Arizona Silver Exploration's new claims protect recent anomaly discovery Mon, 27 Mar 2017 18:49:00 +0100 Endeavour Silver's fourth Mexico mine should generate robust economic returns Mon, 27 Mar 2017 18:15:00 +0100 Tango Mining says terms of Zard stake have been amended Mon, 27 Mar 2017 16:50:00 +0100 Niocorp Developments hails Scandium milestone for Elk Creek project Mon, 27 Mar 2017 14:48:00 +0100 Cadence announces new joint venture for Auroch Minerals Mon, 27 Mar 2017 13:11:00 +0100 Premier African's George Roach 'very pleased' with investor response to £2mln raise Mon, 27 Mar 2017 10:55:00 +0100 George Roach, CEO of Premier African Minerals Limited (LON:PREM) talks to Proactive about the company raising £2 mln through an underwritten offer that was made exclusively available through

]]> Savannah Resources defines resource estimate at Ravene deposit in Mozambique Mon, 27 Mar 2017 10:30:00 +0100 Greatland Gold 'encouraged by the year ahead' as they eye up multiple targets at Ernest Giles Mon, 27 Mar 2017 09:58:00 +0100 Greatland Gold PLC (LON:GGP) CEO Gervais Heddle and Chief technical director Callum Baxter bring Proactive up to speed on their Bromus and Ernest Giles Projects as well as their recent acquisition of the Havieron project in Western Australia.

''We're well capitalised, we've got exciting projects ... we're advancing exploration at all those projects. We're also looking at a strong pipeline of other external projects ... we're very encouraged about the year ahead'', says Heddle.

]]> VSA Capital Market Movers - Independent Oil & Gas Mon, 27 Mar 2017 07:28:00 +0100 Independent Oil & Gas (LON:IOG)
Independent Oil & Gas  has updated the market on the Harvey and Elgood licences.

Firstly, the Oil and Gas Authority (OGA) has continued licence P2085, which contains the Harvey discovery until 20 December 2017. If successfully appraised, this licence has the potential to be the largest gas discovery in IOG’s portfolio, with an internal P50 estimate of 113BCF. In order to extend the licence further IOG must commit to drill an appraisal well, which it expects to do later in 2017. If this licence can be successfully appraised IOG expects to tie it back to the same pipeline which it has signed an MoU to acquire. This pipeline will also be used to export gas from the Blythe and Vulcan Satellite hubs.

Secondly, technical work submitted by IOG in relation to the Elgood discovery has been accepted by the OGA and will be added to the Blythe Field Development Plan (FDP). This has an internal P50 estimate of 22BCF of recoverable gas.

Benchmark Prices
- Brent:   US$50.80/bbl +US$0.24/bbl
- WTI:   US$47.97/bbl +US$0.27/bbl
- Henry Hub:   US$3.08/MMBtu +US$0.02/MMBtu

Risers and Fallers (Last Close)
Risers Price Movement % Chg
Sirius Petroleum +0.09p +12.1%
Empyrean Energy +0.37p +11.5%
Serica Energy +1.50p +7.1%
Fallers Price Movement % Chg
Premier Oil -2.50p -3.8%
Urals Energy -0.38p -6.3%
Gulfsands Petroleum -0.75p -9.7%

]]> Premier African raises £2 mln in oversubscribed underwritten offer Mon, 27 Mar 2017 07:14:00 +0100 South American Iron and Steel to reveal acquisition Mon, 27 Mar 2017 06:00:00 +0100 Cannindah Resources in a halt pending exploration update Mon, 27 Mar 2017 05:30:00 +0100 Metals Australia gets ready to pounce Mon, 27 Mar 2017 04:00:00 +0100 Mantle Mining Corporation's shares in pre-open Mon, 27 Mar 2017 02:30:00 +0100 Mustang Resources takes growing gem-ruby stockpile to Europe Mon, 27 Mar 2017 02:30:00 +0100 Lucapa Diamond Company grows resources at Lulo Diamond Project Mon, 27 Mar 2017 02:00:00 +0100 OreCorp enters capital raising Mon, 27 Mar 2017 01:30:00 +0100 Southern Gold brings gold production to Proactive's Spotlight CEO Sessions Mon, 27 Mar 2017 01:00:00 +0100 Auroch Minerals to explore world-class copper‐zinc district in Portugal Mon, 27 Mar 2017 01:00:00 +0100 Capital Mining progressing to the next stage at lithium project in Ireland Mon, 27 Mar 2017 00:00:00 +0100 Pacifico Minerals in an ASX trading halt Sun, 26 Mar 2017 23:30:00 +0100 Caeneus Minerals to drill for lithium in April Sun, 26 Mar 2017 23:30:00 +0100 Ardiden’s drilling in Ontario, Canada reveals graphite potential Sun, 26 Mar 2017 22:00:00 +0100 Great Boulder Resources has acquisition, exploration results pending Sun, 26 Mar 2017 22:00:00 +0100 WPG Resources receives a Buy Recommendation Sun, 26 Mar 2017 21:30:00 +0100 PepinNini Minerals to reveal raising details Sun, 26 Mar 2017 21:00:00 +0100 Klondex Mines has irons in Fire Creek and more Sat, 25 Mar 2017 14:14:00 +0000 Hinterland Metals stakes claims in Gowganda, Ontario. Fri, 24 Mar 2017 20:28:00 +0000 Algold Resources raises $7.5mln for Tijirit exploration Fri, 24 Mar 2017 18:12:00 +0000 'We are a solid proposition' says Alecto Minerals PLC as it appoints Capital Drilling at Mowana Fri, 24 Mar 2017 15:03:00 +0000 Mark Jones, chief executive at Alecto Minerals (LON:ALO) talks to Proactive Investors about the progress the group is making at Mowana in Botswana and the appointment of Capital Drilling for the drill and blast contract.

]]> Klondex Mines expects to lift output by 36% in 2017 Fri, 24 Mar 2017 15:00:00 +0000 Aldridge Minerals looking to complete land acquisition process at Yenipazar this year Fri, 24 Mar 2017 14:34:00 +0000 Miners wobble, but Trump dump yet to have serious impact Fri, 24 Mar 2017 14:23:00 +0000 Orex Minerals announces completion of Coneto drilling programme Fri, 24 Mar 2017 14:16:00 +0000 Acacia Mining in talks with Tanzania authorities to lift ban on gold and silver concentrate exports Fri, 24 Mar 2017 11:00:00 +0000 Medusa Mining reports fatality at Co-O mine Fri, 24 Mar 2017 09:42:00 +0000 Eurasia Mining "steadily securing its future" Fri, 24 Mar 2017 07:35:00 +0000 Ariana Resources hails first production from gold and silver mine in Turkey Fri, 24 Mar 2017 07:24:00 +0000 Paladin Energy stands up for its shareholders Fri, 24 Mar 2017 03:30:00 +0000 Red River Resources receives a Speculative Buy Fri, 24 Mar 2017 02:30:00 +0000 Kingston Resources samples high-grade lithium at Spotted Wonder Fri, 24 Mar 2017 02:00:00 +0000 Sheffield Resources reveals robust economics for Thunderbird Mineral Sands Fri, 24 Mar 2017 01:30:00 +0000 Lucapa Diamond Company posts maiden resource at Mothae Fri, 24 Mar 2017 00:00:00 +0000 Agrimin heads to market Fri, 24 Mar 2017 00:00:00 +0000 Merlin Diamonds closes fully underwritten rights issue Thu, 23 Mar 2017 23:30:00 +0000 Tlou Energy attracts sophisticated and professional investors Thu, 23 Mar 2017 23:00:00 +0000 Strategic Elements enters stage two agreement in Finland Thu, 23 Mar 2017 23:00:00 +0000 WPG Resources completes ventilation work to unlock Challenger Deeps Thu, 23 Mar 2017 22:00:00 +0000 Azarga Metals names new finance chief Thu, 23 Mar 2017 21:58:00 +0000 NioCorp Developments Ltd extends term of Lind security Thu, 23 Mar 2017 21:55:00 +0000 Reward Minerals appoints Gary Lethridge to the top job Thu, 23 Mar 2017 21:30:00 +0000 Aguia Resources drills thick intercepts at phosphate project in Brazil Thu, 23 Mar 2017 21:00:00 +0000 Arizona Silver Exploration shares surge on Ramsey project findings Thu, 23 Mar 2017 18:30:00 +0000 Noram Ventures and Alba Minerals further encouraged by Clayton Valley lithium findings Thu, 23 Mar 2017 18:07:00 +0000 Energy Fuels hails approval, allowing it to expand Wyoming project Thu, 23 Mar 2017 17:23:00 +0000 MGX Minerals set to expand Utah footprint with new leases Thu, 23 Mar 2017 17:13:00 +0000 Mariana Resources' gold joint-venture in Turkey shaping up to be a world-class deposit Thu, 23 Mar 2017 13:38:00 +0000 Hot Maden 'continuing to deliver', says Mariana Resources' Glen Parsons Thu, 23 Mar 2017 13:08:00 +0000 Glen Parsons, chief executive of Mariana, said the work on its Hot Maden gold-copper project “continues to deliver” after another set of outstanding drill results.
The data also tell another story, he told Proactive Investors’ Andrew Scott: “The thing you can see is the resource has grown and is growing.”

]]> Shanta Gold's Toby Bradbury talks 'exciting' plans to extend life of Tanzania mine Thu, 23 Mar 2017 12:48:00 +0000 Shanta Gold Limited (LON:SHG) has raised its expectations for gold production growth as it announced a revised mine plan that will extend the life of the New Luika gold mine in Tanzania.

CEO Toby Bradbury tells Proactive the New Luika plant will be extended by four years to maximise its value and mine life.

]]> Housebuilder Crest Nicholson says trading environment has “remained generally robust" Thu, 23 Mar 2017 10:30:00 +0000 Noram Ventures becoming a force in the green energy revolution Thu, 23 Mar 2017 09:50:00 +0000 Metal Tiger shares tipped to retest last summer’s highs Thu, 23 Mar 2017 09:10:00 +0000 Technical analyst Zak Mir is tipping the Metal Tiger PLC (LON:MTR) share price to head towards the 4.5p mark and retest the highs it hit last summer.

“We’ve spent the past few days above the 200-day moving average at 2.64p. [While shares above] above that, I’m looking for a target to retest last summer’s resistance through 4p,” explained Mir in the latest Proactive Investors Bulletin Board segment.

“The technical target here is as high as 4.5p over the next one to two months while we hold above the 200-day line.”

]]> Shanta Gold raises production forecast as it extends life of Tanzania mine under revised plan Thu, 23 Mar 2017 08:34:00 +0000 Kibo Mining happy with progress to date Thu, 23 Mar 2017 08:33:00 +0000 Energy Fuels to become 2nd biggest US uranium player in 2016 – as prices rise Thu, 23 Mar 2017 08:15:00 +0000 Mariana Resources drill results appear to confirm the huge potential of gold-copper deposit in Turkey Thu, 23 Mar 2017 07:39:00 +0000 Buddy Platform launches smart building monitoring solution Thu, 23 Mar 2017 02:30:00 +0000 Kidman Resources drilling reveals more lithium at Mt Holland Thu, 23 Mar 2017 02:00:00 +0000 BARD1 Life Sciences shares surge after positive ovarian cancer test Thu, 23 Mar 2017 01:30:00 +0000 Castillo Copper to acquire cobalt and copper projects Thu, 23 Mar 2017 01:00:00 +0000 WPG Resources director Dennis Mutton has retired Thu, 23 Mar 2017 00:00:00 +0000 Ram Resources secures funding to advance zinc project in Ireland Wed, 22 Mar 2017 23:30:00 +0000 Lithium Australia NL to drill for lithium clays in Mexico Wed, 22 Mar 2017 23:00:00 +0000 Cougar Metals NL to lift cash balance Wed, 22 Mar 2017 22:00:00 +0000 Navigator Resources to respond to speculation Wed, 22 Mar 2017 21:30:00 +0000 Gold Resource lauds drill results from Gold Mesa Wed, 22 Mar 2017 16:03:00 +0000 Alecto Minerals powers ahead at Mowana, appoints Capital Drilling Wed, 22 Mar 2017 15:50:00 +0000 Tertiary Minerals' chairman tops up stake Wed, 22 Mar 2017 15:22:00 +0000 Vast Resources booms as it acquires remaining 49.9% of Sinarom Mining Wed, 22 Mar 2017 14:25:00 +0000 How much charge is really left in the lithium boom? Wed, 22 Mar 2017 13:03:00 +0000 Rare Earth Minerals PLC flags lithium move by Auroch Minerals Wed, 22 Mar 2017 11:45:00 +0000 ECR Minerals edges higher as Timor exploration licence issued Wed, 22 Mar 2017 11:38:00 +0000 Market warms to Strategic Minerals' diversification Wed, 22 Mar 2017 09:00:00 +0000 Stratex receives lift from affiliate's drilling results at Egyptian gold prospect Wed, 22 Mar 2017 08:54:00 +0000 VSA Capital Market Movers - Ferrexpo Wed, 22 Mar 2017 08:41:00 +0000 Ferrexpo (LON:FXPO)

FXPO has delivered strong results in a turnaround year recovering from its local banks issues which resulted in the loss of a significant amount of cash of around US$592m. FXPO’s robust operational performance was, however, unaffected. Production of 11.2mnt was down 4% YoY, however, sales volumes were up 3% YoY to 11.7mnt and prices averaged 5% higher YoY at US$58.3/t. Revenue was therefore up 3% YoY to US$986m.

Cash costs were down 13% YoY to US$28/t and EBITDA increased 20% YoY to US$375m as a result of the improved cost base. Net profit of US$189m was up close to fivefold YoY while with minimal capital investment owing to the completion of ramp up activities net cash flow was also up strongly. Consequently net debt was reduced from US$868m to US$589m YoY and FXPO opted to pay a final dividend of US$0.066/sh., double last years.

]]> Asiamet says resource definition drilling program at Beruang Kanan Main expected to be completed in early April Wed, 22 Mar 2017 08:28:00 +0000 Strategic Minerals says drilling has started at Redmore project in Cornwall Wed, 22 Mar 2017 08:26:00 +0000 Australian Mines is Wednesday's ASX Volume Leader late in the session Wed, 22 Mar 2017 04:00:00 +0000 Pioneer Resources posts Australia’s first caesium resources Wed, 22 Mar 2017 02:00:00 +0000 Explaurum substantial shareholder increases stake Wed, 22 Mar 2017 02:00:00 +0000 Intermin Resources more than doubles gold resource at Teal Wed, 22 Mar 2017 01:30:00 +0000 Cassini Resources see increased project value in rising cobalt prices Wed, 22 Mar 2017 00:30:00 +0000 West African Resources drilling reveals higher gold potential Tue, 21 Mar 2017 23:30:00 +0000 Elk Petroleum confirms producer status in US with final payment Tue, 21 Mar 2017 23:30:00 +0000 Talga Resources to develop graphene ink for printed batteries Tue, 21 Mar 2017 22:30:00 +0000 Australian Potash to update from Lake Wells Potash Project Tue, 21 Mar 2017 21:30:00 +0000 Dalradian Resources shares up on potential Minco bid Tue, 21 Mar 2017 20:27:00 +0000 Mawson Resources moves fifth rig to Rajapalot Tue, 21 Mar 2017 16:34:00 +0000 Bezant raises funds as it targets first production in first half Tue, 21 Mar 2017 15:50:00 +0000 Arizona Silver Exploration welcomes Shorr as director Tue, 21 Mar 2017 15:10:00 +0000 Greatland Gold hails commodity sector recovery Tue, 21 Mar 2017 15:02:00 +0000 Investor demand drives Barisan Gold Corporation to increase fundraise to $750,000 Tue, 21 Mar 2017 14:25:00 +0000 Stratmin moves step closer to reverse takeover of Signature Gold Tue, 21 Mar 2017 12:50:00 +0000 Dynacor will use cashflow boost from new Peruvian mill to fund precious metals exploration Tue, 21 Mar 2017 12:43:00 +0000 Berkeley Energia gets 'very important' sign off for uranium supply deal Tue, 21 Mar 2017 12:10:00 +0000 Berkeley Energia Ltd (LON:BKY) managing director Paul Atherley speaks to Proactive about the company winning support from the EU regulator for the Salamanca Mine in Spain as they signed off the company’s first uranium supply deal.

]]> Brexit bloodbath fails to arrive for the UK housebuilders, with Bellway the latest to report robust numbers Tue, 21 Mar 2017 10:45:00 +0000 Premier African aims for maiden resource at Zulu as grades impress again Tue, 21 Mar 2017 09:58:00 +0000 Rainbow Rare Earths 'making great progress' in bringing Gakara to production Tue, 21 Mar 2017 09:09:00 +0000 Martin Eales, chief executive of Rainbow Rare Earths Limited (LON:RBW) tells Proactive that work has now commenced on the Gakara project in Burundi.

Rainbow listed in London back in January, following a US$8 mln fundraising and immediately set to work.

]]> VSA Capital Market Movers - Independent Oil & Gas PLC Tue, 21 Mar 2017 08:49:00 +0000 Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (IOG) have made the following board changes.

• Andrew Hockey joins the board as Deputy Chief Executive. He has 35 years’ experience in the oil and gas industry most recently with Fairfield Energy and Sound Energy. He also led the early development of Clipper South, a successful SNS producing gas field which is analogous to IOG’s Vulcan satellites development.

• Hywel John joins the board as Chief Financial Officer. He was previously CEO of Bayfield Energy, CFO of Candax Energy and senior executive at Burren Energy.

• The Right Honourable Charles Hendry appointed Non-Executive Director as a nominee of the Company’s major stakeholder, London Oil & Gas Limited, a major investor in IOG. Minister of State for Energy between May 2010 and September 2012.

• David Peattie resigns from the Board, with immediate effect, as a consequence of his appointment as Chief Executive of the Nuclear Decommissioning Authority.

• Mark Routh, IOG’s Chief Executive Officer, is appointed Chairman on an interim basis.

• Peter Young leaves the board and takes up a new role as Head of Business Origination. He has a strong track record in business origination, M&A and Finance.

• Graham Cox joins as SNS Project Manager. Previously he was project manager on the Clipper South Development.

]]> Housebuilder Bellway posts robust rise in first-half profits, says “ongoing customer demand is strong” Tue, 21 Mar 2017 08:35:00 +0000 Caledonia Mining achieves record fourth quarter gold production Tue, 21 Mar 2017 08:33:00 +0000 Caledonia Mining's Mark Learmonth delighted with record production Tue, 21 Mar 2017 08:14:00 +0000 Caledonia Mining Corporation's chief financial officer Mark Learmonth speaks to Proactive Investors about the company achieving  record gold production in the fourth quarter,  which was driven by output at its Blanket mine in Zimbabwe.

]]> Rainbow Rare Earths underway and set for sales to Thyssenkrupp by year end Tue, 21 Mar 2017 07:48:00 +0000 Cape Lambert investors can look forward to 'dividends and a lack of dilution' says Tony Sage Mon, 20 Mar 2017 21:00:00 +0000 Tony Sage, executive chairman for Cape Lambert Resources, speaks with Proactive Investors.

]]> Goldplat's Gerard Kisbey-Green 'very pleased with flexible new loan facility' Mon, 20 Mar 2017 11:21:00 +0000 Gerard Kisbey-Green, chief executive of the African gold producer Goldplat plc (LON:GDP) talks to Proactive about their new US$2mln loan facility which will be used to restructure their balance sheet and fund plant expansion at the Kilimapesa mine in Kenya.

]]> Mkango shares could hit 6p, but wait for them to close above this number Mon, 20 Mar 2017 09:15:00 +0000 Technical analyst Zak Mir is tipping the Mkango Resources Ltd (LON:MKA) share price to add another 50% so, but thinks investors should wait for a weekly close above 4p before piling in.

“We’ve got a notional rising trend channel here since the summer of last year,” explains Mir in the latest Proactive Investors Bulletin Board.

“The good news is that there’s plenty of support at the floor of the channel towards 3p, not so good is that way we’ve had tough resistance at the 4p level.

“If you’re cautious on the stock you want to see 4p broken, ideally on a weekly close basis, before targeting the top of the channel at 6p plus.”

]]> VSA Capital Market Movers - Goldplat plc Mon, 20 Mar 2017 08:09:00 +0000 Goldplat (LON:GDP)

GDP announced on Friday that it has secured a US$2m loan facility from Scipion Capital. The facility is available for 360 days from first draw down and is repayable monthly while annual interest is set at LIBOR plus 9.5%. We expect the expansion at Kilimapesa and consequent profits to be the primary source of loan repayments.

Since GDP funded the expansion at Kilimapesa through internally generated cash the loan will improve the working capital position of the operating subsidiaries in Ghana and South Africa strengthening the company’s negotiating position as it procures new by product material. This will also be beneficial for GDP’s push into South America since upfront cash typically improves the contracts’ terms. Secondly, we believe that the addition of a modest level of debt positively enhances GDP’s capital structure and have reduced our WACC from 8% to 7.6%.

To read our flashnote on the announcement please click here.

We reiterate our Buy recommendation and increased our target price by 9% to 12.2p/sh.

]]> Yellen's dovish tone leads gold buyers back into market, reckons Ford Fri, 17 Mar 2017 15:15:00 +0000 Mining Capital's Alastair Ford mulls over the behaviour of the gold price recently in the light of the Fed's small US interest rate rise.
Normally, theoretically, it would be expected that a rate rise would mean lower gold prices, but the increase had been very well trailed in the market, notes Ford.
"So I think any selling  was that likely to happen was already in the market," said Ford, adding that Yellen's commentary was slightly more dovish than many commentators had expected.
"This led the gold buyers back into the market somewhat. They were expecting perhaps a slightly more aggressive programme of interest rate rises," he told Proactive's  Andrew Scott.

]]> Janet Yellen is already feeling the force of Trumponomics, and gold is responding Fri, 17 Mar 2017 14:22:00 +0000 'This is the start of a Scottish gold mining industry', says Scotgold's Richard Gray Fri, 17 Mar 2017 12:10:00 +0000 Scotgold Resources Limited (LON:SGZ) chief executive Richard Gray tells Proactive that an update to the bankable feasibility study at their Cononish gold mine has added “significant value” to the project.

The original BFS, completed back in August 2015, suggested a pre-tax net present value of £23mln although that has now been significantly increased to £43mln.

]]> Berkeley Energia's Paul Atherley talks 'very exciting' Zona 7 drilling results at Salamanca Fri, 17 Mar 2017 12:05:00 +0000 Uranium mine developer Berkeley Energia Limited (LON:BKY) has unveiled “outstanding” results from the latest drilling on the Zona 7 portion of its Salamanca Project.

Managing Director Paul Atherley runs Proactive through the latest work they've done on the near-surface deposit which has uncovered a 12-metre section of triuranium octoxide (U3O8) at 1,003 parts per million (ppm), including one-metre at 2,464 parts per million.

]]> VSA Morning Flow Test - Range Resources Ltd, Tullow Oil plc Fri, 17 Mar 2017 09:02:00 +0000 Tullow Oil (LON:TLW)

Tullow Oil (TLW) have announced this morning a fully underwritten rights issue to raise approximately £607m through a 25 for 49 rights issue of c467m new shares at a price of 130p per share.

This represents a discount of c45% and c35% to the current share price and TERP respectively. This will allow TLW to lower its gearing ratio to a level it is more comfortable at, its aim is for less than 2.5x net debt/EBITDAX, which had grown to 5.1x at 31 December 2016. Reducing its level of debt will allow TLW to improve both its operational and financial flexibility which will enable it to grow the company in the next 3 to 5 years.

One of the stated use of proceeds made by TLW this morning is to “drill high impact, potentially high return prospects across Tullow's African and South American portfolio”. Therefore, we view this to be particularly positive for TLW’s partners across its licences, in particular Eco (Atlantic) Oil & Gas (ECO)# which has a 40% working interest in the TLW operated Orinduik Block in Guyana, adjacent to the giant Liza and Payara discoveries made by ExxonMobil (XOM). TLW and ECO are about to conduct a 3D seismic survey over the Orinduik Block, which TLW estimates to contain prospective resources of 900mmboe, to refine the targets and scope out new leads. The fact that TLW have stated it plans to drill in the next 3-5 years across this portfolio is extremely positive and is ahead of our estimates.

ECO is also a partner with TLW in Namibia where TLW is contingently carrying ECO for the costs of one well on the Cooper Block. We, therefore, re-iterate our BUY recommendation and 25p TP on ECO.

Range Resources (LON:RRL)

We also note this morning Range Resources (RRL) positive set of interim results for the six months ended 31 December 2016. Operationally production was unchanged for the period at 495bopd compared to the six months prior. An independent reserves audit showed 2P reserves increased to 24.4mmboe and water injection has been ongoing on two waterflood projects, with production commencing on one of these as a result.

Financially, revenues had increased by 38% YoY to US$3.8m (H2 16: US$2.8m) largely due to higher oil prices. Whilst operating expenses improved 9% YoY to US$40/bbl. RRL also has a strong cash position of US$20.6m (H2 16: US$13m) with no debt repayments due in the next 15 months.

We view this as positive read across for LGO Energy (LGO)#  which following the restructuring of its balance sheet in December 2016 now appears to have turned the corner and preserved its reputation as an operator in Trinidad. It is now refocusing its efforts on the Goudron Field development plan, including its own water injection programme. We maintain our BUY recommendation and 22p TP on LGO.

]]> VSA Capital Market Movers - Metal Tiger, MOD Resources Fri, 17 Mar 2017 08:48:00 +0000 Metal Tiger (LON:MTR)

MTR’s JV partner MOD Resources (ASX:MOD) has announced that it has raised gross proceeds of A$14.6m in a share placement. The funds were raised at a price of A$0.062, a discount of 2.2% to the 15 day VWAP, with 235.42m new ordinary shares issued.

MTR holds a 30% interest at the project level, which is naturally unaffected by the placing. However, MTR additionally holds shares in MOD which at the last announcement were equal to 5.0% of the outstanding share capital. We now estimate that MTR’s holding in MOD shares is equivalent to 4.4%.

The T3 project in Botswana is one of the most attractive developing copper projects globally and we believe that MTR continues to offer investors attractive exposure to its development as well as the robust outlook for copper prices.

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

]]> Wolf Minerals' Russell Clark hails changes to Drakelands planning permission Thu, 16 Mar 2017 16:03:00 +0000 Russell Clark, executive managing director at Wolf Minerals Ltd (LON:WLFE) tells Proactive they're expecting performance at their Drakelands mine to improve as they drill through into harder granite deeper below the surface.

In the six months to December, the processing plant treated 968,000 tonnes of ore and produced 55,200 metric tonne units (mtu) of tungsten concentrate, with problems with the kiln also affecting output.

]]> Resumption of oxidation hub construction 'vital' for Petropavlovsk Thu, 16 Mar 2017 11:25:00 +0000 Peter Hambro, chairman of Petropavlovsk PLC (LON:POG) speaks to Proactive following the resumption of construction activities on the gold producers pressure oxidation hub at the Pokrovskiy mine in Russia’s Far East.

]]> Thor Mining's Billing hails recent drill findings at Pilot Mountain, Nevada Thu, 16 Mar 2017 11:08:00 +0000 Mick Billing, Thor Mining's (LON:THR) chairman, runs us through recent drill findings from the Pilot Mountain tungsten project in Nevada, USA, where the highlight was a 51 metre intersection.
At the Desert Scheelite portion, where there is an existing resource of around 6.5million tonnes,  Billing noted there was a historical assay of about 17 metres of good copper, good zinc, very good tungsten and a bit of silver.
"We wanted to make sure that wasn't just an isolated pod of mineralisation but there  was some continuity," said Billing, explaining the rationale for  recent holes.
"If you are looking for 17 (metres) and you get 50,  you've got to be happy, and we are.," he explained.

]]> Petropavlovsk has “major” support at 5p, says Zak Mir Thu, 16 Mar 2017 09:10:00 +0000 Leading technical analyst Zak Mir tells the Proactive Investors Bulletin that although Petropavlovsk PLC (LON:POG)shares have fallen this month, there is still major support for them at 5p.

“Recent weeks have not been great for the shares [which] have dipped over the course of March to date, but there is support towards the 5p to 5.5p level and that is major support from the latter part of last year.”

]]> Pickstone-Peerless 'continuing to deliver impressive results' says CEO Roy Pitchford Wed, 15 Mar 2017 11:49:00 +0000 Roy Pitchford, chief executive of Vast Resources PLC (LON:VAST) tells Proactive they're expecting to process the first sulphide ore at a new processing plant at Pickstone-Peerless in Zimbabwe on schedule in the third quarter.

The upgrade will result in a 100% increase in installed primary milling capacity to 40,000 tonnes per month at the gold mine, while grade is predicted to rise from 2 g/t to between 3 g/t and 4 g/t over nine months.

]]> VSA Capital Market Movers - Millennial Lithium, Polymetal International Wed, 15 Mar 2017 08:35:00 +0000 Millennial Lithium (CVE:ML)

ML has announced key changes to its fundraising which is currently underway as well as an update on the Cauchari East project. Following the appointment of Montgomery and Associates, a hydrogeological consultancy, it has been determined that the cost of the next phase of development is likely to be lower due to be reduced drilling costs and necessary drilling frequency.

This will enable any funds raised in the current raise to be used more efficiently; however, ML has announced that at this time it will scale back the planned fundraising from C$8.7m to C$5.65m with a new subscription price of C$1.25 versus the previous C$1.35 which represents a 9% discount to the last close. ML will not be accepting further subscriptions in this raise.

At Cauchari East, ML has begun a ground geophysics programme consisting of a Vertical Electrical Soundings (VES) survey. This will comprise seven profiles of the two blocks and will detect soil layering, the top of the bedrock, groundwater table and salt water intrusions with the last two key for identifying subsurface brines.

We reiterate our Speculative Buy recommendation

Polymetal (LON:POLY)

POLY has announced robust results for 2016 with revenues up 10% YoY to US$1.6bn as gold prices were up 8% YoY. Gold equivalent production of 1.27mnoz was marginally ahead of guidance while gold production of 890koz was up 3% YoY offset by lower silver production which was down 9% YoY to 29.2mnoz.

EBITDA of US$759m was up 15% YoY primarily reflecting the stronger top line as cash costs on a gold equivalent basis were up 6% YoY to US$570/oz, at the upper end of the guidance range. AISC of US$776/oz were also up 6% YoY. The outlook for next year is for a modest increase in production to around 1.4-1.55mnoz gold equivalent although unit costs are expected to rise to US$600-650/oz and US$775-825/oz on an AISC basis.

POLY announced the dividend for 2016 of US$0.42/sh. for the full year which was down 18% YoY.

]]> Lionsgold CEO Cameron Parry hails 'significantly positive and strong' Jonnagiri resource upgrade Tue, 14 Mar 2017 15:46:00 +0000 Lionsgold Limited (LON:LION) has seen a substantial upgrade to the resource quality at its Jonnagiri gold project in India.

The AIM-listed company has a 20.5% stake in Geomysore Services, the company that owns the 30 year mining lease, and a sizeable quantity of the material at the deposit has moved to the more certain indicated category from inferred.

CEO Cameron Parry says early test drilling results from the new South Block at Jonnagiri are particularly encouraging and plans are being made for further drilling on the South Block to establish an additional open pittable gold resource.

]]> Cobre deal could be a 'game-changer' for Strategic Minerals, says John Peters Tue, 14 Mar 2017 12:56:00 +0000 Strategic Minerals PLC (LON:SML) has potentially picked up a substantial new customer for its iron ore tailings business, Cobre, in New Mexico.

Before the contract becomes effective, Galvin Investment Company (GIC) must provide a US$100,000 Letter of Credit from an acceptable bank.

Managing Director John Peters tells Proactive he's treading with some caution until the full contract is signed.

]]> This one trigger could see Antofagasta shares head towards a tenner Tue, 14 Mar 2017 09:15:00 +0000 Technical analyst Zak Mir reckons the Antofagasta PLC (LON:ANTO) share price could head towards  a tenner if it can close above the 50-day moving average.

“There’s plenty of momentum here. Probably all we’re waiting for now from a technical perspective is an end-of-day close back above the 50-day moving average at 798p,” explains Mir.

“[That would] give us a target at the top of the autumn 2016 price channel at £9.80 over the next couple of months.”

]]> VSA Capital Market Movers - Antofagasta Plc, Polymetal International, Sula Iron and Gold PLC Tue, 14 Mar 2017 08:41:00 +0000 Sula Iron and Gold (LON:SULA)

SULA has conditionally placed 128.6m shares priced at 0.4p and raised £0.5m for general working capital purposes and drilling expenses on the Ferensola project and other potential regional programs.

Shares were placed with a select list of targeted existing investors and a strategic long term Asian investor. Trading of the new shares will take place on 17 March. VSA Capital acted as broker on the fundraising. Total shares in issue will amount to 2,214m.

Antofagasta (LON:ANTO)

Year end results for ANTO showed an EBITDA rise of 78.7% to US$1,626m. Operating cashflow rose 70% to US$1,457m. CAPEX fell 24% to US$795m. Earnings per share after exceptional items and discontinued operations fell to just US$0.16/share. A final dividend of US$0.153/share was declared versus none last year.

Forward guidance is for a rise in capex to US$900m but copper output to stay as previously forecast at 685,000 – 720,000t copper metal.

Polymetal (LON:POLY)

POLY has updated JORC reserves and resources after a year of exploration and mine production. Reserves down 5% to 19.8mozs Au EQ. Resources up 29% to 16.5mozs Au Eq due to two project acquisitions and first resources calculated for Levoberzhny and Lichkvaz.

Total resources including reserves rose to 36.4mozs. These results are based on US$1200Au/oz and US$16Ag/oz. Drilling meters of 324km are represented from this past year. POLY is holding an Investor Day tomorrow.

]]> Argosy Minerals taking advantage of lower cost Lithium Brines in Argentina Mon, 13 Mar 2017 12:24:00 +0000 Jervo Zuvela, managing director of Argosy Minerals (ASX:AGY) runs Proactive's Andrew Scott through the company's Rincon lithium joint venture in South America as well as their other assets and plans for 2017

]]> Amur Minerals share price ‘unlikely to drop below 6p’, says Zak Mir Mon, 13 Mar 2017 09:15:00 +0000 Leading technical analyst Zak Mir reckons the Amur Minerals Corporation (LON:AMC) share price is unlikely to drop below 6p and expects it to head towards 10p over the coming weeks.

“It’s interesting from a technical perspective in that we’ve had a rebound last week off the 200-day moving average at 6.28p,” explains Mir in the latest Proactive Investors Bulletin Board.

“That’s a decent technical signal and underlines the idea that there’s a rising trend channel and that it’s unlikely shares will fall much below the 6p.

As for what the future holds, Mir adds: “While we’re above the 200-day moving line we’re looking for at least a partial retest of the former 50-day moving average area at 10.65p over the next one to two months.” 

]]> VSA Capital Market Movers - LGO Energy PLC Mon, 13 Mar 2017 08:38:00 +0000 LGO Energy (LON:LGO)

LGO Energy (LON:LGO) have announced that its first well (GY-682) in its development programme over the Goudron Field has been completed, reaching a total depth of 1,145ft. Electric log interpretation of the Mayaro Sandstone interval confirmed the presence of oil over an estimated net reservoir thickness of 408ft. LGO have now decided to perforate and place on production the 273ft with the best net oil pay within the reservoir.

This is the first well of a planned 45 well programme targeting 2P reserves of 11.8mmbbls. The next well in the programme will be spud shortly with each well planned to cost cUS$500k and come on to production with initial rates of 45bopd.

We re-iterate our BUY recommendation and 22p TP

]]> Trump v Yellen: what next for gold and the US dollar? Fri, 10 Mar 2017 14:04:00 +0000 Kodal Minerals booms, but Zak Mir thinks there’s more to come Fri, 10 Mar 2017 12:35:00 +0000 Shares in Kodal Minerals PLC (LON:KOD) have added almost 50% today (Friday), but technical analyst Zak Mir is tipping the stock to rise even further and test last year’s highs.

“We’ve bounced off the former September resistance at 0.2p and have gapped through the 50-day moving average at 0.32p,” says Mir in the latest Proactive Investors Bulletin Board segment.

“If we close somewhere around here today as an end-of-week close, we’d be looking for the shares to retest the best levels of 2017 to date, above 0.5p.”

]]> Amur Minerals Corp looking to bolster resource at Kun-Manie Fri, 10 Mar 2017 11:31:00 +0000 Robin Young, chief executive of Amur Minerals Corporation PLC (LON:AMC), talks us through its plans to drill two new targets at the Kun-Manie nickel prospect in Russia.
A total of 15,000 metres of in-fill and step out holes are planned, though Amur has enough supplies in place to drill 20,000m.

]]> VSA Capital Market Movers - Egdon Resources Plc Fri, 10 Mar 2017 09:15:00 +0000 Ineos/UK Shale Gas

Ineos announced yesterday it has acquired the entirety of Engie’s (ENGI FP) British shale gas interests spanning over 15 licences, including seven of which Ineos had a previous position in, for an undisclosed sum. This reaffirms Ineos’ position as the largest UK shale gas company which now has access to an area of more than 1.2 million acres.

We view this as a positive deal for the UK shale gas industry as a whole as ENGI’s core focus moves towards power generation and consumer energy as opposed to oil and gas production, whereas Ineos is the key player in UK shale gas, with the deal coming at a time when UK shale is beginning to gather momentum.

We view Egdon Resources (LON:EDR) as an attractive way for investors to gain exposure to UK shale gas and have a BUY recommendation and 34p TP on the stock. EDR has an assessment of its undiscovered mean gas initially in place (GIIP) of 48TCF over 200,190 net acres.

]]> Copper tailings project excites on a number of fronts, says Jubilee Platinum boss Thu, 09 Mar 2017 13:31:00 +0000 Chief executive of Jubilee Platinum (LON:JLP) Leon Coetzer walks us through the rationale behind securing  a surface copper tailings project in Australia.
He said it met a number of the firm's criteria. Fiirstly, that it was a surface project, secondly that it required metallurgical expertise to unlock the copper, that the capital entry level was quite low and that the the timeline between starting investing and earning from the property  was quite short.
"We found this project, which excited us on a number of fronts," he said.

]]> VSA Capital Market Movers - LGO Energy PLC Thu, 09 Mar 2017 10:15:00 +0000 LGO Energy - Turning the Corner

Following the restructuring of its balance sheet in December 2016 and the 20 for 1 share consolidation in early March, LGO Energy (LON:LGO) now appears to have turned the corner and preserved its reputation as an operator in Trinidad. It is now refocusing its efforts on the Goudron Field development plan and looking to capitalise on its acreage position in the South West Peninsula.

Goudron Field Development Underway                                      

Following the completion of its refinancing with Lind Partners in December 2016, LGO was able to repay its senior loan facility with BNP Paribas allowing it to access previously restricted funds in Trinidadian dollars and begin the drilling of infill production wells in the Mayaro Sandstone formation of the Goudron Field, which is estimated to contain 2P reserves of 11.8mmbbls. Despite the challenges it faced LGO maintained production from the Goudron field through 2016, averaging 425bbls/d.

LGO has now mobilised a rig to begin drilling the first two wells of a planned 10 well shallow programme as it begins to ramp up production, with the cash flow from each well contributing to the remainder of the programme.

LGO also plans a full field enhanced oil recovery waterflood development at Goudron targeting over 60mmbbls of independently verified 3C resources. A low cost waterflood pilot programme, using wells already drilled, should be underway later this year.

South West Peninsula Offers Additional Value

Further to its development programme at Goudron, LGO has significant potential to add material upside from exploration in its South West Peninsula leases. Given Trinidad’s history as a prolific petroleum province we view this as a particularly exciting area with reduced geological risk.

Recommendation and Target Price

We initiate coverage on LGO with a BUY recommendation and 22p target price, in line with our risked NAV using 12% WACC and a US$50/bbl flat long-term oil price.

]]> Thor Mining CEO says medium-sized company status achievable Wed, 08 Mar 2017 14:41:00 +0000 Thor Mining PLC's (LON:THR) Mick Billing tells Proactive's Sarah Lowther he can't keep the smile off his face after hitting 51 metres of mineralisation in the second of two holes drilled at the tungsten deposit in Nevada.

The chief executive of the exploration and development company says the objective is "taking a couple of quite tidy projects into production over the next two to three years, and with that we think we can become a medium sized company hopefully relatively quickly."

]]> VSA Capital Market Movers - REDT Energy Wed, 08 Mar 2017 09:26:00 +0000 redT energy (LON:RED) has developed a machine based on vanadium redox flow battery technology for deployment in the commercial and industrial energy storage sector. Unlike the majority of its flow battery peers, RED’s machines have already been deployed in a number of field test environments with first commercial sales occurring at the end of 2016. 

Developing into a Forecasted Multi-Billion Market

Demand for stationary energy storage is set to rapidly increase. Although market estimates and definitions of the market itself vary wildly, most forecasters agree that the sector will be a multi-billion one by 2020. Given its highly reliable, low cost product and strategic cost reduction plan, RED appears well placed to gain significant market share in this sector.

Low Cost Product with Cost Reduction Schedule

We believe RED’s flow battery is currently the lowest cost commercially sold product in the sector. RED currently manufactures its cheapest second generation product at US$496/kWh and it has a specific technology development programme in place (no blue-sky R&D) to drive this below US$300/KWh by the end of 2018.

£14.9m Financing to Accelerate Roll-Out

In December 2016 RED closed a £12.0m placing and £2.9m open offer. The majority of new funds raised (c£8m) will be used to for sales, operations and working capital over the next two years to accelerate pipeline delivery (current pipeline c2,608 units, cUS$263m revenues).

Additional monies (£4m) will be deployed in the development of its third and fourth generation products, with the balance to be used for electrolyte working capital (£2.2m) and fees.

Recommendation and Target Price

We begin coverage on RED with a BUY rating and a target price of 22p.

]]> VSA Capital Market Movers - Metal Tiger Mon, 06 Mar 2017 12:30:00 +0000 Metal Tiger (LON:MTR)

Metal tiger (LON:MTR)# has announced positive assay results, following the discovery of significant mineralisation at greater depth than the T3 resource in Botswana. MTR holds an effective 30% stake in the JV with MOD Resources (ASX:MOD) on this copper project in Botswana.

The hole highlighted in the previous announcement MO 65D which had intercepted 72.6m of mineralisation was determined to have a grade of 1.5% copper and 27g/t silver including 18m at 2.7% copper and 52g/t silver. This mineralisation is therefore of significance and confirms the project potential to 100m below the current T3 resource sequence. Furthermore, infill drilling confirmed T3 resource continuity with 22.2m at 1.6% copper and 26g/t from 163m depth.

We previously indicated that we believed that the initial resource and our analysis of the PEA, which resulted in a mine life of nine years and an NPV of US$170m on a 100% basis, was very much a starting point. With four drill rigs currently on site conducting further infill drilling, the confirmation of strong continuity of mineralisation could enhance the existing resource and the potential mine economics.

We reiterate our buy and 5.68p target price.


]]> '2017 will be a very busy year' says European Metals boss Keith Coughlan Mon, 06 Mar 2017 10:55:00 +0000 Keith Coughlan, managing director of European Metals Holdings Limited (LON:EMH) (ASX:EMH) brings Proactive's Andrew Scott up to speed on the latest at the company's Cinovec project in the Czech Republic.

''We're a month out from finishing our pre-feasibility study ... at that point we’ll be able to show hard numbers. The key things will be the net present value, the capital expenditure and the operating costs.”

]]> 'We've injected a lot of energy and commitment to the company' says Sula's Roger Murphy Fri, 03 Mar 2017 16:01:00 +0000 Roger Murphy, chief executive of Sula Iron & Gold PLC (LON:SULA) talks to Proactive on the back of the release of the company's full year results to the end of September - as well as looks ahead to the  start of drilling at Sanama Hill later this month.

]]> Chinese economic policy begins to mature as US anxiety feeds in on itself Fri, 03 Mar 2017 15:16:00 +0000 Will the latest commodity upswing signal renewed Chinese interest? Fri, 03 Mar 2017 10:28:00 +0000 Mining Capital's Alastair Ford tells Proactive he reckons as the latest commodity cycle begins to head north again, Chinese investors will begin to come into the market again, like last time.
It comes after metals explorer ECR Minerals PLC (LON:ECR) this week revealed Shenyang Xinliaoan Machinery Co has agreed to subscribe for a 29.9% stake in the firm.
"In the last mining boom, a lot of scepticism arose about how easy it was to do business with the Chinese," says Ford, who added perhaps this was a small indication east and west had got to know each other better in the intervening period.

]]> Randgold can push back towards £90, says Zak Mir Fri, 03 Mar 2017 09:45:00 +0000 It may have kicked off lower this morning, but the Randgold Resources Limited (LON:RRS) share price can hit the dizzy heights of £90 again, so says Zak Mir.

“The current situation looking quite encouraging again with a gap through the 200-day moving average at the beginning of February, and consolidation above that [since],” the technical analyst says.

“While we’re above the 50-day moving average and the floor of this rising trend channel from September at £69, the target here is as great as £90 at the October resistance line.”

]]> Can Pan African add 50% to its share price? Fri, 03 Mar 2017 09:35:00 +0000 Zak Mir thinks so. The technical analyst is tipping the Pan African Resources plc (LON:PAF) share price to retest last year’s resistance of 25p over the coming months.

 “We’re back on the front foot in terms of price action. We’re in a rising trend channel which has been in place since the end of 2015, with support just near the 50-day moving average at 15.9p,” Mir explains in the latest Proactive Investors Bulletin Board.

“While we hold that 15p zone which has been in place for the past couple of months we’re looking for shares to retest last year’s resistance in the 25p zone.” 

]]> VSA Capital Market Movers - Sula Iron and Gold PLC Fri, 03 Mar 2017 08:39:00 +0000 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced full year results for the year ended September 2016. The operating loss of £1.8m was in line with the prior year while cash at the end of the period was £100k. Since the period end there have, however, been significant changes to SULA with a new management team put in place along with an injection of a total of approximately £1.8m including the contribution by Madini, SULA’s new strategic partner. Since the period end, the shares have rallied 369%.

In 2016 SULA changed its focus towards the gold mineralisation within its tenements; initially at Sanama Hill. A successful drilling campaign which followed the reinterpretation of historical data confirmed the presence of significant gold mineralisation on which a JORC Exploration Target of 5-7mnt at 4-8g/t which implies 0.8-1.5mnoz had been defined. Subsequently SULA carried out IP surveys and with the receipt of funds, post period end, the data was released which demonstrated 8.5kms of targets with the same geophysical signature as the Sanama Hill deposit.

The drilling programme on which SULA announced that the two drill rigs had arrived on site this week is primarily focused on these geophysical anomalies known as the Eastern Target. SULA now intends to carry out over 2,400m of drilling.

We reiterate our Speculative Buy Recommendation and 1.7p/sh. target price.

]]> Pozzolan test samples 'very encouraging' says Sunrise Resources' Patrick Cheetham Thu, 02 Mar 2017 14:43:00 +0000 Patrick Cheetham, executive chairman of Sunrise Resources Plc (LON:SRES) tells Proactive they're to broaden test work at their pozzolan project in Nevada to include possible perlite production.

Perlite is used as an insulator in paint, plaster, concrete fillers and in soil aeration with its main characteristic that it expands hugely when heated.

]]> 'A big day for Strategic Minerals' with drills poised to hit the ground at Redmoor Thu, 02 Mar 2017 14:16:00 +0000 Peter Wale, director at Strategic Minerals PLC (LON:SML) tells Proactive they're ready to go with their first drilling programme at Redmoor in Cornwall.

Energold Drilling will drill 13 holes in the first phase to be followed by a second phase of 10 additional holes. There is provision for a further six holes subject to additional planning and land owner approvals.

]]> Pilot Mountain tungsten project potentially a 'game changer' for Thor Mining Thu, 02 Mar 2017 11:50:00 +0000 Mick Billing, executive chairman of Thor Mining PLC (LON:THR, ASX:THR), talks to Proactive about their drilling campaign designed to expand the tungsten resource at its Pilot Mountain tungsten project in Nevada.

The Pilot Mountain Project comprises four tungsten deposits: Desert Scheelite, Gunmetal, Garnet and Good Hope.

]]> CanAlaska Uranium boss sees "huge opportunity" for speculators in current market Thu, 02 Mar 2017 11:31:00 +0000 Peter Dasler, president and chief executive of CanAlaska Uranium (CVE:CVV), talks over the recent busy period for the firm, which has seen a pick-up in the uranium market.
The firm holds interests in around 1.2 million acres -  one of the largest land positions in Canada's Athabasca Basin region.
"We see a demand out there from the buildout of nuclear power plants and we see there's a huge opportunity for speculators in this market," he tells Proactive.

]]> Operations in Romania and Zimbabwe back to normal, says Vast Resources chief Wed, 01 Mar 2017 11:32:00 +0000 Operations are back to normal and "progressing nicely", Roy Pitchford of VAST Resources plc (LON:VAST) told Proactive's Andrew Scott after bad weather in Romania and Zimbabwe.
The chief executive also discussed the latest on the subscription and loan deal struck with Bracknor Fund for US$2mln last October, which has now come to an end after the latter exercised 37.5mn warrants
"This is the end of our dealings with Bracknor. There are no further warrants outstanding to Bracknor,” he said.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC Wed, 01 Mar 2017 08:52:00 +0000 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced that the two diamond drill rigs required for the upcoming programme have now arrived on site at Dalakuru exploration camp. The original target was to drill 2,400m, however, since the contractor Equity Drilling has agreed to take a portion of payment in equity, this has freed up cash to pay for additional drilling beyond the original target. We expect the drilling programme to result in the announcement of a JORC Exploration Target.

We reiterate our Speculative Buy recommendation and target price of 1.7p/sh.

]]> ECR Minerals' partnering up with Chinese investors 'a positive development' says CEO Craig Brown Tue, 28 Feb 2017 15:31:00 +0000 Craig Brown, the chief executive of ECR Minerals PLC (LON:ECR), talks to Proactive following the announcement that Shenyang Xinliaoan Machinery Co has agreed to subscribe for a 29.9% shareholding in the company at a price of 1p per share.

Brown also discussed the wider strategy for ECR Minerals and plans for the company's assets in Australia, Argentina and the Philippines.

]]> Savannah Resources identifies 'very exciting high grade portions' at Matumba Tue, 28 Feb 2017 14:20:00 +0000 David Archer, managing director at Savannah Resources Plc (LON:SAV) tells Proactive they're encouraged by exploration at both of their flagship projects.

At the Matumba mineral sands joint venture in Mozambique, drilling has confirmed a second high grade mineralisation zone at Ravene.

Meanwhile in Oman, electromagnetic surveys have indicated potential extensions at depth to the massive sulphide copper mineralisation at the Lasail and Mahab 4 targets.

]]> Strategic Minerals' John Peters 'extremely encouraged' with Hanns Camp Cobalt readings Tue, 28 Feb 2017 11:21:00 +0000 John Peters, chief executive of Strategic Minerals (LON:SML) tells Proactive they've reported a high cobalt content in re-worked assays at its Hanns Camp licence in Australia.

]]> Harvest Minerals chairman 'really pleased' with significantly upgraded Arapua resource Mon, 27 Feb 2017 12:48:00 +0000 Harvest Minerals Limited (LON:HMI) chairman Brian McMaster runs Proactive through their updated and significantly upgraded resource on the Arapuá Fertilizer Project in Brazil.

The higher-confidence indicated resource rises 37% to a JORC-compliant 1.2mln tonnes at a grade of 4.4% potassium oxide (K2O) and 3.45% phosphorus pentoxide (P2O5).

]]> Mexico producer Endeavour Silver turning the focus to growth Mon, 27 Feb 2017 08:37:00 +0000 Brad Cooke, chief executive of  Endeavour Silver Corp (TSX: EDR, NYSE:EXK) walks Proactive through the Mexico focused metals producer.
Last year the miner produced just shy of 10mln ounces of silver and equivalents and is on track to repeat that this year.
As well as its three high grade producing mines, it has three development projects, two of which are subject to economic studies in the next 30 days so that production decisions can be made so the group can refocus on growth.

]]> President Trump one month in: gold range-bound, Europe still edgy Sun, 26 Feb 2017 09:30:00 +0000 Danakali's MD Paul Donaldson talks to Proactive Investors TV Thu, 23 Feb 2017 23:00:00 +0000 Danakali (ASX:DNK) remains focused on the world-class, tier 1 asset, the Colluli Potash Project in Eritrea.

The company holds a 50% equity interest through a joint venture with the Eritrean National Mining Company.

Colluli is one of the most advanced greenfield sulphate of potash (SOP) developments in the world.

]]> Ferrum Crescent hitting 'very healthy' zinc grades at Toral in Spain Thu, 23 Feb 2017 14:36:00 +0000 Ferrum Crescent Ltd's (LON:FCR) senior project manager Merlin Marr-Johnson updates Proactive on developments at the company's Toral project in Spain.

They’ve reported more good zinc grades from early stage development work and are now looking to move on to a small shallow drilling programme to target mineralised zones within 200 metres of the surface to further prove up the potential.

]]> 'We're really bringing this project along' says Asiamet's Steve Hughes Thu, 23 Feb 2017 10:43:00 +0000 Asiamet Resources Limited's (LON:ARS) vice president of exploration Steve Hughes talks to Proactive about recent analysis that's been carried out on historic data for the area around its BKM copper deposit in Indonesia.

It looked at a three-kilometre radius and assessed three targets - Beruang Kanan West (BKW), Beruang Kanan South (BKS) and the BKZ polymetallic prospects (BKZ).

]]> VSA Capital Market Movers - Millennial Lithium, Glencore and KAZ Minerals Thu, 23 Feb 2017 08:29:00 +0000 Millennial Lithium (CVE:ML)
Millennial Lithium has announced that it intends to complete an equity placing of C$8.7m at a price of C$1.45 per share (6m shares), a discount of 4% to the last close. For each share purchased investors will receive one half common share purchase warrant. This will entitle the holder to purchase one common share a t a price of C$1.9 for a period of 24 months from the closing date.

Proceeds will be used to advance the Pastos Grandes project, in Argentina, particularly drilling and process and evaporation trials engineering as well as working capital. ML indicates that the full placement would enable a PEA to be completed.

Please click here for our recent initiation.

We reiterate our Speculative Buy recommendation.

Glencore (LON:GLEN)
Glencore has announced modestly improved results for 2016. Revenues of US$153bn were up 4% YoY while adjusted EBITDA of US$10.3bn was up 18% YoY. EBITDA for energy products and agricultural products were down 20% and 19% YoY to US$1.5bn and US$138m respectively. This was despite the recovery in oil prices. However, the recovery in metals prices meant that the improvement in EBITDA in the metals division of 43% YoY to US$6bn more than offset weakness in other divisions. Net income of US$1.9bn was up 48% YoY. GLEN reduced net debt by 40% YoY to US$15.5bn, below the published target, while capex was down 41% YoY to US$3.5bn. GLEN announced a dividend of US$0.07/sh.

KAZ Minerals (LON:KAZ)
KAZ Minerals  has announced strong results driven by a combination of rising copper and gold prices as well as a strong operational performance. Revenue of US$969m was up 43% YoY as copper production of 140kt was up 73% YoY and gold production of 120koz was up 245% YoY, ahead of guidance. Group net cash costs of US$0.59/lb were down 46% YoY, driven by the significant by product credit contribution. Consequently EBITDA of US$492m was up 136% YoY. Net income of US$180m reversed a loss of US$10m in the prior year. KAZ has opted to not pay a dividend given the ramp up of Aktogay and Bozshakol, which drove the increase in production, is ongoing. We note that net debt increased 18% YoY to US$2.7bn owing to continued pressures from expansionary capex. However, with the ramp ups progressing well, KAZ appears to be on track to reducing its operating leverage.

]]> VSA Capital Market Movers - Millennial Lithium Wed, 22 Feb 2017 08:40:00 +0000 Millennial Lithium (CVE:ML)
Millennial Lithium  has announced the results from the completion of a ground geophysics programme at its Cruz Property in the Salta Province, Argentina. Southern Lithium (SNL CN) has an option to acquire up to 80% of the project through the completion of certain payments, exploration funding and completion of a feasibility study.

A Transient Electromagnetic Survey (TEM) covering 20.25km2 demonstrated a continuous north-south trending conductive unit over a distance greater than 6km, the full distance of the Cruz property. In the central core of the property indications of brine are apparent from 30m and up to 250m beyond which point data becomes limited due to the highly conductive nature of the anomaly. High conductivity is often an indication of high lithium brine contents.


]]> VSA Capital Market Movers - Sula Iron & Gold, Anglo American and BHP Billiton Tue, 21 Feb 2017 14:50:00 +0000 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold has announced the issue of 9.375mn ordinary shares at an exercise price of 0.16p following the exercise of warrants. The gross proceeds raised amounted to £15k. Share capital is now 2,086mn ordinary shares.

We reiterate our Buy Recommendation and target price of 1.7p/sh.

Anglo American (LON:AAL)
Following strong production results Anglo American  has announced strong full year results. Group revenue of US$23.1bn was marginally higher at 1%. However, margins were significantly stronger owing to cost cutting and currency depreciation and EBITDA of US$6.1bn was up 25% YoY. The key segments which drove the improvement were De Beers, iron ore and coal although this was offset by modest declines in platinum and copper. Net income of US$1.6bn reversed a loss of US$5.6bn in the prior year.

AAL opted not to pay a dividend in 2016. The net debt target of US$10bn was well beaten, however, as the strong earnings combined with asset sales (US$1.8bn) and capex reduction (-37% YoY to US$2.5bn) resulted in a 34% YoY decline in net debt to US$8.5bn. AAL is targeting a further US$1bn in cost savings and is aiming to resume dividend payments by the end of 2017.

BHP Billiton (LON:BLT)
BHP Billiton  has released robust interim results as the strong recovery in bulk and base metal commodity prices offset production weakness in petroleum, copper and thermal coal. Group revenues for H1 FY 2017 were up 20% YoY to US$15.7bn driven primarily by the recovery in prices in iron ore, copper and coal. Underlying EBITDA of US$9.9bn was up 65% primarily as a result of the strong top line. EBITDA in the iron ore division was up from US$2.8bn to US$4.2bn while in copper EBITDA was up from US$0.8bn to US$1.7bn and US$0.2m to US$2bn in coal.

Net debt decreased from US$25.9bn to US$20bn owing to a 38% reduction in capex to US$2.7bn combined with the significant recovery in earnings. The final dividend of US$0.3/sh. meant that the full year dividend of US$0.4/sh. was up 150% YoY.

BLT has announced an increase in exploration spending for FY 2017 and 2018 by around US$400m.

]]> Vast Resources 'survives a few challenging months quite nicely', says CEO Roy Pitchford Tue, 21 Feb 2017 14:38:00 +0000 Roy Pitchford, chief executive of Vast Resources PLC (LON:VAST) talks to Proactive about the company's 'significant' operational improvements as part of a quarterly production summary for the period to 31 December 2016.

]]> Anglo Pacific's Julian Treger talks of 'very positive' shareholder response to uranium acquisition Tue, 21 Feb 2017 13:43:00 +0000 Julian Treger, chief executive of Anglo Pacific PLC (LON:APF TSE:TPY) talks to Proactive about the response to the company's recent acquisition of a uranium mine in northern Saskatchewan, as well as spelling out the key points of the deal that investors should focus on.

]]> Bacanora eyes up Lithium growth opportunities in Germany with new acquisition Tue, 21 Feb 2017 08:21:00 +0000 Peter Secker,  chief executive of the AIM-listed junior Bacanora (LON:BCN CVE:BCN) talks to Proactive about the company's decision to take a 50% stake in the Zinnwald lithium project in Germany.

]]> 'Our shareholders understand the incredible upside to the company' says Gemfield's Ian Harebottle Mon, 20 Feb 2017 16:25:00 +0000 Ian Harebottle, chief executive of Gemfields PLC (LON:GEM) spoke to Proactive following the release of the company's interim results.

Revenue clocked in at $51mln - down from $94mln. Harebottle says the one-off Indian demonetisation programme had affected the company's auction schedule.

However taking a longer term view the coloured gems miner has performed exceptionally.

]]> Goldplat's Kilimapesa mine 'on the verge' of profitability, says CEO Gerard Kisbey-Green Mon, 20 Feb 2017 13:42:00 +0000 Gerard Kisbey-Green, chief executive of Goldplat PLC (LON:GDP) spoke to Proactive on the back the gold recovery specialist's latest interims.

The group with operations in South Africa and Ghana posted a 238% rise in pre-tax profit to £1.33mln in the six months to December on revenues of £14.4mln.

]]> Premier African's George Roach 'encouraged' by Zulu Lithium grades Mon, 20 Feb 2017 10:18:00 +0000 George Roach, chief executive of Premier African Minerals Limited (LON:PREM) talks to Proactive about their latest batch of assays from its Zulu project in Zimbabwe.

]]> VSA Capital Market Movers - Petra Diamonds Mon, 20 Feb 2017 08:16:00 +0000 Petra Diamonds (LON:PDL)

Petra Diamonds (PDL) interim results were in line with expectations following a soft trading update. The significant increase in revenues, up 48% YoY, was largely due to the timing of sales with production in the period up 24% YoY to 2mncts. PDL is on track for full year production of 4.4-4.6mncts.  Realised price performance was mixed with changes in product mix the key driver. As expected the benefits of processing undiluted ore impacted earnings positively and along with the stronger top line this meant that EBITDA of US$87m was up, 80% YoY. This meant that net income of US$35.2m reversed a loss of US$2.2m in the prior period.

PDL has not yet opted to resume dividend payments. Capex of US$135m represents the majority of spending for FY 2017 which is expected to be lower YoY overall. Net debt, however, increased in the period from US$385m to US$464m.

]]> BAM East goes from discovery to resource in just a year, says Humphries Fri, 17 Feb 2017 15:53:00 +0000 Bill Humphries, of Canada-focused Landore Resources Limited (LON:LND) talks us through the 301,000 ounce maiden gold resource for the BAM East project at Junior Lake in Ontario.
Due to wide spaced drilling good, grade it was moved up the value chain from discovery to resource in just one year.
"The discovery cost of 5$ an ounce. Drill success rate of 36 ounces of gold per metre. This is amongst the best in the world," says Humphries.

]]> Kincora Copper boss keen to get drills turning in Mongolia within six months Fri, 17 Feb 2017 12:26:00 +0000 Sam Spring, president and chief executive of explorer Kincora Copper Ltd (CVE:KCC) tells Proactive they've resumed field activities as it looks to expand the near surface target area at its Mongolian prospects.

The company has completed analysis of two high priority drill targets: Bayan Tal, an Oyu Tolgoi-style (OT) target; and East Tsagaan Suvarga (East TS), a brownfield Tsagaan Suvarga-style (TS) target.

]]> Major miners poised to hit the acquisition trail reckons Mining Capital's Ford Fri, 17 Feb 2017 11:32:00 +0000 Mining Capital's Alastair Ford talks to Proactive's Andrew Scott about Donald Trump overturning a law preventing companies dumping coal mining debris in streams and rivers.

Ford also discusses suspicions that major miners could be tipped to hit the acquisition trail.

Citing the likes of SolGold plc (LON:SOLG) and Kincora Copper Ltd (CVE:KCC) Ford says ''straws in the wind are now appearing and value is being created on a significant scale again.''

''What’s changed is that big money is once again taking an interest''.

]]> VSA Capital Market Movers - Metal Tiger Fri, 17 Feb 2017 09:06:00 +0000 Metal Tiger (LON:MTR)

MOD Resources (MOD AU), which holds a 70/30 JV with Metal Tiger (MTR LN) has announced drill results which indicate further mineralisation at greater depth than the current T3 resource. The additional drilling has been carried out as part of the PFS work. This result confirms our view that there is potential for resource expansion at the T3 project.

Hole 64D indicated new mineralisation at depth below the current zone, this may be the source of a geophysical anomaly known to lie beneath the current resource. The core showed a 75m wide zone at a depth of around 247m. The drill core also shows that the mineralised interval sediments are folded upon themselves, suggesting that the mineralised horizon repeats, at least in some places. As the potential scope of total copper in resource is expanding MOD has mobilised another drill rig to speed up the effort to assess this new discovery. A new deep drill hole, to a depth of 600m, is intended to tes geophysical anomalies south and below the T3 resource. There are, however, no assays reported as yet and it is not yet possible to determine the grade.

We reiterate our Buy recommendation and 5.68p/sh.

]]> Xrbia aiming to become a leader in affordable, environmentally-friendly housing Thu, 16 Feb 2017 08:17:00 +0000 Rahul Nahar, chairman and managing director of privately-held Xrbia, talks to Proactive about their focus on developing affordable housing.

Nahar tells Andrew Scott that after already establishing their foothold in the domestic affordable housing market in India, they're now eyeing up opportunities in newer geographies including Africa and London.

]]> UEX Corp seeing some 'truly world class results' from Christie Lake drilling Wed, 15 Feb 2017 16:11:00 +0000 UEX Corporation (TSE:UEX) chief executive Roger Lemaitre talks Proactive through the results from the first four holes of a current campaign at the Christie Lake uranium project in Saskatchewan.

]]> Galileo Resources boss 'delighted' to kick off drilling at Concordia Wed, 15 Feb 2017 15:55:00 +0000 Colin Bird, chief executive of Galileo Resources PLC (LON:GLR) tells Proactive that drilling has kicked off at its Concordia copper project in the Northern Cape Province of South Africa.

]]> Leading Edge Materials developing today the materials of tomorrow Wed, 15 Feb 2017 15:22:00 +0000 Blair Way, the president and chief executive, of newly rebranded Leading Edge Materials Corp (CVE:LEM) walks us through the firm with assets in Sweden.
The group was formed in August last year via the merger of Tasman Metals with Flinders Resources and its main asset is the Woxna graphite mine.
The focus is developing materials in preparation for the huge explosion in demand for a greener world and  greener energy, he  explains.

]]> VSA Capital Market Movers - Eco (Atlantic) Oil & Gas Ltd Wed, 15 Feb 2017 13:57:00 +0000 Eco (Atlantic) Oil & Gas (CVE:EOG) is a junior E&P with licences in highly prospective offshore acreage in Guyana and Namibia. The prize catch on offer lies in the potential of ECO’s 40% working interest in the 1,800km Orinduik Block in Guyana, which is firmed up by ExxonMobil’s (XOM US) world class Liza and Payara discoveries on the adjacent block where recoverable resources are estimated to be up to 1.4Bboe.

In light of these significant discoveries being just a few kilometres updip of Liza, ECO and its partner Tullow Oil (TLW LN) have agreed to enhance the work programme in Guyana with TLW carrying ECO for US$1.25m on the 3D seismic survey. This will refine the targets already identified from the existing 2D seismic, which TLW estimates contain prospective resources of 900mmboe, as well as scoping out new leads. ECO is also unique in that it is currently the only AIM listed oil and gas company with exposure to Guyana.

AIM Listing Raises £5m

As part of its AIM listing ECO has raised £5.09m which will be used to advance ECO’s current work programmes including enhancing the 3D seismic data programme on the Orinduik Block, funding the acquisition of new licences as well as providing general working capital.

Carried For One Well in Namibia

In Namibia ECO has working interests across four blocks with multiple leads and is again partnered by TLW and AziNam amongst others. Whilst in Namibia, ECO is contingently carried by TLW for the full costs of one exploration well on its Cooper Block. TLW and its partners are also due to be drilling on the adjacent PEL 37, once a drillable prospect is identified, which will provide read across for ECO as well as providing a catalyst for exploration in the region.

Recommendation and Target Price

We initiate coverage on ECO with a BUY recommendation and 25p 12 month target price, representing a 41% upside on the current share price. This is in line with our risked NAV using 12% WACC and a US$60/bbl flat long-term oil price.

]]> Mozambique mineral sands project 'clearly a globally significant deposit' says Savannah CEO Tue, 14 Feb 2017 15:42:00 +0000 Savannah Resources Plc (LON:SAV) CEO David Archer updates Proactive on developments at the company's copper deposit in Oman, their Mutamba mineral sands project in Mozambique and their interests in Lithium in Finland.

]]> Ariana Resources 'just weeks out' from start-up at Kiziltepe Tue, 14 Feb 2017 10:48:00 +0000 Ariana Resources plc (LON:AAU) CEO Kerim Sener talks to Proactive about the completion of the interim tailings storage facility that it will use to store mine waste from its Kiziltepe gold project in Turkey.

The completion of the tailings storage facility was a pre-requisite ahead of an application for a routine operations permit, and the company is now preparing to apply for this permit.

]]> Are Acacia shares set to test all-time highs? Tue, 14 Feb 2017 09:45:00 +0000 Zak Mir certainly thinks so.

The analyst is tipping the Acacia Mining PLC (LON:ACA) share price to jump up towards the 700p level in the coming months which would cap an incredible turnaround from this time last year.

“Most mining stocks over the past year have seen massive recovery and Acacia is no different,” Mir says in the latest Proactive Investors Bulletin Board segment.

“The implied technical target while we’re above the 50-day moving average of 406p is as high as 700p.”

]]> VSA Capital Market Movers - Millennial Lithium, Acacia Mining Tue, 14 Feb 2017 08:44:00 +0000 Millennial Lithium (TSX:ML)

Iain Scarr has been promoted from VP of Development and Exploration to Chief Operating Officer of Millennial Lithium.

We reiterate our Speculative Buy recommendation.

Acacia Mining (LON:ACA)

Acacia Mining (LON:ACA) has announced strong results for the full year 2016. Gold production of 830koz was up 13% YoY while gold prices averaged 7% higher YoY meaning revenues of US$1.05bn were up 21% YoY. The stronger top line alongside significant cash cost reduction resulted in EBITDA of US$415m, up 137% YoY. Operating cash costs of US$640/oz were down 17% YoY whilst on an AISC basis at US$958/oz they were 14% lower. This was despite a modest increase in capex of 7% YoY to US$196mn.

ACA significantly increased its dividend up from 4.2 cents per share in 2015 to 10.4 cents per share in 2016 after a final dividend of 8.4 cents per share. Net cash of US$218mn was up more than double from US$105m as a result of the strong performance.

]]> Sula boss 'can't wait to get drill rigs turning' at Ferensola Mon, 13 Feb 2017 13:20:00 +0000 Sula Iron & Gold PLC (LON:SULA) CEO Roger Murphy tells Proactive they've increased the number of drills it will use at its Ferensola gold project in Sierra Leone.

One drilled was originally planned, for the 2,400m drilling programme but  its contractor Equity Drilling will now use two to speed up the process.

The two diamond drill rigs have now landed in Sierra Leone, been unloaded and are awaiting customs clearance.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC Mon, 13 Feb 2017 08:23:00 +0000 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced that two diamond drill rigs for its upcoming drill programme on the Ferensola gold project in Sierra Leone were unloaded at the port in Freetown on 10th February. The original programme had envisaged a single drill covering 2,400m, however, the second drill has been provided at no additional cost to SULA meaning that the results of the programme should be received faster than planned. Furthermore, since Equity Drilling are taking a portion of payment in SULA common shares the cash freed up can be used to fund the programme beyond the original 2,400m plan.

Drilling will be carried out on the Sanama Hill target, where drilling previously backed up historical data, as well as on the significantly larger Eastern Target which was highlighted by the recent IP survey.

We reiterate our 1.7p/sh. target price and Speculative Buy recommendation.

]]> VSA Morning Agri Comment Mon, 13 Feb 2017 08:21:00 +0000 AAAP#Secures New Supply Contract

Anglo African Agriculture plc (LON:AAAP), the London-listed food manufacturing and processing company with operations in Cape Town, South Africa, has announced a significant contract win.

AAAP will supply up to 300t of speciality spices to an unnamed South African food manufacturer through CY 2017

Order subject to supply chain volumes from the purchaser

VSA Comment

In FY 2017 AAAP sold c1,100t of product through its wholly owned spice manufacturing business Dynamic Intertrade. This latest contract provides a significant proportion of the volumes needed for AAAP to exceed this figure in FY 2017.

As previously announced, AAAP is currently undergoing a number of expansion initiatives to expand its production capacity to 250t per month, which should be complete by the end of February.

The contract win highlights the continued progress at AAAP, following the installation of new senior management at the end of last year.

]]> Eastmain Resources' Claude Lemasson talks up Clearwater's 'significant potential' Fri, 10 Feb 2017 15:07:00 +0000 Eastmain Resources Inc. (TSE:ER) President and CEO Claude Lemasson talks Proactive’s Andrew Scott through the company’s main projects, in particular their 100% owned Clearwater Project in James Bay, Quebec, as well as their focus for 2017.

The James Bay region is one of North America’s newest gold districts, and is host to five known deposits and the cause of a staking rush that began to heat up only in recent years.

]]> Gold on the rise as markets struggle to gauge the actual impact of Donald Trump Fri, 10 Feb 2017 13:56:00 +0000 Kodal Minerals to re-test 0.5p level as long as it stays above this number Fri, 10 Feb 2017 09:35:00 +0000 Technical analyst Zak Mir reckons the Kodal Minerals PLC (LON:KOD) share price can head back up to its recent highs of 0.5p and above in the coming months.

“Shares have surged through the 0.2p level to start 2017 [and there is] likely support back towards the 0.2p to 0.5p range,” he explains.

“Only back below 0.2p really delaying the bull argument and a potential re-test of the 0.5p+ zone.”

]]> Wishbone Gold has a great future, says Poulden Thu, 09 Feb 2017 12:07:00 +0000 Gold trading firm Wishbone Gold PLC (LON:WSBN) has a great future, reckons Richard Poulden, chief executive and chairman.
One of the aims of 2017, initiated in 2016, is to back integrate up the supply chain of trading the precious metal, which would mean low level investment of some equipment, he said.
" We've been discussing doing that in South America. We've done it in Ghana and looking at doing that to a greater extent in 2017," he said.
"That locks in the suppliers into our supply chain and that I think is quite important," he added.

]]> Feasibility drilling at BKM providing 'phenomenal numbers' says Asiamet's Steve Hughes Thu, 09 Feb 2017 11:18:00 +0000 Steve Hughes, vice president of exploration at Asiamet Resources Limited (LON:ARS; CVE:ARS) talks to Proactive about the company's feasibility drilling at their Beruang Kanan Main project in Indonesia.

A total of 70 holes for 7,030 metres (m) of diamond core drilling have now been completed with two currently in progress. A further 48 holes for 3,970m are planned.

Among the better, high grade results reported today was 26.9m at 2.34% copper, 4.4m at 4.93% and 30m at 0.75% copper.

Several 1m intervals also returned grades of up to 7.8% copper.

]]> If Antofagasta shares dip to this price, Zak Mir says buy Thu, 09 Feb 2017 10:00:00 +0000 Technical analyst Zak Mir reckons any dips in the Antofagasta PLC (LON:ANTO) share price towards £8 should be regarded as a buying opportunity, while his previous target of £10 is still on.

“Shares remain within this rising channel from May with the top of the channel heading towards £10,” explains Mir.

“That target is on while we hold above the floor of the channel and the 50-day moving average at £7.42 any dips towards the £8 zone currently regarded as a buy opportunity.”

]]> VSA Capital Market Movers - Metal Tiger Thu, 09 Feb 2017 08:16:00 +0000 Metal Tiger (LON:MTR)

Metal Tiger (MTR LN) announced yesterday that it has exercised 29.2mn warrants at AUD0.01/sh. for 29.2mn shares in MOD Resources (MOD AU) at a cost of AUD292k (£179k). MOD and MTR hold a 70/30 JV on the T3 copper project in Botswana. The funds arising from the exercise will be used in the development of this project where the focus is on completing a PFS. We note that the exercise of the warrants increases MTR’s holding in MOD’s issued shares to 5.01% which is notifiable on the ASX. 

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

]]> Kolar Gold boss hoping to make roaring success with newly named Lionsgold Ltd Wed, 08 Feb 2017 11:07:00 +0000 Cameron Parry, new chief executive at soon-to-be Lionsgold Limited walks Proactive through the firm's former incarnation as Kolar Gold plc (LON:KGL) and looks to plans ahead.
The new name reflects the firm's move away from the famous formerly producing Kolar Gold mine in India and to leading explorer and  mine developer Geomysore, in which it has a 20.5% equity stake.

]]> VSA Capital Market Movers - Rio Tinto, Tullow Oil plc, Eco (Atlantic) Oil & Gas Ltd Wed, 08 Feb 2017 08:38:00 +0000 Rio Tinto (LON:RIO)

Rio Tinto (LON:RIO) has announced robust full year results for 2016. Revenues were down 3% YoY to US$33.8bn, however, EBITDA was up 7% YoY to US$13.5bn and net income of US$4.6bn reversed a loss of US$0.9bn in 2016. Segment performance was mixed with iron ore and energy and minerals performing strongly offset by weakness in aluminium, copper and diamonds. Annual production for iron ore was up 4% YoY and with the benefit of stronger prices EBITDA was up 11% to US$8.5bn. Although oil production was weaker YoY the rebound in prices drove a significant recovery in segment earnings and EBITDA was up 46% YoY to US$1.8bn. Copper and diamonds segment earnings were, however, weaker with EBITDA down 24% to US$1.4bn owing largely to weakness in commodity prices. The aluminium division also suffered due to weaker aluminium premia, offsetting strong production increases and EBITDA was down 10% YoY to US$2.5bn.

RIO have also declared a final dividend of US$1.25/sh. meaning a full year dividend of US$1.70/sh or US$3.1bn, down 21% YoY. This is alongside a share buyback programme of US$0.5bn to be carried out during 2017.

Tullow Oil (LON:TLW)

Tullow Oil (TLW) announced its results for the year ended 31 December 2016 this morning. FY working interest production was 67.1kboepd (-9% YoY), in-line with recent guidance. However, including the impact of insured barrels from the Jubilee field this increases to 71.7kboepd. With the TEN development coming on-line in August 2016 TLW’s production is now expected to increase to 78-85kboepd in 2017. Revenue was US$1.3bn (-21% YoY) and net debt at a significant US$4.8bn (+19%).

TLW’s balance sheet remains under pressure with gearing standing at 5.1x. 2016 capex was US$0.9bn (-47% YoY) and TLW plans to reduce this further in 2017 to US$0.5bn. Which includes US$125m to be offset by the completion of the farm out for 21.57% of the Lake Alberta project to Total (FP FP) for US$900m. However, only US$100m of this deal will be received upfront so it will not provide significant deleveraging of its balance sheet in the short term.

Whilst TLW was free cash flow positive in Q4 2016 after TEN first oil, we anticipate that it may farm-out more of its assets to allow it to deleverage quicker. We are cautious over the stock whilst the net debt remains at such levels.

Eco Atlantic (LON:ECO)

Eco (Atlantic) Oil & Gas (ECO)# an oil and gas company with highly prospective exploration licences offshore Guyana and Namibia was admitted to trading on AIM today. As part of the listing it raised £5.09 million before expenses by placing 31,781,250 new Common Shares.

]]> Fox Marble inks 'breakthrough' deal in India Tue, 07 Feb 2017 13:24:00 +0000 Chris Gilbert, chief executive of the marble quarries operator Fox Marble Holdings PLC (LON:FOX) talks to Proactive about the company bagging a breakthrough order from an Indian marble export house.

The company upped its 2017 order book size from €2.9mln to €4.1mln as it unveiled a three-year deal with Mahadev Marmo, India’s second largest green marble export house, worth US$1.8mln a year.

]]> First stage of new processing plant 'a huge step forward for us' says Goldplat CEO Tue, 07 Feb 2017 13:07:00 +0000 Goldplat PLC (LON:GDP) chief executive Gerard Kisbey-Green talks to Proactive about the company commissioning the  first stage of a new processing plant at the Kilimapesa gold mine in Kenya.

]]> Analyst tips Randgold shares to add 20% by April Tue, 07 Feb 2017 10:20:00 +0000 Leading technical analyst Zak Mir is tipping the Randgold Resources Limited (LON:RRS) share price to continue its recent rally over the next month or two and thinks it could hit £85 soon.

“The fundamentals look to be back on track and the share price chart has also delivered some recovery,” Mir explains in today’s Proactive Investors Bulletin Board.

“While we’re above the 50-day moving average [of £62.91] we’re looking for a push towards the top of a rising October trend channel at £85 over the next one to two months.”

]]> Thinking of investing in Gem Diamonds? Wait, says Zak Mir Tue, 07 Feb 2017 10:00:00 +0000 If you’re thinking of investing gemstones producer Gem Diamonds Limited (LON:GEMD), Zak Mir reckons you should hold on for a little while before making your mind up.

“There’s been a gap down from the 200-day moving average area at 122p and we bounced off the 50-day line at 111p, so consolidation at the moment,” the analyst tells the Proactive Investors Bulletin Board.

“Probably best to wait for a break of either 125p which is recent resistance, or 105p which is the main support line from the end of 2015.”

]]> VSA Capital Market Movers - Egdon Resources Plc Tue, 07 Feb 2017 08:31:00 +0000 Egdon Resources (LON:EDR)

Egdon Resources (EDR)# has provided an update on its plans at the Wressle oil field having had planning permission refused for production at the site by North Lincolnshire Council’s Planning Committee on 11 January, going against previous planning guidance. As anticipated EDR will now submit a formal appeal against the ruling at the earliest possible opportunity.

Also as expected, EDR has lowered its average production guidance for the year ending 31 July 2017 from 165boepd to 100-110boepd, reflecting the initial refusal. EDR will now take the opportunity to submit a new planning application along with the appeal for the development to address specific concerns outlined by the council.

In our model we assume EDR’s appeal will be successful but the delay has pushed out our expected cash flows for the well by one year, with the Wressle income and associated capex now occurring in FY 2018. However, this does not impact on our NAV and we maintain our BUY recommendation and 34p TP.

]]> 'Lithium is the new oil' says David Lenigas Tue, 07 Feb 2017 08:22:00 +0000 ''I advise George [Roach of Premier African Minerals Ltd (LON:PREM)] and the board with respect to what's going on with their Zulu Lithium project in Zimbabwe …. they're coming up with some spectacular grades'', entrepreneur David Lenigas tells Proactive's Andrew Scott.

''This is going  to be a very, very big Lithium deposit and what people don't understand is that Zimbabwe's the world's fifth largest Lithium producer''.

Lenigas goes on to say ''the whole dynamics of the energy sector is changing - the world currently consumes 180,000 tonnes/year of Lithium. The forecasts are that within the next 10 years  that will double or triple so the world needs a lot more Lithium supply''.

''Lithium is the new oil … with respect to automation''.

''Sure there are plenty of other types of technology out there but Lithium is tried and proven, there's been a lot of money spent on it and Lithium has a very unique place on the periodic table … so whether you've got Lithium anode, Lithium cathode or Lithium anode and cathode there's Lithium in this equation somewhere'', Lenigas says.

]]> Cinovec drilling has been "very positive," says European Metals Holdings chief Mon, 06 Feb 2017 14:18:00 +0000 "It's all been very positive," said Keith Coughlan, chief executive of European Metals Holdings Limited (LON:EMH) as he told Proactive's Andrew Scott about the group's drilling at the Cinovec deposit in the Czech republic.
"All the hits we are getting are have either met or exceeded our expectations," he said.
Last week, the group reported its highest lithium indication so far at  while taking a first step toward a mining licence for the property.

]]> VSA Capital Market Movers - Goldplat and Rangold Resources Mon, 06 Feb 2017 08:29:00 +0000 Goldplat (LON:GDP)

Goldplat has announced the successful commissioning of its Stage One processing facility at its Kilimapesa mine in Kenya. Although in line with our expectations this news confirms that the turnaround at the mine, which has resulted in significant losses in recent period is well underway. The plant has a design capacity of 200tpd and stage one represents the commissioning of the plant whilst stage two includes the installation of the crusher circuit and three leach tanks and stage three is the installation of a second mill and three further leach tanks.

A stockpile of 6kt of crushed ore was created to enable the plant to operate whilst stage two is completed. At the current rate, GDP has guided to gold production of 4,600oz in FY 2017 which is marginally above our estimate of 4,500oz and up from 2,005oz in FY 2016. In line with GDP’s guidance we anticipate that Kilimapesa is likely to reverse operating losses in FY 2017 which would strongly benefit the results of the wider group.

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

Randgold Resources (LON:RRS)
Randgold Resources has delivered robust operational results for 2016 although the significant announcement is the dividend increase to US$1/sh., up 52% YoY. Group production of 1.25mnoz up 3% YoY was in line with guidance while total cash costs were down 6% YoY to US$639/oz.

As a result of stronger production and a recovery in the gold price revenue of US$1.55bn was up 11% YoY. Given stronger revenues and a reduction in cash costs, profit from mining activity was also up strongly by 31% YoY to US$752mn. RRS long term plan indicates that production is due to rise further in 2018 alongside declining unit costs.

]]> Why small cap miners can be far better bets than their larger peers Fri, 03 Feb 2017 15:51:00 +0000 Fourth new discovery at Martiniere 'great news', says Balmoral's Darin Wagner Fri, 03 Feb 2017 15:15:00 +0000 Darin Wagner, president and chief executive of Gold explorer Balmoral Resources Ltd (TSE:BAR) talks to Proactive about the company's fourth new discovery in its Fall 2016 drill programme at the Martiniere property in Quebec.

]]> VSA Capital Market Movers - Metal Tiger, Millennial Lithium Fri, 03 Feb 2017 08:14:00 +0000 Millennial Lithium (TSX:ML)

Millennial Lithium (ML) has added to its existing prospective lithium acreage in the Pocitos basin of NW Argentina with the signing of an option to acquire 100% of an additional 15.9km2. This acreage is to be called the Pocitos West project. ML currently has a license at the north end of the basin optioned to Southern Lithium (SNL CN) and lies 40km west of ML’s primary project Pastos Grandes. ML will make initial payments of US$0.25m and a further set of staged payments over 36 months to total US$4.5m to acquire 100% of the license.

The Pocitos basin is 60km long and is a known host of lithium brines. Historical results from 12 shallow holes drilled in 1979 by an Argentine government agency yielded lithium in brine of up to 417ppm and potassium in brine up to 15,300ppm. Historical geophysical evidence suggests the basin is 500m deep under this license and has a floor which dips toward this ground.

ML continues to consolidate the ownership of prime lithium acreage in the Lithium Triangle of South America; the source of 80% of the world’s current lithium reserves.

We retain our SPEC BUY recommendation.

Metal Tiger (LON:MTR)

Metal Tiger (MTR LN)’s JV partner MOD Resources (MOD AU) announced this week a quarterly activities report. MTR holds a 30% interest in the T3 copper project in Botswana, for which MOD holds a 70% interest. Although the release does not contain additional new information MOD has confirmed that the PFS is now underway following the release of a PEA in Q4 2016.

The PEA demonstrated the potential for a low cost copper project producing c20ktpa Cu and 609kozpa Ag. Our analysis derived a post-tax NPV of US$170m on a 100% basis with initial capital of US$135m and cash costs of US$1.19/lb.

Currently MOD’s market capitalisation of A$48.8m (£29.7m) implies that MTR which currently has a market capitalisation of £9.8m does not even reflect the full value of its interest in the T3 project. We therefore believe that MTR continues to be heavily undervalued particularly given its broader portfolio of interests such as the brownfield zinc-lead-silver mine at Boh Yai and Song Toh in Thailand.

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

]]> Uranium deal 'about expanding our portfolio into a new area' says Anglo Pacific CEO Thu, 02 Feb 2017 14:40:00 +0000 Julian Treger, chief executive of Anglo Pacific Group (LON:APF) talks to Proactive about the company's latest deal - taking a substantial stake in a North American operation and securing an income stream from processing ore from the famous Cigar Lake uranium mine in Canada.

Under the terms of the deal, Denison Mines (TSE:DML) will sell a right to 22.5% of the toll milling proceeds from the McClean Lake Mill, which takes ore from Cigar Lake.

The transaction takes the form of an up-front payment of C$2.7 mln, plus the granting to Denison of a C$40.8 mln loan.

]]> Rainmaker Resources has an early stage project in hot commodity lithium Thu, 02 Feb 2017 12:54:00 +0000 Chris Healey, chief executive at Toronto-listed  Rainmaker Resources Ltd, says the group is entirely focused on hot commodity lithium and has a lot of growth potential for the investor.
Its early stage project is in Nevada and quite close to Tesla's mega battery factory, he says.
This year the focus will be on defining drill targets, and "we have a clear path to the production of a preliminary economic analysis - take about 12 months to get there, budget of about US$2.3mln".

]]> Fox Marble's bragging rights just got bigger, says Gilbert Wed, 01 Feb 2017 16:18:00 +0000 Chief executive of Fox Marble Chris Gilbert runs through the firm's  recent orders and specifications, including  a potential purchase by the developers of  Audley Square in Mayfair.
"The fact that our marble we can now point to as being specified, bought and purchases, and installed in some of these very, very high end developments in London and Sydney, and in other parts of the world, allow us to become very attractive to potential customers.."
"The bragging rights that we get from these things is very significant."

]]> BHP shares on the rise, but how high can they go? Wed, 01 Feb 2017 10:00:00 +0000 BHP Billiton plc (LON:BLT) shares are heading back towards levels not seen for almost three years, according to the ‘King of Charts’ Zak Mir.

“As far as how high the shares might go in the near term, what we’re looking at here really is a rising trend channel from May last year,” he explains in the latest Proactive Bulletin Investors Bulletin Board episode.

“The top of the channel is heading as high as £17 and that’s the technical target over the next two to three months.”

]]> Colluli potash project has 'unrivalled diversification potential' says Danakali CEO Wed, 01 Feb 2017 08:31:00 +0000 Paul Donaldson, managing director and CEO of Danakali Limited (ASX:DNK) walks Proactive Investors through the company's Colluli potash project in Eritrea.

''There's plenty to be excited about .... the resource itself comprises over 1.3 billion tonnes of potassium-bearing salts which are suitable for the production of potash fertilisers'', Donaldson says.

''The company's focusing initially on the production of potassium sulphate''.

]]> MGX Minerals steaming ahead with Lithium projects 'in advanced development phase' Wed, 01 Feb 2017 08:15:00 +0000 Jared Lazerson, chief executive of the Canadian mining company MGX Minerals Inc (CNSX:XMG) runs Proactive through the firm's current Lithium and Magnesium projects.

''We're advancing our Lithium projects, I wouldn't say production quite at this point, but it's certainly in advanced development phase as we prepare for a pilot plant deployment within 60 days''.

]]> European Metals latest drilling programme at Cinovic deposit's gone 'very well' Tue, 31 Jan 2017 13:25:00 +0000 European Metals Holdings Ltd (LON:EMH) has completed its latest drill programme at the Cinovic lithium deposit in the Czech Republic.

The results will be included as part of an upgraded resource estimate for a pre-feasibility study scheduled to be published in March.

Managing Director Keith Coughlan tells Proactive: ''Most of the drilling has been to confirm previously known indications. It's an historical mine that's had a lot of drilling there over the years - over 80,000m in fact - but we needed to do some drilling to bring things into modern day JORC compliance''.

]]> The £10 target is on for Antofagasta, says Zak Mir Tue, 31 Jan 2017 09:30:00 +0000 Technical analyst Zak Mir is expecting some near-term consolidation in the Antofagasta PLC (LON:ANTO) but says the chase for £10 is still on.

“We’re looking for some consolidation perhaps down to the 750p area which would be the floor of this rising trend channel from the end of May,” says Mir in the latest Proactive Investors Bulletin Board segment.

“Above that, the big target is up to £10 which is the 2016 resistance line.”

]]> VSA Morning Agri Comment Tue, 31 Jan 2017 09:03:00 +0000 NWF Group: H1 2017 Results

UK-focused specialist agricultural and distribution business NWF Group (NWF LN) has announced six month results for the period ended 30 November 2016 (H1 2017).

Revenue: £255.9m, +13.9% YoY (H1 2016: £224.6m), FY 2017 consensus is currently £487.3m (+4.6% YoY)

Adjusted Operating Profit: £2.2m, -21.4% YoY (H1 2016: £2.8m), FY 2017 consensus is currently £9.0m (+3.4% YoY)

Adjusted PBT: £2.0m, -23.1% YoY (H1 2016: £2.6m), FY 2017 consensus is currently £8.3m (+22.1% YoY)

Interim Dividend: 1.0p, flat YoY (H1 2016: 1.0p)

Net Debt: £19.1m, +83.7% YoY (30 November 2015: £10.4m)

Feeds: Revenue was £65.1m, +4.8% YoY (H1 2016: £62.1m), operating loss was £0.3m (H1 2016: profit of £0.3m)

Food: Revenue was £20.1, +4.1% YoY (H1 2016: £19.3m), operating profit was £1.6m, +14.3% YoY (H1 2016: £1.4m)

Fuels: Revenue was £170.7m, +19.2% YoY (H1 2016: £143.2m), operating profit was £0.9m, -18.2% YoY (H1 2016: £1.1m)

VSA Comment

Following its trading update on 19 December, NWF has confirmed the extent to which it has been impacted by the poor underlying market conditions in H1, particularly through Q1.

In feeds, following a very strong November for UK ruminant feed production (+8.0% YoY), DEFRA data shows overall ruminant compound feed production fell just 1.0% in NWF’s H1 with a QoQ turnaround clearly visible in the data (Q1: -4.7% YoY; Q2: +2.3% YoY), with sheep feed volumes being particularly strong.

This increase in demand has arrived alongside significant input commodity price increases as a result of the devaluation of the pound following the Brexit vote. This has caused margin pressure for NWF, leading to a loss for its feed division, despite two price increases being implemented during the period (in-line with peers). A third price increase has been made earlier this month as input commodity prices have continued to increase (UK feed wheat now +40% since 1 June 2016).

Although NWF gained market share in H1 (+1.5% YoY to 268,000t) it has clearly come at a cost with regards to margins. If commodity prices stabilise and NWF can maintain these customers, then it should receive a boost from these new customer additions in H2.

Net debt has increased in-line with expectations, with c£4m spent on automating the blending plant at Wardle and doubling capacity to more than 200,000t, and also doubling capacity at the compound feed plant at Longtown to 120,000t.  c£5m was also spent on the acquisition of Jim Peet Agriculture.

NWF’s food division continues its solid performance with its Wardle warehouse fully utilised and high service levels maintained. The division is benefiting from the gradual recovery in the ambient grocery market.

NWF’s fuel supply business was impacted by warm weather and lower demand for heating oil through summer (H1 volumes -20% YoY). FY performance will depend on temperatures in the remaining winter months, with a cold snap forecasted for February, which would be beneficial for volumes of higher margin heating oil.

NWF remains confident on meeting FY expectations, which would represent a significant turnaround from its performance in the quieter H1 period (adjusted PBT moving from -20% YoY for H1 to +20% YoY for FY). Due to higher commodity prices, consensus expectations for revenues are likely to be upgraded through £500m following these results. As we have been writing for some time, underlying market conditions have turned in the UK agricultural sector and NWF appears set to benefit from this improved sentiment in H2.

]]> Funding 'heralds a new phase of growth' says Vast Resources chief Mon, 30 Jan 2017 13:23:00 +0000 Vast Resources PLC (LON:VAST) has told investors they're to offload a chunk of its stakes in the Pickstone-Peerless and Giant gold mines.

SSCG Africa Holdings (SSA) is acquiring the interests in what is described as a strategic investment.

Vast CEO Roy Pitchford tells Proactive: ''It's a step forward in Zimbabwe and it provides us with funding for Romania''.

]]> A 'transformational time for Premier African' says CEO George Roach Mon, 30 Jan 2017 13:17:00 +0000 Premier African Minerals Ltd (LON:PREM) CEO George Roach updated Proactive on the news the company is to raise just over £1mln which will fund the completion of work on the RHA tungsten mine, in Zimbabwe.

The mine is undergoing a phase of construction and optimisation through the first quarter of 2017.

]]> VSA Capital Market Movers - Egdon Resources Plc Mon, 30 Jan 2017 09:01:00 +0000 Egdon Resources (LON:EDR)

Egdon Resources (EDR)# has acquired an additional 12.5% working interest in PEDL 201 in the Widmerpool Gulf from Corfe Energy for a consideration of 424,593 shares, equivalent to £50k based on the average closing mid-price for the five days prior to completion.

This increases EDR’s interest in the licence to 45% which lies in its core area of the East Midlands which is considered prospective for both conventional and unconventional resources. We value PEDL 201 as part of EDR’s shale portfolio, therefore, the value added by increasing its net acreage offsets the dilution by the issuance of these additional shares. Hence we maintain our BUY recommendation and 34p TP.

]]> Trump and May are both heralds of a new protectionism, and gold will benefit Fri, 27 Jan 2017 13:58:00 +0000 Barratt can rediscover pre-Brexit highs if it breaks current range Thu, 26 Jan 2017 10:35:00 +0000 UK housebuilder Barratt Developments PLC (LON:BDEV) can rediscover its pre-Brexit highs of almost £6 if it breaks above the £5.20 mark, so says technical analyst.

“There was a dip in the wake of the referendum vote in June. Since then [we’ve had] a slow recovery back towards the 200-day moving average around the £4.80 level,” Mir explains in the latest Proactive Investors Bulletin Board.

“Basically, one’s looking for a break of the recent £4.50 to £5.20 range to take us back to where we were before Brexit.”

]]> Balkan Zinc's Montenegro mine a 'standout project', says managing director Tim Daffern Thu, 26 Jan 2017 08:23:00 +0000 Tim Daffern, managing director of Balkan Zinc, walks Proactive Investors through the company's main asset in Montenegro - The 'Monty' mine.

''What underpins this standout project is we don't have to build any infrastructure - it's all there ready to go'', Daffern says.

]]> VSA Capital Market Movers - Anglo American, Kaz Minerals, Polymetal International Thu, 26 Jan 2017 08:23:00 +0000 Anglo American (LON:AAL)

Anglo American (LON:AAL) has released largely strong production results for Q4 2016 with production increases across all commodities bar copper and met coal. Diamond production of 7.8mnct was up 10% YoY reflecting curtailed production in 2015 and also the increased contribution from Gahcho Kue in Canada. Platinum production of 610koz was up 2% YoY in Q4 meaning full year production of 2.38mnoz was also up 2% YoY.

Copper production of 147kt was down 19% YoY in Q4 and 10% YoY to 577kt for the full year. This was due to unplanned disruptions as well as planned sequencing of lower grades at Los Bronces. Nickel production of 11kt was up 4% YoY in Q4 meaning full year production of 45kt was up 47% YoY driven by the ramp up of additional capacity.

Iron ore production at Kumba was strong, up 9% YoY to 12mnt in Q4, however, full year production was 8% lower YoY at 42mnt. The optimisation of the pit shell did not take effect until H2 2016 hence the weaker annual output. The ramp up at Minas Rio continued strongly, however, with production of 4.9mnt up 49% YoY with full year production of 16.1mnt up 76% YoY. Met coal production was 2% lower YoY in Q4 and the full year at 5.4mnt and 21mnt respectively following the sale of Foxleigh. Thermal coal production up 4% in Q4 to 8mnt was insufficient to offset the sale of Callide meaning full year production of 33mnt was down 4%.

Polymetal (LON:POLY)

Polymetal (POLY LN) has announced strong Q4 2016 production results with gold equivalent production of 375koz, up 21% YoY. This was primarily driven by stronger gold production, up 30% YoY to 285koz in Q4 while silver production was down 3% YoY to 3mnoz. Full year production of 1.27mnoz gold equivalent was marginally ahead of full year guidance of 1.26mnoz.

POLY expect gold equivalent production of 1.4-1.55mnoz, however, cash costs are expected to rise versus 2016 to between US$600-650/oz from US$525-575/oz and on an AISC basis to US$775-825/oz from US$700-750/oz.


KAZ Minerals (LON:KAZ)

KAZ Minerals (LON:KAZ) has announced strong Q4 production results with 140kt of copper produced in the full year, up 73% YoY and in line with guidance.  Gold production was strong and ahead of guidance with 40koz produced in Q4 meaning that full year production of 120koz was up 245% due to elevated grades at Bozshakol.

]]> VSA Capital Market Movers - Antofagasta Plc, BHP Billiton plc, Fresnillo Wed, 25 Jan 2017 08:34:00 +0000 Antofagasta (LON:ANTO)

Full year copper production at Antofagsta (LON:ANTO) narrowly missed full year guidance of 710-740kt at 709.4kt despite a 12.5% YoY increase. Q4 2016 copper production of 206kt was up 14% QoQ and 22% higher YoY. 2016 gold production of 271koz was up 27% YoY at the upper end of guidance of between 245-275koz.

Despite weaker than planned copper production, net cash costs were ahead of guidance of US$1.25/lb at US$1.20/lb, down 20% YoY. Q4 2016 net cash costs were down 4.2% QoQ to US$1.13/lb.

Guidance for 2017 suggest broadly flat copper production at 685-720kt. Gold production is expected to decline significantly to between 185-205koz while molybdenum production is expected to modestly increase from 7.1kt in 2016 to 8.5-9.5kt in 2017. Capex was previously guided to below US$900m in 2017 while group cash costs are forecast to rise modestly to US$1.30/lb, due to a weaker by-product credit contribution. Operationally the outlook appears weaker in 2017, in our view; however, this is likely to be offset somewhat by stronger copper prices.

BHP Billiton (LON:BLT)

BHP Billiton (LON:BLT) has released weak results, with production declines in petroleum, copper and thermal coal in H1 FY 2017. Petroleum production of 106mmboe was down 15% YoY in H1 due to a sharp decline in onshore US production. Conventional production was largely flat, meanwhile. Copper production of 712kt was down 7% YoY as although Escondida production was flat at 452kt this was offset by maintenance at Pampa Norte and grade weakness at Antamina.

Iron ore production of 118mnt in H1 FY 2017 was up 4% YoY as production continued to ramp up at Jimblebar. Met coal production of 21mnt was up 1% YoY while thermal coal production was down 4% YoY to 14mnt.

Fresnillo (LON:FRES)

Fresnillo (LON:FRES) has released strong results with silver production of 50.3mnoz, up 7% YoY and in line with guidance. Q4 2016 production of 13.3mnoz was up 10% YoY. FRES also benefitted from strong gold production of 934koz, up 23% YoY and ahead of guidance. This was enhanced by a one off inventory drawdown at Herradura. Guidance for 2017 is for continued strong silver production with a further annual increase to 58-61mnoz including 4mnoz from the silverstream. Gold production is again expected to be strong although without the inventory drawdown impact this will likely be lower at between 870-900koz.

]]> Bezant Resources exec director 'very excited' about the potential of Choco project Tue, 24 Jan 2017 13:25:00 +0000 Bezant Resources plc (LON:BZT) is to commission an independent scoping study at the Choco gold-platinum project in Colombia.

Executive Director Laurence Read tells Proactive: ''Just to be very clear what we're looking at is low, low capex,  low opex, operating recovery plants which can then be 'cookie-cuttered' out as we decide to expand''.

''We aren't going to be producing lots and lots of platinum, we aren't going to be producing lots and lots of gold - but what we can do is use our skills .... to create a portfolio which I think is appropriate for the company''.

]]> Greatland Gold CEO 'encouraged' ahead of additional drilling at Ernest Giles Tue, 24 Jan 2017 11:31:00 +0000 Greatland Gold PLC (LON:GGP) has told investors that planning has begun for an additional drilling programme at the Ernest Giles gold project in western Australia.

CEO Gervaise Heddle tells Proactive: ''We recently completed a drilling programme at the Meadows target in the southern portion and came back with some very exciting results ... now we're going 50 kilometres to the north east and we're going to be doing a similar programme up there [at the Empress target]''.

]]> VSA Capital Market Movers - Petra Diamonds Mon, 23 Jan 2017 11:09:00 +0000 Petra Diamonds (LON:PDL)

Petra Diamonds (LON:PDL) has announced a trading update for H1 FY 2017 which is soft, in our view, as achieved prices disappointed. Production increased 24% YoY to 2mnct as mining at Finsch and Cullinan moved away from undiluted ore thereby improving grades while PDL also benefitted from the increased contribution from tailings production at Ekapa. Grades were in line with company guidance and full year guidance of 4.4-4.6mnct is unchanged. However, since the period end, PDL has experienced some labour disruption at Cullinan due to a dispute with contractors. This may impact up to 0.6mnt of ore throughput.

Revenue was up 48% YoY to US$228.5mn, in part due to the timing of sales as volumes sold increased 47% YoY to 1.9mnct. However, per carat prices demonstrate a mixed picture. Despite a periodic increase in per carat values at Finsch of 20% and at Koffiefontein of 8% these disappointed versus guidance. At Cullinan and Williamson per carat values were ahead of guidance although at Williamson values declined 17% YoY.

Capex was marginally lower at US$135m (-4% YoY) although this represents c70% of FY 2017 capex. Net debt was up 21% YoY to US$465m.

]]> Rock Forage preliminary estimates are encouraging, says Golden Saint Resources Ltd finance chief Mon, 23 Jan 2017 09:53:00 +0000 Golden Saint Resources Ltd's (LON:GSR) finance chief Keng Hock Seah tells Proactive how a visit by consultant Rock Forage late last year has led to encouraging results.
The aim behind it was to work together with Rock Forage develop the alluvial exploration targets at the Tongo and Baja licences in Sierra Leone into inferred resources.
"Those preliminary estimates that we've reported they are certainly very encouraging. There's a lot of work to be done but very encouraging," he said.

]]> Mining hits new highs, as world awaits Trump Fri, 20 Jan 2017 14:25:00 +0000 Orosur Mining chief 'very excited' about the prospects of developing Anza project Fri, 20 Jan 2017 12:21:00 +0000 Orosur Mining Inc (LON:OMI ASX: OMI) is to push ahead with a drilling programme at Anzá in Colombia after initial work indicated a significant amount of gold may be present.

CEO Ignacio Salazar tells Proactive: ''We estimated 1.6mln - 2.3mln tonnes averaging between 3.2 - 3.7g/t of gold ... these are very encouraging results in themselves for this part of the deposit''.

''We see that we are ticking all the boxes in Anza and are very encouraged with the results and are very excited about the prospects of developing this project''.

]]> Outlook for gold in 2017 'quite good' says Mining Capital's Alastair Ford Fri, 20 Jan 2017 11:44:00 +0000 Ford tells Proactive: ''What Donald Trump says and does is key to the gold price in 2017''.

''They've got two issues in American politics - domestic and foreign. The obvious foreign policy thing is that investors in gold will be buying gold on the fear that Trump is going to start some sort of foreign war with China''.

Ford adds: ''All fear of conflict sends investors scurrying into Gold''.

Alastair Ford also touched on some of the companies he'll be keeping an eye on in 2017.

''I was interested to speak to Julian Treger of Anglo Pacific Group PLC (LON:APF) this week .... it looks like it's going to make serious profits this year partly because royalty income is going to go higher and also because it will have to revalue the royalty assets upwards''.

Ford also mentioned Rainbow Rare Earths Limited (PRIVATE:RBW) as a company to watch as well as Balkan Zinc Plc (PRIVATE:BALK) .

]]> Logan Resources Ltd offers low downside risk and unlimited upside potential, suggests CEO Fri, 20 Jan 2017 09:38:00 +0000 Mark Morabito, chief executive of Logan Resources Ltd,  walks us through the potential of the Nevada and Utah-focused firm.
The gold explorer has low downside risk and unlimited upside potential, he suggests, and a nice little "insurance policy" with its exposure to uranium.
"If you believe in gold and you are going to take a position that gold has good upside from this point, the downside risk in Logan at the current share price of 10 cents Canadian is almost nothing and the upside is somewhat unlimited," he told Proactive's Andrew Scott.

]]> Paladin Energy 'positioned well for a turnaround in Uranium prices' says CEO Thu, 19 Jan 2017 23:00:00 +0000 Paladin Energy’s the world’s eighth largest uranium producer with two mines in Africa and projects in Australia and Canada. They're listed on both the ASX and the TSX.

Chief executive Alex Molyneux spoke to Proactive: ''We've had to focus on having our operating business be sustainable in these low uranium prices, so we've focused very, very heavily on cost saving and we've managed to bring those C1 cash cost levels down to about $16/pound at Langer Heinrich and that's really the core of our current business strategy''.

]]> VSA Capital Market Movers - Mariana Resources Ltd, Shanta Gold Limited Thu, 19 Jan 2017 14:25:00 +0000 In the news: Mariana Resources, Shanta GOLD, West African Resources, Base Resources & The Alchemist


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

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

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

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




LON:MARL| £0.835 | US$128m

Stellar Economics Highlighted in the Hot Maden PEA

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

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

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

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

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

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

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

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


LON:SHG | £0.11 | US$81m

December Quarterly Production and Operational Update

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

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

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

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

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

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

In summary, the outlook for Shanta looks positive.

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

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

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

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

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

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

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

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

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

• US$3m of equipment finance and lease finance

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


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

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

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

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

]]> Anglo Pacific expecting 'significant growth' in 2017, says CEO Julian Treger Wed, 18 Jan 2017 13:51:00 +0000 Anglo Pacific Group PLC (LON:APF TSX:APY) has reaped the full benefit of coal prices hitting a five-year high.

Royalty income in 2016 will be 140% higher and in a range of £20.5mln - £21.5mln (2015: £8.7m), the company said.

CEO Julian Treger tells Proactive: '''The year ended very strongly in Q4 and the big effect of that is that our dividend is now well covered but we expect 2017 to be an even better year with a very strong start to the year as well''.

''I think 2017 will be a year where we're finally back to where we should have been and is the beginning of a number of years - 7 or 8 years - when we should have very high incomes from the Kestrel mine. It should be very exciting''.

]]> Pershing Gold's Perkins outlines how it will build value Wed, 18 Jan 2017 13:30:00 +0000 Pershing Gold Corporation's (NASDAQ:PGLC, TSE:PGLC) Jack Perkins, vice president of investor relations,  walks Proactive through the investment case for this emerging gold producer in Nevada.
The next major milestone, he says, will be the delivery of a pre-feasibility study early in 2017 on its Relief Canyon Mine.
"This is really a pivotal step for us as a company as it will allow us to define reserves under national instrument 43-101," he said, adding that the firm was "well ahead of the game" on the permitting side.
Pershing builds value four ways, he adds. These are the near term production potential and leverage to the gold price, the resource expansion potential, the fact only 10% of the land package has been explored, and the potential of strategic acquisitions.

]]> Rainbow Rare Earths' Burundi project 'one of a kind' Wed, 18 Jan 2017 11:14:00 +0000 Rainbow Rare Earths Limited CEO Martin Eales and non-executive chairman Adonis Pouroulis spoke to Proactive about the company's high grade Gakara project in Burundi.

Pouroulis says: '''It's one of the highest grade rare earth deposits in the world. It was discovered in 1936 .. and was a mine from 1948 to 1978. All we're doing is coming back many years later and plan to bring it back into production.''

''We'll be the only mine in Burundi when we get into production''.

]]> Study reveals 'real potential' of Hot Maden project, says Mariana's Glen Parsons Wed, 18 Jan 2017 10:49:00 +0000 Mariana Resources (LON:MARL CVE:MARL) may soon have a stake in one of Europe’s most profitable gold mines after an independent study estimated the potential returns from Hot Maden at just shy of US$1.4bn.

Parsons tells Proactive: 'Now we actually see the economics of what this resource can deliver''.

''We're seeing a very high margin mine being developed here. We're talking on average around 300,000 ounces a year .... it ends up being one of the biggest mines in Turkey''.

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

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

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

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

]]> Gold bulls slowly returning, as Trump boost to dollar fades and balance of power shifts Tue, 17 Jan 2017 11:03:00 +0000 VSA Capital Market Movers - Rio Tinto Tue, 17 Jan 2017 08:25:00 +0000 Rio Tinto (LON:RIO)

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

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

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

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

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

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

£5m share buy-back programme

Duration of up to 12 calendar months

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

VSA Comment

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

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

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

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

]]> VSA Capital Market Movers - Egdon Resources Plc, Premier Oil PLC Thu, 12 Jan 2017 09:00:00 +0000 Egdon Resources (LON:EDR)

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

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

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

Premier Oil (LON:PMO)

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

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

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

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

]]> VSA Capital Market Movers - Tullow Oil plc Wed, 11 Jan 2017 08:57:00 +0000 Tullow Oil plc(LON:TLW)

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

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

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

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

]]> VSA Morning Agri Comment Tue, 10 Jan 2017 08:20:00 +0000 Carr’s Group#: AGM Statement

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

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

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

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

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

VSA Comment

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

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

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

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

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

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

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

]]> VSA Capital Market Movers - Metal Tiger Thu, 05 Jan 2017 08:18:00 +0000 Metal Tiger (LON:MTR)

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

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

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

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

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

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

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

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

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

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

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

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

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

Trading was lower YoY in H1 due to a weaker Q1

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

VSA Comment

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

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

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

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

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

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

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

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

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

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

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

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

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

Independent Oil & Gas (LON:IOG)

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

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

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

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

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

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

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

Botswana - Copper

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

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

Thailand - Lead, Zinc, Silver

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

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

Attractive Valuation

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

Recommendation and Target Price

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

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

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

We maintain our BUY recommendation.

]]> Will Trump be good or bad for the oil price? Fri, 09 Dec 2016 13:24:00 +0000 VSA Capital Market Movers -Sula Iron & Gold Thu, 08 Dec 2016 08:35:00 +0000 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold  has announced the results of further analysis of the historic drill core recovered prior to the November 2015 programme. SULA has also announced the issue of equity arising from the exercise of warrants. Consequently 65,468,750 new ordinary shares were issued at a price of 0.16p/sh resulting in gross proceeds of £104,750. The warrants related to fundraisings in February and March 2016.

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

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

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

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

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

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

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

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

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

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

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

VSA Comment

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

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

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

]]> Mines & Money showcased a sector coming back to life, if you looked hard enough Fri, 02 Dec 2016 14:59:00 +0000 VSA Capital Market Movers - Glencore and Stratmin Global Resources Thu, 01 Dec 2016 08:26:00 +0000 Stratmin Global Resources (LON:STGR)
Stratmin Global Resources has provided an update on its position as a cash shell. The company are reviewing potential opportunities and are focusing their resources on finding a suitable asset for completing an RTO. These opportunities have largely been focused on the precious metals sector in which management has prior experience.

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

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

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

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

Asiamet Resources (ARS LN)

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

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

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

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

Sula Iron & Gold (LON:SULA)

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

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

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

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

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

]]> Gold, Trump and the Federal Reserve Fri, 25 Nov 2016 17:53:00 +0000 VSA Capital Market Movers - Zambeef Products Fri, 25 Nov 2016 08:51:00 +0000 Zambeef: FY 2016 Results

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

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

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

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

Gross Profit by Segment (in US dollars):

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

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

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

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

VSA Comment

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

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

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

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

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

SolGold* (LON:SOLG) – Cascabel exploration update

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Skyscanner sold to Chinese group for £1.4bn

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

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

Health & safety going mad

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

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

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

Economic News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

Commodity News

Precious metals:

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

Gold ETFs 61.2moz vs 61.6moz yesterday 

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

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

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

Base metals:   

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

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

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

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

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

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


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

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

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


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

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

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

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

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


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

Company News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The team currently have three rigs at Alpala.

Hole 19 is currently at a depth of 153m

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

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

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

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

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

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

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

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

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

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

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

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

]]> Today's Market View - BlueRock Diamonds Plc, Medusa Mining Limited, Norilsk Nickel, Shanta Gold Limited Wed, 23 Nov 2016 10:53:00 +0000 BlueRock Diamonds Plc (LON:BRD) – plant improvements finished ahead of time
Medusa Mining Limited (LON:MML, ASX:MML) – AGM statement shows infrastructure work at mine on track
Norilsk Nickel (NILSY US) - Norilsk joins United nations Global Compact
Shanta Gold Limited (LON:SHG) – Site visit presentation

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

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

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

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

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

Dominion Diamonds moving HQ to Calgary in move to cut costs

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

Economic News

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

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

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

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

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

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

Services PMI hit the strongest reading in six months.

New business orders including export markets came in strong.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nigeria – central bank keeps rates on hold as economy deteriorates

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

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

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

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


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

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

Commodity News

Precious metals:

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

Gold ETFs 61.6moz vs 61.8moz yesterday 

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

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

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

Base metals:   

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

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

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

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

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

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


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

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

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


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

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

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

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

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


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

Company News

Dominion Diamonds moving HQ to Calgary in move to cut costs

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Norilsk Nickel joins United nations Global Compact

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

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

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

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

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

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

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

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

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

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

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

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

Shanta finished mining at the Bauhinia Creek open pit in September

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

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

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

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

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

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

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

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

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

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

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

In Brief

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

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

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

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

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

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

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

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

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

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

Lundin – artisanal miners rush to Tenke Fungurume

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

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

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

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

Risk on sentiment is driving metal prices and miners higher.

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

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

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

Gold prices increased slightly amid flat US$ index.

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

LME stocks fall as metal is withdrawn from warehouses

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

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

Zinc fell 75t 445,000t

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

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

Lead stocks fell 1,025 to 187,825t

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

Economic News

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

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


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

Commodity News

Precious metals:

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

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

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

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

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

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

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

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

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

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

Base metals:   

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

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

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

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

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

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

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

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

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

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


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

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

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


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

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

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

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

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


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

Company News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In Brief

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


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

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

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

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

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

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

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

Tethyan Resources (LON:TETH) 2.5 pence, Mkt Cap £2.3m – Raising £353,000

Chinese investors pile into commodities as Yuan continues to weaken

Copper prices regain upward momentum on strong demand for infrastructure in China and weaker supply growth

Iron ore and coal prices pull back but remain at high levels despite China raising rates and margins on futures trading

Chinese investors are piling into commodities as the US dollar continues to strengthen and as China allows its currency to depreciate against the US dollar.

President elect-Trump is likely to lower US corporation taxes bringing US dollars back into the US and to rebuild American infrastructure

Markets are increasingly pricing in a Fed Rate rise this year and further rises next year as the Fed moves to issue new treasuries into the market to cover Trump’s spending aspirations.

Middle Eastern and Chinese sovereign wealth funds are reported to have been sellers of US Treasuries this year leaving us wondering on who will buy new issues of US Treasuries going forward.

The Fed dare not go too far in terms of raising interest rates as it may damage US growth when coupled with the strong dollar.

The US Treasury may need to print new US dollar bills to pay for Trump’s expenditure plans, a move which could reverse US dollar gains and allow the Fed to maintain lower rates for longer

The impact of a significantly stronger dollar is hurting US exporters and also serves to raise the effective cost of US energy production versus overseas energy producers.  Trump pledged to help US coal miners.

Mining and oil stocks trade higher as FTSE falls

US$ index is slightly off following a five sessions’ winning strake which saw the index hitting the highest level in more than a decade.

Gold prices are up (+0.7%/+$8/oz) trading at $1,216/oz after sliding below the $1,205/oz level on Friday on US$ index gains.

Brent crude is trading higher ahead of the OPEC meeting in Vienna next week and Iran’s Oil Minister suggesting it is “highly probable” members will agree details of production cuts

Base metals are all up this morning as buying accelerated as Chinese investors are using commodities as a hedge against depreciating yuan.

Iron ore futures continued to fall on the back of increased Chinese trading charges and falling steel prices.

Dow Jones Industrials  -0.19% at 18,868
Nikkei 225   +0.77% at 18,106
HK Hang Seng   +0.06% at 22,358 
Shanghai Composite    +0.79% at  3,218
FTSE 350 Mining   +2.13% at 14,282 FTSE 350 +94% since 1st January
AIM Basic Resources   -1.07% at 2,387 AIM Basic Resources +46% since 1st January

Economic News

US – Fed minutes are unlikely to alter Dec rate hike expectations with the latest economic data coming strong and more hawkish comments made by FOMC members.

Markets currently suggest that a hike is a done deal with the probability of an increase stading at 98%. 

China – The recent industrial private report showed industrial sector remained in contraction last quarter amid state driven cutbacks of overcapacity, according to responses of 2,000 surveyed businesses.

The headline business sentiment index came in at 46 in Q3 signalling a decline in the sector activity, the Cheung Kong Graduate School of Business quarterly report read.

Large firms with a significant share of state owned companies in the category favoured better than medium and small sized companies, with respective readings of 48, 46 and 45.

The outlook remains weak as with inflation and overcapacity are forecast to “increase costs and hinder the recovery of the industrial economy”.

Shijiazhuang city stops production at steel and cement plants and cuts thermal coal power generation

Shijiazhuang city is taking drastic measures to meet emissions targets for PM 2.5 fine particles for the year.

The city produces around 15mt of steel representing around 2% of Chinese production

Shijiazhuang has also cut production by drug manufacturers as part of the measures.

The action serves to highlight China’s determination to cut pollution and to force companies to clean up


US$1.0646/eur vs 1.0602/eur yesterday.   Yen 110.67/$ vs 110.61/$.   SAr 14.230/$ vs 14.575/$.   $1.235/gbp vs $1.241/gbp.    

0.736/aud vs 0.738/aud.   CNY 6.894/$ vs 6.888/$.   – Another low in the Yuan as China continues to depreciate currency against the US Dollar

Commodity News

Precious metals:

Gold US$1,216/oz vs US$1,205/oz yesterday 

Gold ETFs 62.1moz vs 62.4moz yesterday 

Platinum US$932/oz vs US$926/oz yesterday

Palladium US$730/oz vs US$717/oz yesterday 

Silver US$16.73/oz vs US$16.51/oz yesterday

Base metals:   

Copper US$ 5,576/t vs US$5,427/t yesterday 

Aluminium US$ 1,715/t vs US$1,685/t yesterday – Aluminum stocks fall 2.9% in Japan

Nickel US$ 11,165/t vs US$11,045/t yesterday 

Zinc US$ 2,586/t vs US$2,516/t yesterday

Lead US$ 2,185/t vs US$2,144/t yesterday

Tin US$ 20,585/t vs US$20,105/t yesterday 


Oil US$47.5/bbl vs US$46.1/bbl yesterday 

Natural Gas US$2.928/mmbtu vs US$2.725/mmbtu yesterday

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


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

Chinese steel rebar 25mm US$443.4/t vs US$444.3/t –

Thermal coal (1st year forward cif ARA) US$63.0/t vs US$64.5/t yesterday

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

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


Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News

Kibo Mining PLC (LON:KIBO) 7.1 pence, Mkt Cap £25.3m – Agreement signed with GE on Mbeya Coal to Power Project

Kibo Mining reports that it has now signed the previously announced agreement with General Electric (GE) to supply equipment, technology and services to the Mbeya Coal to Power Project (MCPP) in Tanzania.

Under the Agreement, GE will also assist in the implementation of the project which involves the development of a 250-350MW mine mouth thermal power station in at Rukwa in southwest Tanzania based on a 121m tonnes resource, of which 91% is classed as either measured or indicated, within 7 seams.

In addition to GE, Kibo Mining has previously  also signed an agreement with the China based contractor, SEPCO III, “granting it the right to become the the sole bidder for the contract to build the power plant component of the MCPP in exchange for SEPCO III refunding 50% of the development costs incurred by Kibo to date on the project. Kibo has alreadt received the first tranche of this funding in the amount of US$1.m million”.

As well as the technical partners for the MCPP, Kibo Mining uses Standard Bank as its Financial Advisor for the project.

The company is expecting to complete the integrated Bankable Feasibility Study (BFS), comprising a definitive coal mining study and a power pre-feasibility study shortly.

Conclusion: The MCPP appears to be moving forward as it assembles the team which will be required to turn the forthcoming BFS into reality.

Tethyan Resources (LON:TETH) 2.5 pence, Mkt Cap £2.3m – Raising £353,000

Tethyan Resources reports that Canadian listed Southern Arc Minerals has subscribed for 16.5m new shares at a price of CAD0.36 cents per share for a 15.44% interest in the company.

In addition, Southern Arc is purchasing a further 14.64m shares in the company from Newmont taking its interest to 29.15%. Two of Southern Arc’s nominees, John Proust and Michael Andrews are to join the Board of Tethyan.

Tethyan Resources is exploring copper and gold projects in Serbia and Bulgaria and recently started drilling at the Rudnitza porphyry copper prospect in Serbia where it is planning a programme of approximately 2500m of drilling in four or five holes to a maximum depth of 800m.

In addition to its investment in Tethyan Minerals, Southern Arc is reported to hold 43% of Canadian listed  Japan Gold Corp and a stake in Osisko Mining, also listed in Canada.

]]> Today's Oil and Gas Update: EnQuest PLC Mon, 21 Nov 2016 09:00:00 +0000 Headlines

In Brief:
EnQuest (LON:ENQ/ENQ SS – 28p/SEK3.09) – Coming Together

In Brief

EnQuest (LON:ENQ/ENQ SS – 28p/SEK3.09) – Coming Together: While the Company has faced significant headwinds fiscally, which to some extent will continue for some time to come, there is no doubt that operationally at least the Company has been firing on all cylinders. With the announcement of first oil from Scolty/Crathes and the impending sail away of the Kraken FPSO, we believe that provided oil prices don’t experience another significant downward leg, that the combined effect of Scolty/Crathes and Kraken (want is commissioned) will see the fiscal outlook of the Company improve significantly. Whilst further fundraising can’t be ruled out, the further into 2017 it goes without undertaking of fundraising, the less likely it comes. While investors can be rightly nonplussed at the way that the Company has run its finances, specifically failing to address the risks associated with its indebtedness, we believe that management has done well to get to this point and place the Company on more secure footing.

]]> VSA Capital Market Movers - Sula Iron & Gold Mon, 21 Nov 2016 08:42:00 +0000 Sula Iron & Gold (LON:SULA) has announced that it has raised approximately £1.17m through the issue of 558.7m shares at an issue price of 0.21p/sh. The directors of the company subscribed for a further 78m shares and in addition, the company has announced an Open Offer to raise up to £0.3m at the same price as the placing. The placing price represents a 7% discount to the previous close of 0.225p.

The proceeds will be used to further exploration work at the Ferensola gold project as well as for general working capital. A drilling campaign may now proceed and will likely take place both within the bounds of the existing JORC exploration target as well as the significantly larger Eastern Target area which was identified during the recent Induced Polarisation survey.

]]> Donald Trump could end up delivering on the liberal left agenda, where the liberal left have failed Fri, 18 Nov 2016 15:06:00 +0000 Today's Market View - Randgold Resources, Strategic Minerals*, W Resources Fri, 18 Nov 2016 10:43:00 +0000 Randgold Resources (LON:RRS) – Exploration JV with Newcrest in Cote d’Ivoire
Strategic Minerals* (LON:SML) – Quarterly update September 2016
W Resources (LON:WRES) – Initial drilling results from Sao Martinho

Gold prices under pressure as US dollar hits 13.5 year high

India precipitated the fall in gold prices last Sunday under cover of news the Trump election with local press reports that the government may be considering a complete ban in the shipping of gold into India.  We presume this may have been prompted by the move by individuals to convert large denominated Rupee bills, which are being withdrawn, into gold with gold looking set to take over as India’s next black market currency.

Yellen says the Fed could raise rates relatively soon and that Trump has done nothing to change the Fed’s plan for a rate increase

The Fed may also raise rates to assist the Treasury in the issuance of bonds to fund future Trump infrastructure spending

Trump may also lower US corporation taxes as pledged to further repatriate US dollars held in overseas accounts

The flow of funds back into the US could strengthen the dollar further and cause further volatility in the Emerging Markets.

Emerging Markets are fragile and volatile markets at the best of times and a liquidity squeeze in S Korea and other developing nations could well precipitate further crisis.

The question for gold bugs is, how low will gold go as the US dollar strengthens before the next crisis causes the gold price to recover.

Given that currency markets have already priced much of the Trump move into the US dollar and that further strength will damage more exports then it may be that the move in the dollar and the fall in gold prices is largely done

It may also be that the Fed could print new US dollars rather than increasing its borrowings though we seem to be the only people considering this.  The inflationary impact of new money printing could be the deciding factor here.

Iron ore prices rising despite action taken by China’s authorities to reduce speculation in iron ore futures

The Iron ore 62% Fe spot (cfr Tianjin) rose to US$69.0/t from US$67.0/t yesterday despite the actions of the state to raise margins and increase costs in trading iron ore futures.

The resilience of the spot iron ore price suggests ongoing strong demand for imported seaborne iron ore reflecting a move to use better quality ores as coking coal prices remain at high levels.  Cutbacks in local iron ore and the virtual elimination of the use of titano-magnetite due to its higher cost is also helping Australian iron ore exporters to gain further sales and raise prices.

There are no current cyclones affecting iron ore shipping and production at present though the threat is elevated through the cyclone season

OPEC – Venezuela’s president, who badly needs the price of oil to rise comments that OPEC are ready to reach a forceful agreement to cut oil output

Trump’s election takes some of the pressure off oil producers to lower oil prices to remain competitive and defer the rollout of electric vehicles

Higher oil prices inevitably will feed through into significantly higher inflation in weaker currency regions serving to cut demand in these areas.

Egypt – to issue first gold licenses for seven years

Ethiopia – Newmont geologists comment that Ethiopia is particularly jumping out for its exploration teams

Kefi Minerals is one of very few western companies looking to develop and further explore gold assets in Ethiopia.

Dow Jones Industrials  +0.19% at 18,904
Nikkei 225   +0.59% at 17,967
HK Hang Seng   +0.37% at 22,344 
Shanghai Composite    -0.49% at  3,193
FTSE 350 Mining   -2.43% at 14,009 FTSE 350 +91% since 1st January
AIM Basic Resources   +0.38% at 2,413 AIM Basic Resources +48% since 1st January

Economic News

Mexico – raises overnight interest rate as Trump victory weakens the pesp
The victory of Donald Trump has increased the key overnight rate to 5.25% the highest since 2009 as Trump’s victory continues to hurt peso.

France – French finance minister lowers GDP growth for 2016 to 1.4% from 1.5%
The news contrasts with more positive economic in the UK suggesting that Brexit is hurting Europe more than the UK.

Chile – central bank maintains rates on hold
The Chile peso has fallen by 4.2% since Trumps election.  Higher copper prices are part of the decision

Japan - Prime Minister Shinzo Abe has described Donald Trump as a "trustworthy leader" after a meeting the US president-elect on Thursday
The Japanese leadership are proving themselves to be more diplomatic than many other leaders at present with positive comments of support towards the UK following Brexit.

Japan well understands the importance of strengthening its alliances with long term allies in the UK and US as China continues to undermine its economy through weakening the Yuan.

ECB - president comments, continued monetary support will a key ingredient for the economic outlook for the Eurozone
Greek debt issues are rearing their ugly head again with calls for IMF support again.

VW – cuts 30,000 jobs worldwide

Guinea – former minister of mines claims Stephen Din, head of Rio Tinto’s Guinea operation offered him a bribe in order to win back the half of Simandou which was sequestrated by BSG Resources
We wonder how credible this witness might be.

Donald Trump – refusing to go to court as the President-elect is too busy
The trial relates to claims of fraud over Trump’s Real Estate University.


US$1.0602/eur vs 1.0723/eur yesterday.   Yen 110.61/$ vs 109.51/$.   SAr 14.575/$ vs 14.265/$.   $1.241/gbp vs $1.247/gbp.     
0.738/aud vs 0.747/aud.   CNY 6.888/$ vs 6.872/$.   Yuan falls to lowest level for eight years

Euro falls to one year low against US dollar

Commodity News

Precious metals:

Gold US$1,205/oz vs US$1,228/oz yesterday –

Gold ETFs 62.4moz vs 62.7moz yesterday –

Platinum US$926/oz vs US$944/oz yesterday

Palladium US$717/oz vs US$719/oz yesterday –

Silver US$16.51/oz vs US$17.04/oz yesterday

Base metals:   

Copper US$ 5,427/t vs US$5,469/t yesterday – KGHM, the Polish copper miner is unlikely to drop its Sierra Gorda project in Chile despite a heavy writedown last year and political pressure in Poland.  KGHM has been looking to internationalise its business for as long as we can remember. (Reuters)

Aluminium US$ 1,685/t vs US$1,695/t yesterday

Nickel US$ 11,045/t vs US$11,315/t yesterday –

Zinc US$ 2,516/t vs US$2,535/t yesterday

Lead US$ 2,144/t vs US$2,158/t yesterday

Tin US$ 20,105/t vs US$20,260/t yesterday –


Oil US$46.1/bbl vs US$46.8/bbl yesterday –

Natural Gas US$2.725/mmbtu vs US$2.754/mmbtu yesterday

Uranium US$18.50/lb vs US$18.65/lb yesterday –


Iron ore 62% Fe spot (cfr Tianjin) US$69.0/t vs US$67.0/t –

Chinese steel rebar 25mm US$444.3/t vs US$446.3/t –

Thermal coal (1st year forward cif ARA) US$64.5/t vs US$64.5/t yesterday

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

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News

Randgold Resources (LON:RRS) 5700 pence, Mkt Cap £5.3bn – Exploration JV with Newcrest in Cote d’Ivoire

Randgold Resources reports that it has signed a heads of agreement to establish a joint-venture for exploration, development and mining in the south-east of Cote d’Ivoire

Randgold, which already operates the 89% owned Tongon mine in the northern part of the country, is to manage the exploration programme and any new mines which result.

The area covers the extension into Cote d’Ivoire of known gold belts in Ghana which Randgold Chief Executive, Mark Bristow, characterises as offering “the potential for the discovery of truly world class gold deposits [in] … an area that has not yet been explored in depth.”

Although it is in a different area of the country, in central Cote d’Ivoire, Newcrest has another exploration joint-venture in Cote d’Ivoire where it is spending a minimum of US$1.7m  by December 2018 on exploration of Kodal Minerals’* Dabakala gold licence in order to earn a 75% interest in the property.

It is unclear whether Dabakala would fall under the scope of the joint venture with Randgold, however, it seems likely that Newcrest’s exploration team will benefit in a professional sense from the additional technical involvement of Randgold’s team with their experience in exploration developing and running the Tongon operation.

In a recent comment, Mark Bristow noted that “We’ve always believed in the prospectivity of Côte d’Ivoire and we are becoming increasingly confident that it will deliver our next world-class discovery.”

Conclusion: Randgold and Newcrest’s decision to pool their exploration efforts should highlight the gold exploration potential of Cote d’Ivoire and bring the resources to bear to maximise the chances of a successful discovery.

*SP Angel acts as Financial Advisor and Broker to the Kodal Minerals.  *Robert Woodridge, a partner at SP Angel is also Chairman of Kodal Minerals.

Strategic Minerals* (LON:SML) 0.43 pence, Mkt Cap £5.2m – Quarterly update September 2016

Strategic Minerals has provided an update of activities in its three main business areas; the Cobre magnetite tailings business in New Mexico; the nickel sulphide exploration activity in W Australia; and the Redmoor tin/tungsten joint-venture at Redmoor in Cornwall.

Following the previously announced deal to secure a new major customer for its magnetite product, sales tonnages increased sharply to 7,686 tonnes for the quarter bringing 12 months sales to 30th September to 23,477 tonnes, a 68% increase over the equivalent 12 months to September 2015. The average unit sales price for the twelve months declined slightly to US$65.17/t from US$67.77/t “due to “bulk” discount pricing being applied. However, overall net profitability is expected to be maintained at the historical level of 45% of sales.”

In July, an agreement was reached with “the rail provider to the Cobre mine for US$675,000 to be paid in instalments with the final payment being made by 30 June 2017.”

In Western Australia, the company recently announced that, in conjunction with its joint-venture partner Rarus, it was funding further exploration work, including drilling, at the Hanns Camp and Mount Weld nickel and gold prospects.

The company has re-negotiated the timing of its subscription to take its ownership of the Redmoor tin/tungsten project in Cornwall in order to match timing of the company’s receipts from the rail settlement and the earnings from Cobre to the working capital requirements at Redmoor. Earlier this week the company also announced that the joint-venture had invited tenders for a 2-phase drilling programme at Redmoor during H1 2017.

At 30th September, the company had cash of US$0.51m on its balance sheet.

Conclusion: Strategic Minerals is building up sales and cash generation at its Cobre operation in the US and laying the foundations for further exploration in Australia and in Cornwall. We look forward to results as they come through.

*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

W Resources (LON:WRES) 0.495p, Mkt Cap £21.6m – Initial drilling results from Sao Martinho

W Resources has reported results from its first exploration drill hole on the Sao Martinho gold prospect near Portalegre in Portugal.

The hole (SMD-04) forms part of a 1500m drilling campaign which started in September and adds to pre-existing drilling work which outlines an indicated and inferred resource totalling 3.04m tonnes at an average grade of 1.04g/t gold. Inferred resources comprise approximately 85% of this total 112,000 oz resource.

Hole SMD-04 “intersected significant gold mineralisation in 6 levels including 2m at 4.2g/t and 2m at 7.6g/t.”, with individual mineralised intercepts ranging up to 8m wide and down to a maximum depth of 187.60m.

The company’s Chairman, Michael Masterman, commented “The pick-up of visual gold in subsequent holes 10 and 11 together with these first results bodes well for a very successful program.”

Conclusion: These initial results are encouraging, however, we expect that until more of the programme has been completed, the significance and potential of today’s announcement to expand the existing small, relatively low grade resource will not become apparent. We look forward to additional results as the drilling programme progresses.

]]> Today's Oil and Gas Update: Premier Oil, Great Eastern Energy Fri, 18 Nov 2016 09:45:00 +0000 Headlines

Comment: If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?
Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas


Following Great Eastern Energy’s (the “Company”) interim statement today, which we comment on below, the Company discloses the fact that it was able to achieve ~$10.0/mcf in the period, which is jarring when set against the backdrop of significantly lower state gas prices, which is $2.5/mcf (dry basis). This underlines what a disaster Indian gas price policy is and why ultimately, the country will be unable to drive its domestic gas production forward in a meaningful manner. It is clear that the market will support prices ~4x that which is set via a manipulated formula.

While these are a number of significant projects on the horizon in India, we see the government's intervention in artificially suppressing the market price hampering any rapid progress and actually forcing significant delays on the sector.

If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief

Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?: Today's announcement makes for good reading, especially with regards to cost control and production outlook. Assessment of covenant breaches continues to be delayed until such times as the Company is confident it can meet them, and we don't blame them. With ~$2.8bn on net debt it is difficult to imagine the stress the management must be enduring, especially in the wake of its share buyback. While we are provided comfort by the majority of the statement, the one uncomfortable line, which appears right at the end of the statement, reads "....going forward, Premier plans to be cash flow positive at oil prices above $50/bbl...." If this is true to its word, then the Company, at current prices, looks as if it will face further difficulties. Given that group opex hovers around the ~$20/bbl mark, this is either a statement out of context , or a statement that of management's belief that post the debt restructuring, once all debt payments capex and other items are taken in to account, that this will be the new "free cash flow" breakeven price. If so, we need greater clarity and understanding what has precipitated this statement, otherwise alarm bells will start to ring, if there isn’t a little tinkle already. We will await the full results before opining either way.

Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas: Today's results underline a business that is continuing to make progress, and with management of liquid resources and debt payments accounting for the marginal bottom line cash flow, operationally at least the business continues to flourish. That said, we would caution against the Company's debt pile, which although manageable currently, should there be significant amendment to the licence terms imposed, specifically undermining the ability of the Company to set pricing according to the market, then servicing its debt might be difficult.

]]> Today's Market View - Metminco, Rio Tinto, Shanta Gold, SolGold, Vast Resources and Xtract Resources Thu, 17 Nov 2016 10:37:00 +0000 Metminco* (LON:MNC) – Raising A$4.85m to advance the Miraflores project
Rio Tinto (LON:RIO) –– Contracts terminated for key staff following investigation of payments at Simandou
Shanta Gold (LON:SHG) – Receipt of US$5.25m advance on silver streaming
SolGold* (SOLG LN) – Annual report
Vast Resources (LON:VAST) – AGM Resolutions 7 and 8 voted down by shareholder dissent
Xtract Resources (LON:XTR) –Manica review opts for open pit mining

FTSE 100 rises led by miners trading higher despite continuing sell off in China iron ore futures and little change in precious and base metals prices
• Janet Yellen to address Congress this afternoon with comments on the economy and possibly new president plans to cut taxes and raise infrastructure spending.
• Futures markets are implying a 94% chance of a US Fed rate hike during the Dec 14 meeting.
• Brent is little changed this morning as a rebound in oil prices paused on reports of increased US inventories.
• Gold seen stabilising as the US$ index rally paused following eight consecutive days of gains.
• Chinese iron ore futures continued to fall (-1.7%) extending losses to three days now (-10.3% since hitting this year’s high on Monday) and following weakening steel prices (-1.8%) lower.

Dow Jones Industrials  -0.29% at 18,868
Nikkei 225   0.00% at 17,863
HK Hang Seng   -0.08% at 22,263 
Shanghai Composite    +0.11% at  3,208
FTSE 350 Mining   +1.26% at 14,293 FTSE 350 +95% since 1st January
AIM Basic Resources   +0.12% at 2,404 AIM Basic Resources +47% since 1st January

Economic News
US – Industrial production came in weaker than forecast in Oct while core producer prices posted a mom decline same month driven by falls in the services sector.
• Industrial output saw a recovery in oil and gas drilling, while warmer temperatures depressed utility use.
• A decline in input prices is likely to prove temporary given increasing wage pressures and pro-stimulus new US president focus.
• Although, a continuing strength in the US$ is expected to exercise downwards pressure on imported goods.
• A fall in services prices is said to be driven by declines in fees charged by securities brokerages and related services.
• Consumer prices inflation is due later today with estimates for the gauge to have held up above the 2.0% level through Oct, a little lower than a multi-year high of 2.3% recorded in Aug.
Date Index Period   Actual Est Previous
Tuesday Retail Sales Oct %mom 0.8 0.6 1.0 (revised from 0.6)
  Core Retail Sales (ex Auto) Oct %mom 0.8 0.5 0.7 (revised from 0.5)
  Retail Control Group Oct %mom 0.8 0.4 0.3 (revised from 0.1)
Wednesday Core PPI Oct %mom -0.2 0.2 0.2
  Core PPI Oct %yoy 1.2 1.6 1.2
  Industrial Production Oct %mom 0.0 0.2 -0.2 (revised from 0.1)
  Capacity Utilization Oct % 75.3 75.5 75.4
Thursday Weekly Jobless Claims       257k 254k
Core CPI Oct %mom  0.2 0.1
  Core CPI Oct %yoy   2.2 2.2
Source: Bloomberg     

France – Domestic unemployment rate unexpectedly ticked up in Q3/16 contrasting from the recent trend of a declining number of people unemployed.
• Domestic Unemployment Rate (%): 9.7 v 9.6 in Q2/16 and 9.6 forecast.
• Change in Unemployment: +31k v -69k in Q2/16 (revised from -74k).

UK – Oct retail sales came in stronger than forecast with clothing and footwear being major growth contributors.
• “Cooler temperatures in Oct boosted clothing sales as shoppers took their cue to purchase winter clothing, while the supermarket benefited from Halloween,” ONS said.
• “This has also coincided with the strongest growth in internet sales seen in five years.”
• After having climbed slightly on good retail sales data the USDGBP exchange rate is trading flat at 1.248.
• Core Retail Sales (%mom): 2.0 v 0.1 (revised from 0.0) in Sep and 0.4 forecast.
• Core Retail Sales (%yoy): 7.6 v 4.0 in Sep and 5.4 forecast.
• The number of EU nationals working in the UK in Q3/16  climbed to a record high 2.3m making it 7.1% of total UK employment, according to the latest ONS numbers.

Philippines – The economy expanded 7.1%yoy, the fastest pace in three years, in Q3/16 making it one of the fastest growing economies in the region.
• GDP growth has been led by strong gains in consumer spending (+7.3%yoy), government spending (+3.1%) and investments (+20%yoy).
• The economy is forecast to grow at >6% through 2018 led by increased infrastructure spending among other things.

US$1.0723/eur vs 1.0710/eur yesterday.   Yen 109.51/$ vs 109.53/$.   SAr 14.265/$ vs 14.248/$.   $1.247/gbp vs $1.245/gbp.     
0.747/aud vs 0.752/aud.   CNY 6.872/$ vs 6.871/$.   Yuan falls to lowest level for eight years

Commodity News
Precious metals:
Gold US$1,228/oz vs US$1,228/oz yesterday –
     Gold ETFs 62.7moz vs 62.8moz yesterday –
Platinum US$944/oz vs US$933/oz yesterday
Palladium US$719/oz vs US$700/oz yesterday –
Silver US$17.04/oz vs US$17.03/oz yesterday

Base metals:   
Copper US$ 5,469/t vs US$5,476/t yesterday – Jiangxi Coppper, the largest producer in China, agreed a drop in TC/RCs for concentrates delivered next year on the back of strong growth in smelting capacity and slowing mine supply growth.
• TC/RCs settled at $92.5/t and 9.25c/lb compared to $97.4/t and 9.7c/lb agreed with Antofagasta for this year.
• Mine supply is forecast to be little changed after a 4% increase in 2016, according to the ICSG estimates.
• Earlier, spot TC/RCs were reported to have hit $100/t and 10c/lb in Oct, down from $105/t and 10.5c/lb in the three months to Sep, the highest level since Feb/15, according to Bloomberg.
Aluminium US$ 1,695/t vs US$1,718/t yesterday
Nickel US$ 11,315/t vs US$11,320/t yesterday –
Zinc US$ 2,535/t vs US$2,560/t yesterday
Lead US$ 2,158/t vs US$2,190/t yesterday
Tin US$ 20,260/t vs US$20,050/t yesterday –

Oil US$46.8/bbl vs US$46.8/bbl yesterday –
Natural Gas US$2.754/mmbtu vs US$2.705/mmbtu yesterday
Uranium US$18.65/lb vs US$18.65/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$67.0/t vs US$67.1/t – iron ore prices pulling back – should not feel like much of a surprise to anyone
Chinese steel rebar 25mm US$446.3/t vs US$454.5/t – HRC steel prices falling as steel futures prices collapse
Thermal coal (1st year forward cif ARA) US$64.5/t vs US$69.7/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unchanged

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
Metminco* (LON:MNC) 0.16 pence, Mkt Cap £6.7m – Raising A$4.85m to advance the Miraflores project
• Metminco reports that has secured commitments to raise A$4.85m to progress the Miraflores gold project in Colombia towards production. The funds are to be raised in two tranches and “will be sufficient to complete the Miraflores Feasibility Study, and some but not all of the permitting including baseline environmental monitoring”.
• The first tranche will raise approximately A$0.5m through placing approx. 212.6m shares with sophisticated and professional investors. The second tranche, which is subject to shareholder approval at a meeting to be held on 20th December, consists of placements of approximately 548.5m shares by Redfield (A$1.3m), 1,625.8m shares to Lanstead (A$3m) and 31.6m shares to the company’s Managing Director, William Howe.
• If the tranche 2 transaction is approved, Lanstead will hold a 19.9% interest in Metminco and Redfield will hold 8.6%.
• The new funding places Metminco in a position to complete the Feasibility Study work on the Miraflores Project, located in the Cauca gold belt of Colombia, which was acquired as part of a portfolio of gold projects (the Quinchia Gold Portfolio) which also includes the promising gold porphyry targets at Dosquebrados, Tesorito and Chuscal.
• In addition, the recent transaction to finance the company’s Los Calatos project in Peru, where CD Capital is earning up to 70% of the project through spending US$45m on feasibility study work and development in a series of stages, leaves Metminco with a meaningful 30% interest in the project while freeing management to concentrate on moving Miraflores ahead.
Conclusion: Metminco has secured sufficient funding to proceed with the completion of its feasibility study work at Miraflores and we look forward to further updates on progress as the technical work proceeds.
*SP Angel act as broker to Metminco.  SP Angel analysts have previously visited Los Calatos in Peru and Miraflores project in Colombia.

Rio Tinto (LON:RIO) – 2996 pence, Mkt Cap  £55,8billion – Contracts terminated for key staff following investigation of payments at Simandou
• Rio Tinto reports that, following its announcement on 9th November of the suspension of key staff in relation to an investigation of payments at Simandou in Guinea, it has now “terminated the contracts of Energy & Minerals chief executive Alan Davies and Legal & Regulatory Affairs Group Executive Debra Valentine.”
• The Company’s announcement states that, after consideration by the Board, although it does not pre-judge the outcome of any further external investigattions, “the board concluded that the executives failed to maintain the standards expected of them under our global code of conduct … In the circumstances, the board terminated the contracts of both executives”.
• The terminations mean that both individuals forgo awards under the relevant incentive rewards schemes.
• The company has announced that the role of chief executive of Energy and Minerals at Rio Tinto is to be taken by the current managing director of Marine and vice-president of Iron Ore Sales and Marketing and former JP Morgan investment banker, Bold Baatar.

Shanta Gold (LON:SHG) 11.4p, Mkt Cap £66.3m – Receipt of US$5.25m advance on silver streaming
• Shanta Gold reports that it has now received US$5.25m from its silver streaming agreement with Silverback Limited for its by-product silver production from the New Luika mine in Tanzania.
• Under the agreement, the mine has an obligation to deliver a minimum of 608,970 oz of silver over a period of 6.75 years. The company has  reminded investors that silver production in 2015 amounted to 121,682 oz and contributed approximately 2 percent of revenue.
• “As previously stated the Company will also receive an ongoing payment of 10 percent of the value of silver sold at the prevailing silver price at the time of deliveries.”
Conclusion: The silver streaming agreement helps manage the company’s debt repayment and capital expenditure management as it moves underground at New Luika, brinds some of the satellite deposits to account and advances its feasibility work at Singida.

SolGold* (LON:SOLG) 26.3p, Mkt Cap £375m – Annual report
• SolGold have issues their annual report which is available through the following link.
• The Chairman’s statement describes the financing recently entered into with Newcrest, the Australian miner and Maxit Capital which is based in Canada.
• The report goes on to repeat the 12-month drill program for 36,000m with up to six drill rigs and the aim to drill 95,000m in total over two years to end October 2018 using up to 10 rigs.
• SolGold raised US$54.5m post the year end and now reports US$44m in the treasury post fees and the repayment of other bills and debt.
• New shareholders include Guyana Goldfields and Newcrest Mining.  Scott Caldwell, President and CEO of Guyana Goldfields is now a non-executive director of SolGold.
• The statement goes on to comment on the evaluation of further exploration plans for the Mt Perry, Rannes and Normanby projects in Queensland, Australia and the receipt of proposals to participate in new projects in the Solomon Islands.
• The review of operations refers to the work being done at Cascabel in Ecuador where SRK Consultants have been commissioned to qualify the complex geological modelling and a technical report on the exploration at the Alpala prospect with the Cascabel license area.
• Solomon Islands: the review states ‘The exciting Kuma project in Guadacanal has emerged as a significnant porphyry copper-gold target upgraded by recent geochemical and spectral work by Guadalcanal Exploration Pty.
• Ecuador: the review goes on to describe the geological setting of the Cascabel project within the Eocene and Micoene Belts which stretch along the Andean mountain range though Colombia, Ecuador, Peru and Chile.
• SolGold are now progressing with a listing on the TSX market.
Conclusion:  SolGold continue to drill the Alpala prospect at Cascabel with further kilometre long intersections of mineralisation expected.  There is much to be discovered in drilling around the Cascabel license area and we look forward to the potential discovery of high-grade copper/gold mineralisation in porphyry style mineralisation within new areas of the license area.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has previously visited the Cascabel project. 

Vast Resources (LON:VAST) 0.17 pence, mkt Cap £6.6m – AGM Resolutions 7 and 8 voted down by shareholder dissent
• Vast Resources suffered another blow from activist shareholders with two key resolutions voted down at the AGM.
• Resolutions 7 and 8, which were special resolutions proposing to enable the directors of the company to allot securities on a non pre-emptive basis were not passed.
• This is the second time where shareholders have voted against the issue of new shares by management.
• This time shareholders are unhappy with a facility signed with Bracknor fund for a one-year convertible loan note.  Bracknor had already started to convert loan notes into stock in accordance with the terms of note.
• The first time shareholders voted against the issue of new share to a facility signed with Crede CG III Ltd facility following a fall in the company’s share price.  The voting down of the resolutions effectively enabled Vast Resources to walk away from its commitments to supply new stock into the £5m Crede facility into by the company.
• A Darwin Bridge Loan Note facility was subsequently put in place to bridge the gap
Conclusion:  Vast Resources is looking to develop polymetallic mines in Romania and in Zimbabwe.  The Pickstone-Peerless gold mine in Zimbabwe is reported to be profitable and offers good potential for greater production in our view.  The Manaila mine is also reported to be moving towards efficient, profitable steady state production.
We struggle to understand why Vast Resources has felt the need to sign not one but three ‘creative’ financing facilities over the past 12-months, two of which have been effectively cancelled by shareholders, and why it has not simply raised funds through more conventional equity placing methods.

Xtract Resources (LON:XTR) 0.03 pence, Mkt Cap £4.6m –Manica review opts for open pit mining
• Xtract Resources has reviewed the development strategy for the Manica gold project in Mozambique and concluded that development solely as an open-pit mine is preferable to the alternative of a high-grade open-pit mine followed by an underground mine development.
• The conclusion reflects the resource sterilisation which would be incurred by the need to leave ore pillars underground and the additional cost of backfilling the mined-out areas which “would have a serious effect on underground operating cost.”
• As currently envisaged, Manica would have a 7 year life as an open pit mine producing 480,000 tpa of ore at a grade of 2.26 g/t of gold and incurring an average waste:ore stripping ratio of 7.2:1.
• The “break-even all-in cost including capital recovery is USD908 per oz.”
• The Executive Chairman, Colin Bird, also highlights “The exploration potential, if successful, could lead to extended mine life with the processing plant paid for.”
• Discussions with the original owners of the Manica project, Auroch Minerals, are continuing  in a “constructive” manner “concerning the USD1.65 million outstanding payment and a mutually agreeable outcome is expected to be documented and announced before the end of the year.”
Conclusion: The development of Manica as an open-pit mine seems to offer the most effective utilisation of a resource which sounds as if it would be difficult to mine underground requiring widespread support pillars and backfill.

]]> Today's Oil and Gas Update:Premier Oil, Great Eastern Energy Thu, 17 Nov 2016 09:27:00 +0000 Headlines

Comment: If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?
Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas

Following Great Eastern Energy’s (the “Company”) interim statement today, which we comment on below, the Company discloses the fact that it was able to achieve ~$10.0/mcf in the period, which is jarring when set against the backdrop of significantly lower state gas prices, which is $2.5/mcf (dry basis). This underlines what a disaster Indian gas price policy is and why ultimately, the country will be unable to drive its domestic gas production forward in a meaningful manner. It is clear that the market will support prices ~4x that which is set via a manipulated formula.

While these are a number of significant projects on the horizon in India, we see the government's intervention in artificially suppressing the market price hampering any rapid progress and actually forcing significant delays on the sector.

If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?: Today's announcement makes for good reading, especially with regards to cost control and production outlook. Assessment of covenant breaches continues to be delayed until such times as the Company is confident it can meet them, and we don't blame them. With ~$2.8bn on net debt it is difficult to imagine the stress the management must be enduring, especially in the wake of its share buyback. While we are provided comfort by the majority of the statement, the one uncomfortable line, which appears right at the end of the statement, reads "....going forward, Premier plans to be cash flow positive at oil prices above $50/bbl...." If this is true to its word, then the Company, at current prices, looks as if it will face further difficulties. Given that group opex hovers around the ~$20/bbl mark, this is either a statement out of context , or a statement that of management's belief that post the debt restructuring, once all debt payments capex and other items are taken in to account, that this will be the new "free cash flow" breakeven price. If so, we need greater clarity and understanding what has precipitated this statement, otherwise alarm bells will start to ring, if there isn’t a little tinkle already. We will await the full results before opining either way.

Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas: Today's results underline a business that is continuing to make progress, and with management of liquid resources and debt payments accounting for the marginal bottom line cash flow, operationally at least the business continues to flourish. That said, we would caution against the Company's debt pile, which although manageable currently, should there be significant amendment to the licence terms imposed, specifically undermining the ability of the Company to set pricing according to the market, then servicing its debt might be difficult.

]]> VSA Capital Market Movers - Premier Oil Thu, 17 Nov 2016 09:14:00 +0000 In its trading update Premier Oil (LON:PMO) has maintained its strong operational performance with production averaging 69kboepd and it remains on track to meet its increased full year guidance of 68-73kboepd (2015: 57.5kboepd). Its current rate is in excess of 80kboepd and is driven by the outperformance of the Huntington, Chim Sai and Natuna Sea Block A fields.

On the Solan field whilst new production from it has added to PMO’s increased output production is currently constrained at 10-13kboepd due to lower than anticipated water injection capability and the underperformance from the P2 well. The Catcher development remains on schedule with total project capex now forecast at US$1.7bn, a 24% reduction on PMO’s original estimate.

Discussions on its refinancing have taken longer than originally anticipated but it is now in the final stages of negotiation with its banks and private bondholders such that the refinancing should be implemented during Q1 2017, whilst PMO should also receive deferrals on its financial covenants until the refinancing process concludes. Further to this PMO has slashed its exploration and development capex for 2017 which is anticipated to be materially lower than US$300m, whilst it is also expected to be lower for than the initial guidance of US$730m for 2016 due to the weaker sterling exchange rate and efficiencies on Catcher.

With the conclusion of the refinancing process now in sight we remain cautiously optimistic on PMO with its strong operational performance and additional production to be added from Catcher in 2017 allowing it to pay down its debt, which still stands at a significant US$2.8bn.

]]> Today's Market View - DiamondCorp, European Metals, Georgian Mining Corp, Savannah Resources and Strategic Minerals Wed, 16 Nov 2016 10:30:00 +0000 DiamondCorp (LON:DCP) Suspended – Lace mine put into Business Administration in South Africa
European Metals (LON:EMH) – Additional lithium – tin intercepts in recent drilling at Cinovec
Georgian Mining Corporation* (LON:GEO) – Raises £2.6m
(formerly Noricum Gold.  Ticker changed to GEOfrom LON:NMG)
Savannah Resources (LON:SAV) – Additional high grade copper intersections in Oman
Strategic Minerals* (LON:SML) – Drilling tender for Redmoor with drilling expected in H1 2017

FTSE 100 slips as miners trade lower on weaker iron ore prices.
• The US$ index continues to climb trading at the highest level in nearly a year.
• Crude is trading around $47.7/bbl after surging 5.7% yesterday marking the strongest increase in seven months on expectations for the OPEC to successfully reduce production rates.
• Saudi Energy Minister is expected to meet representatives of OPEC members in Doha this week on the side lines of the an energy forum.
• The official OPEC meeting is due on Nov 30.
• Both precious and base metals are little changed while Chinese iron ore futures posted the first back to back daily decline since mid-last month.
• Chinese steel mills are reported to have slowed purchases while traders decided to lock in their rally gains.
• Iron ore futures came down 7.1% today taking the two day decline to 8.8% as Jan futures contracts hit this year’s high on Monday.
• Spot iron ore with 62% Fe delivered to Qingdao fell 6.5% to $72.7/t as of Tuesday following a 2.6% decline on Monday taking prices down 8.9% from $79.8/t, the highest level since Oct/14, hit on Friday.

Lundin Mining to sell 30% minority stake in Tenke Fungurume to China’s BHR Partners for $1.14bn in cash (WSJ)
• The $1.14bn cash price might also be boosted by a further $51.4m depending on future copper and cobalt prices
• A termination fee of $100m is reported to be payable under certain circumstances
• The deal is expected to close in H1 2017
• Lundin has waved its right to acquire Freeport’s 56% stake in the mine
Freeport-McMoRan hold 70% of the Tenke Fungurume copper/cobalt mine.

Economic News
US – Positive retail sales data for Oct with upwards revisions to Sep numbers point to a continuing growth momentum in consumer spending.
• Consumption is led by growing employment levels and rising earnings.
• Sales growth was relatively broad based with 11 of 13 major categories posting a second consecutive monthly increase.
• Retail control group sales, the numbers that are used to calculate GDP, saw the strongest increase since Apr.


Eurozone – Single currency region growth held at 1.6%yoy in Q3/16 putting the annual pace on track for a slowdown when compared to the previous year.
• The economy expanded at 2.0% in 2015 and is expected to grow 1.6% this year and 1.3% in 2017.
• Eurozone Q3 GDP (%qoq): 0.3 v 0.3 in Q2/16 and 0.3 forecast.
• Eurozone Q3 GDP (%yoy): 1.6 v 1.6 in Q2/16 and 1.6 forecast.

Germany – Investment sentiment and the outlook over  the coming six months improved in Nov suggesting a rebound in economic activity in the final quarter of the year.
• ZEW Current Situation Index: 58.8 in Nov v 59.5 in Oct and 61.6 forecast.
• ZEW Expectations Index: 13.8 in Nov and 6.2 in Oct and 8.1 forecast.

UK – Employment climbed less than forecast with earnings growth keeping steady in three months through Sep.
• While unemployment rate fell to the lowest level in 11 years, earnings growth is a figure to follow closely given expectations for stronger inflation moving forwards that would weigh on consumers’ real income.
• Employment change (rolling 3m change): 49k v 106k in 3m to Aug and 91k forecast.
• Earnings (rolling 3m, %yoy): 2.3 in Sep v 2.3 in Aug and 2.4 forecast.
• Unemployment rate (%): 4.8 v 4.9 in 3m to Aug and 4.9 forecast.

DRC – signs royalties held by the state mining company to a company controlled by Kabila ally (Global Witness)
• Gecamines is said to have transferred royalties from Kamoto Mines in January 2015 to an anonymous Cayman company called Africa Horizons Investment Limited.
• According to a report in the Daily Mail, Africa Horizons is owned by Israeli billionaire Dan Gertler, who Global Witness said was involved in murky mining deals in DR Congo and was Kabila's close friend.

US$1.0710/eur vs 1.0798/eur yesterday.   Yen 109.53/$ vs 108.17/$.   SAr 14.248/$ vs 14.178/$.   $1.245/gbp vs $1.243/gbp.     
0.752/aud vs 0.756/aud.   CNY 6.871/$ vs 6.853/$.   Yuan falls to lowest level for eight years

Commodity News
Precious metals:
Gold US$1,228/oz vs US$1,226/oz yesterday –
     Gold ETFs 62.8moz vs 63.2moz yesterday –
Platinum US$933/oz vs US$943/oz yesterday
Palladium US$700/oz vs US$705/oz yesterday –
Silver US$17.03/oz vs US$17.04/oz yesterday

Base metals:   
Copper US$ 5,476/t vs US$5,422/t yesterday –
Aluminium US$ 1,718/t vs US$1,718/t yesterday
Nickel US$ 11,320/t vs US$11,105/t yesterday – Finland continues to operate the Talvivaara nickel mine with €800m spent to date on the business by the government in keeping the operation going.  The mine is now run by Terraframe, a government agency since the mine went into insolvency in 2014.  The mine is expected to see positive cash flow in 2018 according to the chairman of Terraframe.
Zinc US$ 2,560/t vs US$2,548/t yesterday
Lead US$ 2,190/t vs US$2,168/t yesterday
Tin US$ 20,050/t vs US$20,295/t yesterday –

Oil US$46.8/bbl vs US$45.4/bbl yesterday –
Natural Gas US$2.705/mmbtu vs US$2.793/mmbtu yesterday
Uranium US$18.65/lb vs US$18.65/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$67.1/t vs US$72.9/t – iron ore prices pulling back – should not feel like much of a surprise to anyone
Chinese steel rebar 25mm US$454.5/t vs US$465.1/t – HRC steel prices falling as steel futures prices collapse
Thermal coal (1st year forward cif ARA) US$69.7/t vs US$69.7/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t –

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
DiamondCorp (LON:DCP) Suspended – Lace mine put into Business Administration in South Africa
• DiamondCorp have placed the Lace mine into Business Administration in South Africa to protect the business from its creditors
• The process is similar to Administration in the UK and Chapter 11 in the US
• While this is not good news it should protect the business so that the Lace mine may be restarted once the flood water has receded from the mine

European Metals (LON:EMH) 36.5 pence, Mkt Cap £31.8m – Additional lithium – tin intercepts in recent drilling at Cinovec
• European Metals has announced the results of 3 additional drill holes at its wholly owned lithium – tin property at Cinovec where the company has now completed ten diamond drill holes and has three currently underway.
• The results from holes CIW-13, CIW-14 and CIW-18 include an 82m wide intersection averaging 0.48% Li2O from a depth of 132m and a 175m intersection averaging 0.40% Li2O both in hole CIW-14 which was drilled “at the southern edge of the Cinovec Main  sector of the deposit near its boundary with Cinovec South. The area is marked by relative sparsity of historic drill data and lithium analyses.”
• Hole CIW-13 was drilled in a similar part of the deposit and encountered 152.3m of mineralisation at an average grade of 0.37% Li2O at a depth of 277m. The major mineralised intercept in hole CIW-18 was encountered at a depth of 151m in a 243m wide intersection at an average grade of 0.30% Li2O.
• The results to date will be incorporated in an interim update to the resource model which is expected to be released in the next two weeks. “in the meantime, drilling will continue to both expand the resource and increase its level of confidence to allow a further resource upgrade in the first half of 2017.”
• Currently, Cinovec has an indicated resource of 49.1m tonnes at an average grade of 0.43% Li2O with an additional inferred resource of 482mt at 0.43% Li2O. Cinovec also contains an undeveloped tin resource with an indicated 15.7mt at an average grade of 0.26% tin and an additional inferred tonnage of 57.7mt grading 0.21% tin.
Conclusion: The results reported today are generally deeper than some of the holes reported earlier in the programme and appear to come from an area which has less historical geological and drilling information available. The forthcoming resource model update may help put these results into context, however, it appears that there may still be further detailed investigation required to identify the optimum area for initial mine development though all the indications at this stage point to the economic logic of starting in shallower parts of the deposit.

Georgian Mining Corporation* (LON:GEO) 9p, Mkt Cap £7.3m – Raises £2.6m
(formerly Noricum Gold.  Ticker changed to GEO LN from NMG LN)
• Georgian Mining have raised £2.6m by way of an oversubscribed placing of 32.5m new shares at 8 pence per share.
• The placing is to work up a resource of 3-5mt of copper-gold mineralisation within the Kvemo Bolnisi project in Georgia.
• The idea is to utilise around 1mtpa of spare process capacity at the joint venture partner’s Madneuli mine just 7km from the project.
• This capacity is available to Georgian Mining Corp under its existing joint venture agreement.
• Capex:  The use of local contractors and the jv partners process plant means that Georgian Mining could start mining with virtually no capital cost.
• We expect costs to be relatively low at under $600/oz including mining and transport
• Grades should run at around 1% copper with 0.7-0.8% copper to start plus a significant gold credit
• Blending this in with material from the Madneuli mine might also improve recovery rates for both mines.
• Funds will be used for:
o 10,000m drilling program
o mine scoping study,
o plant optimisation review to potentially further expand plant capacity at jv plant
o metallurgical test work
o internal pre-feasibility studies.
o Production should start in Q4 2017 reaching full production of around 1mtpa expected early in 2018
 Processing; copper sulphides will float and gold recovery is via heap leach.
 Exploration:  25 drill holes at the Kvemo Bolnisi site show significant results and has yielded a geological exploration target of 50mt and is considered to offer much greater potential than the current 3-6mt plan.
Conclusion:  The ability to simply dig and deliver copper/gold ore to the existing Madneuli plant should be of great benefit to shareholders.  The opportunity to start mining at relatively low cost and virtually no capital cost presents an unusual opportunity for a junior listed mining company.
*SP Angel acts as Nomad and Broker to Noricum.  The company has agreed to issue 267,750 warrants to SP Angel exercisable at 10p/s

Savannah Resources (LON:SAV) 5.25 pence, Mkt Cap £23.6m – Additional high grade copper intersections in Oman
• Savannah Resources has reported the final results from its drilling at the Mahab 4 prospect which lies within the Block 5 exploration area where the company is earning a 65% interest.
• Hole 16B5DD018 has intersected 14.25m at an average of 3.86% copper, 0.62% zinc and 0.22 g/t gold from a depth of 109.1m in a shallow dipping hole angled at 25⁰ towards 256⁰ (WSW).
• These results, as well as those from previously reported earlier drill-holes in the programme, including a 67.4m wide intersection averaging 4.64% copper and 1.13% zinc in hole 16BDD009 from a depth of 18.6m which was drilled obliquely to the structure in order to produce a larger sample of mineralisation for metallurgical testing, will be incorporated in an updated resource estimate expected during Q4 2016.
• The current indicated and inferred resource of high grade VMS (volcanogenic massive sulphide) mineralisation is 1.7mt at an average grade of 2.2% copper.
• The company is now underway with a new 600m diamond drilling programme to “establish a JORC compliant resource estimate at the Dog’s Bone lens, which is part of the Aarja deposit”, which also lies within Block 4.
• Savannah Resources is working towards a “potential mine development for late 2017” and the resource drilling at Aarja is intended to ensure “that it can be considered as part of the potential mine development”.
Conclusion: With the completion of the drilling at Mahab 4, we look forward to the updated resource estimate later this year and results from the current drilling programme on the Dog’s Bone prospect.

Strategic Minerals* (LON:SML) 0.4 pence, Mkt Cap £5.2m – Drilling tender for Redmoor with drilling expected in H1 2017
• A drilling tender has been issued to eight companies for a two phase, 23-hole drilling programme at the Redmoor  tin tungsten project in Cornwall.
• The first phase consists of 13 holes, followed by a second, 10 hole programme. Discussions and site visits for short-listed companies are expected to occur during December with drilling to start during H1 2017.
• Commenting on the recent appointment of Jeff Harrison as the Community Advisor and the invitation of tenders for the start of drilling a Redmoor, Managing Director, John Peters, said “These developments continue to reinforce our intention to fully exercise our option over 50% of the Redmoor project and to commence drilling at Redmoor in the first half of 2017.”
• Strategic Minerals has also announced that its joint venture partner in the Redmoor, New Age Exploration has changed its name to Cornwall Resources Limited.
Conclusion: The move to drill at Redmoor will provide additional information over a wider area to help update the current inferred resource estimate of 13.3mt at an average grade of 0.56% tin equivalent, which is largely based on limited historic drilling.
*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

]]> Today's Oil and Gas Update - Egdon Resources,Frontera Resources, Gulf Keystone,Providence Resources and others Wed, 16 Nov 2016 09:54:00 +0000 Headlines
• In Brief:
o Egdon Resources (LON:EDR– 15p) – Portfolio Building
o Frontera Resources (LON:FRR– 0.10p) – Another 10 Years?
o Gulf Keystone (LON:GKP– 1.15p) – (HOLD – $203 – 519mm; 0.65 – 1.66p) – Wrong Focus
o Providence Resources (LON:PVR– 10p) – Solid, But Not the Focus
o Sirius Petroleum (LON:SRSP– 0.50p) – The Action Begins… Sort Of
o Soco International (LON:SIA– 134p) – Time to Look to the Future
o Tethys Petroleum (LON:TPL, TSE:TPL  – 1.38p/C$0.02) – Rock and a Hard Place

In Brief
• Egdon Resources (LON:EDR – 15p) – Portfolio Building: Today's acquisition of a 10% interest in PEDL201 serves to consolidate its position in the midlands basins, with which not only adds volumetric prospectivity, but also provides it with additional currency to negotiate with prospective farminees. The wider impact, however, is, in this case, more marked, especially as the unconventional prospectivity is yet to be assessed, and while it may be that the shale series is ultimately unproductive, until such times as that is proven, it represents significant optionality.
• Frontera Resources (FRR LN – 0.10p) – Another 10 Years?: While ordinarily a new country entry would be assessed on its merits as a geological province, but given that it has taken over 10 years to get a more mature province to the point of potential declaration of reserves, we believe that even if this were a mature province such is the management's track record that it is actually a negative. Given that the progress to date in Georgia was the net effect of 100% of management time, now that this time will be spread more thinly, we find ourselves wondering what effect the inclusion of Moldovan acreage will have on the progress of both assets. Either way, a fundraising will be in the offing.
• Gulf Keystone (LON:GKP – 1.15p) – (HOLD – $203 – 519mm; 0.65 – 1.66p) – Wrong Focus: Today's announcement isn't really a surprise, but it isn't the right thing to do, not yet anyway. The smaller shareholders have supported the Company through a significantly trying period, and for shareholders holding less than 100 shares to see such an albeit significant destruction in value, essentially reduced to nil, will gall some. However, and we need to be frank here, the alternative was nil for all shareholders had the conversion not happened. While we can appreciate that the management want to separate themselves from the past and move forwards, but given that past, and the lingering debt that remains, we think that the number of shares in issue should be the least of their worries. What will change investors' perception of the Company is delivery and free cash flow generation . Our valuation range remains $203 – 519mm, 0.65 – 1.66p using the current shares in issue, but post the share consolidation the per share valuation range will be 65 – 166p. Reiterate HOLD
• Providence Resources (LON:PVR– 10p) – Solid, But Not the Focus: Today's news is a shot in the arm for the Company's portfolio, and as we have said previously, is a reflection of the esteem in which its technical capability is held in governmental circles. However, what is undeniable is the fact that no matter how much good news the Company receives on its exploration prospects, these make little contribution to the current valuation, and the market sees this as medium to longer term opportunities to peruse once the Company is generating cash flow from Barryroe. As a result, and while we can appreciate the step forwards that this undoubtedly is, the announcement that investors are looking for is on the next stage of Barryroe. Until then, we believe that everything else will be viewed as a side show.
• Sirius Petroleum (LON:SRSP– 0.50p) – The Action Begins… Sort Of: After much delay, it appears that Sirius may finally start drilling the Ororo wells. While this is good news, and the Company’s shares should rightly trade ahead on the news, there are a number of concerns, namely: (i) that management state “if successful,” which to us is a step back from their previous language of “bring the Ororo field (OML 95) in Nigeria… …into production” where that spoke of development. This can now fairly and squarely be called an appraisal well; (ii) given that it is an appraisal well, we need more information on how it will get to production in under 6 months given that management talk of “first hydrocarbons in 1H 2017;” and (iii) given that only 4.2mm bbl of the 2C Resources of 11.4mm boe are liquids, to what extent is the $3.5/mcf gas solu tion necessary for a commercial development. Of these points, the last is the more pressing, as it transcends the timing issue. Interesting times ahead for the Company, and we suspect that a funding round will be required post the well results, it will be a question of what level and how much.
• Soco International (LON:SIA– 134p) – Time to Look to the Future: today's update is significant not because of the operations, which remain on track, but because of the fact that the delay in the Mongolian payment has a minimal impact on the overall progress of the Company. Given this, we believe that it is now the right time for the Company to start to start to expand its exploration efforts, which in turn will hopefully feed the appraisal, development and production portfolios in due course, quite a luxury problem to have in this current market. All in all, investors should be happy with the Company, and more importantly, the way that it is being managed.
• Tethys Petroleum (LON:TPL – 1.38p/C$0.02) – Rock and a Hard Place: Today's results make sobering reading, especially as the Company is essentially one quarter away from closing down. What is needed is a resolution with Olisol and funds to be able to satisfy creditors (initially), and intervene in its asset base to lift production. The focus on Olisol has meant that the Company has proceeded too far down one funding route to effectively be able to enter in to any wider funding programme, and now needs to pursue the “rifle shot” approaches from other stalking horses. While there is a glimmer of hope, unless it is of a size that enables the Company to address its deficiencies currently and achieve a significant proportion of the production necessary to grow its business, we do not see how this provides anything other than a Band-Aid to the Company. Still, the monies have to be remitted first, which is now the only focus for the Management team, and rightly so.

]]> VSA Capital Market Movers - Egdon Resources Wed, 16 Nov 2016 08:22:00 +0000 Egdon Resources (LON:EDR)

Egdon Resources (EDR)#ce and this will add 2,471 net acres to EDR’s portfolio which is considered to be prospective for both conventional and unconventional resources.

Further to this, yesterday afternoon Nottinghamshire County Council granted IGas (IGAS) planning consent to explore for shale gas at Springs Road in PEDL140, which EDR holds a 14.5% WI in. IGAS has proposed to drill two wells, the first a vertical well to a depth of 3.5km and dependent on the results it may drill a second vertical well to 4.3km before deviating it horizontally.

This is clearly a positive result for both IGAS and EDR, and removes this uncertainty over the licence, but is also another win for the UK shale industry following several major decisions going its way in recent weeks.

]]> Today's Market View - Anglo American, Asiamet Resources, Botswana Diamonds, Edenville Energy and Sula Iron & Gold Tue, 15 Nov 2016 10:46:00 +0000 Anglo American (LON:AAL) – Latest De Beers diamond sales in line with expectations.
Asiamet Resources (LON:ARS) – Additional drilling confirms the continuity of shallow mineralisation
Botswana Diamonds (LON:BOD) – Exploration update on drilling at Orapa and Gope
Edenville Energy (LON:EDL) -  Initial bulk test results confirm coal suitability for power generation
Sula Iron & Gold (LON:SULA) – Visible gold find indicates potential extension to Ferensola gold project

US dollar strength higher potential Fed rates and inflation cause equities to pull back
• The election of Donald Trump is having an interesting impact on equities worldwide.
• Trump’s drive to fund new construction is seen as likely to cause the Fed to raise interest rates in order to borrow more money.
• This is driving the US dollar higher as funds flow back into the US in anticipation of better rates and a stronger dollar.
• New US construction spending is also seen as potentially driving inflation higher as money flows into the economy.
• The downside to all this is the rapid withdrawal of funds from other regions with potential to collapse certain markets and destabilise Asian and other economies.  Political instability in South Korea alongside some expensive corporate mishaps is a concern.
• China is trying to pull back the run in commodity prices through increasing the cost of futures positions through raising fees and margin requirements causing steel futures prices to fall

Miners are off today dragged by lower iron ore and base metal prices.
• Sovereign bond prices are taking a pause from a recent sell off with yields on US 10y Treasuries down 7bp after having climbed 41bp over the last three trading session marking the steepest climb in more than seven years.
• Brent is up for the first time in the last four days helped by a modest correction in the US$ index (-0.6%) which climbed more than 3% since early Nov.
• Gold prices are level this morning trading close to the five-month low with base metals broadly trading lower.
• A correction in iron ore prices saw Singapore AsiaClear contracts dropping as much as 11% to $67.6/t before settling at $70.5/t. Jan one-year iron ore futures were down 1.7% coming off the highest level since the start of the year.
• Chinese steel prices are off as well with both rebar and HRC trading lower.

Dow Jones Industrials  +0.11% at 18,869
Nikkei 225   -0.03% at 17,668
HK Hang Seng   +0.46% at 22,324 
Shanghai Composite    -0.11% at 3,207
FTSE 350 Mining   -3.55% at 14,385 FTSE 350 +96% since 1st January
AIM Basic Resources   -1.85% at 2,417 AIM Basic Resources +48% since 1st January

Economic News
Date Index Period   Actual Est Previous
Tuesday Retail Sales Oct %mom   0.6 0.6
  Core Retail Sales (ex Auto) Oct %mom   0.5 0.5
Wednesday Core PPI Oct %mom   0.2 0.2
Core PPI Oct %yoy  1.6 1.2
Industrial Production Oct %mom  0.2 0.1
  Capacity Utilization Oct %   75.5 75.4
Thursday Weekly Jobless Claims       257k 254k
Core CPI Oct %mom  0.2 0.1
  Core CPI Oct %yoy   2.2 2.2
Source: Bloomberg     

UK – The pound came off against the US$ this morning (-0.6%) following the release of weaker than forecast inflation numbers.
• CPI (%mom): 0.1 in Oct v 0.2 in Sep and 0.3 forecast.
• Core CPI (%yoy): 1.2 in Oct v 1.5 in Sep and 1.4 forecast.

Germany – Economic growth came in below estimates slowing to the weakest level in a year in Q3/16.
• Growth was driven by private and government spending with both vestments and export acting as a drag on GDP expansion.
• The dynamics contrast with the first two quarters when net export contributed positively to growth.
• Meanwhile, low unemployment helped to extend growth in consumption for a tenth consecutive quarter.
• Preliminary data point to a strong finish to the year with the economy likely to hit 1.8% growth in 2016, up on 1.5% recorded in 2015.
• Q3/16 GDP (%qoq): 0.2 v 0.4 in Q2/16 and 0.3 forecast.
• Q3/16 GDP (%yoy): 1.7 v 1.8 in Q2/16 and 1.8 forecast.

Portugal – The nation beat forecasts climbing 0.8%qoq/1.6%yoy in Q3/16 on stronger exports.

US$1.0798/eur vs 1.0757/eur yesterday.   Yen 108.17/$ vs 107.81/$.   SAr 14.178/$ vs 14.428/$.   $1.243/gbp vs $1.250/gbp.     
0.756/aud vs 0.755/aud.   CNY 6.853/$ vs 6.843/$.
Yuan falls again as China continues to depreciate its currency as US dollar surges

Commodity News
Precious metals:
Gold US$1,226/oz vs US$1,225/oz yesterday –
     Gold ETFs 63.2moz vs 63.4moz yesterday –
Platinum US$943/oz vs US$940/oz yesterday
Palladium US$705/oz vs US$676/oz yesterday –
Silver US$17.04/oz vs US$17.24/oz yesterday

Base metals:   
Copper US$ 5,422/t vs US$5,624/t yesterday – Copper – Funds booked record net-long positions in the week before US presidential elections, according to the CFTC data released yesterday.
Total net long contracts held by hedge funds and other large speculators more than doubled to 59.3k last week.
• Chilean copper mine production declined in Sep led by losses at Codelco operations (-1.1%yoy) and Antofagasta’s Los Pelambres (-5.8%yoy).
• Total output totalled 459.7kt with 322.3kt in the form of concentrates and 137.4kt in SX-EW refined copper, according to the state Cochilco commission.
• Production in the first nine months of the year was down 3.9%yoy coming in at 4.1mt.
• The nation remains on target to hit 5.4mt by the end of the year, the commission said.
• Production at Escondida was up 2.5%yoy at 77.0kt in Sep

Aluminium US$ 1,718/t vs US$1,746/t yesterday
Nickel US$ 11,105/t vs US$11,240/t yesterday
Zinc US$ 2,548/t vs US$2,533/t yesterday
Lead US$ 2,168/t vs US$2,149/t yesterday
Tin US$ 20,295/t vs US$21,235/t yesterday –

Oil US$45.4/bbl vs US$44.8/bbl yesterday –
Natural Gas US$2.793/mmbtu vs US$2.682/mmbtu yesterday
Uranium US$18.65/lb vs US$18.45/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$72.9/t vs US$75.5/t – HRC steel prices falling as steel futures prices collapse
• Iron ore stocks at Chinese ports are close to a two-year high at 108mt.
• Tangshan city in China is to spend $5.5bn to consolidate and relocate 10 steel companies with 8mtpa of steel production capacity to the coast
• The city has already closed 32mtpa of steel capacity out of a total of around 100mtpa
• This restructuring should move 8mtpa of capacity 40km away to the coast to the new Tangshan Bohai Steel Project and will cut 3.5mtpa of capacity in the process.
Chinese steel rebar 25mm US$465.1/t vs US$469.4/t
Thermal coal (1st year forward cif ARA) US$69.7/t vs US$73.1/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$307.3/t –

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
Anglo American (LON:AAL) 1128 pence, Mkt Cap £14.55bn – Latest De Beers diamond sales in line with expectations.
• Anglo American reports that De Beers has realised US$470m from the latest, 9th of the year, diamond sale.
• The sales are slightly lower than the US$494m recorded for the previous sale this year but the company comments that they “continued good demand for De Beers rough diamonds, with sales in line with expected seasonal demand patterns”.
• We estimate that De Beers has sold approximately US$5.5 bn of diamonds so far this year, almost US$1bn more than the US$4.67bn of sales achieved in the calendar year 2015.
Conclusion: De Beers diamond sales are in line with company expectations and substantially ahead of the results in 2015 suggesting a modest firming of the market for rough diamonds.

Asiamet Resources (LON:ARS) 2.9 pence, Mkt Cap £17.9m – Additional drilling confirms the continuity of shallow mineralisation
• Asiamet reports the latest tranche of results from a further 10 holes in its resource evaluation drilling programme at the Beruang Kanan Main (BKM) copper project in central Kalimantan.
• A total of 56 holes (5600m) has now been completed and a further 62 holes (5400m) remain outstanding to complete the programme. Among the results reported today are a 42m wide intersection at an average grade of 0.56% copper from a depth of 33m in hole BKM32320-01, 29.5m at an average grade of 0.85% copper from a depth of 97.5m in hole BKM32200-04 and 4m at 2.02% from a depth of 6.6m and 19m at 1.16% copper from a depth of 28.6m both in hole BKM32300-02.
• The company highlights that “Excellent continuity of copper mineralisation has been established across a significant portion of the deposit” and that “coherent higher grades established within the BKM044 and 058 zones provide an excellent opportunity to selectively mine and enhance production early in the project life.”
• Although its programme is still only partially complete, “Extensive areas of very shallow mineralisation with potential to further reduce the already low stripping ratio … have been delineated”.
Conclusion: Asiamet’s resource evaluation drilling programme at BKM is now approximately half complete and is already identifying areas of higher grades and lower overburden (waste) cover which should provide scope for optimisation of the mine design and opportunities to enhance the economic returns of the project when the updated resource estimation is available for use in the feasibility studies.

Botswana Diamonds (LON:BOD) 1.7 pence, Mkt Cap £5.7m – Exploration update on drilling at Orapa and Gope
• Botswana Diamonds has announced that, following 1290m of drilling on 3 licences at Orapa and Gope in Botswana, it has recovered a second visible diamond in drill core from the AK21 licence in the Orapa area. Two 200kg samples have been sent to S Africa for detailed mineralogical and microdiamond analysis which is expected to take around 3 months.
• Two drill holes have been completed on each of the PL260 and PL085 licences at Orapa with a further 4 holes on PL135 in the Gope area. The holes drilled on the PL085 licence “encountered a dolerite sill instead of kimberlite” while at Gope, “Rather than the hoped for kimberlite an intensively weathered part basalt dolerite rock was found. The results are being reviewed”.
Conclusion: We note that the area has extensive sand cover extending up to 150 metres depth and at this early stage of exploration the targets are challenging. Discovery of diamonds on the AK21  kimberlits provides a potential follow up target but the interpretation of the geology of the other areas appears to have been more intractable than originally anticipated

Edenville Energy (LON:EDL) 0.6 pence, Mkt Cap £4.5m -  Initial bulk test results confirm coal suitability for power generation
• Edenville Energy has reported the first test results from the recent bulk sampling programme at the Mkomolo and Namwele coal deposits in western Tanzania have confirmed the suitability of the coal for use as power plant feed.
• The results from sample MK2, which come from the southern end of the Mkomolo deposit, show that “Only moderate, or in certain cases, no washing, will be required for Rukwa coal to be used in the combustion process in a coal fired thermal power plant.”
• The company further comments that where washing is needed, high yields of around 75% are achievable in the production of suitable plant feed.
• The coal “is accessible at the surface which will result in both low mining costs and the deposit being able to be opened up in a short timeframe”. Although clearly there is other work to do, including the testing of other samples from the bulk sampling programme, these initial results imply that in addition to relatively low mining costs, there may also be relatively low treatment costs required to produce a consistent feed for power station development.
• “Further test results on the other Mkomolo near surface coal seam are expected shortly” but  “The Company can now confirm the suitability of this coal to provide a sustained and reliable fuel supply to a power plant project.”
Conclusion: The initial bulk test results suggest that the Mkomolo coal is able to produce suitable power plant feed from near surface sources. We look forward to the results of further testing in the relatively near future.

Sula Iron & Gold (LON:SULA) 0.2p, Mkt Cap £2.8m – Visible gold find indicates potential extension to Ferensola gold project
• Sula report visible gold has been recovered from weathered iron oxide / quartz samples collected from a road exposure that cross-cuts the 4km long Induced Polarisation ‘IP’ anomaly.
• The team have also collected additional samples from the location and is now trenching select targets across the anomaly.
• Sula expect to materially extend the Ferensola JORC Exploration Target’ of 5-7mt grading at 4-8g/t Au for 0.8moz to 1.5moz Au and are likely to upgrade this to a more certain JORC resource in time.
• Similar mineralisation is seen in trenches near the Sanama Hill drill site.
• There are six similar looking IP anomalies interpreted to be associated with potentially mineralised sulphides over 8.5km of strike length indicating the potential for good scale is enough of this is mineralised.
Conclusion:  Ferensola looks like a promising gold prospect but is still in the relatively early stages of its evaluation.  The main prospect and its extension will need to be drilled to materially increase its scale and confidence in the resource.

]]> Today's Oil and Gas Update - Wentworth resources and President Energy Tue, 15 Nov 2016 09:17:00 +0000 o Wentworth Resources (LON:WRL) – Starting to Canter
o President Energy (LON:PPC) – Restructuring Provides Space
In Brief

• Wentworth resources (LON:WRL)– Starting to Canter: Today's news, while likely to disappoint and worry some, underlines the progress that the Company continues to make. While limited sales during the period, whether out of the Company's hands or not, is not an issue in isolation (per se), should this represent a pattern, there will be some concern as to the reliability of the end market. We, however, do not have those concerns currently. The forward plan continues to take shape, which we believe is coming at the right time, with production having been established and the outlook improving. One area where we have a small concern is managements use of debt to fund a forward programme. While we believe that debt is a valid tool to use, we believe that the timing and structure has to be such that it replaces the existing debt or is done on such terms and at such a quan tum that it minimises the likelihood of default, as we can't see any way around the cross default provisions. There is no doubt that the Company is at the start of its expansion period (albeit undermined by the sales in 3Q), and we believe that it will continue to build out its footprint. We believe that the trigger for enlarging the debt capacity (opposed to refinancing the existing debt) should be the point at which the Company has a cash position net of current receivables and payables of ~$10mm, which would provide sufficient headroom for the Company to operate and ride through any periodic downturns.

• President Energy (LON:PPC) – Restructuring Provides Space: Today's placement and announcement of its loan restructuring is welcome, as it will alleviate some of the pressure on the balance sheet and provide the Company with greater access to the cash flows given that the net profit interest has been extinguished. What the Company has to do now is ensure that the wells that it is working over and the development wells that it drills add enough surplus cash flow so that the debt obligations can be met, albeit proportionately to the cash that they require initially. The remainder needs to deployed in such a way that it creates returns sufficient to support the debt at least, which to our mind do not include exploration wells. Only if the investment generates sufficient returns over and above that required to service the debt and provide sufficient headroom to amortise the principal, should that then be deployed on exploration wells. While the loans may be from a connected party, the Company should not rely on Levin's largess or kindness, and the Company's approach should place loan servicing front and centre the same way that they would a third party creditor. Today's restructuring provides the Company with space to execute a measured and successful programme, but it can't be side-tracked excessively by high risk exploration, especially when it's in blocks held by production.Cash generation must be the focus in the near and medium term to rebuild the Company's base.

]]> VSA Capital Market Movers - Sula Iron & Gold and Asiamet Resources Tue, 15 Nov 2016 08:22:00 +0000 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold (SULA) has announced the recovery of visible gold at the Ferensola Project. The samples were taken from weathered iron oxide and quartz exposed by a road which cross cuts the large Eastern Target area that was highlighted as a prospective zone in the Induced Polarisation survey and lies outside the current JORC Exploration target.

These finds have previously described by the company as “goldstones” and they are a common occurrence across the license area. Previously, rock sampling had not been carried out in this specific location and we believe that this additional discovery of visible gold further underpins SULA’s exploration strategy. Indeed, the drilling programme in 2015 which yielded encouraging results and significant sulphide hosted gold bearing mineralisation also demonstrated the link between the IP anomalies and such mineralisation. The goldstones which represent the oxidised gold mineralisation are also correlated with these anomalies and as such represent a low cost method of directing the focus of exploration work.

Given the combination of the significant IP anomaly and the presence of goldstones, underpinned by this latest discovery, we believe that the Eastern Target offers significant exploration potential and could be far more significant than the original JORC target defined in 2015. SULA is now undertaking manual trenching of specific IP targets.

We reiterate our Speculative Buy recommendation and 3.1p/sh. target price.

Asiamet Resources (LON:ARS)
Asiamet Resources (ARS) has announced further encouraging drill results from its infill drilling programme related to the BKM project in Indonesia which is currently progressing towards the completion of a Feasibility Study. The new holes have confirmed continuity of copper mineralisation across much of the resource which should result in strong rates of conversion from Inferred to Measured and Indicated levels of confidence. Further confirmation of extensive shallow mineralisation was also achieved which is key to the low strip ratio of the potential project.
Highlights included;
• 29.5m @ 0.85% Cu from 97.5m depth including 11m @ 1.25% Cu
• 17m @ 1.57% Cu from 1m depth including 7m @2.54% and 3m @ 1.87%
• 42m @ 0.56% from 33m depth including 7m @ 1.43% Cu
Additional drilling is also seeking to determine the limits of the mineralisation. One hole was drilled 50m to the East of the BK044 Zone which yielded mineralisation thus extending the footprint of mineralisation whilst two holes drilled to the West of the current Resource also yielded copper mineralisation, extending the footprint by 150m. Further drill holes were also drilled on different orientations and angles to verify the robustness of the BKM Resource.

Overall, the results confirm our prior view that ARS is making good progress and we expect the Feasibility Study to confirm the potential for a low cost copper project. 56 holes have been drilled from the current programme with a further 62 to drill.

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

]]> Surprise! The markets like Trump after all Mon, 14 Nov 2016 11:11:00 +0000 Today's Market View - Amur Minerals, Aureus Mining, DiomondCorp, Caledonia Mining, Metals Exploration, Serabi Gold and Strategic Minerals Mon, 14 Nov 2016 10:46:00 +0000 Amur Minerals* (LON:AMC) – Access road update
Aureus Mining (LON:AUE) – Q3 Operational update
DiamondCorp (LON:DCP) Suspended – Lace Diamond mine closed as storm causes production level to flood
Caledonia Mining (LON:CMCL) – Looking for a 20% increase in gold production in 2017.
Metals Exploration* (LON:MTL) – Equity placement
Serabi Gold (LON:SRB) – Record Q3 gold production and increased 2016 guidance
Strategic Minerals* (LON:SML) – Exploration of Australian gold and nickel projects

Global growth looks set to continue to pick up as Japan and China see growth in Q3 GDP and investment activity
• Expectations for global growth may rise following better numbers from Japan Q3 GDP and Chinese investment and factory activity.
• The election of Donald Trump is seen as good for US growth with Trump pledging to fix inner cities, rebuild bridges, highways and other infrastructure.
• Trump has also pledged to raise trade barriers against cheap imports which may lead to the need to generate more local materials.
• Many ‘Democrat’ policies may be repealed with less emphasis on the environment and on emissions controls
• Meanwhile China continues to depreciate the Yuan to counteract the impact of US dollar strength

Rio Tinto, BHP, Vale, Fortescue, Glencore and Anglo American benefit from continuing rise in iron ore and coking coal prices
• Rio Tinto is the major beneficiary of the strong recovery in iron ore prices#
• BHP is also well exposed but may be held back by the pull back in oil prices.
• Fortescue is relatively highly leveraged despite an amazing reduction in operating costs.
• Anglo and Glencore are by comparison relatively small iron ore producers but both benefit from sizeable coking coal production .

Russia – President Putin may step down due to ill health
• The Daily Mail Online, the most popular website in the world, reports that President Putin may step aside due to ill health.
• Professor Valery Solovey, dean at Moscow State University hinted at health problems and concerns about relations with the West.
• Solovey’s comment posted on a Kremlin-friendly website was taken down within three hours.
• We have to wonder if President Putin is currently unwell or if his illness is still being planned.

Dow Jones Industrials  +0.21% at 18,848
Nikkei 225   +1.71% at 17,673
HK Hang Seng   -1.37% at 22,222 
Shanghai Composite    +0.45% at  3,210
FTSE 350 Mining   +2.36% at 15,029 FTSE 350 +105% since 1st January
AIM Basic Resources   -1.73% at 2,463 AIM Basic Resources +51% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
Date Index Period   Actual Est Previous
Friday UoM Consumer Sentiment Nov   91.6 87.9 87.2
  UoM Current Conditions Nov   105.9 103.0 103.2
  UoM Expectations Nov   82.5 77.5 76.8
Tuesday Retail Sales Oct %mom   0.6 0.6
  Core Retail Sales (ex Auto) Oct %mom   0.5 0.5
Wednesday Core PPI Oct %mom   0.2 0.2
Core PPI Oct %yoy  1.6 1.2
Industrial Production Oct %mom  0.2 0.1
  Capacity Utilization Oct %   75.5 75.4
Thursday Weekly Jobless Claims       257k 254k
Core CPI Oct %mom  0.2 0.1
  Core CPI Oct %yoy   2.2 2.2
Source: Bloomberg     

China – fixed asset investment rose by 8.3% for the first 10 months of the year slightly ahead of the 8.2% expected
• A mixed bag of economic news released today point to a consolidation of economic growth rate on the way to meet the government’s minimum annual target 6.5%.
• Fixed Assets Investment (%ytd): 8.3 v 8.2 in Sep and 8.2 forecast.
• Fixed asset investment refers to expenditure on physical assets including machinery, land, vehicles and buildings
• Private investment growth rose to 2.9% vs 2.5% seen in the first 9 months of the year
• Retail sales rose by 10% in October, slightly slower than the 10.7% expected as see in September
• Industrial Production (%yoy): 6.1 in Oct v 6.1 in Sep and 6.2 forecast.
• Retail Sales (%yoy): 10.0 v 10.7 in Sep and 10.7 forecast.
• A slowdown in retail sales is a bit of a concern given the authorities’ focus on the development of local demand.
• Private FAI are seen accelerating 0.4pp to 2.9% after hitting record low few months earlier with the state sector continuing to drive growth as state FAI climbed 20.5% (-1.1pp from the previous month).
• The data released on Friday showed new credit dropped in Oct falling by nearly 50% from the previous month which is reported to be driven by seasonal factors such as a week long holiday and US presidential elections related causes.
• Bloomberg said that a 16% increase in total social funding combined with local government’s issued bonds was little changed from Sep suggesting the economy remains leverage-biased.
• Property investments growth climbed 0.8pp to 6.6% in the first 10 months of the year marking the third straight month of acceleration since a low of 5.3% in Jul.
• Aggregate Financing (CNY bn): 896 in Oct v 1,721 in Sep and 1,000 forecast.

Japan – Q3 GDP growth hits 2.2% annualised (vs expectation of 0.9%) as exports beat expectations

South Korea - We are wary of the political crisis in South Korea and potential for further contagion and potential disruption to the economy

US$1.0757/eur vs 1.0881/eur yesterday.   Yen 107.81/$ vs 106.35/$.   SAr 14.428/$ vs 13.248/$.   $1.250/gbp vs $1.264/gbp.     
0.755/aud vs 0.760/aud.   CNY 6.843/$ vs 6.807/$.

Interesting move in the Yuan as China continues to depreciate its currency against as stronger US dollar

Commodity News
Precious metals:
Gold US$1,225/oz vs US$1,257/oz yesterday –
     Gold ETFs 63.4moz vs 65.6moz yesterday – surprise major fall in ETF holdings following Trump election on expectations for a Fed rate rise
Platinum US$940/oz vs US$976/oz yesterday
Palladium US$676/oz vs US$689/oz yesterday –
Silver US$17.24/oz vs US$18.75/oz yesterday

Base metals:   
Copper US$ 5,624/t vs US$5,975/t yesterday –
Aluminium US$ 1,746/t vs US$1,780/t yesterday
Nickel US$ 11,240/t vs US$11,885/t yesterday
Zinc US$ 2,533/t vs US$2,555/t yesterday
Lead US$ 2,149/t vs US$2,190/t yesterday
Tin US$ 21,235/t vs US$21,730/t yesterday –

Oil US$44.8/bbl vs US$45.8/bbl yesterday –
Natural Gas US$2.682/mmbtu vs US$2.620/mmbtu yesterday
Uranium US$18.45/lb vs US$18.25/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$75.5/t vs US$73.6/t – Dalian iron ore futures prices continue to rise indicating iron ore prices may rise to >$80/t
• Higher coking coal prices are causing steel mills to buy imported higher grade iron ore to feed their blast furnaces.
• The very rapid and continuing rise in coking coal prices is forcing steel producers to become more energy efficient and to dump lower quality iron ore in preference for higher grade ores for more rapid conversion.
• China’s drive to continue to develop infrastructure, housing and suburban rails systems is leading demand while Donald Trump’s election to the White House is also leading expectations for greater steel demand going forward.
Chinese steel rebar 25mm US$469.4/t vs US$468.5/t
Thermal coal (1st year forward cif ARA) US$73.1/t vs US$76.2/t yesterday
Premium hard coking coal Aus fob US$307.3/t vs US$307.2/t –

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
Amur Minerals* (LON:AMC) 4.5p, Mkt Cap £23.2m – Access road update
• The 8m wide gravel road fit to handle concentrate and supplies trucking from the Kun Manie site is estimated to be 316km long.
• Preliminary results suggest the project will require five bridges and 200 stream and drainage crossings.
• The team is planning to proceed with field verification programme including the preparation of topographic maps, studies on permafrost conditions and geotechnical and soil stability drilling programme to identify the final route.
• Special attention will be devoted to the design of proposed bridges given highly volatile water levels of local rivers during rains and spring snow melts.
• The cost per km of the road is expected to be brought down considerably reflecting the rouble depreciation.
• The currency currently trades at 65 RUBUSD v 30 RUBUSD assumed in previous studies.
• The average cost per km on a similar road construction project is estimated at $400k/km, down from $1,000k/km budgeted by the Company previously, as suggested by the data provided by the Far East and Baikal Region Fund.
Conclusion: Road access is one of the major project capex components along with processing plant infrastructure, mining equipment and power supply solution. A major cost saving on road construction budget in US$ terms is a welcome news with the Company planning further works to finalise the route and narrow cost estimates range.
* SP Angel act as Nomad and broker to Amur Minerals

Aureus Mining (LON:AUE) 1.7 pence, Mkt Cap £20.2m – Q3 Operational update
• Aureus Mining reports that it produced 14,392 oz of gold during the quarter to 30th September, however, the impact of plant restarts and intermittent stoppages during the quarter, in conjuction with the write-off of low grade stockpiles, resulted in operating cash costs of US$1971/oz and all –in sustaining costs of US$2,153/oz.
• The New Liberty mine treated 221,360 tonnes of ore at a grade of 2.92 g/t, implying that recovery rates are running at around 69%.
• The company, with the strengthened team following the arrival of MNG Gold is continuing with its plant optimisation and remedial work and is reporting that “Throughout Q3 2016 and to date, the process plant detoxification system [which was one of the key problems during the ramp up phase] has continued to operate to specification and all discharges into and out of the TSF [Tailings Storage Facility] have remained fully compliant with the Company’s environment and operating permits.”
• Under the new management team, New Liberty is moving to owner operations of the mining activity and “Management believe that the low gold recovery is primarily attributable to inadequate oxygen generating capacity of the existing plant.” Additional capacity is expected to be installed by mid - 2017. “Management now expects production for the fourth quarter of 2016 will be in the range 17,000-20,000 ounces.”
Conclusion: The turn - around of the New Liberty operation looks like it will be relatively drawn out with some key additional equipment not expected to be installed before mid-2017

DiamondCorp (LON:DCP) Suspended – Lace Diamond mine closed as storm causes production level to flood
• DiamondCorp are possibly the unluckiest mining company around.
• Just as the team were ramping up towards full production the mine has been hit by yet another flood, this time caused by an unusually heavy storm dropping a third of a year’s expected rainfall in a single event.
• The Lace diamond mine is seen as a wet mine so dealing with water seems to be a bit of a regular event.
• The company estimates around 10,000 cubic meters may have entered the mine running down the new decline and through the historic open pit and into the lower levels of the mine.
• All personnel were evacuated in time but the pumping system was inundated unable to prevent the 310m production level from flooding to the hanging wall (normally the roof).
• Sadly this means the longhole drill rig was flooded and cannot return to operation till its electrics are replaced / refurbished which may take around 12 weeks.
• We hope there is not much additional damage to the mine and that the rest of the systems on the 310 level should operate once the water is pumped out.
Solution:  If someone has a spare longhole drill rig, and there will be lots around, please could they drive it round to the Lace Mine PDQ and get this mine back in action.
The company is acutely short of cash but we reckon the loan of a rig is worth more than a few shares not to mention the satisfaction and goodwill associated with saving the jobs of quite a number of mine workers.   Furhermore, if you do have a rig in the region this might be the best deal you will ever do.
Dare we suggest that even the local labour union might find a rig somewhere to bail the mine out to rescue the inherent BEE value contained in the mine.
It is times such as these that our brother miners should dust off their boots and get stuck in.  There are good people at the Lace mine and they really deserve the help.

Caledonia Mining (LON:CMCL) 113.5 pence, Mkt Cap £59.3m – Looking for a 20% increase in gold production in 2017.
• Caledonia Mining has reported quarterly earnings of 24.4US cents/share for the quarter to 30th September bringing the earnings for the year to date to 13 US cents (2015 7.2 cents).
• The result reflects a 23% increase in quarterly gold production to 13,428 oz bringing the total production to date to 36,760 oz of gold at a cash cost of US$643/oz (2015 US$701/oz) and an all-in cost of US$952/oz (2015 US$1006/oz).
• The improved production and reduced costs reflects the ramp of tonnage and increased flexibility of the underground mine infrastructure which is being established as a result of the long-term plan currently underway with the development of the new Central Shaft remaining on track for completion in mid 2018.
• The company now has net cash of US$12.4m and has previously indicated that it has now passed the peak funding requirement for the development plan which aims to deliver production of 80,000 oz pa by 2021.
• CEO, Steve Curtis, commented “The completed shaft down to a level of 1,080m will establish Blanket as a large, low cost operation with excellent prospects to extend the existing mine life.”
• The company has provided production and cost guidance for 2017. The Blanket mine is expected to increase gold production by 20% to 60,000 oz at a cash cost of US$600-630/oz and all in sustaining cost of US$810-850/oz. These figures are consistent with the long term plan which the company described back in 2014
Conclusion: Caledonia Mining’s Blanket mine is steadily increasing production as the benefits of the development plan deliver increased throughput and operational efficiency. The company’s confidence is underlined by the publication of production guidance indicating a 20% increase  in gold production for 2017.

Metals Exploration* (LON:MTL) 5.3p, Mkt Cap £100m – Equity placement
• The Company received commitments to raise $10.3m (£8.4m) through placing of 166.9m shares at 5.0p.
• Additional funding will cover working capital needs given “ongoing delays experienced in realising revenue from gold sales” and as the Runruno ramps up operations.
• Loan rescheduling negotiation continue with a waiver for the $15m debt amortisation payment extended until 30 Nov/16 from 31 Oct/16 set previously.
• The Company continues to make monthly interest payments on the waived $15m capital payment. 
Conclusion: The Company struggles to realise maiden revenues from the Runruno project with the management previously highlighting difficulties in proceeding with gold exports before the MGB confirms the change of the project status from Development and Construction to Operating Stage. While the latest announcement does not refer to causes of revenue delays, we wonder if those are local authorities related issues. Operationally, the ramp up process is reported to be progressing “satisfactorily”, with the BIOX plant previously planned to ramp up to nameplate capacity before year end.
We believe the project continues to offer value at current gold prices driven by budgeted low unit cost production; however, debt refinancing will need to be completed to allow the project to ramp up its operations and realise forecast strong FCFs.
*SP Angel act as Broker to Metals Exploration

Serabi Gold (LON:SRB) 5.1 pence, Mkt Cap £35.8m – Record Q3 gold production and increased 2016 guidance
• Serabi gold reports record Q3 gold production of 10,233 oz of gold bringing year to date output to 29,900 oz and cash costs to US$ 772/oz (all in sustaining costs US$951/oz).
• The company is now guiding for 39,000 oz of gold production in 2016, which increases the previous guidance of 37,000 oz. The cost guidance of US$950-985/oz on an all in sustaining basis is maintained “reflecting the continued strength of the Brazilian Real which has appreciated by 19 percent since March 2016.”
• The improving production profile is reflected in earnings of 0.35 US cents per share for the year to date (2015 - 0.03 cents)
• The company is now showing net cash of US$1.48m, reversing the net debt of US$1.93m at the beginning of 2016.
Conclusion: The management team at Serabi are delivering increased gold production and a stronger balance sheet and have lifted their production expectations for 2016 to 39,000 oz.

Strategic Minerals* (LON:SML) 0.48 pence, Mkt Cap £5.8m – Exploration of Australian gold and nickel projects
• Strategic Minerals has announced that, in conjunction with its joint-venture partner, Rarus Limited, it has agreed to fund A$250,000 of exploration at Central Australia Rare Earths’ (CARE) Mount Weld gold and rare earths project and Hanns Camp nickel project.
• The proposed programme  will involve a 1200m programme of reverse-circulation (RC) drilling and associated data compilation at Mt Weld and additional geophysical exploration and assaying for platinum-group metals at the Hanns Camp project.
• Initially, Strategic Minerals is providing a an interest free loan of A$75,000 to CARE) which is due to mature on 31st March 2017. In the event that, at that date, CARE has less than A$150,000 available, Rarus and Strategic Minerals will  subscribe an additional A$75,000 each in shares and commit to a  further subscription of A$50,000 each at the end of September 2017.
• The Mt Weld project is located in an area of historical gold mining and adjacent to Lynas Gold’s Mt Weld rare earths mine while the Hanns Camp project is reported to exhibit similar characteristics to the Rosie Nickel Sulphide Mine which is located to the north west.
• Elaborating on the plans to help fund the Australian projects, Managing Director, John Peters commented that “ The funding of these arrangements is to be undertaken internally and has been factored into our overall cash flow budgeting, taking into account our recent equity raising, cash flows from Cobre, the completion of the option on the Redmoor Tin/Tungsten project and the expenditure required here.”
Conclusion: Strategic Minerals is following up on its Australian nickel and gold exploration projects and is gearing up to start drilling its Redmoor tin/tungsten project in Cornwall next year.
*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

]]> Today's Oil and Gas Update - Ithaca Energy and Mosman Oil and Gas Mon, 14 Nov 2016 09:25:00 +0000 In Brief

Ithaca Energy (LON:IAE, TSE:IAE – 81p/C$1.34) – Solid Performance: Today's 3Q results announcement underlines the steps that the Company has taken to maximise growth while minimising the risks associated with the balance sheet. While we have known that the operational side of the business is solid, and the production outlook is a testament to that, to our mind the principal take away from today's announcement is the Company's approach to its risk management. While some might focus on the limitation on participation in the upside in the oil price above $60/bbl for a proportion of the crude, this would indeed a be a luxury problem to have, and one in the current environment that is not worth considering given the fact that the far more disastrous downside has been mitigated. All in all, we think that today's announcement will do more for the share price than just th e potential increase in value from the additional cash flow as the confidence in the management team to address every risk (operational and financial) grows.

 Mosman Oil and Gas (LON:MSMN – 1.50p) – ($9.80mm – 3.20p) – Step in the Right Direction: News last week that the Company has secured an interest in an operating field is, to our mind, a step in the right direction in that this acquisition provides prized cash flow. What is required next, however, is a plan to workover the field such that the cash flow generated is at such a level so as to allow for costs to be recovered and investment elsewhere in the portfolio. Until such times as a plan is disclosed, we can't assess the contribution that this acquisition makes to the portfolio. As such our valuation remains unchanged, which ranges up to $9.80mm (3.20p). Given the current ratings system utilised by SP Angel, this represents a BUY.

]]> Today's Market View - Bacanora Minerals and Stratex International Fri, 11 Nov 2016 10:51:00 +0000 Bacanora Minerals (LON:BCN) – Lithium project update
Stratex International (LON:STI) – Exploration update on Goldstone’s Homase/Akrokerri project in Ghana

Copper driving higher on expectations for new US infrastructure growth and higher inflation
• Fed may move to raise rates to draw in funds for new infrastructure spending.
• Gold prices pull back on Fed rate concerns despite new buying in India as government withdraws high denomination bank notes.
• Emerging markets rose on the news of a Trump victory but may pull back as the prospect of higher Fed rates causes funds to flow back into the US dollar

Shanghai composite index over last five weeks has had best run of gains since May 2015
• Gains were led by miners, smelters and construction companies.

Dow Jones Industrials  +1.17% at 18,808
Nikkei 225   +0.18% at 17,375
HK Hang Seng   -1.35% at 22,531 
Shanghai Composite    +0.78% at 3,196
FTSE 350 Mining   -1.56% at 14,879 FTSE 350 +103% since 1st January
AIM Basic Resources   +0.72% at 2,506 AIM Basic Resources +54% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
China – October new Rmb loans at 651.3bn  (US$95.6bn) vs Rmb1.22t in September

UK – construction output at 4-year low
• UK construction volumes fell by 1.1% from July to September
• Repair work suffered largely offset by better infrastructure and public building

US$1.0881/eur vs 1.0900/eur yesterday.   Yen 106.35/$ vs 106.17/$.   SAr 14.248/$ vs 13.409/$.   $1.264/gbp vs $1.241/gbp.     
0.760/aud vs 0.770/aud.   CNY 6.807/$ vs 6.797/$.

Commodity News
Precious metals:
Gold US$1,257/oz vs US$1,285/oz yesterday – Indian market buying gold as government cancels large Rupee banknotes
• Gold prices pull back on profit taking and on expectations for new growth.
• Ironically, the Fed may feel the need to raise interest rates to enable the issue of new bonds to fund President Trump’s new infrastructure spending
     Gold ETFs 65.6moz vs 66.1moz yesterday –
Platinum US$976/oz vs US$997/oz yesterday
Palladium US$689/oz vs US$689/oz yesterday –
Silver US$18.75/oz vs US$18.85/oz yesterday

Base metals:   
Copper US$ 5,975/t vs US$5,669/t yesterday – Chinese TC/RCs fell for the first time since the start of the year posting a 5% decline in Oct, according to Bloomberg.
• Local TC/RCs are reported to currently stand at $100/t and $c10/lb v 105/10.5 in Sep.
• Despite a decline, processing charges continue to stand close to the highest level since the start of 2015.

Aluminium US$ 1,780/t vs US$1,771/t yesterday
Nickel US$ 11,885/t vs US$11,845/t yesterday
Zinc US$ 2,555/t vs US$2,558/t yesterday
Lead US$ 2,190/t vs US$2,151/t yesterday
Tin US$ 21,730/t vs US$21,620/t yesterday –

Oil US$45.8/bbl vs US$46.0/bbl yesterday – The IEA estimates 2017 may become another year of “relentless” global supply growth should OPEC members fail to implement production cuts while output outside the cartel continues to climb.
• OPEC production is at record high of 33.8mmbbl as of Oct which significantly above the output range agreed in Algiers, with production in Nigeria and Libya recovering and Iraq output reaching record levels.
• Saudi Arabia and Kuwait are pumping oil at near all-time high levels with Iran reported to have reached its pre-sanctions rate output.
• Global production is estimated to have climbed 800kbbl in Oct compared to the previous month with non-OPEC producers accounting for 485kbbl of the increase and hit 97.8mmbbl per day. Non-OPEC production hit 57mmbbl as production recovered in the North Sea, Russia and Kazakhstan.
• “If the supply surplus persists in 2017 there must be some risk of prices falling back,” the IEA said.

Natural Gas US$2.620/mmbtu vs US$2.623/mmbtu yesterday
Uranium US$18.25/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$73.6/t vs US$71.4/t – regulators
• Prices surged to the highest level since Jan/15 with Chinese futures up 7.5% from yesterday and currently trading at CNY 580/t ($85.4/t) driven by a potential pro-stimulus Trump administration and continuing Chinese government economic growth support measures.

Chinese steel rebar 25mm US$468.5/t vs US$462.5/t
Thermal coal (1st year forward cif ARA) US$76.2/t vs US$76.9/t yesterday
Premium hard coking coal Aus fob US$307.2/t vs US$307.2/t – coking coal price unchanged again today but still more than 4x that seen last year

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News
Bacanora Minerals (LON:BCN) 75p, Mkt Cap £83.1m – Lithium project update
• Bacanora report progress on their Sonora lithium clay project in Mexico.
• Samples of Sonora battery-grade lithium carbonate sent to off-takers in Asia and Europe.
• IMC preparing the preliminary reserve model and mine plan.
• Ausenco is a third of the way through the Feasibility Study process engineering.
• Initial process flow sheet now finalised.  Optimisation of lithium recoveries and reagent consumption continues.
• Quotes being sought larger equipment and machinery
• Development and optimisation of preliminary operating cost models now running
• Ventana area drilling confirms intercepts of the Upper Clay range from 11 to 49m and in the Lower Clay range from 7 to 26m with average thicknesses in the upper clay unit of 30.7m and 20.7m in the lower clay.
• “Analyses received for the recent infill drillholes indicate that lithium content in the Upper Clay Unit varies from 25 ppm to 6,900 ppm Li with a weighted average of 1,791 ppm Li; for the Lower Clay Unit lithium content varies from 172 ppm to 10,000 ppm with a weighted average of 4,345 ppm Li.“
Conclusion:  Bacanora continue to progress the Sonora lithium project.  The publication of the their lithium production operating cost curve indicates there should be room for a new producer with costs below the Australian hard-rock and Chinese mineral producers

Stratex International (LON:STI) 1.95p, Mkt cap £9.1m – Exploration update on Goldstone’s Homase/Akrokerri project in Ghana
• Stratex International has announced the results of a recent drilling programme undertaken by Stratex’s 33.45% owned associate, Goldstone Resources, at the AK02 target within the Homase / Akrokerri project in Ghana.
• The programme comprised 3000 metres of auger drilling and 1424 metres of reverse circulation (RC) drilling (in 13 holes) to follow up a 750m long zone of gold enriched saprolite identified by an auger drilling programme in 2015.
• The results  of the RC programme included a 14m wide intersection at an average grade of 1.18 g/t gold from a depth of 16 metres in hole 16AKRC011 and an 8 metres intersection grading 1.88 g/t gold from 102m in hole 16AKRC005.
• The Goldstone Resources announcement also shows that a number of the RC holes showed multiple gold intersections within individual boreholes underlying the Stratex comment that “RC drilling indicates a complex structural zone between Homase and AngloGold Ashanti’s Obuasi mine”. Stratex goes on note that “the south-western extension of the main Homase mineralised zone has been offset 200 metres by faulting.”
• Although the drilling has confirmed the continuity of the zone in the southern part of the structure, it shows “limited potential for identifying additional oxide resource” in that direction.
• The drilling has, however, provided sufficient positive encouragement that “Diamond drilling, targeting vertical depths of 200-300 metres, commenced to evaluate high-grade ore shoots beneath the known Homase oxide resource.”
• The auger drilling infill programme has defined “a new 1250 metre x 350 metre zone of gold enrichment in saprolite located approximately 100-200 metres east of the 2015 auger anomaly.”
Conclusion: The recent drilling at Homase / Akrokerri has identified oxide mineralisation which is now being followed up by deeper diamond drilling and also identified additional near-surface targets to the east of the previously identified mineralisation. The area has complex geology but in view of the results reported by Goldstone and the proximity to the historic Obuasi mine, we look forward to the results of the diamond drilling.

]]> Today's Market View - Condor Gold, Dalradian Resources and Gem Diamonds Thu, 10 Nov 2016 10:32:00 +0000 Condor Gold (LON:CNR) – Scout drilling of new exploration targets in La India area underway
Dalradian Resources (LON:DALR) – Quarterly update – Feasibility Study nearing completion
Gem Diamonds (LON:GEMD) – Q3 Results – Guidance intact despite adverse weather at Letseng

Industrial metals prices have taken off with iron ore and copper prices accelerating yesterday
• The Trump victory is seen as good for US infrastructure development following pledges for new roads and bridges
• Iron ore prices were already having a good run due to strong demand for steel in China and in Asian markets
• Copper which had been strangely subdued through much of the year due to new production coming through from Peru and Indonesia finally gained its legs
• While iron ore prices may now be seen at unsustainably high prices, copper should still have far to go

European equities are up taking cues from US markets that closed higher on Trump pro-fiscal stimulus promises.
• Miners climbed on stronger commodity prices while financial and healthcare sector posted gains on expectations for Trump to suggest less stringent regulatory measures.
• Gold prices are trading higher this morning (+1.1% or $14/oz) after the c.$60/oz intraday jump the previous session has been completely undone by the end of Wednesday.
• US presidential elections results ultimately have done little to change investors’ expectations of the Fed raising rates in Dec with currently implied probability standing at 82%.
• Base metals gains are suggested to be led by Trump plans to spend more than $500bn on infrastructure projects including roads, airports and bridges.
• Copper is the biggest winner among other base and precious metals from the US presidential elections results with prices seen climbing 8% in the last two days.
Price change since 08/11/16 close (%)
Copper 8.0
Aluminium 2.0
Nickel 5.3
Zinc 3.0
Lead 2.3
Tin 0.5
Gold 1.0
Silver 2.5
Platinum -0.2
Palladium 3.6
Source: Bloomberg 

Anglo may choose to cut loose South African assets after rejecting offer for Australian coking coal mines from Apollo and Xcoal
Anglo American are reported as having rejected a potential $2bn bid for its Australian metallurgical coal assets from Apollo and Xcoal.
• The news is hardly surprising with coking coal prices rising more than 4x from $75/t a year ago to over $300/t today generating very substantial returns for the mines.  
• The rise in prices is caused by strong demand for seaborne met in China caused by the closure of inefficient Chinese mines and stronger than anticipated demand for Chinese steel within China and in Asia as a whole.
• While the rise in the coking coal price may cause some Chinese mines to restart many have been closed for environmental and health and safety reasons.
• It is our view that Anglo American may now choose to distance its self from the chaos of South African politics and union disruption now that its overseas assets are performing better.  Note higher copper prices will add significantly to overseas profits.
• Strong opposition in South Africa from the Public Investment Corporation, the official South African government pension fund has tried to dissuade the Anglo board with the PIC thought to be increasing its stake in order to have greater influence.
• The Anglo board would be forgiven for wanting to leave South Africa given the poor economics of running many South African mines, union disruption and BEE conditions imposed in recent years.
• At least the PIC recognise the value of Anglo American to its national economy and Anglo’s contribution to the wellbeing of its people

Norilsk Nickel – contract with SNC Lavalin to build $1.7bn sulphur dioxide capture project
• Norilsk Nickel have signed a $1.7bn contract with SNC Lavalin to build a sulphur dioxide capture project at the Nadezhda Metallurgical Plant on the Kola Peninsula in Russia.
• This is great news from Norilsk and for the people who live and work around the Nadezhda Metallurgical Plant as well as for the environment as a whole.
• It is interesting to note the cooperation between Norilsk, an important Russian company and SNC Lavalin which is a major North American contractor.
• We look forward to news of further refineries, smelters, furnaces and power plants adopting this sort of technology.

Polyus – bidders from Qatar considering offers for potential 25% in Polyus (Bloomberg)
• Polyus is listed in Moscow with a market value of around $13.3bn
• While the freefloat in Moscow is around 5% of total Polyus stock making the market valuation a little variable we would still expect investors to offer >3bn for a 25% stake
• A sale may be good for other listed Russian gold miners.  Petropavlovsk, Highland Gold, Polymetal, Nordgold and Trans-Siberian Gold may all be lifted by a positive sale

Dow Jones Industrials  +1.40% at 18,590
Nikkei 225   +6.72% at 17,344
HK Hang Seng   +1.89% at 22,839 
Shanghai Composite    +1.37% at 3,171
FTSE 350 Mining   +3.01% at 15,404 FTSE 350 +110% since 1st January
AIM Basic Resources   +1.93% at 2,488 AIM Basic Resources +53% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
Date Index Period   Actual Est Previous
Tuesday JOLTS Job Openings Sep '000 5,486 5,488 5,453 (revised from 5,443)
Thursday Weekly Jobless Claims   '000   260 265
Friday UoM Consumer Sentiment Nov     87.9 87.2
UoM Current Conditions Nov   103.0 103.2
  UoM Expectations Nov     77.5 76.8
Source: Bloomberg     

Ethiopia – state of emergency continues
• News reports indicate the government six-month state of Emergency in declared October in Ethiopia remains
• The state of emergency was imposed after violence following a stampede at an Oromo religious festival that killed more than 50 people on 2 October.  The stampede was blamed on police firing tear gas at anti-government protesters.
• Agencies claim at least 1,500 have been arrested since the crackdown.
• Most of the arrests were in the Oromo ethnic group towns of Shashemene and West Arsi south of the capital for violence and property damage.
• The state of emergency means that foreign diplomats are banned from travelling more than 25 miles outside Addis Ababa.  It is also illegal to watch television stations set up by the diaspora.
• Our contacts in the region suggest that all is quiet and business as usual and the government are determined to keep development moving in a straight line of 7=10%pa gdp growth.  At the end of the day, this should be good for the nation and hopefully all its ethnic groups.

Mexican fence
• Donald Trump’s proposed wall on the US border with Mexico would cost billions so we reckon we have a better idea
• We reckon a fence used to hang solar panels with suitable transmission lines could generate electricity, facilitate the grid and provide security.
• While monumental walls look interesting from a historical perspective, aka Hadrian’s Wall and the Great Wall of China the economics are less well determined.

US$1.0900/eur vs 1.1069/eur yesterday.   Yen 106.17/$ vs 103.32/$.   SAr 13.409/$ vs 13.556/$.   $1.241/gbp vs $1.240/gbp.     
0.770/aud vs 0.767/aud.   CNY 6.797/$ vs 6.779/$.

Commodity News
Precious metals:
Gold US$1,285/oz vs US$1,300/oz yesterday
     Gold ETFs 66.1moz vs 66.0moz yesterday – big move in buying gold ETFs this week
Platinum US$997/oz vs US$1005/oz yesterday
Palladium US$689/oz vs US$665/oz yesterday – interesting turn around in prices
Silver US$18.85/oz vs US$18.65/oz yesterday

Base metals:   
Copper US$ 5,669/t vs US$5,404/t yesterday – Chinese TC/RCs fell for the first time since the start of the year posting a 5% decline in Oct, according to Bloomberg.
• Local TC/RCs are reported to currently stand at $100/t and $c10/lb v 105/10.5 in Sep.
• Despite a decline, processing charges continue to stand close to the highest level since the start of 2015.

Aluminium US$ 1,771/t vs US$1,745/t yesterday
Nickel US$ 11,845/t vs US$11,560/t yesterday
Zinc US$ 2,558/t vs US$2,500/t yesterday
Lead US$ 2,176/t vs US$2,151/t yesterday
Tin US$ 21,720/t vs US$21,620/t yesterday –

Oil US$46.5/bbl vs US$46.0/bbl yesterday – The IEA estimates 2017 may become another year of “relentless” global supply growth should OPEC members fail to implement production cuts while output outside the cartel continues to climb.
• OPEC production is at record high of 33.8mmbbl as of Oct which significantly above the output range agreed in Algiers, with production in Nigeria and Libya recovering and Iraq output reaching record levels.
• Saudi Arabia and Kuwait are pumping oil at near all-time high levels with Iran reported to have reached its pre-sanctions rate output.
• Global production is estimated to have climbed 800kbbl in Oct compared to the previous month with non-OPEC producers accounting for 485kbbl of the increase and hit 97.8mmbbl per day. Non-OPEC production hit 57mmbbl as production recovered in the North Sea, Russia and Kazakhstan.
• “If the supply surplus persists in 2017 there must be some risk of prices falling back,” the IEA said.

Natural Gas US$2.664/mmbtu vs US$2.623/mmbtu yesterday
Uranium US$18.50/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$71.4/t vs US$65.3/t –
• Prices surged to the highest level since Jan/15 with Chinese futures up 7.5% from yesterday and currently trading at CNY 580/t ($85.4/t) driven by a potential pro-stimulus Trump administration and continuing Chinese government economic growth support measures.

Chinese steel rebar 25mm US$462.9/t vs US$462.5/t
Thermal coal (1st year forward cif ARA) US$77.4/t vs US$76.9/t yesterday
Premium hard coking coal Aus fob US$307.2/t vs US$307.2/t – coking coal price unchanged today but still more than 4x that seen last year

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News
Condor Gold (LON:CNR) 70p, Mkt Cap £37.0m – Scout drilling of new exploration targets in La India area underway
• Condor Gold has announced that it has commenced a 4000m scout drilling programme at its La India property in Nicaragua. Additional soil sampling commenced in June and has now covered more than half the district.
• The first 2000m of the programme has 3 main objectives:
• Firstly, the expansion  of the mineralized envelope and identification of additional ore-shoots at El Calao where, as of 9th November, 87m of drilling has been completed
• Secondly, expansion of known mineralisation at the Csistalito Tatescame target and
• Thirdly, to test the previously undrilled Andrea Vein
• The deployment of the remaining 2000m of drilling will depend upon the early results and may also be used to test other targets.
• The drilling programme and wider exploration of the area seems to have been given additional impetus following the injection of funds earlier this year by the Canadian mining entrepreneur Ross Beatty and by associates of the Sprott fund.
• The recent re-election of Nicaraguan President Daniel Ortega for a third term in office, in an election which has been criticized in some quarters as unfair and potentially unconstitutional as it allowed President Ortega’s wife to run for the vice-Presidency, should nevertheless provide a welcome degree of continuity to Government policy towards industrial and mining development in the country.
Conclusion: The start of drilling in new or relatively untested areas of the La India licence may eventually add to the existing resource of 18.1mt at a grade of 4g/t gold (2.3m oz). We look forward to results of the programme as it proceeds.

Dalradian Resources (LON:DALR) 86.8 pence, Mkt Cap £210.2m – Quarterly update – Feasibility Study nearing completion
• Dalradian Resources reports that its feasibility study on the development of the Curraghinalt gold deposit in N Ireland is nearing completion and that a number of the technical aspects have been de-risked through closer spaced drilling, test mining and flowsheet optimisation.
• The geotechnical studies, test stoping and paste backfill fill trials are all now complete and mine development and production sequencing are almost finished. The Feasibility study is on course for release during Q4 2016.
• Work on the environmental baseline study is complete and the impact studices are on track for completion during the current quarter.
• The Planning Application process is underway and Dalradian Resources expects to make the formal submission “early in Q1 2017”.
• The company is well financed for the completion of its work with  a cash balance of C$43.1m at 30th September.
Conclusion: We look forward to the results of the feasibility study in the coming weeks.

Gem Diamonds (LON:GEMD) 114.8 pence, Mkt Cap £158.8m – Q3 Results – Guidance intact despite adverse weather at Letseng
• Gem Diamonds reports that “Letseng remains on track to achieve all of its guided production targets for 2016 … despite production interruptions during July and August due to the worst weather conditions experienced since the Letseng mine opened.” We understand that 2016 production guidance is in the range 105-108,000 carats.
• As a result of the weather, the mining fleet was unable to mine waste for a period of ten days, though, by implication ore production was able to continue, though possibly at a reduced rate. Alluvial material and stockpiled ore was used to help maintain plant feed.
• During the three months to 30th September, the Letseng mine treated 6% less ore at a 10% lower grade to recover 15% fewer diamonds (24,388 carats vs 28,862 carats in Q2 2016) than in the previous quarter.
• The company also comments that although there is a “continued paucity of large high value diamonds” at Letseng it has sold twelve diamonds at prices in excess of US$1m during the quarter.
• At the Ghaghoo mine, Gem Diamonds reports positive progress on reducing costs and “Encouraging recoveries of larger diamonds as mining moves into the undiluted portions of kimberlite ore.”
• Gem Diamonds comments that while overall market sentiment in the rough diamond business “remains cautious, the demand for Letseng’s high quality large white diamonds has continued as prices … remained firm during the Sales Period.” There were no sales of diamonds from Ghaghoo during the quarter.
• At 30th September, Gem Diamonds held US$44.1m in cash and had drawn US$28.2m of its debt facilities with US$53.2m remaining available and undrawn.
Conclusion: Letseng appears to have managed to overcome the effects of severe weather and although production was reduced during Q3 the company is maintaining its production guidance for the full year.

]]> VSA Capital Market Movers - Vedanta Thu, 10 Nov 2016 08:27:00 +0000 Vedanta (LON:VED)

Vedanta Resources (VED LN) has released weak H1 2016 results. Revenue was down 15% YoY to US$4.9bn while EBITDA was down 4% YoY to US$1.2bn. The net loss, however, narrowed YoY from US$325m to US$64m. VED announced an interim dividend of US$0.2/sh compared to US$0.3/sh for the full year in FY 2016, paid entirely in H2.

Despite a recovery in zinc prices, planned maintenance and mine sequencing meant that earnings in the Zinc division were weakened. Given the stock’s relatively high exposure to zinc prices and the significant recovery YTD this is particularly disappointing. Revenue was down 25% YoY to US$1bn while EBITDA was down 15% YoY to US$546bn. Copper revenues were down 19% YoY to US$1.8bn while EBITDA was down 1.8% YoY to US$144m as an operational recovery in Zambia stabilised profits, offsetting weakness in India and Australia. The impact was largely due to weaker average copper prices in the period. Oil and gas was also weak owing to lower prices which resulted in a 22% decline in revenue YoY to US$586m and 27% decline in EBITDA to US$274m.

The aluminium and iron ore division demonstrated strong recovery, however, these both represent minor contributions to the group overall. Aluminium revenue was up 1.5% YoY to US$864m while EBITDA was up fivefold to US$102m as higher production offset weaker prices. Iron ore revenue benefitted from stronger prices and was up 58% YoY to US$218m while EBITDA rose tenfold to US$72m as prices were up sharply.

]]> Today's Market View - Kefi Minerals, Diamond Corp, Premier African Minerals, Rio Tinto, Stellar Diamonds and Strategic Minerals Wed, 09 Nov 2016 10:34:00 +0000 DiamondCorp (LON:DCP) – Loan drawdown
Kefi Minerals* (LON:KEFI) – Tulu Kapi project and financing update
Premier African Minerals (LON:PREM) – Further Drilling on the Zulu Lithium Project
Rio Tinto (LON:RIO) – Suspension and departure of key staff following investigation of payments at Simandou
Stellar Diamonds (LON:STEL) Suspended – joint venture agreements signed over projects in Guinea and Liberia
Strategic Minerals* (LON:SML) – SP Angel appointed as Nomad and broker to Strategic Minerals


Risk off sentiment on the Republican candidate winning presidential elections in the US drive equities lower with safe haven assets including gold, JPY and US Treasuries.
• The US$ is off against the GBP and EUR with emerging markets’ currencies recording losses including Mexico’s peso that fell to a record low on the results.
• Chances of a rate hike in Dec recovered to 84% after falling to less than 50% overnight as Treasuries rallied.
• S&P 500 index futures were down 5.0% at one stage as first results over Trump lead started to come in triggering trading curbs on the CME. Contracts bounced back since then and currently trade 2.0% down.
• Gold is up 2% or $25/oz holding above the $1,300/oz level. Gold futures posted 4.8% gains earlier in the morning hitting $1,337/oz.
• FTSE 350 Mining Index is up 1.9% led by gains in precious metals miners with “big four” diversified miners’ trading higher at 0.5-1.4%.
• Brent dropped as much as 3.5% earlier today slipping below the $44.5/bbl level but has regained some of its losses currently hovering around $45.5/bbl levels.
• Iron ore futures on the Dalian exchange climbed 6.3% reaching its daily limit of CNY 551/t ($81/t), the highest level in two years. Benchmark steel contracts also posted strong gains.

Dow Jones Industrials  +0.40% at 18,333
Nikkei 225   -5.36% at 16,252
HK Hang Seng   -2.16% at 22,415 
Shanghai Composite    -0.62% at 3,128
FTSE 350 Mining   +4.08% at 14,697 FTSE 350 +100% since 1st January
AIM Basic Resources   -0.95% at 2,441 AIM Basic Resources +50% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
US – The latest results show Republicans winning majority seats in Senate securing both houses of Congress for the first time since the start of the President Barack Obama’s first term.
• Charles Evans, the Chicago Fed President, expressed concerns current inflation expectations warrant a hike in Dec.
• “I am worried that inflation expectations have been moving down in a way that’s not consistent with 2%,” he said.
• “We’ve finally gotten core PCE inflation of 1.7%. We’re close, we’re getting there, and if I had even more confidence about getting to 2% I’d feel better about monetary policy re-normalization. We’ll see how that goes.”
• Evans is one of the most dovish officials of the US Fed and will become the voting member of the FOMC next year.
Date Index Period   Actual Est Previous
Tuesday JOLTS Job Openings Sep '000 5,486 5,488 5,453 (revised from 5,443)
Thursday Weekly Jobless Claims   '000   260 265
Friday UoM Consumer Sentiment Nov     87.9 87.2
UoM Current Conditions Nov   103.0 103.2
  UoM Expectations Nov     77.5 76.8
Source: Bloomberg     

China – Inflation pressures are building up as suggested by the latest PPI and CPI data.
• An acceleration in producer prices is particularly encouraging given its multi-year stretch of negative growth rates up to Sep this year.
• Higher input costs may see some of inflation exported overseas that should in turn help disinflationary pressures elsewhere, Bloomberg reports.
• CPI (%yoy): 2.1 in Oct v 1.9 in Sep and 2.1 forecast.
• PPI (%yoy): 1.2 in Oct v 0.1 in Sep and 0.9 forecast.

US$1.1069/eur vs 1.1048/eur yesterday.   Yen 103.32/$ vs 104.52/$.   SAr 13.556/$ vs 13.407/$.   $1.240/gbp vs $1.241/gbp.     
0.767/aud vs 0.770/aud.   CNY 6.779/$ vs 6.781/$.

Commodity News
Precious metals:
Gold US$1,300/oz vs US$1,284/oz yesterday
     Gold ETFs 66.0moz vs 66.0moz yesterday – big move in buying gold ETFs this week
Platinum US$1005/oz vs US$1006/oz yesterday
Palladium US$665/oz vs US$650/oz yesterday – interesting turn around in prices
Silver US$18.65/oz vs US$18.31/oz yesterday

Base metals:   
Copper US$ 5,404/t vs US$5,055/t yesterday –
Aluminium US$ 1,745/t vs US$1,715/t yesterday
Nickel US$ 11,560/t vs US$11,195/t yesterday
Zinc US$ 2,500/t vs US$2,448/t yesterday
Lead US$ 2,151/t vs US$2,084/t yesterday
Tin US$ 21,620/t vs US$21,750/t yesterday – tin prices continue to climb despite other base metals pulling back

Oil US$46.0/bbl vs US$46.0/bbl yesterday
Natural Gas US$2.623/mmbtu vs US$2.776/mmbtu yesterday
Uranium US$18.75/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$65.3/t vs US$65.3/t – Port Hedland iron ore shipments hit high as China buys ahead of cyclone season
Chinese steel rebar 25mm US$462.5/t vs US$458.6/t
Thermal coal (1st year forward cif ARA) US$76.9/t vs US$75.3/t yesterday
Premium hard coking coal Aus fob US$307.2/t vs US$289.3/t

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News
DiamondCorp (LON:DCP) 2.1p, Mkt Cap £10.1m – Loan drawdown
• DiamondCorp has announced that is drawing down the £300,000 second tranche of the Rasmala financing facility announced last month.
• On the operational side, the company expects to complete the processing of the 5000 carats of diamonds which provide collateral for the loan by the end of the day shift today.
• Production at the Lace diamond mine is reported to be meeting management’s expectations and “is on schedule to exceed 15,000 tonnes” during the month of November with a grade so far of 29 carats per hundred tonnes.
• Conclusion: Today’s announcement should provide reassurance that, with the additional financial support from Rasmala, the Lace mine is getting on track and coupled with the announcement last week that mining conditions are improving, we see a modest recovery underway.

Kefi Minerals* (LON:KEFI) 0.38p, Mkt Cap £14.6m – Tulu Kapi project and financing update
• Kefi Minerals has provided an update on its Tulu Kapi gold development project in Ethiopia following a site visit this week by project financiers.
• The company reports that its mining contractor has confirmed details of the required mining fleet while the lenders’ independent technical advisors have confirmed that the “proposed mining method and equipment specification are considered straightforward and technically sound”.
• The processing plant contractor, Lycopodium, is currently finalising its contract review of the “fixed price lump-sum construction and commissioning contract”.
• Mining specialist lenders are in discussions to “potentially participate alongside the Development Bank of Ethiopia and the other non-specialist banks” and the company indicates that it expects to draw down on its debt facilities during H1 2017.
• Ethiopia’s new Government is said to have “welcomed KEFI’s invitation to increase equity above the $20m committed to date and the discussion will be concluded upon the new Government Ministry settling in.” The company also notes that “The Prime Ministerial Committee established to fast-track the Project has reinforced its commitment to and collaboration with Kefi.”
• The company also stresses its constructive engagement with the Government of Ethiopia both with regard to the core Tulu Kapi project itself but also comments that Government is encouraging it “to plan an ambitious exploration programme in the district around Tulu Kapi and elsewhere in Ethiopia.”, where “targets have been identified for both satellite gold deposits and stand-alone development projects”.
• Conclusion: Kefi Minerals is continuing to press ahead with the development of Tulu Kapi where it expects to develop a mine capable of producing an average 100,000 oz pa of gold over at least a ten-year life for an all-in-sustaining cost of US$766-787/oz
*SP Angel act as Nomad and broker to Kefi Minerals

Premier African Minerals (LON:PREM) 0.35 pence, Mkt Cap £6.9m – Further Drilling on the Zulu Lithium Project
• Premier African Minerals reports that it has now encountered lithium mineralisation in each of the 8 drillholes completed to date at its Zulu lithium exploration project near Fort Rixon, Zimbabwe.
• The holes reported today, ZDD-14 and ZDD-16 both show multiple intersections of lithium mineralisation with grades of individual sampled intervals ranging up to 2.67% lithium oxide (Li2O)
• Hole ZDD-14 is reported to have intersected 4 separate zones of lithium mineralisation from depths as shallow as 11.59m, with a higher grade sample of 1.44% Li2O over an interval of 2.49m between 44.17m to 46.66m in the hole.
• Hole ZDD-16 reports eight separate lithium bearing horizons from as sjhallow as 20.25m depth. The highest grade intersection reported an average of 2.67% Li2O over an interval of 0.90m from a depth of 54.82m.
• Conclusion: At this stage, and in the absence of more specific information on the location and relative positions of the individual boreholes and possible correlation of the lithium bearing horizons, it may be hard to support the company’s assertion that Zulu “is potentially amongst the best hard rock lithium exploration projects at this time”, however the results obtained to date are encouraging and we look forward to further news as exploration progresses.

Rio Tinto (LON:RIO) – 2964 pence, Mkt Cap  £54,447million - Suspension and departure of key staff following investigation of payments at Simandou
• Rio Tinto reports that “On 29 August 2016, Rio Tinto became aware of email correspondence from 2011 relating to contractual payments totaling US$10.5 million made to a consultant providing advisory services on the Simandou project in Guinea.”
• The company has investigated the circumstances under the leadership of external counsel and “Based on the investigation to date, Rio Tinto has today notified the relevant authorities in the United Kingdom and United States and in in the process of contacting the Australian authorities.”
• The company announces that “Energy and Minerals chief executive, Alan Davies, who had accountability for the Simandou project in 2011, has been suspended with immediate effect.” The Legal and Regulatory Affairs group executive, Debra Valentine, has brought forward her planned departure on 1st May 2017 and stepped down.
• On 28th October 2016, Rio Tinto announced that it had agreed a non-binding agreement with Chinalco for the sale of Simandou; binding terms are expected within six months.

Stellar Diamonds (LON:STEL) Suspended – joint venture agreements signed over projects in Guinea and Liberia
• Stellar Diamonds has signed a number of joint venture agreements with Citigate Commodities Trading a Dubai based commodities group.
• The joint venture applies to the Baoule kimberlite project in Guinea and two early stage exploration projects in Western Liberia.
• Citigate can earn a 75% stake in the Baoule joint venture through the expenditure of US$3m and the funding of a pre-feasibility study.
• Citigate can also earn into the Liberian projects through US$6.25m of exploration expenditure spread over three phases.
• The establishment of the joint ventures should enable Stellar’s team to better focus on developing diamond production at its principal Tonguma and Tongo projects in Sierra Leone.
• Tonguma and Tongo in Koidu are the subject of a proposed transaction between Stellar Diamonds and Octea
• The projects are reported to hold a recoverable diamond resource of 4.0mcts (+1.18mm) with 1.45mcts at Tongo grading 165cpht and 3.45mcts at Tonguma at a grade of up to 290cpht worth US$193/ct.  A further 8mcts may exist within the exploration target at Tonguma.
*The author of this comment has previously visited the diamond mines at Koidu in Sierra Leone.

Strategic Minerals* (LON:SML) 0.475 pence, Mkt Cap £5.8m – SP Angel appointed as Nomad and broker to Strategic Minerals
• SP Angel has been appointed as Nomad and broker to Strategic Minerals.  Optiva Securities has also been appointed as joint broker to the company alongside SP Angel.
• “The appointment of SP Angel reflects both its acknowledged resource sector expertise and the Company's increased resource exploration activity, most notably at the Redmoor tin/tungsten project in Cornwall.”
• "The recent three times oversubscribed placement of new shares in the Company by SP Angel and Optiva Securities has highlighted the efficacy of the working arrangements between the parties and has provided the Company with a broad and supportive shareholder base.”
• Strategic Minerals is working in joint-venture with ASX listed New Age Exploration on the potential reopening of the Redmoor tin mine in Cornwall.
• The company recently appointed Jeff Harrison, an experienced mining engineer who most recently served as Operations Manager for Wolf Minerals on the new Drakelands mine in Devon and was instrumental in gaining landowner and community support.  Drakelands is just 40km from the Redmoor mine site.
• Redmoor has two known high-grade veins with the Johnson lode running at around 1.4% tin equivalent and the Great South lode running at 1.1% tin equivalent
• Previous drilling has established an inferred resource of 13.3mt at an average grade of 0.56% tin equivalent.
• The company has plans for further drilling to better define the resource starting in the first half next year.
• Cobre (New Mexico); the company’s Cobre magnetite operation in the US reported a profit of US$62,000 vs US$162,000 a year earlier in its interim result due to lower mangnetite iron ore prices and a costs associated with a legal claim over rail work compensation.  We expect profits from this operation to substantially recover due to the resolution of the legal claim and better iron ore prices.
• Hann’s Camp (W Australia). Strategic Minerals has also acquired a 50% interest in CARE, which has nickel exploration projects at Hann’s Camp in W Australia. Initial drilling intersected nickel sulphides and, in conjunction with its joint venture partner, the company is reviewing the results of the drilling and down-hole electromagnetic surveys “to define the most appropriate strategy for the future.”
Conclusion:  Strategic Minerals offers potential for the reopening of a significant new tin mine in Cornwall.  Profits from the Cobre operation should support much of the cost of running the company with the recent funding enabling further work to be done towards the eventual development of more or more new projects.
*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

]]> Today's Market View - Avocet Mining, European Metals, Savannah Resources and Scotgold Resources Tue, 08 Nov 2016 10:51:00 +0000 Avocet Mining (LON:AVM) – Resumption of operations at Inata expected this week
European Metals (LON:EMH) – Shallow lithium – tin mineralisation at Cinovec
Savannah Resources (LON:SAV) –Savannah declares 3.5bnt ilmenite mineral sands resource at Mutamba
Scotgold Resources (LON:SGZ) – Scotgold auctioning first Scottish gold pour for 10 1oz fine Scottish Rounds

Ecuador – BHP Billiton and Hancock Prospecting, a private exploration entity led by Gina Rinehart, are holding talks with officials on a potential entry into mining and exploration projects in Ecuador, Mining Minister Javier Cordova said.
• Newcrest recently took up a 10% stake in Solgold, for its giant Cascabel copper porphyry copper project in Ecuador while Lundin Mining bought Furta del Norte from Kinross Gold in December 2014.
• “This is the perfect time for us and the industry. It’s the reason why the likes of BHP are looking around, because many of the projects in Chile are declining and they are looking for new opportunities,” according to the Ecuadorian Minister of Mines.

Equities are in the wait and see mode ahead of the US presidential elections results.
• Gold is little changed at $1,285/oz after posting a 1.8% or $25/oz drop the previous day on increased chances of Democratic candidate winning the presidential race.
• Brent is flat trading around $46.3/bbl with base metals mixed.
• Iron ore futures continued to climb (Chinese Jan contract +2.3%) coupled with stronger markets for steel (Chinese rebar +1.9%)

Samsung offices raided in corruption probe
• So why are we interested?
• The Asian Financial Crisis which began in 1997 was fuelled by the unravelling of corrupt lending practices in South Korea which caused the currency to meltdown and the country to fall into economic crisis.
• A rerun of the Asian Crisis in South Korea would not be good for economic growth.
• Samsung is a major employer and a major part of the South Korean economy.  The scandal follows on from the collapse of Hanjin.

Dow Jones Industrials  +2.08% at 18,260
Nikkei 225   -0.03% at 17,171
HK Hang Seng   +0.47% at 22,909 
Shanghai Composite    +0.46% at 3,148
FTSE 350 Mining   +0.38% at 13,873 FTSE 350 +89% since 1st January
AIM Basic Resources   -0.27% at 2,465 AIM Basic Resources +51% since 1st January
A pullback in the share price of Sirius minerals had some impact on the AIM Basic Resource index with the stock pulling the index lower

Economic News
Date Index Period   Actual Est Previous
Tuesday JOLTS Job Openings Sep '000   5,488 5,443
Thursday Weekly Jobless Claims   '000   260 265
Friday UoM Consumer Sentiment Nov     87.9 87.2
UoM Current Conditions Nov   103.0 103.2
  UoM Expectations Nov     77.5 76.8
Source: Bloomberg     

China – Weak trade data released this morning point to a sluggish external demand despite a yuan depreciation with local demand favouring better and imports posting a decline in the contraction pace.
• Exports (US$-terms, %yoy): -7.3 v 10.0 in Sep and -6.0 forecast.
• Imports (US$-terms, %yoy): -1.4 v -1.9 in Sep and -1.0 forecast.
• Auto sales grew for an eighth consecutive month in Oct with deliveries up 15%yoy in the first 10 months of the year as consumers bring their purchases forwards as a tax cut due to expire at year-end.

Germany – Industrial production contracted more than forecast in Sep reflecting an abnormally strong Aug reading with the third quarter posting good performance overall.
• Recently released industrial surveys point to improved dynamics to continue through Q4.
• Industrial Production (%mom): -1.8 v 3.0 (revised from 2.5) in Aug and -0.5 forecast.
• Industrial Production (%yoy): 1.2 v 2.4 (revised from 1.9) in Aug and 2.0 forecast.
• Trade balance climbed in the final month of Q3 led by a drop in imports helping to partially compensate for a weak Jul/Aug period with the sector likely to
• Trade Balance (€bn): 24.4 v 19.9 in Aug and 22.4 forecast.
• Exports (%mom): -0.7 v 3.4 in Aug and -0.8 forecast.
• Imports (%mom): -0.5 v 1.9 in Aug and -0.2 forecast.

UK -  Manufacturing output growth accelerated in Sep to a five month high which coupled with a weak start to Q3 suggests that manufacturing contracted 0.9% over the three months, according to Bloomberg estimates.
• Manufacturing is reported to be performing “broadly in line with recent trends”, according to the Office for National Statistics.
• “There are no obvious signs so far of either the weaker pound or post-referendum uncertainties affecting the output of UK factories.”
• Industrial production, a broader measure of activity in the sector, fell 0.4%mom dragged by a weaker output in North Sea oilfields.

US$1.1048/eur vs 1.1068/eur yesterday.   Yen 104.52/$ vs 104.43/$.   SAr 13.407/$ vs 13.480/$.   $1.241/gbp vs $1.240/gbp.     
0.770/aud vs 0.767/aud.   CNY 6.781/$ vs 6.776/$.

Commodity News
Precious metals:
Gold US$1,284/oz vs US$1,285/oz yesterday
     Gold ETFs 66.0moz vs 65.7moz yesterday – big move in buying gold ETFs despite Trump losing ground to Clinton
Platinum US$1006/oz vs US$990/oz yesterday
Palladium US$650/oz vs US$624/oz yesterday – interesting turn around in prices
Silver US$18.31/oz vs US$18.10/oz yesterday

Base metals:   
Copper US$ 5,055/t vs US$5,051/t yesterday – Refined copper imports fell 15%mom/32%yoy to 290kt in Oct as the nation increasingly relies on concentrate imports and increasing smelting capacity.
• Copper ore and concentrates inbound shipments Totalled 1.36mt in Oct, up 29%yoy, with imports in the first ten months totalling 13.6mt, up 32%yoy.
Aluminium US$ 1,715/t vs US$1,725/t yesterday
Nickel US$ 11,195/t vs US$10,945/t yesterday
Zinc US$ 2,448/t vs US$2,478/t yesterday
Lead US$ 2,084/t vs US$2,114/t yesterday
Tin US$ 21,750/t vs US$21,650/t yesterday – tin prices continue to climb despite other base metals pulling back

Oil US$46.0/bbl vs US$46.1/bbl yesterday
Natural Gas US$2.776/mmbtu vs US$2.851/mmbtu yesterday
Uranium US$18.75/lb vs US$18.75/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$65.3/t vs US$62.1/t – Port Hedland iron ore shipments hit high as China buys ahead of cyclone season
Chinese steel rebar 25mm US$458.6/t vs US$450.4/t
Thermal coal (1st year forward cif ARA) US$75.3/t vs US$77.8/t yesterday
Premium hard coking coal Aus fob US$289.3/t vs US$270.5/t

Tungsten - APT European prices $198-205/mtu vs $195-199/mtu unch last week – tungsten prices are at long last edging forward

Company News

Avocet Mining (LON:AVM) 73 pence, Mkt Cap £15.3m – Resumption of operations at Inata expected this week
• Avocet Mining reports that a judge in Ouagadougou has ordered the lifting of a seizure of gold from the Inata mine by bailiffs acting on behalf of former mine employees which occurred on 7th October.
• As a result, Avocet is aiming “to resume operations at Inata later this week if possible”.
• The company is taking steps “to recover the seized gold for export and to reinstate normal gold shipments thereafter.”
• The seizure was originally pursued by the former employees in pursuance of a 2bn CFA (US$3.4m) claim relating to unpaid benefits outstanding when their employment was terminated following an illegal strike in December 2014. The company is continuing to explore means to resolve the underlying dispute.
Conclusion: The decision by the court in the company’s favour should expedite the resumption of normal production at Inata and may give the wider audience of outside investors in Burkina Faso confidence in the probity of the country’s mining and commercial  law.

European Metals (LON:EMH) 37 pence, Mkt Cap £32.2m – Shallow lithium – tin mineralisation at Cinovec
• European Metals has announced the results of 2 additional drill holes at its wholly owned lithium – tin property at Cinovec in the Czech Republic.
• Two holes collared close to the old shaft have encountered shallow mineralisation, including a 226.7m wide intersection at an average grade of 0.45% Li2O from a depth of 35 metres in borehole CIW-07 and a 246.3m wide intersection averaging 0.405 from a depth of 10.7m in borehole CIW-08. The intersection in hole CIW-08 is reported to represent the shallowest lithium mineralisation encountered so far at Cinovec.
• Drilling is continuing in order to firm up resources estimation at  Cinovec where the company has previously published an indicated resource of 49.1mt at an average grade of 0.43% Li2O and a larger inferred resource of 482mt grading 0.73%. Nine holes have been completed so far this year and 3 more are currently underway.
• In particular, the company is aiming to establish a high grade, near surface resource which is capable of improving the economic viability of a previously published scoping study by accessing early feed for the processing plant.
• The identification of near surface high grade mineralisation has already enabled the company to reduce its estimated capital cost to develop the project at a throughput rate of 2mtpa to produce around 16,000tpa of lithium carbonate by approximately US$85m (33%) to US$169m compared with the scoping study.
Conclusion: The company’s drilling programme continues to encounter near surface lithium mineralisation which should enhance the pre-feasibility study resource estimation. Much of the existing resource at the Cinovec site is currently classified as inferred and the drilling will need to establish greater confidence in the resource for it to form the basis of more detailed pre-feasibility studies. We look forward to further news as the evaluation proceeds.

Savannah Resources ((LON:SAV)4.6 pence, Mkt Cap £20.8m –Savannah declares 3.5bnt ilmenite mineral sands resource at Mutamba
• Savannah Resources has declared a 3.5bnt mineral resource at Mutamba in Mozambique.
• The Mutamba project was previously operated by Rio Tinto and is part of the larger Mutamba / Jangamo project which is being very slowly delineated under a consortium agreement between Savannah and Rio Tinto.
• So why is Rio Tinto working with a junior company like Savannah which clearly has other priorities such as its copper in Oman and Lithium in Finland in its portfolio.
• Rumour has it that the Mozambique government is unsurprisingly unhappy with Rio Tinto over its dealings with Riversdale Mining.   We suspect some may have suggested to the government that Riversdale would become a shining new coal mine providing valuable export revenues to Mozambique.
• We suspect Rio Tinto is also unhappy over its substantial loss on the sale of the Riversdale Mining which was bought by Rio Tinto for $3.7bn at the height of the market in 2011.  The asset was later sold for $50m in 2014.  The reasons for the sale are varied but appear to relate to the nature of the coal resource and routes for potential coal export.
• Back to the resource, the initial indicated and inferred mineral resource estimate comes in at 3.5bnt grading around 3.8% Total Heavy Minerals
• The resource therefore contains around 81mt of ilmenite, 2.2mt rutile and 3.8mt zircon.  The lowish grade of the ilmenite is supplemented by the rutile and zircon co-products as seen down the road at Kenmare’s Moma mineral sands operation which lies on the coast of Mozambique and is dredge mined.
• Within the resource some 52% is in the Indicated Category, 48% is inferred and covers the Jangamo and Dongane deposits at Mutamba
• The company notes that the Jangamo deposit includes both Rio Tinto’s Jangamo deposit and Savannah’s Jangamo deposit where an established resource of 65Mt at 4.2% of total heavy minerals (THM) was previously defined.
• Savannah states that Mutamba compares favourably against Mozambique mineral sands producer Kenmare Resources 31 December 2015 global resource of 6.5Bt grading 2.9% THM and mining reserve of 1.6Bt at 3.3% THM
• A scoping study which is expected to take 3-4 months will commence shortly
Conclusion:  Savannah in co-operation with Rio Tinto have a very substantial mineral sands project in Mozambique.  With an expected increase in pricing and demand for titanium mineral sands we would expect this to gain in value.
The mood at the main industry TZMI conference is reported to be quite upbeat this year with Chinese ilmenite prices moving higher on short Sichuan supply. Prices now offered reaching ~$200/t CFR  for imported ilmenite which is promising.
We note that FinnAust’s Pituffuk ilmenite project in Greenland carries a grade of around 10 times that seen in Mozambique. Average ilmenite grades in early work are estimated to be around >35% at Moriusaq Bay with some areas of >85% ilmenite in this low-medium sized tonnage target.  See recent initiation note on FinnAust Mining.  CLICK FOR PDF

Scotgold Resources (LON:SGZ) 0.58p, Mkt Cap £7.7m – Scotgold auctioning first Scottish gold pour for 10 1oz fine Scottish Rounds
• Scotgold are shamelessly auctioning gold from their first Scottish gold pour at their Cononish Gold mine in Tyndrum.
• The fine Scottish gold rounds can be bought in a sealed bids auction with the deadline of 4pm on 28th November.
• The Gold Rounds have been minted by Baird & Co Bullion Merchants. Each Gold Round features the official registered Scottish Gold Mark of the stag's head and is presented in a luxurious presentation box.
• It will be interesting to see just how much a Scottish gold round, which is after all is only a piece of gold, is worth to a Soctsman?