stratigraphy yet to test on MTR licenses. We believe the chances of finding further high-grade copper-silver mineralisation in new near surface zones as very high.

We retain our BUY recommendation and 5.86p price target.

]]> VSA Capital Market Movers - Millennial Lithium, Vedanta Resources Wed, 24 May 2017 07:45:00 +0100 Millennial Lithium (CVE:ML)

Late yesterday, ML announced the entry into a JV with TSX-V junior Liberty One Lithium (LBY CN) upon its Pocitos West property. LBY may acquire a 70% stake in the property for US$5.5m in staged cash payments over 36 months and completion of work commitments of US$1m. It may increase its interest a further 10% to 80% by completing a bankable feasibility study within 42 months of the closing date of the transaction.

This transaction monetises Pocitos West to the benefit of ML by covering underlying property payments on Pocitos West while it incurs drilling costs in firming up the resources on its primary project of Pastos Grandes to the east. ML only acquired 100% of Pocitos West in February for US$4.5m and these JV payment terms and sums are in excess of those in the underlying agreement for a net gain in current valuation of the Pocitos West property to ML of US$2.1m if all thresholds are met by LBY.

ML is simultaneously advancing, profiting from, and de-risking the Pocitos West ground, a sound capital management strategy. This transaction also shows that well positioned, early stage ground within the Lithium Triangle continues to change hands for a premium on acquisition costs.

We retain our SPEC BUY recommendation.

Vedanta Resources (LON:VED)

A final dividend of US$0.35 is declared by Vedanta Resources (VED) as it discloses an underlying full year profit of US$0.011 vs a loss last year. Revenues rose 7% to US$11.5b while EBITDA rose a strong 37% to US$3.2b on the back of better commodity prices. Gross debt however worsened as a result of paying a special dividend during the year and now stands at US$18.2b. Prices in copper, aluminium, zinc, iron ore, oil and gas have all shown a strong recovery last year.

The chairman, Anil Agarwal, states a dedication this year to deleveraging the balance sheet. We hope he is serious as prior expressions of intent have not been forthcoming in large measure in prior years; lagging other integrated metal miners in that regard. Stronger commodity prices will help out, therefore, now is the time if at all.

]]> VSA Morning Agri Comment Wed, 24 May 2017 07:43:00 +0100 Obtala# Acquires Forestry Business

African forestry and agriculture business Obtala Limited (LON:OBT) has conditionally acquired (subject to due diligence) the forestry business WoodBois International ApS (WBI) for US$14.8m.

• WBI consists of three operations – a wood trading business in Côte d’Ivoire, a sawmill operation in Gabon with 41,300ha of concessions and an under construction veneer factory in Gabon, which is due to be completed in H2 and should contribute to earnings from 2018 onwards. The group employs c150 people.

• The US$14.8m consideration will be paid in three tranches. OBT will pay US$3m cash and US$3.8m in new OBT ordinary shares on completion of due diligence (target: 30 June), US$3m 120 days after completion (or on 30 September 2017, whichever is earliest) and US$5m over five years in quarterly payments starting 30 September 2017 (conditional on the continued employment of the two founders).

• In FY 2015, WBI generated revenues of DKK 106.8m (then £10.4m), an EBIT of DKK 2.54m (then £0.25m).

VSA Comment

This acquisition represents OBT’s first major move since raising cUS$27m in 2016 and early 2017 as it looks to build a leading African forestry and agriculture business.

WBI has been starved of working capital in recent years and as such OBT will look to secure export finance to significantly expand WBI’s trading operations as well as investing cUS$500k to increase the output of its sawmill (current annual capacity 24,000m3 sawn timber) and complete construction of the veneer factory in H2 (planned annual capacity of 18,000m3 veneer).

This deal also provides OBT with an established trading operation for its existing hardwood operation in Mozambique to gain greater access to international markets, with WBI currently selling wood into more than 40 separate countries. Importantly for a trading business that relies on personal networks, the two founders of the business have agreed to remain with the company for a minimum of five years.

Management believe that with additional capital WBI could rapidly improve its financial performance, contributing an operating profit of more than cUS$12m to the group by 2019 under its base case scenario.

We maintain our BUY recommendation but place our target price under review while we assess the likely impact of this significant acquisition on the wider OBT business.

Wynnstay H1 2017 Trading Update

Wynnstay Group (LON:WYN), a UK manufacturer and supplier of agricultural inputs and retail group, has updated on trading for the six months to 30 April 2017.

• WYN’s pet business, Just for Pets (JfP), has produced a loss in H1, which will result in a non-cash goodwill impairment charge being booked. Excluding JfP, H1 group performance is ahead YoY. JfP restructuring plans to be announced in H2

• Group H1 reported profits will therefore be materially below those reported last year with its adjusted PBT (before the impairment) marginally below last year, due to the loss in JfP

• Interim results will be announced on 21 June 2017

VSA Comment

Following on from UK-listed agricultural peer Carr’s Group (CARR LN)# earlier in the year, WYN has delivered its own profit warning, despite generally improving conditions in its core UK agricultural business.

WYN has long discussed the challenging trading conditions in its pet business, as well as the below expectations performance of newly opened stores. WYN had been trying to address this through the launch of new concept stores and a focus on service sales (in-store vaccinations etc…), which has been the strongest performing sub-sector in the industry. (Earlier this year, industry leader Pets at Home (PETS LN) highlighted ‘Merchandise’ like-for-like revenue growth slowing to -0.5% YoY in its Q3 (14 Oct – 5 Jan) but ‘Services’ revenue growth continuing to show decent strength, +7.0% YoY).

The 25 JfP stores contribute a proportion of group profit in the low single digits and given the challenges and seemingly unrelated nature of the business have long been seen by investors as a potential target for disposal. We would expect this to be at least considered as part of its upcoming strategic review for this division.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC Mon, 22 May 2017 07:27:00 +0100 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (SULA) has announced that it has completed the balance of payments to Equity Drilling Limited via the issue of 52.4m shares at 0.43p. SULA previously announced that a significant portion of the contract would be paid for via equity. The dilution of just 2% has been minimised as a result of the shares strong performance, indeed, the shares have risen 95% since the contract was agreed.

We reiterate our Speculative Buy recommendation and 1.6p target price.

]]> Markets spooked by Trump’s disregard for law, spies and media Fri, 19 May 2017 13:55:00 +0100